Amazon's Role in the U.S. Grocery Business

Amazon is reportedly partnering up with Tyson Foods to add ready-to-cook recipe delivery to its grocery delivery service Amazon Fresh. Meal kits are an upcoming trend in the online grocery market and Amazon’s entry is another sign of the company’s growing ambitions in the field of food and beverage delivery.

According to estimates by investment firm Cowen & Company, Amazon will ship groceries worth $8.7 billion this year. While that may sound like a lot, it is actually just a tiny fraction of the U.S. grocery market. Given an estimated market volume of $795 billion, Amazon’s market share amounts to little more than one percent, even though the online retailer captures more than 25 percent of the online grocery market.

Cowen & Co. expect Amazon to increase its grocery sales significantly over the next five years, but its market share is predicted to remain in the low single digits.