Dive Brief:

• Square has expanded its on-demand delivery feature to enable restaurants and bars to offer customers alcohol from their website and have it delivered through DoorDash, according to a press release.
• A DoorDash courier picks up and delivers the order once it's placed through Square Online. The driver also verifies the customer's age. The service is commission-free, while the order will be fulfilled through DoorDash for a $1.50 flat fee. The Square feature is available in Washington, D.C., and 15 states so far. 
• "We're excited to offer a new way for restaurants, retailers and alcohol sellers to get the most out of their current inventory. Whether that's a restaurant monetizing its wine cellar, a grocery store supplementing their on-premise sales, or a local brewery introducing old favorites to a new crowd, we're proud to provide our sellers with a new way to make more money," David Rusenko, head of e-commerce at Square, said in a statement.

Dive Insight:

Several states allowed off-premise alcohol sales during the pandemic to boost revenue for struggling restaurants and bars. Demand for alcohol delivery existed prior to the pandemic, however. In 2019, the National Restaurant Association found that 56% of adults said they would order drinks with their food delivery order from a restaurant.

Now that support is even higher as the option became a lifeline for restaurants. Alcohol has historically been a profitable offering for restaurants and can generate about 30% of revenue. As restaurants grow their off-premise business, it makes sense for them to want to continue driving those sales and profits through those channels.

"There will always be times when customers would rather drink at home — we don't want to miss out on that occasion. Adding a couple of beers to a food delivery is great for the customer and really meaningful to our bottom line," Dan Chapman, owner of A.W. Wander Craft Beer and Pizza in Manlius, New York, said in the release.

As such, several states have voted to make alcohol delivery permanent or are in the process of doing so, illustrating the growing need for Square's new feature.

Michigan was one of the first states to make alcohol to-go available through 2025, and three out of five on-premise restaurants plan to offer the option, according to the Michigan Restaurant Association. Iowa, Ohio and  Wisconsin have made the service permanent and in January, 13 additional states filed bills to make the option permanent. 

With growing demand from both customers and restaurants, other companies have moved to support alcohol delivery as well, including most recently Uber, which purchased Drizly in February and just launched an "everyday essentials" online shop that includes alcohol. Waitr is also now delivering beer and wine from local restaurants.

Despite the financial lift and demand from both restaurants and consumers, there has some been pushback against alcohol delivery. The American Public Health Association and US Alcohol Policy Alliance have warned this offering could lead to increased underage drinking, among other issues. However, with delivery and takeout business remaining steady as dine-in consumers return, the demand for alcohol to-go will likely remain steady as well. Polling by the National Restaurant Association last year found that support for making off-premise alcohol delivery permanent ranges from 70% to 85%.