L CBO & V I NT AGE S T RADE S YMPOSI UM Ma y 14, 2012 W E - PDF document

5/18/2012 T ake s yo u to a map - list o f sto r e s Go ing F o r war d 18

5/18/2012 T o p 3 T hings to Re me mbe r  Suc c e ssio n Pla nning a nd L e a de rship De ve lo pme nt  Re fine L CBO W I S a nd V I NE NT AGE S purc ha sing Stra te g ie s  I mple me nt DCM V I S S S & P U NT AGE AL E RCHASI NG Sha ri Mo g k-E dwa rds Vic e Pre side nt, Me rc ha ndising 416 365 5872 sha ri.mo g k-e dwa rds@ lc b o .c o m 19

5/18/2012 Ove r all Visio n Disc o ve r o ur la te st with V I NT AGE S Mandate T o pro vide o ur c usto me rs with the o ptimum p p a sso rtme nt o f fine wine a nd pre mium spirits with a n inte nse q ua lity/ va lue fo c us a t e ve ry pric e po int a nd a t e ve ry c usto me r to uc h po int 20

5/18/2012 F isc al 2011-12 Re sults F uture s Virtua l $6.5M $5.4M 2 5% Sha re 2.5% Sha re 0 5% Sha re 0.5% Sha re Cla ssic s $8.4M F rontline 2% Sha re $243.7M 58% Sha re VSO $2.4M 1% Sha re E sse ntia ls $155.3M 35% Sha re Pro g ra m Pro duc t Stra te g ie s $1000+ $15 $20 - $100 $75+ $15 Nove l/ L imite d L imite d Custome r F Custome r F avor avor ite s ite s Volume Dr ive r s $30+ $75 Ic onic / Supe r - Pr e mium $15-$100 Ic onic / Unique / Nove l 21

5/18/2012 Ho w is V I S g o ing to a c hie ve this? NT AGE 1. Cle a r pro duc t stra te g ie s fo r e a c h pro g ra m 2. Driving sa le s o f ne w pre mium pric e po ints a t 2. Driving sa le s o f ne w pre mium pric e po ints a t re ta il. 3. I nc re a se d fo c us o n the o n-line b usine ss 2012 -13 T o p T hr e e I nitiative s 1. E xit Stra te g y fo r a ll pro g ra ms 2. Ce ntra l Allo c a tio n Stra te g y Upda te 3. Upda te s to b usine ss pra c tic e s 22

5/18/2012 Mo re F o c use d E xit Stra te g y  De ve lo p a nd e na c t a disc ipline d re vie w to ide ntify slo w mo ving pro duc ts a t re ta il a nd wa re ho use h  E na c t re b a te s a nd sub se q ue nt ma rkdo wns ro utine ly  Co nside r pro mo tio na l e xit pro g ra ms to flush o lde r inve nto ry Mo re F o c use d E xit Stra te g y At Re ta il:  Upda te d ma rkdo wn po lic y is mo re stra ig htfo rwa rd a nd in line with L CBO  Go a l to re duc e the a g e d inve nto ry b y 10% b y e nd o f fisc a l 23

5/18/2012 Ce ntr al Allo c atio n Mo dule U pdate Wha t is it?  A distrib utio n a nd a llo c a tio n push syste m tha t g e ne ra te s c usto m sto re o rde rs b a se d o n fo re c a ste d sa le s fo r pro duc t se t/ sub se t/ pric e Be ne fits  Re ma ining sto c k is a uto -re ple nishe d to sto re s with o ptima l se ll-thro ug h  Co nside ra tio n g ive n to re spe c tive sto re c a pa c ity a nd c urre nt a sso rtme nt Ce ntr al Allo c atio n Mo dule U pdate Sta tus  Pre wo rk to de te rmine syste m re q uire me nts a nd sig n  Pre wo rk to de te rmine syste m re q uire me nts a nd sig n o ff c o mple te d  Pro je c t kic k-o ff c o mme nc ing Q1 2012  Co mple tio n a nd imple me nta tio n pla nne d fo r Q3/ Q4 Ne xt Ste ps  T T ra de fo c us g ro up will b e fo rme d to wo rk tho ug h d f ill b f d t k th h future a llo c a tio n me tho do lo g y, a nd to e nsure fe e db a c k a nd sug g e stio ns c o lle c te d  Co mmunic a tio n to T ra de re g a rding pro g re ss a nd future pro c e sse s will b e g in Q2 24

5/18/2012 Upda te s to Busine ss Pra c tic e s 1. Bo ttle we ig ht c ha ng e s to 420g fo r E sse ntia ls $15 a nd unde r Ja nua ry 2013 y  L o o king to V I S fo r a le a de rship NT AGE ro le 2. V I S E sse ntia ls Sa le s T a rg e ts fo r fisc a l NT AGE 2012-13 will re ma in the sa me . Ne xt re vie w c yc le with L y CBO Spring 2013-14 p g 3. I nc re a se in pro mo tio na l fe e s  3-4%  Ja nua ry 2013 imple me nta tio n Upda te s to Busine ss Pra c tic e s 4. Shift in the F OOD & D RI NK ta rg e t pric e fro m $15 to $17 $15 to $17  Be g a n with April E ditio n o f F o o d & Drink  Ve ry suc c e ssful re sults 5. Re duc e d the numb e r o f sub missio ns fro m 25 to 20: a a . Re duc e time / re so urc e s fo r T Re duc e time / re so urc e s fo r T ra de ra de b . Hig he r q ua lity sub missio ns c . Gre a te r a b ility fo r V I S te a m to NT AGE re vie w e a c h sub missio n d. Mo re stre a mline d, a b ility to me e t re turn de a dline s 25

5/18/2012 V I S One -o n-One Ope n Ca ll NT AGE  Ne e ds Ca ll c lo se d Ma y 10  By Ma y 29 yo u will kno w if:  Yo u ha ve a me e ting  Y h ti  Wha t pro duc ts we ha ve se le c te d fo r yo u to pre se nt  T he time o f yo ur me e ting T o p 3 T hings to Re me mbe r  T his is a ye a r o f c o rre c tio n  V I S a sso rtme nt is spe c ia l NT AGE  I mple me nta tio n o f Ce ntra l Allo c a tio n Mo dule 26

5/18/2012 V I S E AN W I NT AGE U ROPE NE S Co lb y No rring to n Ca te g o ry Ma na g e r, E uro pe a n Wine s 416 365 5876 c o lb y.no rring to n@ lc b o .c o m 2011-12 Sale s Re sults T T Y Y Plan Plan Var Var % Plan % Plan Var Var % L % L Y Y E UROPE AN WINE S $122.7M $130.1M -5.6% 8.0% $61 2M $61.2M $60.7M $60 7M 0 8% 0.8% 8.4% 8 4% E E SSE SSE NT NT IAL IAL S S BORDE AUX $2.3M $1.4M 70.5% 35.3% F UT URE S T otal $ 186.2M $ 192.1M - 3.1% 8.4% 2012-13 Sale s Plan 2012-13 Plan 2011-12 Sa le s 2012-13 Plan 2011-12 Sa le s % Chg % Chg. $127.1M $119.5M 9.1% E UROPE AN WINE S $52.3M $48.7M 7.3% E SSE NT IAL S BORDE AUX $1.8M $2.3M -22.8% F UT URE S T otal $181.2M $167.6M 8.1% 27

5/18/2012 E ur o pe an V I S Busine ss Br e akdo wn NT AGE GE RMANY AUST RIA/ HUNGARY PORT UGAL GRE E CE $1.8M $881K $7.5M $679K 3% 18% - 10% 19% 1% Shar e 0.5% Shar e 4% Shar e 4% Shar e 0 4% 0.4% OT HE R $914K - 37% SPAIN 1% Shar e $14.6M - 1% 8% Shar e IT AL Y $75.8M 11% 43% Shar e F RANCE $75.0M 9% 42% Shar e E ur o pe an V I S Busine ss Br e akdo wn: NT AGE Re gio nal T OT AL Bor de aux 13% T T OT OT AL AL Bur Bur gundy gundy 6% T otal othe r 37% T otal Ve ne to 10% T otal T usc any 14% Champagne T otal 5% Spain - Re d T otal Rhone T otal 8% 7% 28

5/18/2012 T o p Busine ss T r e nds 1. I ta lia n Re d Wine s 2. F re nc h Re d Wine s 3. E uro pe a n Spa rkling Wine s I talian Re d Stro ng I ta lia n Re d sa le s - $41.0M, +13.1%  Pie dmo nt Ba ro lo : 21%  Ve ne to Ama ro ne : 36%  Ve ne to Ripa sso : 12%  T usc a ny/ Chia nti: 23% Ag g re ssive g ro wth pla nne d a g a in fo r this fisc a l  IT IT AL AL Y RE Y RE D PL D PL AN T AN T Y:12.4% Y:12 4%  Pie dmo nt Ba ro lo : 11%  Ve ne to Ama ro ne : 22%  Ve ne to Ripa sso :14%  T usc a ny/ Chia nti:14% 29

