Program Guide 2023
Ontario Small Distillers Direct to LCBO Delivery -- Updated March 2023
Ontario Small Distiller Direct-to-Store Delivery Program
Information for Distilleries – Updated November 2021
Program Overview
The Ontario Small Distiller Direct-to-Store Delivery Program allows small Ontario distilleries to direct-deliver approved, locally produced spirits and liqueurs to select LCBO stores.
The program’s objectives are as follows:
Provide a platform for small distillers to offer their products for sale via the LCBO retail network.
Augment the LCBO’s Spirits assortment with market-relevant, locally produced product.
Eligibility
This program is open to small, licensed manufacturers of spirits and contract distillers in Ontario that meet the following criteria:
· The distiller must own a working still and be licensed to manufacture spirits.
· The distillery must produce less than 75,000 litres globally of saleable product annually.
· Eligible products must be made from start to finish by the distiller and at the distillery.
· Greater than 50% of raw materials must be fermented on-site per product.
Contract Distillers
· Contract distillers must hold an AGCO Manufacturer’s License.
· Contract distiller products must be distilled at an Ontario distillery adhering to all of the above-mentioned criteria.
· Any spirits produced by an Ontario distillery for a contract distiller is included in that distillery’s production for the purpose of determining total annual production under this policy.
Program Terms
1. Only one SKU per product category will be considered until the SKU is exceeding sales target. For example, you cannot list a second vodka SKU until the first vodka is making or exceeding target. (See sales expectations below.)
2. Products accepted for the program are authorized for Direct-to-Store Delivery only. A product cannot participate in the direct delivery program and be available for stores to draw from our warehouses at the same time.
3. Products will be listed and delisted at the discretion of each LCBO store.
4. All products must undergo a Quality Assurance review for packaging and liquid on an annual basis. Once the product is in-market, any changes to packaging or liquid require a new Quality Assurance review and must be brought to the attention of the Category Team.
5. All products must be line priced with the distillery’s on-site store.
6. Category reserves the right to decline products.
7. Category reserves the right to move a product to a different listing type if product offering is deemed appropriate.
8. Distillers who wish to supply product directly to licensees or duty free, must contact LCBO Corporate Policy: lcbo-policy@lcbo.com
Sales Expectation
· All products on the Ontario Small Distillers program will be held the following target:
Average sales to exceed $2000/store by the end of Year One.
· Products not meeting this quota will be eligible to be delisted.
Performance Review
· Sales by store will be formally reviewed semi-annually.
· Products not meeting the quota will be notified with a warning letter. If they continue to fall below the quota, they will be eligible to be delisted.
· The sales target of $2000/store will remain in place regardless of the number of stores to which products are direct delivered. However, Ontario Small Distillers are encouraged to engage with an array of stores in their vicinity and to contact LCBO Category Management staff to address any questions about quota.
· Products participating in the Ontario Small Distiller Direct-to-Store Delivery Program will not be considered for LCBO General List until they have demonstrated a minimum of 1-year of exceptional performance on the Ontario Small Distillers program. At that time, the Category Team will assess if the product is a reasonable candidate to move to an LCBO General List. You may find more information regarding General List in the FAQ at the end of this document.
· Performance Advice to Small Distillers:
· Most successful skus have investment behind them, both through in-store support programs (e.g., LTO, BAM, VA, Tastings) and external promotion. To be considered for paid support programs, please apply in the Merchandising Promotion Tracking System (MPTS) by the deadlines outlined on the Trade Website:
Merchandising & Marketing | Doing Business with LCBO
· It is important to understand that our Retail stores may delist underperforming SKUs at their discretion. It is essential to build relationships at the Retail level.
· As distribution expands, it may be beneficial to consider hiring an agent to represent your SKU(s). Information and a list of agents is available at http://www.drinksontario.com/
Listing Process
Ontario Small Distiller Direct-to-Store Delivery Program issues product calls three times a year. Producers may submit products for consideration into the program via these 3 calls.
Product Needs Letters | Doing Business with LCBO
All new item submissions must be entered into NISS via a Product Call. NISS link:
New Item Submission System (NISS) | Doing Business with LCBO
Key Dates
- Pre-submission Due Date – The final date which the NISS Submission can be made into the call.
- LCBO Callback Date – The date which Category Accepts or Declines products for tasting and review are communicated (via NISS).
- Sample Due Date – The date which the sample is due for tasting (final liquid sample needed).
- Scheduled Tasting Date - The date all products in the call are tasted and reviewed by Category.
