sweets & snacks on amazon 2017 ytd
TRANSCRIPT
Amazon has had a record year so far in a variety of
unexpected places. With clever strategies and long-term
investments, Amazon has become a major destination for
consumers buying automotive products, furniture and home
appliances. Now, Amazon is targeting a very different kind of
product: sweets and snacks.
Amazon Sweets Snacks 2017 YTDBy Nathan Rigby, VP Sales & Marketing, One Click Retail
Competing in the sweets and snacks space is a unique challenge
because it relies so heavily on impulse buying. But Amazon, never one
to shy away from a difficult product group, has a plan: with the new
Prime Surprise Sweets program and the use of Alexa to engage the
impulse buying crowd, Amazon’s effect on the sweets and snacks
industry is quickly being felt. Let’s take a closer look at the eCommerce
giant’s performance in this product group.
The Numbers
• $49 billion: Total 2016 U.S. sweets and snacks sales.
• $240 million: com 2016 Sweets & Snacks sales.
• $215 million: com 2017 YTD Sweets & Snacks sales (January-August
inclusive).
• 42%: YoY growth of Amazon.com Sweets & Snacks sales.
In only the first eight months of 2017, Amazon’s sales of Sweets & Snacks have almost
reached the total volume of sales in 2016, a YoY growth (comparing the past 52 weeks to the
same period in 2015-16) of 42%. Though the biggest subcategories by a significant margin are
not surprising – Chocolate Candy, Salty Snacks, and Non-Chocolate Candy – much of the
year-to-date growth has been driven by more health-conscious consumers. Dry Fruit Snacks,
arguably the healthiest of all subcategories, experienced 75% growth, more than any other
subcategory, while the next three top growers are all relatively healthy: Dried Meat Snacks,
Snack/Granola Bars, and Crackers. Of the larger volume categories, Salty Snacks grew the
most rapidly, leaving sugary treats relatively stagnant by comparison.
Sweets & Snacks International
Conversely, Sweets & Snacks sales in Europe are still overwhelmingly
driven by sugary treats, with the Sweets subcategory dominating in
the U.K. and Chocolate leading in both Germany and France. Quite
unlike the U.S., the majority of top-selling items are sweets and
chocolates, making up at least 8 of the top 10 items in all three of
these countries.
Amazon’s Sweets & Snacks Strategy
Amazon’s burgeoning success in the Sweets & Snacks
product group springs from four main drivers: Private
Brands, Prime Surprise Sweets, Alexa, and Candy Holidays.
Let’s look at how each of these factors into Amazon’s
strategy.
Private Brands: Happy Belly & Wickedly Prime
Currently, Amazon has two private brands competing in the snack
space: Happy Belly and Wickedly Prime. The latter, to smaller
effect, ranks 65th in the product group with $800,000 YTD sales
this year. Half of those sales are popcorn snack bags, generating a
respectable 25% of the sales of the top incumbent SkinnyPop (with
$1.6M YTD sales).
Private Brands: Happy Belly & Wickedly Prime
Happy Belly, on the other hand, ranks as the 4th-best selling 1P brand in the
Snacks category, generating $3.5M in YTD in the Snack Nuts subcategory.
Though Happy Belly’s biggest 1P competitor is Planters with $6.5 in Snack
Nuts sales YTD, Happy Belly’s flagship Trail Mix products have no direct 1P
competition on Amazon. Category leaders Kirkland Signature and Archer
Farms are both only available through 3rd-party sellers, leaving a vacuum for
Happy Belly that may be responsible for the private brand’s success.
Launching “Prime Surprise Sweets”
Amazon’s recent pilot program Prime Surprise Sweets is something new for the
platform. In brief, it’s a button on an Amazon Prime member’s dashboard
(purchasable for $4.99) which, when clicked, automatically orders an $18 box of
assorted artisanal sweets. The Dash button, which requires a 1-click ordering
address, is designed to promote Amazon’s assortment of specialty chocolates,
sweets and baked goods, delivering a “surprise” package of premium handmade
treats, many of which can’t be bought through Amazon in any other way.
Launching “Prime Surprise Sweets”
So far, the program has already brought in about $1.6M in sales and is rapidly
growing: the button only sold about $65,000 in January but grew to five times that
size by July. The program has generated $700,000 YTD sales of Artisanal Baked
Goods, $300,000 of Artisanal Chocolates and $130,000 Artisanal Caramels as well
as lesser amounts of several other subcategories, though since Prime members
don’t actually choose the items included in the box, its contents may not accurately
reflect consumer demand.
