Bottoms up: Instacart expands alcohol delivery to 14 states

Dive Brief:

Instacart has expanded its alcohol delivery offerings to reach more than 40 million households in the U.S., according to a press release emailed to Grocery Dive. Shoppers in 14 states and the District of Columbia can now get alcohol delivered same-day from participating retailers.
Almost one-third of Instacart’s 300 retail partners now offer alcohol delivery, including grocery stores Albertsons, Publix, Kroger and Schnucks as well as wine and liquor specialty stores BevMo and Total Wine & More. A new in-app banner calls out the new service and gives customers a link to shop beer, wine and spirits from participating stores.
Instacart began a slow rollout to expand alcohol delivery early in 2018, gradually adding new states and partners. Since then, the company has more than doubled its alcohol deliveries and tripled the number of retail partners offering alcohol delivery.

Dive Insight:

There is no shortage of retailers moving into delivery of liquor, wine and beer, and the pace keeps picking up. From coast to coast, new and traditional grocery companies including Meijer, Schnucks, Thrive Market, Amazon and Publix are now delivering booze, allowing shoppers to order their favorite six-pack, a celebratory bottle of Scotch or a nice Sauvignon Blanc for dinner with a quick tap or two on their phone.

Instacart has an extensive footprint in the U.S., now reaching more than 80% of households in all 50 states, but the company needs to continue to add users and build baskets in order to stay ahead. Alcohol delivery is a growing market, and for Instacart as well as the retailers it partners with, it offers the opportunity to bring new customers into their online grocery ecosystems.

The competition is growing, but Instacart knows it could see a substantial gain if it can win alcohol business from its shoppers. Retailers are making alcohol delivery available through their own e-commerce services or through other third-party partners like Favor and Postmates. Outside of grocery retail, there are a number of alcohol delivery apps such as Drizly and Saucey, as well as endeavors from companies like Anheuser-Busch to break into delivery.

Instacart is investing in its services and in maintaining its powerful reach among consumers. With big names like Kroger, Albertsons and Total Wine relying on it for alcohol delivery, Instacart has an opportunity to further prove its value for retailers. Alcohol is a high-dollar item with high profit margins, but the laws and logistics that govern delivery are tricky for retailers. In partnering with Instacart, grocers won’t have to worry about those logistics.

Less than 1% of alcohol sales occur online, the CEO of delivery service Thirstie told trade journal Shanken News Daily. But he expects that number to grow to 10% over the next year as online grocery sales increase and availability of alcohol delivery expands. With its existing infrastructure and incredible penetration across the country, Instacart is well-positioned to become a go-to provider for alcohol delivery.

E-commerce penetration in grocery is still low, but being able to get six packs and bottles of spirits delivered to their doorsteps in as little as an hour promises to get more shoppers buying online. Instacart is clearly optimistic about the market, and retailers will want to make sure they're offering a toast-worthy assortment both online and in stores.