Click here to get your liquor quicker, your hooch for cheap

Too lazy or busy to go to the store and buy whiskey? There’s an app for that.

An Israeli-American-Venezuelan businessman whose area of expertise is international Duty Free stores is betting that alcohol is the next big thing that Israelis will order online. Leon Falic, the co-founder of the Falic Group which operates 180 Duty Free stories in 30 countries, recently launched an online alcohol retail website in Israel called Paneco.co.il.

“People here are tech savvy, and they buy a lot online, so marketing here is not difficult,” Falic told The Times of Israel.

Falic lives in Panama, but visits Israel five times per year, and his two sons have served in the paratroopers unit of the Israel Defense Forces. His mother was a seventh-generation Israeli, and he grew up in both Miami and Caracas. He founded the Falic Group with his two brothers, Simon and Jerome.

Paneco.co.il, his newest venture, is part of a rapidly growing sector of online retailers hoping to capture the Israeli market. Flights, movie tickets, and hotel reservations are still the most popular online shopping products, but 9% of Israelis also tried ordering food and drinks online from major retailers in 2014, according to a Statistica report.

Paneco aims to capture the consumers that wait for a trip abroad to buy at the Duty Free at Ben Gurion Airport to avoid the 17% value-added tax at regular stores (Falic Groups does not own the Duty Free shops at Ben Gurion). While Paneco customers will still pay VAT and Israel’s alcohol taxes on their orders, price comparisons are still lower than at Ben Gurion’s Duty Free, due to the volume that Paneco imports and the lack of brick-and-mortar stores with their associated costs. They offer free shipping on all orders, which usually arrive the next business day but are guaranteed to arrive within four business days depending on location.

The site is for people looking to save money on high-end liquors such as single-malt whiskeys, though they also offer their own unique brands, Israeli spirits, beer, and wine, and bottom-shelf liquors. The staff can also offer recommendations via chat, phone, and SMS.

“This is a business that will always be bought and consumed,” said Falic.

However, compared with other OECD countries, Israel has the fourth-lowest alcohol consumption per capita, with each person drinking just a little over two liters per year (to be clear, the journalists invited to the launch of the Paneco website, including this one, may have finished that off per diem).

Indonesia, a Muslim country, is the lowest country with essentially zero consumption. Lithuania is the highest consumer, with an average of 14 liters per person per year. The OECD average is 8 liters per person per year, down from 9 liters per person per year in 2000.

“Israel may be a smaller market, but they drink brand name,” Falic said.

The Paneco website is expected to expand to other countries including Mexico and Japan in the coming months. Stringent liquor laws in the United States make the business model impossible there.

Other interesting trends that the website has revealed about Israeli drinking habits: the number one seller on the site is Van Gogh Acai vodka. Whiskey and vodka are growing quickly, while cream-based liquors, such as Bailey’s are becoming much less popular as people are increasingly health-conscious. Paneco also offers a few exclusive liquors made especially for the company such as Gila Tequila, Caribana Sol rum, and King of Queens whiskey, though they have decided not to venture into the crowded arak market.

Online retail is certainly the economic model of the future. According to research commissioned by PayPal, 72% of all Israeli consumers have bought something online in the past year, and 82% of them purchased it from a website outside of Israel (eBay accounted for nearly half of international purchases, Chinese site AliExpress accounted for 19%).

Paneco promises delivery to 90% of the country within four business days. They do not deliver to the Eilat duty-free region. Most deliveries in the center region to Jerusalem and Tel Aviv are made within the next business day, and there will soon be a three-hour delivery option in the Gush Dan region. Paneco’s warehouses are at Airport City and they are utilizing the BUZZR delivery system.

Falic, whose family is a major donor to Prime Minister Benjamin Netanyahu and pro-Israel Republican candidates in the US, said his familiarity with Israel was the driving force behind his decision to launch the website first in Israel, but he also loves the country. His mother Nily Falic is the national chairperson of Friends of the IDF, and brother Simon’s wife Jana Falic is president of the Women’s International Zionist Organization (WIZO). Simon Falic owns Psagot Winery, near Pisgat Zev.

For other people interested in starting businesses in Israel, whether they are locals, immigrants, or intimately connected to the country through family ties, Leon Falic had a few words of advice. “You have to make sure you’re delivering something different. I’m selling a product that everyone knows, but in a different way,” he said.

“This country is very smart and very advanced,” Falic added. “Be careful what you do, because it’s likely people here are already on to something similar.”