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blue apron

My wife and I have been trying to cook more—we’ve been saying this now for over a year since my parents got us a beautiful All-Clad set of pots and pans. Inevitably our schedules get in the way and we don’t have time to get groceries (despite the fact that we live across from Safeway) or to plan a menu.

Enter Blue Apron, a weekly service that delivers fresh groceries in the exact quantity you need for the accompanying recipes. Problem solved. For only $9.99 per person per meal, Blue Apron sends a minimum of three meals for two people each week and is available in most areas across the county. Your choices are limited to the number of servings, vegetarian vs meat & fish, and day of delivery, Tuesday-Thursday.

Here are a few thoughts on what might make the service even more attractive:

More Choices

As of now, from a recipe perspective, your choice is binary, vegetarian or meat & fish. I’ll start with some simple tweaks, keeping in mind that what enables the price to stay reasonable is that Blue Apron is able to buy ingredients in scale by limiting the number of dishes per week and the ability to demand forecast to minimize waste. At a minimum, allow three choices among the six options. Sometimes there’s a choice from the meat & fish menu that I know I don’t really like, and I see something on the vegetarian menu that I’d strongly prefer. Alas, it’s one set or the other. An even better scenario would be to have a fourth and fifth option to choose from for each set. This would still allow for scale advantages, while also enabling an “out” for that dish that doesn’t float your boat. If a customer didn’t have time to make selections, it could just default to a consistent set of three.

Blue Apron is set up as a subscription, where you are automatically opted in to weekly delivery. This is smart in that it’s less work for the customer and increases the likelihood of future sales. That said, it’s not very friendly for the one-off use case. For example, through the referral program, I gave my parents a free week of the service. They loved the product, but my mom, who is recently retired, said that she wouldn’t continue with it because she has time to go to the grocery store and actually enjoys the shopping process. That said, she mentioned that on weeks that she knows will be busy, like when they return from a trip out of town, the service would be great. Currently ordering on an ad hoc basis like this requires that you manually opt out of each week and then have to remember to continue doing this as the delivery schedule only goes five weeks out. In short, it would be helpful if you could put your account in a “paused” status that would allow you to opt in when desired.

Lastly, I would like the option to adjust the quantity for specific meals. We like to entertain, and nights that we are having friends over for dinner can’t be Blue Apron nights because we only need enough for two on the other nights. This would potentially contribute to not skipping a week if other activities, like dinner parties, were planned, and it presents an opportunity for an upsell.

Pre-paid Pricing

I noticed that on the gifting page that a 4 week prepaid subscription comes with a small discount to $9.49 per person per meal. Why isn’t something like this offered to regular customers? I could see this being modeled after SaaS based pricing, or even an Audible.com Platinum membership where if you commit to a year of service and pay up front that you get a discount. Of course a “year” of service couldn’t realistically be 52 weeks, but Blue Apron could analyze how frequently their top cohorts of customers are ordering and use that as a proxy for what would be reasonable. Get 20 weeks of 3 meals for two to be used over the course of a year for $999 pre-paid has a nice ring to it. That’s a 16% discount and a guaranteed customer and free working capital.

Engagement Hooks

Blue Apron is doing a great job of engaging its customers. The level of interaction on their Instagram and Facebook accounts is impressive, but there is opportunity for making the site even more sticky. Start by taking a play from OpenTable and Amazon playbook—ask for a rating and review of each recipe as a follow up. Currently you are able to download a PDF of the recipe and leave comments via a Facebook plugin. Why not include the ability to rate a recipe and leave a review that would live on the site where other customers could reply and vote on its usefulness? This could also serve as a guide for what recipes to continue and which ones to retire. If Blue Apron took my recommendation to expand choices, the ratings could be used to recommend which dishes the customer would be most likely to enjoy.

The subscription nature of the product lends itself to regular use by multiple customers per account—couples, roommates, and families. Currently the direct relationship is between Blue Apron and the person who set up the account, but this misses a big opportunity engage with the other half (or more) of their customer base. Of course it’s possible to share the login information, but I propose allowing multiple individual accounts to be associated with one subscription. I typically end up forwarding the menu preview email to my wife. I’m sure she’d feel more connected to the brand if she were also getting included on relevant communications, and even her own set of referral free meal offers. This also ties back to more engagement with respect to ratings and reviews.

Partnerships

Clearly anyone that has subscribed enjoys cooking. The recipes are accessible to the beginner to intermediate cook as they are generally not very complex and designed for relatively fast preparation. There is an opportunity to partner with some established players, like Williams Sonoma, to produce and co-market Blue Apron branded cooking classes. Something like this could easily be piloted in New York or San Francisco and has the potential to be a great community builder. It could even be positioned as an invite-only benefit for top customers.

As of this writing, we’ve ordered seven times and have really enjoyed it. The large majority of the dishes have been very good, and the misses were more related to our personal taste preferences. Overall, I recommend trying it out.

muncheryMunchery offers a healthy and affordable alternative to restaurant takeout/delivery for Bay Area residents. It has partnered with dozens of personal chefs to prepare gourmet meals, offering a handful of choices for delivery Monday-Friday. Entrees approximately range in price from $9.99-$15.99, which is competitive with many restaurant delivery options. Delivery varies slightly depending on where you are located but costs in the neighborhood of $3.95 as a flat fee. Orders can be placed for same day order delivery by 4pm, and you can choose among one-hour deliver windows. There’s also an option available for cooler drop-off service if you won’t be there to take delivery. The food comes almost ready to eat, with only a quick heating in the microwave or oven required. All-in you can get a nice meal for two for under $30.

I recently tried the service myself, and absolutely recommend it. The order process was simple, delivery was seamless, and the food was tasty. I certainly plan to order again. So how can Munchery encourage repeat orders? Offer subscriptions. Now this idea isn’t new, as it was mentioned in Brenden Mulligan’s TechCrunch piece back in June. I’ll take the concept a step further and suggest some thoughts around how this might play out. I will also preface this with the fact that I don’t know Munchery’s profit margin on the dishes and what delivery costs net out to be, but I imagine that the general modeling of the meal plans could be adjusted to be net positive after a certain number of orders have been placed.

The “Prime” Model – Similar to Amazon Prime, Munchery could charge an annual fee that covers all deliveries. If a customer were to place two orders a month over a year, that would cost approximately $95 in delivery fees. For someone who is interested in repeat ordering, doing so twice monthly as a breakeven point feels attainable. There could also be a bonus item—bread, a cookie, etc—included as a bonus for these members. To limit exposure it could require a certain minimum order amount.

The Monthly Pre-Pay Model – This would involve prepaying for a minimum amount for a monthly (30 day) period and in return for this commitment you get free delivery (again with a minimum order amount) for the duration of the 30 days. Assuming that for this to work something in the neighborhood of two entrees, or around $25/order, a starting point could be a $100 monthly prepayment, which would net out at ordering once a week for two. This would be set to renew automatically.

Munchery already has a built-in group that they could test this against in VIPs from the program they launched in August, in which members get 10% off all orders. Ultimately the people that join one of these plans are going to be brand ambassadors and be the ones most likely to recommend the offering to their friends. Even if the margins get really thin, or at breakeven, Munchery will have loyal cheerleaders, more frequent regular customers, and happy chefs since it will mean more meals sold in the long run.