Nearly two years and multimillions of dollars in development, a new high-technology wine-fulfillment center in Napa Valley is set to roll out its first shipments to consumers next month.
Napa-based WineDirect said the goal of building and tricking out the 268,000-square-foot American Canyon facility is allowing vintners to offer Amazon-like responsiveness to orders, while upping the game in how much more special wineries can make the experience of opening their packages.
“The direct-to-consumer wine channel grew 17 percent in 2016 and is poised for explosive growth in the next few years,” said Joe Waechter, president and CEO of WineDirect, in a statement.
The biggest challenge for wineries will be keeping up with rising consumer expectations.
“Our new fulfillment center is designed to do just that,” he said.
WineDirect has noticed that consumers who are buying wine online want more customization and personalization in orders, according to Jim Agger, vice president of marketing and business development.
And consumers have “superhigh” expectations about the speed of delivery, he said. It used to be that “fast shipping” was four or five days. Now it’s two days or less.
Getting the immediate confirmation of orders, rather than a day or more later, is expected in the e-commerce world led by the Seattle-based giant. That can be handled by WineDirect's software for client vintner websites and point-of-sale venues such as tasting rooms.
But working in customization or orders or club shipments and speeding the process to get them out to couriers for delivery in as little as two days was something that required more than an upgrade of WineDirect's 18-year-old main fulfillment center in American Canyon.
That 130,000-square-foot facility was state of the art at the time, with about $200 million spent by previous ventures on software and systems, but a lot has changed in fulfillment-center tech, particularly in the past decade, Agger said. WineDirect also has fulfillment centers in Paso Robles and Santa Maria on the California Central Coast and in Ohio for the East Coast.
WineDirect is preparing to move wine into the hulking new American Canyon building on 10.6 acres at 450 Green Island Road. Testing of software and the more than a mile of conveyors and automated sorting systems has gone well enough that the company plans to have the first orders ready to ship on Aug. 7, according to Karin Ballestrazze, senior vice president of operations.
Because of more-efficient systems and processes, the new warehouse will have three times the order throughput, she said. The company averages 7,500 orders shipped daily, but peak output is about 40,000 from the four facilities, including up to 25,000 from the current Napa Valley facility.
At the heart of making that happen logistically is a roughly $7 million software and mechanical warehouse execution system by Vargo, a Hilliard, Ohio, company that has designed such systems for big-volume companies such as Amazon. Vargo's Continuous Order Fulfillment Engine, or COFE, is shifting WineDirect's pick-and-pack approach to a waveless method, according to Ballestrazze.
"Instead of manually processing orders in waves based on criteria like time in transit or destination, the new waveless technology uses intelligent software to continuously push orders through the system," she said. "It's faster, more efficient and greatly reduces the possibility of human error."