UPDATED: 15 JULY 2020

PRODUCT LIFECYCLE PROCEDURE MANUAL

Updated: 15 July, 2020

1. ANBL – Who We Are

2. What You’ll Find in This Manual

3. Product Lifecycle Management

• Listing Types

• Channels, Banners, and Events

• Production Selection

• Application Process

• Evaluation Process

• Samples/Tasting Process

4. Quality Assurance

5. Pricing and Fees

6. Purchasing and Logistics

• Distribution

TABLE OF CONTENTS

ANBL WHO WE ARE

WHO WE AREAlcool NB Liquor (ANBL) is a Provincial Crown Corporation established as the sole authority for the importation and retailing of beverage alcohol within the Province of New Brunswick.

ANBL is one of Atlantic Canada’s leading retailers, with a network comprised of 42 retail stores including Experience by ANBL and Depot, 89 licensed agency retailers that are privately operated, 31 Manufacturer’s Agency Stores, 66 Grocery stores and a central distribution center. We are an engaged team delivering the B.E.S.T (Better Every Single Time) customer experience while generating annual sales of over $430 million. As a crown corporation of the province of New Brunswick, we do this while responsibly managing a profitable business for the people of New Brunswick.

ANBL operates a retail operation center and distribution centre, both located in Fredericton.

ANBL - WHO WE ARE

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WHAT YOU’LL FIND IN THIS MANUAL

OUR PROCEDURES The purpose of this document is to provide the reader with information on the listing process utilized by ANBL. Within this document you will find answers to questions pertaining to how to apply for a listing; definitions of the various listing types; how to maintain a listing and finally how a product exits the portfolio.

In addition, this document will provide the reader with all the necessary direction pertaining to product identification requirements, logistics standards as well as product production standards.

The product portfolio at ANBL has been sub-divided into five main departments:

• Refreshment Products (Coolers & Ciders)

• Beer

• Wine

• Spirits

• Non-liquor

The Customer Strategy and Engagement Department is responsible for the product life cycle management and merchandising of the portfolio. Contact details can be found in Appendix A Contact List.

A call for submissions based on Appendix B Product Call Schedule will be issued on a regular basis via email and is subject to change based on portfolio needs. If you would like to be added to

the invitation list, please contact the Marketing & Merchandising Associate. Full detail of this process can be found on here.

Companies that wish to have products outside the scope of the listing call reviewed for consideration in New Brunswick must first meet with the appropriate category team. The purpose of this meeting will be to discuss the current market conditions, review the state and needs of the ANBL product portfolio and therefore determine the feasibility of submitting a product for a listing review. (While it is recommended that representatives arrange for a meeting in person, it is not mandatory. The initial meeting may also occur via telephone or through web conference.)

Suppliers/Agents that are selected to proceed must provide a fully- completed listing application form for each product (or size of product) for which a listing is being sought. Any applications that are found to be incomplete or contain inaccurate information will not be processed until the issue has been resolved and may result in the forfeiture of the listing. Details regarding submitting listing applications and the BevHub process and can be found here.

Suppliers/Agents are expected to demonstrate a strong commitment to the New Brunswick marketplace and provide detailed merchandising and marketing plans to support any products offered to ANBL for listing.

WHAT YOU’LL FIND IN THIS MANUAL

Updated: 15 July, 2020

PRODUCT LIFECYCLE MANAGEMENT

LISTING TYPESThe routing of the application and listing type being applied for will be determined in the initial pre-submission meeting with the Category Teams.

GENERAL LISTING (GL) • Products that are considered to appeal to a large cross section of the buying public and have reasonable

sales expectations in majority of stores will be considered for a GL.

• These will be expected to maintain annual sales that meet or exceed the established targets for their specific product category.

• Products granted a GL will be re-ordered on a regular basis based on projected sales volumes and kept in continuous stock at the ANBL central warehouse.

GL products can be exclusive to a channel or banner within the ANBL network. More details on Channels and Banners can be found here

• GL status is granted only after the product has passed its initial test phase in the market.

TEST PRODUCTS (TP)• Products granted a TP listing are treated similarly to a GL but are conditionally listed for a trial period

(determined by the Category Manager) and then evaluated for performance.

• Products that are considered to appeal to a large cross section of the buying public and have reasonable sales expectations but that may be subject to specific conditions agreed to by ANBL will be considered for TP listing.

