[caption id="attachment_38311" align="alignright" width="324" caption="Groskopf's main warehouse on Eighth Street East near Sonoma"][/caption]

SONOMA -- Under new leadership and with a broader range of services, Groskopf Warehouse & Logistics has significantly expanded its customer base and plans a big boost to its storage capacity and markets served.

Started in 1939 and focused on the wine industry for more than three decades, Groskopf had been targeting the storage and shipping needs of boutique wine producers until the dramatic reduction in consumer spending starting in late 2008 hit the luxury end of the wine business hard. At the beginning of this year, Jaguar Properties, company owner since 2004, brought in packaging industry veteran David Hammond, 47, as vice president and general manager. Charlene Groskopf, in that role for years, retired from the company.

[caption id="attachment_38312" align="alignleft" width="198" caption="David Hammond"][/caption]

"We've grown 40 percent in the last seven months," Mr. Hammond said, referring to a larger portfolio of customers. Revenues last year were $8.5 million. He expects them to reach into double digits by the end of this year, though not back to 2008 levels because of recent fee-schedule adjustments.

With its 200,000-square-foot and 17,500-square-foot facilities in the industrial parks of Eighth Street East in Sonoma Valley reaching capacity at 1.2 million cases, the company has been looking for 60,000 to 80,000 square feet to handle another half-million cases immediately. Consolidation of facilities among large wine producers Constellation Wines U.S. and Diageo Chateau & Estate Wines has provided sizable options -- a portion of Constellation's 1010 Shiloh Road in Windsor, a Diageo warehouse on Eighth Street East, and a portion of Constellation's share of 80 Technology Ct. in south Napa, according to Kevin Doran. He and fellow Keegan & Coppin commercial real estate agent John Tico are representing Groskopf.

The warehouser wants to reach out to more Napa County wineries and accommodate growth from existing customers, so the location in Napa Valley Gateway Business Park is attractive, according to Mr. Hammond. Groskopf wants the ability to expand the third warehouse to 130,000 square feet over three years. Cushman & Wakefield is representing Constellation in the sublease talks.

Groskopf also is actively looking for warehouses to lease in growing Pacific Northwest wine markets.

Company growth is rolling in from a number of directions. Mr. Hammond is diversifying the customer mix with medium- and large-sized wine producers, delegating customer responsibilities and expanding services beyond storage. To handle new business, he created the role of business development manager and hired Bob Buhman, formerly sales manager of Synergy Glass & Packaging. Mr. Hammond was president of Benicia-based Synergy before helping to start Vertical Glass & Packaging in Santa Rosa last year as president.

Groskopf now has nearly 200 customers in Sonoma, Napa, Mendocino and Lake counties, including more than 90 wine clubs, as well as longstanding logistics contracts for the government-run liquor control boards of Pennsylvania, the nation's largest single purchaser of wine and spirits, and of Ontario, the world's largest buyer, accounting for half the C$9.7 billion sold in that Canadian province last year. In a cost-cutting move, Pennsylvania has been moving toward a bailment system, which would have alcoholic beverage producers retain ownership of their inventory at three big beverage warehouses in Pennsylvania until ready to move to the state's alcoholic beverage stores.

"The only two suppliers in the bailment rollout in January were us and a local preferred warehouse-carrier," Mr. Hammond said. "This is a big thing for us."

Of the 10 million-plus cases of alcoholic beverages entering the state annually, Groskopf moves millions of cases and distributors take care of just more than half. A bailment system, adopted by more than a dozen states with restricted sales of alcohol, puts the responsibility of maintaining inventories bound for state-controlled stores on the producer, rather than the state system purchasing the cases. That increases requirements for wineries to maintain required inventory -- not too much or too little -- at state-authorized warehouses.

With Groskopf's loading about 100 rail cars worth of wine from Sonoma just to Pennsylvania, the logistics company has switched to a new rail carrier, C.H. Robinson.

Other new services added at the main Sonoma warehouse -- eventually going to the local expansion warehouse -- in recent months are counter-to-counter shipments from Groskopf directly to California restaurants and stores via VinLux Fine Wine Transport, a Napa-based joint venture between Biagi Bros. and Jackson Family Wines. VinLux now is transporting almost 2,000 orders a month from Groskopf.

Two years in the works, Groskopf recently became one of eight Bay Area warehousers to receive U.S. Customs and Border Protection bonding to store, consolidate and ship spirits for producers and distributors. Use of the secured 5,000-square-foot space in the Sonoma warehouse is ramping up this summer.

Wanting to become a one-stop resource, Mr. Hammond is working toward packaging procurement deals for customers and started offering labeling at the Sonoma facility.

For more information, contact Groskopf at 707-939-3100 or visit www.groskopf.com.