directly from brand websites . Currently , the platform displays around 150,000 SKUs .
“ We started around the same time as Drizly , but they ’ re more of an online liquor store , whereas we ’ re more about being the extension of what brands wanted ,” explains ResereveBar CEO Derek Correia . “ We are built to be the optimal brand environment , and to manage that last mile to consumers . Like any business , you need to be differentiable . You need to stand for something and to create specific value for consumers and businesses .” Like other alcohol ecommerce services , ReserveBar does not have an alcohol license . “ We ’ re a tech company that connects consumers with licensed retailers for compliant purchases ,” says Correia . “ We don ’ t ship or deliver . We ’ re a platform for consumers to be exposed to products , learn about them and buy them . Buyers are matched with retailers who have that product in stock .”
“ ReserveBar doesn ’ t ship anything ,” he adds . “ We don ’ t put bottles in boxes or ship anything . Brands pay us to have their products merchandised and to create content .”
What about concerns that the retailer who carries the purchased product might ship the alcohol illegally ? Perhaps across state lines ?
“ We have commercial agreements with 3,500 retailers which explicitly states that the retailer must operate reputably ,” Correia says . “ We only work with reputable retailers . They know all the licenses and laws in their area . They know if they can ship .”
“ We are not in the position of being — nor do we want to be — a regulator , or have the duty to enforce regulations ” he adds . “ There may be bad actors in our network . But we ’ re pro-enforcement . I ’ m talking to regulators all the time . We embrace and support the three-tier system . Retailers are operating on their licenses . Special licenses are required for retailers in some cases . It ’ s important that laws are maintained with maximum enforcement . If you ’ re a retailer , you must understand this .”
Elsewhere in the industry , Sovos ShipCompliant has emerged as the leader in automated alcohol beverage compliance tools for alcohol producers looking to sell and ship directly to consumers . The company launched in 2005 .
“ DTC in alcohol reflects broader market trends of the consumer increasingly expecting DTC options with whatever they buy ,” says Alex Koral , Sovos ShipCompliant Senior Regulatory Counsel . “ This was even more true during the pandemic . There ’ s been a tremendous surge in DTC wine . No surprise that this is also true in other alcohol product types .”
“ We provide end-to-end framework solutions that can track orders and recognize the individual rules of the different markets ,” he adds . “ We send orders to partners holding the products , who then pack and ship . We automatically pay the proper sales tax and excise tax .”
As with alcohol laws in general , DTC rules vary greatly from state to state . Sovos ShipCompliant offers services that efficiently comply with these differing laws and
Alex Koral
taxes when shipping .
For instance , some states limit how much alcohol an individual or household can order via DTC . Other laws limit how much alcohol a producer can ship into a state during a given length of time . Sovos ShipCompliant is programmed to get out and ahead of potential violations .
“ We ’ re tracking these things all the time to see when they ’ re coming up ,” Koral says . “ We send a notice ahead of time when it ’ s getting close . And we block an illegal order automatically . We ’ ll send a message like , ‘ It ’ s great that you want to buy that wine , but you have to wait a couple of weeks ’.”
“ These are very real laws that states are increasingly tracking ,” he adds . “ It ’ s a central part of our business .”
DTC ISSUES OVERBLOWN ?
Koral is correct that state alcohol agencies and their legal / law enforcement divisions have focused more on DTC in recent years . Beyond bad actors ship-
NOTE FROM THE PUBLISHER : In the NovDec 2022 issue of Beverage Dynamics , we ran the first in a series of articles about direct-to-consumer alcohol shipping titled “ Consumer Convenience , but at What Cost ?” It included interviews with Attorneys General from multiple states , beverage alcohol industry regulators and representatives from the distributor tier . Many of those sources highlighted illegal shipping ’ s negative effects on the industry and society at large .
Part two of our series focuses mostly on legal alcohol shipping , which is allowed in dozens of states under varying rules and regulations . In almost all cases , these purchases flow through the existing three tier-system ( although not everyone interviewed believes that should be the case ).
We do not take a position on whether DTC sales should or should not be allowed , only that everyone should follow the letter and spirit of the law . Editor Kyle Swartz conducted dozens of on- and off-the-record conversations in reporting this series , which will continue in 2024 as new developments come to light .
Jeremy Nedelka , Beverage Group VP , jnedelka @ epgacceleration . com
www . beveragedynamics . com November 2023 • Beverage Dynamics 9