Josh Hammond
Tom Wark
a corner store or something like that .”
Agreeing with him is Tom Wark , Founder of Wark Communications , a marketing communications firm specializing in solutions for the wine industry ’ s needs — including assistance with legal shipping .
“ Minors can walk into liquor stores and buy alcohol ,” he says . “ Are minors ordering alcohol over the internet ? The fact that they could doesn ’ t mean that they are . It ’ s simply not happening . DTC is the safest way to sell alcohol without minors getting their hands on it . And the local delivery services have way more issues with underage consumers buying alcohol than DTC .”
Like Koral and Correia , Wark sees the rise of DTC as having less to do with underage consumers purchasing lower-end items , and correlating more with legal-age consumers wanting greater access to premium products .
“ Why is illegal shipping happening ?” Wark asks . “ Because consumers clearly can ’ t get what they want in the states where they reside . Consumers want access to a greater number of products , as opposed to the small selection wholesalers provide in the marketplace .”
Wark pushes back at criticisms leveled against DTC by the middle tier ( as covered in part 1 of this series ).
“ The consumer knows what products they want better than the wholesaler , and the consumer should have access to those products ,” he adds . “ There is always going to be more illegal shipping when the states protect the wholesaler .”
While not as critical of the middle tier , Koral also believes that wholesalers should reconsider their DTC protest .
“ I don ’ t think DTC is going to hurt the middle tier ’ s bottom line ,” he says . “ In fact , I think it can help increase three-tier sales . When alcohol brands can get into more states , they can get a foothold there , and then start getting into retail stores . It ’ s about creating more options by raising the water for everyone .”
“ I think we need to partner with the wholesaler to create a compliant marketplace ,” Koral adds . “ We want to meet the consumer demand that ’ s out there and make sure we do so in a safe , regulated marketplace — rather than a free for all .”
CONCERNS REMAIN
While highly sophisticated services like ReserveBar and Sovos ShipCompliant strive for compliant shipping , concerns remain about the many parties operating below these industry leaders .
For instance : Liquor store owners will notice products in their markets that are not carried by local wholesalers .
“ Today ’ s consumer thinks all alcohol shipping is on the table and completely legal ,” says Josh Hammond , President of Buster ' s Wines & Liquors in Memphis , TN . “ We all need to take a step back and look at the big picture and say , ‘ What ’ s going on ?’”
What Hammond sees that ’ s particularly alarming is “ websites that say they ship alcohol to all states .” In fact , 16 states do not allow alcohol shipments to a consumer ’ s home : Alabama , Arizona , Arkansas , California , Colorado , Connecticut , Delaware , Florida , Georgia , Hawaii , Idaho , Illinois , Indiana , Iowa , Kansas and Louisiana .
“ You wouldn ’ t know that when a website says they ship all over the country ,” Hammond says . “ It becomes a big jurisdiction issue . How do state regulators enforce penalties in other states ? I know there are thousands of cases shipped illegally , purchased in the face of the law because there ’ s little to no enforcement .”
As alcohol producers sue state governments and claim discrimination , Hammond asks why the same isn ’ t true for out-of-state retailers . Which is not to say that Hammond is completely against DTC . Rather , he ’ s for a fair , balanced and safe marketplace .
“ The litmus test must be upholding public safety ,” he says . “ Lack of enforcement leads to safety issues like counterfeit products , people avoiding paying taxes , scammers , underage people being delivered products and products getting stolen .”
“ Illegal alcohol shipping is still the elephant in the room in the alcohol industry ,” he adds . “ Or , it ’ s the elephant in the mail .”
In the meantime , alcohol ecommerce will assuredly only grow as consumers today expect all shopping to take place online , followed by fast delivery .
“ We ’ re looking to bring buying alcohol to every logical moment on a website ,” says Correia of ReserveBar . “ On brand sites , in whiskey articles ; we ’ re expanding the shelf . If someone wants to buy alcohol , we ’ ll make sure they have the link . We bring the shopping cart and checkout right to the moment .”
“ What if we put a QR code on the side of your Yeti cooler so you can use that QR code to buy more alcohol instantly ?” he adds . “ Now we ’ ve created more opportunity for that cooler to create a lifetime value for all those transactions put into it . We ’ re empowering the ecommerce of alcohol in all these different ways .” • www . beveragewholesaler . com Spring 2024 • Bevearge Wholesaler 23