2016 OPERATIONS REPORT - The Beer Store Report/2016OPS... · The Beer Store 2016 Ops Report 1. ......
Transcript of 2016 OPERATIONS REPORT - The Beer Store Report/2016OPS... · The Beer Store 2016 Ops Report 1. ......
2016 OPE R ATIONS
REPORT
1The Beer Store | 2016 Ops Repor t
CONTENTS1 Presidents Message
3 The Year at a Glance
4 Growth Continues
5 E- Commerce
11 Our Commitment to the Community
12 An Ongoing Commitment to Responsible Ser vice
14 Communit y Involvement
16 Advancing Our Circular Economy
18 Environmental Per formance
21 Environmental Activities
24 Health and Safety
25 Training and Development
26 The Year in Beer Sales
30 Beer Tax Contributions
31 Rate Sheet
33 Financial Statements
2016 was a great year for The Beer Store and we are delighted to
share with you our Annual Operations Report. 2016 marked the
first full year of implementation of the ten-year Master Framework
Agreement (MFA) with the Province of Ontario, triggering
significant change in the beer retailing industry in Ontario. With
the MFA embracing so many Beer Store initiatives from the
previous year, we saw The Beer Store ownership group grow to
30 Ontario-based Brewers, a tenfold increase in just over two
years. We experienced dozens of small Ontario Brewers take
advantage of free listings in our stores and we witnessed brand
selection at The Beer Store grow to unprecedented heights. We
were also very pleased to welcome a new Board of Directors to
The Beer Store with representation from Ontario Brewers of all
sizes and four new independent directors who bring their own
individual expertise in helping build a better Beer Store future.
As the year closed out, we welcomed a new Ombudsperson to
help manage service issues.
The MFA also called on The Beer Store to allow licensees that
sell fewer than 250 cases per year to purchase their products
at home consumer prices and by the end of 2016 well over
eight thousand (8,314) or approximately half of all licensed
establishments were enjoying this new feature. The Beer Store
invested significantly in new resources including people and
software to facilitate merchandising initiatives. Along with
other exciting initiatives, small Ontario brewer sales have
grown by 26% since 2015.
Just in time for Canada Day 2016, we launched Beer Xpress,
a new e-commerce tool that allows customers to shop and
purchase online. Launched in 25 Ontario communities, this new
experience has been welcomed by beer lovers everywhere and
The Beer Store looks forward to expanding its online shopping
experience in 2017 to include more communities throughout
the province. Continuing with its digital initiatives, hundreds of
Beer Stores introduced electronic price information centres in
2016. These exciting digital kiosks allow customers to explore
all of the various brands that their Beer Store has to offer.
While significant change was taking place in 2016, one thing
that did not change was The Beer Store’s unwavering commit-
ment to its core values, including our serious approach to
responsible sale. Over 3.5 million customers were challenged
to produce age identification, resulting in tens of thousands of
refused sales. Thousands more were refused service for
intoxication, a fact that was applauded publicly by Arrive Alive
Drive Sober and by Police Officers across Ontario. Recognized
for its commitment to responsible sale by like-minded organiza-
tions, The Beer Store was again proud to partner with the great
people from Arrive Alive Drive Sober and the Ontario
Association of Chiefs of Police in 2016.
Thanks to our 7,000 hard-working employees, The Beer
Store’s award winning environmental stewardship program
continued to be a global leader in 2016, as we ensured that
almost two billion beer, wine, and spirits containers were
diverted from landfill and either reused or recycled into other
valuable products. Along with all of the secondary packaging
that comes with these containers, over 350,000 metric tonnes
of landfill was avoided thanks to our efforts. We are very proud
to play such an integral role in Ontario’s circular economy and
we encourage all Ontarians to join us in ensuring a greener
future. And finally, we are thankful to work alongside the
UFCW Local 12R24 that represents so many of our employees
to raise funds and awareness in the support of so many great
causes. From Fort McMurray fire victims, to the fight against
blood cancers, to Habitat for Humanity, to Rogers House, and
to countless other community charities, we salute all of our
caring staff and employees for their relentless pursuit of being
wonderful corporate citizens.
