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Wednesday, January 7, 2009

Meet the LCBO's Beer Category Manager

Things at work have been hectic lately which has put a strain on me writing some new stuff. So here is another past TAPS interview I conducted.

Almost a year ago I sat down with Leanne Rhee, Manager of the LCBO's Beer Category to conduct an interview for TAPS. We chatted for over an hour about sales, the LCBO structure, speculated where beer is heading and discussed how new beers get into LCBO stores. The interview was featured in the Spring issue of the magazine that helped shed some light into the LCBO, which sometimes seems like Fort Knox when trying to obtain information.

Some of the information may be a little dated (like the question on American craft beers), but most of the questions and answers are still relevant and interesting. Enjoy!


Eleven years after the Ontario Government abolished the Temperance Act, the Liquor Control Board of Ontario, better known as the LCBO, opened sixteen outlets in the Province and would soon become one of two establishments in Ontario to sell alcoholic beverages. That was 1927, and by the end of the year there were 86 stores operating throughout the Province selling beer, wine and spirits in a set-up similar to that of today’s Beer Store. Today there are more than 600 LCBO stores around the Province generating billions of dollars and earning the distinction as the largest alcoholic purchasers in the world.

The LCBO has undergone an extensive turnaround in recent years when it comes to their beer section. Years ago who could expect to find a handful of imports, usually generic European lagers, and mainstream beers like Canadian, Blue and Bud. The scenery in the stores has changed to reflect the growing demand for quality craft beers and the diverse imported products from great brewing nations. The selection is ever changing, the consumers are better educated, and the LCBO has built a long-term vision for the future.

I recently had the opportunity to sit down with Leanne Rhee, Category Manager of Beer for the 600 plus stores in Ontario, to gain a better understanding of the person responsible for overseeing the improved beer selection and to get a glimpse into the future of the LCBO. Joining us was Manager of Media Relations, Chris Layton, who described himself as a beer lover and graciously provided insights into the spring/summer release.

LOOK, FIRST THING’S FIRST. WHAT IS YOUR FAVOURITE STYLE OF BEER?
(She laughs out loud) I enjoy fruit beer. Is that a cliché? A girl saying her favourite style is the fruit beer category? Regardless, I enjoy lambics, especially Krieks. It varies though, as I like to pair my beer with what I’m eating or sometimes it depends on what mood I’m in. There are so many terrific styles out there to choose from, but I’ll stick with fruit beers.

WHAT IS YOUR FAVOURITE FRUIT BEER THEN?
A Canadian favourite: McAuslan Apricot Wheat Ale. It’s a great beer for salads, chicken, eggs or warm summer nights.

HOW LONG HAVE YOU BEEN WITH THE LCBO?
I have worked with the LCBO for four years.

HOW LONG HAVE YOU SERVED AS THE CATEGORY MANAGER OF BEER?
It has been two wonderful years working as the Category Manager of Beer. It has provided me with a great opportunity to meet some very interesting and creative people.

WHAT IS THE ROLE OF CATEGORY BEER MANAGER?
I am responsible and accountable for the achievement of sales and profit, assortment management (product mix, purchasing decisions, procurement), merchandising strategy development (product shelf representation), product and brand promotion, developing strategic/collaborative relationships with suppliers and industry partners, building relationships with retail, identifying and implementing growth opportunities.

YOU HAVE AN INTERESTING JOB. WHAT DO YOU LIKE MOST ABOUT IT?
I work in the beer industry! The people are great, their products are delicious and the environment is wonderful. I take great pride in the fact that I have been part of the ever-increasing craft brewing movement, which is the fastest growing segment at the LCBO.

HOW ARE BEER SALES AT THE LCBO?
Stronger than ever! Net sales increased by 9% this year. By the end of 2009, the beer category’s sales will have doubled in 10 years. We are attracting new drinkers all the time, offering fresh, unique and wall balanced beers.

BEER AND FOOD PAIRINGS ARE POPULAR, WHAT’S YOUR TAKE ON THEM?
Everyone knows about wine and food but I’m here to tell you that beer and food go together so well. TAPS readers are probably already aware of this though. We’re actually getting loads of feedback from customers who have told us how well a certain beer went with their roast beef, or how well it matched their desserts. There is a big difference between matching foods with beer and wine, and it is creating a whole new group of drinkers. These people are open to trying new beers in their recipes which helps push the craft beer market. I also think the craft brewers have done a great job promoting the qualities of beer and food pairings, and customers are quickly releasing the rewards.

THE LCBO HAS EMPLOYEES CALLED BEER GUYS/BEER GALS. WHO ARE THEY AND WHAT DO THEY DO?
Beer Guys and Beer Gals is a program operating in 100+ stores that have strong premium beer sales. Each store has one person, either a guy or a girl that looks after the beer section. Their role is to maintain the appearance of the section, educate new employees, speak with brewery people and assist the store manager with selection and ordering. They also provide product knowledge for customers who make inquiries and they can recommend what food goes well with certain beer.

