Dive Brief:
- E-commerce convenience brand GoPuff announced Thursday that it plans to acquire alcoholic beverage specialty retailer BevMo for $350 million.
- The deal, which is expected to close within 30 days, would fuel BevMo's expansion on the West Coast, where the delivery startup already runs more than 160 neighborhood stores in California, Arizona and Washington.
- The companies' expansion of alcohol sales coupled with fill-in trips and impulse purchases of everyday items comes at a time when the pandemic has limited on-premise alcohol consumption.
Dive Insight:
The acquisition means GoPuff would have a coast-to-coast presence, Rafael Ilishayev, co-founder and co-CEO of GoPuff, said in the announcement.
Recently, the delivery startup has accelerated its growth by more than tripling its footprint in the last 18 months and raising $380 million, which put the company’s valuation at $3.9 billion. When the funding was announced in October, GoPuff said it would support product selection, expansion and adding to its executive team. The company also unveiled three new senior-level hires last month, bringing in former executives from Uber, Lowe’s and TripAdvisor.
Founded in 2013 and headquartered in Philadelphia, GoPuff operates more than 200 small-scale fulfillment centers and services more than 500 cities across the U.S. GoPuff is available in 38 states and Washington, D.C. Currently, its West Coast presence is minimal — its website lists Seattle as the sole market it serves in Washington and no markets in California or Nevada.
With a $10.95 order minimum, GoPuff has a $1.95 delivery charge and a membership program of $5.95 per month for free delivery. For purchases with alcohol, an additional fee up to $2 applies. GoPuff already offers alcohol, including craft beer, hard seltzer, liquor and a variety of wines, in most of its markets, according to its website.
The acquisition of BevMo would broaden GoPuff’s alcohol delivery range and add millions of potential new customers for BevMo, which would soon be able to get items like baby and pet products, cleaning supplies, over-the-counter medicine and food with their alcohol in 30 minutes or less, according to the press release.
Founded in 1994, the alcoholic beverage specialty retailer is based in Concord, California, and offers beer, wine, hard seltzer, spirits, snacks and mixers at its physical stores and online with pickup, shipping and delivery options.
Yakir Gola, GoPuff's co-founder and co-CEO, told the Los Angeles Times that the company had already planned to come to California and that buying BevMo "is just a better and faster and strategic way for us to enter the market." Gola told the paper that the company hasn't decided yet if it would open fulfillment centers, use BevMo's stores to store products or rely on a combination of the two in the Golden State.
Convenience retailers have quickly expanded their online operations this year. 7-Eleven and other brick-and-mortar c-stores have extended their delivery partnerships and moved into new markets. DoorDash recently launched DashMart, a competitor to GoPuff that offers low-fee delivery from dark stores in several U.S. cities.
