Blue Apron Customers are Raging over Empty Boxes, Missing Ingredients

Dow Jones08-19

Marlene Cooper has paid $100 a week to get a box of five meals from Blue Apron for the last decade, delighting in dinners like chicken enchilada skillet and cilantro paneer and chickpea curry.

But a few weeks ago, the 53-year-old who lives in Fredonia, N.Y., started noticing problems with her orders. Some ingredients were missing-like all the vegetables. Others were replaced with acceptable substitutions, like garlic tahini for regular tahini. This week was worse.

"It looked like some random person threw stuff in the box," said the clinical-trials executive. After she complained on social media, Blue Apron gave her a refund, she said.

Customers of meal-kit companies like Blue Apron and Marley Spoon are angry over a host of recent problems including missing ingredients, nearly empty boxes or no delivery at all. Many are demanding refunds, stopping orders and venting on social media.

At the root of the problem is the bankruptcy of a major supplier earlier this year. Both companies recently transitioned to a new assembly-and-shipping supplier, which has caused a cascade of issues related to ingredients and packaging, they said.

"Missing ingredients. Incomplete boxes. Delivery delays," said Marley Spoon on Instagram Monday. "We're in the middle of an operational transition, and it hasn't gone as smoothly as planned."

Blue Apron offered a similar message: "Over the past several weeks, we've been transitioning to a new fulfillment partner, and to say that it has not gone smoothly would be an understatement," Blue Apron posted on one of its social-media accounts.

Kim Condas, a retired librarian for the Central Intelligence Agency, said her recent Blue Apron shipment box arrived damaged and missing key ingredients like the tomatoes for the "baked garlic shrimp and tomatoes" recipe. She didn't get the noodles, scallions or soy sauce for "cold sesame noodles."

"I've skipped the next four deliveries," said the 65-year-old who lives in Herndon, Va., and has ordered from Blue Apron for a decade.

The stumbles add to a string of struggles in the meal-kit industry since the boom times of the pandemic receded. Meal-kit companies typically sell recipes and ready-to-cook portioned ingredients that are sent to customers' residences, pitching easy, healthy, home-cooked meals. Some have expanded into ready-to-heat meals and groceries. Many of the companies have struggled to find a financial model that works long term and have cycled through different ownership and fulfillment models.

After struggling as a public company, Blue Apron was purchased by food-delivery startup Wonder in 2023 for around $103 million, far below its IPO value of $1.9 billion in 2017. In fiscal 2022, Blue Apron reported revenue of $458.5 million, down from its pre-IPO revenue of more than $790 million.

The company is now "temporarily focusing our menu on what we're confident we can deliver, adding quality checks before boxes ship, and making progress with our partners to fix what's broken," said a Wonder spokesman.

FreshRealm had been the main supplier for Blue Apron and Marley Spoon. It filed for bankruptcy earlier this year after a series of listeria outbreaks in its factories last year led Walmart-its largest customer-to end the relationship. Walmart stopped buying its food, such as some store-brand prepared meals, in January, according to court documents related to the bankruptcy filing. Walmart accounted for over 20% of the company's revenue at the time, said the filing. Blue Apron, FreshRealm's largest customer, also filed a lawsuit to attempt to get out of its contract with FreshRealm.

HelloFresh-the largest meal kit company globally-has escaped unscathed as it does all of its meal-kit manufacturing in-house. HelloFresh used to get some ready-to-heat meals from FreshRealm but ended that relationship in the wake of the listeria problems, said a HelloFresh spokeswoman.

Bankruptcy lawyers and executives for FreshRealm didn't respond to requests for comment.

As part of its bankruptcy agreement, FreshRealm sold some of its business, including parts of its Blue Apron and Marley Spoon contracts, to Misfits Markets, a Baltimore-headquartered perishable food e-commerce company that has grown its business by shipping other companies' fresh and frozen foods in recent years.

The transition process through bankruptcy has been "incredibly messy and incredibly fast," which has led to fulfillment problems, said Misfits Chief Executive Abhi Ramesh in an interview.

Earlier this year, Blue Apron-owner Wonder discussed with Misfits the idea of buying FreshRealm as bankruptcy proceeded, said Ramesh. "If the doors close for FreshRealm, as you can imagine, the doors end up closing for everyone they are doing fulfillment for," he said.

In recent weeks more meal-kit orders were transitioned from former FreshRealm locations to one of Misfits' regional warehouses, said Ramesh. Some inventory counts reported as part of the bankruptcy proceedings were incorrect, leaving the company scrambling to find enough ingredients, such as buffalo sauce and croutons, he said.

"I feel for the customers because it's a horrible experience," he said. "This is a supply chain that took years and years to architect and has basically fallen apart in 60 days," he said. "We are trying to put it back together as quickly as possible."

This week it pre-emptively canceled orders that won't have the required ingredients, he said. Ramesh said he hopes to be back to more normalized shipping within the next two weeks, he said.

Meanwhile, some customers have canceled their weekly meal shipments.

For over a decade Steven McGinty has spent around $70 most weeks for three Blue Apron meals to cook dinner for himself and his husband. Last week two chicken portions were missing, said the 43-year-old pricing analyst who lives in Atlanta.

This week the meal box came with a container of harissa sauce splattered over its contents. McGinty has been able to get a credit for the disappointing orders, but has canceled all future shipments for now, he said.

"We just went to the grocery store this week like normal people."

 
 

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