Merchant Innovation

Amazon Joins Private-Label Coffee, Baby Food Biz

Amazon began selling its first ever private-label food products this week, including baby food and coffee.

From its humble beginnings as an online bookstore, Amazon has morphed into an eCommerce giant over the years as it built a strategy to sell, well, just about anything and everything you could possibly think of.

Perhaps running out of ideas for things it could sell, Amazon is now in the process of quietly launching its own – and the company’s first ever – series of private label food products.

An Amazon spokesman confirmed to several news sources this week that the company has begun selling two new products, Happy Belly coffee and Mama Bear baby food, available only to Amazon Prime members in the U.S.

Amazon appears to be aiming for the higher end of the perishable food market with its two initial product releases, emphasizing that the Mama Bear baby food is organic and notes that it is “not made with genetically engineered ingredients,” while the Happy Belly coffee is billed as “100% Arabica coffee grown in Central and South America, roasted and packed within 24 hours,” and listed as organic and fair trade.

The coffee retails for $9.99 for a 12-ounce bag, while a 12-pack of four ounce jars of the baby food – available in apple-blueberry or apple-pear-banana – will cost $12.49.

Last month, The Wall Street Journal reported that Amazon planned to roll out a series of private label products, including tea, coffee, baby food and vitamins, in an effort to expand into the lucrative “store brand” market.

Store branded items rose to an all-time sales high of $118.4 billion in U.S. sales in 2015, which was a $2.2 billion increase from the previous year’s sales, according to the Private Label Manufacturers Association.

Industry experts agree that store branded items typically carry higher profit margins than their name branded counterparts, especially for a company like Amazon because they can control the supply chain, reduce marketing and branding costs and already have a built in customer base of millions and millions of members – and Amazon already knows all their buying habits and history.



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