Dive Brief:
- DoorDash expanded its marketplace on Monday to include beer, wine and spirits on demand across 20 states and Washington, D.C., as well as Canada and Australia, reaching more than 100 million customers, according to a press release sent to Restaurant Dive.
- Where legally permissible, customers can toggle to the alcohol tab in DoorDash's app and order a selection of alcohol, including to-go drinks, from restaurants, grocery stores, local retailers and convenience stores. DoorDash's alcohol catalog includes 30,000 SKUs.
- The delivery firm's move comes after many municipalities allowed restaurants to sell to-go alcoholic beverages and cocktails during the pandemic as a way to boost revenue. As of late May, CNBC reported at least 14 and Washington, D.C. have made alcohol delivery permanent.
Dive Insight:
DoorDash's alcohol play is part of the company's push to enter new categories. In 2020, the delivery platform added grocery delivery to its app and launched DashMart, an online convenience store. Earlier this year, DoorDash rolled out DoubleDash. The feature allows users ordering from a restaurant to add items from nearby stores to their ticket, with no additional delivery free required. Square added to-go alcohol to its on-demand delivery feature in May, and DoorDash fulfills these orders.
Before the pandemic, DoorDash only offered alcohol delivery in California, but the company has built out the channel over the past year and a half. The addition of an alcohol category to its delivery marketplace could help boost awareness of this channel and make it easier for customers to discover which restaurants and retailers offer the option.
Facilitating alcohol delivery could also help attract and retain restaurant partners thanks to the category's revenue potential. Prior to the COVID-19 crisis, only a handful of restaurants used this channel to boost alcohol sales, because alcohol delivery laws can be confusing. But as local governments have eased alcohol regulations to support struggling restaurants, it's become clear how profitable this channel can be.
"The ability to continue offering alcoholic beverages with takeout and delivery orders could boost off-premises sales by 5%-10% for a typical restaurant that invested in such a program," Mike Whatley, vice president of state affairs and grassroots advocacy at the National Restaurant Association, said in the organization's State of the Restaurant Industry Mid-Year Update August 2021.
Demand for alcohol delivery is also high among U.S. adults, with 56% saying they would likely order an alcoholic beverage if it was offered with a food delivery order, according to NRA's 2020 State of the Industry Factbook.
As part of its rollout, DoorDash said it has implemented various industry standards and safeguards related to the delivery of alcoholic beverages, including rigorous ID verification to ensure customers are of legal age. The delivery firm is also offering a compliance course to Dashers 21 years of age or older to ensure they understand the laws surrounding alcohol delivery. DoorDash also allows customers to exclude themselves from receiving alcohol orders from DoorDash so they won't receive direct marketing related to alcohol promotions, the company said.
Other delivery companies have recently expanded their reach into alcohol as well. Uber purchased alcohol delivery startup Drizly for $1.1 billion in February. Waitr added alcohol delivery in 2019 in Louisiana, and Grubhub offers alcohol delivery in 10 markets.
