Description

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Providing the most comprehensive and up-to-date information and analysis of the Evolving eCommerce: Alcoholic Beverages– US market including the behaviours, preferences and habits of the consumer.

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What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in this report

The online alcohol market experienced an unexpected sales surge during the beginning of the pandemic as more consumers shopped from home. Online alcohol retailers may quickly lose new consumers as those facing economic hardships reduce their alcohol expenditures or look to streamline online shopping activities. Grocery retailers will become the leaders of the online alcohol market as general online grocery shopping becomes normalized. Dedicated online alcohol retailers can differentiate themselves by focusing on providing customers with unique experiences.

Expert analysis from a specialist in the field

Written by Caleb Bryant, a leading analyst in the Food & Drink sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The pandemic resulted in the rapid adoption of online alcohol delivery services as consumers chose to avoid shopping in-store. While online alcohol retailers enjoyed unanticipated success, they face the challenge of retaining customers during a recession when consumers are extra-sensitive to fees associated with online shopping. Online alcohol beverage services can excite and retain customers by delivering unique experiences that appeal to new drinking behaviors and occasions consumers have developed during the pandemic.
Caleb Bryant
Associate Director of Food and Drink Reports

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Definition
          • COVID-19: Market context
          • Executive Summary

              • Top takeaways
                • Market overview
                  • Figure 1: Total US sales and fan chart forecast of retail alcohol, at current prices, 2015-25
                  • Figure 2: Total US sales and forecast of retail alcohol, at current prices, 2015-25
                • Impact of COVID-19 on online alcohol
                  • Figure 3: Short-, medium- and long-term impact of COVID-19 on online alcohol, September 2020
                • Opportunities and Challenges
                  • Re-emergence
                    • Pandemic props up online alcohol sales
                      • Figure 4: Reasons for purchasing alcohol online, by age, July 2020
                    • Alcohol retailers and brands adjust to new consumer behaviors
                      • Consumers become bartenders
                        • Recovery
                          • Recession dampens future of online alcohol
                            • Figure 5: Reasons for not purchasing alcohol online, by financial situation, July 2020
                          • Online alcohol retailers need to deliver experiences
                            • Loyalty programs keep core consumers engaged
                              • Figure 6: Online alcohol purchase frequency, by alcohol shopping methods, July 2020
                            • Make alcohol packaging more ecomm-friendly
                            • The Market – Key Takeaways

                              • Retail alcohol faces strange market conditions
                                • Alcohol trends will outlast the pandemic
                                  • Retailers and brands can adjust to the online world
                                  • Market Size and Forecast

                                    • Retail alcohol is pushed and pulled by opposing factors
                                      • Figure 7: Consumer expenditure on alcohol for off- and on-premise consumption, 2005-2012
                                      • Figure 8: US unemployment rate, January 2007-August 2020
                                      • Figure 9: Consumer sentiment index, January 2007- August 2020
                                      • Figure 10: Total US sales and fan chart forecast of retail alcohol, at current prices, 2015-25
                                      • Figure 11: Total US sales and forecast of retail alcohol, at current prices, 2015-25
                                    • Impact of COVID-19 on online alcohol
                                      • Figure 12: Short-, medium -and long-term impact of COVID-19 on online alcohol, September 2020
                                    • Lockdown
                                      • Re-emergence
                                        • Recovery
                                          • COVID-19: US context
                                          • Market Factors

                                            • Pandemic leads to rapid adoption of online shopping
                                              • Figure 13: Behaviors adopted due to pandemic, “shopping more online,” by generation, April-August 2020
                                              • Figure 14: Behaviors adopted due to pandemic, “using curb-side pick-up/click-and-collect more,” by generation, April-August 2020
                                            • Alcohol sales get watered down during recessions
                                              • Figure 15: Consumer expenditure on alcohol for off- and on-premise consumption, 2005-2015
                                              • Figure 16: US unemployment rate, January 2007-August 2020
                                              • Figure 17: Consumer sentiment index, January 2007-August 2020
                                            • Drinking behaviors were changing prior to the pandemic
                                              • Figure 18: Dining out behaviors, by generation, May 2020
                                            • Patchwork of laws complicates the market
                                              • Restaurants respond with alcohol delivery
                                              • Market Opportunities

