Home Delivery of Booze - Can Startups cash in the huge opportunity?

Lots of money and opportunity will eventually follow in India when booze is concerned and it is the liquor delivery sector that has led companies, services, startups and entrepreneurs alike to see a massive windfall. In India, liquor sales take place through three licensed vertical retail, horeca (hotels, restaurants and catering), and department canteen stores. The total horeca licensed places are around 30,000 in the country and the stock in hand is for 1 month at any given time, which means that the total unsold inventory at various horeca outlets throughout India would be around Rs 3,000 while liquor retail sales are opening, the service industry continues to be deferred due to corona.

According to the All India Brewers Association (AIBA), the liquor industry is contributing revenues to state governments about Rs 2.5 lakh crore. In the 40-odd days when liquor trade was closed, states lost revenue of around Rs 25,000 crores. After the lock down imposed in the country on 25 March, all liquor shops and distributors in the country were closed and production, services and supply were also halted. Although customers were supported by eCommerce and app-based logistics companies to get on their doorsteps a continuous supply of food and vital goods, alcohol buyers were left in the lurch.

The Indian food aggregators such as Zomato and Swiggy seem to have heard the alcohol lovers’ anxious prayers. The company has confirmed in a major announcement that it is making a foray into supplying alcohol to customers at their doorstep. The company is on the road to set an example for the entire industry, having already diversified its interests into grocery stores and home essentials delivery less than a week after launching similar services in Jharkhand Zomato and Swiggy  launched home delivery of alcohol in Odisha as part of measures to avoid overcrowding of customers in shops in the midst of the coronavirus pandemic. Zomato would soon spread to other towns, such as Rourkela, Balasore, Balangir, Sambalpur, Berhampur and Cuttack, beginning with Bhubaneswar.

Swiggy said in a separate statement that their home delivery service went live in Bhubaneswar and Rourkela last month after receiving the necessary approvals from the government of Odisha and plans to extend to other major cities in the state. Earlier this month, the Supreme Court requested states to allow non-direct contact or digital purchases and home delivery of liquor during the lockout phase to avoid the spread of coronavirus due to crowding in the shops, there will be age checks at the time of order as well as at the time of delivery of the product. Users would be asked to submit a valid proof of Identity to be qualified for order, which will then be checked by the delivery partner when the order is issued. The service called Zomato Wine Shops would be available on the Zomato app's homepage and will enable users to select any product from the listed retailers and have it delivered right outside their doors of place orders.

All orders will carry a unique OTP which the customer must provide at the time of delivery. The news has certainly grabbed the eyeballs throughout, with businesses of all scales, especially those who are up and coming, looking to expand their horizons, vertically or horizontally, aggressively and actively. Within no time the internet became abuzz with the news of many other existing businessmen and investors who have set their eyes on this untapped Indian market and this has led to many unanswered questions which are as follows

1. Will Liquor delivery be the next multi-billion startup idea for entrepreneurs in INDIA?

2. Whether this kind of business model is high-risk high-gain for entrepreneurs and investors?

3. Will it be a new cash cow for the economy?

Liquor Delivery: The Trigger

It will come as no surprise that the market for liquor has skyrocketed since the shutdown, consisting of such a vibrant customer base. As the government eased restrictions on the movement of essential and non-essential goods from 4 May, it also took the decision to allow a fraction of liquor outlets to reopen throughout the country. This prompted other consumers around the country to flout social distancing norms such desperate acts by the people prompted the government to consider viable ways to curtail the spread of coronavirus and offered the involved parties an immense opportunity to capitalize on such a huge market. Whether or not liquor delivery was originally in every organization's plans, the pandemic's onset has intensified the effort to diversify their operations.

This actually has an impact across multiple facets. Startups such as HipBar, HipCask, sites such as WineBazar.in and LetsBuyDrink.com, etc., have already been doing business in space, facilitating the home delivery of alcoholic beverages in that time, also achieving varied levels of success, sometimes due to the grey area in operation and sometimes due to changing state government laws. It is precisely these issues that have made this lockdown the perfect opportunity to rake in the extra cash for these companies.

