I stayed with my parents and while there my mom informed me that she had just ordered a package of three meals from Blue Apron.
Upon hearing the details I was immediately skeptical (especially regarding the price), but I decided to wait it out and see what happened.
BTW, my mom had paid $20 for three meals for two people (six meals total) as part of an introductory offer. Regular price is $59.94 for six (or $9.99 each).
Blue Apron Arrives
The next day, the package arrived and mom and I unwrapped it together.
She had ordered three meals — one with steak, one with chicken, one with eggs.
We unpacked everything bit by bit. It was nicely wrapped, nothing was broken, and all the ingredients appeared fresh. She also got three recipes telling how to make these dishes.
After we unpacked everything my first thought was, “Is this it?” The amount of food seemed like something my wife and I would eat in a meal and a half or two meals — certainly not three meals. The portions seemed way too small.
But at $20 it seemed like an “ok” value. At $60, it was an entirely different story.
Two Meals Made
After I left my mom did make two of the meals and said they were “ok”. My dad is more of a meat and potatoes guy and Blue Apron seems to specialize in fancier fare. She said that the recipes took more time than Blue Apron had estimated and more time than what she’d normally spend because they were quite complicated.
They still hadn’t eaten the egg dish for one reason — there was no meat in it! I’m not sure why she even ordered it.
We talked about it and I reiterated how it seemed like a bad deal financially to me (my dad and I had joked about this when I was home). She cancelled any future deliveries and we moved on.
Meal Kit in the News
A few weeks later I saw a piece on Facebook (can’t remember if it was an ad or a friend had posted it.) It was a CBS news story comparing the cost of meal prep kits (as they called them) to buying food at the grocery store. They looked at Blue Apron, Chef’d, Hello Fresh and Home Chef. Their key findings:
Chef’d offered the most variety including recipes from the American Diabetes Association and Weight Watchers.
But at a cost of $56 for four entrees, the store was a lot cheaper – costing just $43-dollars. A savings of nearly $13.
The store was also cheaper compared to Hello Fresh, which cost $69 dollars for the box of six entrees. But the store was $61, $8 less.
There were savings with both Home Chef and Blue Apron. Four entrees, including delivery, were $50 at Home Chef. The store was $57. A $7 savings buying the meal kit.
Six entrees from Blue Apron cost $60. At the store, ingredients were $65-dollars. $5 dollars in savings with Blue Apron.
No matter which one you use – if you keep the price per meal to $10 or less – it’s likely buying the kit will be less expensive than buying all of those ingredients at the store.
Wow. As I type I realize this is yet another example of someone in the media doing a story on something they know nothing about. I’m putting it into my “not experts” category for sure. Have these people ever planned and shopped for a meal? $10 is a good price per meal? Remember that later as math will prove they know little about the topic.
But we’ll get to the pricing issue in a minute.
Not How You Plan and Shop
The flaw with the CBS story was that they let the box kit providers set the menu. Then they went out and bought the exact items with two major price disadvantages for the grocery store:
- There was limited sale pricing/couponing to lower prices (which always happens when you get food that you just “have to have” and don’t really pay attention to the price).
- They had to buy more than what they needed for this one meal because that’s how things are packaged at the grocery store. If a kit called for a tablespoon of something, at the store they had to buy a bottle of it because the store does not sell tablespoons of anything. This of course costs more but you’d also have it left over for future meals. Any savvy shopper could tell you that the cost-per-use would be way lower with the store item.
In addition, most people don’t plan meals this way (at least people who don’t want to spend a fortune on food). They think about what they want/like, then look at ads to see what they can get for a decent price. And this is what they buy.
Even with these disadvantages, the store won two out of four times. This alone should give a big hint that these kits are way over-priced.
But as I said, we’ll get to pricing in a minute.
Blue Apron Marketing
Even with the CBS piece the issue was out of my mind until I saw a Blue Apron marketing page (this one was an ad on Facebook for sure) where they claimed, “Research shows that shopping at the grocery store is 70% more expensive than Blue Apron.”
At this point, I hadn’t run the numbers but simple math, gut instinct, an awareness of how pricing works, and knowledge of what things cost said Blue Apron was way more expensive than buying at the grocery store.
Here are some highlights from the article/marketing piece:
Is this convenience more cost-effective than grocery shopping in the long-run? The answer is yes, according to a study we conducted with Nielsen.
We worked extensively with researchers at Nielsen to determine how much Blue Apron customers spend (or in this case, save!) in comparison to shopping at the grocery store. Here’s what we discovered: On average you save $40 per week with Blue Apron.
Uh, no. No way!!! I knew there was a catch in here somewhere and I didn’t have to read much more to find it:
Here’s how the study was conducted: We recreated 12 weeks of Blue Apron recipes (2-person plan) using the Nielsen database national average prices from traditional grocery stores. While the price of Blue Apron was consistent week after week ($59.94/week for 3 meals), the average cart of groceries for three meals serving two people each was $103.07. Grocery prices for each week fluctuated but were on average 70% more expensive than Blue Apron.
We looked at the prices of ingredients exactly as they sold (e.g. herbs had to be bought as they were sold in a big bunch, condiments had to be bought in their full containers, etc.). However, if specific ingredients were not readily available, we substituted alternatives as long as they were approved by our Culinary team.
