Online Beer Market (USA) project

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Online Beer Market (USA) Competitive Landscape

The overall revenue from online alcohol sales and delivery rose 33% in 2017, averaging an increase of 3% per month. Several online beer retailers contributed to this success. Several websites give opinions on the top retailers. The top 10 online beer retailers for this list were identified and ranked by overall revenue and unique attributes.

1. Total Wine & More

  • Total Wine & More is the top retailer in this list. Total Wine & More began setting records in 2017 with a revenue of $2.7 billion. The success has continued, and this retailer now averages more than $3 billion in annual revenue.
  • Total Wine & More is located in Bethesda, Maryland. The online retail address is
  • Total Wine & More is a 4 time winner of the national retailer of the year award. A unique offering from this company is same-day delivery, which most other retailers cannot offer.
  • This retailer offers a variety of over 8,000 wines, 2,500 beers, and 3,000 spirits, contributing to it's top rating in this list.

2. Guinness

  • Guinness is a large brick-and-mortar retailer accentuated by an online retail store. It is owned by Diageo, which has a reported revenue of $16.7 billion. Specific information on Guinness' revenue was not publically available. Therefore, it was ranked as number 2 rather than one, as the reported revenue is not solely attributed to Guinness.
  • Guinness has locations in multiple countries, including the United States. Their online address is
  • Guinness offers unique items in addition to alcoholic beverages, including personalized glassware and clothing, bar supplies, and furniture.

3. Wine Warehouse

  • The Wine Warehouse is ranked third on this list of top online beer retailers, with a reported revenue of $64.6 million. Wine Warehouse is located in Commerce, CA, with an online address of
  • The Wine Warehouse is family owned and operated. This retailer offers wholesale distribution of wine, beer, and spirits. The company has been in business over 40 years, showing stability even prior to online sales.
  • The Wine Warehouse offers a variety of products, including world-class and import beer, fine wines, artisanal spirits, and specialty beverages.

4. The Beer Connect

  • The Beer Connect ranks number four on our top 10 list, with a reported revenue of $21.2 million.
  • The Beer Connect is located in South Lake Tahoe, CA, with an online address of
  • This retailer has a unique approach to sales. The Beer Connect is a vendor for multiple breweries to sell using their own digital platforms. This online retailer limits its products to craft beers from multiple breweries. The company connects breweries directly to customers via a central online store.

5. Drizly

  • Drizly earns number five on this list with a reported revenue of $11.5 million and being recognized as the largest online market for alcohol in the United States.
  • Drizly has demonstrated tremendous growth in recent years, including a revenue growth of 62% in 2017.
  • Drizly is located in Boston, Massachusetts, with an online address of This company offers same-day delivery, with delivery in under 60 minutes for some areas. Very few online beer retailers are able to offer this rapid delivery.
  • Drizly is unique in products offered. No only does Drizly sell beer, wine, and spirits, but this company also sells nonalcoholic beverages, snack foods, party supplies, and more.

6. Applejack Wine & Spirits

  • Number six on the list is Applejack Wine & Spirits, with a reported revenue of $7 million.
  • Applejack Wine & Spirits is located in Wheatridge, Colorado, with an online address of
  • Applejack Wine & Spirits offers beer, wine, and spirit selections for all budgets. Additionally, their unique concierge service sets them apart from retailers with similar revenue. Applejack offers personal buyers to assist cellars, bars, and corporations with their alcohol supply needs.

7. Tavour

  • Tavour ranks number seven on the list, with a reported revenue of $7 million.
  • Tavour is located in Seattle, Washington, with an online address of
  • Tavour is a beer subscription service, specializing in rare and difficult to find beers. The retailer uses an app to connect customers to independent craft beer selections. Customers are able to build a "custom box" to enroll in a subscription containing the customer's unique choices. The subscription has no minimum order or subscription commitments.

8. Craft Shack

  • Number eight on the list is the Craft Shack, with a reported revenue of $6.4 million.
  • The Craft Shack is located in Wilmington, Delaware, with an online address of
  • The Craft Shack is a self-funded small business. The company has a large variety of products, including more than 1800 craft beers to choose from, including addition to spirits, hard seltzer, and mead.

9. Craft Beer Kings

  • Number nine on the list is Craft Beer Kings, with a reported revenue of $5.8 million.
  • Craft Beer Kings is located in El Monte, California, with an online address of
  • This company offers over 1,000 craft beer options, national and international. Setting Craft Beer Kings apart is unique brew flavors, such as S'mores, marshmallow, and chocolate. This company also offers subscription services.

10. Beer of the Month Club

  • Ranked number ten on this list is the Beer of the Month Club, also known as the Rare Beer Club, reporting a revenue of $5.6 million.
  • The Beer of the Month Club is located in Lake Forest, CA, with an online address of
  • This retailer has been in business since 1994, demonstrating stability. The company boasts offerings of award-winning craft beers and multiple subscription options. In addition to subscription beer service, this company offers subscription clubs for cheeses, chocolate, cigars, wines, flowers, and customer-designed packages.

