Report: U.S. Online Alcohol Sales Expected to Reach $614 Million in 2016

onlinesales970

Online sales of alcoholic beverages in the United States are on the rise, and the industry is expected to generate $614 million in revenue this year, according to market research firm IBISWorld.

Sales are expected to continue growing over the next five years, the firm said, as consumers who are too busy to shop in brick-and-mortar stores rely more heavily on making purchases with their smartphones and tablets.

U.S. sales of beer, wine and liquor have grown at an annual rate of 11.7, percent from 2011 to 2016, according to IBISWorld. This year, revenue is projected to grow 6.5 percent due to greater consumer demand for craft beer, and an increasing number of online purchases from aficionados who are seeking out specialty products with limited availability, IBISWorld reported.

IBISWorld said it expects online alcoholic beverage sales to continue growing at 4.7 percent annually through 2021, to $772.3 million in revenue.

This year, beer accounted for the largest share — 43.2 percent — of total online alcohol sales, followed by wine (32.2 percent) and liquor (20.1 percent), according to the report.

That’s encouraging news for fledgling on-demand booze delivery services like Drizly, which recently launched a beer, wine and spirits marketplace that allows consumers to browse retailer inventories and compare prices.

However, Drizly, a Boston-based company founded in 2012, claimed less than one percent of online alcohol sales; market leader Wine.com owns 17.9 percent market share, IBISWorld said.

In August, Drizly completed a $15 million Series B funding round led by venture capital firm Polaris Partners, and IBISWorld projects Drizly will achieve profitability in 2017.

Meanwhile, Amazon Prime Now, which already offers alcohol deliveries in Seattle, Manhattan and Minneapolis, is considering adding Columbus and Cincinnati to its delivery footprint.

So who’s doing all of the buying?

This year, it’s been drinkers in the 30- to 49-year-old age group, which accounted for 36.9 percent of the industry’s revenue, the report said. However, purchases from 18- to 29-year-old millennials are expected to grow in the coming years. IBISWorld, citing a 2014 global e-commerce survey from Nielsen, said millennials accounted for 53 percent of respondents who said they planned to make an online purchase.

In its report, IBISWorld also noted that online retailers are partnering with brick-and-mortar liquor stores to fill and deliver orders as a way to increase profitability.

Profits are expected to reach 4.6 percent of industry revenue in 2016, IBISworld noted.