Retail Operations Rafik Louli, Director, Central Region 14 May 2015
Investment in the Store Network Fiscal 15/16: 7 new stores+14 relocations+1 major expansion 657 stores $40 Million incremental sales
Fiscal 16/17 & 17/18 Add 7 new stores & 11 relocations each year Total # of stores= 671 stores
4 Key Retail Priorities 1 2 3 4 PRODUCT KNOWLEDGE CUSTOMER ENGAGEMENT OUR PEOPLE COLLABORATION
1 2 3 4 PRODUCT KNOWLEDGE CUSTOMER ENGAGEMENT OUR PEOPLE COLLABORATION
NEW Product Knowledge Programs BRONZE
NEW Product Knowledge SILVER
NEW Product Knowledge GOLD
Beer Ambassador Program
Focus on Product Knowledge: Educational Beer Comparison Craft Trade Fair lunch
WOW Leader Program - Period 6
Focus ON Product Knowledge: Educational wine comparison Promotion of Ontario wines & VQA Tasting WOW Leader & SM Action Planning Session
2015 Spirits Advocate Training- Period 8
Focus Increase awareness of spirits profitability Product Knowledge: Educational Tasting Panel discussion with Top National Spirit Ambassadors Trade Fair Lunch
1 2 3 4 PRODUCT KNOWLEDGE CUSTOMER ENGAGEMENT OUR PEOPLE COLLABORATION
Create a Culture of Engagement
Regional Customer Service Advisory Councils
Customer Based Scheduling Standards
Greet
Determine
Match
Confirm
Checkout/Lasting Impressions
Through the Eyes of the Customer
In-Store Tasting Program
In-Store Tasting Training Program Objective: 1. To educate our Retail Store Managers, the Trade, 3 rd Party Suppliers on the LCBO mandatory protocols for handling in-store samplings for our customers with a specific focus on Responsible Retailing. 2. To position the program as an opportunity to encourage trial & enrich the customers shopping experience. Target Audience: Store Managers, Trade and their 3 rd Party Tasting Demonstrators Format: E-Learning module for Trade and 3 rd Party Tasting Demonstrators In-Store Meeting Guide for Retail Store Managers & Store Team Launch: Summer 2015
1 2 3 4 PRODUCT KNOWLEDGE CUSTOMER ENGAGEMENT OUR PEOPLE COLLABORATION
Friendly & Knowledgeable Service-oriented Naturally Friendly engaging
Store Manager Succession Planning
Product Consultants
Product Consultants Development Days Conferences Educational Supplier Tastings
1 2 3 4 PRODUCT KNOWLEDGE CUSTOMER ENGAGEMENT OUR PEOPLE COLLABORATION
Store Visits 1. Call ahead & schedule a mutually convenient time 2. Indicate the purpose of your visit 3. Introduce yourself upon arriving at the store
Store Visits 4. Ask for permission to enter backrooms or before taking photos of your product displays 5. Inform the Store Manager of any concerns & seek resolution 6. Allow the Store Manager to express their concerns
Store Visits 7. Problem solve together 8. Establish regular visits (incl. lower volume stores) 9. Discuss upcoming promotions & consumer tastings 10. Leverage the chain of command & provide specifics
Staff Tastings
Thank you!
