Blue Apron Stock drops as Amazon announces Meal Kit Business

By Angela Moon

Shares of Blue Apron (APRN - Free Report) fell 9% in morning trading on Monday after news broke that Amazon.com (AMZN - Free Report) has registered a trademark in the USA for a meal-kit business.

Blue Apron, a leader in the meal-kit delivery service industry, has seen shares drop by more than 30 percent since going public last month. But Amazon indicated plans to enter the market in a trademark application with the U.S. Patent & Trademark Office, dated July 6 and first revealed on Monday by TheStreet. The service covers "prepared food kits. ready for assembly as a meal" and, according to CNBC, will primarily include dishes consisting of grains, pasta, rice, and noodles. "You be the chef" for a business described in its application as a seller of prepared food kits. Amazon has not said exactly what it would do with Whole Foods' stores and other assets, but analysts and investors say the deal could upend the landscape for grocers, food delivery services and meal-kit companies.

The application, reported by the Times this weekend, sent Blue Apron's stock tumbling 11.8 percent to $6.49 a share Monday. Amazon didn't immediately return a request for comment. Amazon already sells meal kits from third party companies like Tyson and the Martha Stewart-Marley Spoon collaboration, and delivers them through Amazon Fresh. In just the span of a few years, Blue Apron has exposed a business that generated almost $800 million in revenue in 2016 and was able to eke out a small profit in the first quarter that year. After the second-biggest cut in IPO price in at least five years, Blue Apron listed with a valuation of $1.9 billion. Blue Apron's stock reacted very poorly to the news of Amazon's new venture, sliding as much as 12% according to Bloomberg. Most meal kits on Amazon Fresh are now priced between $10 and $24 and include ingredients for at least two servings.




A month ago, Amazon acquired Whole Foods, sending shockwaves through the business world.

"The target customer who uses a meal kit delivery service is a busy, affluent consumer".

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