5/18/2012 I talian Re d L o o king fo r  Ba ro lo a t $40 60  Ba ro lo a t $40-60  Gre a te r inve stme nt in pre mium Chia ntis: $25-35  Ama ro ne a t $40-70  Mo de stly inc re a sing pre se nc e o f pre mium pric e d Ama ro ne : i d A $70-100 F r e nc h Re d  So lid F re nc h Re d sa le s $30.0M, +7.4%  Bo rde a ux – Me do c : 29%  Bo rde a ux Po me ro l/ St. E m: 30%  Burg undy Co te de Nuits: 25%  Rho ne So uth: 20%  Ste a dy g ro wth pla nne d fo r this fisc a l  F RANCE RE D PL AN T Y:7.1%  Bo rde a ux Me do c : 8%  Bo rde a ux Me do c : 8%  Bo rde a ux Po me ro l/ St. E m: 7%  Burg undy Co te de Nuits: 6%  Rho ne So uth: 7% 30

5/18/2012 F r e nc h Wine L o o king fo r  $20- $35 Bo rde a ux $20 $35 Bo rde a ux  $20+ fro m Co te s de Bo urg , Co te de Bla ye , F ro nsa c , Co te de Ca stillo n, e tc  $25+ fro m Me do c & St. E millio n  2009 a nd 2010 vinta g e whe re ve r po ssib le  Burg undy wine s fo c use d b e twe e n $30-60+ g y $  Cô te s du Rhô ne , a nd CDR Villa g e s pric e po ints will shift fro m $14-$20 to $18-$25 Spar kling Wine  Spa rkling wine s ha d a n unpre c e de nte d ye a r o f g ro wth: 21% unpre c e de nte d ye a r o f g ro wth: 21%  Cha mpa g ne : 37%  F ra nc e : -7.5%  I ta ly: 33%  Spa in: 29%  Ag g re ssive g ro wth pla nne d a g a in fo r this fisc a l: fo r this fisc a l:  SPARKL ING PL AN T Y:9.1%  Cha mpa g ne : 9%  F ra nc e : 8%  I ta ly: 10%  Spa in: 12% 31

5/18/2012 Spar kling Wine L o o king fo r  Sma lle r Cha mpa g ne ho use s  F o c using o n the pre mium a nd supe r se g me nt  No n-vinta g e wine s in the $50-80 Othe r K e y I nitiative s  Gro w Spa nish Wine Sa le s  Gro w Spa nish Wine Sa le s  Gro w Po rtug ue se Wine Sa le s  Cla ssic s Ca ta lo g ue Mo ving Online  I nc re a se o f Virtua l Offe rs 32

5/18/2012 Gro w Spa nish Wine Sa le s  Slo w ye a r L Y -5.47%  F o c us fo r Re ds:  Rio ja - $16-35  Ye c c la - $15-22  T o ro - $16-25  Jumilla - $15-22 J ill $15 22  F o c us fo r White s  Rue da - $15-20  NW Spa in - $15-22 Gro w Po rtug ue se Wine Sa le s  Slo w ye a r L Y -29% fo r ta b le wine s, a nd +17% fo r Po rt  F F o c us fo r Re d Wine s: f R d Wi  Do uro – $15-25,  Ale nte jo - $15-20  F o c us fo r White Wine s:  Vinho Ve rde - $15-20  We ll re vie we d wine s fro m le sse r kno wn re g io ns  F o c us fo r Po rts:  $18-30 fo r pre mium Rub y, L BV a nd T a wny style  Va lue -pric e d, o lde r de c la re d vinta g e s >$100 33

5/18/2012 Cla ssic s Mo ving ONL I NE  Mo ve a wa y fro m c a ta lo g ue fo rma t  Mo re fre q ue nt pro duc t re le a se s Mo re fre q ue nt pro duc t re le a se s  I nc re a se in numb e r o f wine s o ffe re d o ve r the spa n o f the ye a r  I nc re a se in pric e po ints  F F o c us o n ic o nic supplie rs a nd b ra nds o c us o n ic o nic supplie rs a nd b ra nds I nc re a se F re q ue nc y o f Virtua l Offe rs  Mo nthly virtua l o ffe rs o y ua o e s  I c o nic b ra nds a nd supplie rs a s we ll a s c o mpe lling uniq ue o ffe rs  Ple a se pre se nt us with ide a s tha t fit this c ha nne l, no pro duc t c a lls a re po ste d 34

5/18/2012 T o p 3 T hings to Re me mbe r  Co lla b o ra te with us o n stra te g ie s to  Co lla b o ra te with us o n stra te g ie s to g ra dua te c usto me rs into the mo re pre mium pric e po ints  L a rg e r a llo c a tio ns fro m truly I CONI C supplie rs supplie rs  I nte re sting va rie ta ls a nd b le nds V I S N E W W ORL NT AGE D W I S & S NE PI RI T S Da vid Ca c c io tto lo Ca te g o ry Ma na g e r, Ne w Wo rld Wine s & Spirits Po rtfo lio 416 365 5908 da vid.c a c c io tto lo @ lc b o .c o m 35

5/18/2012 2011-12 Sale s Re sults Var Var % % Var % Var % T T Y Y Plan Plan Plan Plan L L Y Y NE W WORL D $130.2M $130.2M $132.1M $132.1M -1.4% 1.4% 9.2% 9.2% WINE S S E SSE NT IAL S $93.8M $88.2M 6.4% 16.1% T ota l $224.0M $220.3M 1.7% 12.0% 2012-13 Sale s Plan 2012 13 2012- 13 2011 12 2011- 12 % Chg. Plan Sale s NE W WORL D $150.7M $137.1M 10.0% WINE S E SSE NT IAL S $114.6M $105.4M 8.8% T ota l $265.4M $242.5M 9.4% Ne w Wo r ld Wine s Sale s Br e akdo wn Othe r Spir its $21.7M South Afr ic a Califor nia $25.9M $6.6M 28.6% $81.6M 14.5% 9.1% 9.6% Shar e +18.4% 4.9% Shar e 2.9% Shar e 36% Shar 36% Shar e e Chile $13.9M 10.4% Spe c ialty 6% Shar e $14.8M 23.3% 6.5% Shar e Ar ge ntina $18.8M - 2.1% 8.3% Shar e Austr alia Ne w Ze aland $30.6M $27.8M - 4.2% +18.3% 13.5% Shar e 12.3% Shar e 36

5/18/2012 T o p Busine ss T r e nds 1 Ca lifo rnia 1. Ca lifo rnia 2. Pino t No ir 3. Sa uvig no n Bla nc Califo r nia T o p V I p S se t: $81M o r 20% o f V I $ NT AGE NT AGE S sa le s Gro wth Ra te : 18%; re d 18%, white 19%  Ca b e rne t Sa uvig no n - $41M,+22.5%  Cha rdo nna y - $16M,+23.1%  Zinfa nde l - $9M,+19% 37

5/18/2012 Califo r nia Pre mium Pric e b a nds (re d)  $30-40: +41%  $40-50: +65%  $50-100: +42%  $100+: +32% Oppo rtunitie s  Pino t No ir  Co o l c lima te re g io ns  Alte rna tive va rie ta ls – e .g . Pe tit Ve rdo t, Pe tit Syra h Pino t No ir Annua l sa le s: $13.0M, +31%  I I nc re me nta l sa le s we re $3 millio n nc re me nta l sa le s we re $3 millio n Be st Pe rfo rma nc e  Ne w Ze a la nd: +47%  Ca lifo rnia : +15%  Ore g o n: +115% Oppo rtunitie s Oppo rtunitie s  E nha nc e d a sso rtme nt fro m re g io ns whic h spe c ia lize in Pino t No ir  Gro w the >$40 se g me nt 38

5/18/2012 Sauvigno n Blanc Annua l sa le s: $22 millio n, +15%  T he to p white va rie ty in te rms o f inc re me nta l g ro wth: $2.9 millio n Be st Pe rfo rma nc e  Ne w Ze a la nd +17%  Chile + 19%  Ca lifo rnia +20% Ca lifo rnia 20% Oppo rtunitie s  Gro w hig he r pric e b a nds, e .g . Ne w Ze a la nd >$20; Chile , So uth Afric a >$15 T o p 2012-13 I nitiative s 1. Gro w Austra lia n Wine s 2 De ve lo p Ne w Ze a la nd Be yo nd Sa uvig no n 2. De ve lo p Ne w Ze a la nd Be yo nd Sa uvig no n Bla nc 3. Gro w Spirits 4. E nha nc e Spe c ia lty Po rtfo lio 39

5/18/2012 Gr o w Austr alian Wine s Annua l Sa le s: $30.6 millio n  Ca te g o ry in de c line , e spe c ia lly white s  Gro wth pla nne d fo r 2012-13 De ve lo p Ne w Ze aland be yo nd Sauvigno n Blanc Annua l sa le s: $28M $ 8 T re nd: +18% Sa uvig no n Bla nc : 71% o f sa le s, Gro wth 17% Stra te g y  E nha nc e a sso rtme nt o f Pino t No ir, re d b le nds a nd o the r white va rie ta ls o the r white va rie ta ls  Hig hlig ht the se wine s to c usto me rs thro ug h re le a se c a ta lo g ue 40

