VINTAGES TRADE DAY Presented by Tom Wilson & the Vintages - - PowerPoint PPT Presentation

Presented by Tom Wilson & the Vintages Category Team APRIL 15, 2009

VINTAGES TRADE DAY

AGENDA

Welcome - Bob Downey Vintages Team & 2008-09 in Review - Tom Wilson Vintages 2009-10 Plans - Kate Mallett-Thomas Vintages Inventory Management - Bob Davio Vintages Submission Process - Greg Dunlop Questions and Answers - Tamara Jakes & Greg Dunlop Questions from the Floor - Moderator, Tom Wilson

Vintages INTRODUCTION

Tom Wilson, Vice President, Vintages

What is Vintages?

❖ Vintages is the LCBO’s

fine wine and premium spirits business unit

❖ Vintages is an

international leader in buying, marketing and retailing fine wines and premium spirits

Discover

• ur Latest

with Vintages

Vision

Mission

To provide our customers with the optimum assortment of fine wine and premium spirits with an intense quality focus at every price point and at every customer touch point.

Who is Vintages?

Sales Events Inventory Licensees

System Improvements

Tom Wilson Vice President, VINTAGES Robin Sirutis

Associate Manager, Licensee Programs

Kate Mallett-Thomas

Director, Sales & Purchasing

Rose Holness

Events Manager

Bob Davio

Inventory Manager

Amal Gavros

Business Analyst

Sales & Purchasing Team

Source and purchase 6,000+ fine wines and premium spirits

❖ Vintages Retail Releases and Essentials ❖ Direct Sales Programs – Classics Collections, Futures, VSO and Virtual

Kate Mallett-Thomas Director, Sales & Purchasing

Jim Brown

VINTAGES Programs Analyst

Laurie Harvey

Supervisor, VINTAGES Sales Center

Tamara Jakes

Category Manager, New World Wines & Spirits

Greg Dunlop

Category Manager, European Wines

Susan Wheeler

Associate Manager, VINTAGES Programs

Allan Craik

VINTAGES Reception

European Wines Category Team

Greg Dunlop

Category Manager, European Wines

Igor Ryjenkov Product Manager, European Wines David Beauroy Product Advisor, European Wines Lisa Chapman

Category Administrator

New World Wines & Spirits Category Team

Tamara Jakes

Category Manager, New World Wines & Spirits

Tony D'Alessio

Product Manager, New World Wines

Alanna Bailey

Product Advisor Kosher and Specialty

Liam Doherty

Category Administrator

Paul Farrell

Product Manager, Spirits and Ontario Wines

Inventory Team

Responsible for managing Vintages Inventory

Bob Davio

Inventory Manager

Gord Froner

Store Allocations

Nancy Pybus Teige Reid Ruth Simpson

Publications Team

Responsible for developing and producing content for all Vintages publications (28/year), website and Virtual Offers (~50/year)

Susan Wheeler

Associate Manager, VINTAGES Programs

Phoebe Duong

Publications Coordinator

David Churchill Greg MacDonald Leo Wigglesworth Douglas Webster

Writers

Events Team

Responsible for producing Vintages Events 20+ annually

Rose Holness

Associate Manager, VINTAGES Events

Emily Hui

Events Coordinator

Felix Silva & Tricia Lahde

Event Specialists

Vintages Net Sales

vs General Purchase 2008-09

Category VINTAGES Sales General Purchase Sales VINTAGES Market Share Imported Wines $293.0 M $830.0 M 26.1% Ontario Wines $15.7 M $289 M 5.2% Imported Spirits $17.1M $687 M 2.4% Domestic Spirits

• $887 M
• Beer and

Ready-to-Drink

• $1,040 M
• Total

$325.8 M $3,734 M 8.0%

*Private Stock Excluded

Net Sales 2008-09 by Major Product Category

Red Wine $212.4 M 9.9% Growth 65.2% Market Share White Wine $72.9 M 6.2% Growth 22.4% Market Share Spirits $16.4 M 4.8% Growth 5.0% Market Share Sparkling Wine $11.66 M (6.9%) Growth 3.6% Market Share Rose $3.5 M 14.4% Growth 1.1% Market Share Fortified Wines $4.5 M 5.4% Growth 1.4% Market Share Other Products $4.1 M 23.4% Growth 1.3% Market Share

