HelloFresh tops Blue Apron in customer satisfaction
- HelloFresh scored another win against Blue Apron, topping its rival in customer satisfaction, according to YouGov BrandIndex. "New numbers from YouGov BrandIndex reveal that Germany’s HelloFresh has started to pull away from American rival Blue Apron," the survey found.
- The research firm asked respondents if they hold an overall positive or negative impression of a particular brand. Since January 2018, HelloFresh’s impression score climbed from 15 to 18. Blue Apron's has decreased from 15 to 13. In addition, HelloFresh’s satisfaction score recently reached a peak of 26 while Blue Apron has yet to hit a score of 18 this year.
- Earlier this year, HelloFresh said it had 1.2 million U.S. customers and confirmed previous reports that it has overtaken Blue Apron as the market share leader in America.
Competition between meal kit retailers is heating up, but HelloFresh continues to pull away from the one-time market leader Blue Apron. The YouGov survey underscores what has become increasingly apparent: While Blue Apron has struggled, HelloFresh has done a better posting higher margins, keeping customers and watching its finances.
HelloFresh, which isn't profitable, expects to reach break-even EBITDA by the the fourth quarter, while Blue Apron warned prior to its IPO that it may never achieve profitability — and there has been little to indicate it is any closer to reaching this goal. All these things add up to giving HelloFresh more resources to use to improve its business and impress consumers, increasing its long-term viability in the space.
To be sure, the $5 billion meal kit market remains a market ripe with untapped growth so the major players in the space all have room to grow. Globally, subscription-based meal kits are expected to reach $10 billion in sales within the next two years, according to Technomic.
Blue Apron's time in the public spotlight has been anything but uplifting. It has faced a drop in subscriptions as it has pulled back on marketing costs, the loss of top executives and challenges from a fulfillment center in New Jersey that went live too early.
HelloFresh has made some strategic expansion moves lately of its own. The company acquired Green Chef, the maker of gluten-free, paleo, and keto meal kits, in March. HelloFresh announced in June it would sell its kits at nearly 600 Giant and Stop & Shop stores owned by Dutch grocer Ahold Delhaize. For its part, Blue Apron launched a pilot program with wholesaler Costco and opened a pop-up shop in New York City, among other initiatives to attract more customers.
Increasingly, the challenge for meal kit makers is to find ways to stand out by focusing on specific market niches such as regional cuisine, vegetarian cooking and special diets, or partnering with grocers or CPG manufacturers. It's evident in the YouGov survey that efforts by HelloFresh are paying off with customers, while Blue Apron, the one-time market leader, struggles to catchup despite a number of promotional initiatives aimed at overcoming its ongoing challenges.
Blue Apron does have a well-known brand name that could prove attractive to a competitor like Walmart or Target looking to growth their reach in meal kits. The New York company could continue to expand its brand by moving offline with more popup stores or partnering with retailers, but with most grocers either owning their own meal kit brand or partnering with companies that offer the service, the later may have little room for growth.
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