PEI LILQUOR ACOOL Î.P.-É ALCOOL Î.-P.-É

2013

December, 2012

Marketing Program Guide

2013 Marketing Program Guide

December 2012

2

Table of Contents

Contents Introduction .............................................................................................................................................................................. 3 Our Vision ................................................................................................................................................................................ 3 Our Mission ............................................................................................................................................................................. 3 Our Values .............................................................................................................................................................................. 3 Commitments and Expectations ............................................................................................................................................. 4 Key Contacts ........................................................................................................................................................................... 4 Sales Trends ........................................................................................................................................................................... 5 Marketing Program Applications ............................................................................................................................................. 7 Application Process ................................................................................................................................................................. 7 Marketing Program Timeline ................................................................................................................................................... 7 Period Highlights ..................................................................................................................................................................... 8 Marketing Programs ................................................................................................................................................................ 9

Added Value Program ......................................................................................................................................................... 9 Shelf talker/Neck tag Program........................................................................................................................................... 10 Limited Time Offer Program (LTO) .................................................................................................................................... 11 In-store Tasting Program ................................................................................................................................................... 12 PEI Liquor Wine Tasting Station ....................................................................................................................................... 13 Digital Advertising .............................................................................................................................................................. 13

Display Programs .................................................................................................................................................................. 14 200 ml Display Program .................................................................................................................................................... 14 At Cash Display Programs: ............................................................................................................................................... 14

Impulse at Cash Program .............................................................................................................................................. 14 Cooler at Cash Program ................................................................................................................................................ 15

Chilled Product Program ................................................................................................................................................... 15 Floor Displays .................................................................................................................................................................... 16 Spirit End Aisle Displays .................................................................................................................................................... 17 Wine End Displays ............................................................................................................................................................ 18 Other Opportunities: .......................................................................................................................................................... 19

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Introduction PEI Liquor is a Provincial Crown Corporation, reporting to the Department of Tourism and Culture. It is governed by a five member, government appointed board of commissioners, and is responsible for the importation, distribution, wholesaling, retailing and regulation of beverage alcohol within the province. The 2013 Marketing Program Guide has been prepared in order to help provide agent and supplier partners with the information necessary to maximize marketing opportunities with PEI Liquor. While you have been provided this copy for reference, P.E.I. Liquor will communicate changes with you electronically and encourages you to check the online version located on www.peilcc.ca for any updates. PEI Liquor is committed to excellence in retail sales and will achieve this by:

• Providing opportunities for supplier programming throughout year • Committing to having the necessary inventory to successfully execute marketing programs • Continually updating retail locations to maximize sales opportunities • Optimizing the SKU base to maximize sales volumes

Our Vision PEI Liquor will be recognized as a truly superior retailer in Prince Edward Island. We will achieve this through quality products, modern technology and increased services. We will always strive for the best possible value for our customers, staff and other stakeholders.

Our Mission The PEI Liquor regulates the sale of beverage alcohol under the authority of the Liquor Control Act. It manages the distribution of alcohol by:

• Operating in a socially responsible manner; • Achieving the revenue goals of the Provincial Government; • Providing suppliers with controlled access to the marketplace on a fair basis from modern, attractive venues; • Encouraging responsibility and moderation in the consumption of beverage alcohol; • Providing its employees with equal opportunity and increased training programs that assist in individual and

personal development and in the Commission's overall customer service strategy.

Our Values • Moderation - We promote responsible use as a way of life. • Quality Service - We take pride in the quality of our work. We strive for excellence in caring for our customers,

suppliers and one another. • Continuous Improvement - As a retailer, we welcome change. We are committed to continuous improvements

to all our services. • Integrity and Fairness - We take responsibility and are fully accountable for our actions, decisions and

behaviour. We meet our commitments and obligations to co-workers, customers and business partners. We are open, honest and fair.