For certain nations, overall tax based on alcohol consumption amounts to as much as 25 per cent. annually, Delhi with per capita GDP higher than the national level, receives over Rs 5,000 crore. Last year Karnataka earned Rs 21,400 crore from the liquor sales. In this time of crisis, states like Kerala and Meghalaya, which have the highest per capita consumption rates for alcoholic beverages, along with Goa, which is also a tourism-driven industry are severely impacted. The central government has proclaimed itself to be hit hard, and the GST reserves and revenue sources of the states have dried up. 

In the aftermath of these spectacular results, states are pushing for a regulated compliance and delivery allocation to account for lost sources of revenue. It has also encouraged app and web services to continue their work and to stabilize their companies by expanding their offerings to multiple outlets and governments of the state. States such as Chhattisgarh, Punjab and West Bengal have all launched online portals and mobile apps that offer door-to - door alcoholic beverage distribution (9am-7pm) based on age verification by means of Aadhar numbers.

At the other hand, many companies have also requested state governments to encourage them to move forward with the distribution services in tandem with Zomato, with their near rivals Swiggy obviously interested in entering the space. ISWAI, the Indian Spirits and Wines Association of India, a representative body, has also called for more clarification on the standards and legislation for alcoholic beverage distribution through the states but the biggest challenge for Swiggy and Zomato will be the detailed clearance required by each state government to expand this line of business.

A Multi-Billion Dollar Opportunity for Entrepreneurs

Such technological measures will not only provide the government with effective ways to fight the spread of COVID-19 while maintaining regulations, but will also enable potential entrepreneurs to benefit from the clientele. The delivery model which works on the app has garnered huge success in India.  Though Zomato, Swiggy, Big basket has already been riding high with their unicorn status, there are more than 1,0007 logistics start-ups, including Dunzo and JhutPut, seeking to gain a substantial market share.

India's alcohol industry is the world 's third-largest with an estimated $35 billion behind just two big nations, China and Russia.  According to Euromonitor International, a well-known research firm, India's spirit industry – which includes whiskey, brandy, rum and vodka is estimated to grow 25 percent by 2022 to 2.92 trillion rupees ($41bn). Combine it with India's beer market, by 2022 the combined demand is expected to be as high as $56 billion to $60 billion (4.4 trillion rupees).

With the increase in the rise of smartphones, the rapid use of digital payment systems and the growth in customer trust in technology-driven delivery firms the app-based liquor delivery start-ups could comfortably account for not less than 1% of the overall market over the next two years, which will amount to $600 million (3,800 crore rupees) now that Indian delivery startups are growing it would be safe to assume that India 's online liquor delivery market would be nearly $ 3 billion – $4 billion business in the next 4-5 years.

Liquor Delivery: The Challenges

It is just the dawn of India's liquor delivery market. Just like every emerging sector, it always comes with a range of its own policy challenges, as well as emerging businessmen. The government has to re-examine its liquor policies to gain entrepreneurs' trust. The uncertainty in the business model of liquor delivery is a major problem and companies like HipBar have already felt the brunt of that.   The biggest barrier to the sale of liquor continues to be the disparity of laws between various jurisdictions. Retail laws are not only special but there is also a disparity in income, rates and also age limits.

The major challenge is about managing inventories. Imagine a consumer order on the app for a particular variety of beer, and something else is delivered which is not desired also retailers worry that online businesses such as Zomato , Swiggy and others may threaten profitability, which is a major deal in the liquor store industry due to the high sale license price. For businesses like Swiggy and Zomato there are no rules as retailers believe they won't be able to access the orders they normally receive because applications can monitor the whole chain from ordering to last-mile delivery. Just a few retailers could go for exclusive Zomato and Swiggy tie-ups. In this situation, when exclusivity comes at a premium, smaller retailers would miss out on the market. Data misuse by food delivery apps could monopolize consumer data from liquor distribution, claimed by some restaurants in the food delivery space. Retailers want to own this data as they think consumers will be linked directly to sellers.

To sum up

Governments in almost all states have imposed on the alcoholic drinks a heavy 'extra corona tax' to maximize revenue, thus helping the operations of delivery services. Brewery workers have also called for this model to be affirmed, because it will help thousands of workers to get paid and restaurants, roadside dhabas will benefit from this arrangement which have been dry all along this time. What seems to be a controversial issue on the surface can be the one which provides the economy and its related businesses with a big cash flow it is really an opportunity worth exploring for entrepreneurs. How far the liquor delivery firms extract the revenue will rely on the policies the government chooses to adopt.

