The proverbial “800 pound gorilla” of the e-commerce business is slowly but surely moving into the grocery business.

“AmazonFresh” – the brand name of Amazon’s new home grocery delivery service – is currently available in Seattle and Los Angeles. For $299 per year, consumers can purchase groceries on Amazon.com and have them delivered to their home in one day or less, with no delivery charge.

According to the Fresh.Amazon.com website, consumers in LA get free delivery on orders over $35. If an order is placed by 10am, consumers can expect to “have it by dinner.” If an order is placed before 10pm, it will arrive the next morning. According to CNBC.com:

CNBC tested the service, ordering about $40 worth of groceries to be delivered the following morning between 7 and 8. The bright-green AmazonFresh food truck arrived at 7:51, and the delivery person, Raul Ruiz, said it was his 14th stop so far that day.

“I am extremely busy,” he said.

It’s simply not known how successful AmazonFresh has become. However, we know that Amazon is planning to greatly expand AmazonFresh very shortly (more on that below).

AmazonFresh Is A Game Changer For Specialty Food Brands

Affordable and convenient home delivery will change the food business for a lot of folks, but specialty food brands, including condiment companies, have a lot to be excited about.

1. Amazon.com doesn’t have a “shelf space” limitation. Amazon can carry every food product on the market.

2. Amazon.com reviews allow for differentiation. With reviews, specialty food brands have the opportunity to demonstrate their unique value. When a consumer stands in front of the shelf at their local grocer, they’re making a guess about which brand is best based on labeling and placement. On Amazon.com, consumers can place an order based on reviews and ratings. No longer will specialty food brands have to worry about being muscled by big brands with big budgets.

3. Amazon.com already has a huge audience of consumers. As AmazonFresh rolls out across the USA, the market for specialty foods is only going to increase.

AmazonFresh is Expanding

According to a recent news report on Fool.com from a few days ago, AmazonFresh delivery trucks have been spotted in New York City. This news supports a Reuters report from earlier this year, which suggested that AmazonFresh would be expanding dramatically in 2014:

…the company may launch AmazonFresh in 20 other urban areas in 2014, including some outside the United States, said one of the people.

Bill Bishop, a prominent supermarket analyst and consultant, said the company was targeting as many as 40 markets, without divulging how he knew of Amazon’s plans.

If AmazonFresh finds success in this next phase of expansion, it seems likely that they’ll expand nationwide at some point.

At this point, I feel obligated to point out that AmazonFresh is not going to replace the local grocery store. While AmazonFresh offers convenience and pricing that’s reportedly comparable to Wal-Mart, it also comes with a steep membership fee ($299 per year in Los Angeles), and it still requires consumers to do a bit of planning. Consumers who “forgot the milk” cannot ask Amazon to make an emergency delivery.

What’s more, many consumers prefer to buy their meat and produce in person. The concept of buying these items sight unseen makes some uncomfortable.

Still, the facts are these:

1. The world’s most successful e-commerce retailer is expanding into the grocery business.
2. Savvy specialty food brands will be able to leverage Amazon’s expansion for their own benefits.

What do you think – is AmazonFresh a game changer or just a bunch of hot air?

About Jason Lancaster

Jason is the President of Spork Marketing, an agency offering online marketing services to auto part and accessory retailers and manufacturers. Jason is also the husband of Sara Lancaster, founder of Condiment Marketing.