Almost half of Gen Z and millennial drinkers want to buy alcohol from their favorite online retailers, but most can’t, according to a report from Glendale, California-based Drinks.
Since Prohibition's end in 1933, alcohol sales in the U.S. have operated through a three-tier system: Producers sell to distributors, who sell to retailers, who then sell to consumers, said Drinks, an innovator and provider of e-commerce solutions to alcohol producers, retailers and e-commerce merchants.
“While this system helped prevent monopolies and ensure regulatory compliance, it was designed for a local, brick-and-mortar world,” Drinks said. “This structure directly conflicts with the modern digital commerce landscape, where potential customers span the entire country, not just a local region.”
Drinks said its 2024 consumer survey reveals “an industry stuck in the past while digital-native consumers look to the future. The traditional alcohol distribution system simply wasn’t built for how today's younger buyers shop.”
So, what does that mean for convenience stores?
Mark Buonomo, senior category manager for beer, wine and liquor at Global Partners, Waltham, Massachusetts, told CSP it’s widely acknowledged the current three-tier system has its challenges, and Drinks is working to highlight the need for change.
“Research shows that 80% of our beverage shoppers have already made their decision before entering the store,” Buonomo said. “Consumers know what they want, and as retailers, we must embrace the ‘digital voices’ of these shoppers. This requires looking beyond traditional syndicated data sources, staying attuned to social media trends, podcasts and identifying the right voices to engage these audiences while updating our messaging accordingly.”
Sales ‘Locked’ in Stores
Convenience drives 32% of millennial purchasing decisions, Drinks said, but alcohol sales remain “rigidly locked in physical stores.”
This disconnect is costly, Drinks said. “Younger generations now discover brands through social channels, with Instagram influencing 22% of buyers aged 25-34. This digital exposure leads to dead ends instead of digital carts, leaving billions in potential sales on the table.”
Kelsey Capellino, category manager at Long Beach, California-based United Pacific, said the company has been active in the online delivery space through DoorDash, Uber Eats and Grubhub for several years and has seen strong demand for adult beverages—especially among younger of-age consumers.
“Popular brands like BuzzBallz and White Claw continue to drive sales, reinforcing the need for more digital accessibility in alcohol retail,” Capellino said.
However, she continued, a major challenge in this space is the limited ability to dynamically promote and engage both new and returning customers.
“While digital platforms have created a seamless and modern experience for restaurants, retail has largely been left behind,” she said. “The lack of robust marketing tools and promotional flexibility makes it difficult to fully capitalize on consumer interest. To truly meet the expectations of today’s shoppers, the industry must evolve beyond outdated restrictions and embrace a more agile, digital-first approach.”
Challenge, Opportunity
Drinks said that for alcohol brands and retailers, this shift to younger generations finding brands via social channels presents both a challenge and a multibillion-dollar opportunity.
“Those who modernize their distribution networks, embrace digital-first experiences, and adapt to social-driven discovery will capture an entire generation of consumers,” Drinks said. “The rest will watch as their customers—and profits—disappear, one online search at a time.”
The gap between how different generations buy alcohol runs deeper than simple digital preferences, Drinks said.
“Our data shows that 64% of people over 45 always purchase alcohol in stores versus just 36% of younger buyers,” Drinks said. “This data shouldn’t come as a surprise; consumers across all age groups shop online first for most purchases.
‘Consumers across all age groups shop online first for most purchases.’
Today’s shoppers expect the convenience of next-day delivery for everything, Drinks said.
“They manage their lives through smartphones—comparing prices, reading reviews and making purchases with a few taps,” Drinks said. “Yet when it comes to alcohol, they’re forced into an outdated experience: physical store visits, limited selection, and disjointed shopping.”
Powell, Tennessee-based Weigel’s, which delivers alcohol and tobacco via mobile orders, is seeing firsthand the shift in how younger legal drinking age consumers expect to engage with alcohol and tobacco purchases.
“Gen Z and millennials have grown up in a digital-first world, and they expect the same convenience for beer and tobacco as they do for food or fashion,” said Nick Triantafellou, director of marketing and merchandising. “That’s why we’ve leaned into both first-party and third-party solutions. Through our partnership with Vroom, we offer direct delivery of beer and tobacco from our stores. And now, with our recent launch on Uber Eats, customers can order alcohol with just a few taps.
Meeting the Customer
For Weigel’s, it’s about meeting customers where they are, “and increasingly, that’s online,” Triantafellou said. “Younger generations don’t want to be told when and where they can shop. They want speed, flexibility and digital integration. We view this as an opportunity, not a hurdle.”
Every shift in behavior is a chance to modernize the c-store chain’s model, create new revenue streams and future-proof its business, he said.
“The more friction we can remove, the more loyalty we earn,” he said. “The industry may be catching up, but at Weigel’s, we’re already on the road.”
‘The more friction we can remove, the more loyalty we earn.’
Brian Sudano, CEO and managing partner of Norwalk, Connecticut-based S&D Insights, which offers beverage industry management consulting, said that the alcoholic beverage system regulation is geared to preventing underage drinking with systems in place to manage this.
“There are states that do allow purchases via Instacart, Uber Eats, etc. but this is not universal,” Sudano said. “There are also states that do not permit sales of spirits from convenience stores, such as New York.”
The issue, he continued, does not lie at the doorstep of distillers or brewers but instead at regulators.
“Until a secure universal system is in place to prevent under-age consumers from purchasing product along with a mechanism to ensure state taxes are collected and submitted to appropriate jurisdictions, it is unlikely that e-commerce with instant delivery will be universally adopted,” Sudano said.
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