The Food Industry’s Concerns Over Amazon’s Private-Label Food Launch – Jay Lee’s U.S. Report (136)

Amazon’s Launch of Private-Label Food Brand Alarms the Food Industry

– U.S. Column #136 by Jay Lee

“Amazon Saver” under $5

Rising Food Prices Drive Private Brand Preference

Market Share Expected to Grow from 20% to 24% in Six Years

By Jongchan Lee, CEO of J&B Food Consulting

Source: Food & Beverage News (http://www.thinkfood.co.kr)

Amazon, the largest online retailer in the U.S., is expanding its grocery lineup with the launch of its private-label brand Amazon Saver. The company states that it created Amazon Saver to help ease grocery budgets for households struggling due to economic downturns.

Most of the Amazon Saver products are priced under $5. Amazon Prime members can receive an additional 10% discount through a customer benefit program when purchasing items from this brand. Amazon also announced plans to expand the Amazon Saver line with over 100 new items. The initial product lineup includes crackers, cookies, deli meats, honey, coffee creamers, pancake syrup, condiments, and canned fruits and vegetables.

Amazon Saver products will be available both on Amazon’s online platform and at its Amazon Fresh grocery stores—49 locations across California, Illinois, Virginia, Washington, Pennsylvania, Maryland, New Jersey, and New York.

Along with this brand launch, Amazon is expanding Prime member discounts to more than 3,000 grocery items. This includes weekly rotating discounts of up to 50% on 8–15 fresh produce, proteins, and pantry staples, as well as 25% off more than 1,200 grocery and household essentials exclusive to Prime members.

In addition to Amazon Saver, Amazon already offers over 1,700 private-label products across its brands—such as Amazon Fresh, Amazon Kitchen, Happy Belly, and 365 by Whole Foods Market—with 10% Prime discounts. These are also sold at Whole Foods Market, Amazon’s grocery chain.

Amazon’s move to launch a private food brand and expand grocery discounts reflects a broader retail trend: as food prices have increased over the past few years, consumer preference for private brands has risen. Retailers are now focusing on providing better discounts to inflation-fatigued consumers.

While adjusting its grocery retail strategy both online and offline, Amazon has continued to build a robust private-label portfolio across food and non-food categories, with brands such as Solimo, Wag, Wickedly Prime, Presto!, Revly, and Amazon Basics.

Private brands currently account for 20% of the U.S. grocery market, and this share is expected to rise to 24% by 2030. Strategies targeting consumers’ shrinking wallets during economic hardship are expected to continue growing in importance.

In Korea, retailers like Coupang and E-Mart are also entering the food market with their own private-label brands. For small to mid-sized companies without strong brand recognition, OEM (original equipment manufacturing) production partnerships can create win-win opportunities. There is also growing potential for Korean companies to manufacture products under Amazon’s private brands, rather than simply exporting their own.

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