In the Doghouse

In the Doghouse: Pernod Ricard Partners with Alcohol Delivery App

January 30, 2014

Drizly delivery
Alcohol delivered to America's doorstep, all with a credit card number and a tap of an iPhone. That's what Drizly, a start-up alcohol-delivery app service with ambitions to be the " for alcohol," promises. Drizly just entered into a marketing deal with Pernod Ricard, to promote its service along with Pernod products (Absolut, Jameson, and Kahlua brands, to name a few). What could possibly go wrong?

Let's start with the intent of the venture capitalist investors, who had this to say about their recent $2.25 million cash infusion into the company: "We believe Drizly is poised to fundamentally change the behavior of 225 million Americans who can legally buy alcohol, as well as the three-tier system that services them.” This investor statement is prescient, alluding to the lines between retail service and producer within the three-tier regulatory system that could get blurry without much notice under this arrangement. Drizly has already cleverly circumvented the New York State Liquor Authority’s (NYSLA) regulatory system by getting NYSLA approval despite not having a retail liquor license because of the way it set up the service payment (technically the store processes the credit card, not Drizly). This isn't the first foray into alcohol delivery apps, but it's a troubling example of a special kind of deregulatory activity, without the bother of a legislative process, or public participation in the matter. 

Another troubling aspect is the potential for Pernod's marketing deal with Drizly to slide into an influential, or even controlling, interest. How much has Pernod Ricard sunk into the deal with Drizly? So far, the details are under wraps. The press release vaguely describes a new association between the liquor giant and Drizly, centered around promotion, education and brand awareness. And who is in charge when a young, new startup welcomes Big Alcohol into its circle? The multibillion global alcohol conglomerate infusing the little startup with cash, or the startup?

That newly cemented relationship with Big Alcohol makes it hard to believe the app's press release statements about only focusing its online promotion and actual sales on adults who are 21 and older. In a recent study, 45% of home deliveries to underage youth were successful, many to those with fake IDs. Drizly scrambles to reassure that their delivery method is “responsible,” but, industry calling itself "responsible" is a tired marketing spin with the ironic intent of absolving the industry of any actual accountability. And despite Drizly's repeated assurances that its ID scanning technology will prevent sales to underage customers, the app can be downloaded by any 17-year-old.

It's a slippery slope from a couple of college guys who seal a marketing deal for their wannabe Amazon alcohol app, to that app (and its owners) being influenced, controlled, or even owned by Big Alcohol.