$325.8 M, up 7.8%

Net Sales 2008-09 by Major Country

Italy (1.7%) Growth USA 18.8% Growth Australia (10.5%) Growth Canada 15.6% Growth Other 9.6% Growth France 16.7% Growth

$325.8 M, up 7.8%

$52.8M 16.2%

$60.0M 18.4%

$76.2M 23.4%

$86.3M 26.5%

$18.6M 5.7%

$31.9M 9.8%

Vintages Net Sales

2008-09

$175M $350M Plan Actual

(4.4%) $325.8 M $345.0 M 7.8%

$302.1 M, 2007-08

Front Line Essentials Internet Classics Futures Virtual

1.3% 16.5% 28.2% (0.7%) 173.5% (29.4%)

$325.8 M, up 7.8% 2007 2008 $200M $100M

Net Sales by Program

$25M $50M New World Ontario Icewine European Spirits

25.5% 41.2% (8.4%) 5.0% (7.4%)

$97.4M, up 14.2% 2008 2007

Essentials - Net Sales

Net Sales by Buyer 2008-09

Sales $ Net % Change European Wines $95.5 M (0.2%) Essentials - European Wines $40.9 M 5.0% New World $108.1 M 1.0% Essentials - New World $66.3 M 24.9% Futures And Directs $19.0 M 84.0% Total $329.8 M 8.1%

*Includes GP Kosher Portfolio

Net Sales 2008-09 Period 1-8 vs. Period 9-13

Periods Sales $ Net Change Periods 1 - 8 $190.9 M 12.8% Periods 9 - 13 $138.9 M 2.2% Fiscal Year $329.8M 8.1%

*Includes GP Kosher Portfolio

Wine Net Sales by Price Band P1-8 vs. P9-13

Price Range Period 1-8 Change

• vs. LY

Period 9-13 Change

• vs. LY

P9-13 vs. P1-8 $0.00 - $9.99 $506.2 K (50.0%) $567.4 K (28.2%) 21.8% $10.00 - $14.99 $21.4 M (3.7%) $11.4 M (18.6%) (14.9%) $15.00 - $19.99 $71.0 M 15.9% $47.9 M 12.7% (3.2%) $20.00 - $24.99 $20.9 M (0.2%) $17.6 M 8.8% 9.0% $25.00 - $29.99 $12.6 M 11.7% $9.6 M (4.2%) (15.9%) $30.00 - $49.99 $18.4 M 19.6% $15.4 M (8.6%) (28.2%) $50.00 - $99.99 $15.3 M 15.5% $13.3 M (0.1%) (15.6%) $100.00 and above $16.3 M 41.6% $9.2 M (4.3%) (45.9%) Total $176.3 M 12.4% $125.0 M 1.4% (11.0%)

*Excludes Bordeaux Futures

Net Sales by Top Sets

Sets 2008-09 Net Sales Change Market Share France - Red $49.5 M 22.6% 15.0% Italy - Red $41.3 M (1.1%) 12.5% United States - Red $39.3 M 13.9% 11.9% Australia - Red $28.2 M (9.7%) 8.5% New Zealand - White $14.6 M 12.5% 4.4% Italy - White $14.2 M 1.6% 4.3% Subtotal $187.0 M 6.8% 56.7%

Net Sales by Top Subsets

Subset 2008-09 Net Sales Change Market Share California Red - Cabernet Sauvignon $22.4 M 26.0% 6.80% Australia Red - Shiraz $15.6 M (0.8%) 4.75% France Red - Bordeaux-Medoc $11.7 M 37.1% 3.54% Italy White - Pinot Grigio $11.4 M 2.1% 3.47% New Zealand White - Sauv. Blanc $11.3 M 11.8% 3.44% Champagne $8.5 M (3.7%) 2.59% Subtotal $81.1 M 21.1% 24.59%

*Total Subsets 250

Net Sales Top Performing Subsets

Subset 2008-09 Net Sales Change Argentina Malbec $7.1 M 128.6% Veneto Ripasso $6.6 M 40.2% California Shiraz $2.8 M 58.5% South France Red $2.7 M 43.5% Ontario VQA Pinot Noir $1.4 M 84.6%

