Should Starbucks acquire Blue Apron?

Blue Apron's recently announced partnership with Costco is meant to help the meal kit provider out of a year-over-year slump. But one consultant who spoke with RetailWire saw the Costco deal as a poor move for Blue Apron. Consultant Brittain Ladd envisions an acquisition by Starbucks as Blue Apron's real meal ticket, though the success of this hypothetical buyout would also depend on Blue Apron shifting gears.

"Blue Apron needs to diversify by entering the ready-to-eat meals and protein snacks business," Mr. Ladd said. "Specifically, I recommend that Blue Apron acquire ICON Meals, a leader in both categories. ICON offers meals for breakfast, lunch and dinner and sells a line of protein snacks."

Mr. Ladd sees Starbucks' thus-far weak performance with food as something that could be reversed by properly presenting ready-to-eat meals from Blue Apron. The demand, he says, is there, citing surveys that reflect 50 percent of Starbucks customers wanting more food options. He suggests discounts when food and coffee are purchased together, and giving customers Starbucks rewards for purchasing online meal kits from Blue Apron.

Mr. Ladd also notes a branding synergy with Starbucks not present with Costco.

"Blue Apron is a premium brand. Starbucks has an opportunity to better leverage their stores to add value to customers by offering premium food products," said Mr. Ladd. 

As for the current Costco deal, Mr. Ladd saw it as setting up Blue Apron to get undercut.

"Blue Apron should only sell their meal kits through Costco if Costco [were to acquire] Blue Apron and made the brand their primary meal kit," said Mr. Ladd. "At some point, Costco will sell their own branded meal kits at a price point lower than Blue Apron. Blue Apron will be forced to reduce the price of their meal kits even more, further diluting their brand and online sales."

Were a Starbucks acquisition of an improved Blue Apron to happen, on the other hand, Mr. Ladd sees it as Starbucks' first step down the path toward innovation and differentiation in food.

"Acquiring Blue Apron is an inexpensive opportunity for Starbucks to enter multiple food categories that will delight customers and increase revenue," said Mr. Ladd.