When liquor shops opened up recently, the large crowds tossed social distancing aside. So, many states are exploring home delivery of liquor. Maharashtra gave it the nod yesterday. But, warns an expert, it’s more complex than delivering food.
India has had a complicated, love-hate relationship with liquor. While consumption has been rising steadily, drinking is socially frowned upon. That’s why much of it is consumed outside the home. The Constitution of India says that ‘the State shall endeavour to bring about prohibition’. Only two large states, Gujarat and Bihar, have currently done so but still, liquor is a political hot potato.
Though state governments (which determine policy) don’t like to admit it, they are desperately dependent on revenue from liquor sales. The lockdown has bankrupted them and hence the rush to reopen shops. But the crowds of desperate consumers wrecked social distancing.
That’s why several states are in talks with the likes of Zomato, Swiggy and others to explore home delivery. Last week, even the Supreme Court suggested a look at this option. (It is not clear if the Maharashtra step will be effective only during the lockdown or even later.) If everyone seems to be on the same side, can we expect booze delivered at home soon? Assuming that it is, will this change the nature of liquor marketing which is constricted since advertising is now allowed?
Not so fast, says Samar Singh Sheikhawat, a business consultant and former CMO of United Breweries where he spent nearly nine years. Sheikhawat has been with a bunch of well-known firms including Cadbury, Pepsico and Dabur. Delivering liquor at home, explains Sheikhawat, raises far more prickly issues than dropping food at the doorstep. Read on to understand the issues:
Contribution of home delivery to sales
While there is excitement about liquor being delivered home, Sheikhawat has his doubts about how much this new segment will contribute to overall sales. Going by the restaurant experience, it may not be very large. Even if it happens, the experience will be limited to those who have access to smartphones, the internet and an online payment mechanism. A very large percentage of low-income consumers - workers and labourers - will be left out.
Brand choice, upselling
Retailers may resist the idea of home delivery. Shouldn’t they be excited about an additional, new avenue to increase sales?
Not necessarily, cautions Sheikhawat. The ‘alcobev’ (alcoholic beverage) business is heavily experiential in nature. Ninety per cent of alcobev buying decisions are made at the point of purchase while the customer is physically in the store. (“Nothing can duplicate the experience of holding that cold bottle of beer in your hand!”) It is here that the retailer can gently upsell and persuade the buyer to spend more than he’d intended.
Drinking at home vs drinking outside
Sheikhawat underlines a little-known fact: 70 per cent of liquor consumption in India occurs outside the home because having it inside is socially unacceptable. And it isn’t as if the rest of it is consumed in in bars and restaurants.
When buyers pick up their bottle at most state-owned outlets – in Tamilnadu’s Tasmac stores eg – they consume it right there or say, in a neighbouring alley.
“We found this when we ran a study at UB. If 70 per cent seems very high, let me tell you that the figure was 90 per cent 10 years ago!” Considering the social stigma attached to alcohol, most people wouldn’t want to take delivery at home.
The tricky age issue
The legal age for drinking will create complications in more ways than one. The minimum age to get a drink varies from 18 years (Karnataka, Goa eg) to 25 years (Delhi, Punjab).
“Anyone can order food on Swiggy or Zomato – as long as they have the money to pay for it,” explains Sheikhawat. “But that’s not the case with alcohol. If the seller can’t confirm the age of the prospective buyer, how can he make the sale? Moreover, most delivery boys are themselves under 25. Is it correct for them to deliver an item that they are not allowed to consume?”
Sheikhawat has another concern. A Zomato or a Swiggy might ask their customers to declare their age while placing an order, but their liability won’t end there. If the father orders the liquor but an underage teenager receives it, what happens? Is it legally safe? There is no such dilemma when it comes to ordering a pizza!
Weight, value and security
“Premium liquor will typically be far more expensive than food,” points out Sheikhawat. “If a customer opts for cash payment, will the retailer trust the delivery man with the money? The amount could be in tens of thousands of rupees and that would be more than the salary of the delivery man. Will they get around it by limiting the value of liquor that can be ordered?” He asks.
He also says that liquor is heavier than food because of the bottle weight. When it comes to beer, a crate (of 650-ml bottles) would weigh around 11-12 kg. That’s a lot to cart around. There is also the danger of breakage.
India is a culturally sensitive place where, say, a Jain family, may not like the idea of an alcohol bottle nestling amidst the food it has ordered. Separate container may be advisable in a country where most people don’t consume liquor, says Sheikhawat. All in all, the delivery of liquor is full of possibilities – but the road to the home is full of bumps too.