Once a submission is accepted:
Once a product has been tasted and reviewed by Category, you will receive notification of the results via NISS email. If your submission is accepted, you will be prompted to provide additional product information:
Provide through NISS (Upload in NTP/Additional Info):
A quote on Supplier letterhead, signed and dated, indicating cost per case and retail price per bottle. Please contact Pricing Administration for any questions related to calculating retail price points. Spirits Pricing Calculator is available at:
PricingCalculators | Doing Business with LCBO
Upload a file with a picture of the label in to the NISS system for Label Examination.
Confirm UPC and SCC Codes through the NISS system.
Provide tastings notes
After the additional information is received and the label is deemed compliant, an LCBO product number will be generated and then you will receive an NTP (Notice to Purchase) via NISS email.
Once the NTP has been issued it is time for final lab examination.
Provide to the Category Team:
1. A finished product sample for chemical analysis and visual inspection of the label. This sample must be market-ready and in every way a true representation of what will be delivered to LCBO stores should approval be granted.
2. A bottle shot of the finished product to be used on the product page of lcbo.com and in the Ontario Small Distiller Program Direct Delivery Guide
Once the item has passed final lab examination, the pricing quote will be submitted to the Pricing team to verify it is correct. If any changes are needed to hit your desired retail price, the Category team will request an updated quote.
Once the product is priced, you are free to start soliciting stores and delivering.
It is advised that the stores be largely concentrated in the vicinity of the distillery and to start small and ladder up.
Please note that approval to participate in the program allows the distillery to approach the desired stores for listing – it does not obligate the store to list the product. The final listing decision is at the discretion of each individual Store Manager.
When a store has agreed to list a product, the distiller and Store Manager are responsible for determining an initial inventory forecast and replenishment process/timeline.
The Category Administrator will provide the distillery with a Distributor code that stores will require for receiving inventory.
A small distiller wishing to have their product made available for sale via our e-commerce website should contact Aleksandra Novakovic (aleksandra.novakovic@lcbo.com) through store 974, LCBO Ecommerce Warehouse. They should ensure consistent supply of inventory is delivered.
**All forms are available at Forms | Doing Business with LCBO
Quality Assurance
The Supplier is responsible for the quality and safety of the product it produces and ensuring compliance with all Regulatory and LCBO consumer unit and shipping container packaging and labeling requirements, including tamper-evident and barcoding requirements established by the Canadian Association of Liquor Jurisdictions (CALJ). Refer to LCBO's Product Packaging Standards and the CALJ Product Identification Standards for the Distribution of Beverage Alcohol documents for information pertaining to these requirements.
All products must undergo a Quality Assurance review at a minimum on an annual basis. Product chemical composition and labelling must meet all applicable regulatory requirements including all LCBO Product Packaging Standards and Guidelines for Chemical analysis as published from time to time. Once the product is in-market, any changes to labelling, packaging or product composition will require a new Quality Assurance review and must be brought to the attention of the Category Team. Quality and compliance must be maintained consistently from Lot to Lot while the product is in market.
The supplier is responsible for maintaining thorough production and quality records to support a product quality investigation. The supplier will be required to produce records of shipments to LCBO stores for traceability of distribution by Lot in the event of a product quality investigation that may lead to a recall.
Product that is determined to be unsatisfactory in market, will be treated as is outlined in the LCBO Purchase Order Terms and Conditions.
Payment Info
The LCBO has a pay on receipt program which means you do not need to invoice the LCBO for products which are delivered to the store as part of the Ontario Small Distillers program. Please follow the steps outlined below:
Stores will place order for product
Suppliers will ship product directly to stores
Suppliers will obtain a signed proof of delivery from each LCBO store
Stores will record product receipt(s)
The product receipts will generate invoices in Accounts Payable for payment. Pricing, HST, and any other cost component, if applicable, will be automatically generated by how the sku is databased
Suppliers will continue to receive email payment notifications and can get more details on shipments via iSupplier
- LCBO will remit a rebate to small distillers proportional to the volume they deliver direct to LCBO stores. The rebate rate is set at $0.1567 per litre. Payment for the rebate will be included in the same payment as the product that was received by LCBO stores.
Suppliers must provide on all packing slips/bill of ladings to the LCBO stores the following:
- SKU number
- The number of selling units being shipped
- The number of cases being shipped
- LCBO store number and address
- Shipment date
- Packing slip/bill of lading must be signed by an LCBO employee as proof of delivery in the event of any discrepancies
Pricing
Suppliers are paid for products delivered directly to LCBO stores based on the active quote at the time of delivery. Please note that the case cost is not adjusted when a product is on an approved Limited Time Offer (LTO). The cost of reducing the price is billed back to the supplier in the period following the LTO.
