Blue Apron becomes a penny stock, trading under $1 for the first time(markets.businessinsider.com)
markets.businessinsider.com
Blue Apron becomes a penny stock, trading under $1 for the first time
https://markets.businessinsider.com/news/stocks/blue-apron-stock-price-tumbles-below-1-first-time-2018-12-1027818501
327 comments
After 10 years of marriage, my wife thought it would be helpful for me to start cooking, as she was getting stressed out with our 2 years old.
We used Blue Apron as the starting point.
I can't tell you how much time we save in planning meals and trips to the store. My wife doesn't have nag me about what I what I want for the week's dinner. The quality of the food and the time saved is well worth the price. I know there are some disadvantages about Blue Apron such as waste, carbon food print etc...
Cooking with Blue Apron is now extremely relaxing for me as I cook and just tune into NPR or teach my son to cook. Out of 100 meals I would say that we only had maybe one that was mediocre.
I suspect Blue Apron will survive as it will probably be taken over or bought out. It's kinda the leader of the pack and the market will eventually consolidate. It also helps that I might have helped I bought about $1000 discounted gift cards at Costco.
We used Blue Apron as the starting point.
I can't tell you how much time we save in planning meals and trips to the store. My wife doesn't have nag me about what I what I want for the week's dinner. The quality of the food and the time saved is well worth the price. I know there are some disadvantages about Blue Apron such as waste, carbon food print etc...
Cooking with Blue Apron is now extremely relaxing for me as I cook and just tune into NPR or teach my son to cook. Out of 100 meals I would say that we only had maybe one that was mediocre.
I suspect Blue Apron will survive as it will probably be taken over or bought out. It's kinda the leader of the pack and the market will eventually consolidate. It also helps that I might have helped I bought about $1000 discounted gift cards at Costco.
"Securities traded on a national stock exchange, regardless of price, are exempt from regulatory designation as a penny stock"[1]
Blue Apron is on the NYSE
[1]"SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 240" https://www.sec.gov/rules/final/34-51983.pdf
Blue Apron is on the NYSE
[1]"SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 240" https://www.sec.gov/rules/final/34-51983.pdf
I feel like grocery stores could easily compete with blue apron for much lower costs. Just ration the food they already have in stock in little packages. Charge a little more than you would otherwise for the employees time picking recipes and combining them into the packages. I would happily use this service at local grocery stores. But compared to grocery stores and cooking from scratch blue apron is too expensive for me.
edit: Blue apron is currently $7.50 - $9.99 per serving. I cook delicious food for myself regularly for less than $4 per serving if I make enough to have leftovers for a day or two. It really seems to me that grocery stores could eat blue apron alive with their lowered costs to provide this same service.
edit: Blue apron is currently $7.50 - $9.99 per serving. I cook delicious food for myself regularly for less than $4 per serving if I make enough to have leftovers for a day or two. It really seems to me that grocery stores could eat blue apron alive with their lowered costs to provide this same service.
I recently subscribed to a different box service, which does all the food prep work for you (chopping/dicing/slicing, making sauces). It generally takes us 20-30 minutes less to prep, cook and clean over Blue Apron. IMO this is the main value prop Blue Apron is missing.
For me, Blue Apron is really only solving for time spent looking up a recipe. In most cases, I'm already going to the grocery store each week. So, where's the value in spending $80/week? If you can shave off the time I spend in the kitchen, that's what I want to pay for. I suspect most people subscribe, love the new recipes they would typically pass over from the internet. And then a month in realize "I'm not saving any time by doing this... I don't want to spend an hour or more in the kitchen tonight... Let's just get take out.".
Aside from that, Blue Apron's fulfillment execution is very wonky. Missing/Bad/Broken ingredients, late boxes (which spoil if not delivered timely), and excessive packing.
For me, Blue Apron is really only solving for time spent looking up a recipe. In most cases, I'm already going to the grocery store each week. So, where's the value in spending $80/week? If you can shave off the time I spend in the kitchen, that's what I want to pay for. I suspect most people subscribe, love the new recipes they would typically pass over from the internet. And then a month in realize "I'm not saving any time by doing this... I don't want to spend an hour or more in the kitchen tonight... Let's just get take out.".
Aside from that, Blue Apron's fulfillment execution is very wonky. Missing/Bad/Broken ingredients, late boxes (which spoil if not delivered timely), and excessive packing.
