Blue Apron To Double Marketing Spend, Aims To Draw In “High-value Customers”

Meal delivery service Blue Apron told investors during its Q4 2021 earnings call this morning that it expects to double its marketing spend compared to pre-pandemic 2019.

Since introducing its Heat & Eat line in September and closing a $78 million capital raise in November, the company’s President and CEO, Linda Findley, said Blue Apron is now positioned to accelerate through the third prong of its growth plan: scaling marketing infrastructure.

“We have seen a steady uptick in volume and unique-customer trials, especially as

we rotate new recipe selections,” Findley said about the launch of its Heat & Eat line. “The demand has continued into the new year. Based on our analysis, customers who are adding Heat & Eat to their box appear to be doing so on top of their standard recipes, which in turn helps drive Average Order Value.”

“We are also innovating and executing across the business,” Findley continued. “By leveraging proceeds from the capital raise in the fourth quarter, we have been moving aggressively to scale our marketing infrastructure, raise brand awareness, and improve targeting efficiency.”

Findley said that since she took the helm in 2019, Blue Apron has worked to increase average order value, expand menu options and create more flexibility within its portfolio, including via the launch of premium add-ons and meal customization capabilities. Additionally, it has looked to partnerships with brands such as mental health app Calm, Panasonic and Amazon Alexa to continue growing customer engagement and retention rates while also adding value and flexibility to its user-experience.

She said these efforts have helped the business address and overcome the challenges it was facing when she first joined, and that she believes 2022 will be a “transformational year” for Blue Apron.

“To give you a sense of how far we’ve come, back in 2019, we offered just 17 weekly menu options, and now, we have over 50, without counting the additional non-subscription boxes on the Blue Apron Market,” she said on a call with investors. “Moreover, many of our menu options in 2019 were complicated and took too long to prepare. Now, the majority of our Two-Serving and Four-Serving recipes are designed to be ready in 35 minutes or less. We also introduced options that have quicker prep and easier cleanup, alongside our popular Wellness recipes.”

On today’s earnings call, the company reported average order values have increased 10% to $63.78 since Q4 2019 and overall, its net revenue has accelerated 13% from pre-pandemic levels to $107 million this quarter.

Now, Blue Apron is turning its attention to promotional spending. According to Findley, the company’s marketing spend increased 68% year-over-year last quarter and those expenses will continue to rise throughout 2022, primarily facilitated with the funds from its capital raise. The company has also looked to digital media outlets such as Buzzfeed and Food52 to drive brand awareness through branded content partnerships during the last quarter and built out its own customer data platform to manage first-party analytics.

“Our focus on execution, combined with disciplined investments in our business, drove Average Order Value, Orders per Customer and Average Revenue per Customer well above pre-pandemic fourth quarter 2019 levels,” Findley said in a press release. “These elevated customer engagement metrics over the last seven quarters give us confidence that our strategic growth initiatives are working, and we believe now is the right time to focus on accelerating customer acquisition.”

In addition to its growth plan, Blue Apron also said it is making progress on its ESG initiatives, announcing it has implemented a wage increase to a minimum of $18 per hour for all hourly employees. The company said it is also on track to reach its goal to be carbon neutral by the end of March and is continuing to work towards its racial and gender diversity goals in regard to the composition of its board of directors.

“We believe the market potential is huge, and our vision of Better Living Through Better Food is as important now as it ever was,” said Findley on the call. “We couldn’t be more excited about what lies ahead in 2022. Having made great progress on the first two prongs of our growth strategy, we feel strongly that we are on the right path. We believe the actions and investments that we are taking in this final stage are putting us in a great position to get back on a path for long-term and sustainable growth.”