Amazon to jump into wine biz
By JILLIAN JONES
Register Staff Writer
Internet giant Amazon.com will begin selling U.S. wines this fall, vintners announced this week, a move that many believe will modernize the tradition-bound wine industry.
Amazon.com, the massive online retailer that began in book sales, is now the largest Internet retailer in the world. Its wide-ranging product line features everything from jewelry to music to cars. Until now, wine has remained conspicuously absent from the retailer’s catalog.
Come late September or early October, all that is expected to change, Napa Valley Vintners Communications Director Terry Hall said this week; Amazon.com will add wine to its product list with help from a Napa-based wine shipment company called New Vine Logistics.
New Vine Logistics will navigate the complicated shipping issues for Amazon.com’s wine sales, a difficult endeavor given the varying regulations from state to state.
Hall said Amazon.com will sell wines from across the country to 26 states.
“They want to be sort of a go-to site,” he said.
Representatives from Amazon.com declined comment, noting only that they “don’t comment on rumor and speculation.”
But Hall said Amazon.com officials have already visited with about 80 to 90 vintners in the Napa Valley. Friday marked the last of the two workshops between Amazon.com and Napa vintners, Hall said. Both workshops were organized by Napa Valley Vintners, of which 315 of Napa’s approximately 400 vintners are members.
Hall speculates that everyone from small to large wineries will participate in the program, depending on their individual business plans.
Ceja Vineyards General Manager Ariel Ceja believes the opportunity will particularly benefit small wineries looking to gain exposure.
“I think it’s just going to make it that much more easy for ordinary people to find out about smaller gems,” Ceja said. “Boutique guys will be signing up. … It’s allowing us smaller guys to get our name out there rather than relying on distributors.”
Ceja said he is “very much looking forward to” selling wine on Amazon.com. After a test run with his family’s limited production wines, “I wouldn’t mind selling all our wine” on Amazon.com, he said.
Napa vintner Dario Sattui said his two wineries, V. Sattui and Castello di Amorosa, will not sell wine on the Web site. But he lauded the benefits of the online sales opportunity for small wineries and the industry in general.
“The more we can allow wineries to sell direct from the wineries, to sell direct throughout the United States … the more it’s going to benefit the wine industry,” he said. “There’s no question about that.”
Sattui said he also expects the increase in online wine sales to bring down the cost of wine by cutting out the middlemen.
“We can keep our prices down and still make a healthy markup,” Sattui said. “There are only a few distributors left in the U.S. and they have all the power. They squeeze the heck out of the winery.”
Still, others remain skeptical about the move toward online sales. Ken Morris, communications and marketing manager for Grgich Hills Estate, said the winery is still deciding whether or not to sign up with Amazon.com after meeting with representatives.
“I think it’s probably a good thing given the broad reach of Amazon and the name recognition, but no one really knows until it happens, and there’s always unintended consequences,” he said.
“With something this big, there’s always surprises,” Morris added. “It could be positive, or it could be a real surprise.”
Hall said the move affects not only industry insiders, but wine culture in general. Specifically, he said, the availability of wine on Amazon.com cements the role of wine in American culture.
“It’s exciting that wine is part of everyday American life now that a giant American retailer, the world’s largest online retailer, is on board with it. (Wine is) in the mainstream,” he said.
“It’s a great shift and exciting turn in our culture,” Hall added, stressing in particular the potential impact on young consumers.
“As millenials drive the market … they’re really excited about wine, more predisposed than any generation to be wine lovers,” he said. “It is also a group that grew up on the Internet.”
In the Napa Valley and across the nation, industry leaders say the shift to online sales will have far-reaching implications.
“I am of the generation that I can barely use a computer…,” Sattui said, “but (younger people) are very much adept at using the computer, so I think that’s the future, really. Online retailing is really a big part of the future.”
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jfz wrote on Sep 13, 2008 8:07 AM: