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The new age of alcohol

TechCrunch TechCrunch 10/06/2016 Megan Hanney

Never before has Europe seen an app dedicated to the late-night delivery of alcoholic beverages until the launch of Bevy, one of London’s emerging tech startups. With operations running until 5 a.m., plans to become a 24/7 business and a model ready for rapid scale, Bevy is redefining on-demand services through increased access to liquor.

Designed for ultimate convenience, the app is built with GPS technology for tracking deliveries and offers a zero minimum spend along with a wait time of only 30 minutes. Appealing to those enjoying nightlife, Bevy additionally delivers mixers, tobacco, vape products and condoms.

Bevy’s alcohol-specific market domination is enhanced through stylized drivers presented as “butlers.” Not only are drivers dressed in the appropriate attire, they also are trained to ID customers upon arrival. Bevy doesn’t fail to mention the customer may wish to tip the “butler” once alcohol has been received.

Competition throughout Europe and the U.S.

Competition has long been rising for on-demand food delivery services throughout Europe, with the likes of Deliveroo following on from earlier players such as JustEat. The on-demand market then expanded in London when unspecialized apps, including Henchman, began offering a door-to-door service for any shopping item or store essential.

While the U.S. is well ahead of the game with on-demand alcohol apps, including Saucey, Drizly, Minibar and Thirstie, Europe has never seen anything like Bevy until its launch in December 2015, and there is still no sign of any direct competitors on the horizon.

“The success of similar apps in the U.S. was hugely validating for us,” says Marco Saio, co-founder of Bevy. “Typically alcohol is hard to purchase in-store after 1 a.m. in the States, so if we hit a market where purchases can be made 24 hours a day, then we have the ability to democratize alcohol around the clock and feed instant gratification at any hour.”

“Although the U.S. is well acquainted with various late-night alcohol delivery apps, our model is the first to maintain complete management of a driver network in addition to shifting responsibility of direct sales to the retailer. We spend significant resources on drivers who are put through months of training before being allocated to one single store to purchase goods,” says Saio. “This means we can operationally deliver within half the time of other convenience apps. By putting store inventories online we simultaneously avoid licensing issues and distribution risk.”

Success of the business model

Bevy’s business model is perfectly disruptive in today’s digital age. As with many industry leaders, Bevy doesn’t own any wholesale stock; just as Uber doesn’t own any cars and WeWork doesn’t own any property. Instead, Bevy partners with large 24-hour off-license retailers; a model which enables drivers to immediately purchase from stores and deliver directly to the customer.

Europe’s nightlife is in decline and millennials are opting for more nights in.

Despite the company’s high-end presentation, Bevy’s prices reflect standard store prices, unlike food delivery apps, such as HungryHouse, which typically charge a premium on alcohol.

Due to Bevy’s pricing consistency with stores, money is made through a double revenue model of taking commission from retailers (which is the core revenue stream) in addition to taking a percentage off the £5 flat delivery fee. Bevy has plans to look into app advertising for additional income.

Bevy has developed an integrated delivery and technology solution in-house. Saio describes it as two apps talking to one another. “One app focuses on the customer and pulls the stock information from the nearest available stores whilst the other uses an algorithm to send incoming orders to the closest ‘butler.’ A whole year of development went into the app before its launch; we are now in the 75th version with a new version released every six weeks. Our focus is on utilizing our business model and technology to ensure we nail the competitive 30-minute delivery window.”

Growth and funding

The company’s first delivery hotspots in Britain included Kensington and Chelsea, the Royal boroughs of London. Since launching, Bevy has ventured to other affluent neighborhoods, including Westminster, which doesn’t have any 24-hour off-license stores. Affluent neighborhoods are targeted because they have the lowest supply; by partnering with stores on the periphery, Bevy is able to meet high demand in these areas.

“We are laser focused on London as our first location and intend to solidify our position within the market before expansion,” says Saio. “Manchester is potentially a second location due to the supply landscape and availability of 24-hour retailers. The major challenge will be digitizing store operations and inventory management systems. We’re working towards a light switch activation system to instantly pull store inventories into one directory.”

Saio says Bevy is currently in its Series A seed funding round, half of which has already been received through private investment. The remaining capital is set to be raised through angel investors and accelerators. Although the app is currently built for iOS, there is a bigger market and faster growth potential for Android in Britain. Thus, money raised through Series A will go toward Android development in addition to an e-commerce web app.

Series B funding is likely to be raised through crowdfunding, which is a particularly suitable model due to the social nature of the company. Bevy is positive about approaching cash for equity models such as Seedrs and CrowdCube. Expansion throughout Europe is a keen possibility later down the line, when the company will face the more stringent and challenging laws enforced in major cities such as Paris.

On average, the company has seen 55 percent user growth per month, plus a revenue increase of 40 percent per month.

Millennial context and the decline of clubs

At a slower rate than the U.S., Europe’s nightlife is in decline and millennials are opting for more nights in. This might suggest why on-demand alcohol delivery services have been slower to emerge in Europe. Britain’s nightclubs have fallen by 45 percent over the last decade and the Netherlands experienced a 38 percent fall.

This only strengthens the opportunity for Bevy to expand throughout Europe following expansion throughout Britain. The alcohol and tobacco market in the U.K. is valued at an estimated £30 billion; it will be interesting to see how well Bevy copes in a continent renowned for heavy drinkers.

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