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The LCBO’s Ford-fuelled revolution: 'We’ve evolved and come a long way'

National Post logo National Post 2022-09-26 Jessica Mundie
LCBO president and CEO George Soleas, shown here at the company’s flagship store in downtown Toronto. © Provided by National Post LCBO president and CEO George Soleas, shown here at the company’s flagship store in downtown Toronto.

Warm light floods the new LCBO flagship store on the downtown Toronto waterfront.

The ultra-modern outlet features digital product tags, computer kiosks for in-store browsing, and a same-day pick-up service that boasts a three-hour turnaround time. It also, throughout its 24,000 square feet, is very much a familiar Liquor Control Board of Ontario store, in branding and product.

In store, customers can browse over 4,000 different beverages — beer, wine, cider, coolers, and spirits – familiar and obscure, far-flung and local. It also hosts the largest vintage collection in all of the LCBO’s 680 stores, with over 1,500 labels.

This store, which anchors the new LCBO headquarters on Queens Quay East, symbolizes the coming of age of a 95-year-old crown corporation born at the end of prohibition.

What was once an institution that seemed embarrassed by its mission has become one that reflects the pleasurable nature of its product. The success of the modern LCBO can be credited to a shift in the company’s mission to one that prioritized private-sector lessons about customer experience and corporate growth.

Its current president and CEO, George Soleas, came from the private sector, as did its board chairman, Toronto real estate developer Carmine Nigro, and the provincial minister responsible, Peter Bethlenfalvy.

For Bethlenfalvy, the Ontario minister of finance, investing in the LCBO means investing in customer choice and experience. He points to the Ford government’s 2019 decision to allow the creation of 200 LCBO Convenience Outlets, meant to serve communities that do not have convenient access to an LCBO store, as an example.

“I think the LCBO does an excellent job of keeping the pulse of their customer,” said Bethlenfalvy. “If they need to distribute online or come up with new products, they’re always adapting to the environment.”

The Ford government has been the “biggest supporter” of modernization and advancement at the LCBO, said Nigro.

Less than a year ago, the Ford government gave the LCBO funding amounting to “hundreds of millions” of dollars to modernize, said Nigro. This is money that he said the previous Liberal government would not provide.

“Because in their mind, it wasn’t broken, why fix it?” said Nigro.

During the pandemic, Soleas said he worked closely with Bethlenfalvy to support the recovery of the province’s hospitality industry. This resulted in regulatory changes which allowed restaurants to offer alcohol take-out and delivery with food purchases as well as increased discounts for products purchased through LCBO.

Before the LCBO, the Cypriot-born Soleas had worked for over a decade in the Ontario wine industry as director of quality assurance for then Andrés Wines, now Andrew Peller, a winery in the Niagara Peninsula. At the time, he was responsible for winemaking as well as the winery’s relationship with the LCBO.

He has worked with the LCBO for 25 years, as vice president of quality assurance and specialty services, senior vice president of logistics and quality assurance, and executive vice president. When he became president and CEO in 2016, he had a goal to make the company a best-in-class alcoholic beverage retailer and wholesaler by embracing competition.

“My mandate was really to turn quality assurance into a best-in-class process with an international reputation,” said Soleas. “One that supported the mandate of the LCBO to be a socially responsible organization.”

In 2016, Kathleen Wynne’s Liberal government authorized 70 Ontario groceries stores to sell wine, beer, and cider, in addition to the 60 already selling beer. This has grown considerably under Doug Ford’s Progressive Conservative government. Currently, up to 450 grocery stores in the province can sell beer and cider, and around 225 of those also carry wine.

The LCBO made over $486 million in sales at grocery stores, according to the 2020/2021 annual report. The LCBO also serves around 18,000 restaurants and bars, as well as the now 395 LCBO Convenience Outlets.

For Ontarians, this means convenience and choice. For the LCBO, it means competition.

“Which is really music to my ears,” said Soleas.

While the LCBO is responsible for the wholesale of products to these grocery stores, Soleas recognizes that they are vying for the same customers. There is also the multinational-owned The Beer Store, which cuts into the LCBO’s beer sales, and the Wine Rack, an Ontario-based wine store with 164 locations across the province.

“The competition helps me to challenge my people, here at the LCBO, to continuously do better and to continuously innovate and raise the bar, because that is what the customer is looking for,” said Soleas.

Amid a changing industry landscape, Soleas said LCBO decision-makers recognized that to deliver on their mission – to be a best-in-class retailer and wholesaler, to support the local community and industry, and to deliver value to the people of Ontario (whom Soleas said he considers the owners of the LCBO) – they needed to evolve alongside their customers’ and the government’s expectations.

In the 2020/2021 fiscal year, the LCBO delivered a $2.39 billion dividend to the Ford government.

“They understand that with these improvements we are creating a stronger LCBO and will be delivering even greater value to Ontarians,” he said.

Within the past two years, the LCBO has launched a newly revamped online platform, LCBO.com , which allows users to purchase products and schedule a same-day pickup at their nearest store or have the items delivered to their door.

According to the LCBO’s 2020/2021 annual report, eCommerce sales rose by over $140 million.

Last year, the company introduced its new Aeroplan loyalty program, in partnership with Air Canada, which replaced the Air Miles rewards program. The company also transitioned out of its old warehouse and head office, which it had been in for almost 70 years, to the new modern facility on Queens Quay East.

Being a crown corporation and an alcohol retailer comes with an important social responsibility, said Soleas.

According to Statistics Canada, in 2019, Ontario had the lowest rate of police-reported drunk driving incidents among all the provinces, with 104 per 100,000 people. That same year, LCBO staff challenged more than 12 million customers for failing to produce a valid ID, appearing intoxicated, or attempting to purchase alcohol for a minor or someone who is impaired.

“We want our customers to drink responsibly,” said Soleas. “We promote safe and informed consumption.”

The LCBO was founded on this premise of moderation. Although, the LCBO that Ontarians know now compares little to the business born post-prohibition.

In June 1927, the first 18 LCBO stores were opened under the Liquor Control Act which, as stated by then-Premier George Howard Ferguson, allowed “people to exercise a God-given freedom under reasonable restrictions.”

The government of the time wanted to promote temperance through education and moderation. They wanted to know who was buying alcohol and exactly how much they were purchasing.

To achieve this, LCBO stores had glass fronts to make buying alcohol, literally, transparent. Until 1962, the LCBO required those who wanted to purchase alcohol to get an Individual Liquor Permit which had to be presented when purchasing. The clerk would record what everyone purchased and if they thought a customer was buying too much, they could deny the sale.

“We’ve evolved and come a long way in the last 95 years,” said Soleas, whose next task is updating the company’s IT ecosystem, which will not happen overnight.

“And with our current vision, we hope to be relevant for the next 95.”

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