Research Strategy

Research began by reviewing websites ranking online beer retailers with various criteria. This information was cross-referenced with reported revenue amounts, using a consistent database to compare revenues whenever available. Companies were ranked by revenue and further evaluated for unique attributes, found by reviewing company websites.
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Online Beer Market (USA) Company Analysis (1)

Total Wine & More, Guinness, Wine Warehouse, The Beer Connect, and Drizly are among online beer markets that charge their clients depending on the items purchased, shipping fees, and other charges. Below are the details of each company's charging scheme and partnerships.

Total Wine & More

  • Total Wine & More charges their clients based on the ordered items, selected shipping speed, and certain taxes or fees including deposit, CRV, recycle fee, or spirit tax.
  • The total amount paid by customers of Total Wine & More will vary depending on their ordered items and shipping provider. The company will also add taxes or fees required by state law.
  • Further, clients will have a lesser amount to pay through company discounts. Special offers and promotions are also applied depending on state and items purchased.
  • There are discounts for wines with sizes 750 ml and 1.5 L which prices end in "9". States such as Arizona, California, Delaware, Florida, Maryland, Minnesota, North Carolina, New Jersey, New Mexico, Nevada, South Carolina, Texas, Virginia, and Washington can avail of this discount.
  • Clients from Connecticut can also apply discounts to their purchased wines or spirits for those with a price that ends in "8".
  • Discount coupons for alcoholic beverages are not available in all states. These states are Georgia, Massachusetts, Missouri, and Texas.
  • In 2018, the company partnered with a software company Onfleet for its expansion on fleet delivery, as it is offered by Onfleet's platform.
  • According to Tom Kooser, CIO at Total Wine & More, "Onfleet provides Total Wine & More with powerful routing and analytics tools to enable our own Total Wine & More associates to provide a world-class delivery experience. Our partnership has allowed Total Wine to also expand our delivery program into several markets and sets a foundation for future growth".
  • Total Wine also partnered with a middleware company named Delivery Solutions as their final mile provider. Their partnership allows customers to outsource deliveries to third-party delivery service providers.


  • The customers will be charged depending on the purchased item. Various categories with different price ranges may include men, women, headwear, glassware, home bar, personalized gifts, and Valentine's Day gifts collections.
  • Customer charges can be lessened through discounts and promos. One of these is free shipping if customers have a total of $70.00 on all orders.
  • They also have seasonal sales like Winter Sale in which they have up to 20%-25% discount on applicable items in categories such as fashion, glassware, home bar, and personalized gifts.
  • Baltimore-based Diamondback Brewing Company has signed a collaboration with Guinness that will start on February 20, 2020. The purpose of the partnership is to produce Dark Czech Pilsner, a beer that will be available after St. Patrick’s Day.
  • In 2019, they partnered with a nonprofit organization that supports education for women in the beer industry named Pink Boots Society. The collaboration is a part of honoring women in the brewing industry during the celebration of International Women's Day.
  • Guinness produced their Guinness Saison Blanc that features white wine and pear flavors in which 50% of the proceeds from each pint sold will go to Pink Boots Society.
  • Other popular coupons that can help customers lessen their charges are 5% off on any order, 15% off on any order with Email Sign Up, up to 71% off on Men's T-Shirts, 15% off on any order for new clients, and free shipping on orders over $60.

Wine Warehouse

  • Wine Warehouse charges their clients depending on the item purchased. Several categories can be selected from wine, beer, spirits, and non-alcoholic drinks to glassware.
  • There are added charges known as California Refund Value which is a fee mandated by California state law to be charged by wholesalers for some recyclable beverage containers.
  • Customers can be charged depending on selected items plus charges by California Refund Value if the transactions are applicable for the fee.
  • In 2016, Wine Warehouse celebrated along with Venica for the tenth anniversary of their partnership. The purpose of the partnership is to help Venica, and together, to produce the best-of-class wines.

The Beer Connect

  • The Beer Connect charges its clients based on the purchased item and the cost of shipping. Clients can be charged, for example, with a price of $60 with 6 bottles (22oz and 750ml) plus the shipping fee. The cost per beer bottle is estimated at $10.
  • There are no discounts for purchasing bulk items. There are also no bonus gifts and shipping restrictions in states like Alaska, Hawaii, Kentucky, Minnesota, and Utah.
  • Customers can receive discounts on their Craft Beer Festival tickets. Some of these tickets are lessened from $45 to $29.
  • In shipping a refrigerated beer, clients need to contact The Beer Connect to get a free quote. The company provides cheaper shipping for clients in many volumes they wanted.
  • No evidence found for any The Beer Connect partnerships.