WHERE DO THEY RECEIVE THEIR TRAINING?
The Beer Guys/Beer Gals from the 100+ stores attend a training seminar once a year where they’re taught about beer styles, pairings, presentation and entertaining habits and selling techniques, by both international and domestic brewers, agencies and others in the beer industry. They also learn about the LCBO’s annual beer strategy and how to effectively present it to the public. These staff members are key to educating consumers about the taste and qualities of the beer we sell and we hope to start rolling the program out to more stores in the near future.

WHAT IS CONSIDERED WHEN BRINGING IN NEW BEERS?
What most of the public doesn’t know is that we plan our beer strategy a year in advance with the exception of the occasional special listings. To bring in a new listing we plan ahead by recognizing holes we need to fill. For example, if we plan to get stouts in for our winter season, we send out a ’product needs’ list to our partners asking them to submit their products. The product needs list would be based on consumer demands and market trends we’re witnessing. Our partners would submit their products for tasting where teams of highly trained and experienced tasters try the products they rate them based on taste, appearance, smell and colour. If the beer passes, other aspects like packaging, pricing, marketing plans, style and the beer’s sales history are taken into consideration. We then start the process of marketing; ensuring customers receive adequate information to make a valid purchase. Taste is where it all starts though.

SOUNDS LIKE A JOB FOR ME! WHO ARE THESE ‘TASTERS’?
Product consultants; people that have made a living learning as much as they can about the products we sell. We have an in-house product knowledge department that gathers resources for ongoing education, and they have spent years developing their palates.

HOW DOES A CUSTOMER INQUIRE ABOUT GETTING A BEER BROUGHT INTO THE LCBO?
By contacting the LCBO toll free hot line (1-800-ONT-LCBO) or by speaking with your local LCBO Store Manager.

WHAT TRENDS ARE YOU SEEING IN THE BEER MARKET?
Right now the LCBO is experiencing a large number of requests directly through stores and through our hot line for gluten free beers. When the requests first started coming in a few years ago we responded by bringing in Le Messanger from Quebec, and sales have been good so far. A lot of people are inquiring about Red Bridge, a gluten-free beer made by Anheuser Busch and we’re listening closely. Besides the gluten-free products, we get numerous requests for more Ontario Craft Beer and other craft beer from other countries like the United States and Provinces like Quebec. As mentioned earlier, beer and food pairings are also becoming a big trend. Cans are also becoming more and more popular.

SPEAKING OF CANS, WHAT’S THE DEAL WITH THEIR POPULARITY RECENTLY?
Ontario has witnessed a tremendous growth in canned beer over the last 18 months. We first thought that it would continue to cater to ‘summer’ drinkers but it has evolved year round. They are convenient to handle, you can mix and match in our eight pack holders and they are easily recyclable. Canned products in the stores have largely been driven by customer demands; you ask, you received and it’s great to see more and more OCB products now being offered. It’s a great way to experiment.

WHY SO MANY EUROPEAN LAGERS?
Customers continue to purchase them in record numbers. An interesting fact though is that we haven’t added any German lagers in years. It is not something we are actively building on.

AS AMERICAN CRAFT BREWERIES GAIN MORE AND MORE NOTORIETY FOR THEIR PRODUCTS, WILL THE LCBO BE BRINGING ANY TO ONTARIO CONSUMERS?
Our priority has been to work with and promote Ontario Craft Beers, and that will continue to be a priority for us. However, we have listened closely to all the feedback, requests and inquiries from consumers and we are currently looking at expanding our US Craft Beer selection in the next three to fives years. We have been speaking with US breweries and Ontario import agencies about getting some products listed in the future.

SO, CONTACT WITH AMERICAN BREWERIES HAS BEEN MADE?
Yes. Although, it’s not as easy as people think. We don’t just call up a brewery and ask if the brewer can send beer to us. People sometimes forget that US Craft breweries are similar in size to Ontario Craft Breweries and can’t always supply demand for other markets. They are usually at limited capacity as is and can’t afford to expand past their home turf. They also have to comply with federal bilingual labeling requirements, which can be costly for smaller breweries. But yes, we have contacted them.

WHAT HAS THE FEEDBACK BEEN LIKE?
Some are very interested but tell us that they can’t commit at the moment. Some ask us to call back in a year, two years or five years to see if they would be able to work with us at that time. There is definitely interest to expand into a well-educated beer market.

