Food Businesses Need To Pay For Space And Attention, Even on Amazon

Amazon Prime

“This product sells itself!” Have you ever heard that expression? It’s one of those clichés that is unfortunately not true. While there are things you can do to gain awareness, interest and trust in the marketplace, no product, food or otherwise, sells itself.

If you are a food business going into distribution at a physical grocery store, you have to spend money on things to position yourself to get trial by new customers searching through tens of thousands of SKUs. This includes discounting your product through a price promotion and/or paying slotting fees to get the “prime real estate” on the grocery store shelf. In addition, food businesses spend money on marketing to leverage relationships with customers to get them to go to stores and purchase the product or else, through in-store demos of their product. This is in addition to the money spent developing their branding to develop a relationship with their customer as well as packaging that both tells that brand story and sticks out on the shelf.

Selling your food products online is no different. On our podcast this week, Jeff Walcoff of Marketplace Strategy talks about how Amazon product pages essentially function as the “packaging” of online products and how even the big brands pay to advertise their product pages in Amazon’s search results. And, given the amount of complexity that goes into keyword research for determining what is in that brand’s product pages, most people who choose Amazon as a channel have to spend lots of their time (and thus, money) optimizing pages so they are discoverable on Amazon.

People’s time and attention are limited, and often the biggest challenge with acquiring new customers for food businesses is getting those customers to try the product. Because the food space is competitive, online and off, emerging food companies have to spend lots of marketing and sales dollars to get people’s attention by paying to have their product in the right place with the right positioning.


And now, our roundup of the best food and beverage finance news, events and resources from around the web…

Food and Beverage Business Models

Business Model Insights

Raising Capital

Raising Capital

Grocery Store Shopping

CPG/National Brands

  • Just getting started on Amazon? Consider these factors when choosing a platform (New Hope Media) – “One of the first big decisions a brand must make is deciding what platform to sell on. Which, for most packaged food and personal care brands, means weighing the pros and cons of Seller Central and Vendor Central. Brands that engage with Amazon through Seller Central are technically a third-party and are selling directly to customers, giving them more control around that experience, said Andy Thompson, a marketplace strategist at digital marketing agency Booyah. On the other hand, brands must be invited to engage through Vendor Central, and in that case they sell wholesale to Amazon just as they would to any other retailer, while Amazon is actively pricing their products on the platform.”
  • Transitioning your Branding to Amazon (Marketplace Strategy)
  • Food brands stuck in the middle face challenges (Meat+Poultry)

Grocery Store Produce Section

Market Trends

  • 9 beverage industry trends for 2019 and beyond (New Hope Media) – “Consumers are moving away from sugary, caffeine-laden drinks and looking for healthy alternatives that are both healthy and environmentally friendly. Increasingly, start-ups are filling the void that traditional beverage companies haven’t yet reacted to. Emerging brands are grabbing market share at record-breaking speeds, dwarfing the traditional five-to-seven-year lead time and minimizing the usual multimillion-dollar investments behind new beverages. These start-ups are ramping up through nontraditional sales routes such as e-commerce and promotions via social media and word-of-mouth. To compete, established brands must adapt and become more nimble.”
  • What Consumers Are Buying in an ‘Amazon-ized’ Grocery World (Progressive Grocer)
  • Quick-to-prepare foods dominate categories across the store (New Hope Media)

 Regenerative Agriculture

Farming and AgTech

Mergers and Acquisitions

Deals/M&A

Events

Industry Events

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