One Year Post Lockdown: Insights from Drizly’s Past Year Data
Lessons from the Covid-19 pandemic’s early impacts on U.S. beverage alcohol sales and implications for the long term
On March 11, 2020, the World Health Organization declared the COVID-19 outbreak a global pandemic, and cities and states across the U.S. began to enact shutdown mandates. By the end of the month, much of the country was living under lockdown. As Americans hunkered down at home and off-premise venues shuttered, consumers embraced e-commerce as a safer way to shop and on-premise alcoholic beverage sales, particularly online sales, surged.
During the initial pandemic-affected months of March and April 2020, as awareness of alcohol e-commerce and delivery increased, total online sales of wine, beer, and spirits spiked 334 percent year-over-year, according to NielsenIQ data. Drizly began seeing unprecedented growth beginning on March 12, with year-over-year sales spiking 500 percent by mid-March and peaking on April 17 at 1,000 percent. In 2020 overall, sales increased 350 percent year-over-year.
One year after the pandemic shut down the U.S. and impacted consumer behavior in ways never seen before, look back at Drizly’s past year data for takeaways that persist today.
Impact of Lockdowns
Looking back, the timing and volume of Drizly’s March sales increases coincided with regional lockdowns. Sales in cities like San Francisco, New York City, and Boston spiked as stay-at-home orders were enacted.
As the pandemic worsened, cities modified their regulations and classifications of essential businesses throughout March and April. This also had a big impact on Drizly sales. “For example, in Denver, liquor stores were initially left off the list of essential businesses for a new order in mid-April,” says Cathy Lewenberg, Drizly’s chief operating officer, “causing a massive spike in order volume before it was ultimately reserved 24 hours later.”
Pandemic restrictions and safety concerns immediately impacted consumers’ beverage alcohol shopping behaviors. Rather than picking up a few bottles here and there, as they did in pre-pandemic days, people stocked up.
“The average order value on Drizly grew 45 percent in March and April 2020, compared to January and February of the same year,” says Lewenberg. One year later, though the average order value on Drizly has dropped since the initial stock up phase of the pandemic, it remains 25% above the pre-pandemic average.
3×3 Insights, which collects data from more than 1,000 liquor retailers across the country, noticed a similar phenomenon. “There was a big surge in March, April, and even into May, where basket sizes increased dramatically,” notes founder and CEO Mike Provance. “For that period, we saw sales that exceeded the prior year by almost 50 percent.”
With more consumers working from home, shoppers also shifted the timing of their alcohol purchases. Drizly’s order share on weekends (Friday through Sunday) declined, while Monday through Wednesday order share increased. Though Friday and Saturday continued to hold the highest order share, from March 12 to April 30, orders increased from 11 percent to 12 percent on Mondays, 11 percent to 13 percent on Tuesdays, and 12 percent to 14 percent on Wednesdays. However, in 2021 to date this early pandemic trend has reverted to pre-pandemic order share on Monday, Tuesday and Wednesdays.
As consumers looked for ways to avoid leaving their homes and retailers noticed the increasing demand for e-commerce, more beverage alcohol retail shops looked to adopt online sales and delivery. In early March 2020, Drizly had approximately 1,800 active retail stores on its platform. Since then, that number has more than doubled to over 4,000 retail partners.
“Though competition may have increased in some areas, many of the new retailers that joined Drizly over the past year were in markets that did not previously have coverage,” says Lewenberg. “These retailer partners were able to extend Drizly’s reach outside our predominantly urban footprint into surrounding metro areas and suburbs.”
To help local businesses adapt to local regulations and altered consumer shopping behaviors, many cities and states also revised their alcohol delivery legislation. Georgia and Oklahoma were among those to legalize alcohol delivery in 2020, while states such as Oregon relaxed existing legislation.
“As more stores adopt online selling and Drizly’s coverage for consumers continues to improve, we expect significant growth in these markets in the coming year,” says Lewenberg. “In 2021, the impact of the pandemic continues to push additional regions—including Las Vegas and Alabama—to legalize delivery. We are excited to launch in these markets soon.”
While all categories experienced surges during the pandemic’s initial panic-buying months, spirits saw the greatest growth. “If you think about the shift from buying in a restaurant or bar to buying at home,” says Provance, “the big push was on ready-made cocktails and cocktails at home.”
Drizly’s March and April 2020 sales reflected the home mixology trend, with liquor overtaking wine as the top-selling category. The largest share increases occurred in the tequila, ready-to-drink, and gin categories, as well as liqueurs, cordials, and schnapps. One year later, liquor remains the top-selling category on Drizly, accounting for 43% of order share.
“In the early months, with consumers home-bound, we saw a dip in share for the sparkling wine and Champagne category,” says Lewenberg. However, share quickly rebounded, largely a result of the growth in gifting on Drizly as consumers sought ways to celebrate occasions and milestones from afar. Today, the sparkling wine and Champange category has grown 4 percentage points share compared to pre-pandemic share in early 2020.
Among beer sales, the IPA category—particularly standard IPA, imperial/ double IPA, and New England/ hazy IPA—increased its sales share amidst the pandemic. This trend has held strong over the past year, with combined IPA category share of beer sales up 15% compared to pre-pandemic share.
While the easing of Covid-19 restrictions will eventually lead consumers to resume making alcohol purchases in on-premise settings, Lewenberg believes they will also continue purchasing online. “Customers have shifted the way they buy alcohol, as they did across many other categories like grocery and pharmacy,” she says. “Ordering online and having items delivered to your door has become the norm.”
While beverage alcohol previously lagged behind other product categories in consumer awareness and regulations for e-commerce, pandemic-related purchasing priorities accelerated this change for good. “Covid fast-tracked each of these factors, and the impacts will persist long beyond the pandemic,” says Lewenberg.
For a deeper dive into the lasting impact of the pandemic on the alcohol industry, join BevAlc Insights’ One Year Post Lockdown: What We’ve Learned and What’s Next for Retailers webinar on March 24. Hear actionable ideas to optimize and grow your retail business in a post-COVID world from a panel of industry experts, featuring Lewenberg, along with leaders from Constellation Brands and Georgio’s Liquors. Register for free today.