Hotel/Restaurant 2.0 - How they will look post COVID-19?

Gone are the days when we pushed people together with the elbows seeking to get a drink in a crowded pub, where you favoured a particular restaurant because it was cosy, crowded and buzzing.  Dining outside was not just about the meals, but also about interacting. In a post-Covid era, it's all about social distancing.

Think about pre-ordering a meal and pre-booking a table ahead of turning at the restaurant at the designated time. Have your temperature checked in the entry, you will be walking through automated doors and then sit at a table that's at least 6 ft apart from the nearby table or there may be plexi-glass separating both tables. Sanitize the Hands with all the sanitizer that's likely to be the new centerpiece in the desk rather than scented candles or blossoms.

You've got a mask and gloved server, serve you with that your pre-ordered meal, make the payment online so that you won't need to get the bill book or the credit card machine touched and leave, all through the entire workout you are going to be placing a mask which you'd remove only while eating. Now, stop imagining because this is going to function as the newest norm post the lock down, after the dining establishments reopen.

The restaurant industry is just one among the biggest from the service sector, accounting for about 3 percent of India's GDP and employing roughly 7.3 million people is suffering possibly its worst catastrophe ever. According to the National Restaurants Association of India (Nrai), Restaurants around the country are trying hard to reopen and plenty of restaurants won't ever open , rendering several employees jobless, four out of each 10 dining establishments is likely to be permanently closed in the lack of a government bailout, and the industry has increased operating expenses, including leases, licences, utility bills and the lock-down has attracted additional woes. Covid-19 has spelt doom to a sector that pre-lockdown had a turnover of Rs 4 lakh crore.

A Sequence of Ups and Downs

The industry was coping with issues before Covid-19 struck. The biggest issue that restaurants have been facing is the shortcoming to claim input tax credits under the GST regime which adds to the costs of operating a Hotels/Restaurants. It is a misconception that work on huge margins instead they work on deferred payment model with very less margins. Income is essential as the company is working on rolling credit. If GST benefits are taken away then it decreases the bottom line of the business which is already at roughly 12 per cent to 15 percent. Pre COVID, people used to drift out not only for the food but also for meaningful interaction. Today with guidelines set up where not more than four guests are allowed on each dining table the taste and vibe of the eatery threatens to develop a thing of the past.

Fine dining at your doorstep

Hotels/Restaurants are currently delivering Roasted chicken, marinated meats, pasta, grilled vegetables and much more which comes using recipe notes that contain directions to complete the dish in your kitchen. Given that these are unprecedented instances a new way of functioning has been adopted for most Hotels/Restaurants and they are tweaking procedures often, trying to discover a balance among quality and viability predicated on opinions.

Taj Hotels has started "Hospitality@Home" a Contact-less take-away support, at 10 of its accommodations in Delhi Bengaluru, Hyderabad, Kolkata and Chennai, with dishes out of the iconic restaurants Offered. That Means You can zip by to pick keema pav out of Shamiana up in the Taj Mahal Palace, Mumbai, the delicate Delhi-6 Mutton Stew from the java shop Taj Lands' Stop chicken Tai-chin at Taj Palace, Delhi from Spicy Duck, Blue Ginger's signature Vietnamese hot red curry out of Taj West End butter garlic prawns out of Taj Krishna's Golden Dragon along with an Dish from Southern Spice Peppermint and pineapple flavour mix, in Hyderabad and many more.

Likewise, Marriott Worldwide has established the “Marriott On-wheels" initiative a compact menu has been made by More than 20 of its accommodations, together with meals delivered in sanitized vehicles. Select from selections such as the quinoa chaat along with artichoke and avocado salad with peppers and lettuce or hearty, comforting dishes like the classic Margherita pizza, smoked chicken tagliatelle, gosht rogan josh along with Konkani curry. When It is hotels or restaurants, these Do It Yourself Delivery menus and kits have been priced reasonably, remembering that the Financial uncertainties in the lifestyles of customers.

 New Norms

Matters like automation will come into play in order to steer clear of human contact, sensor-based light in common areas, detector replacements and gesture-controlled flushing in people washrooms will become industry standard as people may get aware concerning the number of surfaces, they used to the touch during hotel visit.

