Blue Apron is heading to the grocery store as customer retention remains elusive

Key Points
  • Blue Apron is bringing its meal kits to grocery stores this year.
  • The company has been struggling to overcome well-publicized operational issues that have dragged its stock down.
  • Blue Apron is also under pressure by competitors.
Blue Apron

Blue Apron is coming out of its box and onto grocery store shelves.

The meal kit company, which has struggled to hold onto customers amid growing competition and distribution issues, is set to bring its meals to supermarkets sometime this year, Blue Apron confirmed Thursday.

"This offering is part of our strategy to leverage the strength of our brand and the quality of our product to expand to new channels and new consumer segments," a company spokeswoman told CNBC.

Blue Apron has been struggling to overcome well-publicized operational issues that have dragged its stock down more than 78 percent since it started trading in late June.

Shares of the company were up about 2 percent on Thursday.

The company has been slimming down its marketing budget in an effort to turn profitable, but in doing so, its customer acquisition has slowed.

In the fourth quarter, the company said the number of customers fell 15 percent from a year earlier and fell 13 percent from the prior quarter.

Blue Apron started testing the waters in offering specialized programs and diets as a way to lure customers. In January, it started selling a Whole30 meal plan. The 30-day diet plan, which was available through Feb. 26, focused on "whole" foods such as fresh fruits and vegetables and eliminated items like sugar, alcohol, grains, soy and dairy.

In addition, the company has begun to offer flexible plans and recipes. It has introduced meals that could be made within 30 minutes, meals that require less cleanup and brought back customers' favorite recipes.

Entering grocery stores is the next step.

"This new multichannel offering, which will make our brand more accessible to homes across the country," the Blue Apron spokeswoman said.

Blue Apron has been pressured by a growing number of competitors in the meal kit industry as well as the grocery space.

Meal kit companies like Marley Spoon and Sun Basket have capitalized on consumers' desire for cheaper meals and more choice; grocers like Albertsons and Kroger have acquired smaller meal kit services to bring into their stores; and Walmart and Amazon announced plans to bring meal kits to supermarkets.

Even Weight Watchers is jumping into the fray. The company announced plans last week for a line of quick prep meal kits at grocery stores.