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DUTYFREEMAGAZINE.CA MARCH 2017 · IAADFS· VOL 27 · NO 1

Tocumen Airport under construction p. 12 Motta unveils new projects p. 26 A glance at Argentina’s TR landscape p. 44

LETTER FROM THE EDITOR

MARCH 2017 · IAADFS · VOL 27 · NO 1

The Americas Duty Free & Travel Retailing magazine (ISSN 0962-0699) is published four times a year April, June, October and November by Global Marketing Company Ltd. 26 Pearl Street, Mississauga, Ontario L5M 1X2 Canada. It is distributed throughout Central America, South America, the United States, Canada, U.S. Virgin Islands, U.S. Pacific islands, and the islands in the Caribbean. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or the editor. March 2017, Vol 27. No. 1. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2017 Global Marketing Company Ltd. .

THE AMERICAS DUTY FREE & TRAVEL RETAILING 26 Pearl Street Mississauga, Ontario L5M 1X2 Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemagazine.ca PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@dutyfreemagazine.ca SENIOR EDITOR Wendy Morley wendy@dutyfreemagazine.ca ASSOCIATE EDITOR Jas Ryat jas@dutyfreemagazine.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca CONTRIBUTORS Ronnie Lovler Max Mishler Mary Jane Pittilla

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

Looking up

t’s an exciting time to be in travel retail in the Americas. We all know about the ebb and flow of business, and while the troughs can be difficult, it’s all the more rewarding when the ship rises, as it is doing now in Latin America. Nowhere is that more the case than in Argentina and Uruguay. Both of these countries have seen their coffers drop in the past two years, mainly because of the political and economic instability of Brazil. Enrique Urioste, CEO of Neutral Duty Free, says the company’s growth rate in January 2017 is 60 to 70% year on year. Magdelena Ducos, Commercial Manager of London Supply in Puerto Iguazu, says 2016 ended much better than it seemed at the beginning of the year, not far off 2015’s sales. Both of these stories appear in our Latin America Report. Retail giant Dufry is investing heavily in Argentina; in this issue Rene Riedi, Divisional CEO Latin America & Caribbean for the company, discusses renovations. Our Publisher AJ Khan recently paid a visit to one of the major global duty free centers, Panama. He interviews one of the giants of the industry – Motta Internacional’s Director Erasmo Orillac, who tells Khan about some purchasing behavior trends. While in Panama, Khan found out all about the rebuilding of Tocumen airport. And that’s something that should provide hope and enthusiasm for all in this industry: passenger traffic continues to grow. With passenger numbers increasing at a global average of 5% per year and many airports not in a position to accommodate that traffic, infrastructure growth is massive around the world. In this issue we focus on the reconstruction of three major airports: LaGuardia, Miami and Tocumen. As airports continue to recognize the value of their commercial areas, these areas have gained greater footprint and importance in the design. Many airports at least double their commercial space with redesign, and Miami is looking at a 300% increase. Additionally, airports are learning that when passengers are unhappy or it takes too long to get to the gate, non-aeronautical revenue suffers. That means greater focus is also being put on smooth and easy passage from curb to gate. By all reports, the duty free industry in the Americas should be set for some smooth sailing ahead. Kindest Regards,

Hibah Noor Editor-in-Chief hibah@dutyfreemagazine.ca

www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

LETTER FROM THE EDITOR

Por buen

camino E

n estos momentos, formar parte del sector minorista de viajes de las Américas es un hecho apasionante. Todos conocemos los altibajos del negocio, y si bien el camino puede ser escabroso, volver a tiempos de recuperación como los que experimenta Latinoamérica, es lo más gratificante. Esta es una realidad que se cumple cabalmente en Argentina y Uruguay. Ambas naciones han pasado por momentos difíciles durante los últimos dos años, en gran medida a causa de la inestabilidad política y económica en Brasil. Enrique Urioste, Director Ejecutivo de Neutral Duty Free, afirma que la tasa de crecimiento en enero del 2017 es de un 60 a un 70% interanualmente. Asimismo, Magdalena Ducos, Gerente Comercial de London Supply en Puerto Iguazú, señala que el 2016 terminó mucho mejor de lo que aparentaba a comienzos del año, no lejos de las ventas del 2015. Los artículos que analizan ambas situaciones están contenidos en nuestro “Reporte de Latinoamérica”. Por su parte, el gigante minorista Dufry también está invirtiendo sustancialmente en Argentina. En este número de nuestra revista, René Riedi, Director Ejecutivo de la División de Latinoamérica y el Caribe de la compañía, habla sobre renovaciones. Recientemente, nuestro director editorial AJ Khan visitó Panamá, uno de los principales centros duty free del mundo, y entrevistó a uno de los gigantes de la industria: Erasmo Orillac, Director de Motta Internacional, quien habló sobre algunas tendencias en la conducta de compras. Y durante su estancia en

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Panamá, el Sr. Khan conoció todos los detalles referentes a la reconstrucción del Aeropuerto Internacional Tocumen. Todo lo anterior debe infundirles esperanza y entusiasmo a todos los que pertenecen a esta industria: el tráfico de pasajeros sigue creciendo. En la medida que la cantidad de pasajeros se incrementa a un promedio global del 5% por año, y muchos aeropuertos no tienen condiciones actuales para manejar ese tráfico, el crecimiento de la infraestructura es una tendencia masiva en todo el mundo. En este número nos enfocamos en la reconstrucción de tres aeropuertos importantes: LaGuardia, Miami y Tocumen. En la medida que los aeropuertos siguen reconociendo el valor de sus zonas comerciales, las mismas han logrado una mayor presencia e importancia en el diseño arquitectónico. Numerosos aeropuertos están duplicando al menos su espacio comercial con rediseños, y Miami se propone un incremento del 300%. Además, los aeropuertos van aprendiendo que cuando los pasajeros se sienten insatisfechos o se demoran demasiado para llegar a la puerta de salida, los ingresos no aeronáuticos sufren por esa situación. Eso equivale a que se está poniendo un mayor énfasis en el tránsito más fluido y fácil, desde la entrada al aeropuerto hasta la puerta de salida. Según todos los reportes, la industria duty free de las Américas va por buen camino para que todo marche viento en popa. Cordialmente,

Hibah Noor Editora en Jefe hibah@dutyfreemagazine.ca

CONTENTS

What’s inside LEAD STORIES 12 Tocumen International Airport GRAND AMBITIONS

Exciting plans for a new, state-of-the-art Terminal 2 at Tocumen International Airport will consolidate Panama as a hub of the Americas when it opens next year

GRANDES AMBICIONES

Los atractivos planes de una nueva y moderna Terminal 2 en el Aeropuerto Internacional Tocumen International consolidarán a Panamá como centro de concentración de vuelos de las Américas cuando sea inaugurada el año próximo

26 Motta Internacional BUILDING ON SUCCESS

2016 was an action-packed year for leading operator Motta Internacional, and 2017 promises to be even busier as a number of ambitious projects come to fruition

UNA TRAYECTORIA CONTINUA DE ÉXITOS

El 2016 fue un año pleno de acción para el prestigioso operador Motta Internacional, y el 2017 promete ser aún más activo, en la medida que dan frutos varios proyectos ambiciosos

36 Dufry Americas A CONSISTENT AND FOCUSED STRATEGY

Despite tough times in Argentina, Dufry Americas continues to invest in its retail portfolio with new commercial initiatives and store upgrades

54 LaGuardia GLOBAL STANDARD

New York City’s LaGuardia airport has been a thorn in the side of anyone with interest in the city’s airports, whether for travel or industry reasons. Finally, work on the new terminal has begun

60 Uruguay Report URUGUAY OUTLOOK

Political stability in neighboring Brazil and Argentina is good news for Uruguay’s duty free and travel retail industry

PERSPECTIVAS DE URUGUAY

La estabilidad política en los vecinos Brasil y Argentina es una buena noticia para la industria duty free y minorista de viajes de Uruguay

72 Top Brands International ON THE MOVE

Top Brands International is growing with projections to increase the number of its stores in the Caribbean and Latin America from 50 to 70 by the end of the year

72 FEATURES Copa MAXs out Argentina round-up Guest Writer: Sarah Branquinho, ETRC More growth at MIA

34 44 50 66

The Millennial mindset IAADFS update Satori helps customer experiences Leading face masks

70 80 92 102

CONTENTS

LEAD STORIES 94 CTO BANNER YEAR

At the recent annual Performance of the Tourism Industry Review, the Caribbean Tourism Organisation reported the region’s best year yet

98 Essence Corp. GETTING A HEAD START

After celebrating a good year in the Americas, family-owned fragrance distributor Essence Corp is tackling 2017 with gusto, thanks to a series of exciting new launches

110

110 Duty Free Dynamics BUILDING UP STRENGTH

Panama-based distributor Duty Free Dynamics is using its great location and experienced management team to forge a growing business in the Americas and Caribbean

114 ACTIUM CRUISING TO SUCCESS

US-based distributor ACTIUM is celebrating a number of big travel retail business wins involving some of the world’s best luxury names

120 Costa Sunglasses FOCUSED ON CONSERVATION

Costa Sunglasses aims to offer a distinctive, premium brand for outdoor adventurers, while at the same time protecting the oceans its customers love to explore

120 132

132 Diageo THE EXPERIENCE OF SHOPPING

As the leader in the spirits category, Diageo’s Global Travel team has a solid handle on what works in the channel

134 Edrington Global Travel Retail A SHARED VISION

As Igor Boyadjian begins his new role at the helm of Edrington Global Travel Retail, the seasoned executive explains how he will navigate the opportunities

FEATURES Monalisa now in Asunción FDFA’s northern climate Tracking the uber-shoppers Caribbean ARI grows stronger

78 84 86 88

Toronto’s Pearson remodels T3 90 Interparfums’ success story 106 Guest writer: Neil Ebbutt, Rituals 108 Bushmills Whiskey sees huge potential 140

Transforming Travel Retail.

Wherever you go with Dufry, you have a world of shopping in your hands. The best brands and the best prices with the largest variety. Today a world made up of more than 2200 shops, in 63 countries and close to 440 locations all around the world.

CONTENTS

LEAD STORIES 136 Beam Suntory GTR A PRIORITY PLATFORM

144

136

With its diverse portfolio, Beam Suntory Global Travel Retail is perfectly positioned to take advantage of the boom in bourbon and Japanese whisky sales

142 Patrón FINGER ON THE PULSE

Patrón’s provenance, heritage and ideals all bring the company directly in line with current trends

144 Kavalan MAKING A SPLASH

Ambitious Taiwanese whisky distillery Kavalan is breaking out onto the world stage with its high quality single malt whisky portfolio – including a travel retail exclusive product

148 Bacardi STRONG IN CHANNEL

Bacardi’s age-statement whiskies featured in its John Dewar & Sons Fine Whisky Emporium are helping drive global travel retail sales

151 Rémy Cointreau IN GOOD SPIRITS

French liquor group Rémy Cointreau is reporting solid growth in the Americas across its core Cognac brands as well as the new spirits that have joined its global travel retail portfolio

146

159 Alzawrae FULL STEAM AHEAD

Mazaya, the fast-growing shisha tobacco brand, is going all out to woo travel retailers with its new product developments and major investments

160 Pet pictures OUR FAITHFUL FRIENDS

Travel is a must in our industry. Americas Duty Free is here to give you a glimpse of the loyal pets that wait for their well-traveled owner upon their return

159

162 A mixed bag IT’S IN THE BAG

Calling all fashionable adventurers: these practical yet luxurious novelties will help you pack stylishly this season

FEATURES

160

Spotlight on IAADFS exhibitors Guest writer: Jonathan Smith, Travel Blue IBBI boosts portflio Celebrating the Habano Brown-Forman delivers quality

116 122 124 130 138

Stoli’s line expansion MONARQ’s proven method WEBB’s enthralling activations Busy year for Goslings Rum Bottega inspired by exclusivity

146 147 150 156 157

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TOCUMEN INTERNATIONAL AIRPORT

Grand ambitions Exciting plans for a new, state-of-the-art Terminal 2 at Tocumen International Airport will consolidate Panama as a hub of the Americas when it opens next year by

AJ KHAN

An artistic rendering of the new Terminal 2 building at Tocumen International Airport, Panama, featuring a design that resembles a stealth airplane

A Joseph Fidanque III, General Manager, Tocumen Aeropuerto Internacional (pictured right) with AJ Khan, Publisher of Americas Duty Free & Travel Retailing Magazine

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

n ambitious new terminal project is under way in Panama that will see Tocumen International Airport flourish as a hub of the Americas and secure the country’s position as a tourist destination in Latin America. The airport itself is considered as the country’s second most important asset after the Panama Canal, the famous feat of human engineering that links the Atlantic and Pacific oceans to create an essential shipping route. The new, state-of-the-art T2 project is perhaps no less of an undertaking. Costing well in excess of US$1 billion, the new Terminal 2

Increasing revenues Funding for T2, which will boost the airport’s capacity to 22 million passengers per year was raised by two bond issues. The first 10-year bond was issued in Panama for US$650 million in late 2013 and then the operator went to the US public market in May 2016, successfully launching an issue for US$575 million. Fidanque explains that more funding needs to be raised, but he is not concerned about the shortfall. “We still lack a bit more funding… A lot of people are knocking on the door to lend us money. The financial situation of the airport is very solid right now. We closed about 20% above our budget that we promised our bondholders. We have been increasing revenues, controlling costs. We feel happy. We have solid financials and people are eager to give funding to airport infrastructure.” Fidanque brims with enthusiasm as he describes the T2 project. “For Latin America, T2 is going to be world renowned; it’s going to look and feel gorgeous… it was designed by Foster + Partners. They have done very nice work throughout Europe and the Middle East. The terminal will look very appealing. Most of the airports around Latin America are more boxy in style. Notwithstanding that, I don’t see the look as important as the functionality of the airport. So for us, we look at the terminal and the airport as one. This is a hub airport, meaning all the gates are being used at the same time, at least six to seven times a day, so we need to ensure the wayfinding is going to be crucial for passengers.” A lot of technology has been invested in the baggage system to comply with connection times and new requirements by the TSA of the US to ensure the airport knows the location of every bag at any time. In addition, the Panama Metro will be arriving at the airport by 2019, some 10 months after the terminal opens. “This will be very important,” says Fidanque. “It will be easy to get to the city, and it will be a state-of-the-art metro station.”

New airlines slated to begin flights

project is on schedule for a soft opening of the first few gates in January 2018, according to Joseph Fidanque III, General Manager, Tocumen Aeropuerto Internacional. “Right now we’re 60% advanced on Terminal 2,” he tells Americas Duty Free & Travel Retailing at his offices in Panama City. “We hope to finish it or have a soft opening of first few gates in January next year, but really the end of March is when the terminal will be fully operational. Everything’s on schedule. We’re doing a lot of infrastructure work on the airport so we can land planes more quickly and efficiently. That means more time in the terminal. A lot of work is being done on the baggage system. We’re making progress – it’s stressful, but I call it positive stress.”

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New airlines coming into the terminal will include Emirates Airline, which plans to start operations when the new terminal opens. That will also be an important development for the airport operator, which has received visits from a number of major international carriers from across the world, including Asia. It’s too early for Fidanque to talk about the grand opening plans, but he promises “a surprise, especially inflight”. The main local carrier Copa Airlines will be receiving new Boeing 737 MAX airplanes at around same time, which can fly further and will provide more capacity. “We have a lot of expectations,” he says. The new, long-range airplanes such as the Boeing 787 and Airbus 350 are changing the dynamics of flying and opening new city pairs, he notes. More city pairs in the Far East and Middle East will potentially come into Panama. In addition, new flights will come into the hub from secondary cities in Latin America, and that’s where he sees a lot of growth potential. “Despite the depressed currencies in the region, notably Brazil and Colombia, what’s incredible is that Latin America [flights] still grew 8.5% this year – it’s enormous,” he enthuses. “There’s a pent-up demand. I see that terminal filling up in three years time. We already have to think of new frontiers which are part of our masterplan. We have a plan for a new, third runway that’s in the works. We’re not going to stop; we view this like the canal.

TOCUMEN INTERNATIONAL AIRPORT

The roof of T2 will have zoned lighting by skylights that will allow natural light to enter. Daylight will also enter the glazed perimeter

After the canal this is one of the most important assets in the country.”

Space for luxury brands Turning to the duty free business, Tocumen International Airport launched tenders in January for three spaces for two operators in the existing terminal. The current contracts operated by Motta and Grupo Wisa expire in December 2017 and new 10-year contracts will be offered. An additional two areas in the new terminal will be tendered a few months after those for the existing terminal. The total duty free space will be up to 2,200 square meters for Terminal 2 and approximately 2,100 square meters for T1. There will also be space for F&B, specialist stores and luxury brands in the new T2. Estée Lauder has visited and is eager to open for business, says Fidanque. The plan is to attract top brands, some of which are not prevalent in the rest of Latin America, so it’s a good opportunity for them, he believes, adding that the Pandora jewelry brand has been “super-successful” at the airport. For F&B, there will be one master concessionaire, operating on the second floor. A refined dining restaurant will be connected to the Copa Airlines Presidents Club lounge. On the ground floor there will be a fine gourmet store and a cafe. The Copa Presidents Club lounge will be used by members of the Star Alliance, and there will be a new VIP club for other airlines to use. A further VIP opportunity exists if there is demand.

