GrubHub (GRUB - Free Report) has started Blue Apron’s (APRN - Free Report) on-demand meal kits on its online and mobile platforms.
The meal kits delivery option, which is in the pilot stage, have been available at a few places in New York since Oct 1. Blue Apron’s kits come in two sizes – two and four serving meals with a different menu every week on GrubHub’s platform.
The on-demand program will allow customers to get their meal kits in less than an hour, per Blue Apron. Notably, Blue Apron’s meal kits will also be delivered on Seamless’ online and mobile platforms.
Meal Kit to Attract Users?
The online meal kit delivery business was introduced in 2012 and has been gaining traction on the back of increased Internet penetration and meal preparation convenience to customers.
The value of the meal kit delivery market in 2017 in the Unites States was $4.65 billion. In the same period, Blue Apron reported revenues of $881.2 million, which means it has a share of almost 20% in the United States meal kits market. Moreover, the market is expected to grow to $11.6 billion by 2022.
Additionally, from November 2017 to April 2018, 9% of the people in the Unites States have purchased a meal kit, per Nielsen, out of which 6% shopped online. Moreover, compared with other channels, meal kits spending grew three times from March 2015 to March 2017.
Increasing online purchases coupled with growing demand for meal kits market will help GrubHub to benefit from this deal. Notably, in the last reprted quarter, daily Average Grubs (DAGs) were 423,200, which increased 35% from the year-ago quarter.
Moreover, the deal may also attract Blue Apron’s customers to GrubHub’s other services, which will eventually drive user base. Increased user base will lead to increased transaction revenues for GrubHub.
GrubHub Inc. Revenue (TTM)