New Vine Logistics On Hold

Direct-shipping company suspends operations, seeks capital

by Jane Firstenfeld
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In happier days, New Vine Logistics staff plucked wine from a well stocked Napa warehouse to ship to consumers in up to 44 states.

Napa, Calif. -- At a time when direct-to-consumer wine shipments are becoming both more essential and more feasible for wineries across the U.S., a pioneering fulfillment company abruptly suspended operations over the weekend. As reported in winebusiness.com this morning, Napa-based New Vine Logistics e-mailed some 200 clients to tell them it would no longer receive or process further orders for shipment and would shut down its electronic order process.

Founded in 2001 by Kathleen Hoertkorn and staffed by wine, technology and transportation veterans, New Vine developed proprietary fulfillment systems enabling it to ship wines to as many as 44 states in full compliance with shipping regulations.

The New Vine Logistics website did not yet refer to the suspension, and in fact, under "Events," had an item about an open house that was to be held late last week. It also showed an announcement, headlined "2009, Sell More Wine," affirming that New Vine would not raise shipping rates this year.

According to winebusiness.com, and confirmed by the company's voicemail, a skeleton crew remains at New Vine's Napa headquarters, including two executives, a chief operating officer and a vice president of sales and marketing. Wine Business also speculated that the suspension would delay the long-planned Amazonwine.com, in which New Vine had partnered with Amazon.com to launch a direct-to-consumer wine marketing program.

Jason Eckenroth, CEO of Colorado-based direct-shipping compliance powerhouse Ship Compliant, told Wines & Vines to expect further developments on the New Vine situation. He said this morning that the news was completely unexpected. "I think it took everybody by surprise," he commented. But despite the suspension of normal services, he said, New Vine Logistics is "not out of business. They are looking for more capital. It's not a dead horse."

Another company in the arena, WTN (wtnservices.com), operates warehouses and fulfillment centers in Albany, N.Y. as well as in Napa. In a statement, vice president/general manager Chris Edwards lamented, "As a founding employee (of New Vine) and friendly competitor, I personally am saddened by the loss of jobs that occurred at New Vine Logistics on Friday." WTN is owned by 1-800-Flowers.

In a subsequent statement issued June 2, Kathleen Hoertkorn said the company was working with customers to transfer services to another means of legal direct shipping, and was compiling reports, reconciling inventory and invoices, and performing necessary business operations for May and June.

See www.shipcompliant.com.

Posted on 06.02.2009 - 12:49:48 PST
Kathleen Hoertkorn, founder of New Vine Logistics, a Napa-based wine shipping and fulfillment company, and Chairman of the Board Homer Dunn's response about the suspension of business operations:
NVL 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.”
Hoertkorn stated that will keep winery customers, employees and shareholders advised of next steps. “Our employees and our customers are our top priority during this difficult time. We will work with our customers to make as smooth and expedient shipping transition as possible.”