Incubator initiative: How can small producers in Western Australia achieve economies of scale efficiencies in logistics and distribution?

In the transportation and distribution of wine, any temperature above 16°C (60°F) accelerates the maturation process and could change the wine’s varietal character, its sense of origin and possibly shorten its life expectancy. One way to control temperature in the transportation and distribution of wine is to use cold chain logistics. Cold chain logistics provides guaranteed, end-to-end temperature controlled conditions (i.e., temperature-controlled rail, road, air and sea transportation and storage and warehousing). According to industry insiders, cold chain logistics is a big step forward in the conservation and protection of wine (especially premium wine).

In general, the participants realised the benefit of cold chain logistics in the sense that end-to-end temperature-controlled transportation, storage and distribution of wine can preserve the integrity and provenance of the product. However, there were differences in perceptions of the necessity and use of end-to-end cold chain logistics. With respect to current practice relative to cold chain logistics, there were no participants using a complete, end-to-end cold chain solution. However, some producers are using temperature-controlled measures in the transportation of wine.

The findings suggest several potential options for collaboration in the transportation and distribution of wine. While there was clear interest in participating in a collaborative arrangement (including cold chain solutions), a number of disadvantages were also identified including time and flexibility constraints as well as challenges in co-ordination.

In summary, the use of a complete end-to-end cold chain solution for the transportation and distribution of wine in any of the collaborative recommendations identified is unlikely to be an acceptable option. This is due to the increased cost of using an end-to-end cold chain solution which makes it more likely to be economically prohibitive. However, certain elements of a cold chain solution (e.g. insulated liners, timing based on weather forecasts) can be used collaboratively. Individual producers may be able to determine which aspect or ‘leg’ of a cold chain solution is most applicable and leverage the collaborative group to share the costs.