LCBO WINES CAROLYN O GRADY-GOLD DIRECTOR, WINES
A Great Year for Wines! 2014/15
Excellent year for wine sales
LCBO Wines 29% 32% EUROPEAN WINES +2.6% NEW WORLD WINES +3.2% 39% ONTARIO WINES +6.7%
LCBO Wines $25M $24M $20M $14M $30M $33M $58M $87M $116M $154M $179M $399M $242M ONTARIO +6.7% ITALY +3.6% CALIFORNIA +9.3% AUSTRALIA -4.2% FRANCE 0.0% CHILE +6.4% ARGENTINA -3.8% SOUTH AFRICA +3.0% SPAIN +4.6% PORTUGAL +6.6% GERMANY -0.3% NEW ZEALAND +18.2% OTHER +10.7%
Consumers drinking even more Ontario Wine
Consumers are buying better wine
LCBO Wines $25.0 +$21.5M (+14.4%) $20.0 +$16.7M (+5.5%) Growth (in Millions) $15.0 $10.0 $5.0 +$2.4M (+0.4%) +$9.8M (+5.0%) +$2.9M (+6.5%) $0.0 <$10.00 $10.00 - <$12.00 $12.00 - <$15.00 $15.00 - <$20.00 $20.00 +
What s Next? 2015/16
LCBO Wines +4.4% +3.4% +5.1% +4.2% $19.5M $17.6M $20.4M $57.6M EUROPEAN WINES NEW WORLD WINES ONTARIO WINES TOTAL
LCBO Wines DELUXE TIER FOCUS ON ONTARIO CONTINUED FOCUS ON INVENTORY TURNS CASE SALES
LCBO Wines
FORECASTING
LCBO Wines 2014/15 EUROPEAN WINES 71% NEW WORLD WINES 63% ONTARIO WINES 48% TOTAL 62% 2015/16 EUROPEAN WINES 62% -9% NEW WORLD WINES 65% +2% ONTARIO WINES 57% +9% TOTAL 62% 0%
LCBO Wines Always submit a forecast Submit by the deadline Put some thought behind the forecast Do not include display quantities Do book regular meetings/phone calls with the product manager Develop a relationship of mutual trust
INVENTORY
LCBO Wines FORECASTING IS CRITICAL! KEEP US INFORMED COLLABORATE
ONTARIO WINES +VINTAGES MARIE CUNDARI CATEGORY MANAGER, ONTARIO WINES + VINTAGES
PURCHASING THE ONTARIO WINES TEAM ADMINISTRATION ASTRID BRUMMER PRODUCT MANAGER LAURA RUFFOLO PRODUCT ADVISOR (ACTING) LUCY SKEARD CATEGORY ADMINISTRATOR, WINES HOLLY GARNER CATEGORY ADMINISTRATOR VINTAGES
A YEAR IN REVIEW
Ontario Wines $423M, $446M, +6.8% +2.6% EUROPEAN WINES NEW WORLD WINES $541M, +3.2% ONTARIO WINES & VINTAGES
Ontario Wines NON-VQA WINES, $39.2M, 9.3% VQA WINES $107M, 25.3% VQA VINTAGES$ 22.3M, 5.3% ICB, $254M, 60.2% TOTAL ONTARIO WINES NET SALES $423M,+6.8%
CUSTOMERS ARE DRINKING MORE ONTARIO WINE
CONSUMERS ARE BUYING MORE VQA WINE
REDS CONTINUE TO DRIVE VQA SALES CAB- MERLOT $14.4M +9.1% BACO NOIR $6.3M +11.2% PINOT NOIR $5.1M +17.3%
VQA WHITES ARE BACK ON THE RISE RIESLING $14.1M +6.7% PINOT GRIGIO $5.5M +14.7% SAUV BLANC $4M +23.8%
IT S ALL ABOUT FLAVOUR
VALUE-CONSCIOUS CUSTOMERS ARE LOYAL TO ICB WINES +10.3% +10.8% BAG-IN-BOX $106.4M 750ML $47.4M
VINTAGES REMAINS A KEY VQA GROWTH DRIVER PROGRAM DRIVERS $22.3M +7.6% $11.1M +4.8% $10.9M +10.9% VINTAGES FRONT LINE ESSENTIALS
VINTAGES VQA IS GROWING IN ALL SUBSETS +12.5% +3.8% +4.7% +49.7% RED WHITE ROSÉ SPARKLING
DIRECT DELIVERY PROGRAM DRIVES REGIONAL SALES IN KEY MARKETS LAKE ERIE $132K +121% PRINCE EDWARD COUNTY $545K +35% SOUTH COAST $266K +220%
OUR WINE COUNTRY BOUTIQUES ENGAGE CUSTOMERS WITH VQA NEW OWC BOUTIQUES +9.6% TOTAL OWC BOUTIQUES +7.4% TOTAL LCBO +5.0%
WE HAVE A BIG YEAR AHEAD!
