What Can We Learn from On-Demand Alcohol Purchasing During the Covid-19 Pandemic?
Lessons from online sales and consumer buying trends during quarantine
Most U.S. consumers were quarantined at home for more than two months due to Covid-19, so it’s no surprise that online alcohol delivery saw a major spike during the pandemic period. For Drizly, the online alcohol marketplace leader, sales jumped 700 percent YOY, and the company’s average order size shot up by 50 percent. Consumers not only changed the way they shopped during the pandemic, they also altered their buying patterns and moved toward new product categories.
“Historically, wine has made up the majority of sales share on Drizly,” says Liz Paquette, Drizly’s head of consumer insights, “but over the last three months, liquor took the leading spot.”
During this time period — mid March through May — spirits’ category share grew on Drizly, accounting for 39.6 percent of sales, compared to 37.4 percent during the same time period in 2019. Wine accounted for 38.4 percent, down from 41.7 percent during the same period last year, and beer brought in 19.5 percent, up from 18.7 percent in 2019.
The rise in spirits sales — as well as spikes for canned cocktails, mixers, and liqueurs — reflects the pandemic-inspired home bartending trend. Sales of mixers, syrups, and bitters skyrocketed to 1,707 percent over expectations. Likewise, sales of liqueurs, cordials, and schnapps increased to 951 percent above Drizly’s baseline. Convenience was also key, as ready-to-drink beverage sales jumped to 1,211 percent above Drizly’s baseline expectations during the week of May 4.
Red wine maintained its position as Drizly’s top seller, with Cabernet Sauvignon as the category’s leading varietal, followed by white wine, vodka, bourbon, hard seltzer, alternative whiskeys, and tequila.
Comfort Brands in the Lead
When shopping online for alcoholic beverages during the last three months, consumers gravitated toward established players — also known as “comfort brands.”
Drizly’s top-selling wine brands, in order of most-purchased, included: Bota Box, Josh Cellars, Veuve Clicquot, La Marca, and Barefoot.
“Although Veuve Clicquot and La Marca maintained top spots, we did see a pretty significant decrease in share for sparkling wine and Champagne during this time period,” Paquette says. “These purchases are typically skewed toward corporate or event orders, so we can likely attribute some of the decline to that shift in purchasing behavior.”
Drizly’s top-selling spirits brands included Tito’s, Bulleit, Casamigos, Jack Daniel’s, and Jameson. “Casamigos has been a standout during this time period,” Paquette says. “We’re continuing to see an increase in Casamigos’ share and lift alongside the broader tequila category.”
In the beer category, Drizly saw an increase in market share for independent brands as Ale pulled share away from Lager, which historically comprises the majority of beer sales and is largely driven by major holding companies. However, Drizy’s top-selling beer brands remained more or less the same. These included White Claw (hard seltzer), Bud Light, Corona, Coors, and Miller.
The continued success of established brands appears to be a product of comfort-seeking, rather than a cost-saving strategy as the country enters into a recession.
“With wine in particular, we did see some signs of price sensitivity in the early weeks, with an initial increase in sales share for bottles under $10,” Paquette says. “However, we’ve actually noticed the opposite since then with both wine and spirits. To a degree, this is influenced by the audience that is naturally on Drizly. Users have historically been located in urban markets, and have higher incomes.”
Want to grow your retail business?
Get sales-driving data and insights in your inbox every week.
Market Ebbs and Flows
Several markets saw strong growth during the pandemic period, including Minneapolis, Indianapolis, Seattle, Providence, and Hartford-New Haven.
“Throughout the last three months, there were ebbs and flows in many markets,” Paquette says. “We observed accelerations when stay-at-home orders were initially announced, followed by a dip in order volume. Most often, that was followed by another, more-sustained increase.”
Denver, for example, saw a massive acceleration in GMV growth around the time that the city’s mayor deemed liquor stores as non-essential businesses. (That order was quickly reversed.)
In terms of developing new markets, “our focus is on onboarding retailers in the areas where we know we have the most demand,” says Paquette. “We’re able to share that kind of information with potential partners before they come on—what we’re seeing in their area, and the scope of the potential missed opportunity for their business.”
Mix of In-Store and E-Commerce
Looking ahead to post-pandemic times, Paquette predicts that consumers will stick with online alcohol delivery now that they’ve experienced its ease and convenience.
“We expect that the mix between in-store and e-commerce will look quite different on the other end of this,” she says. “We always believed that alcohol delivery would become a permanent fixture in beverage alcohol, just as it has in food. We’re simply on an accelerated timeline now.”
Over the next three to six months, she adds, “More brands and retailers will lean into e-commerce as a critical diversification strategy for the long term.”