Whole Foods, Pharmaceuticals, and Now Wines – Is Amazon Going After the Decadent Elite?
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?
Allen F July 6, 2017 um 1:02 pm
"… went against Amazon’s tradition of selling …"
No, becoming the 'go-to' place for 'everything' for 'everybody' is not going against any Amazon tradition.
Disgusting dude July 6, 2017 um 7:16 pm
tired July 7, 2017 um 9:37 am
That is so cute, you think a cheap $20 bottle of wine is for the decadent elitist. What do you drink wine coolers? Or maybe just Miller Lite?
Pundits are idiots if they confuse Amazon with Walmart. Walmart specializes in selling the cheapest crap possible. Amazon sells EVERYTHING without differentiation. But the wine that you’re talking about is inexpensive even if it isn’t bottom of the barrel bargain priced.
Nate Hoffelder July 7, 2017 um 9:39 am
Dude, you’re taking my joke wy too seriously.
Frank July 7, 2017 um 4:35 pm
Amazon has not bought Whole Foods yet, the deal still has to go through a process that takes months.
Hannah Steenbock July 11, 2017 um 3:52 am
They are going where the money is. Simple.