The case discusses the successful journey of subscription-based meal kit delivery startup Blue Apron. Founded in 2012, Blue Apron is one of the fastest-growing food delivery businesses in the US. The company adopted a unique business model by mailing perfectly portioned, pre-packaged ingredients and recipe cards to home cooks in need of handholding. Instead of shipping out finished meals, Blue Apron let its customers be the chefs, delivering recipes and fresh ingredients to people all over the US. Though the company was profitable in just the third quarter of 2016, its growth was impressive. In 2016, Blue Apron generated revenue of about US$795.4 million by delivering about 8 million meals per month to customers. However, the meal kit delivery startup faced some challenges as it accelerated into a bigger company. One of the biggest challenges was the cost of attracting new customers and the retention of existing customers. The company also had to face some operational challenges due to its broader product expansion. Moreover, intense competition and Amazon’s plan to launch its own meal kits made things difficult for Blue Apron. It remains to be seen how Blue Apron will survive the challenges that come its way.
PayPal (7 USD)
The case is structured to achieve the following teaching objectives:
Understand the reasons why Blue Apron succeeded initially in the meal kit delivery industry in the US
Appreciate the difficulties in transforming a new concept to a mainstream product
Understand the issues and challenges the company faced and explore new ways to combat the challenges
Analyze future prospects of the meal kit delivery service in the US