  • Drizly's various categories with different price ranges may include beer, wine, liquor, extras, items for business buying, and gifts.
  • Shipping fees depend on the shipping type which includes delivery and ground shipping. On delivery, a $5 delivery fee is applied, whereas a flat rate price is charged per box shipped for ground shipping. This will vary based on the retailers and couriers.
  • In some cases, a $1 charge on credit card will be given to some clients due to some bank's $0-1 pre-authorization charge before the full transaction. However, the $1 charge will be removed within several business days.
  • Clients can also be charged less due to Drizly coupons. Some of these are "$15 off Your First Order of $30+" and "Save $5 On Your Next Delivery".
  • Drizly, as the largest online alcohol marketplace in the US, partnered with Anheuser-Busch. The aim of the partnership is to keep Anheuser-Busch offices across the country stocked with beer from Drizly. Drizly is now exclusively managing delivery to Anheuser-Busch's innovative Office Bud-e fridges. Further, the re-order of beer when stocks are running low is automatically done through the leverage of smart sensors and WiFi connectivity.
  • According to vice president of expansion and co-founder at Drizly Justin Robinson, "Anheuser-Busch's Office Bud-e is an awesome innovation for businesses looking to automate their purchasing, and we're proud to make our network of best-in-class retail partners a key part of the equation".
  • Another partnership was done by Drizly in 2019 when Drizly announced their collaboration with one of Louisiana's leading liquor retailers Shop Rite & Tobacco Plus. Its objective is to bring beer, wine, and liquor in a convenient and lesser time across 14 Louisiana parishes. The partnership helps to deliver items to 1.4 million consumers of legal drinking age.
  • Cody Gielen, the CEO of Shop Rite & Tobacco Plus said, "We pride ourselves on bringing smiles to our customers' faces, and Drizly gives us the means to do exactly that in the comfort of peoples' homes, or wherever they may be".

Research Strategy:

For this request, we gathered information through leveraging the assigned companies' official websites, news, articles, and press releases. We were able to find information on how each of these companies charges their clients and partnerships that the companies have signed, including the purpose of those partnerships. However, there is no evidence for partnerships of The Beer Connect and other partnerships of Wine Warehouse aside from that of Venica. Below are the strategies we used to look for this information.

We checked for each company's press releases since these are the sources that usually indicate news on partnerships, company management changes, and other news that companies might have. However, only one partnership was found for Wine Warehouse, while The Beer Connect does not indicate one.

Next, we utilized credible sources such as news and other media discussing business activities specifically partnerships. These include Forbes, Bloomberg, Business Insider, and Market Watch among others. However, there were no published details on The Beer Connect partners and Wine Warehouse's other partnerships. These sources only show company information and updates. From this point, we focused on looking through company information platforms such as Crunchbase, ZoomInfo, etc, that give information about private and public companies. However, no information was available on their partnership aside from each company's overview.

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Online Beer Market (USA) Company Analysis (2)

The last five companies from the online beer market (USA) include Tavour, Drizzly, Craft shack, The beer connects, and The Best Damn Beer Shop.


  • Tavour company always charges the client card a flat shipping rate of $14.90, the rate is fixed no matter how many bottles of beer are purchased. Tavour will then pack the box containing your order and release it.
  • The prices of beer range from about $3 (two cans for $5.99) to over $20 for some more expensive bottles of beer.
  • Some companies that Tavour has joined include New Image Breweries, Urban Family Breweries, and Boxing Bear Breweries. The partnerships were signed to ensure that the companies positively impact the people they serve and ensure their products get to their customers on time.


  • Drizly normally charges its clients a monthly fee to use its order fulfillment mechanism. The company does not set the prices of beverages itself.
  • The company accepts purchases that are at least $20 and charges an additional fee of $5 for delivery, which goes to the liquor store.
  • Company has partnered with Shop Rite & Tobacco Plus, a leading liquor retailer in Louisiana and BevMO, a leading beverage specialty. These partnerships are aimed at bringing convenient delivery of beer, wine, and liquor.


  • Craftshack company charges its clients according to the order; it has a minimum order limit that reflects into its shipping fee. Craft shack company charges its clients a $35 minimum order and $20 for the shipping process.
  • Craft shack has partnered with Telegraph Brewing Co.

Best Damn Beer Shop

  • The company requires a $40 minimum order.

The Beer Connect

  • The cost of beer varies with the brewer and increases with the size of the order. They have a standard shipping rate of between $25 to $35.
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Online Beer Market Regulations

Regulations Impacting online beer market in the US

The federal and state laws that the online beer market faces in the US are complex and varying. Despite the Supreme Court's ruling in the Tennessee Wine & Spirits Retailers case, states have wide powers with regard to legislation that they can pass on alcohol sales in state. These differences in laws apply to almost every step of the sales transaction; age limits of potential customers, sales taxes, amount and type of alcohol permitted, licences and permits needed.

