With the HORECA businesses struggling to stay afloat and consumers staying indoors, alcohol category sees green shoots in online booze shopping.
Alcobev (alcoholic beverage) brands, like others, also want consumers to step out of their homes. Adults having a good time at the watering holes is, after all, good news for the category. However, this was in conflict with what the government wanted during COVID-induced lockdowns, i.e., to keep people within their homes.
Alcohol brands sell via on-trade formats, like bars and restaurants, and off-trade retail outlets or ‘thekas’. With both gone, the focus shifted to online alcohol delivery (just like groceries and medicines), a service which was stuck in regulatory hurdles for years. While consumers missed their happy sip, the state governments missed the hefty revenues they collected from excise on liquor.
The category witnessed a major (long-awaited) development as multiple state governments gave the green signal to the online sale and delivery of liquor.
Anmol Gill, head of customer marketing (India and neighbouring countries), Bacardi, says that the lockdown had a significant impact on the whole alcobev industry, as a healthy share of business happened on-trade. Also, unlike groceries, etc., liquor wasn’t considered an ‘essential’ item.
“The focus on essentials was a big setback in the initial months. The lockdowns cut down on a lot of outdoor occasions – going out with friends, weekend outings, etc. Consumers soon started to look for opportunities for celebrations at home.”
"Consumers soon started to look for opportunities for celebrations at home.”
Gill says that this was followed by the need for buying essentials on e-commerce, which eventually opened the conversation around buying alcohol online. “The government also saw an opportunity. The eastern markets have been quite progressive in terms of taking to alcohol on e-commerce. It is still nascent and we have just started establishing it.”
Players like Swiggy, Zomato and Amazon soon got into conversations with state governments, opening alcohol delivery windows in states like Jharkhand, Chhattisgarh, Odisha and West Bengal (In late May). Several other states, like Delhi and Mumbai, are now exploring the service. Multiple state governments have also facilitated online purchase themselves.
"E-commerce in alcobev in India is going to be a long journey.
Gill mentions that online ordering is catching up well in the smaller markets too, especially in towns like Bhubaneswar, etc. “However, e-commerce in alcobev in India is going to be a long journey. It is great that we have started. Every state has its own regulations. Also, e-commerce has a lot to do with inventory. The partners have to set that up, and also match government regulations. I am absolutely positive that it will work out.”
Around 30 per cent of Bacardi’s business happens within the country’s HORECA ecosystem, with the rest 70 per cent being at retail outlets. “With the on-trade business gone, it didn’t just impact our business, but also the whole on-trade community.” To keep its community relationships afloat, Bacardi started its ‘Raise Your Spirits’ global program, a $3 million aid, coupled with online upskilling initiatives for bartenders.
With the easing of lockdowns, Gill says that the retail side of Bacardi’s business is showing early signs of recovery. While out of home occasions have reduced, it has led to multiple occasions of in-house celebrations. “Safety has been the most important of all behaviour. The basket size has increased since they don’t want to go out to the store repeatedly. It is the younger audience that’s bringing a lot of business.”
"We cater to the consumers who consume alcohol at home.”
Bacardi is a premium brand and is targeted at a higher wallet size. “The consumer we are targeting is not the one who’s consuming only on social occasions, but one who is looking for indulgence – to be able to enjoy a good cocktail, and sip on great liquor. We cater to the consumers who consume alcohol at home.”
“At home consumption grew many new verticals."
“At home consumption grew many verticals – office get-togethers on Fridays, family get-togethers, reconnecting with old friends, etc. We created content based on occasions. Our brands had specific occasions defined and we had activities built around them,” adds Gill.
The lockdown also banned live outdoor events, an important tool in the alcohol brand’s marketing arsenal. ‘Happy At Home’, an online extension of Bacardi’s leading event NH7 Weekender, was made available on booking sites. This included live music and comedy shows. Same went for Breezer Vivid Shuffle, Bacardi’s leading dance-oriented event. Bacardi also retained its association of William Lawson’s Music CDs with Mumbai Indians for the Indian Premier League (IPL) this year.
Speaking about Bacardi’s content initiatives, Gill adds, “Creating the right conversation in the right place is extremely important. In such a situation, the indulgence also goes up. Consumers want to treat themselves. They’d want to indulge and celebrate within the safety of the four walls. Advocacy plays a great role here, to say the right things, because the consumer will share it with 10 other people, who might be looking for the same thing.”
"The second half of the year will be much better than the first.”
Gill mentions that it is difficult to put a quantifier to the recovery at the moment, as each state and region is in its own stage of opening up. “The occupancy levels in bars and restaurants will be low due to limitations, but we expect the trade business to grow in the next three months. The second half of the year will be much better than the first,” she signs off.