Net Sales Ontario Wines

Category 2008-09 Net Sales Change White Table $4.9 M 35.1% Red Table $4.4 M 36.1% Rose $457.0 K 57.9% Sparkling $187.7 K 34.0% Subtotal $9.9 M 36.4% Icewine $5.8 M (7.5%) Ontario Total $15.7 M 16.0%

Net Sales Bordeaux Futures

0M 5M 10M 15M 20M 2005 2006 2007

$16.9 M $6.6 M $2.1 M Vintage:

Average Expenditure per Order

VINTAGES Orders Average $ Order Retail Stores 6,213,950 $57.57 Classics 9,394 $1,089.88 Bordeaux Futures 2005 14,481 $1,157.72 VSO (Internet) 4,202 $314.99 VINTAGES Total 6,245,973 $62.10 General Purchase 110,017,515 $32.40

Retail Inventory March 31, 2009 (Cost $)

Actual Budget Variance %Variance % Last Year $26.57 M $20.20 M $6.26 M 30.8% 36.2%

❖ Retail inventory at historic high level ❖ Over-weighted with “high” price points ❖ “Lump” will take some time to normalize ❖ Stores receiving what they order -

no “forcing”

Warehouse Inventory March 31, 2009 (Cost $)

Actual Budget Variance %Variance % Last Year $33.30 M $28.58 $4.72 16.5% 19.2%

Front Line Program

❖ Over 700 “active” front line release product

available; 1301 total skus Direct Programs - Classics, VSO, Futures

❖ 1,881 skus in total ❖ 94% pick slot utilization

❖ Unprecedented change in business from

end of October; uncharted waters

❖ Huge currency swings - USD, Euro ❖ Inventories backing up; overweighted in

high-end products

❖ Suspended buying ❖ Variety of discounting and sales ❖ 2005 Bordeaux Futures ❖ Economic impact likely longer term

Vintages

2008-09 in Review

Vintages

2009-10 Plan

Kate Mallett-Thomas, Director, Vintages

Financial

❖ Achieve sales of $323 million ❖ Zero planned growth over 2008-09 results ❖ Deliver $144.5 million in margin dollars ❖ Manage inventory/investment to sales ratio ❖ Maintain inventory turns

Vintages

2009-10 Objectives

Non-Financial 1.Adapt buying direction to meet market needs

❖ Expand offerings of exceptional price quality

in products in the $15-$29.95 range

❖ Decrease purchases of premium and ultra-

premium products 2.Continue to expand the Retail network for Vintages

Vintages

2009-10 Objectives

Non-Financial

• 3. Look for new ways to maximize potential of the

Essentials portfolio

❖ Drive sales; new products ❖ Improve inventory metrics ❖ Target new customers

• 4. Grow Ontario Wines

❖ Continue to captialize on growth of table wine

segment with exceptional 2007 vintage

❖ “Go Local” trend ❖ Develop new Icewine strategies

Vintages

2009-10 Objectives

Non-Financial

• 5. Leverage Technology to improve process

efficiencies

❖ Automated Letter of Commitment (LOC) ❖ Enhancements to New Item Submission System

(NISS)

❖ Move to web-based Purchase Orders

• 6. Enhance Vintages Internet experience

❖ Vintages Shop-on-Line improvements ❖ Redesign of www.Vintages.com

Vintages

2009-10 Objectives

Non-Financial

• 7. Continue to make the environment and Social

Responsibility part of Vintages fabric

❖ Target high volume products for light-weight glass

bottles

❖ Grow depth of offerings produced organically,

biodynamically and/or sustainable agricultural practices

• 8. Continue to focus on growing niche segments of

Vintages portfolio

❖ Specialty and Kosher ❖ Spirits ❖ Licensee offerings

Vintages

2009-10 Objectives

Global Economic Crisis

Economy has changed since LCBO’s 5-year plan completed:

❖Collapse of world financial

markets

❖Big business going bankrupt ❖Unemployment rising ❖Consumer confidence falling

The accepted wisdom is that alcohol is recession-proof, EXCEPT when unemployment rises FACT: Alcohol tends to weather general economic downturn better than other products FACT: Alcohol sales DO fall in value when times are tough FACT: Alcohol sales DO fall in volume and value when unemployment rises

Ontario Situation

Accepted Wisdom:True or False?