Federal Regulations

  • 18 U.S.C. § 1716 - U.S. Code - Unannotated Title 18. Crimes and Criminal Procedure § 1716 prohibits the US Postal Service from carrying delivering alcoholic beverages.
  • Shipment of alcohol is available through couriers such as FedEx and UPS, but this requires licenced alcohol shippers to enter into an Alcohol Shipment Agreement with both service providers. Different shipping agreements might be required depending on which type of alcohol is. Furthermore, sellers also need to comply with the individual alcohol shipping laws that govern both the state shipped from as well as the state being shipped to.
  • Alabama, Oklahoma, and Utah prohibit alcohol deliveries to private consumers. Beer delivery is permitted in Arizona, Delaware, District of Columbia, Delaware, Florida, Hawaii, Ohio, Oregon, Massachusetts, Missouri, Nebraska, New Hampshire, North Dakota, and Vermont.
  • The 21st Amendment to the US Constitution allows states to control the sale, importation, and distribution of alcohol within and into the state.
  • In a case involving a liquor store in Tennessee in 2019 (Tennessee Wine & Spirits Retailers Ass’n v. Blair), the Supreme Court struck down state regulations in connection with a 2-year residence requirement as being unconstitutional and in breach of the Commerce Clause. The Court held that the 21st Amendment did not give the states a right to pass regulations that favor in-state residents as this violates the Constitution's ban on placing barriers on interstate commerce.
  • The Supreme Court Justices in the above case raised the point whether this decision could eventually lead to the conclusion that states do not have the authority to prevent online retailers from selling alcoholic beverages directly to consumers.

State Specific Regulations

Impact on Online Beer Market

  • The impact of existing legislation, both federal and state level, on vendors wishing to sell beer online is difficult. Because states have wide powers to legislate on this matter despite The Supreme Court ruling in the Tennessee Wine and Spirits case mentioned above, there is a myriad of obstacles facing sellers: there can be limits to the amount of alcohol that can be shipped into state, Virginia allowing only one gallon per person whereas California has no limit on how much beer can be shipped into the state as long as it is for personal use.
  • Vendors are required to verify the age of buyers; customers must be at least 21 years old to purchase alcohol online. National Minimum Drinking Age Act enacted this minimum drinking age, but only five states do not have any exceptions to this, leaving 45 states that do, in some form, allow minors to consume or possess alcohol.
  • States vary to a great extent in connection with alcohol sales laws; Kansas, Mississippi, and Tennessee are the most strict, also known as dry states, whereas Nevada is amongst the most lenient.
  • Complying with the various taxes that the states impose on beer sales can also be demanding; Virginia, Connecticut, Wisconsin, Missouri, and Wyoming have the lowest taxes, whereas the highest taxes are found in Tennessee, Alaska, and Hawaii.

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Online Beer Market Regulations Texas

Three Texas regulations that are impacting the online beer market in the state are Senate Bill 1232, Senate Bill 1450, and the law that prohibits publicly traded companies from selling alcohol in the state. Full details are below.

Senate Bill 1232

  • Senate Bill 1232 went into effect in Texas on September 1, 2019.
  • This law allows retailers and restaurants with wine and beer permits to deliver wine and beer. It does not allow for establishments with mixed beverage permits to deliver either product directly to a consumer's door.
  • The law requires that all beer and wine deliveries include food, so consumers must add food products to their delivery orders if they also want to get beer or wine delivered.
  • This impacts the online beer market because Texas residents are now able to order beer and wine from grocery stores like H-E-B or restaurants and have the products delivered directly to their door.
  • This law opens the door for restaurants and bars with delivery services to add beer and wine products to their online delivery menus.

Senate Bill 1450

  • Senate Bill 1450 went into effect in Texas on September 1, 2019.
  • This law allows third-party companies and businesses with mixed beverage permits to deliver beer, wine, and spirits directly to a consumer's home.
  • Cocktails mixed at an establishment are excluded from this law and cannot be delivered.
  • Alcohol orders must still include food orders.
  • This impacts the online beer market because not only can restaurants and grocery stores deliver beer directly to consumers, but now liquor stores and third-party delivery companies like Instacart and Favor can deliver beer as well.
  • Texas residents can now order beer, wine, and spirits from "businesses licensed by the Texas Alcoholic Beverage Commission such as bars, restaurants and liquor stores" and have their products delivered as part of a meal or grocery order even if the bar, restaurant, or liquor store does not offer a delivery service.

Publicly Traded Companies

  • Texas prohibits publicly traded companies from holding liquor permits.
  • This means that companies like Walmart cannot sell alcohol in Texas.
  • This impacts the online beer market in the state because "it shuts publicly traded corporations out of the marketplace while allowing family-owned chains the right to an unlimited number of liquor store permits."
  • In combination with the new laws created from Senate Bill 1232 and Senate Bill 1450, Walmart and other publicly traded companies will not be allowed to take advantage of beer delivery permissions.
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Online Beer Market: Case Studies

Opportunities in ecommerce have proliferated in recent years, and while many industries have taken advantage of this new retail platform, the alcohol industry in the US has tended to lag behind in these developments because of challenges presented by alcohol-specific laws and regulations. In recent years, more and more alcohol brands including Anheuser-Busch and Heineken have pushed into the ecommerce market in the US. These brands have been successful in their use of ecommerce as a tool to gather customer data, increase brand awareness, and increase sales and accessibility through online platforms.

