Drizly Consumers Seek Out 30% More Expensive Bottles of Alcohol

In Distillery by John Temple

To say alcohol prices are complex would be a massive understatement. There are a multitude of considerations that impact the price of a bottle, including the cost of the ingredients, desired prestige of a brand, consumer demand, markups applied by wholesalers and retailers, and many more. Suppliers, wholesalers, and retailers each have a hand in the final price, but they also have their own motivations and act independently from one another. The result? Pricing remains a mystery to those at all levels of the three-tiered system.

The average price of an item sold on Drizly is just over $16. Unsurprisingly, this ranges significantly. Comparing a standard 750ml bottle of liquor, a bottle of wine, and a six pack of 12oz beers, the liquor costs roughly twice as much as the wine and almost three times as much as the six pack.

Broken down by gender, women and men spend similarly when buying beer, but men tend to buy more expensive wines and liquors, at about $1-2 more per unit.

When compared to purchases made by customers of independent, brick-and-mortar liquor stores, Drizly consumers prefer more premium products. Depending on the category, the cost-per-unit upgrade is between 25-35%. Much of this difference can be traced to the fact that average Drizly consumers are, generally, in a higher income bracket (allowing them to opt for more expensive items) and reside in urban areas (where a higher cost of living leads to higher prices on consumer goods). Accounting for the fact that prices shown on Drizly are store-controlled and mirror in-store prices, this affinity for high-end alcohol appears to be a core trait of online consumers.

Considering the buying preferences of Drizly consumers across income levels, it’s no surprise that those who earn a higher income buy more expensive products. Consumers with an income above $125K show a preference for alcohol that’s priced 10% higher than those who earn $50K or less.

Meanwhile, shipping orders are likely to contain the most expensive items. Drizly consumers take advantage of shipping availability to track down elusive types of alcohol and disproportionately buy liquor. Orders placed by businesses also contain slightly more expensive products on average, mostly because they’re buying in larger quantities (e.g., more 24 packs of beer, fewer 6 packs).

Although liquor is generally the most expensive category, there are particular types of liquors and wines that carry a premium price tag. Absinthe is the priciest liquor for a 750ml bottle, followed by mezcal. Within wine, champagne stands alone at the high end of the spectrum, with rosé coming in second. Beer prices show much less variation, with only a $1.50 difference from the average ale at the high end to the average lager at the affordable end.

Despite the many changes in alcohol preference that occur throughout the year, price is generally stable each month until the end of the year. In the last quarter of the year price creeps up slightly then jumps up more than $1 in December. This isn’t a result of a change in list price, but rather drinking habits. During the holidays people buy more liquor and wine, larger quantities of beer (e.g., 12 packs instead of 6 packs) and send high-priced gifts, such as champagne, to loved ones. These seasonal aberrations in behavior lead to an increase in the average price of a unit sold on Drizly.

Most Drizly consumers live in urban areas where cost of living is higher, but geography still plays a big factor in price. New York is the most expensive state for beer and liquor, while Californians show an affinity for premium wines.

Curious about outliers? The record for highest-priced item ever sold on Drizly belongs to a bottle of Remy Martin Louis XIII cognac, which sold for $3,200. Coming in slightly behind are a few bottles of the legendary bourbon Pappy Van Winkle.

Price plays a vital factor in whether or what a consumer will ultimately choose to purchase. But the dynamics that go into the final number remain murky across the three tiers. As part of our raw dataset offering, Drizly aims to provide transparency into retail-shelf price for hundreds of thousands of items across the country. Click here to request access to this open source shelf price data.