With the Coronavirus pandemic, companies and entrepreneurs suffered from a decrease in profit and market value loss. These conditions obligated such businesses to adapt and develop a new plan of action. For instance, home delivery alternatives supported these companies in these challenging times, and still, it might become a future market tendency.
More specifically, the alcohol selling industry was one of those that struggled during the COVID-19 outbreak. According to a Statista report, the international alcoholic beverage market had a decline in revenue. However, it also projects that this industry will reach 1,475,176 million euros in 2021 worldwide, with an annual growth rate of 7.2%.
Considering these projections, why investors and business owners are now optimistic about an overturn in the market? One reason is possibly the beginning of vaccinations against the virus and softening the restriction measures. In addition to that, the implementation of alcohol delivery services is another factor that might positively influence the market.
A recent example is Uber’s purchase of Drizly, an alcohol delivery platform specializing in commercializing beverages online. As Uber might have envisioned a business opportunity, the numbers sustain this approach. According to IWSR, a drinks market analysis portal, the alcohol e-commerce market was projected to grow 42% in 10 core markets last year, including countries like China, Germany, Japan, and the US. The same research center also pictures the United States as the biggest alcohol e-commerce market by the end of 2021.
According to Joeri Schasfoort, an economics professor at the University of Groningen, investing in the alcohol delivery business is a “good investment,” as he anticipates big players in the market putting money into it.
He also alerts about the lack of competitiveness in that sector, which means that it will not necessarily substitute the stores but amplify the investment field. In other words, online alcohol shopping could be considered more of a complementary good.
The second manager of Slijterij’s liquor store at Groningen, Mark-Jan Gorter, talks about the store’s experience during Corona times and considers alcohol delivery convenient for the business. “We are even doing better than before (the pandemic),” he claims.
Gorter emphasizes the lower costs of running a business online, avoiding expenses in the physical store. Despite that fact, he thinks that liquor stores will not be overthrown by delivery, as “some people go to the store as part of their customers’ journey,” he concludes.