Ontario Wines Total VQA +4.8% +6.2% +3.4% +4.4% +6.8% ICB NON-VQA VQA WINES VQA VINTAGES TOTAL ONTARIO WINES NET SALES $444.9M, +5.4%
ENHANCE THE VQA IN-STORE CUSTOMER EXPERIENCE
CONTINUE TO ENGAGE STORE STAFF WITH ONTARIO WINES
5.6% ANOTHER BANNER PERIOD 7
ONGOING SUPPORT FOR LOCAL WINERIES
WHAT WE NEED FROM YOU!
OPPORTUNTIES FOR GREAT QUALITY WINES INNOVATION IN ALL AREAS RIPE, ROUND REDS ON-TREND SINGLE VARIETAL WHITES WINES WITH REGIONAL APPEAL
HOW TO FIND SUCCESS AT THE LCBO Varietals and styles Ontario does best New products that offer exceptional price/value Support LCBO programs and new initiatives Come prepared with an exit strategy
Ontario Wines 1 2 3 VQA GROWTH is an LCBO priority ENHANCE the VQA in-store customer experience OPPORTUNITIES for quality wines that over deliver
EUROPEAN WINES IGOR RYJENKOV MW CATEGORY MANAGER, EUROPEAN WINES
European Wines - European Team - 2014-15 results - Key Drivers: Italy, France, others - 2015-16 plan - Key Initiatives - Needs Letter Highlights - Growth Tips Recap
IGOR RYJENKOV MW CATEGORY MANAGER BOBBY PANCHU PRODUCT MANAGER THE EUROPEAN WINES TEAM LIAM DOHERTY ATEGORY ADMIN
European Wines Net Sales $446M,+ 2.6%, +11.5M 7% 6% % 6% ITALY FRANC E 52% GERMA 25% NY PORTU GAL
ITALY KEY DRIVERS
Subsets Contribution Valpolicella 11% ITALY RED +4% Ripasso 12% Blend 13% Chianti 14% Montepulciano 14%
Subsets Contribution Chardonnay 3% Moscato 4% Other 5% Soave 7% Blends 22% ITALY WHITE +1.5% Pinot Grigio 59%
FRANCE KEY DRIVERS
Subsets Contribution Other 20% South Cabernet Sauvignon 8% Bordeaux Blend 10% Cotes du Rhone 13% Beaujolais 13% South Blend 16% Merlot 20% FRANCE RED -3.8%
Subsets Contribution Other 15% Burgundy Chablis 6% South Sauvignon 7% Rhone White 8% FRANCE WHITE -2.7% Burgundy Chardonnay 12% South Chardonnay 20% South blends 32%
European Wines +7.8% +$1.5M +8.1% +$3M +17% +$1M
+4.3% $465.4M European Wines
European Wines GROW FROM WITHIN: BIG MATURE CATEGORIES Re-energize sets like Ripasso, Soave and Southe France Blends
European Wines GROW FROM WITHIN: SMART PROMOTIONS Deeper, smarter LTOs/BAMs Use the entire year Licensees and above-the-line promotion
European Wines GROW FRANCE Stabilize the mature sets Introduce new hardworking sets and SKUs
European Wines FINE TUNING: SETS RETURN AND RESHAPING Re-introduce Medoc Beef up St. Emilion New levels in CdRhone and Rhone Crus New subsets: Kabinett, Sherry, Other
European Wines FINE TUNING: PRICE LADDERING Introduce the price steps in Cremant Review and adjust Bordeaux Review and fill-in CdRhone and Rioja
European Wines FINE TUNING: DISRUPTOR BRANDS & WINE CREDENTIALS Seek the brands that bring new customers: Highly successful elsewhere Disruptor brands and/or Wines with true credentials in category context
