Blue Apron (APRN) President and CEO Brad Dickerson is resigning after just 18 months at the helm, while Ilia Papas, the meal-kit company's co-founder and chief technology officer, will be leaving next month.

While Blue Apron seems to have found a solid replacement for Dickerson in Linda Findley Kozlowski, who was COO at Etsy and Evernote, and previously served as marketing director at Alibaba, the meal-kit business is reeling and it's questionable whether anyone will be able to resurrect it. 

Blue Apron meal kit, containing ingredients like beef, carrots, onions, Brussels sprouts, and potatoes

Image source: Blue Apron.

Nothing has worked

Blue Apron has struggled since going public in 2017. The meal-kit industry has rapidly evolved, seemingly bypassing Blue Apron's subscription model, which has largely proved unworkable and inefficient at delivering meal kits to the broadest number of customers.

In its place, a kit that can be found in supermarket refrigerator cases or ordered online -- without a costly subscription required -- is proving to be a more successful model, though at the same time causing the product to be commoditized. The markups Blue Apron used to command are evaporating in the face of retailers like Walmart offering kits for $2 to $3 per meal per person.

It's not that Blue Apron doesn't understand the market has changed, just that its response has been been ineffective at curbing falling revenue and customer defections. Dickerson failed to make the company break even in the fourth quarter as promised, and it remains to be seen whether the meal-kit specialist can turn profitable on an adjusted basis in the first quarter.

Dickerson's plan to cater only to Blue Apron's most loyal (and profitable) customers may mean we'll continue to see customers and sales wither away. But with Kozlowski now at the helm -- she is Blue Apron's third CEO in two years -- she may decide to take the company in a whole new direction. The question is: How many paths are there left open to it?

Teaming up to succeed

Blue Apron has attempted to get its meal kits into supermarkets, partnering with Costco for a few months before the trial run ended just ahead of Christmas. It also made its kits available to order online without a subscription, but chose to market them on Walmart's site in a bid to appeal to more upscale customers who may be more willing to pay up for a meal. Its other plan to sell just its sauces and seasonings at a pricey markup seems half-baked as well.

Kozlowski will be confronted with an industry in transition, and the possibility that a stand-alone meal kit provider is an unsustainable model.

Rival service Chef'd closed down suddenly last summer, despite ticking off all the checkboxes of what's expected of meal-kit companies, like having partnerships with supermarkets and offering kits online. It was subsequently acquired by True Foods and rebranded as an in-store meal-kit offering.

And just last week, Albertsons announced it was pulling its Plated meal kits from some stores, though it maintains it's doing so because it is attempting new innovations. The grocery store chain acquired the meal-kit maker in 2017, marking the first real move by supermarkets to co-opt the burgeoning market. However, Plated's co-founder and CEO resigned unexpectedly in January without explanation.

Last year, Kroger acquired Home Chef, while Walmart began selling Gobble meal kits online. HelloFresh partnered with Ahold's Giant and Stop & Shop chains.

Key investment takeaway

Although Kozlowski brings with her extensive experience in e-commerce marketing, something that could substantially benefit Blue Apron, she may have to get its meal kits into physical stores to succeed. Albertson's, for example, found 85% of meal kit subscribers and 80% of its own customers want an in-store meal kit option.

So until Blue Apron is able to partner with a major supermarket chain or is acquired by one, it won't matter who is leading the company.