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GoPuff Founder Talks BevMo Purchase, E-Commerce Outlook

March 18, 2021

Late last year, Philadelphia-based e-commerce giant GoPuff—valued at $3.9 billion—made a splash in the drinks business with its acquisition of West Coast retail chain BevMo. GoPuff co-founder and co-CEO Rafael Ilishayev recently discussed the future of e-commerce, evolving consumer behavior in the wake of the pandemic, and beverage alcohol’s embrace of digital platforms in conversation with Southern Glazer’s CCO John Wittig, moderated by Conecuh Brands CEO Roy Danis and hosted by the UJA-Federation of New York.

Wittig and Ilishayev believe that e-commerce will continue to grow as a force in the beverage alcohol world, with both reporting that their companies have seen significant growth during the pandemic. Wittig reported that the business-to-business aspect of SG Proof, SGWS’s digital platform, was up 30% in the last year and reported over $1 billion in revenue. Currently, Wittig said online order value is increasing at around 15% each month.

“We’ve activated 100,000 accounts in the B2B space and we’re super proud of that accomplishment. Our goal this year is another 50,000 accounts to bring us to 150,000 total,” said Wittig. “Our salespeople on the street have data in their hands every day now to allow them to hit more goals.”

Wittig said the company’s partners have widely adopted Proof during the pandemic and the combination of inventory transparency and convenience has been a boon. SGWS has continued its expansion in the e-commerce sector, yesterday making an equity investment in ReserveBar.

GoPuff has also seen tremendous growth during the pandemic, with Ilishayev comparing the jump in consumer e-commerce awareness during the first three months of the pandemic to two years’ worth of effective marketing. Looking forward, he sees continued growth for the e-commerce sector (within beverage alcohol and beyond) as many consumers opt for at-home convenience in lieu of in-store shopping.

Since its founding in 2013, GoPuff has expanded exponentially. After starting in a Drexel University dorm room, the company has grown to “6,500 employees and tens of thousands of driver partners,” according to Ilishayev. He added that in GoPuff’s worst year, the company grew by 150%. GoPuff’s calling cards are its quick delivery times and self-contained fulfillment centers, which offer delivery of snacks, drinks, alcohol (where available), and other consumer goods for a flat fee.

The BevMo purchase was a strategic move for GoPuff, opening up California for beverage alcohol delivery for the company as well as giving them outposts in Arizona and Washington. “There are 161 neighborhood stores, not just in California, but also in Arizona and Washington. It really gave us an extensive, physical and licensed infrastructure footprint,” he said. “We bought BevMo to bring GoPuff to California.”

GoPuff has already begun integrating some of its licensed BevMo locations into its network of fulfillment centers to jumpstart the company’s alcohol delivery program in the Golden State.

While both Wittig and Ilishayev are bullish on the future of e-commerce and online ordering, neither see the shift as a replacement for brick-and-mortar retail. Both highlight the need for companies to offer consumers convenience and a strong buying experience as keys to success, whether through an app or over a counter. “I don’t think brick and mortar is going to disappear,” said Ilishayev. “If the locally owned a wine shop is delivering an amazing consumer experience, I think they’ll thrive.”—Shane English

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