Ecommerce to remain key driver as US online alcohol sales hit $6.1 billion

By James Lawrence

Published: 04 February, 2022

Ecommerce is becoming a major force in global retail, with online sales of BWS achieving a total value of $6.1 billion in the US market last year.

That's according to a new Rabobank report, which notes that “the huge spike in alcohol ecommerce that occurred from 2019 to 2021 isn’t going away. While growth is slowing, it’s clear that consumers will embrace online sales for years to come.”

Rabobank, a leading global food and agribusiness bank, reviewed a variety of data sources and interviewed experts at top companies in the alcohol industry for the report, concluding that ecommerce will be the number-one driver of industry growth over the next decade.

Its findings revealed that online sales now represent about 4% of all off-premise alcohol sales in the US, increasing from nearly 1.9% in 2019. In addition, the two channels most important for large brands and retailers – online grocery and marketplaces – grew 271% in just two years and are now nearly four times larger than they were in 2019. Moreover, the average size of ecommerce teams at US alcohol companies has increased 117% since 2019.

Rabobank forecasts suggest that online alcohol sales will grow an additional 3.4% in 2022, a testament to the robust nature of the channel and the continued investment from tech firms, brands and retailers.

Meanwhile, UK-based online retailer Virgin Wines has posted encouraging sales growth in 2021, suggesting that ecommerce will also remain as an increasingly an important part of the UK landscape. The business is one of the UK’s largest DTC digital wine retailers, and so offers a useful barometer when measuring the channel's future prospects.

“The Group has continued to deliver excellent growth across its subscription schemes, with customers on its flagship WineBank service performing ahead of expectations, delivering a 28% increase in revenue,” a report issued by Virgin Wines noted.

“The Group’s subscription schemes are a key driver of its direct-to-consumer (D2C) sales channel which represented 82% of total Group revenue in the period. Total subscription revenue accounted for 79% of D2C sales in the Period, up from 69% in H1 2021.”

Jay Wright, chief executive officer at Virgin Wines, commented: “As expected, the trading environment has evolved considerably over recent months, and given strong prior year comparatives, we have worked hard to maintain encouraging growth from our core sales channels, whilst maintaining strict discipline around our customer acquisition and our cost control.”

He added: “Despite current headwinds we look forward to the future with optimism. We have a range of leading consumer propositions with more and more people experiencing the benefits of buying delicious, great value wine online through our subscription models. We also have strong growth in our commercial channel and a clear strategy for continued long term, profitable growth.”

In the five years to 2025, total alcohol beverage ecommerce sales are predicted to grow by 66% across key global markets, according to the lWSR.

The organisation predicts that the US will lead the way, with other countries among the 16-strong focus group – including the UK, France, Germany, Brazil, Japan and China – also continuing to experience strong ecommerce growth.

Printer friendly version