You're listening to Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. All right, you are listening to Bloomberg Business Week on this Tuesday Carol Masser along with Jason Kelly. Now, back in the first week of May, we caught up with the head of blue Apron to hear how she and her team were managing through the pandemic and how user growth had moved up as a result of consumers being in lockdown and really uh spending of course, so much more time at home due to
the virus. Let's get to another edition of Bloomberg Business Week Talks. It will be highlighted in an upcoming issue of Bloomberg Business Week magazine. Linda Kozlowski, president CEO at New York based Blue Apron, back with us on the phone from Garrison, New York. Linda, how are you and how is your team? All Right, It's so great to be here. I'm doing well and my team is doing well. We're continuing to just put every bit of energy we
have into getting more boxes out to more people. And so what has been especially since we last talked to you, Linda, what's been sort of the biggest learning, like what what have you sort of learned the most about your business or your or your customer that you can point to. So I think, you know, the biggest learning is as
things have evolved. You know, obviously when when COVID first hit, it was uncertain, you know, when things were going to change, how things were going to change, how people's behavior and reactions would adjust as as things move forward, And what we are seeing is we are seeing continued demand for the products UM as as people sort of grapple with the new reality and think about how much time they want to spend at home versus how much time they want to you know, want to be out even as
things open again. UM. There's a lot of new information out in the in the world about about continuing to be cautious and continuing to um to sort of stay inside when possible, and and how to safely have contacts with other people. But we are seeing sort of the manifestation of the trend that we talked about in early May, which is the fact that people are telling us that no matter what happens, UM, they are starting to plan
on cooking at home more. UM. This is a habit that they've really started to form um again, internal and external researches all pointing pointing to the same thing that no better. What happens as things start to ease up and restaurants open, what have you, That people have gotten a lot more confident in the kitchen and they plan on continuing to cook at home and they want interesting solutions to help them think about how to make that time more connected to family and less focused on preparation
and planning. So we're continuing to see that trend. I do wander landed to you know, when you think about scenario planning, right, you think about those things that you know out of the box that could happen in the pandemic is certainly one of those things. But I do think as you look down the road, I think you know, when normal returns, you know, what are you doing though, and are you thinking about, you know, managing and an
inevitable fall off in your business? Do you anticipate that? Well, I think that's a little bit of what UM, what I was referring to earlier. Um. You know, there's always going to be ebbs and flows as people have different needs. But what we're planning for is staying on the thing strategy we were on before, So before we actually got into the pandemic, we had a growth strategy that was
obviously not based on a pandemic. It was based on product improvements, marketing improvements, and audience expansion, and we already thought that come together into one UM And now we're continuing to see that those products improvements, which we are continuing to do as we sort of ease out of the pandemic, UM are engaging people and and keeping them
involved with the product. So it's there will always be ebbs and flows to the business, and again there's seasonality, trends um when we return to whatever that new normal is.
But we're more focused on the longer term growth potential of some of the product improvements that we're putting in around variety, flexibility, healthier options, and continuing to drive new ways to create that variety in our business while also managing the complexity and being able to ex spanned our operations without having to put significant capital into that operations, given we already have so much ability to do that. Now.
We we've made a lot of investments early on that are now paying off in in automation and the and the ability to UM to scale with labor essentially, So Linda talk to us about sort of the supply chain and the logistics side of this. Were there are things that you had to sort of resolve along the way. I mean, you've got folks obviously working physically, but you've got other folks working remotely, You're dealing with different suppliers. Talk to us about that process of maybe solving some
of those issues. Yes, so, I think the the initial thing that we did was very similar to what a lot of people did, which is how do you think about making sure that you're developing a resilient supply chain across across a lot of different areas at the same time. Simplicity is key when faced with um rapidly changing environments.
So early on we did make some modifications to our menu to some plify and streamlined suff of the recipe availability to make it faster and easier to pack and to manage logistics than Over time, we reintroduce that complexity back in and then it can again continue to evolve the product itself with new products offerings UM As we were able to manage some of those ebbs and flows and continue to bring labor into the facility so UM a lot of people had to streamline their their menus
and and look at ways to to to avoid some complexity early on, and we're really happy that we're able to start bringing that complexity back in. We're already back up to full service on our our family menu and UM and very close to full variety on our two person menu, and so we're going to continue to do that along with introducing the new products and variety that
we have into play. On the supply chain side, that's some scen area where we've had an advantage for quite some time because we've worked so closely with the producers and because UM we have really really high quality standards for our ingredients. UM we've always had really great relationships
with our suppliers. We can consider it and move very quickly depending on supply, and we also have the ability to substitute and swap out if there's ever a challenge because of the nature of how our recipes are built, and so we're able to really flex that supply chain to make sure that we don't have to sacrifice any quality during this time where we continue to ramp volume. Linda just got a minute. We're gonna do some news
and then come back and continue the conversation. But I do want to just quickly get your thoughts on supply chains. How have they been? Are they improving? Can you get everything that you want in terms of the products that you need to provide to customers. Yeah, we've had minimal disruption in our supply chain, and I think part of
it is because of the quality that we're sourcing. UM. We are able to access high quality ingredients, oftentimes resourcing from the same places that restaurants with source from, and so therefore we're able to get really high quality ingredients and UM and hadmidable disruption. When we have had a disruption, it's usually when it comes to a certain amount of time UM, and so we can just swap recipes between weeks to make sure that we're getting the freshest possible products.
