Blue Apron's IPO is Finally Happening

You’re probably familiar with popular meal-kit delivery service Blue Apron. It has delivered over 159 million perfectly constructed meals to households across the U.S. over the past six years.

Blue Apron offers its customers two flexible plans: the Two-Person Plan and the Family Plan. Customers pick the meals they wish to make each week, and the pre-portioned ingredients are delivered to them in a refrigerated box that keeps all of the ingredients fresh.

For a while now, Blue Apron has been changing up the way people get their groceries, with meal kits intended to provide healthier and more sustainable options for dinner to families across the country — families that may have relied on the convenience of fast food for dinner in the past.

Blue Apron started its business with the understanding that people are busy, but that doesn’t mean they can’t spend an hour preparing a healthy meal together.

Over the decades, families have eliminated the sacred bond that once was the sit-down family dinner, and Blue Apron wants to return its customers to that tradition.

While most people still get their groceries from traditional brick-and-mortar stores, there has been an obvious shift toward retailers bringing food right to your doorstep.

Statista reported that in 2016, 5% of U.S. consumers preferred to shop for groceries online. In total, U.S. online grocery sales amounted to about $7 billion in 2015 and are forecast to rise to $18 billion by 2020.

Consumers are beginning to rely on the convenience of ordering what they need online or through smartphone apps and having that order arrive at their doorstep in less than a day.

I’m guilty of this. Usually, if something I’m ordering online isn’t going to arrive in the next two or three days, I don’t think it’s worth it, and I’ll either go somewhere else to get that quick delivery or decide not to get the item at all.

Amazon Buys Whole Foods

Around the same time that Blue Apron announced it would be making its market debut, Amazon (NASDAQ: AMZN) made its own announcement: It plans on purchasing Whole Foods (NASDAQ: WFM) for $13.7 billion — a clear indicator that the company is ready to get serious about the grocery industry.

That raises a big question for investors who have been waiting for Blue Apron’s IPO: Will the company be able to survive in the same realm as Amazon?

I believe it will. There’s still a lot of speculation on what Amazon will do with its Whole Foods purchase. And if there’s one thing we know, it’s that box delivery services like Blue Apron continue to appeal to consumers.

If Amazon decides to immerse itself in the grocery delivery industry, it will without a doubt bring a lot of convenience to grocery shopping. But that wouldn’t necessarily mean it would be in direct competition with Blue Apron.

Blue Apron offers something different.

It offers seasonal recipes that are simple to make. Customers have the option to pick out the recipes they’d like, and then all of the pre-portioned ingredients are delivered to them. Everything a person needs will be right in front of them — no need to worry about going back to the store or waiting for an item to be delivered because you forgot it. 

Blue Apron offers something more than just groceries… it offers an experience.  

This experience keeps customers committed, a commitment that resulted in the company delivering 4.3 million orders in the first quarter of 2017.

Not to mention, Blue Apron grew its net revenues in 2016 by 133% to an astounding $795 million.

Blue Apron’s IPO and Its Growth Potential

Blue Apron will be the second major consumer IPO to happen this year. The company plans on selling shares in the price range of $15–$17, which would, at the top end of its IPO pricing, give the company a valuation around $3.2 billion, as it aims to raise nearly $600 million.

Unfortunately, Amazon’s announcement could have hindered some investors’ interest in Blue Apron, which could force it to choose a more conservative IPO price.

Blue Apron is expected to start trading on the NYSE on Thursday, June 29, 2017, with the symbol APRN. The underwriters involved with this IPO include Goldman Sachs, Morgan Stanley, Citigroup, and Barclays.

The company is growing, and it isn’t just sticking to food. In September 2015, it expanded its services and launched Blue Apron Wine — a direct-to-consumer wine delivery service that pairs Blue Apron wines with its meals.

It also has Blue Apron Market, which opened up in November 2014 and is essentially an e-commerce marketplace that has a curated selection of cooking tools, utensils, and pantry items recommended by Blue Apron’s culinary team.

The company is moving in a couple of different directions while still doing what it knows best, expanding its business and even further creating brand awareness and loyalty with new and existing customers. 

If customers are satisfied with their meals, they’ll likely end up using Blue Apron Wine and Blue Apron Market to supplement the service they already enjoy.

Not only is Blue Apron constantly working on broadening its product portfolio to develop new brands and new channels that’ll eventually attract new customers, but it is also in exclusive arrangements with over 300 suppliers that deliver high-quality products at affordable prices.

Blue Apron’s growth, reliability, and high valuation make it an appealing buy for investors.

Keep an eye out for Blue Apron’s public offering this Thursday!

Until next time,

Monica Savaglia
Wealth Daily