As the world works its way back to pre-pandemic operations, lawmakers across the country are looking to make to-go sales of alcoholic beverages from bars and restaurants a lasting legacy, and DoorDash has launched its latest innovation in support of that effort. The on-demand food delivery service announced Monday that it has expanded its marketplace offerings into the alcoholic beverage category allowing consumers to pair a restaurant meal with a beer, wine or cocktail.
How does it work?
Consumers can now toggle to a separate tab dedicated to alcoholic beverages in the app, select their restaurant of choice, and place a food order alongside their preferred beverage. With this rollout, DoorDash also introduced DoubleDash which allows consumers to pair any alcoholic beverage with their restaurant meal, meaning in one order they can bundle a meal and a beverage that do not necessarily come from the same merchant. According to a press release, Doordash’s catalog consists of more than 30,000 alcoholic beverages available for delivery from more than 10,000 restaurants, grocery stores, local retailers, and convenience stores.
The app has put precautions in place to curb the sale of alcoholic beverages to under-age customers by placing the category in an separate tab that requires identity verification prior to purchase and a second age-verification performed by the courier when the order is delivered. In addition to precautions added to the customer side, DoorDash drivers will be required to complete a compliance course to learn the laws around alcohol delivery and the company will allow drivers to entirely opt out of delivering orders with alcohol. Along with the launch DoorDash has partnered with organizations dedicated to educating others about responsible alcohol choices such as Responsibillity.org and Students Against Destructive Decisions (SADD).
“The delivery and e-commerce sale of alcohol is still in its infancy and we believe as more states and cities allow for the delivery of alcohol through their own channels or third party partners, there will come a greater need for all players to operate responsibly,” a spokesperson for DoorDash said. “We want to work with the experts to get it right and build products, programs and policies that enable safe and compliant delivery of alcohol for all special occasion needs.”
Where does this position them?
DoorDash has been fulfilling alcoholic beverages orders through its white label delivery service integrated into the retailer’s online platform for more than a year, and the company said it has been carefully rolling out third-party distribution for a few months to ensure it is operating in accordance with individual state regulations. According to DoorDash chief operating officer Christopher Payne, adding alcoholic options to the marketplace app will help grow basket sizes and increase average order values by 30%, which in turn helps support the merchants and DoorDash’s gig-workers.
“We’re focused on creating more drinkable moments to the benefit of our merchants across our categories, which include restaurants, grocery stores, and convenience stores,” a spokesperson for the company said. “Because we run the leading third-party delivery marketplace and have the ability to service more than 100 million consumers and counting, we are able to leverage alcohol sales primarily to the benefit of our merchants and scale very quickly.”
The new segment is available in 20 states across the country and Washington, D.C., where to-go alcoholic beverage sales are legal. When the pandemic initially hit, 45 states revised legislation to allow first- or third-party alcohol delivery, according to DoorDash, and now, 14 of these states have since permanently amended that legislation while six have extended the relaxed restrictions until 2022. As of May 2021, 15 states had introduced bills to make to-go alcohol sales permanent, according to a report from CNBC. The new category will also roll out on the platform in Canada and Australia.
How is this segment growing?
Now that the trend of to-go alcoholic beverages has begun its shift from trend to legacy status, competition between on-demand delivery platforms is escalating as each company looks to integrate the new normal into their operations. According to Bloomberg, sales on meal delivery service platforms such as DoorDash and its top competitor, UberEats, grew 15% during the pandemic. Both platforms continue to race to outdo one another through a range of retail partnerships, brand acquisitions and tech innovations.
Additionally, DoorDash went public late last year as one of the biggest IPOs of 2020 closing its first day at $102 per share, according to Bloomberg. In February, Uber upped the stakes once again with a $1.1 billion planned acquisition of on-demand alcohol delivery marketplace Drizly. Alongside today’s announcement, DoorDash has partnered with national liquor retailer Total Wine & More to amplify its new category offerings.
Other major on-demand delivery services such as InstaCart and Gopuff have also integrated alcohol delivery alongside in app-purchases over the past year while apps such as Drizly, Saucey and Provi have fully dedicated their efforts to the category. Last month, national convenience store chain 7-Eleven announced a pilot launch with Minibar Delivery to bring on-demand delivery to consumers in select cities across Florida, Texas and Virginia with more states to follow soon.