DoorDash to offer alcohol delivery in effort to take on rivals

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DoorDash updates

US delivery app market leader DoorDash announced on Monday it would launch alcohol delivery in 20 US states, as the speedy shipment of beer, wine and spirits to consumers’ doors becomes the latest on-demand battleground.

The announcement, which follows similar moves by rivals including Uber and Gopuff, will add to growing concerns from anti-addiction groups over the trend for swift alcohol delivery.

Drinks market analysts IWSR said that “Covid-19 has acted as a trigger” for elevated online alcohol sales, which were up 80 per cent in 2020 compared with 2019. By 2024, the group predicted, online alcohol sales would make up about 7 per cent of total alcohol retail, compared with about 3.4 per cent at the end of last year.

DoorDash said it would deliver from about 10,000 retailers, made up mostly of its existing network of restaurants and convenience stores. This means that a customer could, for instance, order food from McDonald’s and have the driver also pick them up a cocktail from another restaurant or shop.

“Over the past year, many cities where we operate evolved their legislation in order to permit the delivery of alcohol to residents’ homes,” said Caitlin Macnamara, director of alcohol sales and strategy at DoorDash, in a statement. “Over that time, we worked tirelessly to build a trusted alcohol ordering and delivery experience for merchants, customers and [couriers].”

The company said that among its alcohol partnerships was Total Wine & More, a chain of more than 200 stores across the US. DoorDash said it would also offer alcohol to its customers in Canada and Australia, opening up a potential pool of 100m consumers.

The move is the latest in a string of efforts in the rapid delivery space to navigate a complex system of differing liquor laws in various markets across the country.

In February this year Uber acquired alcohol ecommerce platform Drizly in a deal worth $1.1bn, a move that brought on board alcohol retailers operating in 1,200 US cities, each with their own individual liquor licences.

Months earlier, delivery app Gopuff acquired alcohol retail chain BevMo! in a deal worth $350m, providing it with more than 185 stores that are now used as delivery hubs for Gopuff’s own gig worker driver network.

Unlike Uber and DoorDash, this approach means Gopuff owns its alcohol inventory, a move it claims helps it achieve a more reliable service and bigger margins.

Alcohol was seen as an effective way to drive up average basket sizes, Gopuff added, with more than 50 per cent of customers adding other convenience items, such as toiletries or snacks, at the same time as purchasing alcohol.

But anti-addiction groups find such trends troubling, with one sharing concerns that the “tremendous rise” in sales should be met with tighter controls.

“Delivery apps that make it easier to buy large quantities of alcohol are likely to increase problematic drinking and related health issues, including addiction,” said Emily Feinstein, chief operating officer at the Partnership to End Addiction.

“States should consider regulating the sale of alcohol via these channels to reduce the potential harms.”

A Bank of America research note published last week said analysts expected the gross merchandise volume for online delivery of groceries, convenience items and alcohol combined to reach $150bn by 2025.

While the dominant players in those categories today are Walmart, Amazon and Instacart, analysts forecast that the much faster delivery times offered by the emerging rapid apps — some of which promise delivery in as little as 15 minutes — will see them capture significant market share over time.

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