The Biggest Brands Also Restart Again

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Think about how quickly the world around us changes 🧐 Netflix reshaped entertainment, Uber transformed transportation, and Blue Apron brought meal kits to the masses.

Look at how delicious this looks 🤤

It was a bold idea to turn cooking into a simplified experience for busy lives. But like many great stories, Blue Apron hit turbulence.

Competition, high costs, and a dip in customer interest put them on the ropes. Yet, the brand did not quit 😣 It fought back, adapting to new customer needs and proving that resilience and creativity can rewrite any script.

What problems did Blue Apron exactly face, and did it overcome them?

Let's see!

Blue Apron is a pioneer in the meal kit delivery industry. Launched in 2012, it simplifies home cooking by delivering pre-portioned ingredients with easy-to-follow recipes.

The brand initially was popular among urban millennials who valued convenience, and it stood out by offering high-quality, sustainably sourced ingredients.

By 2017, it had delivered over 159 million meals and had close to 1 million customers. This made it a market leader in the meal kit category.

It became so successful that it launched an IPO (Initial Public Offering) in 2017 at a valuation of $1.9 billion​. However, after its IPO, Blue Apron struggled with problems.

Crisis Context

Blue Apron faced a crisis starting around 2018. Between 2017 and 2022, its customer base shrank drastically, from over 1 million subscribers to just 298,000 in Q4 2022. That was a drop of more than 70%.

Revenue declined by 2.5% in 2022, reaching $458.5 million, and the company consistently reported net losses totaling $109.7 million in 2022.

Key issues included:

1. High customer churn:
   Many subscribers canceled their plan after trying the service. That was either because of high prices or limited menu variety compared to its competitors. Blue Apron's failure to keep pace with consumer expectations played a role.

2. Operational strain:
   Scaling operations were costly. Logistics, packaging, and food waste management added to rising overheads. The financial structure remained fragile despite introducing price hikes in 2021 and 2022.

3. Market saturation and competitor growth:
   Companies like HelloFresh gained market share with aggressive marketing and flexible offerings, leaving Blue Apron struggling to differentiate itself.

4. Economic challenges:
   Inflation and changing consumer behavior post-pandemic affected demand. Many opted for budget-friendly alternatives or cooking without meal kits (one of the reasons people canceled their subscriptions).

5. Failed IPO expectations:
   When Blue Apron went public in 2017, its stock price plummeted from $10 at launch to below $1 by 2019. That worried all investors about the brand's growth.

All these factors combined forced Blue Apron to reassess its strategy, focusing on menu innovation, partnerships (e.g., DoorDash), and targeting core customers, but the crisis highlighted how the brand underestimated evolving market dynamics​.

Crisis Management

Blue Apron faced notable challenges after its IPO in 2017. To address these issues, the team focused on a multi-pronged crisis management strategy.

1. Revamping marketing strategies

Blue Apron shifted its marketing approach to focus on high-value customers who would remain loyal. They stopped spending more on digital ads for broad customer acquisition.

The company reduced its marketing budget to $14 million per quarter, around 10% of its revenue. That lowered customer acquisition costs and prioritized customers who could provide a one-year ROI.

By targeting only 30% of its highest-value customers, Blue Apron improved customer retention and reduced churn​ rates.

2. Simplifying operations

The company identified inefficiencies in its supply chain and logistics as critical barriers to profitability. So, they invested in structures to boost delivery speeds and reliability.

For example, they introduced same-day delivery in key markets like the Bay Area, where customers could receive meal kits within hours. This approach competed with grocery stores selling on-the-spot meal kits​.

They also studied customer data to align inventory with demand. This approach helped in ingredient sourcing and waste management while maintaining product quality and cost.

3. Diversifying revenue through partnerships

Blue Apron looked for partnerships to expand its reach. They collaborated with Weight Watchers (now WW) to offer customized meal plans.

Also, alliances with other brands increased their visibility and customer options. These efforts allowed Blue Apron to diversify its products and attract niche customer segments​.

4. Leadership overhaul

Appointing Linda Findley Kozlowski as CEO in 2019 marked a turning point. With experience guiding companies like Etsy, Kozlowski stressed sustainable growth and operational efficiency.

Under her leadership, Blue Apron focused on financial discipline and cut quarterly losses from $23 million to $5 million within a year​.

By systematically addressing every challenge, Blue Apron created a more stable foundation for growth while competing in the meal kit industry.

Recovery Process

Blue Apron implemented a multi-faceted recovery plan to regain its financial stability and customer trust after significant losses and subscriber declines. Here’s how the company navigated this phase:

1. Introduction of the Next Course Strategy

In 2022, Blue Apron launched the Next Course strategy to drive sustainable growth, profitability, and shareholder value. The strategy focused on three pillars:

• Customer-centric growth: They improved customer experience with curated meal options.

• Scalability: They built a flexible platform for operational efficiency.

• Sustainability: They aim to achieve carbon neutrality and integrate environmental, social, and governance (ESG) goals.

The company targeted achieving adjusted EBITDA profitability by 2023 and positive free cash flow by 2024, with $700 million in revenue from 500,000 active customers.

2. Operational Adjustments and Partnerships

Blue Apron improved its operations through:

• Subscription model revisions: They offered flexible meal plans and discounts for its PLUS members to draw young people and families.

• Fulfillment efficiency: They improved logistics and fulfillment center performance to lower costs.

• Partnerships: They expanded beyond meal kits by collaborating with brands to offer complementary products.

They introduced product variations through collaborations, like premium and customizable meal options, ready-to-eat add-ons to target convenience-focused consumers, and collaborative offerings, such as recipes created with guest chefs.

3. Diverse Marketing Efforts

To expand its audience, Blue Apron used:

• Influencer marketing: They collaborated with influencers on YouTube and Twitch. This approach helped them reach niche audiences, mainly through micro-influencers.

• Traditional advertising: They invested in TV, radio, and direct mail campaigns to reach broader demographics.

• Performance-driven campaigns: They focused on conversion metrics, using discount codes to drive new customer acquisitions.

Notable Campaigns

Blue Apron has executed several marketing campaigns to improve its brand presence and drive customer engagement. Some notable ones are:

• Influencer Marketing Campaign:

Blue Apron collaborated with 92 influencers across platforms like YouTube, Instagram, and Twitch to promote their meal kits. For example, here’s a post the brand did in collaboration with a fitnes influencer:

lisabreckenridge

View more on Instagram

Here’s another one it did with a non-profit organization to promote eco-friendliness:

Influencers shared authentic content, such as cooking tutorials, and they gave a unique promo code for two free meals to drive conversions and engagement.

• 2022 Brand Campaign

After a four-year gap, Blue Apron launched a fresh campaign with a dual focus.

Being a Hero emphasized how the service simplifies meal preparation and brings out the cook in everyone, while Expect the Unexpected highlighted unique recipe features.

Here’s Being a Hero campaign:

These campaigns were on TV, online, and digital ads to target diverse customer segments by increasing awareness, broadening the customer base, and improving the customer experience​.

Conclusion

Blue Apron's journey is a powerful example of resilience. Despite setbacks from the competition and operational struggles, it depended on customer-focused innovations, sustainable practices, and cost-control strategies. Today, it continues to rebuild with diversified offerings and long-term goals for profitability.

Can you answer any one of these?

1. How can you balance acquiring new customers while retaining existing ones in a highly competitive market?

2. What innovative steps can Blue Apron take to regain its position as a market leader while managing costs and improving customer loyalty?