Blue Apron Holdings Inc said it has seen a “sharp increase” in demand for its mail-order meal kits over the past week as Americans look for alternatives to shuttered restaurant dining rooms and barren grocery store shelves.
The company said it’s boosting capacity for future orders and expects to be able to fulfil the increased demand by the week of March 30. Blue Apron shares have surged this week amid speculation that the coronavirus outbreak would be a big boon to its business, which had been declining amid stiff competition from fellow meal-kit pioneer HelloFresh SE and retail giants like Kroger Co and Walmart Inc.
“We are hiring for temporary and permanent positions in our Linden, New Jersey, and Richmond, California, fulfilment centres and hope to create employment opportunities for individuals who may have been displaced by the restaurant or food service industry,” Chief Executive Officer Linda Findley Kozlowski said in an e-mailed statement.
Shares of the New York-based company have risen more than 500 per cent this week, bucking the broader market rout, as cities and states ordered restaurants to limit or halt operations in an effort to curb the spread of Covid-19. Earlier Thursday, the stock opened above US$25 a share for the first time since the fall of 2018, before erasing those gains. The stock fell 12 per cent, to US$14.34, as the market closed.
While the run on grocery stores has sparked some concerns about a potential food shortage, Blue Apron said it’s in contact with its suppliers and has seen no significant disruption to date as a result of the outbreak. Due to the spike in demand, the company has had to make some changes to recipes and box orders for a small portion of its volume next week.
Google Trends data show that search interest for Blue Apron is spiking, although the top searches in the past seven days related to the name have been about the stock or competitors, such as Germany’s HelloFresh.
Any boost in demand for Blue Apron will likely ebb after the immediate threat of the outbreak passes and consumers act on pent-up demand for eating out, Bloomberg Intelligence senior analyst Jennifer Bartashus said.
“For Blue Apron, the ability to hang onto any customers they pick up during this pandemic will depend on execution,” Bartashus said. “The ability to ensure people receive their kits on time with high-quality ingredients will be crucial.”