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The Spoon

Daily news and analysis about the food tech revolution

alcohol delivery

Third-Party Delivery Service Waitr Buys Delivery Dudes for $23M

Third-party delivery service Waitr announced today it has entered into an agreement to buy Delray Beach, Florida-based company Delivery Dudes for $23 million. The stock-and-cash deal is expected to close before the end of next week.

Delivery Dudes’ digital ordering properties and phone number will remain operational. The company said the acquisition would help it to improve service for customers, which is available around the South Florida area.

What the deal brings for Waitr is a little less clear. Waitr, which operates in small- to medium-sized U.S. cities, is one of the only third-party delivery services that has so far achieved profitability. However, it holds just 1 percent of the market share for third-party delivery in the U.S., according to recent data from Second Measure. By comparison, DoorDash holds 56 percent, Uber Eats holds 20 percent, and Grubhub has 17 percent.

Delivery Dude’s service radius is unlikely to change those numbers much, since the company only operates in a small region within the U.S.

Potentially more advantageous for Waitr is its move in recent months to add more service types to its business. In some markets, Waitr now delivers alcoholic beverages directly from restaurants. Even more recently, the company struck a deal with a payment processing company called Flow Payments to create “a compliant marketplace, delivery, and payment solution” for cannabis dispensaries. 

Other third-party delivery services have also diversified their business models over the last year, with both DoorDash and Uber Eats offering grocery and DoorDash running its own “ghost convenience stores.” We’ve yet to see any of the major players peddling cannabis to customers doorsteps, though.

Whether Waitr will be successful at this remains unclear. The service operates largely in the South and Southeastern U.S., where cannabis and/or cannabis delivery is illegal in most states. There is currently no timeline for Waitr’s service in this particular vertical.

As far as its acquisition of Delivery Dudes goes, Waitr will be able to expand into new markets through it. Again, it would be a relatively small expansion, given that Delivery Dudes only serves part of Florida. But these may also be new areas in which Waitr can try out its diversified services, potentially building more profitability for the company in the future.

Uber Buys Alcohol Delivery Service Drizly for $1.1 Billion

Uber announced today that it is acquiring online alcohol marketplace and delivery service Drizly for roughly $1.1 billion in stock and cash. Prior to the acquisition, Drizly had raised $119.6 million in funding.

According to the press announcement, Drizly operates in more than 1,400 cities across most of the U.S. The company works with thousands of local booze sellers to facilitate orders and delivery of beer, wine and spirits.

Uber said that more than 90 percent of the price paid to Drizly stockholders will be in stock, with the remaining balance paid in cash. Once the acquisition is complete, Drizly will become a wholly owned subsidiary of Uber. Drizly’s marketplace will eventually get integrated into the Uber Eats app and also keep its own titular app.

The move further strengthens Uber’s biggest moneymaker right now — delivery. The pandemic, of course, crushed Uber’s ridesharing business as various states of lockdown/quarantine/movement restrictions negated the ability of people to go anywhere.

But all this quarantining has been a boon for Uber’s food delivery business. In its 2020 Q3 earnings report, Uber said that adjusted net revenue for delivery grew 190 percent year-over-year, hitting $1.14 billion in revenue. As such, the company has spent the past year bolstering delivery, acquiring rival delivery service Postmates for $2.65 billion last summer, and expanding beyond just restaurant food and into grocery delivery.

In addition to eating at home more often, the pandemic, for good or bad, pushed a lot more people into drinking. As of September 2020, Nielesn reported that total sales of alcohol outside bars and restaurants were up 24 percent during the pandemic. At that same time, Drizly told NPR that its sales were up 350 percent year over year.

With the Drizly acquisition, Uber stands to gain in the short term from the continued closure or limited capacity of bars and restaurants across many states. Beyond the immediate closures, since we’ve been dealing with COVID life for practically a year now, new habits have formed including getting alcohol delivered to your door. So getting a bottle of vodka brought to you at home pretty close to on-demand isn’t that strange an idea any longer.

And even though the rates of COVID infections are currently going down in the U.S. and vaccines are being deployed, who knows what going to bars will be like when things return to normal. Will people be skittish to be shoulder to shoulder with hundreds of people yelling for prolonged periods of time? After being cooped up for so long, there’s certainly a pent up desire to do so. But there will also be a desire for smaller, more controllable gatherings at our homes. Gatherings that will definitely need some booze.

Haus Raises $4.5M for Direct-to-Consumer Spirits Business

California-based Haus has raised $4.5 million in seed funding for its direct-to-consumer approach to spirits that promises healthier ingredients, less alcohol, and a more transparent distribution process. The round included over 10 funds and 100 individual members contributing, according to TechCrunch, and included contributions from Haystack Ventures, Shrug Capital, Resolute Venture Partners, and Work Life Ventures, among others. 

Haus, which was founded by married couple Helena Price Hambrecht and Woody Hambrecht, makes a low alcohol by volume (ABV) apéritif it sells directly to consumers online. The company also offers an alcohol subscription service that functions much like a traditional wine club — members pay a monthly fee and receive discounted bottles of spirits delivered directly to their door. Members can receive one bottle per month for $35, two for $63, or six for $144.