Vintages Impact

❖ Continued softness of the

Canadian dollar, negative impact on prices

❖ Vintages premium and

ultra-premium price point products are most exposed

❖ 2008 Bordeaux Futures

program to be scaled back

Sales Change by Price Band P1-8 vs. P9-13

Price Range Period 1-8 Change

• vs. LY

Period 9-13 Change

• vs. LY

$0.00 - $9.99 $506.2 K (50.0%) $567.4 K (28.2%) $10.00 - $14.99 $21.4 M (3.7%) $11.4 M (18.6%) $15.00 - $19.99 $71.0 M 15.9% $47.9 M 12.7% $20.00 - $24.99 $20.9 M (0.2%) $17.6 M 8.8% $25.00 - $29.99 $12.6 M 11.7% $9.6 M (4.2%) $30.00 - $49.99 $18.4 M 19.6% $15.4 M (8.6%) $50.00 - $99.99 $15.3 M 15.5% $13.3 M (0.1%) $100.00 and above $16.3 M 41.6% $9.2 M (4.3%) Total $176.3 M 12.4% $125.0 M 1.4%

Release Program

❖Target key price bands, in particular the $15-

$29.95 with exceptional quality products

❖In short term, reduce depth of the release

• purchases. Breadth to be enhanced from

previous Releases, VSO and Classics

❖Explore novel ways to promote and highlight

Vintages Release programs to a broader audience

❖Eliminate Releases from the calendar where

necessary to help manage inventory levels

What Vintages is Doing Changes by Program

Essentials

❖Reviewing the portfolio to ensure a relevant

collection to drive sales

❖Developing a more robust promotional

program for agents and suppliers to leverage and drive sales eg. being able to participate in General Purchase FSIs

❖Creating a novel communication piece targeted

at high potential Vintages customers

❖Reviewing and implementing new sales targets

What Vintages is Doing Changes by Program

Vintages Shop On-Line (VSO) and Classics

❖Broadening the customer target group to

include customer shopping in remote areas

❖Enhancing the on-line experience to improve

search and navigation

❖Exploring ways to promote products to the

customer, through recommendations, collection offers and the opportunity to offer BAMs and LTOs as well as Value Adds

❖Deploying residual inventories to Retail to

enable assortment to remain fresh and relevant

What Vintages is Doing Changes by Program

Leveraging this strategic channel:

❖ Organize and initiate large taste and buy

events which allows Vintages to sell “virtually” and mitigate purchase risk

❖ Design and create educationally focused

events such as Wine 101, scaleable to smaller communities

❖ Hold Chateaux and Estate tastings and

• dinners. Allowing iconic suppliers interact

with customers in the Ontario market place

Vintages EVENTS

Vintages Tasting Program

Good News... Vintages Tasting Program application will be moving to a web-based platform. Stay tuned...

Vintages

Licensee Program

Robin Sirutis (Toronto) and John MacKinnon (Ottawa) look for novel ways to support the licensee channel.

❖ Looking for new customers to service and

sell Vintages brand and products

❖ Work with the Vintages Event team to

execute dinners in novel locations to build relationships

❖ Helping to ensure that VSO can service

Licensee customers in the future

What Does This Mean for Agents & Suppliers?

❖ Visit the LCBO Trade website and become

familiar with information offered

❖ Visit the site frequently, as this is how Vintages

communicates:

✦ Announcements ✦ How to Grow Your Business with Vintages ✦ How to improve your success with

Vintages

✦ Links for applications: NISS, MPTS, SOD -

Narrowcast

✦ Vintages Needs Letter

❖ Submit products that are laser-focused on buyers’

needs:

✦ Offer best price possible up front ✦ Offer to better the payment terms ✦ 3rd Party scores that can be validated ✦ Outline your plan to support the product at

Retail

✦ Highlight product availability limitations ✦ Review quantities ordered by the category

teams - ensure that it is appropriate to achieve sell-through

ZERO tolerance on incomplete/inaccurate submissions

What Does This Mean for Agents & Suppliers?

Support your products at Retail; Release programs and Essentials by visiting Stores (Managers and Product Consultants):

❖ Keep an eye on the inventory levels -

encourage stores to reorder

❖ Participate in Vintages tasting program ❖ Increase store distribution ❖ Drive sales through use of LTOs and BAMs

What Does This Mean for Agents & Suppliers?

