The eCommerce way to sip, swirl and swallow
Tannico has what must be the world’s largest collection of fine Italian wines. The international e-tailer holds licences for 15,000 wine labels from 2,500 wineries. The logistics was outsourced to FIEGE in 2016. Only five years later, FIEGE opened a fully automated warehouse for Tannico in Castel San Giovanni near Milan.
“Life is too short to drink bad wine!” Sounds like Johann Wolfgang von Goethe, but it is not. Still, it is the perfect start for this story. To be more precise, for Marco Magnocavallo who is mixing things up in the wine market with his Tannico online shop which he founded in 2012. The food tech company shipped over 4.5 million bottles world-wide in 2021, generating a turnover of around 76 million euros. The groundbreaking success has already stirred the interest of renowned investors, including the Italian beverage group, Campari and well-known Moët Hennessy, which is part of the LVMH luxury brand.
High-performance logistics are necessary to store that many bottles and be able to process the roughly 600,000 orders that are recorded every year. Initially, Tannico still handled this itself. However, in 2016 the expansion-driven start-up brought in help from the outside. “Speed, reliability and good customer service are the key to success in eCommerce. With FIEGE we have partnered with someone who knows this business like the inside of their own pocket”, says the CEO. Next to warehousing, FIEGE also oversees value-added services such as product photography for the online shop and the customisation of select wine assortments.
Ideal storage conditions
DTo properly store wine, the bottles must be kept in a dry, cool and odourless place. FIEGE therefore dedicated a bespoke area to this business at its location in Arese, north of Milan. Amedeo Girometti, Head of the FIEGE Branch in Castel San Giovanni, tells us: “Tannico has grown alongside us. We started out in Arese with around 40,000 bottles. Thanks to the fantastic work of the Branch Manager, Vito Priano and his team, this figure has increased to 600,000 bottles and over 12,000 square metres of logistics space.”
With growing success in the private customer segment, the B2B market became a stronger focal point. And since wine lovers are found around the world, the e-tailing segment ships to 23 countries today, including USA, South Africa, New Zealand, and South Korea. Says Magnocavallo: “Between 2016 and 2019, we grew on average by around 50 per cent. In 2020, our turnover grew by a phenomenal 80 per cent. To live up to this, we were forced to also expand our logistics.”
Magnocavallo was very much on the same wavelength as its logistics provider when it came to this: “Innovation is a central pillar of the business both for us as well as for FIEGE. We therefore made the conscious decision to rely on an automated warehouse solution, which in Italy was a total novelty for e-tailing with wine.” Across the whole of Europe, there are few projects that compare to this.
New spheres of productivity
The choice of location fell to the small commune of Castel di Giovanni, some 50 kilometres from Milan. The FIEGE branch there has 6,000 square metres of additional logistics space available. Says Girometti: “The goal was to create the same storage capacity on half of the space to achieve a shipping volume of three million bottles per annum.” At the heart of the facility is the automated rack system which stores up to 45,000 plastic containers holding 15 bottles each. The entire system is temperature-controlled to avoid fluctuations and to ensure the best possible quality of the wine.
At five inbound stations, new merchandise is readied for storage or prepared for shipment at the four picking stations – a fully automated process. “We have increased efficiency and considerably reduced the error rate. Ultimately, that also ensures even greater customer satisfaction”, says Magnocavallo. The FIEGE team in Castel San Giovanni comprises young employees that were trained especially for the Tannico project. Giromette adds: “We can count on an excellently prepared team that knows the ins and outs of the individual processes.”
During its planning phase, the system was already set up as such that it can be conveniently expanded if need be. And according to Magnocavallo, that will most likely also be necessary: “We want to grow further. The plan is for us to reach a daily throughput rate of around 25,000 bottles a day by 2024, which would total five million bottles shipped per year”, is how the wine pioneer outlines his plans. After all, life is too short to drink bad wine!