Amazon may enter the meal kit market, putting the heat on Blue Apron

Amazon may enter the meal kit market, putting the heat on Blue Apron

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Amazon’s first public grocery store, now open in the Seattle neighborhood of Ballard. But you can’t go inside. Pickup only.

Sam Machkovech


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Amazon’s grocery ambitions were clear long before the internet giant bought Whole Foods last month, and the company is moving ahead after purchasing the grocery chain. According to a report from the British publication The Times, Amazon filed a trademark for a meal kit service on July 6 with the tagline “We do the prep. You be the chef.” The service covers “prepared food kits… ready for assembly as a meal” and, according to CNBC, will primarily include dishes consisting of grains, pasta, rice, and noodles.

Any Amazon meal kits to come in the future will likely be sold through Amazon Fresh, the company’s online grocery ordering and delivery service. Amazon Fresh already sells meal kits from partners including Tyson Foods and Martha Stewart, so any newly branded Amazon meal kits won’t be the only prepared ingredient boxes available through the service. While it’s unclear if Amazon Fresh will take over Whole Foods’ existing grocery delivery service, there’s a good chance that any meal kits offered by Amazon could also be prepared and delivered via Whole Foods locations.

It may be some time before we see Amazon-branded meal kits online, but the competition is already feeling the heat. Blue Apron is the largest meal kit provider in the US, followed by HelloFresh, and this is the second hit the company has taken recently. Blue Apron filed its IPO shortly after Amazon bought Whole Foods, and since then its stock has fallen 30 percent month-to-date. Today, Blue Apron stocks hit an intraday low of $6.51 a share, down nearly 10 percent.

The meal-kit market is small but expanding, and it may be hard for companies like Blue Apron to compete in a world where Amazon and other grocery giants offer their own prepackaged, ready-to-cook ingredient boxes. Pricing will be key for any service going forward—Blue Apron’s per-serving price is similar to that of partner meal kits on Amazon Fresh (about $9.99 per serving). Most meal kits on Amazon Fresh are currently priced between $10 and $24 and include ingredients for at least two servings. Blue Apron is structured as a subscription service in which users get a set number of meal kit boxes per week, whereas meal kits on Amazon Fresh appear to be one-off purchases. Considering Amazon is known for affordable prices on all sorts of products, it’s possible that the company will create cost-effective meal kits to feed families and groups of more than two people.

TECH|SCI

via Ars Technica https://arstechnica.com

July 17, 2017 at 11:23AM

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