As it turns out, of all the things needing “disruption” by some startup, cooking dinner wasn’t one.
Blue Apron, the premier meal kit service for halfway ambitious millennials, has begun to flounder, laying off 240 workers and shutting down its warehouse in Arlington, Texas. Once heralded by the New York Times as “the Starbucks of the meal kit business,” the eight-year-old company has finally run out of steam.
Here’s the problem. If you sign up for Blue Apron, you can have two to three recipes delivered to your home each week, complete with all of the ingredients you’ll need to cook each two-person meal. To its most ambitious customers, Blue Apron offers four-person meals for as much as $119.84 a week. For some, that price point isn’t sustainable. For others, neither is that lifestyle.
People who are too lazy to grocery shop can order groceries through AmazonFresh. Those who are too lazy to cook can go to Chipotle. This particular mood — in which an adult doesn’t mind overspending on groceries, does mind going to the grocery store, but doesn’t mind cooking as long as the process is as painless as possible — just might not have much of a market.
Two years ago, an article in Forbes questioned whether Blue Apron was “the coal mine for the online meal kit category,” meaning that its inevitable demise might spell doom for competitors such as HelloFresh. The question for meal planning services is whether Blue Apron, like MoviePass, suffered not from a lack of demand but the unsustainable nature of the company’s business model.
“The overall market is still growing, but not as much as we thought,” HelloFresh CEO Dominik Richter explained to the Wall Street Journal, which reported “tepid” growth in the demand for meal kits. In the past 30 days, fewer than 5% of consumers in the United States used meal kits, according to a recent survey.
A few years back, proponents of meal kits were more optimistic. “We don’t know why Blue Apron wouldn’t have a place in every home in America in some way,” Matt Salzberg, then the CEO of Blue Apron, said in 2016.
Now, Blue Apron has almost bottomed out, retaining just two distribution and assembly locations for its 351,000 remaining customers. It has lost millions of dollars and hundreds of thousands of customers.
There’s a simple explanation: Millennials just aren’t that into it. And those who don’t want to pay for Blue Apron try to game the system by signing up for a first free meal and never registering for a subscription. It seems like the product is simultaneously too much and too little effort.
Instead, business consultant Brittain Ladd told MarketWatch that consumers are scrapping meal kit services in favor of healthy, ready-to-eat dinners, which provide a similar sense of health consciousness without the cooking.