The Environment

❖ Light-weight Glass ❖ Organic ❖ Biodynamic ❖ Sustainable

Agricultural Practices

Break

15 Minutes

Inventory Management

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Bob Davio, Inventory Manager, Vintages

Mandate

❖ Forecasting and planning inventory targets ❖ Placing and tracking orders ❖ Retail release allocations ❖ Develop tools and reports for early warning

• f larger issues

Inventory Management

Current Climate

❖ Slow down in sales relative to

plan

❖ 8 month planning horizon ❖ New sales channel - VSO ❖ Kosher portfolio (continuous) ❖ Inventory over plan at year end: ✦Warehouse - 16.5% ✦Stores - 31.8%

Inventory Management

Vintages

Fiscal Year End Inventory

(Cost $)

$0 $15,000,000 $30,000,000 $45,000,000 $60,000,000 Warehouse Retail Total Actual Plan Last Year

16.5% Variance to Plan 30.8% Variance to Plan 22.5% Variance to Plan

Retail Inventory By Price Band Comparison

Price Range 2008 Week 49 Inventory Cost 2009 Week 49 Inventory Cost Cost Change $0.00 - $9.99 $225 K $167 K (25.6%) $10.00 - $14.99 $1.46 M $1.26 M (13.8%) $15.00 - $19.99 $4.29 M $5.27 M 22.8% $20.00 - $24.99 $2.30 M $2.81 M 22.0% $25.00 - $29.99 $1.49 M $1.71 M 15.2% $30.00 - $49.99 $3.23 M $4.66 M 44.1% $50.00 - $99.99 $3.30 M $5.29 M 60.2% $100.00 and above $2.50 M $4.08 M 63.4% Total $18.80 M $25.25 M 34.3%

Issues

❖ 6 pack vs. 12 pack ❖ Quality assurance - destroy or return ❖ Shipping on time ❖ Heads up/follow up ❖ Problem resolution ❖ Packaging non-compliance

Inventory Management

Inventory Management New Initiatives

Web Purchase Order

❖ Changing how the LCBO sends purchase

• rders to vendors

✦More robust ✦More timely ✦Better communication tool for

changes/updates

Web Purchase Order

❖ Place purchase order ❖ Email notifications on received purchase

• rder

❖ Vendor will respond back with purchase

• rder confirmation/changes

❖ Purchase order status

Inventory Management New Initiatives

Web Purchase Order

❖ Planned implementation for August 2009 ❖ All Vendors

Inventory Management New Initiatives

What Does this Mean?

❖ Vendors Only/Not Agents ❖ All your vendors MUST have Internet access

(no exceptions)

❖ Includes email and browser ❖ Each vendor will have an admin sign-on ❖ That person can give access to others ❖ Agents will continue to get information

through Narrowcast

Inventory Management New Initiatives

New Item Submission System (NISS)/ Letter of Commitment (LOC) Site

❖ Based on ongoing feedback we will be

rolling out enhancements to the current NISS application

❖ In addition, we will be launching a web-

based LOC module for the suppliers

❖ Suppliers must therefore have access to

computer and an active email address (no exceptions)

NISS/LOC Initiatives

❖ Suppliers will now be able to go online to: ✦ View and review their LOCs and its status ✦ Accept or decline the terms and

conditions of the LOC

✦ Provide comments and reasons for

declining the terms and conditions

✦ And should they accept the LOC terms,

they will be required to provide additional information

NISS/LOC Initiatives

NISS/LOC Initiatives

Vintages

Submission Process

Greg Dunlop, Category Manager, Vintages

❖ Vintages Receives 40,000+ offers annually

and selects about 5,000 for tasting program

❖ The majority of our calls yield 1,000+ offers/

call

❖ Vintages Buyers taste and review about

100 wines every Monday

❖ We evaluate offers and make selections

based on our inventory needs and category strategies (20-30 products)

Vintages

Submission Process

Vintages Retail Submissions

and Purchases 2008

8,000 16,000 24,000 32,000 40,000 # of Submissions # of Tastings # of Purchases

40,000 2,000 5,000

Vintages

Submission Process

❖ Vintages is looking

for the best price/value ratio

❖ Vintages is looking

for competitive pricing i.e., $25 wine for $19.95 retail price

❖ Will release fewer

products

Regular Product Calls

Competitive Product Calls (Needs Letter)

