Red Apron is a food subscription service that aims to provide a fun, exciting and convenient means to planning versatile meals. With the hectic lifestyle that we have today, planning meals can become extremely tiresome and even daunting. Red Apron provides a local solution to this by shifting the planning away from the consumer, the consumer only has to say what kind of meals they are looking for and their budget. For their respective meal plans, portioned out ingredients will be delivered to our customers along with recipes with nutritional values accounted for.
The main value proposition for Red Apron is that “Quality meals should be hassle-free”. In this day and age, not many have the time to research recipes, shop for groceries and food items with a particular brand or labelling. Upon subscribing to a Red Apron Meal Box comes with the freshest ingredients, handled and portioned exactly the way it should be. The subscription box comes with printed step-by-step recipes (also available on our web application) ensuring that users will never not know how to cook a perfect meal again. We provide versatile and diverse options for any form of food plans with various themes and different price categories. Trackable delivery will also be provided, scheduled in a manner such that the ingredients are fresh and convenient for our users. Our application provides diet suggestions to users after they enter their basic details such as weight, height and age. With consultations from dieticians, we will be able to ensure that the meals meet daily nutritional requirements and also cater the needs of the category chosen.
We also designed a gift system to reward our loyal customers. Depending on the amount spent/ their subscription plans, the feature allows our users to enjoy the wide range of rewards including cooking equipment, accessories or small gifts coupon for future boxes.
Red Apron’s main revenue pipeline will come from a subscription-based model where subscribers can choose to pay for a weekly or monthly package. Prices of each subscription package vary according to the food category selected (eg. Budget Baking, Premium Baking, Meals for 2, Meals for 4 etc) and the number of recipes the subscriber indicates per week to be delivered. On top of that, to encourage subscribers to continue with our services, the monthly package will be 10% cheaper per week than a weekly subscription. By tiering subscription prices according to functionality through categories, discounts to incentivise bulk purchases, metered according to usage levels (eg. when subscribers decide on number of recipes per week), and optimized to reward loyalty, Red Apron offers a multitude of solutions to meet the diverse needs of customers. Though seemingly complex, our pricing strategies will be transparent and organised, giving us a competitive edge in the market.
Strong customer relationships are at the core of a subscription business model. Without them, there can be no sustainable recurring revenue growth as customer loyalty depends on their satisfaction. In addition, it’s much less resource-intensive to build on existing customer relationships than to acquire new ones. Most large companies generate 15% to 25% of their revenues from brand new customers. As a result, providing customers with intuitive and comprehensive tools to manage their accounts over the entire subscription life cycle is critical to us. This is why at Red Apron, we ensure that we have channels where customers can make enquiries about subscriptions and also make reviews about recipes that they have tried, building a community of “foodies”.
Secondary revenue can come from advertising on the food/ingredients packaging. Details of the expiration dates for each ingredient and the nutritional information for each recipe will also be clearly stated.
Future revenue can stream from food vendors/suppliers as Red Apron expands. The larger our consumer base is, the more we will be able to make bulk purchases for ingredients required, allowing us to enjoy cost savings with lowered cost per unit.
Food delivery services have been growing in recent times especially in Singapore and this trend does not seem to be slowing down. Given that Red Apron belongs to the food industry and is new, we face the dangers of phasing out in a sea of emerging competitors, both online and offline. In order to get past the barrier to entry, Red Apron will definitely have to fight the price war at least until sufficient market traction is achieved. Venture Capitalist and Angel Investors will definitely be necessary in order to achieve sufficient funding at this beginning stage.
Although a subscription business model for food services is still a new and niche market, there are still subscription service businesses such as SimplyFresh, a fresh organic food ingredient delivery service provider as well as the conventional means of food ingredient purchasing spot such as NTUC FairPrice in Singapore. There are also some other online services such as Grain, an online restaurant service presents as an indirect competitors since their product offerings are considered to be similar from what Red Apron provides. Hence, it is important to analyse the possible threats Red Apron may face before entering the market.
Source : https://www.simplyfresh.sg/
Firstly, SimplyFresh (SF) is a weekly subscription services for fresh organic food which harvested from their trusted family-owned farm located in Europe, New Zealand and Australia. Their main target market is for the family who enjoy more luxurious food which cannot be easily found in local hypermarket. They offered 8 types of boxes to cater to different needs, for example, juicing box, simply fruit box, simply vegetables box, office and school box, grandma’s garden box, and etc. Each box is weighted on the average of 5 to 7 kg. The food includes mainly fresh fruits and vegetables. In this case, when compared to Red Apron, Red Apron focuses on using their well-designed recipes as the main selling point here. Red Apron may be a food ingredients providers, but the box comes with a detailed recipe and the ingredients are prepared properly according to the recipe to avoid food wastage. In addition, Red Apron does not provide only vegetables and fruits, but also cater to larger group of population who loves meat and desserts. To add on, SimplyFresh targets on more luxurious groups and Red Apron caters to different budgets of group, such as Budget, Premium and Normal.
Source : https://www.fairprice.com.sg/
In addition, there are also the traditional food providers, such as FairPrice supermarket. They are Singapore’s largest supermarket retailer with up to 100 outlets which comprise FairPrice supermarket, FairPrice finest and FairPrice Xtra hypermarkets. They also have online platform, FairPriceOn which allows customers to buy groceries online. They do charge delivery fee for $7 and free delivery if customer spend up to $33.05. They owns a Fresh Food Distrubution Centre, warehouse and distribution company. They are considered as the incumbent in this food ingredient provider market. To face such strong competitor, Red Apron aims to provide a more customised and different way to purchase groceries. Red Apron allows customers to subscribe and choose number of recipes they wish to receive, in this case, it saves time to think about what to buy and cook, and even able to avoid food waste. Compared to FairPrice where customers do not have any restrictions on buying groceries, they will need to decide on their menu and spend time to note down the ingredients they need to purchase. In this case, some people may buy unnecessary items and incur food waste, or some may forget to purchase important ingredients because of human errors. Hence, Red Apron brings much convenience especially for working adults and college/ university students when they are too busy and have no time to decide on their menu and purchase groceries.
Source : https://grain.com.sg/
Next, Grain is an online restaurant which meal option plan to customers with the mission of making great food that is sustainable and accessible for everyone. It provides variety of categories for customer to choose from firstly, shared meals, meal boxes, sides, desserts and drinks. They have the similar concept as Red Apron, however, their target markets are very different from Red Apron. Grain focuses on people who care about their health and provides the meals with well-balanced and nutrients-filled meal box for their customer, on the contrary, Red Apron focuses on population who cares about eating healthy, staying fit, enjoy hands-on food preparation as well as willing to create family time by preparing dessert or meal together. Hence, both companies can have different directions and this may be an indirect competition. One competitive advantage of Red Apron is we are able to create a randomness or “surprise” element when we deliver the parcel to the customers. They may not know what they are getting even though they might state their preferences, meal category and numbers of recipes they wish to receive. The subscription box is prepared such a way that customers do not know which recipe they are getting, and create the excitement of having to wait and anticipate the recipe that they are going to get. However, for Grain, the meal plan are fixed and customer only get to order and subscribe from the list of meals. To add on, their options are not considered a lot, only 23 choices after adding up the different categories they offered. This may because the meals are all prepared by their own chef and hence limited by the resources.
As explained in the introduction, the world today moves at a very fast pace, especially in Singapore. This means that if Red Apron is executed well, the ease of convenience will appeal to consumers in Singapore, hence demand.