Canadian Vintners Association Grocery Stores Landscape July, 2016 - PowerPoint PPT Presentation

Canadian Vintners Association Grocery Stores Landscape July, 2016

Do you believe that wine will be available in every grocery store in 20 years? Present Day 20 Years from Now 4,060 Points of Distribution 11,938 Points of Distribution Wine Retailers Per 1000 People < 0.25 > 0.25 3 X MORE POINTS OF DISTRIBUTION BY 2036

Grocery represents an emerging channel for future wine opportunity As wine sales and volume continue to grow, nationwide wine-in-grocery reforms provide increased access and opportunity to further grow the category Canadian Wine Industry at a Glance National Wine-on-Shelf Grocery Reforms Wine is the fastest growing major alcohol category in Canada NL BC AB MB SK QC PE Wine is seeing a move towards ON NB NS increased premiumisation Canadians vastly under index ON NB BC in consumption of wine 40+ licences 300 grocery 3 store pilot coming licences by expanding to 2025 18 stores Provinces with mature wine-in-grocery market Provinces with planned wine-in-grocery reforms

Grocery can deliver unparalleled exposure and access to large populations Grocery stores can drive traffic in a socially responsible way. Wine-in-grocery reforms would expose The grocery channel has experience in the wine category to 120 M additional socially responsible growth of controlled customers/year by 2017 categories

Customer need for convenience is redefining the grocery store Grocers are offering creative occasion solutions and omnichannel retail options to meet the increasing customer need for a convenient shopping trip. Sobey’s Extra banner makes meal Grocery retailers are experimenting with preparation more convenient delivery and click-and-collect models

Customers value local, sustainable and healthy food choices Grocers are bringing healthy options to stores by working with high-quality and local suppliers. Organic foods are growing at 10% / Year Almost 50% of organic food sales are locally sourced

Innovations in experience-based retailing are increasing customer traffic 52% of shoppers cite in-store experience as the primary reason they return to the store Corks Beer and Wine Bar restaurants inside Eataly marries grocery shopping with Longo’s stores invite a high-end experience customers to pair Longo’s foods with craft beer or local wine

Unique and diversified category offerings are driving growth As the grocery channel grows at a modest rate, retailers looks to introduce unique categories to help grow the business through differentiation Food and Beverage Store Sales Growth (2010 – 2015 CAGR) 1 2.64% 0.94% 3.64% Alcohol Stores Supermarkets Specialty Stores Specialty foods are outpacing market growth in food & Artisanal bakery Première beverage by 2-3 X due to Moisson acquired by Metro differentiated assortments provides a diversified offering

Premium and unique products drive impulse purchases The rise of upscale grocery stores and premium product lines create opportunity to boost wine sales and product discovery. Partnership with luxury retailers Rise of the premium private label brand Premium retailer Saks Fifth Avenue chose Loblaw’s PC Black Label is a highly to partner with Pusateri’s to deliver a luxury differentiated offering that drives 42% impulse food experience in their Canadian stores purchases through at-shelf engagement

Customer trends highlight the perfect pairing between wine and grocery A customer-centric approach has redefined the grocery channel, making it a natural fit to grow the wine category. Trusted community partner History of local sourcing Desire to Buy Local Interest in Health Product discovery Variety Consciousness Strategic positioning At-shelf engagement Organic food pairings Cross-promotions WINE TRENDS Increased In-store product Immersive experience Education Premiumisation ambassadors Premium product On-shelf marketing pairings Social responsibility National experience with controlled categories 10