People buy a bigger share of their groceries online each year, which seems to bode well for meal-kit makers. However, Slice Intelligence analyst Ken Cassar expects at least half of meal-kit companies to die off following Blue Apron's market debut on Thursday, and the acquisition of Whole Foods by Amazon, which is expected to close later this year.
"There's going to be a lot of competition to win customers, and a lot of spending on advertising and marketing here," Cassar tells CNBC. "The companies that aren't already established will have to entice folks who have tried competing services and decided meal-kits are not for them. At least half of them aren't going to make it."
Those who have a chance at survival, Cassar says, should be thinking about partnering with major brick-and-mortar groceries such as Kroger, which might stock their kits, and help them reduce costs by making pickups a possibility and alternative to delivery.
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