Uber Technologies Inc. said it has reached a deal to buy the alcohol delivery service Drizly for $ 1.1 billion in stock and cash, indicating that the company has ambitions to deliver a wider range of items to consumers’ doorstep.
The deal could further accelerate the growth of online alcohol sales, traditionally a small portion of US beverage consumption that boosted widespread shelter-in-place orders last year. Tuesday’s announcement marks the largest deal to date in the American online alcohol space, according to the Wine & Spirits Wholesalers of America, a trade group representing more than 350 distributors.
Delivery has become an unexpected lifeline for Uber as the pandemic has hit its core business. The company acquired food supplier Postmates Inc. last year. in a $ 2.65 billion equity deal.
That combination made its Uber Eats business the second largest delivery company in the US, after DoorDash Inc. Both companies have boosted their delivery offerings during the health crisis. Uber began delivering groceries in the US and Canada last year after acquiring Chilean startup Cornershop. DoorDash began supplying cleaning supplies and over-the-counter medications at 7-Eleven convenience stores, Walgreens, and CVS, among others.
The pandemic accelerated online sales of alcohol, a category long lagging behind other consumer goods products in the US and some other key markets due to strict regulations and deep-seated consumer habits. E-commerce made up just 1% of US retail alcohol sales by volume in 2019, but is expected to grow to 7% by 2024, industry tracker IWSR said.