Blue Apron CEO talks food inflation, profitable growth, and partnerships

Blue Apron CEO Linda Findley joins Yahoo Finance Live to talk about inflation hitting food prices, the meal kit company's business operations in the late pandemic, distribution partnerships with Walmart, and the business' ten year anniversary.

Video Transcript

- Ahead of their 10-year anniversary, meal kit company Blue Apron ringing the closing bell today. Shares of APRN up almost 17% on this day on an otherwise down day for the markets. Linda Findley is the Blue Apron CEO. She joins us now from the exchange. Nice to see you, Linda. The story leading into the holiday weekend was the cost of the barbecue increasing 17%. I'm sure you read that a dozen times. How has food inflation impacted business at Blue Apron?

LINDA FINDLEY: It's really interesting. Blue Apron was built on this model of really transforming the food system. And because of that, we actually have a direct sourcing model, which means 80% of what we put into the box comes directly from producers. That allows us to have longer term contracts, keep very high quality ingredients coming into the box, and mitigate some of those pressures for our customers.

Right now, when you look at Blue Apron meals compared to, say, going to the grocery store and getting similar ingredients, we certainly come out as a much better value for our customers and also reduce waste at the same time by removing food waste from the entire supply chain. So we're very focused on translating our purchasing power into creating value and a joyful experience at home for our customers.

- And Linda, Rochelle here. On this 10th anniversary of your company being founded, just how much do you think has the consumer changed since you founded the company versus now in the sort of post-pandemic world of trying to figure out what the consumer really wants right now?

LINDA FINDLEY: The consumer has actually evolved quite a bit in a really, really interesting way. The behavior that we expected to see during the pandemic has actually borne out, which is we knew that people going into the pandemic were already cooking at home more than they had in many years prior. And then during the pandemic, they started cooking at home more.

But a really interesting transformation happened. It was less about, do I have to cook at home? And it was more about developing the skill sets, finding value, finding variety, and creating a moment, an actual time of engagement with the family around meal time. And so what we've seen is post-pandemic, cooking at home behavior has actually stayed higher than it was pre-pandemic.

And people are seeing more of the true values of the box, including things like how they think about the cost of the ingredients they get, how they think about food waste, how they think about sustainability. And that really has changed a lot. In the last 10 years, we've shipped 483 million meals to people all over the country. And that's something that we really are very excited about continuing to add more value in the future with new products.

- So how have you as a company evolved then coming out of this pandemic?

LINDA FINDLEY: We've evolved quite a bit. So I'd say the two biggest ways that we've evolved as a business, one, is we've really used all the customer data that we have access to to create a much broader, much bigger product set that our customers can choose from. So Blue Apron has always been known for quality but wasn't always as flexible as it needed to be for families at home. What we've been able to do is now we have almost 60 options on our menu. You can customize. You can change what's actually coming in your box to make sure that you're meeting your family's needs.

Those product innovations, particularly over the last 2 and 1/2 years, have really changed the dynamic of what people can purchase. On the other side, we've actually really shifted our focus. We buckled down, focused a lot on getting the product innovation to a point where we were very competitive. Now we can lean into growth and pave our path towards long-term, sustainable, profitable growth.

- And as part of that growth, obviously, you have this partnership with Walmart. How important are those partnerships to really growing the company, growing the audience, and perhaps branching out into other directions as well?

LINDA FINDLEY: Partnerships are really important to us. And we actually focus on a variety of types of partnerships. Everything from acquisition partnerships that let us just bring in new customers, as well as alternative channels like the Walmart partnership that let us take advantage of the direct to consumer model that we have to keep our margins strong while we're actually focusing on new distribution channels and new audiences.

So those third party distributions that still are fulfilled by us and let us continue to see the value in our supply chain and the operations that we built over the years are really important opportunity for us going forward, particularly as you think about how the cost of acquiring customers across the media landscape has changed. A mix of partnerships and sort of traditional marketing is really the future of the business.

- And Linda, I referenced on the introduction the shares. Just a wild ride recently. And you're no secret-- it's 17% up on the day in a year in which you're down 28%. Some have suggested Blue Apron is being traded almost as a meme stock. How do you account personally for the volatility of the stock?

LINDA FINDLEY: We're just focused on what we've always been focused on, which is long-term sustainable value. So as far as we're concerned, we're continuing to put the bricks in place to make sure that we have the right foundation. This is a huge market. Food at home has always been a big market and continues to be so. So we're staying laser focused on making sure that we have the right products for our customers. We don't waver on quality. And we focus on growth going forward. So we stay focused on that. And that's really how we think about our business.

- Thank you there to Linda Findley there, Blue Apron's CEO. Thank you for your time today.