trade day 2017 beer & cider · 2017. 5. 9. · the numbers fiscal 16/17 cases received net...
TRANSCRIPT
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 [email protected] 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• [email protected]
Available Resources
Contingency plan for grocery
www.lcbonegotiations.com
Questions?