Online alcohol sales benefit of a new regulatory approach
Online alcohol sales benefit of a new...

During the Covid-19 pandemic, alcohol sales and home delivery services for wine, beer and spirits are on the rise. This is due to a novel regulatory approach that changed alcohol distribution rules. As of today, 42 states, Puerto Rico, and the District of Columbia have adopted some (more or less binding) stay-at-home orders due to the Covid-19 outbreak. While many businesses are either shutting down or asking employees to work remotely, the US alcohol industry is booming as more people order from home.

During the week ending March 21, 2020 – the same week that California issued the nation’s first state-wide lockdown order – total alcohol sales rose by 55% across the country. Sales of hard alcohol rose 75%; wine 66% and beer 42%. By the end of March, online alcohol sales had risen 243%. The changing economic circumstances have led some states to relax their otherwise tight regulations on alcohol sales, distribution, and delivery to satisfy 250 million Americans staying home.

The Illinois Liquor Authority, for example, typically requires two separate licenses for establishments that make both off-premise and on-premise alcohol sales. For the duration of the pandemic, however, the liquor authority has granted municipalities the ability to permit restaurants to offer alcohol on their takeout and delivery menus. New York has taken similar measures to allow restaurants to deliver alcohol with food orders.

Alcohol delivery services have benefitted substantially from the decreased foot traffic through traditional alcohol retailers. Delivery app Drizly’s sales were up approximately 300% in March compared to earlier this year, and 41% of orders came from new customers.

Another delivery platform, Minibar Delivery, saw a 131% increase in sales in mid-March.

Both platforms say the average order amount increased by more than 20%.

These temporary policy changes are currently sustaining the food and beverage industry, and at least for the first month of lockdown, policymakers’ efforts have been successful. The industry is already discussing whether to extend these changes indefinitely.