The non-demand food wars continue: Blue Apron defends its turf against Gobble and Sun Basket
There are three food delivery companies that might not be completely fucked:
- Blue Apron: Leader of the way too crowded meal kit space, valued at $2b
- Munchery: Leader of the prepared space, valued at $300m
- Postmates: Leader of the food delivery space, valued at over $400m.
I’ve always been a fan of Postmates. I use it at least twice a week. Paul and I have spent months testing Blue Apron and its many (way too many) derivatives. Munchery I have never used, even though someone very thoughtfully gave me a gift certificate a few weeks ago when I wound up in the hospital with pneumonia. There’s a reason it’s worth a fraction of Blue Apron: There’s something vaguely cafeteria about having prepared food delivered to me that isn’t from a restaurant I know and love.
Before spending months reviewing all the “non-demand” food services, I would have scoffed at Munchery’s news yesterday that it’s also going to take on the meal kit space, directly competing with BlueApron. Great, because the world – and the ad space in my Facebook feed – needs yet another of these totally undifferentiated services.
That conclusion: The only hope for any of these companies to survive and get big enough to go public is to Voltron up and create a player who can collectively solve the dinner problem, depending on your needs and desires and for God’s sake do it in a flexible way that can be customized on any given week.
More on Gobble and Sun Basket in a bit. Spoiler: They both fared better than any competitor who has gone up against Blue Apron yet.
But here’s what I was going to propose as the food delivery company I’d actually use for a long time: Blue Apron buys Gobble and Munchery. Postmates can stay stand-alone as a better but more expensive GrubHub with a UI that doesn’t make me want to blind myself. It fulfills a distinct enough purpose, in my view.
But the novelty rapidly wears off when it comes to the meal kit services. And I’m not even cooking them – Paul is. I used to excitedly pick between my options. Now I sigh. Another seared cod? Another twist on a burger?
These services seem great at first. Blue Apron – as we’ve detailed in this series – delivers consistently delicious, foolproof meals at a bargain price. But there’s a huge flaw: Its subscription model is way too rigid and once you see a recipe you like, you never see it again. The pressure to highlight a new ingredient every month leads to things like “hops week” in honor of Oktoberfest (Not their best…). Meantime there are some Thai chicken burgers I had months ago that I’d eat once a week if I could.
Because that’s the thing: When people regularly cook for themselves, they discover recipes they like to keep in regular rotation. By not allowing that option, and more customization in general, Blue Apron remains something fun to try out for a month, an artificial experience of what it’s like to be that person who is together enough to cook dinner three times a week.
Enter Gobble. Gobble is so far the second place winner for one simple reason: IT ACTUALLY HAS A DIFFERENTIATED IDEA. Somewhere between Munchery and BlueApron, it delivers very prepped ingredients (many pre-chopped) so that dinner takes just ten minutes. It is not as delicious as Blue Apron in our relatively short time testing it. But several meals were competitive and it’s just so fast. Way faster than any other way to get dinner that doesn’t involve a microwave. And it’s way cheaper than take out too.
We should talk about Sun Basket for a minute. Like HelloFresh, it’s just not differentiated enough. To wit: The press release I got a month or so ago made it sound like the meal kit space was an entirely new phenomenon:
VC’s are poised to cash in on our culture’s increasing obsession with food as well as the unprecedented growth of market segments previously considered “niche”: Organic food sales will reach a startling $35 billion this year, while non-GMO consumer awareness is at an all time high, at over 60%, according to recent data from the NMI.
As VC’s evaluate food start-up investment, more and more are relying on their own dietary regimens and food-related value systems, in addition to the latest market research, to guide their next moves.
There is nothing in that release that tells me why Sun Basket is different from others on the market. Like PlateJoy, it gives you the option to eat Paleo or Vegan. That’s about it. It just announced a $4.5 million round. In this overcrowded environment, going up against a huge, well-funded competitor without differentiation, I don’t understand why this company was funded and the press materials gave me no further clue.
Neither did my experiences as a customer over several weeks. It’s not that Sun Basket wasn’t good. In fact, in terms of meal quality, Sun Basket held up best to Blue Apron of all the services we’ve tried. But it’s way too late to an over-crowded market with shitty margins at the worst possible time. Sorry. Years ago, this could have been a viable competitor. Timing and differentiation matters as much as quality.
So, six companies into this series, I’d still consider Blue Apron the leader in terms of experience and quality and consistency, and Paul didn’t disagree. But he noted if you asked which he was likely to still subscribe to in a year’s time, it’s only Gobble. I can’t disagree with that. But I frankly think both services would get old.
What I want is a combo. I want a way that I can get a nicer Blue Apron meal when I want something a little more gourmet and I have the time to make it. I want two quick and easy Gobble meals in the fridge each week for …. the realities of life. And I’d probably be cool with one totally prepared meal a week to lessen my takeout budget. But I want all this from one company, in a mix-and-match format, customizable per week. And I want to at least “Pandora Up” recipes I’d like to have on repeat.
Now, I totally get why this would be a massive logistical challenge in a space that’s already massively logistically challenging. But it’s the only way I see using a service like this consistently. It has to solve the dinner problem according to my life, not according to how each of these players would like my life to be. Because ordering takeout or running to the grocery store is simply not that hard. You aren’t solving the problem enough right now for enough people to sit back and demand users adjust to you.
Munchery – way smaller than Blue Apron in valuation – seems to get that. I haven’t yet tested its service – we will now and report back –but moving the “non-demand” meal kit idea into the “on demand” space and breaking apart the rigid subscription model is an immediate and consumer friendly plus.
I hope Blue Apron pays attention. They’ve done something tremendous in the insanely difficult realm of perishable atoms, but it’s not yet more than a few months’ novelty.
I liked Sun Basket enough, I’m going to enjoy it for another week. And, I’ll keep Gobble for a while because I want to see how consistent the quality is over time, given the harsh construct of dinner in ten minutes.
Up next, we’ll try Plated – because it’s the other giant and we might as well, right? And, given the news yesterday, Munchery. There are half a dozen others with no differentiation that we’re just passing on, because I don’t know why a consumer wouldn’t just go with the bigger players given their quality and all the noise in the market at this point.
Stay tuned… Blue Apron is so far hanging on as the leader by a thread...