The Blue Apron (NYSE:APRN) IPO dumpster fire may have incinerated the hope of any other meal kit delivery service going public anytime soon, but the industry itself still looks healthy enough to survive.

With the spigot of the public equity markets likely turned off for the time being, though, meal kit players will increasingly need to turn to private equity and other corporate patrons to raise cash to grow. That's the route Blue Apron rival Chef'd has taken, raising $35 million by turning to Smithfield Foods, Campbell Soup (NYSE:CPB), and online grocer Fresh Direct. The development indicates we may not recognize the meal kit business in a few years.

A dumpster fire

Image source: Getty Images.

Food prep made easy

The market for meal kit delivery is burgeoning. It's benefiting from food price deflation at the grocery store that has more consumers choosing to cook at home than eat out, but also from our hectic lives that make the planning, purchasing, and preparing of dinner a great big hassle. By delivering to your door a kit with all of the ingredients for a delicious meal, companies like Blue Apron, Plated, and Chef'd are tapping into the zeitgeist of an "experience" surrounding dinner, not the drudgery of it.

Last year, market researchers at Technomic said fresh food subscription services would grow by a factor of 10 over the next five years in just the U.S. alone, while global revenues would exceed $10 billion by 2020.

The biggest problem seems to be whether the delivery services can attract enough customers to make their businesses viable. Customer acquisition costs for Blue Apron are rising, and last quarter, it lost 93,000 customers. It also saw year-over-year declines in average order value, orders per customer, and average revenue per customer. Customers are increasingly testing out the service, then abandoning it, and those who stay are using it less and spending less when they do.

Because you can have a service that caters to just about any specialized menu you want, the pie of available customers will necessarily be cut up into narrower slices. We're also seeing bigger, well-financed companies entering the market.

A Blue Apron meal kit delivery

Image source: Blue Apron.

The elephant in the room

The biggest, of course, is (NASDAQ:AMZN), which did a soft launch of a service recently and has sought trademark protection even as it swallows Whole Foods Market (NASDAQ:WFM). That move alone doomed Blue Apron's IPO and caused investors to question whether it was possible for niche companies to make a go of it. There's a shakeout coming to meal kit delivery.

This is why the route Chef'd is taking could be the future for the industry. First, Chef'd is not a subscription service like Blue Apron, but rather one that you call when you want so you're not tied to a recurring bill. It's also not spending a lot on marketing, as its better-known rival is. According to CNBC, Chef'd spends about 1% of its sales on marketing; Blue Apron spent 14.5% of net sales on getting its name out there. That was lower than the 25% it spent in the first quarter, but still elevated, and it also means that without heavy advertising, Blue Apron will have difficulty attracting customers.

Chef'd, on the other hand, is turning to name-brand partners to help pick up the tab, and you can bet Smithfield Foods and Campbell products will feature prominently in future kits from the service. Last month, Coca-Cola (NYSE:KO) signed on as a partner with Chef'd too, giving customers a choice of Coke, Dasani, or Gold Peak tea as beverage choices.

In a unique twist, Anheuser-Busch InBev (NYSE:BUD) is also partnering with meal kit companies. While you won't actually get a Budweiser with your meal kit from Canadian outfit ChefsPlate, you will get two Stella Artois glasses.

Ordering a meal kit online

Image source: Getty Images.

Making an end run

The evolution of how meal kit companies tackle the high cost of attracting customers to the service and getting them to stay also suggests that Amazon's entry might not be the category-killer many fear, even for Blue Apron. Certainly it brings seemingly unending financial resources to bear, and a top-tier delivery service with a built-in, loyal customer base, but it had that with groceries and delivery and hasn't made much of a mark in the space yet. The Fresh Direct connection with Chef'd also shows how Amazon's online rivals are responding. They don't have to build a service from the ground up, but they can leverage existing capabilities to meet the threat.

The Blue Apron IPO was a disaster in that it spectacularly failed to meet investor expectations. But even though it has dampened enthusiasm for any similar service to go public, it hasn't killed off meal kit delivery, which so far is showing resiliency in the face of adversity.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.