Amazon Now Owns 1/5 of Online Grocery

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Amazon Now Owns 1/5 of Online Grocery

01/17/2018

Amazon reportedly earned 18 percent of U.S. online grocery sales – valued at $2 billion – in 2017, representing growth of 59 percent, according to new research from Sandy, Utah-based ecommerce solutions firm One Click Retail.

The Seattle-based ecommerce giant also saw growth of more than 50 percent in its two other biggest markets: the United Kingdom and Germany, the firm noted in its “Amazon Grocery 2017 Review” report. The reasons behind the impressive growth are threefold:

  • Amazon's penetration is at an all-time high in both North America and Europe, and it's increasingly valued by young professionals, busy with their careers and/or raising young families, as a one-stop shop for their online purchases, including groceries.
  • Signups for Prime membership, which includes access to Amazon's Prime Pantry grocery items, took place in record numbers during the 2017 holiday season.
  • Amazon Fresh continues to be available to more ZIP codes throughout the United States, United Kingdom, Germany, Japan and soon Australia.

The report also found that:

  • In the United States, Amazon saw cold beverage sales – driven by bottled water and sports/energy drinks – and coffee – driven by disposable pods – earn more than double the next leading categories, with cold beverages increasing 65 percent year over year. The remaining top categories – snack foods, breakfast foods, and candy and gum – show that nonperishables continue to dominate Amazon's grocery sales.
  • Weekly sales of Amazon Fresh more than doubled over the course of the year, rising to more than $7 million, from $3 million in 2017, to reach an estimated sales total of $350 million. Dairy drew the highest sales value, estimated at $85 million, while most of the top fresh items were fruits and vegetables.
  • “Organic” was a key search term, with roughly 25 percent of all Amazon Fresh sales going to products with the word in their titles, including eight of 2017's top 20 bestsellers.
  • Whole Foods Market's 365 Everyday Value brand consistently held the No. 2 spot among the etailer's bestselling private labels (AmazonBasics held first place), earning an estimated $11 million in sales between late August, when it began selling through Amazon, and the end of the year.

"The Amazon and Whole Foods partnership is a perfect match, doubling down on the campaign begun by Amazon Fresh to change consumer perceptions of online grocery sales from 'nonperishables only' to high-quality, fresh, 'whole'-some foods," said Nathan Rigby, VP at One Click Retail. "For brands, this will have – and already has had – widespread implications, with food sales moving online in record volumes as consumer confidence soars. The growth potential for online sales of groceries in 2018, and fresh foods in particular, is huge. In all likelihood, this is the tipping point we have been waiting for."