For all active SKU’s, suppliers will be paid based on the cost per case that is active at the time of receival at the LCBO store. For corporately delisted SKU’s, the most recent historical cost per case will be used. Suppliers will be notified in advance if an ongoing product is being delisted by the Category Management team. Furthermore, for a seasonal product, the time frame during which the SKU will be active for shipping will be given in the Notice to Purchase (NTP). The LCBO will not pay for inventory delivered to stores once the SKU is no longer in the LCBO system as this inactivates all costing information. It is the responsibility of the supplier to know the status of a given SKU prior to shipment.
Direct Delivery to Licensed Establishments
Ontario distilleries can deliver spirits directly to licensed establishments in Ontario, on behalf of the LCBO, through LCBO’s Direct Delivery to Licensees Program:
Direct Delivery to Licensee Program | Doing Business with LCBO
Contact Information
For more information about the LCBO’s Ontario Small Distiller Direct-to-Store Delivery Program, please contact:
Sean Adams, Product Advisor, Local
White Spirits Category Team (Vodka, Gin, Rum, Soju, RTD)
Category Manager White Spirits & RTD: Jeryca Dillas – jeryca.dillas@lcbo.com
Product Manager White Spirits (Acting): Amanda Mustard – amanda.mustard@lcbo.com
Category Administrator: Mihir Parmar - mihir.parmar@lcbo.com
Brown Spirits Category Team (Whisky, Liqueurs, Tequila, Brandy)
Category Manager Brown Spirits: Peter Cloutier – peter.cloutier@lcbo.com
Product Manager Whisky: Emily Liao – emily.liao@lcbo.com
Product Manager Liqueurs, Tequila, Brandy/Cognac: Ken Ramnaraign- ken.ramnaraign@lcbo.com
Category Administrator: Tania Hofweller – tania.hofweller@lcbo.com
Pricing Administration: pricing@lcbo.com
LCBO Quality Assurance Department: quality.assurance@lcbo.com
Corporate Policy: lcbo-policy@lcbo.com
Important Links and Resources
TPAR – Trading Partner Access Request (includes access to NISS)
Trade Partner Access Request | Doing Business with LCBO
*Please note the FAQ link on completing this access form.
iSupplier
You may also visit www.doingbusinesswithlcbo.com for more information regarding the LCBO’s programs, strategies, updates and key contacts.
Labels and Packaging
Labelling and Packaging Resources | Doing Business with LCBO
Packaging and Labelling Regulations
http://laws-lois.justice.gc.ca/eng/acts/C-38/
Food and Drug Act, Food and Drug Regulations
http://laws-lois.justice.gc.ca/eng/acts/f-27/
http://laws-lois.justice.gc.ca/eng/regulations/C.R.C.%2C_c._870/
IMPORTANT: General List FAQ
What does moving to a General List mean?
General List has two key implications compared to the Ontario Small Distillers program:
- Distribution: Products on Regular List will be ordered via the LCBO Inventory team and flow through our warehouses. This means the SKU would no longer be direct delivered to stores.
- Sales Targets: Annual sales targets on General List differ greatly from that of the Ontario Small Distillers program. The sales targets are available on the LCBO Trade website:
2021-22 Sales Targets for LCBO Wines, Spirits, Beer & Vintages | Doing Business with LCBO
What happens if a General List sku does not meet the sales target?
To keep our portfolio fresh with many new products hitting our shelves each year, we actively delist underperforming SKUs. If the SKU has failed to meet the category target after a year on General List, we will discontinue it in order to make room for other new products.
How are Purchase Orders managed?
LCBO’s Inventory Management team will determine the frequency and volume of purchase orders, based on the rate of sale and taking into account projected uplifts for programming (LTO, BAM etc).
Will inventory be forced to stores?
LCBO will force the new general list SKU to approximately 100 stores (at the discretion of Category), less the number of stores that currently list the product. (e.g., If your product is currently listed at 25 stores, we will consider forcing it to an additional 75 stores.) Forced stores will be required to carry the SKU for a duration of 6 months. After 6 months, it may be continued or delisted at the store manager’s discretion.
If I move a SKU to General List, can I still have SKUs in the Ontario Small Distiller Direct-to-Store Delivery Program?
Yes, if you have one or more SKUs on General List, you may still have other SKUs in the Ontario Small Distiller Direct-to-Store Delivery Program.