DRINKS ONTARIO

VINTAGES UPDATEVINTAGES UPDATE

S M E

P RESENTED BY:

S HARI MOGK-E DWARDS

V ICE PRESIDENTM ERCHANDISING & V INTAGES

K ELLY T AYLOR

D I R E C T O R

V I N T A G E S O P E R A T I O N S

KATHY CANNON

D IRECTOR

D AVE M ISETICH

I N V E N T O R Y M A N A G E RD IRECTOR

W INES & V INTAGES

N O V E M B E R 2 9 2 0 1 2

I N V E N T O R Y M A N A G E R

V I N T A G E S

N O V E M B E R 2 9 , 2 0 1 2

Agendag

O er ie of teamsOverview of teams

Overview of business

Overview of operations

Member’s questionsq

Open discussion

VINTAGES UpdateVINTAGES Update

KATHY CANNON

DIRECTORDIRECTOR

WINES & VINTAGES

VINTAGES Sales Performance

Sales year-to-date as of the week ending November 10th

Net Dollars% Change % Change

Net Dollarsg

vs Last Yearg

vs Plan

VINTAGES - European Wines $68M 6.0% -4.2%$ 4

VINTAGES - New World Wines $75M -0.9% -13.6%

ESSENTIALS – European Wines $28M 9.3% -2.2%

ESSENTIALS New World Wines $65M 10 3% 0 3%ESSENTIALS – New World Wines $65M 10.3% 0.3%

VINTAGES - Futures $9M 6.3% -7.3%

TOTAL $246M 5.2% -6.1%

Top VINTAGES Trendsp

California RedsCalifornia RedsCalifornia Reds are trending up 9 9% YTD trending up 9.9% YTD vs. LY.Growth is being driven Growth is being driven by Zinfandel (+17.2%), Cabernet Sauvignon ( 6%) d b (+9.6%) and by Premium California reds priced between reds priced between $25.00 - $50.00 (+30.7%).

Top VINTAGES Trendsp

Ontario Whites

Sales are trending up g p10.9% YTD vs. LY

Riesling is leading the Riesling is leading the growth in this

category contributing category, contributing 65.5% of the total growthgrowth

Top VINTAGES Trendsp

It lItaly

Italian Reds are trending up 8.4% YTD vs. LY.

Italian Whites are trending up 9.6% YTD vs. LY

Tuscan reds such as Chianti and Brunello are

driving growth (+20.6% YTD vs. LY)

European Sparkling Wines

French Sparkling Wines (+29.9%) & Italian

Sparkling Wines (+31.5%)

VINTAGES Price Bands

Price Band Per 750 mL

Sales $ Net R13

Sales $ Net LY

R13Chg % Chg

Sales $ Net YTD

Sales $ Net LY

YTDChg % Chg

<$15.00 $45M $61M -$16M -26.1% $25M $34M -$9M -27.7%

$15.00 - <$20.00 $181M $161M $20M 12.7% $110M $98M $12M 12.60%

$20.00 - <$25.00 $60M $55M $5M 9.3% $35M $33M $2M 5.4%

$25.00 - <$30.00 $34M $27M $7M 24.3% $19M $15M $4M 26.2%

$30.00 - <$40.00 $29M $28M $1M 3.8% $15M $15M $58K 0.1%

$40 00 <$50 00 $18M $16M $2M 12 1% $10M $9M $2M 18 4%$40.00 - <$50.00 $18M $16M $2M 12.1% $10M $9M $2M 18.4%

$50.00+ $62M $58M $4M 7.8% $31M $29M $2M 6.4%

Grand Total $431M $407M $24M 5 9% $246M $234M $12M 5 2%Grand Total $431M $407M $24M 5.9% $246M $234M $12M 5.2%

VINTAGES Frontline Price BandsVINTAGES Frontline Price Bands

Price Band Per 750 mL

Sales $ Net R13

Sales $ Net LY

R13Chg % Chg

Sales $ Net YTD

Sales $ Net LY

YTDChg % Chg

<$15.00 $33.4M $50.0M -$16.2M -32.7% $18.0M $27.5M -$9.5M -34.4%

$15.00 - <$20.00 $98.7M $89.8M $8.9M 9.9% $59.8M $53.9M $6.0M 11.1%

$20.00 - <$25.00 $32.6M $30.4M $2.2M 7.3% $19.0M $18.5M $0.6M 3.0%

$ $ $ M $ 6 M $ M % $ M $ M $ M 6 6%$25.00 - <$30.00 $21.2M $16.2M $5.0M 30.5% $12.3M $9.0M $3.3M 36.6%

$30.00 - <$40.00 $20.3M $19.9M $0.4M 1.9% $11.1M $11.6M -$0.6M -4.9%

$40.00 - <$50.00 $13.4M $12.1M $1.3M 11.1% $7.3M $6.3M $0.9M 15.9%$40.00 <$50.00 $13.4M $12.1M $1.3M 11.1% $7.3M $6.3M $0.9M 15.9%