5/18/2012 Gr o w Spir its Annua l sa le s: $11M T re nd: +15% Sc o tc h: 20% E a u de Vie : 11%  Offe r a n e nha nc e d a sso rtme nt  Gre a te r visib ility in re le a se c a ta lo g ue s  Mo re V I S e ve nts NT AGE Oppo rtunitie s  Bo urb o n  I rish Whiske y  L iq ue urs E nhanc e Spe c ialty Po r tfo lio Annua l sa le s: $15M T re nd: 23% Stra te g y  F o c us o n the ne e ds o f dive rse c o mmunitie s in Onta rio  T a rg e t spe c ific re lig io us a nd c ultura l o c c a sio ns  Offe r c o nsiste nt a va ila b ility o f hig h de ma nd ite ms O Oppo rtunitie s t iti  I de ntify pro duc ts tha t a re in de ma nd a nd no t c urre ntly a va ila b le  I mpro ve se rvic e le ve ls a nd a va ila b ility, e spe c ia lly le a ding up to ke y c ultura l e ve nts 41

5/18/2012 T o p 3 T hings to Re me mbe r 1. L 1. L a rg e r a llo c a tio ns o f hig h de ma nd a rg e r a llo c a tio ns o f hig h de ma nd Ca lifo rnia wine s 2. Pino t No ir fro m re g io ns a nd supplie rs who spe c ia lize in the g ra pe 3. Alte rna tive va rie ta ls a nd inte re sting b le nds V I S O PE NT AGE RAT I ONS Ca ro lyn O’ Gra dy-Go ld Dire c to r, V I S Ope ra tio ns NT AGE 416 864 7639 c a ro lyn.o g ra dy-g o ld@ lc b o .c o m 42

5/18/2012 Ope r atio ns  Pub lic a tio ns  L ic e nse e  Dire c t Sa le s  Spe c ia l E ve nts DI RE CT SAL E S - ONL I NE 43

5/18/2012 Dir e c t Sale s Online  Dire c t Sa le s On-line : Ne w sa le s pla tfo rm fo r a ll dire c t pro g ra ms dire c t pro g ra ms  L a unc h Da te : E a rly F a ll Pr o gr ams  V I S Sho p Online ; NT AGE No w: Online Co lle c tio n  Cla ssic s  Bo rde a ux F uture s  Virtua l Offe rs  V I S E ve nts T ic ke ts NT AGE  Bin E nds 44

5/18/2012 Online Co lle c tio n  Offe r tre ndy, e me rg ing style s, va rie ta ls a nd upc o ming / ne w re g io ns a nd sub re g io ns upc o ming / ne w re g io ns a nd sub -re g io ns  Ha rd to g e t, limite d a va ila b ility wine s  F ills g a ps fo r nic he pro duc ts tha t c a nno t b e a c hie ve d a t Re ta il: e .g . full ra ng e o f de sse rt wine s  De stina tio n fo r pro duc ts tha t a re to o uniq ue fo r F ro nt L ine b ut no t ic o nic e no ug h fo r Cla ssic s  Pric e Ba nd: $25 - $85 Classic s  Mo ving a wa y fro m c a ta lo g ue a s o f the Oc to b e r c o lle c tio n Oc to b e r c o lle c tio n  Ne w mo nthly fo rma t, sma lle r c o lle c tio ns  De fining ‘ c la ssic s’ a nd e nsure a ll purc ha se s me e t the de finitio n to q ua lify  Ma inta in pre mium ima g e while a ttra c ting a p g g la rg e r a udie nc e  Mo ving to a lmo st e ntire ly first-c o me -first- se rve d b a sis 45

5/18/2012 Bo r de aux F utur e s  2012 c a mpa ig n will la unc h o n-line 2012 c a mpa ig n will la unc h o n line  Re sidua l 2010’ s a nd 2011’ s will g o o n-line upo n the la unc h  Mo ving a lmo st e ntire ly to first-c o me -first- se rve d  E xtre me ly sma ll lo ts a nd/ o r hig h de ma nd wine s will ma inta in a llo c a tio n pro c e ss  E a sie r a c c e ss a nd mo re visib ility to a la rg e r a udie nc e Vir tual Offe r s  Dyna mic unusua l/ uniq ue o ffe rs  L L i imite d time - sho rt time to re spo nd a nd b uy it d ti h t ti t d d b – 30 da y turna ro und  Ma y o r ma y no t b e re la te d to a n e ve nt  Sho rte ne d time line to c o mme rc ia liza tio n a nd inc re a se e xc ite me nt a nd e ng a g e me nt in g g pro g ra ms 46

5/18/2012 V I S E ve nt T ic ke ts NT AGE  Ca n b e o rde re d o n-line  Printe d a t ho me b y the c usto me r  Printe d a t ho me b y the c usto me r  I n so me insta nc e s, tic ke ts will b e a va ila b le fo r purc ha se rig ht up until the sta rt o f the e ve nt  Sc a nna b le b a rc o de s fo r tra c king  Mo re visib ility to mo re c usto me rs Bin E nds  E xit stra te g y fo r slo w mo ving wine s  Auto ma te d syste m to hig hlig ht hig h  Auto ma te d syste m to hig hlig ht hig h- inve nto ry, slo w mo ving wine s with re duc e d pric e s to c usto me rs 47

5/18/2012 Mo r e T r aditio nal Custo me r s  Custo me rs no t c o mfo rta b le with b uying o nline will still ha ve the o ptio n to use the V I ha ve the o ptio n to use the V I S Co nta c t Ce ntre S Co nta c t Ce ntre NT NT AGE AGE to ma ke the ir purc ha se s Ne w – Mar c h 5, 2012  25% no n-re funda b le de po sit re q uire d fo r virtua l o ffe rs a nd Bo rde a ux F uture s Advantage s o f Dir e c t Sale s Online  A c o nso lida te d c ha nne l will e nc o ura g e c ro ss- sho pping a nd a wa re ne ss o f a ll o ur pro g ra ms sho pping a nd a wa re ne ss o f a ll o ur pro g ra ms  Minimizing the ne e d fo r a n a llo c a tio n pro c e ss witho ut c o mpro mising e q ua l o ppo rtunity o rde ring (first-c o me -first-se rve d)  Puts c o ntro l in the ha nds o f c usto me rs – 24/ 7 sho pping  A b uying pla n tha t is stra te g ic b y c ha nne l  E nc o ura g e s b ro wsing  Pro viding a mo re po we rful se a rc h c a pa b ility  Co nsta ntly a dding ne w pro duc ts 48

5/18/2012 Advantage s o f Dir e c t Sale s Online  Ma ny mo re c usto me r-frie ndly fe a ture s to e ntic e mo re sho pping  Be tte r c usto me r o rde r visib ility a nd c o mmunic a tio n  A mo re e ng a g ing site using ima g e s a nd o nline style writing  Ca pa b ility to inc lude pro duc ts with virtua l inve nto ry  Co nso lida te s a ll no n-re ta il pro g ra ms into o ne c ha nne l, inc luding V I S e ve nt tic ke ts NT AGE  I nc o rpo ra te s L ic e nse e sa le s T r ade Pr e se ntatio n  Ca n pre se nt the we b site to the T ra de a t a Drinks Onta rio me e ting o nc e the site is live - Drinks Onta rio me e ting o nc e the site is live o ve rvie w o f the site , ho w do e s it wo rk fo r lic e nse e s e tc . 49

5/18/2012 SPE CI AL E VE NT S Spe c ial E ve nts L o o king fo r e ve nts tha t  T a rg e t a ne w a udie nc e  E duc a te o ur c usto me rs  Are I c o nic / Pre stig io us  Offe r ‘ inside r a c c e ss’ to wine s o r wine pe rso na litie s pe rso na litie s  Va ry in size – fro m ve ry la rg e wa lk-a ro und ta sting s to sma ll, intima te dinne rs 50

5/18/2012 Ple ase Co nside r Diffe re nt ide a s!  Summe r, c a sua l e ve nts Summe r c a sua l e ve nts  E ve nts tha t use E sse ntia ls o r wine s a lre a dy sc he dule d fo r re le a se  Spe a ke rs se rie s – Wha t? Who ? Ho w?  E duc a tio na l e ve nts  L a rg e pa rtne rships with T ra de Org a niza tio ns  I I c o nic / c ult pro duc e rs fo r sma ll e ve nts i / lt d f ll t  Wo me n-fo c use d e ve nts  Nic he e ve nts ta rg e te d a t a spe c ific de mo g ra phic  E ve nts o utside o f T o ro nto NI SS 51

5/18/2012 NI SS  Ope ning up visib ility to ‘ L ife c yc le ’  T T ime line : June ime line : June T RANSI T I ON 52

