Blue Apron Kits Moving into Physical Stores

Following competing meal-kit services, Blue Apron is moving its kits into physical grocery stores, ditching its subscription-only model to expand its user base, The Wall Street Journal has reported.

Blue Apron Holdings Inc. has been hemorrhaging subscribers, reporting subscriptions of 750,000 last month, down by one-quarter compared with a year ago, according to the WSJ. Current CEO Brad Dickerson said he thinks that his company can find more customers via a combination of its subscription service and meals sold in stores or through its website.

The New York-based service has struggled after a lackluster IPO, cutting staff and losing its CEO amid a highly competitive market that's only growing more so as grocers ramp up their private label offerings and/or from partnerships with rival services. Rival service Chef’d, for example, has teamed with Southern California grocer Gelsons and Northeastern food retailer Tops Markets to extend its brand via brick-and-mortar operators, while Bashas’ and Costco have begun offering True Chef meal kits, the latter of which are specifically designed for retail and boast a long shelf life. And Albertsons has outright purchased Plated, expanding the service’s offerings to its own physical locations.

Meanwhile, in the past year, Publix, Walmart, Kroger and other grocers have introduced and/or expanded their selection of meal kits. Even kits that target specific types of solutions are rolling out at grocers: H-E-B has begun selling dinner kits targeted specifically at children, while Publix has introduced solutions designed specifically for preparation in slow cookers.

Meal kits offered through brick-and-mortar food retailers have experienced impressive gains, new research from Chicago-based market researcher Nielsen shows. Sales of in-store meal kits grew 26.5 percent over the past year, reaching $154.6 million, with growth likely attributed to two advantages: They require less commitment than those purchased via subscription-based services, and they offer more flexibility for retailers and suppliers to experiment with components and “levels” of convenience that keep customers coming back. Meanwhile, total brick-and-mortar sales for center store edibles – including shelf-stable, dairy and frozen foods – dipped 0.1 percent to $374 billion during the same period.