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Monday, July 27, 2009, 1:28 am

Inertia Beverage launches direct-to-trade shipments

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    Point-and-click service for restaurants, shops available in 12 states

    Inertia's WineREvolution e-commerce system

    Inertia's WineREvolution e-commerce system

    NAPA – Inertia Beverage Group reached a milestone this month toward its goal of simplifying the trade wine buying process to the point-and-click convenience U.S. consumers in many states have enjoyed in the past several years.

    In 112-degree weather on July 14, a refrigerated truck rolled up to Cave Creek Wines in Phoenix with wine from Santa Barbara producer Radog, an order placed and processed totally online via Inertia’s Wine REvolution e-commerce system.

    “This is the first indication that we have an alternate way for wineries to access the trade directly,” said President and Chief Executive Officer Ted Jansen.

    Inertia's direct-to-trade model

    Inertia has been working on the trade side of direct-shipping since early 2006, when the company started beta-testing the model in California and New York. Yet a “last mile” delivery link between a local warehouse and trade buyer that is on par with deliveries from wholesalers has been a remaining key to unlocking winery acceptance of the direct-to-trade program, he said.

    Such service includes temperature control and an understanding of requirements for delivery times so that cases don’t arrive at inconvenient times, such as the dinner rush at a restaurant.

    Also new to the direct-to-trade process is automatic order processing online. Up to now, a trade account would have to call the winery to place the order then call Inertia as the marketing agent to fulfill the order.

    In April the company launched a test Internet portal for store-like ordering for the trade. Now 35 of the nearly 300 wineries that use Inertia’s services, which include regulatory compliance and e-commerce Web sites, now employ Inertia as their direct-to-trade marketing agent, according to Mr. Jansen.

    Currently, Inertia offers self-distribution or in-state distributor arrangements for direct-to-trade fulfillment in 12 states: Arizona, California, Connecticut, District of Columbia, Florida, Illinois, New York, Ohio, Oregon, Vermont, Washington and Wyoming. The company is working on such access to 10 more states, with three more possible this year.

    Not being tied to allocation requirements from wholesalers to be in certain markets has helped 8,000-case-a-year Brook Winery in Oregon expand into California, Florida and now Arizona via direct-to-trade shipments, according to General Manager Janie Brooks Heuck. Since starting direct-to-trade service last year, such sales have grown from 3 percent of revenue to 10 percent, equal with direct-to-consumer sales through the appointment-only tasting room and the Web site. The brand currently is in distribution in 10 states.

    “I’ve gotten feedback that if they are interested in getting my product they can get mine without anything attached to it and as little or as much as they want,” Ms. Heuck said.

    That flexibility has helped keep orders flowing in a tough economy, and being able to offer trade accounts lower wholesale pricing has helped the winery maintain pricing for whites at $11 to $16 a bottle and most pinot noir selections at $13 to $24.

    Though Inertia now offers completely automated trade ordering, Ms. Heuck said she likes the opportunity to build personal relationships with trade accounts by talking to them on the phone to log orders. Spot trade ordering also has allowed her to offer special wines for such orders, such as 92 cases of sweet riesling made this year.

    AZ Wine Co. offers 5,000 different wines through its three stores in the Scottsdale, Ariz., area and currently orders about a dozen wines directly from producers through Inertia.

    “These are wines we can’t get because our local distributors do not carry them,” said co-owner Ted Powell.

    He said he likes the ability to obtain wines his shoppers have researched on in-store computers. Even with transportation costs added, he can obtain the wines in a matter of days for about one-third less than the wholesale price he gets from distributors, a savings that is helping to move higher-end wine in current economic conditions.

    His first direct purchase from a winery came at an Inertia trade show in Phoenix last year, and he said he was surprised he could place a credit card order for wine right at the event. A benefit of ordering by credit card is cash-flow management in a state like Arizona, in which payment is due on delivery, Mr. Powell said.

    Bob and Lauren Ackerman

    Bob and Lauren Ackerman

    For the 500-case-a-year Ackerman Family Vineyards brand, made by chief Inertia funder and board member Bob Ackerman and his wife, Lauren, direct-to-trade shipping has been the only way the charity brand has been able to make it to 23 accounts, what they call “partners,” in seven states, according to Mrs. Ackerman.

    Their goal is to reach 100 direct-to-trade accounts. Buyers log on to the Web interface, order one or more cases, and the order is passed to the fulfillment house, currently Copper Peak Logistics, which ships the order.

    “We’ve tested shipments to the farthest markets, and it takes two or three days,” she said.

    The next frontier for Inertia’s direct-to-trade system is to take the “virtual book” of all Inertia clients and offer it for wholesalers to use to access wines they wouldn’t want to carry in inventory, according to Mr. Jansen.

    For more information, call 800-819-0325 or visit www.winerevolution.com.

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