                                                • Alcohol packaging adapts to delivery
                                                  • AI as sommelier
                                                    • Figure 19: New spirit brand discovery, September 2020
                                                  • Cater to home mixologists
                                                    • Alcohol enthusiasts love exclusivity
                                                    • Companies and Brands – Key Takeaways

                                                      • Immediate delivery companies experience strong gains but must retain customers
                                                        • Experience acts as a differentiator
                                                        • Competitive Strategies

                                                          • Immediate delivery companies enjoy unexpected success
                                                            • Figure 20: Modelo/Drizly online ad, August 2020
                                                          • Deliver experiences not products
                                                            • Grocery retailers offer it all
                                                              • Tech and delivery go hand-in-hand
                                                              • The Consumer – Key Takeaways

                                                                • Millennials are core online alcohol purchasers
                                                                  • Retailers will face challenges attracting new consumers
                                                                    • Grocery retailers will lead the online alcohol market
                                                                      • Recommendations can deliver consumers new experiences
                                                                      • Alcoholic Beverage Purchasing Behaviors

                                                                        • Beer leads the alcohol market
                                                                          • Figure 21: Alcoholic beverage purchases, July 2020
                                                                        • Alcohol is primarily purchased in-store, but COVID has accelerated adoption of online ordering
                                                                          • Figure 22: Alcoholic beverage shopping methods, July 2020
                                                                        • Millennials blend in-store and online
                                                                          • Figure 23: Alcoholic beverage shopping methods, by generation, July 2020
                                                                        • Barriers exist for rural consumers
                                                                          • Figure 24: Alcoholic beverage shopping methods, by area, July 2020
                                                                        • FMB drinkers are already buying online
                                                                          • Figure 25: Alcoholic beverage shopping methods, by alcohol types purchased, July 2020
                                                                      • Channels Shopped for Alcohol

                                                                        • Supermarkets fulfill most consumers’ needs
                                                                          • Figure 26: Channels shopped for alcohol, any shop, July 2020
                                                                        • Online ordering can replace small basket shopping occasions
                                                                          • Figure 27: Channels shopped for alcohol, any shop, by age, July 2020
                                                                      • Interest in Purchasing Alcohol Online

                                                                        • Low interest is driven by older consumers
                                                                          • Figure 28: Interest in purchasing alcohol online in the future, July 2020
                                                                          • Figure 29: Interest in purchasing alcohol online in the future, by gender and age, July 2020
                                                                        • Turn drinkers’ interest into clicks
                                                                          • Figure 30: Interest in purchasing alcohol online in the future, by alcohol types purchased, July 2020
                                                                      • Willingness to Spend on Delivery

                                                                        • Consumers accept that convenience comes at a cost
                                                                          • Figure 31: Willingness to spend on delivery, July 2020
                                                                          • Figure 32: Willingness to spend on delivery, by age, July 2020
                                                                        • Aggressive deals are necessary to change consumer habits
                                                                          • Figure 33: Willingness to spend on delivery, by alcohol purchase method, July 2020
                                                                      • Change in Online Alcohol Purchases

                                                                        • Pandemic supercharges the use of online ordering
                                                                          • Figure 34: Change in online alcohol ordering, July 2020
                                                                          • Figure 35: Change in online alcohol ordering, by alcohol purchase method, July 2020
                                                                      • Online Services for Alcohol Purchases: Use and Interest

