Grocery Operations. Beer & Cider in Grocery April 25, Chris Dini Director of Grocery Operations

Transcription

1 Grocery Operations Beer & Cider in Grocery April 25, 2017 Chris Dini Director of Grocery Operations

2 Team and the Players Program Overview Tranches Wine Boutiques Agenda The Numbers Sales Fill Rates Making Products Available Recalls Pain Points & Adding Value Resources Available

3 Grocery Operations Team LCBO: Mandesh Dosanjh SVP Supply Chain Chris Dini Director Leanne Rhee Account Management & Vendor Relationships Jamie Fazekas Policy & Operations IT Cross Functional team Logistics QA Barb Chapple AGCO

4 Supply Chain Division Mandesh Dosanjh Mandesh Dosanjh Logistics Supply Chain Supply Chain Retail Service Centres Traffic & Customs Space Management Measurement & Analysis Specialty Services Grocery Operations Quality Assurance Laboratory Quality Services

5 Regulatory Framework

6 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

7 Responsibilities 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

8 Product Eligibility Beer & Cider The Rules 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

9 Authorization Rollout By tranche Beer Initial allocation of 60 authorizations 13 companies Cider added June 24 th, 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. 15 th 2015 Oct. 28 th 2016 Summer 2017

10 Tranche #1 & #2 Allocations Grocer B&C B,C&W 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&W 1 U U 1 R 2 R 2 R 1 R TOTAL 58* 35 U, 35 R

11 Tranche #3 Beer & Cider East West North GTA Total Large Independent Total

12 Wine Boutiques Bonus Beer OWNERS VQA wine manufactured by nonowners 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

13 Wine Boutiques & Bonus Beer Current Locations 3. Collingwood 5. Pickering 7. Bowmanville 4. Brampton 6. Whitby 2. Brantford 1. London

14 Beer & Cider Maximum under regulation

15 The Numbers Fiscal 16/17 Beer Cases Received Net Sales ON Small producers 232,921 $11,851,361 ON Large producers 510,928 $21,328,021 Import 313,143 $14,959,789 TOTAL BEER 1,056,992 $48,139,171 ON Small producers 15,189 $945,800 ON Large producers 11,069 $635,818 Import 34,347 $2,057,356 TOTAL CIDER 60,605 $3,638,974 WINE 90,051 $13,347,937 GRAND TOTAL 1,207,648 $65,126,082

16 Product Type Market Share In dollars Beer 74% Cider 6% Wine 20% BEER CIDER Imports 31% ON small 25% ON small 26% ON large 44% Imports 57% ON large 17%

17 Fill Rates Fiscal 16/17 Source Cases Ordered Cases Shipped LCBO 546, ,686 OTHER 682, ,057 Total 1,229,412 1,160,743 LCBO 94.9% OTHER 94.1% Total 94.4%

18 Existing eligible beer & cider products: Making Products Available The Process 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

19 Product Recalls Record Year CLASS 1 CLASS 2

20 Product Recalls

21 Product Recalls Bad start? 4 Recalls to date + 2 currently under investigation

22 1) Out of market for days to weeks or longer Product Recalls Impact on your Business 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

23 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

24 Sensory Evaluation Risk Mitigation To identify faults only and prevent defective product from going to market

25 Grocer Top 3 Pain Points 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

26 How to add value in the grocery channel 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

27 LCBO s commitment for continuous improvement Enabling a smooth transaction Collecting feedback from suppliers and grocers Continuous improvement through IT enhancements EDI transactions GMS portal enhancements System & Process enhancements

28 Available Resources Grocery Website Online webinars Procedure Manual Power point presentations Key Contacts Authorized store locations Regulation 232/16 Grocery Operations team

29 LCBO Resources Available to You Questions?

30 Contingency plan for grocery

31 Questions?