Thanks to inflation, penny stocks are now stocks that trade under $5.
https://www.investopedia.com/terms/p/pennystock.asp
Also, penny stocks tend to be fairly illiquid with very marginal market cap and tend to trade on OTC/pink sheets and not on major stock exchanges.
So blue apron is penny stockish, but not quite there yet. We'll have to see if NYSE gives Blue Apron the boot.
https://www.investopedia.com/terms/p/pennystock.asp
Also, penny stocks tend to be fairly illiquid with very marginal market cap and tend to trade on OTC/pink sheets and not on major stock exchanges.
So blue apron is penny stockish, but not quite there yet. We'll have to see if NYSE gives Blue Apron the boot.
Blue Apron is a perfect example of a company that has no moat. Anyone could compete with them -- other delivery startups, Amazon, grocery stores, etc.
There is also no obstacle to Blue Apron customers jumping ship to a competitor. That contributes to making a moat impossible, but it also means Blue Apron and services like it are probably going to be commoditized and forced into a race to the bottom on prices, so I wouldn't expect their future profit margins to be very good.
The only way Blue Apron can differentiate itself is by offering better recipes and better customer service than its competitors. But their competitors can easily become equally good at those things.
Overall it's not a good investment because even if the business manages to survive, it won't be able to make very much money for its shareholders. I guess you could buy the shares cheap and hope Blue Apron will be acquired.
There is also no obstacle to Blue Apron customers jumping ship to a competitor. That contributes to making a moat impossible, but it also means Blue Apron and services like it are probably going to be commoditized and forced into a race to the bottom on prices, so I wouldn't expect their future profit margins to be very good.
The only way Blue Apron can differentiate itself is by offering better recipes and better customer service than its competitors. But their competitors can easily become equally good at those things.
Overall it's not a good investment because even if the business manages to survive, it won't be able to make very much money for its shareholders. I guess you could buy the shares cheap and hope Blue Apron will be acquired.
Maybe we're seeing now that burning up hundreds of millions in VC cash to try to acquire users with free meals isn't really a viable business model? After being annoyed hearing them on every podcast I ever listened to for awhile, I signed up for the sole purpose of getting free meals, nothing else. I have a grocery store a mile from my house, I don't need a startup sending me food to cook. I did enjoy the free meals, though! Thank you VCs!
Somewhat OT but do any of these services let you opt into deliveries rather than opt out? As someone who might consider trying out a few meals now and then on a week when I'm not traveling/busy, the menus look appealing, etc. I'd be potentially interested. But I don't want to have to be constantly opting out and/or canceling my subscription (which I'm sure would get messed up sooner or later). It really is a dark pattern that makes me even less likely to use any of these services than I otherwise would.
As someone who's very un-knowledgeable about the stock market - is there something special about the $1 mark? Isn't it arbitrary how the total market value of the company is divided into individual shares?
I once worked for their biggest competitor - HelloFresh - as a door-to-door salesperson and I have to say... the way we were told to pitch to potential customers was terrible. We were told to sign up the customer and then then opt-out of delivery for a period of 5 weeks so the customer forgets that they’re still subscribed. The salespeople - mostly ~20 year olds - were also heavily exploited and the wages and commissions not paid. I’m lucky I got out quick because otherwise they pressure you to stay because most of your colleagues become your friends and they then peer pressure you...
I’ll assume it’s quite similar to BlueApron... but I don’t know for sure...
I’ll assume it’s quite similar to BlueApron... but I don’t know for sure...
I thought about doing some subscription cooking service before but I recently joined the New York Times free 6 month trial and I didn't know/expect how useful their recipe section is. Takes most of the anxiety of choosing what to cook. For those who know how to cook, I highly recommend trying it out and following their weekly/daily suggestions. With this and the grocery delivery services, it doesn't make financial sense to join subscription food services. Though admittedly, I was taught how to cook at a young age so it's easier for me to follow the recipes.
Honestly, it's just a lame business model.
It's sort of like when you see the college kid who doesn't know how to do laundry. It's amusing, but even the most inept and lazy individual doesn't need alot of time to learn how to fold pants. In the food space, if you have the money to have pre-packaged groceries fedexed to your home to save time... why wouldn't you just get takeout?
