Specialty Food Magazine is the leading publication for retailers, manufacturers and foodservice professionals in the specialty food trade. It provides news, trends and business-building insights that help readers keep their businesses competitive.
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8012 Hankins Industrial Park Toano, VA 23168 800-831-18 28 • wholesale@Th e Pe a nutShop.com Visit us at the Winter Fancy Food Show #990. Ask about our Free Freight Program! ® Winter Fancy Food Show Booth 990 "The timing couldn't be better, either," she says. "Shoppers are easily bored and looking for interesting items, new recipes, and exciting f lavors." Amazon's Acquisition of Whole Foods The acquisition of Whole Foods Market by Amazon has the potential to increase pricing pressures on specialty food products, accord- ing to Balanko of The Hartman Group. "Amazon appears to be focused on democratizing premium/specialty foods," she says, noting that the e-commerce giant could pressure manufacturers of specialty food items to lower prices, which may affect their margins. Stern of McMillan Doolittle says it may still be too soon to tell exactly what impact the Amazon-Whole Foods acquisi- tion will have on the industry. "They obvi- ously have plans for growing the brand, and we just don't know what that's going to look like," he says. As expected, Amazon at f irst addressed Whole Foods' high-price image by announcing price cuts on a handful of items. It also said it would use its Amazon Prime membership service as a quasi-loyalty program to offer discounts for Prime subscribers, and would begin offering Whole Foods' 365 private-label brand online. Some research shows that Amazon's initial moves may have been successful in driving traffic to Whole Foods stores, but it was unclear if that business would hold up over the long term. Whole Foods had already been implementing changes that threatened to impact specialty food suppliers, includ- ing a shift toward more centralized procurement. A spokeswoman forWhole Foods, however, recently told TheStreet. com that the company remained "com- mitted to discovering local and innovative brands. Still, the potential for Whole Foods to focus less on local suppliers as Amazon seeks to drive efficiencies may have been behind the recent launch of Kroger's new website that highlights its local suppliers and offers information about how local ven- dors can supply Kroger stores. Steiner of Market Centre says Amazon and Whole Foods each have strengths that the other can leverage. "Amazon is going to learn a lot about customer satisfaction from Whole Foods, and Whole Foods is going to improve efficiencies," she says. "Retailers need to capitalize on the many areas where they fall short." WINTER 2018 57