Anheuser-Busch (AB)

  • Selling alcohol online is somewhat uncommon and is illegal in some parts of the US. AB has developed ecommerce models that accommodate this obstacle by focusing some of their online efforts on selling branded merchandise rather than on selling beer.
  • AB has worked with Adobe and Magneto (an ecommerce tech company recently required by Adobe) for five years on the development and improvement of their ecommerce platforms.
  • Although the value of branded merchandise AB sells online is relatively insignificant in comparison to beer sales, the real value of AB's investment in ecommerce is the data it brings in.
  • In the past, individual AB brands like Budweiser, Busch, or Michelob each had their own online store, but recently AB has moved to combine all of these stores into one general AB store that services all the brands. This means that instead of collecting small amounts of data from disparate sources that don't aggregate the information, AB can collect a larger and more useful amount of data from one centralized source.
  • The consolidation also allows AB to track data for return users, and better drive and attract consumer traffic, since merchandise is all sold from one universal website rather than on multiple websites on a campaign-by-campaign basis.
  • The improvement of data collection facilitated by AB's ecommerce platforms will allow the company to better inform shifts in branding and business that will be more consumer-centric and driven by the specific needs and demands of AB customers.
  • Online sales of alcohol are a very small portion of the current market (online sales of beer currently make up less than 1% of the market, and only 6% of American adults have ever bought beer online), but there is evidence that this sector of the market has room for growth, and the ecommerce branch of AB believes online sales of beer have the potential to grow to 10% to 20% of total sales.
  • Alcohol regulations in the US state that alcohol companies may not have any direct to consumer channels, so in order to ramp up online sales of alcohol and prepare for growth in this sector, AB is devising growth strategies with retail partners such as Walmart, Kroger, and Amazon. Although AB's relationship with most of these partners has traditionally been through retail sales at brick and mortar locations, AB is using data collection and consumer insights to show retail partners who the digital buyer will be and how this venture can be profitable for both sides of the partnership.
  • According to Carolyn Brown, the head of ecommerce for AB, the ideal state of ecommerce in the beer market would be one where customers regularly use online shopping for routine alcohol purchases, and where customer data and patterns in purchasing can be used to create targeted one-to-one advertising and promotional offers that will be specific to each customer and their predicted needs or demands.
  • AB's ecommerce is run by a branch called ZX Ventures which functions as the corporation's growth and innovation arm. In their 2018 annual report, AB reported that their ecommerce and brand experience platforms had each returned double digits in growth, and that ZX Ventures represented more than 10% of total growth for the year.


  • In 2018 Heineken launched their USA ecommerce website The website features same-day delivery, and products including a line of Heineken's home tap machines, 2-liter kegs of cold beer, and new product lines such as kombucha and cold-brew coffee. Heineken plans for the site to eventually be available to the entire US, but it is currently only available in NYC.
  • Although Heineken has been selling and delivering beer through ecommerce in Europe since 2014, different restrictions and regulations on alcohol in the US have made it a much harder market to penetrate in the ecommerce sector.
  • Heineken began experimenting with ecommerce in the US in 2017. During the initial stages Heineken launched one website specific to the Heineken brand, and one website specific to the Dos Equis brand (which is part of Heineken). Data and customer feedback showed that customers strongly preferred variety on one site over several separate brand sites, so Heineken shut down the Dos Equis website and relaunched a new site which contained product offerings from eight of its companies.
  • Laws in the US prohibit alcohol producers from selling alcohol directly to consumers. In order to circumvent this obstacle in their online platforms, Heineken routes online sales through local retailers depending on the zip code of the purchase so that the purchase is technically being made through a local retailer and is therefore not direct-to-consumer.
  • To accommodate alcohol laws and restrictions in the US, Heineken also requires that a person over the age of 21 sign for each delivery.
  • Since ecommerce remains a relatively under-exploited and under-served sector of the alcohol market, particularly in the US, Heineken is using its forays into ecommerce as a way to stand out in a market that tends to be dominated by domestic beer brands such as those offered by AB.
  • Heineken is also using its ecommerce initiatives as an opportunity to offer increased variety. Along with its own brands of beer, Heineken intends to eventually partner with 250 different local and international breweries to sell a wide variety of kegs and mini-kegs on their site that will be compatible with their home tap systems.
  • The site aims to specifically address the finding that while 70% of consumers prefer beer on draft, there tends to be decreased accessibility and availability for draft beer. By offering a home tap system and a variety of beverage options (cold-brew, kombucha, and beer) that can be consumed throughout the day, Heineken is addressing increased demand and desirability for draft beer with a system that can be used in the home and that can be relevant for beverage consumption from breakfast through dinner.
  • Sales of kegs and online tap systems are not necessarily expected to be top revenue drivers for Heineken. The main goal of these products is instead to improve brand image and recognition, and provide another way for Heineken to stand out from the crowd and make its way into the homes and minds of consumers.
  • To mitigate some of the costs and complications involved with the online ordering and delivery process, Heineken has partnered with companies such as Hopsy and Drizly which specialize in delivery and online sales, and have already developed the infrastructure needed to handle the unique problems of alcohol delivery which include weight, handling, and refrigeration.
  • Heineken is using Facebook and targeted online advertising to spread awareness about its online offerings. The company has also promoted its ecommerce initiatives at different events, and is exploring partnerships with larger retailers like Amazon to improve availability and scalability of its online offerings.
  • In Heineken's 2018 Annual Report, the company stated that its main drivers for top line growth are its brands and its ecommerce, and in a mid-year report for 2019, the company stated that it plans to continue to increase its investment in ecommerce initiatives and technology upgrades as a key strategy in growing profit.
  • Since Heineken is an international company, it is somewhat difficult to differentiate ecommerce performance of the company as a whole from ecommerce performance in the US specifically, but the findings in the 2018 Annual Report detailed above, and the success of older ecommerce initiatives in Europe that are similar to those recently launched in the US indicate that ecommerce in the US could be equally successful.
  • One of Heineken's most successful ecommerce ventures in Europe has been the Heineken-owned startup Beerwulf. Beerwulf is similar in many ways to some of the ecommerce platforms recently launched in the US. Like, Beerwulf seeks to disrupt the booming craft beer industry by providing a single online outlet for purchasing over 1000 different beers from a variety of local and international breweries. Beerwulf provides easy online ordering, access to educational material and expert recommendations, and free delivery on qualifying orders.
  • Beerwulf is listed as one of the main drivers of ecommerce in Heineken's 2018 Annual Report, and in one year the startup grew from 400 orders per week to 400 orders per hour. As of 2019, Beerwulf was already active in the Netherlands, Belgium, the United Kingdom, Germany and France, and was set to expand to Italy, Switzerland, Austria, Spain and Portugal.

