North Bay Business Journal

Monday, May 21, 2012, 6:15 am

Wineshipping investing millions in Napa fulfillment facility


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    Wineshipping logoSONOMA — Increasing sales of wine plus greater demand for direct shipments has fulfillment services provider Wineshipping packing for a major expansion to Napa Valley.

    The 14-year-old company is spending millions of dollars on conveyors, warehouse racking and automation to go into a 150,000-square-foot warehouse space in south Napa, according to Rick Moradian, chief executive officer.

    “It’s a long-term investment,” he said. “The permutations being demanded from us far exceed the ability for human touch to customize solutions.”

    The new location, subleased from Constellation Brands at 80 Technology Court, will have high-tech mechanical devices with sorting logic to maintain a high level of accuracy in putting the right wines are packaged the right way, such as a greeting card inserted, gift wrapping or shipping holds because of weather temperatures or alcoholic-beverage shipping restrictions.

    “The contents are expensive and our customers’ clients very discerning, so we want to make sure they are taken care of at a high level of service standards,” Mr. Moradian said.

    Automation will allow the company’s current staff of 60 to 100, fluctuating depending on the time of year, to handle many more shipments of orders, samples and club releases. The investment is intended to meet Wineshipping’s projected needs for the next half-dozen years better than the current 78,000-square-foot warehouse at 21481 Eight St. E. in south Sonoma.

    And moving such an operation to a new location while not disrupting orders for several hundred customer wineries, marketing agencies and wine clubs has Wineshipping planning a gradual transition over the summer.

    Order fulfillment services today need to provide more than just moving boxes from the warehouse to the consumer’s or trade account’s front door, according to Mr. Moradian. Now, there are more demands on how the order is handled and the ability of the fulfillment house to scale up for customers with millions of clients.

    There has been a significant shift in wine order fulfillment from the North Coast in the past few years. Large-scale Napa Valley fulfillment house New Vine closed and was acquired by IBG in mid-2009, and Napa-based IBG in September acquired WTN Services and created WineDirect. Sonoma County Vintners Cooperative and Vynapse created Pack N’ Ship Direct in Windsor and have expanded it to Napa, Oregon and the Central Coast. Windsor-based Alexander Valley Cellars created AVC Direct in 2010, and Copper Peak Logistics expanded to American Canyon the same year.

    Marty and Alicia Herrick started Wineshipping (707-933-9063, www.wineshipping.com) in 1998. Charlie Baxter bought into the company in 2004 and is now managing member. The company has been a partner with WorldShipNet for a decade and is part of The Network, created by ShipCompliant and MHW.

    Three reasons for Wineshipping’s growth has been existing customers are enjoying increasing sales as the economy improves, acquisition of new customers and greater interest in the company’s 4-year-old temperature-controlled delivery service option, according to Mr. Moradian.

    The option for keeping wines chilled — or warmed, during winter months — while aboard trucks from Wineshipping’s fulfillment center to the destination has scaled up significantly in recent years, allowing wineries to ship throughout the year. The company contracts to have wine moved in temperature-controlled trailers to courier nodes as close to the destination as possible.

    And Wineshipping has been setting up warehouse hubs in key winegrowing regions. In 2008, Wineshipping acquired Vintage Logistics and opened a hub in Santa Maria to serve the Central and South coastal regions of California. Two years later, the company opened an East Coast warehouse in Colonie, N.Y., just outside Albany, to serve customers with imported brands and allow some clients to stage inventory several days closer to key markets.

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    1. May 21, 2012, 7:56 am

      by Scott

      Millions? Automated conveyors, gift cards and partnerships with key compliance vendors? Sounds like wine shipping is playing catchup as WTN Services and IBG had those capabilities 5 years ago. A move to Napa signals competitive pressure more then a true expansion. As having been a client of each. What does investment of “millions” mean? Good PR spin or factual reporting? What’s the real story?

    2. May 21, 2012, 11:15 am

      by Jeff Quackenbush, Business Journal Staff Reporter

      As the executive said, to have employees physically touch millions of bottles is not an efficient, scalable logistics business model. Scaling up too quickly leads to challenges the Business Journal reported regarding Wineshopper.com, Wine.com and New Vine.

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