Please ensure Javascript is enabled for purposes of website accessibility

Amazon's Grape Escape

By Rick Munarriz – Updated Apr 5, 2017 at 9:57PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Amazon.com wants to wine and dine you.

Will that be a bottle of red or a bottle of white with your copy of The Grapes of Wrath?

Amazon.com (Nasdaq: AMZN) is gearing up to begin selling wine through its online storefront, this morning's Financial Times speculates after unearthing a job opening for a senior wine buyer at the world's leading online retailer.

The eventual hire will be in charge of "the acquisition of a massive new product selection" with the challenge of building an "entirely new selection from the ground up."

Wine may seem like a no-brainer addition -- given the upscale clientele Amazon attracts and its perpetually growing storefront -- but don't pop the cork just yet.

Pimping vino via cyberspace is a thorny issue. Moving libations over state lines is a regulatory challenge. That may explain why Amazon pulled the plug on its 1999 minority stake in WineShopper.com -- which now simply redirects to privately held Wine.com -- even before the dot-com bubble popped.

Amazon doesn't currently sell wine through its site. Even third-party merchants on its site, like Wine.com and Wine Country Gift Baskets, sell merchandise stripped of wine bottles. IAC's (Nasdaq: IACI) Gifts.com sells wine through gift baskets and wine club subscriptions, although the practice is rare beyond the smaller dedicated websites that dare to tangle with state regulators.

If restrictions are easing -- and the Financial Times article points to a 2005 Supreme Court ruling that does just that -- there's plenty at stake if Amazon can get on board and deal with red wines instead of red tape.

The company's push into nonperishable grocery items in bulk nationally and fresh items locally fit right in with cracking into the wine cellar. Between Amazon Prime's membership club, fostering loyalty with subsidized shipping, and the company's breadth spanning across dozens of merchandise categories, it may not be long before someone can subsist exclusively off Amazon's deliveries. Be wary, Costco (Nasdaq: COST) and Safeway (NYSE: SWY). You're in Amazon's crosshairs. One company's wine is another company's whine.

Amazon's push should also boost the prospects of small vineyards like Willamette Valley Vineyards (Nasdaq: WVVI), eager to pitch its Pinot Noir and Chardonnay wines on a grander stage.

It may be just a bottle of wine, but uncorked it represents challenges for Amazon's competitors and opportunities for its prospective suppliers.

Another round of Foolishness:

Amazon.com and Costco have been recommended to Stock Advisor subscribers. You can drink to that on us with a 30-day trial subscription to the service.  

Longtime Fool contributor Rick Munarriz wonders if Sideways refers to a buddy road trip flick through California wine country or the way that Amazon shares have been trading lately. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story. The Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$115.15 (1.20%) $1.37
Costco Wholesale Corporation Stock Quote
Costco Wholesale Corporation
COST
$480.30 (2.98%) $13.90
Match Group, Inc. Stock Quote
Match Group, Inc.
IAC

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.