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Blue Apron still dominates the market for meal delivery kits but its market share is plummeting

Lower customer retention is sapping spending.

Food from meal delivery kit company Blue Apron is spread out over a counter top in a kitchen with the shipping box in the background. Scott Eisen/Getty Images
Rani Molla is a senior correspondent at Vox and has been focusing her reporting on the future of work. She has covered business and technology for more than a decade — often in charts — including at Bloomberg and the Wall Street Journal.

Blue Apron’s market share declined 17 percentage points in September from 57.5 percent a year earlier, while most other meal kit services gained market share in the $5 billion U.S. meal kit market.

Blue Apron has the largest share of sales among U.S. meal kit companies, but individual consumers are spending more money with its competitors, according to new data from Second Measure, a company that analyzes billions of anonymized debit and credit card purchases.

As of September, Blue Apron held the largest market share, 40.3 percent, among its U.S. competitors — HelloFresh, Home Chef, Sun Basket, Plated, Green Chef, Purple Carrot, Gobble and Marley Spoon — according to Second Measure.

HelloFresh, which is expected to go public tomorrow, came in second with 28.4 percent of the market — a 10 percentage point increase since last September.

Chart of Blue Apron and other meal kit market share

But Blue Apron and HelloFresh don’t retain customers as well as some of their smaller competitors, leading people to spend less with the companies over time.

A year after the first purchase, Blue Apron held on to 15 percent of its customers, while HelloFresh had a retention rate of 11 percent. Meanwhile, Gobble and Sun Basket retained 22 percent and 20 percent of their customers, respectively.

Higher retention rates contributed to higher annual spend.

Chart of average annual spend on meal kits

Gobble customers, on average, spent $897 in their first year using the service, according to a two-year analysis by Second Measure. Gobble specializes in meals that are pre-chopped so they can be prepared within 15 minutes. Accordingly, they command a higher per-meal price point than Blue Apron or HelloFresh, also contributing to the higher spend.

Sun Basket customers followed closely by spending $843 in their first year. Blue Apron was nearer to the industry average at $626 per year and HelloFresh was even lower at $492.

Blue Apron, the only company of the bunch that is currently publicly traded, reported an annual decline in average revenue per customer in its second-quarter filings. It has been struggling, thanks to warehousing issues, not to mention the specter of Amazon entering its space.

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