No Big Leaks in the Amazon Baby Food Category

Congrats to the baby food brands! Our latest analysis of the baby food category on Amazon shows no brands in the “Large Leakers” quadrant and only one in “Laggards”. No brands ranked high in Marketing Performance but low in Supply Chain Effectiveness (cheers!). This actually makes sense given Amazon’s algorithms will naturally restrict your product if you’re unable to deliver on the demand. On the bright side, there are three clear leaders in this category who are acing both marketing and operations.

The BrandIQ Quadrant benchmarks brand performance by the critical disciplines of supply chain operations and marketing. Who is best able to both drive and fulfill demand on Amazon? The metric that underpins marketing is Share of Voice (how often your brand appears in organic and paid search results), and for operations it’s revenue leakage (how well are you able to avoid losing sales because shoppers are unable to buy your product because it’s unavailable, lost buy box to 3Ps, etc.). Given Amazon’s ever-increasing complexity and speed, mastering both is not simple.

High IQ Brands

Brands in the High IQ quadrant are the ones who clearly demonstrate both marketing and operational prowess. They get their brand in front of buyers and ensure they’re positioned to get the sale and have the inventory to deliver. Of the three, Happy Baby (Danone) spent most aggressively on advertising, which resulted in the highest paid share of voice in the category. Share of voice for Gerber (Nestle) and Earth’s Best (Hain Celestial) tilted more towards organic. There may be some advertising headroom here for these two. And it’s also possible Happy Baby’s strong organic results are benefitting from its aggressive advertising push. That would warm our hearts!

All three did quite well to minimize revenue leakage by containing out-of-stocks and loss of sales to 3P variants. Gerber was weakest on both of these metrics. For an example of a top performer in another category check out Pepsico in cereals.

Niche Performers

The brands in the Niche Performers quadrant do well operationally but are less well placed on the marketing side. All three brands had similar organic share of voice, but only Sprout is making moves on the advertising side. Sprout looks poised to potentially step up into the High IQ quadrant if their spend boosts sales and thus organic rank. Operationally, they are all pretty solid, though Similac (Abbott) did not score well on lost revenue due to availability issues. That’s a dangerous spot to be in. Hard to get any better than Plum Organics (Campbell Soup) in preventing revenue leakage! See Nature’s Path in cereals for an example of a similar high performer.

Laggards

Enfamil struggled to compete with 3Ps, but really fell down with inventory availability issues. The Laggards quadrant is not the place you want your brand to be. You can be sure the only way out of this situation is to improve operations so you can shift to the right. Only then will Amazon reward you with better organic rankings. And only then would spend on ads trigger the positive reinforcement mechanism where purchases sourced from paid ads drive organic results to launch you towards the High IQ quadrant. Let’s see how this dynamic situation evolves!

Explore Other BrandIQ Quadrants

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Methodology

Our data was drawn from an automated, daily analysis of top keywords in the Amazon baby food category over a one-year period. Our method focused on 1P brands and their associated SKUs. Marketing performance was determined by analyzing Share of Voice which essentially divides how many times a brand appears in search results, by the total available slots in the search results. Our system looked at both organic and paid ads for the top keywords discovered for the baby food category on Amazon. Our system focused on page 1 search results and the product page for each SKU. Each appearance of the brand in organic search and paid ad slots was given equal weighting. Revenue Leakage was determined by an algorithm that analyzes inventory availability of the SKUs on the product page and translates that into estimated revenue missed for each brand due to things like a SKU being Currently Unavailable, Inventory Encumbrance, Item Under Review, a 3P seller taking the buy box, etc.