“They have to, just to justify the high shipping costs.” “There’s a reason all of these companies focus only on premium ingredients and ‘date night’ meals,” said Lawrence Chen, co-founder of meal-delivery startup Sooma. But the combined cost of both food and shipping and handling - the only hint Blue Apron gives as to its delivery costs - totaled more than half a billion dollars. In other words, even if you and a friend down the street both order from Blue Apron, different trucks might deliver your (differently insulated) boxes.īlue Apron reported in its recent IPO filings that efforts like these brought its shipping costs down in 2016. And the company continues to adjust both the packaging of its boxes, and the company that delivers them, on a ZIP code by ZIP code basis. When you place an order with Blue Apron, it is shipped from one of three facilities - in New Jersey, California and Texas.īlue Apron opened the Texas site in late 2015 to help bring down the cost of shipping to customers in the Midwest. The top national brands - Blue Apron, HelloFresh and Plated, among them - are all able to use their volume to negotiate special rates, Thoresen said.Įven with those special rates, however, shipping is expensive. Thoresen and other analysts cautioned in interviews that it’s not easy to generalize between companies, because all have different agreements with third-party couriers and each uses different materials for insulation and packaging. And they’re responsible, in large part, for the high price of meal kits: $10 per serving, according to market research firm NPD, compared with $4 for the same meal when the shopper buys ingredients at the grocery store. They must always arrive on time and in pristine condition.

“This is definitely one of the biggest headaches for them.”īlue Apron’s boxes are heavy, after all - and many travel long distances. “You see a lot of companies leaving the market because they can’t handle the costs,” said Erik Thoresen, a principal at the food industry consulting firm Technomic. That markup will become especially important, given that Amazon - which is known for its sophisticated shipping and logistics network - agreed last week to a deal to buy Whole Foods.

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