A little noticed news item in The Napa Valley Register on September 30, 2007 would seem to signal an expansion of online wine sales by the major grocery chain, Safeway. From a quick check of Safeway's shopping site, one can already order wine online (2,147 items listed on Winesearcher.com) but only for local delivery.
What happened?
- The American Canyon, CA planning commission approved a conditional use permit for Safeway to open an office that will be licensed to take online wine orders. When the office will open is not determined yet.
- Orders will be shipped Fedex with warehousing/shipping support by New Vine Logistics, a major wine industry fulfillment house used by many wineries for (almost) national shipping of wine -- 36 states can be shipped to via NVL according to the services description on their site.
- Given the maze of shipping laws that wine retailers must contend with, it's not surprising that Safeway is starting off cautiously by taking online orders only from California residents.
Why it happened
- Safeway no doubt has noticed the success that Costco has had in the wine category, including Costco's online wine sales initiatives which are currently limited to 5 states (CA, IL, NM, OR, and TX).
- Wine is a huge retail category with $25+ billion in retail sales annually. That's too big a pie to ignore.
- Consumers are increasing their online spending in all categories and offering wine online enables consumer needs to be better met.
Why it's significant
- The fact that the director of Safeway's national direct business was involved in securing the approval and her comment that there "potentially" could be other offices signals broader ambitions.
- New Vine Logistics' ability to support out-of-state shipping from a single location also implies sales beyond CA might occur in the future.
- Major national retailers like Safeway and Costco seeking growth in online wine sales is a very positive development for consumer direct shipping initiatives such as those of the Specialty Wine Retailers Association as it should inevitably bring additional support to bear.