• Importance of People - We are committed to fostering a positive workplace that builds teamwork and mutual respect and encourages individual development.

• Focus on Results - We are committed to getting the job done and improving our productivity levels.

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Commitments and Expectations PEI Liquor commits to providing the highest quality service to our suppliers and partner. Approved marketing programs will benefit from:

• On-time implementation of displays and other marketing program materials • Proper positioning of all display opportunities • Proper positioning of all Point of Sale (POS) materials

In order to ensure the success of approved marketing programs, the PEI Liquor:

• Expects that suppliers will forward ample signage for each retail outlet participating in marketing program(s). • Commits to carrying sufficient inventory to ensure the success of each marketing program.

Category managers are available to meet with agents and suppliers to help maximize opportunities to market your products and to determine programs to help execute and maximize marketing strategies.

Key Contacts Please direct any questions regarding marketing programs and promotional opportunities to the following: Danny MacDonald Marketing Coordinator Phone: (902)368-6277 Email: ddmacdonald@gov.pe.ca

Mark Carragher Category Manager, Beer and Spirits Phone: (902)368-6274 Email: macarragher@gov.pe.ca

Jean-Sebastien Morin Category Manager, Wine Phone: (902)368-6671 Email: jsmorin@gov.pe.ca

You can reach PEI Liquor by fax at (902)368-5735.

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Sales Trends This document details the PEI Liquor’s updated marketing programs, program periods and application process for PEI Liquor’s fiscal year (April 2013 – March 2014). Marketing program fees have been aligned not only by store sales but also by monthly sales volumes as detailed in the following:

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Marketing Program Applications Various marketing program opportunities are available throughout the year. Details of these programs are outlined in this document. Interested suppliers are invited to complete a Marketing Program Application Grid which can be found on our website www.peilcc.ca

Application Process Marketing Program Application Grids can be submitted for any of the available program periods outlined in the Marketing Program Timeline below. Submissions must be received as detailed in the Program Application Deadlines column. PEI Liquor will review applications and provide Program Approval Notification by the dates specified in the Timeline. Upon notification, agents and suppliers will submit marketing materials by the POS Submission Deadline for approval. POS approval will be provided by the PEI Liquor on or before the POS Approval Date. The POS to Warehouse dates have been indentified to ensure that POS materials will be available in our Retail Outlets in time to properly execute each marketing program. Current inventory and lead times for product delivery should be taken into consideration when submitting Marketing Program Application Grids, to ensure sufficient stock is available to maximize the benefit of the program. The Marketing Timeline table that follows defines important marketing program application dates

Marketing Program Timeline Period Program

Dates Total

Program Days

Program Application

Deadline

Program Approval

Notification

POS Submission

Deadline

POS Approval

Date

POS To

Warehouse 1 April 1 – 30 30 7-Dec-12 4-Jan-13 1-Feb-13 8-Feb-13 2-Mar-13

2 May 1 – 28 28 7-Dec-12 1-Feb-13 1-Mar-13 8-Mar-13 5-Apr-13 3 May 29 – June 25 28 7-Dec-12 1-Mar-13 5-Apr-13 12-Apr-13 3-May-13 4 June 26 – July 30 35 8-Mar-13 5-Apr-13 3-May-13 10-May-13 7-Jun-13

5 July 31 – August 27 28 8-Mar-13 3-May-13 7-Jun-13 14-Jun-13 5-Jul-13

6 August 28 – October 1 35 8-Mar-13 7-Jun-13 5-Jul-13 12-Jul-13 2-Aug-13

7 October 2 – November 12 42 7-Jun-13 5-Jul-13 2-Aug-13 9-Aug-13 6-Sept-13

8 November 13 – January 2 51 7-Jun-13 6-Sept-13 4-Oct-13 11-Oct-13 1-Nov-13 Start of 2014 Calendar Year

9 January 3 – February 4 33 6-Sept-13 4-Oct-13 1-Nov-13 8-Nov-14 6-Dec-14

10 February 5 – March 4 28 6-Sept-13 1-Nov-13 6-Dec-13 13-Dec-14 10-Jan-14

11 March 5 – 14 27 6-Sept-13 6-Dec-13 10-Jan-13 17-Jan-14 7-Feb-14

*POS includes: signage, neck tags, shelf talkers and any other promotional material.

