The e-commerce giant recently aquired Whole Foods for $13.7bn, sending a message to food companies, like Torie & Howard, that the move will boost the availability of organic foods to more US households.
However, manufacturers should not rely solely on Amazon to extend their natural product footprint.
Two submission processes
Miche Bacher, founder and CEO of vegan and gluten-free cookie startup Miche’s Kitchen, noted that products on the shelf at Whole Foods does not mean they will automatically be available on Amazon. BakeryandSnacks met up with her at the recent Snack Attack event being held in New York.
“Right now the two [avenues] are separate,” she said. “To get into Whole Foods, [a producer] must go through the submission process. They have a calendar they follow for 10 annual category reviews. [The producer must] submit its insurance; ‘RangeMe’ info; spreadsheet and a PowerPoint presentation, as well as product samples.
“This is done regionally,” Bacher added. “[Whole Foods] then reviews the [submission] and decides whether to stock the product. Once [the producer] is in a certain number of stores or regions, they will consider it for global distribution.”
Amazon has separate parameters.
“You pay to be on their site and how much you pay and how well your product sells determines whether you are part of their distribution system or you take care of that," she said.
Miche’s Kitchen, which uses sprouted grains and seeds for its cookies started entering the US market last month and is currently available in eight stores on the east coast.
Bacher has gathered her initial investment from family and friends, and is entering another round with investors.
Miche’s Kitchen is currently working with Amazon Fresh for local delivery and hopes to eventually enter the conventional channel as well, as Bacher believes that 90% of natural food startups limit themselves to the natural channel only.
“I have mixed feelings about Amazon’s acquisition [of Whole Foods],” Bacher said. “In some ways, it gives natural foods a platform they would not ordinarily have. [I know that] this is going to be hard for the ‘little guys' as it costs a fortune to get into Amazon and the national distribution channel. I think the acquisition will create a barrier for smaller players.”
But Bacher is not intimidated by the situation and is confident her products deliver health and wellness to its audience.
By the end of Q4, Miche’s Kitchen is expected to be available in 60 to 100 brick & mortar stores, including Whole Foods, across the US, “which is not a lot, but we’re starting from zero,” Bacher said.
Bahlsen’s Amazon initiative
German baker Bahlsen also plans to work with Amazon to expand its US footprint, the company told this site at Snack Attack.
The company is known for its cakes made with butter, and its milk and dark chocolate cookies.
“The US market represents a small piece of our business as we sell in over 70 countries worldwide. We’re relatively new in the US, and we've been distributing through domestic channels for the past few years," Kathi Carroll, marketing director of Bahlsen North America said.
“We [expect to be on] Amazon in the next few weeks and know that e-commerce will be a more popular way for people to shop for snacks,” she added.