• TP products are expected to maintain annual sales that meet or exceed the established targets for their specific product category.

• Products granted a TP Listing will be re-ordered on a regular basis based on projected sales volumes and kept in continuous stock at the ANBL central warehouse.

• TP products can be exclusive to a channel or banner within the ANBL network. More details on Channels and Banners can be found here

• These products may be priced outside of general Mark Up Policy

PRODUCT LIFECYCLE MANAGEMENT

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PRODUCT LIFECYCLE MANAGEMENT

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ONE TIME LISTING (OT) • Products that are temporary in the market and have a defined length in market

• OT products will, in most cases, be fully distributed by the stores during a defined ordering period.

• OT products can be exclusive to a channel or banner within the ANBL network. More details on Channels and Banners, please see below.

ONE-TIME LISTINGS – SALES EXPECTATIONSANBL strives to work with the Supplier/Agent community to maximize potential sales of seasonal and one-time offer opportunities to provide customer with innovation and trial of new products. These products are meant to be in market for short measured time, determined by ANBL and the forecast and sell-through date will be agreed upon by the Supplier/Agent and ANBL before a listing will be granted.

Below is a list of guidelines to be used by all parties to ensure steps are being taken to optimize the business need of variety, while ensuring all parties are protected from the risk of an overabundance of product that would need to be liquidated after the desired time in market.

GUIDELINES FOR ONE-TIME PRODUCT LISTINGS:1. Each Supplier/Agent will provide a sales forecast

as part of the application for each product listed, broken down by month, as part of the listing offer.

2. The forecast is reviewed by the appropriate category team and is either accepted as submitted or returned to the Supplier/Agent with the suggested revisions. If ANBL decides to purchase a quantity exceeding the forecast given from the Supplier/Agent, ANBL will be responsible for the liquidation of product above-and-beyond the original forecast submitted.

3. Once the forecast is agreed upon, Supply Chain will ensure that the proper orders are placed in a timely manner.

4. Once the product is released into the market, a monthly date sensitive review will be completed and all products in jeopardy of not meeting their sell-through targets will be forwarded to the appropriate Supplier/Agent.

5. A product with remaining inventory after the agreed upon selling period will be liquidated and the discount up to 25% of retail will be changed back to the Supplier/Agent on a landed cost reduction.

CHANNELS, BANNERS AND EVENTSAny item (GL, TP or OT) can have a channel, banner and event assigned to it which provides more information about the listed items availability in market.

CHANNELSChannels are how and where consumers buy items listed for sale, and are listed below:

• Brick & Mortar (ANBL stores) – Products assigned will be available for sale in our corporate stores. Please see Banners below for more detail on what stores are part of this channel.

• Agent Stores – Products are available for the Agent store network

• Licensee - Products that are available to the Licensees customer to purchase. Certain products would be considered exclusive to this channel, for example beer kegs.

• Duty Free Shops – Products that are exclusive to the Duty-Free stores

• Grocery Stores – Products that are available or exclusive to the grocery channel

BANNERSANBL stores are assigned a banner of A, B, C, D, Boutique or Depot. The availability of an item is assigned to one, multiple or all banners.

EVENTSAny of the 3 product listing types can be assigned to Events, which allows for increased ability to group and track items. Examples of Events are “World Wine & Food Expo”, “NB Spirits Festival” and “EXPÉRIENCE Program”. Each event will have a specific year and / or period assigned. Items can potentially be assigned to more than one Event at a time.

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PRODUCT SELECTIONAny item (GL, TP or OT) can have a channel, banner and event assigned to it which provides more information about the listed items availability in market.

APPLICATION PROCESSAll applications received will be reviewed by the Category Teams based upon the published Category Review schedule. Appendix B Product Call Schedule

All applications are subject to final approval by the Category Manager and applicants will be advised via BevHub by the respective Assistant Category Manager “ACM” as to the result of their application.

APPLICATION/LISTING REQUESTAll Suppliers/Agents who are selected to submit an offer to ANBL for the sale of products, a request for an exchange or an additional size for products already listed, must complete a prelisting request. Once approved, a full listing will be requested via the ANBL BevHub portal. To register your company and get access to the online listing application, please contact the Product Data Coordinator. Appendix A Contact List.

BevHub is the ANBL on-line listing application portal. Each new product or reordered product being applied for, needs to go through the listing process that starts with BevHub. A training manual can be found in Appendix C Bev Hub Training Manual. A YouTube training video is also available here. It is the responsibility of the Supplier/Agent to review and understand the training materials.

