August 13, 2021Breweries
For Craft Breweries, rolling lockdowns are sink or swim.
Adapt quickly and you’ll survive and in some cases; thrive. But, for those that didn’t shift while the world changed around them… ‘ice-berg ahead!’
If on-premise was your sole source of revenue (bars, clubs, and restaurants) and you failed to have a plan B, you missed out.
But new opportunities are popping up in some more traditional forms.
Recently, we went through the core sales channels for a brewery that can diversify revenue streams and future proof against the next world event. So, we decided to look at some data around the home delivery market and what we found was something really quite astounding, but not at all surprising.
Our in-house Google Guru Tommy looked into the search term “craft beer” and its associated trends in Google. This led him to find a massive spike for the search term “Craft Beer Delivery”. As you can see in the graph below, the spikes look like what you would see on the vital signs monitor of a sick patient.
Significant spikes, followed by a period of calm with a completely random distribution.
% increases in search volume for the term “Craft Beer Delivery”.
However, with just a few minutes of digging into these dates, they don’t seem random after all.
Once Tommy started mapping this to the news, it was clear there was a perfect correlation to the rolling lockdowns experienced in Melbourne, Melbourne, Melbourne, Sydney, Melbourne, Brisbane, and did I mention Melbourne.
Melbourne Lockdown, end date June 10th – Spike on 10th of June
Sydney lockdown extended on June 14th – Spike on 14th of June
Melbourne Lockdown on July 18th – Spike on the 19th
Melbourne Lockdown on May 26th – Spike on the 27th
If you look at the data in a little more detail, it shows something much more powerful.
As each new lockdown is announced, there is an uplift in consumer interest for this search term. It seems the lockdowns are having an unexpected long-term effect. They are causing a new consumer habit.
Consumer behavior during lockdowns
Based on new IWSR research, the value of alcohol e-commerce is forecasted to increase by 42% this year in 2021, across 10 core markets (including Australia and China), to reach $24 billion.
Google reported that they saw a 500% increase in the interest in purchasing alcohol online during the first month of lockdown (March 2020).
1: You will need to obtain the appropriate license
If you are wanting to sell your beer online, home delivery service or mail order, you must hold a valid liquor license. Specifically, you must hold a:
a) A Packaged Liquor License will authorize you to sell;
liquor by retail in sealed containers on the licensed premises for consumption away from the licensed premises;
liquor wholesale to persons authorized to sell liquor;
or supply liquor, at any time on the licensed premises, to the employees of the licensee;
or supply liquor on the licensed premises during the trading hours permitted, otherwise than in sealed containers to customers only for the purpose of tasting.
b) A producers Liquor License authorizes a Brewery, Distillery or Winery to:
supply their own alcoholic products to other license holders
supply their own alcoholic products at your premises for taking away sale
supply liquor for consumption on their premises
deliver their own packaged products to customers
sell their own alcoholic products from additional retail premises.
2: Marketing your product
Put yourself in the consumer’s shoes. If they want to find beer online, they are going to:
search craft beer delivery in which case you get the picture below, which is all ads. You want a good beer maker, not a great marketer.
go to the first brand they know; which takes time and money that 95% of breweries don’t have.
go to where they order their food (UberEats, Deliveroo, etc) which costs the restaurant 35% of the total bill size, so probably very little margin.
For the vast majority of craft breweries, these options are untenable, but if marketing and logistics aren’t your strong suits, you have options. If you think about beer delivery….
Selling through your website with a 3-7 day shipping turnaround won’t work for customers. Alcohol is an “On-Demand” product. When you want it, you want it, and tooling up with a delivery team, vehicles, fuel, insurance, and systems is a poor commercial decision.
So get your beer onto the alcohol delivery apps
Online alcohol retailers/delivery apps are lockdown-proof. Most importantly they provide a way for new and existing drinkers of your beer to access your products cold and quickly via a method that is not going to break YOUR bank.
So call them up and add them to your portfolio of distributors.
Here is what Google says are the top 5 On-Demand and Same Day delivery apps
If you can spark up a distribution relationship with apps like these, you add another “on-demand” sales channel to your portfolio, on top of the sales channels discussed in our previous article.