The app-based delivery service goPuff is acquiring the alcoholic beverage retailer BevMo for $350 million, making it significantly easier to expand its alcohol options in the future.

The Concord, CA based BevMo has 161 stores throughout California, Washington, and Arizona. Philadelphia based goPuff currently has a presence in 500 cities, and the new deal will allow the app to greatly expand its reach.

Founded in 2013, goPuff sells many of the same items typically found in a convenience store with a total offering of 3,000 products including ice cream, snack foods, and over-the-counter medicines. It charges a flat delivery fee of $1.95, and has a minimum order of only $10. Most of its orders are delivered in 30 minutes or less. goPuff offers late night deliveries, even operating 24/7 in some markets.

goPuff Needed Help with Alcohol Distribution

goPuff currently sells alcohol in about half of its markets. The new deal with BevMo will remove a big barrier to expanding its booze sales, as the stores are already equipped with liquor licenses. As alcohol is one of goPuff’s best selling products, the BevMo acquisition could prove to be quite profitable for the company.

Without BevMo, goPuff faced the task of obtaining a liquor license in every new market to which it expands, a request local officials are often reluctant to approve.

Co-founders and co-CEOs Yakir Gola and Rafael Ilishayev started goPuff while in college, delivering items to other students on campus. “We started this business because the convenience store was anything but convenient,” says Ilishayev. “The immediacy we offer is unmatched,” Gola added.

The company announced last month that it managed to raise $380 million to fund its geographic expansion. After acquiring  BevMo, goPuff will have a presence on both coasts.

“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,” said Ilishayev.

A Deal that is Win-Win

The deal represents significant growth for BevMo as well, which will gain an east coast presence via goPuff. The store sells cigars, glassware, bar and wine accessories, and specialty foods in addition to alcohol.

“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,” said Josiah Knutsen, CEO of BevMo.

goPuff currently has around 200 micro-fulfillment centers serving its territories, and plans to use BevMo stores as fulfillment centers where it can pack online orders. The start-up faces stiff competition from other app-based delivery services, including Amazon, DoorDash, PostMates, and InstaCart. What separates goPuff from these competitors is its low, $1.95 flat rate delivery fee. Some apps charge up to 30 percent in delivery fees.

As we appear to be deep in the third surge of the pandemic and cold weather starts to set in, delivery services are likely to keep rising in popularity; it is a good time for goPuff to expand its territory.

Erin Grafton
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