AB InBev has announced to reinforce its efforts for online beer sales. Currently, the online beer market in the U.S. makes up less than 1% of the overall sales but is expected to outgrow the market.
At ZX Ventures, the global growth and innovation arm of AB InBev, the company has identified ecommerce as one of the future drivers of the beer business. “We have an ecommerce team around the world focused on winning in a digital world. Our team in North America works closely with retailers of all sizes to elevate the beer category online, while navigating state and federal regulatory regimes,” ZX Ventures said in an online announcement.
Online beer sales are not totally new to the industry, but consumers are still reluctant to go online shopping for beer for several reasons. Main problem is the "chicken-egg" dilemma, where consumers do not go online for the lack of sufficient attractive offerings and providers do not offer the product online for the lack of sufficient demand.
However, in the last time things are beginning to change. When Amazon launched its online grocery service Amazon Fresh in 2007, it was still a local service and the online giant needed to gain experience with grocery goods. In the meantime Amazon has gradually rolled out its service across major cities in the U.S. and expanded to other countries overseas. The development gained further momentum, when Amazon bought Whole Foods Market in 2017 (inside.beer, 15.8.2017), which operates grocery stores all around the U.S.
“Beer is very different from other consumer categories that have been disrupted by Amazon. But there’s little doubt that the industry will feel the impact of the largest online retailer expanding into grocery,” MillerCoors wrote in a blog post after the acquisition was made public.
Indeed, beer has never been the easiest product to sell online. In 2015, AmazonFresh stopped selling and delivering beer, wine, and other liquors without citing a reason for it. As it was supposed, the company encountered regulatory problems because intoxicating liquor couldn’t be mailed in the U.S., and services like FedEx had strict requirements for delivery. Until recently there was a well-known joke in the industry that the only person that made money on wine.com was the person who sold the URL.
But times are changing and it looks like the time has come for the online sale of beer and other alcoholic beverages. More and more players are entering the market.
In Germany, where online trade with alcohol and beer is widely liberated, a startup company called Flaschenpost (message in a bottle) was able to secure two weeks ago additional EUR 50 million for the further expansion of the business. Already one year ago, Dieter Büchl, founder and Chairman of the Board of Flaschenpost, was able to fund EUR 20 million from financial investors. The company, which started in 2014, guarantees a delivery of beverages in selected German cities within two hours.
Another promising concept is used by Oettinger Brauerei, one of the biggest German brewing groups, and several other smaller ones which recently started selling online draught beer in a one-way steel kegs (inside.beer, 19.12.2018)
ZX Ventures has conducted a survey together with privately owned, UK-based market research firm Mintel and asked 1,000 consumers in the U.S. about their awareness of online beer shopping, preferences and purchase drivers. From the results the company developed a guide called eCommpass, which is now handed out to retailers and gives insights, research and recommendations about the online beer category.
As a short summary, ZX Ventures has identified five emerging insights and trends around the online beer category in the U.S.
- A Small but Growing Market
Consumers who have purchased beer online in the past represent only roughly 6% of the adult (21+) beer purchasing population in the U.S. Over ¼ of consumers surveyed also didn’t even know they could buy beer online, showcasing an awareness gap in states where online purchasing is legal for adults of legal age.
- Convenience is King
With the barrier of carrying beer purchases home eliminated, consumers are driving larger basket sizes and buying more at once in comparison to an in-person purchase experience.
- Deals for Days
Shoppers love a good deal and beer is no exception. Value is a core driver of online beer shopping and shoppers want to know that they’re getting comparable, or better, prices than an in-store experience.
- Free Shipping Reigns
Overall, shoppers most frequently cite free delivery as the improvement they would like to see to drive a repeat purchase. Shoppers already expect free and fast delivery from their more traditional online retail purchases and beer is no different.
- Grocery & Beer Linked
Online grocery shopping is a more developed market but still only represents under 2% of the overall market 2. As grocery shopping becomes more ubiquitous we expect online beer shopping to as well.