So far, Amazon’s performance with private label grocery brands has received mixed reviews, and its offerings up to this point have been fairly limited despite a lot of trial and error. Both Solimo and Happy Belly brands are relatively new. Solimo launched last summer, while Happy Belly launched as a snack brand in 2017 and was expanded last October to include a variety of cheeses. A report from Coresight Research found that just 2% of Amazon’s private label offerings are in food and beverage, and new milk and coconut water offerings won’t necessarily bring that number up much. However, selling beverages that are a go-to for many consumers could provide a boost in private label sales for Amazon.
AMAZON FRESH AND THE GROCERY’S STRATEGY
Amazon’s decision to launch dairy staples like milk and half-and-half could indicate a renewed push behind AmazonFresh. That service, which grew over the course of a decade, pulled back from several markets in late 2017. With Whole Foods stores and distribution centers now under its control, Amazon has key cold-chain facilities that it can use to bring AmazonFresh to new markets and expand within existing ones. Dairy products are the building blocks of many grocery shops, and a key step towards Amazon gaining more of the large, profitable orders it has so far struggled to build.
Amazon’s entry into private label coconut water is a reminder of how popular non-dairy beverages have become and shows consumer demand for lower pricing on their favorite products — even those that were once considered a bit more of a specialty. With the coconut water craze now several years old, odds are that shoppers are used to its availability and want a basic, low-cost coconut water option to keep their pantries stocked. As a whole, Amazon’s new private label beverages are a sign that the retail giant is not letting up on its plans to expand its grocery footprint under the Amazon banner, despite its ownership of Whole Foods and the spotty performance of services like AmazonFresh and Prime Pantry.