March 22, 2020, 10:16 a.m. EDT

Blue Apron is increasing capacity and hiring workers to meet coronavirus-related demand, stock soars more than 500%

Blue Apron says there have been no significant supply chain disruptions

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By Tonya Garcia, MarketWatch


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Blue Apron’s CEO says the company has had a “sharp increase” in demand over the past week

Blue Apron Inc. says demand for its meal kits has soared, and it is taking steps to rise and meet the demand over the next couple of weeks.

Blue Apron’s /zigman2/quotes/203710464/composite APRN -7.82%   stock has also soared, rising as much as an eye-popping 529%. Shares closed Thursday at $14.34.

Linda Findley Kozlowski, Blue Apron’s chief executive, told MarketWatch in a statement that demand for Blue Apron meal kits has experienced a sharp increase over the past week.

“We are increasing our capacity for future orders and expect to fulfill this increased demand by the next available weekly cycle, starting on March 30,” she said.

See: General Mills says its food supply chain is operating ‘effectively’ and guidance assumes that will continue

Kozlowski said nothing in the statement sent to MarketWatch is “a prediction about current or future performance of the company as the situation remains very fluid and various matters could affect our ability to serve our customers.”

However, the sudden coronavirus-related demand for the company’s meal kits is an about-face from what it had been experiencing for some time. Shares retreated 29% on Friday, with Blue Apron stock is down 34% over the past year.

The S&P 500 index /zigman2/quotes/210599714/realtime SPX -1.81%   is down nearly 15% for the past 12 months.

Blue Apron reported a fourth-quarter revenue miss last month and said it was exploring strategic alternatives.

The company is now looking to hire on a temporary and permanent basis in its Linden, N.J., and Richmond, Calif., fulfillment centers, and Kozlowski said the company is unaware of any supply chain disruptions.

Grocers and food companies have seen a spike in demand and traffic over the past week or so as people settle in at home and eat more homemade meals, part of an effort at social distancing to curb the spread of coronavirus.

Read: Walmart stock wins second upgrade of the week as customers flock to grocers amid coronavirus

According to a GlobalData coronavirus consumer impact study, 13.7% of consumers are eating out less. And consumers say they’re stocking up on food items and other necessities at places like Walmart Inc. /zigman2/quotes/207374728/composite WMT -1.28%  , Kroger Co. /zigman2/quotes/206215053/composite KR -1.44%   and discount stores like Dollar General Inc. /zigman2/quotes/200691429/composite DG -1.26%   and Dollar Tree Inc. /zigman2/quotes/203712248/composite DLTR +0.37%  

Nielsen data shows that much of the food that shoppers are “pantry loading” are shelf-stable items like rice (sales up 57.5% for the one-week period ending March 7) and black beans (sales up 41% for that same period). Fruit and vegetable sales have declined, though Edible Arrangements, the fruit bouquet company that makes orders available for delivery, says its fresh produce box has been a hot seller.

As the coronavirus isolation wears on, Jim Hull, senior industry strategy director at digital-fulfillment platform Blue Yonder, thinks shoppers will become even more comfortable with online grocery, which has been slow to grow.

Hull also thinks people might start looking for more variety in their diets.

“[T]he longer this lasts, the less people will settle for frozen pizzas and reheated pasta — bolstering the case for Blue Apron and similar,” he said.

“[I]f the first orders come in with great quality vegetables and still-cool protein, they stand the chance of capturing a long-term customer instead of a short-term dabbler.”

/zigman2/quotes/203710464/composite
US : U.S.: NYSE
$ 6.13
-0.52 -7.82%
Volume: 582,547
Sept. 23, 2020 2:44p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$116.65 million
Rev. per Employee
$284,934
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/zigman2/quotes/210599714/realtime
US : S&P US
3,255.43
-60.14 -1.81%
Volume: 1.45B
Sept. 23, 2020 2:44p
loading...
/zigman2/quotes/207374728/composite
US : U.S.: NYSE
$ 136.55
-1.77 -1.28%
Volume: 4.84M
Sept. 23, 2020 2:44p
P/E Ratio
21.85
Dividend Yield
1.58%
Market Cap
$391.94 billion
Rev. per Employee
$223,654
loading...
/zigman2/quotes/206215053/composite
US : U.S.: NYSE
$ 33.26
-0.48 -1.44%
Volume: 3.80M
Sept. 23, 2020 2:44p
P/E Ratio
10.05
Dividend Yield
2.17%
Market Cap
$26.13 billion
Rev. per Employee
$269,849
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/zigman2/quotes/200691429/composite
US : U.S.: NYSE
$ 205.72
-2.62 -1.26%
Volume: 926,710
Sept. 23, 2020 2:44p
P/E Ratio
22.36
Dividend Yield
0.70%
Market Cap
$51.88 billion
Rev. per Employee
$189,815
loading...
/zigman2/quotes/203712248/composite
US : U.S.: Nasdaq
$ 87.13
+0.32 +0.37%
Volume: 1.03M
Sept. 23, 2020 2:44p
P/E Ratio
23.33
Dividend Yield
N/A
Market Cap
$20.60 billion
Rev. per Employee
$129,604
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Tonya Garcia is a MarketWatch reporter covering retail and consumer-oriented companies. You can follow her on Twitter @tgarcianyc. She is based in New York.

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