Cheers,
PR ES I D E NT’S
MESSAGE
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RELOCATED NEW REDEVELOPED
Scarborough Waterloo Ottawa
Pickering
Minden
Increase of 109 BR ANDS
since 2015
Increase of 27 BREWERS
since 2015
Increase of 2 STORES since 2015
No. of BR ANDS
LISTED in 2016
715
No. of BREWERS
LISTED in 2016
163
No. of STORES LISTED in 2016
452
TH E Y E AR AT A
GLANCE2016 was a year about making change happen. Beginning with the new Master Framework Agreement, processes and procedures were put in place to improve the shopping experience for Beer Lovers in Ontario. The business spent a considerable amount of time at the start of the year preparing, organizing and planning all marketing and shelf management programs. As the year progressed, changes were made to the layout of stores, the format of communications and fixtures to be more efficient and a better experience for both customers and staff.
Mid-way in the year TBS offered a new e.channel where customers can shop and purchase beer on-line. This new way to buy beer has been positively accepted to-date amongst the 25 Pilot store communities. Investments and improvements in this channel will continue into 2017 as smart phone shopping becomes an integral option for buying beer in Ontario.
The company maintains its strong commitment to it’s core values: Health & Safety, Honesty, Integrity and Respect, Environmental Leadership, Social Responsibility and Operational Excellence. Embedded in company’s culture is the tireless efforts of union and management employees working together to raise funds to eliminate blood cancers through donation efforts to the Leukemia and Lymphoma Society of Canada. Over $11 million dollars have been raised to-date.
G ROW TH
CONTINUESRenewal of the network continues to be a major part of the growth strategy for TBS with a consistent focus on building self-serve stores whether in newly populated areas or to a new site when relocation options become available. For 2016, five new self-serve stores with empty returns were built; one net new in a growing community, three relocations to better sites and one to be redeveloped with a new store as part of a residential development.
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E-COMMERCE
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B E E R X PR E SSOn June 29, 2016 The Beer Store was excited to announce to the media and all beer lovers in Ontario a new way to purchase beer – by smart phone or by the TBS website. This new e.channel is a Pilot program, appropriately called ‘Beer Xpress’ (BX) , is a way of ordering your beer on-line and picking it up at the store within 30 minutes or three days. Available at launch in 25 stores across various communities in Ontario the goal of this first phase was all about learning and refining the experience of buying beer on-line.
Customers use the mobile website to search for their favourite brands in a nearby Beer Xpress store. Orders are placed electronically, paid for by credit card and customers indicate the approximate day and time they will be at the store to pick up their beer. Staff receive the order at the store and pick the items from inventory and get them ready in time before the customer arrives. Upon arriving at the store customers go directly to a Beer Xpress station, staff are notified that they have arrived and staff retrieve orders from the storage area and meet the customer. The usual checking of ID and validation of the order takes place and the customer is on their way. No waiting in line… fast service when you want it.
After considerable feedback over the summer, customers wanted more stores and greater access to Beer Xpress stores. In response, the BX Pilot program was extended to include all stores in the Kitchener/Waterloo area – 7 more stores for 32 stores in total. This updated strategy was about measuring how saturating stores in one market area might lead to increased performance of on-line orders. The result to-date – orders have increased 3–4 fold.
The plan for 2017 is to continue to add more consumer value options and service areas and make this on-line beer buying experience available to even more beer lovers across Ontario.
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IN -S TOR E
EXPERIENCE
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First introduced in 2014, new electronic Price Information Centre stands with pricing and product menus were rolled-out to over 235 stores in 2016. Screens were updated with category search menus to match how beer was organized on shelves for display
The new screens allow customers to search for new brands, new pack sizes and value priced products on their own time and at their own speed. Some quickly adapted to the new way to shop for beer in our conven-tional stores and others were hesitant but soon found how efficient and helpful it was to have all the beers available to them in one dynamic environment.
Plans are underway in 2017 to continually enhance search engines, add value content and generally improve the in-store shopping experience aided by this modern technology.
