The post-Drizly booze-delivery battlefield
Plus: Exit stage left (pursued by a beer)!
Last week, as your fearless Fingers editor was freezing in Portland, Uber announced it was shutting down Drizly, which it purchased in 2021 for $1.1 billion. On one hand, this is a shame, because the booze-delivery platform was moderately useful1, and now thousands of liquor stores that used it to launch and streamline their delivery operation will have to learn a new app or shut down that channel entirely.
On the other hand, this is funny as hell, because who buys something for a billion dollars just to bail on it a few years later? (What is this, Constellation Brands?!) Of the theories I’ve seen a-swirling about this shut-down, the two that make the most sense to me are:
Firewalling the feds. Drizly had a major data breach in 2020 and got slapped by the Federal Trade Commission for its (mis)management of that situation in 2022, after Uber’s acquisition. At Wine-Searcher, W. Blake Gray framed Uber’s decision to kill its billion-dollar brand2 as a potential effort to distance the mothership from that scrutiny and any potential follow-up regulation that results. Is that… how any of this works? Even the FTC itself doesn’t seem sure, telling Wine-Searcher “We're still evaluating the situation and can't comment at this point.” Hmm!
Advertising at scale. In Friday’s VP Pro newsletter, VinePair co-founder Josh Malin persuasively argued yes, and. I.e., that Drizly’s demise was inevitable once Uber acquired it, because its core value wasn’t its delivery model but its booze advertising relationships3, and “[t]rying to run a targeted advertising business with onerous data restrictions is obviously problematic.” If Drizly and Uber were running the same tech, continued Malin, “there’s a case to be made for preserving Drizly as an independent app, a unique advertising surface of ‘high intent alcohol buyers.’” That doesn’t appear to be the case, though. One gotta go.
As I often do when encountering Silicon Valley tea leaves in need of reading on the beverage-alcohol beat, I asked San Francisco-based restaurant-technology journalist nonpareil
, publisher of the excellent newsletter, to help me contextualize Uber’s latest move in the broader ecosystem. (Buy a subscription to Expedite, it’s a must-read.) She was kind enough to oblige in an email exchange last week, which I’ve published below exclusively for paying Friends of Fingers.Also behind the paywall: a top-down visual guide to the United States’ on-demand booze battlefield by the Fingers Design Department, updated to reflect Drizly’s recently announced demise. This multibillion-dollar, consumer-facing sector is chaotic and crowded with firms large and small from across the American economy launching and acquiring platforms to capture lazy busy Americans’ recession-resilient drinking dollars. How it evolves (or doesn’t) will shape the beverage-alcohol industry, and vice-versa. Here’s the state of play in a post-Drizly world.