5/18/2012 Dir e c to r , Ope r atio ns T r ansitio n  Re pla c e me nt: K e lly T a ylo r, Mar keti ng Communi c ati ons  T ra nsitio n sta rt da te : Ma y 28th, 2012  My la st da y: My la st da y: June 15th, 2012 T o p 3 T hings to Re me mbe r 1. So me o ne fro m Drinks Onta rio to c o nta c t So me o ne fro m Drinks Onta rio to c o nta c t 1 Sha ri o r me (K e lly T a ylo r) to a rra ng e fo r a pre se nta tio n a b o ut DSO in the fa ll 2. All Dire c t Sa le s pro g ra ms mo ving to o ne pla tfo rm = mo re e xpo sure a nd po te ntia l fo r sa le s! sa le s! 3. E ve nts – c o me to us with yo ur ide a s! We wa nt to he a r fro m yo u! 53

5/18/2012 I ORY B NVE NT U SI NE SS D E VE L OPME NT E diso n Yo n I nve nto ry Busine ss De ve lo pme nt Ma na g e r 416 864 6886 e diso n.yo n@ lc b o .c o m 2012-13 I nitiative s  De ma nd Cha in Ma na g e me nt (DCM) Mi Mig ra tio n ti  Sa le o f Da ta E nha nc e me nts  I n-Sto re T a sting s Cha ng e s  He lpful T ips! 54

5/18/2012 DE MAND CHAI N MANAGE ME NT (DCM) DCM Migr atio n Ba c kg ro und  Sinc e e a rly 90’ s, se ve ra l ve rsio ns  F o re c a sting a nd Re ple nishme nt c o re func tio ns  Cre a te s sug g e ste d o rde rs  L a st ve rsio n:   Allo c a tio n – F Allo c a tio n – F o rc e s, V I o rc e s V I S Re le a se s S Re le a se s NT NT AGE AGE  Sug g e ste d tra nsfe rs b e twe e n wa re ho use s  We b sto re – Re ta il Sto re s pla c e o rde rs  He a vily c usto mize d 55

5/18/2012 DCM Migr atio n Ja n 2009: no lo ng e r suppo rte d b y de ve lo pe r De c ’ 11 Mig ra tio n Adva nta g e s  Ne w func tio na lity to furthe r IMPROVE fo re c a sts a nd in-sto c k po sitio n  Mo ving fro m c usto mize d ve rsio n to b a se M i f t i d i t b ve rsio n wo uld me a n ta king a dva nta g e o f ne w ve rsio ns q uic ke r  Ne w pla tfo rm e na b le s sc a la b ility: a s L CBO g ro ws, mo re c o mple x a na lytic s, q uic ke r DCM Migr atio n Suc c e ssfully mig ra te d ne w ve rsio n Ma y 7! Sc o ping o ut o ppo rtunitie s  Co mpre he nsive re c o ve ry fro m o ut-o f- sto c k po sitio n  Utilizing lo ng ra ng e vie w – da ily a nd g g g y we e kly  Syste m c a lc ula te d Pro mo Uplifts 56

5/18/2012 SAL E OF DAT A E NHANCE ME NT S Sale o f Data E nhanc e me nts Ba c kg ro und: 2010 – 2011 Co ntinuo us fe e db a c k fro m Ag e nts o n pro g ra m o ppo rtunitie s Aug ust 2011  Cre a te d T ra de F o c us g ro up  Sc o pe d o ut da ta pro g ra ms to T Sc o pe d o ut da ta pro g ra ms to T ra de fro m ra de fro m inte rna l de pa rtme nts Se pte mb e r 2011  Additio na l me e ting s with T ra de F o c us g ro up 57

5/18/2012 Sale o f Data E nhanc e me nts I n a dditio n to e xisting sa le s a nd inve nto ry, YOU a ske d fo r “Re ta il “Daily, shipme nts, weekly, ple a se ” period?” Ob je c tive Ob je c tive Cre a te a VAL UE -ADD da ta pro g ra m, E ASI L Y a c c e ssib le , to me e t the ne e ds o f DI VE RSE tra de me mb e rs Sale o f Data E nhanc e me nts I ntro duc e d 6 mo nth sub sc riptio n, April 1, 2012 Cha ng e s Pha se d: F a ll 2012  I I n a dditio n to e xisting pa c ka g e s, intro duc ing n a dditio n to e xisting pa c ka g e s, intro duc ing fo rma tte d ve rsio ns o f the re po rts 2013/ 14  I ntro duc ing a dditio na l pa c ka g e s  Sing le po rta l fo r sub sc riptio ns a nd da ta 58

5/18/2012 CHANGE S T O I N-ST ORE T AST I NGS I n-sto r e T astings S PE AL E S T CI VE NT AST I NGS  I n-sto re T a sting Re q uire me nts e xist, with Spe c ia l E ve nts T a sting s pig g y-b a c king to the se re q uire me nts  E xpe rie nc ing c ha lle ng e s re g a rding c o nduc t o f De mo nstra to rs in o ur sto re s 59

5/18/2012 Change s to I n-sto r e T asting I ntro duc ing  Unifie d I n-sto re T a sting Re q uire me nts fo r L CBO Sto re s a nd L CBO Spe c ia l E ve nts  De mo nstra to r Co de o f Co nduc t I nfo rma tio n Se ssio ns  We dne sda y, Ma y 23, 2-4pm  We dne sda y, Ma y 30, 10 – no o n  We dne sda y, June 6, 2-4pm  We dne sda y, June 13, 10 – no o n HE L PF UL T I PS! Did yo u kno w…. 60

5/18/2012 He lpful T ips! Did you know…. Yo u c a n he lp g e t pro duc ts to ma rke t so o ne r! Yo u c a n he lp g e t pro duc ts to ma rke t so o ne r! HE L PF UL T I PS:  F ill o ut the full name o f the pro duc t in NI SS; e g . ‘ Cha te a u Gre g Cha rdo nna y’ , no t ‘ Cha rdo nna y’  I f the re is limite d quantity , ple a se le t us kno w  Se nd sample s on- time  Ve ndor ofile fo rms c o mple te d fully & a c c ura te ly Pr  Administra to rs fo r We b PO must ha ve le gal ity to b ind the c o mpa ny author He lpful T ips! Did you know…. Yo u c a n he lp g e t pro duc ts to ma rke t so o ne r! p g p HE L PF UL T I PS:  F o llo wing L CBO Produc t Pac kaging Standards , spe c ific a lly:  All lo a ds must b e 12” c le ar o f the to p o f the c o nta ine r  F  F loor loor loade d c o nta ine rs re q uire d fo r a ll no n loade d c o nta ine rs re q uire d fo r a ll no n- c o ntine nta l No rth Ame ric a n lo a ds  40” x 48” Ca na dia n Pa lle t Co unc il (CPC) or e quivale nt palle ts fo r c o ntine nta l No rth Ame ric a n lo a ds 61

5/18/2012 He lpful T ips! Did you know…. Yo u c a n he lp with o rde ring e ffic ie nc y! Yo u c a n he lp with o rde ring e ffic ie nc y! HE L PF UL T I PS:  Must use We b PO to a dvise whe n “Re ady to Ship”  L e t us kno w c ar ton size c hange s so tha t we c a n c a lc ula te the c o rre c t T i-Hi fo r o rde rs!  L e t us kno w o f pr oduc tion issue s a nd po te ntia l ina b ility to fill o rde rs!  L e t us kno w if a pro duc t is not available fo r o rde ring T o p 3 T hings to Re me mbe r  De ma nd Cha in Ma na g e me nt (DCM) Mig ra tio n  Sa le o f Da ta E nha nc e me nts  I n-Sto re T a sting s Cha ng e s 62

5/18/2012 S S & B PI RI T E E R Chris Ro b e rtso n Dire c to r, S PI S & B E RI T E R 416 365 5886 c hris.ro b e rtso n@ lc b o .c o m Sale s Plan fo r F isc al 2012-13 Ne t Sale s 2012- 13 Plan 2011- 12 Sale s % Chg. Do me stic Spirits Do me stic Spirits $923 9M $923.9M $910 0M $910.0M 1.5% 1 5% I mpo rte d Spirits $820.2M $779.1M 5.3% RT D $184.4M $184.6M 0.0% T o ta l Spirits* $1,928.7M $1,873.7M 2.9% L CBO Be e r** $658.9M $637.0M 3.4% Cide r Cide r $24.1M $24 1M $21 0 $21.0 15 1% 15.1% T o ta l Be e r & Cide r $683.0M $657.9M 3.8% T o ta l Spirits & Be e r $2,611.6M $2,531.6M 3.2% *E xc lude s Duty F re e **E xc lude s T BS 63

5/18/2012 Busine ss Br e akdo wn – Ne t Sale s T BS $250.9M 9% Sha re Whisky +1.7% $575.6M 21% Sha re +3.9% L CBO Be e r $657.9M 23% +4.9% Vodka $452.1M 16% Sha re +5 4% +5.4% Othe r $206.5M 7% +4.8% Rum L ique urs $251.9M RT D $226.8M 9% $184.6M 8% +5.2% 7% +0.8% +3.3% F ive -Ye ar Be e r Mar ke t Shar e Volume (L) 100 81.9 81.1 80.4 79.2 78.2 80 ket Share % 60 40 21.8 20.8 18.9 18.9 19.6 18 1 18.1 Mark 20 0 2006-07 2007-08 2008-09 2009-10 2010-11 LCBO TBS L CBO Mar ke t Shar e at the e nd of Pe r iod 13 (F 11- 12): 22.56% (21.85 L Y) 64

