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USA: Distribution Moving Towards Online Retailing

Every large food retailer in North America and Europe is now marketing organic foods under their private labels. The next spurt of growth is envisaged to come from mobile apps linked to delivery services. Ecovia Intelligence (formerly Organic Monitor) sees distribution moving towards online retailing and home delivery schemes.

Sustainable foods and natural cosmetics were initially introduced in health & natural food retailers, with distribution expanding to the mass market in the last two decades. Mainstream retailers now comprise most organic food sales in almost all leading country markets. Every large food retailer in North America and Europe is now marketing organic foods under their private labels. The next spurt of growth is envisaged to come from mobile apps linked to delivery services.

Whole Foods brand is number two selling label at Amazon

Amazon’s purchase of Whole Foods Market heralds the beginning of a new growth phase for the organic & sustainable products market, says Ecovia Intellligence. Since acquiring Whole Foods Market, its 365 Everyday Value brand has become the number two selling private label on Amazon. The online retailer is reported to have sold US $10 million in Whole Foods snacks, canned foods, and frozen fruits and vegetables in the first few months. The private label is projected to show over US $40 million sales from Amazon this year.

Sprouts Farmer’s Markets, one of the largest natural food retailers in the US, has just partnered with Instacartfor same day delivery of its grocery products. Starting in Phoenix, Tuscon, and Arizona, the home delivery scheme will be extended to other areas. Target and Wal-Mart have already partnered with Google to set up similar delivery services. Sprouts Farmer’s Markets and other natural food retailers are looking to actively market their private label ranges via home delivery schemes. Organic foods marketed under private labels are attractive to consumers as they typically have lower prices; they also generate higher margins for retailers.

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