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Period Highlights PEI Liquor Marketing Calendar is continually developing. Five periods have been highlighted where additional investments are planned in POS and merchandising to improve the customer shopping experience. Agents and suppliers are encouraged to explore the following opportunities and submit programs that support these initiatives for each occasion. Period 2 – Festival of Wines The wine category has been growing as PEI Liquor customers continue to evolve in their understanding of the category and our offerings. The focus during the 2013 Festival of Wines will be to bring more people to the category, provide the opportunity to try new items and our feature country of France. Periods 4&5 - Summer Programming PEI is a great place to be during the summer; many people are on vacation and have discretionary income to spend. PEI Liquor stores will be merchandised to drive sales and up sell customers. Periods 4 and 5 provide key selling time for a specific program designed with prizing and increased chances of winning when buying specific items. Period 7 – Island Rivers Worth Protecting. This fall campaign is highlighted by participating supplier contributions, based on sales figures. These funds support projects of the Atlantic Salmon conservation Foundation (ASCF) on Prince Edward Island. For more information on the ASCF and its work in our region please visit http://www.ascf-fcsa.ca Period 8 – PEI Liquor Gift cards November and December are the biggest months for PEI Liquor to sell gift cards. Stores will be merchandised to capitalize on the holidays. Seasonal items and sales opportunities will be an important part of the period 8 merchandising. A program will be designed to encourage customers to include PEI Liquor gift cards in their holiday shopping. Period 11 - March Madness The focus in March will be to drive PEI Liquor volume. This is a month where 6.5% of our annual sales are done, and there is an opportunity for an increase in these sales. PEI Liquor stores will be merchandised with programs that drive volume by customers, while respecting social responsibility guidelines. Programming will explore creative options to introduce customers to new categories and new items.

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Marketing Programs PEI Liquor has a variety of marketing programs available for 2013/14, and is open to discussing other mutually beneficial opportunities. The following programs are available for the program periods outlined on page 7 of this document. Invoices will be issued to Applying Agents upon program completion, NOT to Individual Suppliers. Pricing is based on display opportunity and further by period, size and number of locations. Where an opportunity is not available in all 18 locations, the list of stores appears in order by sales.

Added Value Program Both liquid on and non-liquid added value options are available as part of this program. The supplier or agent is responsible to ensure timely order and shipment of added value items to the PEI Liquor Warehouse. There is no additional charge for delivery to the Retail Outlets. Promotional items for approved programs will be:

• Tamper proof • In the event that items will be attached to another product, promotional items will be attached/removed by PEI

LIQUOR staff on schedule with timing of the program • Provided with attachment mechanism • Formats no larger than 200ml • Subject to the following fees

o Subject to a $0.20/unit handling fee (liquid on liquid) o Subject to a $0.10/unit deposit (liquid on liquid) o Handling fees applicable to beverage alcohol added value only o All liquid on liquid subject to deposit

• Other format opportunities will be handled on an individual basis • Received by the PEI LIQUOR four (4) weeks in advance of the scheduled promotion period. Please contact

Dave Stewart (902)368-5721 or dlstewart@gov.pe.ca to notify of added value shipment.

ADDED VALUE PROGRAM Program Period Cost (per SKU)

1 $185 2 210 3 210 4 260 5 260 6 235 7 285 8 360 9 160

10 160 11 160

Eligible products: All Categories Excluding Economy Added Value on Economy Product.