5/18/2012 SPI RI T S & BE E R Visio n T o inspire , g uide a nd de lig ht o ur c usto me rs with a wo rld-c la ss a sso rtme nt o f spirits, b e e r a nd re a dy-to -drink c o c kta ils Wo r ld-Class Asso r tme nt “L o o king a ro und … yo u wo uld ne ve r kno w tha t we ha d a la c k o f b e e r in the pro vinc e b e e r in the pro vinc e ” Jo hn S t. Jo hn No v. 2011 “Um, wo w? ! T his is a da mn fine re le a se with lo ts o f b e e rs fo r e ve ryo ne ,” wro te o ne b lo g g e r whe n de sc rib ing the 2012 spring c ra ft b e e r re le a se ” A Ye ar o f Be e r Jan. 2012 “I ’ ve b e e n luc ky to a tte nd pre vio us Whisky Sho p ta sting s, a nd I ha ppily re po rt tha t the ir se le c tio n ke e ps g e tting b e tte r with e a c h turn o f the se a so n” S po tlig ht T o ro nto Jan. 2011 65

5/18/2012 Asso r tme nt Pr io r itie s  E nha nc e the L CBO’ s re puta tio n fo r wo rld- c la ss spirits a nd b e e r c la ss spirits a nd b e e r  F o c us spirits a sso rtme nt de c isio ns o n pro duc ts tha t pro mo te tra de up a nd re c ruit ne w c usto me rs  Gro w b e e r sa le s with a diffe re ntia te d a sso rtme nt tha t o ffe rs va lue a nd g re a t c ra ft t t th t ff l d t ft b e e r Asso r tme nt Pr io r itie s  Bring pro duc ts to ma rke t mo re q uic kly  Se c ure limite d a llo c a tio ns (i.e . whiskie s)  Offe r first-to -ma rke t a nd e xc lusive s  Suppo rt lo c a l pro duc e rs, inc luding b o th c ra ft b re we rie s a nd mic ro distille rs 66

5/18/2012 Sale s T ar ge ts 2012-13  Ne w ta rg e ts will b e pub lishe d this we e k  No ma jo r c ha ng e s to mo st g ro uping s No ma jo r c ha ng e s to mo st g ro uping s  Pro duc ts ra nke d in the to p 95% in te rms o f c umula tive sha re b y pro duc t g ro uping  Ca te g o ry le a de r do mina nc e ha s b e e n minimize d b y ha lving a ny SK U with 20% o r mo re sha re sha re B R & C I E E DE R K a thy Me sse rsmith Ca te g o ry Ma na g e r, BE R & CI E DE R 416 365 5889 ka thy.me sse rsmith@ lc b o .c o m 67

5/18/2012 Busine ss Br e akdo wn – Ne t Sale s CIDE R $21M +15.8% OUT OF 3% Shar e PROVINCE BE E R $15M $15M IMPORT E D BE E R – +21.8% E UROPE 2% Shar e $180M +2.3% 27% Shar e IMPORT IMPORT BE BE E E R - R USA/ ME XICO $50M ONT ARIO BE E R +6.5% $382M 8% Shar e +5.0% IMPORT BE E R - 58% Shar e OT HE R IMP $9M -1.0% 2% Shar e 2011-12 Sale s Re sults ACT UAL L AST YE AR VARIANCEVARIANCE $657.9M $627.2M $30.7M 4.9% BE E R & CIDE R 2012-13 Sale s Plan ACT UAL L AST YE AR VARIANCEVARIANCE $682.9M $657.9M $25.0M BE E R & CIDE R 3.8% 68

5/18/2012 BE E R & CI DE R Highlights 1. Po pula rity o f Cra ft Be e r Po pula rity o f Cra ft Be e r 1 2. Do mina nc e o f Sing le Se rve Ca ns 3. Gro wth o f the Cide r Ca te g o ry g T r e nd # 1: Cr aft Be e r  Custo me rs mo re e duc a te d a b o ut b e e r a nd de ma nding wide r ra ng e o f style s  Sa le s o f the Cra ft Be e r pro g ra m ha ve inc re a se d o ve r 200% in the la st 5 ye a rs  Onta rio Cra ft Be e r se t is the fa ste st g ro wing se g me nt +26% in litre s (4% sha re ) “T he b e e r se le c tio n ke e ps impro ving … kudo s to the L CBO.” Jo sh Rubin, T o ro nto S tar 69

5/18/2012 T r end # 2: S i ngl e S er ve Cans  Sa le s ha ve triple d in vo lume o ve r the la st six p ye a rs  T his fo rma t a c c o unts fo r 36% o f a ll b e e r sa le s  Ove r ha lf the e ntire c a te g o ry’ s g ro wth la st  Ove r ha lf the e ntire c a te g o ry s g ro wth la st ye a r T r e nd # 3: Cide r  Sa le s g re w +16% la st ye a r g  Sing le c a ns a c c o unt fo r 75% o f sa le s a nd a lmo st a ll o f the g ro wth  A numb e r o f ne w pro duc ts a re sla te d to b e  A numb e r o f ne w pro duc ts a re sla te d to b e re le a se d during this fisc a l ye a r 70

5/18/2012 K e y 2012-13 I nitiative s 1. Co ntinue to e xpa nd the L CBO’ s se le c tio n o f c ra ft b e e r thro ug h ta rg e te d purc ha se s a nd c ra ft b e e r thro ug h ta rg e te d purc ha se s a nd pro g ra m e nha nc e me nts 2. Ca pita lize o n the po pula rity o f b e e r sa mple r pa c ks 3. Drive vo lume a nd ma rg in b y stra te g ic a lly e xpa nding va lue se le c tio n a nd o the r uniq ue di l l ti d th i o ffe ring s I nitiative # 1: Cr aft Be e r Cra ft Be e r Pro g ra m & Bre we ry F F e a ture s: e a ture s:  F o c us o n fe a turing the b e st b e e rs fro m the mo st inno va tive a nd ic o nic c ra ft b re we rie s  Must c o ntinue to e vo lve to e ng a g e the b e e r e nthusia st a nd c re a te e xc ite me nt  Wo rking to c o ntinuo usly impro ve e xe c utio n “ T he re a re a numb e r o f g re a t b e e rs in this re le a se whic h sho uld, in my o pinio n, thrill Onta rio b e e r drinke rs.” Gre at Canadian Be e r Blo g F e b 201 2 71

5/18/2012 I nitiative # 1: Cr aft Be e r B: Onta rio Cra ft Be e r : O a o C a e e  Po pula rity c o ntinue s to g ro w  I nno va tio n is impo rta nt – se a so na ls, sa mple r pa c ks, g ifting  T  T he re will b e mo re pro mo tio na l he re will b e mo re pro mo tio na l o ppo rtunitie s a va ila b le so ple a se c o ntinue to inve st  Sa le s ta rg e ts will b e fo rma lize d this fisc a l ye a r I nitiative # 1: Cr aft Be e r C: Ame ric a n Cra ft Be e r  Hig hly so ug ht a fte r b y b e e r e nthusia sts:  Go a l to e nha nc e the e xisting se le c tio n o f Onta rio a nd inte rna tio na l pro duc ts  Pre fe re nc e fo r fla g ship b ra nds fro m to p-tie r pro duc e rs pro duc e rs  T he re a re c ha lle ng e s a sso c ia te d with so urc ing the se pro duc ts 72

5/18/2012 I nitiative # 2: S ampler Pac ks  Sa le s +15% ve rsus la st ye a r, with inc re a se d SK SK U se le c tio n U se le c tio n  Gre a t vo lume drive rs tha t pro vide g o o d ma rg in  Oppo rtunitie s fo r c ra ft a s we ll a s ma instre a m b ra nds  Will b e g ive n mo re pro mo tio na l o ppo rtunitie s a nd a tte ntio n during the Pe rio d 5 Be e r pro mo tio n, ho lida y a nd o the r g ifting o c c a sio ns I nitiative # 3: Oppo r tunitie s to Dr ive Vo lume Sale s  Stra te g ic a lly e xpa nd the va lue se g me nt Stra te g ic a lly e xpa nd the va lue se g me nt  Co ntinue to purc ha se sing le c a ns whe n it ma ke s se nse  L a rg e b o ttle s, sa mple r pa c ks  L L o o k fo r mo re uniq ue o ppo rtunitie s to k f i t iti t drive vo lume – ma ximizing L T Os, o ffe ring stra te g ic pric e po ints, b undle d BAMs 73