New Terminal 2 takes shape In 2018, Panama’s new Terminal 2 will open as part of the airport’s modernization plan. Tocumen International Airport,

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

located in East Panama, is committed to move from a regional airport terminal to a first world intercontinental facility, according to its growth projections. Currently, 80% of the airport’s traffic is transit. Tocumen International Airport was built at the beginning of the 1970s with an initial capacity of 1.5 million users. Today more than 14 million passengers are served at the terminal. At present, the airport connects with 89 destinations in 34 countries of the Americas and Europe. Due to its level of operations and passenger traffic, Tocumen International Airport launched the first phase of its expansion masterplan between 2004 and 2008, which included the expansion and modernization of the terminal’s current facilities. A year later, the airport began work on the second phase of its expansion plan, which was concluded in January 2012. However, the strong growth of the airport, due to Panama’s privileged geographical position, coupled with the accelerated growth of Copa Airlines, have forced it to start Terminal 2, the third phase of its expansion masterplan. According to studies, it is expected that the Tocumen International Airport will serve more than 22 million passengers and will increase the tourist value of Panama as a destination.

Terminal 2 facts and figures The Tocumen International Airport Expansion Project aims to accompany the socio-economic and tourism growth that Panama has recorded in the last 13 years. The new terminal covers an area of more than 1,000 hectares and features a passenger terminal building whose emblematic and iconic design was conceived by the famous British architect Sir Norman Foster.

TOCUMEN INTERNATIONAL AIRPORT

The façade of the new Terminal 2 building, which was designed by Foster + Partners to reflect the Panamanian landscape, evoking a unique sense of place to welcome visitors to the country

The new building, which will connect with T1, will have 50 counters to issue boarding passes, 10 security checkpoints, and a tax free commercial area of more than 10,000 square meters. The mezzanine levels will house the VIP lounges, food courts and airline offices. T2 will have state-of-the-art facilities, such as the use of fiber optics, an integrated baggage system between terminals T1 and T2, with a capacity to initially process 7,200 and then 8,400 suitcases per hour. The roof of the T2 will have zoned lighting by skylights that will allow natural light to enter. Daylight will also enter the glazed perimeter, in conjunction with the LED lighting system, Construction work is on schedule for a soft opening of first few gates in January 2018, and by the end of March it will be fully operational

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

which seeks to optimize the use of energy and preserve the environment. The parking area, located opposite T2, will have an initial capacity for 1,200 spaces, featuring cellphone parking. The construction work began at an initial cost of US$780 million, but to achieve efficiency and compliance, adjustments will raise its cost by about US$1,000 million, including the buildings, facilities and external infrastructure. The Expansion Project by the Brazilian company Norberto Odebrecht, working in partnership with Foster + Partners, will have four levels, with a design that resembles a stealth airplane. Once Terminal 2 is completed, Tocumen International Airport will have 54 gates for the embarkation and disembarkation of passengers, allowing it to process 22 million passengers annually. “Tocumen International Airport will become the center of connectivity par excellence in the region, surpassing any airport in Central America,” the operator says. “This advance will considerably improve the attractiveness of the country and put Panama on a par with developed nations that have created similar concepts. “This goal, in short, will contribute decisively to the consolidation of the country as a destination, and more convenient and profitable in terms of business and tourism – factors that directly influence the growth of the Panamanian economy.” With the construction of a future satellite, capacity will increase to approximately 33 million passengers, boosting the tourist value of Panama for the next 10 to 15 years.

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TOCUMEN INTERNATIONAL AIRPORT

Grandes ambiciones Los atractivos planes de una nueva y moderna Terminal 2 en el Aeropuerto Internacional Tocumen consolidarán a Panamá como centro de concentración de vuelos de las Américas cuando sea inaugurada el año próximo

Tocumen International Airport currently has two runways, with plans for a third runway in the works as part of the continuing expansion masterplan

n proyecto ambicioso para una nueva terminal está en marcha en Panamá, para que el Aeropuerto Internacional Tocumen florezca como centro de concentración de vuelos de las Américas, y garantice la posición del país como destino turístico en Latinoamérica. El aeropuerto está considerado como el segundo valor nacional en importancia después del Canal de Panamá, la famosa hazaña de ingeniería humana que enlaza los océanos Atlántico y Pacífico para crear una ruta marítima esencial. El nuevo y moderno proyecto de la T2 es sin lugar a dudas una tarea de esa misma naturaleza. El proyecto de la nueva Terminal 2, cuyo costo supera los mil millones de dólares, está programado para una apertura experimental de las primeras zonas de llegadas y salidas en

enero del 2018, según Joseph Fidanque III, Manager General del Aeropuerto Internacional Tocumen. “En estos momentos estamos en un 60% de avance en la Terminal 2”, explicó a Americas Duty Free desde sus oficinas en Ciudad de Panamá. “Esperamos terminarla o realizar una apertura experimental de las primeras zonas de llegadas y salidas en enero del año próximo, pero realmente a finales de marzo es cuando la terminal entrará en plena operación. Todo marcha como se ha programado. Estamos realizando muchos trabajos de infraestructura en el aeropuerto, para que los aviones puedan aterrizar de manera más rápida y eficiente. Eso equivale a más tiempo en la terminal. También estamos trabajando intensamente en el sistema de procesamiento de equipaje. Estamos progresando, es estresante, pero podemos considerarlo un estrés positivo”.

Incremento de ingresos

Joseph Fidanque III, General Manager, Tocumen Aeropuerto Internacional, has high expectations for the new terminal, which will boost capacity to 22 million passengers per year

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

El financiamiento para la T2, que elevará la capacidad del aeropuerto a 22 millones de pasajeros al año, se recaudó con dos expediciones de bonos. El primer bono a 10 años fue expedido en Panamá por US$650 millones a finales del 2013. Posteriormente, el operador concurrió al mercado público estadounidense en mayo del 2016, logrando una exitosa expedición de bonos por US$575 millones. Fidanque explicó que se necesita recaudar más fondos, pero que no le preocupa el resultado de ese proceso. “Aún nos falta un poco más de fondos … Muchas personas nos están ofreciendo

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TOCUMEN INTERNATIONAL AIRPORT

préstamos. La situación financiera del aeropuerto es muy sólida en estos momentos. Cerramos cerca de un 20% por encima del presupuesto que prometimos a nuestros tenedores de bonos. Nos sentimos felices. Contamos con finanzas sólidas, y muchos están dispuestos a otorgar financiamiento a la infraestructura del aeropuerto”, añadió. Fidanque no pudo ocultar su entusiasmo al describir el proyecto de la T2. “Para Latinoamérica, T2 tendrá fama mundial. Va a ser y a sentirse hermosa… fue proyectada por Foster + Partners, una firma que ha realizado trabajos magníficos en Europa y el Oriente Medio. La terminal será muy atractiva. La mayoría de los aeropuertos de Latinoamérica son de un estilo más rectangular. Sin embargo, no creo que la apariencia sea tan importante como la funcionalidad del aeropuerto. Por tanto, para nosotros, consideramos la terminal y el aeropuerto como una unidad. Es un aeropuerto centro, o sea, que las zonas de llegadas y salidas se usarán al mismo tiempo, al menos de seis a siete veces al día, por lo que debemos garantizar que la orientación sea crucial para los pasajeros”. Por su parte, se ha invertido mucho en la tecnología del sistema de procesamiento de equipajes, para cumplir con los horarios de conexión y los nuevos requisitos establecidos por la TSA estadounidense, para garantizar que el aeropuerto conozca la ubicación de cada valija en cualquier momento. Además, el Metro de Panamá llegará hasta el aeropuerto en el 2019, unos diez meses después de la inauguración de la terminal. “Esto será muy importante”, agregó Fidanque. “Será fácil llegar a la ciudad, y tendrá una estación moderna”.

Operaciones de nuevas aerolíneas Entre las nuevas aerolíneas que operarán en el aeropuerto figuran Emirates Airlines, que proyecta iniciar vuelos cuando sea inaugurada la nueva terminal. También será una buena noticia para el operador del aeropuerto, que ha recibido visitas de numerosos transportistas notables de todo el mundo, incluyendo Asia.

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Aunque resulta demasiado pronto para que Fidanque pudiera hablar de los planes de la gran inauguración, el alto funcionario prometió “una sorpresa, especialmente en vuelo”. La principal aerolínea local Copa Airlines recibirá nuevos aviones Boeing 737 MAX alrededor de esa fecha, que pueden volar más lejos y proporcionarán más capacidad. “Tenemos muchas expectativas”, aseguró. Según afirmó Fidanque, los aviones nuevos y de mayor capacidad de vuelo como el Boeing 787 y el Airbus 350 están cambiando la dinámica de la industria y abriendo nuevos pares de ciudades (city pairs). Cada vez más pares de ciudades del Lejano y Oriente Medio llegarán potencialmente a Panamá. Además, habrá nuevos vuelos en el centro de concentración procedentes de ciudades secundarias latinoamericanas, y es precisamente aquí donde el alto funcionario aprecia mucho potencial de crecimiento. “A pesar de la depresión de las monedas en la región, sobre todo en Brasil y Colombia, resulta increíble que este año [los vuelos] de Latinoamérica se incrementaron un 8.5%. Una cifra enorme”, aseguró. “Hay una demanda contenida. En tres años se llenará la terminal. Ya tenemos que pensar en nuevas fronteras como parte de nuestro plan maestro. Contamos con un plan para una nueva y tercera pista que ya está en marcha. No vamos a parar. Para nosotros es algo similar al Canal. Después del Canal, es uno de los valores más importantes del país”.

Espacio para marcas de lujo En lo referente al negocio duty free, el Aeropuerto Internacional Tocumen International inició licitaciones en enero de tres espacios para dos operadores en la terminal ya existente. Los contratos actuales, operados por Motta y Grupo Wisa expiran en diciembre, y se ofrecerán nuevos contratos por diez años. Dentro de pocos meses se licitarán dos zonas adicionales de la nueva terminal, después de los pertenecientes a la ya existente. El espacio duty free será de hasta 2,200 metros cuadrados en la Terminal 2 y aproximadamente 2,100 en la T1.

TOCUMEN INTERNATIONAL AIRPORT

de pasajeros, e incremente el valor de Panamá como destino turístico.

Datos y cifras de la Terminal 2

También habrá espacio para venta de comidas y bebidas, tiendas especializadas y marcas de lujo en la nueva T2. Estée Lauder ha visitado la terminal, y está dispuesta a operar negocios, según Fidanque. El plan es atraer marcas importantes, algunas de las cuales no predominan en el resto de Latinoamérica, algo que el alto funcionario considera una buena oportunidad para las mismas, y añadió que la marca de joyería Pandora ha sido “súper exitosa” en el aeropuerto. En lo tocante al rubro de comidas y bebidas, habrá un concesionario maestro que operará en el segundo piso. Además, un refinado restaurante estará conectado con el salón Presidents Club de Copa Airlines, mientras que en la planta baja habrá una tienda gourmet y café. El salón Presidents Club de Copa Airlines será usado por miembros de Star Alliance, y habrá un nuevo club VIP para otras aerolíneas. Y si fuera necesario, existe otra oportunidad más de club VIP.

La nueva Terminal 2 toma forma En el 2018, la nueva Terminal 2 de Panamá estará abierta, como parte del plan de modernización del aeropuerto. El Aeropuerto Internacional Tocumen, ubicado en la zona este panameña, tiene el compromiso de transformarse de terminal de aeropuerto regional a una instalación intercontinental del “primer mundo”, según sus proyecciones de crecimiento. En la actualidad, el 80% del tráfico aeroportuario es de tránsito. El Aeropuerto Internacional Tocumen fue construido a principios de la década de los años setenta, con una capacidad inicial de 1.5 millones de usuarios. En la actualidad, se les presta servicio a más de 14 millones de pasajeros en la terminal. Además, el aeropuerto se conecta con 89 destinos en 34 países de las Américas y Europa. Debido a su nivel de operaciones y tráfico de pasajeros, el Aeropuerto Internacional Tocumen inició la primera fase de su plan maestro de expansión entre el 2004 y el 2008, que consistió en la expansión y modernización de las instalaciones actuales de la terminal. Un año después, el aeropuerto comenzó la segunda fase de su plan de expansión, que concluyó en enero del 2012. Sin embargo, el sólido crecimiento del aeropuerto, debido a la posición geográfica privilegiada de Panamá, conjuntamente con el acelerado incremento de las operaciones de Copa Airlines, han obligado a iniciar la Terminal 2, tercera fase del plan maestro de expansión. Según los estudios realizados, se espera que el Aeropuerto Internacional Tocumen preste servicios a más de 22 millones

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

El Aeropuerto Internacional Tocumen tiene en proyecto incorporarse al crecimiento socioeconómico y turístico que ha logrado Panamá en los últimos 13 años. La nueva terminal abarca una extensión de más 1,000 hectáreas, y cuenta con un edificio para la terminal de pasajeros cuyo diseño emblemático e icónico fue concebido por el famoso arquitecto británico Sir Norman Foster. La nueva edificación, que se conectará con la T1, tendrá 50 mostradores para expedir pases a bordo, 10 puntos de chequeo de seguridad, y una zona comercial libre de aranceles de más de 10,000 metros cuadrados. Los niveles del mezzanine o entresuelo estarán ocupados por los salones VIP, las zonas de expendedores de comidas y bebidas, y oficinas de aerolíneas. La T2 contará con instalaciones equipadas con la más moderna tecnología como el uso de fibra óptica, un sistema integrado de control de equipaje entre las terminales T1 y T2, con una capacidad de procesamiento de 7,200 y posteriormente de 8,400 valijas por hora. El techo de la T2 tendrá iluminación zonificada con claraboyas que permitirán la entrada de la luz natural, la cual también penetrará en el perímetro encristalado, en conjunción con el sistema de iluminación LED, que busca optimizar el uso de energía y preservar el medio ambiente. La zona de estacionamiento, ubicada frente a la T2, tendrá una capacidad inicial de 1,200 espacios, y contará con la posibilidad de parquear con teléfonos celulares. Los trabajos de construcción comenzaron a un costo inicial de US$780 millones, pero para lograr eficiencia y cumplimiento de las reglas establecidas, los ajustes elevarán los gastos en unos mil millones, incluyendo edificios, instalaciones e infraestructura externa. El proyecto de expansión a cargo de la compañía brasileña Norberto Odebrecht, en trabajo conjunto con Foster + Partners, consistirá en cuatro niveles, con un diseño inspirado en un avión stealth. Una vez concluida la Terminal 2, el Aeropuerto Internacional Tocumen contará con 54 puertas de llegadas y salidas para embarque y desembarque de pasajeros, lo que propiciará el procesamiento de 22 millones de pasajeros anualmente. “El Aeropuerto Internacional Tocumen se convertirá en el centro de conexión por excelencia de la región, y superará a cualquier aeropuerto de Centroamérica”, aseguró el operador. “Este avance mejorará considerablemente el atractivo del país, y ubicará a Panamá a la par de las naciones desarrolladas que han creado conceptos similares. “Este propósito, resumiendo, contribuirá decisivamente a la consolidación del país como destino, y más conveniente y rentable en términos de negocios y turismo, factores que influyen directamente en el crecimiento de la economía panameña”, agregó el operador. Asimismo, con la construcción de un futuro satélite, la capacidad se incrementará a cerca de 33 millones de pasajeros, lo cual elevará el valor turístico de Panamá en los próximos 10 a 15 años.

MOTTA INTERNACIONAL

Pictured from left at Motta Internacional’s headquarters in Panama City are Carlos Alberto Motta, Director, Motta Internacional, AJ Khan, Publisher, Americas Duty Free & Travel Retailing and Erasmo Orillac, Director, Motta Internacional

Building on

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2016 was an actionpacked year for leading operator Motta Internacional, and 2017 promises to be even busier as a number of ambitious projects come to fruition by

AJ KHAN

t’s an exciting time to be at the helm of Motta Internacional, the leading operator in Central America, South America, and the Caribbean. Among other developments, the warming of Cuba-United States relations that began in December 2014 has opened up fresh opportunities for the Panama-based company that’s seeing its much-respected duty free business grow year-on-year. In a frank interview with Publisher AJ Khan at Americas Duty Free & Travel Retailing in Motta Internacional’s Panama City headquarters, Erasmo Orillac, Director, reports “a lot of developments” going on at the company. “We have a few projects going on in the duty free industry that are going to be a challenge. Some are already work in progress and some are in the planning,” he says. “Work in progress is Havana, Cuba. We are in the process of opening a duty free shop in Havana and three other smaller airports. We’re negotiating the contracts as we speak and it’s a very complex situation but things are moving along very well and we are targeting to open in the third quarter of 2017. It’s very interesting and challenging.” Havana José Martí International Airport already has one shop operated by CIMEX, a local Cuban general trading company, and Motta Internacional has signed a joint venture with CIMEX to operate the airport’s duty free business. Orillac sees this new development as a positive challenge. “It’s a good challenge, in view of the opening between the US and Cuba,” he says. “It’s going to be an airport that will have a lot of traffic – no question about it. A lot of people will go by boat, but a lot of people will fly over. So it’s a challenge, but a good challenge to have.”

