Online alcohol sales skyrocket during coronavirus

Liquor service On The Rocks delivers bottled cocktails and other prepackaged alcoholic beverages right to your door. On The Rocks CEO Patrick Halbert joins Yahoo Finance’s On The Move to discuss the company's surge in alcohol sales and the demand of liquor amid the coronavirus pandemic.

Video Transcript

JULIE HYMAN: Well, of course, the cruise industry just one of those that has had to change and adapt to this new environment. And it's unclear how they're going to emerge from it, as Norwegian shows. But there are other businesses that are trying to pivotal and are seeing more success doing so.

One of them is a company called On the Rocks. And the CEO of the company, Patrick Halbert, is joining us right now. Patrick, you guys make prepackaged cocktails basically. Before, you were supplying industries like cruise lines, which kind of went away overnight. So now your major channel is, what, selling into restaurants that then are selling it and reselling it for takeout, right? How did you-- how did that transition go for you guys?

PATRICK HALBERT: Right, that's a-- it was a unique pivot a little bit for us, typically selling in the transportation business itself-- airlines, cruise liners, hotels. Restaurants, you know, typically have the ability to create the cocktails. So us as a premium bottled cocktail, we became pretty quickly an opportunity for their to go and delivery business.

ADAM SHAPIRO: Hey, it's Adam, and wishing you the best, and I know everybody sometimes before 4 o'clock, nothing like a little drink to help [INAUDIBLE]. Do you see-- we're going to get past COVID-19. And hopefully, things will return to normal with restaurants and the people that you used to supply. But do you see a new business avenue for yourselves because of this to help expand what you're doing?

PATRICK HALBERT: It's a great question. You know, I live in Texas, and we have a number of restaurants that carry us here. And the Governor Abbott recently announced that he has no plans of taking away these new legislative changes that allow to go and delivery opportunities for restaurants. And I don't think throughout the country is going to make any changes either.

It's a great opportunity for restaurant owners who are looking for a new revenue center to really bring the bar to their consumers when in a position where they typically can't right now.

MELODY HAHM: Patrick, you just mentioned that you are in Dallas, Texas. As we know, Texas has kind of removed some of those early restrictions. But from what I can gauge right now, it looks like it's not as though foot traffic is off the roof. People are very tepid and cautious as they head back to restaurants and the like. What are you seeing on the ground? How are you really anticipating the economy to get back up and running?

PATRICK HALBERT: You know, as we look out and see the restaurants, and you know, most people want to go to restaurant and experience it with friends and family, and, you know, being a premium bottle cocktail on the market today, we've seen a number of different outlets of opportunity.

And I really try to keep my team and my sales force really focused to try to be nimble, try to be creative when you're talking about new solution-based opportunity sales. And I think that we-- you know, there's a really strong support to be opportunistic during this time.

JULIE HYMAN: Patrick, you keep saying premium in front of your product description. So premium to me usually means pricey, potentially. So when you're looking at the cost structure of a restaurant, where, presumably, it's cheaper for a restaurant to buy, you know, the raw materials, the vodka, the mixers, what have you, themselves and mix it themselves, how are you then offering sort of a competitive edge with more cost, or maybe I'm wrong that it's more costly?

PATRICK HALBERT: No, it's absolutely correct. You know, in a restaurant space where you can just typically buy your alcohol and your mixers and go and make a cocktail at the bar, we're definitely not trying to take that away from any restaurant or any bar. What we're trying to do is offer a cocktail where the bartender is not.

It's really our sales approach where we decided to make a all-natural spirit-based bottle cocktail, which is a little bit different than what you see in the market of ready-to-drink category today, which is typically built on convenience. And so we are a little bit different, a little bit more innovative in our offerings.

ADAM SHAPIRO: They think this is coffee, but let's be honest. I'm curious as I hold up my mug, what's the most popular drink that you're seeing? Is it a vodka drink, or is it just scotch? What is it people want to drink?

PATRICK HALBERT: Good question. We have a number of flavors in the market. But what we've seen the most successful and the most popular become your margaritas, your vodka-based cocktails. We have a cosmopolitan, and we also have a Knob Creek bourbon old fashioned, which is higher alcohol content than the others, all the way up to 70 proof.

JULIE HYMAN: All right, Patrick Halbert, thank you so much for giving us a little cocktail tour there.