A California startup is betting on the increasing interest in home delivery services and the growth of craft beer by selling and delivering growlers of brew to drinkers in the Bay Area.
Hopsy, based near Berkeley, views itself a disruptive force in beer distribution. The concept? Cut out the distributor by picking up and delivering growlers of freshly filled beer from small, mostly taproom-focused breweries scattered throughout the Bay Area, to beer aficionados and enthusiasts in the East Bay.
Currently partnered with 10 breweries, including recognizable names like Moylan’s and Magnolia Brewing, as well as others that are self-distributing in smaller geographic footprints, Hopsy purchases 32. oz. growlers directly from small producers and delivers them to customers from Oakland to El Cerrito for a small upcharge plus delivery fee.
“Most of the breweries we work with don’t have distribution and if they do, it is mostly limited to a few bars or retailers,” said Sebastian Tron, the co-founder and CEO of Hopsy. “There are so many amazing and very small microbreweries that most people don’t have access to.”
To get that access, a customer pays a slight premium: Hopsy buys each 32 oz. growler of beer below each brewery’s retail cost and resells the product at prices ranging from $11.99 for lagers, wheat beers, and pale ales, to $15.99 for more upscale offerings. There’s also a $4.99 delivery fee, which is only waived by ordering four or more growlers.
In other words, drinkers can expect to pay on-premise pricing for the convenience of drinking otherwise difficult-to-obtain beer in the comfort of their own homes.
The pitch seems simple enough: In order to consume beer from virtually unknown craft breweries like San Leandro’s Cleophus Quealy or Redwood City’s Freewheel Brewing Company, East Bay drinkers must either travel to the brewery itself or visit a limited selection of on-premise accounts that may or may not have the beer on tap.
Enter Hopsy, which will transport and store beer from those producers under temperature-controlled conditions and deliver it to customers during a three-hour delivery window. The company also advertises 60-day freshness.
Tron said the company is currently delivering beer to consumers within 48 hours of picking it up from a brewery, something that will likely get longer when it moves to an on-demand ordering system that requires longer-term forecasting and tighter inventory management. The company is currently only making deliveries on a pre-order basis, meaning that the total transaction time can take up to four days.
Unlike competitor booze-delivery services like Drizly or Minibar, both of which simply connect customers to nearby retailers with their own inventories, Hopsy manages the entire logistics process from growler fill to doorstep drop.
Launched with $450,000 in seed money from private investors, Tron said the company’s biggest challenge will be determining how to scale beyond a small volume of growlers.
“We don’t have an issue on how to scale home delivery — urban logistics capacity is emerging right now,” he said. “The main challenge is scaling the relationship we have with our brewers and, in some cases, their wholesalers.”
Hopsy is licensed as a retailer and not a wholesaler, and is currently only delivering growlers, but Tron said he is not ruling out the possibility of selling bottles, cans or kegged packages as well. He is aware that beer companies looking to grow distribution into more mainstream channels could be discouraged at the prospect of working with Hopsy, but is banking on the continued proliferation of small breweries with modest expansion plans.
During a three week beta-testing period, the company delivered 1,500 growlers to 500 customers and had about 100 repeat buyers, Tron said.
“We have created a marketplace — online and offline — where customers can have access to microbreweries without having to drive to them,” he said. “We are comfortable that there are enough breweries around here and that we can add more by finding the right fit for what we want to do.”
Tron said Hopsy would look to expand its operation into other craft hubs like San Diego, Portland, Ore. and Seattle. The company has three selection criteria for determining which cities it would enter: favorable self-distribution laws, 30 percent craft beer market share and more than 100 small breweries within a 50 mile radius of the Hopsy warehouse.
Hopsy has already identified 15 potential cities for expansion, Tron said, but will need additional funding to get there. In the coming months, he said, the company plans to embark on a second round of funding, seeking upwards of $2.5 million from institutional investors and venture capital groups.