Where Haus differs from other online alcohol services is in the products it offers. The founders were inspired to start Haus in order to offer a more health-conscious alcohol product than what one normally finds in-store and via subscription clubs. To that end, the company’s apéritif drink uses only natural ingredients and has a lower ABV than many spirits: 15 percent compared to the 35 to 45 percent found in most regular spirits.

That lower ABV content also allows Haus to ship their product directly to consumers in certain states, according to TechCrunch: “Woody, an experienced winemaker, identified a loophole that allows distributors to ship alcohol direct-to-consumer if the product is made mostly from grapes and is under 24% alcohol.”

At present, the apéritif concept is less popular in the U.S. than hard liquor or wine, but the lighter alcohol content speaks to the growing number of consumers interested in low- or no-alcohol beverages. And with more traditional services like Thirstie and Drizly already popular in the U.S., Haus’ emphasis on flavor and wellness could very well help it stand out from other alcohol delivery brands.   

Thirstie Launches Thirstie Access to Let Alcohol Brands Sell Directly to Consumers Online

Thirstie, who makes e-commerce software for liquor brands, today announced Thirstie Access, a solution that will let alcohol brands build and manage their own online storefronts. According to an email sent to The Spoon, Thirstie Access enables the direct purchase of actual booze from these sites, which is a first for the spirits industry.

Despite the uptick in online booze sales over the last few years, purchasing alcohol directly from a brand is tricky business in the U.S. There’s a three-tier system, where alcohol producers hand the product to wholesale distributors, who in turn supply retailers (aka the liquor store) that sell to the customer. Under this system, each tier is regulated separately and no one party can be involved in more than one tier.

The advent of online alcohol sales calls into question whether that system is antiquated and inefficient, seeing as it slows down the process of getting on-demand-crazed consumers their goods as fast as possible. Hence the arrival of companies like Thirstie.  

Since its launch in 2014, the Thirstie platform has acted as a kind of middleman between liquor companies and consumers, facilitating the purchase of alcohol online and connecting brands to its network of local retailers that can deliver the order to the consumer. Its software platform enables liquor companies to essentially bypass the distribution tier and send consumer orders to the retailer for delivery. As my colleague Chris Albrecht wrote last year, with Thirstie, brands, “can ‘sell’ their goods without actually selling them.”

The Thirstie Access tool changes that by letting liquor brands process and handle purchases directly from their own sites. In other words, they can finally add that “Buy” button so noticeably absent from most of these brands’ websites, which is something of a first for the spirits industry. Using Thirstie Access, an alcohol company will be able to quickly build an industry-compliant website from which it can sell its products to consumers. Companies using the Access tool will also be able to leverage Thirstie’s API and its network of retailers (who still have to do the actual delivering of the booze).

There are a few advantages to consumers being able to purchase directly from a liquor brand’s website. For one thing, it cuts out an extra step (or three) in the consumer’s buying journey — instead of getting redirected to a marketplace or liquor retailer’s site, the buyer can simply add items to their cart and hit “buy.” Direct purchasing also means liquor companies get access to their consumers’ purchasing behavior, which is nowadays considered the Holy Grail in online retail. The hope is that both of those things translate to higher direct sales for alcohol brands, particularly the independent ones who often have to fight hard for visibility alongside their more mainstream counterparts.

On that note, Thirstie will launch Thirstie Access with three indie spirits companies: Proper No. Twelve Irish Whiskey, RAMONA Organic Wine Spritzes and rum brand Ten to One. Proper No. Twelve will be available for delivery for residents of California, New York, Kentucky, and 15 other U.S. states. Further expansion is planned for 2020.

Thirstie said in the press release it will add “an extensive list” of brands to the Access platform over the next few months. 

Trendwatch: Flat is the New Black for Bottles

One of IKEA’s more genius moves was to break down their products so they could fit into flat boxes. These flat boxes made stacking, shipping and delivering odd-shaped Malm-style dressers and such easier and cost-effective. In much the same way, we are starting to see the containers for your favorite liquids get flattened to facilitate easier shipping and delivery.

Case (pardon the pun) in point: Food and Wine reports Garçon Wines’ Flat Wine Bottle, which was just listed as a Diamond Finalist in 2018 30th Awards for Packaging Innovation put on by Dow Chemical Company. (You know, like the Oscars, but without all the glitz.)

The Garçon flat wine bottle is pretty much what it’s name suggests: a squished wine bottle made from recycled plastic that is narrow enough to fit through the standard U.K. (where the company is located) mail slot. The company says it is made from 100 percent recycled, food-safe PET plastic. The plastic also makes the bottle lighter to ship and helps it withstand tumbles in transit as well as the drop from the mail slot to the floor.

Garçon is actually a B2B company, and has protected the intellectual property behind its bottle design. According to its website, Garçon is actively seeking out relationships with various wineries and “with those working at every stage of the drinks supply chain,” according to its website.

