Study Ranks Which Food Companies Should Be Most Intimidated By Amazon

While eating food is still far from being a digital experience, acquiring food is increasingly accomplished online. According to an article by CNBC, the research firm Bernstein recently published a note analyzing how prepared food companies are to compete with the e-commerce and delivery giant Amazon.

According to CNBC, Bernstein estimates that while e-commerce only accounts for about 1 percent of packaged food sales in the U.S. currently, this figure could grow to 5 or 6 percent in the near future. Amazon’s acquisition of Whole Foods in 2017 launched a new phase of its packaged food strategy as it began promoting the grocer’s 365 Everyday Value Brand online, according to the article.

"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," Bernstein analyst Alexia Howard wrote in the note cited by CNBC.

Bernstein ranked J.M. Smucker as the worst-positioned company due to its uncompetitive online presence, and ranked Mondelez second to last thanks to its under-indexing of cookie brands like Oreo and Chips Ahoy, according to the article. Kellogg’s, General Mills, Kraft Heinz and Campbell’s fell in the middle, while McCormick and Hershey nabbed the top and second highest spots due to their strong digital strategies and profitability of their products, according to CNBC.

Read the full article here.