Amazon’s entry into the grocery business is pushing packaged-foods companies to innovate their e-commerce marketing

Wall Street is betting that Amazon.com’s push into groceries will be very bad news for the packaged-food industry.

It’s up to the likes of Mondelez International to prove that notion wrong.

The snack giant, which makes everything from Oreos and Tang to Trident gum, has been selling more products over the internet and retooling its supply chain for a digital world, said Jeff Jarrett, Mondelez’s e-commerce chief. The idea is to show it can shift business online without getting crushed by Amazon, which is famous for squeezing suppliers’ margins.

After Amazon agreed to buy Whole Foods Market in June for US$13.7 billion, food producers saw their shares tumble. And few analysts are predicting a rally anytime soon.

Amazon is expected to transform grocery shopping into an industry where brands have less sway over consumers and prices are lower. That’s put pressure on Mondelez and others to build their own direct relationships with customers, helping preserve their influence.

“You’ll continue to see big brands focus on the online channel like never before,” Mr Jarrett said in an interview.

Amazon hasn’t said much publicly about its plans for Whole Foods, but the company is expected to bring prices down at the notoriously expensive chain. And most analysts agree that Jeff Bezos’s business will play tough with suppliers.

While Amazon’s grocery ambitions were well-established before the Whole Foods deal, only about 2 per cent of the food business has moved online. The prospect of the company taking over an upscale grocer was seen as the latest piece of bad news for the group of companies known as “Big Food”.

The day the Whole Foods acquisition was announced, 10 of the largest food companies in the US, including Kraft Heinz, General Mills, Mondelez and Campbell Soup, lost