As social distancing will be maintained in the kitchen with less chefs working in and around the kitchen it will compress the menu and there will be a limit in overall range of people allowed within the cafe at any given time. Big restaurants will come up with live cameras and will stream it on the Internet so anyone across the globe can log on to their website and see how they are operating. To reduce touch, Hotels/Restaurants will put disposable crockery and cutlery of very high-quality high-tech devices along with ultra violet enabled technology will ensure cleanliness throughout table turnovers.

To lessen contact, restaurants are looking at installing automated flushes and pedal step water faucets in washrooms and automated hand sanitization station. Working on delivery and takeaway menus during the lock-down has helped restaurants to generate some revenue. To guarantee clients, the Food Safety and Standards Authority of India (FSSAI) already has a list of guidelines place for foods companies, specifically keeping the covid-19 pandemic in mind. These vary from cough manners to screening of friends and staff members equally with thermometers. They also spell out distancing norms for the food and also staff handlers, that are required to maintain at one metre space from one another while tackling their own lockers.

The FSSAI guidelines also recommend the creation of a regional emergency group, notably to deal with ailments, with just one individual specified as a co-ordinator against covid-19. Staple choices in fine-dining restaurants will be tweaked keeping these safety norms. For instance, the buffet process in Marriott's Hotels. Gone are the times when guest was permitted to serve themselves by a container working with a long spoon touched by other diners earlier. The buffet will be reinvented with small portions and live stations.

The table where people used to dine will vary. Vases filled with exotic blossoms, dainty tea lights along with condiments will share space with sanitizers disposable menus, wipes and disposable dining table mats with sealed components of cutlery.  Air-conditioner filters will be cleaned frequently as they have emerged as a cause of concern. The crowded restaurant concept will no longer work. The number of guests might have to be distributed by assigning different time slots, big group bookings will be discouraged and alternate tables will be blocked.

Contactless dining- a word that has been doing the rounds for a month will probably mean there will be little interaction with all team. Delivery aggregator Zomato, that has been advocating this concept vociferously, outlines the experience at three different steps: Scan on a QR code on the table to learn more about the cafe menu with dish and pairing recommendations and order through the app the server will create an appearance. Pay the invoice via the program when completed. Don’t be surprised if someday you have robots delivering food to your table.

Social media is very likely to perform a more powerful position in conveying with these security measures that are new towards the client. Customers may not necessarily be able to see what is happening in the kitchen, so restaurants will show daily live feeds from the kitchen. To reassure people, (societal media feeds) can be supplemented by visible exhibit of an third party day-to-day audit file, wellbeing record of staff members, a study on regular sensitization of their restaurant, even inside of the physiological space as properly but putting this safety network in place will obviously add into cafe operating expenses but eateries believe earning customer confidence will likely probably be key to success at a post-lockdown environment.

When Gates get unlocked

 Several dining, including those with star hotels, have shifted to home delivery units, advanced options like non-alcoholic mixtures, redeemable coupons and discounts will help to overcome current cash flow crunches and certainly will retain a relationship with customers once industry resumes.

Support in the shape of rental and wages protection (the Danish government for example has promised to pay 75 to 95 percentage of salaries if businesses usually do not lay their staff; Singapore is covering wages up to 75 percentage; Canada has declared rental reduction for small businesses) is the industry hoping for. A re-engagement on payment of rentals with soft loans for longer intervals at lower rates of interest and the excise fees which varies with each state as well as a revisit on the GST and inputs credits issue at this time would be appreciated.

Technology is being aggressively encouraged a tool effective for social distancing and contact less dining. My Menu, an international digital menu provider, has launched contact-less QR in order to replace most common touch point in dining i.e. Menu Card. The guest scans a QR-code and looks at the menu and then places the order by means of the application.

 Another initiative is by a food–tech platform Smart Q, which has come up with slot-based booking and allocation system called as Smart Pass which will assist to decongest cafeterias. It helps in distributing the crowds uniformly in the café, enabling physical distancing. The procedure for clean-up of guest rooms will probably appear completely different post Covid-19. Changes such as cleaning of soft surfaces which includes pillows, rugs, drapes, bed runners and carpets after each checkout. Usage of UVC Ultra-violet technology will be seen which kills micro-organisms including viruses, bacteria and mould spores. Electro static spraying technology which uses a special applicator which gives an electric charge to a disinfectant will make sure that it fully covers the target surface. Electrostatic spraying is also very quick and effective. The average guest room can be disinfected within a couple of minutes with a cordless Electrostatic sprayer.