Concession renewals and winning bids In a further development outside of Cuba, Motta Internacional has renewed its concession in Venezuela for five years. Again,

Orillac is optimistic about this well-established operation. “It’s an interesting situation; we have been there for 15 years.” In addition, Orillac reported the renewal of the company’s contract in Bogotá, Colombia until 2027, where an additional 618 square meters of retail has been added in the new section of the airport that will open in June or July. “We’re working on that as we speak,” he enthuses. “Our main store needed a facelift after some years and we’re also reshuffling a bit within the store. We also won a contract for 10 years in Cali, a smaller airport in Colombia. It’s a brand new terminal and we are setting up shop there.” In Trinidad and Tobago, Motta Internacional recently won a bid for the duty free business and everything is ready to go. At time of print, the firm was preparing for a soft opening in March of this year.

Increasing the average ticket per passenger Right now, Motta Internacional is gearing up for the new opportunities at Tocumen International Airport on its home turf in Panama City. Orillac says the company will be participating in the bidding for two clothing boutiques in the new Terminal 2, which is currently being built. In addition, it will be bidding for a consumer electronics specialty monobrand shop. Turning to duty free sales, 2016 was better than 2015 as far as sell-out was concerned – the company was up 15% overall. Orillac believes this double-digit result is due to working “very hard” on the training of its store managers and sales staff. “We’ve been able to succeed in increasing the average ticket per passenger by half a product,” he says. The penetration rate depends on the dwell time that people have in the airport, and some airports in its portfolio are better than others. Panama is not the best airport for dwell time, notes Orillac, because the main carrier is Copa Airlines and the average connecting time is 56 minutes, which offers very little time

A painting of (from left) Alberto Motta Cardoze and Alberto Pancho Motta Jr. hanging on the wall at Motta Internacional’s headquarters in Panama City

www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

MOTTA INTERNACIONAL

The soft opening of Motta Internacional’s Trinidad and Tobago store took place in early March 2017

for shopping. Here, penetration rate is up to 10%. However, an airport like Quito in Ecuador, where people have more time, is seeing a higher penetration rate – up to 20%. Orillac adds that Motta International has benefited from a few new carriers serving Tocumen International Airport, such as Turkish Airlines. The top three product categories in duty free change from airport to airport and from arrivals to departures. In arrivals, liquor is number one and perfumes and cosmetics is number two, closely followed by confectionery. In departures, perfumes and cosmetics is number one, followed by liquor, cigarettes, and confectionery. In terms of nationalities, Brazilians have always been good customers. “When they had the currency crisis in the last couple of years the traffic went down, but they are rebounding back,” says Orillac. “I would say Brazilians are number one, Colombians number two, and Argentineans are number three.”

Major changes in purchasing behavior In recent years, Orillac has observed a major trend in purchasing habits. Passengers are now very well informed on prices. Using their smartphones and taking advantage of the free Wi-Fi at the airport, they can check prices worldwide at a click. “The younger crowd, the millennials, they are so good at using cellphones for internet pricing, they know everything,” he says. The use of credit cards as a paying method has also surged. A few years ago, 60% of transactions were made in cash, and now it’s only 25%. That affects the company’s sales as there is bank commission. There’s also a trend among passengers towards buying better products, he notes. “The new generation want to buy the very

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

best; they want the latest product on the market, the most fashionable product on the market. They know exactly which is the latest model. They are very smart shoppers and very well educated. They know what they want and if you don’t have it, they don’t buy it. They travel light, too. They like smaller products they can stick in their carry-on bag, and they have no suitcase.” In response to the changes in customer behavior, Motta Internacional has shaken up its promotional tactics, introducing two new initiatives. The firm used to produce one booklet per month for promotions, but now it issues one booklet every 15 days, because “customers like to see new things”. The other thing that’s doing very well for the company is the website www.attenza.net, where passengers can pre-order on the internet and pick up and pay at the airport. The company guarantees it will have their package waiting for them at the airport, where their payment is then processed. “That’s increasing every month, and when you look at the age of the shoppers, those 35 and younger make up 80-85% of pre-order sales. Passengers aged 35 and older buy physically [in the store].” New listings are introduced all the time, says Orillac, but several products have been a hit in past two years. They include GoPro action cameras – a “fantastic” category, he says – and cellphones. The other popular category is top quality headphones: in ear, over ear, and especially noise reduction. Shoppers are opting for top brands like Bose, priced between US$250 and US$299. One future development that Motta Internacional has its eye on is to provide an inflight duty free service for Copa Airlines, which currently does not operate such a service. “We’ve spoken to Copa about duty free and they’ve got the facts. Motta would love to do it and we have a plan, we’re ready to do it.”

MOTTA INTERNACIONAL

Una trayectoria

continua de

ÉXITOS El 2016 fue un año pleno de acción para el prestigioso operador Motta Internacional, y el 2017 promete ser aún más activo, en la medida que dan frutos varios proyectos ambiciosos.

s una ocasión emocionante estar al mando de Motta Internacional, el principal operador en Centroamérica, Suramérica y el Caribe. Entre otros acontecimientos importantes, el “deshielo” de las relaciones entre Cuba y los Estados Unidos que comenzó en diciembre del 2014 ha propiciado nuevas oportunidades para la compañía radicada en Panamá, cuyo respetado negocio duty free crece de año en año. En una franca entrevista con AJ Khan, Jefe de Redacción de Americas Duty Free en las oficinas centrales de Motta Internacional en Ciudad Panamá; Erasmo Orillac, director de la compañía, se refirió a “muchos acontecimientos” que están ocurriendo en la misma. “Tenemos algunos proyectos en el sector duty free que serán un desafío. Algunos ya son obras en progreso, y otros en fase de planificación”, expresó Orillac. “Por ejemplo, una obra en progresión en La Habana, Cuba. Estamos en el proceso de inaugurar una tienda duty free en el aeropuerto de La Habana, y en otros tres más pequeños. En este instante estamos negociando los contratos, una situación muy compleja, pero todo marcha muy bien, y nos proponemos abrir en el tercer trimestre del 2017. Es muy interesante y estimulante”, añadió el alto funcionario de Motta Internacional. El Aeropuerto Internacional José Martí ya cuenta con una tienda operada por CIMEX, compañía local cubana de comercio general, y Motta Internacional ha suscrito una empresa conjunta con CIMEX para la operación del negocio duty free del aeropuerto. Orillac considera este nuevo acontecimiento como un reto positivo. “Es un buen desafío, en vista de la apertura entre los Estados Unidos y Cuba. Va a ser un aeropuerto que tendrá mucho tráfico, indudablemente. Muchos visitarán Cuba por vía marítima, pero también muchos lo harán en avión. Por tanto, es un reto, pero un buen reto a enfrentar”, asegura.

Renovación de concesiones y obtención de licitaciones En otro acontecimiento aparte de lo que ocurre en Cuba, Motta Internacional ha renovado su concesión en Venezuela por cinco años. Nuevamente, Orillac se siente optimista con respecto a esta operación bien establecida. “Es una situación interesante. Ya hemos estado allá durante quince años”, explica. 30

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Además, Orillac hizo mención a la renovación del contrato de la compañía en Bogotá, Colombia, hasta el 2027, donde se han añadido otros 618 metros cuadrados de espacio comercial en la nueva sección del aeropuerto que se inaugurará en junio o julio. “Estamos trabajando en eso ahora mismo”, añade. “Nuestra tienda principal necesitaba un remozamiento exterior después de varios años de operaciones, pero también estamos reorganizando un poco dentro de la misma. También ganamos un contrato de diez años en Cali, un aeropuerto colombiano más pequeño. Es una terminal nueva donde estamos instalando una tienda”. En Trinidad y Tobago, Motta Internacional ganó recientemente una licitación para el negocio duty y todo está listo para comenzar. La firma espera solamente por los permisos aduanales para el depósito aduanero, que se expedirán entre este momento y el mes de febrero, a tiempo para una apertura limitada potencialmente a principios de marzo.

Incrementando el gasto promedio por pasajero En estos momentos, Motta Internacional se apresta a aprovechar las nuevas oportunidades en el Aeropuerto Internacional Tocumen en Ciudad Panamá, localidad sede de la compañía.

MOTTA INTERNACIONAL

Orillac afirmó que la firma participará en la licitación por dos boutiques de ropa en la nueva Terminal 2, actualmente en construcción, además de otra para una tienda especializada en electrodomésticos de marca única. Con referencia a las ventas duty free, el 2016 fue mejor que el 2015 en lo tocante a liquidaciones, pues la compañía reportó un incremento del 15% en general. Orillac estima que este resultado de dos dígitos se debe a que están trabajando “muy duro” en el entrenamiento de sus gerentes de tiendas y personal de ventas. “Hemos podido tener éxito en el incremento del gasto promedio por pasajero en medio producto”, afirmó. El índice de penetración depende del tiempo de permanencia de los pasajeros en el aeropuerto, y algunos aeropuertos del portafolios de la compañía son mejores que otros en este aspecto. Panamá no está entre los mejores, según Orillac, porque su principal aerolínea es Copa Airlines, y el tiempo promedio de conexión es de 56 minutos, un período muy limitado para comprar, de ahí que el índice de penetración es de hasta un 10%. Sin embargo, un aeropuerto como el de Quito, Ecuador, donde los pasajeros permanecen más tiempo, está reportando un índice mucho mayor, de hasta el 20%. Orillac añadió que Motta Internacional se ha beneficiado con la llegada de nuevas aerolíneas al Aeropuerto Internacional de Tocumen, como Turkish Airlines. Las tres principales categorías de productos duty free varían de aeropuerto a aeropuerto, y de llegadas a salidas. En la sección de llegadas, los licores ocupan el primer lugar, mientras que los perfumes y cosméticos el segundo, seguidos de cerca por la confitería. En cuanto a la de salidas, los perfumes y cosméticos están al frente, seguidos por licores, cigarrillos y confitería. En términos de nacionalidades, los brasileños han sido siempre buenos clientes. “Cuando fueron afectados por la crisis de la moneda en los dos últimos años el tráfico disminuyó, pero se está recuperando”, agregó Orillac. “Me atrevería a decir que los brasileños están en el primer lugar, los colombianos en el segundo, y los argentinos en el tercero”.

Cambios importantes en los hábitos de compra Orillac ha observado en años recientes una notable tendencia en los hábitos de compra. En la actualidad los pasajeros están muy bien informados con respecto a los precios. Usando sus teléfonos inteligentes y aprovechando la ventaja de la conexión inalámbrica gratuita de los aeropuertos, pueden verificar los precios mundialmente con solo un clic. “Los pasajeros más jóvenes, pertenecientes a la Generación del Milenio, son muy efectivos en el uso de sus celulares para buscar precios en internet. Lo saben todo”, aseguró. Además, también ha resurgido el uso de las tarjetas de crédito como forma de pago. Hace unos años, el 60% de las transacciones se hacían al contado, pero actualmente solo se reporta un 25%. Eso afecta las ventas de la compañía, debido a que debe abonar comisión al banco. Orillac destacó también otra tendencia entre los pasajeros. “La nueva generación quiere 32

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

comprar lo mejor. Quiere adquirir el producto más reciente en el mercado, el que está más de moda en el mercado. Sabe exactamente cuál es el modelo más reciente. Está integrada por compradores inteligentes y de alto nivel académico. Saben lo que quieren, y si no lo tenemos, no compran. Además, viajan ligeros de equipaje, y les gustan los productos más pequeños que quepan en sus bolsos de mano o mochilas, y no llevan valijas”. Como respuesta a los cambios en la conducta del cliente, Motta Internacional ha reformulado sus tácticas promocionales, introduciendo dos iniciativas nuevas. La compañía solía publicar un folleto de promociones al mes, pero ahora produce uno cada quince días, porque “los clientes quieren ver cosas nuevas”. Otro de los componentes que marcha exitosamente para la compañía es la página web www.attenza.net, en el que los pasajeros pueden hacer su pedido con anticipación, y recogerlo y pagarlo en el aeropuerto. La firma les garantiza que su paquete estará esperándolos en el aeropuerto, donde se procesa el pago. “Las ventas están incrementándose todos los meses, y cuando vemos la edad de los compradores, los menores de 35 años conforman del 80 al 85% de las ventas de productos solicitados con anticipación. Los pasajeros mayores de 35 años compran físicamente [en la tienda]”. Según Orillac, se introducen continuamente nuevos productos, de los cuales varios han adquirido gran popularidad en los últimos dos años. Entre ellos figuran las cámaras de acción GoPro – una categoría “fantástica”, asegura – y teléfonos celulares. La otra categoría popular la componen los auriculares: en el oído o dentro del mismo, y especialmente los que cuentan con reducción de ruidos. Los compradores eligen actualmente marcas de primera línea como Bose, con precios que oscilan entre US$250 y US$299. Un nuevo acontecimiento a producirse en el futuro es que Motta Internacional se propone prestar servicios duty free en vuelo a Copa Airlines, que no cuenta con el mismo en este momento. “Hemos hablado con Copa sobre operaciones duty free, y tienen los datos. A Motta le encantaría hacerlo y tenemos planes al respecto. Estamos listos para ello”, concluyó Orillac.

COPA AIRLINES

The 737 forms the backbone of the Copa Airlines fleet. This aircraft is the -800 series. The airline will be receiving its 737 MAX aircraft order in 2018

Copa MAXs

out

n January 19, officials from Copa Airlines broke ground at Tocumen International Airport on a new Center of Specialized Technical Maintenance set for completion in the second quarter of next year. By that time, the airline will be in the midst of a busy delivery schedule that will see more than 60 737 MAX aircraft set to arrive during 2018. “With these new Boeing 737 MAX aircraft, our customers will enjoy the benefits of the best technology available in the market,” said Gustavo Vargas, Communications Director at Copa Airlines. “This order represents an important step toward strengthening Copa Airlines’ leadership in the region, while allowing us to improve our world-class service and expand our network through the Hub of the Americas in Panama City.” However, the airline is currently building its fleet. At the beginning of

Panama’s flag carrier is preparing for a big year, with a major 737 delivery schedule set for 2018 by

this year Copa took delivery of a 737-800 Next Generation aircraft, while another is scheduled to arrive this spring. In addition to building its route structure, Copa is reaching out to another passenger group with a low cost carrier called Wingo, and adding a new destination in Cuba. Copa has invested US$15 million in the new maintenance center at Tocumen. It will allow the carrier to simultaneously conduct maintenance on three 737s and an Embraer 190. In addition to its major maintenance capabilities, Copa plans to use the facility for winglet installations, landing gear replacement, aircraft painting and other specialized technical work. The airline currently has a fleet of 100 aircraft of two varieties, 79 737 Next Generations and 21 Embraer 190s. The new center “brings to Panama the majority of the specialized technical maintenance that Copa today handles outside the country,” said Ahmad

The Hub of the Americas Airport in Panama City

RICK LUNDSTROM

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Zamany, Copa Airlines’ Vice President of Technical operations. A total of 38 aircraft in the airline’s fleet are in a two-class configuration and outfitted with with leather seating, according to the Copa Airlines website. The Business Class cabin offers a range of comfort items, a frequently updated wine list and a new rum is featured each month. Last summer, Copa Airlines opened up a new route to Holguin, Cuba, the country’s fourth largest city. The new destination adds to the commitment the airline has to the country. Copa first flew to Cuba with three weekly flights starting in 1995.

Copa’s LCC Copa launched Wingo, based on Bogota, Colombia in December 2016 with a fleet of four 737-700s. It currently operates flights to 16 destinations has a classic tiered fare and service structure common to low-cost carriers around the world. “With Wingo, we want to serve those who want to fly well at low prices,” said Vargas. “We want to be a low-priced good quality alternative for those who fly for the first time and for those who want to travel more but cannot afford it.” The airline’s fare structure gives passengers six options to personalize the flight experience. With extra payment they can choose from airport check-in, express lines at check-in, checked baggage. Pets, musical instruments and sports equipment are a separate charge along with food and beverage, seat assignments and the “Wingo Experto” seat, which has extra pitch. Passengers are allowed to carry on one personal item of up to six kilograms and one piece of hand luggage up to 10 kilograms without charge.

DUFRY AMERICAS

Dufry currently operates 13 stores at five different international airports in Argentina, including the recently renovated store at Ezeiza International Airport

A consistent and focused strategy Despite tough times in Argentina, Dufry Americas continues to invest in its retail portfolio with new commercial initiatives and store upgrades

t’s no secret that certain South American countries have been through major financial and political upheaval, led by Brazil and, not coincidentally, Argentina. Meanwhile, Dufry has been investing heavily in the region. This has been the leading operator’s deliberate strategy – and there’s a good reason for this. “Undoubtedly, our commitment to the region is consistent and focused,” asserts Rene Riedi, Chief Operating Officer, Dufry Americas. “An example is the continuous development of different commercial concepts not only in airports, but also in other travel retail channels throughout the continent.” Riedi points out that Brazil and Argentina are the two key economies in the Southern Cone of Latin America. Both have a unique potential as in- and outbound travel destinations.

