North Bay Business Journal

Wine warehousers see opportunity in fulfillment services

NAPA — A new 62,000-square-foot wine storage and fulfillment facility in Napa is part of a trend toward warehouses offering a wider range of logistics services.

Anu Wines signed a five-year commitment to the warehouse left behind at 626 California Blvd. by Black Stallion Wines, which DFV Wines acquired in May. (Photo compliments of Cushman & Wakefield)

Anu Wines signed a five-year commitment to a warehouse left behind at 626 California Blvd. by Black Stallion Wines, which DFV Wines acquired in May.

Anu owner Bob Miller, who spent 24 years in the wine business in various production and marketing roles, has returned to the industry after a few years of launching and selling entertainment businesses in Napa.

“Many of our clients are in smaller production brands, and there was a lot of interest in someone to take care of the needs of small-lot wines,” he said.

So far, the facility is one-fifth full with clients ranging in storage needs from just 12 to 20,000 cases, ranging from grower-vintners to online merchants.

To keep the warehouse full and active without the cyclical ebb and flow of storage demand based on wine supply, he’s positioning Anu to offer bonded private and commercial storage of wine in barrels and cases as well as fulfillment and regulatory compliance for one-off and club shipments to customers.

Contracts for compliance and local pickup and delivery are pending.

At the 132,000-square-foot Adobe Creek Wine & Storage facility in Petaluma, Larry Jerome joined the company recently to add fulfillment and, perhaps, demand-generation services such as telemarketing. He spent more than seven years building Jackson Family Wines’ fulfillment business from eight brands to 48 and 78,000 orders annually.

“We want to create a logistics solution from the winery bottling line to the consumer,” said Mr. Jerome, fulfillment operations manager.

The service launched a month ago at the Petaluma facility, and 15,000 square feet are being set aside in the building for the operation. Already, a couple hundred cases a week are being packed and sent out of the facility for about 20 customers. As many as 10 of those are existing storage clients.

“Wineries will eventually figure out why it doesn’t make sense to store in one place and move it to the place where you do fulfillment,” Mr. Jerome said.

Earlier this year, Adobe Creek and Redwood Empire Wine Storage of Santa Rosa had been planning to combine resources for a direct-to-consumer venture, but the two companies are planning their own fulfillment options.

Windsor-based Pack n’ Ship Direct, a joint venture with Sonoma County Vintners Cooperative and the group that owns negociant winemaker Adler Fels of Santa Rosa, is rapidly expanding “in-sourced” consumer-direct fulfillment services for wine warehousers.

From 38 wineries served seven years ago, the firm now serves 225 wineries in the North Coast, Central Coast and Oregon.

“We believe in partnering with the most powerful operators in a region,” said Steve Schwitalla, chief executive officer of Sonoma County Vintners Cooperative and founding partner of Pack n’ Ship Direct. “We teach them and provide software, training and equipment and then operate it alongside of or for them.”

Recently, the Central Coast division was expanded from Fess Parker Winery to Santa Maria-based Central Coast Wine Services, the region’s largest public warehouser.

In addition to a two-year partnership to fulfill orders for storage members of St. Helena-based Wine Service Cooperative, Pack n’ Ship Direct Napa Valley launched in a south Napa Valley warehouse in September with Jeff Weiss as director of operations.

A fulfillment service gaining more prominence is called zone-skipping. It’s named after the complex logistics strategy of moving orders from the primary warehouse to a “forward” warehouse near the destination.

Goals include reducing fees charged by freight and delivery carriers for moving orders between geographic zones and avoiding heat damage as the wine travels in carriers’ unrefrigerated trucks without specially designed packaging.

Pack n’ Ship Direct has a full-time employee handling the intricate scheduling for zone-skipping and refrigerated transport. Adobe Creek has been considered that service.

“I bet that 12 months from now, we’ll see big cold-chain solutions coming from the major carriers,” said Mr. Jerome. “They don’t want to lose that part of the business.”

Cushman & Wakefield agents in San Rafael brokered the Anu Wines lease.