The food and beverage industry hasn't been successful when it comes to ecommerce sales; the market is projected to make up just 2.5% of overall ecommerce sales this year, according to eMarketer. But watch for specialized online programs, lured by food technology pioneers and products with new spins on natural, organic and free from ingredients, to possibly move the needle.
An example is Amazon's Launchpad program, which spotlights innovative products and builds a sense of community by sharing the inspiration behind these companies' products.
Products from food and beverage companies such as Barnana, an "upcycler" of bananas that makes chewy bites, Sweetie Pie organic products for toddlers, Vermont Smoke & Cure Turkey Sticks, and Soylent’s 2.0 RTD beverage, are among those featured at this dedicated Amazon storefront.
Many of the food and beverage startups at Amazon Launchpad have a clean ingredient component. "The food and beverage startups in the Amazon Launchpad program tend to be a reflection of investment trends made by venture capital firms, startup accelerators, and crowd-funding platforms," Lori Richter, PR Manager at Amazon.com, wrote in an email. "We offer a variety of organic, natural, gluten free, and local/farmers' market items, which is where we're seeing product innovation in this industry. It could be considered a representation of changing consumer habits.”
Amazon Launchpad, by partnering with 100 leading venture capital firms, such as AccelFoods and VMG Partners, has helped more than 700 startups "launch" 1,400 products in the U.S., the UK, Germany and China. These emerging brands receive support services such as inventory management and order fulfillment.
But will the latest ingredient trends or food technologies be enough to increase online food and beverage sales? An online portal is a good jumping off point for startups [and large food companies] to build awareness, Tim Barrett, retailing analyst, Euromonitor International, told Food Dive. Online food and beverage subscription services, which have experienced success, could possibly drive more consumers to make purchases online. Products available at Amazon Launchpad also offer subscription services.
In regard to subscription box services, non-GMO and gluten-free focused monthly deliveries are catching on with consumers. Love With Food, a natural snack food monthly subscription company, recently announced it acquired gluten-free subscription service, Send Me Gluten Free. "These products are tailored to people who are really into this, which tends to be people who spend a lot more on food in the first place," Barrett said.
While on the surface online food sales seem like a good idea due to the small percentage of online sales taking place, executing the idea can be difficult, especially when it comes to shipping expenses. People would rather go to grocery or natural food stores to pick up products. "It would be interesting if there was a food specific type of Launchpad program or website," Barrett said. "Perhaps use it as a platform where there is a lot of knowledge and people want to be on it."
Or perhaps an app or aggregator could pull together what consumers want, like what Amazon is doing, but at the grocery level, Jennifer Silverberg, CEO, SmartCommerce, told Food Dive earlier this year. "And then delivering it either all at once or in some coordinated way that makes sense for the consumer," she said.
What can food and beverage companies take away from the experiences of companies involved in online programs, where it seems like promoting natural flavors and/or ingredients, for example, is an important factor? Richter said to pay close attention to what customers want and need. "Today, there are a number of consumers that are most interested in organic and/or natural ingredients, as well as foods that meet their dietary restrictions," she wrote.
Barrett said that in general, online is better for marketing than it is for actual final sales. "Hopefully, what you will be able to do is use whatever you do online to get more of a foothold in stores because that is where the sales still are."