Wine shipment competitors field queries from New Vine customers

AMERICAN CANYON, June 1, 2009, UPDATED-- The handful of North Coast companies that specialize in shipments of wine directly to consumers were fielding a "flurry" of calls today from the about 200 customers served by New Vine, a Napa-based company that just ceased operations.

Rumors had been circulating in the wine business in recent days that New Vine was looking for financial advice and brought in a consultant who specializes in business turnarounds. Today the company's main line had the following message, with instructions on leaving messages for various departments, "New Vine is no longer receiving or taking orders for shipment from our facility. ... We have limited staff to make it through this transition, but we will make every effort to assist."

Those customers, a mixture of bonded wineries, marketing companies and other retailers, are contacting New Vine's competitors in wine-order fulfillment -- WineShipping.com in Sonoma, Pack n' Ship Direct in Windsor, The Winetasting Network in Napa and newcomer Copper Peak Logistics of Benicia.

"There is a flurry of phone calls and uncertainty in the market at a time when wineries don't need it," said Chris Edwards, vice president and general manager of The Winetasting Network.

He said he is saddened this happened to New Vine's more than 100 employees and as many as 200 clients.

Larry Dutra, whose Westlake Village-based Adams Wine Group owns Pack n' Ship and Adler Fels winery in Santa Rosa, said his fulfillment centers in Windsor and south Napa will be able to handle any new demand from New Vine customers.

"We have the capability in near term for any additional clients in Napa and Sonoma," he said. "Long term, we're looking for opportunities for expansion."

Mr. Edwards said The Winetasting Network has been preparing for the last year to expand into a market that had been dominated by pioneer New Vine since it started in 2001.

A subsidiary of publicly owned 1-800-Flowers, The Winetasting Network recently renewed its lease of Napa warehouse space and last fall opened a third distribution facility to serve the Midwest. In March of this year 1-800-Flowers acquired online wine retailer Geerlings & Wade to complement Napa-based e-tailer Ambrosia, which was acquired in 2004.

The company also secured a contract with MHW, a New York-based company that helps importers and producers navigate the three-tier alcoholic beverage distribution system that dominated the country until a 2005 U.S. Supreme Court ruling started allowing for greater direct-to-consumer shipments.

Since its founding in 2001 New Vine was the dominant direct-to-consumer fulfillment house that allowed wineries to access regulated-access markets. Chief Executive Officer Katie Hoertkorn was an executive with WineShopper.com, a Napa-based wine company that received $180 million in venture funding before it was absorbed by wine.com in 2000. She acquired about $40 million of investment in logistics and compliance software and a more than 100,000-square-foot high-tech fulfillment center in American Canyon and started New Vine Logistics.

Ms. Hoertkorn could not be reached for comment. The phone number for the company's listed media contact was disconnected.

Current investors in New Vine are Altos Ventures, Angels Forum/Halo Fund, Equity Group Investments, Kleiner Perkins Caufield & Byers, Pacific Community Ventures, Thomvest and Staenberg Ventures.

The company had about 120 employees as recently as July 2008, when the BUSINESS JOURNAL profiled veteran logistics expert and Chief Operating Officer Carol Thompson.

The company changed its name from New Vine Logistics to just New Vine in February to reflect the company's expansion of services into wine storage and regulatory compliance.