According to market research firm Packaged Facts, the US meal kit delivery services market is estimated to grow to $1.5 billion in sales this year. The researcher predicts that the industry will grow to a multi-billion dollar market over the next five years. New York-based Blue Apron (Private:APRON) is estimated to be the market leader in the industry and analysts believe that the company is now gearing to go public.
Blue Apron’s Financials
Like other food kit subscription services, Blue Apron offers multiple meal plans to choose from. Subscribers can choose from a two-person plan, which is priced at $59.94 a week for a three-meal delivery schedule or a family plan, which is priced at $139.84 a week for four meals for a family style meal for four. The company does not disclose detailed financials or user statistics, but it has reported that it does make money on all the boxes it supplies. Analysts estimate that after earning revenues of nearly $3 million in 2013, the company was trending to revenues of $70 million in 2014. In 2015, it had claimed to be delivering 3 million meals a month, which translated to at least $324 million in annual revenues. In May this year, analysts estimated Blue Apron to be delivering 8 million meals a month, which translates to revenues of at least $960 million for the year.
It remains venture funded and has raised $194 million in funding so far from investors including Jason Finger, BoxGroup, Bessemer Venture Partners, Stripes Group, Fidelity Investments, Peak Opportunity Partners, Joseph N. Sanberg, First Round, Alan Gould, Eric Gould, and Nat Turner. Its last round of funding was held in June last year when it raised $135 million at a valuation of $2 billion. In April 2014, it was valued at nearly $500 million.
Blue Apron’s Increasing Competition
Blue Apron is not alone in the quest for the consumer’s dinner table. There are several other existing players like Plated, Chef’d, Hello Fresh and Munchery, to name a few, that offer similar services. But the market also is witnessing a slew of interesting names joining the foray. Recently, The New York Times announced a tie-up with food kit delivery company Chef’d to offer similar services. According to the agreement, subscribers will be able to offer meals from Chef’d based on recipes featured in the NYT’s cooking section. NYT expects the meal kit service to become at least as big as its travel unit. Such agreements aren’t new to the industry though. Last year, Chef’d had entered into a similar agreement with Men’s Health.
Besides media companies, there are other Internet giants who are evaluating the industry. Earlier this year, Amazon (NASDAQ:AMZN) announced its tie-up with Tyson Foods (NYSE:TSN) to create a meal kit service to be sold through Amazon Fresh. The meal kits will be sold under the name Tyson Taste Makers and will use Amazon Fresh to source and deliver ingredients to the subscribers. Amazon’s might could end up being a cause for concern even for industry leaders like Blue Apron.
Other contenders include traditional retailers like Stop & Shop, which owns the grocery delivery service Peapod. Stop & Shop has announced plans to expand into the prepared meal kit segment to help grow its private label sales.
Meanwhile, Blue Apron is expected to be planning an IPO this year. The company has not disclosed details, but analysts estimate that it is planning on going public at a valuation of nearly $3 billion. Some even believe that if Blue Apron does not list, it could well end up getting acquired by some of these big players wanting to enter the market.