The Musings of the Big Red Car

Blue Apron v Red Apron

The meal kit business has been frothy and nobody has had a tougher time swimming through the froth than Blue Apron.

Blue Apron came public — raising $300MM — during the same week that Amazon announced the acquisition of Whole Foods. Bad timing, bad luck. That, however, was only the beginning.

Blue Apron — APRN NYSE

The IPO price was low — $10/share — and hasn’t fared well since then with the company being forced to do a reverse 15:1 reverse stock split in order to forestall de-listikng from the NYSE as a penny stock.

If you owned FIFTEEN shares of Blue Apron before the reverse stock split, you ended up with ONE share of Blue Apron after the reverse stock split. [There are A and B shares.]

As you can see, it has been a downward spiral — down 94% since IPO, the third worst post-IPO performance in recorded history — since the very beginning. Today’s stock price was trending downward at $6.75/share.

Give me the facts, Big Red Car

Here are the bloody facts, beloved reader:

 1. Blue Apron was once upon a time a Unicorn. No more.

 2. Blue Apron reports that as of last month it had 550,000 customers down from their peak of 1,000,000 two years ago and a 30% decline from last year.

 3. Blue Apron has dramatically slashed its marketing expenses from 20% of revenue to 10% of revenue — a reduction of 64%. The percentage is higher because the comparable revenue is lower.

Slashed marketing expenses. Reduced revenue. Duh.

 4. The company has tried some Hail Mary marketing attempts with Costco, Walmart (Jet.com), Weight Watchers — none to good result.

 5. The company has replaced its CEO with the former CEO of Etsy, Linda Findley Koslowski. Not to be catty, but Etsy began to do better when she departed the scene. Don’t believe me, look at their chart. The new guy has done a great job.

Co-founder and CTO Ilia Papas also left the company at the same time. Never a good sign.

 6. This is all happening in a market that sees the “meal kit” business growing but becoming commoditized — meaning meal kits in grocery stores are working fine, but the “premium” delivery meal kit business is not. The idea of providing a luxury, top of the line experience is suspect.

The grocery store delivery method is an “instant gratification” experience while the meal kit by mail is not. That may have a lot to do with it — plus the baked in cost of delivery.

So, dear reader, there you have it.

So, Big Red Car, what happens to Blue Apron?

Here is my prediction — Walmart buys it for pennies on the Unicorn dollar and marries it with Walmart groceries like Amazon is doing with Whole Foods.

But, hey, what the Hell do I really know anyway? I’m just a Big Red Car. Be kind to somebody who is not expecting it. It will make you feel good and bewilder the snot out of them.