1. Final Presentation: Blue Apron MKTG 796 Section 302 Team 7; Chou, Jacobs, Stohler, Ramoutar, Manepalli

2. ●Objective ●Research & Insights ○Exploratory ○Survey ○Regression Analysis ●Final Recommendations ●Other Considerations Today, we’ll go over...

3. Research Objective: To determine whether development of a line of meals for specific customer segments (e.g., low-carb, restricted-calorie, gluten-free, or vegan diet) is a viable option.

4. Exploratory research indicates a “dietary adherence” segment willing to pay for convenience Cited time constraints as the number one reason they do not cook more Spend ~$13.65/meal when eating out, suggesting meeting customer demand within Blue Apron’s current price structure of $10/meal. Were 80% likely to purchase Blue Apron if special dietary meals were introduced Figure 2: Social media sentiment of Blue Apron vs. competitors Figure 1: Geographic Interest Based on Google Search Subjects with dietary restrictions... 1:1 Interviews Internet research

5. Individuals who adhere to diet dine out less frequently than those without dietary restrictions 79% of participants indicated time was the main factor restricting them from cooking at home Survey confirms time as cooking constraint, and that specialty dieter dine out less frequently Qualtrics survey conducted, & respondents demographic as follows: 101 total respondents 69% have heard of Blue Apron before survey 25% adhere to a special diet 49 Singles, 51 Married, 3 Divorced

6. With vegetarian option already available, only 10.25% of the market would currently be interested in additional speciality diet offerings However, the special diets market is small, price- sensitive and faces limited growth 25% special dieters Diets (excl. vegetarian) are fragmented among the those who adhere to special diets Those with dietary restrictions are more price sensitive than non- dieters; Blue Apron cannot charge a premium for special dietary offerings Limited growth & revenue potential

7. Regression analysis indicates there is a weak relationship between special diets and intent to purchase Blue Apron Even those that currently adhere to a particular diet (either current or in the future) are unlikely to buy a Special Blue Apron meal, indicating there isn’t a large market for this service. Currently adhere to special diet Plan to adhere to special diet in future Q17: 1 = Extremely Likely; 2 = Somewhat Likely; 3 = Somewhat Unlikely; 4 = Extremely Unlikely ; Q71, Q91: Yes = 0, No = 1).

8. Regression analysis indicates there is a weak relationship between special diets and intent to purchase Blue Apron Even those that have heard of Blue Apron and adhere to a particular diet (either current or in the future) are unlikely to buy a Blue Apron meal, indicating there isn’t a large market for this service. Excluding subjects who have not heard of Blue Apron before the survey... Plan to adhere to special diet in future Currently adhere to special diet Q17: 1 = Extremely Likely; 2 = Somewhat Likely; 3 = Somewhat Unlikely; 4 = Extremely Unlikely ; Q71, Q91: Yes = 0, No = 1).

9. Speciality diet market is small, highly fragmented, and offers limited growth Recommendation: Do not pursue speciality meal options Customer segment is price sensitive and unlikely to pay premium Speciality meals fails to address customers’ reluctance to cook at home due to time constraints

10. Caveat! Biased sample not representative of U.S. population More price sensitive: cash-strapped graduate students More dietary concerns: only 3.5% with restricted diets in population vs. 25% in the survey sample; may overstates interest and potential market size for speciality diet offerings Further research in ‘young & single’, large quantity packages, meal flexibility, & reduced meal prep Look into alternate segments and discover new value propositions: Singles demographic Large quantity packages (e.g. once-a-week meal prep) Meal selection flexibility Reduced meal prep time (e.g. Munchery)

11. Appendix

12. Regression Analysis

13. Regression 1 Analysis : Dependent Variable: Q17 → How likely are you to buy a blue apron “specialty meal” subscription (A Specialty meal is a meal that caters specifically to your dietary requirements) Analyzing scale: 1 – Extremely Likely 2 – Somewhat Likely 3 – Somewhat Unlikely 4 – Extremely Unlikely Independent Variable: Q71 → Do you currently adhere to a particular diet such as: Gluten-free, Vegetarian, Vegan, Paleo etc. Analyzing scale: (Yes = 0 ; No = 1) Q17 = 2.5 + 0.554*Q71 Therefore, If Q71 = Yes = 0 Q17 = 2.5 (This leans towards Unlikely) If Q71 = No = 1 Q17 = 2.5 + 0.554 = 3.054 (Somewhat Unlikely) This analysis says, even those that adhere to a particular diet( Glutenfree, Paleo etc) are not likely to buy a Blue Apron meal, which indicates that there is not much of a market for this service

