Chips? Check! Salsa? Check! Cupcakes? Check! Shopping for the checklist of party items and driving all over town to pick them up can seem like a huge task to take on when inviting people over to your home.
Whether it’s entertaining a group of friends at a dinner party, celebrating the Super Bowl or a summer barbecue, one of the last party items to check off the list is usually beer, wine or liquor. Making a run out to the corner store to stock up on last-minute adult beverages has the possibility of resulting in either an unintended accident or not getting every guest’s preferred drink. There’s also the possibility that the closest liquor store may not carry everything.
One company that’s helping consumers with their adult beverages via on-demand delivery is startup company Saucey. This app platform delivers on-demand adult beverages within an hour. We sat down with Saucey’s CEO and co-founder, Chris Vaughn, to discuss how this alcohol delivery company was started and how they’re planning to grow over the next few years.
PYMNTS: In your own words, what is your company about?
CV: Saucey offers a better way to shop for alcohol. We believe that drinking often brings people together and fuels life’s celebrations. Because of this, we think that the traditional brick and mortar experience is broken. People are meant to enjoy life together, often spontaneously, and having to go to the liquor store is simply an interruption in what otherwise should be your time to relax, enjoy, laugh and discover with the people around you.
PYMNTS: What’s the story behind how Saucey started?
CV: In late 2013 I noticed that roughly 80% of the times I purchased alcohol, it was an impulse that came out of nowhere, and the moment was spontaneous. I’d be halfway through dinner with friends, and we’d want wine — or watching a movie, and want a cocktail. The core idea was that there’s got to be a large demo of people that buy the majority of their alcohol based on a moment or an impulse, and that the huge proliferation of liquor stores in each city played into that idea that purchasing was driven by convenience. I shared that idea with two colleagues, and we started building Saucey. It was later that we learned that those early hypotheses were correct, and found out things like over 85% of wine is consumed within just hours of being purchased. The $113B/year U.S. retail alcohol market was untouched by eCommerce, and the primary buying behavior is driven by convenience and time… Saucey is solving that problem.
PYMNTS: How does the pricing model work, and how does your company get paid?
CV: We work with existing retailers in a market, offering their inventory to customers throughout the city. We can run entire geographies from just a few locations. We work with the store on pricing, often offering a discount from their standard price, and have a $2.99 delivery fee. Customers pay the store (including any fees), and the stores pay Saucey. We also work with major alcohol brands around drinking data they otherwise don’t have access to from traditional data providers.
PYMNTS: Who does Saucey see as its competition, if any, and why?
CV: Saucey’s competition is the trip to the liquor store. We work hard to offer the best, most convenient way to shop for alcohol, and if we lose to a trip to the store, then we’ve missed the mark. There are a few other services with different offerings in the space, but they have a fundamentally different approach, with a very different long-term vision of where this industry is headed. Most eComm plays are simply ordering platforms for liquor stores, where the store handles all the customer service, delivery and everything else customer facing.. the platform simply lets you connect with that store. Those platforms have no control over the long-term customer relationship/experience, so we’re chasing different animals.
PYMNTS: Since its inception, how much has the company grown year over year? Does it have any future projections for where it hopes to grow within the next few years?
CV: I can tell you it’s been like holding on to a wild animal by the tail. When we first started, I maybe spoke to 50 potential liquor store partners who all turned us down thinking delivery wasn’t a customer behavior. Today, we’ve had liquor stores from most every state in the U.S., along with stores in France, Germany, Finland, China, India, Australia and others, reach out to us asking to bring our model to their location. When we started, some of the brands we work with that are $100B companies had zero person eCommerce teams. Today, because of our work with the brands, some of those organizations now have 100+ person teams dedicated to digital.
PYMNTS: How many rounds of funding has Saucey received?
CV: We’ve announced a total of $4.8M in funding to date. By focusing on Unit Econ, we may be one of the only venture-backed delivery services that actually makes money in every city we operate. So we’ve been able to to build much more, with much less capital than a lot of “on-demand” companies who are struggling to take markets profitable.
PYMNTS: What does the term “Uber of X” mean to you, and how does Saucey fit that mold?
CV: “Uber of X” simply meant you applied a smartphone action to something that then physically happens to you in the real world, usually in an immediate fashion. The term has a bad connotation, as after Uber’s rise, so many “companies” thought they if they applied “on-demand” to any industry they would be a success. That theory is simply not true, nor has it ever been, and a lot of entrepreneurs and VCs got burned by not addressing real customer behaviors. Uber is successful because Taxis suck, as does driving yourself in traffic, and they offer a better way with a premium-feeling experience. Saucey is successful because the vast majority of alcohol purchasing is based on last-minute impulse, how much time the customer has, and convenience… we offer a better way with an experience that far outweighs most liquor stores.
PYMNTS: As most startups have their fair share of hiccups, can you share a few lessons-learned anecdotes?
CV: I would say a lot of startups get into trouble when they can’t say “no” to all the potentially “great” ideas out there. To succeed, you need to focus. As we grew rapidly, a huge number of players in the industry wanted to work with us, all offering their own takes on where the future could be and how they’d love to help be a part of that. At the end of the day, the only thing that matters is what the customer wants. Airbnb wasn’t founded by executives at Hilton Hotels, Uber wasn’t founded by the exec team at GM, and Saucey will not be built by the industry’s incumbents. It took a ruthlessly focused team that wasn’t afraid of having everyone tell us “no” to get where we are today. VCs will tell you “what you should be working on,” industry giants will tell you “what you should be working on” — we’ve gotten a long way by staying true to our vision and saying no to people.
PYMNTS: What are Saucey’s 2017 goals?
CV: Continue our dominance of the key markets we are focused on, focus on market penetration, and build a repeatable machine that we can take to the top alcohol markets in the U.S. The majority of alcohol in the country is consumed in fewer than 10 markets — this isn’t an Uber “launch every city that you can” play. It’s about domination in the markets that matter.