In a prospectus filed with the SEC ahead of an initial public offering (IPO), Blue Apron notes explains that it has “experienced net losses in each year since our inception,” and anticipates that its operating expenses and capital expenditures “will increase substantially in the foreseeable future” as it continues to build out its operations.
However, it also highlights its "attractive unit economics," noting that, "We benefit from favorable customer acquisition costs due to our strong customer relationships and engagement.
"Of our customers for the fourth quarter of 2016, 39% were acquired through our customer referral program. Once we have acquired a new customer, we have historically had efficient payback periods on our marketing expenses due to the cumulative revenue that we have generated from these customers... During 2016, 92% of our net revenue was generated from repeat orders."
It added: "As we have continued to scale our business, grow our direct supplier relationships, and introduce increased automation into our fulfillment centers, we have become more cost efficient."
The company – which was incorporated in Delaware in December 2011 under the name Petridish Media and changed its name to Blue Apron in August 2012 - also spelled out how much it is spending on marketing ($14m in 2014, $51.4m in 2015 and $144.1m in 2016, representing 17.9%, 15.1% and 18.1% of net revenue, respectively) and noted that customer acquisition costs were $94/customer.
Net losses of $54.9m on revenues of $795.4m in 2016
As for the P&L, it said: “In 2014, 2015, and 2016, we generated $77.8m, $340.8m, and $795.4m in net revenue, respectively, representing growth of 338% from 2014 to 2015 and growth of 133% from 2015 to 2016….
“In 2014, 2015, and 2016, we incurred net losses of $30.8m, $47.0m, and $54.9m, respectively.”
"We have applied to list our Class A common stock on the New York Stock Exchange under the symbol APRN."
The cost of goods as a percentage of net revenue fell from 77.3% in 2015 to 67% in 2016 but increased slightly to 68.8% in Q1 2017, it added.
In Q1, 2017, Blue Apron delivered meals to just over one million customers, who made 4.1 orders each, compared with 649,000 customers making 4.5 orders apiece in Q1, 2016. The average order value also fell slightly from $59.28 in Q1 2016 to $57.23 in Q1 2017, while the average revenue per customer dropped from $265 to $236.
“From inception through March 31, 2017, we have delivered over 159 million meals to households across the United States, which represents approximately 25 million paid orders.”
We're capturing share from grocery and restaurant businesses
Challenging though the economics of meal kit delivery are, it added: “We believe that our business is poised to capture share from the grocery and restaurant markets and to benefit from shifts in consumer preferences, including a growing interest in cooking, prioritization of experiences over goods, and increasing interest by consumers in where their food comes from.”
“Our vision for the future is ambitious: to build a better food system. We are transforming the way that food is produced, distributed, and consumed. We believe a better food system will benefit not only consumers and stockholders, but also the planet, and we manage our business for the benefit of all three.
"During 2016, 92% of our net revenue was generated from repeat orders."
“We have re-imagined the traditional grocery business model and developed an integrated ecosystem that employs technology and expertise across many disciplines… We eliminate middlemen and work in a direct, coordinated manner with our suppliers to reduce costs so we can make our products available affordably and at scale.”
Read the full prospectus HERE.
Further reading on meal kit delivery models:
According to Packaged Facts, the U.S. meal kit delivery market had sales of $1.5bn in 2016 and will mature into a multi-billion industry over the next five years.
Get more info on the new Packaged Facts report into the meal kit delivery market HERE.
- Chef’d CEO: ‘Our customer acquisition costs are about a tenth of what the competitive set is paying’
- Personalized nutrition is the future, says Habit CEO: ‘Generic public health advice is great.The problem is, people don’t follow it’
- Morningstar: 'It would be a mistake for investors to dismiss meal-kit delivery services'
- Unilever’s venture unit backs meal kit company Sun Basket
- Flexibility will distinguish winners from losers in the meal kit category, says Terra's Kitchen CEO