But then, you have the issue in terms of, who owns Whole Foods? With Amazon potentially having taken over that business and deciding to throw its hat into the ring here with the help of the brick-and-mortar infrastructure that Whole Foods includes, the scale and size advantage that they have, and Amazon's logistical prowess, I feel like every single time we talk about some industry on the verge of disruption Amazon has something to do with it and how they can hurt the established players. So neither company right now is operating profitably, but if they can do that, it definitely helps to legitimize and add some weight to the idea of these being more sustainable businesses. Management has also indicated that they hope to break even in the next 15 months. But, on the HelloFresh side, I think they have more active customers than Blue Apron. Blue Apron, despite the challenges that it's seen, some of the analyst expectations for the company's revenue, they expect it to grow double digits in the next several years, hitting close to $1.2 billion by 2018. I think competition ultimately is going to drive prices down, shake out some of the weaker players. Overall, I'm not all that bullish on the meal kit space in general.
They might be the biggest players right now, but I think you have to look at the growth overall for this industry. If the whole market for meal kit delivery is $2 billion, and these two companies will have most of that market by some point next year, guess what? They're extremely vulnerable to me. Not to mention Kroger, which also has its own small meal kit delivery service that it's working on.
We mentioned Plated, which is now owned by deep-pocketed grocery chain Albertson's. These are two companies - small, fledgling, raising money in the public markets to go against the likes of Amazon-Whole Foods with AmazonFresh, and we know Amazon has taken out some trademarks and patents for its own delivery service. Now, most of the estimates that I have seen for the meal kit delivery market in North America in total are about $2 billion. So, if both companies are at a run rate of about $500 million in half a year's time, that's $1 billion revenue, roughly. Blue Apron, as I mentioned earlier, did a little less than $500 million of revenue in the first six months of this year. Which is why HelloFresh says it can overtake Blue Apron this year. Sharma: The detail that really stuck out to me, Vince, was if you line up the second quarters between these two companies, HelloFresh had sales - and I'll convert this to dollars - $169 million vs. What other details have you seen around them, and what kind of impact do you think this is going to have for Blue Apron? 1 meal kit player in the United States by next year. Management has established a very clear goal of becoming the No. The CEO of HelloFresh, Dominik Richter, he said that his company is poised to surpass Blue Apron by revenue in the coming months.
Did I get that right, Asit?Īsit Sharma: About €1.5 billion, or $1.8 billion. Currently, Blue Apron has a market cap of about $1 billion, whereas HelloFresh would like to come out with a valuation, I think it was €1.8 billion. If they price where they want to, that will ultimately be a bigger deal than Blue Apron had, and they'll come out of the gates potentially with a stronger valuation than Blue Apron as well. Vincent Shen: To make matters even more interesting, you have HelloFresh, one of their biggest rivals, gearing up for its own IPO in Germany.
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