Alcohol delivery companies enjoying the party

Holly Ryan

19 Jan, 2018 04:00 PM7 mins to read

How much alcohol is there in your favourite drink?

In an on-demand era when you can buy anything from clothes to groceries without leaving your lounge, alcohol delivery was just a matter of time.

Cue a swathe of businesses all offering to deliver whatever tipple you fancy - wine, beer, spirits, RTDs, plus snacks and tobacco - to your door in less than an hour, for as little as $5.

"Having too much fun to do a beer run? We got this!" brags the billboard for one such company, My Beer Case.

Bevee, Brewbound and My Beer Case are just a few of the companies delivering alcohol at liquor store pricing.

Services that deliver beer or wine on an occasional or regular basis, such as My Wine Friend or Beerjerk, have been around for a while. Delivery within the hour, however, is a new model.

Despite potential risks and concerns, the industry is prospering, with new suppliers, expanding delivery routes and growing customer numbers.

My Beer Case founder Harmeet Sehgal, who set up the business in September, says he saw a gap in the market. The business is continuing to grow, he says, and now employs a team of five.

Starting with a small base in central Auckland, My Beer Case now delivers from Takapuna through to the southern boundary of Mt Wellington, and though he wants to continue expanding, Sehgal is wary of growing too quickly.

"We are looking to expand but it gets harder the further out you go. We don't want to open up all of Auckland from Matamata to Silverdale and then find we're struggling to keep up with deliveries - we want to manage the growth."

Under current alcohol regulations, these companies require an off-licence to operate as remote sellers. Sales cannot be delivered between 11pm and 6am, and the responsibility is on the seller and delivery person to ensure the buyer is not a minor or intoxicated.

Auckland Council manager of alcohol licensing Peter Knight says all applications by similar companies for an off-licence are considered by the council, before being approved by the District Licensing Committee.

He says the council is responsible for ensuring compliance by remote sellers, with inspectors regularly visiting the premises where the licence is held, and so far there have been few issues.

"The licence holders have been made aware of their responsibilities, as well as the potential risks involved with their business model," Knight says. "There have been very few breaches in regards to remote sellers. They appear to adhere to the objects of the Act very well."

The rise of these businesses has not been without controversy, however. A similar operation in Wellington, called Quenched, opened in May 2015 but closed just a week later after backlash from health professionals, who said it encouraged binge drinking.

The company faced criticism over its slogans, which included: "Delivering happiness"; "Need booze quick? We'll have it to your door in 45 minutes"; "Don't stop the party at your place early, we are here to help".

Alcohol Healthwatch director Nicki Jackson says the market is already saturated, and the organisation doesn't support these ventures.

"Our view is, overall, we want to reduce the availability of alcohol and we certainly want to protect those who have addictions and dependencies from ready access," she says.

"We think we're already saturated to be honest - alcohol is everywhere and we don't need it readily available within an hour of someone dropping it off to you."

Hazardous drinking is increasing, Jackson says. Since liquor laws changed in 1989, the number of off-licences has doubled.

Alcohol delivery company Bevee founders Jack Price (left) and Hugh Blackburne.

Bevee, founded by Jack Price, Jordan Jennings and Hugh Blackburne, launched in central Auckland suburbs in December 2016. At the time, Blackburne said Bevee was the only alcohol delivery company in Auckland, and after the issues with Quenched, they did their research.

"There are some obvious risk factors associated with alcohol delivery so we went out of our way to address those before we started the business."

Bevee spoke extensively with the council, police and a number of bars and other establishments before opening, Blackburne says, to ensure it was prepared for any issues it may face.

Delivery drivers are given extensive training and are required to ask for ID for anyone who appears to be under 25, and will refuse to serve anyone who is intoxicated.

In these cases the customer would be refunded, however if the customer was at fault, a small restocking fee would be kept to compensate for the driver's time.

Intoxication of minors was the major concern when the firm launched, but Blackburne says this has been almost a non-issue. Most of the company's customers are typically 25 to 35-year-old young professionals wanting a beer after work or wine with dinner, rather than those at big parties, he says.

"It has really surprised me because we haven't had that many issues at all. We were so prepared for this going in but then most of the customers are great and it's been an incredibly positive experience," Blackburne says.

"Mostly they're just chuffed that the service exists and how easy and enjoyable it is to use."

Bevee also sells cigarettes, which is legal as long as no brand images are used. Although legal, the sale of cigarettes is not encouraged, a Ministry of Health spokesperson says.

As well as organic growth, alcohol delivery companies may enjoy a boost in business if Auckland Council's new, provisional trading hours come into force, which could restrict off-licence trading hours to between 7am and 9pm, including at supermarkets.

For remote off-licence companies, including alcohol delivery firms, remote sales could still be made at any time, and delivered until 11pm.

A council spokesperson says the new policy was resubmitted in October last year, and is not yet in force.

The idea of fast alcohol deliveries is not a new one. Similar businesses have been operating overseas, with several receiving significant investment.

"We saw this delivery trend growing and when we looked overseas we realised alcohol delivery was actually a really big thing," Blackburne says.

"There's a few companies that have raised tens of millions of dollars, so we just thought, let's bring this to New Zealand - an exciting service that the local market would have a demand for."

Drizly, a US company founded in 2012, has received about US$35 million in funding since its launch. It now operates in 70 US cities as well as in Canada.

For Sehgal, the demand for an alcohol delivery service is no different to any other commodity ordered online. He says people have many reasons for wanting to have items delivered.

"In terms of the market, people would order under many scenarios - maybe because they don't want to be in traffic," he says. "Maybe because they've had a few drinks and want to make the right choice and not drive, and have their alcohol delivered - obviously the convenience part plays the biggest role."

"It's just easier to pay a small delivery charge and have the alcohol delivered."

Sehgal says the company is able to keep its pricing competitive by buying and selling in bulk.

"Alcohol is a very competitive business - just because you're an online shop and on-demand shop it doesn't give you the right to charge whatever you feel like. At the end of the day you're serving normal people."