GOSHEN, N.Y. — The fairy tale eggplant is nearly seedless, light purple and white-streaked, and tiny enough to fit in the palm of your hand. It’s shape is familiar but it tastes less bitter than the common variety.
Fairy tale eggplants are hardly a staple of the American dinner table and are nearly nonexistent in supermarkets. And yet, Blue Apron, the meal-kit delivery service, has plenty of use for them: The company expects to buy half a million pounds of them this year. In fact, executives think they are buying literally the entire commercial supply of the obscure produce.
They plan to do the same with Shokichi Shiro squash, Atlas carrots and at least 40 other specialty crops this year.
Blue Apron’s vegetable binge is helping the young company build a fast, almost-cult following among people who want to prepare original home-cooked meals without the fuss of dealing with a shopping list.
And it is hardly alone. Investors have poured hundreds of millions of dollars into a wave of ambitious startups with names like Plated and Sun Basket that are aiming to take a piece of a grocery industry that has proven difficult to disrupt.
Each meal-delivery player has its own hook: HelloFresh has enlisted celebrity chef Jamie Oliver to whip up exclusive recipes, while Marley Spoon is doing the same with Martha Stewart. Purple Carrot, backed by former New York Times food columnist Mark Bittman, touts plans for vegans. PeachDish promises customers seasonal food with Southern flair.
Earlier upstarts tried to win over shoppers by delivering food to their doorsteps and saving them a trip to the grocery store. The dinner-in-a-box companies, though, are betting that they can bypass the supermarket altogether by adding the convenience of curating recipes and portions so that all families have to do is chop and stir and fire up the stove.
It’s still too soon to know whether they will ultimately become a threat to traditional grocers. But Blue Apron thinks the secret might be changing the logistics of how fresh food moves to the pantry, fundamentally rethinking the food supply chain by starting all the way back at the farm.
On the farm
Rogelio Bautista’s farmstead is nestled in Upstate New York’s Black Dirt region, so named for the dark-colored, highly fertile soil that is unique to this stretch of one-time swampland.
On a sun-drenched spring day, only the tiniest shoots of green appear in his plot of 23 acres. But by the end of summer, if all goes well, much of the land will be bursting with tens of thousands of pounds of fairy tale eggplants destined for the dinner plates of Blue Apron subscribers in the Northeast and Mid-Atlantic.
Bautista, like many of the 16 farmers cultivating the tiny vegetable for Blue Apron this year, hasn’t grown the crop before. But the company helped him make a plan: Its agroecologist, Alison Grantham, earlier visited Bautista’s farm in Goshen, N.Y., to take soil samples. She consulted localized temperature and precipitation data. And she asked Bautista about what crops he has grown successfully in the past.
With that information, she gave guidance to Bautista about topics including planting dates, plant spacing and pest management for growing the fairy tale eggplant.
This kind of partnership is at the heart of Blue Apron’s strategy: If farmers grow only what they need, and then if Blue Apron delivers to customers only the precise portions a recipe calls for, that efficiency could both benefit the environment and keep a lid on the company’s costs, a key to competing in an industry notorious for thin profit margins.
Agriculture experts say this attempt to match supply with demand resembles a CSA, or community-supported agriculture model, where farmers sell directly to a prepaid group of families — but on a bigger scale.
Bautista said the arrangement marks a welcome change from his previous setup, in which he was largely dependent on sales at farmers markets: One rainy day could keep away so many customers that he would end up throwing away armloads of perfectly good food that would spoil before his next selling opportunity.
“It’s been easier for us as a business,” Bautista said.
“It tastes better”
Almost two hours north of Bautista’s New York land, the growers at Ironwood Farm in Ghent, N.Y., said that quest for stability has made it attractive for them to grow thousands of pounds of pea shoots for Blue Apron for dishes like “Falafel pitas and tzatziki with pea shoot salad.”
“A lot of wholesale is through restaurants,” said Aliyah Brandt, one of the farm’s co-owners. “They kind of know what they want, but it’s not precise. This is so precise.”
“And we know we can sell all of it,” adds Jenny Parker, also a co-owner.
In the late-morning heat, as the Ironwood team takes two of Blue Apron’s co-founders, Matt Salzberg and Matt Wadiak, on a tour of the farm, it is easy to see why this precision matters.
They’ve got only nine acres of land, and that means little room for error.
“We get one shot to make all of our money in a small space,” Jones said.
As the women invite Salzberg and Wadiak inside a greenhouse bursting with rows of salad greens, it’s not long before Wadiak — a former chef and tomato farmer who today heads Blue Apron’s operations — is crouching down to pick off a piece of arugula and taste it, immediately praising how spicy it is. Salzberg, the chief executive, is soon crunching on the arugula as well. Stepping out of the heat of the greenhouse, Salzberg says the punchy flavor captures why working with small farmers is a core business strategy for Blue Apron. “It tastes better,” Salzberg says. “It’s the quality control.”
Also, there’s this: At a moment when small-batch goods and local produce are ultra-trendy, Blue Apron can use these relationships with farmers to create a halo of uniqueness and a feel-good vibe around its brand. But Wadiak and Salzberg think the business case is broader than that: The grocery business is extremely competitive, and they think what Blue Apron is doing with specialty crops would be hard for a supermarket to replicate.
“Traditional grocery stores can’t sell the variety of products we can, because they don’t merchandise as recipes,” Salzberg said.
Here’s what Salzberg means by that: Take a crop like pink lemon, another item that Blue Apron thinks it has bought the entire commercial supply of. If shoppers saw the uncommon green-and-yellow striped fruit at the supermarket, they might not know what to do with it — and so they probably wouldn’t buy it.
But Blue Apron isn’t selling a pink lemon. It’s selling a recipe. It’s selling something like “Za’atar Chicken and Pearl Couscous” that is dressed with a pink lemon compote. By providing the pink lemon as part of a broader suite of ingredients, and providing instructions on what to do with it, Blue Apron thinks it’s better positioned to do a big business in unconventional produce, and differentiate itself from other sellers.
Convenience dilemma
Analysts say Blue Apron and others of its ilk seem to have tapped into something very powerful and appealing to today’s consumer.
“Everyone’s busy; no one has any time. This is a trend we’re seeing across multiple industries, not just food. People are increasingly demanding that products and services come to them,” said Fiona O’Donnell, an analyst at Mintel.
And yet, the meal-kit category overall appears to have work to do on the customer retention front: According to e-commerce analytics firm Slice Intelligence, less than half of shoppers that used subscription meal services between January 2014 and February 2016 ended up ordering more than three times.
Blue Apron offers two plans: A family plan that includes two or four dinners a week that feed four people, or a couple’s plan that includes three dinners a week that feed two people. That means there is a huge swath of consumers its model doesn’t work well for, including one-person households, which make up a greater share of the population than ever before. What if a couple wants to cook only once a week? What if some nights a busy mom is cooking for two, and other nights cooking for four?
And although Blue Apron does offer vegetarian plans and accommodations for certain dietary restrictions, it’s not doing much right now to cater to dining preferences.
It’s clear that Blue Apron is considering more options to address these limitations. Salzberg said Blue Apron is trying to reach more households, and pointed to the 2012 addition of vegetarian plans and the 2015 addition of the family plan as evidence of how it has already done that.
Papas said more personalization is in the works.
“The data team is working very hard on making more intelligent recipe recommendations,” Papas said.
