Eight in 10 regular craft beer drinkers believe breweries should be allowed to ship beer directly to consumers in more states than the 13 where the practice is legal, according to a study published by the Brewers Association (BA) and Sovos ShipCompliant.
“It’s perhaps no surprise that craft beer drinkers’ interest in having their favorite beverages shipped to their doorsteps grew amid the COVID-19 pandemic,” Sovos ShipCompliant vice president and general manager Larry Cormier said in a press release. “Consumers got a taste for DTC beer shipments, and these attitudes and interests are here to stay.”
State and municipal governments began loosening restrictions for direct-to-consumer shipments and home delivery last spring when the pandemic forced on-premise establishments to close for on-site service, including the taprooms that many of the country’s nearly 8,400 craft breweries rely on for revenue.
The BA, the national not-for-profit trade group representing small and independent breweries, and Sovos ShipCompliant, a logistics and compliance company that serves the beverage alcohol industry, commissioned a survey of consumers and craft brewers about their DTC shipping habits and opinions.
The survey found that 57% of respondents who drink craft beer monthly had purchased beer directly from a brewery and had it shipped to their homes through third-party carriers. These consumers skewed mostly male — 65% of men had ordered beer to be shipped to them, compared with 43% of women.
The population segment most likely to purchase beer through DTC channels was men aged 35-44 who drink craft beer monthly, 83% of whom have ordered beer directly from breweries.
Just 20% of survey respondents older than 55 have ordered beer through DTC platforms.
Regular craft beer drinkers (those who consume craft beer at least once a month) tend to be male college graduates between the ages of 21-44 with an annual household income of $100,000 or more, the study found.
Respondents’ attitudes toward DTC shipments were overwhelmingly positive: 84% want breweries to have greater DTC shipping privileges and want to be able to purchase beer to be shipped to their homes. Four in five respondents said they “would be more likely to try new beer brands” if they could order them via DTC shipments.
Nearly three quarters (73%) of respondents who drink craft beer monthly said that their interest in beer shipped directly from breweries has increased due to the pandemic.
Currently, only 11 states have “clear, statutory authority for brewers to legally solicit and fulfill sales remotely and across state borders,” according to the report. They are Alaska, Kentucky, Nebraska, Nevada, New Hampshire, North Dakota, Ohio, Oregon, Vermont, Virginia and Washington, D.C. Oregon will only allow breweries to ship product to its residents if they are in a state that also allows DTC shipping. Pennsylvania grants shipping licenses to businesses with off-premise retail or wholesale licenses in their own states. Some states, such as California and Massachusetts, have allowed breweries to ship beer directly to in-state consumers.
The BA surveyed craft brewers on their DTC business practices and found that 82% employ some method of DTC sales, most commonly at their taprooms for on-site service (76%) and to-go sales (79%).
Just 13% offer shipping directly to consumers through common carriers, such as UPS or FedEx. Nearly a quarter (23%) run their own home delivery service, and 6% offer delivery through a third-party vendor. The least popular DTC method is shipping through a third-party retail platform (5%).
“Craft brewers across the country are interested in the market access afforded by all types of direct-to-consumer sales, including DTC shipping,” BA chief economist Bart Watson said in the release that accompanied the report. “This is not only a pandemic-induced pivot but a response to the growing demand we see from beer lovers to access their favorite beverage — online and shipped to their homes — the same way they do countless other goods in today’s ecommerce era.”
The majority of breweries surveyed told the BA they would be interested in more DTC options if they became available:
- Shipping via common carrier — 70%
- Brewery-run delivery — 70%
- Shipping via third party retail platform — 57%
- Third-party delivery — 56%.
This data “suggests that keeping brewery control of these processes matters to many breweries, as the lost margins from a third party, such as delivery or third-party shipping platforms, make the percentage interested drop by similar amounts,” the report read.
When contracting with third-party shipping or delivering platforms, breweries need to be cognizant of the legal responsibilities they and their partners have, McDermott, Will & Emery counsel Nichole Shustack said on the February 25 episode of the Brewbound Podcast.
“Brewers should keep their ears to the ground and understand what the dynamics are in the state and who they’re actually operating with, because if you contract with a third party, that’s not where your liability ends,” Shustack explained. “You have some obligation to make sure that you’re contracting with the right third party and they have all the protocols to make the delivery — for example, age verification.”