Locations: All 18 Retail Outlets

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Shelf talker/Neck tag Program On shelf promotional materials can generate interest and help to differentiate products. Promotion in this manner can include but is not limited to shelf talkers, neck tags and pad bound promotional materials. These items can be used to communicate product accolades, supplier managed contests, recipes, pairings and general product details. Maximum dimensions for shelf talkers are 4”x5” which must include a 1” flap. All materials under this program require prior approval and follow the Application Process set out on page 7 of this document.

Program Period Cost (per SKU) 1 $50 2 50 3 50 4 100 5 100 6 50 7 100 8 100 9 50

10 50 11 50

Eligible products: All categories Locations: All 18 Retail Outlets

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Limited Time Offer Program (LTO) Suppliers are invited to provide discounts as a Limited Time Offer. Suppliers must ensure that Limited Time Offer pricing does not fall below the Social Reference Pricing (SRP) as noted in the table below.

Spirits Format Social Reference Pricing (SRP) 50ml $2.85 200ml $8.45 375 ml $13.75 750 ml $24.95 1.14L $35.75 1.75L $53.15

3L $86.95 Wine

750 ml $9.99 1L $10.99

1.5L $15.99 2L $19.99 3L $29.99 4L $37.99

Program Period Cost (per SKU) 1 $185 2 210 3 210 4 260 5 260 6 235 7 285 8 360 9 160 10 160 11 160

Eligible products: All Categories Locations: All 18 Retail Outlets

LTO fees for wines 750 ml only are prorated based on the regular retail as follows: Up to $15.00: 100% of LTO Fee $15.01 - $20.00: 50% of LTO Fee $20.01 and over: 0% of LTO Fee

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In-store Tasting Program In-store tastings provide an excellent opportunity to allow customers to sample products they may not have normally purchased. All product categories are eligible for in-store tastings. Supplier, Agent or Host Responsibilities It is the responsibility of the supplier, agent or host to:

• Purchase product from Retail Outlet. • Ensure no advertising of any form including but not limited to print, radio, television, online will be made to

promote the in-store tasting session. Notices can be posted within the participating retail outlet during the scheduled tasting time(s).

• Verify inventory levels of tasting products with the store manager prior to the tasting. • Assemble and dismantle the tasting station/booth. • Ensure all necessities for the tasting session including product, cups, table cloth, napkins are available and that

the tasting station is clean and tidy with appropriate waste containers at all times during the tasting sessions. • Provide recipe cards or any other display material (e.g. posters, danglers, backer cards) to highlight the products

being tasted. • Monitor sampling and safeguard against the sampling by minors or intoxicated persons. • Ensure that opened product in not left unattended at any time. • Assume responsibility for any liability arising as a result of the tasting. • Contact both the Marketing Coordinator and the Store Manager in the event of the need to cancel. Please

provide 24 hours notice of cancellation. Store Manager/Staff Responsibility It is the responsibility of PEILCC Store Managers and Staff to:

• Ensure appropriate amount of product being sampled is available • Ensure adequate space is available in a highly visible area to maximize the opportunity • Monitor the amount of product sample poured and the safekeeping of the open product in the event the tasting

continues for a following day • Communicate and ensure staff understand that they cannot participate in in-store tastings • Ensure that supplier representatives conduct themselves in a professional manner and adhere to their

responsibilities outlined above. Manager have full authority at any time to cancel a tasting session for non-compliance with these responsibilities or the PEI Liquor Control Act regulations

• Complete and forward a Tasting Report to the PEILCC Head Office detailing the name of the agent, the product sampled and the overall conduct of the agent responsible for the tasting.

