Using Innovative Consumer Business Models to Cook-Up Billion-Dollar Businesses | Lux Quarterly

Using Innovative Consumer Business Models to Cook-Up Billion-Dollar Businesses

As Uber upends the taxi, general transportation, and shipping industries and as Airbnb redefines the hospitality industry, consumer-facing business model innovation is all the rage right now, with billion-dollar acquisitions, IPOs, and fast-growing businesses. Novel consumer business models are affecting nearly every way consumers engage with a product, from selection to acquisition to using the product itself, and large incumbents are taking notice. For example, Unilever recently bought men’s shaving supply delivery company Dollar Shave Club for $1 billion in July 2016, and Walmart is in the process of purchasing, an e-commerce site which offers dynamic pricing depending on product combinations in a customer’s cart, for $3 billion. Meanwhile, Blue Apron, the pioneering food delivery service that offers pre-portioned raw ingredients and step-by-step cooking instructions, is preparing for its IPO and is coming up on $1 billion in annual revenue a mere four years since its 2012 founding. These examples highlight how business model innovation is rapidly disrupting consumer-facing industries.

Gone are the days when consumer interaction with food was simplistic, consisting of a trip to the grocery store for ingredients to cook at home or dining out in a restaurant. Behind Blue Apron’s headlines are hundreds of food companies offering new business models through either new food products (as Blue Apron does) or tools and services for planning meals, ordering groceries, and choosing restaurants, among others. These business models further evolve how consumers choose, acquire, and interact with their food. Some even add on a layer of analysis, using the customer’s inputs or purchase history to make customized recommendations (see the figure below).


Our analysis of companies with innovative food business models shows that Blue Apron inspired the launch of many similar meal kit offerings like those from HelloFresh and Just Add Cooking. These developers cater to individuals that want the experience of a gourmet meal without the effort of planning, shopping, and prepping for the meal. However, these business models are just the beginning, as companies like Feastly and EatWith offer a unique social experience paired with product discovery to provide an innovative way to eat out. These companies advertise types of cuisine by location – be it the best of Latin flavors in San Francisco or tapas in Madrid – and consumers can select their meal of choice and join other patrons at the homes of a budding chef that will prepare the meal for the group, similar to a dinner party among friends.

While clearly most of these business model innovations will not be successful, the winners are tapping into key consumer needs like emotional relationships with products, value in the experience, and the premium of convenience – attributes that cut across nearly every consumer product category. While combining the exact mix of product and experience to make the next Uber, Blue Apron, or Dollar Shave Club is no easy task, it is clear that the winning combination can lead to billion-dollar businesses in a very short timeframe.


For more information contact Camilla Stice at or Jonathan Melnick at


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