Crypto News: Amazon gets real about groceries

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Amazon.com Inc. is launching the biggest overhaul of its grocery business since it acquired Whole Foods Market six years ago—revamping stores, testing new highly automated warehouses and, for the first time, offering fresh-food delivery to customers who aren't Prime subscribers.

In a move likely to play well with shoppers, the company also plans to merge its various e-commerce supermarket offerings—from Whole Foods, Amazon Fresh, Amazon.com—into one online cart.

The changes, which will roll out in the coming weeks and months, mark the Seattle-based company's latest effort to grab a bigger share of a US grocery market that UBS Group AG analysts estimate is worth $1.5 trillion. The tech behemoth has elevated a slate of more traditional retail executives to help. Tony Hoggett, the former Tesco Plc executive leading the charge, has deep brick-and-mortar experience but confronts a landscape dominated by the likes of Walmart Inc. and Kroger Co.

In an interview with Bloomberg Businessweek, Hoggett, 49, describes the company's ambitions to transform Amazon from something of a niche grocer specializing in organics and home delivery of cereal and paper towels into a destination for shoppers trying to stretch their dollars and consolidate trips to the store. "We're serious about grocery," he says. "Our plan is on building this really strong grocery relationship with customers over time."

On Aug. 2, Amazon will begin inviting people without Prime subscriptions in a dozen US metropolitan areas—including Boston, Dallas and San Francisco—to order groceries online from Amazon Fresh stores and warehouses. Previously, only shoppers paying the annual $139 Prime subscription could get food delivered from Fresh. The company aims to make the offer standard nationwide by the end of the year and eventually include products from Whole Foods and other grocers. Delivery fees range from $7.95 to $13.95, or $4 more than Prime members pay.

Amazon customers have long expressed frustration that they need to check out from three separate web pages to get everything on their shopping lists. Consumers who want king salmon fillets (sold by Whole Foods), a pack of shredded lettuce (sold by Amazon Fresh) and a box of Cheerios (sold, with other shelf-stable products, by Amazon.com) sometimes found themselves making three different orders—ferried to their homes in three separate deliveries. The company is looking to simplify the process this year or next by stocking more Whole Foods products in Amazon warehouses and creating one cart. "We recognize that still needs to be improved," says Hoggett, the senior vice president for worldwide grocery stores.

Amazon.com Prime grocery bags ready for delivery outside a Whole Foods in Washington in March 2020. Photographer: Andrew Harrer/Bloomberg

In the physical world the company is revamping its Fresh stores, placing Krispy Kreme coffee and doughnut stands near the front door, adding roughly 1,500 items to what had been limited inventory for a full-size supermarket and trying to make the space more inviting with bright colors. Grocery analysts and some shoppers were turned off by the chain's sterile, utilitarian design. "It just feels soulless," says Peter Abraham, a marketer in Los Angeles who dropped in on a Fresh store a few times and has stopped going back.

Amazon's rationale for being in the famously low-margin grocery business is much the same as Walmart's: to use regular pantry refills to drive traffic and coax shoppers to buy other products. Over the past few years, Amazon has built a large online business selling such staples as paper products, canned goods, pet food, and health and beauty items. Those sales were supercharged when the pandemic forced many people to shop online for groceries and consumables for the first time.

But the company has been trying for years to figure out how to profitably sell fresh food, starting and killing a range of initiatives. Delivering meat and produce is logistically challenging and expensive. Two people familiar with the situation, who requested anonymity to discuss an internal matter, say Amazon required a grocery order of about $115 to break even in 2010, on average. A decade later that break-even point was still $90 to $100. Hoggett says the company doesn't track delivery economics using a single figure because of differences in order speed and types of trips, but he says the company had made "big steps" in building a more efficient home delivery business.

So what does Amazon do now? Well, read all of Matt Day's fascinating look at the platform's latest foray into physical spaces.

It seems that 2020 was both the launch of Beyond Meat's efforts in China and the high-water mark of its presence. As Bloomberg's Deena Shanker and Daniela Wei write, in that year Beyond Meat was featured at Starbucks and sold on JD.com's shopping site. No longer.

Beyond isn't alone in having trouble being successful in China. But it did invest a lot in its effort:

It partnered with the administrative committee of the Jiaxing Economic & Technological Development Zone to lease and renovate a manufacturing facility near Shanghai; the company also leased a 12,000-square-foot space for research and development in Shanghai. As of April 1, Beyond had invested an initial $22 million in the project and advanced another $20 million to its subsidiary in the country, according to public filings.
But finding a Beyond Meat product in China isn't always easy. At a Starbucks in Shanghai, the Beyond Meat sandwich, as well as any other plant-based meat products, is no longer available, according to the store manager. A Starbucks spokesperson said that "choices and availability vary by store." Beyond Meat launched its burgers with Dicos restaurants last summer, but the chain is now mounting a big marketing campaign online and in stores around the spicy plant-based burger it's sourcing from local alt-meat maker Starfield. And while KFC tried offering a Beyond "beef" wrap in 2021, none of parent Yum China Holdings Inc.'s restaurant chains today offer Beyond items on their menus.

The company declined to comment for this story. After its IPO in 2019, Beyond has had some trouble in general—you might remember this Businessweek cover story on the topic of fake meat—but the difficulty for vegetable-based meat alternatives is felt by many trying to appeal to Chinese consumers. Experts pointed to the fact that plant-based protein like tofu and mung beans have long had a place in China's kitchens; fake chicken nuggets, not so much.

It was a bit of a bombshell a few years ago when Fawn Weaver, a historian and entrepreneur, told the world about Nathan Green, known to his community as Uncle Nearest. Green, an enslaved man, had guided Jack Daniel on his journey as a whiskey maker, and eventually ran the distillery that bore Jack Daniel's name. As the whiskey traveled the world, Uncle Nearest's contribution was unacknowledged.

Now, thanks to Weaver, Uncle Nearest is having a moment. As Donna Wilson writes for Businessweek:

In 2016 the historian and entrepreneur stumbled on Green's story and a year later founded a company to honor him. She soon bought and began restoring the farm in Lynchburg where Green worked as Daniel's first master distiller, a position he later bequeathed to his sons. In 2019, Weaver purchased a horse farm 16 miles to the north, in Shelbyville, and built the Nearest Green Distillery.
For the first few years, Weaver simply bottled spirits that other distillers produced, starting sales of her own production only last year. Even so, Uncle Nearest Premium, which follows Green's original recipe, has become the fastest-growing American whiskey brand and the bestselling spirit founded by a Black person. Weaver says sales are on track to double this year after reaching $100 million in 2022, and she says she turned down an offer topping $1 billion for the label. "Uncle Nearest was a true pioneer," says Weaver, who serves as chief executive officer of Uncle Nearest Inc. "I want to make sure his legacy lives on."

Read on to hear how this whiskey is winning awards—for, of course, Uncle Nearest's own recipe. Weaver has plans for making a kind of entertainment destination out of her properties, where you can learn about the history of Uncle Nearest's contributions to the spirits world and imbibe some along the way.

$1.8 Million

That's the average retirement savings target in the US now, according to a nationwide Charles Schwab survey. People who have 401(k) plans say it's getting harder to put money away as costs rise.

"It kind of makes you wonder, is there something that they're hiding that they won't release this information?"

Michael Thompson

Trustee who represents union contractors that pay into the Connecticut unions' health plans

Two union health insurance plans in Connecticut alleged that insurer Elevance Health routinely overpaid medical bills. Employers are fighting for data that they say shows how their health plans overpay for care.

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