NEW YORK — McCormick & Co. and Hershey Co. are the two best-positioned food companies in the online marketplace, while J.M. Smucker Co. and Mondelez International rank near the bottom, according to a new research report from Alexia Howard, a senior analyst with Sanford C. Bernstein & Co., L.L.C.

Using a proprietary “Amazon Scorecard” that was first introduced in October 2018, Ms. Howard said the research agency has begun ranking U.S. food companies relative to their positioning on Amazon. The scorecard is based on five primary inputs: online shelf space, estimated online market share, customer ratings, number of customer reviews and category profitability estimates.

Category profitability estimates are given a 40% weight in the scorecard. Ms. Howard said Bernstein calculates the category profitability score by dividing a category’s estimated online profitability by the average profitability across categories.

Accounting for 30% of the score is online shelf space, which Ms. Howard said is estimated by calculating the percentage of products by the same manufacturer that appear on the first two pages of Amazon’s search results. The online shelf space is then compared against the company’s offline shelf space, which is measured by the percentage of total distribution points a manufacturer has in measured channels.

A 10% weight is given to estimated online market share. Ms. Howard said online market share is estimated by leveraging Amazon’s Best Sellers list, which ranks products by sales in each category and is updated hourly according to Amazon. The companies’ online share is then compared with its offline share in measured channels based on Nielsen data.

The scorecard also assigns a weighted value of 10% to both customer ratings and number of customer reviews. Ms. Howard said Bernstein uses these two metrics as proxies for how much traction a brand has with customers. A brand’s customer rating score is calculated by dividing its average customer ratings in a category by the average customer rating for the category based on the first two pages of search results. Meanwhile, a brand’s number of reviews score is calculated by dividing its average number of reviews in a category by the category average based on the first two pages of search results, she said.

Based on the Amazon Scorecard, McCormick & Co. is best positioned online, followed by Hershey Co., Kellogg Co., General Mills, Inc., Kraft Heinz Co., Campbell Soup Co., Mondelez International and J.M. Smucker Co. Conagra Brands, Dean Foods and Tyson Foods, Inc. were excluded from the analysis due to their limited online exposure, while the Hain Celestial Group was excluded because the research analysis did not focus on health and wellness categories.

“Based on our proprietary Amazon Scorecard, McCormick stands out as the best positioned online in our coverage given its meaningful online presence and favorable economics of the seasoning category,” Ms. Howard said. “Hershey remains the second-highest ranked as the company has invested heavily behind its digital strategies. On the other hand, Smucker’s remains among the worst-positioned as it under-indexes online in coffee where challenger brands fare better. Mondelez slipped one place to the second-worst-positioned as it continues to under-index online in the cookies category.

"It is of note that the Amazon Scorecard captures a point-in-time screenshot of companies' positioning, which could evolve over time especially given that we are still in the early innings of e-commerce development in the packaged food space. We expect to update this analysis on a quarterly basis to capture any changes in relative positioning over time.”

Shifting from company performance to category performance, Ms. Howard said the cereal, cookies and soup categories continue to see dispersion among key players, whereas mainstream products continue to under-index online in the coffee, chocolate and dog food categories.

Ms. Howard identified two ways in which U.S. food companies have taken steps to improve their performance in e-commerce. First, they are investing more in e-retailer relationships to compete for online shelf space. Second, they have begun leveraging co-packers to produce club-size variety packs for the online channel that better justify shipping costs.

“For example, Hershey has launched variety packs — each containing 18 single-serve bars — which is now the No. 8 best seller in the candy and chocolate bars category on Amazon,” Ms. Howard said. “Kellogg has also launched variety packs of single-serve cereal products on Amazon, which have gained less traction than Hershey’s variety packs but even so have weighed on Kellogg’s margins in recent quarters.”

She added that while most consumer packaged goods companies argue that the shift online has been largely margin neutral, Bernstein believes this is unlikely “given the amount of investment required to list sponsored products, to participate in various Amazon programs like Prime Pantry and Subscribe & Save, and to develop pack sizes suitable for the online channel.”