Why It Matters That Amazon Is Selling Wine In Texas

Posted: Jul 18, 2018



Texas has long been one of the most complicated states for wineries and producers to do business in. It is riddled with dry counties and home to complicated sales legislation.

As Amazon is close to celebrating its full first-year of Whole Foods ownership, the Seattle chain has made some clever inroads to the wine sales market in several major Texas cities. As of June, the chain rolled out one-day wine delivery in Dallas, Fort Worth, Austin, Houston and San Antonio. One- and two-hour delivery windows are available as well.

Going Through the Right Channels

Unlike some other alcohol-delivery services, the forward-thinking chain has always checked all its boxes. Amazon stopped selling wine online via its own site, which never had much traction, from the moment it acquired Whole Foods. Trade analysts and consumers alike expected some fancy footwork from the chain and it has performed as expected.

A number of permits were requested from the Austin-based Texas Alcoholic Beverage Commission, so drinks ordered could be stored and shipped from a number of local warehouses. Drivers are trained to check customer identification upon delivery to prevent minors purchasing alcoholic beverages.

With a minimum order of $35, wine—and food—can be delivered for free in a two-hour timeframe. For an additional $7.99 customers can have their purchases in an hour. Like many other alcohol-delivery vehicles—such as Minibar Delivery and Drizly, which has the greatest market share at 100+ metros—analysts believe Amazon and Whole Foods are primarily catering to a millennial demographic.

What the Future Holds

Local sommeliers and restaurateurs think they will continue to gain market share, even if the baseline product might be more expensive. Certain demographics will be willing to pay for the added convenience, says Napa-based industry analyst Jon Moramarco, a partner in number-crunching firm of Gomberg & Fredrikson.

Sean Beck, the sommelier at a number of Houston restaurants including Backstreet Café and Xochis, thinks the target market is the under-40 set. He adds that these new services will be particularly welcomed by people who like to entertain, as they will be able to order all their party prep with one, easy click.

He adds that, “it will be easy to capitalize on both impulse purchasing and those who like to organize the life by computer or cell phone.” He adds that the chain has long been way ahead of its competition in terms of how it deals with technology and deliveries.

“There is clearly a convenience factor in ordering all your meal items and getting them delivered,” shared Rob McMillan, the Napa-based executive vice president and founder of the Silicon Valley Bank Wine Division. Amazon also has the advantage of being a retailer, as opposed to having to partner with one of them, as other delivery services have had to do. These other services, he continued, will also have to “compete on product selection with Amazon.”

In the long run, the grocer’s move to include wine and spirits delivery is a smart and savvy one. “There is every reason to believe that they will continue to move this part of their initiative forward,” shared McMillan.

By Liza B. Zimmerman
July 17, 2018 
Source: Forbes.com



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