Blue Apron, the meal-kit delivery company, is undergoing significant changes this year in order to achieve profitability and regain top-line growth by 2024, according to Chief Executive Linda Findley.
Despite these changes, Findley ensures that the customer experience will not be compromised. Instead, Blue Apron’s strategic overhaul will lead to long-term savings and success following a decline in demand caused by the pandemic.
As part of its transformation, Blue Apron has recently sold its production and fulfillment business to FreshRealm. By partnering with FreshRealm, Blue Apron will benefit from the cost efficiencies of FreshRealm’s larger scale and infrastructure. This collaboration allows Blue Apron to pass on these savings to customers and optimize its own overhead costs as an asset-light company, resulting in a leaner organization.
The transaction with FreshRealm is expected to yield financial benefits for Blue Apron starting in 2024. The company aims to achieve adjusted Ebitda profitability by the second quarter of next year.
Through these strategic changes and partnerships, Blue Apron is positioning itself for long-term success while maintaining a commitment to providing high-quality meal-kit delivery services.
Blue Apron Aims for Growth in 2024
Blue Apron, a leading meal kit delivery service, is set to bounce back and return to growth in 2024. The company’s main focus is on enhancing customer retention and optimizing their marketing budget to achieve this goal.
Intelligent Marketing Strategies
Blue Apron has successfully utilized its marketing budget more effectively, resulting in a 30% decrease in the cost per acquisition on a year-over-year basis. Additionally, the company has seen a 25% increase in conversion rates during the same period.
While Blue Apron is expecting net revenue for 2023 to range from $410 million to $415 million, which is slightly lower than the previous year’s figure of $458.5 million, they anticipate posting an adjusted Ebitda loss of $23 million to $27 million.
Second Quarter Performance
In the second quarter of the current year, Blue Apron reported a widened net loss of $61.9 million, equivalent to $9.52 per share. This is in comparison to a net loss of $23.3 million, or $8.22 per share, during the same period last year.
Revenue Decline and Analyst Expectations
The company experienced a decline in revenue, dropping from $124.2 million to $106.2 million in the year-ago period. Analysts had predicted revenue to reach $109.6 million, according to FactSet.
Customer and Order Count
Blue Apron’s total customer count has decreased by 23% compared to last year, currently standing at 267,000. Similarly, the number of orders has fallen by 18%, totaling 1.4 million. However, an increase in average order value to $75.66 and a 21% rise in average revenue per customer to $397 has been observed, primarily due to higher product pricing.
Following the announcement of their financial results, Blue Apron’s shares faced a 7.6% decline in midday trading, reaching $5.23.