From Startup to Sip: Journey of Drizly Business Model

By whiteadmin blog November 21, 2023

From Startup to Sip: Journey of Drizly Business Model

The demand for alcohol delivery has been increasing in recent years, especially with the rise of on-demand delivery services. Many customers prefer the convenience of having alcohol delivered to their doorsteps.

Indeed, one of the growing delivery platforms that has contributed to the rising demand for alcohol delivery is Drizly. The company has gained popularity, catering to the increasing need for convenient alcohol delivery services. It has become a go-to choice for customers who prefer having alcoholic beverages delivered to their doorsteps.

Drizly’s platform, with its user-friendly apps and website, has made it even more convenient for individuals to access a wide range of alcoholic beverages without physically visiting a liquor store or bar.

Drizly’s success and expansion into various markets underscore the demand for this service. The platform has effectively addressed the preferences of customers who are either unable or unwilling to leave their homes. This includes people with mobility issues, parents with young children, or individuals who prefer the comfort of their homes.

Drizly’s partnership with local liquor stores and its commitment to legal and age verification requirements have further boosted its reputation in the alcohol delivery industry.

The platform’s growth exemplifies the increasing role of on-demand delivery services in satisfying consumer needs for convenience and accessibility. Let’s explore this blog to explore the Drizly business model and gain quick insight into the success story of online ordering and delivery platforms.

What is Drizly?

Drizly is an online alcohol ordering and delivery platform facilitating liquor delivery from local retailers. The company has partnered with more than 4000 retail partners as of December 2020. Drizly prioritizes document verification to verify that the purchaser is of the right age to buy alcohol.

Drizly provides beer and wine and doesn’t charge a commission for delivering them. Instead, the company charges monthly fees for its platform use from the customers.

From Startup to Sip: Drizly Success Story

Founded in 2012, Drizly’s headquarters is in Boston, Massachusetts, U.S. The company was founded by Nick Rellas, Spencer Frazier, and Justin Robinson. Later, in 2013, Drizly expanded its service to Los Angeles, Chicago, and New York.

In 2015, Drizly raised $13 million in a Series A funding round from Cava Capital, Polaris Partners, Fairhaven Capital Partners, First Beverage Group, and Suffolk Equity Partners.

The company later expanded its service in 2016 to Alberta, Canada, Edmonton, and Calgary through a partnership with LSNA (Liquor Stores N.A.). In 2016, Drizly raised a $15 million Series B round.

In 2018, Anheuser-Busch and Drizly partnered with each other. This partnership aimed to keep beer stocked in offices through Anheuser-Busch’s Office Bud-e fridges, the advanced technology that automatically re-orders beer when stocks run out. Later, in 2021, Drizly started its service for weddings.

The Boston-based Drizly operates in 1,400+ U.S. cities, connecting customers with local stores to purchase wine, liquor, and beer. Drizly sales increased by 400% above historical levels during the United States lockdown. Customers due to the convenience of getting orders at doorsteps more frequently than ever before.

In 2022, Uber acquired Drizly for $1.1 billion in cash and stock. The Drizly purchase will surely add an expansive selection of Uber’s product delivery. The company confirmed that the deal will close in the first half of the year.

Uber subsidiary Drizly teamed up with GoPuff to provide on-demand alcohol delivery service to adults of legal alcohol purchase age. The partnership will have the addition of the entire assortment of wine, spirits, beer, and more by Gopuff Liquor and Drizly beverage alcohol eCommerce shop and expand the BevMo and Liquor Barn number stores on the platform.

Getting inspired by the success story of Drizly, an on-demand alcohol ordering and delivery platform, many entrepreneurs are looking to develop a similar platform. If you are the same, having insight into the Drizly business model can help you make an intelligent choice.

Drizly Business Model: How Does the Online Ordering and Delivery Platform Work?

