After Amazon buys whole Foods, it may target boutique coffee, just Starbucks on the front.

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After Amazon bought whole Foods, it quickly cut prices and seized the fresh food market, and started selling Echo speakers offline. It is generally believed in the industry that this is a very good deal. So the question is, what will be Amazon's next goal after ending this perfect acquisition?

Amazon, which already has a fashion empire, bookstores, streaming and grocery businesses, may be short of a coffee shop, according to Bezos's ambitions to "rule the world". Across the street corner from Starbucks, there is Amazon coffee. This style is very Bezos.

According to Techcrunch, Amazon's next acquisition target is likely to be boutique cafes like Blue Bottle and Philz, which are completely different from Starbucks, focusing on the artistry and culture of coffee, and their consumers are worth more. Different from the standard Starbucks style, in these boutique coffee shops, coffee is made by hand, and even coffee beans are baked in the store, which is both sentimental and professional.

This kind of boutique coffee has now become one of the hot targets of capital pursuit, with Blue Bottle completing a $70 million round of financing and Philz completing a round of $45 million last year.

Walking down Valencia Street in San Francisco, you will see Blue Bottle, Ritual Coffee, Four Barrel, Sightglass and Philz, the boutique coffee shops of different brands representing a wave of coffee. Not to be outdone, Starbucks is working on high-end coffee, retelling the coffee story with Zhenxuan store Roastery.

Two boutique coffee companies, Peet's and seesaw, the father of Starbucks, plan to enter China on a large scale and seize the trend of coffee "upgrading". Tom, founder of seesaw, told Curiosity Daily that this is the so-called "third wave of boutique coffee" era, the first wave is instant coffee, the second wave is represented by Starbucks, focusing on the quality and taste of coffee, and the third wave is boutique coffee shops with personality.

So why would Amazon buy boutique coffee brands? Because this boutique coffee market is very much in line with Amazon's usual acquisition style. Amazon usually chooses emerging markets with huge demand, and consumers had better match its Prime members, and the boutique coffee market fits both, with broad consumer prospects and high audience value. The coffee shops all over the street corner can also create a wealth of user value.

Unexpectedly enter the vast emerging market, gain a firm foothold by virtue of its strong brand, channel and capital advantages, and provide additional benefits for its prime members. Amazon's tricks in buying whole Foods can be used on emerging coffee brands, and even the tactics of reducing the price of boutique coffee and competing for market share can continue to be used.

However, it is true that these emerging boutique coffee brands are not as mature and stable as the business model of whole Foods, and consumer awareness of these emerging brands is very limited. After the acquisition of whole Foods, Amazon does not have to interfere too much, whole Foods can develop independently.

But not necessarily for emerging boutique coffee brands, if Amazon relies on the new brand front just Starbucks is a little risky. After all, Starbucks has tens of thousands of stores around the world, opens hundreds of new stores every year, and maintains a high operating profit margin of 18.4%. Even if same-store sales are criticized by Wall Street, there is still plenty of room for growth in emerging markets and growth in the United States.

However, for Amazon, if it wants to buy boutique coffee, this is really not a problem. After all, Amazon shares are close to $1000, generating $9.7 billion in free cash flow in the 12 months to June 30, 2017, like a money-making machine.

Amazon's stock rose instead of falling when it bought whole Foods for $13.7 billion. And unexpectedly chose to issue $16 billion of bonds to complete the acquisition plan, without drawing on the company's cash flow. This means that Amazon still has a lot of cash to make some small acquisitions.

Of course, the above is purely an analysis, and it seems that it has nothing to do with me what Amazon will buy in the end.

In addition, combing through Amazon's cross-border areas, Bezos is still a trendy person, engaged in fashion, entered the entertainment industry, and bought a high-end supermarket. If you take the boutique coffee, Amazon is the least technology-like company in Silicon Valley.

Original article, by Evelyn du.