Listing applications must be accompanied by a comprehensive marketing and merchandising plan including supporting data indicating consumer demand, Supplier/Agent support, investment and representation intended.

Listing applications must include complete pricing information and digital copies of all product labels and product images.

Suppliers/Agents should note, failure to complete the application in full or submission of an application without digital image and labels, will result in rejection of the application and possible forfeiture of the listing.

Listing applications are considered incomplete until product samples have been received. Samples must be received by the deadline date indicated in Appendix B Product Call Schedule.

PRODUCT LIFECYCLE MANAGEMENT

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APPLICATION DEADLINESAll applications received will be reviewed by the category team based upon the published review schedule. Appendix B Product Call Schedule.

Any product that has been rejected for listing will not normally be reconsidered for listing until after the expiration of a twelve-month period from the original date of application.

Any product that has been rejected based on pricing issues only, may be reconsidered for listing once the original pricing concern has been resolved.

UNSOLICITED APPLICATIONSSuppliers/Agents are reminded that unsolicited applications will not be accepted, see Appendix B Product Call Schedule for opportunities.

INVITATION OF APPLICATIONSANBL may at its discretion, invite Suppliers/Agents to submit applications for specific products.

ANBL may at its discretion, invite a Supplier/Agent to submit another request for a previously rejected product, prior to the expiration of the twelve-month period stated above.

FESTIVAL PRODUCT SELECTIONApplications for products to be considered for inclusion within one of the ANBL supported festivals listed in the call schedule, must be identified on the official listing application and must be received by the appropriate date.

EVALUATION PROCESSDIRECT NEGOTIATIONS WITH SUPPLIERSANBL shall negotiate and transact its purchases directly with the Supplier and payments will be made only to them. At no time will ANBL be responsible for payment of commissions or other remuneration to any person.

PRODUCT LIFECYCLE MANAGEMENT

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SUPPLIER AND/OR AGENT REPRESENTATION Suppliers are not required to have a local agent in order to conduct business with ANBL, although the benefits of having local representation are significant in nature.

Suppliers are required to notify ANBL in writing of the appointment, or termination of any agents/agencies authorized to act on the supplier’s behalf within the province.

A list of Independent Agents operating within the province is available upon request.

ROLE OF CUSTOMER STRATEGY AND ENGAGEMENT TEAMThe Customer Strategy and Engagement Team is responsible for the product lifecycle of all products within the product portfolio.

The Customer Strategy and Engagement Team determines acceptance or rejection of an application for listing based on the following criteria in no particular order:

SAMPLES/TASTING PROCESSTasting sessions are conducted in order to determine the palatability of products recommended for acceptance by the Category Teams.

Sessions are conducted “blind” when applicable.

An unacceptable review of any product constitutes just cause for the application to be rejected even though previously recommended by the ACM.

A tasting is composed of ANBL employees but may include approved members of the General Public.

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• Taste

• Suitability for the NB market

• Price

• Evaluation of proposed marketing and merchandising plan

• Relationship to other products currently listed

• Performance in other markets

• Uniqueness

• Packaging

• Supply chain considerations

• Labeling

• Past performance of supplier and/or local agent

• Strategic fit for ANBL

• Portfolio requirement

APPEALSIn the event a Supplier/Agent receives notice that an application has been rejected, the decision may be appealed in writing to the Director of Customer Strategy and Engagement.

The letter should clearly state the Suppliers/Agents reasoning for appeal and must be supported by additional information that was not contained in the original application.

DELISTINGThe Category Team will conduct quarterly portfolio reviews in conjunction with the Application Review Schedule. The results of the review will be issued by email. At the point the product has been identified as having been delisted, any outstanding purchase orders will be cancelled, and no further purchase orders will be issued.

The Category Team reserves the right to delist a product at any time if deemed to be in the best interest of ANBL.

Permanent listings (GL and TP) delisted during their first 24 months in market will be marked down 25% of landed case cost at the Suppliers/Agents expense. Depending on the individual circumstances, alternate arrangements may be made with regards to moving delisted stock out of the ANBL system. Please contact the Category Team for details.

In the event that a Supplier/Agent does not agree with ANBL’s delisting decision, a letter of appeal may be sent to the Director of Customer Strategy and Engagement for consideration. All decisions rendered by the Director of Customer Strategy and Engagement are final.

