Diageo Launches Alcohol Delivery Service In Time For the Holidays

Diageo (NYSE:DEO), the maker of Johnnie Walker whiskey and Smirnoff vodka, has partnered with the takeaway service Deliveroo to offer a new alcohol delivery service. Orders placed through thebar.com store, on the Deliveroo app and website, will be delivered by the takeaway service’s team of cyclists and bikers, using 30 local stores and off-licenses who have partnered with Diageo. This initiative is a part of the move to ‘take the stress out of shopping for your favorite drinks.’ The service will first be available to select London postcodes, with plans to later roll it across the UK.

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Founded in 2013, the takeaway service Deliveroo works with more than 16,000 restaurants, as well as over 20,000 riders to deliver food, attracting more than £150 million in venture capital investors. The company has earlier tied up with Heineken, which saw the launch of a new brand – Brew House – to offer door step delivery for the brand’s beers and ciders. This service was also first launched in London in November, with a roll out in the rest of the UK slated for before the end of the year. Deliveroo also inked deals with Majestic Wines and BrewDog in July. The home delivery service for food in the UK has boomed in recent years, with significant opportunity available for drinks companies to grow in this business. This also follows the growing connectedness of the generation of 18 to 24 year-olds, that now account for roughly 12% of the UK population. The spending habits of these consumers is estimated to be 24% higher than that of the average Great Britain consumer. Thus, tapping into this vibrant market is essential for today’s food and beverage providers. In a survey conducted by Zonal Retail Data Systems, over half (54%) of the 18 to 24 year olds were interested in using their mobile phones to speed up ordering and to pay for their meal or drinks. This leaves a great scope for growth among this generation for companies like Diageo.

Diageo first entered the direct-to-consumer shopping space with the launch of its ‘Alexander and James’ e-commerce site, aimed at shoppers looking to purchase premium labels, such as Blue Label and Gold Label Reserve Johnnie Walkers, Tanqueray No. 10, Ciroc Ultra Premium Vodka, Ketel One Vodka, and select single malt whiskeys. The site was named after Alexander Walker and James Buchanan, the founders of two of Diageo’s most popular whiskey brands. The sleek website, with easy navigation, was directed at people with money to spend. This was a result of an opportunity identified by the company, to create a luxury e-commerce platform, in response to the way people are seeking to purchase luxury items online. In addition to browsing and ordering spirits, visitors to the website can also learn about the company’s product offerings, and receive advice on food pairing and mixology ideas.

UK retail ecommerce sales are set to exceed £67 billion in 2016, fueled by growth in smartphone-based buying, according to eMarketer’s forecast. The region is a world leader in this space, and by 2020, digital retail sales will represent a 22.6% share of the total retail sales. This trend is also helping to offset a slowdown in traditional retail sales in the UK. During this year, total m-commerce sales are set to account for £25.2 billion, a whopping 25% increase over the previous year, and by 2020, the sales are projected to exceed £45.2 billion. Smartphone usage can be seen to have far-reaching implications for the retail industry, and hence, it comes as no surprise that Diageo is looking to embrace this trend full throttle, with a convenient holiday period time chosen for the launch of this service.

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