Blue Apron Struggling to Find its Niche

August 14, 2017

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In the beginning, it hit the market with great promise. The Blue Apron meal kit delivery service was lauded by urban professionals who didn’t have time to get out to the store, busy moms who had other priorities, and seniors who weren’t getting around as well as they used to.

So, the interest was definitely there. Since then, though, things haven’t quite been so rosy. The company has struggled to get through multiple challenges in opening a new factory, and, subsequently, the IPO raised a lot less than expected. The shortfall is expected to damage business cash flow throughout the second half of the year.

The factory in question is being built in Linden, New Jersey. While, on paper, transitioning from two different facilities to move operations to a single facility seems like it would streamline processes. But it hasn’t worked out that way. Delays and cost overruns have created multiple issues for the company.

One of those issues, according to Blue Apron CEO Brad Dickerson, is training employees on new jobs for the new facility. With thousands of employees in training, less is getting done … and what is getting done is falling on fewer people to do the work.

Perhaps anticipating fundraising issues, Blue Apron chose to cut its IPO price, hoping to attract more investors. According to media reports, the company raised about $300 million … hundreds of millions less than they wanted or expected. In response to the shortfall, Dickerson said the company would scale back its marketing budget for the rest of the year.

The new projections have Blue Apron bringing in less in the back half of the year than in the front half. Stock is down, and the mood is generally sour. But it doesn’t have to be.

While it’s true that less marketing money could mean fewer sales. There’s a lot of assumption in that math that need not be there. Sure, marketing is important, but you don’t always have to buy as much to get as much from what you buy.

When funds are tighter than expected, it’s time to get creative. You can’t just give up and say, “well, sorry, we’re not going to do very well over the next six months.” Especially when there are alternatives out there a savvy PR team could take advantage of to help a brand get more for their money.

The opportunities may vary from brand to brand and market to market, but lean times can be solved with creative solutions, and they are not helped by lowered expectations.

Ronn Torossian is the founder and CEO of 5WPR and one of the most well-respected Public Relations professionals in the United States.