Beer & Cider Category Session Chris Robertson, Director, Beer - - PowerPoint PPT Presentation

Chris Robertson, Director, Beer & Cider, LCBO

LCBO PSM Trade Symposium 2017 April 25, 2017

Beer & Cider Category Session

Beer & Cider had Another Good Year

$ 906 Million + 5.5% to LY + 2.7% to plan + 2.9 % to LY (volume)

In an Evolving Marketplace

Beer Market

Share 2016

659 Stores 29% Share 450 Stores 70% Share 117 Stores 2% Share

Top Trends in 2016

New Products Drive Growth

$45 million in sales last year Particularly important in craft beer Seasonal listings account for about 1/3 of all SKUs

New Products are Being Driven by the Local Industry

Almost 1,600 new submissions Resulted in almost 400 new products Increase from 31 to 133 Local breweries in past five years Now over 200 craft breweries

• perating in Ontario

Local Craft Beer is the Fastest Growing Category

Sales increased by 27% in 2016 Local craft beer accounts for 10.5% of the sales Top five local craft breweries account for about 50%, but grew by only 1.3%

Pale and light lagers account for 27% of SKUs, 76% sales The LCBO carries over 70 Beer Styles

Consumer Tastes are Evolving

This Year’s Plan

+ 1.9%

In net dollars

To offer the best Beer & Cider Experience in the Marketplace

Offer the best craft beer assortment Deliver consistent and high service levels Enhance the shopping experience Establish the LCBO as the ‘Beer Experts’

Four Core Principles

Focus on newness

First-to- market, exclusive beers High SKU churn through seasonal releases Popular brand innovation

Support Local

Strategy 1: Drive craft beer loyalty by

• ffering the best

assortment

Customer- centric, merchandising

Retail Beer Experts Gifting E- commerce 8 pack carrier

Strategy 2:

Enhance the Customer Experience

Improve product turnover

Vendor Collaboration Exit Strategies Centralized assortment

Beer is a Top Priority

Trends

Big Brands

Mainstream $210 million +2.4% Domestic +1.8% Import +3.9% Premium $458 million +4.9% Domestic +2.6% Import +7.6%

Growth of Craft

Total Craft Sales +12.6%

• Import -7.7%
• Macro -3.2%
• Ontario Independent

+30.5%

Growth of Craft

Increasingly diverse styles, sales trends driven by consumers and innovation Top Five: American IPA +32% Growth: Blonde Ale NA Lager

• 1%

Session IPA American Pale Ale

• 7%

Red Ale Kolsch +59% Saison Czech Pilsner +3% Sours

• Trend to tall cans

continues, singles are +11% and multi +15%

• Craft & Cider see higher

tall can sales

• Bottles trending -8%
• 355ml cans still relatively

small and growing +2.4%

Formats

Single Tall Cans, $370 Multi Tall Cans, $202 Multi Bottles, $144 Single Bottles, $38 Short Cans, $32 Rolling 13 Sales $ - 000,000’s

Cider

Total Cider +9% to $79 million

• Flavoured/Traditional +6%
• Ontario Craft +39%

Trend is to less sweet

• Sweeter liquids are -1.4%,

less sweet are +25%

Assortment Priorities and Planning

Mainstream & Premium

• Competitive assortment
• Maintain SKU count
• Breadth not additional formats
• Bring brand and partnerships to life in-store
• Impactful promotions

• Higher churn with new products

and seasonal releases

• Import – maintain assortment size,

look for new opportunities – brand, format, packaging

• Ontario – looking for craft customer

appeal, store sales productivity and sustained growth

• Effective execution

Craft

Cider

• Maintain SKU count in

Flavoured/Traditional

• Reflect trend to less sweet
• Expand assortment of

Ontario Craft

• Seasonal opportunities

Assortment Planning

• Innovation schedule with

calendar for product releases and volumes

• Upcoming years promo plan
• Planned delists

BEER AND CIDER SEASONAL PROGRAM OVERVIEW

What is the Seasonal Beer Program

• Reflecting seasonal diversity

What to submit in the program

• How to be successful with

submissions Overview of Submission Process

• How the program works

Overview of Seasonal Call Program

Follows the natural seasonal progression

• Beer Styles appropriate to the season

Part of the specialty beer program

• 100 top craft beer stores

Fast Sell through

• Appropriate Product format

What is the Seasonal Beer Program?

Review the seasonal call requirements

• “Best in Class” Products

How to be successful

• Submit an appropriate product
• Meet LCBO requirements
• Commit to program deadlines

Chances of selection

• ~1 : 10 based on current submission

volumes

What to Submit into the Program

Review Call Submissions Select shortlist for tasting panel Evaluate tasting panel results Final selection and approval NTP issued

Overview of Submission Process

OCB BEER BUYING PROGRAM

Permanent Listings

• Existing Suppliers
• New Suppliers

Seasonal Listings

• All Suppliers

Cider Programs

• All Import & Domestic, New

Ontario Cideries, Ontario Craft Specialty

OCB Beer & Cider Programs

Trade Day 2017- Successful Submissions/Best Practices to Gain a Listing

 Best Practices to gain a Listing  Permanent Listing  Seasonal Listings  New Brewery Listing

Trade Day 2017 – LCBO – New SKU’s

Consumers Demand for New SKU’s Importance of New SKU’s to the LCBO Refreshing LCBO’s Portfolio

Trade Day 2017 By the Numbers, and Notes

By The Numbers How the Numbers Affect Listings Following program timelines Niss/Retail Quotes Growler Program

Chris Robertson Mark Wilson John Tyler Neal Boven

Thank You!