Grapes in space

Grapes in Space? Cyber Grapes? Virtual(ly) Grapes?

Oh, here's the best one "GRAPE NETS!" Grape nuts.... Get it?

You need grapes. How are you going to get them? Traditionally, you would contact a broker or call around to some vineyards. Now there is a new option: the Internet.

The Internet helps buyers find lots that might not normally be accessible to them. It solves the logistics for someone to search for and find obscure lots without having to do extensive travelling or making numerous phone calls or faxes. It allows sellers to reach a wider market and get competitive prices for their grapes.

WineryExchange, a leading B2B wine industry marketplace, prides itself with their "from the dirt to the bottle" supply chain of products and services. WineryExchange is strategically partnered with the brokerage firm of Joseph W. Ciatti Company, which enables them to offer the widest selection of bulk wine and grapes online.

A visitor can go to the WineryExchange Web site and become a registered user, which allows access to the services and products available. Featured prominently on the Web site are grapes. The user clicks on the heading and can do a search for specific lots, referred to as offerings, by choosing options which include vintage, appellation and varietal. A list of all available lots is generated along with quantity and asking price. The offerings may be procured on the Web site by making an offer to the seller in a one-on-one negotiation. If the price and terms are agreed upon, the deal is closed, not with a handshake but with a click of the mouse. It doesn't necessarily stop there. WineryExchange expects to add more supplies and services, including financing, in the near future. Soon it may be one-stop shopping on the Internet.

WineryExchange hopes to follow the success of the August auction with another one-day online auction in March 2001.

This past August, WineryExchange held its first ever online grape auction and CEO Peter Byck was very pleased with the results. "Competitive bidding on these super- and ultra-premium grape s produced an average of 50% over the minimum bid." He felt part of the success was due to the quality of grapes that were sold at auction. There was a wider market available and the demand was high. "By selling their grapes through an auction, growers will be able to obtain a true market price for their crop and, at the same time, buyers will gain access to scarce, exceptional grapes,' said Tony Stephen, WineryExchange's manager of winegrowing. "Our online auction will create a new marketplace for these rare winegrapes that will benefit both growers and buyers.

But you don't need to be a large B2B to take advantage of the net. Smaller companies have emerged and are taking advantage of the technology.

Wild Rose is a vineyard in Lodi, California managed by Kurt Boese. The vineyard is 90 acres with an additional 900 acres that are leased or controlled by Wild Rose. They grow pre-mium grapes, mostly Zinfandel, Merlot and Chardonnay, but can source anything that the buyer wants from one of the 50 vineyards with whom they contract.

"We sell mostly to the small- to medium-sized wineries," said Boese, "We want to keep our focus on being the small guy." Last year he sold grapes over the Internet. He did not target any specific market and had no preset expectations. Most of the grapes sold by Wild Rose were through regular channels but he received quite a bit of interest on the Web site from home winemakers who were interested in the small 45 lb. boxes. Many of his customers were from the East Coast where there is a tradition of home winemaking. "Once we harvest the orders, we pack the grapes in an insulated box with an ice pack and Fed Ex it to the customer." While shipping can become costly, he feels it is part of the business at this point. He sees a future with home winemakers as well as small wineries who are looking for good sources of premium California grapes and who would otherwise not be able to access them in smaller quantities.

Al Lombardi of A-1 Wine Grapes is a broker in New Jersey. He is partnered with Bill Stokes, a third-generation winegrape grower who operates Lodi Wine Grapes in California, the source of the 3,000 acres of grapes sold by the two companies. Both companies have their own Web sites, which are linked. Last year was the first time they sold grapes on the Internet. Lombardi reported the Web sites generated an average of 40 to 50 hits per day during the months of July, August and September.

According to Lombardi, the company sold over 17,000 tons of grapes last year, mostly the "old-fashioned" way--through brokers or buyers who came directly to the vineyards. However, 1,500 tons were sold over the Internet. "I think we did pretty well," said Lombardi, "We were overwhelmed by the response and we had to turn away some business. We had some problems with shipping of grapes to certain states but we have since resolved it by contracting with a logistics company and are ready for the 2001 harvest."

The site is set up so when a buyer clicks on the state in which they are located, it directs them to either Lodi Wine Grapes, which handles California, Oregon, Washington and Nevada, or to A-1 which handles the rest of the United States. Lombardi says many of his customers are on the East Coast, mostly the Mid-Atlantic states. Once the buyer is connected to the correct site, they can choose the number of boxes and type of premium grapes they want, place the selections in the shopping cart and proceed to checkout. There is no bidding on the site; the prices are pre-determined by the vineyard manager based on current market value. The site is electronically secured and enables the buyer's credit card or banking information to go directly to the company's bank for immediate authorization.

"When the order is confirmed, we assemble it with the other orders," he explained. "Bill Stokes, our vineyard manager, determines when the orders are ready to harvest. We pick in the morning when it is cool and the grapes chilled--never frozen. Each order is shipped within 48 hours of harvesting." Most of the shipments are in 50 to 100 ton lots but he sees interest from home winemakers who purchase about 400 to 500 lbs. at a time. Occasionally someone will request the minimum of one box for a photo shoot or special event.

The company sells mostly Cabernet Sauvignon, Zinfandel and Syrah, but is looking ahead to Pinot grigio. "Last year we harvested 30 acres," said Lombardi, "we have another 100 acres planted and I think we will do well."

When asked how he ended up partnering with a vineyard clear across the country, Lombardi responded, "I found him on the Internet."

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COPYRIGHT 2001 Gale Group