On July 6, Amazon filed a trademark “We do the Prep, You be the Chef” with the U.S. Trademark office.
By now we are used to seeing Amazon file trademarks and patents. Some that see the light of day, others that do not.
BLUE APRON STOCK FALLS AFTER NEWS OF TRADEMARK FILING BY AMAZON
Blue Apron Holdings, Inc. dropped 12% after news broke about Amazon’s filing of the trademark for a meal kit service. The company has been a leader in the ready to cook meal delivery service space for some time.
However, June’s IPO by Blue Apron was already underwhelming as the company expected to come out of the gate with $15 to $17 per share price. As of this writing, the stock price is below $7 and falling, which is a 30% drop from the IPO price.
When the IPO launched, Blue Apron had to settle for $10 per share as investors were already concerned about Amazon or others larger competitors entering the meal-kit segment.
WHOLE FOODS ACQUISITION BY AMAZON FACTOR IN MEAL-KIT SERVICE
Investors point to Amazon’s acquisition and disruption of the grocery and food market as the reason for the bearish view on Blue Apron.
But why would a grocery chain be a competitor to a meal-kit service? The answer to that question lies in the Whole Foods distribution and stores network.
Before Amazon’s entry into the fresh food segment, Amazon’s distribution centers were not equipped to deal with large scale food delivery.
By adding over 400 Whole Foods locations, Amazon can use the stores and distribution network from Whole Foods to deliver meal kits in most urban U.S. markets.
Amazon could go to an on demand meal-kit service utilizing Whole Foods stores. This type of service would just about but kill companies like Blue Apron that do not have the local presence Amazon is gaining with Whole Foods.
At this point, this is all speculation as Amazon has not provided any information about the meal service or how it may use Whole Foods in its operation.
However, it doesn’t take a genius or an MBA in Business to see how the pieces can easily fit together and how this may disrupt the meal-kit market before it even reaches maturity by existing players.
AMAZON DISRUPTS DISRUPTERS
With the revelation of the trademark registration and the other story we published today about the possibility of Amazon entering the messaging space, Amazon is not stopping at disrupting traditional brick and mortar markets.
This new trend shows the power of Amazon, and one wonders when regulators may start to believe the company is too big… Could we see a forced breakup by U.S. or EU regulators in the future?