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Jordan Kivelstadt
CEO, Free Flow Wines
SuperNova Award Category:
The Company:
Launched in 2009, Free Flow Wines was created to focus on an unaddressed opportunity within the market – maintaining a high quality of wine for consumers while bringing new efficiencies to distribution. Free Flow Wines distributes high quality wine in kegs so that it can be served on tap.
Premium wineries began inquiring if Free Flow Wines could package and distribute their products in a similar way. By 2013, Free Flow Wines had changed its business model, from distributing its own wine to using its distribution system for other wineries’ products. Free Flow Wines now has a presence in 49 states. It works with nearly 250 wineries and more than 300 wholesalers.
The Problem:
With its new distribution process, Free Flow Wines faced numerous challenges.
- Wine kegs must be properly and effectively filled. Free Flow Wines developed a process to fill wine kegs while maintaining the quality of the final product. However, this process is handled at the individual wineries and requires a close relationship between Free Flow Wines and the wineries.
- The complexity of shipping the product through a national network of distributors. The distribution relies entirely on a vast network of distributors, so distribution requires a large amount of information to measure and control the process.
- The need to manage the kegs themselves, as an asset within the supply chain. The kegs are returned to Free Flow Wines, adding a layer of complexity that does not exist with wine bottles.
Free Flow Wines needed a technology solution that would enable them to to manage the three hurdles above. FFW required specific solutions – from inventory management to asset tracking. Additionally, being able to truly maximize the value of the information coming from the kegs required a scalable and flexible system to understand the data that was being collected.
The Solution:
Adoption of a suite of Netsuite applications in the cloud enabled FFW to conquer the hurdles presented by its new distribution methods. FFW realized it needed a software system that could scale with its growth plans. Free Flow Wines chose NetSuite’s cloud software for financials, inventory management, and work order & assemblies as the solution addressed the hurdles outlined above.
Properly filling kegs. FFW manages 85,000 kegs and 300 wholesalers a year. NetSuite’s inventory management system tracks kegs and partners.
Shipping via distribution network. FFW added NetSuite financials to track the receipt of kegs and tie the inventory info to financials.
Managing the return of kegs. Kegs need to be properly handled at every step of their journey. FFW's distribution model requires a true end-to-end asset tracking system. A custom system was built using NetSuite and its open APIs, allowing FFW to build a platform that could meet its needs.
The Results:
Free Flow Wines Has Changed How Wine Is Distributed and Consumed
Having replaced legacy systems such as QuickBooks, Free Flow Wines has been able to achieve 300 percent annual revenue growth. The company also has been able to control its labor costs as the NetSuite system allowed Free Flow Wines to avoid hiring additional personnel to manually manage the system as the company scaled up. Through the technology platform, Free Flow Wines was able to make its existing workforce more efficient and capable of scaling up with the business.
The ability to distribute wine in kegs has not only allowed the industry to increase sustainability but it also enables new business models to emerge. However, Free Flow Wines would not have been able to implement and expand its business model without the right software systems in place.
The largest impact may be in how Free Flow Wines has disrupted the traditional wine business. Through its distribution model, Free Flow Wines has been able to remove hundreds of tons of glass bottles from circulation, making the wine industry more eco- friendly and sustainable.
Metrics:
“We had to set up the company on a flexible technology platform. If we did not have systems that could scale, we would run into a major issue.” -Jordan Kivelstadt, CEO, Free Flow Wines
Thanks to an ERP platform that provides the necessary insight to run an ever- expanding distribution business, and modular software solutions can scale up with the growth of the business, Free Flow Wines has been able to achieve 300 percent annual revenue growth.
For 2015, Free Flow Wines expects to move close to the equivalent of 300,000 cases of wine. With a distribution center on the West Coast and one scheduled to go live on the East Coast, Free Flow Wines is looking to continue expanding its distribution of kegged wines.
The Technology:
- NetSuite financials
- NetSuite inventory management
- NetSuite work order & assemblies
Disruptive Factor:
Free Flow Wines distribution of wine in kegs is disrupting long-established modes of distributing wine. In pioneering this wine distribution model, Free Flow Wines created a new industry —the kegging and distribution of wine in kegs.
In addition, distribution of wine in kegs reduces the environmental impact of traditional wine distribution by reducing glass bottle packaging, shipping, and waste.
Another major disruption is that Free Flow Wines will have a much greater understanding of the true consumption of the product. The data generated from the movement and use of kegs will potentially open up new use cases for wine distributors and producers.
Shining Moment:
Free Flow Wines is proud to have created a disruption by focusing on a distribution model, rather than product innovation. Free Flow Wines' kegging and logistics services have brought more than 220 premium wine brands to the taps of more than 3,900 restaurants, hotels, sports, and entertainment venues nationwide. To date, the company has removed more than 4,285,564 wine bottles from U.S. landfills
