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North Bay Business Journal

Monday, June 24, 2013, 7:00 am

Demand stacks up for wine warehouser

Building empty-glass and bulk-wine business

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    SANTA ROSA — In a sign of renewed crunch on North Coast wine storage space, Alexander Valley Cellars overflowed the other half of Sonoma County’s largest warehouse in just two months and now is looking for a fourth facility.

    Alexander Valley CellarsThe company at the end of March subleased the remaining 113,500 square feet of a 282,000-square-foot warehouse at 1010 Shiloh Rd. on the Windsor side of Airport Business Center, and by mid-June already had filed the space with about 700,000 more cases of bottled wine and empty bottles ready for filling, according to Meritt Dahlgren, co-owner of Alexander Valley Cellars.

    The operation moved into the building two years ago, the full-time workforce has doubled to as many as 45 in the past year, and a sixth truck was added recently. Nelson Staffing has been providing 20 to 25 temporary employees for large jobs on an ongoing basis.

    “This weekend, we’re looking for where we will move stuff to make room for cases coming in next week,” he said Wednesday.

    Driving the pace toward more space has been the addition of large-scale client wineries, addition of services such as storing empty wine bottles for a local supplier and repacking bottles into printed cases, and doubling of the size of the AVC Direct pick-and-pack fulfillment business.

    AVC Direct now packs orders for as many as 120 wine clubs and daily orders for up to 200 producers, and that has doubled the footprint of the operation to 20,000 square feet. Automation in conveyors and erecting boxes have helped efficiencies as the business kept coming, Mr. Dahlgren said.

    Alexander Valley Cellars is in negotiations for a 117,000-square-f00t wine warehouse in northwest Santa Rosa. That would bring the company’s portfolio to about 500,000 square feet of warehouse space, including two smaller warehouses in Windsor and Healdsburg.

    The plan for a fourth warehouse includes tanks for storage of wine in bulk, starting with 250,000 gallons this fall, double that next year and up to 1 million gallons the third year.

    “There is a definite need in Sonoma for bulk storage,” Mr. Dahlgren said. The record-sized 2012 North Coast winegrape harvest taxed tank space at a number of wineries, custom winemaking facilities and existing bulk-storage producers, which include Premium Wine Services in Airport Business Center and Napa Valley providers Laird Wine Services and Safe Harbor Wine Storage.

    An undisclosed Sonoma County wine bottle supplier has started to store boxed cases of glass at the Shiloh facility, and that business has provided Alexander Valley Cellars with more wine casegood storage business, Mr. Dahlgren said.

    Other local direct-to-consumer fulfillment companies have been growing recently.

    Napa-based WineDirect, formerly known as IBG and previously the buyer of New Vine assets, is expanding its American Canyon warehouse by 20,000 square feet, nearly doubling the size of its Ohio facility to 115,000 square feet and opening an 18,500 square foot fulfillment facility in Paso Robles for California’s Central Coast wineries.

    “Direct-to-consumer sales in this part of California have surged tremendously in the past couple of years, largely due to savvy sales and marketing outreach,” said Joe Waechter, president and chief executive officer of WineDirect, about the Paso Robles location. “That growth prompted us to look for warehouse space in the area. We believe strongly in being agile and flexible because the needs of our customers are changing.”

    San Jose-based California Wine Transport recently expanded its Napa Valley warehouse with a nearly 21,000-square-foot lease at 759 Airpark Rd. south of Napa.

    Napa-based WineShop at Home, which creates wines sold through 2,500 “independent wine consultants” to a club list of 5,000, just expanded into a 20,o00-square-foot facility at 525 Airpark Rd. in Napa Valley Gateway Business Park in south Napa.

    Shawn Johnson of Keegan & Coppin brokered the expansion sublease at 1010 Shiloh for Alexander Valley Cellars, and Mike Flitner of the same brokerage represented Constellation Brands. Glen Dowling, Matt Bracco & Chris Neeb of Cushman & Wakefield brokered the lease between California Wine Transport and Lowenberg Corp.

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