                                                                        • Consumers prefer grocery delivery services
                                                                          • Figure 36: Online services for alcohol purchases: use and interest, July 2020
                                                                        • Grocery retailers should target consumers aged 45 and older
                                                                          • Figure 37: Use and interest of online alcohol services, July 2020
                                                                          • Figure 38: Use and interest of online alcohol services, July 2020
                                                                      • Online Alcohol Purchase Frequency

                                                                        • Opportunity to increase order frequency
                                                                          • Figure 39: Online alcohol purchase frequency, July 2020
                                                                        • Loyalty programs can keep the most active consumers engaged
                                                                          • Figure 40: Online alcohol purchase frequency, by alcohol shopping methods, July 2020
                                                                      • Online Alcohol Basket Extras

                                                                        • Basket extras enhance the convenience of online shopping
                                                                          • Figure 41: Online alcohol basket extras, July 2020
                                                                          • Figure 42: Online alcohol basket extras, by alcohol types purchased, July 2020
                                                                      • Reasons to Purchase Alcohol Online

                                                                        • Platforms must retain consumers post-COVID
                                                                          • Figure 43: Reasons for purchasing alcohol online, July 2020
                                                                          • Figure 44: Reasons for purchasing alcohol online, by age, July 2020
                                                                        • Personalization appeals to online-dominant shoppers
                                                                          • Figure 45: Reasons for purchasing alcohol online, by alcohol shopping methods, July 2020
                                                                      • Reasons for Not Purchasing Alcohol Online

                                                                        • Consumers flee from fees
                                                                          • Figure 46: Reasons for not purchasing alcohol online, July 2020
                                                                      • Occasions for Purchasing Alcohol Online

                                                                        • The alcohol industry adjusts to the next normal
                                                                          • Figure 47: Occasions for purchasing alcohol online, July 2020
                                                                        • Bulk up basket size with expenditure-based deals
                                                                          • Figure 48: Occasions for purchasing alcohol online, by age, July 2020
                                                                        • Meal kits can be a soft entry for online alcohol
                                                                          • Figure 49: Occasions for purchasing alcohol online, by alcohol shopping methods, July 2020
                                                                      • Online Alcohol Shopping Behaviors

                                                                        • Delivery platforms can facilitate exploration
                                                                          • Figure 50: Online alcohol shopping behaviors, July 2020
                                                                        • Parents respond to the convenience of online shopping
                                                                          • Figure 51: Online alcohol shopping behaviors, by parental status, July 2020
                                                                      • Online Alcohol Purchase Motivators

                                                                        • Mitigate price concerns and provide consumers options
                                                                          • Figure 52: Online alcohol purchase motivators, July 2020
                                                                        • Platforms can shape Gen Z’s future preferences
                                                                          • Figure 53: Online alcohol purchase motivators, by generation, July 2020
                                                                        • Knowledge is power for current online shoppers
                                                                          • Figure 54: Online alcohol purchase motivators, by alcohol shopping methods, July 2020
                                                                      • Online Alcohol Attitudes

                                                                        • Current users enjoy the simplicity of online ordering
                                                                          • Figure 55: Online alcohol attitudes, any agree, July 2020
                                                                        • Safety will draw consumers in, recommendations will retain them
                                                                          • Figure 56: Online alcohol attitudes, any agree, July 2020
                                                                          • Figure 57: Online alcohol attitudes, any agree, by generations, July 2020
                                                                          • Figure 58: Online alcohol attitudes, any agree, by alcohol types purchased, July 2020
                                                                        • Opportunity to increase orders among multi-channel shoppers
                                                                          • Figure 59: Online alcohol attitudes, any agree, by alcohol shopping method, July 2020
                                                                      • Appendix – Data Sources and Abbreviations

                                                                        • Data sources
                                                                          • Forecast
                                                                            • Consumer survey data
                                                                              • Abbreviations and terms
                                                                                • Abbreviations
                                                                                • Appendix – The Market

                                                                                    • Figure 60: Total US sales and forecast of retail alcohol, at inflation-adjusted prices, 2015-25

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