How to Sell Private Label Food and Beverages on Amazon

Amazon has its eyes set on the U.S. grocery industry — and for good reason. While the $700 billion category has been historically slow to shift to online, that consumer mindset is changing, presenting substantial opportunity for early players in the space.

In fact, U.S. grocery e-commerce is the fastest-growing product category online. In 2019, U.S. food and beverage e-commerce sales will grow over 18% to nearly $20 billion, according to eMarketer, with projections to reach over $38 billion by 2021. Furthermore, grocery is the fastest-growing category on Amazon, posting sales growth of over 40% in 2018, per eMarketer. Feedvisor’s ProductSphere pricing technology continually analyzes your dynamic competitive landscape to pinpoint the optimal price for your private label or branded products in real time.

What is driving this growth? As a seller or brand on Amazon, what can you do to tap into this segment and leverage its growth for the long-term success of your own business? For many, private label may be the solution.

According to a recent report from Coresight Research, annual sales of private label consumer packaged goods (CPG) are growing faster year over year than national brands. Plus, these products have a high degree of shopper loyalty, with 85% of shoppers saying they trust private brands as much as national brands. 

As consumer sentiment toward both online food and beverage purchases as well as private label products continues to improve, e-commerce channels are well-suited for a rise in private label CPGs. 

For Amazon sellers, private labeling offers more flexibility and control around pricing and helps reduce levels of competition on the marketplace, given that private label ASINs do not compete for the Buy Box. To launch your own private label food and beverage line on Amazon, consider the following recommendations and Amazon rules to ensure compliance and long-term success.

Abide by Amazon’s Grocery Rules and Requirements

Selling in the food and beverage space on Amazon’s marketplace perhaps has more nuances and restrictions than other product categories due to the nature of food and beverage retailing in regard to health safety and federal regulations. While you should closely familiarize yourself with Amazon’s thorough list of Grocery and Gourmet guidelines, below are a few of the most important takeaways.

1. Documentation and Certification

While all food and beverages on Amazon were previously sold under a single category, Grocery & Gourmet, this segment has since been split into three sub-categories: Food & Beverage, Organic Products, and Chilled & Frozen Foods. You must be approved to sell in these gated categories by: 

• Signing up for the Professional Selling Plan
• Providing Amazon with the required documentation about the products you wish to sell
• Meeting Amazon’s seller performance requirements, including an order defect rate of less than 1%, a pre-fulfillment cancel rate of less than 2.5%, and a late shipment rate of less than 4%

As the brand owner, you will also be required to provide your Certificate of Registration with the U.S. Food and Drug Administration (FDA) and your FDA New Dietary Ingredient Notification. Additionally, if your item is organic, you must provide documentation proving that your product has been produced to the USDA Organic requirements, your product complies with the USDA Organic labelling standards, and you can provide the identification of the product’s certifier.

2. Packaging and Labeling

The product packaging of your food or beverage item must meet Amazon’s requirement of appropriately packing and sealing the product from spoiling, melting, or being damaged as well as protect the quality and safety of the food. 

Amazon views all food items as date-sensitive, so your product must have an expiration date permanently marked on every unit. These items can be sold via Fulfillment by Amazon (FBA) so long as the units arrive at Amazon’s warehouses with a shelf life greater than 105 days from the time of arrival. The company will remove units that are within 50 days of the expiration date.

Amazon also requires the packaging to include the name of the product, the name and address of the packaging company, the net content quantity and weight, any dietary or allergen-free claims like “kosher” or “gluten-free.” 

3. Refrigerated and Frozen Foods

Refrigerated and frozen foods require a few more steps of documentation and precautions to ensure the preservation of food safety and quality. Visit Amazon’s Chilled and Frozen Foods guidelines for details on temperature requirements for specific foods, like produce or poultry.

Lastly, Amazon recognizes the Global Food Safety Initiative (GFSI) benchmark standards and will accept a GFSI certificate as proof of meeting the company’s food safety criteria. However, if you do not have a GFSI certificate, you will be required to show documentation that proves your product is handled and shipped in a way that maintains required temperature ranges throughout the supply chain, you hold all required registrations or permits to distribute the products, and you can provide relevant licenses from the FDA, USDA, or other government body proving you can do so across all state lines.