❖ Product Call issued to

trade identifies our needs

❖ Published three times

per year

❖ Buy the bulk of new

products through this process

Regular Product Calls

Ad Hoc Product Submissions

❖ Fill in gaps in current

portfolio or react to emerging trends

❖ Must be discussed with

Buyers

❖ Products sourced via: ✦Trade Shows ✦Buying trips ✦Trade publications

Submission Process Pre-submission

❖ Compelling case ❖ Good quality, focused

information

❖ A complete application

containing:

✦Varietal ✦Vintage ✦LCBO # ✦Description ✦UPC #

Submission Process Pre-submission

❖ Competitive price offering

relative to the segment

❖ Promotional plan ❖ Sales in other markets ❖ Payment terms ❖ Varietal ❖ Third-party scores

Submission Process Selection

❖ Organoleptic

assessment

❖ Price/Quality ratio ❖ Packaging appeal ❖ Laboratory analysis

❖Offer exceptional price and value ❖Promote products through advertising, bonus

Air Miles, in-store tastings, Food & Drink, neck tags, wine/trade shows

❖Agent and sales team must focus on ✦Retail Channel ✦On-premise

Remember

❖ Agent needs to create interest ❖ Competition, large supply

How to be Successful Through Vintages

Direct Purchases

❖ Buy on reputation or

score

❖ Repeat brands that have

performed exceptionally well

❖ Direct purchases ❖ Are not tasted ❖ Are not “pre-labbed”

LCBO TRADE WEBSITE

• www. lcbotrade.com

Your Primary Resource

❖ Labeling Requirements ❖ Q & A ❖ Contact Information ❖ Pricing and Quote Template ❖ Meeting Request Form ❖ Product Needs Letter ❖ Presentation ❖ Promo Tracking Link and Guide ❖ Accounts Payable Form

VINTAGES Buying/Thematic

Calendar

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Questions and Answers

The Vintages Team

FAQ Questions from the Trade

Q – Does VINTAGES have any published standards of performance in respect to responding to agents written and verbal (voice mail) messages? A – No, we do not have written standards. Every member of the VINTAGES team strives to respond by end of next business day. This is dependent on the quality of the information left by the agent. This is true also of email, the preferred method of communication.

FAQ Questions from the Trade

Q - My contact information has changed. What do I do? A - Send an email to the VINTAGES reception desk, listing the new contact information, and we will change it in our database

FAQ Questions from the Trade

Q - I was issued a licensee number by the Alcohol and Gaming Commission of Ontario. Is that the agent number I use for submissions? A – No. We do not use the AGCO licensee

• number. VINTAGES will provide you with an

agent number the first time a purchase is made through your agency. This agent number applies to VINTAGES and General List

• submissions. This number does not apply to

Private Ordering.

FAQ Questions from the Trade

Q - What duty do I have to pay on the samples that I bring in from my supplier? A -You will need to contact Canada Customs and Border Services for that information.

FAQ Questions from the Trade

Q - The supplier has run out of the vintage listed on the Letter of Commitment. What do I do? A – Please notify the respective Category

• Administrator. If the respective vintage is no

longer available, the offer is rescinded. VINTAGES expects that suppliers will set aside the inventory of product outlined in the LOC. If the supplier is not prepared to do this, do not present the product to VINTAGES.

FAQ Questions from the Trade

Q – Why doesn’t VINTAGES indicate the number of units it requires? A – It is the role of the agent to indicate any limitations on product availability through the NISS application. If the buyers wish to select the product for consideration they will use this information to slot it into the appropriate VINTAGES program.

FAQ Questions from the Trade

Q – Why is there limited space in NISS to provide more details on the name, awards and recommendations? A - In reviewing 1000+ submissions, VINTAGES has left sufficient room for agents to provide the critical information required for decisions to be made.

FAQ Questions from the Trade

Q - Should the final quoted retail price on the VINTAGES NISS submission form include the bottle deposit? A – YES. When using the LCBO pricing model on LCBOTRADE.com website, the bottle deposit is included.

