Whisky LootBusiness

Alcohol subscription services boom in Australia

The growing trend of conscious consumption in Australia means consumers prefer to drink less, but are making sure their tipple is premium quality when they do indulge. Alcohol subscription services that offer craft, hard-to-find and limited edition drinks choices are thriving in this space.

Beer Cartel, which offers subscribers the opportunity to sample the huge variety of craft beers in Australia, revealed last week that its business has been growing at approximately 25% year on year over the last five years. The company launched a crowdfunding campaign last week that raised $540,000 in just 48 hours.

Meanwhile, wine subscription service Vinomofo saw its with new customer numbers averaging growth of more than 100% year-on-year from March 2020 through to the end of September, while revenue over the same period averaged more than 50% growth year-on-year. It is poised to list on the ASX this year with the company now valued at more than $300million. 

Whisky Loot founder Joel Hauer (above) told Drinks Digest that spirit subscription services are also booming. Whisky Loot was founded in 2016, with the aim of shaking up Australia’s online whisky market. Every box sent to its subscriber list includes three 60ml tasting bottles, paired with tasting notes created by its team of whisky sommeliers.

Hauer announced the launch of Gin Loot last year, which offers a similar subscription model, to capitalise on the growing popularity of the gin category in Australia.

In the quarter to August 9, IRI reported $141million growth (MAT to 9/8/2020) for gin, with its market share up more than 22%. According to IWSR Drinks Market Analysis (May 2021), whisky sales are even more buoyant. Local whisky sales more than doubled from 2019 to 2020, growing at 150%, while Scotch whisky and US whiskey were both up 13.9%.

Whisky Loot and its sister site Gin Loot offer tasters of drinks as opposed to full bottles, which enable consumers to try spirits and learn more about them. The company has experienced 400% growth year on year. 

Here’s what Hauer had to say about the trend toward spirits lovers “looking for balance”.

Premiumisation in liquor took a backseat for a few months during early lockdowns – has it returned to the forefront of spirits now? 

COVID-19 restrictions have led to a massive shift in spirits purchasing habits. For Whisky Loot we saw increases across the board in regard to especially demand for premium tasting packs and the average price people are willing to pay for a premium bottle. This trend towards premiumisation suggests that people are valuing the experience of tasting over the value-based, consumption-driven decisions that have historically fuelled entry level commoditised products.

How are Whisky Loot and Gin Loot addressing the trend to drink less but better with their subscription services? 

As a unique tasting subscription business model, we’re seeing an influx of consumers who resonate with the idea of tasting rather than buying full bottles. Our unique model allows for discovery and education. We are witnessing a new way people want to discover their favourite spirits, coupled with a less volume, higher quality consumer consumption trend. We continue to see mounting interest and support in our products and solutions from both consumers and distilleries.

What are some of the most popular types of spirit in both categories and why do you think they are so highly regarded? 

The growth and rise in popularity of the Australian spirits industry over the last few years has been incredible, we are seeing some exciting drams come out of Aussie distillers. This is unsurprising considering that Australia now has over 300 distilleries in operation; producing whisky, gin, vodka, rum and other spirit. Our diverse bio-culture enables some really interesting flavours that are so unique to Australia that it really puts our spirits into a league of their own. 

How are Whisky Loot and Gin Loot growing and evolving as businesses?

The last three years have been incredibly exciting for the business, we’ve grown 400% year on year and broke $500,000 in monthly revenue in 2020. We opened an investment round of $1 million in mid 2020, and it ended up closing earlier than anticipated thanks to strong interest from investors including former AFL identities Jobe Watson and Cale Hooker; Koala co-founder Dany Milham via the Dropbear fund; and Melbourne-based Eli Labs. 

What’s the development you’ve been most excited about so far in 2021? 

This year will see the return of our most anticipated Advent Calendars, and we’ve got something very exciting in store for our customers with the introduction of a few new products, which I’m sure will be very well received. We are also pushing forward with continued investment into our online product, including the subscriber experience, and packing in a lot of great videos and educational resources. We’re also expanding into a new warehouse, and bringing on more full bottles to extend our very popular members-only bottle shop.

Do you think the COVID-19 crisis has made people more open to ordering online?

COVID-19 restrictions have brought forward the growing trend in online retailing, consumers are now able to purchase practically any item online and through necessity have really been forced to rethink how they shop. This has seen a huge growth in purchasing drinks online – particularly tastings and subscriptions where they get to experience a variety of premium spirits or drinks without investing in a full bottle.

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Categories: Business