Online delivery company GoPuff has agreed to buy adult beverage retailer BevMo for $350 million. Named to CNBC’s 2020 Disruptor 50 List, GoPuff operates more than 200 micro-fulfillment centers which serve more than 500 cities across the country. The company specializes in quick-turnaround deliveries, including late night delivery and 24/7 service in some markets, on a variety of consumer products including everyday essentials like groceries and cleaning supplies to snacks and drinks.
GoPuff charges a delivery fee of $1.95 per order ($10.95 minimum) and an additional $2 per order on deliveries that include alcohol. Online delivery company GoPuff also offers a membership option. For $5.95 a month, GoPuff Fam members receive free delivery.
BevMo has 161 stores in Arizona, California and Washington. By partnering with online delivery company GoPuff, BevMo customers can order “instant delivery” on their favorite BevMo items as well as GoPuff’s product inventory.
GoPuff to expand into new territory
“We’re proud to bring GoPuff’s operations to California and look forward to investing in talent and real estate across the state,” said GoPuff co-founder and co-CEO Rafael Ilishayev in a November 5 news release. “Partnering with BevMo quickly advances our strategic objectives of providing more customers in new geographies with a seamless solution for their instant needs. Through this acquisition, GoPuff will operate coast-to-coast, solidifying our presence as a leading, national consumer business.”
GoPuff co-founder and co-CEO Yakir Gola also commented on the acquisition.
“BevMo has an extremely loyal customer base and a deep infrastructure across three states. Bringing its iconic brand, locations and employees together with GoPuff’s tech-driven, vertically integrated operating model positions us for unparalleled opportunity. We’re thrilled to welcome BevMo employees to the GoPuff team and look forward to building relationships with these new local communities,” said Gola.
Though the deal is expected close in the next 30 days, GoPuff is still working on the best way to strategically combine the two companies, says the Los Angeles Times. As of now, there are no plans to close any BevMo stores. Last month, the online delivery company raised $380 million in a funding round led by Accel and D1 Capital Partners. The company was valued at $3.9 billion.
Better meet customers’ changing needs
Josiah Knutsen, BevMo CEO, said the deal will help the company better meet their customers’ needs.
“Joining GoPuff, a company that has created a truly differentiated approach and defined the instant needs category, will allow us to better meet our consumers’ evolving needs, including delivering everyday essentials directly to their doorstep. We look forward to helping introduce GoPuff to California and working together to further enhance the experience for BevMo! customers and our communities at large,” said Knutsen.
The Los Angeles Times reports that, since the beginning of March, alcohol purchases outside of supermarkets and liquor stores have increased by 22% compared to the same period last year. This is likely due to number of Americans sheltering in place at home and the closure and restrictions of dining establishments, bars and restaurants.
Insider Take
This acquisition seems like a good fit for online delivery company GoPuff and adult beverage retailer BevMo. While GoPuff does offer some alcohol delivery in some markets, it is limited. BevMo also offers delivery, so this acquisition allows both companies to expand their footprint. It also provides BevMo customers with access to other consumer products delivered by GoPuff. With no end in sight for COVID, the need for home delivery will likely continue into the new year.