WHAT HAPPENED WITH DOGFISH HEAD? IT SOLD OUT IN ONE WEEK A COUPLE YEARS AGO AND HAS NEVER BEEN BACK.
That is something I’d rather not comment on. It was before my time as Category Manager and it wouldn’t be fair to provide a comment when I don’t know the whole story. I do know that it was very popular and did very well and it is a brewery that we have been looking at. (It has since been added to the LCBO’s general listing beginning in April - $2.25ea.)
*It is obvious to those of us living in Ontario that Dogfish Head didn't arrive in April, but arrive it eventually did. At the time of the interview it was anticipated the beer would be on the shelves by the May long weekend.

ARE THERE ANY PLANS OF BRINGING IN MORE CANADIAN CRAFT BEERS LIKE UNIBROUE OR PROPELLER?
Well, we certainly have plans for bringing in more Unibroue products. As most readers may be aware of, we recently stopped carrying Unibroue six packs in favour of their 750ml bottles. Next on the list is to get their seasonal products into the stores. Their Ephemere Apple beer will hit the shelves for the summer release and we expect big things from it. As for other Canadian Craft Beers – we have also paid close attention to what has been happening across the country, and yes, we plan on looking at some for future releases.

COMMENT ON THE LCBO’S RELATIONSHIP WITH THE ONTARIO CRAFT BREWERS ASSOCIATION.
We have forged a great working relationship with each other since they formed as an association. It feels great promoting locally produced quality beer and we have done a great job doing so. We noticed that consumers are starting to appreciate the freshness of the Ontario beers and are drinking more of it than ever.

WAS THE FIRST OCB DISCOVERY PACK SUCCESSFUL? AND WILL THERE BE OTHERS?
It was very successful. Most stores sold out very very fast. It was a great way for people to try some OCB beers that they may not have tried otherwise. The LCBO expects a new Discovery Pack to be released in the fall.

THE TORONTO STAR BROKE A STORY ABOUT THE LCBO INTRODUCING MORE ‘PREMIUM’ PRODUCTS. WHAT WILL THIS MEAN FOR BEER?
Easily put – more craft and specialty beers. We find that more and more people are experimenting with imports or craft products, which are priced higher than domestic lagers from National breweries. The LCBO’s focus for the future will be to bring in a greater selection of these premium priced products.

WOULD YOU WELCOME A PRIVATE BEER BOUTIQUE IN ONTARIO?
(She laughs). An LCBO one or a private one?

DOESN’T MATTER. ANY BEER BOUTIQUE.
The biggest misconception about the LCBO is that people associate it with government. Yes it’s a government agency but we operate it like a private business. This is a question best situated for the Provincial Government.

HOW DOES THE BEER STORE HELP LCBO’S SALES?
We try to differentiate from them by offering more craft products, more specialty beers, and the opportunity to see and choose what you want to drink by yourself. The LCBO currently accounts for 20% of the Ontario beer market and that number is expected to rise as we bring in most diverse products. We try to cater to every beer drinker out there and as I mentioned earlier, our sales have done very well in recent years.

HOW MUCH CONTROL DO STORE MANAGER’S HAVE IN STOCKING BEER IN THEIR STORES?
Store manager’s control anywhere from 50-60% of product assortment in their store. Many tailor their product listings to meet the interests and demographics of the area their in or choose products to help fill a void in a particular style.

SO IF THEY WANTED A PARTICULAR BEER, THEY COULD GET IT IN?
Yes, if it is part of the core product list. Meaning the product has to be listed at the LCBO.

WILL WE SEE MORE IN STORE TASTINGS IN THE FUTURE?
Well that’s up to the breweries. They cover the price of the beer and pay a small ‘rental fee’ to set up. Most of that ‘rental fee’ goes to charities like We Care who fund raise for Easter Seals and Camp oochigeas (camps for children with cancer). The breweries can make arrangements for tastings everyday of the week with very little exceptions.

ARE YOU A BAR TOWEL (WWW.BARTOWEL.COM) READER?
As a matter of fact yes, I am a reader. I check it out daily.

WHAT DO YOU THINK?
*Laughs* Some people are very opinionated but overall the site is very useful. It’s a great way to see what people are saying about some of the beer we sell. We take their comments into account, as they are very passionate and educated in craft beer.

WHAT IS THE BEST TIME FOR A BEER?
Anytime! There is a beer for every occasion.

There you have it. Rhee is off on maternity leave right now so here's wishing her all the best!

2 comments:

Alan said...

Oh. My. God.

"SOUNDS LIKE A JOB FOR ME! WHO ARE THESE ‘TASTERS’?
Product consultants; people that have made a living learning as much as they can about the products we sell. We have an in-house product knowledge department that gathers resources for ongoing education, and they have spent years developing their palates"


Any reason to believe this star chamber of beer tasting hails mainly from the former Warsaw Pact nations?

Zoran said...

She really didn't answer the questions regarding small boutiques. It's also rather funny how she tries to underline the independence issue in the context of the latest min price increase issue.

Alan, I'm from Warsaw myself, and I'll pick a good British ale over boring Polish lagers any day.

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