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Rene Riedi, here shown speaking at ASUTIL, says it’s important to remember that airports are the first and last point of contact a tourist has with a country, and therefore should offer products that reflect local culture

DUFRY AMERICAS

Imminent arrival of low cost airlines In the case of Argentina, its potential becomes apparent when looking at two very relevant facts, he says. First, the imminent setting-up of low cost airlines: Norwegian Air Argentina has already been established, although it is not yet operational. Ryanair through its Viva firm, Wingo, a wholly owned subsidiary of Copa Airlines, and Flybondi are other aspirants trying to secure a place for themselves within the country’s air traffic business. Second, the significant investment in airport infrastructure that has been strongly supported by the new Government since last year. Alongside this, forecasts predict a gradual but sustained economic recovery in the short and medium term for both countries, he notes. “Dufry’s philosophy has always been to leverage organic growth through continuous investment in our stores. We have been implementing, for several years now, different initiatives and projects focused on improving and upgrading Dufry always tries to adapt it to the preferences our most relevant duty free stores worldwide. and changing needs of the passengers Among others, at the Division level I would like to highlight the cases of Sao Paulo and Rio de Janeiro in Brazil, Lima in Peru, Cancun in stores: one located at Ezeiza’s departures terminal and the other Mexico and [Buenos Aires] Ezeiza and Aeroparque, both in in the arrivals area at Mendoza International Airport. In the Argentina, where enormous efforts have been made to upgrade middle of last year, it also finished the refurbishment of Córand expand the commercial spaces.” doba’s departures store. In 2015, one of Ezeiza’s arrivals stores and one in Aeroparque’s departures terminal were refurbished and upgraded. At time of Complete renovation of Ezeiza writing, Aeroparque’s arrivals store is also being renovated. International Airport’s flagship store And there’s more to come. Throughout the first half of 2017, Dufry currently operates 13 stores at five different internaDufry is planning to start with the refurbishment of Ezeiza’s flagtional airports in Argentina: two at Buenos Aires Ezeiza and ship store in the international departures terminal. Riedi describes Aeroparque, plus Mendoza, Córdoba and Bariloche Río Negro. this as an ambitious project that will go hand in hand with the Over the past few years, many new commercial concepts airport’s terminal expansion works, which have already begun. have been introduced and stores have been upgraded and All this demonstrates how Dufry has continued to invest in refurbished in Argentina. This shows Dufry’s commitment to its Argentinian duty free stores despite the economic and politiArgentina and the confidence the group has in the country’s cal uncertainty the country has been experiencing during the long-term prospects. past years. And the future is looking brighter, he adds: “It is true Riedi lists what has been achieved so far. Towards the end of 2016, the operator completed the renovation of two new duty free that with the gradual recovery from recession in Argentina and During a time of economic upheaval in Argentina but with clear improvements on the horizon, Dufry has invested heavily in the region

PHOTO CREDIT: LUIS ARGERICH

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

DUFRY AMERICAS

neighboring countries, the economic outlook is more favorable than it was just a few months ago and it has encouraged us to move forward with the complete renovation of our flagship store at Ezeiza International Airport.”

incorporates the most innovative travel retail trends and digital technologies in order to enhance the customer experience,” he says of the Ezeiza walk-through store.

Plans to improve passenger traffic and mobility

Riedi highlights that as with other locations in South America, Argentina has a huge cultural and gastronomic heritage that is highly recognized worldwide, and which the company intends to keep promoting. “We should not forget that airports are the first and last point of contact a tourist has with a country. For this reason, the new store will have an exclusive area dedicated to destination products. It will also include a wine cellar with a wide range of selected local wines.” Dufry does not plan to introduce Hudson News in Argentina, bearing in mind local regulations governing the operation of convenience stores in the country. However, if the regulations change and make it easier to operate convenience stores, the company will certainly consider the launch of Hudson News. Riedi also notes that the Dufry Shopping concept as it exists in Brazil cannot be operated in Argentina, as Dufry is only allowed to run stores under the tax and duty free regime. Duty paid stores in the domestic departing terminals are currently operated by a local retail operator.

Dufry will keep the same commercial floor space in its Argentinian operations, and no expansion is planned. However, there is the possibility of an increase in the floor area at Ezeiza Airport once the renovation of both terminals, Terminals A and B, are completed. The main departures store at Ezeiza is already configured as a walk-through, and this arrangement will be maintained in the future. In addition, the company plans to improve passenger traffic and mobility within the store in order to maximize both the shopping experience and accessibility to the different store sections. As for its approach to the commercial offer, Dufry always tries to adapt it to the preferences and changing needs of the passengers, says Riedi. This involves incorporating new brands into the commercial offer and/or redefining floor area assigned to the different product categories. “We are talking about a state-of-the-art concept store that

New area dedicated to destination products

The Government of Argentina has expressed its intention to double air traffic by year 2019. Achieving this goal would mean that airports will have to absorb approximately 25 million international passengers

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

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Dufry will keep the same commercial floor space in its Argentinian operations, and no expansion is planned

Tourism development strategy

South Americans often plan duty free shopping as an important part of their travel plans

The main departures store at Ezeiza is already configured as a walk-through, and this arrangement will be maintained in the future

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Dufry keeps a keen eye on the new Government’s plans. “We understand that the new Government’s economic agenda is to combat the hyper-inflation which keeps on eroding the purchasing power of Argentinians and stabilize the exchange rate. In addition, the government is working towards improving the accessibility to consumer credit. The rate of success in reducing inflation and stabilizing the local currency will determine whether Argentinians will travel more,” he says. “If the economic measures adopted by the Argentinian government show positive results and the Brazilian Real keeps on appreciating, we are confident that in- and outbound traffic will grow throughout 2017.” Another factor that may contribute positively to traffic growth is the tourism development strategy that the Government recently launched, aiming at positioning the country as an emerging tourist destination. The prime target audience is the European traveler and high-income traveler segments. In addition, the arrival of the new low cost carriers mentioned above will build additional traffic of lower income passengers, he says. The Government of Argentina has expressed its intention to double the air traffic by year 2019, and achieving this goal would mean that airports will have to absorb approximately 25 million international passengers. Plans to expand the passenger capacities and renew the airport infrastructure are being discussed. The renovation of the terminals at Ezeiza and Aeroparque are just two examples, says Riedi. Behind the scenes at its airport operations, Dufry has an “excellent” relationship with Aeropuertos Argentina 2000 (AA2000) and this has been the case from the first day Dufry started operating in the airport in 2011, he says, adding that Dufry and AA2000 have been working jointly on different projects aiming at improving passenger flow and increasing customer satisfaction. To that end, Dufry’s goal is to complete all works by the end of 2017.

ARGENTINA REPORT

A close-up look at the signage lets customers know they are approaching the London Supply duty free store in Puerto Iguazú

Argentina economic forecast sees better days ahead by

Prospects look good for a return to economic normality in Argentina, with hopes that economic stability will replace economic volatility as the dominant trend

Carlos Melconian, Consultant, Macroview

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

RONNIE LOVLER

fter years of economic disarray and dissatisfaction, the economic outlook is one of cautious optimism in Argentina, with hopes for a gradual return to economic normality, and with it, a boost for the country’s sagging tourism and travel retail trade. That’s the opinion of a number of the country’s business and economic leaders who shared their views with The Americas Duty Free & Travel Retailing in a recent series of interviews. Carlos Melconian, a former president of the National Bank of Argentina, told us the year-old government of President Mauricio Macri, has given the world and the region a new vision of Argentina where economic stability, rather than economic volatility, could become the dominant trend. “The coming to power of President Macri means that politically and economically, Argentina is positioning itself closer to the international and regional community than in previous years with the previous government,” Melconian said. “In this sense, the world of business in general and tourism in particular interprets this change of course as positive, with a favorable expectation,” he added. Melconian is now a consultant with Macroview in Buenos Aires. Global economic leaders appear to be happy. The International Monetary Fund visited Argentina for the first time in ten years in late 2016 and was pleased with Macri’s approach. The World Bank also likes his business friendly policies, which long term may be good news for the country’s travel retail trade. Macri’s big test will come later this year with mid-term legislative elections. That vote will indicate what Argentines think of the market reforms his government is implementing. A principle issue still on the table, however, is inflation. Outof-control inflation has long been a way of life in Argentina. And

Jose Luis Donagaray, Secretary General of ASUTIL

while the 2016 inflation rate of 35% is still far from terrific, there is hope those numbers will fall by at least half in 2017. “One of the biggest economic challenges the government faces is to lower the inflation rate to one digit annually, when (Macri’s) term ends in 2019,” Melconian said. “After an inflationary jump in 2016, in 2017 the increase in prices is slowing down to around 1% a month.” Magdalena Ducos, Commercial Manager for retailer and distributor London Supply concurs to a point, noting that economies thrive when people have money to spend. “The challenge will be to lower the inflation level, which we expect to be about 20% and this is not done just by getting people to have a lower consumption or purchase less,” she said. Ducos said London Supply is coming out of a particularly challenging period, starting off 2016 with earnings that were 35% under those of the previous year, even at its flagship duty free store in Puerto Iguazú, in large part due to a devaluation of the Argentine peso at the of 2015. But she said the company ended 2016, just 10% lower than the previous year, something she credits to the company’s creative marketing techniques, like its “crazy day” sales where discounts offered change every day. “We are making different activities to maintain consumer interest so that customers …spend more money than they expected to (when they) entered the store,” she said. For now tourism and the duty free industry in Argentina seems to be a mixed bag of economic pros and cons. On one hand, the high cost of living in Argentina sends those Argentines who are able to travel to the duty free shops where prices are

Customers walk over a boardwalk to enter the London Supply’s duty free store in Puerto Iguazú

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ARGENTINA REPORT

lower than in-country. But this means less shopping for highend goods is done at home. “Argentina is an expensive country and people are traveling a lot outside of Argentina. People from Argentina are going to Uruguay, Brazil, and Chile,” according to Jose Luis Donagaray, President of the South American Association of Duty Free Stores or ASUTIL. “The movement of Argentines going out of Argentina is good, because they stop in duty free shops where goods are less expensive.” Donagaray, Ducos, and Melconian concur that the country’s duty free and travel retail industry will benefit if Argentina becomes more of a player on the global tourism scene. Ducos says Argentina needs to become more competitive with its neighbors in terms of pricing. Donagaray argues that tourism won’t really take off until Argentina experiences a true economic recovery. “Argentina still has a long way to go compared with other

countries in the region that have a more developed tourism industry,” Melconian said. But Argentina is taking steps in the tourism arena. Macri was on hand recently for the opening of a visitor center in southern Argentina and in October, Salta will host the Adventure Travel World Summit. London Supply is jumping on the bandwagon with its plan to open a duty free store in the Rio Gallegos free zone in Argentina’s Santa Cruz province, that will target Argentine customers, who at least up to now, do a lot of their shopping in neighboring Chile, where goods cost less. “Our idea is to get people to do their shopping in Argentina,” Ducos said. “We want to be competitive with domestic prices in Chile. We want them (Argentines) to choose for their money to stay in Argentina.” Argentina may not yet be out of the proverbial woods, but things are definitely looking up for 2017.

The photo gives an aerial view of London Supply’s duty free complex, now under construction in Rio Gallegos in southern Argentina

The rendering shows what the Rio Gallegos complex will look like once construction is completed

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ARGENTINA REPORT

El pronóstico económico de

Argentina avizora tiempos mejores

A view of the exterior of the duty free store that London Supply operates in the Puerto Iguazú duty free zone

Hay buenas perspectivas de un regreso a la normalidad económica en Argentina, con esperanzas de que la estabilidad reemplace a la volatilidad como tendencia

uego de años de desorden e insatisfacción económica, la perspectiva en este ámbito es de un cauteloso optimismo en Argentina, con esperanzas de un regreso gradual a la normalidad, y con ella, un impulso al decreciente turismo y comercio minorista de viajes. Esa es la opinión que comparte un grupo de líderes del comercio y la economía de esa nación, quienes la manifestaron a The Americas Duty Free & Travel Retailing en una serie reciente de entrevistas. Carlos Melconian, ex presidente del Banco Nacional de Argentina, nos dijo que el año de gobierno del presidente Mauricio Macri le ha dado al mundo y a la región una visión nueva de Argentina, en la que la estabilidad económica, no la volatilidad, podría convertirse en la tendencia dominante. “La llegada al poder del presidente Macri significa que, en el aspecto económico y político, Argentina se está acercando más a la comunidad internacional y regional que en años previos con el gobierno anterior”, expresó Melconian. “En este sentido, el mundo de los negocios en general, y el turismo en particular, por supuesto, interpretan este cambio como algo positivo, con una expectativa favorable”, añadió Melconian, quien se desempeña actualmente como asesor de Macroview en Buenos Aires. Aparentemente, los líderes económicos globales se sienten felices. A fines del 2016, el Fondo Monetario Internacional visitó Argentina por primera vez en diez años, y se mostró complacido

con el método adoptado por Macri. Asimismo, al Banco Mundial también le agrada su política favorable a los negocios, que a fin de cuentas puede ser una buena noticia para el sector de comercio minorista de viajes del país suramericano. La mayor prueba para Macri vendrá posteriormente este año, con las elecciones legislativas a mitad de mandato. Ese voto indicará lo que piensan los argentinos de las reformas del mercado que está implementando su gobierno. Sin embargo, un problema fundamental a enfrentar es la inflación. La inflación fuera de control ha sido durante mucho tiempo una forma de vida en Argentina. Y si bien la tasa de inflación del 35% reportada en el 2016 está aún lejos de lo aceptable, hay esperanzas de que esa cifra disminuya al menos a la mitad en el 2017. “Uno de los principales desafíos económicos que enfrenta el gobierno es haber bajado anualmente la tasa de inflación a un dígito, cuando el mandato (de Macri) termine en el 2019”, explicó Melconian. “Después de un salto inflacionario en el 2016, en el 2017 el incremento de los precios está reduciéndose a cerca del 1% mensual”. Magdalena Ducos, gerente comercial del comerciante minorista de viajes y distribuidor London Supply coincide hasta cierto punto, destacando que las economías florecen cuando la población dispone de dinero para gastar. “El reto será bajar el nivel de inflación, que esperamos sea de un 20% aproximadamente, y esto no se logra solo con que el pueblo tenga un nivel de consumo más bajo o compre menos”, dijo. Ducos agregó que London Supply está emergiendo de un período particularmente difícil, que comenzó en el 2016 con ganancias que estuvieron un 35% por debajo de las del año anterior, debido en gran parte a la devaluación del peso argentino en el 2015.

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ARGENTINA REPORT

Sin embargo, la alta funcionaria agregó que la compañía culminó el 2016 a solo un 10 % inferior que el año anterior, algo que atribuye a las técnicas de mercadotecnia creativa de la compañía, como sus ventas del “día loco”, donde se ofrecen descuentos diariamente. “Estamos realizando diferentes actividades para mantener el interés del consumidor a fin de que los clientes gasten más dinero que el que esperaban (cuando iban a) entrar en la tienda”, aseguró Ducos. Por el momento, el turismo y el sector duty free en Argentina parece estar en un campo donde se mezclan los aspectos positivos y los negativos. Por una parte, el alto costo de la vida hace que los argentinos que viajan recurran a las tiendas duty free, donde los precios son más bajos que en su país. Pero esto también implica menos compras de artículos costosos en el ámbito nacional. “Argentina es un país costoso, y la gente está viajando mucho fuera del país. Los argentinos viajan a Uruguay, Brasil y Chile”, destaca José Luis Donagaray, presidente de la Asociación Sudamericana de Tiendas Libres (ASUTIL). “El movimiento de argentinos que viajan fuera de Argentina es bueno, porque compran en duty free donde las mercancías son menos costosas”. Donagaray, Ducos y Melconian coinciden en que el sector duty free y minorista de viajes del país se beneficiará si Argentina tiene una mayor incorporación al entorno turístico global.

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Ducos afirmó que Argentina necesita ser más competitiva con sus vecinos en términos de precios. Por su parte, Donagaray destacó que el turismo no despegará realmente hasta que Argentina experimente una auténtica recuperación económica. “Argentina tiene mucho camino por andar en comparación con otros países de la región que cuentan con una industria turística más desarrollada”, añadió Melconian. Pero Argentina está tomando medidas en el aspecto turístico. Macri estuvo presente recientemente en la inauguración de un centro de visitantes en el sur de Argentina; y en octubre próximo, Salta será la sede de la Cumbre Mundial de Turismo de Aventura. London Supply está incorporándose al movimiento con su plan de inaugurar una tienda duty free en la zona franca de Río Gallegos, en la provincia argentina de Santa Cruz, que se dedicará a clientes argentinos, los cuales, al menos hasta ahora, hacen gran parte de sus compras en la vecina Chile, donde las mercancías cuestan menos. “Nuestra idea es que la gente haga sus compras en Argentina”, explicó Ducos. “Queremos ser competitivos con respecto a los precios nacionales en Chile. Queremos que ellos (los argentinos) decidan que su dinero se quede en Argentina”. Probablemente Argentina no esté aun fuera del proverbial peligro, pero la situación es siendo más promisoria para este año 2017.

