Amazon's web site will be flooded with Whole Foods brands, meaning more competition for food sellers

Key Points
  • Amazon Fresh is now selling hundreds of Whole Foods private label products.
  • The influx of competition could inspire food brands to buy more ads on Amazon's sites.
  • Amazon racked up an estimated $2.5 billion in online ad revenue last year.
A customer browses avocados at a Whole Foods Market 365 location in Santa Monica, California.
Patrick T. Fallon | Bloomberg | Getty Images

That was fast! On Monday, Amazon Fresh began selling hundreds of new items from Whole Foods' house brands, including fancier fare and bath products from Whole Foods Market, staples from 365 Everyday Value, and pet foods from Whole Paws.

The influx of new products to Amazon's e-grocery service spells competition for the fresh food and packaged brands already selling there, including Arrowhead and Dasani bottled water, Del Monte and Dole canned fruit, and Hunt's and Newman's Own for tomato sauce.

The inclusion of the Whole Foods private label items won't be limited to the Amazon Fresh section of the massive e-commerce platform, either. The company announced on Monday:

"Whole Foods Market's healthy and high-quality private label products—including 365 Everyday Value, Whole Foods Market, Whole Paws and Whole Catch—will be available through, AmazonFresh, Prime Pantry, and Prime Now."

It's a smart move on Amazon's part to add Whole Foods' many private label products to the company's digital shelves. More competitors selling in the same store could drive up demand for on-site advertising in the food and packaged goods category.

WPP CEO Sir Martin Sorrell recently estimated, during the advertising giant's mid-year earnings call, that Amazon racked up about $2.5 billion from digital advertising in 2016.

Brands like advertising on Amazon and its many sites because so-called "purchase intent" is high there, unlike it may be on Google where users go for general research and not just shopping-related searches.