$50.00+ $34.5M $30.9M $3.6M 11.7% $16.0M $13.8M $2.2M 15.9%

Grand Total $254.0M $248.7M $5.2M 2.1% $143.5M $140.6M $3.0M 2.1%

VINTAGES Essentials Price BandsVINTAGES Essentials Price Bands

Price Band Per 750 mL

Sales $ Net R13

Sales $ Net LY

R13Chg % Chg

Sales $ Net YTD

Sales $ Net LY

YTDChg % Chg

<$15.00 $11.7M $11.6M $0.2M 1.8% $6.6M $6.7M -$0.01M -0.2%

$15.00 - <$20.00 $82.5M $71.2M $11.2M 15.8% $49.9M $43.7M $6.2M 14.1%

$20.00 - <$25.00 $27.4M $24.7M $2.7M 11.0% $15.5M $14.4M $1.1M 7.6%

$25.00 - <$30.00 $11.7M $10.8M $1.0M 8.9% $6.4M $6.1M $0.3M 4.2%

$30.00 - <$40.00 $8.1M $7.7M $0.5M 6.1% $4.2M $3.8M $0.5M 12.4%

$40 00 <$50 00 $4 1M $3 6M $0 5M 14 0% $2 2M $1 8M $0 4M 23 9%$40.00 - <$50.00 $4.1M $3.6M $0.5M 14.0% $2.2M $1.8M $0.4M 23.9%

$50.00+ $17.9M $16.8M $1.1M 6.8% $8.9M $8.5M $0.4M 4.4%

Grand Total $163 5M $146 3M $17 2M 11 8% $93 8M $85 0M $8 8M 10 3%Grand Total $163.5M $146.3M $17.2M 11.8% $93.8M $85.0M $8.8M 10.3%

VINTAGES Inventory Performancey

InventoryCost

% Changevs Last Year

% Change vs PlanCost vs Last Year vs Plan

VINTAGES - European Wines $22.0M -7.9% -19.5%

VINTAGES - New World Wines $28.2M 18.2% 9.7%

ESSENTIALS – European $ESSENTIALS – EuropeanWines $6.6M 31.6% 0.9%

ESSENTIALS – New World Wines $11.5M 18.9% 2.5%

VINTAGES - Futures $11.0M 32.3% -6.5%

TOTAL $79 5M 2 % 0%TOTAL $79.5M 12.1% -4.0%

Food & Drink Wine Move to $17 price-point$ 7 p p

A 8 k l $ $

ProductRelease

Date

Cum. Net Sales Week

Sell-Thru % Week 8

Average 8 week sales at $15 - $417,222

Date8

% Week 8

Merlot Irony Napa 28-Apr-12 $398,380 93.18%Chianti Classico Riserva 28-Apr-12 $439,583 98.53%Carmenere Marques - Rapel Vly 23-Jun-12 $206,518 47.67%Reserva Bodegas Ramon Bilboa 23-Jun-12 $314,037 73.33%Chateau De Galifay Cairanne 01-Sept-12 $311,331 69.8%

’ hi / i i $Oscar’s Estate Shiraz/Viognier 01-Sept-12 $463,630 96.2%

VINTAGES Wines + LCBO WINES Price Band AnalysisPrice Band Analysis

VINTAGES LCBO WINES

Price Band Per 750 mL

Net Sales Chg. % Chg. Net Sales Chg. % Chg.

<$12.00 $3.3M -$3.6M -52.5% $515.1M $11.0M 2.2%$12.00 - <$15.00 $21.4M -$5.8M -21.5% $163.3M $24.0M 17.2%$15.00 - <$20.00 $110.1M $12.3M 12.6% $75.7M $12.2M 19.2%$20.00 - <$25.00 $34.9M $1.8M 5.4% $3.7M $0.4M 11.2%$20.00 $25.00 $34.9M $1.8M 5.4% $3.7M $0.4M 11.2%$25.00 - <$30.00 $19.6M $4.1M 26.2% $2.2M $0.09M 4.0%$30.00 - <$40.00 $15.8M $0.06M 0.4% $4.2M $0.5M 13.8%$40.00 - <$50.00 $10.2M $1.6M 18.4% $0.4M -$0.1M -23.8%$ $6 $ M $ M % $ 6M $ M 6 %$50.00 - <$60.00 $4.9M $1.1M 29.5% $0.6M $0.2M 76.9%$60.00 - <$70.00 $3.0M -$0.2M -6.0% $7.5M $0.6M 9.4%$70.00 - <$80.00 $3.2M $0.2M 7.9% $1.5M $0.09M 6.5%$80.00 - <$90.00 $2.1M $0.01M 0.6% $0.6M $0.05M 9.5%$90.00 - <$100.00 $3.0M $0.2M 8.4% $0 $0 0.0%$100.00+ $14.8M $0.5M 3.4% $0.02M $0.02M 551.0%Grand Total $246.1M $12,190,359 5.2% $774.9M $49.1M 6.8%