14. Regression 2 Analysis : Dependent Variable: Q17 → How likely are you to buy a blue apron “specialty meal” subscription (A Specialty meal is a meal that caters specifically to your dietary requirements) Analyzing scale: 1 – Extremely Likely 2 – Somewhat Likely 3 – Somewhat Unlikely 4 – Extremely Unlikely Independent Variables: Q71 → Do you currently adhere to a particular diet such as: Gluten-free, Vegetarian, Vegan, Paleo etc. Analyzing scale: (Yes = 0 ; No = 1) Q91→ How likely are you to follow one of these diets in the future? (Ex: Gluten- free, Vegan, Paleo) Analyzing scale: (Unlikely = 0 ; Likely = 1) Q17 = 2.5 + 0.627*Q71 – 0.491*Q91 Therefore, If Q71 = Yes = 0 and Q91 = Likely = 1 Q17 > 2 (Still not likely) If Q71 = Yes = 0 and Q91 = Unlikely = 0 Q17 = 2.5 (Leans toward Somewhat Unlikely) If Q71 = No = 1 and Q91 = Likely = 1 Q17 > 2.5 (Still not likely) If Q71 = No = 1 and Q91 = Unlikely = 0 Q17 > 3 (Somewhat Unlikely) This analysis says, even those that dont adhere to a particular diet now but may in the future aren’t likely to buy a BA meal

15. Regression 3 Analysis : Dependent Variable: Q17 → How likely are you to buy a blue apron “specialty meal” subscription (A Specialty meal is a meal that caters specifically to your dietary requirements) Analyzing scale: 1 – Extremely Likely 2 – Somewhat Likely 3 – Somewhat Unlikely 4 – Extremely Unlikely Independent Variable: Q391 → How important is personal fitness/health to you? Very Imp = 1 ; Slightly Imp = 0 Q17 = 3.06 - 0.214*Q391 Therefore, If Q391 = Very Imp = 1 Q17 = 2.8 (This leans towards Unlikely) If Q71 = Slightly Imp = 0 Q17 = 3.06 (Somewhat Unlikely) This analysis says - those that feel personal fitness/health is important to them are not likely to buy a special meal from B.A Not Statistically Significant, but can be used as backup

16. A similar analysis was done specifically with people who had heard of Blue Apron earlier. This eliminates the possibility of - people who will not subscribe to special meals from Blue Apron because of a lack of awareness of the service. i.e this goes to show that they are rejecting the service not because they don’t know what BA is, but because they feel it is not a great value add.

17. Regression 4 Analysis : Dependent Variable: Q17 → How likely are you to buy a blue apron “specialty meal” subscription (A Specialty meal is a meal that caters specifically to your dietary requirements) Analyzing scale: 1 – Extremely Likely 2 – Somewhat Likely 3 – Somewhat Unlikely 4 – Extremely Unlikely Independent Variable: Q71 → Do you currently adhere to a particular diet such as: Gluten-free, Vegetarian, Vegan, Paleo etc. Analyzing scale: (Yes = 0 ; No = 1) Q17 = 2.545 + 0.34*Q71 Therefore, If Q71 = Yes = 0 Q17 = 2.54 (This leans towards Unlikely) If Q71 = No = 1 Q17 = 2.54 + 0.554 = 3.094 (Somewhat Unlikely) This analysis again says even those that adhere to a particular diet and knew of the BA service are not likely to buy a Blue Apron special meal

18. Regression 5 Analysis : Dependent Variable: Q17 → How likely are you to buy a blue apron “specialty meal” subscription (A Specialty meal is a meal that caters specifically to your dietary requirements) Analyzing scale: 1 – Extremely Likely 2 – Somewhat Likely 3 – Somewhat Unlikely 4 – Extremely Unlikely Independent Variables: Q71 → Do you currently adhere to a particular diet such as: Gluten-free, Vegetarian, Vegan, Paleo etc. Analyzing scale: (Yes = 0 ; No = 1) Q91→ How likely are you to follow one of these diets in the future? (Ex: Gluten-free, Vegan, Paleo) Analyzing scale: (Unlikely = 0 ; Likely = 1) Q17 = 2.545 + 0.614*Q71 – 0.492*Q91 Therefore, If Q71 = Yes = 0 and Q91 = Likely = 1 Q17 > 2 (Still not likely) If Q71 = Yes = 0 and Q91 = Unlikely = 0 Q17 = 2.54 (Leans toward Somewhat Unlikely) If Q71 = No = 1 and Q91 = Likely = 1 Q17 > 2.5 (Still not likely) If Q71 = No = 1 and Q91 = Unlikely = 0 Q17 > 3 (Somewhat Unlikely) This analysis says, even those that dont adhere to a particular diet now but may in the future and are aware of BA services are not likely to buy a Blue Apron special meal

19. Survey Data

20. Ratings for Q17-Q23 How likely would you be to purchase a blue apron subscription for $X per week ($60-$90) – 1 = Extremely Likely – 2 = Somewhat Likely – 3 = Somewhat Unlikely – 4 = Extremely Unlikely

21. Determined Percentages of Population Applied 80% deflator to each “extremely likely” person Applied 30% deflator to each “somewhat likely” person Summed these up and then took percentage to total number of this specific demographic that took the survey.

22. Percentage of people in each segment 15% of singles would be interested in a specialty meal at $60

23. Question 16 Divide 100 points equally between food options: – Gluten-Free – Low Sodium – Paleo – Vegan – Low Carb

24. 100 Average among Interested Singles for $60 meal (15% of singles) **Interested Singles = singles who marked either “Extremely Likely” or “Somewhat Likely” for the question: how willing are you to pay for a $60 specialty meal subscription?