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Blue Apron is now selling its meal kits on Grubhub and it 'seems odd'

Sarah Whitten
  • Blue Apron said Tuesday that it is testing selling its kits through Grubhub.
  • The meal kit company has struggled to keep subscribers with the service the long term.
  • Blue Apron's current selection of 2-and-4-serving meals on the Grubhub and Seamless platforms cost between $19 and $38, take 15 to 25 minutes to cook.

Blue Apron APRN is now available on Grubhub GRUB — if you live in New York City.

The meal kit company, which has struggled to hold onto customers amid growing competition and distribution issues, said Tuesday that it is testing selling its kits through the on-demand food service in select areas of the five buroughs.

"This new on-demand product is a complement to our core offering, giving consumers — for the first time – the option to have a Blue Apron meal delivered to their doorstep in less than an hour," Brad Dickerson, CEO of Blue Apron, said in a statement.

Blue Apron's move into online food-ordering comes as the company continues to try to overcome well-publicized operational issues and to keep subscribers with the service the long term.

Shares of the company were down more than 5.6 percent in intraday trading Tuesday, hitting a 52-week low of $1.50 a share. Its shares have plunged 72 percent over the last 12 months.

While the company's new on-demand service seems like a like a sensible way for Blue Apron to expand its availability to more customers, the move also prompts big questions, Neil Saunders, managing director of retail at GlobalData, said.

"Grubhub is really a convenience based platform and most people use it because they want to eat quickly and with minimum fuss," he told CNBC. "Blue Apron does not offer immediate satisfaction as there is cooking and preparation required. In that sense, there is a certain incompatibility between the two offers."

Blue Apron's current selection of 2-and-4-serving meals on the Grubhub and Seamless platforms cost between $19 and $38, take 15 to 25 minutes to cook. There is also a $3.99 delivery fee.

To entice customers to try this new delivery method, Blue Apron is offering coupons giving 40 percent off their first order.

While the cost of the meals are on-par with what consumers would pay at other restaurants for delivery, they still need to be cooked and are only available for delivery between 4:00 pm and 8:45 pm.

"Moreover, launching the service in New York City where a transient population can easily pick up food and semi-prepared food on the way back home from work seems odd," Saunders said. "Blue Apron should be looking to expand into retail channels as this is where the biggest opportunity lies."

The company began a pilot program to sell its kits in some Costco locations earlier this year and has considered expanding this service with the grocer and other retailers. In addition, the company has begun to offer flexible plans and recipes. It has introduced meals that could be made within 30 minutes, meals that require less cleanup and brought back customers' favorite recipes.

Blue Apron declined to comment further.



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