The global alcoholic beverage market, ripe with potential, is yet to fully leverage the eCommerce platform due to regulatory complexities. Zac Brandenberg, CEO of DRINKS, an alcohol eCommerce platform, sheds light on how 90-year-old regulations continue to stymie growth in the industry.
Historic Laws Impede Alcohol eCommerce
The three-tier system established post-prohibition in 1933 in the United States requires that producers sell their products to wholesale distributors. These distributors then sell to retailers who finally sell to consumers. This historic system continues to be a roadblock for digital advancement.
Brandenberg estimates the U.S. alcoholic beverage market at $285 billion. Aligning this with online grocery statistics reveals a massive opportunity. Online transactions account for 12% of grocery sales and applying this percentage equates to a $34.2 billion opportunity for online alcohol sales.
However, old laws surrounding alcoholic beverage sales pose significant challenges. Brandenberg jokingly comments that it’s easier to buy a vehicle online than alcohol in certain states.
Consumer Demand vs Regulatory Hurdles
Despite high consumer demand since the pandemic’s onset, maturity in this space requires major distributors and retailers reaching a “tipping point” and genuinely embracing eCommerce platforms.
Reports indicate that close to half of all consumers increased their online alcohol purchases since the pandemic began. However, industry changes will come slowly and cautious optimism is warranted.
A Giant Leap Ahead
To ensure progress in this sector, there needs to be concerted effort from key stakeholders towards digitizing operations while navigating through regulatory frameworks intelligently. The untapped potential of this massive market is ready for those willing and able to make bold strides into the future of alcohol eCommerce.