DoorDash is starting a dedicated alcohol delivery service, advancing a push into nonfood categories as the battle for on-demand delivery intensifies with Uber Technologies and Instacart.
DoorDash will offer beer, wine and spirits through the DoorDash Marketplace in 20 U.S. states and Washington, D.C., as well as Canada and Australia, the company announced on Monday. Customers will be able to order alcohol offerings from grocery stores, restaurants and other local merchants through a new "Alcohol" tab in the DoorDash app.
Alcohol delivery exploded during the pandemic as covid-19 restrictions shifted happy hour from bars and restaurants to people's homes. Lawmakers in many states temporarily relaxed regulations to make alcohol available for home delivery and pickup. E-commerce made up just 1% of U.S. alcohol sales by retailers in 2019 by volume but is expected to grow to 7% by 2024, according the Wine & Spirits Wholesalers of America, an industry trade group.
The boom has created an opportunity for delivery giants like DoorDash and Uber Eats to capitalize on the higher-margin category. It's also a boon for restaurants as adding alcohol could increase average order values by as much as 30%, according to DoorDash Chief Operating Officer Christopher Payne. "It's a win-win for everyone. Customers have a wider selection, restaurants can achieve greater sales and Dashers can earn more," he said.
The San Francisco-based company commanded 57% of the food-delivery market as of August and has seen sustained growth across segments even as indoor dining has resumed. The dedicated alcohol operation, which counts more than 10,000 retailers, will also benefit from DoubleDash, a feature that lets customers shop from multiple stores and bundle them into a single order. DoorDash's move heats up competition with Uber, which purchased on-demand alcohol delivery app Drizly for $1.1 billion in February.
Because regulations around alcohol delivery differ city-to-city, the new offering will be available only in select markets.