In-Store Tasting Sessions Days and Times

Days Times Monday to Saturday 12:00 – 4:00pm and 4:30 – 8:30pm

Sunday 1:00 – 5:00pm Tasting Measures

Product Category Measure Wine 1 oz/30 ml Beer 1 oz/30 ml

*Spirits ½ oz/15 ml Cooler/RTD ½ oz/15 ml

Cider 1 oz/30 ml Cost per Tasting session: $25 *Spirits ½ oz (15ml) to 1.5 oz (45ml) of non-alcohol in a 2 oz sample. 3:1 of non-alcohol mix to alcohol

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PEI Liquor Wine Tasting Station The PEILCC is pleased to offer opportunities for wine tasting using the Winegate™ WineStation. Interested agents and suppliers can effectively feature their wine in a method that:

• Professionally showcases the product (correct serving temperature and inert gas protection from oxidization) • Removes the need to secure staff and supplies for in-store tastings

Product Details

• Typically 2-3 bottles used per location, per period • Limit of 4 red and 4 white wine SKUs per period • Agents must provide a brief description for any products participating

in this program. Details will be used for product knowledge training and will be sent out to registered Taste Station cardholders via email newsletter

• Additional locations to become available during PEILCC Fiscal 2013

Cost per period/SKU/location: $25 + Landed Cost + Taxes (PHT, PST and GST) Location: Stratford Eligible products: 750ml format (no Sparkling wines at this time), $15+ retail

Digital Advertising Digital advertising provides suppliers and other vendors with the opportunity to advertise static or short video advertisements on high definition flat screen televisions located at or near the point of purchase. Both Responsible Use and general advertising are available using this medium. Static advertising specifications:

• Ad size 10” x 7.5” at 72 pixels per inch (PPI) • RGB (.jpg) • Imported images must be at least 72 PPI • Saved at highest possible quality

Responsible Use Messaging

Program Period Program Fee April - March $2500 - Includes 2 slides per loop

Eligible categories: All Locations: Cornwall, Montague, Oak Tree*, Stratford*, West Royalty* and Granville Street (6)

Please contact Mark Simmons, Synergy Screens fore@rogers.com or (902)314-9449 for details on other advertising opportunities.

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Display Programs 200 ml Display Program A separate display space for 200ml format products is available near the point of purchase in 10 PEI Liquor Retail Outlets. This is an annual program with Twelve (12) SKUs available per display unit.PEI Liquor provides display units for these impulse purchase items. The selection of 200ml format products is based on the following factors:

• Seasonal themes • Profitability/Sales potential • Inventory levels • Impulse in nature • Program support

Program Period Cost (per SKU) April - March $1000 Eligible Products: 200ml Spirits Locations: Oak Tree Place, West Royalty, Stratford, Granville Street, Waterfront Mall, Cornwall, Montague, Queen Street, Souris and Tignish (10)

At Cash Display Programs:

Impulse at Cash Program Displays of 200ml and/or 375ml products can be made at cash. One space available per program period. The selection of 200ml/375ml format products is based on the following factors:

• Seasonal themes • Profitability/Sales potential • Inventory levels • Impulse in nature • Program Support

Program Period Cost (per SKU) 1 $150 2 200 3 200 4 250 5 250 6 200 7 250 8 300 9 150 10 150 11 150

Eligible products: 200ml/375ml formats Locations: All 18 Retail Outlets

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Cooler at Cash Program Open faced coolers are located at cash for impulse Single Serve products which are typically refrigerated. There are Nine (9) Display opportunities available per retail outlet. Where applicable, suppliers will change their products on this display monthly to adapt to seasonal trends. Products will be submitted with quarterly program applications. The selection of Cooler at Cash products will be based on:

• Category strategy • Seasonal themes • Profitability/Sales potential • Inventory levels • Program support

Program Period Cost (per SKU) April-March $4800

Eligible Products: Single Serve Beer, Ready to Drink, Cider and Wine. Locations: Oak Tree Place, West Royalty, Stratford, Granville Street, Waterfront Mall, Cornwall, Montague, Kensington, North Rustico, Queen Street and Borden-Carleton. (11)

Chilled Product Program In addition to the Cooler at Cash Program, PEI Liquor offers the following opportunities to promote products in refrigerated areas within our retail outlets.

