Retailers are continuing to see home delivery of beverage alcohol products grow in the face of the Covid-19 pandemic. Drizly, an online beverage alcohol delivery service, has seen business more than triple since 2019. “We’ve had an increase in sales of 350% year to date—it definitely has been a sharp increase,” says Jaci Flug, general counsel at Drizly.
Average Order Growing
Recently, more and more states—Georgia, Pennsylvania, Arkansas, and Oklahoma among them—have expanded their beverage alcohol delivery laws to allow for home delivery services. In all, 25 states now permit the delivery of wine, spirits, and beer, and another eight states permit wine and beer deliveries. In response to the rising demand for home delivery during the Covid-19 crisis, Drizly increased its workforce by 62%, from 136 employees on March 9 to about 220 employees to date, including jobs in marketing, sales and account management, product engineering, and information technology.
Not only is the footprint for home delivery expanding, but the average dollar sales order on Drizly has increased 29% since last year, from $52 up to $67. “The average order went up in price on its own and then there was a time, especially in April, when retailers were increasing their minimum order because the demand was so high that they couldn’t keep up and needed to be more cost effective,” says Flug.
With New York, Massachusetts, California, Texas, and Colorado as its respective leading markets, Drizly does business in 33 states and more than 100 cities in North America. The beverage alcohol delivery service connects consumers to retailers who handle how the products are delivered depending on local laws. “How the product gets to the delivered is up to the retailer,” Flug says. “Some states allow retailers to use third parties. Other states require deliveries be done by the retailer.”
While the wine category has been popular in the home delivery channel for quite some time via direct-to-consumer (DTC) shipping, the spirits category is now having its moment. Wine.com, the country’s No.-1 online wine retailer, began selling spirits last year in New York, Florida, and New Jersey, and California was tacked on this February. “In the four states where we offer spirits, it has represented 12% to 15% of our monthly revenue,” says Mike Osborn, founder and executive vice president of Wine.com. “Whiskey represents 44% of sales, followed by Tequila, gin, and rum.”
This year, Wine.com customers have purchased more than 2,500 different spirits labels to date. “Like our wine business, our customers prefer premium spirits selections,” Osborn says. “Our average selling price for spirits in 2020 is $45.16. This bodes well for the future of artisanal spirits online.”
Stands To Reason
It’s interesting that the home delivery of beverage alcohol—a business model that once faced significant opposition—now seems logical. “Covid-19 has exposed a number of antiquated laws or flaws in the system, not only in the beverage alcohol world but in any supply chain,” says David Wojnar, vice president of state government relations for the Distilled Spirits Council. “As consumers become more reliant upon their smart phones and the internet to make orders for delivery because they physically can’t go shopping, it stands to reason that’s going to be taking place.”
The home delivery of beverage alcohol could expand to states that don’t have it yet, including Ohio, South Carolina, Alabama, and New Mexico. “The issue of home delivery will be a big one for the state legislatures, either in special sessions in the fall or when the legislative sessions kick off in 2121,” Wojnar says. “Covid-19 highlighted the utility and need for it.”
For now, beverage alcohol home delivery is likely to accelerate in markets where it’s already available. “Home delivery is only going to increase now with more awareness that alcohol can be delivered due to Covid-19,” Flug says. “It’s something retailers will want to engage in more and consumers will want to avail themselves of.”