Napa-based company aims to revive New Vine

NAPA, June 5, 2009, UPDATED 12:45 p.m. -- Direct wine shipping conduit Inertia Beverage Group of Napa has reached a tentative agreement to infuse Napa-based direct-shipping fulfillment and storage provider New Vine with funds to allow it to quickly return to full operation.

New Vine, which has offices in Napa plus wine storage and order-fulfillment facilities in American Canyon, stopped taking new orders from wineries last Friday and trimmed its staff of around 100 to 40 at the direction of some of its current financial backers.

Inertia "agreed in principle" with Silicon Valley Bank to acquire its debt position in New Vine, subject to due diligence and definitive agreements, according to a statement from Inertia this morning.

"There is a strategic fit between the two companies," said Inertia President and Chief Executive Officer Ted Jansen about his company's interest in replacing the bank as New Vine's largest creditor.

“In order to address New Vine’s customer needs and allow for their systems and operations to get back online and shipments flowing immediately, IBG will provide interim cash funding to New Vine pending final documentation,” Mr. Jansen said. “Operations are already gearing up, and we are confident in the ability of New Vine’s operational team and employees to quickly respond.”

Inertia, launched in 2003, offers direct-to-consumer and direct-to-trade shipping arrangements for about 300 mostly small-production wine producers in California, Oregon and Washington. Its REThink Engine system helps vintners automate the process of taking orders and having them fulfilled through operations such as New Vine and strategic partner WTN Services.

Last month Inertia launched its direct-to-trade system, WineREvolution, and plans to upgrade it with real-time transactions in coming weeks. The company's system allows vintners to ship directly to restaurants or retailers in 12 states, with two more states pending and potential for up to 16 states by year-end.

According to ShipCompliant, the 14 states open to direct-to-trade shipments reach 29 percent of U.S. wine consumers, and litigation is pending in eight states to expand penetration to 45 percent.