5/18/2012 2012-13 Pr o duc t Call Highlights One -time purc ha se o ppo rtunitie s  Ro ta tio na l c ra ft b e e r pro g ra m  Summe r g ifting a nd sa mple r pa c ks S ifti d l k  Ha llo we e n/ Oc to b e rfe st/ Ha rve st  Ho lida y g ifts Ye a r-ro und purc ha se o ppo rtunitie s  Glute n-fre e  Ame ric a n Cra ft  OOP Cra ft  Onta rio Cra ft – Spring / Summe r No t inc lude d  I nte rna tio na l Be e r o r Cide r W HI E S T PI RI T S Sta c e e Ro th Ca te g o ry Ma na g e r, W HI E S PI S & R E O D RI T RI T ADY T NK 416 864 6347 sta c e e .ro th@ lc b o .c o m 74

5/18/2012 2011-12 Sale s Re sults ACT UAL L AST YE AR VARIANCE VARIANCE WHIT ESPIRIT S $765.8M $727M $38.8M 5.3% RE ADY- T O- DRINK $184.9M $178.2M $6.7M 3.7% T OT AL $950.7M $905.2M $45.5m 5.0% 2012-13 Sale s Plan ACT UAL L AST YE AR VARIANCE VARIANCE WHIT E SPIRIT S $793.8M $765.8M $28.1M 3.7% RE ADY- T O- DRINK $184.5M $184.9M ($0.4M) ‐ 0.3% T OT AL $978.3M $950.7M $27.6M 2.9% Busine ss Br e akdo wn – Ne t $ COOL E RS ONE POUR $139M COCKT AIL S +5.0 $13M 15% Shar e -21.1% 1% Sha re VODKA COCKT AIL S T O GO $452M +5.4% $33M +12.5% 48% Shar e 3% Shar e RUM $252M +5.2% 27% Shar e 27% Shar e SOJU/ SHOCHU $2M AL COHOL +11.3% GIN $0.32M 0% Shar e $59M -79.7% +5.6% 0% Shar e 6% Shar e 75

5/18/2012 White Spir its Highlights Vo dka  +5.4% o ve r L Y  24.1% sha re o f the Spirits ma rke t  +100M o ve r the pa st five ye a rs  L a rg e st sing le spirits se t Ma in Sa le s Drive r  Pre mium se t ho lds 67 6% se t sha re Pre mium se t ho lds 67.6% se t sha re  +5.4% in ne t sa le s g ro wth o ve r L Y a ste st Gro wing F  De luxe +14.7% inc re a se o ve r L Y  F la vo ure d +7.4% inc re a se o ve r L Y White Spir its Highlights Spic e d Rum  +33.5% vs L Y  L a unc he d fo ur ne w b ra nds within pa st ye a r  I nno va tio n fo c use d o n diffe re ntia tio n De luxe Rum  +12% vs L 12% L Y Y  Custo me rs lo o king fo r mo re c o mple xity  T ra ding up within b ra nd fa milie s 76

5/18/2012 White Spir its Highlights Re a dy-to -Drink  +3.7% vs L Y  Co o le rs & Co c kta ils-to -Go se g me nts dro ve $9 5M in  Co o le rs & Co c kta ils to Go se g me nts dro ve $9.5M in a dditio na l sa le s, +5.9% vs L Y K e y Sa le s Drive rs: Ca n fo rma ts Gre a t I nno va tio n Simple Mixe s +53%, 22% Pric e / q ua lity ma rke t sha re T o p 2012-13 I nitiative s 1. De ve lo p Supe r-Pre mium Vo dka se g me nt Wha t we a re se e ing …. Wha t we a re se e ing  Custo me rs tra ding up in vo dka  Po la rize d pric ing  Hig h sa le s ta rg e t impe ding inno va tio n impe ding inno va tio n a t hig he r ‘ pre mium’ pric e s  Gro wth in b ra nds pric e d $30-$40 77

5/18/2012 T o p 2012-13 I nitiative s 1. De ve lo p Supe r-Pre mium Vo dka se g me nt Pr Pr Prem Prem emium emium 375 375 $13 70 $13.70 $14 80 $14.80 T he o ppo rtunity… 750 $24.90 $26.90 1140 $37.00 $39.90  Ne w ‘ Supe r Pre mium’ 1750 $54.95 $59.40 pric e b a nd: $26.95-$29.95 375 $14.85 $17.95 Sup Super 750 $26.95 $29.95  Re duc e d sa le s ta rg e t Pr Prem emium 1140 $39.95 $49.80  Pre mium she lf pla c e me nt 1750 $59.45 $75.85 Deluxe De xe 375 $18.00  Pre fe re nc e fo r 750 $30.00 pro mo tio na l 1140 $49.85 o ppo rtunitie s 1750 $75.90 T o p 2012-13 I nitiative s Ne w RT D Pric e Struc ture 2.  Pric e b a nds intro duc e d Pe rio d 1 2012.  Ob je c tive : inc e nt c o nsume r tra de -up ma inta in the va lue o f the  Ob je c tive : inc e nt c o nsume r tra de -up, ma inta in the va lue o f the RT D b usine ss.  T wo pric e tie rs: Va lue o r Ma instre a m/ Pre mium  Va lue = L T O a nd Displa y re stric tio ns Price per Description Format Min Retail mL 6x330 $ 11.76 6 ‐ pack, ≥ 1L < $0.594 6x341 $ 12.15 containers, and containers and per per 6x355 6x355 $ $ 12 65 12.65 473 $ 2.81 ≥ 473mL single serve 100ml 1000 $ 5.94 4x330 $ 9.03 < $0.684 4x341 $ 9.33 4 ‐ pack per 4x355 $ 9.71 100ml 4x400 $ 10.94 • Pro duc ts a t o r b e lo w the minimum re ta il will fa ll into the Va lue c a te g o ry • Ba se d o n re g ula r re ta il 78

5/18/2012 T o p 2012-13 I nitiative s Ne w RT D Pric e Struc ture – I MAGE Guide line s: 2. Pr Pr ic e Band ic e Band L L T T Os Os Display Display p p y y Va lue • 2 pe rio ds b e twe e n L T O’ s o n • No E nd Aisle s, Po ds individua l SK U’ s o r He ro displa ys • 1 L T O pe r pe rio d pe r Bra nd • No DOC’ s • ma x. 2 a nnua lly pe r SK U • Blo c kpile a nd She lf • ma x. 10 a nnua lly pe r Bra nd E xte nde r pe rmitte d • ma x disc o unt o f 10% • no Supe r Sa le s p Ma instre a m • Sta nda rd g uide line s • Sta nda rd a nd – no b a c k to b a c k g uide line s Pre mium – ma x. 4 a nnua lly pe r SK U – ma x disc o unt o f 20% T o p 2012-13 I nitiative s 3. Se a so na l F la vo ure d Vo dka Pro g ra m  De sig ne d to c a pita lize o n ho t D i d t it li h t tre nds in fla vo ur: ‘ He re fo r a limite d time ’  E ntic e ne w c usto me rs  Drive inc re a se d tra ffic into c a te g o ry 2011/ 12 Ne t 2012/ 13 F c st 2012/ 13 Re fc st % Var . T o L Y Se a so na l F la vo ure d $787.1K $1.2M $2.5M 222% Vo dka Pro g ra m 79

5/18/2012 2012-13 I nitiative s 4. F ro nt E nd Me rc ha ndise r: Ne w Stra te g y T T he issue : he issue :  Prime lo c a tio n in the sto re c urre ntly la c ks e xc ite me nt  I nc o nsiste nt me rc ha ndising a nd a sso rtme nt a c ro ss the c ha in T T he o b je c tive : he o b je c tive : Cre a te a me rc ha ndising stra te g y tha t…  E nc o ura g e s disc o ve ry o f ne w pro duc t  Me e ts re ta il o pe ra tio na l e ffic ie nc ie s a nd is c o nsiste nt a c ro ss the c ha in  Ge ne ra te s inc re me nta l pro fits 2012-13 I nitiative s 4. F ro nt E nd Me rc ha ndise r: Ne w Stra te g y Be g inning Pe rio d 3 2012 Be g inning Pe rio d 3, 2012…  50mL spirits disc o ntinue d  So ld Spa c e pro g ra m to fe a ture NE W (P1- 8,11-13)  So ld Spa c e pro g ra m to fe a ture 375mL Spirits (P9/ 10) (P9/ 10)  T o p 10 Co re 200mL Spirits pro g ra m b y PPG  Sta nda rdize d Sta ff Pic k me rc ha ndising  A re vita lize d 200mL spirits a nd 375mL wine a sso rtme nt 80

