SPIRITS & RTD STACEE ROTH - Director, Spirits

Alanna Bailey Category Manager, White Spirits & RTD

Marijke McLean Category Manager,

Brown Spirits

Courtney Allison Inventory Manager,

Spirits & RTD

Carol Fallon Administrative

Assistant

Anton Muljadi Special Assignment –

Merchandise Financial Planning Project

The Team

Stacee Roth Director Spirits

Courtney Allison Inventory

Manager(ACT)

Matt O’Sullivan Inventory

Replenishment Manager (ACT)

Nelia Arruda Order Specialist (Domestic &FCL Imports) (CDO)

Joe Arbuscato Order Specialist

(RTD & US Imports) (CDO)

Terri McGowan

Inventory Replenishment Analyst (ACT)

Marijke McLean Category Manager

(Brown Spirits & Duty Free)

Peter Cloutier Product Manager

(Whisky)

Sherry Arseneault Category

Administrator (Brown Spirits)

Kevin Ethier Product Manager (Brandy, Liqueurs, Tequila, Duty Free)

Adam Caputo Product Advisor

Alanna Bailey Category Manager

(White Spirits & RTD & Accessories)

Christina Bellotti-Ramzan

Product Manager (White Spirits)

Angela Van Category

Administrator (White Spirits & RTD)

Mike Hodgson Product Manager

(RTD & Accessories, Holiday) (ACT)

Carol Fallon Administrative

Assistant

$2.21B PLAN

2016/17 +3.7%

$2.24 B 5.1% VS LY

1.3% VS PLAN

-0.3%

-0.6%

-0.4%

-0.1%

-0.3%

-0.1%

0.2%

0.4%

0.1%

0.0%

-0.4%

-0.5%

0.5%

0.4%

0.5%

0.2%

0.0%

0.3%

0.1%

0.0%

FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17

Spirits RTD Wines Beer & Cider Vintages

Retail Market Share Growth

*Excludes Grocer, TBS & Duty Free

Spirits & RTD Close the Market Share Gap

-0.2%

-0.6% -0.6% -0.5%

-0.3%

-0.1%

0.1%

0.3%

0.1%

0.0%

-0.6% -0.6%

0.4%

0.3%

1.0% 0.9%

0.0%

0.3%

0.0%

-0.1%

FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17

Spirits RTD Wines Beer & Cider Vintages

SMi Market Share Growth

*Includes Grocer, TBS & Duty Free

Spirits holds total market share decline

2017/18 Spirits Plan: + 4.9%, $2.35B

+8.3%

+2.7%

Vodka …………………………….. $537M +4.5% Canadian Whisky ………… $458M +5.6% Rum………………………………… $278M +2.7% Imported Whisky ………….. $290M +8.3% RTD………………………………… $242M +5.1% Liqueurs ………………………… $237M +0.4% Brandy/Cognac …………….. $113M +7.2% Gin………………………………….. $93M +9.9% Tequila …………………………... $66M +10% Other……………………………….. $37M +5.0%

Products, Sales & Merchandising Strategy

•Exclusive, Drives Margin, KEY STRATEGIC PRIORITY Spirits

remains the lead category

•LCBO as trusted advisor, Ultimate One-Stop Shop Headquarters for

Learning

SPIRITS STRATEGIES

9 SPIRITS STRATEGIES

1 INCREASE

SPIRITS SHARE OF VOICE

2 ELEVATE

CANADIAN WHISKY 3

INCREASE SUPPLIER

COLLABORATION

4 ONTARIO CRAFT

SPIRITS SUPPORT

5 ENHANCED

SPIRITS TRAINING

6 OFFER AN

ENVIOUS, SOUGHT-AFTER SPIRITS ASSORTMENT

8 BE ‘THE’

COCKTAIL EXPERTS

9 LEARN MORE

ABOUT THE SPIRITS CONSUMER

INCREASE VISIBILITY

& EXCITEMENT AROUND SPIRITS

IN-STORE & ONLINE

7

INCREASE SPIRITS SHARE OF VOICE

1

ELEVATE CANADIAN WHISKY 2

Build on the positioning of Canadian whisky as a premium category and grow consumer confidence in its quality and craftsmanship.

The Vision

Canada day whisky celebrations!