Garçon seems to be hitting the market at just the right time. Beverage Daily writes that by one estimate, 34 percent of beer drinkers in the U.K. buy booze online. Here in the U.S., DRINKS said that it shipped 10 million bottles of wine in the U.S. in 2017, and has 500,000 active households as customers.

Garçon is thinking bigger and partnering up with bottling facilities to expand beyond wine. Other companies are taking this flat approach as well. As we wrote about last month, Olivery’s smart olive oil bottle/system uses flat, plastic pouches that can fit through a mail slot to get you your olive oil refills.

Better packaging for shelf-stable beverage and liquid delivery will beget more types of bottled products that can be ordered online, which will beget even more types of packaging modified for easier/cheaper transport. And unlike IKEA, when the flat bottle of wine arrives, you don’t have to assemble it.

DRINKS Gulps Up $15M to Boost its Boozy B2B Biz

DRINKS, an online platform that powers direct-to-consumer wine sales for brands like Martha Stewart Wine Co. and Wine Insiders, today announced it has raised a $15 million Series B round of funding led by Beverly Pacific. This bring the total amount raised by DRINKS to $25 million

According to the press announcement, DRINKS will use the new funds to scale its “ship-to-home platform that enables online and brick-and-mortar retailers to market wine directly to consumers in up to 41 states.”

The DRINKS platform lets digital merchants as well as brick and mortar stores start selling their own wine portfolios directly to consumers. The company says it facilitates curating wines for its clients, state-level compliance, as well as delivery.

While the funding is a nice way for DRINKS to bolster its coffers, it also reinforces the trend of investors paying attention to logistics and fulfillment of food and beverage. The DRINKS raise comes less than a month after Boxed raised $110 million in part for its end-to-end bulk grocery fulfillment technology, which the company can license to other retailers in the U.S..

Of course, DRINKS faces plenty of competition when it comes to delivery of boozy libations to your front door. Saucey, Drizly and Minibar also connect online customers with retail stores to facilitate home delivery of alcohol. DRINKS’s more B2B white label approach, however, seems to set it apart. And unlike other wine sellers online, DRINKS focuses on straight purchases, not subscriptions.

Based in Los Angeles, DRINKS was founded in 2013 and the company says it delivered more than 10 million bottles of wine in 2017, has delivered to 1 million households since its founding and has 500,000 active households. With today’s news, the people at DRINKS were probably raising a few glasses to celebrate.

Want To Become A Mixologist? There’s a Subscription Delivery Service For That

With alcohol-delivery services becoming the norm, it’s time to take the next step in the evolution of the online drink: cocktail-making kits delivered to your door.

Some might question whether $50 per month for a cocktail kit is worth the money. And sure, if your idea of a mixed drink is tonic water splashed onto an arbitrary amount of vodka, said kit might be a waste of money. But if you’re after high-quality ingredients and a chance to learn the art of mixology, Shaker and Spoon is definitely worth checking out.

The company was born in 2015 in Brooklyn, when designer Anna Gorovoy and animator Mike Milyavsky decided to apply the meal kit concept to drinks. You won’t find any rum-and-coke recipes here. The idea is to recreate the kind of bespoke cocktails found in upscale bars, but in the comfort of your own home. The monthly service aims to turn subscribers into tastemakers and, one assumes, keep them from defaulting to beer cans as party refreshments.

To do that, Gorovoy and Milyavsky enlisted “The People’s Champion of Bartending,” Russell Davis. Davis has some well-documented mixology chops and also owns a high-end spirits company. He currently oversees the creation of Shaker and Spoon’s many recipes that get shipped out with the boxes.

And those recipes will certainly widen your cocktail palette, whether they call for snap peas mixed with gin or lemon-lychee cordial and sake. Each box includes all ingredients needed, except the alcohol itself. (The company has a thorough explanation for this.) Subscribers can preview upcoming boxes to decide if the contents are appealing or if it’s better to skip a month.

As far as cost goes, it’s a lot cheaper than taking a mixology class or trying out new drinks at a bar. Boxes range from $40 to $50 per month, with ingredients to make 12 cocktails (4 per each recipe). Considering that the average high-end cocktail in Brooklyn costs at least $14, often more, a $50 price tag doesn’t seem too steep even when you add the extra money for the alcohol.

Some are calling Shaker and Spoon the Blue Apron of booze, which is fair. I’d argue, though, that the service actually reaches beyond that. It’s going a bit far to say the company promotes an entire lifestyle (yet), but they offer a pretty in-depth education on high-end tastes via the website. Ever wonder how to properly crush ice? Shaker and Spoon will tell you. Did you know the Coupe glass was modeled after Marie Antoinette’s breast? Neither did I until I read about it the site. All things considered, I’d dub the service “mixology school in a box.”

In our transaction-based society where we eat faster, drink more, and hardly stop to savor either, it’s encouraging to see a company favor quality over quantity and grow popular at the same time. Let’s hope they’re paving the way for new era, where we learning the craft of food and drink is as important as getting the materials themselves delivered.