Amazon Plans Its Own Private Label Food Line

It’s not a complicated, private label food done right drives top line sales and bottom line profits for retailers both large and small for both Grocery and Convenience Store operators. So, why not an on-line retailer selling private label?   The only questions everyone is asking now is just how Big will Amazons private label line be, become, or who will they best.

Amazon plans to introduce its own line of grocery items, including milk, cereal and baby food, under the Amazon Elements label that it launched last year, according to the Wall Street Journal.  Does this mean that many legacy food manufactures will find one less competitive avenue of distribution or one more less competitive avenue of distribution or both?  

Just how smart is Amazon when it comes to pricing its own private label products?  The strategy with it other private label brand basics “appears to quietly go after product categories where shoppers don’t have a strong brand preference and where big brands don’t dominate”. 

However with “Elements, Amazon looks to be interested in competing head-on with big consumer brands, starting with a landing page on the site that stands out from the rest of the Amazon shopping experience according to Re/code.   “It’s a big deal when Amazon does a color that’s not yellow or black,” said an industry executive who helps grocery brands sell on Amazon.

Amazon is not the first to tackle big manufactures. Companies the ilk of Costco, Kroger and Target sell their own private label brands to boost profit margins, but Amazon is the on-line sales leader and wants to stay that way with an estimated 90 million prime customer subscribes. 

Disrupting industry segments is one thing Amazon has been doing since it opened for business. So,  does this mean that many legacy food manufactures will find one less competitive avenue of distribution or one more less competitive avenue of distribution or both?  We think both! 

Simply put Amazon may have found it’s last mile solutions with private label food.  Is success does leave clues and it does Amazon is very, very good at picking them up.

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy.  Visit : www.FoodserviceSolutions.us  we are the global leader in the Grocerant niche  for more visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant 253-759-7869