RO LL- O UT O F PR I C I N G AN D PRO D U C T TO U C H -SC R E E N S
TBS introduced category merchandising of the brands available for sale, namely; Domestic Specialty, Imports, Value, Premium and Ontario Craft (a sub category of Domestic Specialty). In the Spring of 2016, colour coded shelf tickets next to price tickets were added to indicate the category of beer the brand belonged to. In the late Fall of 2016, another category feature was added with ‘category flags’ on top of gondolas so customers could see the section of beer from afar and quickly navigate to the area they wanted to shop. For more information regarding our category policy please visit: http://www.TheBeerStore.ca/ownership-governance/corporate-policy-financial-information
I M PROVI N G TH E S E LF -S E RVE S H O PPI N G E X PE R I E N C E
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OUR
COMMITMENTTO THE
COMMUNITY
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YEAR CHALLENGE TYPE CHALLENGED REFUSED
2016 Intoxicants 15,631 12,377
2016 Minors 3,545,646 33,038
“The Beer Store was very supportive of arrive alive DRIVE SOBER in 2016. In addition to being a primary supporter of the annual arrive alive DRIVE SOBER campaign, you also supported our newly re-branded arrive alive Conference, our Drive Straight Golf Tournament and our Shut Out Impaired Driving winter campaign. In 2016, thanks to local Beer Store locations in the GTA, we were able to host two alcohol awareness events – one before the Super Bowl and another before the holiday season – sharing strategies for planning ahead with The Beer Store customers. Thanks to the consistent and incredible support we receive from The Beer Store; we have been able to build a strong and long-lasting campaign to help keep Ontario’s roads one of the safest in North America. arrive alive DRIVE SOBER is the #1 recognized slogan in Ontario and has been for many years thanks to your support. Thank you again for your support and we look forward to continuing to work together to eliminate impaired driving.”
Michael Stewart, Program Director, arrive alive DRIVE SOBER
R E S P O N S I B LE SALE S P O LI C I E S:
• Request ID from anyone who appears to be 25 years old or under
• Refuse service to anyone who appears to be intoxicated
• Mandatory annual responsible service training for all sales staff
• Mystery shop program to ensure compliance with policies
• Store level responsible service results incorporated into store manager performance reviews
TBS supported Arrive Alive DRIVE SOBER in a number of different initiatives
throughout 2016, including:
• 2016 Super Bowl Event
• 2016 Holiday Event
• 2016 arrive alive Basket
• Shut Out Impaired Driving
• Thank You for Driving Sober Contest
• arrive alive Conference
• 22nd Annual Drive Straight
Golf Tournament
The Beer Store prides itself on the responsible sale of alcohol. Strict policies are in place to ensure that minors and intoxicants do not have access to alcohol.
AN O N GO I N G CO M M ITM E NT TO
RESPONSIBLE SERVICE
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CO M M U N IT Y
INVOLVEMENTThe Beer Store is dedicated to giving back to the communities we operate in and are pleased to support a number of local and provincial organizations. Some of the charities and programs we support include:
R E TU R N S FO R LE U K E M IA D R IVEReturns For Leukemia is a fundraiser held each May by United Food & Commercial Workers Local 12R24 in partnership with The Beer Store to raise funds for The Leukemia & Lymphoma Society of Canada at over 450 Beer Store locations. Together we raised over 11 million dollars during the 11 years of bottle drives which will help find a cure for blood cancers.
RO G E R S H O US E BOT TLE D R IVEBeer Store locations in the Eastern Ontario Region raise money each year to support the families of sick children and youth. Our stores, along with our great volunteers, helped raise $82,684.75 for Rogers House in 2016.
TH E BOT TLE S H E DThe Beer Store facilitates returns from The Bottle Shed Foundation to DCs. They are a non-profit organization that supports local charities and causes. The main source of fundraising is through donations of empty alcohol containers.
CO M M E RC E & E N G I N E E R I N G E NVI RO N M E NTAL CO N FE R E N C E (C E EC)The Beer Store proudly sponsors the Commerce & Engineering Environmental Conference at Queen’s University in Kingston. Each year, CEEC attracts 130 delegates from across North America with backgrounds in business, engineering, arts, and sciences. CEEC utilizes workshops, speakers, and case competitions designed to challenge delegates to address current issues concerning energy, the environment and sustainability.
PAR TN E R S I N PROJ EC T G R E E NInitiated by the Greater Toronto Airports Authority (GTAA) and Toronto and Region Conservation Authority (TRCA), Partners in Project Green is dedicated to creating the biggest eco-business zone in the world. TBS corporate office hosted a Recycling Collection Drive for Waste Reduction Week Oct.17-21st, 2016. Employees were encouraged to drop off Clothing items and, Electronic Waste (computers, phones, monitors, keyboards, mice, audio and video equipment).