But we are seeing you know, we've seen prices increase in in the grocery source supply chain, but we've been able to manage our prices very very closely so that we can, UM, we can make sure that we're still delivering great value to the consumer and haven't had to
adjust any of that pricing at all. So Linda, I have to ask you, what have you learned about management and stress and sort of an organization at the core of our sort of human experience, and that all of this because you provide something that is fundamental to all of us. Not to be too silly about it, but you're literally delivering food to people. It's it's actually true.
I mean I I talked about the fact that what we're doing is really one of the most intimate part of starts of people's lives because it's it's what you put in your body, it's what you feed your family. And it's part of the reason that we do feel so much pressure to to make sure that we're providing the highest quality ingredients and the best recipes because again, we're thinking about this product beyond the pandemic and um and it's really about, you know, removing stress and and
creating incredible connecting moments. And so there's a huge amount of pressure even outside of this, But for me, it's it's really focused on a few things when it comes to leadership during this particular time. One is um to recognize the fact that I consider myself extremely lucky that I work and and run you know, a product that is so critical to people's lives and so important to people's lives of of being able to stay motivated and and and stay focused on everything you need to do.
And then I think the other aspect of it is our number one priorities has got to be safety at all times, the safety of our customers and the safety of our employees UM as we sort of have frontline UM workers who are really UM putting themselves at risk every day to try to come in and make sure
that that we're moving the business forward. And so we take those safety standards incredibly incredibly UM seriously, and even prior to the pandemic, we we already had some you know, incredibly high food safety standards and and heighten those even more. So number one priority is really making sure that everybody
is safe. And then I think the bigger part about it is is really focusing the team on that mission of how do we make sure that we get food to people during this critical time, but something that isn't just going to be sustenance, something that they're actually really going to enjoy, something that's going to increase the connection of their family and UM, something that is going to add sort of a sense of accomplishment to their life.
If there's somebody maybe who has like cooked before, or a sense of variety to their life, for somebody who you know, maybe as an expert cook and just wants to make sure that they shake up the routine. So I think staying focused on that mission during such a stressful time is really the most important. Yeah, totally. And I do wonder if you think about idea, you have to think about kind of the next stress on your business?
And do you guys do? And I guess I always think about, you know, the big gorilla that's out there. I feel like for almost you know, many many industries or many you know, businesses, and that is Amazon and you know, as they decide or work on leveraging whole foods, Linda, you know and probably look at a model like yours, and especially how you're doing in the pandemic, you know, what do you think about? Um? And you know for Amazon,
you know what would happen to you? Guys? How do you build a strategy kind of with that potential eventuality in mind? Well, to be honest, I think that that's that's to me, the biggest area of discipline is really being focused on how do we continue to build the business and add value for our customers and not get distracted by um by what could go wrong or what
could be UM, what could sort of intervene. Because the way that we look at it is we are really were the experts in bringing incredibly delicious, UM incredibly like beautifully sort of creative and sourced meals to your home, teaching you how to cook them, are helping you cook them if you already know how to cook, and creating that moment with your family, and that is really what
we focus on. That is all we do. And so I'm just a big believer that when it comes to certain moments in your life, that including the importance of food and what you put in your body and what you're serving your family, that that area of focus and that area of expertise is something that people are craving
and people are looking for. And UM, when I think about the competitive future, I think that there's a huge amount of opportunity to innovate on how we actually develop products to serve you in the home and help you make meal time less stressful, help you, um add variety
to your day. And so I'm less focused on big players that might focus on multiple things and um, and whether they're going to come into the space and more on, how can we actually make the best products, because this is all we do, and we're experts at it, and we're very very very good at being able to scale that when it comes to our production facilities, when it comes to our equipment, when it comes to our culinary authority, and really create restaurant quality experiences on an individual basis
in every person's home. So just go, I think that's focus and that that Yeah, that's that's really the most important to me. So just like fifty seconds, so it sounds like you're not looking over your shoulder at Amazon. Is that safe to say? I'm not looking over my shoulder at all. I think it's more important that the customer wants me looking forward and figuring out how to
develop better and better products. And again, you know, as we see demand increased, folks from new customers coming in as well as from existing customers who are buying more and more of the product, they're seeing the value in the product and they're seeing that that quality comes through. Well, Linda, I gotta say, we know you're busy, and we really do appreciate um you carving out again a nice tunk of time for us to just catch up on what
you're up to and the business. Linda Koslowski, she is president and CEO of Blue Apron, joining us on the phone in New York,