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| Details |
Case Code: CLBS161
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| Case Length: 7 pages |
| Period: 2016-2018 |
| Pub Date: 2019 |
| Teaching Note: Available |
| Subject :Business Strategy |
| Price:Rs.150 |
| Organization :Blue Apron Inc. |
| Industry :Food Delivery Service |
| Countries : United States |
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Blue Apron: Can the Meal-kit Delivery Disruptor Cook up a Turnaround? |
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| The case is about the strategic moves made by US-based meal-kit delivery service Blue Apron to stay in the competitive meal-kit market. The company delivered pre-portioned ingredients required to cook the recipes chosen by customers. With its direct-to-consumer business model and innovative food delivery system, Blue Apron grew rapidly and was all set to make an impact on the specialty grocery chains and restaurants in the US. In June 2017, the company went in for an IPO. Just before that, e-commerce giant Amazon announced acquisition of specialty food retailer Whole Foods. This had an impact on the valuation of Blue Apron because investors interpreted that Amazon would likely focus on e-commerce and grocery delivery. The investors sued the company claiming that they had been misled as its client base squeezed due to its plan to reduce market spending. The company made some changes and brought in consumer products, announced that it would set up a new fulfilment center, and also ventured into new products like cookware and cookbooks. However, with the delay in the commencement of the fulfilment center, costs increased and the company cut spending in areas like marketing and customer services, which impacted top-line growth. Amidst all the problems, Blue Apron witnessed several changes in the top management. The founding CEO quit the organization and the CFO, Brad Dickerson, became the CEO. At the same time, the share price continued to fall, the number of active customers and orders declined, and competition grew stronger. The new CEO needed to address all these challenges before taking the company forward. |
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Issues: |
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- Evaluate the disruption brought by meal-kit services in the food delivery industry
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- Understand the challenges faced by meal-kit delivery services amid increasing competition and changing consumer behavior
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- Understand how changes in the company’s organizational structure can promote growth
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| Introduction |
| Blue Apron Inc. (Blue Apron), the US-based ingredient-and-recipe meal kit service, was founded in 2012 by Matt Salzberg (Salzberg), Ilia Papas (Papas), and Matthew Wadiak (Wadiak) with the objective of delivering ingredients and recipes that would help customers to cook meals at home. Every week, Blue Apron created several original recipes from which customers could select the ones they wanted. Kits containing these recipes and pre-portioned ingredients were then delivered to the customers. Blue Apron delivered two meal plans – one for two people at US$ 59.99 per week for six servings, and another family plan with an eight-serving delivery for four people at US$ 69.92 per week. In addition to its meal plans, the company also sold wine to be paired with the meal offerings, and marketed kitchenware through its online store. It targeted millennials as its key demographic and had a competitive price to match their food spending habits... |
Keywords |
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Blue Apron; Meal-kit services; Disruption; competition; consumer behavior; organizational structure; Turnaround; Strategy formulation; Strategy implementation; Competitors’ strategies
* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US
$16) per copy.
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