My wife did a personal chef business with a friend when she got out of school. They would cook meals for dentists and doctors and deliver it. The most insane customers even had clean silverware and plates delivered, and one asked paid a 5x markup for them to go to Williams Sonoma and buy a fully outfitted fancy Thanksgiving dinner, with place settings and all. (ie. "Make it look like the catalog, please")
Blue Apron appeals to some middle ground of harried people, but the customer isn't rich enough to pay a wacky markup for burgers and isn't getting enough done to save a ton of time!
It's sort of like when you see the college kid who doesn't know how to do laundry. It's amusing, but even the most inept and lazy individual doesn't need alot of time to learn how to fold pants. In the food space, if you have the money to have pre-packaged groceries fedexed to your home to save time... why wouldn't you just get takeout?
My wife did a personal chef business with a friend when she got out of school. They would cook meals for dentists and doctors and deliver it. The most insane customers even had clean silverware and plates delivered, and one asked paid a 5x markup for them to go to Williams Sonoma and buy a fully outfitted fancy Thanksgiving dinner, with place settings and all. (ie. "Make it look like the catalog, please")
Blue Apron appeals to some middle ground of harried people, but the customer isn't rich enough to pay a wacky markup for burgers and isn't getting enough done to save a ton of time!
While I enjoyed the trial, the food was great, and the freezer packs they ship with the food have found a new life keeping things in my cooler nice and cold, i can't say that i'm surprised at all. Cancelling the service required jumping through numerous hoops, ultimately requiring me to call them to cancel.
I love Blue Apron but get how they are not exactly profitable. Almost every single week they leave an item out of my box and the customer support resolution is to credit my account $40... for like a $3 head of broccoli. I am not complaining obviously, but yeah, fix the missing ingredients.
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Hello Fresh is down ~48% since its IPO in July. In that same period, Blue Apron is down ~70%. Blue Apron is doing even worse than the competitors.
How well is papa Murphy’s doing? I found it really odd that I get the ingredients home and then cook again. Now Blue Apron is just making a generic company out of the papa Murphy model. I don’t find it attractive. When I saw that they are going public it just felt like a way to cash out of their short term popularity.
I stopped using blue apron because I can't stand having a subscription to everything. I travel with some frequency and it's just a hassle to have to plan that ahead. All I want to do is order a box for next week without thinking about when I can cancel again for the following week.
When the economy goes down, the first thing we stop spending money on is luxury stuff. See it as a sign.
I considered trying one of these but I realized I'm not going to get all my at-home meals (or any drinks, snacks, paper towels, etc.) from them. Which means I'm still making a weekly trip to the grocery store. So where's the convenience?
Blue Apron customer here, family of two, three meals a week for the past two years.
I like BA a lot, but I don't see anything about BA that is unique to them. There's probably 5 other options in my area. I stick with BA largely due to momentum.
For those curious:
Pros:
- No food waste. Grocery shopping inevitably resulted in large amounts of food getting tossed due to expiration (or even space concerns).
- "Forced" variety. I have had a _ton_ of meals and ingredients I would have never gotten if I wasn't doing BA. Things I've never heard of and wouldn't know to ask for. Now that I know of them, I bring them into some of my non-BA cooking too. Part of this is just just breaking habits. Before BA there were about 10 meals I was making a lot - I liked them I know how, etc., this meant I was only eating the ingredients in these meals which was probably not "complete nutrition."
- Learning a few "tricks." While the actual BA meals are cook by numbers, the specific steps often contain general purpose info. Random example: Before BA I never cooked with garlic, just never thought of it, but most BA meals use it. Now I use more garlic when I cook non-BA meals.
- Portion control. If I cook from a supermarket (and buy in super market portions) I inevitably make more than a meal, and inevitably _eat_ more than a meal. BA means I make and eat the suggested amount.
- No grocery shopping. I'm not a big fan of shopping and my wife hates grocery shopping, not having to do it is a plus.
- Less eating out. BA isn't cheap, but it's cheaper than most restaurants I'd go to. Having already paid for BA meals encourages eating them at home.
- Fast. The food isn't easier to prepare and certainly doesn't cook faster, but having exactly the right ingredients all together means I don't have to spend time assembling (or googling alternatives when I realize I forgot something).
- Fun. I look cooking, and I like BA cooking. Probably not for everyone, but there you have it.
Cons:
- Not cheap.
- Bummer when you don't like the meal. (Rare, but it happens.) Worse when you _know you're not going to like it_ but it was you're only option. Example: The texture of kale bugs me and sometimes you can't get a meal without it.
- Doesn't scale for guests.