• End Aisles • Custom value ads • Custom packaging • Product innovation • Focused advertising • Online 1 day sale

MY

OUR ASK: INNOVATION

INCREASE SUPPLIER COLLABORATION

3

Spirits & RTD Inventory

A document of upcoming innovations, initiatives and collaboration best practices will be emailed to you shortly…

Thank you for your continued collaboration, mutual accountability & ownership

This year’s focus: On-time shipments, proactive planning and reducing vendor lead times

NEW Spirits-only Test: • For ‘grandfathered’ participating SKUs, flat

$700 fee vs case fee • Imported SKUs or new SKUs will not be

approved • Continue to apply for plant applied VA in

MPTS • VA’s should not be applied in excess after the

promotion end • Category will continue to approve VA

quantities • Case configurations MUST remain the same,

shipped under the mother SKU/SCC • SUPPLIER MUST REINVEST INTO LCBO

PROGRAMMING

Plant Applied Value-Add program

Asking F&D from some of the creative from the vodka tasting article

GET MIXIN’ WITH VODKA

SUPPORT ONTARIO SMALL DISTILLERS

4

LCBO Supports Ontario Small Distillers

ENHANCED SPIRITS TRAINING

5

Execute spirits summit initiatives

1)Spirits University

2)Trade Playbook for store visits

2016

TRAINING PROGRAMS

100 additional dedicated Advocates covering A & B stores

SPIRITS SEASONAL GUIDE FOR STORE STAFF

• Target 2-4 guides per year

• Include new launches, buyer’s picks, product features & benefits

• One-in-one-out information

The Best of Fall 2017

EMPLOYEE GUIDE TO THE SEASON’S NEW SPIRITS

LCBO

OFFER AN ENVIOUS SOUGHT-AFTER SPIRITS ASSORTMENT

6

E-Commerce

Online boutiques

Exclusive offers

Curated boxes

Flash sales

Enhanced whisky shop

• NEW Innovative concepts

• Stocking stuffers & 50mL

• Gifts < $20

• E-commerce exclusives

• Big brand representation

Holiday Gifting

INCREASE VISIBILITY AND EXCITEMENT AROUND SPIRITS IN STORE & ONLINE

7

Spirits Brand Domination P5/P8/P9/P12

130 stores

Period 1 Participating

stores:

15% vs non-participating stores

Spirits near the cold room display

Store Manager Survey: “Customers definitely noticed the rezoning effort and were generally positive about the change (i.e. easier to shop)”

Goal: Roll-out all annual re-planograms + New/Relo/Reno stores

PHASE 1 ZONING:

PHASE 2 ZONING: Enhanced On-Shelf & Category Signage

Spirits section beacon In-section cocktail solutions In-section way-finding Styles called out

BO

LD &

SM

OK

Y

Clear and colourless; neutral nose; soft grain flavour, alcohol gives sting of warmth

NEW FORMAT TASTING NOTES

Founded in 1864 by Pyotr Arsenievich Smirnov, what we now call Smirnoff was the first vodka to use charcoal filtration in the distillation process. This charcoal filtration produces a spirit that is ideal for mixing because of its smooth and clean palate; perfect in a Moscow Mule.

Enhanced Tastings Update

1. PLAN AHEAD – submitting final creative decreases unnecessary administration on both sides

2. Get your application in by the deadline 3. Make sure you are filling out the correct application form 4. Option 1A submissions are limited to 25 activations. The points

allocation ensures you will get most, if not all, of your store selections, so there’s no need to double up on your applications

5. Call the store one week prior to:

• Confirm all components are on hand (banner sign fixture, wicker baskets)

• Confirm delivery arrangements if you are providing a custom bar cart

• Arrange to taste the cocktail with store staff prior to the tasting

6. Take care in setting up an attractive display & experience 7. Choose an appealing and appropriate food match 8. APPLY!!!!! Help shoppers to try before buying & increase your

conversion rate!

ENHANCED TRADE TASTINGS

Tips…

BE THE COCKTAIL EXPERTS

8

NEW SPIRITS MINI-THEMATIC STRATEGY

Headquarters for Learning theme = Mixology

• Merchandise simple mixed drink

solutions • Spirits + VA Mixer(s) • Showcase cocktail solution using

display sleeves/necktags • Use bar accessories to enhance

display

COCKTAIL OF THE MONTH

• Cocktail of the Month endorsed by staff

• ‘How-to’ video instructions for staff, including mandatory cocktail tastings

• Focus on cocktail trends for easy at home solutions

LEARNING MORE ABOUT THE SPIRITS CONSUMER

9

DEDICATED SPIRITS CONSUMER RESEARCH