5/18/2012 2012-13 Pr o duc t Call Highlights Vodka: Rum:  P Pre mium, Supe r- Pre mium, i S P i  Pre mium, De luxe , F P i D l F l la vo ure d d De luxe , F la vo ure d  Co nside ra tio n fo r Spic e d Rum  F o c us o n fulfilling Supe r-Pre mium will b e limite d pric e b a nd, $26.95-$29.95  Oppo rtunity to de ve lo p  Oppo rtunity to ta rg e t a ne w pre mium white rum c a te g o ry c usto me r (i.e . fe ma le )  Pre fe re nc e fo r  I nno va tive pa c ka g ing uniq ue / re no wne d rums pric e d  Stro ng ma rke ting suppo rt $26-$32.95 re q uire d re q uire d   Bro a de n re pre se nta tio n o f rum Bro a de n re pre se nta tio n o f rum  F irst to ma rke t o ppo rtunitie s pro duc ing c o untrie s  Ho t/ E me rg ing fla vo urs to  De luxe : the b e st o f the b e st, suppo rt the Se a so na l F la vo ure d hig hly a wa rde d a nd so ug ht Vo dka Pro g ra m a fte r  L o c a l, a rtisa na l, c ra ft  Oppo rtunity fo r Ca c ha ç a 2012-13 Pr o duc t Call Highlights Gin: RT D:  S Se a so na l/ One -sho t l/ O h t  Co nside r c o nsume r c ha ng e in C id h i  Uniq ue pro po sitio ns tha t ta rg e t ta ste pro file s (le ss swe e t, lo w 25-39 – yr o ld c o nsume r c a lo rie , na tura l ing re die nts)  F o c us o n pro duc ts tha t furthe r  E nviro nme nta lly frie ndly de ve lo p the c a te g o ry a nd pa c ka g ing pre fe rre d b ro a de n the a ppe a l o f g in  Ca pita lize o n po pula rity o f c a n  Stro ng pa c ka g ing a nd fo rma ts ma rke ting suppo rt  Oppo rtunity to de ve lo p ne w   Gins tha t a ppe a l to the Gins tha t a ppe a l to the spirit b a se s spirit b a se s c o nno isse ur  Oppo rtunity to ta rg e t the b e e r o c c a sio n/ ma le c o nsume r  OPC: ne w fo rma ts, a lc o ho l c o nte nt – fo c us o n e nte rta ining o c c a sio ns  Pre mium pre fe rre d – stro ng pric e / q ua lity 81

5/18/2012 T o p 3 T hings to Re me mbe r 1 1. Re a lize ne w tra de -up o ppo rtunitie s in Re a lize ne w tra de up o ppo rtunitie s in Supe r-Pre mium Vo dka in o rde r to c o ntinue driving spirits sa le s 2. Cre a te e xc ite me nt in-sto re thro ug h inno va tio n 3. Ra ise the pro file o f the Rum a nd Gin c a te g o rie s B ROWN S PI RI T S Ma rijke Mc L e a n Ca te g o ry Ma na g e r, B ROWN S PI S & D UT Y -F RI T RE E 416 365 5873 ma rijke .mc le a n@ lc b o .c o m 82

5/18/2012 2011-12 Sale s Re sults ACT UAL L AST YE AR VARIANCE Br o own Spir Sp its T s O OT AL $923.9M $895.8M 3.1% 2012-13 Sale s Plan L AST YE AR VARIANCE ACT UAL Br own Spir its T OT AL $950.3M $923.9M 2.9% Busine ss Br e akdo wn - Ne t $ C OCKT AIL MIXE RS E XOT IC MIXE RS T E QUIL A W HISKY SHOP $34M $17M - 8.0% $38M +12.7% $5M +90.2% +0.7% T r e nd 2% Shar e 4% Shar e 0% Shar e 4% Shar e L IQUE URS SIPPE RS BIT T E RS $62M +6.4% 7% Shar e W HISKY CANADIAN $388M +2.3% T r e nd 42% Shar e L IQUE URS CL ASSICS $112M - 0.7% 12% Shar e B RANDY/ COGNAC $82M +0.5% 9% Shar e W HISKE Y AME RICAN $33M +13.8% W HISKY SCOT CH W HISKE Y IRISH 4% Shar e $136M $12M +18.3% +3.5% T r e nd 1% Shar e 15% Shar e 83

5/18/2012 Br o wn Spir its Highlights Ca na dia n Whisky  + 2.3% o ve r L Y  21% sha re o f the Spirits ma rke t Pre mium  +3.3% in Ne t Sa le s o ve r L Y  Ha s g ro wn in ma rke t sha re to 51% o f the c a te g o ry De luxe  F a ste st g ro wing sub se t in the c a te g o ry  +104 o ve r L Y e q ua ling +7.8M in a dditio na l sa le s  Gro wth fro m ne w inno va tive pro duc ts a ttra c ting ne w c usto me rs  Re viving the c o nve ntio na l pe rc e ptio ns a b o ut Ca na dia n whisky Br o wn Spir its Highlights Ame ric a n Whiske y  Sa le s +14% o ve r L S l +14% L Y Y Pre mium  +16 in sa le s  81% o f the se t sha re  Adde d six ne w listing to the po rtfo lio  I nc re a se d e xpo sure in the me dia  Gro wing b a se o f e nthusia sts a nd c o nno isse urs  Attra c ting ne w c o nsume rs into the whiske y ma rke t 84

5/18/2012 Br o wn Spir its Highlights T e q uila : +13% o ve r L Y Pre mium: +84% o ve r L Y, +2.3% g ro wth in se t ma rke t sha re De luxe  +25% in sa le s o ve r L Y  21% o f se t ma rke t sha re  Adde d 11 ne w se a so na l a nd pe rma ne nt p pro duc ts to the a sso rtme nt  Will b e upda ting me rc ha ndising o f 100% a g a ve pro duc ts to de sira b le she lf spa c e Whisky Sho p  $4.9M in re ve nue , +92% o ve r L Y  Sa le s ta rg e t o f $8.8M fo r 2012/ 13  F e a ture d in 101 lo c a tio ns a c ro ss the pro vinc e  93 ne w pro duc ts liste d in the first p ye a r  73 ne w pro duc ts c o nfirme d fo r this ye a r 85

5/18/2012 L ique ur s I nitiative Curre nt Sta te  Sa le s de c line  Co mpe titio n Co mpe titio n  Se a so na l Our Pla n  Re se a rc h  Re vie w  Pla n  T e st  Ro ll o ut Our Go a ls  Re ne w  Re ve rse  I nc re a se  Hig hlig ht Ne w and Se aso nal Pr o duc t F ixtur e T he g ift fixture s  Prime re a l e sta te in 166 lo c a tio ns P i l t t i 166 l ti  I nc o nsiste nt me rc ha ndising fro m sto re to sto re  L o w sa le s vo lume in no n ho lida y se a so n Custome r insight  44% of c ustome r s do not fe e l that we c onsiste ntly offe r ne w pr oduc ts of inte r e st 86

5/18/2012 Ne w and Se aso nal Pr o duc t F ixtur e So lutio n – Ne w a nd Se a so na l pro duc t fixture  Pe rio ds 9-11  Ho lida y g ifts  Pe rio ds 12-8  Ne w re le a se s  Summe r ro se pro g ra m  Se a so na l spirits “Gre e n” c e ntre  7 T o ro nto lo c a tio ns  F e a turing susta ina b le pro duc ts 2012-13 Pr o duc t Call Highlights E a ux-de -vie  F ill g a ps in the c urre nt a sso rtme nt  I nvig o ra te a sso rtme nt with ne w b ra nds  Suc c e ssful b ra nds fro m fo re ig n ma rke ts  Ob vio us use o c c a sio ns 87

5/18/2012 2012-13 Pr o duc t Call Highlights Sc o tc h  L o o king fo r b le nds a nd sing le ma lts o o g o b e ds a d s g e a s  Co mme rc ia l b ra nds tha t do n’ t fit into the whisky sho p mo de l  Suc c e ssful b ra nds fro m fo re ig n ma rke ts  Stro ng ma rke ting suppo rt 2012-13 Pr o duc t Call Highlights Ame ric a n & I rish Whiske y  Ca pita lize o n c urre nt sa le s tre nds  Ca pita lize o n c urre nt sa le s tre nds  Answe r c o nsume r de ma nd fo r ne w pro duc ts  F o c us o n hig h vo lume c o mme rc ia l b ra nds  Re ta il pric e within the pre mium o r de luxe b a nds  Stro ng ma rke ting suppo rt 88

5/18/2012 T o p 3 T hings to Re me mbe r 1 1. Wo rk with o ur tra de pa rtne rs to g ro w Wo rk with o ur tra de pa rtne rs to g ro w Ca na dia n whisky c a te g o ry to its b e st sa le s re sult in five ye a rs 2. Re a lize a n a c tio n pla n to sta b ilize a nd g ro w the liq ue urs c a te g o rie s 3. L e ve ra g e pro duc t c a ll to a dd e xc ite me nt a nd inno va tio n to the po rtfo lio a nd b e st se rve the ne e ds o f o ur c usto me rs W I NE S K a thy Ca nno n Dire c to r, W I S & V I NE NT AGE S 416 365 5907 ka thy.c a nno n@ lc b o .c o m 89

5/18/2012 Sale s Br e akdo wn ONT ARIO E UROPE AN WINE S $340.1M WINE S (+5.7% ) $406.2M 520 SKUs 520 SKUs ( 4 3% ) (+4.3% ) 574 SKUs 27.4% Shar e 32.6% +0.3% Shar e 0.0% ) 40.0% Shar e (- 0.3% ) NE W WORL D WINE S $497.2M (+3.6% ) PT13, YTD 515 SKUs 2011-12 Sale s Re sults Buye r y T Y L Y Chg g % Chg % g E UROPE AN $406M $389M $16,631 4.3% WINE S NE W WORL D $497M $480M $17,229 3.6% WINE S $3401M $322M $18,264 5.7% ONT ARIO WINE S Gr and T otal $1,244M $1,192M $52,125 4.4% Onta rio VQA Wine Sa le s g re w b y 9.6% 90

