Since its launch in 2012, meal kit startup Blue Apron has grown exponentially. Though the company has always strived to source sustainable ingredients, doing so with meat has proven challenging. Find out how purchasing a ranch offers an innovative solution for Blue Apron’s procurement issues.
Situation: Blue Apron Faces Constant Procurement Problems
Blue Apron’s neatly packaged and meticulously organized meal kits offer a glimpse of the company’s impressively complex operations. Though the company, which is nearly five years old, can now predict customer demand with relative accuracy, Blue Apron still faces persistent procurement issues. Its appearance standards for ingredients are remarkably high, and not all of its supplies pass muster. This means the company’s procurement teams constantly scramble to source fresh yet affordable ingredients at the last minute.
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For this New York-based startup, not just any ingredients can appear in the company’s meal kits. Blue Apron has long made a name for itself as a company that encourages healthy, sustainable meals with a farm-to-table feel. Though the company doesn’t necessarily emphasize organic farming or similarly restrictive labels, it does seek out sustainable producers, a policy that doesn’t always bode well for the company’s bottom line.
Approach: Blue Apron Purchases BN Ranch
In early 2017, Blue Apron announced a surprising solution to its procurement issues. The meal kit startup purchased BN Ranch from Bill Niman, who has been at the forefront of sustainable, grass-fed ranching for decades. Rather than simply taking over the ranch, Blue Apron has hired Niman to continue in an executive position, where he will direct the grass-fed, grass-finished cattle operation.
Though BN Ranch isn’t yet a global operation, it has the potential to scale. It currently includes a network of ranches in California and New Zealand, all of which raise animals and produce meat using the same grass-fed standards. As the ranch grows, Blue Apron will gain even more access to sustainable yet affordable meat for the company’s meal kits.
Impact and Advantage
While this is a new partnership and its full impact remains to be seen, Blue Apron’s purchase of BN Ranch appears advantageous for the startup in several ways. First, buying the ranch grants Blue Apron much greater control over its procurement process and its overall cost. This may substantially simplify the meal kit company’s supply chain and may even pave the way toward future partnerships with other farmers or ranchers.
In addition, this partnership with BN Ranch allows Blue Apron to embrace its sustainable identity more fully. While the startup may have purchased only the cuts of meat it needed in the past, going forward, the company will own the entire animal. Blue Apron plans to design menus with the intention of using as much of the animal as possible, which boosts the sustainability aspect of the company’s brand.
Blue Apron’s acquisition of BN Ranch has caught many industry experts by surprise, but the partnership appears to be an innovative solution to a problem that many companies experience. In the meantime, all eyes in the food industry will be on Blue Apron, eager to see how the startup fares after this bold step forward.[/show_to]
