March 22, 2016
Spirits are LCBO’s largest and most profitable product category. In fiscal 2014-15, net sales of LCBO’s spirits and ready-to-drink (RTD) products were $2.014 billion, an increase of 2.4 per cent over the previous year. Year to date, Spirits sales have soared to 5% over last year and are expected to surpass $2.1 billion. This category represents more than 40 per cent of total LCBO sales; wine represents 28 per cent ($1.387 billion) and beer represents over 21 per cent ($1.058 billion).
Of total spirits sales year to date 2015-16, Whisky has led the category at +5.6% with the iconic Canadian Whisky segment accounting for 63% of its incremental sales. Seasonal categories such as Ready-to-Drink (+10.6%), Gin (+11.4%) and Tequila (+12.3%) have also contributed to strong spirits sales.
In partnership with the trade, LCBO leaders launched an annual Spirits Summit to collaborate on initiatives that strive to enhance the promotion and sales of spirits, and engage customers in exploring Ontario’s world class assortment.
The LCBO stocks a top notch selection of quality spirits including an expanded assortment of whiskies. Located within 100 select stores, Whisky Shop is intended for longtime connoisseurs, as well as budding enthusiasts. It features an ever-evolving selection of renowned and rare products, artisanal and limited releases, and award-winning bottles.
The Whisky Shop concept has been expanded to include a flagship “whisky experience” at our Summerhill LCBO store which has an enhanced assortment of an additional 130 SKU’s of whisky from around the world. Sales are expected to top $7.5M in sales by the end of this fiscal, up 25% over last year. LCBO is looking forward to further expanding this program in the coming year.
Whisky Shop has four releases per year -- October, January, April and July -- with the October release being the first. It comprises about 24 products, approximately a dozen of which will be available until the following October. The rest are quarterly releases, which means the inventory is estimated to last for three months.
You can find more information on Whisky Shop and recent releases here: http://www.lcbo.com/content/lcbo/en/pages/spirits/WhiskyShopLCBO.html.
To further promote spirits, LCBO has a spirits advocate program in which 250 employees in our largest stores are designated as specially trained leaders to promote the sale of spirits. This year the program was expanded to include an additional 150 employees and all participating store managers.
LCBO has also increased the promotional opportunities for spirts and their presence in the LCBO store environment, including a larger proportion of display allocations, and other promotional activities. LCBO, in partnership with suppliers, continues to hold an annual autumn celebration of whisky.
To help consumers better understand the flavours and characteristics of spirit products, the LCBO introduced style descriptors in all spirits segments with the last category, Tequila, to be introduced this spring. These descriptors are available at the point of sale and are helping customers navigate the wide assortment available.
Craft distillery support
There is a small but emerging trend of craft distillers in Ontario. As this sector continues to grow, we expect it to attract more consumer interest and increasing sales in the future.
A key ongoing objective in LCBO’s strategic plan is to grow the sales of local Ontario products. This objective extends LCBO’s longstanding commitment to increase Ontario wine and craft beer sales to other local products, including spirits produced by local small distillers.
As part of this strategy, LCBO looks for opportunities to highlight local craft distilleries, through consumer, employee and media information. We are also working on enhancing the on-shelf presentation and visibility for Ontario craft spirits in addition to incorporating education on this emerging industry to our staff and customers. LCBO further supports local craft distilleries through programs designed to help small Ontario distillers sell their products to bars and restaurants.