Rising disposable income has enabled households to purchase more expensive alcoholic beverages.
Los Angeles, CA (PRWEB) November 09, 2013
Businesses in the Online Beer, Wine and Liquor Sales industry sell prepackaged beer, wine and liquor through online stores. The industry has flourished over the past five years, as consumers have increased their reliance on online shopping and e-commerce in general. More Americans are purchasing goods and services online, as it offers convenience by allowing them to browse from the comfort of their home. Additionally, online shopping provides greater ability to evaluate and compare different products and prices. Rising per capita disposable income following 2009 has led households to purchase more-expensive alcoholic beverages. Per capita consumption of alcohol has grown only marginally, but consumers have turned to more high-end products when drinking alcoholic beverages. As a result, the industry is expected to over the five years through 2013. Industry revenue is forecast to grow a slightly slower in 2013 due to moderate growth in per capita disposable income.
The Online Beer, Wine & Liquor Sales market is very fragmented, with the four largest players (Wine.com Inc., JJ Buckley Fine Wines, K&L Wine Merchants and WineExpress.com) accounting for a little over 5.0% of total market revenue (see IBISWorld report OD5087 for major player market shares). Regulations surrounding alcohol sales and shipping make it difficult for participants to capture a large portion of market share. The majority of states ban retailers of other states from shipping alcohol to local residences, unless the retailer has operations within the state. In turn, the cost of doing business on a national scale has significantly increased, as retailers may have to open up operations in multiple locations. Consequently, many of the advantages associated with online retailing, such as reduced brick-and-mortar expenses, are diminished. This helps explains why many online liquor retailers are solely focused on e-commerce operations and serve only local state or regional residences.
According to IBISWorld Industry Analyst Jeremy Edwards, “The industry also faces a high level of regulatory attention with regard to the inherently dangerous side effects of alcohol.” Regulation is mostly provided at the state level, as businesses limit the alcohol that can come in from across state borders. Additionally, many states, such as New York, require manufacturers to go through wholesalers and retailers, rather than selling directly to customers. “This has somewhat mitigated industry growth over the past five years and is expected to continue to provide a roadblock to industry growth,” says Edwards.
Over the five years through 2018, per capita consumption of alcohol is not expected to change significantly. However, rising per capita disposable income and improving consumer confidence will result in more Americans purchasing premium alcohol such as craft beer, fine wines and high-end liquor. Due to rising data capacity and new online offerings, the percentage of services conducted online is expected to increase over the next five years This will help to boost industry revenue slightly, over the five years through 2018.
For more information, visit IBISWorld’s Online Beer, Wine & Liquor Sales in the US industry report page.
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IBISWorld industry Report Key Topics
The Online Beer, Wine & Liquor Sales Industry comprises firms that sell prepackaged beer, wine and liquor through online stores. This also includes firms that sell online as a complement to physical storefronts.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
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