The value proposition and convenience drops even further, Greenberg explained, as it’s a fairly pricey service for a meal that still needs to be prepared. “It’s hard to get consumers to stick around,” said Greenberg, especially now that they have the option to go back out to restaurants after months of home cooking. Most recently, Blue Apron tried more niche collaborations via exclusive partnerships with Beyond Meat and Weight Watchers, but those haven’t proven hugely successful in bringing in new customers.

The company has been trying to offset this in various ways. While meal kits don’t use on-demand messengers, shipping fresh ingredients across the country have been known as yet another cost impacting Blue Apron’s expensive fulfillment.

“I don’t see them returning into a growth mode, unless they can suddenly figure out how to appeal to new customers,” Reid Greenberg, executive VP of digital retail and e-commerce insights at Kantar, told Modern Retail. Similar to other booming services, like Instacart and Grubhub, Blue Apron’s economics of delivering perishables don’t add up. And while Covid-19 helped its average order value and conversion rate increase in the past four months, the momentum is not enough to ride out even into the next quarter. Analysts estimated cost-per-customer to be closer to $400 in 2019, based on rising costs of TV and social media ads. Like Casper and other money-losing DTC brands that relied on cheap digital ads to grow, Blue Apron can’t outpace the high customer acquisition costs - reported to be around $94 per customer as of 2016, when it was still private. in flattening the curve and have started to reopen. That was at the start of the pandemic, when Kozlowskie said that at-home cooking was still strong in countries “ahead of” the U.S.

This cautious outlook is in contrast with the lofty expectations Blue Apron had during its last earnings in April, when it predicted a quarantine-related bump. For its third quarter outlook, the company plans to ramp up marketing dollars again, in hopes of attracting new customers, after it scaled back ad spending in 2019. “We generated strong adjusted and free cash flow in the second quarter,” CEO Linda Findley Kozlowski said, which “adds financial flexibility for Blue Apron to continue executing our strategic growth plan.”īlue Apron warned that its arrival at the long-winding road to profitability will likely be short-lived.

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