(Bloomberg)—Kroger Co., No. 86 in the Internet Retailer 2018 Top 1000, is getting into the wine delivery business.
The nation’s biggest supermarket company has partnered with Drinks Holdings Inc. to offer home or office delivery to customers in 14 states, with additional locations to be added in coming months. The wines—from regions including California, Italy, France and Spain—cost between $10.83 and $16.67 a bottle and come in six- and 12-bottle assortments.
Retailers are ramping up their wine and spirits offerings to generate additional sales as customers, particularly millennials, seek more affordable liquor options beyond beer.
Kroger’s move follows forays into wine by rivals like Target Corp. (No. 17), which has found success with a $5 store-brand wine label called California Roots, and Walmart Inc. (No. 3), which introduced a range of its own wines earlier this year for about $11 a bottle. Upscale supermarket chain Trader Joe’s started the trend more than a decade ago with its Charles Shaw label, nicknamed “Two-Buck Chuck” for its affordability. Kroger won’t sell the wine under its own label.
For Kroger, the partnership is the latest step in its goal to reposition the retailer under its Restock Kroger strategic plan announced last year. Among other things, the plan aims to expand Kroger’s digital and e-commerce efforts and make broader use of personalized customer data. As the plan unfolds, Kroger has been actively investing in technology and omnichannel capabilities.
Earlier this month, Kroger began working with Walgreens Boots Alliance Inc. (No. 37) to test a “new format and concept” that will allow customers to order Kroger grocery items online and pick them up at a Walgreens drug stores.
In August, Kroger launched a new e-commerce website that sells non-perishable grocery items directly to consumers in select markets. The same month it began working with the University of Cincinnati to operate an “innovation lab” there.
Over the summer, Kroger also announced plans to work with autonomous vehicle startup Nuro to test grocery delivery via an unmanned road vehicle that will steer itself from the grocery store to customers’ homes. Those moves came on the heels of the grocer in May buying a stake in U.K. online grocer Ocado Group PLC, No. 24 in the Internet Retailer Europe 500, and licensing Ocado’s automated warehouses and delivery technology.
Thrive Market, the membership-based organic online grocer and No. 208 in the Top 1000, also recently got into the wine business. It now offers six- and 12-bottle bundles of organic wines, all priced at $18 per bottle or less, to the 38 states that allow wine shipments.
John Melton contributed to this report.
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