In this file:


·         Amazon’s Unnatural Approach With Whole Foods

·         Amazon Is On Track to Be a $1 Trillion Company by 2022, Jefferies Says

·         Shift In Whole Foods' Supplier Relationships Under Amazon Shouldn't Be A Surprise



Amazon’s Unnatural Approach With Whole Foods


By Avi Salzman, Barron's

March 12, 2018 (AMZN) didn't just shock the grocery world when it bought Whole Foods Market last year. It also raised eyebrows among Whole Foods' own suppliers, who wondered how the retailing behemoth would rework the supply chain to serve its interests.


If Whole Foods moves away from showcasing some of the mom-and-pop brands that appeal to natural foods fans, it could alienate some of its suppliers -- and its shoppers.


In recent weeks, suppliers have begun grumbling. For one thing, Whole Foods has been centralizing the ordering process, a project that started before Amazon got involved. But they've also been taking more control over how the food is distributed and displayed, and looking to collect a servicing fee, according to the Washington Post and CNBC.


The changes are upsetting vendors, and they plan to meet with the company on March 19 to hash out their issues, according to CNBC. One vendor complained to the Post that they're losing that "local, personal touch."


Whole Foods is also rankling suppliers in other ways too. The company had a reduced presence at the Natural Products Expo West food conference this past weekend in Anaheim, according to an analyst who was there. In the past, Whole Foods has been the biggest fish at the conference, which features new products that can excite shoppers about healthy food.


"We believe such a decision poses a great risk to the grocer's reputation as a retailer that partners with and grows small, innovative brands, and in turn, this could negatively affect how shoppers view Whole Foods as a narrow brand assortment might detract from the overall experience," wrote Jefferies analyst Christopher Mandeville. "Aside from the centralized purchasing issue, vendors also complained about Whole Foods's new Order-to-Shelf inventory management system as it has provided greater disruption throughout the supply chain, resulting in elevated out-of-stocks and additional expenses to deliver. Suppliers were pessimistic that such issues would be resolved any time soon."


Whole Foods' decision to step back could also embolden competitors like Kroger (KR).


"Over the past year, Kroger has shown an increased presence at Expo West, hosted two separate natural foods summits, and created an online portal for local/natural/organic brands to submit a supplier application," Mandeville wrote.


A Whole Foods spokesperson, however, tells Barron's that the company had a "very large presence at Expo West this year and our buyers were on the floor all weekend talking with suppliers. We are continuously working with suppliers to bring in new items and have maintained the flexibility that the regions need to bring in new products as they see fit to best serve our customers.”


Another change that began before Amazon got involved is also causing trouble. A supply strategy known as "order-to-shelf" (OTS) was designed to keep the products on sale fresh, but has led to shortages...


more, including links



Amazon Is On Track to Be a $1 Trillion Company by 2022, Jefferies Says


By Courtney Dentch, Bloomberg

March 13, 2018


The world’s largest online retailer could grow almost a third bigger in the next four years., Inc. is on track to reach $1 trillion in market capitalization by 2022, according to a sum-of-the-parts analysis from Jefferies analyst Brent Thill. That would be a 29 percent jump from Monday’s valuation of $773.8 billion, already greater than the combined market value of Walmart Inc. and Alibaba Group Holding Ltd, the next two biggest retailers.


Thill sees “plenty of avenues” for Amazon’s revenue to more than double over four years to near $500 billion. The company’s aggressive push to expand its advertising business will be a key driver, as the shift in ad spending to online platforms has helped it grow without needing to compete for dollars with Facebook Inc. or Alphabet Inc.’s Google. And having “billions of touch points with consumers” helps Amazon distinguish itself from other ad markets, putting it on the path to reach $22 billion in ad revenue by 2022, Thill says, up from about $4 billion last year.


Thill rates the stock a buy and raised his 12-month price target to $1,850...


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Shift In Whole Foods' Supplier Relationships Under Amazon Shouldn't Be A Surprise


Phil Lempert, Contributor, Forbes

Mar 12, 2018


Some Whole Foods suppliers are pointing the finger at Amazon for changes that are threatening their products on the chain’s shelves. But let’s remember that Whole Foods' operations and profits were broken long before Amazon came into the picture.


Few doubt that Amazon’s food strategies at Whole Foods will be successful; in fact, most food retailers are scrambling to compete with Amazon Whole Foods. From a consumer standpoint, the chain is on target as it rolls out its Amazon Prime delivery, Amazon lockers and new offerings like fresh meal kits. The challenge that faces Amazon is how to run the business side of Whole Foods.


Whole Foods has always worked closely with small and local food brands to nurture them and make them successful – to the brands’ benefit and often to Whole Foods’ disadvantage. Whole Foods’ “foragers” were buyers who would scour their areas looking for and signing up unique brands that most times did not have the wherewithal to pay for promotional allowances or slotting fees. Whole Foods took these brands under their wing and waived the costs, unlike most other large chains.


That’s changing.


Amazon was able to purchase Whole Foods because it was “broken” — let’s not forget that — and now Amazon is building best practices to solve those problems, and its suppliers are complaining...