Is Amazon Planning Meal Kits?

Randall Padilla
July 18, 2017

Blue Apron emerged as the leader in a competitive market for home-delivered, ready-to-cook meals, after a few of its rivals scaled back or closed up shop.

Amazon's acquisition of Whole Foods means the company will soon have access to top-notch food sourcing and distribution, which will undoubtedly make it easy to compete with Blue Apron in the meal-kit market. Amazon has registered a USA trademark for what looks suspiciously like a meal-kit service with the slogan "We do the prep".

The news follows the March launch of Martha Stewart's "Martha & Marley Spoon through AmazonFresh", where AmazonFresh customers in New York, San Francisco, Dallas and Philadelphia can purchase a Martha & Marley Spoon meal kit that includes the ingredients for a two-person meal.

Today, news of e-commerce juggernaut (NASDAQ: AMZN) filing for a prepared food kit trademark application was enough to send shares of Blue Apron down 10% as of 11:30 a.m. EDT.

Amazon didn't immediately respond to a request for comment.

Amazon also filed a trademark for "Some eat to live". When you combine that with slowing revenue growth, dismal customer retention rates, contracting margins, and rising expenses, Blue Apron becomes a high-risk stock for investors' money. In fact, just days after Amazon filed the trademarks, Blue Apron's stocks plummeted, falling by at least 10 percent (though any correlation is purely speculative). Competition, especially from a juggernaut like Amazon, will bring down meal kit prices, NPD's food and beverage analyst Darren Seifer said. (WFM) already torpedoed Blue Apron Holdings Inc.'s (APRN) IPO. It seems only logical that Amazon would be watching an area like this very closely, and buy buying Whole Foods, may see an opportunity to pick off that now-low hanging fruit. Shares closed Friday at $7.36, or 26.4% below the IPO price. VMWare was up 3 percent Monday on a report it may partner with Amazon in corporate data centers.

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