After the acquisition of two major North Coast wine bottle suppliers in as many years, Chicago-based Berlin Packaging is planning to have an even bigger impact on Northern California fine wine, craft beer and spirits, and gourmet foods businesses via a Solano County megawarehouse set to open this fall.
In April, Berlin Packaging plans to start storing inventory in a 430,000-square-foot distribution center nearing completion in Panattoni Development’s Gateway80 Business Park project just off Interstate 80 on Cordelia Road in Fairfield. The full move-in is set for October. The facility is next door to a twin expansive building set to house meals-by-delivery giant Blue Apron.
It’s part of a concerted effort to expand Berlin Packaging into the wine industry and into the Northern California and the Pacific Northwest, according to Pete Reno, Western region president.
“We have a great and growing customer base,” Reno said.
HAVE TO STORE MORE INVENTORY
Other reasons for needing more storage space is customers, particularly in the wine business, have been requesting deliveries more often and extra stock needs to be on hand until shipments from afar arrive, Reno said.
Just-in-time or lean manufacturing has been remaking supply chains in various industries since it emerged in the automotive industry in the mid-20th century. Among the touted benefits of making products closer to the time of order are cutting the amount of floorspace needed for storage and increasing throughput. Downsides can include increased pressure on suppliers to manage inventory and heightened risk of a producer not being able to keep up with spikes in demand.
The wine business has been moving toward lean production processes in the past decade, Reno said. Unlike beer and spirits production, which often has multiple batches a year, the wine business is focused on the winegrape harvest. So in Northern California, a common practice has been to move wine into bottles just before harvest to free up tanks and barrels for the next vintage.
“There is still big precrush filling of bottles, but also we're seeing wineries filling throughout the year,” he said. “That means have to have stock of products all the time. The market dictates which brand will do good. If a brand gets into Costco [Wholesale] and is hot, we have to be flexible.”
That makes “safety stock” even more important for a packaging supplier, Reno said. The supplier and the customer agree on how much stock will be available to order, such as a percentage of the customer’s annual production needs. Reorders are placed when the safety stock drops too low.
Safety stock also helps as a buffer for transoceanic shipments from Europe, the Middle East and Asia, Reno said. Berlin Packaging is one of the top five importers through the Port of Oakland, bringing in about 5,000 40-foot ocean-going containers annually.
NORCAL AND GLOBAL ACQUISITIONS
In November 2015, Berlin Packaging acquired Fairfield-based Diablo Valley Packaging, which Reno ran as CEO. With $125 million in annual sales, that catapulted Berlin into California and the Pacific Northwest, he said.
Last November, Berlin went global big time with the purchase of Italy-based Bruni Glass, a specialist in high-end glass packaging with locations in Italy, France, Spain, China, Canada and the U.S., including a facility near Diablo Valley Packaging in Fairfield’s Solano Business Park. Bruni had more than $150 million in annual sales, 3,000-plus custom-designed and patented containers and over 7,000 global customers as well as a high-end packaging design studio at its Milan headquarters.