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The LCBO and the Future of our Market George Soleas, President & CEO, LCBO Spirit & Vinleverantrsfreningen November 14, 2018 The Canadian Landscape Importations of beverage alcohol into Canada are consigned with provinces
The LCBO and the Future of our Market
George Soleas, President & CEO, LCBO Spirit & Vinleverantörsföreningen – November 14, 2018
alcohol into Canada are consigned with provinces
levels of private sector involvement in Retail
YukonOntario ario
Quebec ec New Brunsw swick ick Nova va Scoti tia: a: Prince ce Edward Island Newfou LCBO O 667+ 667+
Agency
The Beer Store re 470+
On-Site Breweries Winery Retail Stores Duty-Free Stores Distillers' On- Site Stores
Grocers ers 348 348
On On-sit site e fermen ment t fa facili iliti ties es
Ontar ario io
By the numbers
Over r 9,000 emplo loyee ees $11M fo for char ariti ities es 13.9M M challeng allenges es Net sales: les: $6.2B Net income
: $2.2B 630,000 00 te tests s 29,000 products ucts 80 countries tries 5 wareho ehous uses es Over r 667 sto tore res LCBO. O.co com m / App
LCBO
99.9% 9% 84% 30% 30% 43% 43% Sp Spirits irits Wine ine Beer Beer Total Total Other LCBO
* In terms of sales volume. “Total” excludes estimates of illegal sales but include other legal sales.
B2C B2B
Ret etail il
77.6% 6% of Net et Sales 53.1% Margin in
eC eComme mmerce ce
0.2% of Net et Sales 48.9% % Margin in
Groce
2.5% of Net et Sales 39.5% % Margin in
Wh Wholesa esale le
19.1% of Net et Sales 40.3% % Margin in
Source: LCBO Segmented Statements, YTD P13 2017-18 Wholesale channel includes Licensees (9.1% of Net Sales), The Beer Store (6.2%), Agency Stores (1.9%), sales to other jurisdictions (1.4%) and Duty Free (0.5%).
Customer Centric Attributes
Data Driven Focused on product & experience
Engaged with Customers - all stages, all channels
Design Thinking Measurement Agile and Responsive
$1 $11M 1M+ Sales les last t fiscal cal
9,6 ,600 Produ ducts cts
Promo
tional l plann nnin ing g and nd improved ed conten ent t curati ation
leadin ding g to increased eased sales es
tunities: es:
s Centre ntre
llections ctions Centre ntre
clusiv sive e Sales es Events nts
e Shippi pping g Promo
tions
6,5 ,500 Mobile le
ders
Channe nel Order ers Mix eCommerce ce 40,402 86% mCommer erce 6,479 14% Orders AOV Mix Store re Pick Up Up $167 53% Standa ndard d Ho Home Deliver ery $259 27% Next Day Ho Home Deliver ery $366 18%
55% 18% 27% 60% 33% 8% Wine Spirits Beer % Units % Dollar Value Category Performance
Websit ite e & Order er Managemen gement t Syst stem em Re-plat platform
Cont nten ent t Managemen gement t Platf atform
Upgrade rade
Enhan ance ced d Online ine Exclusiv lusive e Sales es Capabilit pabilities es
Continued tinued Mobile/Ap ile/App p Capabilit abilities es
Atmospheric digital screens with active sights and sounds
Interactive digital screens engaging customers directly with content
Through these features, we’ll continue to empower
Atmospheric digital screens with atie sights and sounds
Interactive digital screens engaging customers directly with content.
Holiday Absolut Windows
Holiday Gifting Assistant
Making ng gift-givin giving g easier sier
PEOP OPLE LE
Health & Wellness Privacy & Equality Locality & Communities Education & Development Minimizing Poverty Human Rights Security & Safety Ethics & Governance
PROFIT FIT
Competitive Advantage Profit Maximization Investor Return Fully Integrated Partners Positive Employee Relations Creativity & Innovation Business Model Optimization Process Efficiency
PLANE NET
Renewable Energy Replenishing of Resources Logistics & Transportation Waste Management Emissions & Pollution Control Green Building Design Disaster Avoidance
Respo pons nsible e Ret etail ailing ng & Moderat ate e Consum sumpti ption
Product uct Quality & Safet ety Communi unity ty Involveme ment nt & Fundr drais aising ng Envi vironm
ental Sustai staina nability ty
Res esponsi ponsible ble Ret etai aili ling ng an and d Mod
erate e Co Cons nsump umptio tion n
intoxication
not personal, it’s the law
campaigns
Cust stomer
alty & e experience perience Trad ade e partner tner feedbac ack Effic icienci iencies es Emplo ployee ee engagem gemen ent Culture lture change
New w Provincia incial Governm ernmen ent elect cted d Jun une e 2018 Provincial incial Bevera erage ge Al Alcohol
mework Cross ss-Province vince trade de Legaliza galizati tion
reation ional l Cannabis nabis