Liquor store robberies and thefts have dramatically escalated over the past 18 months in the City of Edmonton (the “City” or “Edmonton”). The Edmonton Police Foundation (“EPF”) and the Edmonton Police Service (“EPS”) have teamed up with Alcanna Inc., Alberta’s largest retailer of liquor, to combat this epidemic. This challenge is part of that effort.
In the Edmonton area, liquor store retailers have experienced approximately a 290% increase in liquor store thefts between 2018 and 2019. The total liquor store robberies/thefts were 9595 in 2019, compared to 3306 in 2018 and only 488 in 2015. Currently liquor store robberies/thefts are occurring on average 26 times a day. These robberies/thefts aren’t only isolated to the Edmonton market; the situation is as dire in Calgary and other communities across Alberta and Canada. The Liquor Control Board of Ontario (LCBO) in Ontario reported $77 million losses in 2018, and the province of Manitoba had also reported similar dramatic crime increases in its stores.
As these incidents escalate, the criminals have become more violent and threatening over time, and the likelihood of serious injuries or worse increases. Alcanna alone has lost millions of dollars in product through these robberies/thefts. Proceeds from stolen liquor have now gone to fueling the drug trade and organized crime gangs, who openly claim responsibility. The safety of Alcanna’s employees and customers is paramount and as robberies/theft continues to rise, it increasingly endangers their safety. From occasional instances of individual offender or single location theft, events now have groups – often armed with knives, pepper spray or guns – targeting locations with groups of individuals entering with large empty duffel bags, filling them with products and walking out – this has now become a daily activity with offences being coordinated and methodized in different parts of the city.
In most cases, once a robbery/theft Is reported, there is little a police officer can do besides taking the report and investigating what information from the crime may be available. In order to ensure safety, store staff are prohibited from engaging with or detaining offenders, or attempting to prevent the crime. In the last year, liquor store employees have been stabbed, hit with broken bottles, and sprayed with bear spray - all without provocation. Alcanna uses proactive mitigation strategies to prevent robberies/thefts, including video surveillance, alarms, locks and the use of internal and external loss prevention staff in stores, but these have all had no impact on the worsening situation.
Robberies/theft are also not limited to the Liquor industry, a range of products from different industries are often targeted; from high-end designer clothing to day-to-day products (razor blades, cologne, baby formula), anywhere there is an opportunity to profit from resale, there is an opportunity for theft. The Retail Council of Canada states that an average of two per cent of annual sales in retail is lost to theft, which amounts to a total of $5 billion in losses across the retail sector in Canada, that’s over $13 million in a single day.
Alberta is the only Canadian province with a fully privatized retail liquor industry. Liquor store operators in Alberta are free to set their own retail prices, including selling at or below the wholesale cost, and may adjust prices based on the customer, the amount of the sale or any other factor determined relevant by the store operator. In addition to selling alcoholic beverages, liquor stores may also sell certain related items, such as soft drinks and other drink mixes, ice, de-alcoholized beverages, glassware and other accessories, although sales of such items may not exceed ten percent (10%) of total sales. Liquor stores may sell liquor to other liquor stores, other licensed premises (e.g., lounges, restaurants, pubs, taverns, etc.) and special event license holders. Liquor stores may also sell special event licenses for private functions and may provide delivery service.
The liquor store industry in Alberta is a fragmented market, with over 2,200 locations that provide sales for off-premises consumption in total. While across Canada, beer and liquor stores and agencies sold $23.5 billion worth of alcoholic beverages during the twelve-months prior to March 31, 2018, Alberta’s share of the alcoholic beverage market during that time period was 11.0%. In Alberta, alcoholic beverage sales totaled $2.58 billion for the twelve-months prior to March 31, 2018, a 1.2% increase over the previous year (all figures cited in this paragraph are from the most recent information published by Statistics Canada).
Successful submissions to this challenge will:
Additionally, EPF, EPS, and Alcanna would like submitted approaches to:
This two phase challenge seeks to identify and test approaches that can significantly reduce the rate of liquor store robberies and thefts. There is a total prize purse of $250,000 CAD to award the most compelling approaches.
