Canada Market: Insights on Exporting to Alberta. Category Manager Rob Singleton

Transcription

1 Canada Market: Insights on Exporting to Alberta Category Manager Rob Singleton

2 Canada Market: Insights on Exporting to Alberta Liquor Stores North America (LSNA) Overview Alberta Business Overview Beer Trends in Alberta Summary

3 About LSNA Our Business: Sale of beer, spirits and wine through 247 retail stores North America s largest publicly traded liquor retailer (by number of stores and sales) LSNA total sales in $694 million Our Markets: Canada (BC and AB) 75% of total LSNA sales U.S. (KY and AK) 25% of total sales

4 About Alberta Alberta has an estimated population of 4.1M as of July 1, With 75% of the population being above LDA The majority of its residents are located in the main centers of Calgary and Edmonton Alberta s growth rate was 2.86% between 2013 and 2014 which is double the Canadian average It also has the highest male to female ratio in Canada with 103 males for every 100 females Alberta has the lowest median age in Canada of 36.5 years

5 About Alberta Retail There are currently 1,340 retail liquor stores in Alberta. 362 Calgary (1 store for every 2,914 LDA) 320 Edmonton (1 store for every 3,113 LDA) The Alberta average is 1 store for every 2,307 LDA Rural Alberta traditionally has had less demand for craft beer than urban centers. Most small town consumers are price conscious and less willing to experiment with beer styles.

6 Privatization and Change Alberta is the only province in Canada with a fully privatized retail liquor system Privatization was fully implemented in 1994 Product selection expanded quickly and now there are over 40,000 adult beverage items available to the Alberta consumer 4,590 Beer items are currently listed in the Connect warehouse (BDL & DD not included)

7 2014 LSNA Alberta Retail Beer Segment

8 The Craft Beer Boom Alberta Craft Beer sales with LSNA grew 10.89% from 2013 to 2014 Leading styles are IPA, Wheat, Pale Ale and ISA The segment is healthy and the Alberta consumer is looking for more choice and variety Selection is key, consumers see what is available online and want the same products available in their local store

9 Focus On Craft While not all stores currently have a high demand for craft beer, in Alberta LSNA has 57 locations with an expanded craft beer selection. We have made a concerted effort to allocate space in all new store development to this growing and profitable segment.

10 The Growth of the Growler In key craft locations, LSNA has developed a diverse selection of Draft on Tap including up to 34 taps at our largest location. We are working with craft brewers to source new and unique items for the Alberta consumer.

11 Local Craft Beer Boom Recent changes in Brewery licensing restrictions have made a favorable climate for the Alberta small craft brewer to develop Minimum capacity of 5,000 hectoliters a year for brewers was removed in 2013 Local brewers that produce less than 20,000 HL are charged a reduced tax rate of $0.20 per liter compared to $1.20 per liter for producers brewing 200,000 HL or more There are currently 24 breweries and brew pubs licensed in Alberta at this time

12 Distribution Opportunities Alberta has a four tier system made up of the Brewer, Agent, Distributer and Retailer Canadian brewers are allowed to distribute Canadian produced beer products directly to retailers but all foreign brewed products must be distributed through the Connect warehouse Liquor Connect is a 3rd party distribution warehouse located in St. Albert, Alberta

13 Distribution Opportunities There is only one warehouse for the entire province Liquor Connect charges a flat distribution fee to retailers and storage fees to Agents Liquor Connect does place restrictions on what is in its warehouse Out of 4,590 beer skus available there are currently 1,201 American beer item skus in Connect

14 Find The Right Agent There are currently 315 Agencies in Alberta and growing Make sure they are committed to your Brewery and to the distribution and promotion of your beer Verify the size of their sales force and in province representation Be conservative on quantities for initial distributions

15 Pricing And Shipping Challenges Large shipping costs and need for temperature controlled containers Price discrepancies between imported craft items and locally brewed products Price discrepancy has been compounded recently due to falling Canadian dollar Extreme temperature shifts in the winter can lead to unforeseen quality issues

16 And now for the other side Customers always want to have the freshest and best tasting beer available Significant issues regarding the large number of skus available and the true velocity of the Alberta craft beer market Major problems with expired product in the market

17 And now for the other side It is left to each individual Agency to verify the freshness and expiry dates of the items in the Connect warehouses Many instances of product arriving at the store already expired

18 Summary LSNA is North Americas largest publicly traded liquor retailer ( $694 million) LSNA currently has 247 retail location Alberta is the only province in Canada with a fully privatized retail liquor system Alberta Craft Beer sales with LSNA grew 10.89% from 2013 to 2014

