Amazon’s private label success is undeniable, with estimates from investment firm SunTrust predicting that revenues will climb from a projected $7.5 billion in 2018 to $25 billion by 2022. That growth rate is staggering, but optimism has been even higher since Amazon launched its Accelerator Program in early October 2018.
This program essentially flips the normal private label creation process on its head. Instead of Amazon coming up with ideas for brands and products and then putting them out for bid with manufacturers, it is instead inviting manufacturers to “join the Amazon family of brands” and be part of the creation process.
With this invitation, Amazon is essentially eliminating time spent on brand and product development. In exchange for launching exclusive products only available on the Amazon platform, Amazon gives manufacturers an array of valuable resources, services and placements that usually have high costs for vendors and sellers. This new partnership model allows Amazon to create private label and exclusive brands at a much faster and more dynamic pace. In the past four months alone, it’s estimated that the Amazon Accelerator program has launched well over 100 new brands.
"In the past four months alone, it’s estimated that the Amazon Accelerator program has launched well over 100 new brands."
Many of these brands have been in popular CPG categories such as Health & Personal Care, Grocery, and Pet. Early evidence indicates that consumers are quick to adopt Amazon’s brands, with market share growing fast in many key subcategories. This represents a major threat to established players, who have spent tens of years and billions of dollars to solidify their place in the market.
Here are 10 Amazon private label and exclusive brands that established CPGs need to pay attention to in 2019.
Health & Personal Care
Health and personal care is Amazon’s largest consumables category, accounting for an estimated $5 billion in sales in 2018, a growth rate of 35% YoY. It’s also where you see some of the strongest initial brand creation under the Accelerator program.
1. Nutrition & Wellness: Challenge by GNC
GNC, a competitor of Amazon’s in the Nutrition & Wellness category, is putting its $2 billion retail brand equity behind this Amazon exclusive brand, as well as its Informed Nutrition by GNC brand. CEO Ken Martindale believes offering Amazon-exclusive supplements are a way of making up for lost in-store sales.
2. Baby Care: Mama Bear
This Amazon private label was started in late 2017 with the launch of diapers. Since then, the brand has expanded its offerings to a variety of baby care products. It is estimated that Mama Bear brought in $9 million in revenue last year.
3. Household Consumables: Presto!
Paper towels are huge business for Amazon, with an estimated $160 million in total sales in 2018. Presto!, Amazon’s private label brand, accounted for 6% of these sales, an increase of nearly 80 times over the previous year.
4. Health Care: Basic Care
Basic Care is a brand of over-the-counter (OTC) medication manufactured and owned by Perrigo and sold exclusively on Amazon. In 2018, Basic Care’s share of sales on Amazon overtook that of Good Sense, Perrigo’s existing brand.
Grocery is Amazon’s second largest consumables category, accounting for an estimated $3 billion in sales in 2018, a growth rate of 45% YoY. After 2017’s acquisition of Whole Foods Market, there is no mistaking that Amazon has big plans for grocery.
5. Cold Beverages: 365 Everyday Value
When Amazon bought Whole Foods, it effectively turned the grocer into a testing ground for a variety of private labels. It also inherited a great existing brand in 365 Everyday Value, which has recently launched a variety of cold beverages, including sparking water to compete with La Croix.
6. Coffee: Solimo
Introduced in Q2 2018, Amazon’s Solimo brand of coffee pods quickly became one of the top 25 products in its category, averaging an estimated $60,000 in weekly sales. This is comparable to established brands like Caza Trail, Peet’s and Eight O’Clock.
7. Snacks: Wickedly Prime
This Amazon private label was created in late 2016 and now offers a variety of products from granola bars to pasta and even seaweed snacks. Because of its longer history on the platform, Wickedly Prime has many fast-moving listings that will continue to cause havoc on established snack brands.
Pet is Amazon’s third largest consumables category, accounting for an estimated $2.5 billion in sales in 2018, a growth rate of 30% YoY. With Millennials now having children later, many of these Amazon-obsessed buyers are considering pets as their “starter kids,” creating a growing opportunity for the internet retailer.
8. Pet Food & Feeding Supplies: Wag
The Wag.com e-commerce pet website, which closed in 2017, was bought by Amazon that same year. The site now redirects to the Amazon private label under the same name.
9. Habitats & Supplies: Pet Craft
Though Amazon Basics pet beds seem to currently have a better sales velocity, the Pet Craft brand has a great variety of clothing, toys and other supplies.
10. Pet Health: Zoeez Naturals
This is a new private label category for Amazon and one that will take some time to build trust with consumers. The Zoeez Naturals brand is launching unique products with easy-to-understand packaging that should perform well against competitors this year.
What Can Brands Do?
While physical retail channels are and will always be important for established CPG brands, having an Amazon strategy is paramount in 2019. Consumers are turning to Amazon to buy their consumables at a breakneck pace, with 2018 sales in all major categories estimated to have grown over 30 percent year over year. At the same time, Amazon is rapidly growing its number of private label and exclusive brands, including consumables.
For established players, it’s going to become increasingly important to have a competitive presence on Amazon that retains market share and brand loyalty. One of the most fundamental components of this strategy is search visibility. Brands must understand the terms consumers search for the most in their category, and they must optimize their listing page content to ensure their products appear as close to the top of search results for these terms as possible.
OneSpace helps you optimize your product content at the speed of e-commerce. Ongoing optimizations and maintenance activities are driven by seasonal trends, updates to retailer requirements, consumer search behavior, the paid search landscape, and your competition.
Contact OneSpace today to see how you can optimize your product content at unrivaled speed and scale.
Joshua Schall, MBA has an 11-year background in the emerging and intersecting CPG/FMCG categories of functional food and beverage and nutritional products.
He currently is the owner of J. Schall Consulting, an Austin, TX-based boutique management consulting company that focuses on digital growth strategies for CPG/FMCG brands that range from pre-launch to portfolio companies with $500M in yearly revenue.
Joshua enjoys an active healthy lifestyle but still finds himself spending way too much time scanning social media and digital grocery aisles for new consumable brands.