Phase 1 is open to everyone. In this ideation phase, participants are invited to submit their proposed approaches to preventing liquor store robberies and thefts. Phase 1 winners will be selected based on how their submissions score against the evaluation criteria listed below. Note that proposed approaches must be demonstrable in order to advance. Conceptual approaches and those that are not technically mature enough to field trial are not of interest. Up to 5 of the Phase 1 participants will be selected to advance to Phase 2.
During Phase 2, each participant will field trial their proposed approach for a minimum of 90 days. The specific length of each individual field trial will be partly dependent on the trend line evidenced by data collected. Each Phase 2 participant will receive $5000CAD to help defray the costs of field trialing their proposed approaches. At the end of the field trials, the Phase 2 prize(s) will be awarded as follows:
Alcanna is offering up to $250,000 CAD in a financial prizes, subject to the terms and conditions appended below, that will be awarded based on results from field trials conducted at select Alcanna stores in the City of Edmonton. The specifics regarding the number and amount of prizes have been described above in the Challenge Structure and Overview section. Additionally, opportunities exist for successfully field tested approaches to receive assistance in commercialization. Such assistance could include a being a reputable paying first customer, providing pre-seed funding, and/or marketing assistance.
The Primary purpose of the Edmonton Police Foundation (and the CSA formed and operated by the EPF) is to support community safety. To maintain funding sustainability for this primary purpose, the EPF will work with Alcanna to negotiate with the appropriate competitors within the contest to determine a fair royalty or other agreeable compensation model for the commercialization of the successful field trial(s). All intellectual property will remain the property of the Edmonton Police Foundation but will be free to assign any such IP to appropriate party(ies) as they deem fit. All parties will act in good faith to ensure the venture Is commercially viable and not hinder iIt In any way deemed harmful. If a submitter has a commercial solution and charges a license fee, they are welcome to submit their proposal and instead of the prize money, we would negotiate a fair license agreement.
Alcanna is passionate about fighting the war on liquor theft and committed to finding a solution to this issue. In the last couple of years, Alcanna has lost millions of dollars in product through robberies/thefts and has seen firsthand, the increasing violence and risk it has had on the safety of Alcanna’s employees and customers.
As the prize sponsor, Alcanna is committed to working with the selected contestant(s) on performing a proof of concept (field trial) in select stores and for those solutions that are deemed to be successful, Alcanna will commit to implement the solution based on a negotiated licensing rate when it is commercially viable.
Phase 1 submissions will be judged by a panel of Alcanna and EPF or EPS experts. They will be evaluated using the criteria and weighting listed below.
Phase 2 field trial results will be evaluated by Alcanna and by a committee of research experts, independent of the Community Solutions Accelerator (CSA) Governance Board., They will determine whether the results of a field study align with the prize thresholds identified above. The committee will be formed by the CSA Governance Board and include members from the stakeholders identified.
Upon completion of a field trial, methodology and results will be posted on-line – subject to approval from Alcanna and limited to non-financial data only.
Demonstrates creativity and novelty
Ideas that are variations of known approaches vs completely new
|Technical Maturity||Likelihood that approach can be demonstrated in a field trial within 2 weeks||20|
|Safety||Likelihood that approach will maintain the safety of both employees and customers||25|
Cost to implement approach
Potential for lost sales
Change to labor costs
Identify risks and potential side effects
In the past 18 months, Alcanna has partnered with the Edmonton Police Service (EPS) to proactively disrupt the liquor theft Issue. Several projects have been attempted in order to reduce the Impact of liquor theft; outlined below is a summary of those projects that have already been done. During the challenge webinar, Alcanna can discuss the outcome of each project and feedback on the impact of the project based on several factors (I.e. liquor theft reduction, sales impact, employee safety, customer experience, etc.). In most instances, subjective feedback will be provided rather than quantitative evidence.
Note that approaches which have already been tested or are otherwise mentioned below are not of interest. Only submissions which cover approaches significantly different from those listed below will be eligible for consideration.
Disrupt Sale of Stolen Goods
As many solutions have been explored in this area, several learnings have been experienced throughout the process:
Information available on EPF portal (https://drive.google.com/open?id=1P4bl9HgqRdWAvTfozYc6_r_EZiVxb7CN):