I was struck by New Vine Logistics’ incredible 0% shrinkage
rate on the $16M of inventory it moved, especially given how fragile and
high-value wine is. I also wondered how big of a problem shrinkage was in the
wine industry, which revealed a couple of incredible stories.
Perhaps most relevant to NVL’s track record, Australian
winery Mollydooker
lost over $1M of inventory in a single forklift crash in 2011. Reportedly,
a pin on the forklift sheared, sending 462 cases of the wineries premiere 2010
Velvet Glove Shiraz (retailing for AUD185 a bottle) crashing to the concrete
floor. The damage wiped out about a third of the wine’s annual production. The
loss was particularly inopportune given the winery’s plans to expand into the
US market using the destroyed inventory. Mollydooker tried to make lemonade out
of lemons by capitalizing on the worldwide attention the accident attracted,
even posting a video
of the owner inspecting the damaged bottles.
A few years earlier, a
wine warehouse in Vallejo caught fire, destroying $100M of inventory. While
NVL’s warehouse probably wasn’t any more resistant to fire than the ill-fated
Vallejo facility, the root cause of the Vallejo fire turned out to be theft. A
tenant in the warehouse who managed private collections had been
surreptitiously selling his client’s collections. He intentionally set fire to
the facility to hide the embezzlement, and ultimately was sentenced
to 27 years in prison for the crime.
I'd imagine this is just the tip of the iceberg when dealing with such a special, coveted good. What hard-working manual laborer wouldn't be deeply inclined to steal a few sips (literally) after a long day on the vines?
ReplyDeleteIt's not just at the wineries and the warehouses, either, it can happen anywhere. One of the more reported-upon incidents happened at what some would argue is the best (or at least fanciest) restaurant in the country, The Franch Laundry, in Yountville (in Napa). As reported in the Napa Valley Register (http://napavalleyregister.com/star/news/local/update-wine-stolen-from-french-laundry-recovered-in-north-carolina/article_0d61ccd0-2175-5bd5-9766-bf694c34e98b.html), 76 bottles of ultra-fine wine were stolen from the restaurant, on the particularly nefarious occasion of Christmas Day (when monitoring may well have been more lax). The wines were recovered a full month later, all the way across the country in North Carolina. These 76 bottles alone commanded a retail value of approximately $300,000. Many of the bottles were Domaine de la Romanee-Conti and Screaming Eagle. For a single bottle of 1988 Domaine de la Romanee-Conti from 1988, The French Laundry asked for $5,750. In bottling these ultra high end wines, the manufacturers made the wise choice of having a separate serial number on each bottle, and marked the corks and capsules in a way that only ultra-violet light could reveal. Though the security system ultimately prevailed, The French Laundry learned the hard way that such wines can't be completely safe until they're consumed.