Amazon is already disrupting the grocery industry
Brad Rubin, Wells Fargo Food and Agribusiness Sector Analyst, Specialty Crops
In just 24 years, Amazon has become the largest internet retailer in the world measured by revenue1, and three years ago, it surpassed Walmart to become the largest retailer in the world by market capitalization. Amazon has transformed itself from an online bookstore into a retail giant. In addition to its retail business, Amazon’s cloud infrastructure, commonly known as Amazon Web Services (AWS), controls about 40% of the cloud computing market2. Based on its track record, it appears that Amazon finds a way to win in whatever space it chooses to enter.
Most people who have studied economics have been exposed to the term “production function.” And the majority have forgotten the concept, representing the loss of a valuable tool. At the most basic level, the production function maps what you get out for what you put in. I suppose most people would think this exemplifies a trite concept. However, if you really believe that a strong relationship exists between the inputs and the outputs, you should work hard to understand that relationship. Crucially, this places the control of your business into your own hands. Being able to control the process is about all you can really ask for in business.
Welcome to my first Food Matters blog, intended to provide insights and perspectives on the tidal wave of change impacting food producers, value-added processors, and distributors. Against a backdrop of low commodity prices, increasing global competition, and changing consumer preferences, the time has come to embrace new technologies — such as data analytics, robotics, automation, and artificial intelligence — that can improve returns and reduce risk. I hope you’ll remain tuned into Food Matters with each issue of our Food for Thought e-newsletter.
Review a comprehensive monthly update from the Wells Fargo Food and Agribusiness Industry Advisor team covering supply and demand drivers up and down the food value chain — from crop inputs to the grocery aisle.
Review a summary of monthly Federal Government activities and their potential impact on the Food and Agribusiness industry.