As the holidays approach, Costco has hit the pause button on its meal kit pilot with Blue Apron.
Costco needs shelf space for holiday offerings, and Blue Apron customers are typically less engaged during the holiday season, Blue Apron CEO Brad Dickerson said on a recent earnings call.
Blue Apron hopes to return to Costco in 2019 and develop other retail partnerships as well, and Dickerson gave some insight on lessons learned since Blue Apron started its Costco pilot in May.
“Some of the interesting things we learned is that regional taste preference (varies) pretty widely across the country, so we saw some great successes in certain regions, and with the same recipes, maybe not as great successes in other regions,” Dickerson said on the call. “So the ability to be more tailored and specific on a regional taste preference is something that we need to keep looking at going forward.
“I would also say that the changing of recipes from one recipe to the other, that transition period is something that you have to be really very, very strategic about and very deliberate about how you switch from one recipe to the other,” Dickerson said. “That’s just is a logistical thing that we have to work through.
“The other thing I’d say is, not unlike other items in kind of the grocery brick-and-mortar channel, shelf life and shrink and waste are something that we have to keep focusing on,” Dickerson said.
The company plans to work on addressing those issues in preparation for the coming year.
“What we’re looking forward going forward is to continue to test our core product,” Dickerson said on the earnings call. “We’re talking to some of the folks also in addition to Costco because we still think there’s a lot to learn with that. I think coming out of this pilot, probably the most important thing that we’ve recognized is we believe there needs to be some pretty decent product innovation specifically focused on how can we put products out there to leverage the strength of our brand that have a better way to manage shelf life and shrink and waste going forward.
“We’re in the process of working through some of those types of products innovations,” Dickerson said. “We don’t want to talk in too much detail about them right now, but more to come on that as we’re ready to launch those in the near future.”