And while this still represents a tiny fraction of the $49bn US sweets and snacks market, it’s an area set for continued growth as Amazon experiments with initiatives designed to make impulse buying just as easy online as it is in stores, says report author Nathan Rigby, VP Sales and Marketing at One Click Retail.
“Amazon's recent pilot program Prime Surprise Sweets is something new for the platform. In brief, it's a [Dash] button on an Amazon Prime member's dashboard (purchasable for $4.99) which, when clicked, automatically orders an $18 box of assorted artisanal sweets.
“The Dash button, which requires a 1-click ordering address, is designed to promote Amazon's assortment of specialty chocolates, sweets and baked goods, delivering a ‘surprise’ package of premium handmade treats, many of which can't be bought through Amazon in any other way.”
Amazon Prime Surprise Sweets… a surprise hit?
To date, the program – which only launched in January with little fanfare - has already brought in about $1.6m in sales and is rapidly growing: the button only sold about $65,000 in January but grew to five times that size by July, notes Rigby.
“Prime Surprise Sweets has generated $700,000 year-to-date sales of artisanal baked goods, $300,000 of artisanal chocolates and $130,000 of artisanal caramels as well as lesser amounts of several other subcategories, though since Prime members don't actually choose the items included in the box, its contents may not accurately reflect consumer demand.”
Voice ordering platforms utilizing Alexa (Amazon's digital assistant built into devices such as the Amazon Echo, Dot, Tap or Fire TV) also gives Amazon access to a whole new level of impulse buying, claimed Rigby.
“Amazon Echo owners can now shout out the candy or treat they're craving at any given time and the very next moment Alexa will have the order placed for them… As Alexa grows in popularity, voice-activated purchases of snack foods and other consumables have the potential for major growth.”
“Prime Surprise Sweets is a new and unique way for Amazon to market specific product categories, generate brand awareness for artisans and other 1P [first party] sellers [who work directly with Amazon Retail], and increase its portfolio of premium and artisanal products.”
Nathan Rigby, VP Sales and Marketing, One Click Retail.
Amazon shoppers in Europe are not buying the same things…
While the biggest sub-segments in the category are chocolate candy and salty snacks (notching up $31m apiece between January and August 2017), and non-chocolate candy ($27m Jan-Aug 2017), the fastest growing sweets and snacks categories on Amazon in 2017 are dry fruit snacks (+75%) followed by dried meat snacks (+65%), snack/granola bars (+59%), and crackers (57%).
By contrast, Amazon’s sweets and snacks sales in Europe are still “overwhelmingly driven by sugary treats,” said Rigby.
“The sweets subcategory is dominating in the UK and chocolate is leading in both Germany and France. Quite unlike the US the majority of top-selling items are sweets and chocolates, making up at least 8 of the top 10 items in all three of these countries.”
*52 weeks to August 31, 2017 vs 52 weeks to August 31, 2016
Amazon private brands: Happy Belly and Wickedly Prime
Wickedly Prime is 65th in the product group [in terms of dollar sales on Amazon], generating $800,000 in sales so far this year. Half of those ($400k) were from popcorn snack bags (to put this in perspective the top selling popcorn on Amazon was SkinnyPop, which generated $1.6m over the same period).
Happy Belly, is the 4th-best selling 1P* brand in the Snacks category, generating $3.5m so far this year in the snack nuts subcategory. Though Happy Belly's biggest 1P competitor is Planters with $6.5m in snack nuts sales so far this year, Happy Belly's flagship trail mix products have no direct 1P competition on Amazon, says One Click Retail VP sales and marketing, Nathan Rigby.
“Category leaders Kirkland Signature and Archer Farms are both only available through 3rd-party [3P] sellers, leaving a vacuum for Happy Belly that may be responsible for the private brand's success.”
* 1P or 1st party brands sell wholesale, directly to Amazon Retail, using the Vendor Central interface; whereas 3P or 3rd party brands sell third-party to consumers through the Amazon marketplace, using the Seller Central interface.