Moving Forward Together Kathy Cannon Director, Vintages
Wines Strategy Growth from big categories Drive foot traffic Big volume Focus on local Create excitement Increase visits Assortment and exclusivity Showcase premium
Wines Sales = 37% Share SPIRITS BEER & CIDER WINES 37%, -0.4% 40%, -0.3% Total Wines $1.97B 23% +0.9%
Wines: $1.97B $1.45B +4.7% $512M +7.6%
Vintages Share Vintages (26%) LCBO Wines (74%)
6% 2% SPARKLING/CHAMPAGNE +0.26% ROSE +0.14% 36% WHITE -0.02% Everything s Rosie and Sparkling 56% RED -0.39%
Different Blend Wines Vintages 5% Ontario -0.3% Ontario +1.0% 30% New World +0.4% New World -0.3% 39% 50% European -0.7% 31% 45% European -0.1%
Vintages Retail Programs Strong! 50% Share $19m 45% Share $18m 5% Share $2.6m
Top Growth Drivers Canada (Ontario) $456M 8.0% Italy $340M 4.8% USA (California) $308M 15.5% New Zealand $68M 9.0% Spain $63M 15.2% PNW $17M 28.2%
EUROPEAN WINES
We Have Different DNA Spain 8% (+0.2%) Italy 56% (-0.2%) France 25% (-0.4%) Spain 13% (+0.6%) Italy 43% (+0.3%) France 39% (-0.7%)
ITALY
Millions $350 $340 $330 $320 $310 $300 $290 $280 $270 An Upward Trend Net $ Sales +2% +4% +5% +3% 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016
Consumers Shifting to Premium Vintages, $93M, (+9%) LCBO Wines, $250M, (+3%) Vintages aggressive sales growth
Growth Strategy - LCBO Wines Re-engaging Customers Primitivo Familiar Premium Producers Ripasso & Chianti Modern Packaging
Growth Strategy - Vintages Premiumize $15-$20 Tuscany Emerging Regions Italian Whites Ultra Premium
FRANCE
France Losing Share -3.0% +3.6% Total Sales $1.97M +1.3%
Vintages Gaining from LCBO Wines Vintages, 41% (+0.9%) LCBO Wines, 59% (-0.9%) Portfolio shift to lower pricing in Vintages
Growth Strategy - LCBO Wines Reversing the Trend Fill Portfolio Gaps Refresh high volume red & white blends Affordable France Mini Thematic
Growth Strategy - Vintages Shift the Portfolio From Classics to Front Line Southwest: South of France Entry Bordeaux Rhone Burgundy
SPAIN
Spain is on Fire $70 $60 $50 +10% Net $ Sales +8 % +13% +15% Millions $40 $30 $20 $10 $0 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016
Spain is on Fire +12% Total Sales: $6.2M +15.2% +20%
Customers are Shopping Premium Vintages (44%) LCBO Wines (56%) Largest growth $14+ Price Bands
Growth Strategy - LCBO Wines Focus on Current Portfolio Strengthen Existing Brands Refreshing White Wines
Growth Strategy Spain Vintages Education & Premiumization Highlight lesser known Regions Releases $14.95 - $40 Build Collaborative SKUs
NEW WORLD WINES
Our DNA is Different New Zealand 5% +0.3% New Zealand 18% +0.3% Chile 6% +0.4% Australia 11% -0.1% Chile 16% -0.2% Australia 28% -0.6% California 50% -0.3% California 34% +0.7%
Top Growth Areas LCBO Wines California 10% New Zealand 24% PNW 32% Vintages California +6.5% New Zealand +11% PNW +30.8% Chile +21.9% Australia +6.3% Argentina +3.4%
CALIFORNIA
California the Superstar! +19.0% +12.5% +13.8% +9.1% $350 $300 $250 $200 $150 Millions $100 $50 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 $0
Brand Dominant Category Wines Top Ten Brands 71% Share Vintages Essentials 60% Share
California Market Share Vintages 40% (-1%) LCBO Wines 60% (+1%) Share over-indexed in Vintages
Growth Strategy - LCBO Wines Continue Driving Growth Expand Portfolio Innovative Seasonal Listings Core SKU Promotion
Growth Strategy - Vintages Maintain Interest in Retail Release Program Premium & Iconic Canadian Dollar Reduce Quantities Zinfandel Diversity in White Wines
AUSTRALIA
Total Australia 1.3% 5.7%
Australia Market Share Vintages 15% (+0.9%) LCBO Wines 85% (-0.9%) Indexed higher to LCBO Wines and Big Brands
Growth Strategy - LCBO Wines Re-engage Customer with Australia Revitalization of Portfolio Core SKU Promotion
Growth Strategy - Vintages Re-engage Customer with Australia Classic Varietals & Diversity of Wines Promote as Trendy & Fashionable Strategic Pricing ($15-$25)
ONTARIO
Ontario Market Share Vintages 5% (-0.3%) LCBO Wines 95% (+0.3%) Share Shift to LCBO Wines
Strongest Growth in VQA +8.6% +8.5% +6.5% VQA ICB Non VQA
Growth Strategy LCBO Wines VQA Continue Growth Momentum Local Signature Varietals Increased Access Engaged Staff
Growth Strategy Vintages VQA World Class Cool Climate Producer Showcase Quality Signature Varietals Strong Sell- Through
Growth Strategy - Non VQA Everyday Great Value: ICB Innovation: Non-VQA
KELLY TAYLOR Director, VINTAGES Operations
VINTAGES MERCHANDISING UPDATE
What s New? All products merchandised by country Releases, Essentials and residual all in one section Dedicated ends for program wines and features
Essentials New Releases Residual 55
Should I move this super premium Amarone from the last release to the bottom of the shelf? 56
I don t have room above the release products to merchandise all my Essentials. Should I delist some? 57
Should all Essentials be double merchandised? 58
Feature End Priorities A & B feature
Feature End Priorities Program Wines Wine of the Month $17 wine
Inline On-Shelf Signage
Inline On-Shelf Signage
Generic Thematic Backer Card
The Rollout 200+ store managers and Product Consultants Fully implemented instore June 14
Next Steps Additional stores (sections in smaller stores) Rollout complete by August 2016
Next Steps Vintages Merchandising Guide Fall 2016: Merchandising with varying levels of inventory Merchandising Program Wines Displays during peak occasions
New Wines Release Guide Carolyn O Grady-Gold Director, Wines
New Products Today What Works?
New Products Today What Doesn t?
New Products Today Opportunities
The Idea 5 releases/year Ignite passion for what s NEW Retail focused catalogue Set products up to succeed Integration of delists
Buying Approach Measure, Review, Adapt Communicate/ Activate Needs Assessment Tender/ Selections Develop Launch Plans
Needs Assessment 12+ months advance
Tenders / Selections 8-10 months advance
MUST TRY BUYER S PICK TACTICAL RELEASES Develop Launch Plans 6-8 months advance
Communicate / Activate 1 month in advance
Communicate / Activate
Measure, Review, Adapt Continuous
Benefits
Timelines FISCAL 2016-17 # of Products P03 SUMMER 40 P06 FALL 35 P08 HOLIDAY & WINTER 65 P11 - WINTER 10 P13 - SPRING 45