Napa's Wine Service Cooperative: A Shift in Strategy

In a notable move, the Wine Service Cooperative in Napa Valley is changing its game plan. After nearly 20 years of handling direct-to-consumer wine shipments, they've decided to pass the baton to a third party. This shift comes as sales have been sluggish, and the cooperative aims to free up space and focus on other services for its members. The cooperative's president, Steve Tamburelli, revealed that they teamed up with Wineshipping, a local company, to manage these orders. This decision has already led to a significant reduction in their warehouse space, with around 120, 000 to 130, 000 square feet no longer in use. As a result, the cooperative will be vacating its current 226, 000-square-foot facility near the Napa County Airport. They plan to move to a smaller space in American Canyon, which is part of a larger facility owned by Sutter Home Winery. This move is expected to be completed by May. The cooperative had been providing direct-to-consumer services for about 75 wineries, including some of its 60 members. With this change, they plan to focus more on other benefits for their members, such as group purchasing, insurance, and healthcare benefits.Interestingly, plans to consolidate their Napa Valley facilities into a single large warehouse have been put on hold. This was initially seen as an exciting project, but the cooperative has decided to wait for now. The cooperative still operates two other warehouses in Napa Valley and has sublet its East Coast facility as part of this scale-back. They will continue to monitor industry conditions before making further strategic decisions. This move highlights the challenges faced by the wine industry and its ripple effects on related sectors like real estate. In the fourth quarter, the cooperative's lease transaction in American Canyon made up nearly all the industrial property leasing activity in Napa County. The vacancy rate for industrial space in the county is currently around 11. 1%, with more space potentially available to lease. Experts predict a continuation of vacancies, emphasizing the market's reliance on the wine industry's performance.