Dive Brief:
- Kroger has officially added wine delivery to its current list of services, Bloomberg reported. The grocer has announced a new partnership with Drinks Holdings Inc., and Kroger customers in 14 states can now order wine for delivery. More locations will be added in the future.
- Wines available for delivery through Kroger will cost between $10.83 and $16.67 a bottle, and will come in six or 12-bottle assortments. The wine selection will come from regions in California, Italy, France and Spain.
- Kroger will not sell any wines under its own label. This move comes on the heels of many other retailers making changes to their wine, beer and spirits offerings.
Dive Insight:
The race to offer wine delivery is picking up among grocers as e-commerce continues to prevail, with research showing that online alcohol sales grew by 32.7% in 2017. Clearly, Kroger wants to capitalize on the growing demand among consumers to have wine delivered directly to their doorsteps. It looks like Kroger is targeting millennials with this new service, in part because the generation is rapidly adopting e-commerce and because many are looking for options beyond beer that will fit within their budgets, according to Bloomberg.
Kroger joins a list of heavy hitters that have decided to invest in alcohol delivery. Just a few days ago, online grocer Thrive Market announced a line of clean, organic wines. Over the summer, H-E-B introduced alcohol delivery in Texas through a partnership with Favor, and last year Publix began testing alcohol delivery in some of its Florida stores for shoppers who purchase groceries through Instacart. Amazon has also been working to expand its beer and wine delivery, which is now available to Prime customers in select cities in Washington, Florida and Texas.
While few details have been released about this partnership with Kroger, Drinks Holdings Inc., says it partners with a number of licensed retailers nationwide to offer an online selling platform, and it seems to be an emerging brand that could disrupt the space and change the market. According to LA TechWatch, the company has raised $28.3 million in three rounds of funding as of last month, and currently owns and operates Martha Stewart's Wine Co. and Wine Insiders.
Judging by the scope of this launch, Kroger appears to have confidence in its plans for wine delivery. Introducing the service in 14 states requires a significant investment and a sense that this offering is in high demand and will be well received. There is little doubt that Kroger has made the decision with significant insight from its research firm 84.51 and has established a clear roadmap.
In the fight to maintain its status as the biggest grocer in the nation, Kroger has not let up on efforts to innovate and roll out its Restock initiative this year. In August, Kroger expanded its same-day grocery deliveries with Instacart, and earlier this month the grocer announced a partnership with Walgreens to offer more grocery pickup locations. Those announcements came after a laundry list of others, from launching a clothing line to acquiring Ocado. With so many investments to differentiate itself and to support e-commerce efforts, wine delivery may be a good move by Kroger to keep up with, or outmaneuver, some of its strongest competitors.
