Norway’s largest food supplier believes 5-10 of its brands have global potential and has rolled Amazon sales in both Germany, India, the US and the UK. The sales hit so far is sad.
Orkla is currently selling around 200 cranboxes a week on Amazon in Germany. In the long run, Orkla boss believes Amazon can give the food giant good revenue from channels other than traditional groceries.
–Håkon Mosvold Larsen / Screenshot Amazon
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Although the vast majority of Orkla products will mainly be found in the grocery stores for the foreseeable future, the company has moved out of the Nordic region into new markets over the past year.
Amazon has allowed Orkla to test out sales of various brands without having to battle its way into expensive store shelves.
– It is incredibly exciting learning, which in addition generates revenue, says Jaan Ivar Semlitsch, Orkla’s top manager at E24.
– We have some very strong brands that we can take globally, but only 5-10 brands have this potential, says Semlitsch.
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Tran in Germany
Orkla has had its products online for a while already, where both supplements through the gym wholesaler and clothing through Pierre Roberts are sold in their own online stores.
But in Norway, Orkla does not want to challenge the grocery industry by selling the goods they normally sell in stores. However, it is not a problem abroad, and it is therefore sold:
- Muller’s cranberry on Amazon in Germany
- Jordan toothbrushes have been launched on Amazon in the United States
- Spices are traded on Amazon in India
- Paint brushes are sold on Amazon in the UK
Semlitsch says Orkla has million sales in the various markets, but that there are still modest levels, since marketing is not practiced.
“In Germany, we have just over 200 orders per week of Møller’s cod liver oil, which we believe is a good start,” he says.
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– Orkla needs growth channels
The Orkla website is still so small that there is no “story for us”, says analyst Markus Borge Heiberg, who follows Orkla for the brokerage Kepler Chevraux.
– At the same time, Orkla communicates that their own growth ambitions are higher than the opportunities that exist in Nordic grocery, he says and continues:
– E-commerce is one of the channels where you do not have to relate to the high bargaining power the chains have in the grocery industry, explains Heiberg.
He also believes that many Norwegian brands, especially related to fish and sustainability, can do well abroad.
“Møller’s tran has the potential, and so has Jotun,” says Heiberg.
The analyst also thinks it’s smart that Orkla understands Amazon and the way the e-commerce giant operates.
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Think Amazon is in the Nordic countries in 2021
At the end of 2019, Orkla had 18,348 employees. Four of these work with the Amazon venture, so there is no major department in the group.
– For a change from the traditional industry, Amazon wants as little human contact as possible, so it’s a new way of working, but also a very cost-effective way of working, says Semlitsch and continues:
– And when Amazon comes to Norway, we have several products that are doing well online. For Orkla, customer diversity is important, and network players are part of it. It would surprise me if Amazon is not located in the Nordic countries in 2021.
– So you think there are great opportunities here in the long run?
– Definitely. If you look to the United States, Amazon has half of all e-commerce. For a strong brand supplier like Orkla, we also see this as an opportunity to showcase parts of the range that are not as well displayed in other sales channels.
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