Note: I don't buy the argument that BA packaging is bad. It's almost all recyclable. But I live in an area that makes recycling pretty easy so that might not be generalizable.
I like BA a lot, but I don't see anything about BA that is unique to them. There's probably 5 other options in my area. I stick with BA largely due to momentum.
For those curious:
Pros:
- No food waste. Grocery shopping inevitably resulted in large amounts of food getting tossed due to expiration (or even space concerns).
- "Forced" variety. I have had a _ton_ of meals and ingredients I would have never gotten if I wasn't doing BA. Things I've never heard of and wouldn't know to ask for. Now that I know of them, I bring them into some of my non-BA cooking too. Part of this is just just breaking habits. Before BA there were about 10 meals I was making a lot - I liked them I know how, etc., this meant I was only eating the ingredients in these meals which was probably not "complete nutrition."
- Learning a few "tricks." While the actual BA meals are cook by numbers, the specific steps often contain general purpose info. Random example: Before BA I never cooked with garlic, just never thought of it, but most BA meals use it. Now I use more garlic when I cook non-BA meals.
- Portion control. If I cook from a supermarket (and buy in super market portions) I inevitably make more than a meal, and inevitably _eat_ more than a meal. BA means I make and eat the suggested amount.
- No grocery shopping. I'm not a big fan of shopping and my wife hates grocery shopping, not having to do it is a plus.
- Less eating out. BA isn't cheap, but it's cheaper than most restaurants I'd go to. Having already paid for BA meals encourages eating them at home.
- Fast. The food isn't easier to prepare and certainly doesn't cook faster, but having exactly the right ingredients all together means I don't have to spend time assembling (or googling alternatives when I realize I forgot something).
- Fun. I look cooking, and I like BA cooking. Probably not for everyone, but there you have it.
Cons:
- Not cheap.
- Bummer when you don't like the meal. (Rare, but it happens.) Worse when you _know you're not going to like it_ but it was you're only option. Example: The texture of kale bugs me and sometimes you can't get a meal without it.
- Doesn't scale for guests.
Note: I don't buy the argument that BA packaging is bad. It's almost all recyclable. But I live in an area that makes recycling pretty easy so that might not be generalizable.
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APRN's Q3 filings are ominous-- although margins are decent at 33%, they've never been profitable and their customer base decreased 25% Sept. 2017 to Sept. 2018.
Loved it but quality problems continued to rise. Quality consistency is core to customer retention.
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Just reverse split: less shares, same market cap = higher price. wow no more penny stock status
Blue Apron, Hello Fresh, Plated, and all the other food prep deliver services are a hack. A disgusting, wasteful hack.
Calling someone using Blue Apron a cook is like calling someone doing a "paint by numbers" a painter. I'm not trying to be a cooking snob but I get really sick of people praising BA/Plated/etc as some amazing concept or a huge time saver. It's neither, it's for people who want food delivery (as in UberEats, Grubhub, etc) with extra steps.
Calling someone using Blue Apron a cook is like calling someone doing a "paint by numbers" a painter. I'm not trying to be a cooking snob but I get really sick of people praising BA/Plated/etc as some amazing concept or a huge time saver. It's neither, it's for people who want food delivery (as in UberEats, Grubhub, etc) with extra steps.
What confused me (and makes me think I've overlooked something) is why nothing more interesting has come along from the supermarkets. In the UK at least, they're all online and deliver - but they all seem to stick to "buy your ingredients and we'll deliver them". I'd quite enjoy one that let you browse recipes and would stick all the ingredients in your basket - but then added some intelligence. e.g. You add the "roast chicken weekend meal" to your cart, and it asks "are you going to eat all that chicken?" For £5 extra would you like to add some bacon, creme-fraiche, tarragon, frozen-pastry & peas to enable you to make a lovely pie on Monday? Or asks "what's in your fridge" - here are some recipes and prices for things to use it up? Could even add some intelligence - I don't like mushrooms, so when recommending a chicken pie and providing a recipe, switches something else into my basket & recipe (leeks are lovely). Or would further adjust the recipe - you said you needed to feed 8 at the weekend, so I picked the larger lump of meat, and have adjusted the cooking time in the recipe. Or "Do you own a pressure cooker, a freezer and have 2 hours free this weekend to batch cook some chilli" Or... basically Blue Apron and the rest seem to be trying to solve a real problem, completely the wrong way.