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CNBC has an interesting story comparing two meal kits companies - Blue Apron and Chef’d - that have embarked on very different approaches to long-term viability.

Blue Apron, as the story points out, “tested the public markets” with an IPO, but “the results haven't been pretty.” It “planned to sell shares at $15 to $17 a piece and ended up cutting that price to $10 in late June. The company, which is scheduled to report quarterly results on Thursday for the first time since its IPO, has since lost 38 percent of its value, closing on Wednesday at $6.24.”

Rival Chef’d, on the other hand “is skirting the venture capital path and is instead reeling in cash from strategic investors who are seeking to adapt to digital trends in the food industry. Corporate capital gives the company a different approach to a market that features 10 or more players all vying for consumers who want meals delivered directly to their door.”

Among the partners are Smithfield Foods (to the tune of $25 million), Campbell Soup ($10 million), and FreshDirect ($200,000). Plus, the story notes, Chef'd CEO Kyle Ransford points out that “Chef'd spends just 1 percent of its sales on promoting the product. Blue Apron, by contrast, spent about 25 percent of its $245 million in first-quarter revenue on marketing. Rather than offering free meals and deep discounts for newcomers and spending heavily on social media, Chef'd relies on partnerships with household brands that have big budgets.

“Last year, the start-up teamed up with the New York Times to become the exclusive meal kit for the newspaper's online cooking section, and last month Chef'd partnered with Coca-Cola to offer combination food and beverage kits. It also gets a lot of business through Amazon, where a search for ‘meal kits" typically puts Chef'd results at the top, and has gotten some publicity for raising money on crowdfunding sites Indiegogo and CircleUp.”
KC's View:
This probably isn’t an apples-to-apples comparison, but while reading this story I found myself thinking back to the Webvan IPO, and how less than two years later that company found itself declaring bankruptcy. One of the problems that Webvan had was that its goals exceeded the ability of the foundation it built to support them.

I have to say that I kind of like the Chef’d approach … find lots of strategic partners and build as strong a foundation as possible, and not let the goals get ahead of them. Managing growth in an effective way is incredibly important, because it allows companies to be both effective and efficient.