By Michelle Jones
Amazon (AMZN) has been stretching its wings to fly into more and more areas, and grocery shopping is one of its newest areas of interest. The timing may be apt too, as a new study found that the age group that purchases groceries online the most is entering the stage of life when their grocery spending rises to its peak.
Amazon to quickly become a big player in groceries
Cowen and Company analysts John Blackledge and Oliver Chen predict that Amazon will be one of the top ten biggest players in the U.S. food and beverage grocery market by 2019, based on the results of their recent survey focusing on Amazon and its grocery efforts this week. They estimate the value of the total market at about $795 billion.
They expect Amazon’s Prime platform to drive its success in the grocery business and believe it will benefit greatly from the generational shift that’s occurring as online spending in food and beverages grows. The Cowen survey found that 23% of all the U.S. consumers they surveyed said they’re likely to purchase groceries online at some point, so taken in total, Blackledge and Chen say the results imply that 34% of consumers in the U.S. might buy groceries online at some point.
Unsurprisingly, Millennials are leading that shift, with 21% of U.S. consumers between the ages of 25 and 34 buying groceries online as of February, according to Cowen’s survey. The findings also indicate that 28% of consumers in that age group say they’re likely to buy groceries online at some point—the highest percentage of all the age groups surveyed. These numbers imply that about half of U.S. consumers between the ages of 25 and 34 might buy groceries online in the future.
This is a key finding because this age group is just entering or is about to enter their time of peak grocery spending. Cowen said that consumers between the ages of 35 and 54 account for 43% of the spending in the U.S. food and beverage grocery industry.
