Amazon has had a record year so far in a variety of

unexpected places. With clever strategies and long-term

investments, Amazon has become a major destination for

consumers buying automotive products, furniture and home

appliances. Now, Amazon is targeting a very different kind of

product: sweets and snacks.

Amazon Sweets Snacks 2017 YTDBy Nathan Rigby, VP Sales & Marketing, One Click Retail

Competing in the sweets and snacks space is a unique challenge

because it relies so heavily on impulse buying. But Amazon, never one

to shy away from a difficult product group, has a plan: with the new

Prime Surprise Sweets program and the use of Alexa to engage the

impulse buying crowd, Amazon’s effect on the sweets and snacks

industry is quickly being felt. Let’s take a closer look at the eCommerce

giant’s performance in this product group.

The Numbers

• $49 billion: Total 2016 U.S. sweets and snacks sales.

• $240 million: com 2016 Sweets & Snacks sales.

• $215 million: com 2017 YTD Sweets & Snacks sales (January-August

inclusive).

• 42%: YoY growth of Amazon.com Sweets & Snacks sales.

In only the first eight months of 2017, Amazon’s sales of Sweets & Snacks have almost

reached the total volume of sales in 2016, a YoY growth (comparing the past 52 weeks to the

same period in 2015-16) of 42%. Though the biggest subcategories by a significant margin are

not surprising – Chocolate Candy, Salty Snacks, and Non-Chocolate Candy – much of the

year-to-date growth has been driven by more health-conscious consumers. Dry Fruit Snacks,

arguably the healthiest of all subcategories, experienced 75% growth, more than any other

subcategory, while the next three top growers are all relatively healthy: Dried Meat Snacks,

Snack/Granola Bars, and Crackers. Of the larger volume categories, Salty Snacks grew the

most rapidly, leaving sugary treats relatively stagnant by comparison.

Sweets & Snacks International

Conversely, Sweets & Snacks sales in Europe are still overwhelmingly

driven by sugary treats, with the Sweets subcategory dominating in

the U.K. and Chocolate leading in both Germany and France. Quite

unlike the U.S., 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.

Amazon’s Sweets & Snacks Strategy

Amazon’s burgeoning success in the Sweets & Snacks

product group springs from four main drivers: Private

Brands, Prime Surprise Sweets, Alexa, and Candy Holidays.

Let’s look at how each of these factors into Amazon’s

strategy.

Private Brands: Happy Belly & Wickedly Prime

Currently, Amazon has two private brands competing in the snack

space: Happy Belly and Wickedly Prime. The latter, to smaller

effect, ranks 65th in the product group with $800,000 YTD sales

this year. Half of those sales are popcorn snack bags, generating a

respectable 25% of the sales of the top incumbent SkinnyPop (with

$1.6M YTD sales).

Private Brands: Happy Belly & Wickedly Prime

Happy Belly, on the other hand, ranks as the 4th-best selling 1P brand in the

Snacks category, generating $3.5M in YTD in the Snack Nuts subcategory.

Though Happy Belly’s biggest 1P competitor is Planters with $6.5 in Snack

Nuts sales YTD, Happy Belly’s flagship Trail Mix products have no direct 1P

competition on Amazon. Category leaders Kirkland Signature and Archer

Farms are both only available through 3rd-party sellers, leaving a vacuum for

Happy Belly that may be responsible for the private brand’s success.

Launching “Prime Surprise Sweets”

Amazon’s recent pilot program Prime Surprise Sweets is something new for the

platform. In brief, it’s a 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.

Launching “Prime Surprise Sweets”

So far, the program 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. The program has generated $700,000 YTD sales of Artisanal Baked

Goods, $300,000 of Artisanal Chocolates and $130,000 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.

Impulse Buying with Alexa

Amazon has invested heavily in automation and today, thanks to Alexa, there is no need to

click a button to place an order and have it delivered directly to your home. This innovation

accelerates Amazon’s ability to compete in a wider range of product groups and

subcategories. Specifically, it eliminates the bane of online ordering: the ability of the

consumer to reconsider. Alexa gives Amazon access to a whole new level of impulse

buying. 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.

Candy Holidays Drive Chocolate Sales

All this talk about impulse buying of candy would be disingenuous without

recognizing that the three biggest chocolate-buying days of the year are not

impulse-driven at all: Valentine’s Day, Easter, and Halloween. As might be guessed,

sales of Chocolate Candy see an annual spike around each of these dates, with

Valentine’s Day driving an 85% increase in 2015 and 2016, which then climbed to a

135% lift in 2017. This Halloween may be even higher since last year it drove a 3-

week long sales lift of 120%.

Candy Holidays Drive Chocolate Sales

Counterintuitively, Easter has yielded very little change in the past, generating a

negligible lift in chocolate sales prior to the holiday. Instead, we’ve seen a sudden spike

in sales during the few weeks after Easter driven by a high volume of lightning deals

discounting chocolate items by 30-80%. This is most likely due to brands overstocking

on Easter candy and later trying to clear their inventory; adding credence to this

interpretation is that in 2017, Amazon bucked the trend with an unprecedented 50%

spike in candy sales before Easter and, subsequently, the post-holiday deal-driven spike

disappeared.

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Key Takeaways

• Amazon shoppers in the U.S. are buying more snacks year after year, but their preferences are shifting towards healthier,

non-sugary and organic snacks.

• Amazon’s private brands (which are still limited in this space) are competing more effectively in areas where there are less

first-party competitors, such as Happy Belly Trail Mix.

• Prime Surprise Sweets is a new and unique way for Amazon to market specific product categories, generate brand

awareness for artisans and other 1P sellers, and increase their portfolio of premium and artisanal products.

• As Alexa grows in popularity, voice-activated purchases of snack foods and other consumables have the potential for major

growth.

• Year after year, Amazon has been improving holiday candy sales (including Valentine’s Day, Easter, Halloween and

Christmas), both in volume and in duration of lift.

If you are a brand manufacturer who would like to learn more about how

you stack up to the competition—or would like to see your market share

and category growth insights—email us at info@oneclickretail.com for a

free capabilities demo.

One Click Retail (OCR) is a market leader in eCommerce data measurement, sales analytics andsearch optimization for brand manufacturers in North America, Europe and Asia. Thanks to ourproprietary sales calculations that are 98.5% accurate down to the SKU level, OCR’s accuracyis unrivaled in the marketplace. The OCR Product Suite provides 1st and 3rd party businessintelligence across the 30 largest retailers such as Amazon, Walmart, Target, Staples and HomeDepot. The world’s top brands, such as Procter & Gamble, Panasonic, Nestle, Hamilton Beach andHP, rely on OCR insights to drive sales and profitability across eCommerce.

Founded in 2013 by eCommerce experts from Amazon, Walmart, Target, Overstock and otherleading retailers, OCR was acquired in 2016 by Ascential plc (LSE: ASCL.L), a UK-based internationalB2B media company with a focused portfolio of market-leading events and information servicesproducts.

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