GUEST WRITER

Facing

future challenges In this guest writer piece, ETRC President Sarah Branquinho provides a detailed overview of some of the major issues (threatening the industry in Europe and elsewhere) that are being addressed by ETRC by

Restrictions on carry-on baggage Although some airlines have relaxed excessive restrictions on carry-on baggage, many still require items purchased in duty free shops and carried in shopping bags to be placed inside their hand baggage or charge for the additional items to be placed in the hold. Seen by some airlines as an opportunity to increase ancillary revenues, the variation in policies is creating confusion for travelers and undermining passengers’ confidence in carrying their duty free purchases onboard their flights. This is not only an issue for low-cost carriers, as restrictions are also being applied by some legacy carriers. While RyanAir is currently contemplating the reintroduction of a strict one-bag rule

SARAH BRANQUINHO, President, ETRC

policy, the recent announcement by United Airlines to charge passengers for the use of overhead lockers to stow carryon luggage through the introduction of a new “basic economy fare” is the latest in a range of varying rules that is contributing to the confusion for travelers making duty free purchases. Elsewhere, we are now seeing restrictions being imposed by airlines that hand luggage must be within a certain weight limit, sometimes as low as 7/8 kilos. This confusion and uncertainty for travelers and our customers arising from differing rules imposed by airlines, and even by the same airline on different routes, leads many potential customers to decide not to purchase duty and tax free items in case there is a problem carrying such goods onboard. It is important that the duty free and travel retail (DFTR) industry works with our airport partners to ensure that they understand the implications for their retail income and address this issue with the airlines within their air service agreements.

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Information to consumers and product labeling The ever-increasing demand from legislators, consumer organizations and many politicians for new and additional information to be provided on all products to allow consumers to make informed choices is creating enormous challenges for the global DFTR industry. It is anticipated that as well as tobacco, all leading product categories in our retail channel, including alcohol, food and confectionery, beauty and fragrances, will at some point in the future be subject to demands for the labeling of allergens and ingredients and additionally for consumables, nutritional information and health attributes. The requirement to provide all consumers with information on-pack creates substantial problems for the DFTR channel, particularly when national language requirements or specific national/regional labeling rules are incorporated in regulatory initiatives. One of the issues the food industry has been struggling with for the DFTR channel is EU legislation on food information to consumers where there

GUEST WRITER

“We are now seeing restrictions being imposed by airlines that hand luggage must be within a certain weight limit, sometimes as low as 7/8 kilos,” says Branquinho.

cannot be more than one nutritional table, e.g. the EU table, for food products sold in the EU. A nutrition declaration in the format required by the US, for example, would not be in line with the EU requirements, making it extremely difficult to have only one global product for our retail channel. The industry urgently needs to find alternative ways to provide the required information to the consumer, other than placing that information on the product and its packaging. ETRC is currently assessing a number of alternative technological solutions that may achieve the goals of the regulator but without placing the DFTR industry at a competitive disadvantage and reducing consumer choice.

Mexico, Uruguay, Chile and Argentina have all tabled proposals for the removal of tobacco branding within the next few years. The removal of tobacco branding and the imposition of standardized packaging is now a primary goal of the tobacco control NGOs when influencing governments on health policies, as was confirmed during the recent World Health Organisation’s conference on tobacco control in New Delhi last November. In our view, it will be critical that the DFTR industry closely monitors these developments and is ready to react wherever such a policy proposal is forthcoming from government agencies seeking the provision of an exemption for our unique retail channel.

Cooperation with ACI regional teams ETRC very much welcomed the adoption at the ACI World Governing Board in Panama on August 30, 2015 of a resolution entitled “Protecting Airports’ Non-Aeronautical Revenues – Global challenges facing the industry”.

In Europe, we are in the process of agreeing arrangements for increased cooperation with our airport partners, ACI Europe, to defend the uniqueness of airport retail from regulatory and legislative developments and to highlight the importance of non-aeronautical revenues. ACI Africa is currently considering how to reach out to their airport members to focus on non-aeronautical revenues and airport retail, particularly as there is a growing move towards regulatory restrictions on many of the core product categories for duty free in the region. Enhanced cooperation with our airport partners must be a primary goal for all our duty free/travel retail trade bodies across the globe.

We need your support The industry’s active regional and national trade associations continue to address these and the many other challenges facing the DFTR industry but can only continue to do so with the support of all retailers, brands and other allied stakeholders operating in this unique and vibrant industry.

The challenge to tobacco from standardized packaging Following Australia’s decision in 2011 to adopt standardized (or plain) packaging, the UK, France and Ireland have all introduced legislation removing branding for tobacco products, and all without providing an exemption for the duty free channel. A number of other countries are now planning to follow suit in the near future, including New Zealand, South Africa, Singapore and Canada, as well as Norway, Finland, Belgium and Hungary in Europe. In Central and South America, Brazil,

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

ETRC’s President Sarah Branquinho with Violeta Bulc EU Commissioner for Transport

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LAGUARDIA

View from the Grand Central Parkway

GLOBAL STANDARD New York City’s LaGuardia airport has been a thorn in the side of anyone with interest in the city’s airports, whether for travel or industry reasons. Finally, work on the new terminal has begun

ne of three major airports that serves the greater New York City area – a region heavily populated, and both a global tourist and business hub – LaGuardia has seen better days. Built in 1964 to serve 8 million passengers, Terminal B – the airport’s main and busiest terminal – is now over 50 years old and serves over 14 million passengers. And, as is the case for most if not all airports, that number is ever increasing.

Government intervention The Port Authority of New York and New Jersey (PANYNJ) manages all three major airports of the region, LaGuardia, JFK and Newark. Until recently, government had been of the notion

that the PANYNJ and its airlines should be solely responsible for financing any redevelopment. The Authority began looking at the cost of redevelopment in 2010, and asked for proposals in 2012. At this time Patrick Foye, executive director of the Port Authority, said, “It’s got a quaint, nostalgic kind of 1940s, 1950s feel, that’s just not acceptable.” Vice President Joe Biden was a little more blunt, suggesting the airport felt like one in a third-world country. At least from the outside, this statement seemed to serve as a jumping off point for the reconstruction to come. The original estimate of rebuilding after PANYNJ’s 2010 review was $2.8 billion, but research showed that the airport’s Terminal B would need to be completely demolished and an entirely new terminal built. The Terminal B project is now pro-

The interior design will help to create an inviting atmosphere to help keep passengers happy, while leading them past all the many food and shopping options

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Key features of the new Terminal B include pedestrian bridges over the active taxi lanes with sweeping views of the airfield and the Queens and Manhattan skylines

jected to cost from $4 billion to $5.3 billion in total. Other exciting possibilities of the redevelopment include a proposed high-speed ferry servicing the Marine Air Terminal, a national historic landmark that will remain intact. An onsite tram has also been proposed to move passengers more quickly within the central terminal. The new airport will be eco-friendly and is expected to contain accommodations such as a hotel of approximately 200 rooms and a business/conference center. The entire airport will move 600 feet (180 m) closer to the Grand Central Parkway. In July, 2015, Governor Andrew Cuomo, joined by Vice President Biden, announced a plan that would rebuild the terminals as one contiguous building with terminal bridges connecting buildings. Terminals C and D, which do not have as much traffic, will be rebuilt by Delta Air Lines under the new agreement. This will take place following the rebuilding of Terminal B. “Our plan will fundamentally transform LaGuardia – replacing what is now an outdated and poorly designed complex with the world-class airport New York has always deserved,” said Governor Andrew M. Cuomo at the press conference.

First phase well underway Construction of the project’s first phase started in spring of 2016 with the tearing down of the P2 garage. The entire redevelopment is scheduled to be completed by 2021. To oversee the design, construction, management and operation of the new Terminal B,

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LAGUARDIA

The crew repairs the taxiway pavement after demolition

The crew awaits the ok signal to guide rebar into place

the Port Authority selected LaGuardia Gateway Partners as part of a 35-year lease agreement. LaGuardia Gateway Partners is a consortium comprising Vantage Airport Group, Skanska, Walsh Construction, Meridiam, HOK and Parsons Brinckerhoff, companies that have collectively worked on more than 350 aviation projects worldwide. Lysa Scully, General Manager of LaGuardia Airport for the Port Authority, says in 2016 the airport set a record for numbers of passengers for the sixth year in a row. “Despite weather-related challenges at the beginning of the year, our passenger service increased by 4.7 percent last year, supported by a 1-percent increase in seat capacity. LaGuardia handled 29.8 million passengers, topping the 2015 record by 1.35 million passengers.” Forecasters expect the growth trend to continue. “We expect that the redeveloped airport will accommodate 34 million passengers as forecasted for the year 2030.” LaGuardia is a national airport, without a Customs area. These numbers are almost exclusively domestic, therefore, with the exception of pre-screened flights from such places as Toronto, which has such a high volume of US traffic that it has US Customs agents screen people there.

Commercial interests

be an important point of consideration moving forward. “We are finalizing our plans for the new terminal but we do know that we will have 100% more [commercial] space than we have today; 90% of it will be post security and 75% of that will be located in our main terminal building.”

A sense of place New York City is an iconic destination with so many facets to its strong personality, from baseball to theater to the Statue of Liberty to fashion and so much more. Throughout the world, the duty free/travel retail industry has been focusing more on creating a “local” “destination” feel for its commercial spaces as travelers have loudly told the industry that’s what they want. Gateway Partners’ CCO Baklor affirms that this will be an important aspect of the new terminal and commercial space. “We’re building a world-class terminal for New York City, bringing about a new era of travel for an iconic – and critical – airport, and we want the terminal to reflect the surrounding city,” he says. “From a view of the Manhattan skyline to food, retail, and beverage options that reflect regional and national offerings, the new terminal will be uniquely New York. Passengers will feel like they are in the ‘greatest city in the world.’ This airport terminal may be the first and last experience a passenger may have when visiting New York and the surrounding region, so we want to both make a good impression and really embrace the sense of place.” While tenders are still in the distance, Baklor and his team have an understanding of what they’re looking for. “We’re still figuring out the specifics, but we know that in the new terminal, there will be food, retail and beverage options that reflect

The airport’s non-aeronautical revenue currently accounts for 26% of total revenue. As with all airports, LaGuardia would like that to increase, and Scully comes from a commercial background. “From a revenue perspective, commercial retail is an important business factor as well as a vitally important customer service consideration,” says Scully. “Across our airports, our total concession sales in 2016 reached $1.2 billion dollars. Of that, LaGuardia contributed $154 million in sales. The passengers that pass through our New York airports, including Sorting debris at the P2 garage demolition site LaGuardia, demand the best and we are striving with our airline and terminal partners to accomplish this.” Scully adds, “LaGuardia’s customers deserve a worldclass travel experience that includes retail and food establishments reflective of the diverse and creative population that makes up our fast-paced metropolitan region. In partnership with our airline and terminal partners, planning for future concessions includes regional offerings that paint a sense of place for our customers, supported by technology for speed of service so important to New York travel customers.” Terminal B management company LaGuardia Gateway Partners’ Chief Commercial Officer Ed Baklor confirms that increasing the commercial footprint and revenue will 56

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OPULENT

RADIANT

REFINED

LAGUARDIA

local, regional and national offerings.” Minority and Women-owned Business Enterprise(s) (MWBEs) are participating in LaGuardia’s redevelopment.

The more than 1.3 million square feet of the new Central Terminal Building will be flooded with natural light and feature exciting food, retail and beverage options for passengers

A fine balance All travelers and all in the airport travel retail industry can appreciate the fine balance between time, security, the need to provide what passengers seek in terms of shopping and food and beverage options, the time to do it in and also to create an atmosphere where they find the process easy enough that they will still consider going into stores. These components of earning commercial revenue have certainly been in the thought and design processes of LaGuardia Gateway Partners. “In our new terminal, close to 90% of our shopping, dining and services will be post-security so our passengers can relax and enjoy the offerings without the stress of worrying about the security process,” says Baklor. “Offerings will be mostly centered in the main terminal building with a good selection in the gate concourses as well. There will also be select offerings in the main terminal outside of security.” Location is just part of that equation; easing the way all along is another large component. “From the moment you arrive to the moment you take off, we want to give passengers the best experience we possibly can,” says Baklor. “We want to make travel more enjoyable (and even fun) as we know that travelers nowadays dread the airport. In the new terminal, our TSA screening will be centralized and all of our wayfinding will be clear and intuitive. Every passenger will flow forward through our merchandise and dining location, making it easy for everyone to check out all of our options.”

Passenger improvements already begun LaGuardia Gateway Partners is not waiting until Terminal B is complete to begin paving the way for happier travelers, which will hopefully become more willing customers. “We’re taking that same approach during the current construction period as well,” says Baklor. “In the past months, we have even brought on a

squad of entertainers to amuse folks as they make their way from the curb to their gate.” Baklor also has a keen understanding that the airport is part of the travel retail success triad. “We recently created a very successful holiday promotion for our operations and plan to continue those kinds of efforts in our new terminal. We are also using our sense of place to provide wayfinding to drive our passengers past our storefronts and restaurants,” he says. Construction time is tedious for those needing to use the space being rebuilt, and LaGuardia Gateway Partners is making great effort to ensure the rebuilding time is as painless as possible for those continuing to use the airport. “We are constructing the new terminal while keeping the current terminal fully operational,” says Baklor. “This makes for an incredibly complex project with unique challenges, but we’re focused on offering creative – and fun – solutions to minimize disruption, for both passengers and retailers. Our approach has minimal phases of construction for an accelerated schedule with no disruption to any of the 35 gates. This means that when the new terminal building is complete, we will close the current building at night and open the new facility in the morning.” To help with this transition, the consortium is investing $5 million in the current terminal to make necessary improvements and improve passenger experience for the 15 million passengers it serves currently.

Originally opened in 1964, LaGuardia Airport’s Terminal B currently serves the majority of the airport’s airlines and 14+ million passengers per year, although the terminal was built to accommodate 8 million

The first of its kind in the world, LaGuardia Central will feature dual pedestrian bridges spanning active aircraft taxi lanes, allowing for improved aircraft circulation and gate flexibility

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

URUGUAY REPORT

Uruguay

outlook

Political stability in neighboring Brazil and Argentina is good news for Uruguay’s duty free and travel retail industry by

RONNIE LOVLER

t’s starting out to be a very good year for the travel retail industry in Uruguay. At least that is the consensus being reached by some of the top movers and shakers in Uruguay’s duty free and travel retail business. Industry leaders cite the current economic revival in neighboring Brazil and to a lesser extent, Argentina, as positively impacting Uruguay’s border retail trade, at least for the 2017 summer tourism season. Carlos Loaiza, Secretary-General of the Cámara de Empresarios de Free Shops de Uruguay, spoke with The Americas Duty Free & Travel Retailing about the prospects for the coming year and is cautiously optimistic. “Last year we saw an improvement in our sector and we are optimistic,” he said. “We see a kind of stabilization (in terms) of people coming from Brazil. “But we have to wait and see if this growth can be sustainable in the future.” That sustainability is dependent on how things fare in Brazil and Argentina. In a conversation with us, Enrique Urioste, CEO of the Uruguayan border store chain Neutral Duty Free, described his country “as a buffer state. Anything that happens in Argentina or Brazil impacts us. The saying is that when Brazil or Argentina sneezes, we catch a cold.”

Enrique Urioste, CEO of the Uruguayan border store chain Neutral Duty Free, and other Neutral team members applaud as the candles are lit on the cake marking the festivities for the chain’s 30th anniversary celebration at its original store in Chuy, Uruguay

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Carlos Loaiza, Secretary-General of the Cámara de Empresarios de Free Shops de Uruguay

Uruguay’s tourism business with Brazil dropped when then President Dilma Rousseff was impeached in 2016. Her Vice President, Michel Temer is now in charge. Uruguay also suffered from the volatile political situation in Argentina under the populist President Christina Férnandez de Kirchner. Things are slowly changing since the election of Mauricio Macri in 2015. Both Temer in Brazil and Macri in Argentina are considered to have more favorable policies toward business. “I would say the change in the political map in Brazil with the coming of Temer was a game changer in the economic sense,” Urioste said. “We started to see in the last quarter a bounce back of our business and I would say a very aggressive bounce back. We started to see growth at rate of 60 to 70% compared to the same month last year.” Uruguayan distributor Alejandro Sosa, President of Y. Lucas-Calcraft S.A, is just as enthusiastic. “We are coming out of a couple of very bad years,” Sosa said. “The former President (of Argentina) made our life impossible and then there was the Brazilian situation. This is the best tourism season in the history of Uruguay.”

