Inside Blue Apron’s Meal Kit Machine

Each month, Blue Apron delivers about 8 million meal kits to Americans who like to cook but would rather not waste time shopping or searching for recipes. Blue Apron boxes include cooking instructions for meals and suggested wine parings—shiitake mushroom burgers with a Santa Barbara Highlands Vineyard Grenache, for example. The raw ingredients, which include such exotica as romanesco cauliflower and fairy tale eggplants, are sourced from family farms and artisans. Then they're sorted, chopped and packaged in giant fulfillment centers and delivered to homes around the country.

It's an enormously complicated operation, and Blue Apron has built sophisticated software to manage the supply chain and wring out costs typically borne by the food industry. The company has been signing up subscribers at an impressive clip and last year generated between $750 million and $1 billion in revenue, according to a person familiar with its finances. That far exceeds the $300- to $400-million goal for 2016 that was pitched to investors a few years back, says this person, who requested anonymity to discuss a private matter. Backed by Bessemer Venture Partners, Fidelity Investments and other venture firms, Blue Apron is the largest company of its kind, with more subscribers than rivals like HelloFresh and Plated. Meanwhile, dozens of other food-related startups have disappeared or are struggling.