Blue Apron isn't done yet
Meal kit innovator and would-be disruptor Blue Apron continues to shrink, but even as the company’s sales decline and a distribution facility is closed CEO Linda Kozlowski see signs of hope in two key metrics.
Meal kits never did become the transformational force the digital hype machine made them out to be and Blue Apron’s fall from grace is a prime example. The company's sales in the fourth quarter ended Dec. 31, declined 33% to $94.3 million after the company reduced marketing spending to $12.1 million from $20.3 million. The company said the move was consistent with its strategy to focus on marketing efficiency and target high affinity consumers within its direct-to-consumer platform. It also reported a net loss that was smaller than the prior year. In the fourth quarter, Blue Apron said losses totaled $21.9 million compared to a prior year loss of $23.7.
Losing less money is a victory of sorts, but what CEO Kozlowski saw as more encouraging were two key metrics. Average revenue per customer and orders per customer which increased 6% and 7%, respectively, according to the company.
Even so, further cost cuts are needed to right-size the company's expense structure, so plans were detailed to close a distribution facility in the Dallas area and operate from two facilities in California and New Jersey. The company also said it was exploring strategic alternatives, but that’s not exactly news since Blue Apron has been viewed as a takeover target for at least two years.
“We continue to believe that we have the right strategy to drive our resumption of growth as we work to launch additional new capabilities and test new product offerings,” said Kozlowski. “Our strategic alternatives process, together with our cost optimization initiatives, is intended to best position the company for the future, including to support our growth strategy. These efforts reflect the commitment of the Board, management and myself to doing what’s in the best interest of the business, Blue Apron’s shareholders and other stakeholders.”
She added that in the fourth quarter the company’s teams remained focused on pursuing a previously announced three-pronged strategy to drive revenue and customer growth by engaging more consumers that have the best customer characteristics; offering greater menu choices and flexibility in products and services; and scaling marketing efficiently.