Blue Apron stock sunk to an all-time low on Monday, plummeting to prices of $6.45 a share. The sudden decline comes amidst Amazon’s entry into the meal-kit delivery marketplace, with the e-commerce giant having only recently filed its first trademark in the industry.
Following a highly anticipated IPO, which priced initial shares at $10 each, Blue Apron stock has progressively declined, particularly in the wake of Amazon’s acquisition of Whole Foods, which stirred fears that it would soon be outcompeted.
The meal-kit delivery service, which delivers prepared ingredients ready to be assembled directly to customer’s doorsteps, has seen its stock decline by nearly 30 percent since its initial offering. The company’s regular net losses since 2014, as recorded in annual filings, have done little to help its case to investors.
While Blue Apron enjoyed highly explosive growth in previous years, according to Inc.com, experiencing more than a 300 percent year over year gain from 2014 to 2015, its inability to compete with larger competitors such as Kroger and now Amazon cast a cloud over its future.
Blue Apron CEO Matt Salzberg has remained confident in his company’s future during public interviews. “We’ve grown our business 10-times over the last two years. Demand for what we do is incredible.” Salzberg said in an interview with CNBC.
As the meal-kit delivery service market continues to grow in the U.S., with 55 percent of respondents in one Nielson survey claiming they were willing to order groceries online, companies like Blue Apron have been intensely vying for shares of the market.
With major retailers like Amazon and Walmart increasingly dedicating resources to acquisitions of meal-kit delivery companies, smaller initiatives like Blue Apron will need to dazzle for investors if they hope to survive.
While Blue Apron already delivers around eight million meals per month, its forays into other areas, such as a wine subscription service and sales of kitchen utensils, according to Reuters, may be its answer to increased competition.
“We can engage customers in a way that is really exciting.” Salzberg said. “One of the big opportunities for Blue Apron going forward is to grow that revenue generation per customer by going into new categories, so we can sell more products to the same customers we’ve already acquired.”
[Featured Image By Scott Eisen/Getty Images]