Blue Apron isn't having a good summer.
The New York-based subscription meal kit service, arguably the largest and most well-known in the U.S., had high hopes for its Initial Public Offering in late June.
And then #AmazonWholeFoods happened.
Yes, folks, it has a hashtag. Like #Brangelina and #Bennifer before it, the mega merger of—let's face it, celebrities of retail—pretty much overshadowed everyone's news.
Lidl opened in June, and there was plenty of coverage, but not a ton of follow-up as everyone's speculating what Whole Foods will be in an Amazon world.
But Lidl's not going to hit subscription meal kits like Amazon, and guess what? Amazon meal kits are already here.
The Seattle-based company started offering them to Amazon Fresh customers in late June, and is trademarking “We do the prep. You be the chef,” hinting at an imminent wider launch (through its new network of 400+ retail locations with an army of fresh food experts—AKA Whole Foods, perhaps?)
Amazon Fresh offers 36 SKUs, both under Amazon's name and partnered with Martha Stewart's Marley Spoon. Kits range from 2 to 4 servings, and $8 to $10 per serving, on par with Blue Apron and its competitors.
But what Amazon has that subscription meal kits don't is a no-commitment on-demand option that millions of Amazon Prime members enjoy already. Meal kit subscriptions have only about a 5% household penetration, and a troubling retention problem.
Amazon Prime hits about 60% of U.S. households, and it's not just for higher income brackets. They're making it easier for low-income households to join, and use their SNAP funds for grocery purchases, by offering a discounted monthly payment option.
People can't get behind a subscription just for fancy meals, but if you tack on free two-day shipping for just about everything else?
Game changer.