Store Managers will conduct periodic reviews of their individual store portfolio in order to identify products that may be discontinued at store level. Once this review has been completed, any products that remain identified for delisting will no longer be carried in that store.

PRODUCT SAMPLESSamples requested by ANBL for each product for which a listing is sought must be forwarded on an FOB basis to the Category Teams at:ANBL Warehouse Receiving | 170 Wilsey Road | PO Box 20787 | Fredericton Industrial Park | Fredericton, NB E3B 5B8

A document outlining the sample shipping process is available upon request.

PRODUCT LIFECYCLE MANAGEMENT

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• Wine – GL 2 selling units

• Wine – Specialty Listing - 2 selling units

• Spirits – 1 selling unit

• Beer – 2 selling units

• Coolers – 2 selling units

DIGITAL IMAGE FILESAll digital image files must meet the following minimum standards as noted in BevHub:

• JPEG/JPG format

• Image pixel dimensions of at least 1000 or larger in either height or width

• Square aspect ratio

• File size must not exceed 30MB

• Pure white background colour is preferred (RGB: 255, 255, 255)

• RGB or CMYK colour mode

• The full product must be in frame

• Please avoid images that include any shadows or special effects

If Supplier/Agent cannot provide an image meeting the minimum standards outlined above, ANBL will supply the image for the Supplier/Agent at a cost of $30 per image (to be charged back to the Supplier/Agent upon completion).

ADDITIONAL SIZESRequests for additional sizes of already listed products will be considered on the same basis as requests for new products. Products of a different size must follow the same process as a new listing.

While product samples are not required for this type of application, a sample of the actual package to be used must be included with the application.

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QUALITY ASSURANCE

LABELLING STANDARDS Suppliers shall ensure that labels meet the requirements of all Federal Legislation, including the Food and Drugs Act and Regulations. Failure to do so will result in the removal of products from retail stores and delisting. These regulations can be found in the Guide to Food Labeling and Advertising – Chapter 10 available on the Canadian Food Inspection Agency website.

Suppliers shall ensure that labels meet the requirements of the Beverage Containers Act of the Province of New Brunswick. Failure to do so will result in penalties ranging from removal of the offending product, up to and including monetary penalties as found in Appendix D Fines and Fees Schedule.

The following are approved versions of acceptable refund statements:

Refund/Consignee

Return for refund where applicable/Consignee la ou la loi le prescrit

Return for refund where applicable/Consignee la ou applicable

Outside of the product application process, all labels or changes to labels must be submitted to the appropriate ACM for approval.

All retail sales units must bear the Universal Product Code “UPC” as outlined in the Product Identification Standards Manual, as issued by the Canadian Association of Liquor Jurisdictions “CALJ”. A Copy of this report is available at the Supplier/Agent section of the corporate web site at www.anbl.com

ANBL will no longer issue in-house generated UPC and SCC codes as of January 1, 2020. To obtain new UPC codes (GTIN’s) please source from GS1, www.gs1ca.org. This is the source for all food products internationally.

If you need a company (Manufacturer) number, please contact:

GS1 Canada

www.gs1ca.org

For package design including the GTIN, please consult with packaging designers and suppliers of packaging materials. Typically, they have already had significant experience with GTIN requirements.

QUALITY ASSURANCE

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ALLERGEN DECLARATION ATTESTATIONAll applications received must include a completed APPENDIX E ALLERGEN DECLARATION ATTESTATION FORM These will be reviewed by the ACM and kept on file. Labels must be compliant with all Health Canada and CFIA regulations. A current list of allergens can be found on the Health Canada Website (embedded link).

Gluten-free, fair trade or organic declarations require proof of certification, to be uploaded during the product application in BevHub.

CASE LABELLING All shipping cases processed through our central warehouse must conform to the Case Label Specifications as contained in the Product Identification Standards Manual, issued by CALJ. Failure to do so will result in penalties ranging from removal of the offending product, up to and including monetary penalties as shown in APPENDIX D FINES AND FEES SCHEDULE.

CHANGES IN PACKAGING OR LABELS OF A PRODUCT Changes of any kind in the presentation of a product must have prior written approval of the Category Team.

Requests for approval of changes will be accepted at any time throughout the year, provided they are received by the Category Team a minimum of eight weeks in advance of the requested implementation date of change.

