Dive Brief:
- Meal kit delivery service Blue Apron recently kicked off a "Best of the U.S." virtual road trip, offering recipes for its meal kits that reflect select U.S. cities. The tour started with Philadelphia in March, according to the company website.
- Two Blue Apron chefs have created recipes unique to major U.S. cities for the eight-week culinary experience, offering subscribers new tastes and the opportunity to learn about food cultures throughout the country. Recipes include a pimento cheese patty melt from Nashville, Italian beef sandwiches from Chicago and chicken-fried steak from Austin.
- In addition to Philadelphia the tour includes flavors from Washington, D.C.; Nashville; New Orleans; Austin; Chicago; Portland, Oregon and a final "stop" in San Francisco.
Dive Insight:
Blue Apron has been struggling recently. The meal kit pioneer posted a year-over-year loss in net revenue for 2018, primarily due to a loss in customers, and its stock price recently dipped below $1 per share.
But Blue Apron is not alone in its struggles, with a number of meal kit companies experiencing uncertainty in an industry that has been called unsustainable. Competing meal kit service Chef’d shut down unexpectedly and then reopened as an in-store meal kit brand after True Foods acquired it. Last week, Albertsons announced it was temporarily pulling its Plated meal kits from Boise store shelves.
The good news for Blue Apron and other meal kit makers is that nearly 100 million Americans still want to try meal kit services. According to a Nielsen report, 14.3 million households purchased kits in the last six months of last year, up 3.8 million households from 2017.
Blue Apron's U.S. recipe tour is one way to convert those curious consumers into subscribers. It could boost interest in the subscription meal kit service and entice consumers to sign up for at least two months so that they can take advantage of each city’s offerings. One of the biggest challenges for meal kit companies is coming up with new and fresh recipe ideas that have widespread appeal, and tapping into well-known classics from major cities will pique the palates of customers who want to explore new flavors.
The challenge, of course, is hanging on to those customers once they've signed up. Meal kit companies have a high churn rate, with many subscribers defecting to competitors or dropping the service altogether after just a few months.
Blue Apron isn’t the first meal kit company to take inspiration from a U.S. road trip. In March, Kroger's Home Chef launched a food truck tour in Chicago, with plans to host events in 20 cities nationwide. The food truck events offer customers an in-person experience with cooking demos, free samples and a culinary team to answer any questions about the Home Chef service. The food truck tour will run for six months.
Another recent effort from Blue Apron was its introduction of a new retail line on Jet called Knick Knacks, which bundles sauces, grains, dairy, spices, and step-by-step recipes that customers can pair with Jet’s produce or protein offerings.
Momentum may be shifting in the meal kit market as in-store meal kits win favor with shoppers. Sales of in-store full meal kit offerings rang in at $93 million in 2018 as in-store users jumped by 2.2 million households – accounting for 60% of all meal kit user growth, according to Nielsen. Amazon started offering meal kits at select Whole Foods locations earlier this month, which are portioned for two and can be prepared in under 30 minutes.
