AmazonFresh is Amazons grocery delivery service that will bring you your groceries the same day that you order them. It is a fantastic idea and a huge convenience, but this comes at a cost. In order to do this Amazon must have the infrastructure to deliver people's groceries quickly. This is why the AmazonFresh service is currently limited to three cities, San Francisco, New York, and Los Angeles. In those three cities though, the service has been pretty popular and successful. So much so that Amazon has reportedly made the decision to launch an Amazon-branded perishable food line.
This report comes from the Wall Street Journal, they are saying that Amazon is discussing a line up of perishable food with existing food companies. One of the companies that the Wall Street Journal mentioned is Treehouse Foods Inc, a company that got around $3 billion in sales last year. What Amazon reportedly hopes to accomplish with these discussions is to strike a partnership with one of these food companies. Amazon would need these existing food companies to design the food products. From there Amazon would brand the food and then vouch for its quality, which can be a dangerous game.
Amazon knows the dangers of relying on other companies to design products and then vouching for them all too well. You may remember a little while back when Amazon briefly had their own diapers brand by the name of Elements. Amazon only sold the diapers for about a month before having to pull them from its site due to customer complaints and negative reviews. All of this negativity stemmed from the diapers actually having a flawed design.
This time around with Amazon getting into the perishable food market, they will need to be extremely careful as this is a market with absolutely no room for "flawed design" or quality issues. Items in this market include things such as milk, cereal, baby food, and bread. As you can probably guess, when customers purchase these types of items they don't want to have to worry about anything being wrong with them. Something being wrong with one of these items, such as purchasing milk that has gone bad, can result in significant issues for Amazon. It is important to take note of this still being a report, nothing is official quite yet and may never be. But, it will definitely be interesting to see how a company such as Amazon goes about creating their own line up of perishable foods.