M ISS I N G C H I LD R E N SO C I E T Y O F C ANADAIn 2016, The Beer Store facilitated returns received from the Missing Children Society of Canada which collected nearly 67,000 empty containers from condominium buildings in Toronto that are donated to help fund investigations, emergency response, and family and peer support related to that charity.
R EC YC LI N G CO U N C I L O F O NTAR I ORecycling Council of Ontario (RCO) is a not-for-profit membership-based organization involved in policy, education, and project work around the issues of consumption, waste generation, reduction and diversion, and recycling. The Beer Store contributes annually by sponsoring RCO’s website.
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ADVANCING THE CIRCUL AR
ECONOMY
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At The Beer Store, we are serious about our commitment to the environment. We work hard every day to protect the environment by facilitating the reuse and recycling of beer containers and the packaging they are sold in.
As in previous years, The Beer Store recovered more beer containers than it sold in 2016 thanks to the expansive network of empty return locations. The Beer Store continues to collect beer containers and secondary packaging on behalf of over 150 producers that sell through The Beer Store retail and wholesale systems.
E NVI RO N M E NTAL
PERFORMANCECombined, The Beer Store and ODRP avoided an estimated 203,555 tonnes of GHG emissions – that’s the equivalent to:
Taking 42,988 vehicles off Ontario roads!
OR
Powering 21,495 houses in one year!
OR
Consuming 471,273 barrels of oil3
* Figures in chart may not add to the total due to rounding.
** “Avoided GHG” and “Avoided Energy” coefficients for PET Recycling used for Mixed Plastic Figures
GLASS REUSE
CLEAR GLASS
BOTTLE
COLOURED GLASS
ALUMINUM RECYCLING
STEEL RECYCLING
PET RECYCLING
MIXED PLASTIC RECYCLING**
TOTAL DIVERSION
Beer Store Tonnes Diver ted
185,677 16,331 32,531 10,258 252 - 997 246,046
ODRP Tonnes Diver ted
- 41,084 67,671 1,493 - 1,023 - 111,271
TOTAL Tonnes Diver ted
185,677 57,415 10 0,202 11,751 252 1,023 997 357,317
Avoided GHG Emissions (MTCO2E)
70,557 6,316 5,511 113,519 30 0 3,723 3,628 203,555
Avoided Energy Consumption (GJ)
1,262,604 96,457 109,220 1,026,608 3,175 87,263 85,033 2,670,360
BEER STORE AND ODRP DISPOSAL DIVERSION ESTIMATED AVOIDED GHG EMISSIONS & AVOIDED ENERGY CONSUMPTION (2016)* 1, 2
January 1st, 2016 – December 31st, 2016
1 Source for avoided energy and emissions multipliers: Determination of the Impact of Waste Management activities on Greenhouse Gas Emissions: 2005 Update Final Report, ICF Consulting for Environment Canada & Natural Resources Canada, October 2005 and GHG Calculator for Waste Management, Update Oct 2009, ICF Consulting for Environment Canada. Multipliers for avoided GHG Emissions (eCO2/tonne) used were 0.38 for glass reuse and 9.66 for aluminum recycling. Avoided GHGs from glass bottle reuse (0.38) is not presented in the Determination of the Impact of Waste Management activities on Greenhouse Gas Emissions: 2005 Update Final Report. This multiplier was provided in the previous version of the report from 2004.
2 Pollutant reductions associated with recycled versus virgin aluminum production and glass production from Weitz, Keith A. et al. 2003. Life-Cycle Inventory Data Sets for Materials Production of Aluminum, Glass, Paper, Plastic and Steel in North America. Report prepared by RTI International for the U.S. EPA, Office of Research and Development. EPA-600/Q-03-001. Research Triangle Park, NC.