19 Summary Leading styles are IPA, Wheat, Pale Ale and ISA LSNA has made a concerted effort to allocate space in all new store to craft LSNA is always looking to source new and unique items for the Alberta consumer Alberta is experiencing the beginning of its craft beer boom

20 Questions?

21 Appendix

22 LIQUOR STORES NA IN WESTERN CANADA

23 Alberta Consumer Price Index

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25 Top 1000 Beers (2014) (ranked by case sales) Rank SKU Product Unit Size ML Unit Price Country Type Segment KS VARIETY PACK BEER SAMUEL ADAMS LAGER (BOTTLES) NEW BELGIUM BREWING FAT TIRE BARD'S TALE GLUTEN FREE BEER ANCHOR STEAM BEER NEW BELGIUM BREWING RANGER IPA SAMUEL ADAMS MIX PACK LAKE FRONT NEW GRIST -NON GLUTEN BEER ANCHOR LIBERTY ALE NEW BELGIUM BREWING FAT TIRE DESCHUTES MIRROR POND DESCHUTES CHAINBREAKER BROOKLYN LAGER SAMUEL ADAMS OCTOBERFEST SAMUEL ADAMS COLD SNAP ROGUE DEAD GUY NEW BELGIUM BREWING SNAPSHOT WHEAT SAMUEL ADAMS WINTER LAGER ROGUE DEAD GUY ALE SAMUEL ADAMS BOSTON LAGER GOOSE ISLAND MATILDA GOOSE ISLAND SOFIE SAMUEL ADAMS SUMMER ALE HAT TRICK IPA SAMUEL ADAMS REBEL IPA ANCHOR BREKLE'S BROWN ALE 12.75

26 Top 1000 Beers (2014) (ranked by case sales) Rank SKU Product Unit Size ML Unit Price Country Type ANCHOR PORTER ROGUE DEAD GUY DESCHUTES INVERSION ROGUE HAZELNUT BROWN NECTAR KENTUCKY BOURBON BARREL ALE KLINGON WARNOG ROGGEN DUNKEL ALE OMMEGANG GOT FIRE AND BLOOD DESCHUTES BLACK BUTTE BROOKLYN EAST INDIA PALE ALE VULCAN ALE - SEASON ONE - EPISODE ONE YARD SALE AMBER ALE FRESH SQUEEZE OSKAR BLUES DALES PALE ALE LAGUNITAS INDIA PALE ALE ANCHOR CALIFORNIA LAGER ROGUE CHOCOLATE STOUT DESCHUTES OBSIDIAN STOUT GOOSE ISLAND HONKER'S ALE PIGS ASS PORTER ROGUE BRUTAL BITTER BROOKLYN BROWN ALE HOPWORKS IPA ANCHOR CHRISTMAS ALE VOODOO PRETZEL RASPBERRY & CHOCOLATE ALE ANCHOR STEAM BEER - 50L KEG Segment

27 Top 1000 Beers (2014) (ranked by case sales) Rank SKU Product MAGIC HAT # NEW BELGIUM BREWING RANGER IPA ROGUE JUNIPER PALE ALE DESCHUTES CHAINBREAKER PYRAMID APRICOT ALE Unit Size ML Unit Price Country Type ANCHOR SEASONAL BEER STONE IPA LAGUNITAS HOP STOOPID ALE OMMEGANG GAME OF THRONES ROGUE FARMS 7 HOP IPA LAGUNITAS LITTLE SUMPIN' SUMPIN' ALE LAGUNITAS IPA MAXIMUS ROGUE YELLOW SNOW IPA DESCHUTES TWILIGHT BROOKLYN PUMPKIN ALE LAGUNITAS THE CENSORED RICH COPPER ALE STONE ARROGANT BASTARD ALE BROOKLYN BLACK CHOCOLATE STOUT SAMUEL ADAMS OCTOBERFEST DEATH OF A CONTRACT BREWER BLACK IPA MAINE BEER MO ANCHOR IPA DESCHUTES MIRROR POND LOST COAST TANGERINE WHEAT ALE DESCHUTES BLACK BUTTE 5.11 Segment

28 Top 1000 Beers (2014) (ranked by case sales) Rank SKU Product ROGUE CHIPOTLE ALE RUCKUS HOPTIMUS PRIME STONE GO TO IPA GIGANTIC IPA TENAYA CREEK HOP RIDE IPA LAGUNITAS CZECH STYLE PILSNER Case Sale Total for Top 1000 Beer SKUs: Case Sale Total for All Beers (4431 SKUs): Unit Size ML Unit Price ,490,560 6,592,396 Country Type Segment

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