PRODUCT FORMAT AND/OR PACKAGING CHANGES A new listing application is required if a product is changing size or packaging material. The new product must have a unique UPC/SCC. If a product format change or packaging change is approved by the category team, an exit strategy is required by the Supplier/Agent for the existing product. The exit strategy is to be presented as part of the application. Existing Product with shelf life or inventory concerns may be reduced at retail and billed back to Supplier/Agent.

CHANGES IN PACKAGING OR LABELS OF A PRODUCT Product that is packaged in special containers or contains additional non-beverage items, must have the cost of containers and non-beverage items shown separately from the beverage alcohol contents on the application form.

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QUALITY ASSURANCE

DATE SENSITIVE PRODUCTS ANBL strives to work with the agent and supplier community to prevent stale-dating of time sensitive products. Below is a list of guidelines to be used by all parties to ensure all steps are being taken to prevent loss, both prior to ordering, and after the product has arrived in our facilities.

Guidelines for time sensitive product listings:

1. Each Supplier/Agent will provide a sales forecast to the Category team for each product listed, broken down by month, for one calendar year immediately following the listing. The supplier/sales agent will also identify for each product, the format, decryption key and location of the date coding on their packages, also indicating if the date is a production or expiry date.

2. The forecast is reviewed by the category team and is either accepted as submitted or returned to the Supplier/Agent with the suggested revisions. If ANBL decides to purchase a quantity exceeding the forecast given from the Supplier/Agent, ANBL will be responsible for the stale-dated product above-and-beyond the original forecast submitted.

3. Once the forecast is agreed upon, Supply Chain will ensure that the proper orders are placed in a timely manner.

4. ANBL will complete a monthly date sensitive review and forward all products in jeopardy of stale-dating to the appropriate Supplier/Agent. Category team will discuss options to prevent stale-dating with the Supplier/Agent including, but not limited to: LTOs, sampling, and increased store distribution. If the product stale-dates and we are required to destroy and discard the product, the Supplier/Agent will be billed the duty paid landed case cost in addition to the disposal cost for each case destroyed.

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QUALITY ASSURANCE

PRICING & FEES

PRICE CHANGESPlease refer to Appendix F ANBL Pricing Policy for detailed mark up information.

STOCKING ADMINISTRATION FEES Stocking Administration fees apply to newly listed products as follows:

• GL & TP Listings will be subject to a $250.00 charge upon the listing being accepted by ANBL.

• The Category Team has the right to waive the Stocking Administration Fee at their discretion.

• OT Listing types are exempt from the Stocking Administration Fee.

PRICING & FEES

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PURCHASING & LOGISTICS

PRODUCT DISTRIBUTIONConsequent to the granting of a listing, all stores are notified of a products’ availability through the issuance of a New Product Release Bulletin that communicates pricing and ordering information about a product.

All new listings will receive automatic distribution of the product to stores upon release. The distribution will be determined by the category team at the time of the listing being granted.

For stores that are not included in the initial distribution of a new listing, it is the responsibility of the Store Manager, after reviewing all pertinent information, to determine whether the product will be carried in their store.

The Customer Strategy and Engagement Team reserves the right to determine the distribution of selected products and/or product types at their discretion. Store Managers will be advised of terms and conditions of the listings and may have initial distribution of these products determined by the Category Team.

PORTFOLIO REVIEWS The Category Team will review the entire portfolio quarterly, ranking products on product performance within (category, sub-category) Supplier/Agent performance, current ANBL portfolio requirements and other criteria.

The resulting score card identifies top performers that are safe from de-listings, mid-range performers that will require attention by the Supplier/Agent and bottom performers that are strong candidates for delisting.

The results are shared with the suppliers’ representatives on a quarterly basis via email. Products other than top performers should be discussed with the Category Team.

Suppliers /Agents should review the ANBL Import order schedule APPENDIX G IMPORT ORDER SCHEDULE as well as APPENDIX H ANBL PO TERMS AND CONDITIONS.

CUSTOMER EXPERIENCE More in depth detail around Visual Merchandising can be found in APPENDIX I RETAIL MERCHANDISING STANDARDS MANUAL.

For more information on instore merchandising opportunities See APPENDIX J MERCHANDISING PROGRAM GUIDE.

Space Planning is done internally by the store operations team. A combination of demand and sales are used to determent placement.

PURCHASING & LOGISTICS

Updated: 15 July, 2020