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Exclusive: Blue Apron's CEO On Why Revenue Growth Is Sustainable 'Even Beyond COVID'

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Exclusive: Blue Apron's CEO On Why Revenue Growth Is Sustainable 'Even Beyond COVID'

Meal kit delivery company Blue Apron Holdings (NYSE: APRN) recently reported mixed fourth-quarter results.

A loss of 67 cents per share fell short of the 61-cents-per-share loss expected, while revenue of $115.46 million beat estimates of $110.5 million.

Following the report, Benzinga had the opportunity to catch up with Blue Apron CEO Linda Findley Kozlowski to recap the fourth quarter and discuss what to expect from the company in 2021.

Blue Apron's Customer Initiatives: Blue Apron ended its fourth quarter with 353,000 active customers, up from 351,000 last year but down from 357,000 as of the end of September. Meal kit delivery has some seasonality, especially in the fourth quarter, the CEO told Benzinga.

Also important to note is that the company acknowledged in its third-quarter earnings report it's working through challenges in terms of labor availability, and this will impact its ability to address all of the increased demand, she said. 

The headwinds became "significantly better" throughout the fourth quarter and into the first quarter of the new year, Findley Kozlowski said.

Coupled with a compelling lineup of food choices and a refreshed marketing campaign, Blue Apron is focused on increasing the value and engagement of every customer. 

"We have been focused on really accelerating our product initiatives, building new products and doing product innovation specifically beneath the needs of our existing customers to help them engage with us more but also to be attracted to new customers coming into the business," she said.

Engaging with customers and providing them with relevant food options has resulted in an increase in orders per customer from 4.6 last year to 5.3 as of the end of 2020, according to Blue Apron.

The average order value has also increased year-over-year and sequentially to $61.43.

Related Link: Blue Apron's CEO On Management Turnover, COVID-19 Safety, Standing Out Among Meal Kit Rivals

Blue Apron's Investments In Technology: Blue Apron makes use of automation technologies and tools that help with food preparation, Findley Kozlowski said. Investments in automation help the company derive greater efficiency from its workers and helps support overall margins. 

"We can take pretty much anything and break it down into individual portions on our own so we don't have to only rely on pre-packed [food]," she said. "

Blue Apron's Product Innovation: Blue Apron saw success in 2020 by introducing customizable food options or initiatives built on special occasions like Thanksgiving, the CEO said. This helps drive incremental revenue per customer and allows the company to better invest in retaining and engaging with its users. 

Blue Apron also counted on partnerships to help drive growth, such as a Walt Disney Co (NYSE: DIS)-inspired meal based on the "Soul" film. More recently, Blue Apron teamed up with Stella Artois to create a Super Bowl-themed box.

"There's a lot of interesting partnership opportunities in order to connect with customers and bring new customers into the fold," Findley Kozlowski said. 

The Weight Watchers collaboration remains an ongoing partnership, and "things are going really well," the CEO said. 

Without going into specific details, she said customers and investors can expect to see more partnerships in 2021 that focus on health and entertainment.

Blue Apron's Confidence In 2021 Outlook: As the COVID-19 crisis is showing some signs of improving from a health perspective, Blue Apron remains confident in its ability to generate double-digit revenue growth in 2021.

The year will likely bring a lot of volatility, but Blue Apron has been introducing new products along with a reset of its marketing initiatives, and this should help sustain revenue growth "even beyond COVID." 

"We're very confident in the direction that we're headed and what we are doing and how we are adding value to customers," Findley Kozlowski said. "We're confident in our plan for growth. So that's how I continue to show value to investors: to prove what we say we're going to do."

Blue Apron's stock trades at $8.50 at publication time.

Photo courtesy of Blue Apron.

 

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