Brief

Amazon's Subscribe and Save powers e-commerce for CPG

Dive Brief:

  • E-commerce sales for CPG jumped 42% last year, which was faster than the 30% growth rate for e-commerce overall, according to 1010data. 
  • Amazon drove CPG e-commerce sales, particularly with its Subscribe and Save feature, which automatically ships out new products after a pre determined time frame. This feature, which grew 200% year over year, accounted for more than 20% of all growth.
  • Top food and beverage categories in terms of U.S. e-commerce sales last year included bottled water, protein powder, adult nutrition, and health snack bars. Bai energy drinks was the second fastest-growing brand in CPG e-commerce for 2015, and other Top 10 brands included Vega, Orgain, and Donut Shop Classics.

Dive Insight:

However, this level of growth comes from a low base figure with less than 10% of total CPG sales coming from e-commerce, and less than 5% for major manufacturers like Unilever, Mondelez, Coca-Cola, and PepsiCo. In September, General Mills reported that e-commerce accounted for only 1% to 2% of total sales, though the company expects that figure to rise to 5% to 6% in the next few years.

Still, e-commerce in food and beverage is growing. Last year, Mondelez made a commitment to boost its e-commerce business to $1 billion in 2020 and also debuted "buy now" buttons in shoppable ads. Snyder's-Lance's Snack Shack will enable the company to sell more products online. A General Mills exec called e-commerce "mission critical" in an interview with Food Dive last year.

The fastest-growing brands for CPG e-commerce also fit industry trends, and major manufacturers have caught on. Dr Pepper Snapple acquired a minority stake in Bai Brands, maker of coffeefruit-infused antioxidant beverages, last year, and WhiteWave Foods purchased plant-based foods maker Vega, which was a contributor to the company's recent record-breaking quarter for company sales.

Filed Under: Corporate