GeekWire on Amazon’s new private labels for food:
Amazon is now selling nuts and trail mix under the Happy Belly brand, its private label for perishables.
The e-commerce giant began rolling out private-label food products in June, starting with Happy Belly coffee and Mama Bear baby food. The newly added Happy Belly products include whole nuts, assortments, and several types of trail mix.
_Wall Street Journal _reporter Greg Bensinger, who originally broke the news about the company’s private-label food initiatives, spotted the latest items on Amazon.com. (…)
The company already sells household goods and other items under the Amazon Basics and Amazon Elements brands.
Amazon is not telling its customers that those food labels belong to the company. Fortune:
Although Amazon has started selling private label groceries, it doesn’t advertise that it’s doing so. The perishables’ description pages don’t include any mention of Amazon being the creator.
A year ago, Amazon tried its hands at a private-label diapers brand only to pull the brand again less than two months after launch.
For an online retail giant like Amazon, there is obviously a lot to gain from private labels. The Wall Street Journal (paywall):
Such in-house brands tend to be lucrative for both their manufacturers and retailers, in part due to savings on brand development and marketing. By creating its own products, Amazon may be able to design packaging to reduce shipping costs, as well as better control profit margins.
Also, I guess private labels are one way to battle counterfeits on your marketplace.
Kidding aside, it makes sense that Amazon is going into perishables with its own private labels. Those are the categories to be ordered through Amazon Fresh and/or the Dash buttons. Owning the majority of the labels, and thus the margins at that level of the value chain, can help a lot in making the economics of the whole model work.
Also, Amazon going more vertical is kind of a tradition by now, isn’t it.
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