FAQ Questions from the Trade

Q – Completing NISS submissions is highly repetitive and time consuming. Why doesn’t the NISS system allow us to retain and recall Agent and Vendor info? A – It does. When using the vendor or agent number in the appropriate fields, detailed information will populate the respective fields automatically.

FAQ Questions from the Trade

Q – Why does NISS not allow agents to save product profiles permanently, so that it can be simply submitted each time? A – NISS was not designed as a database system for use by agents. It is a web-based tool to be used to submit vital information about a specific product to VINTAGES, without the use of paper. Data related to product changes frequently from vintage to vintage making it vital for the information to be accurately updated.

FAQ Questions from the Trade

Q – Will VINTAGES consider abandoning its charge – back clause in its supplier commitment letter? This discourages suppliers from doing business with VINTAGES. A - The charge-back clause was introduced for two reasons:

• 1. To share the risk of the bringing the product into

the market place by ensuring the agent takes an active role in driving sales of the product

• 2. Ensuring product continues to move through the

Retail channel, so that VINTAGES can continue to

• purchase. If inventory does not sell through, then

VINTAGES will not be able to purchase new items.

FAQ Questions from the Trade

Q – Why doesn’t VINTAGES copy the agent on P.O.s, payment notices and other communications sent to the supplier? A – VINTAGES legally does business with the vendor, hence the information going directly to

• them. The agent can track all purchase orders

issued through the Narrowcast Report. This STET information is found on the Trade

• Website. Under Quick Links, click on Inventory

Management, then Information Sharing.

FAQ Questions from the Trade

Q - Why does VINTAGES keep so much inventory in the central warehouse when that product is first release? Further when a location quickly sells out of a given product, why does VINTAGES not automatically replenish the stock? A - VINTAGES does not control the inventory levels of the individual stores in the network. This is the responsibility of the store manager and staff. Initial release orders are reviewed by VINTAGES and in “normal” times orders are increased to hit release ship- through targets of 85-90%. “Forcing” products is currently suspended. It is the responsibility of the store to re-order products after they are released.

FAQ Questions from the Trade

Q - Some Agents are interested in receiving data from VINTAGES regarding the number of submissions to its tenders, the number of tastings and number of products purchased. Can this be provided on a regular basis? A - VINTAGES does not have the resources to be providing statistical summaries of the numbers of submissions, tastings and purchases the team

• makes. We can provide high level data at future

Trade presentations.

FAQ Questions from the Trade

Q - VINTAGES promotional sales in December reduced product transfers from the warehouse and more frequent releases in January have placed added pressure on Agents to meet sell-through deadlines. Please comment on rebate clause enforcement in light

• f unexpected developments in the Ontario
• marketplace. Is this being done on a by-request case-

by-case basis? A - As highlighted in the presentation, the market place took a negative change in the Fall. Review of the sell- thru has been done, and will be done, at the discretion

• f the buyers on a case-by-case basis.

FAQ Questions from the Trade

Q - What is VINTAGES current inventory turn rate? A - 4.9 turns overall for the business for 2009-10

FAQ Questions from the Trade

Q - Since the end of February, Product Consultants in VINTAGES corners have indicated that they are under pressure from their Store Managers and District Managers to watch their days-on-hand inventory. As a result, many are restricting or eliminating orders from the Toronto Warehouse Residual inventory. There was added pressure not to transfer in inventory for year-end closing so as not to have to count it. It is difficult for agents to drive sales when stores will not order in wine from the warehouse. A - Retail inventories are at historic high levels. Until retail inventories return to “plan” and the excess “lump” of inventory is resolved, there will pressure by retail management to manage their inventories down. The cancellation of the April 25th release was designed to draw down residual warehouse inventories. Once retail inventories return to plan levels, VINTAGES will resume “allocating” release orders, improving the release ship-thru levels. Agents should be continuing to partner with Retail managers and product consultants to draw down their inventories and expand their store distribution.

FAQ Questions from the Trade

Q - Will VINTAGES fund and operate up to four Trade tastings annually, each with 50 agents and ~250 products? A - VINTAGES is not in a position to fund or

• perate these tastings but like other trade

tastings buyers would attend, if available.

Questions and Answers From the Floor

Tom Wilson, Moderator

Thank You