In general, specialty condiments you wouldn’t necessarily use on a regular basis (think capers and spices) can be pricey or difficult to track down, not to mention they often go unused for months, taking up space in your pantry or fridge (hello, giant bunch of cilantro of which you only used a pinch!). This brings up another advantage Blue Apron has over the grocery store: less food waste.
By using Blue Apron, you’re not just paying for convenience and incredible meals; you’re actually saving more money than you would shopping for groceries and reducing your food waste in the process—in other words, a true win-win!
In this case, Blue Apron gave the stores four disadvantages:
- There was no consideration for alternative meals as noted above. Blue Apron picked what food would be priced. Anyone think they tested a hundred different combinations to come up with the ones that showed them in the best light? Of course they did. I was in marketing for 30 years and you ALWAYS portray your product in the best possible light.
- No coupons or sale prices. I’m sure most of the food was purchase at full retail. I worked with Nielsen data for YEARS (decades really) and you can make that data say whatever you want to if you’re sharp enough. For instance, the Nielsen database has many different price fields — retail price, promotion price, price on feature ad, price on display, etc. You can use whatever price you want to get whatever answer you want.
- The grocery store items were purchased “exactly as they sold”. In other words, if a recipe called for two eggs (which my mom’s egg dish did), Blue Apron charged themselves for two eggs. But the store was charged for a dozen eggs since that’s “exactly as they [were] sold”. A bit of ketchup from Blue Apron compared to a bottle of ketchup at the store. A couple leaves of lettuce from Blue Apron compared to a head of lettuce at the store. Of course the store cost more! But it probably had three times the food (in weight) purchased as well!!!
- There were specialty condiments used. These are some of the most expensive things you can buy in a grocery store. And if you’re comparing a pinch of this and a spoon of that to a bag of this and a bottle of that, the costs are going to go through the roof for the larger-sized options.
So if you tilt the table as far as you can in one way, sure the other option looks better. But facts have a way of ruining a party.
Pricing Analysis of Blue Apron
Let’s just consider a few facts and some basic math:
- Blue Apron is marketing itself as a cheaper alternative to buying food from the grocery store.
- The cost of Blue Apron is $9.99 per meal. Let’s round it off to $10 to make the math easy.
- Let’s assume you had Blue Apron for every meal for a year for a family of four. That’s 4 people * $10 cost * 3 meals a day * 365 days = $43,800.
- Let’s assume you had Blue Apron for every supper (evening meal) for a year for a family of four. That’s 4 people * $10 cost * 1 meal a day * 365 days = $14,600.
- So if Blue Apron was a better deal than the grocery store (by 70%!!!) then I should save a ton of money by using it, right?
Well, look at the numbers. $43k per year for a family of four is out of control. But that could be considered an unfair comparison since Blue Apron is more of a meal replacement for lunch and supper (not breakfast).
If we only take SUPPER alone, the annual cost of Blue Apron for four people is over $14k! That doesn’t include any spending for breakfast, lunch, snacks, eating out, etc. Yikes!
I looked at Quicken and here are the annual costs we had the past three years for four people (grocery purchases plus eating out):
- $12,172 (this is the year we ate out 2-3 times per week because of hectic schedules)
They are all well below $14k. And remember, the $14k includes only supper meals. So it’s probably more like $20k when you add in other meals and eating out.
And I guarantee you that I got way more food (in weight) for my money than what $14k at Blue Apron would buy me!
In other words, Blue Apron is AT LEAST TWICE AS EXPENSIVE as the combination of shopping at the grocery store and eating out. If you compared it to shopping at the grocery store alone, it would be even more expensive (as we all know eating out costs more than eating at home)! And if you did it on a food-weight basis, it would get even more expensive.
BTW, when we eat out, the four of us spend anywhere from $25 at Taco Bell to $50 at Olive Garden and the like (yes, we use coupons). That means Blue Apron’s costs of $40 a meal for us (assuming the amount of food is the same — which it is not) is about the cost of eating out. Now, just on a basic gut check level, do you think eating out is pricier than buying food from the grocery store?
Bottom-line: Blue Apron is VERY expensive!
Other Data Says It’s Expensive Too
That’s just the information from my household. What does the USDA say about food costs? Here’s their chart of annual food costs at home (i.e. food bought at a grocery store and prepared at home) at four different income levels (family of four with two kids — I used monthly costs and annualized them):
- Thrifty plan — $7,806
- Low-cost plan — $10,255
- Moderate-cost plan — $12,775
- Liberal-cost plan — $15,518
These numbers do assume that all food is purchased and eaten at home (no eating out). So we’re in the middle of the pack (especially considering our kids are older and eat more than the kids used in this example).
It also shows that Blue Apron, which is $14k+ for ONE MEAL a day only, is way over-priced, even on a liberal food-spending plan.
Blue Apron Advantages and Disadvantages
There’s no denying that Blue Apron has some advantages such as:
- Eliminates shopping and meal planning
- Portion control
- Gives recipes you can keep and create on your own
- Unique cuisine
But there are disadvantages as well:
- Small portion sizes
- Longer prep time
- Food is too “exotic” for those who prefer basic American fare
But the biggest disadvantage is cost. It costs SUBSTANTIALLY MORE than shopping at the grocery store. It’s more comparable to eating out.
The fact that they try to skew the numbers and say they are less expensive than the grocery store is disingenuous at best. On that basis alone I will never order from them.
What’s your take on meal prep kits? Do you use them? Why or why not?