JANA Partners, the activist investor that pushed Amazon (AMZN) to buy Whole Foods (WFM), now has a stake in Blue Apron (APRN) – the deeply troubled meal kit delivery company. Blue Apron is down 50% from its IPO less than two months ago.

JANA now owns 2% of Blue Apron shares, having bought into the company shortly after the IPO.

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Is JANA angling to get Blue Apron bought out as well?

That likely wasn’t the initial thesis, but with the stock price down so heavily, it could now be on the table. Can he convince Amazon to buy Blue Apron as well? Doubtful. Blue Apron raised less money than expected from its IPO as it was hit with news that Amazon is testing its own meal kit delivery service. Now, in terms of market share in the meal kit delivery service, Blue Apron rules. However, the Amazon-Whole Foods tie up means that full-scale grocery delivery could be on the horizon.

Blue Apron’s CEO and co-founder has already recently stepped down, and operational wise, Blue Apron is still losing a lot of money - marketing is expensive and margins are already low for food delivery business.

When it rains it pours; Blue Apron is letting its HR chief go, has a hiring freeze for salaried employees, and is firing recruiters. But, on the bright side, it is building a new fulfillment center to help expansion.

Where an activist could help

An activist investor, such as JANA, could help with cost cuts and a new growth strategy, which might include offering higher margin products in as add-ons (e.g. alcohol). An activist might not be keen on the plant expansion plan, however, which will require more capital outlays.

Still, upgrading its fulfillment operations and offering a much wider selection of products is a necessary growing pain if Blue Apron hopes to eventually make money. This new fulfillment center it’s working on will cover half the production volume the company does. I’d expect more interim pain for Blue Apron as it tries to get this new facility up and running, which requires new machinery training and a bit more skilled labor - as it’s not as simple as an assembly line. Those delays will only further push out new menu product and options, leaving the door open in the meantime for another player to innovate Blue Apron out of business.

There is no activist coming to Blue Apron’s rescue

The only thesis for Blue Apron is a buyout, and that’s a hope, not an investment strategy. Plus, lest we forget Blue Apron’s corporate structure and share class setup, which keeps all the power in founders hands and prevents any activist from being able to push for change. Meanwhile, Blue Apron is also battling investor lawsuits given the large stock price loss after “failing to disclose important info,” which includes the fact that Blue Apron was having trouble getting its boxes delivered to customers on time and containing all the promised ingredients.

The better ‘activist’ bet

JANA also took a small stake in Sprouts Farmers Market (SFM) as well. JANA loves the grocery space, having helped push Albertsons to buy Safeway just a few years ago. A big grocery company could buy up Sprouts Farmers and use it to get immediate exposure to the organic foods business, paging Wal-Mart (WMT) or Kroger (KR). Even alone, Sprouts plans to grow to 300 stores, but as a buyout candidate there are purchasing power opportunities and operational efficiencies if a larger grocer comes in and scoops it up. And Albertsons has already been taking a look at Sprouts, but may come back around for a second look after losing out on the Whole Foods deal.

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