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Should Wal-Mart Investors Be Concerned That Amazon Invited Food Execs To Its Seattle Office?

Should Wal-Mart Investors Be Concerned That Amazon Invited Food Execs To Its Seattle Office?

The battle between, Inc. (NASDAQ: AMZN) and Wal-Mart Stores Inc (NYSE: WMT) could soon emerge in a different arena: food purchases.

According to a Bloomberg report, Amazon invited food executives from some of the biggest brands to its Seattle office. The online retailer invited executives from General Mills, Inc. (NYSE: GIS), Mondelez International Inc (NASDAQ: MDLZ) and other notable brands for a three-day gathering in May.

The purpose of the meeting is to persuade food companies to ship their products directly to consumers through Amazon's platform, rather than relying on retail chains like Wal-Mart, Target Corporation (NYSE: TGT) and Costco Wholesale Corporation (NASDAQ: COST).

The food executives will tour Amazon's fulfillment center and will be hosted by the company's Worldwide Consumer chief Jeff Wilke.

'Times Are Changing'

Amazon's pitch to the food executives will focus on how the evolution of business has changed.

"Times are changing," Bloomberg quoted the invitation sent to the food executives as saying. "Amazon strongly believes that supply chains designed to serve the direct-to-consumer business have the power to bring improved customer experiences and global efficiency. To achieve this requires a major shift in thinking."

The Bloomberg report further noted that Amazon hasn't gained traction in the food and packaged goods market. The problem Amazon faces is that it is nearly difficult, if not impossible to ship various food products.

Consider Mondelez's oreos, which come in a flimsy package that is designed specifically for the grocery aisle. Amazon would need to convince food and consumer good companies to re-imagine packaging and other aspects of their products.

Ken Cassar, an analyst at Slice Intelligence, told Bloomberg that Amazon boasts 300 million shoppers. This is notable because Amazon has the power and scale to make its own products if brands pass on selling on its platform.

"Fear, more than anything else," Cassar said, "may compel these companies to pay attention."

Related Links:

Wal-Mart Vs. Amazon: 2016 E-Commerce Breakdown

Cheers To Amazon: E-Commerce Giant Applies For Liquor License


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