Natural-food vendors look to new channel for sales

BOULDER — Amazon Fresh is available in Denver — and likely expanding to Boulder — which provides an opportunity for the area’s local and natural-food vendors.

Amazon’s food delivery service is still in early stages and available only in a few cities across the country and internationally.

But Colorado’s booming natural and organic food scene made the area an attractive one for Amazon, as the shipping giant in turn uses its far reach to change how people get their food.

SPONSORED CONTENT

Federal District Court Rules Corporate Transparency Act Unconstitutional . . . But Most Small Businesses Must Still Comply

Lyons Gaddis Real Estate and Business Attorney Cameron Grant shares important details of the Corporate Transparency Act (CTA).

For their part, several Boulder Valley food manufacturers have been in contact with Amazon to be a part of the Amazon Fresh program.

“The thing about Amazon Fresh or any ecommerce channel is you can turn it on right away,” said Alex Hanifin, CEO of Alpine Start coffee company. “You lose the middle step of the distributor, so it touches fewer hands. For a small business like us desperately looking to ramp up our revenue and get our name out there, Amazon Fresh and Amazon’s digital e-commerce platform is an instant delivery system. That’s what’s growing our business.”

Many food entrepreneurs have adopted Amazon’s marketplace, where customers order items online and have it shipped to them in a matter of days.

AmazonFresh actually started its beta testing 10 years ago in the Seattle area. But as grocery delivery became more popular, with services like InstaCart and others, AmazonFresh ramped up its availability. Since 2016 the service added Boston, parts of London, Dallas, Chicago, Tokyo, Berlin, Miami and Denver.

Rather than dry goods, which has a strong market presence on Amazon’s e-commerce platform, AmazonFresh focuses on the same-day delivery of perishable items. AmazonFresh works by having drop-off points where manufacturers bring their products for the day, and then Amazon delivers those items to customers based on their order.

That’s where area vendors become interested — it adds yet another option for getting products to customers, especially for those who were limited to farmer’s markets or traditional retailers because of the perishability of their product.

“For some brands, it’s an absolute windfall,” said Arron Maniska, executive director of Naturally Boulder, an industry group for natural and organic food manufacturers. “It can help make some brands more successful, through its potential for an incredible audience.”

It’s not just area vendors that have expressed interest: Reportedly, Amazon is also looking at expanding into the Boulder market as part of its Denver service, and is looking at spaces in the Boulder County area as potential drop-off points for product. Amazon did not return multiple requests for comment.

But Maniska said that AmazonFresh did have a couple of informational sessions in Denver for food manufacturers that may be interested in the program.

“The ironic thing is, one of the people in the audience asked ‘how many of us are from Boulder,’” Maniska said. “About three-fourths of the room raised their hand. I think that was an “aha” moment for Amazon. Boulder is the heart of the natural products world, so why are they down in Denver?”

If Amazon does open a drop-off point in the Boulder or Longmont area, that will make the program worthwhile for some area vendors to give it a shot.

“We gotta try it out,” said Christopher Algea, founder of  Keenone quinoa. “Anything that will help out, especially in our region, to get product in front of those that haven’t seen it while shopping in the Denver or Boulder area. If we’re able to do it right and find a lot of great local customers and support, then awesome. If it’s in our own area, we have to do it. Like a farmer’s market or a demo, it’s a necessary step.”

As Amazon tests AmazonFresh in the Pacific Northwest, it makes sense to vendors that they would come to the Denver/ Boulder area as its next market.

“There’s the same consumer desire in the Denver/ Boulder area,” said Hanifin.

AmazonFresh isn’t the only interest Amazon has in the area. In May, it was announced that Amazon was planning a small distribution center and office at 3550 Frontier Ave. as a way to connect the dots between Denver metro and the Front Range.

While it remains to be seen if Amazon officially announces AmazonFresh in the Boulder market, the delivery service is another mark of changing trends for the natural and local food industry. (Amazon recently made another change to the industry with the announcement it would purchase Whole Foods and lower prices for Amazon Prime members.)

The growth of AmazonFresh has meant that brick and mortar retailers have started to also offer grocery delivery. Both Safeway and King Soopers can be ordered online or through services like InstaCart. But neither the retailers nor Instacart have quite have the name power of Amazon.

As the industry changes, local vendors see yet another channel for getting their products into the hands of consumers.

“The delivery time is much less and it’s way more local,” Hanifin said. “We can be part of the community with the local component. We’re from the Denver/ Boulder area and consumers know us. But the distribution factor is hard. If a consumer wants a product today or tomorrow, AmazonFresh is such a really good way to get it.”

While it may take a long time for large retailers to approve and get product on the shelf, Hanifin said AmazonFresh can be an immediate route to get product into the hands of consumers.

“AmazonFresh is an immediate turn on,” she said. “The way consumers are purchasing nowadays, they’re still going to the grocery store but they’re also ordering off websites. This immediate component is so desirable. It’s a megatrend. Now it’s ‘how do we take it to the next level?’”