News Headline November 3, 2009
Vintrust Closes Consumer Business
Winery fulfillment services continue to operate in Napa Valley
by Paul Franson
Vintrust published the last issue of its Somm
Selections magazine last winter
Napa, Calif. -- Another wine company is calling it quits. Vintrust is closing its consumer wine storage system and referring customers to former competitor Vinfolio.
Napa-based Vintrust offered collectors a place to store wine securely, plus a data management system to keep track of their holdings. It was particularly popular with out-of-state buyers, many from states that don’t allow legal shipping. Vintrust is continuing its winery club fulfillment services, however.
Vintrust CEO Barry Waitte says the company is winding down the collector side of the business, a process that started two months ago. “Business conditions simply didn’t allow us to move forward with this business.”
He says that Vintrust’s downfall has been the economic climate, which has strongly affected the customers who stored their cult and other wines at its facility. “Clients stopped buying and collecting wine. They started to sell the wine in vast quantities, as we could see from where the wines were being shipped, like to auction houses.”
Ironically, Waitte says, the facility recently has been receiving automatic shipments of wine for clients who haven’t changed their arrangements, because this is the season when wineries typically ship new releases.
He says his company has been trying to make the transfer to Vinfolio as seamless as possible. “Vinfolio was in semi-competition with us, and we looked a lot alike in our operation, so it was straightforward. They’re gladly taking on the business.”
Vinfolio CEO Steve Bachmann told Wines & Vines, “Vinfolio has been working closely with Vintrust to offer its clients a safe transfer of their wine collections to Vinfolio’s full-service storage facilities in San Francisco and American Canyon, ensuring the security of their wine.”
Vintrust’s Waitte says that most of his customers seem to be taking advantage of the agreement with Vinfolio, although some have just picked up their wine and taken it home. That’s not practical for out-of-state buyers, who accounted for more than half the customers for the service.
Vintrust was founded in 2002 by investment banker André de Baubigny and his friend and former business associate, technology industry management consultant Timothy Komada. The two decided to create an “investment bank” for wine, which became Vintrust.
After securing investors, they leased a suitable warehouse in Napa in October 2003 and signed their first clients. They opened a storage facility in New York in 2006, and one in Sonoma in 2008. Both are now being closed.
Vintrust also started a recommendation service featuring 30 sommeliers, and it even published a quarterly magazine, Somm Selections. The winter 2008 Somm was the last issue.
The company expanded from serving collectors to develop storage and wine-club fulfillment services for small wineries. It also started selling wine online.
“We discovered that the world didn’t really need another wine retailer,” Waitte says. “It’s a rough business to be in, and you have to know the regulations,” he adds, alluding to recent California Alcoholic Beverage Control rulings questioning wine sales by unlicensed Internet and other retailers who depend on third parties for compliance.
Vintrust continues its winery services, including warehousing and direct-to-consumer fulfillment, which Waitte says serve more than 100 wineries in Napa Valley. “This business is fine, even good,” he says.
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