42,988 CARS & TRUCKS
21,495 R ESIDENCES
O F O I L
3 https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator
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SALES IN UNITS RETURNS IN UNITS RECOVERY R ATE
CONTAINER TYPE
SMALL CONTAINERS
LARGE CONTAINERS
SMALL CONTAINERS
LARGE CONTAINERS
SMALL CONTAINERS
2016
SMALL CONTAINERS
(F2016)
LARGECONTAINERS
2016
LARGE CONTAINERS
(F2016)
COMBINED 2016
COMBINED (F2016)
Glass 79,003,336 209,404,965 57,601,139 179,567,149 73% 74% 86% 87% 82% 84%
PET 19,161,848 10,211,572 8,340,736 7,286,782 44% 43% 71% 73% 53% 53%
Tet ra/Bib
1,189,261 10,018,266 85,250 2,762,216 7% 9% 28% 28% 25% 26%
Subtotal 99,354,445 229,634,804 66,027,125 189,616,148 66% 67% 83% 84% 78% 79%
Cans 118,734,989 93,674,172
79% 81%
GR AND TOTAL 447,724,237 349,317,444 78.0% 79.4%
ODRP CONTAINERS: SALES & RECOVERYJanuary 1st, 2016 – December 31st, 2016
#BAGITBACK ONTARIO DEPOSIT RETURNS PROGRAM SOCIAL MEDIA CAMPAIGNJanuary & February 2016
The annual #BagItBack campaign was launched in unison with the Ministry of the Environment, Ministry of Finance and LCBO. Each party contributed and shared content to promote the Ontario Deposit Returns Program. The goal was to raise awareness and ultimately increase the ODRP return rate.
E NVI RO N M E NTAL
ACTIVITIESSO C IAL M E D IA
EARTH DAYApril 22nd, 2016
Along with the in-store signage and employee t-shirts, several Facebook, Twitter and Instagram posts were shared leading up to Earth Day.
#WASTEREDUCTIONWEEK WASTE REDUCTION WEEKOctober 16th – 23rd, 2016
The Waste Reduction Week Campaign consisted of daily Facebook and Twitter posts. The hashtag #wastereductionweek was used to unite with other supporters of the recycling initiatives and reach a new audience.
CONTAINER TYPEBEER STORE
SALES (UNITS)LCBO SALES
(UNITS)RETURNS
(UNITS)
SYSTEM RECOVERY
RATE (CY2016)
SYSTEM RECOVERY
RATE (2015-2016)
All Glass Bottles (Refillable & Non-Refillable)
839,682,241 119,243,302 914,621,297 95.4% 96.5%
Refillable Bottles (Industry Standard Bottle (ISB) & Non-Standard
715,475,323 70,242,974 760,463,945 96.8% 97.5%
Non-Refillable Bottles
124,206,918 49,000,328 154,157,352 89.0% 91.6%
Metal Cans 553,453,983 277,580,986 661,619,348 79.6% 81.8%
Kegs 1,306,776 - 1,334,334 102.1% 101.6%
Total (by Units) 1,394,443,000 396,824,289 1,577,574,979 88.1% 90.1%
THE BEER STORE CONTAINER AND RECOVERY BY CONTAINER TYPEJanuary 1, 2016 - December 31, 2016
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HOLIDAY CAMPAIGNNovember – December 2016
All 451 retail locations displayed 24”x36” recycling posters encouraging customers to return empties to The Beer Store and keep them out of landfills. This campaign empha-sized all of the container types that The Beer Store accepts for a deposit return.
C A M PAI G N SBE GREEN EARTH DAY CAMPAIGNApril 2016
For the month of April, all stores received and displayed the “Be Green” poster to promote the benefits of returning empties. All staff also received a “Be Green” t-shirt to wear leading up to Earth Day to support the campaign.
I N -S TO R E
NEW EIGHT PACK CARRIERS2016
New eight pack carriers were introduced in 2016, replacing the previous bleached fiber carriers with carriers constructed of kraft material that includes approximately 70% of post-consumed content and reduced use of inks. New consumer messaging has been added to ensure consumers are aware that the carriers, as well as the cans, can be returned to TBS return locations for recycling.
GOING ABOVE AND BEYOND OUR DEPOSIT RETURN PROGRAM2016
Over the course of 2016: hot water tanks at 13 sites were converted to smaller, more efficient units; 7 R30 Roofs were upgraded; washroom renovations were completed with low flow toilets and LED lighting with movement sensors were installed; refrigeration systems were replaced that are up to 70% more efficient depending on location.
At our corporate office, we eliminated the use of single-serve coffee pods and encouraged the use of refillable mugs by employees and visitors. We con-tinue to use high-speed doors in our coolers to keep the cold in to save energy. Some stores even draw in ambient air in the colder months to reduce the cooling required through refrigeration units.
When renovating or building new stores, greater footprint is given to the container and packaging returns area to improve functionality, in particular sorting space of the ever expanding list of container types. More dedicated space also ensures a low breakage rate to ensure high refill and recycling rates.