Net sales as of PT8 YTD

Refining the VINTAGES Offeringg g

St ti i t i • Starting point in differentiating VINTAGES as $15+VINTAGES as $15+

• We will now be filling in the gaps

• Australian White & Chilean Reds - $13.95+ California Zinfandel California Zinfandel -$16-$19.95

• Spanish Reds & Whites Spanish Reds & Whites - $13.95+

• Bordeaux - $14.00+

Product Consultant Tastingg

Toronto Product Consultants taste everything

Ottawa Product Consultants and media do not Ottawa Product Consultants and media do not taste ISD’s

Exceptions:Exceptions:

Lab failures

hi iLate shipping

Wrong product or vintages shipped

Satellite Product Consultant tastings are restricted to 50 or 60 wines50 60

Instore Discoveries

Back in the release in the fourth quarter of the fiscal yearfiscal year

Each product will have a note

Segregated as a group of products only available in select locations

Release Date and Channel Changesg

In general, category administrators will contact agentsage ts

Manual process

Investigating automationInvestigating automation

• Who is receiving this information at your end?

We rebate 9% of all release products purchased this fiscal

Ordering from DICEg

Orders from DICE are NOT adjusted

Push out residual inventory when we can with Push out residual inventory when we can with retail approval

May get picked and shipped with a DICE orderMay get picked and shipped with a DICE order

We aim to push out 80% of the release

l d f dj dRelease orders are often adjusted

New! Wine Styles Descriptory p

75% of customers found the wine styles descriptors to be very useful for selecting wine

Over 70% of consumers said they were interested in becoming more knowledgeable about wine

O l / l i d b k l d bl b i Only 1/10 claimed to be very knowledgeable about wine

New! Wine Styles Descriptory p

Incorporate wine styles in to our VINTAGES section

Help bridge consumers in to fine wine Help bridge consumers in to fine wine

New! Central Allocation

Currently in IT testing

Three to four weeks inventory team will testThree to four weeks inventory team will test

Will run three to four releases against the allocation system to compare dataallocation system to compare data

Go live date February 19, 2013

Fee Change 2013g 3

Effective April 1, 2013

% i No Change!

5% increase on:

Release covers

i f h h

Essentials

CollaborativesWines of the Month

BenchmarkHoliday

Arrive in Style

Food & Drink Discovery

New – Release Fee

To offset administrative and promotional costs

Fl f f $ d i h d Flat fee of $200.00 per product with orders over $20,000

VINTAGES OperationsVINTAGES Operations

KELLY TAYLOR

DIRECTORDIRECTOR

VINTAGES OPERATIONS

VINTAGES Licensee

Continue to offer premium customer service to VINTAGES

Licensee including:

Regular release tastings & advanced order options

Participation in approved supplier initiatives to enhance collaboration between licensee-serving suppliers & VINTAGES

i i f i liOn-site review of wine lists upon request

Collaborate with GTA Service Centre to further support t i ffi i i f licustomer service efficiencies for licensees

VINTAGES Licensee (Future)VINTAGES Licensee (Future)

Provide increased support for licensees and bl li d i i th l h f DSOenable on-line ordering via the launch of DSO

Increased collaboration with category management team to bring in wines/products management team to bring in wines/products that meet the needs of the licensee customer

VINTAGES Events

Building a diverse schedule of events for all customer segments

Hip, trendy and unexpected venues

Principle and key player p y p yattendance ensures success

VINTAGES Events

Continued and regular collaboration with LCBO and VINTAGEScategory managers and trade to bring exciting event opportunities to customers.

Supported by commercial element that allow for exposure to broader selection of products in specific categories.

Expand the reach of VINTAGES events to smaller yet high value Expand the reach of VINTAGES events to smaller, yet high value markets that include Ottawa, London, Sudbury, etc. (pending trade support)

Look for in-store opportunities to host events with key trade partners to create Vintages brand awareness.

Customer acquisition/awareness through increased frequency of multi-agent/supplier events (except in instances of Iconic brands) to offer a diverse selection of products to new customer segmentsto offer a diverse selection of products to new customer segments.

Questions?Q

Open Discussion

Thank You