Amazon poses new threat to rivals as it ramps up PL

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SEATTLE — Inc. reportedly is set to begin rolling out a broadly expanded lineup of private label brands as the company aims to burnish its reputation as a lower-cost retailer and bolster its efforts to sell more perishable goods.

Amazon’s private label offerings will be available only to Amazon Prime members, The Wall Street Journal (WSJ) reported. Members pay $99 a year for two-day delivery, free streaming video and other ­extras.

The newspaper reported last year that Amazon had sought trademark protection under its Elements brand for more than two dozen product categories, including coffee, soup, pasta, water, vitamins, dog food and household items such as razors and cleaning products.

U.S. consumers continue to grow more accepting of store brands, which last year generated $8.4 billion in sales for the nation’s drug store chains, according to the Private Label Manufacturers Association (PLMA). That marked a nearly 1% gain in drug store market share, coming at the expense of national brands, PLMA reported in its latest yearbook. In the supermarket channel, store brands accounted for nearly one in four products sold and $1 of every $5 in revenue, PLMA said.

Amazon’s new brands will include the Happy Belly line of food stuffs including nuts, trail mix, tea and cooking oil, WSJ reported. The Wickedly Prime brand will feature snack food. Amazon’s plans also include the Presto! line of household products such as laundry detergent and the Mama Bear brand for diapers, baby food, gentle detergent and other baby items.

Private label has been good for brick-and-mortar retailers, most notably Kroger Co. Kroger brands are the No. 1-seller in its supermarkets, accounting for 29% of total units sold in 2015 and $26% of sales dollars, the company reported. Its three-year-old natural brand, Simple Truth, generated $1.5 billion in sales last year.

“And already in 2016, Simple Truth expanded to be a true lifestyle brand, with the introduction of Simple Truth household, personal care and baby products,” Randy McMullen, chairman and chief executive officer of Kroger, told shareholders during the company’s fiscal 2015 earnings call in March.


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