“Blue Apron Custom” For Specific Dietary Restrictions March 1, 2016 Kanaka Balasabapathi, Yalli Canaani, Karthik Yedu Kumar, Bryan Reisch, Jia Wen Teo

Recommendation Blue Apron should expand a custom product line for low calorie meal options, or potentially halal meal options, to capture a new market. The decision will depend on the variable costs for each meal. Less than a $5.00 cost per meal, a low calorie line is the most profitable option. More than a $5.00 cost per meal, a low calorie line and a halal line are equally profitable options.

Exploratory Research One-on-one interviews with 5 people with dietary restrictions Laddering Technique Gain understanding Important attributes they have for meals Existing habits and their willingness to change Segments likely to become a Blue Apron Custom customer Insights There is a wider range of dietary restrictions that we should consider Hypothesis Consumers that had the most difficulty find meals that met their dietary restriction will have the highest willingness to pay for a Blue Apron Custom meal.

Quantitative Research Conducted survey with 68 participants, 41 of which reported at least one dietary restriction Backwards market research What new product line would be most profitable? Which has the largest customer segment? Which has the highest willingness to pay? Questions centered on: Dietary restriction prevalence Perception and interest in Blue Apron Likeliness of changing existing eating habits Demographic information for potential segmentation

Survey and Results Most prevalent dietary restrictions Low carbohydrates (16%) Low calorie (16%) Vegetarian (12%) Willingness to pay Wide distribution Clusters around moderate prices (~$10) and high prices (~$20) Halal customers had highest average

Additional Tools: Perceptual Map

Additional Tools: Analysis of Preferences   Prepare dinner at home Eat dinner at a restaurant Take out dinner from a restaurant Prepare dinner with Blue Apron or similar services Prepare dinner with "Blue Apron Customized" Choice Share – Current Offering 44% 33% 17% 6% ---- Forecasted Choice Share Blue Apron Custom Offering 25% 21% 3% 9%

Additional Tools: Disaggregate Choice Modelling Variable Cost per Meal New Product Line Price Point $0-$4 Low Calorie $9.00 $5-$14 Low Calorie or Halal $19.00 $15-$24 $24.00

Questions?