FAC I LITI E S
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LE AR N I N G
& DEVELOPMENTFor 2016, TBS has put a larger focus on Customer Service relations throughout the field. Our successful Retail Customer Service Training has been implemented and reformatted for the Logistics field.
S E RVI C E S TAN DAR DS TR AI N I N GFor the 2016 training year, we launched a Service Standards training course for all TBS logistics employees. This course was geared towards logistics employees to assist in gaining a better perspective of customer needs while maintaining a highly efficient distribution system.
Training highlights include:
How to effectively communicate & engage with customers | How to conduct oneself in the public eye
Identifying customer variations & accessing customer needs | How to manage complaint resolution effectively
PRO D U C T K N OWLE D G E TR AI N I N GOur product knowledge training has grown within our Brand Ambassador program. As of 2016, all Brand Ambassadors have received Level I of Prud’homme Beer Certification.
This certification gives employees a more educated look at the brewing process, tasting concepts, pouring and servicing concepts along with in depth food and beer pairings.
At a corporate level, our corporate trainers provide additional support in the field. Our senior corporate trainers are now accredited Level III Beer Sommelier’s. These trainers are used as an additional resource throughout the company for support in product knowledge training across all districts, as well as providing introductory training for new employees to the business.
ACC E SS I B I LIT Y S TAN DAR DSWe have made large strides with our AODA training across TBS. In 2016 we introduced a second AODA e-learning module, focusing on various aspects of the act:
Effective & appropriate accommodation | Discrimination Issues | Equal Opportunity | Accommodation Requests
H E ALTH
& SAFETYWe Are Champions of Health & Safety.
Health and safety is a core value at The Beer Store. It is as key pillar within our organization, but health and safety does not stand alone; it is part of everything we do. Leaders of health and safety throughout The Beer Store recognize the value of a safe workplace.
People, equipment, materials, environment and process are all part of a healthy and safe workplace. In Retail, Store Managers and Worker Health & Safety Representatives work together jointly completing monthly workplace inspections, and designated Store Managers and Union Representatives complete an annual inspection at locations within their area district. Through this collaborative approach workplace hazards are identified, corrective actions implemented, and safety culture is embedded in every layer of operations.
The Beer Store has embarked on a number of safety initiatives designed to prevent workplace injuries. New ladders, ergonomic mats, portable mobile barriers, winterized PPE for our drive-thru locations are just a few examples of the continuous improvements made in the past year.
Internal training is also a crucial element. We regularly enhance our safety training to remain complaint and keep pace with changing work demands.
Communication generates awareness, safety infor-mation boards contain legislative and internal safety requirements. This written correspondence helps everyone stay focused and aids toward continual education in health and safety.
The Beer Store safety culture starts at the top and resonates throughout the entire organization. We will continually strive to keep health and safety at the forefront of all we do.
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I . PRO D U C T S E LEC TI O N
TH E Y E AR I N
BEER SALES
The Beer Store has an open listing policy meaning that any brewer around the world wanting to sell product approved by the LCBO in the retail and distribution chain can do so. At the end of 2016, The Beer Store stocked 715 brands from 163 brewers from many different countries.
2016 SALES BY BREWER
Ontario BasedBrewers
Out of ProvinceBrewers/Import
2016 BREWER SEGMENTS
Ontario49%
4%
47%
Out of Province
Import
In 2016, 88% of beers sold were produced by Ontario Based Brewers.
THE BEER STORE BREWER FACTS (2016)
2016% of
Sales
Ontario Based Brewers 80 88%
Out of Province Brewers 6
12%
Import Brewers 77
Total Number of Brewers 163
Small Ontario Brewers* 77
Brewery Countries of Origin 32
* Refers to Ontario Brewers whose annual production is less than 400,000hl.
I I . SALE S BY VALU E AN D B E E R PR I C E S
AVERAGE BEER STORE HOME CONSUMER PRICE CONVERTED TO CASE EQUIVALENT
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I I I . B E E R S TO R E SALE S BY C HAN N E L
The Beer Store is both a retail and wholesale business. As the following chart indicates TBS operates 452 stores (as of December 2016) in an Ontario beverage alcohol system that includes over 1,300 outlets where beer can be purchased.
