Seeing 50 million bottles of wine stacked 35 feet high was awe inspiring.
$3 billion dollars of wine works out to approximately 16,000,000 cases of wine, all of which passes through their two distribution centers, which total 1,000,000 square feet. To put this in context, the mighty Zappos has a mere 800,000 square feet of distribution space.
What really intrigued me, was not just the scale of the operations, but also the knock on benefits of (benevolently) controlling the entire market from import to final sale. SAQ has huge buying power, so the end prices are reasonable. They have the clout to make sure that their containers are stored low down on the ships, so the wines are less affected by weather. Because importing is centralized, and SAQ offers a 1 year guarantee on all purchases (really!) they are able to have a chemical lab where they inspect bottles from each lot, and test them for sulfite levels, presence of toxins such as methanol, or most commonly the presence of yeast and sugar, which could lead to an undesired secondary fermentation. Its only after passing these inspections that they feel comfortable offering such a promise.
I wish I had a better picture of the labs, but felt a little awkward taking photos inside a government building. However, as someone who studied Chemistry to a graduate degree level, and who worked in several chemical labs, let me say that they had some slick machinery: filtration, titration, automated chemical analysis machines, reaction booths and so on.
Next time I'll talk about their consumer facing operations - in particular the fact that they have an entire division which is focused on collector services. For, while the backend operations were impressive, they are also necessary, the consumer operations were where they differentiated themselves in my mind.