Wine distribution company Digital Wine Ventures has partnered with Australia Post to launch WINEDEPOT, a vertically integrated logistics platform to support the country’s multi-billion dollar wine industry, and is considering international expansion next year.
The platform will offer Australian manufacturers, distributors, importers and retailers of all sizes the opportunity to get orders fulfilled from inventory reserves held in ‘depots’ servicing key markets. This reduces delivery times, freight costs and the possibility of breakages significantly.
The five-year agreement with Australia Post enables WINEDEPOT to establish its first four depots within the postal group’s current distribution centres in Sydney, Perth, Brisbane and Melbourne.
Digital Wine Ventures CEO, Dean Taylor, explained: “Each depot will hold a very broad range of suppliers’ inventory on consignment, which can be accessed by a range of sales channels. As orders are processed through our platform they are routed to the depot closest to the delivery address where they are picked, packed (by bottle or case) and drop-shipped to the end customer. Depots are then automatically replenished on a bi-weekly basis from WINEDEPOT’s regional bulk storage facilities on behalf of suppliers.
“Being located within Australia Post’s distribution centres will allow orders to flow directly into Fulfilio, Australia Post’s fulfillment system, avoiding the typical need for collection, transfer and sortation. This further reduces handling, costs and delivery times.”
Taylor emphasised: “With the arrival of Amazon, every Australian consumer will soon expect fast and free delivery. Any business not offering the same will simply lose market share. WINEDEPOT will provide the wine industry the infrastructure to allow that calibre of service level to be provided viably.”
Furthermore, Paul Hersbach, Head of Growth Products at Australia Post, also sees the potential for WINEDEPOT to transform the existing wine supply chain. “As wine is heavy, bulky and fragile, shipping one case at a time from regional areas to consumers in major cities drives higher costs and increases risk of damage to consumer products. WINEDEPOT’s model will address many of these limitations and provide a much improved overall customer experience.
“Our partnership with WINEDEPOT provides the wine industry with a specialised distribution service that will not only save money but also improve the consumer delivery experience. We believe that it will help many wine businesses increase their online sales as they place their inventory closer to end consumers and offer same day evening delivery as a standard service.”
He concluded: “It’s why the Growth Products Team at Australia Post was excited to get behind the WINEDEPOT project when it was first presented to us.”
Moreover, Digital Wine Ventures CEO Taylor sees opportunities to expand the wine distribution concept internationally. “The partnership with Australia Post greatly reduces our initial capital requirements and allows us to roll out our first four Australian depots by the end of this year well ahead of our original schedule. That’s a massive saving in both time and capital expenditure that will allow us to start looking at ways to expand the platform into other markets such as China, UK, Singapore, New Zealand and USA, as early as next year.”
Accordingly, the entrepreneur expects WINEDEPOT to leverage the learnings from the Australia Post partnership to establish a working model that the company can use in other countries, too.
He explained: “Australia produces $6 billion of wine each year. However, it’s just a small part of the $300+ billion global wine market. We believe that our platform has the potential to release an enormous amount of value not just here but globally. Partnering with existing carriers and or 3PL logistics companies like we have with Australia Post in other key wine markets makes a lot of sense.
“There is no point in rebuilding infrastructure that already exists. Our role is to just make it more efficient by providing a technology platform that connects the key stakeholders.”
