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Amazon's First Move

By Joe Pawlak, Managing Principal, on August 31, 2017

It took little time before Amazon made its first move in the supermarket industry following the Whole Foods acquisition by announcing drastic price reductions in several product categories. Overall reviews are mixed, with some experts saying there have been big price drops in key staples and others believing the overall impact is modest at best. It is evident that Amazon is making a strong statement that it intends to be a much bigger player in the supermarket space by growing its share of market basket with existing and even new customers. The new price cuts are just the first step in Amazon’s goal of helping Whole Foods shed its “Whole Paycheck” reputation.

What has yet to emerge is the foodservice opportunity from the Amazon-Whole Foods grouping. We expect Whole Foods’ prepared foods to eventually become a food delivery option on Amazon’s website. Whole Foods gives Amazon access to over 460 kitchens throughout the U.S. to execute excellent quality prepared foods, delivered to your door hot and ready to eat.

What could play out in many homes across the country is this scenario: A woman is shopping on Amazon for the latest electronics around 6 p.m. in the evening. During this time, a screen pop-up asks her, “Have you had dinner yet?” She is hungry and clicks on the link to see a menu of chef-quality foods, all offered and prepared by Whole Foods. She orders the most appealing meal, as well as a few staple items on the Whole Foods microsite such as bananas, organic oatmeal and kefir. Within 45 minutes, Amazon delivers the meal and groceries right to her door. And since she’s an Amazon Prime member, delivery is free. Pretty powerful stuff.

 

 

Joe Pawlak, Managing Principal

Joe is head of the Advisory Practice, Technomic’s vertical that is engaged in food industry proprietary and multi-client consulting and research assignments. A 30-year food industry veteran, Joe’s experience encompasses virtually all food industry categories and channels. Read more »

About Technomic
Technomic Inc., a Winsight company, delivers a 360-degree view of the food industry. It impacts growth and profitability for clients by providing consumer-grounded vision and channel-relevant strategic insights. Its services range from major research studies and management consulting solutions to online databases and simple fact-finding assignments. Its clients include food manufacturers and distributors, restaurants and retailers, other foodservice organizations, and various institutions aligned with the food industry. Visit Technomic at technomic.com.

About Winsight, LLC
Winsight LLC is a recognized leader in business-to-business media and information services for the convenience-retailing, foodservice and grocery industries. Winsight has an extensive media portfolio, including five publications: CSP, Restaurant BusinessFoodService DirectorConvenience Store Products, and Winsight Grocery Business. Winsight also offers a suite of digital products, including websites, e-newsletters, webinars, video products, mobile and tablet apps, and custom marketing solutions. In addition to more than 12 major EduNetworking conferences and advisory meetings, Winsight also produces seven exclusive, large-scale executive-level conferences: Restaurant Leadership Conference, Global Restaurant Leadership ConferenceOutlook Leadership Conference, Convenience Retailing University, FSTECMenuDirections and Restaurant Directions. In 2015, Winsight acquired Technomic Inc., a provider of primary and secondary market information and advisory services for the food industry. For more information on Winsight and its brands, go to www.winsightmedia.com.

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