This tech company is taking over San Diego’s alcohol and convenience market
What started as a way to quickly satisfy college-kid cravings has morphed into a business so ubiquitous you’re likely already a customer without knowing it.
Thursday, Philadelphia-based Gopuff begins a more aggressive push to make its name synonymous with convenience for people in San Diego County. Although quietly making doorstep drop-offs in the market for months, the company is officially ready to show off its ability to deliver thousands of everyday essentials and booze to most people in the region in minutes.
“We deliver everything from snacks, ice cream and alcohol to baby, pet and beauty products and over-the-counter medication. We do it in under 30 minutes, 24-hours a day for a flat $1.95 delivery fee,” said Daniel Folkman, who is the senior vice president of business for the startup. “The way that we do that is what makes us different.”
That’s because Gopuff owns all of the products it delivers, amassing an expansive inventory of goods that makes the 8-year-old technology company distinct from a laundry list of familiar delivery apps that are merely go-betweens.
What’s more, Gopuff has a physical footprint — a combination of warehouses and storefronts — that rivals some of the nation’s largest retailers. The venture-backed company, fueled by $2.5 billion in financing, owns BevMo and all 161 of its stores in California, Arizona and Washington. It purchased the popular West Coast alcohol chain for $350 million late last year.
In San Diego, the company has converted five of the county’s 16 BevMo locations — La Mesa, Mira Mesa, Escondido, Encinitas and Mission Valley — into stores that sell the chain’s usual fare alongside a curated assortment of thousands of convenience items. The product selection includes a variety of healthy and indulgent brand-name snacks, Bird Rock coffee, greeting cards and frozen everything.
These hybrid stores also act as distribution hubs for Gopuff’s e-commerce customers, who place orders using the company’s smartphone apps and website. BevMo employees, versed in the store’s products, fill the online orders as soon they come in and pass off the goods to drivers, who are independent contractors. The process is designed to eliminate the lag time with on-demand apps that rely on third-party workers to drive to stores, track down and pay for the products in question and then make the deliveries.
It’s an atypical approach that builds on a simple munchie model dating to 2013, when Gopuff co-founders and co-CEOs Rafael Ilishayev and Yakir Gola set out to make app-based deliveries less of a hassle for impatient youngsters who just wanted to get their stuff fast.
“We have a maniacal focus on delivering a magical experience,” Folkman said. “What we have done very well for eight years is take physical infrastructure and integrate technology and enable immediate delivery.”
The model worked well enough to allow the startup to expand regionally without outside investment for its first few years. More recently, venture capitalists have poured a few billion dollars into Gopuff to turn the technology company into a global powerhouse. The company has since been on a spending spree, buying in short order BevMo, Liquor Barn, and the routing and fleet management firm rideOS.
With Thursday’s launch, Gopuff now delivers to most people in San Diego County, including many north and east county neighborhoods. The company’s Southern California expansion comes as BevMo rival Total Wine & More prepares to open locations in Mission Valley and Carmel Mountain Ranch.
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