5/18/2012 Ne w Pr o duc ts Dr iving Gr o wth % of T otal # of Pr oduc ts $ Gr owth Gr owth Ne w Pro duc ts 309 $42,7M 82% E xisting 1,305 $9,340M 18% Bra nds Bra nds T o ta l 1,614 $52M 100% Buye r T Y L Y Chg . % Chg . E UROPE AN $9.17 $8.99 $0.18 2.0% WI NE S NE W WORL D NE W WORL D $8.99 $8.72 $0.27 3.1% WI NE S ONT ARI O WI NE S $7.39 $7.29 $0.10 1.4% Gra nd T o ta l $8.53 $8.36 $0.18 2.1% PT13, YTD 91

5/18/2012 Avg. Pr ic e Pe r 750 mLBo ttle By Co untr y Countr y T Y L Y Chg. % Chg. VQA $10.88 $10.75 $0.13 1.2% I T AL Y $8.70 $8.53 $0.17 2.0% AUST RAL I A $10.70 $10.56 $0.14 1.3% CAL I F ORNI A $8.50 $8.09 $0.41 5.1% F RANCE $10.32 $9.98 $0.34 3.4% ARGE NT I NA $7.69 $7.40 $0.30 4.0% SPAI N $10.29 $10.08 $0.22 2.2% Fiscal 11/12 Var ie tal/ Re gio n Plano gr am T e st  By va rie ta l/ re g io n pla no g ra ms te ste d in 16 sto re s a ll WI sto re s a ll WI NE NE S se c tio ns S se c tio ns – pre mium pro duc t pre mium pro duc t o n to p she lf  Co nsume rs tra ding up  Pre mium Wine sa le s up 8.4%  I nc re a se d ma rg in  Ro llo ut b e g a n Ja n 2012  All sto re s c o mple te d b y Ma rc h 2013 92

5/18/2012 What is Pr e mium? Pre mium thre sho lds va ry b y c o untry a nd style o f wine  I ta lia n White Ble nds $11.00  Ripa sso $15.95  Ca lifo rnia Cha rdo nna y $14.95 T ra de We b site F lighte d E nd Aisle s T T e ste d a ne w pro mo tio na l stra te g y in P2 fo r e ste d a ne w pro mo tio na l stra te g y in P2 fo r Austra lia tha t a llo we d fo r mo re ne w b ra nds to b e pro mo te d o n E nd Aisle s witho ut e no rmo us inve nto ry c o mmitme nts:  F  F lig hte d the sto re s a nd ta ilo re d the b ra nds lig hte d the sto re s a nd ta ilo re d the b ra nds  Re pe a te d fo r Onta rio Wine s a nd I ta ly pro mo tio n suc c e ssfully 93

5/18/2012 Obje c tive s 2012-13 1. Build e xc ite me nt a nd sa le s g ro wth thro ug h ne w pro duc ts  T urn 10 – 15% o f po rtfo lio (150 – 225 pro duc ts pe r ye a r) 2. Ma ke sho pping fo r wine e a sie r a nd le ss intimida ting fo r c usto me rs 3. E nha nc e the q ua lity I ma g e o f VQA wine s a nd e nc o ura g e sta ff to re c o mme nd the m  Gro w VQA sha re thro ug h the L CBO 4. E nc o ura g e c usto me rs to tra de up the ir e ve ryda y purc ha se s Sale s Plan fo r 2012-13 2011/ 12 2012/ 13 Buye r % Chg. Sale s $ Ne t F or e c ast E UROPE AN WI NE S $406.2M $419.2M 3.2% NE W WORL D WI NE S $497.3M $523.6M 5.3% ONT ONT ARI ARI O WI O WI NE NE S S $340.7M $340 7M $356.3M $356 3M 4.6% 4 6% T OT AL WI NE S $1,244.2M $1,299.2M 4.4% 94

5/18/2012 K e y I nitiative s  I mple me nt style de sc ripto rs o n e a c h pro duc t in sto re to g ive c o nsume rs a d t i t t i b e tte r ide a o f the fla vo r pro file o f the wine b e fo re the y purc ha se :  All WI NE S ha ve b e e n c la ssifie d into o ne o f o ur e ig ht style de sc ripto rs  Style de sc ripto rs will b e o n the b in ta g s St l d i t ill b th b i t Style De sc r ipto r s Wine Style De sc r Wine Style De sc r iptor iptor s s R d Re d Whit White L ig ht b o die d a nd fruity L ig ht a nd c risp Me dium b o die d a nd Off dry a nd fruity fruity Aro ma tic a nd F ull b o die d a nd smo o th fla vo urful fla vo urful F ull b o die d a nd firm F ull b o die d a nd ric h L a unc hing a pe rma ne nt to o l in P2 – Ma y 2012 “Wine Sho pping Ma de E a sy” 95

5/18/2012 P2 – Ne w Bin T ags K e y I nitiative s I mple me nt a So ld Spa c e pro g ra m in the p p p g Wine F ridg e :  Minimum 50% re ma ins disc re tio na ry  Add c o nsiste nc y to the fridg e se le c tio n  Oppo rtunity to try pro duc ts in a g re a t Oppo rtunity to try pro duc ts in a g re a t numb e r o f sto re s 96

5/18/2012 K e y I nitiative s De ve lo p a “ Sig na ture Se rie s ” o f pro duc ts tha t wo uld inc lude “must ha ve s” in a ll c a te g o rie s to e nsure a wo rld c la ss po rtfo lio .  Be nc hma rks o f the re g io n  No ta b le b ra nds  No b le g ra pe va rie ta ls   E E nc o ura g e tra de -up nc o ura g e tra de up  F ill a pric e g a p Sale s T ar ge ts Se t le ve l Austra lia n Re d Sub se t le ve l Austra lia n Shira z Austra lia n Ca b e rne t Austra lia n Pino t No ir Austra lia n Re d Ble nds 97

5/18/2012 Sale s T ar ge ts  Pro te c t 90% o f Gro ss Ma rg in  Bra nd do mina nc e re mo ve d b y c utting sa le s o f la rg e vo lume skus in ha lf  Bra nd do mina nt if 25% o f sub se t Winte r / Summe r Wine Pr o gr am Go a ls  E E ti ntic e c o nsume rs to try so me thing ne w t t thi b y e ndo rsing o ne wine fo r the se a so n  Cre a te e xc ite me nt a nd a se nse o f urg e nc y to purc ha se thro ug h its limite d time a va ila b ility Ho w we b uy  Wine s to ma tc h the se a so n  Po pula r wine style s a nd pric e po ints  I ntro duc e c o nsume rs to so me thing ne w 98

5/18/2012 Winte r / Summe r Wine Pr o gr am Ove rvie w  Pro g ra m c o st: $30,000  L isting fo r fo ur Pe rio ds  A fo rc e d distrib utio n to a ppro xima te ly 250 sto re s,  Oppo rtunity fo r displa y spa c e in the pa rtic ipa ting sto re s, Ma rke ting suppo rt  E  E nd a isle b a c ke r c a rd a nd pre printe d pric e r c a rd nd a isle b a c ke r c a rd a nd pre -printe d pric e r c a rd to suppo rt the displa y a nd a b ra nde d she lf ta lke r.  A do ub le pa g e fe a ture in the F o o d & Drink,  T o ta l o rde r q ua ntity o f 5,000 – 8,000 c a se s  Any re sidua l inve nto ry a t the e nd o f the fo ur- mo nth pe rio d will b e sub je c t to a 25% re b a te Ontar io W I S Buying T e am NE Onta rio Kathy Cannon Busine ss Unit Dire c to r L CBO W I NE S T amar a Jake s Ca te g o ry Ma na g e r Onta rio W I S / V I NE NT AGE S A t id B Astr id Br umme r Pro duc t Ma na g e r Onta rio W I S / V I NE NT AGE S L uc y Ske ar d Ca te g o ry Administra to r Onta rio W I S / V I NE NT AGE S 99

5/18/2012 Ontar io Str ate gy (VQA) E le va te the Qua lity I ma g e o f Onta rio Wine s  I nc re a se c o nsume r c o nfide nc e Ho w?  Hig hlig ht Pino t No ir, Cha rdo nna y, Rie sling , Spa rkling a nd Ca b e rne t F ra nc a s sig na ture va rie ta ls  L L e ve ra g e c o nsume rs mo tiva tio n to b uy “lo c a l” to ti ti t b “l l” t inc re a se tria l o f Onta rio Wine s e ve ra g e the 3 rd pa rty a c c o la de s tha t the wine s  L ha ve re c e ive d O NT O W I ARI NE S T a ma ra Ja ke s Ca te g o ry Ma na g e r, O NT O W I ARI NE S 416 365 5882 ta ma ra .ja ke s@ lc b o .c o m 100