Have you been planning to take your alcohol business online? Or, perhaps build a new mobile app that could be the next Uber for Alcohol? Well, the market is ripe and if there was a right time to enter, then this is….
A fairly new entrant in the online space, alcohol was traditionally sold only in liquor stores, or one would visit local pubs or nearby places to enjoy a few drinks. However, with the advent of various on-demand alcohol delivery apps, it is now easier for consumers to order their favourite bottle of booze online and have it delivered straight to their doorsteps, anytime. Certainly, no hassle of visiting the local stores, and no worry about your stock getting finished! Offering great convenience to users, these booze delivery apps have been gradually gaining popularity across many countries, creating a significant buzz in the on-demand market.
In 2018, the sale of alcohol through on-demand liquor delivery apps witnessed a significant growth of 35%. Moreover, the revenue generated by online alcohol delivery in the same year reached $776 million. In the US alone, online liquor sales amounted to $ 2.6 billion in 2019, reporting year-on-year growth of 22%. This sale has been further categorized into online grocery and alcohol marketplaces, which grew respectively by 115% and 60%, in 2019.
Going forward, it is quite likely that the size of the on-demand booze delivery market will expand over the coming years. A new report by IWSR indicates that online sales of alcohol (including apps) are expected to grow nearly five times to reach $13.4 billion by 2024.
Some of the underlying trends which are triggering these sales on a global level are listed below –
a) As per a report, 47% of millennials prefer to drink at home, while 28% feel that it is too much of an effort to head out to a local store to buy drinks.
b) According to IWSR, nearly three-quarters of US consumers are comfortable spending a few extra bucks for buying drinks online versus visiting a nearby store for the same.
These trends point towards a changing consumer behavior, which is causing an evident boom in the on-demand liquor delivery space.
Top On-Demand Alcohol Delivery Apps
Leading on-demand booze delivery apps like Drizly, Saucey and MiniBar have been successfully catering to demands of a wide variety of consumers by giving them access to a wide range of drinks to choose from, while also offering door-to-door delivery services. Due to several benefits that these smart apps offer, there has been an overwhelming response to their services.
a) Drizly, the fastest growing online spirits retailer founded in 2012, allows users to conveniently shop for beer, wine, and other liquor through its mobile app, and ensure quick delivery through local stores in less than an hour. The startup has a strong network of 1,400 stores that are present in more than 100 markets across North America. Delivery is done by the local alcohol stores only to whom the orders are directed, and Drizly simply acts as a tech intermediary, connecting them with the consumers.
Delving deep into Drizly’s business model, 70% of its total alcohol sales are achieved through mobile phone apps, whereas the remaining comes from desktop computers and tablets. Reporting a 700% year-on-year sales increase, Drizly has cemented its place in the top tier of the online spirits retailers.
Funding: The online alcohol delivery giant has raised $69.6 million to date from a mix of leading investors, spread over five funding rounds. The last round of funding was conducted in December 2018, where it secured a whopping $34.5 million from a group of 17 investors, that included Polaris Partners and Baird Capital, among others.
b) Saucey, another popular on-demand booze delivery app founded in 2013, has been catching up steadily with Drizly for a long time. The Los Angeles based start-up boasts of its robust delivery network, which it uses to fulfill all alcohol deliveries within an hour. With its operations spread across various US markets, including Chicago, San Diego, San Francisco, Los Angeles, Saucey has been recording strong growth for the last 7 years.
Funding: To date, Saucey has raised a total amount of $10.2 million in funding, spread over 3 rounds. Their latest funds raised were an amount of $5.4 million in July 2017, which was led by Bullpen Capital, with participation from investors like Blumberg Capital, Structure Capital and HashtagOne.
c) MiniBar – Offering a wide range of beer, wine, liquor as well as non-alcoholic beverages on its mobile app, Minibar, amongst others, has been a leader in the on-demand alcohol delivery space, promising quick delivery. The marketplace which was launched in 2013 delivers to 40 cities nationwide, including New York, Los Angeles, Chicago, San Francisco, Miami, and many more. Its additional feature of renting a bartender is an exciting offering for all the party organizers.
Funding: The start-up has secured a total funding amount of $6.8 million to date, which was done over two rounds. Their latest funding of $5 million was received in August 2017, which was led by Corigin Ventures, along with participation from investors like Female Founders Fund, Winklevoss Capital, LaunchCapital and RiverPark Ventures.
Being at a nascent stage, the market for on-demand alcohol delivery holds huge potential for all the budding entrepreneurs and start-ups. There are numerous growth opportunities for these apps, which are only going to grow with time. Some of them have been listed below –
a) As consumer awareness of these on-demand liquor delivery apps increases, their adoption is bound to grow in the coming times, thus expanding their overall market. This presents a great opportunity for various new players to join the wagon with their unique offerings and business model.
b) Considering the rapidly advancing lifestyles of today’s population, it is quite certain that alcohol consumption all around the world is going to pick up over the years. According to a report, the global alcoholic beverage market is estimated to reach $1600 billion by 2024. These numbers highlight the huge scope and potential for new businesses to thrive and grow in this space.
c) The industry is currently not driven by tough competition, as currently, there are only a few on-demand liquor delivery apps that have been dominating the space. With growth likely on the cards, the industry awaits the entry of new players, who could contribute to this rapid growth and help in ensuring a perfect demand-supply equilibrium.
d) Liquor delivery has now been legalized in many countries. With many of the guidelines and regulations now being relaxed, the governing policies that could have been a hindrance to the entry of new players, have now been watered down or completely removed. This further broadens the scope of growth for newer players.
It is pretty certain that the future of on-demand alcohol delivery is bright and promising, where the probability of success of new players is pretty high.
So, if you are also thinking of entering into this space and planning to launch an on-demand alcohol delivery app that could become the next Uber for Alcohol, get in touch with AppsRhino. We would assist you in designing the most appropriate, distinct and user-friendly app for your business.
Let us help you kickstart your journey into a market with limitless growth potential!