Amazon signals that it wants in the meal-kits business

Amazon signals that it wants in the meal-kits business

The mere possibility of Amazon entering the meal kit delivery space has kept Blue Apron's stock notably below its $10 offering price.

The meal-kit market is small but expanding, and it may be hard for companies like Blue Apron to compete in a world where Amazon and other grocery giants offer their own prepackaged, ready-to-cook ingredient boxes. Underwriters were hoping to price the new offering between $15 and $17 until Amazon made a $13.7 billion deal to gobble up Whole Foods Market (NASDAQ:WFM).

The application tagline is "We do the prep. You be the chef." - leaves little question about the market that the e-tail juggernaut is gunning for here. The service will provide customers with "prepared food kits. ready for cooking and assembly as a meal", according to company's application, which was filed July 6.

Blue Apron holds the title as the largest meal-kit provider in the USA, followed by German-based HelloFresh. It now sits roughly 34% below its IPO price of $10 a share.

While Blue Apron is perhaps the most extreme example, its plight highlights the unfortunate reality facing many companies in the retail industry: Amazon is coming, and there's nowhere to hide.

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Shortly after the opening bell, Blue Apron was trading at $6.52, down 11.3 percent.

Any Amazon meal kits to come in the future will likely be sold through Amazon Fresh, the company's online grocery ordering and delivery service.

Representatives from Amazon and Blue Apron didn't immediately respond to CNBC's request for comment.

Up until now, though, Amazon's testing of meal kits has carried no official label, slogan nor branding. Most meal kits on Amazon Fresh are now priced between $10 and $24 and include ingredients for at least two servings.

"Amazon will sell anybody anything they want to buy", Bittman said.

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