Y. Lucas-Calcraft S.A President Alejandro Sosa, left, taking a break with Perfetti Van Melle’s Eric Vermetten, Area Manager for Europe and Americas and the High Visibility Chupa Chups Frog

He also lauded the fact that the currency in Brazil is stabilizing, which makes tourists more open to spending on goods. “There is no currency hurdle. People will come if you are within a good price range. They won’t go to stores if the prices are more expensive than at home. We have had a very good season. And hopefully the duty free industry has hit the bottom and is getting out of it. “The worst thing in the duty free business is uncertainty. People buy on credit and then they don’t know what they are going to pay for what they buy. When the dollar is stable, no worries, people are confident they can spend,” Sosa said. Also applauding the business upswing is Siñeriz CEO and Director Gandhi Abdullah. “Since the summer of 2016, the regional economy has been recovering, with a bit more strength since June. This is due to the improvements in the Brazilian political situation, which has increased Brazilian’s confidence (in their situation) and consequently, they have begun to travel more.” The International Monetary Fund concurs with the positive outlook shared by Uruguayan travel retail industry leaders. In Neutral Duty Free’s shop in the Melancia Mall in Rivera appeals to customers February, the IMF released its annual report on the overall Uru-

Neutral Duty Free also offers its customers the opportunity to have a GAP shopping experience

Neutral Duty Free gives its customers a wide selection of fragrance choices in its duty free shops

www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

URUGUAY REPORT

Siñeriz offers its customers a chance to shop in thematic displays like this basketball court for Nike products at its flagship store in Rivera.

Siñeriz offers its customers a chance to shop in its high-end bazaar and purchase products from high-end brands like Le Creuset, Lalique, Bacarat and Lladró at its flagship store in Rivera. Neutral Duty Free gives its customers a wide selection of sunglass choices in its duty free shops.

guayan economic forecast, lauding Uruguay for demonstrating resilience in the face of recessions in its large neighbors. “The economic slowdown has bottomed out in 2016 and there are signs that the economy is on an incipient recovery path. Real growth is estimated at 1.2% in 2016 and projected to reach 1.4% in 2017, as the external environment strengthens, together with private consumption,” according to the IMF report. Industry statistics indicate that most of the duty free trade in Uruguay is from Brazil, perhaps as much as 90%. At times of domestic political and economic uncertainty, Brazilians, like most people anywhere in the world, travel less. So when the Brazilians stay home, Uruguay suffers. But now Uruguay’s neighbors are on the move again. While Brazilian shoppers may generate most duty free sales, Uruguay is getting many more visitors now from Argentina. Local news stories reported that during the first two weeks of 2017, 170,000 people visited Uruguay, nearly 25% more than during the same period in 2016, with some 73% coming from Argentina. Which means, for the Uruguayan duty free and travel retail industry, much of the focus is on Brazil. Urioste’s Neutral Duty Free just celebrated the 30th anniversary of the founding of its first store in Chuy, on the Uruguayan side of the border between Brazil and Uruguay, with a major in-store event in January as well as continuous promotions in all nine Neutral stores along the border. Neutral also has a tenth store in Argentina. Siñeriz’s recent opening of a second spot for the well-known Montevideo restaurant, La Perdiz, at its location in Rivera was a favorite destination of tourists during the recent Southern hemisphere summer season. “Today it is the only restaurant to offer fish as well as the traditional Uruguayan “asado” that all the tourists want,” Abdullah said. Abdullah also highlighted the new streamlined customs operations now available at Siñeriz Shopping, also in Rivera,

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

which he said has reduced the waiting time to enter and depart both countries from five hours to about one. Uruguay also derives tourism income from Argentina, although to a much lesser extent than Brazil, particularly in regards to the Rio de la Plata ferry business that takes people to and from Buenos Aires to different destinations in Uruguay. Neutral is expanding its operations to include the ferry business, Urioste said. “The ferry business is new for us. We got the business in 2016,” he said. “In our total company scope, Argentina represents 10%, but for the ferry business, Argentina represents more than 60%. “This summer, the first big ferry that is a 600 passenger and 40-car ferry (launched) and we are tripling our forecast in terms of sales. A new ferry bigger than this one will come into operations in the first half of this year,” Urioste added. Duty Free distributor Lucas- Calcraft is beginning to sell more exclusive products to Neutral and other duty free shops that work both borders, such as the Golden Bear gummy candies and British craft beers. “We are starting with that. We think it will work. It is already in local markets there (Brazil) and Brazilians are big beer drinkers,” according to company President Sosa. Sosa is also hoping to gain greater visibility for his products on the Rio de la Plata ferries. But despite the improved Brazilian economy, another challenge remains in place for Uruguay. Brazil will soon allow duty free stores to operate along its side of the border and at the Chamber, Loaiza’s team are focused on making sure the Brazilian stores don’t have an advantage over the Uruguayan operators. “The tax allowance is the amount that can enter the country without paying duties. We want it to be the same amount for both countries. Brazil will have a higher amount of tax allowance, then the ones on the Uruguayan side. We are fighting to get a level playing field,” he said.

URUGUAY REPORT

Balloons adorn a display at celebrations marking the 30th anniversary of the opening of Neutral’s original store in Chuy, Uruguay

Perspectivas de Uruguay

ste año está comenzando a ser uno muy bueno para la industria minorista de viajes en Uruguay. Ese es al menos el consenso al que han llegado los principales protagonistas del negocio duty free y minorista de viajes de esa nación suramericana. Los líderes de la industria citan el renacimiento económico actual en el vecino Brasil, y, en menor cuantía, en Argentina, como un impacto positivo al comercio fronterizo de Uruguay, por lo menos para la temporada de turismo veraniego del 2017. Carlos Loaiza, Secretario General de la Cámara de Empresarios de Free Shops de Uruguay, habló con The Americas Duty Free & Travel Retailing acerca de las perspectivas para el próximo año, y se mostró cautelosamente optimista. “El año pasado experimentamos una mejoría en nuestro sector y nos sentimos optimistas”, afirmó. “Vemos una especie de estabilización (en términos) de viajeros que llegan desde Brasil.

Neutral Duty Free offers its customers the opportunity to have a Victoria’s Secret shopping experience.

La estabilidad política en los vecinos Brasil y Argentina es una buena noticia para la industria duty free y minorista de viajes de Uruguay Pero hay que esperar y ver si ese crecimiento puede ser sostenible en el futuro”. Esa sostenibilidad depende de cómo marchen las cosas en Brasil and Argentina. En conversación con nuestra revista, Enrique Urioste, Director Ejecutivo de la cadena de tiendas uruguayas de frontera Neutral Duty Free, describió a su país como “estado entre dos aguas. Cualquier cosa que ocurra en Argentina o Brasil nos impacta. Según se dice, cuando Brasil o Argentina estornudan, nos resfriamos”. El negocio turístico de Uruguay con Brasil disminuyó cuando la presidenta Dilma Rousseff fue destituida en el 2016. Su vicepresidente, Michel Temer, es el actual mandatario brasileño. Uruguay también sufrió con la volátil situación política en Argentina bajo el mandato de la presidenta populista Cristina Fernández de Kirchner. Pero la situación está cambiando lentamente después de la elección de Mauricio Macri en el 2015. Se considera que tanto Temer en Brasil como Macri en Argentina, tienen políticas más favorables hacia los negocios. “Diría que el cambio en el mapa político de Brasil con la llegada de Temer fue transformador en el sentido económico”, afirmó Urioste. “En el último trimestre comenzamos a ver una recuperación de nuestro negocio, y me atrevería a decir que es una recuperación muy agresiva. Comenzamos a ver un crecimiento del 60 al 70% en comparación con el mismo mes del año pasado”. El distribuidor uruguayo Alejandro Sosa, Presidente de Y. Lucas-Calcraft S.A, comparte ese entusiasmo. “Estamos saliendo www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

URUGUAY REPORT

de un par de años muy malos”, aseguró Sosa. “La expresidenta (de Argentina) nos hizo la vida imposible, y para colmo, tuvimos que enfrentar la situación en Brasil. Esta es la mejor temporada turística en la historia de Uruguay”. Sosa también alabó el hecho de que la moneda en Brasil se está estabilizando, lo cual propicia que los turistas sean más propensos a gastar en mercancías, “No hay impedimentos con la moneda. Los clientes vendrán si conservamos un buen rango de precios. Pero no irán a las tiendas si los precios son más altos que en su país. Hemos tenido una razón muy buena. Y esperamos que el negocio duty free haya tocado fondo y esté saliendo del mismo”. “Lo peor en el negocio duty free es la incertidumbre. Los clientes compran a crédito y luego no saben lo que van a pagar por lo que adquieren. Cuando el dólar es estable, no hay que preocuparse, la gente está confiada en que pueden gastar”, añadió Sosa. Otro alto funcionario que aplaude la recuperación del negocio es Gandhi Abdullah, Director Ejecutivo y Director General de Siñeriz. “Desde el verano del 2016, la economía regional se ha estado recuperando, con un poco más de fuerza a partir de junio. Esto se debe a las mejoras en la situación política brasileña, que ha incrementado la confianza del brasileño (en su situación) y, consecuentemente, han comenzado a viajar más”. El Fondo Monetario Internacional (FMI) coincide con la perspectiva positiva compartida por los líderes de la industria minorista de viajes uruguaya. En febrero, el FMI dio a conocer su informe anual sobre el pronóstico económico general de Uruguay, elogiando a la nación por demostrar resiliencia frente a las recesiones en sus vecinos más grandes. “La crisis económica tocó fondo en el 2016, y hay señales de que la economía está en un camino incipiente de recuperación. El crecimiento real se estimó al 1.2% en el 2016, y se proyecta que alcance un 1.4% en el 2017, en la médica que se fortalezca el entorno externo, conjuntamente con el consumo privado”, declaró el informe del FMI. Las estadísticas de la industria indican que la mayoría del comercio minorista de viajes en Uruguay procede de Brasil, quizá hasta en un 90%. En momentos de incertidumbre política y económica nacional, los brasileños, al igual que la mayoría de los ciudadanos de cualquier parte del mundo, viajan menos. Por tanto, cuando los brasileños no viajan, Uruguay sufre las consecuencias. Pero en la actualidad, los vecinos de Uruguay están en vías de progreso. Si bien los compradores brasileños pudieran generar la mayoría de las ventas duty free, en la actualidad Uruguay está recibiendo más visitantes de Argentina. Varios reportajes noticiosos locales aseguraron que, durante las primeras semanas del 2017, 170,000 personas visitaron Uruguay, o sea, un 25% más que en el mismo período del 2016. De esa cifra, un 73% procede de Argentina. Eso significa que, para la industria duty free y minorista de viajes uruguaya, gran parte de la atención está en Brasil. Urioste, de la cadena Neutral, acaba de celebrar el trigésimo aniversario de la fundación de su primera tienda en Chuy, ubicada en la parte uruguaya de la frontera con Brasil, con un importante evento en la tienda, realizado en enero, y promociones continuas en nueve establecimientos Neutral a lo largo de la frontera. Y ya Neutral tiene una décima tienda en Argentina. Por su parte, la reciente apertura de una segunda sucursal por parte de Siñeriz en el conocido restaurante de Montevideo, La 64

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Perdiz, en su sede de Rivera, propició un destino favorito de los turistas durante la reciente temporada veraniega del Hemisferio Sur. “En la actualidad es el único restaurante que ofrece pescado, así como el tradicional ‘asado’ uruguayo que desean todos los turistas”, expresó Abdullah. Abdullah también se refirió a las nuevas y más fluidas operaciones aduaneras disponibles en Siñeriz Shopping, también en Rivera, las cuales, según él, han reducido el tiempo de espera para entrar y salir de ambos países, de cinco horas a una aproximadamente. Uruguay también recauda ingresos por concepto de turismo de Argentina, aunque en mucho menor cuantía en comparación con Brasil, particularmente en lo tocante al negocio de trasbordadores del Río de la Plata, que transporta pasajeros hacia y desde Buenos Aires a diferentes destinos en Uruguay. Neutral está ampliando sus operaciones para incorporar el negocio de trasbordadores, afirmó Urioste. “El negocio de trasbordadores es nuevo para nosotros. Nos incorporamos al mismo en el 2016”, explicó. “En el campo de acción total de nuestra compañía, Argentina representa un 10%, pero para el negocio de trasbordadores, Argentina representa más del 60%”. “Este verano, (se inauguró) el primer trasbordador de gran calado con capacidad para 600 pasajeros y 40 automóviles, y estamos triplicando nuestros pronósticos en términos de ventas. Además, en la primera mitad de este año entrará en operaciones otro trasbordador nuevo más grande que el que acabo de mencionar”, agregó Urioste. El distribuidor duty Lucas- Calcraft está comenzando a venderle más productos exclusivos a Neutral y a otras tiendas duty free que operan en ambos lados de la frontera, como los ositos de gominola Golden Bear, y cervezas artesanales británicas. “Estamos comenzando con eso. Pensamos que va a funcionar. Ya están en los mercados locales aquí (Brasil) y los brasileños son grandes consumidores de cerveza”, aseguró Sosa, presidente de la compañía, quien también espera ganar una mayor visibilidad de sus productos en los trasbordadores del Río de la Plata. Pero, a pesar de la mejoría en la economía brasileña, Uruguay tiene que enfrentar otro desafío. En breve, Brasil permitirá la operación de tiendas duty free en su lado de la frontera, y en la Cámara, el equipo de Loaiza está enfocado en garantizar que las tiendas brasileñas no aventajen a los operadores uruguayos. “La deducción tributaria es la cantidad que puede entrar al país sin pago de impuestos. Queremos que sea la misma para ambos países. Brasil tendrá la mayor cantidad de deducción tributaria, en comparación con las tiendas del lado uruguayo. Estamos luchando para que haya igualdad de condiciones”, concluyó Loaiza.

Siñeriz has three wine cellars in its flagship store in Rivera. Here is a view of one of them.

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MIAMI INTERNATIONAL AIRPORT

The Central Terminal program involves the redevelopment of concourses E, F and G in both the pre- and postsecurity areas, and within the footprint of the existing Central Terminal

More growth for Miami International Airport by

A new strategic master plan is in place to manage Miami International Airport growth through 2035

here is probably no one who does business in Latin America or the Caribbean who has not traveled in or out of Miami International Airport (MIA) on more than one occasion, and has not seen the changes and expansions that have marked the facility over the years. But now, even more changes are in the offing, with a new strategic master plan that addresses the airports’ projected needs through 2035. Greg Chin, MIA’s Communications Director, shared some of the details during a recent conversation with The Americas Duty Free & Travel Retailing. “MIA has experienced sustained growth in passengers, operations and

cargo tonnage since the 2008/2009 economic downturn. To support future demand, the Miami-Dade Aviation Department has prepared a strategic master plan that addresses the airport’s projected needs through 2035,” Chin said. “The master plan calls for the terminal complex to be expanded for an incremental gain of 10 or more gates, and for the older Central Terminal section to be modernized,” he added. The updates come at a time when MIA is registering record-breaking use of its facilities. In 2016, the airport served 44.6 million travelers, an all-time high, and the seventh straight year the airport has outdone itself in terms of the numbers of passengers passing through its gates. Last year’s numbers surpassed by 234,000 passengers what had then been the record in 2015. Expectations are that MIA will continue its annual record-breaking trend. So what are airport officials planning to do to

The waiting area for passengers in Terminal E at MIA has new carpeting and seating among other updates

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

RONNIE LOVLER

keep up with the growth and the continued domestic and international reliance on the use of its facilities? “The master plan calls for some expansion of the North and South terminals to allow for additional gates. The Central Terminal program involves the redevelopment of concourses E, F and G in both the pre- and post-security areas, and within the footprint of the existing Central Terminal,” Chin said. “It includes the demolition of the existing, older facilities and the development of modern, efficient terminal facilities within the same location.” That however, is the long-term goal, since that work will not begin until at least 2025, depending on funds available. But MIA is not waiting until then to begin work. Short and mid-term projections are helping lay the ground for future expansion. “In the meantime, various terminal improvements are being implemented as part of our Terminal Optimization Program (TOP), to improve operational efficiency, passenger and baggage processing capabilities, and the overall customer experience with the existing terminal,” Chin explained. “The TOP’s short- and mid-term improvements will allow MIA to meet the demands of projected passenger growth until the more extensive redevelopment program can commence.” MIA currently serves a total of 107 airlines, 42 of which are all-cargo carriers. Last year, 10 new airlines were added to the mix: AeroUnion; Dominican Wings; Eurowings; KF Cargo; KLM Royal Dutch Airlines; Northern Air Cargo; Pan American World Airways Dominicana; Scandinavian Airlines; Silver Airways and 21 Air.

