A few weeks ago, I posted a note asking where are the supply chain entrepreneurs? In this post, I would like to introduce two innovative supply chain companies-- New Vine Logistics and MooBella. They indulge two of my passions--fine wine and fine ice cream. Both have brought significant innovation to industry supply chains. Unfortunately, I only have shares in New Vine Logistics.
New Vine Logistics is our latest investment in Supply Chain Ventures Fund II. Anyone who has tried to source fine wines from California or Oregon when living outside those states knows what a hassle it is to obtain Kistler, Pahlmeyer, Peter Michael, Silver Oak, Ridge, Screaming Eagle, etc., etc. direct from the vineyard. For years, the powerful distributor lobbies held the small consumer in their grip, releasing fine wines only to their best customers and friends. If you lived in Maine as I do, forget getting any fine wines in any store. Then along came last year's Supreme Court ruling which struck down some laws prohibiting direct from winery to consumer shipments (read: get the distributors out of fine wine sales and shipping) and consumers in most states (but not Maine as yet, but that's another story) can now have fine wines shipped directly to their homes or businesses.
New Vine Logistics is riding the crest of this innovative supply chain wave, having over 150 California premium wine producers as customers. Mailing list sales to consumers are the fastest growing and most profitable (the wineries sell to you at retail and keep the distributor's portion) part of high end winery business. New Vine Logistics stores the product in their warehouse, fulfills orders from the mailing list, pays all relevant state taxes and does all the legal paperwork for the states. A small, high end California winery would have a very difficult and expensive time establishing shipping deals with the 44 or so states that currently allow direct shipments to consumers. New Vine does all the work for them via an outsourcing contract. They are also looking to begin direct shipping of premium wines to high end restaurants across the U.S. Restaurants typically have large wine inventories foisted on them by the distributors. Premium wines are sold on a first-come, first-serve basis so that buying cases at a time is required. New Vine is exploring overnight replenishment of fine wines to top restaurants, reducing inventory costs and improving overall selections.
MooBella is trying to change the way premium ice cream is manufactured and delivered to consumers. The current supply chain is as follows: Ben & Jerry slave over making their ice cream in Vermont. The ice cream is then shipped to distributors all over the U.S. Most is then directly shipped to big supermarket chains. The remainder is shipped to secondary distributors who deliver to smaller convenience stores, etc. Overall, it is not a very efficient or cheap cold chain delivery operation. The bottom line is that we have to go searching for our favorite ice cream in a local store. Well, what if you brought the ice cream plant to the consumer?
That is exactly the innovative supply chain model that MooBella is trying to implement--a vending machine that manufactures the ice cream on-site, in 96 varieties from 12 different flavors, with three mix-ins (yum) in about 45 seconds. And you can either have premium or low-carb ice cream. Sounds like a winner to Dave, but then again, I do like my ice cream. For the moment, the only two places one can get what some have called the "world's best engineered ice cream" is the Union Court dining area at Boston University and at Children's Hospital in Boston. Does it compare well with Ben & Jerry's? I cannot tell you yet, because I have not tasted it. But a number of my ice cream loving friends pronounce it very good. I also like the "on demand" aspect of the delivery process, perhaps they should have a flavor called SaaS, soft serve as a service?
The vending machine has as much technology as your average laptop, including an AMD 1.2 GHz processor. The processing power is needed to run the food product database--key manager of the mixing process. The machine and computer must also manage multiple ingredient temperatures from ambient to freezing. The basic ice cream mix does not require temperature controlled delivery, meaning that FedEx or UPS can drop it off at the machine site days in advance, further reducing supply chain costs. The "assembly" process is also simplified: The base mix is pumped in, aerated, flavored, flash frozen, scraped off a freezing surface, turned into a scoop, popped into a container and delivered in under 45 seconds. Oh, they have 14 patents on the technology, so don't bother to buy one and disassemble it for the IP.
It's nice to see supply chain innovators taking old, inefficient supply chains and reinventing them for the 21st century. If you know of similar innovators, send me a note. I'm always interested in the new, new thing. Now if we could find a better way of having gourmet meals delivered to the coast of Maine....