BEER STORE VOLUME SALES
2012 2013 2014 2015 2016
Home Consumer 63.97% 63.93% 63.89% 64.04% 64.17%
Licensee 18.45% 18.20% 17.84% 17.32% 17.02%
LCBO 12.26% 12.54% 12.85% 13.24% 13.28%
Retail Partner/Agency 4.61% 4.60% 4.69% 4.76% 4.74%
Grocery Stores 0.13%
Other 0.72% 0.73% 0.73% 0.64% 0.66%
Volume reflects [60] stores authorized by the LCBO/AGCO in 2016 . Up to 450 grocery stores, in aggregate, may be issued after May 1, 2017.
BEER STORE WHOLESALE SALES
In addition to selling beer to the public through its retail stores, The Beer Store also distributes and sells beer to LCBO stores, agency stores, and Beer Store Retail Partner stores, as well as 20,723 licensed bars and restaurants.
B E E R S TO R E WH O LE SALE VO LU M E SALE S TR E N DS
OVERALL WHOLESALE
SALES IN 2016
DECREASED BY
30,794 HL OR 1.3%
LICENSEE SALES
DECLINED BY 22,029 HL
OR 1.9%
LICENSEE PACKAGED
BEER SALES DECLINED BY
10.346 HL OR 1.9%
LICENSEE DRAUGHT
BEER SALES DECLINED BY
11,908 HL OR 1.9%
LCBO SALES DECREASED
BY 4,790 HL OR 0.5%
AGENCY STORE/
RETAIL PARTNER SALES
DECREASED BY 3,975 HL
OR 1.2%
ONTARIO RETAIL BEER OUTLETS
2012 2013 2014 2015 2016
Beer Stores 443 447 445 450 451
TBS Mobile Trailers 2 2 2 2 2
LCBO Stores 623 634 639 651 654
LCBO Agency Stores & TBS Retail Partners 214 219 217 212 212
On-site Brewery Stores 45 52 73 113 156
Grocery Stores 130
TOTAL 1,327 1,327 1,374 1,426 1,659
Store numbers for LCBO stores, on-site brewery stores and Agency and Beer Store Retail Partners are provided by the LCBO Annual Reports. Beer Store numbers for all years are from Beer Store data as of December 31st for that year.
BEER STORE CONSUMER SALES BY VOLUME
BEER STORE LICENSEE SALES
BEER STORE RETAIL PARTNER/AGENCY SALES
BEER STORE LCBO SALES BEER STORE GROCERY SALES
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TAX EXAMPLES BY PRICE POINT 20164
RETAIL PRICE
FEDERAL TAX
PROVINCIAL TAX
TOTAL TAX
24 – 341ml Bottles - Domestic Specialty $43.19 10.3% 26.3% 36.6%
24 – 341ml Bottles - Premium $33.81 12.0% 31.6% 43.6%
24 – 341ml Bottles - Value $31.05 12.7% 33.8% 46.5%
24 – 341ml Bottles – Ontario Craft $46.37 6.6% 16.2% 22.8%
24 – 330ml Bottles - Import $48.09 9.6% 28.2% 37.8%
24 – 355ml Cans (Average across categories) $40.96 10.9% 33.4% 44.3%
ONTARIO TAXES COLLECTED ON BEER SALES 2016
ESTIMATED GOVERNMENT REVENUES ASSOCIATED WITH TBS BEER SALES (MILLIONS) 2016
Provincial Commodity Taxes $620.3
Federal Excise Taxes $181.0
Goods and Service Tax (Federal portion of HST) $116.7
Provincial Sales Tax (Provincial portion of HST) $186.8
Total Government Beer Taxes Associated with TBS Sales $1,104.8
FEDERAL AND PROVINCIAL BEER TAX CONTRIBUTIONS 2016
Federal Excise Tax $0.3122/litre5
Provincial Taxes/LCBO Mark-ups6
Ontario Beer Manufacturer($/L) Ontario Microbrewer
Draught Basic Tax $0.6710 $0.3061
Packaged Basic Tax $0.8382 $0.3383
Volume Levy $0.176/litre
Environmental Levy $0.0893/non-refillable container
HST 13%
4 Based on prices in effect on December 31, 2016
5 Rate based on abv > 2.5% producing more than 75,000 hl annually. http://www.cra-arc.gc.ca/E/pub/em/edbn8/edbn8-e.html
6 Rates are as effective December 31, 2016. http://www.fin.gov.on.ca/en/tax/bwt/
B E E R TA X
CONTRIBUTIONS
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2016
BRI R ATE SHEET
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