MIAMI INTERNATIONAL AIRPORT

“The Central Terminal Redevelopment was planned with consideration for MIA’s growth reaching approximately 1,500 daily passenger airline operations (arrivals plus departures) by 2035. Currently, MIA serves an average of 900-950 daily passenger airline operations during its peak months,” Chin said. Duty free and domestic shopping opportunities are also being taken into account with the airport expansion. “The preliminary space allocation allowances included in the master plan for the redevelopment of the Central Program nearly triples the amount of square footage (space) to serve a diverse mix of concessions relative to the amount of concessions space in the existing Central Terminal,” Chin said. The redeveloped Central Terminal will also provide post-security connectivity with the airport’s North and South terminals, which will give passengers additional shopping opportunities in the three terminals, he added. MIA already handles flights by the largest commercial aircraft now in use - the Airbus A380, which can accommodate more than 500 passengers - and that capability will be expanded under the redevelopment plan. “This means MIA will be able to handle additional flights from even the largest planes operated by existing or entrant air carriers,” Chin said. “The new, improved MIA will be able to accommodate any Jumbo aircraft currently in or planned for production (like the Boeing 747-8), by both U.S. and foreign-flag carriers,” he said. MIA is one of the largest U.S. international hubs, particularly for travelers going to and from Latin America and the Caribbean, making a positive and secure customs and immigration experience important. And that, too, is being taken into account with the expansion plans. The U.S. Customs and Border Protection (CBP) processing area in Concourse E was closed in 2012 after a newly constructed CBP facility opened in the North Terminal that could serve concourses D, E and F, Chin said. “As part of the TOP, the Concourse E CBP facility will be modernized and re-opened in 2017, in an effort to better accommodate MIA’s international passenger growth. The Central Terminal Redevelopment program also calls for an entirely new CBP facility,” he said.

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

The check-in counter at Gate E-33 in MIA’s Terminal E has been newly renovated to provide customers with a better experience

The people station is one of the areas renovated under Phase I of the Terminal Optimization Program (TOP) at Miami International Airport

Displayed is one of the gate areas with waiting area for passengers that has been renovated at MIA. Here new lighting, carpeting, ceilings and seating have been put in place

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M1ND-SET

Zoning in on the Millennial mindset

the money they spend while traveling, means that North American Millennials account for almost half of the shoppers in the total retail travel market, according to m1nd-set’s forecasting. 42% of Millennials like to buy a gift, and 30% of Millennials typically buy themselves a treat at airports. Interestingly, every fifth North American Millennial travel retail shopper likes to shop both outbound and inbound, which is higher compared to other generations. Seven out of 10 North American Millennials like finding a specific collection at a given location. This highlights that these shoppers rarely limit their shopping universe to their own country. They mainly look for unique products, not being available everywhere.

Communicate at each touch point of the journey

m1nd-set’s Co-Owner and CEO Peter Mohn

The North American Millennial consumer travels a lot, spends a lot and has a different approach to duty free shopping from previous generations, finds industry research firm m1nd-set

ravel research specialist m1ndset is urging travel retailers to take appropriate action to woo North American Millennials, who account for almost half of the shoppers in the total retail travel market. Not only are they a sizable group, they behave differently from previous generations, according to the company’s research. North American Millennials are focused on personal experiences. And for many, those experiences happen away from home, since Millennials are very interested in travel. In fact, they travel more than any other generation, including Baby Boomers, and they’ll likely travel more as their income grows. Their preferences make them different from their older counterparts. This

uniqueness means that the travel retail industry will need to adjust in order to meet their specific needs and desires.

Millennials want to control their experiences themselves North American Millennial travelers have different approaches to travel and duty free shopping, mainly because they want to control their experiences themselves. By contrast, older generations were more likely to allow brands to drive their travel experiences. Millennials who travel say they will make two long-haul trips per year, and one-third say they make four long-haul trips each year. They are not just traveling a lot, they also spend a lot in travel retail. This high rate of travel, combined with

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Millennials are most likely to buy alcohol and beauty items, with almost every third shopper buying in this category. This category correlates highly with impulse buys as alcohol and beauty items often make good gifts. But also souvenirs, confectionery, fashion and electronics are on the top of the list, according to recent m1ndset research. Only 31% of North American Millennials plan their duty free visits in advance, which is lower compared to the global average of over 50%. Millennials inform themselves at multiple touch points, such as on the airport website, social media, forums, etc, even before they enter the airport, so it is crucial to proactively communicate with the Millennials at each of the touch points to increase the share of planned purchases and to increase footfall in travel retail. Furthermore, 58% of Millennials get their travel retail information when they are actually in the duty free shop, says m1nd-set, with 31% sourcing information from the airport, and 17% on the plane. Nearly a quarter (24%) gather information on their way to or from the airport. Meanwhile, 28% get their information from friends’ references or posts on social media, revealing the importance of word of mouth to this demographic. Almost one-fifth (19%) inform themselves when booking their trip, while the same percentage find information at their destination.

TOP BRANDS INTERNATIONAL

Top Brand International’s Escentia store in the Parque La Colina Shopping Center in Bogotá

On the

move

anama-based Top Brands International is making its mark in Latin America and the Caribbean with a greater presence in numerous countries throughout the region and plans to open more stores. Company President Danny Yohoros recently spoke with Americas Duty Free & Travel Retailing, detailing Top Brand pro-

Danny Yohoros, President, Top Brands International

Top Brands International is growing with projections to increase the number of its stores in the Caribbean and Latin America from 50 to 70 by the end of the year by

RONNIE LOVLER

jections in Latin America, the Caribbean and along the Mexican-U.S. border. Yohoros said the company had a 15% growth rate in 2016, and is looking forward to topping that number this year. The company also plans to increase the number of its stores in the region to 70, up from 50, by the end of 2017. “We have a lot of projects with a lot of investment,” he said. “We have our hands full with new opportunities and ways to continue growing the company.” Among the countries where Top Brands is projecting growth are Cuba, The Bahamas, Colombia, and El Salvador and

throughout the Caribbean and the U.S. Mexico border, Yohoros said. One country where Top Brands sees a lot of potential for company growth is Cuba, in part because of the change in relations between the United States and Cuba, and the relaxation of laws in the United States, allowing U.S. citizens to travel there. Although Top Brands is no newcomer to Cuba, having done business there for more than 25 years, Yohoros sees new avenues for his company to explore in Cuba now. “Today after so many years, we are enjoying the growth that we were expect-

Renderings of Top Brand International’s future Dorado Duty Free stores. Dorado Duty Free continues its process of expansion and renovation expanding to bring to the market a modern and luxurious concept of duty free stores that customers can enjoy

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

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TOP BRANDS INTERNATIONAL

Top Brand International’s Escentia store in the Plaza Central Shopping Center in Bogotá

ing for so long,” Yohoros said. “Tourism is booming. All the hotels are at over 90% capacity. Restaurants are completely full. When you walk on the street, you feel the difference in ambiance.” Yohoros said The Bahamas is another place where Top Brands sees growth potential. “We want to expand our stores and renovate them and bring other categories to our portfolio,” he said. “Currently, the focus is on perfumes. We want to bring in the rest of the categories.” 74

Top Brands is able to look toward expansion now in the Caribbean and the U.S. Mexico border because of its acquisition last year of Miami-based Image Duty Free. “To be able to expand into the Caribbean and the U.S. borders (business) you need to be based in Miami,” Yohoros said. “Image Duty Free had the experience for more than ten years. It is a perfect way of doing business, a no-brainer deal.” However, Yohoros emphasized that

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

although the two businesses are now under one umbrella, each company will maintain its own identity. “We have worked with all the synergies between both companies. We have a huge potential of growth for both,” he said. Top Brands is also expanding in Colombia’s domestic market this year with the establishment of its new chain of stores, Escentia. The company has already opened two Escentia stores in Bogota, and another in Cartagena. Other Escentia stores will open later this year at another location in Bogota and in Barranquilla, Yohoros said. “We will be opening distribution and retail stores in a massive way and all the stores will run under the name of Escentia,” Yohoros said. “This year we will be opening ten to 15 stores and we project we will have 50 stores in Colombia in four years.” Yohoros said Top Brands had an eye on Colombia for quite some time, and circumstances now made the moment exactly right. Yohoros highlighted the peace agreement between the government and the Revolutionary Armed Forces of Colombia or FARC that ended decades of war. He also noted that Colombia has one of Latin America’s largest economies, with a population of nearly 49 million people, the largest Spanish-speaking country in the region. With Colombia at peace, tourism is also booming. Yohoros said another plus for Top Brands is the fact that the Colombian government is lowering the import taxes for perfumes and cosmetics “so it will help to be more competitive with other countries. “This was a new economic opportunity for us,” Yohoros said. “We will have regular stores in shopping centers.” Top Brands is working on an expansion of its presence in El Salvador. Yohoros said talks are ongoing and that he expects to be able to announce details in the near future. Top Brands is a travel retail business with a presence in eight Latin American countries, currently with 50 stores in Belize, El Salvador, Costa Rica, Panama, Colombia, Chile, Uruguay and Cuba. Image Duty Free has businesses throughout the Caribbean, with an emphasis on fragrance and cosmetics.

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MONALISA

Monalisa’s store in Paseo La Galeria has a definite appeal for customers looking for luxury goods and a chance to visit the company’s emblematic La Cave winery on the premises

Monalisa now in Asunción Paraguay retailer Monalisa brings its unique brand to the residents and tourists in the country’s capital city by

RONNIE LOVLER

n 1972, Monalisa opened its first retail outlet in Puerto Presidente Stroessner, actually Ciudad del Este – Paraguay, triggered by the economic boom generated from the construction of the Friendship Bridge between Paraguay and Brazil in 1965. Since inception, Monalisa was recognized as a luxury retail outlet and throughout the years it maintained its tradition, introducing all novelties in almost all categories of consumer products, including exclusive wines and champagnes in its cellar “La Cave” and grew to become a unique shopping experience distinct from its surroundings.

A view of the entrance to the Monalisa store in Paseo La Galeria. Even the entry into the store is an experience

After almost 45 years at the same location, Monalisa was encouraged by the economic boom in Paraguay and selected the flagship, newly opened, shopping center Paseo La Galería to expand its operations and solidify its presence by opening a second Monalisa in the capital Asunción (MO-2). Monalisa (MO-2) is meant to be an improved replica of the historical Monalisa flagship’s border store and it has dedicated an exclusive space for selective wine and champagne lovers at its newly inaugurated “La Cave.” Both stores are open for local residents and tourists. Nonetheless,

On display is just one of the exclusive wines available for purchase in Monalisa’s wine cellar, La Cave, in Asuncion

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Monalisa is investing highly in the local market for the sake of generating customer’s loyalty and steady growth in the local market. We take great pride with around 500 labels that we import from all over the world. The Asunción winery “La Cave” has designated spaces by label. In addition, it has a private seating for tasting. Monalisa defines its mission as an effort to “import and distribute luxury products, in order to enrich the lifestyle of our customers. We create opportunities to contribute to the growth of our country, ensuring individual and collective success.” And Monalisa is living up to its promise.

A fisheye view of the wine cellar in Monalisa’s wine cellar, La Cave, in its Asuncion store

IAADFS

Alberto “Pancho” Motta, President of IAADFS, passed away just days after cutting the ribbon to open the tradeshow floor in 2016

Exciting times Transitions can be painful but also rewarding, and the current time is transitional both for IAADFS and for the industry in the Americas as a whole by WENDY MORLEY

fter an upswing that lasted many years, 2015 and 2016 have offered clear challenges for the duty free industry both in the Americas and elsewhere. While some sub-regions, namely the US and Caribbean, have been especially strong, other regions, LATAM in particular, have faced great difficulties. The uncertain times affected attendance at last year’s IAADFS Duty Free Show of the Americas, as some companies were inclined to send fewer representatives. Additionally, acquisitions in the industry increased this trend. At the event in 2016, the association’s Executive Director Michael Payne suggested that South America would start to show signs of improvement by 2017 and that seems to be the case, though it remains to be seen

whether the burgeoning recovery will be reflected in attendee numbers. Last year the show attracted approximately 620 buyers. The current numbers are down slightly compared to the same time last year in part due to some mergers, but Payne is comfortable with them. He says, “We always have a lot of registrations at the event, so we never know the final number until we are on site.”

Softer rules The association has had quite strict rules in the past for who was allowed to attend the show, but last year some of those rules were softened, addressing members’ concerns that many important buyers from the Caribbean had been unable to attend. Payne says the new rules reflect the changing industry, which is becoming more about travel retail as opposed to strictly duty free. “Some islands in the Caribbean are completely tax free zones,” he says, implying that the association and industry need to be a little more flexible. Payne’s focus in the weeks leading up to this year’s event has been getting the word out to these previously excluded buyers.

Joining forces The Reese’s Peanut Butter Cup was a popular selfie partner at last year’s Welcome Cocktail

There has been much talk and speculation in recent years about the possibility of the IAADFS show and ASUTIL conference taking place together. The two associations confirmed at the TFWA

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Executive Director Michael Payne is excited to embark on this new journey beginning with next year’s Summit oaf the Americas

World Exhibition in Cannes that they were working toward this, and finally in January the announcement was made, meeting with great enthusiasm from the community. Payne says he has heard nothing but positive remarks. “We will offer the best of both events in one place. Traveling to two events is costly not only because of travel, but also time,” he states. “Time is money.” The two associations still have many details to sort out. This year will be a transitional year with both events taking place although ASUTIL will have some input and workshops in Orlando, but in 2018 the first Summit of the Americas Conference and Trade Show will take place. As we report in the FDFA article on page 84 in this issue, the two associations are also in talks with FDFA Executive Director Laurie Karson to see if the three organizations are able to work together on the event in future. For now, The FDFA’s Strategic Convention Committee is determining whether and how this might work.

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IAADFS

Revised floor plan The IAADFS tradeshow floor has been redesigned to better suit exhibitors and to offer additional space for events and workshops. Some exhibitors have expressed concern that with the floor plan so separated and spread out, there has not been enough traffic. This year, therefore, the exhibitors will be mainly in one hall, although some choose to have more private rooms accessed by the main thoroughfare, and some prefer to be on display and easily accessible outside the hall. Much of the focus at this year’s event will be on creating next year’s. There will be focus groups, questions and educational programs, all gearing up for the inaugural Summit of the Americas in 2018.

At last year’s IAADFS, Stolichnaya launched a gluten free vodka in response to increasing consumer demand

Loch Lomond whisky made a big splash at last year’s IAADFS

The industry Mergers, acquisitions and consolidations have been constantly in the duty free news in recent years, and Payne expects the coming years to offer more of the same. “There’s no question that the industry is growing,” he says, despite the fact that last year saw the first decline in global travel retail sales. “All signs point toward continued greater air traffic growth, with a growing middle class in many less developed countries and massive infrastructure investment.” While the numbers keep increasing, however, penetration does not. The majority of travelers continue to refrain from spending money in travel retail, and the continual question remains: How to attract travelers into the store and then convince them to buy once they are in? “This is a main issue facing the industry,” says Payne. “To resolve it, the industry needs to further embrace technology as a way to attract millennials in particular. This group is a huge cohort and the demographic group gaining the most income, and is therefore the target market of choice.” But, he adds, the baby boomers are also still important. Those now in their 50s and 60s have disposable income and both the time and proclivity to travel. Payne feels that stores and brands will have to work together creatively and proactively in order to increase footfall and spend. Two trends he sees happening now that he sees as important for future success are the trends toward local products and GTR exclusives. An example he

gives is visiting Portugal and being able to purchase a special port unavailable or rare outside of the country. “Retailers need to do much more to get people into the store and inspire impulse buys,” he says. “They are all searching for more imagery, more excitement, more surprises.”

Growing pains There has been a clear shift in relative importance of the various regions for travel retail, and the shift continues, with strong infrastructure investment in Africa, Malaysia and other underserviced regions. Payne says the US is in dire need of infrastructure investment as well. But along with this growth, the current global situation brings a new set of concerns. Regulation is a major issue for anyone in the industry. Meanwhile, no one argues that security shouldn’t be strong, but at the same time passengers need enough time to shop plus they need to be in a frame of mind to shop – in other words, relatively calm and happy.

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Shifting times can be difficult but also beneficial. People and businesses get set in their ways. There is no kiss of death as swift as that brought on by lassitude, but it is sure to come for some. Those who admit that times have changed, who listen to their customers and who are willing to go beyond are the ones that not only survive these times of change but also thrive. “All in all, it’s an exciting time,” says Payne.

A year has passed As many readers might remember, IAADFS President Alberto “Pancho” Motta suddenly passed away immediately after the IAADFS show in 2016. Erasmo Orillac, who worked closely with Motta as CEO of his company, stepped in to fulfill Motta’s term. Payne says: “He’s really done an excellent job. Remember he’s a very busy guy running a multinational company, but he has great relationships in the industry and has done very well in a tough year.”

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FDFA

As formerly announced, the FDFA’s 32nd annual Convention and Trade Show will take place this November in Montreal

Northern

climate

verall, 2016 was a successful year for Canada’s duty free industry. As of the end of November, the county’s land border duty free sales for 2016 had seen an increase of 5.5% over the previous year, and the airport duty free stores were up even more, at close to 8% increase over the same period in 2015. But that’s not to say the year was without its challenges. As 2016 began the FDFA needed to work to establish a relationship with the new Minister of Small Business and Tourism, who at that time was also a new member of parliament. “Bardish Chagger understands the importance of our industry,” says Executive Director Laurie Karson. “When she was first announced as Minister, she sent a glowing letter to the FDFA, recognizing our industry’s Each year at the FDFA Convention and Trade Show, Executive Director Laurie Karson presents the FDFA Gold Standards Awards

While the FDFA has faced some challenges over the past year, the region is doing well and Executive Director Laurie Karson is excited for the future by WENDY MORLEY

importance to the Canadian economy and to the economic viability of our border communities throughout Canada. I met with Minister Chagger last year to further discuss our industry’s voice and importance. She is doing a great job in her role and we look forward to working with her in the future.”

