Amazon.com is entering the retail wine business. So is the Wall Street Journal. Clearly these corporate giants see opportunity in a growing U.S. wine consumer base. Amazon plans to launch its new Web site devoted to wine Web sales this fall-in fact, if all goes according to schedule, the site will go live late this month. This will be the retail giant’s second attempt at entering into the internet wine market. Meanwhile, the Wall Street Journal‘s new site is up and running at wsjwine.com.
Nearly a decade ago, there was much excitement about the great potential of e-commerce for expanding wine sales. Amazon itself was part of that first wave; in 2000, the company invested $30 million in WineShopper.com. Alas, these early internet wine retailers, including Wine.com and Virtual Vineyards, ran into major logistical challenges, specifically from complex state-by-state shipping laws. These first wave companies either went bankrupt or changed ownership.
Confusing state shipping laws have been a primary obstacle for internet retailers. In 2007, total U.S. wine sales were $30-$32 billion. Currently, only about 7 percent of that total is generated by e-commerce, according to numbers from Stonebridge Research Group, a wine industry research firm. To be successful, internet wine retailers must overcome these shipping issues.
Toward that end, both Amazon and WSJ have outsourced order fulfillment to firms experienced in navigating the maze of regulations. Amazon, working with Napa-based New Vine Logistics, plans to start shipping to 25 states by the end of October. WSJ has partnered with London-based Direct Wines Ltd. and currently ships to 33 states.
Does the entry of these nontraditional wine sellers mark an auspicious next wave in direct to consumer wine sales? Despite a 2005 Supreme Court ruling stipulating that states may not discriminate against out-of-state wineries, the shipping rule quagmire continues to stymie direct-to-consumer shipments. With a behemoth like Amazon entering the fray, wine consumers just might find themselves with a substantial dose of added “muscle” in the ongoing struggle to complete the overhaul of antiquated state laws.
WINE LIST KUDOS: In a recent column, I expressed frustration at restaurants featuring wine lists put together seemingly as afterthoughts. So I was particularly pleased when I paid a visit to newly opened Julienne on the corner of Santa Barbara and Canon Perdido streets. Owners Justin West and Emma Gudeman along with Graham Tatomer have put together a tight, not-too-big, reasonably priced, well-balanced wine list featuring wines that actually pair well with their menu. They get a big gold star-and my repeat business.