Wine Logistics Company's Failure Puts Amazon.com's Wine Future At Risk
With the news today that New Vine Logistics, a Napa, California wine-shipping service has closed up shop, it looks like my long-held dream of having Amazon.com deliver my wine as well as my books may be just a little further away. New Vine Logistics has suspended operations after multiple attempts to raise new financing. Wine Business reports that the eight-year-old company stopped processing new orders last week. The company handled fulfillment for direct orders for around 200 wineries and merchants including some big names such as Beringer and Chateau St. Jean helping them navigate the various state laws regarding alcohol shipments. Because wine shipping policies are determined by the state this is often no easy task. New Vine Logistics had a contract with Amazon.com to work on a way to bring wine shipments to Amazon.com
The Santa Rosa Democrat says that one of the company's creditors, Silicon Valley Bank, arrived at the Napa offices Friday and sent around 100 employees home without pay. Wine is being returned to the vintners who now have to find a new way to get their wines to the customers. The company was one of the biggest in the wine shipping business and as the Wall Street Journal mentions, this does cast doubts on the viability of businesses that provide direct shipping of wine to customers. The Journal says that direct shipping is just a small part of total U.S. wine sales.
UPDATE: Wine Business reports that Inertia Beverage Group is working on a deal with Silicon Valley Bank to acquire its debt position in New Vine and to take over the company's responsibilities.
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Reader Comments (Page 1 of 1)
Kevin Kadow Jun 2nd 2009 1:09AM
Good news, it appears Wine.Woot (http://wine.woot.com) uses "Wine Country Connect", and is not affected by the New Vine Logistics shutdown.
The article states that "The company was one of the biggest in the wine shipping business", is there any information on what other firms are big in wine shipping, and how they are faring in the current economy?
Charlotte Milan Jun 2nd 2009 5:30PM
Kathleen Hoertkorn, founder of New Vine Logistics, a Napa-based wine shipping and fulfillment company, and Chairman of the Board Homer Dunn responded today to media reports about the suspension of its business operations yesterday, June 2.
New Vine Logistics is currently working with customers to transfer all services to another means of legal direct shipping, and in the meantime, is finalizing all work, including compiling of reports, reconciling inventory and invoices, and performing all of the necessary business operations for the months of May and June.
In response to comments that the company knew it was in financial trouble, Hoertkorn affirmed that they “truly believed that they would have been funded and were not expecting to have to cease operations.”
“New Vine has always been committed to quality, legal service, and built the only service that integrated compliance and fulfillment. It does cost more to be compliant and follow all the laws established by the various states. The company also pioneered many solutions such as temperature controlled packaging. The whole objective was to allow wineries to concentrate on sales and marketing, versus the back end processes from inventory to fulfillment to special services to compliance.”
New Vine was founded in May 2001 by wine industry, technology, and transportation veterans to solve the complex business problems associated with the interstate sale and distribution of wine. The company has developed proprietary fulfillment systems that enable fully compliant consumer-direct shipping in up to 44 states.
Hoertkorn stated that she will keep winery customers, employees and shareholders advised of next steps. “We deeply apologize for the situation, and we pledge to work with our customers to make as smooth and expedient shipping transition as possible.”