When Amazon bought Whole Foods a few weeks ago, the mid-sized retailer surprised many pundits in buying a grocer that went against Amazon's tradition of selling as much as possible as cheap as possible.
And when CNBC reported that Amazon was hiring a manager for a pharmaceutical division, it looked like just a normal expansion plan.
But after yesterday's news, I think both of the above stories are related. The connection is Amazon's new Wine label, Next.
Trader Joe’s has Two Buck Chuck. Amazon? A new wine label called Next with bottles costing $20, $30 and $40 a pop.
The company recently announced that it helped develop this new wine brand produced by King Vintners, a subsidiary of Oregon’s King Estate Winery, and had started selling it on Amazon.com. In a press release, the new wine brand is described as “the first wine ever developed from conception to release with Amazon Wine.”
Recode has asked an Amazon rep for details on the relationship between Amazon and King Vinters and I will update this story if I get feedback. In the meantime, it sounds like Amazon has contracted with King to develop the wine on its behalf.
The new line includes a Pinot Gris for $20, a Red Blend for $30 and a Pinot Noir for $40 — not extravagant prices, but higher than I would expect for Amazon, which always is thinking about mass appeal. Amazon launched its online wine marketplace, Amazon Wine, in 2012, but this appears to be the first time it has helped create its own wine.
Amazon is clearly laying the groundwork to go after a new, wealthy customer base and will be selling them expensive foods along with drugs and alcohol.
This, folks, is how Amazon is going to keep boosting its revenue quarter after quarter. The retailer first got its start in books before diversifying into general merchandise, and now it is moving upmarket.
Amazon is going to cultivate the decadent elite as a customer base. It all makes perfect sense, and in fact I think I can predict Amazon's next market after luxury goods.
What with the US foreign policy, this will obviously be a growth market for years to come.
And really, why else do you think Amazon has been investing in drones for all these years?