Businessmodel of Blue Apron

Customer Segments

Blue Apron’s subscription meal services are aimed primarily at young professionals and families with working parents. These demographics normally have less time to shop for ingredients themselves but are more likely to be interested in cooking meals from scratch. These demographics are also more likely to have enough disposable income to afford subscription services.

The Blue Apron service also attracts more health conscious customers who are interested in the provenance of their ingredients and require a healthier alternative to traditional food delivery services. The Company addresses these customer needs by using fresh ingredients sourced from local producers and providing set portion sizes.

Blue Apron’s subscription meal plans are currently only available in the US, where it primarily serves customers living in urban and suburban areas. The Company does not have any immediate plans to expand its services internationally.

Value Propositions

Blue Apron’s most obvious value is that its subscription service removes the need for customers to spend time sourcing their own ingredients and organising their own meal plans. It also helps customers to ensure that their ingredients are sustainably sourced and that they support local and family-owned businesses.

One of Blue Apron’s key values is that, by providing only the necessary ingredients in the necessary quantities, it helps to reduce food waste across the US. Blue Apron ensures that its customers receive a variety of recipes, promising not repeat any meal in a single year, and can cater to customers with specific dietary requirements.

Blue Apron’s subscriptions are also reasonably priced in comparison to services provided by its major competitors.

Channels

Customers can sign up for a Blue Apron subscription, make purchases in the Blue Apron store and download recipes through the Company’s website at www.blueapron.com. The Company also offers a mobile app for iOS platforms, that allows users to watch how-to videos, receive cooking tips and read about specialty ingredients.

Customer Relationships

Blue Apron customers can subscribe to the Company’s meal plans directly from its website on a self-service basis. Users can also make changes to their profiles and accounts through the Blue Apron website and mobile app without interacting with any sales representatives.

The Company’s wine subscription service and online store are also accessible on a self-service basis. Blue Apron customers are provided a range of support resources via the Company’s Help Centre, which includes FAQs and Guides. Users can also access cooking tutorials, recipes and tips via the Blue Apron mobile app. If customers require more personalised care they can reach the Company’s support staff through an online contact form.

Additionally, Blue Apron interacts with customers through its Facebook, Twitter, Instagram and Pinterest accounts.

Key Activities

Blue Apron’s principal business activity is its food delivery and meal plan service, whereby it sources produce and ingredients which it sends in the correct amounts for customers to cook specific recipes. It offers meal plans that cater for two people or for families on a subscription basis, priced per week.

The Company manages a network of local suppliers that ensure its ingredients are sources sustainably. Blue Apron also offers a similar wine subscription service under which customers can pay a fixed monthly fee in return for receiving 6 bottles of wine per month.

Additionally, the Company operates an online store where its customers can purchase cookware, wine, cookbooks and other kitchenware products.

Key Partners

Blue Apron’s key partners are producers, farms, and importers. The Company primarily deals with small-scale producers and family-run businesses, sourcing its ingredients as locally as possible. The Company lists a number of its recent partners on its website, which include small-batch pasta manufacturer Severino Pasta, artisanal noodle maker Sun Noodle, cattle ranching cooperative Country Natural, goat and cow dairy company Vermont Creamery. Blue Apron has also partnered with Monterey Bay Aquarium’s Seafood Watch to ensure that the Company sources fish in a sustainable with a limited impact on the environment.

Some of Blue Apron’s recipes are provided by professional chefs as part of its Guest Chef Series. These chef partners have included John Adler, the former chef of Brooklyn-based pizzeria Franny’s, and Melissa Perello, the Michelin star chef and owner of San Francisco-based restaurant Octavia. The Company also has a partnership with Bravo Media under which Blue Apron customers are given the ingredients to cook the winning recipes from Top Chef.

In 2015 Blue Apron launched a partnership with food discovery company Yummly, under which Blue Apron recipes are included in the Yummly feed with a link that enables them to register with the Company and receive all the ingredients they need to cook these recipes at home. Blue Apron additionally operates a network of affiliate marketing partners, including websites and bloggers, that earn commissions by promoting the Company’s meal plans.

Key Resources

Blue Apron’s key resources are its software platform, its IT infrastructure, its network of suppliers, its catalogue of recipes, its logistics and warehousing chains, its packaging facilities and its personnel.

Cost Structure

Blue Apron incurs costs in relation to the sourcing of its ingredients, the packaging of its meal boxes, warehousing and distribution of its produce, the maintenance of its platform and IT maintenance and the retention of its personnel.

The Company operates three fulfilment centres in the US, where ingredients are sorted, portioned and packaged, which incur operating costs. It also accrues costs in relation to the delivery of its packages, which appears to be outsourced to a third party provider.

Revenue Streams

Blue Apron’s primary source of revenue is it subscription food delivery service. Users are able to register for weekly subscriptions priced by the serving. The Company’s basic subscription provides three meals every week for two people, priced at $9.99 per serving and amounting to $59.94 per week. Blue Apron also offers family plans that serve four people, priced at $874 per serving and amounting to $69.92 for two weekly meals and $139.84 for four weekly meals. Customers are able to skip any week in which they do not require meals and may cancel their subscription at any time. As well as its meal plans, Blue Apron also offers wine subscriptions, delivering three red and three white or seasonal rosé wines to customers per month at a price of $10 per bottle. Monthly subscriptions are priced at $65.99, including shipping and tax.

In addition to its subscription service, Blue Apron has also launched an online marketplace, accessible through the Company’s website, that sells cookbooks, knives and preparation tools, pans and utensils, wine and general kitchenware, with a view to providing customers with the tools to get the most out of their Blue Apron subscriptions.

While Blue Apron does not release its revenue figures, media reports have made estimates as to annual revenue based on the number of meals it is understood to deliver each month. The Company currently states on its website that it delivers 3 million meals every month. Using this figure and a price of $10 per meal, the Wall Street Journal estimated in June 2015 that the Company generates $30 million per month. Blue Apron has since been reported to deliver more than 5 million meals per month, leading Inc Magazine to estimate that the Company has an annual gross revenue run rate of $600 million. These estimates do not appear to take into account revenue generated by wine subscriptions and ecommerce.