By Jackie Davalos | Bloomberg
DoorDash Launches Dedicated Alcohol Delivery Service, Advancing Into Non-Food Categories As The Battle For On-Demand Delivery Intensifies With Uber Technologies and Instacart.
DoorDash will offer beer, wine and spirits to the DoorDash Marketplace in 20 U.S. states and Washington, DC, as well as Canada and Australia, the company said on Monday. Customers will be able to order offers of alcohol at grocery stores, restaurants and other local merchants through a new “Alcohol” tab in the DoorDash app.
Alcohol delivery has exploded during the pandemic as COVID-19 restrictions moved happy hour from bars and restaurants to people’s homes. Lawmakers in many states have temporarily relaxed regulations to make alcohol available for home delivery and pickup. E-commerce accounted for just 1% of U.S. alcohol sales by retailers in 2019 by volume, but is expected to grow to 7% by 2024, according to Wine & Spirits Wholesalers of America, a trade group in the industry.
The boom has created an opportunity for delivery giants like DoorDash and Uber Eats to capitalize on the higher margin category. It’s also a boon for restaurants, as the addition of alcohol could increase average order value by up to 30%, according to Christopher Payne, COO of DoorDash. “It’s a win-win for everyone. Customers have more choice, restaurants can have better sales and Dashers can earn more, ”he said.
The San Francisco-based company controlled 57% of the food delivery market in August and has seen steady growth across all segments, even as dining room has picked up. The alcohol operation, which has more than 10,000 retailers, will also benefit from DoubleDash, a feature that allows customers to shop in multiple stores and consolidate them into one order. DoorDash’s move intensifies competition with Uber, which bought the on-demand alcohol delivery app Drizly Inc. for $ 1.1 billion in February.
Since regulations regarding alcohol delivery differ from city to city, the new offering will only be available in certain markets. DoorDash has stepped up its lobbying efforts alongside the restaurant industry and has seen “great traction” as lawmakers insisted on helping businesses that were battered when the pandemic shut down restaurants, Payne said.
DoorDash will use identity verification before payment and by couriers before delivery to ensure customers are 21 or older, the company said in a statement.
The company delivers alcohol to restaurants and through its Drive service, which handles orders from a merchant’s website rather than through the regular DoorDash Marketplace app.