European Wines ENGAGE RETAIL EVEN MORE Greater engagement of the entire retail core, starting with PCs: - Collaboration with KRG on Consultants Development days - LCBO portfolio tastings - WINES Newsletter
KEY INITIATIVES ALL-PLAY, NO MONO-CATEGORY THEMATICS SUPPORT FOR SHARED & MINI THEMATICS P8 ITALY MT
European Wines SOAVE FRANCE SOUTH RED EASTERN EUROPE
European Wines SALES OBJECTIVES NEED AGGRESSIVE PROGRAMMING TO MEET THE SALES TARGET BE STRATEGIC AND TACTICAL ABOUT YOUR PROMOTIONS LICENCEES AND ABOVE- THE-LINE WORK ARE OPPORTUNITIES
THANK YOU
NEW WORLD WINES GREG TRANAH CATEGORY MANAGER, NEW WORLD WINES
NWW SALES AND TRENDS IN 2014-15 FISCAL PLAN FOR 2015-16 SHARE INITIATIVES 2015-16 3 KEY POINTS
GREG TRANAH CATEGORY MANAGER LINDA STRYSIO INVENTORY MANAGER COURTNEY DAWSON PRODUCT MANAGER NWW TEAM TONY D ALESSIO INVENTORY REPLENISHMENT MANAGER LIZ SILVA CATEGORY ADMIN DIMITRIOS SPIROU ORDER SPECIALIST
NWW 2014-15 NET SALES $540M; GROWTH 3.2%; +$16.9M LITRES 42.6M, +2.8% NWW NET SALES MILLIONS $545 $540 $535 $530 $525 $520 Net Sales $12.63 Litres $12.68/L 42.9 42.7 42.5 42.3 42.1 41.9 41.7 41.5 41.3 41.1 LITRES MILLIONS $515 2013-14 2014-15 40.9
NWW 7% STANDARD 37% 56% PREMIUM DELUXE
NWW 538 500 Active SKUs SKUs +69 +95 +91-81 -133 2013/14 2014/15 2015/16
NWW 103 473 1,266 54.3 7% 45.6 3% Evaluated, Not Tasted NEW BRANDS BRAND
NWW ARGENTINA +18% SOUTH AFRICA +49% AUSTRALIA +15% CHILE +19% NEW ZEALAND +48%
CALIFORNIA 2% 1% 1% 4% 3% 6% 10% 16% 27% 29% AUSTRALIA CHILE ARGENTINA SOUTH AFRICA NEW ZEALAND ROSE FLAVOURED SPARKLING PNW
NWW 1 $95M,+7.4% 2 $118.3M,+5.9% 3 $54M,+9.5% CABERNET SAUVIGNON LY, +$6.59M; 18% of NWW RED BLENDS LY+$6.56M; 22% of NWW SAUVIGNON BLANC LY, +$4.6M; 10% of NWW
NWW 1 $46M, 2 $19M, 3 $19M, SHIRAZ/SYRAH -5.8% LY, -$2.8M WHITE BLENDS -6.5% LY, -$1.3M THE TRIMMINGS -6.5% LY, -$1.3M
NWW NET SALES $558M, +3.4% $/L $12.75, +$0.07 LITRES 43.8M, +2.7%
NWW CALIFORNIA 2% 1% 1% AUSTRALIA 3% 6% 4% 29% CHILE ARGENTINA SOUTH AFRICA 10% NEW ZEALAND 16% 27% ROSE FLAVOURED SPARKLING PNW
MERCHANDISING PLAN PROMOTIONS
NWW NEXT GENERATION AUSTRALIA
NWW CORE VARIETALS RED BLENDS MERLOT CAB SAUV SAUV BLANC WHITE BLENDS
NWW DELUXE PREMIUM STANDARD
MERCHANDISING INITIATIVES GIFTING
NWW CALI-CAB P12 MINI- THEMATIC
NWW THE DISOUNT ENVIRONMENT Limited availability P09-10 = category leaders TIPS ON LTO APPLICATIONS Discount12-20%; $2+ Couple with display/in-store tastings
NWW SUPER SALES - NWW is #1 GROW SHARE OF PREMIUM BRANDS EXCITEMENT FOR CUSTOMERS
NWW 1 2 3 CALIFORNIA IS KING KEEP PUTTING CUSTOMERS FIRST AUSTRALIA 0% GROWTH TARGET GREAT VALUE AT EVERY PRICE POINT
Q & A