Shopping Patterns at LCBO
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1 Shopping Patterns at LCBO S Shari Mogk-Edwards LCBO Vice-President Merchandising and VINTAGES March 5, 2013
2 Agenda Sales Trends Consumer Shopping Patterns New Opportunities at LCBO
3 $4.7B in sales year over year $968M 21% $436M 9% $2B 42% SPIRITS WINES $1.3B 28% BEER & CIDER VINTAGES
4 Growth Rates BEER and CIDER 8.0% WINES 6.3% VINTAGES 4.5% SPIRITS 4.6%
5 ICB and Ontario VQA are the fastest growing New World wine segments at LCBO
6 Growth Rates by Category European WINES ICB and Ontario VQA WINES VINTAGES New World WINES 8.7% 7.1% 4.5% 3.7%
7 Sales of Wine at LCBO $382M (7.1%) 22% 42% $620M (8.0%) 36% EUROPEAN WINES NEW WORLD WINES $745M (3.5%) ICB and VQA
8 Bottles of Wine Sold WINES and VINTAGES 30M 47M EUROPEAN WINES NEW WORLD WINES 60M ICB and VQA 750 ml
9 More Wine Trends
10 -1.0% 1.0% 3.0% 5.0% 7.0% 9.0% WINES Sales Trends by Type Red Imported White Rose ICB Total VQA
11 VINTAGES Sales Trends by Type Total Rose White Imported VQA Red -10% 0% 10% 20% 30% 40%
12 Trends by Type Organic Wines 27% Sparkling Wines 5% Icewine 0.3%
13 Hot Whites in WINES Pinot Grigio $114M +15% Chardonnay $99M +6% Sauvignon Blanc $73M +9%
14 White and Hot in VINTAGES Chardonnay $33M +8% Sauv Blanc $27M +7%
15 Hot Reds in WINES Cab Sauv $96M +7% Red Blends $72M +20%
16 Red and Hot in VINTAGES Cab Sauv $62M +3% Pinot Noir $20M +8% Sangiovese (Chianti) $18M +15%
17 Average Prices for Wine $30.00 $25.00 $26.64 $20.00 $15.00 $12.43 $12.33 $14.67 $10.00 $8.59 $5.00 $0.00 EUROPEAN WINES NEW WORLD WINES ICB VQA VINTAGES
18 Prices for WINES - Imported -$8.00 6% $8.00 -$ % $ $ % +$15 25% Per 750ml bottle
19 Prices for WINES ICB Wines -$ % $8.00 -$ % $ $ % +$15 27% Per 750ml bottle
20 Prices for WINES Ontario VQA $8.00 -$ % $ $ % +$15 27% Per 750ml bottle
21 Prices for VINTAGES - Imported -$ % $ $ % $ $ % +$25 8% Per 750ml bottle
22 Prices for VINTAGES - Ontario VQA -$ % $ $ % $ $ % +$25 27% Per 750ml bottle
23 Market Share of ICB, NON-VQA and Ontario VQA Wines 11% 28% 61% ICB NON- VQA VQA
24 Growth Rates ICB 8% Ontario VQA 6% Non-VQA 2%
25 New Brands Drive Growth 12.00% 10.00% 8.00% 6.00% 4.00% Ontario VQA ICB 2.00% 0.00% 2009/ / / /13
26 What s Hot in Ontario VQA
27 White and Hot and Ontario VQA White Blends $16.5M +10% Riesling $13M +9% Sauvigno n Blanc $4M +22%
28 Red and Hot and Ontario VQA Cabernet- Merlot Blends $13M +9% Baco Noir $5M +18%
29 Ontario VQA and Hot in VINTAGES Rose Wines $1.3M +33% Red Blends $0.7M +18%
30 Ontario VQA and Hot in VINTAGES Vidal Icewine $5M +1% Chardonnay $2.5M +17% Riesling $2M +31%
31 LCBO s Ontario VQA Wine Strategy Elevate the quality image of Ontario VQA wines to increase consumer confidence
32 How to be Successful at LCBO
33 Success in LCBO WINES Provide exceptional value Be socially and environmentally responsible Offer new and exciting products
34 Success in VINTAGES Provide premium products at great value Ever changing, dynamic portfolio
35 New at LCBO! More opportunities for Ontario VQA Enhanced Assortment New Programs
36 Boutique Destination Stores Launching in 2013 Five stores in key markets Enhanced assortment 110+ Incremental Skus Full integration of LCBO and VINTAGES +120 linear footage 400 linear feet dedicated to Ontario Wines
37 Boutique Destination Stores Launching in 2013 Four Additional Fixtures in-section: 4 Wine Fridge VINTAGES Gondola Icewine Shrine Local Talent Fixture
38 Boutique Destination Stores Launching in 2013 Six Additional Programs: Limited Availability Wines (60 stores) Local Talent PLUS Upcoming Wineries Regional Stories Seasonal Selections Unique Finds
39 Icewine Showcase Wine Country Ontario Destination Boutique VINTAGES Gondola 4 foot wine fridge Local Talent
40
41 Limited Availability Wines Program 60 stores Increase market access for great wines with limited production
42 Direct Delivery Program Ontario wineries can direct deliver to selected LCBO stores Grow and develop regional wines Augment the Ontario wine assortment Create destination locations for customers interested in a broader assortment of local VQA wines
43 VINTAGES Front Line Releases Every two weeks VINTAGES releases 8-10 Ontario Wines available to 300 stores Individual purchases range from cases Products are featured in a print catalogue
44 Summary Consumers are responding with their wallets Opportunities are increasing for sales of both ICB and Ontario VQA Wines
45 Wine is one of the most civilized things in the world and one of the most natural things of the world that has been brought to the greatest perfection, and it offers a greater range for enjoyment and appreciation than, possibly, any other purely sensory thing. Ernest Hemingway
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