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Why Sun Basket is the Investment I’m Hungriest for in the Meal Kit Space

Meal Kits are one of the fastest-growing consumer categories lately and one that I have looked at both as a customer and as part of a venture firm. I’m clearly not the only one paying attention. Tech Crunch reported that sales in the category were already over $1bn and it would not surprise me at all for two or even three billion $ exits to come from the category.

Many have already pored over Blue Apron’s recent S1 filing and surfaced some interesting findings. This is not another of those posts (read this if that’s what you’re looking for). Instead, I am going to discuss how the better experience I had with Sun Basket has led to stronger retention metrics and a brighter future than what I see in Blue Apron.

My experience with Blue Apron

Several years ago, I tried Blue Apron and wrote about my experience. Though I enjoyed the meals, I decided the value proposition was not there for my family to continue being a customer for very long. I came to this conclusion based on the time it still took to get food on the table, as well as the quality of the meals relative to that time. What brought me to this decision was comparing the process using Blue Apron out of the box with selecting the ingredients myself from Whole Foods and re-creating the same meals. I found the quality better the second time and the time saved was small.

Enter Sun Basket

Several years had passed since my Blue Apron experience and getting a high-quality, nutritious meal on the table remains a chore. I had heard good things about Sun Basket from several sources, so decided they were the next service to try. Sun Basket appealed to me both because of their eco-friendlier packaging as well as their solution for specific kinds of diets (paleo, vegetarian, etc.). This set of three meals was on our menu during one of our first weeks using the service:

  • Jamaican jerk-spiced pork with kale-blueberry salad (pictured above)
  • Seared summer squash with black bean tacos with cabbage slaw
  • Falafel pita pockets with lemon-yogurt sauce

Overall we scored Sun Basket’s take on these meals 8 out of 10 with the pork being our favorite. This score was higher than where we ranked the Blue Apron meal kit versions from years ago (7) and lower than the same Blue Apron meals using store-bought ingredients (9). More importantly, the Sun Basket meals took on average 32 minutes to get on the table relative to 40 with Blue Apron.

Putting the Sun Basket Meals Through the Test

A sustainable and strong value prop is a critical ingredient in retaining customers, so I thought it would be a worthwhile exercise to re-create each Sun Basket meal as I did with Blue Apron to see quantitatively the type of value the product delivered relative to making them from scratch.

Can you tell which version came from Sun Basket?

My experiment to recreate the Sun Basket meals backed up my intuition that Sun Basket was a great value. Here are the results and how they compare to the similar exercise I performed with Blue Apron:

Time, cost, and quality ratings of meal kits under two different preparations

The ‘Benefits of Meal Kit’ column here is important to note: with Sun Basket, I am paying $2.02 more per serving, but saving 17 minutes, and achieving the same quality as if I’d made the meal myself. This is a trade-off I have been willing to make and have now been a Sun Basket customer for several months.

Blue Apron was a different story when I did a similar exercise in 2015. In that case, I was paying $1.46 more per serving, saved 15 minutes, but the quality was lower than if I’d made the meal myself and the overall time spent was 25% longer than Sun Basket. I did not remain a Blue Apron customer for long. However, this was my subjective experience, and I next turned to some benchmark data to find out if other customers had similar retention behavior to me.

Comparing User Retention and Customer Value

Consumer spending data is one of the most useful tools I have as a growth advisor in a VC firm. In most cases, the company with the highest customer values and user retention wins a category and tools like TXN and Second Measure allow you to compare companies on these critical metrics. In this case, TXN data shows Sun Basket’s cohorts spending more than Blue Apron’s during their first 12 months:

Customer Lifetime Value comparison — data courtesy of

Other data I saw showed that user retention and revenue per customer were both higher with Sun Basket and the combination of the two led to 50% higher demand per customer at the one-year mark. Now Blue Apron is much larger and it’s very possible that their customer cohorts looked similar at a relative point in time to where Sun Basket is today, but this data and my own experience lead me to be more optimistic about Sun Basket going forward.

Key Factor = Sun Basket Came Later

One theory I’ve been exploring is whether Sun Basket had any benefits by starting several years after Blue Apron. Meal kits are a relatively new concept, so if consumers are already aware of the category and how it works, then it may lead to more realistic expectations and stronger retention metrics as well as less friction in acquiring customers.

TXN data again proves useful:

it turns out 30% of Sun Basket customers have also shopped at Blue Apron.

It’s not clear how many of those overlapping customers tried Blue Apron first as I did, but I believe Sun Basket benefited from having another company establish the market before them. Sun Basket could then study weaknesses in the incumbents and offer a superior product to a targeted segment of the market (busy, health-conscious eaters like me). The meal kit category seems particularly suited for this fast follower strategy as food is very large overall and it lacks both lock-in and network effects, both of which would make it harder for a later entrant to gain traction.

Looking Ahead

Both Sun Basket and Blue Apron are success stories so far and much can be learned from them. Sun Basket is a business I am very excited about going forward, but that does not mean challenges don’t remain. Based on my experience working at a high-growth consumer company, zulily, I have two pieces of advice for Sun Basket as they grow:

  • The first is be very quick to observe and correct any operational scaling issues that could negatively impact the customer experience. In several months as a Sun Basket customer, I’ve had my meals show up a day late once and another time had the wrong meal. Credits were issued in my case and I remain a customer, but others may not be as forgiving. Sun Basket would be wise to monitor the impact these incidents have on customers and closely track NPS.
  • Second, it is going to be important to observe the marginal Customer Acquisition Cost (CAC) and marginal Customer Lifetime Value (CLV) of people yet to come. CLV looks very strong so far, but how will that look once the product reaches further into the mainstream? It is common for these incremental customers to be more expensive to acquire than the early adopters. The best antidote to this is to be very diligent about testing into new channels and monitoring cohort values closely and granularly. Blue Apron could offer some inspiration when it comes to new channels as they have found the success with offline channels that I see with many top performers these days.

Applicability to Other Markets

Beyond meal kits, Sun Basket’s success speaks to the possibility of entering recently established markets but doing so with a strong product focused on a large but specific segment. It is interesting and exciting to think of where this model can apply elsewhere. Zulily followed this pattern in the daily deal space starting out with moms and kids and executing at a high level before extending to a broader customer set. Stitch Fix took a similar strategy in subscription fashion following Trunk Club, but for women. More recently, Dia & Co. is applying the Stitch Fix business model to plus-sized apparel.

Do you have any ideas on where else this strategy might take form? Let me know at



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