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Blue Apron (Free Trial)

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Forgot to mention, each meal is about 500-600 calories and they're generally pretty well balanced nutritionally. We find them generous servings, sometimes very generous, so it wouldn't be a great leap to turn this into meals for 3, or two with a leftover plate.

Also, I don't know where they're sourcing their breads, but those have been outstanding so far.
 
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BIATCHabutuka said:
one, great offer.

two, not interested in receiving the free food myself. i don't think you will have much of a problem giving this stuff away though as it looks / sounds great.

three, i am fascinated by the food / luxury food business almost as much as the plastic business.

four, i am bored tonight and not getting laid so lets break down this business with some random thoughts.


9.99 a plate for 6 total meals is $60 a week for those 6 meals.

i like the price point for the market they seem to be targeting. to get this variety / perceived quality you are paying more than $10 for the ingredients, not getting the variety of ingredients, and having leftover stuff go bad. i can see this having potential to lower the total cost for a customer and increasing the variety of foods, which is important to some people.

i would wonder how they make their packages up. if i was a family of five, those 6 meals wouldn't work. if i was a family of one, i probably wouldn't want doubles in the same week.

as a customer I would like access to all the menu options available and then pick my own meals out with the option of letting blue apron pick any i don't specify

to sell this to me, i would tweak it. i like the idea of having a few meals to cook per week with the variety. i would be more willing to pay to have my work lunch packed for me a couple of times a week too without any effort on my part. as in already brown bagged in the box, i just throw it in the fridge and grab and go as needed.



so the business is generating $60 a week off an account like this.

start with the variable costs always

shipping has to be at least 5 bucks or so, maybe even 10.

the box plus the refrigerant (dry ice?) has to cost at least a dollar, maybe even 2 or 2.50.

food and packaging has to be their largest cost. looking over what you list and not knowing the portion sizes i still don't see any way you are buying the food at less than $2.50 per plate. so something higher than that. maybe you are around 5 bucks food / packaging cost per plate. 5 may be more than i would want to pay to offer at 10 like this though so maybe it is 4 per plate. who knows.

labor is probably minimal. say you pay a guy $20 an hour to take the food how it arrives (ideally in the box quantity packaging already / prepacked) and break it down into individual shipments. i could probably get that guy to pack at least 30 boxes an hour and have them ready for ups / fedex to pick up at the end of the day. that is $1.50 a box. i bet they are doing it for no more than 50 - 75 cents a box.

take all these variable costs and you are looking at 10 to ship, 2.50 box and refrigerant, $5x6 plates = $30 food cost, and 75 cents labor. call it $43.25 variable cost for a variable margin of 16.75 per box. sounds reasonable to me.

now this blue apron has fixed costs too. warehouse (unless they are drop shipping which doesn't sound like a local farmer type of thing), utilities, management, stuff like that. marketing looks to be minimal other than the word of mouth with free boxes. that costs money though as does marketing people, sales people, and other talentless types. say 10% of the revenue is going to these type of fixed costs too. Another $6 in cost.


take all those wild assumptions and you are basically at $49.25 per box that is sold for $60. maybe making 20% margin here.


as for the consumer, i think they may receive more than $60 in value, and if so then this should be wildly successful. if they don't receive $60 in value, they won't be.

consumer is getting the value of the food. at 5 per plate that is 30 bucks to start with. the box, shipping, other packaging, and labor are waste to the consumer and have no value. they are his trash.

i honestly doubt that the consumer would get the same food at the same cost. it is tough to buy 2 potatoes at a good price for a consumer, but easy for blue apron to buy a whole buttload of them and ship two out in each food box. some economy of scale too. also blue apron has the ability to create demand in certain foods that may not have it otherwise (useful if i am a kumquat producer invested in this business perhaps). i definitely see this as saving the consumer some spoilage too. i have no problem assigning a consumer value of $40 to the producer cost of $30.


now the fun one, i value my time as a consumer at near zero. i can always make time to do something i want to do and i only get paid to work, not to fix my own meals.

i am probably in the minority there.

the consumer is saving the following in the time category.

shopping time and shopping expense (gasoline)
prep time
menu planning time

the consumer also gets the following intangible benefits from this service

food variety
cooking & food education
more free time to do other things you wouldn't have time for but for the time savings here
the excitement of getting something in the mail
the surprise of not knowing what type of food you are getting


if the customer values the time / intangibles at the gap from food cost to their out of pocket cost, this business will do very well. if not, it will need tweaked.

the food delivery business is a tough nut to crack. these guys aren't trying to get cheetos out to the welfare recipients though and are targeting the food bling crowd.

if i had to guess this is a group of small farmers that met up at a 4H type of thing or a farmers market and started this as a venue to move their marginal capacity to higher paying end user than their normal product outlets.


me, i think they will do alright. i'd feel better if their total costs were somewhere south of $42 on a $60 box.
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Supply chain major that loves looking at things like this. Was trying to go through it in my head myself as I read through, but this covers it pretty well. Very very interesting.

Not interested currently, but I will keep my eye on this. Thanks C-dog!
 
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Doing a bit of research, not available everywhere. Makes sense for freshness.

blue-apron-ship-zones-74ca3a08e6fade7250fe1adfc00c8181.jpg
 
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FYI - review last year from NY Times of Blue Apron and similar services.

Do the Dinner Kits Deliver?
By JULIA MOSKIN
Published: February 12, 2013

THE TWO WEEKS I spent cooking dinner from the kits available in New York City were surprisingly pleasant. As a veteran of the scramble to feed a family of four after work, I found it restful to bypass the stress of choosing a recipe at work, mentally mapping the ingredients (is there still some chicken stock in the freezer?) and sprinting through the market on the way home. . .
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http://www.nytimes.com/2013/02/13/dining/testing-whether-the-kits-deliver.html?_r=0
 
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