Amazon Launches Private-Label Products

The e-commerce conglomerate is branding products ranging from diapers to perishable foods.

May 17, 2016

NEW YORK – In the coming weeks, new lines of private-label brands will begin to appear on, which will include the ecommerce company’s first broad push into perishable foods, reports the Wall Street Journal.

“The new brands with names like Happy Belly, Wickedly Prime and Mama Bear will include nuts, spices, tea, coffee, baby food and vitamins, as well as household items such as diapers and laundry detergents,” the news source writes, adding that first of the private-label brands could begin appearing on by the end of May or in early June.

From big-box retailers to grocery and convenience stores, private-label products resonate with consumers for not only being less expensive than the major CPG brands, but also comparable in terms of quality and taste, or usage and functionality. According to the Private Label Manufacturers Association, store brands reached a record high of $118.4 billion in U.S. sales in 2015. The dollar share of private-labels brands captured 17.7%, also the highest level ever. Across all channels, combined store brand sales accelerated 2%, a percentage matched by national brands, which also increased 2%. Last year, unit sales for private-label products hit nearly $44 billion, about the same as in 2014.

“Amazon is ‘carpet-bombing’ the market with new products,” Bill Bishop, chief architect of brand consultancy Brick Meets Click, told the news source, adding, “Private label allows them to test out new prices and distinctive flavors with less risk.”

The new lines of private-label products will only be available to Amazon Prime members, adding to other branded products the company has been rolling out for years, including the AmazonBasics line, which features hundreds of items such as cellphone cases, batteries, dumbbells and dog crates.

The new lineup of private-label products may also feed Amazon’s Fresh grocery delivery business, which is available in several U.S. cities, notes the Journal.

Meanwhile, according to an analysis by Boomerang Commerce, Target and Walmart’s beverage and breakfast product pricing is approximately half that offered by Amazon. Given the scale of the price difference, the findings suggest Target and Walmart could lure customers away from Amazon by expanding their assortments of pantry goods, such as canned food, snacks and other non-perishables, while maintaining competitive pricing.

Read more about store brands and convenience stores in “Private Matters” from NACS Magazine.