Research Strategy

The research team combed through general information and news articles on ecommerce trends to identify a few alcohol brands that were investing in and using ecommerce platforms to increase sales in the US. Once relevant case studies were identified (AB and Heineken), the research team combed through company websites, annual reports, financial reports, company press releases, and third party news articles to find more detailed information including specific strategies and ecommerce initiatives, the intent of these initiatives, and how these initiatives have benefited the company.
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Online Beer Consumers: Demographics

According to studies by Drizly Distillery and Profitero, the average online alcohol consumer is male, around 39, married, employed full-time, and lives in an urban area. The Drizly study is based off of a survey of its own customers while the Profitero study is based off of results compiled by Nielsen and Harris Polls in 2017. Below is an overview of our findings.
  • In general, the gender split of online alcohol purchases is 55% male and 45% female, according to the Drizly study. However, the Profitero puts this split at 77% male versus 23% female. Males (60%) tend to by beer online more than women, while women (54%) tend to by wine online more often than men. In addition, men tend to spend slightly more than women.
  • The Drizly customer is primarily Millennial at 75% with the average age at 33 and the most represented age at 27. The Profitero results place the average age of online alcohol consumers at 39, compared to age 49 of in-store only purchasers.
  • Around 25% of the Drizly customers make between $50,000-$74,999 and 32% make over $100,000 annually. According to Profitero, approximately 43% of online alcohol purchasers make over $100,000 compared to 31% of in-store only purchasers. According to Danny Brager, SVP, Beverage Alcohol Practice at Nielsen, it is not surprising that the average household income of online alcohol purchasers is generally higher than in-store consumers, as online alcohol prices, specifically in the wine category, are significantly higher than in-store.
  • The majority of online alcohol consumers live in urban areas. Approximately 85% of Drizly customers are city dwellers. The Profitero study claims 56% live in urban areas while 56% of in-store consumers live in suburban areas. Specifically, 31% of online consumers live in the northeast while 34% of in-store only customers live in the south.
  • Roughly 73% of online alcohol customers are married compared to 53% of in-store only customers. Additionally, 65% of online alcohol consumers own their home compared to 62% of in-store only customers.
  • Approximately 71% of online alcohol consumers are employed full time compared to 42% of in-store only customers.
  • Since the Drizly Distillery study is based solely on its own customers, the statistics may be slightly skewed. However, both studies agree that the average person that purchases alcohol through online channels is male, in their 30s, has an average household income over $100,000, and lives in an urban area.
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Online Beer Consumers: Psychographics

Online alcohol consumers in the United States are people who are accustomed to having items delivered to their residence. Though price-conscious, they tend to check out larger baskets or buy more items online than in-store. They desire convenience and a speedy service because, for them, time is a precious and scarce commodity.


  • Online alcohol consumers are used to having items shipped to their home. According to Far West Liquor President Dave Robertson, this behavior may have something to do with the Amazon factor or the fact that “everyone is becoming used to just looking online and finding what they want.”
  • In urban markets, online alcohol consumers tend to stock up on sale items and buy items for same-day delivery on a regular basis. In suburban markets, on the other hand, online alcohol consumers tend to purchase “special, hard to find items” for pickup at the store. They opt for pickup 73% of the time.
  • Online alcohol consumers still buy most of their alcohol purchases in-store. Half of online alcohol consumers still go to local liquor stores to make most of their alcohol purchases. Also, 62% of consumers who have bought alcohol from a retailer through the Drizly app indicate they are inclined to buy alcohol again from that retailer in-store.
  • Online alcohol consumers appear to have different buyer personas. Online alcohol marketplace Drizly, for example, segments its users into six categories, namely, beer enthusiasts, seasoned sippers, wine buffs, spirits specializers, wine hosts, and office organizers. Of the orders Drizly is receiving, 27% come from spirits specializers, another 27% come from wine buffs, 18% come from beer enthusiasts, 8% come from office organizers, 7% come from seasoned sippers, and 3% come from wine hosts.
  • The majority of online alcohol consumers place their orders between 5 pm and 7 pm."

