Photo: Canva
Wonder Group, the food-delivery startup led by Jet.com founder Marc Lore, reached an agreement to acquire meal kits pioneer Blue Apron to help fulfill its vision of becoming the “primary destination for at-home dining.”
Blue Apron was the dominant meal kits provider in the fall of 2017 with a 40.3% market share at a time when the meal kit trend was buzzing, according to Recode. However, as noted by the Wall Street Journal, “Supply-chain challenges and unstable ingredient costs have taken a toll on the business, as has an increasingly saturated meal-kit market, with rivals ranging from grocer Kroger to Amazon.”
Other reasons cited for the high churn across meal kits in recent years include the logistics challenges involved in delivering individually wrapped portions in temperature-controlled boxes and fatigue over subscription models. Ordering meal kits days ahead of time also doesn’t align with the busy lifestyles of many households.
In June, Blue Apron closed a deal with FreshRealm, which delivers fresh meals to retailers, transferring its fulfillment centers, equipment, and some staff in a shift to an asset-light model.
Wonder agreed to pay $103 million, about 95% below Blue Apron’s valuation of $1.89 billion in its June 2017 initial public offering.
Wonder, which earned a $3.5 billion valuation in a funding round in June 2022, earns much of its attention by being founded by serial entrepreneur Lore, who has established and sold four businesses, including Jet.com to Walmart in 2016 for $3.3 billion and Diapers.com and parent company Quidsi to Amazon in 2010 for $545 million.
Promising to reinvent the at-home meal delivery experience, Wonder launched in 2021 by offering meals from the recipes of famous chefs such as Bobby Flay and Michael Symon cooked from vans parked outside homes.
This past January, Wonder abandoned the food truck concept in favor of opening retail locations that allow for delivery, pickup, and limited dine-in options. A major benefit is that while each van had one trained chef onboard dedicated to one restaurant concept, the physical locations can handle orders placed across multiple Wonder concepts. Lore wrote in a LinkedIn post, “These locations will give us the ability to offer dozens of different cuisines through a single kitchen, utilizing the same technology from our mobile restaurants, all while making our great food even better, faster and hotter, delivered right to your door.”
Wonder currently has four brick-and-mortar locations and will end the year with 10. Wonder plans to continue Blue Apron’s current meal kit operations, but the combination is expected to provide synergies to both businesses as well as the potential for product expansion.
“Wonder is creating the mealtime super app, serving a broad range of occasions that feature cuisines from some of the world’s best chefs and restaurants while leveraging our culinary engineering and vertically-integrated model,” said Lore in a statement. “At-home meals play a key role in this vision and have been on our strategic roadmap since the beginning.”