The meal kit industry is a booming business, and leading the charge is longtime contender Blue Apron. Blue Apron Holdings Inc., filed for an IPO in June, and is the first in this new industry to go public.
Blue Apron filed for an IPO for up to $100 million, and is being underwritten by finance giants Goldman Sachs, Morgan Stanley, Citigroup and Barclays. The company plans to trade on the New York Stock Exchange under the symbol APRN.
Sun Basket, a competitor of Blue Apron that focuses on delivering organic ingredients as part of its meal kits, has hired banks for an IPO that could take place later this year, according to Reuters.
Blue Apron, despite the growth of the industry and its revenue, is not yet profitable, which could be a problem once it goes public. According to Reuters, it lost $54.9 million last year although revenue more than doubled to $795.4 million. Blue Apron also posted a net loss of $52.2 million for the first quarter of 2017 despite revenue of $244.8 million. According to SFGate.com, “some of the increased loss stemmed from the rising cost of ingredients and from spending on marketing, which jumped 10-fold from 2014 to 2016, to $144.1 million.”
"We have a history of losses, and we may be unable to achieve or sustain profitability," Blue Apron said in its filing with the U.S. Securities and Exchange Commission.
According to Fortune Magazine, analysts have predicted that big grocery companies will look into acquiring meal kit delivery services. Currently, the industries compete, so successful meal kit services like Blue Apron are an attractive proposition and grocery providers like Wal-Mart, Kroger and even Amazon with its new grocery delivery service, who have the bandwidth to take care of fulfillment.
Blue Apron now offers a two-person meal plan and a family plan, starting at $8.99 per serving. The company used to offer subscription plans that were delivered each week, but found that customers were dropping off because they wanted more flexible options and the ability to order one meal at a time. The small meal-kit box, containing fixings for three meals for two people, costs $59.94. Blue Apron also began selling wine that can be paired with the meals.
"Our customers often cook with us multiple times each week, and they trust us to craft delicious recipes and to select interesting, high-quality ingredients to feed their families and loved ones," the company said in the filing. "Hailing from 48 states, our customers span ages, geographies, income brackets and culinary expertise."