Boom in US alcohol ecommerce sees value surpass USD$6 billion

US alcohol sales online are expected to grow further after hitting more than USD$6 billion in 2021, and more than doubling sales in the last two years, a new report has confirmed. 

According to the 2022 Alcohol E-commerce Playbook by agrifood and drink experts, Rabobank, the online sales of alcohol in the US  are now woth $6.1 billion – a rise of 131% since 2019 – and now account for 4% of all off-trade alcohol sales.

Unsurprisingly, 2020 saw the greatest growth due to the pandemic, with online alcohol purchases soaring by 238% year on year, but the growth was maintained during 2021, albeit at a slower rate. The 9% year on year growth reflected tough comparables, but demonstrated that more bricks and mortar retailers were increasingly selling alcohol online, fuelling growth. For example Rabobank points to Walmart, which increased the number of locations delivering alcohol in the US from 200 in 2019, to around 1,500 by the end of 2021.

It noted an increasing propensity for grocery retailers to view alcohol as “the most important lever available” to drive the overall growth in their e-commerce business. This resulted in online sales rates more than doubling the wider overall online grocery business, and showing no signs of abating. Alcohol sales in the online grocery channel are expected to grow 15% in 2022, Rabobank estimated.

Licensed specialist independents also saw strong growth, rising 151% during 2020, driven by the rise of convenient options such as local delivery and curb-side pickup. Rabobank noted that although this channel was historically dominated by “high-end consumers and collectors searching for hard-to-find wines”, it was now more able to widen its net and serve the everyday needs of the general public.

There was also growth in online DTC sales, rising 73% in 2020, with online sales making up nearly a quarter  (23%) of the $7.2bn US direct-to-consumer wine business.

“E-commerce will be the number-one driver of industry growth over the next decade and a critical component of brand building, awareness, and trial, both online and in-store,” the report’s author, Bourcard Nesin, a RaboResearch F&A beverages analyst said.

In addition to the online grocery channel, online marketplaces such as Drizly and Instacart) were key to the growth in alcohol ecommerce, the report noted, having grown 274% during 2020. Those two companies already had a 86% share of the channel, with growth in the channel led to a “massive influx of marketing dollars from alcohol brands”, Rabobank said. Further growth of 15% is expected during 2022.

The overall alcohol online channel was set to grow by around 3.4% in 2022, Rabobank said, due to “the stickiness of the channel” and greater investment by brands and retailers and tech firms. It pointed out for example that drinks companies across the US had increase the size of the e-commerce teams by around 117% since 2019.

However Nesin warned that companies that fail to proactively invest in their e-commerce teams “will struggle to remain relevant and retain market share.”

Rabobank’s 2022 Alcohol E-commerce Playbook focuses on the growth of e-commerce alcohol sales since the start of the Covid-19 pandemic, based on data and interviews with drinks brands and retailers.