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Introduction to Grocery Wholesale Operations May 27th, 2016 Chris Dini – Director of Grocery Operations
Grocery Operations
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Agenda Grocery Operations Team Evolution & Mandate of Grocery Wholesale
Roles & Responsibilities
Current State & Continuous Improvement
What’s Next & The Road Ahead
Resources Available
Questions
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Chris Dini – Director Leanne Rhee – Operations Holly Garner – Operations Jim Sheridan – Operations Matt Lopez – Inventory & Supply Chain Jamie Fazekas – Finance IT Cross Functional team
Grocery Operations Team
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April 2015 • Premier’s Advisory Council on
Government Assets (PAC) – Striking the right balance: Modernizing
Beer Retailing/Distribution in Ontario – 150 grocer licences before May 2017 to
sell beer to the public – Maximum of 450 total
June 2015
• Ontario Budget – Province announced it would proceed with
this recommendation
September 2015
• LCBO RFB 2015-010 Wholesale Supply Agreements for Beer
– Up to 60 grocery stores before end of year 2015
Evolution of Grocery Operations
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November 2015 • LCBO RFB 2015-010 Closed
– 13 successful respondents with 60 locations December 2015
• Grocery Management System (GMS) Launched
– On December 15th, authorized beer grocers placed orders
February 2016
• Premier’s Advisory Council on Government Assets (PAC)
– Striking the right balance: Modernizing Wine & Spirits Retailing/Distribution in Ontario
– Existing authorized grocery stores (60) licenced to sell beer can sell cider
– Initial allocation of 70 wine, beer and cider licenses; competitive process to begin mid-2016
– Winery Retail Stores permitted to operate inside grocery stores before May 1, 2017 and grocers will be granted beer and cider licenses
Evolution of Grocery Operations
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• Enabling you to pursue sales opportunities
• Here to serve as a conduit for you to grow your business in a new channel
• Increased Mandate – An operational enterprise of the
Province. – Importer of record for all beverage
alcohol products in Ontario – Wholesaler of record for all
beverage alcohol sold by grocers
Our Mandate
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• What we are involved in… – Business-to-Business wholesale transactions – Access between suppliers and grocers – Listing and order flow – Financial processing – Fulfillment facilitation
• What we are NOT involved in
– Targeted consumer marketing Access between suppliers and grocers
– Product category management – Grocer sales & marketing plans – LCBO sales and promotions – Determining wholesale product mix
Our Responsibilities
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• Regulates the laws pertaining to the sales, service and consumption of alcohol
• Enforces Ontario regulation on Government stores 290/15 as per but not limited to the following – Types of products eligible – Shelf space requirements – Hours of operation – Advertising rules – Trade spend restrictions – Sampling rules
• WWW.AGCO.ON.CA
AGCO Responsibilities
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Key Partners
Roles
INDEPENDENT PHARMACISTS
PATIENTS
PHARMA NEWCO Grocers
Suppliers
Wholesaling “eligible beverage alcohol products
in grocery” Program
GROCERY OPERATIONS
SOURCE OF SUPPLY
BUSINESS CUSTOMERS
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Joint Activities
INDEPENDENT PHARMACISTS
PATIENTS
PHARMA NEWCO Grocers
Suppliers
Wholesaling “eligible beverage alcohol products
in grocery” Program
PRODUCT LISTING
PRODUCT ORDERING & FULFILLMENT
MARKET OPPORTUNITY
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• Providing product catalogue to grocers
• Receive orders for beverage alcohol from authorized grocers
• Filling grocers orders through various supplying sources
• Supplying source for all imported beverage alcohol
• Invoice grocers for product received
• Pay suppliers for products grocers receive
LCBO Responsibilities
INDEPENDENT PHARMACISTS
PATIENTS
PHARMA NEWCO Grocers
Suppliers
Wholesaling “eligible beverage alcohol products
in grocery” Program
PRODUCT LISTING
PRODUCT ORDERING & FULFILLMENT
MARKET OPPORTUNITY
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• Manufacturing and listing products for wholesale through the LCBO
• Setting retail prices • Pursuing sales and
marketing opportunities with grocers
• Supplying source to grocers for domestic beverage alcohol
Supplier Responsibilities
INDEPENDENT PHARMACISTS
PATIENTS
PHARMA NEWCO Grocers
Suppliers
Wholesaling “eligible beverage
alcohol products in grocery” Program
PRODUCT LISTING
PRODUCT ORDERING & FULFILLMENT
MARKET OPPORTUNITY
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INDEPENDENT PHARMACISTS
PATIENTS
PHARMA NEWCO Grocers
Suppliers
Wholesaling “eligible beverage alcohol products
in grocery” Program
PRODUCT LISTING
PRODUCT ORDERING & FULFILLMENT
MARKET OPPORTUNITY • Purchasing decisions on
brands and quantity of products ordered
• Brand and marketing relationships with suppliers
• Paying LCBO for beverage alcohol received
Grocer Responsibilities
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• Delivered a B2B wholesale solution to enable Beer sales in grocery
• 60 grocery stores now have access to Beer sales
• Over 150 beer producers now have access to the grocery channel
• Over 600 beer items available for grocery
• Fulfilled over 1,500 orders from grocers from December to April
It’s a new business!
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• Importance of data integrity
• Need for simplicity of replenishment and delivery operations
• Plentiful assortment
• Finance considerations
What we’ve learned
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• Collecting feedback from suppliers and grocers
• Continuous improvement through IT enhancements
• EDI transactions • GMS portal
enhancements • Process enhancements
LCBO’s commitment for continuous improvement
Enabling a smooth transaction
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• Use resources available
• Data integrity • 80% of new item submissions were
incorrect and cannot be processed • Invalid UPC/SCC codes may lead
to product refusals and payment opportunities
• Simplifying delivery operations
• Build relationships with grocers
How you can be successful in this channel
Doingbusinesswithlcbo.com
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- Grocers legally permitted to start selling Cider on June 24th
- Release of RFB to Grocers for Wine licenses
- Info sessions this summer for Wine manufacturers and agents
- Closure of RFB and announcement of new grocery partners
- Grocers to start selling wine in late fall 2016
What’s next
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The road ahead
Summer 2016 • Cider Assortment available to 60
existing authorized grocers
Fall 2016 • Wine licenses will be granted up
to 70 grocery stores through formal bidding process
• Winery Retail Stores will be permitted to co-locate and operate in grocery stores
• All grocery stores selling wine will have Beer and Cider licenses
Spring 2017 • By spring of 2017, there will be
up to a total of 150 stores selling Beer and Cider, and up to 90 of which will be selling Wine
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• Striking the right balance • www.ontario.ca/page/striking-right-balance-modernizing-
wine-and-spirits-retailing-and-distribution-ontario
• Grocery Website
• www.doingbusinesswithlcbo.com • Online webinars • Procedure Manual • Power point presentations • Key Contacts
• Ontario Liquor Control Act Regulation 290/15
• https://www.ontario.ca/laws/regulation/150290
• Grocery Operations team
Available Resources
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Questions?
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