Meal-Kit Service Blue Apron Files for IPO

Blue Apron, a meal-kit-delivery service dedicated to making “incredible home cooking accessible to everyone,” has filed preliminary documents for an IPO.

The largest company in the meal-kit-delivery sector, Blue Apron has not been profitable, and it intends to change this by raising up to $100 million in the IPO. While it has seen net revenue grow from $77.8 million in 2014 to $340.8 million and $795.4 million in 2015 and 2016, respectively, it also has suffered net income losses: $30.8 million in 2014, $47 million in 2015, and $54.9 million in 2016, its filing with the U.S. Securities and Exchange Commission reveals.

Blue Apron acknowledged the profitability issues among its risks, noting that it has had a history of losses, and it may be unable to achieve or sustain profitability. Additionally, it acknowledged its limited operating history and novel business model, which can make it difficult to evaluate future prospects and risks and challenges it may encounter.

Despite the struggles, Blue Apron still points to several strengths it believes will help it succeed in the saturated market, including a powerful and emotional brand connection, superior products at compelling values, constant product innovation, attractive unit economics, proprietary technology and data. Its growth strategy is to increase market penetration with its core product, expand its core product to fit more lifestyles, broaden its product portfolio, develop new brands and channels, and even expand internationally.

Still, many of its competitors arguably can claim many of the same strengths and strategies, given how saturated the kit-delivery market has become. Already, it competes against other services such as HelloFresh, Home Chef, Plated and PeachDish.

Even grocers, which see these services as a threat to their own business, have been jumping on board with meal-kit delivery: In the past month alone, Kroger, Publix and Peapod have begun their own services, while Midwestern grocer Coborns, through its CobornsDelivers service, has expanded its own line of meal kits available for delivery. Other grocers offering meal kits include Giant Food Stores, with its Fresh Meal Kits, and Whole Foods, which partnered with Purple Carrot – a service offering kits containing only plant-based recipes and ingredients – to sell its offerings.