Blue Apron shares fell as much as 12 percent Monday following an ominous sign that Amazon is preparing a move into its niche market for meal-kit deliveries.
On July 6, about a week after Blue Apron priced its IPO, Amazon applied to register a trademark with the U.S. Patent and Trademark Office for the slogan “We do the prep. You be the chef.” The phrase could be a stand-in slogan for Blue Apron, which has registered “A better way to cook.”
The application, reported by the Times this weekend, sent Blue Apron’s stock tumbling 11.8 percent to $6.49 a share Monday. That marks a 35 percent decline from its $10 a share offering price and an even steeper discount to the $15-to-$17 a share IPO it had initially hoped for. With a market cap of $1.23 billion, Blue Apron is about a quarter billion dollars away from losing its unicorn status.
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. That left some thinking it could be a good partner for Whole Foods Markets — until Amazon moved, two weeks after Blue Apron filed its prospectus, to buy the retail chain, limiting Blue Apron’s options.
To grow its market share, Blue Apron spent heavily on marketing. In the last quarter, the company spent $61 million, or about a quarter of its revenue, on online, podcast, and other marketing. Amazon can blunt this marketing edge with its Prime membership and Whole Foods’ brand recognition. It can also offer meal kits for in-store pickup, in addition to the kind of delivery subscription Blue Apron offers.
After the Amazon-Whole Foods deal was announced, pushing into meal-kit deliveries struck observers as a simple step for the ecommerce giant to take. Amazon seems to agree, having registered a trademark for such a business. Techcrunch noted that Amazon has filed for two other trademarks related to meal kits this year, including another slogan, “We prep. You cook.”
Amazon has emerged as an 800-pound gorilla in retail and the cloud, becoming a source of volatility for many stocks. Not only did Whole Foods rally on the announced acquisition, but grocery retailers dropped. A partnership with Nike helped its shares but hurt those of sporting-goods stores. VMWare was up 3 percent Monday on a report it may partner with Amazon in corporate data centers.