The Roof Fell Through on These Wine Businesses

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For a handful of small wine distributors in Massachusetts, the Foxboro Terminals warehouse facility was a great fit, until the roof caved in last month.

The Terminals have long offered storage and services to wholesale companies, helping them get products from producers to customers. The name of the company that operates it, fittingly, is Supply Chain Solutions.

“We’ve been storing wine there, but they also provided us with other services—handling wine coming in and out, entering it into the inventory system, and more,” said Oscar Hernandez, who is the sole proprietor of Olmstead Wine.

Large distribution companies generally have their own warehouse and storage spaces, but small businesses—like Hernandez’s—often don’t have that luxury. Olmstead is only a few years old, and beyond that, it’s a niche distributor, with a focus on finding and selling specialty organic wines from around the world. It doesn’t deal in big volumes.

Without the resources for manpower or space to manage his own inventory, Hernandez outsourced to the Terminals.

Matt Carroll, the owner of Genuine Wine Selections, has been in the Terminals for eight years. He also considers his company a niche player, primarily focused on selling wines from “small, European producers.” It employs four people and distributes to about 100 restaurants and fine wine shops. The Terminals, he said, made for “a very convenient way to run a company.”

But on February 15, the Terminals were victim to a common crisis this winter in Massachusetts. The roofs on two of the six connected buildings that comprise the property buckled under the weight of snow. The site was shut down by the town’s building inspector, and a week later—before the Terminals were deemed safe to access, and correctly so judging by what happened—two more roofs fell through.

The good news for the Terminals’ wine distributors was that their bottles were kept under one of the two roofs that didn’t fall through, and temperatures were appropriate enough under their still-standing cover to not sour their grapes.

But the bad news was significant: It would be another several days before anybody would be let in the warehouses. By the time they were able to access the buildings, it was March 1—a full two weeks removed from the first collapse. And when they did get in, it was to collect their supplies and move on; the Terminals weren’t going to be able to store their wine any time soon. (Supply Chain Solutions could not be reached for comment for this article.)

“We expected we’d be able to get in soon, and the company would get operational,” said Carroll. “[The second collapse] made us scramble a bit.”

Jeff Slavin runs the wholesaler Hangtime Wine, where he manages 300 accounts and three employees. He described the period since the roof collapse as “similar to Homer’s Iliad and Odyssey.”

For Hernandez, Carroll, Slazi, and other distributors who relied on the Terminals, the roof collapses sent business into a deep freeze, preventing them from doing much but working the phones and responding to emails to keep customers up to date.

The wholesalers said customers were understanding and sympathetic, and they didn’t lose any accounts due to the circumstances. The ripple effect into the Greater Boston wine market was a small one. Emmylou Taylor, the general manager of Hangtime customer Eastern Standard, said the effect was minimal on the restaurant. It only required some communication with customers about missing menu items. “Oh, it was just one more way the weather has affected us,” Taylor said. At Social Wines, a South Boston shop that buys from Olmstead and Charles River Wine (another Terminals wine distributor, which declined to comment for this article), wine buyer Eileen Elliott said some of its shelves were thin of bottles by the end of the two-week period. But she said any issues at the store were slim compared to the effect the roof collapse had on its distributors.

As soon as they were allowed to get their wine, the wholesalers got on the road and began, at last, fulfilling orders. But the 14 days of lost time on the distribution front will eventually hit the wholesalers financially; two weeks of not moving a product will set back their billing cycles. Slavin, for one, estimated that the roof collapse probably cost him between $30,000 and $50,000 in lost business.

The distributors all expect to be able to make up for most of the lost business through insurance policies, but they probably won’t see those checks for months. So they’ve been working the phones to find ways to smooth out the pending financial hit. Carroll is offering discounts to his customers in an effort to keep cash flowing; Slavin is asking his suppliers if they’ll push their own billing cycles back a couple of weeks from normal to account for the upcoming hiccup in his. Overall, though, they said things should be manageable.

“I’m not worried about financial ruin,” Slavin said. “I’m more concerned about getting back to a stable situation where the focus is back to what we were doing before.”

That’s a reference to the hunt for a new home. While the roof collapse would have affected any company that kept all of its inventory at the Foxboro Terminals, finding a new place to handle storage and logistics is a particular challenge to alcohol distributors. Including the Foxboro Terminals, there are only 19 warehouses in the state that are properly licensed to serve as storage space for alcohol wholesalers, and few of them, the distributors said, could offer the level of services provided at the Terminals.

Hernandez, Carroll, and Slavin each said they have found new homes to keep their wines, though only Hernandez was willing to share the location (a warehouse in Brockton). But the Terminals offered a level of convenience they’re worried they won’t be able to match elsewhere.

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