KANSAS CITY — A little more than a year has passed since Amazon.com Inc. made the stunning announcement it would acquire Whole Foods Market for $13.7 billion. Since then, prominent technology companies have continued to target the market for food and beverages. While none have expressed an interest in food manufacturing or restaurant operation, they are working to one day be the consumer’s purveyor of choice online, in some brick-and-mortar formats and delivery.
Amazon currently is the most significant competitor. Since the acquisition of Whole Foods closed, the company has been working to integrate the two businesses. Its Prime membership program now may be used at Whole Foods Market stores nationwide, and Whole Foods’ private label brands have gained prominent positioning on some of Amazon’s e-commerce platforms.
But Amazon’s foray into brick and mortar does not stop with Whole Foods. Bloomberg reports Amazon management is considering plans to open 3,000 Amazon Go outlets nationwide, which offer consumers a “just walk out” shopping experience with no cash register. The brick-and-mortar concept is app based and allows shoppers to fill their shopping bags and simply walk out. Scanners tabulate the bill and charge a credit card on file.
The Bloomberg story says management is experimenting with different formats, one that may be akin to a convenience store business model or another that may be a “meal-on-the-run option.”
The ride-sharing service Uber also is expanding its presence in food. Through its Uber EATS platform, the company is working with McDonald’s and many other restaurant chains and independents. Starbucks reportedly is testing a partnership with the company in Florida.
Amazon and Uber are working to one day be the consumer's purveyor of choice online, in some brick-and-mortar formats and delivery.
News broke on Sept. 21 that Uber is in the early stages of talks to invest in Deliveroo, a food delivery company based in London. If consummated, the acquisition would give Uber a strong foothold in the more than 200 cities globally where Deliveroo does business.
Each of these initiatives highlights how competitive the market for selling and delivering food and beverages is becoming. This change is unfolding against a backdrop in which Facebook and Google are quickly building dominant positions in how products are advertised and marketed.
All of these businesses are information platforms first, and they use the vast quantities of data they generate to be more innovative, agile and price competitive. It is easy to see how both Amazon and Uber, working across multiple platforms and with numerous suppliers, will be able to develop proprietary insights that may give each a competitive edge.
Walmart Inc. and Kroger Co. have seen this trend developing at retail and made significant investments in response to remain competitive. Other delivery firms such as GrubHub, DoorDash and Postmates will have to make similar investments to stave off Uber’s growth.
How consumers learn about and acquire food and beverages is changing rapidly. This shift will continue to have a dramatic effect on manufacturers as information-based platforms like Amazon and Uber continue to make inroads into the marketplace. Food manufacturers must ensure they are agile enough to successfully adapt.