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North Bay Business Journal

Monday, August 18, 2014, 6:30 am

Warehouser eyes sixth site as wine sales grow

15 percent case volume increase in 2014

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    AVC Direct line at 1010 Shiloh Rd., Windsor

    AVC Direct seeks 53 percent more space as direct-shipment demand doubles.

    WINDSOR — Wine warehousing and logistics company Alexander Valley Cellars in recent months has been gobbling up industrial space in Santa Rosa and north, as wineries increase case shipments and seek more specialized direct-sales initiatives.

    AVC Direct line in operation at 1010 Shiloh Rd., Windsor

    AVC Direct line in operation at 1010 Shiloh Rd., Windsor

    Alexander Valley Cellars has overflowed the 282,000-square-foot wine warehouse at 1010 Shiloh Rd. in Windsor — Sonoma County’s single largest such structure — and is seeking a sixth warehouse location that would bring its operational footprint to nearly 400,000 square feet. That would put further into the company of major wine warehousers in the North Bay.

    “Everyone is looking for more offsite storage, even some that have been storing wine inhouse, because they are running out of space,” said Meritt Dahlgren, co-owner. “Wineries are looking for more third-party storage and transportation.”

    This year, the company is trying to accommodate a 15 percent increase in case volume going through its locations. The company has 60 employees and recently added a truck to its fleet of now seven big-rig and two bobtail trucks.

    This demand has been rapidly filling wine warehouse space in southern Napa County and spurring an industrial building boom there, with several hundred thousand square feet of space poised to come out of the ground or already doing so.

    Last year, Alexander Valley Cellars expanded by 110,000 square feet into the remainder of the 1010 Shiloh warehouse. This year, the company leased 37,000 square feet at a southwest Santa Rosa warehouse at 975 Corporate Center Pkwy. and recently inked a deal for 23,000 square feet at 3430 Brickway Blvd. in the same Charles M. Schulz–Sonoma County Airport industrial area as 1010 Shiloh.

    And the 6-year-old AVC Direct division, which packs club shipments and fulfills direct-to-consumer orders, is looking for a place of its own. Its crew of 20 works a packing line and inventory area in 15,000 square feet of 1010 Shiloh.

    The plan originally was for the division to grow to 30,000 square feet of that building, but demand for general warehousing restrained that growth. And now demand for “special projects,” such as packing special cases for shipments to Costco Wholesale stores and wrapping bottles in decorative bags, has doubled this year, Mr. Dahlgren said.

    Alexander Valley Cellars added a seventh big-rig truck to its fleet, which also has two bobtails.

    Alexander Valley Cellars added a seventh big-rig truck to its fleet, which also has two bobtails.

    So Alexander Valley Cellars is looking for about 23,000 square feet of insulated, night air–cooled warehouse space in the airport area to become the new home for AVC Direct. Anticipating the deal could be finalized by this fall, the company has been shopping for automated machinery and extra inventory racking to accommodate the expansion, Mr. Dahlgren said.

    While other significant Sonoma County wine warehousers, namely Sonoma County Vintners Co-Op of Windsor and Groskopf Warehouse and Logistics of Sonoma, have expanded operations to southern Napa Valley to serve customers there and be closer to transportation hubs and conduits, Alexander Valley Cellars isn’t intending to make that move.

    “We looked into that, but most of our clientele is in Sonoma, Lake and Mendocino counties, with some in Napa Valley,” Mr. Dahlgren said. “To go to Napa would mean we would be competing with Western Wine and Biagi Bros. and other major players.”

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