trade day 2017 beer & cider · 2017. 5. 9. · the numbers fiscal 16/17 cases received net...

Beer & Cider in Grocery April 25, 2017

Chris Dini – Director of Grocery Operations

Grocery Operations

Agenda

Team and the Players

Program Overview• Tranches• Wine Boutiques

The Numbers• Sales• Fill Rates

Making Products Available

Recalls

Pain Points & Adding Value

Resources Available

LCBO:Mandesh Dosanjh – SVP Supply ChainChris Dini – DirectorLeanne Rhee – Account Management & Vendor RelationshipsJamie Fazekas – Policy & OperationsIT Cross Functional teamLogisticsQA – Barb Chapple

AGCO

Grocery Operations Team

Mandesh Dosanjh

Supply Chain

Supply Chain DivisionMandesh Dosanjh

Logistics

Retail Service Centres

Traffic & Customs

Specialty Services

Supply Chain

Space Management

Measurement & Analysis

Grocery Operations

Quality Assurance

Laboratory Quality Services

Regulatory Framework

https://www.ontario.ca/laws/regulation/160232

Responsibilities

• What we are involved in…– Business-to-Business wholesale transactions– Access between suppliers and grocers– Listing and order flow– Financial processing– Fulfillment facilitation

• What we are NOT involved in– Targeted consumer marketing – Product category management– Grocer sales & marketing plans– LCBO sales and promotions– Determining wholesale product mix

• Regulates the laws pertaining to the sales, service and consumption of alcohol

• Enforces Ontario Regulation on Government Stores 232/16 as per but not limited to the following– Types of products eligible– Shelf space requirements– Hours of operation– Advertising rules– Trade spend restrictions– Sampling rules

• WWW.AGCO.ON.CA

Responsibilities

Beer & Cider

The Rules

Product Eligibility• Alc. content ≤ 7.1%

• No malt based coolers

• No container ≥ 750ml

• Pack size ≤ 6

Display Requirement• At least 20% small brewers

• Where small brewer < 400,000 hl worldwide production

• At least 20% small cidery• Where small cidery < 25,000 hl worldwide

production

Authorization Rollout

By tranche

Beer • Initial allocation

of 60 authorizations

• 13 companies• Cider added

June 24th, 2016

Wine • Additional

allocation of 70 beer & wine authorizations

• 35 restricted• 35 unrestricted• Wine boutiques• 18 companies

Beer & Cider• Additional

allocation of 80 beer & cider authorizations

• 70 Wine boutiques + bonus beer

• 22 companies

Dec. 15th

2015Oct. 28th

2016Summer

2017

Tranche #1 & #2 Allocations

Grocer B&C B,C&W19 18 U, 2 R

15 8 U, 7 R

9 13 R

3 2 R

3 4 U, 3 R

2 2 R

1 3 U

2

1

Grocer B&C B,C&W1 U

1

1

1

1 U

1 R2 R

2 R1 R

TOTAL 58* 35 U, 35 R

Grocer B&C B,C&W1 U

1

1

1

1 U

1 R2 R

2 R1 R

TOTAL 58* 35 U, 35 R

Tranche #3

Beer & Cider East West North GTA TotalLarge 14 19 6 26 65Independent 3 2 0 10 15Total 17 21 6 36 80

Wine Boutiques

Bonus Beer

OWNERS• VQA wine

manufactured by non-owners

• Subject to sale targets

• No grocery Floor

GROCERS• Bonus beer & cider

• Alc. content ≤ 7.1%• No malt based coolers• No container ≥ 750ml• Pack size ≤ 6

• Display requirement of at least 20% small brewers & 20% small cideries

Wine Boutiques & Bonus Beer

Current Locations

1. London

3. Collingwood

2. Brantford

4. Brampton

7. Bowmanville

6. Whitby

5. Pickering

Beer & Cider

Maximum under regulation

The Numbers

Fiscal 16/17

Cases Received

Net Sales

BeerON Small producers 232,921 $11,851,361ON Large producers 510,928 $21,328,021

Import 313,143 $14,959,789TOTAL BEER 1,056,992 $48,139,171

ON Small producers 15,189 $945,800ON Large producers 11,069 $635,818

Import 34,347 $2,057,356TOTAL CIDER 60,605 $3,638,974

WINE 90,051 $13,347,937

GRAND TOTAL 1,207,648 $65,126,082

Market Share

In dollars

ON small25%

ON large44%

Imports31%

BEERON

small26%

ON large17%

Imports57%

CIDER

Wine20%

Beer74%

Cider6%

Product Type

Fill Rates

Fiscal 16/17

LCBO94.9%

OTHER94.1%

Total 94.4%

Source Cases Ordered

Cases Shipped

LCBO 546,753 518,686OTHER 682,659 642,057

Total 1,229,412 1,160,743

Making Products Available

The Process

Existing eligible beer & cider products:

• Email wholesaleservice@lcbo.com with LCBO SKU#

New Ontario beer & cider products:

• Enter in to NISS under:

Product Need #2428 Ontario Beer –Grocery Channel

Product Need #2429 Ontario Cider –Grocery Channel

Product Recalls

Record Year

CLASS 1 CLASS 2

Product Recalls

Product Recalls

Bad start? 4 Recalls to date + 2 currently under investigation

Product Recalls

Impact on your Business

1) Out of market for days to weeks or longer

2) Impact to Brand

3) Fees for:

• Lab testing

• QA Admin fees

• Retail Destruction of inventory

• Repatriation of product from grocery

• Warehouse destruction of inventory

• Freight, recycling fees

• Risk of Fines by CFIA

Vendor Experience

$1,000 - $200,000

Product Recalls

What happens?

1. Product is withdrawn from all sales channels

2. Grocery inventory is Repatriated to LCBO for destroyal

3. Retail stock destroyed

4. Warehouse stock returned or destroyed

5. Investigation launched with CFIA

Sensory Evaluation

Risk Mitigation

To identify faults only and prevent defective product from

going to market

1. Shipping Documentation• Grocer PO number missing • Quantities in units rather than Cases• LCBO SKU # missing • References to pricing

2. ASN 24 hours prior to delivery

3. SKU changes → minimum two       weeks notice required

Grocer Top 3 Pain Points

1. Education• Product Knowledge• Storage and stock rotation• Shelf life and date codes• Industry and consumer trends

2. Quality Assurance

3. Simplify delivery operations

4. Build relationships

How to add value in the grocery channel

• Collecting feedback from suppliers and grocers

• Continuous improvement through IT enhancements

• EDI transactions• GMS portal

enhancements• System & Process

enhancements

LCBO’s commitment for continuous improvement

Enabling a smooth transaction

Grocery Website• www.doingbusinesswithlcbo.com

• Online webinars• Procedure Manual• Power point presentations• Key Contacts• Authorized store locations

Regulation 232/16• https://www.ontario.ca/laws/regulation/160232

Grocery Operations team• wholesaleservice@lcbo.com

Available Resources

LCBO Resources Available to You

Questions ? Email: wholesaleservice@lcbo.com

Contingency plan for grocery

www.lcbonegotiations.com

Questions?