Guest will not ask for magazines or newspapers as there is a probability of cross contamination. Hotels will look for digital alternative which will give guests free access to a wide range of magazine and newspapers on their own device with reducing face to face interaction between both guests and staff will be the priority. Promote contactless and keyless check-in with a mobile app or a kiosk

Remote controllers for tv sets may end up being just another area of the situation and there are chances that a guest might get affected thus, when a hotel decides to get remotes at the guest room, they should ensure that the covers are changed. A more appropriate option is installing an app in guest’s smartphone, through which various functions such as the lights, air-conditioning, curtain and TV channels can be operated.

The contactless experience is going to be a requirement for Hotels/Restaurants after the lock down is lifted. An industry that vouches with its ‘touch of hospitality and human interaction' will now need to switch to an automated experience empowered by technology. All new hotels will soon possess sensor-based taps in public washrooms and the doors which open two-way would soon be a trend. The main entrance will have motion detected sliding doors and will define contactless experience. The whole concept of servicing the guests will change. From the pick up at the airport to the check-in, entire stay and until check-out everything will be contact-less.

For Park Inn from Radisson moves in the direction had begun pre-pandemic. The hotel in 2019 had installed Alexa in its deluxe and junior suites and offered services with the assistance of device hence, the guest does not need to contact front desk. They can merely put amenity requests with voice orders and the same will probably be Set up in elevators so that the guest does not have to touch the buttons. The cable TV in the guest living room can’t be stopped but the Hotels can opt for less costly bouquet of channels" Changes include discontinuing the bus service and moving into in-room eating though cutting down on the meals cost to lessen touchpoints some of the other changes include discontinuing the buffet service and moving to in-room dining to reduce touchpoints while cutting down on the food cost.

Some of the instructions need to be followed by staff members are

• Infrared thermometers will be used to screen all the staff members and providing them sanitizers before entering the hotel premises.
• Ensure that the entire kitchen and all the equipment are being disinfected and cleaned using appropriate chemicals multiple times a day
• The staff should be sent to designated hospital for further screening or asked to go into self-quarantine for 14 days if any symptom develops
• In case the hotel has a positive case, employees who have cleaned the room or served the individual/individuals would be isolated and quarantined.

It is to make sure that crockery cutlery and all and glassware utensils were washed at temperatures over 65-degree Centigrade to be sure that they are sanitised correctly, soon after guest's check-in, Welfare courtesy calls should be created at minimum one time a day to ensure that their well-being. In the Event the hotel believes a person infected with COVID-19 , the government concerned is likely to soon be immediately informed and the guest should be requested to keep themselves quarantined .The entire floor including each of the touchpoints of those guests shall be sanitized using appropriate chemicals. During this period only designated staff shall be allowed to serve the guest in his/her room, using personal protection equipment and sanitation at all points during this period. 

The guest would also be advised to practice social distancing and minimum contact with the outer world until the test reports arrive. Hotel chains have begun revamping their existing service protocols and standards for guests following the COVID-19 pandemic. Guests will also be able to share their location with the hotel so that the hotel staff starts preparing the food when the guest is enroute

At the end of the entire article i feel like, dining out will still take a long time to recover post the lockdown as consumer discretionary spending will be low thanks to salary cuts and job losses but still the Hotel/Restaurant industry will constantly evolve. It will not be same as it was a decade ago. Covid-19 will be a model changer where businesses will have to adapt. Zero-maintenance buildings, touch-free interactions, and technology-based sanitisation will evolve as a new normal for hotels. As the customer will feel more and more secure then the industry will start to get back to normal. Hotel/Restaurant will have to weather different kinds of storms all the time so they have to developed resilience. The food service sector has made a loss of ₹35,000 crores in the last month, which is the second highest among all industries and has affected 300 million people, but still it is the only industry that makes in India, lives in India and serves in India and its whole survival and recovery is an humanitarian issue.