Meal Delivery Subscription Service Blue Apron Filed for an IPO

Company hopes to overcome past losses to achieve sustainability.

Subscription News: Meal Delivery Subscription Service Blue Apron Filed for an IPO

Source: Blue Apron

On June 1, mail delivery subscription service Blue Apron filed an S-1 form with the U.S. Securities and Exchange Commission (SEC), indicating its intention to take the company public as soon as possible after the request for an IPO has been approved. Goldman Sachs is leading the public offering. Blue Apron, which will use the ticker symbol APRN on the New York Stock Exchange, has not said how much it hopes to raise through the IPO, nor has it priced its shares or how many shares it plans to sell. According to Business Insider, Blue Apron has raised close to $194 million in funding and was last value around $2 billion.

Blue Apron was launched in the summer of 2012 by Matt Salzberg, Ilia Papas and Matt Wadiak. Now the company delivers more than 8 million pre-measured, proportioned meals per month to hundreds of thousands of customers across the country, and they employ thousands of employees. Competitors include Chef'd, Purple Carrot and Martha (Stewart) & Marley Spoon.

Blue Apron is more than another subscription box service though. The company strongly believes in four core values: creating better standards, regenerating land, eliminating the middleman to deliver fresher food, and reducing food waste to create better value. With those values in mind, Blue Apron partners directly with more than 150 farmers to ensure high quality ingredients and by investing in the environment and the communities where Blue Apron subscribers live.

Subscribers can choose from two plans – a two-person plan and a family plan. With the two-person plan, subscribers receive three recipes per week, each serving two people, for a weekly total of $59.94. The family plan offers subscribers two or four recipes per week, each serving four people. The two-recipe option costs $71.92 per week and the four-recipe option costs $143.84 per week. Here are three dishes available under the two-person plan for the week of June 2.

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Subscription News: Meal Delivery Subscription Service Blue Apron Filed for an IPO

Source: Blue Apron

In addition to the meal delivery service, Blue Apron offers a monthly direct-to-consumer wine subscription, which launched in September 2015, and the company started an online marketplace in November 2014 which sells a selection of prep tools, cutlery, cookware and bakeware. Earlier this year, Blue Apron acquired BN Ranch, a premium supplier of sustainable beef, poultry and lamb.

So how is Blue Apron doing financially? Let's look at the financials in Blue Apron's S-1:


Dec. 31, 2014


Dec. 31, 2015

Dec. 31, 2016

March 31, 2017




$165.0 million

$273.4 million

$322.5 million

Net Revenue

$77.8 million

$340.8 million

$795.4 million

$244.8 million

Net Loss

$(30.8 million)

$(47.0 million)

$(54.9 million)

$(52.2 million)

Costs of Goods Sold (excl. depreciation & amortization)

$72.2 million

$263.3 million

$532.7 million

$168.5 million


$14.0 million

$51.4 million

$144.1 million

$60.6 million


  $5.9 million

$31.1 million

$103.4 million

$50.0 million

Product, technology, general and administrative

$21.8 million

$70.2 million

$165.2 million

$63.2 million

So why the big losses? As the company has grown and it has added subscribers, its cost of goods sold, including food costs, packaging, labor, shipping and wine, increased so the company could procure more product. Blue Apron reported that in 2014, one shipping carrier accounted for 14 percent of their total cost of goods sold for the year.

The company reported two other big expense categories that have also steadily increase: marketing and product, technology, general and administrative. Advertising accounts for a significant portion of the company's marketing costs.

Blue Apron reported some interesting customer data. Some of customers were subscribers, but those who purchased wine or items from the online marketplace are also included in the totals. Blue Apron said it considers the number of customers as a key indicator of its scale and growth.


For three-month period ended Dec. 31, 2016

For three-month period ended

Mar. 31, 2017


3.7 million

4.3 million




Average order value



Orders per customer



Ave. revenue per customer



“Our growth will depend in part on our ability to cost-effectively launch marketing campaigns that attract and retain customers and successfully promote awareness of our brand. We use various offline paid advertising channels (such as television, direct mail, radio, and podcasts) and online paid advertising channels (such as digital and social media and email),” said Blue Apron. “We typically complement our paid advertising channels by offering promotional discounts to new customers for use on their first Order, a practice we began emphasizing in 2016. We also attract new customers by word of mouth, including through our customer referral program, through which certain existing customers may invite others to receive a complimentary meal delivery. We intend to continue investing in marketing and offering promotional discounts to drive customer acquisition. We are also increasingly focused on using marketing to drive customer retention, customer engagement and brand awareness, and to support that effort we have expanded our investment in offline paid marketing.

In addition to marketing, we continue to invest in our products, brand and overall customer experience, each of which further drives customer acquisition, customer retention and customer engagement and encourages repeat purchases. We also engage with our customers through social media, our website, blog, in-box content and mobile application, including through how-to videos, visual imagery and original stories about our ingredients and suppliers, to deepen our customers' connection with our brand. Our flexible platform allows customers to interact with us by either actively managing or passively receiving orders, and we believe this flexibility drives higher customer engagement, loyalty and retention over the long term.”

Regarding its customer base, Blue Apron said this in the prospectus, “Cost per Customer of $94. The chart above also illustrates that, while we derive significant revenue from those Customers that continue to make purchases from us, over time our Customers on average order less frequently or sometimes cease ordering, as evidenced by the declining increases in cumulative net revenue per Customer over the time intervals presented.”

Insider Take:

We're not going to make a prediction about the success or failure of the IPO, but it Blue Apron has what seems to be a premium product that a growing number of customers are interested in. In the short-term, the company needs to get its costs under control, and in both the short and long-term, it needs to work on customer retention. We'll watch the IPO closely to see how Blue Apron fares.We'd love to see it become successful and use what its learned about its customers to improve retention and grow its customer base.