Hobbies and Interests

  • Consumers who buy wine from online direct-to-consumer (DTC) wine retailers appear to be interested in wine tasting. Most sales in the online DTC wine segment can be traced to consumers who have visited a winery’s tasting room and registered for a wine club. These consumers often purchase a case of wine and have this case delivered to their home.
  • Online alcohol consumers appear to be interested in beverages, news and media, computer electronics and technology, and fashion and apparel. People who visit online alcohol marketplace show an interest in these topics.

Spending Habits

  • Alcohol consumers, particularly beer consumers, seem to be purchasing a larger number of items online than in-store because, with online purchases, they have the option to not be the ones to carry the purchases home. Compared to in-store beer consumers, online beer consumers have been observed to be checking out bigger baskets or purchasing more items at once.
  • Almost 75% of consumers say they are willing to spend more money when buying alcohol online than when buying alcohol in-store.
  • This does not mean that they do not care about price. Online alcohol consumers, particularly online beer consumers, seek good deals. They want to know they are getting comparable if not better prices relative to buying in-store.
  • Online alcohol consumers, particularly online beer consumers, are driven by free and fast shipping to make repeat purchases.
  • Online alcohol consumers pay an average of $20 to $40 for 750 ml liquor bottles, $13 to $18 for 750 ml wine bottles, and $9 to $14 for six packs of 12 oz beer containers. Their average order value ranges from around $60 to $82.

Values and Beliefs

  • Online alcohol consumers believe that time is precious. The desire for convenience and a speedy service drives them to purchase alcohol online. Customers of online alcohol marketplace Minibar are a case in point, as they often make positive comments about the speed of Minibar’s service when they leave reviews.
  • Online alcohol consumers like the idea of having a bottle of wine show up at their doorstep right after they finish making dinner.
  • Online alcohol consumers believe that alcoholic beverages lend themselves well to the online or on-demand delivery model. Alcoholic beverages are typically bought on short notice for a party or another social occasion, and consumers, especially those in more conservative areas, have to be discreet when buying alcohol.
  • Online alcohol consumers, especially those belonging to the Millennial generation, place a great deal of importance on customer experience and the story behind the products they consume.

Research Strategy

Though the psychographic profile of online alcohol consumers in the United States is not readily available in the public domain, we were able to provide one by piecing together psychographic insights from various sources such as news articles, industry reports, and surveys.
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Online Beer Market: Consumer Journey

In 2016, the latest year for which data is available, 8% of online consumers in the US browsed for and purchased alcoholic beverages online. However, online alcohol sales still represent less than 1% of total alcohol sales. The main motivation for purchasing online is convenience, while leading online retailers include Drizly and Amazon.


  • One of the biggest motivators for purchasing alcohol online is convenience.
  • Other motivations include finding rare brands and saving money.

Online Channels

  • The most important online distribution channels for alcohol brands are online grocery, liquor stores with e-commerce capabilities, online delivery apps, online specialty retailers, amazon, and direct to consumer through brand websites.
  • 74% of online alcohol purchases are made on mobile devices.
  • Based on expert mention, some of the most important online sites for online alcohol sales include online beer distributor Drizly, online giant Amazon, and mobile-shopping app Boxed.
  • Based on popularity, some of the most important online sites for alcohol sales include, Drizly, Total Wine, Mini Bar, Fresh Direct, BevMo, Safeway, Harris Teeter, Walmart to Go, and


  • While no information specific to how long consumers spend researching before placing an online alcohol purchase was available, it was identified that "micro-moments", or small moments that create impulse shopping behavior, are one of the leading triggers to online alcohol purchases. Therefore, it is assumed that consumers spend little time researching prior to making online alcohol purchases, and a lot of purchases are done on impulse.
  • Younger consumers buy alcohol online more frequently than older consumers.
  • 85% of online shoppers are occasional shoppers. They spend the most and shop the most compared to other groups of online shoppers.


  • 68% of consumers begin researching products for online purchase on Amazon.
  • When researching craft beer online, consumers want to see the style of beer. When researching imports and domestic beer, consumers wanted to see the pack size.
  • Consumers can be overwhelmed at the number of alcoholic beverage options available online, and when they cannot find the specific product they desire easily, they purchase less than they intended to.
  • Browsing but then abandoning the cart before purchase is common.

Research Strategy

Where information specific to beer was not available, we expanded to include information on the purchase journey for online alcohol sales in general, as beer and wine are the leading types of alcohol to be sold online.
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Best Places to Sell Online Beer

The three states that offer the best opportunity for online beer sales are New Hampshire, North Dakota, and Montana. The worst states for online beer sales are Alabama, Oklahoma, and Utah because online alcohol sales are currently illegal.

