Amazon.com, Inc. (NASDAQ:AMZN) is planning to expand its footprint in the $700 billion a year grocery business with the deployment of a new technology designed to offer prepared meals. The e-commerce giant is in discussions about the possibility of offering ready to eat meals such as beef stew as early as next year.
Amazon’s Ready-To-Eat Meal Service
The microwave assisted thermal sterilization system was developed to provide meals to troops while in missions. The system relies on microwaves to eliminate bacteria on prepared meals thus allowing them to stay fresh from the time they are prepared. A combination of cleanliness and preservation could allow the meals to remain viable for up to 12 months.
The new system would allow Amazon to offer fully pre-cooked meals that don’t require any form of refrigeration and are extremely cheap compared to take-outs from restaurants. Implementation of the system would be a big leap in the company’s push as it moves to affirm its position in the food business.
Reports indicate that Amazon has already started to work out on the logistics that will facilitate the new service. The company plans to market and distribute the pre-cooked meals to customers from its existing warehouse structures.
“They obviously see that this is a potential disruptor and an ability to get to a private brand uniqueness that they’re looking for. They will test these products with their consumers, and get a sense of where they would go,” said Greg Spragg, a former Wal-Mart Stores Inc. executive.
Competition
A move to offer ready to eat meals would put Amazon in a collision course with Blue Apron Holdings Inc.(NYSE:APRN) and Plated that already offer similar services . However, the company would enjoy a competitive edge on the fact that its meals would be ready-to-eat, unlike those of its peers that require customers to do preparation and cooking.
Offering meals would also go a long way in strengthening AmazonFresh service that offers fresh groceries to customers. The new program would also complement the company’s checkout-free convenience store that is currently in the test stage.
Amazon’s push into the food business has gained momentum this year having recently announced plans to acquire Whole Foods Market, Inc. (NASDAQ:WFM) for $13.7 billion.
Amazon stock was up by 1.16% in Friday’s trading session to end the week at $967.99 a share.