The online alcohol delivery market has experienced a remarkable surge in recent years, and Drizly is at the forefront of this industry transformation. The innovative Drizly business model capitalizes on the increasing consumer demand for convenient access to alcoholic beverages. Its value proposition, customer segments, and distribution strategy revolve around several key pillars:

Value Proposition

Drizly offers the convenience of ordering a wide range of alcoholic beverages from local liquor stores and having them delivered to customers’ doorsteps, eliminating the need for in-store visits, especially during late hours.
Customers can access various alcoholic products, including beer, wine, spirits, and more, catering to different preferences and occasions.
Drizly ensures age verification, promotes responsible alcohol purchasing and delivery, and provides a secure and compliant platform for customers.
Drizly allows consumers to compare liquor prices and delivery options from multiple retailers, helping them make cost-effective choices.
Drizly offers an additional sales channel and online presence for liquor stores and retailers, allowing them to expand their customer reach without needing a liquor license for eCommerce sales.

Customer Segments

Customers of legal drinking age who seek the convenience of ordering alcohol online as well as having it delivered to their homes. This includes party hosts, busy professionals, and those looking for a wide liquor selection.
Businesses partner with Drizly to extend their reach to online customers, increase sales, and compete in the digital marketplace.

Distribution Strategy

Drizly’s mobile app is the primary distribution channel, enabling customers to browse products, place orders, and track deliveries.
Customers can access Drizly’s services through its website, providing an alternative channel for online orders.
Drizly partners with independent liquor stores as well as retailers, integrating their inventory into its platform. This partnership model allows customers to access various products available at local stores.

Marketing Strategy

Drizly leverages digital marketing channels, including online ads, social channels, and search engine marketing, to reach potential customers and encourage app downloads.
Collaboration with liquor stores and retailers is essential for increasing its network of retail partners and expanding the platform’s reach.
Drizly offers discounts, referral programs, and more to incentivize customers to use its platform and refer others.
Drizly emphasizes responsible alcohol consumption in its marketing messages and age verification processes, addressing the potential risks associated with alcohol delivery.
Drizly earns additional revenue through advertising from alcohol brands and products featured on its platform, diversifying its income sources.

Age Verification Framework

Drizly has developed an age verification framework that it can offer to other companies as a monetization method.
This framework serves as an additional source of potential revenue for Drizly, which leverages its expertise in responsible alcohol sales.

Drizly Revenue Model: How Does the Company Make Money?

Now you might have insight into the Drizly business model, it’s time to know how online ordering and delivery platforms work. Drizly’s revenue model is founded on a straightforward and transparent system that benefits both its liquor store partners and consumers. Here’s an overview:

Revenue from Liquor Store Partners

Liquor store partners are the primary source of revenue for Drizly.
Drizly charges a monthly fee to its partner stores, which can vary based on factors such as the store’s location, the value of deliveries, and affordability.
This monthly fee typically falls within the range of $100 to $10,000.
Crucially, Drizly does not charge any margin on individual sales made by its partner stores. The revenue comes from the monthly licensing fees.

Customer Delivery Fee

Drizly charges a delivery fee of $5 to customers for each order they place through the platform.
Importantly, this delivery fee is transferred directly to the liquor store responsible for fulfilling the order.
Drizly’s pricing structure is transparent and does not include additional charges for the alcohol products themselves. The respective liquor stores determine the prices listed in the app.

Get Your App Like Drizly Developed Today!

The innovative Drizly business model connects customers with local liquor stores through a user-friendly mobile app and website that has disrupted the traditional alcohol purchasing process. The value proposition of convenience, extensive selection, age verification, and price comparison has captured the attention of many customers, from those seeking a quick drink after work to hosts planning special occasions.

Drizly’s journey is a testament to the transformative potential of technology and innovation. It serves as a valuable case study for startups aspiring to make their mark in complex markets. Drizly’s rise from a startup to a leading player in the online alcohol delivery sector underscores the importance of innovation, strategic partnerships, and a steadfast commitment to responsible alcohol sales. Drizly’s success story showcases the power of entrepreneurial vision and adaptability in the ever-changing business landscape.

For those considering developing an app like Drizly, White Label Fox emerges as a dependable partner. We offer a ready-to-use alcohol delivery app solution, streamlining development and saving valuable time and resources. Our expertise in creating customized solutions for the alcohol delivery sector positions us as an ideal choice for businesses looking to enter this dynamic market.

By embracing our solution, you can efficiently launch your venture, ensuring a feature-rich and reliable platform to embark on your journey from startup to sip, just like Drizly. Specify your requirements or contact us at [email protected] to get your queries solved quickly.