As we approach the holidays, I’d like to provide an update on some ongoing global supply chain issues that continue to affect the beverage alcohol industry, and LCBO’s inventory position as we seek to provide an exceptional customer experience.
We started proactive planning for this year’s holiday season in March 2022 by collaborating with our industry partners, pulling forward orders and increasing our inventory of local products. As a result, we have a great selection of gifting, international products and local beer, wine and spirits this holiday season.
While there have been improvements in the flow of products globally, the situation varies by geography. The most significant supply chain issues continue to be:
Transportation issues – Transportation issues still account for almost half of LCBO’s stock shortages. Countries continuing to face transportation challenges include: Australia and New Zealand which are dealing with backlogs, Mexico and the USA which have capacity issues with high variability in delays, and countries in Europe which have isolated cases of delays.
Supplier/production issues – Production schedules continue to be impacted by the availability of raw/packaging materials, weather-related challenges and the ability to meet demand. This accounts for more than half of LCBO’s stock shortages. For example, several European countries and the US were impacted by scorching heat and record-breaking drought which reduced the yield for winemakers. Meanwhile, categories such as scotches, champagne, cognac and tequila are challenged to increase capacity to meet global demand which has significantly increased in the past couple of years.
It is anticipated that we will continue to experience global supply chain issues into next year (compared to pre-pandemic service levels).
Consistent with last year, we advise our customers to shop early this year for the best selection of holiday favourites, be flexible about product selection, and take the opportunity to try something new if a particular product is temporarily unavailable. Our knowledgeable employees are available in-store to help customers make alternative choices.
We remain committed to working closely with our supply chain partners and suppliers to stay informed and plan accordingly to ensure that our position remains strong.
Thank you for your ongoing partnership and support as we work together to ensure that Ontarians find the perfect choice this holiday season.
Chief Supply Chain Officer