Impulse Buying with Alexa
Amazon has invested heavily in automation and today, thanks to Alexa, there is no need to
click a button to place an order and have it delivered directly to your home. This innovation
accelerates Amazon’s ability to compete in a wider range of product groups and
subcategories. Specifically, it eliminates the bane of online ordering: the ability of the
consumer to reconsider. Alexa gives Amazon access to a whole new level of impulse
buying. Amazon Echo owners can now shout out the candy or treat they’re craving at any
given time and the very next moment Alexa will have the order placed for them.
Candy Holidays Drive Chocolate Sales
All this talk about impulse buying of candy would be disingenuous without
recognizing that the three biggest chocolate-buying days of the year are not
impulse-driven at all: Valentine’s Day, Easter, and Halloween. As might be guessed,
sales of Chocolate Candy see an annual spike around each of these dates, with
Valentine’s Day driving an 85% increase in 2015 and 2016, which then climbed to a
135% lift in 2017. This Halloween may be even higher since last year it drove a 3-
week long sales lift of 120%.
Candy Holidays Drive Chocolate Sales
Counterintuitively, Easter has yielded very little change in the past, generating a
negligible lift in chocolate sales prior to the holiday. Instead, we’ve seen a sudden spike
in sales during the few weeks after Easter driven by a high volume of lightning deals
discounting chocolate items by 30-80%. This is most likely due to brands overstocking
on Easter candy and later trying to clear their inventory; adding credence to this
interpretation is that in 2017, Amazon bucked the trend with an unprecedented 50%
spike in candy sales before Easter and, subsequently, the post-holiday deal-driven spike
disappeared.
One Click Retail is the industry’s most accurate source of sales data for the world’s top
eCommerce marketplaces. Using a combination of website indexing, machine learning
and proprietary software, OCR estimates weekly online sales figures with 98.5% accuracy
down to the level of the individual SKU on Amazon in order to deliver the best insights,
analytics and strategies to their brand manufacturer clients. To catch a glimpse of how
OCR gives brands critical edge on online platforms with our unique data and expertise,
subscribe to our weekly eCommerce insights blog, and follow us on Twitter and LinkedIn.
Key Takeaways
• Amazon shoppers in the U.S. are buying more snacks year after year, but their preferences are shifting towards healthier,
non-sugary and organic snacks.
• Amazon’s private brands (which are still limited in this space) are competing more effectively in areas where there are less
first-party competitors, such as Happy Belly Trail Mix.
• Prime Surprise Sweets is a new and unique way for Amazon to market specific product categories, generate brand
awareness for artisans and other 1P sellers, and increase their portfolio of premium and artisanal products.
• As Alexa grows in popularity, voice-activated purchases of snack foods and other consumables have the potential for major
growth.
• Year after year, Amazon has been improving holiday candy sales (including Valentine’s Day, Easter, Halloween and
Christmas), both in volume and in duration of lift.
If you are a brand manufacturer who would like to learn more about how
you stack up to the competition—or would like to see your market share
and category growth insights—email us at [email protected] for a
free capabilities demo.
One Click Retail (OCR) is a market leader in eCommerce data measurement, sales analytics andsearch optimization for brand manufacturers in North America, Europe and Asia. Thanks to ourproprietary sales calculations that are 98.5% accurate down to the SKU level, OCR’s accuracyis unrivaled in the marketplace. The OCR Product Suite provides 1st and 3rd party businessintelligence across the 30 largest retailers such as Amazon, Walmart, Target, Staples and HomeDepot. The world’s top brands, such as Procter & Gamble, Panasonic, Nestle, Hamilton Beach andHP, rely on OCR insights to drive sales and profitability across eCommerce.
Founded in 2013 by eCommerce experts from Amazon, Walmart, Target, Overstock and otherleading retailers, OCR was acquired in 2016 by Ascential plc (LSE: ASCL.L), a UK-based internationalB2B media company with a focused portfolio of market-leading events and information servicesproducts.
To learn more about how OCR can provide your brand with the competitive edge in today’secommerce marketplace, visit www.oneclickretail.com.
About One Click Retail