Dec 4, 2020
Here’s a statistic you should commit to memory: As the coronavirus began spreading across the U.S. earlier this year, total e-commerce penetration experienced 10 years of growth in just three months’ time (March-May)
A hockey stick-like graphic (below) depicting the surging growth was presented by Drizly’s head of consumer insights, Liz Paquette, during the debut episode of Brewbound’s “Data Club” last month.
Missing from that particular slide was a picture of just how much alcohol is now being purchased online in the U.S.
According to a new report from market research firm IWSR, which provides insights on the global alcoholic beverage market, online sales of alcohol in the U.S. are expected to grow by more than 80% this year.
U.S. alcohol e-commerce sales will approach $5.6 billion in 2020, according to IWSR, up from roughly $3 billion last year.
Meanwhile, across 10 core markets — Australia, Brazil, China, France, Germany, Italy, Japan, Spain, UK, and the U.S – alcohol e-commerce sales are expected to increase by 42%, to $24 billion, in 2020.
IWSR attributes the sharp increase in alcohol e-commerce sales to the COVID-19 pandemic, which has caused many consumers to alter their buying habits and convert to online shopping in an effort to avoid exposure to the virus.
These changing behaviours can be seen in Drizly’s own data. The online alcohol marketplace has grown its gross merchandise value by 3.5x during the pandemic, which Paquette said is “lightyears beyond” where the company expected to be at this stage of development.
Meanwhile, in an effort to reach more consumers, brick-and-mortar retailers are beginning to realize the importance of developing an e-commerce strategy and are subsequently turning to Drizly for help.
According to Paquette, the company’s retail partner network has tripled in size, while new users on the platform have more than doubled in 2020.
“A lot of new people are starting to think about alcohol delivery, test it out and trial it,” she told Brewbound.
Overall e-commerce sales have exploded during the coronavirus pandemic DRIZLY So, what types of products are consumers adding to their online carts?
On the Drizly platform, spirits make up 40.8% of sales, while wine accounts for 38.2% and beer make up 18.7%. And within the broader beer and flavoured malt beverage set, hard seltzers are the number one seller on Drizly, making up nearly 21% of segment sales.
Those figures are somewhat different from IWSR’s read on the overall alcohol e-commerce market in the U.S., where it pegs online sales of wine at 54%, followed by spirits at 28% and beer, cider and so-called ready-to-drink (RTD) products at 17%.
However, IWSR predicts that RTD offerings — which it defines as hard seltzers, canned cocktails, and other spiked adult beverages — will represent 10% of total alcohol e-commerce sales across its 10 core markets by 2024, up from just 2% last year.
Much of that growth will be driven by U.S. consumers, IWSR notes.
RTD products are poised to represent 20% of U.S. alcohol e-commerce value by 2024, up from 5% in 2019, the firm said.
“Spurred by the trend for the category in the market as a whole, the expansion of the U.S. omnichannel and the prevalence of younger legal drinking age consumers in e-commerce, online sales of RTDs are expected to soar in the coming years,” Wolfe said.
What’s more, by this time next year, IWSR predicts the U.S. will eclipse China as the largest alcohol e-commerce market in the world.
In 2019, alcohol sold online represented just 1% of total off-premise volume. By 2024, IWSR predicts that 7% of alcohol sales will occur online as consumers continue shopping the virtual shelves even after the pandemic has subsided. Source: Forbes. Chris Furnari. 01.12.2020
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