• 12 month program period with option to change product upon approval from PEI Liquor. • Each facing is based on a 750ml format

o Other formats i.e. – 1.5L and boxed wines will be pro-rated according to package size • Guaranteed SKU facings in Top 7 PEI Liquor retail outlets.

o The remaining outlets will accommodate participating SKUs based on space availability

Facings Retail Outlets 4 Facings Oak Tree, Granville

West Royalty, Stratford 2 Facings Waterfront Mall, Cornwall 1 Facing Montague

Facings Retail Outlets 4 Facings Oak Tree, Granville

West Royalty, Stratford 2 Facings Waterfront Mall, Cornwall 1 Facing Montague

Category Annual Program Fee Spirits and Wine (less than $15) $700 per SKU Wine ($15 and over – 750ml only) $350 per SKU

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Premium Mass Display PEI Liquor offers category specific display opportunities to feature products throughout our retail outlets.

Floor Displays Program Period Premium Mass Display

(2 spaces available) Floor Display 1

(2 spaces available) Floor Display 2

(2 spaces available) 1 $2200 $1650 $825 2 2750 1925 1100 3 3300 2200 1375 4 5500 2750 1650 5 5500 2750 1650 6 3300 2200 1375 7 3300 2200 1375 8 6600 3850 1650 9 1100 825 440

10 1100 825 440 11 1100 825 440

Locations

All 18 retail outlets Oak Tree Place, West Royalty, Stratford, Granville Street, Waterfront Mall,

Cornwall, Montague and Queen St (8)

Oak Tree Place, West Royalty, Stratford and

Granville Street, Montague and Waterfront (6)

% of PEILCC Sales 100% 92% 60% SKU limits Please contact Category Manager for opportunities in excess of 4 SKUs

Eligible categories: All products in all categories

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Spirit End Displays

Spirit End Aisle Displays Program Period Premium

Spirit End Spirit End 1

(3 spaces available) Spirit End 2

(2 spaces available) 1 $850 $575 $475 2 1125 750 575 3 1400 925 800 4 1675 1125 925 5 1675 1125 925 6 1400 850 700 7 1400 850 700 8 1925 1375 1100 9 475 375 300

10 475 375 300 11 475 375 300

Locations All 18 retail outlets

Oak Tree Place, West Royalty, Stratford, Granville Street,

Waterfront Mall, Cornwall and Montague, Queen Street,

Kensington, Alberton and O’Leary (11)

Oak Tree Place, West Royalty, Granville Street,

Waterfront Mall and Cornwall, Montague,

Queen Street and Kensington (8)

% of Spirits Sales per PEILCC stores

100% 74% 64%

SKU limits 4 SKUs 4 SKUs 4 SKUs Eligible products: All spirit products

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Wine End Displays

Wine End Displays Program Period Premium Wine End

(1 per store) Wine End 1 (3 per store)

Wine End 2 (2 per store)

1 $675 $300 $175 2 925 400 250 3 1150 450 275 4 1450 550 325 5 1500 575 350 6 1050 425 250 7 1100 500 275 8 1500 675 425 9 375 200 125

10 400 225 150 11 400 225 150

All 18 Retail outlets Oak Tree Place, West Royalty, Stratford, Granville Street,

Waterfront Mall, Cornwall and Montague, Alberton, O’Leary, Kensington and Queen Street

(11)

Oak Tree Place, West Royalty, Waterfront and Granville Street,

Queen Street and Montague (6)

% of total PEI Liquor wine

sales 100% 81% 60%

SKU limits 4 SKUs 4 SKUs 4 SKUs Eligible products: All wine category products

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Other Opportunities: Window Cling Program will be available in the near future. Please check PEI Liquor website for more Information.

PEI Liquor is open to discussing any marketing ideas and opportunities not outlined in this document, and invites interested suppliers to make contact to discuss other marketing options.