Trend Watch – Fast Delivery And Vertical Integration

There was another ABInBev buyout this week, one that went completely under the radar because it wasn’t a brewery. UK Online beer retailer, Beer Hawk, announced they have “hooked up” with ABInBev and reading their announcement it seems aggressive expansion is on the cards*.

This signals a direction that will probably be lucrative for ABInBev – and local beer retailers should probably be keenly aware of what they are doing because this isn’t the first move they’ve taken in the UK to get involved in home beer delivery.

Late last year they put out a press release, citing their estimate that more than 1 million UK households will buy beer online in December alone. That’s up, they said, from 200,000 the previous year (note: there hasn’t been any follow up). As part of the press release they also announced a beer delivery service for that month in a short term partnership with food delivery service Deliveroo to have beer delivered on bikes. Deliveroo have recently had a high profile launch here in Australia.

In the press release the founder of Deliveroo said,

We’ve seen incredible demand for top-quality food delivered to homes and offices, and think beer is a natural extension of our service. With the rise in popularity of online beer sales this Christmas, we feel this is the perfect time to launch this new project

One interesting thing from the Beer Hawk buyout is right from the start they are using vertical integration to get their beer into people’s hands by including bottles of Goose Island, their flagship craft brand, in all deliveries for the next week. Somewhat reminiscent of the Apple/U2 album from a while back, although probably a bit more pleasant than having a Bono forced upon you (woah, a hot take on Bono? Is no one safe?).

In addition to this, just over a year ago their US arm launched their “Bud Light Button” – a delivery service app for Bud Light in Washington DC (which as far as I know wasn’t rolled out further), while also last month they announced an e-commerce platform being trialled in Brazil, Canada and Mexico. However actual details on what that actually means are scant from what I can find.

Based on all of this, it’s safe to say they are going to keenly focus on online and delivery in the near future.

When compared to moves to the Australian market, where ABInBev don’t really have a foothold (yet, but with the SABMiller buyout still in the works, it’s hard to tell), it paints an interesting picture.  Our two major players, Lion and CUB, haven’t really dabbled in the online delivery space and instead they leave it purely up to retailers – who have some small “craft” brands under their ownership.

Dan Murphy’s (Woolworth’s owned) offer same day metro delivery, but rather than aggressively pushing their Woolworths affiliated brands in similar vertical integration to ABInBev’s Goose Island push, they have operated somewhat autonomously and even partnered with smaller beer related brands such as GABS and Tru Bru to up their craft credentials. The latter is providing Tru Bru growlers of keg beer to a much wider audience than previously.

The other Woolworths owned liquor chain, BWS, has no online ordering and rather sends you through to the main Woolworths page – they do present their own brand on the site site in the form of some John Boston (their James Squire rip off) information but it’s not really prominent or interesting. When taken to the Woolworths site it’s just a standard catalogue for all of their products, rather than a specialist beer delivery service.

The other major player in the retail space is Coles. Firstly their Liquorland brand strangely don’t have “Beer” as a dropdown menu on their site and instead you need to search for it – revealing three products and only one is actually a beer.  Coles’ boutique brand, Vintage Cellars, have no obvious vertical integration with Coles brands, but do however offer a premium same day delivery service for a fee. While over at their Dan Murphy’s competitor, First Choice, they have one “we recommend” beer which is one of their brands, but no same day delivery.

Confusingly, both Vintage Cellars and First Choice also include pre-mix spirits and cider under their “beer” category.

The big thing ABInBev have going for them is also the credentials of Goose Island, something that neither Coles or Woolworths have in their brands.

There are a host of smaller online stores as well, all offering similar levels of service to the big players. Some with same day service but most without. Additionally some small breweries offer deliveries and clubs that range from well organised to clumsy. I won’t cover them all as this isn’t really a comparison, but rather a picture of how easily this space might be to shake up for a player the size of ABInBev.

Getting ads on TV is one thing, but getting a beer into the hands of the mass market either instantly, or by buying an online retail store, is still fairly new territory for breweries. With the slumbering giant waking up and beginning to throw cash around, it isn’t brewers who should be the only ones concerned about buyouts and innovation. Online retailers are also going to need to be on their toes… or maybe even their bikes.

*Much love to Boak and Bailey for being literally the only beer media to spot the news.