Best States for Online Beer Sales

New Hampshire

North Dakota


Worst States for Online Beer Sales

  • Online alcohol sales are prohibited in Alabama, Oklahoma, and Utah, which means these are the worst states to sell beer online.
  • Alabama is 30th in beer sales per capita, which indicates it does not represent a very good opportunity to drive sales of beer in general, much less online.
  • Oklahoma is 32nd in beer sales per capita, so like Alabama, this is not a good place for driving beer sales.
  • Utah is 51st in beer sales per capita, which is last. Utah does not have the potential to drive a very high amount of beer sales, either online or otherwise.

Research Strategy

In an effort to find the 203 best states that are driving or have the potential to drive the highest amount of sales of online beer, we first searched industry publications for current records of online beer sales. Unfortunately, despite searching sources such as the Brewers Association, Beer Insights, Beer Business Daily, among others, we were not able to find such records. We did, however, find the ranking of states based on beer sales per capita. Due to the absence of actual online beer sales data, we used the ranking of states by beer sales per capita and the legality of online beer sales to triangulate the top three states that represent the best opportunity to drive sales of online beer. To determine the worst states for selling online beer, we found three states that outlaw online alcohol sales completely, which means that currently, they do not represent any opportunity for online beer sales.
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Online Beer Market: SWOT Analysis

The online alcohol retail sector in the United States is a $2.6-billion industry. Its strengths center on in its rapid growth and the variety of channels it encompasses, while its weaknesses center on the inadequacy of its efforts to increase market penetration, raise awareness, and perform as well as other online sectors of the food and beverage industry. Though state alcohol and shipping regulations and the difficulty of enforcing the legal drinking age pose a threat, the sector has plenty of opportunities to take advantage of, the most important of which appears to be the opportunity to build online relationships with consumers and understand these consumers better.


  • The sector is fast-growing, expanding by 22% year-on-year and reaching $2.6 billion in 2019, an amount made up of the following segments: online direct-to-consumer wine ($950 million), online grocery ($295 million), alcohol marketplaces ($265 million), and online liquor stores ($1.1 billion).
  • The number of businesses in the sector is growing as well and is, in fact, experiencing an average annual growth rate of 12.4%.
  • The sector has several types of online channels that alcohol brands can use. In 2018, there were around a dozen of these channels.


  • The sector is lagging behind other online sectors of the food and beverage industry. It appears that several grocers or retailers, daunted by the “complex patchwork of state alcohol regulations” they have to navigate, have not yet decided to sell alcohol online.
  • The sector has not done its best in raising awareness about online alcohol retailers. Market penetration is very low, with only 6% of adults in the country reporting that they have bought beer online. Twenty-eight percent of consumers in the country say they do not know that they can purchase beer online.


  • The sector has the opportunity to take advantage of online grocery marketplaces and online alcohol marketplaces. These channels, having grown by 115% and 60% in 2019, respectively, have been identified as the key channels to drive the market’s growth in succeeding years. Albertsons, Amazon — Whole Foods, goPuff, Instacart, Kroger, and Walmart are examples of these online grocery marketplaces, while Drizly, Instacart, Minibar Delivery, ReserveBar, Thirstie, and Vivino are examples of these online alcohol marketplaces.
  • The survey finding that online beer purchases are driven by free shipping and low prices presents an opportunity for the sector to leverage this knowledge and increase sales. Based on a survey, consumers want not only free and fast delivery but also better prices.
  • The survey finding that women purchase more alcohol online compared to men presents an opportunity for the sector to use this knowledge to its advantage and market to women.
  • Given that market penetration is very low at present, the sector still has countless omnichannel consumers to build online relationships with. The sector can gather invaluable consumer data from these online relationships.
  • The sector has the opportunity to shift from transactional selling to experiential selling. Major grocers in the sector are yet to provide informative product pages, tasting notes, and third-party ratings, and allow consumers to shop by price.
  • Wine and beer present growth opportunities for the sector, as states are less strict about wine and beer than about spirits.


  • State alcohol regulations remain a threat. There are still states that do not permit companies to ship alcohol directly to consumers, such as Alabama, Arkansas, Oklahoma, and Utah. There are also states that do not permit “out-of-state retailer shipping.” [14]
  • Additionally, alcohol regulations vary by state and, in some cases, by product category. According to Seth Weinberg, a lawyer at Weinberg, Zareh, Malkin, Price, a law firm in Manhattan that provides advisory services to alcoholic beverage companies, “shipping alcohol in the U.S. is like dealing with 50 different countries.” Regulations can vary within states, like in the case of California where there are more rules for beer or liquor than for wine.
  • Strict enforcement of the legal drinking age remains difficult and is the responsibility of the person or company doing the delivery.

Research Strategy

Though a SWOT analysis of the online beer retail sector in the United States is not readily available in the public domain, we were able to prepare one by reading through the articles and reports that cover the sector.

From Part 01