Canada's unique distribution system

Wine in Canada

Canada is a medium-sized market in terms of wine. The consumption of wine was more than 405 million litres in 2008 (up 7 per cent from 2005), with an average consumption of 12.24 litres per person. Canadians spend about 187 dollars (Canadian dollars; the equivalent of 140 euros) per year on wine, and the places they choose to drink it are identical to those in Europe, with a preference for drinking at home. For producers that hope to export their wines there, however, the situation is dramatically different from Europe: there is one sole wine trader and it is a government monopoly.

Wine distribution in Canada is rather unique: each province and territory has a liquor board, through which the winemaker must sell their product. These commissions are for the most part (except in Alberta) import and distribution monopolies for wines and spirits. The producer’s sole client is therefore this state-owned corporation. To sell its wine, a winery must present it to the commission, which then decides whether or not to carry it. Often, the winemaker must be represented by an agent, who promotes the wine to the commission. It is rare for a wine to be selected without an agent’s representation. In fact, in Ontario, an agent is obligatory. If a wine is accepted, the commission orders the wine directly from the supplier. Each liquor board has its own retail distribution network. These liquor boards include:
- Société des Alcools du Québec (SAQ)
- Liquor Control Board of Ontario (LCBO)
- British Columbia Liquor Distribution (BCLD)
- Alberta Gaming Liquor Commission (AGLC).

To better understand the Canadian wine market, I  interviewed Daniel Simard, Vice-President of Procurement and Merchandising at the SAQ.

 

What is the role of the SAQ and how does it function?

The Société des Alcools du Québec is 90 years old this year. It is a state-owned corporation responsible for the trade of alcoholic beverages with the mission of serving the entire population of Québec by offering a large range of quality products. To do this, we have a network of 414 outlets with more than 10,500 products from over 60 countries provided by over 3,000 suppliers. Our commercial activity is around 2.5 billion dollars (CAD, or 187 billion euros) and we have 7,000 employees.

 

How would you describe the wine market in Canada and Québec?

In terms of wine consumption, Québec ranks highest in Canada, with 21.4 litres per capita, but we rank lowest in terms of spirits. The Québécois are open to the world when it comes to wine: we advise them in our outlets, they consult various information sources, they travel; they like to be up on the latest trends. Québécois taste is more refined than ever. Customers that particularly like rare or sought-after products expect the SAQ to offer what they are looking for. To meet their demands, we have to keep enhancing our product offer. 

 

How do you select your wines?

To satisfy our customers, the SAQ has to be as curious as they are, as serious about its purchase of products and as well informed! All suppliers are invited to submit their products to us; these are then automatically listed in our bid catalogue. The SAQ then draws from this the new products that it will sell following a rigorous and transparent selection process led by our selection committee. If necessary, we also hold an invitation to tender if we have identified specific needs for which we don’t have the desired product in our catalogue.

 

What is the proportion of French wines the SAQ sells?

French wines account for over 800 million dollars (CAD, or 600 million euros) in SAQ sales. Of all the bottles of wine sold last year, almost one in three was from France. More specifically, French wines make up 31.2 per cent of the still wines sold in Québec, or just over 31,000 litres. The three French regions with the biggest sales (in terms of dollars), of all products taken together, were Languedoc (reds) with 18.9 per cent, Bordeaux (reds) with 14.4 per cent and Vallée du Rhône (reds) with 7.9 per cent.

 

It should be noted that in terms of specialty products, Bordeaux reds lead, with 25 per cent of sales. Red wines are the most popular, with 63 per cent, while whites and rosés account for 31 per cent and 5 per cent of sales respectively. Although wine is our province’s most popular alcoholic beverage, French spirits are also well represented in Québec (cognac, eau-de-vie and vodka, for example) and are enjoying an increase in sales, as well as champagnes, rosés, sparkling wines and dessert wines, which are on the rise. Nonetheless, although French wine sales remain at the top, they are relatively stable (+ 3.3 per cent), whereas sales of South African wines (+29.3 per cent), New Zealand wines (+23.1 per cent) and American wines (+21.9 per cent) show stronger growth. Having said that, it should be remembered that France and Italy alone account for almost 55 per cent of the still wine market in Canada.

 

How can a small winemaker be carried in your outlets, and what is the key to success of French wines?

Quality and price remain the main factors behind our purchases.

 

How does a customer in Québec choose a wine – what styles do they like? What is the best way to educate customers when they are buying a wine?

We are always concerned about improving the customer experience. To this end, we  identified different segments of the market in 2005, and then created specific marketing materials aimed at each market segment (for example, the Cellier and Tchin Tchin magazines), as well as services adapted to different market needs (training in-store wine advisors, better presentation of products, enhancement of our website, SAQ.com, etc.). We also redesigned our outlets. One common interest was identified for all market segments: the desire to know more about the products.

 

To allow our customers to identify their wine preferences, express their tastes and needs and to successfully pair wines with food, the SAQ developed an innovative classification concept: taste tags! The tags serve to create a shared language between our in-store wine advisors and our customers by categorising different wines according to their strength, aromas and texture. Used for red, white and rosé still wines, the tags are affixed directly to the shelves and make locating wines of the same profile simple. They also allow SAQ customers to discover new products. The tags are at the heart of the new concept behind our outlets and also appear in our circulars, in the Tchin Tchin magazine, on our website, as well as in several restaurant chains. The many tools that we have developed to better guide our customers around the world of wine are joined by the valuable information provided by our in-store wine advisors. These wine enthusiasts remain essential reference points for our customers.

 

The love of eating and drinking in Québec is well known: does SAQ do presentations for customers on food and wine pairing?

It’s true, the art de la table and wine culture are ubiquitous in Québec, so food and wine pairing is as well! Aside from the taste tags, which are already twinned with particular foods, our wine advisors know how to direct customers in the right direction. In our outlets, there are also areas dedicated to presenting wines and foods together. Our website also has wine and food pairing suggestions that recommend good matches, as well as a search engine that directs customers to well-suited pairings. The SAQ also offers gastronomic evenings with winemakers.

 

How do Canadian restaurants and hotels choose and buy wines?

They also purchase from us; we can offer them personalised service.

comments powered by Disqus

Read our other articles :

2016 harvest: 10% down on 2015 but some beautiful fruit

Bordeaux 2015: Prices on the rise again!

State of the global wine industry

A producer in Dogliani, new president of Barolo Consorzio

Is China ready for wine tourism?

London Wine Fair 2016: a must attend show

Prowein 2016: Consolidating global performance

A new generation of winemakers in China

Records Broken at the 155th Hospices de Beaune Charity Wine Auction

Download the Gilbert & Gaillard app on your mobile

» On Iphone : http://urlz.fr/21mA
» On Android : http://urlz.fr/21mF

logo faceook logo twitter logo pinterest logo linkedin logo youtube

Magazine

couverture du magazine du vin G&G

Wine guides

Wine guides
application iphone vin Gilbert & Gaillard

Download the Gilbert & Gaillard app on your mobile !

» On Iphone
» On Android

Top 100 SPAIN

The best 100 Spanish wines on 2014/15 Edition