Amazon to Strengthen Physical Presence with New Grocery Biz

Dear Client:

While big grocers are focusing their efforts on building out e-commerce and delivery, Amazon is focused on strengthening its physical presence.

The retailer plans to open dozens of new grocery stores in several major US cities, according to people familiar with the matter, per WSJ. No word on what the new business will be called or if it will carry the Amazon name.

This new concept will be completely separate from Whole Foods and cater to a different consumer with a variety of products at a lower price point. The new stores will also be a smaller format than typical grocery stores, at about 35,000 square feet.

It’s unclear whether or not the stores will be cashier less like Amazon Go, but they will be “heavily tilted to customer service and pickup capabilities,” according to WSJ.

Amazon is planning to open the first of these new stores by the end of the year in Los Angeles, and they’ve also signed leases for at least two other locations in different cities, with plans to open in early 2020.

Though WSJ notes that just because Amazon has signed a lease, doesn’t guarantee they’ll be opening a store as “retailers sign contracts and then pull out or delay store openings if certain conditions aren’t met.”

Other cities they’re currently targeting for these new stores include San Francisco, Seattle, Chicago, D.C. and Philadelphia.

Moreover, the retailer is also looking into acquiring regional grocery chains, which could be used to strengthen the new business, according to one of the sources.

US, CHINA CLOSING IN ON TRADE DEAL

The US and China are nearing an agreement that would put an end to the months long trade dispute. The US would remove the tariffs on $200 billion worth of Chinese goods so long as China pledges to make structural economic changes (particularly regarding intellectual property) and remove the retaliatory tariffs on US goods, according to a source familiar with the matter, reports Reuters.

US and Chinese officials “have conducted fruitful and intensive consultations and made important progress on many issues of common concern,” Zhang Yesui, a spokesman for the National People’s Congress, the annual session of China’s legislature, told reporters in Beijing on Monday, per Bloomberg. “We hope that the two sides will continue to hold consultations and reach a mutually beneficial and win-win agreement.”

“Speaking of China we’re very well on our way to doing something special. But we’ll see,” President Trump said at a press conference in Hanoi last week, per Bloomberg, adding, “I am always prepared to walk. I’m never afraid to walk from a deal, and I would do that with China, too, if it didn’t work out.”

You may recall, China has levied 15%-30% tariffs on US spirits and wine.

President Trump and Chinese President Xi Jinping could sign an agreement at a summit as early as March 27.

NEW BOULEVARD BEVERAGE COMPANY DEBUTS SPIRITS-BASED RTDS

Missouri-based Boulevard Brewing Company, a well-known Midwestern brewer owned by Duvel Moortgat USA, is trying its hand at spirits-based RTD canned cocktails. They’re starting a new company, dubbed Boulevard Beverage Company, to do it.

The RTDs are called Fling Craft Cocktails, but Boulevard brass says these are just the first in a line of non-beer innovations for the new company, if all goes well, reports sister publication Craft Business Daily.  

The line includes Blood Orange Vodka Soda, Cucumber Lime Gin and Tonic, a Margarita, and a Mai Tai. They come in 4 packs of 12 oz. regular cans and will be available for about $13.

The creation of the flavors has been primarily done at Boulevard, said VP marketing, Natalie Gershon. But the spirits were outsourced, and they’ve partnered (mostly) with local distillers.

“For our Blood Orange Vodka Soda, we partnered with 360 Vodka; our Cucumber Lime g&t, we worked with Restless Spirits Builder’s Botanical gin,” said Natalie. “And then for our margarita, there’s a small company called Mean Mule Distilling, who makes an American agave spirit.” The Mai Tai utilizes a rum brand from the Virgin Islands.

Though the spirits come from other companies, Duvel Moortgat USA and Boulevard chief Jeff Krum says they are sourcing all the ingredients, blending and packaging them at the brewery. Boulevard Beverages will share a sales force with the brewery as well, at least for now. And these brands will go through Boulevard distributors (so long as they are equipped to sell spirits).

Fling will debut at Kauffman Stadium for the Kansas City Royals’ opening day on March 28. Regional distribution will follow the next month, with national expansion slated “throughout 2019.”

RTD cocktails are increasingly gaining interest and popularity. Recall, Anheuser-Busch InBev recently purchased Cutwater Spirits to capitalize on their line of RTD cocktails [see WSD 02-20-2019].

WSD BRIEFS:

BREAKTHRU EXPANDS PARTNERSHIP WITH O’NEILL VINTNERS & DISTILLERS. Breakthru Beverage Group has expanded its sales partnership with O’Neill Vintners & Distillers. Effective immediately, Breakthru will represent O’Neill’s full portfolio in Pennsylvania. Breakthru already represents O’Neill’s portfolio in AZ, IL, MN, NV, SC, VA and WI.

BLUE RIDGE SPIRITS & WINE PARTNERS WITH REBECCA CREEK DISTILLERY. Blue Ridge Spirits & Wine Marketing has partnered with Texas-based Rebecca Creek Distillery. This partnership will further the growth of Rebecca Creek Distillery brands in the US. “Partnering with Blue Ridge is a great match for our team to grow our brands around the country,” says Rebecca Creek founder Steve Ison.

STILLHOUSE SPIRITS CO. LAUNCHES CLASSIC VODKA. Stillhouse Spirits Co. has launched Stillhouse Classic Vodka. It is made from 100% estate grown corn and limestone water, then filtered through sugar maple charcoal and bottled at 80 proof. The vodka will be available nationwide starting in April at a suggested retail price of $22 a 750 ml.

QUINTESSENTIAL WINES WELCOMES INDUSTRY VET. Quintessential Wines has appointed Scott Gerber as vp business development. He has more than 40 years of industry experience under his belt, co-founding and running Martin Scott Wines for the last 20 years. In his new role, Scott will primarily work with the company’s New York area management to analyze the competitive sets, review sales histories and needs, and provide input with proposed marketing suggestions for their distributors, per a release.

THE FAMILY COPPOLA APPOINTS NEW PRESIDENT OF SALES. The Family Coppola has appointed Allison Westhoven to president of sales. In her new role, she will oversee the domestic and international sales teams for The Family Coppola wines, Great Women Spirits and Mammarella Foods as well as all functions of the sales support teams including customer service, trade marketing and analytics. Allison joined The Family Coppola 16 years ago. She succeeds Wendy Putman, who retired after 19 years of leadership.

Until tomorrow,
Sarah

“The safe way to double your money is to fold it over once and put it in your pocket.” – Kin Hubbard    

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