Amazon Boxes

Earlier this week, it was announced that starting this summer Amazon will be among a select number of online retailers to begin accepting food stamps via the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP).

With the American grocery market and e-commerce platforms growing further intertwined by the day, this was a logical progression by SNAP to bring food stamps into the 21st Century.

An estimated 46.5 million Americans particulate in the program. And if many of them are now opting for the convenience and selection provided by e-commerce, it seems only reasonable to allow consumers to use Amazon and other online channels just as they would brick-and-mortar outlets.

It’s amazing, really, that e-commerce has come this far. When Lyndon Johnson signed the Food Stamp Act in 1964 – launching the service that has been providing provisions for those in need for more than a half-century – it’s unlikely he ever dreamed of a day when Americans could view, select, and order groceries from their own home and have them delivered within hours!

But putting the wonders of e-commerce and technology aside, what does this actually mean for the ever-expanding grocery market on Amazon?

SNAP supplies approximately $125 per month to each person enrolled in the program, which brings $69.7 billion of new potential revenue to Amazon and the other platforms to be included (of which Amazon is by far the largest).

It’s unlikely a significant percentage of that near-$70 billion will be spent through Amazon, but even if 1% makes its way to the world’s largest e-commerce retailer, that’s nearly $700 million in new grocery revenue for Amazon merchants.

With that in mind — and with programs like Amazon Fresh and AmazonNow growing faster than ever — 2017 is clearly destined to be a year of benchmark growth for the grocery industry online.