Smucker, Mondelez Stand To Lose The Most To Amazon

J.M. Smucker and Mondelez, the two U.S. food manufacturers, are seen as the least prepared for the competition that is coming from Amazon.

That’s according to a new research report from Wall Street firm Bernstein. Analyst Alexia Howard said in a research note covered by CNBC that those two companies aren’t prepared for the time when Amazon starts selling packaged foods online.

“While we expect private-label shelf space to normalize over time as Amazon separates winners from losers, we continue to believe that Amazon’s private label could pose a meaningful threat to branded food manufacturers, especially as its 365 Everyday Value brand is already highly credible with consumers,” Howard wrote in the note, according to CNBC. She also noted that Smucker’s rivals are doing a much better job of promoting their brands online. Meanwhile, Mondelez doesn’t promote its cookie brands online.

Since Amazon acquired Whole Foods back in 2017, it has been pushing into the grocery market, promoting Whole Foods’ private-label brand online, as well as its own private-label lines. According to CNBC, Amazon has also overhauled its website so that its brands are featured more prominently, as the private-label products it has rolled out have been doing well among consumers.

With more people in the U.S. doing their food shopping online, Amazon is expected to disrupt the consumer packaged goods industry. Bernstein said eCommerce only accounts for about 1 percent of packaged foods sales in the U.S., but that could increase to between 5 and 6 percent in the years to come.

Among the packaged food companies that Bernstein thinks will fare well is McCormick, which got the No. 1 spot in the ranking. The Wall Street firm gave the company kudos for its strong online presence and leadership in the seasoning category of packaged foods.