Amazon Enters Farmers Market, Alcohol Sectors

With the launch of services targeting the grocery and alcoholic beverage
segments, Amazon.com, Inc., has garnered media attention for its latest
forays into a new and competitive marketplace. In a September 1, 2015,
article, The Los Angeles Times compares Amazon’s Farmers Market
Direct program to other food delivery startups aiming to bring fresh local
products from farm to doorstep. A partnership with Connecticut-based
Fresh Nation, the Farmers Market Direct program seeks to connect
Southern California agricultural producers to Amazon’s consumer base,
promising food delivery within 36 hours of harvest. As the Times notes,
“Development of food-delivery technology has attracted an enormous
amount of money. About $710 million was invested in the segment in the
first half of 2015, more than the $681 million invested all of last year.”

Meanwhile, The Wall Street Journal reports that Amazon’s one-hour
delivery service for alcohol beverages joins “more than a half-dozen
alcohol delivery startups… working to differentiate themselves from
one another.” In many cases, these companies do not require liquor
licenses as they sell their apps and technology to existing physical
stores to help them boost online sales. But under Amazon’s model, the
online retailer has acquired a Washington state liquor license to sell
wine, spirits and other beverages directly to Seattle consumers. “Private
investors backing the booze delivery startups remain bullish on the sector
despite Amazon’s entry and similar activity by delivery services such
as Postmates and Instacart,” states the September 1, 2015, article. “The
ability to bring offline transactions online and mine the data coupled
with consumer enthusiasm for summoning items from smartphones
as evidenced in food, rides, laundry, and other services have made the
sector a compelling one for tech investors.” See The Wall Street Journal,
September 1, 2015.

Issue 577