It became easier than ever to order alcohol on the go during the pandemic, as restaurants added cocktails to their take-out menus and delivery apps sped up alcohol delivery.

Today, many of the relaxed rules that allowed all of this to happen are becoming permanent and the race is on to dominate the on-demand alcohol market.

Alcohol is generally more profitable than hot meals, which is why companies like Grubhub GRUB -0.17%

and Uber Eats who struggle to make money by delivering food are scrambling for the company. But they face stiff competition. Supermarkets sell six packs for pickup and delivery. Restaurants are investing in premium take-out drinks. Established online liquor sellers such as Minibar Delivery and Wine.com flourished during the pandemic.

Alcohol sales on apps and delivery platforms more than tripled last year compared to 2019, according to an analysis of credit and debit card transactions by Earnest Research. Alcohol sales at grocery retailers increased 27%, according to NielsenIQ.

Last year, more than 30 states and Washington, DC, relaxed rules limiting take-out drinks to restaurants and bars during Covid-19 lockdowns, and some delivery companies have also allowed delivery companies to transport beverages, according to the Distilled Spirits Council of the United States. , a trade group that pushed for change. More than a dozen of these laws have become permanent, and more are underway, making widespread changes to the delivery and take-out of alcohol across the country.

A bartender serves a customer at the Brooklyn Safehouse in Greenpoint, Brooklyn. New York was among states that relaxed rules limiting take-out drinks to restaurants and bars during the pandemic.


Photo:

James Sprankle for The Wall Street Journal

Some delivery companies are spending to capture as much of the market as the new rules allow.

“We do it wherever it’s legal,” Grubhub Inc. CEO Matt Maloney said of alcohol delivery.

Delivery apps are successful deals to take alcohol sales further. Uber Eats Parent Uber Technologies Inc.

made a deal earlier this year to buy the Drizly liquor delivery service for $ 1.1 billion in stock and cash, and payment processor Square Inc. partnered with DoorDash this month to deliver alcohol.

Drizly has already navigated the complex local rules around alcohol delivery and will allow Uber to grow into the high-margin category faster than alone, the company said. The delivery company will eventually integrate Drizly into its Eats app, while allowing it to retain its independent service, Uber said.

Paula Lorena Pérez, a 25-year-old medical student in San Antonio, Texas, tried alcohol delivery services for the first time during the pandemic. Ms. Pérez and her fiancé are now addicted, especially since the services offer a variety of things like hard seltzers that they can’t find in convenience or grocery stores in the area.

“We will definitely be following these services mainly because I like inventory,” Ms. Pérez said.

Take-out cocktails were a higher margin lifeline for restaurants reliant on delivery and postponement last year. The work involved in mixing a drink, for example, is usually less than cooking a hot meal. About seven in 10 full-service restaurant owners said they had started offering takeout or delivery alcohol, according to a survey of 6,000 operators by the National Restaurant Association trade group. Twenty percent of takeout customers surveyed said they added alcohol to their orders, compared to 18% of delivery customers.

Kimberly Solomon, a 41-year-old lawyer from Austin, Texas, said she started ordering take-out margaritas and sake last year and plans to continue doing so now that the state allowed take-out alcohol consumption at all times. Takeout for a dinner for two with drinks can cost anywhere from $ 100 to $ 250, she said, but saves her from paying a babysitter. She is avoiding delivery for now to give more of her money directly to restaurants.

“We often receive a suitable drink with our meal, just as we would if we were dining out,” she says.

Delivery companies have less market share for take-out cocktails than for restaurant meals, according to estimates from industrial firm Black Box Intelligence. Many states require a takeout order to contain more food than alcohol, and not all states allow delivery apps to sell takeout cocktails.

A Drizly driver makes a delivery to Boston in February. Uber has struck a $ 1.1 billion deal to buy Drizly this year.


Photo:

allison dinner / Reuters

Responsibility rules and the safe handling of alcohol have discouraged some delivery companies from transporting cocktails to certain areas of the country. Uber Eats did not deliver take-out cocktails to California, for example, because the state requires them to be transported in a locked trunk under most circumstances and many couriers do not use a car, said one. spokesperson.

Delivery of alcohol from restaurants is likely to remain a small share of overall sales, but can help attract new customers and is generally positive, said Victor Fernandez, vice president of knowledge and insight at Black Box. Alcoholic beverages made up 14% of restaurant-to-table sales before the pandemic, according to figures from Black Box. When the crisis hit, those incomes plummeted.

Since prohibition ended in 1933, Congress has largely left it to the states to regulate the sale and distribution of alcohol. This has led to a patchwork of rules across the United States and some quirks influenced by local ridings. The ability to take cocktails to a restaurant or bar was rare, although Florida and Mississippi allowed take-out cocktails with restrictions – just like New Orleans.

Business groups called on state houses to ease restrictions on alcohol when the pandemic closed dining halls.

But not everyone is a fan of the new rules. Critics of bills to make take-out drinks permanent fear that loosening alcohol laws will make drinking easier for young people. Others say states are moving too quickly to overturn alcohol laws that have been in place for decades in the face of pressure from business groups seeking to capitalize on the pandemic.

In New York City, liquor store owners are pushing to revert to the old rules, with the backing of a coalition of law enforcement unions worried about the potential increase in drink driving. A temporary allowance for serving take-out drinks, currently authorized by an executive order signed by Governor Andrew Cuomo, expires on June 5.

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Some, concerned about the new laws, have called on states to ensure authorities enforce identification requirements and safe handling guidelines to tackle drinking and driving. In Georgia, for example, the State Police and Alcohol Watch Division are launching a campaign later this year to enforce open container laws, a State Department spokesperson said. of Income.

Along with alcohol on the go, there is also a lot at stake for traders. Retailers have seen strong increases in alcohol sales over the past year, but face competition from alcohol delivery companies keen to reach customers beyond traditional parameters. Some stores are responding by selling alcoholic slushies and other drinks to in-store customers, some trade groups have said. Other retailers are partnering with delivery companies to try and satisfy their customers’ interest in convenience.

Several chains are investing in take-out and delivery cocktails even as their dining rooms have reopened. Applebee’s said it offers a $ 5 take-out cocktail offer online where permitted. The Outback Steakhouse has been testing take-out cocktails and plans to start selling take-out margaritas in mason jars at 230 restaurants this summer, according to parent company Bloomin ‘Brands Inc. The company hopes to use its own drivers to deliver the cocktails. where permitted.

Gary Cohen, executive vice president of Glory Days Grill, a chain of 39 restaurants in six states, said demand for take-out mixed drinks remains higher in places like Florida, where state rules are more permissive .

“Our managers in Florida sell margaritas and sangria by the gallon,” Cohen said.

Some Death & Co. establishments offer cocktails and toppings to go. They were also selling through delivery apps, but stopped around two months ago due to the high commissions charged by the apps.


Photo:

Shawn campbell

The owner of the craft cocktail bar, Death & Co., searched for labels, bottles and recipes for cocktails consumed offsite during the pandemic, said National Beverage Director Tyson Buhler. Death & Co. used app-based companies to deliver their drinks last year, but Mr Buhler said bars suspended service about two months ago because of the commissions they were charging.

At the moment, Death & Co. bars sell bundles of cocktails in sealed containers for around $ 30 for three servings to patrons in New York, Los Angeles, and Denver – for take-out only.

The next act for delivery apps

Write to Heather Haddon at [email protected]

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