The Amazon Effect: How eCommerce will change food and beverage packaging
Amazon, Whole Foods deal propels food and beverage eCommerce forward, and companies will need to respond.
Everybody knows that the internet is changing the retail landscape, but food and beverage companies have seemed to lag behind when it comes to selling products online. That could be about to change drastically though.
Amazon recently bought Whole Foods for $13.7 billion and, and as soon as the deal was finalized the website eCommerce giant started including more groceries online — successfully. According to a Bloomberg report, Amazon saw, “a surge in online grocery shopping for basic staples like canned beans and tomato paste,” right away.
“Amazon immediately put about 2,000 items on its site from the Whole Foods 365 Everyday Value brand and sold out of almost all of the most-popular items,” Spencer Millerberg, chief executive officer of One Click Retail, which monitored sales, told Bloomberg. The news report added that, “web sales of Whole Foods branded products totaled about $500,000 in the first week, according to One Click Retail’s estimate.”
And the more people are willing to buy food and beverages online, the more brands will have to respond — especially when it comes to packaging.
Jorge Izquierdo, vice president, market development for PMMI, says the impacts can already be felt.
“If you had [asked] this question to me last year, maybe my answer would be a little different.... Now, we have seen a significant change,” he says. “In the past we've seen big retailers asking for specific presentations, formats for their own stores. Now we are starting to see online retailers like Amazon asking for specific formats for them. So it's happening.”
And it can be a nightmare for brand owners, which no longer have complete control of the sales experience, but rather are at the mercy of the delivery service. And, as such, it can become important to add a second layer of packaging to help prevent damages during the shipping process.
“In the past, it was about sending the same type of product by mail,” Izquierdo says. “Now it's really developing a new product for eCommerce.”
That also include changes to packaging design.
“Traditionally packaging has been designed for those three seconds that you're looking at the shelf and you're making a decision,” he explains. “Now, the first time you look at a product, you already bought it. So it's about experience with the product, and about repeating the purchase.”
And that might lead to changes in things like labels, which could be smaller to save costs.
As for how exactly these products will be delivered though, Izquierdo cautions that it likely won’t be by drone anytime soon — at least not for food and beverages. He says drone delivery might make sense for products that have a high volume and a low weight like pharmaceuticals, but not much else.
“Drone delivery is a reality for some very, very specific applications and requirements.” Izquierdo says. “[But] I don't think it will be prevalent for most of the products.”
Brand managers, manufacturing and packaging professionals in food and beverage can find the latest solutions that help meet challenges with eCommerce at PACK EXPO Las Vegas (Las Vegas Convention Center; Sept. 25—27) co-located with Healthcare Packaging EXPO. Additionally, for those curious about the capabilities of autonomous vehicle delivery systems, PMMI in collaboration with electric truck and drone maker Workhorse, will also be presenting the "PACK EXPO Drone Demo - Packaging for the Last Mile," an interactive drone delivery exhibit to showcase automated packaging distribution.
To learn more about the event and register, visit packexpolasvegas.com.