Amazon.com has announced that its new online wine marketplace will make more than 1,000 wines available to California, Connecticut, Florida, Idaho, Illinois, Iowa, Nebraska, Nevada, North Carolina, Oregon, Washington, Wyoming and the District of Columbia. Iowa is one of the first states to be able to participate in Amazon’s venture. The shipping costs are as low as $9.99 for six bottles. Although Wine.com ships wine online, and includes foreign-sourced wines as well, it does not ship to Iowa. I suspect that part of the problem is that Wine.com includes shipments of wine from France, Italy, Spain and Australia.
Recent court cases forcing states to open up their markets to wine made in other states may not apply to foreign wine producers. If it is the restriction to U.S. wines that makes the Amazon venture possible then that would be a shame in a way because some of the best, lease expensive, and hardest to get wines come from overseas. On the other hand, almost every time I read about a great American wine in some publication it is almost always something that I’ve never seen in a store. Allowing people across the country to see a review of a wine and to instantly order a case will increase consumer demand. That said, I doubt that it will result in much reduction in wine purchases at most local retailers (such as Hy-Vee). Here is why. The vast majority of wine purchases are reportedly made within a few hours of consumption. Bob or Brenda know they have some friends coming over for dinner and Bob stops off a the store and buy a bottle or two. If this is how Bob and Brenda buy wine then I doubt that they will have the presence of mind to order that same bottle from Amazon far in advance of that party.
If Amazon offers enough high quality wines (see my discussion on that below), the market that might be hit harder could be be the specialty wine stores. If the selection is broad enough, retail buyers may in fact load up on wines that they read about either online or in their latest issue of Wine Spectator or Food and Wine magazine. They will order the wine from the comfort of their living room couch and leave no room in either their schedule or their wine rack for a special trip to the local liquor store to hunt for those bottles.
A quick check of the different wines currently offered makes me think that for now this is not a huge threat. I checked for Pinot Noirs from Sonoma County, California and found 17 wines being offered, ranging in price from $21 to $60. You can also search by rating and only one had a rating above 90, a 2010 Viszlay. Similarly, only one 90 plus point California Cab was for sale, a $47 2008 Long Meadow Ranch Estate.
One market that will really be affected will be those wine producers lucky enough to get a lot of publicity for a particular run. Wine sales through Amazon could be practically instantaneous. If the mention was warranted, I’m sure that the Amazon algorithms will keep those buyers coming back until the supply is exhausted. I can see a lot of frantic activity by wine marketing consultants right now trying to position some of the smaller producers to take advantage of this new marketing opportunity. Imagine the cross-marketing and branding discussions going on right now.