Dive Brief:

• Amazon has added private label dairy and beverage offerings to its grocery lineup, according to TJI Research. The retailer has introduced new dairy products, including a variety of milks, under its Happy Belly brand and a new coconut water product under its Solimo brand.

• The Happy Belly brand milk and dairy products are the first non-Whole Foods private label milk and dairy offering from Amazon, according to TJI. Products include lactose-free milk in whole, low-fat, reduced-fat and fat-free varieties. Amazon will also sell half-and-half, heavy whipping cream and dairy whipped topping with the Happy Belly label. The products are only available to customers of AmazonFresh, the company's $15-a-month grocery delivery service available in metro areas like New York, Seattle and Chicago.

• Amazon’s new private label coconut water will retail at $24.99 for a 24-pack of cartons at 11.2 ounces each. The product will be sold alongside coconut water brands such as Vita Coco, Naked and O.N.E. A variety of coffee, tea, drink mixes and nutritional shakes are already available under the Solimo brand.

Dive Insight:

So far, Amazon’s performance with private label grocery brands has received mixed reviews, and its offerings up to this point have been fairly limited despite a lot of trial and error. Both Solimo and Happy Belly brands are relatively new. Solimo launched last summer, while Happy Belly launched as a snack brand in 2017 and was expanded last October to include a variety of cheeses, TJI Research reported.

A report from Coresight Research found that just 2% of Amazon’s private label offerings are in food and beverage, and new milk and coconut water offerings won’t necessarily bring that number up much. However, selling beverages that are a go-to for many consumers could provide a boost in private label sales for Amazon.

Amazon's decision to launch dairy staples like milk and half-and-half could indicate a renewed push behind AmazonFresh. That service, which grew ploddingly over the course of a decade, pulled back from several markets in late 2017. With Whole Foods stores and distribution centers now under its control, Amazon has key cold-chain facilities that it can use to bring AmazonFresh to new markets and expand within existing ones. Dairy products are the building blocks of many grocery shops, and a key step towards Amazon gaining more of the large, profitable orders it has fo far struggled to build.

As of now, the pricing of Happy Belly milk and Whole Foods 365 milk are both about five cents per ounce on Amazon.

Amazon’s entry into private label coconut water is a reminder of how popular non-dairy beverages have become and shows consumer demand for lower pricing on their favorite products — even those that were once considered a bit more of a specialty. With the coconut water craze now several years old, odds are that shoppers are used to its availability and want a basic, low-cost coconut water option to keep their pantries stocked.

As a whole, Amazon’s new private label beverages are a sign that the retail giant is not letting up on its plans to expand its grocery footprint under the Amazon banner, despite its ownership of Whole Foods and the spotty performance of services like AmazonFresh and Prime Pantry.