The meal kit segment as a whole is getting hotter: it reached $5 billion in sales in 2017, according to Packaged Facts, up from an estimated $400 million in 2016. But individual companies within the sector are still struggling to find the right recipe for success. Despite leading the pack in market share, Blue Apron announced on Oct. 18 that it would cut 6% of its workforce — approximately 300 jobs.
In a letter to employees, Blue Apron CEO Matt Salzberg wrote that the company’s actions “flowed from the roadmapping and reprioritization exercise that we recently undertook. As part of that work, we identified the need to reduce some roles, open others, and streamline decision making for greater accountability.”
Blue Apron filed an IPO in June 2017 that was, unfortunately for the company, accompanied by significant activity in this vertical:
• Amazon purchased Whole Foods for $13.7 billion in June;
• Amazon filed a trademark application for “prepared food kits” on July 6, and Blue Apron stock sank 11%, according to Business Insider;
• Albertsons acquired Plated in September, aligning a leading supermarket retailer’s buying power with the meal kit provider; and
• Rival HelloFreshannounced it was planning its own IPO earlier in October.
The job cuts will cost Blue Apron approximately $3.5 million in severance costs. The company reports its Q3 earnings on Nov. 2, 2017.