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July 3, 2017

What the Amazon, Whole Foods Deal Means for Dairy

 |  By: Mike Opperman

Recently Amazon, the online e-commerce juggernaut, announced the purchase of Whole Foods, the grocery store entity that made fresh and local foods a national movement. Adding the brick-and-mortar Whole Foods to its portfolio gives substance and extension to its online food brand, AmazonFresh.

What does this mean for dairy? According to a report on dairyreporter.com, the potential growth of AmazonFresh could mean a significant jump in dairy sales.

In Q1 2017 Amazon reported that AmazonFresh generated $10 million in sales, with dairy product sales taking second behind produce sales.  Frozen novelties and desserts, such as ice cream, ranked as the fifth-best selling category.

AmazonFresh is an online service that allows customers in 18 cities to order perishable grocery items and have them delivered the same day for a small fee. While the idea of ordering groceries online and having them delivered is still a stretch for a majority of consumers, Charlie Cain, executive partner of the consumer product consulting company Building Oz, says in the dairyreporter.com article that the Whole Foods acquisition should ease the process.

“Whereas before a consumer may have been uncertain as to what to expect from AmazonFresh, they know and trust Whole Foods and are therefore more likely to try home delivery,” Cain says. “Amazon’s purchase of Whole Foods exponentially increases the credibility and reach of AmazonFresh. This partnership is the first real threat to America’s dominant grocery chains.”

The article states that Whole Foods remains committed to providing fresh food free of preservatives, artificial ingredients and antibiotics.

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