Wine direct-to-consumer shippers merge: Napa's Vin-Go, Sonoma County's Pack n' Ship

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A big warehouse in northern Solano County is the next stop in the national expansion of a New York-based logistics and distribution company into direct-to-consumer wine shipments.

Blending together the acquisition of Sonoma County-based order-fulfillment service Pack n’ Ship Direct and its Napa-based Vin-Go third-party logistics firm, 24Seven Enterprises in July plans to start moving into a 404,950-square-foot space it leased at North Bay Logistics Center. 24Seven will be filling up the vacant roughly half of the hulking former Savemart grocery distribution center at 700 Crocker Drive in Vacaville.

The acquisition is one of multiple deals late last year for all the ventures in which Westlake Village-based Adams Wine Group had stakes, according to Larry Dutra, the group’s CEO. That included wine club Vinesse, Windsor-based Pack n’ Ship Direct and Santa Rosa-based AWDirect.

“Thus, Adams Wine Group, as it once existed, no longer does,” Dutra wrote to the Business Journal in an email.

Dutra and Stephen Adams, a Minnesota entrepreneur whose holdings include billboards, newspapers and Camping World/Good Sam, formed Adams Wine Group around the time of the acquisition of Sonoma County’s Adler Fels Winery and its associated Sonoma Estate Vintners custom-winemaking business in 2004. Vinesse had been operating various wine clubs since 1993. Adler Fels and Sonoma Estate Vintners later were operated under AWDirect in Santa Rosa.

Dutra said he acquired full ownership of Vinesse.

As for AWDirect, its base of operations at 980 Airway Court in Santa Rosa is now home to Wine Hooligans LLC, a venture formed in 2013 by longtime wine and retail top executive Dennis Carroll to revamp tired brands and create new ones. At the beginning of this year, Carroll renamed AWDirect as Sonoma 980, a custom winemaker and creator of private-label brands for national retailers, handling brand development and sourcing of wine from California, Washington, Oregon and 10 counties.

Sonoma County Vintners Co-Op was a minority owner in Pack n’ Ship Direct, the dba of Vynapse LLC, and gave it a place to launch at the co-op’s main facility in Windsor in early 2006. Pack n’ Ship Direct opened pick-and-pack facilities in the Central Coast in 2007 then in Napa Valley and central Oregon in 2008. In 2015, Vynapse leased all of a 226,000-square-foot wine warehouse in south Napa.

Before the merger in November, Vin-Go and Vynapse had been working together for over a decade and the combination is part of a comprehensive multiwarehouse beverage alcohol fulfillment strategy nationwide, according to Edmund Delaney, chief revenue and compliance officer of 24Seven. That relationship started with consolidating Pack n’ Ship Direct’s orders for shipment, and that evolved into work with enterprise-class customers and then co-developing proprietary warehouse management software, ProNimbus.

“It made sense to acquire them late last year, because there is so much value to the overall service,” Delaney said.

Drawing on his background as an IBM vendor, Vynapse founding General Manager Truman Reynolds helped that inventory system, which helped Vynapse offer pick-and-pack as a service to wine warehouse operators’ storage clients. Since the acquisition, Reynolds is consulting with 24Seven on technology.

Up to the merger, Pack n’ Ship Direct had four fulfillment locations, and Vin-Go operated from 24Seven’s eight warehouses. With the opening of the Vacaville facility, 24Seven will have 13 locations with over 2 million square feet under roof and over 400 employees.

24Seven was started by the Delaney family in 2005 for shipping perishable products and still does, according to Edmund Delaney, part of the second generation involved with the company. That was the year of the pivotal Granholm decision at the U.S. Supreme Court that started breaking down barriers to interstate shipment directly to consumers.

The family saw the growth in such business and started to steer their operation toward it, Delaney said.

24Seven now has more than 10 wine-order fulfillment centers strategically placed around the U.S. to be within same- or next-day delivery for 90% of the U.S. population where direct-to-consumer shipments are permitted. That’s because in the past five years, Amazon has raised the bar from free two-day deliver to now same-day service to consumers.

“As a greater percentage of total retail sales are handled through e-commerce, we think the same will hold true for wine,” Delaney said. “We’re at the tip of the iceberg, and we want to have cold warehouses with quick-fulfillment centers to get wine to customers in cost-effective means.”

So far, the company strategy has paid off, with top-line revenue growing at 20% to 30% annually, he said.

Brooks Pedder, John McManus and Tony Binswanger of Cushman & Wakefield represented the Vacaville landlord in the transaction, inked early this year. Pedder and Scott Bertrand also of Cushman & Wakefield represented 24Seven.

The lease is arguably the biggest such transaction in the North Bay since Marin County-based Serena & Lily leased 434,000 square feet of the same building in September, Pedder said. The deal reduced the industrial real estate vacancy rate in Vacaville from nearly 10% to less than 3%, he said.

LDK Ventures LLC and PCCP LLC purchased 700 Crocker in October 2017. A 600,000-square-foot second phase is in entitlements for the 124-acre property, which fronts on Interstate 505.

Jeff Quackenbush covers wine, construction and real estate. Contact him at jquackenbush@busjrnl.com or 707-521-4256.

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