States investigate home alcohol delivery via instant-commerce platforms

In a significant move that could change the logistics landscape for the alcoholic beverages sector, states like New Delhi, Karnataka, Haryana, Punjab, Tamil Nadu, Goa and Kerala are exploring pilot projects to facilitate home delivery of alcohol through online platforms like Swiggy, BigBasket, Zomato and Blinkit. Initially focused on low-alcohol beverages like beer, wine and liqueurs, these initiatives could revolutionise the way alcohol is distributed and consumed in India.

State officials are currently evaluating feedback from e-commerce platforms and spirits producers to assess the potential benefits and challenges of online alcohol delivery. The shift is largely due to the growing expat population in major cities, evolving consumer profiles that see mid-strength drinks as part of recreational dining, and demand from women and the elderly for a more convenient and less intimidating shopping experience.

“This initiative aims to adapt to changing consumer behavior and the needs of a diverse demographic,” said a well-placed industry executive. “Online platforms provide a streamlined, safe way to purchase alcohol, ensuring age verification and compliance with regulatory standards.”

The logistics of delivering alcohol involve complex coordination between e-commerce platforms, retailers and regulators. Platforms like Swiggy and Spencer’s Retail, which are currently facilitating home delivery of spirits in West Bengal, have developed robust systems to ensure comprehensive transaction records, excise compliance and adherence to shipping restrictions.

“Online models ensure accurate transaction records, age verification, and compliance with regulatory requirements,” explains Dinker Vashisht, vice president of corporate affairs at Swiggy. These measures include synchronizing with regulatory requirements on delivery times, dry days, and zoning restrictions.

Despite the potential benefits, the initiative has faced obstacles, including political opposition, challenges related to public perception, and resistance from brick-and-mortar retailers. During COVID-19 lockdowns, temporary permits for alcohol delivery in states like Maharashtra, Jharkhand, Chhattisgarh, and Assam have highlighted both the need for such a model and the challenges of implementing it.

In states where online alcohol delivery is allowed, such as West Bengal and Odisha, retail executives are reporting sales growth of 20-30%, especially for premium brands. This suggests a significant market opportunity for logistics and supply chain companies specializing in e-commerce and fast-paced retail.

In addition, implementing mandatory eKYC, purchase limits and OTP verification between stores, delivery staff and customers solves the problems associated with uncontrolled sales. “Online delivery services can offer more controlled and regulated sales than traditional retail outlets, helping to prevent underage drinking and ensure responsible consumption,” noted a senior executive from Beer Cafe.

Beer and wine producers, including major players like United Breweries and AB InBev, are particularly interested in expanding home delivery services. This is in line with consumer preferences for chilled beverages that seamlessly blend with grocery shopping. Plus, because beer requires refrigeration, it takes up a less visible space in traditional alcohol stores, making online delivery a more viable option.

In 2020, AB InBev launched Beerbox, a technology platform that lists outlets that deliver spirits within a 3-4 km radius, after Maharashtra temporarily allowed home deliveries during the pandemic. Such innovations underscore the potential of technology to transform the alcohol supply chain.

As countries continue to research and potentially implement these pilot projects, the logistics and supply chain sectors must prepare for the complexities and opportunities that the digital transformation of alcohol distribution brings.

Sources: Economic Times