A rise in demand for meal kit deliveries is caused by the coronavirus
As grocery shops cut back on hours and restaurants transition to takeaway and delivery, the meal kit industry is seeing a spike in demand. Retailers probably won’t have too much trouble keeping their shelves stocked, but some customers are choosing not to go shopping because of possible health hazards, thanks to government-issued advice and orders to stay at home.
Customers are resorting to online meal kit subscriptions to keep pantries and refrigerators stocked as they are forced to make last-minute changes to their shopping and eating habits. A possible reversal for an industry that was having trouble attracting new clients and retaining existing ones is indicated by investors’ attention being drawn to meal kit companies as a result of the outbreak.
During the first week of March, Blue Apron’s stock price was less than $2.50, having dropped from $6 at the start of the year and $14 a year prior. For numerous years, the company has experienced a decline in sales and clientele. Since becoming public in 2017, Blue Apron has not turned a profit, and the firm revealed last year that it may be delisted from the New York Stock Exchange after its closing share price stayed below $1 for the majority of May. The business declared its intention to close its Arlington, Texas, location in February.
As worries about the outbreak increased, Blue Apron’s shares surged, peaking at $16.25 on March 18 before dropping below $12 the following day. The entire month has seen a surge in orders for the company.
Blue Apron CEO Linda Findley Kozlowski stated, “We have seen a sharp increase in consumer demand over the last week.” “We anticipate meeting this increased demand by the next available weekly cycle, which begins on March 30,” the statement reads. “We are increasing our capacity for future orders.”
To keep up with the growing demand, the company is expanding its employment efforts at its fulfillment sites in California and New Jersey.
“Our objective is to generate job prospects for people who might have been displaced by the foodservice or restaurant sector,” stated Ms.
Orders are rising for other meal kit providers as well, such as HelloFresh, Marley Spoon, and HomeChef.
A HelloFresh representative stated, “We have been well prepared for the increase in demand that we have been seeing.” “There aren’t any significant service interruptions at the moment; we’re working nonstop to deliver our boxes on schedule. To make sure we can keep providing our consumers with dependable, fresh meals, we are carefully collaborating with our network of partners and suppliers.
In order to handle the spike in demand, Marley Spoon is adding more staff and boosting production in anticipation of future orders. HelloFresh declared intentions to increase employment at its UK factory by fifty percent.
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Some organizations have experienced slight difficulties in supply due to the sudden increase of requests. For example, a small percentage of Blue Apron’s recipes are being replaced because of higher demand. Marley Spoon is taking precautions to prevent delays, including as making sure suitable alternatives can be made if needed and stocking stores with ingredients from vetted vendors.
Businesses anticipate being able to meet demand and are taking steps to guarantee delivery continuity. A number of businesses informed Food Business News that they had strengthened sanitation procedures and restricted access to production locations as additional measures to safeguard employees.
Supply networks have not been significantly impacted by the outbreak.
Ms. Kozlowski stated, “We are in contact with our ingredient suppliers and are closely monitoring our supply chain.” “As of right now, we are not aware of any major supply chain disruption caused by the coronavirus.”
Ms. Kozlowski issued a warning, stating that Blue Apron is operating with “imperfect information” regarding COVID-19 and its effects on business, much like other companies.
She stated, “The situation is still very fluid and a number of issues could affect our ability to serve our customers.” “We are making every effort to navigate these extraordinary circumstances.”
The outbreak’s long-term effects are still unknown. It remains to be seen if consumers who subscribed to meal kits during the outbreak will do so after it has been contained.