US online alcohol sales hit $1.7 billion

Online alcohol sales in the US hit US$1.7 billion dollars last year, according to a new report from Rabobank, which urges brands to “aggressively pursue strategies” for e-commerce growth.

Alcoholic drinks brands should “aggressively pursue strategies” for e-commerce growth

Analysts at Rabobank state that growth in online channels is “dwarfing that in brick-and-mortar retail”.

Over the course of five years, off-premise alcohol sales had a CAGR of +1.44%, while sales from winery websites quadrupled, and on-demand delivery apps processed more than US$100m in annual sales in 2017 – up from zero in 2013.

Speaking to The Spirits Business, the CEO of leading US on-demand alcohol delivery service Drizly estimated that alcohol sold online will be worth US$7-US$15 billion annually in the country “over the next few years”.

However, Rabobank states in its report: “While the growing power of online sales cannot be ignored, brand owners are facing a new problem. There are at least a dozen online channels, and each channel affects brands differently.

“If brand owners want to carve a space in the booming online segment, they must sort through the jumble of companies and identify the channels in which they can be most successful.”

Rabobank’s research shows that sales from on-demand alcohol delivery services reached US$103m in 2017; online grocery reached US$87m; direct-to-consumer online sales reached US$410m; and online speciality retailers reached US$975m.

The report further states: “Brands must do more to develop and aggressively pursue strategies for growth online. Each day a brand is not building contacts and specialised knowledge to operate online, it is ceding territory and sales to its more enlightened competitors.”

For more information, see Rabobank’s full report.