Amazon Australia just set its sights on a brand-new market niche and the biggest players in the booze business down under and farther afield should be concerned.
With online shopping habits shifting due to the impact of coronavirus, increased online sales of alcohol and growth in work from home, the move is hardly surprising.
Sales of beer, wine, and spirits will add an estimated 125 million products to the Australian Amazon marketplace. “We’re excited to bring customers our new Wine, Beer, and Spirits store, featuring a range of much loved local and international brands,” said Matt Furlong, Amazon Australia Country Manager.
“Customers will be able to experience the convenience of ordering their favorite wine, beer or spirits alongside all the other products available on Amazon.com.au from household essentials, fashion, and beauty, through to video games and books,” Furlong added.
Australia’s $26.9 billion alcohol market
According to Statista, sales in 2019 for Australia’s wine, beer, and spirits industry were estimated at $26.9 billion and are expected to grow annually by 7.9%. Data showed 2019 beer sales were 43.8% of the market followed by wine (35.4%), spirits (12.3%), and cider, Perry, and rice wine (8.4%) with annual per capita consumption estimated at $1,054.96.
Like many industries, overall sales of alcohol have dropped dramatically with the closure of bars, restaurants, business and holiday travel, and tourist attractions. The Sydney Morning Herald reports beer, wine and spirit producers are being hit hard although some are thriving
Online wine retailer Vinomofo said it saw a 50 to 75% increase in online sales since the beginning of the coronavirus pandemic and is now on track to reach $60 million in sales this year. “People are no longer buying from restaurants and bars so have transitioned that experience to at home,” co-founder and chief executive Justin Dry told the newspaper. “For us at the moment we are running a million miles an hour to keep up with the growth.”
But not everything is rosy. For most businesses, online sales are not enough to replace their in-store and on-site sales of booze, especially when e-commerce was not part of their business model.
Alcoholic Beverages Australia chief executive Andrew Wilsmore said while online sales and delivery to the home grew, beer wine and spirit producers reported up to 30% declines in their overall business. “Indications are that overall sales and volume loss range from 10% to 30% with many small producers even more severely impacted,” Mr. Wilsmore said in an interview.
A perfect storm of alcohol sales opportunity?
Amazon says it will work closely with local breweries and distillers in its new online alcohol sales initiative as well as offer popular international brands such as Johnnie Walker, VB, and Penfolds.
“Australian brewers, distillers, and winemakers make some of the world’s best beverages from organic wines to Curatif Cocktails. We’re particularly thrilled to work with local brands at launch and help them access our customers, marketing tools, and logistics expertise to grow their business,” said Furlong.
Matt Sanger, Co-founder of Curatif Cocktails, said his company is happy to be one of the first liquor companies to sell on the Amazon platform. “We are so excited that we’ve decided to make our latest ready-to-serve creation exclusive to Amazon.com.au – the Curatif Plantation Rum Pineapple Daiquiri,” he said.
Nonetheless, Amazon will have to meet strict Australian regulations for online sales and home delivery including age verification and no unattended deliveries.
In what could be a test market for other larger markets, Australia represents a great place for Amazon to evaluate the potential for online alcohol sales. As we all know, once Amazon picks a market, it’s footprint can get very large, very fast.
Here’s to interesting times ahead in Australia.
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