BevMo acquired in $350-million deal as booze deliveries surge
Need a case of Chardonnay paired with a side of toothpaste, batteries and dog food? Soon you’ll be able to get that delivered to your door, courtesy of BevMo — and its new owner.
The beverage chain announced Thursday that it had agreed to be bought by GoPuff, a Philadelphia online delivery company, for $350 million.
The deal, which is expected to close within 30 days, will bring together a household name with 161 stores in the West and a fast-growing upstart with no California presence.
“The plan all along was to get into California,” Yakir Gola, GoPuff’s co-founder and co-chief executive, said in an interview. “This is just a better and faster and strategic way for us to enter the market.”
Although it is little-known in Los Angeles, GoPuff operates more than 200 micro-fulfillment centers serving more than 500 cities around the country. It specializes in quick-turnaround delivery: For a flat rate of $1.95 (there’s also a subscription option), customers can get thousands of items — cleaning supplies, food and electronics among them — delivered in 30 minutes or less. In several markets, GoPuff deliveries are available 24/7.
GoPuff is still figuring out how to best combine the two companies, with a target completion date of sometime next year. When that happens, GoPuff customers will be able to add BevMo products to their delivery orders.
Gola said the company hasn’t yet decided whether to open fulfillment centers in California, or use some of the real estate in BevMo’s stores to house GoPuff products. It could be “a combination of things,” he said. “We’re still working on that.”
Currently, there aren’t plans to close any BevMo stores, which are in California, Washington and Arizona.
GoPuff has about 3,000 employees and Concord, Calif.-based BevMo has about 2,000. Gola declined to provide financial figures for the companies, which are privately held.
“It’s a very sensible deal,” said Anthony LeCour, who specializes in food and beverage as head of consumer investment banking at Wedbush Securities. The companies complement each other, he said, and both are in categories — alcohol sales and home delivery — that have seen business boom during the pandemic.
Since the beginning of March, U.S. alcohol sales in “off-premise channels” — such as supermarkets and liquor stores — are up 22% compared with the same period last year, according to Nielsen data.
The shift in drinking habits comes as consumers spend more time imbibing at home instead of at bars and restaurants, said Danelle Kosmal, the market research firm’s vice president of beverage alcohol. Large liquor store chains such as BevMo and ecommerce sellers have both benefited from the trend, she said.
BevMo already offers local delivery and online shipping; GoPuff sells alcohol in some of its markets, but it’s “not a significant amount,” Gola said. Nationally, online alcohol sales currently represent a small percentage of overall alcohol spending, according to Nielsen data.
But that, too, is changing — and GoPuff stands to benefit.
“Shifts in shopper behavior during COVID have helped to fuel online growth for alcohol,” Kosmal said. Online alcohol sales were up more than 400% year over year in the second quarter, she said.
GoPuff was founded in 2013. Last month, the company announced that it had raised $380 million at a $3.9-billion valuation. The funding round was led by Accel and D1 Capital Partners; Luxor Capital and SoftBank Vision Fund, a previous investor, also participated.