Digital Wine Ventures’ (ASX: DW8) main investment vehicle WineDepot has announced it will roll-out a nationwide network of temperature-controlled storage facilities for Australia’s wine and beverage industry in partnership with logistics company Border Express.
It will be applied on a commercial scale at WineDepot’s facilities in Brisbane, Sydney, Melbourne, Adelaide and Perth over the next six months.
Border Express will provide storage, freight and third party logistics services to support the new network under an initial two-year agreement with option to extend.
Digital Wine chief executive officer and founder of Wine Ark in 1999, Dean Taylor, is confident the industry will welcome temperature-control technology.
“When I launched Wine Ark, few people realised the devastating impact that high and variable temperatures could have on wine [but] we managed to educate private collectors as to how wine should be stored and [eventually] set the benchmarks for that industry,” he said.
“However, there’s no point in the consumer going to all that effort if the wine is damaged in the supply chain before it gets to them.”
Wine and beverage distributors have been a key part of the quality control issue to date.
“Very few distributors or third party logistics providers utilise any temperature control in their warehouses [and] temperatures can often reach over 40 degrees in summer at
ground level and well over 50 degrees at higher levels,” Mr Taylor said.
“Most winery owners would hate to know how their wines are being treated [but] up until now there hasn’t really been any other option.
“The strategy to temperature-control our own facilities reinforces our customer proposition, reduces our cost of doing business and helps us build an even larger moat against potential competition,” he added.
Growth in sales
WineDepot will also expand its network of final mile carriers to cater for an expected growth in sales once the new facilities are in place.
Until now, the company has relied on Australia Post to complete the bulk of trade and consumer deliveries.
“We will continue using the postal service for direct-to-consumer orders [and] we will engage with other carriers for our direct-to-trade orders which tend to be larger, more time-sensitive and often have specific delivery requirements,” Mr Taylor said.
“Having access to more than one carrier allows us to maintain effective service levels when the network is congested… it allows us to scale our platform more rapidly and de-risks our operation considerably.”
Bonded storage will also be of benefit to customers having to deal with import duties on their products.
“It will have massive cash flow advantages for our customers that deal in imported beer and spirits as it allows them to delay the excise and duties payable, which should in turn increase our addressable market,” Mr Taylor said.
WineDepot expects to have its national network of temperature-controlled facilities fully
operational within six months, with Sydney, Melbourne and Brisbane expected to be up and running by year end.