Amazon’s Meal Kit Trademark filing Negatively Impacts Blue Apron
Orange County – In the latest Amazon empire expansion, on July 6, 2017 the company filed a trademark application for meal kits. The trademark application is for “We do the prep. You be the chef.” and is for a convenient service whereby frozen and prepared kits including meat, vegetables, pasta, etc. are delivered to your door. The trademark also covers a loyalty rewards program offering points and coupons for loyal customers. This potential service is great news, unless you are Blue Apron.
Blue Apron’s current claim to fame is that it is the largest meal kit provider in the country. Upon news of Amazon’s trademark filing, Blue Apron stock dropped 10%. The company’s shares are currently at an all-time low, below $7. One Wall Street analyst evaluated the company as only being worth $2 a share, citing it as unlikely that the company will become profitable.
Other companies in the meal kit business may have difficultly competing with Amazon due to Amazon’s large customer base and traditional effort to undercut on prices. Amazon’s meal kits are currently set to start at $8 per serving, whereas Blue Apron’s start at $10. But Amazon may find ways to make the servings even cheaper. In the food meal kit industry, customers prioritize cost. Amazon’s history is full of low pricing and outbidding competitors, making it poised to set competitive pricing in this industry as well.
This is not the first time Amazon has embarked into the food delivery world. In 2007, it released AmazonFresh – a food delivery service. The company also currently sells meal kits by established other companies, such as Tyson Foods’ Tyson Tastemakers. It also recently acquired Whole Foods.
The Amazon food kits have been sold in limited quantities since the end of June as part of consumer testing. Currently, they are only available to Amazon Prime Members. The kit subscription cost is $14.99 per month (in addition to the monthly Amazon Prime subscription fee). There are 17 available meal options for consumers. Compared to other meal kit options, the serving sizes are slightly smaller, but consumers may look past this drawback given the convenience and if the prices are lower than the competition.
Both companies have yet to comment on the trademark and Amazon’s expansion efforts.