Yahoo Finance South Asian liquor lovers in Ontario frustrated by absence of favourite brands at LCBO
Ravindra Kumar finds great pleasure in sharing a glass of whisky with his friends at his bar when they visit his home in Brampton, Ont.
He has a fondness for all types of whisky, including those from his homeland of India.
However, he's frustrated by the limited availability of Indian whisky at his local Liquor Control Board of Ontario (LCBO) store.
"I have to co-ordinate with local distributors for Indian whiskies, aligning my purchases with their schedules," he said. "I can't simply stroll into the LCBO and buy them whenever I please as I do with other brands of whisky."
Kumar's complaint is not an isolated one. Distributors of South Asian alcoholic brands in Ontario say that they do not receive adequate shelf space, and the absence of a destination store for South Asian brands makes it challenging to sell in Ontario. Consequently, many of them end up launching their brands in other provinces in Canada.
The LCBO, a government enterprise that operates as one of the world's largest buyers, retailers and wholesalers of wine, beer and spirits, has 18 destination stores to sell spirits from different geographies of the world.
It recently launched its third East Asian store in Toronto for products from the East Asian region, but none cater to the preferences of South Asians.
According to Statistics Canada, South Asians are the largest visible minority in Ontario.
Inaccessible shelf spaces
Abish Cherian, of Thamesford, Ont., east of London, started making the Mandakini brand of country liquor, popularly known as Desi Daaru in Hindi, as a COVID lockdown project.
It grew and by 2023, annual sales hit 21,000 bottles in Alberta, B.C. and other parts of the world, including the U.S., India and the United Kingdom, according to Cherian.
"People want to have Mandakini, but [the] LCBO won't give me a shelf space and asked us to remove 'South Asian' labelling. This is systemic bias," said Cherian, one of the co-founders of Oxford Beverage Group Inc., the manufacturer of Mandakini.
"The absence of a designated category for South Asian products, subjective critiquing of taste, feels like an oversight in recognizing and accommodating cultural diversity."
Mandakini is available for sale on LCBO.com, but not in its retail stores.
For Cherian, Mandakini embodies South Asian flavours and celebrates "South Asian culture and heritage. Maintaining this label is crucial for our brand identity and appeal."
In an emailed response, the LCBO said its website doesn't categorize products by individual producing countries.
"Customers can explore a wide range of global products and filter them based on their country of origin."
The LCBO said it offers a solution for distributors and suppliers who can't get their products listed for sale in the stores through its Specialty Services. This initiative enables customers to purchase products that are otherwise not available in retail stores.
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Additionally, if the products are made by manufacturers in Ontario, they can choose to sell them directly in stores or use the LCBO's direct delivery program, which allows them to deliver products straight to customers, the LCBO said.
"Each year we receive approximately 55,000 applications from suppliers of all sizes, and we add approximately 7,000 new products to our selection annually."
To get shelf space in LCBO stores, distributors have to submit products for consideration. LCBO will then evaluate the product on the basis of factors like price, packaging and quality, ensuring it meets Canadian regulations and LCBO standards, according to its website.
"We currently list nine products from South Asia. Given the vast world of alcohol-producing countries, we do not have a separate category/section for each producing nation."
Logistical challenges
South Asian brands face multiple challenges beyond securing shelf space, according to distributors. One hurdle, they say, is the misclassification of their spirits as East Asian because of the absence of a distinct South Asian category by LCBO.
Distributors say this creates logistical challenges because the products are often sent to stores in places with a higher concentration of East Asian people.
"It has required me to manually reposition the stock to areas with a higher South Asian demographic like Brampton," said Maneesh Jalota, marketing director of Distillers Pride Ltd., an importer of South Asian alcoholic brands since 2007.
Balaji Nagaraja moved to Brampton in 2016 from India and got a job in the IT sector.
Soon, he said, he became aware of the absence of Indian brands at the LCBO. That led him to start Great White Northern Spirits in 2021 to import his favourite Indian labels such as Indri and Rampur single malt whiskies, along with Jaisalmer gin.
"Despite residing in Ontario, I initially introduced my products in Alberta due to the ease of selling there," Nagaraja said.
Alberta's market is open to more new alcohol brands, with spirits from 85 countries registered through Alberta Gaming, Liquor & Cannabis (AGLC).
Interested distributors can easily join by partnering with existing agencies or becoming one, an AGLC spokesperson said via email.
"From the list of 85 countries with spirits products registered in Alberta, a majority have only one or two products registered."
Looking to Alberta
This contrasts with Ontario's market, where it is more difficult to make sales, explaining why distributors like Nagaraja opted to start in Alberta.
Since its inception three years ago, Nagaraja's company has seen growth, increasing from selling 200 cases in its first year to concluding 2023 with 1,700.
"I strongly believe the market potential is higher if selling in Ontario were more accessible," he said.
Nagaraja said the LCBO only opens opportunities for new brands to secure shelf space two to three times a year through a tender process or "open calls." During each of these opportunities, only three or four brands get shelf placement across its stores in small quantities.
This limited frequency and the fewer brands selected by the LCBO pose significant challenges for broader sales outreach and market penetration, the distributors say.
LCBO said it understands what customers are demanding by reviewing "sales data and looking at innovation and emerging trends in the market. This helps us identify gaps which form the basis of our product calls."
Despite LCBO efforts to tailor its offerings based on sales trends and market innovations, some customers, like Kumar, feel that this approach does not fully cater to consumer preferences.
"LCBO should have more choices in their offerings. The people's voice should be heard rather than making specific brands available," he said.
"Our alcohols are a celebration of our cultural wealth and LCBO should commit to truly listen to the communities, in line with the multicultural spirit of Canada."