The annual convention The biggest challenge currently facing the association, especially given decreased participation by some operators in Canada, is to bring into play the Strategic Convention Committee’s final recommendations. “The committee has a clear direction to offer recommendations that ensure everyone has a bigger voice and a tremendous experience at future shows,” says Karson. The association is confident that any current issues will be resolved. “We have to actively listen to challenges from various operator members and not turn a blind eye,” she says. “All industries change and business environments change, so we have to adapt to those changes.” She feels this is an exciting time to be a part of the FDFA. “This year’s board of directors is one of the strongest I have seen in my 12-year tenure and are extremely collaborative and progressive in their approach.”

And then there were three Unlike other global regions, in the Americas there are three duty free associations. 84

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

The three have always had a close and respectful relationship. Now that the IAADFS and ASUTIL have confirmed their partnership in the future Summit of the Americas Conference and Trade Show, the question is to what degree the FDFA will take part. “The FDFA is in constant discussion with ASUTIL and IAADFS. As part of our analysis, our Strategic Convention Committee is looking at the benefits of a future merger,” says Karson. “The FDFA may choose to fully merge for the event and we may choose to take part in only certain components of the joint event, also continuing with our annual convention in Canada. This is early days and we will continue to work on and analyze many components before making any decisions.” Karson feels the 2016 convention went well, considering some issues with main operator members. She says post-convention surveys and feedback have been positive. “That being said, the FDFA Board is currently working hard at looking at ways to create greater business value for every member as we move forward to evolving the future conventions,” she says. “We certainly want a more holistic operator base as we are stronger as a larger unit especially for government relations issues.” The board is currently identifying the FDFA’s 2017 objectives that will be shared with the membership soon. The 2017 convention will take place in Montréal, as previously announced.

MICHEL GERMAIN EXCLUSIVELY AT BLOOMINGDALE’S, MACY’S MICHELGERMAIN.COM

I2I GROUP

Tracking the

Alipay, the financial payment system of online sales giant Alibaba, and WeChat Wallet, part of Tencent (China’s largest company by market capitalization), own this world of mobile payments

ubershoppers Researcher i2i Group reveals the most important mega trends among Chinese global travelers that will shape the shopping environment this year by

HIBAH NOOR

hina-based research specialist i2i Group has made a number of predictions for the coming year about the world of luxury shopping and spending by Chinese global travelers. The company has drawn on its pool of nearly 20 million people. More than nine million Chinese global travelers and shoppers read its Galerié magazines, in addition to five million focused on just shopping and another five million WeChat readers. Here, the firm unveils the mega trends and most important considerations for luxury brands and retailers in the coming year who are focused on Chinese global travelers and shoppers.

The rise of frequent independent travelers (FITs) For years, luxury brands and retailers have been focused on the busloads of Chinese tour groups traveling the globe and trying to get them to spend a few minutes in their stores or boutiques. After all, groups made up the vast majority of Chinese travelers and shoppers. In 2016 this trend shifted substantially, with premier shopping destinations such as New York, Paris, Los Angeles, London, Singapore, Tokyo and Seoul seeing the majority of their arrivals as independent travelers, in some cases as much as 60%. Based on i2i group’s reader and WeChat fan research, the independent traveler and shopper stays longer, shops more and spends more by as much as 100% compared to the typical group traveler. FIT shoppers buy higher end products and spend over US$6,800 per person per trip and travel as much as three to four times each year around the world. This translates into approximately US$40 billion of luxury buying. Brands and retailers who focus on this segment will find that their average sale increases in value while extending brand loyalty to a frequent global shopper as compared to the once-in-a-

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

lifetime group traveler. “There is little doubt that this will be your primary Chinese shopper for years to come. While global group travel was stagnant in 2016, FIT travelers increased by as much as 30% to some destinations,” says Alexander Glos, CEO, i2i Group.

Uber-global Chinese travelers and shoppers Much has been written in the past year about the slowdown in the Chinese economy and how it will impact global Chinese shopping. The country’s 7% growth rate is, by Chinese standards, slower than before. But Glos believes these Chinese macro numbers do not do justice to the micro influences that are thrusting the high-end Chinese global luxury shopper to be the world’s number one international customer. Long haul global Chinese travel shoppers in 2016 reached 30 million travelers, out of the 140 million total international Chinese travelers. Long haul means from China to Europe, North America, Australia and New Zealand. Of this group, approximately 20% are uber-shoppers, which i2i defines as spending more than US$25,000 or equivalent per person per trip exclusively on shopping. These shoppers take only 6 million annual trips and count about 4.5 million travelers – just a quarter of 1% of the population. In its research, i2i focuses on how these travel shoppers act, behave and how their income affects their travel shopping tastes and spend. These uber travel shoppers earn their income largely through independent businesses; they own their businesses. Glos gives an example: “I once met a man on a flight in China who told me his company, which he founded about 15 years ago, manufactures over 100 million glasses, mugs and cups each year for sale throughout China and the world. His average profit

Premier shopping destinations for Chinese include New York, Paris, Los Angeles, London, Singapore, Tokyo and Seoul

margin per item is approximately 20 cents, which translates into US$20 million a year. He told me he loves to hear the sound of glasses being dropped and breaking in restaurants or bars.” No matter how the Chinese economy grows or slows in 2017, these businesspeople, these uber travel shoppers, will manage their businesses to their bottom line. If sales drop because of Chinese or global economic woes, they will simply cut costs, dismiss staff, etc. Their bottom line, their take home income each month, will not be affected. Hence their disposable income will remain strong no matter and they will continue to travel and shop.

Alipay and WeChat Wallet “I live in China and I am really glad I don’t work in the credit card business,” says Glos. “To paraphrase a recent Nobel Prize winner, The payments they are a-changing!” Alipay, the financial payment system of online sales giant Alibaba, and WeChat Wallet, part of Tencent (China’s largest company by market capitalization), own this world of mobile payments. Over 800 million people in China are using one or both mobile payment systems for virtually all of their non-cash payment transitions. According to Worldpay’s 2016 Global Payments Report, Alipay accounts for 44% of global mobile wallet spending and is on pace to reach 60% by 2020. “No matter if you are topping up your metro card, paying for a taxi, at a convenience store, checking into a hotel, buying an airline ticket or now shopping in Asia, Europe or North America – Alipay and Wallet are the way the Chinese consumer wants to go and so you need to follow,” says Glos. The reason for this upsurge in mobile payments? Glos says they are easy to use, cheap, and offer discounts and benefits. Unlike banks with capped interest and expensive transaction

Alexander Glos, CEO, i2i Group

fees, Alipay and WeChat Wallet are not banks and unregulated. Hence they pay higher rates of interest to the customer, take no fees, and offer cash discounts and loyalty incentives. It’s an easy choice for the Chinese global shopper. In 2016, China will generate over US$1,700 in mobile payment volume per capita, compared with US$475 in the US. In real terms, this is over US$2 trillion. “If you are opening a WeChat store, or want to offer China home delivery, pre-arrival shopping to independent travelers, or just looking to be very China friendly, you need to take Alipay and Wallet,” says Glos.

The Trump effect Chinese global travel shoppers can be fickle. As seen over a year ago, European terrorism impacted travel choices for all tourists and particularly the Chinese, who are especially risk adverse and safety conscious. If hot words between the US and China under President Donald Trump translate into hotter deeds by either country, it’s logical to assume that Chinese travel shoppers will shift their travel plans to locations perceived or propagandized to be more appealing and welcoming to Chinese travel shoppers. Two years ago, exchange rates propelled the Chinese to Japan and South Korea because global luxury brands were underpriced by shifts in exchange rates. Suddenly stores in Tokyo’s upscale Ginza district were awash with Chinese shoppers. No matter what happens politically, the Chinese will still travel and shop. The only question to be determined is where. Smart brands will watch these trends and monitor travel and spending behavior as the political temperature swings, concludes Glos.

www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

CARIBBEAN ARI

Caribbean ARI’s specialty concept store, The Caribbean Rum Collection, had another excellent year, helped by promotional support from Mount Gay

A year of pride

and industry by

JAS RYAT

Caribbean ARI’s flourishing travel retail operation in Barbados grew even stronger in 2016, thanks to the 50th anniversary of independence celebrations

2016

was a milestone anniversary for Barbados with the 50th anniversary of independence on November 30. Diaspora from around the globe flew in to participate in the celebrations – and Caribbean ARI’s airport operation shifted into top gear to reap the rewards. Caribbean ARI General Manager Toni McDonald says: “Caribbean ARI has been a key part of Barbados travel retail since 2007 and we proudly celebrated this milestone anniversary with a series of events and promotions in our three airside stores,” she says. “These included 50th Anniversary Exclusives, and limitededition products from Hennessy Cognac and Mount Gay rum drove sales in the liquor category. A special Pride & Industry gondola featured a range of premium, 100% Bajan products over the 50-day celebrations and together with our Taste of Barbados concept the category outperformed the previous year by 24%.” Caribbean ARI finished 2016 strongly with overall sales increasing by 5% compared to 2015. This was driven by double-

Whisky category expands “Our specialty concept store, The Caribbean Rum Collection, which opened in June 2015 had another excellent year,” says McDonald. “This was helped by tremendous promotional support from Mount Gay.” The whisky category also grew, strongly aided by the continued support of William Grant & Sons. New products listed this year include niche chocolatier The Green Monkey, a Barbados-made, premium gifting range of rum truffles, mendiants and confitures. The brands own boutique on the island is exclusively available at Runway Duty Free. The Green Monkey brand has outperformed the company’s expectations and is now in the top five selling brands. The operator has also secured exclusivity within the airport on St Lucy artisanal fragranced candles, another locally made premium artisan product, which has sold very well. Other than Caribbean ARI the St Lucy range is available only at Limegrove and premium Spa resorts on the island.

digit growth on liquor, tobacco, food and confectionery and fashion accessories.

New concept focusing on local foods In Q2 the operator opened its new Taste of Barbados concept focusing on local foods, which helped increase the subcategory by over 12% year-on-year. Its top three categories are perfumes and cosmetics, liquor, food and confectionery. Passenger traffic grew at 7.5% versus 2015, and even though penetration was marginally down on 2015, the company enjoyed good growth on the core liquor, tobacco and confectionery categories. Caribbean ARI has also been impacted by Brexit, which has had an impact on UK penetration rates due to the weak sterling rate versus the Barbados dollar. The UK represents 36% of the traffic and has the largest share of sales, followed by regional and US destinations. However, this has been offset somewhat by good growth in spend across the categories on all other key destinations, namely the US, Canada and regional traffic.

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

To celebrate the 50th anniversary of Barbados independence on November 30, Caribbean ARI staged a series of events and promotions, including a special Pride & Industry gondola highlighting a range of premium, 100% Bajan products

TORONTO PEARSON

Enhancing the passenger experience

The look of Pearson’s T3 enhancement project will be very similar to the work that was done in its international/domestic departures entrance area

Toronto Pearson Airport is busy remodeling its Terminal 3 US Departures area with an expanded retail and food & beverage offering in a bright, airy environment by

JAS RYAT

he latest space within Toronto Pearson’s Terminal 3 Enhancement Project will open in sections with the newest duty free store fully operational this spring, and the remaining retail and food and beverage units fully operational in early 2018. The units are located in the Terminal 3 US Departures area, following US Customs and Border Protection inspections. Similar to the airport’s recent Terminal 3 International space that was recently redeveloped in summer of 2016, the company will offer walk-through duty free, and integrate retail and food and beverage options. The food court will showcase three new quick-service restaurants and a feature bar. “We are also taking a deeper dive in brand selection and design for the commercial opportunity,” says Giovanna Verrilli, Associate Director, Retail and Food Programs, GTAA. For example, the duty free store will carry a wide section of perfume brands that will include lines from Clinique,

Lancôme and Estée Lauder. A large section of all top liquor brands and a tastefully Canadian gift and souvenir area will also be part of the mix.

Exceeding passenger expectations Expectations are high for the latest T3 project, where the primary carriers are American Airlines, Delta Airlines and Westjet. “The ultimate goal is to improve the overall passengers’ experience by ensuring that that we exceed their expectations while flying to the US in T3,” says Verrilli. Specifically on the passenger experience, the airport authority plans to improve passenger flows by increasing the number of security lanes available, add new places to sit and rest before their flights, improve the wayfinding signage, add new digital elements throughout,

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

and expand the commercial (retail and food & beverage) space. Visually, the look and feel of the remodeled terminal will also be enhanced to make a more comfortable passenger experience. “The look will be very similar to the work that occurred in our international/domestic departures entrance area – it will feel bright, airy, welcoming,” says Verrilli. This T3 US transborder sector will also feature two new passenger lounges, one that will be specific to American Airlines and one that will be pay-per-use, operated by Plaza Premium Lounges. The rate for the Plaza Premium lounge will be similar to their other lounges in Toronto: two hours for C$32 (US$24), three hours for C$40 and six hours for C$56. The refreshed duty free stores and food location will open their doors in Q2, 2017 with more to follow.

SATORI COMMUNICATIONS GROUP

Enhancing the customer journey Satori Communications Group works with retail partners to help improve the customer’s experience in-store, as its managing Partner Jay Togawa explains

“C

reating enlightening brand activations” is the tagline for Satori Communications Group, which specializes in connecting consumers with brands in travel retail stores. Among its varied services, the Canadabased firm provides brand demonstrators, sales support, in-store sampling, POS/POP creative and design, and merchandising. The company’s clients span the biggest names in the travel industry, such as Bacardi, Godiva, Dior, Chanel and Clarins. Here, Jay Togawa, Partner, Satori Communications Group, details its services and expansion plans. Americas Duty Free: How did you get into staffing solutions? Jay Togawa: We like to think that the work we do in global travel retail goes beyond just staffing. We see ourselves as solution providers, working with our clients and retail partners to help enhance the customer’s experience in-store and ultimately helping to drive sales. Providing trained and polished demo staff and brand ambassadors is just the first step in enhancing that customer journey and really just the tip of the iceberg in the solutions we offer our clients. ADF: How do you enhance customer experiences? JT: Everything we do in-store, whether it be sales support, product demos or tasting events, revolves around how we can 92

enhance the customer journey. Shopping in duty free goes well beyond just getting a great deal. It’s a learning experience for customers to uncover the newest products, find exclusive items that they cannot get anywhere else, and learn more about the brands and products they love. For us, enhancing a customer’s experience is about helping each and every customer by identifying their need, educating them on what’s important to them and providing a solution – through supporting their purchasing process, providing the opportunity to experience the brand through trial or by introducing them to something new that is only found in duty free. ADF: Is there a particular project you’re proud of? JT: We support sales and advocacy for Bacardi cross-Canada with everything from hiring and managing full-time brand specialists to drive in-store sales, developing and executing branded tastings, providing store associate trainings and supporting sales with reports on pricing and in-store placement. Our work not only falls within the airport but also within their border store markets. Working closely with their travel retail team has really allowed us the opportunity to tailor our offerings so we can create the best customer journey for Bacardi within the Canadian market. ADF: Who is your newest client? How have you working with them?

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Satori Communications Group helps customers discover the newest products, find exclusive items that they cannot get anywhere else

JT: One of our newer clients is Godiva Chocolatier. In addition to supporting Godiva with in-store tasting events for all of their brands, we are really excited about the work we do for them and another one of our clients, Peller Estates. We have discovered a great partnership between these two brands by creating tasting events offering customers a pairing of Godiva chocolate with Peller ice wines, which continues to be highly successful for the brands and a big hit with the customers. ADF: What are your expansion plans in travel retail? JT: We are based in Canada and currently service the entire Canadian market but since our clients and capabilities span across borders, our natural expansion plans are to expand our services across the Americas and then beyond. Satori Communications Group partners with retailers to help enhance the customer’s experience in-store and ultimately helping to drive sales

The Best Ingredients to Boost your Sales! S AT VISIT U 31, 10 BOOTH S IA ADF DO ORLAN 2017

For further information please contact Mrs. Sabrina Valenti at s.valenti@ritter-sport.de

www.ritter-sport.com

CTO

Banner year by

WENDY MORLEY

At the recent annual Performance of the Tourism Industry Review, the Caribbean Tourism Organisation reported the region’s best year yet

The cruise industry grew modestly in 2016, but varied greatly by destination. With 26 new ocean vessels carrying over 30 thousand passengers, growth is expected to continue at 1.5% and 2.5% for the coming year

ach year’s report from the Caribbean Tourism Organisation (CTO) appears positive, and indeed that is the case once again after the organization’s report on the region for 2016. Buoyed in great part by a strong US economy, almost all subregions reported growth, with the exception of the US territories and the Dutch Caribbean, which lost market share because of a falloff in tourists from Venezuela to Aruba and Curaçao. Cuba and the Dominican Republic showed especially strong growth, above the regional average of 4.2%, which itself was slightly above the global average of 3.9%. Cuba welcomed 4.0 million tourists, up 13% from 2015. This increase reflects the US-Cuba rapprochement. The Dominican Republic, meanwhile, was up 6.4% to nearly 6 million tourist arrivals, nearly 20% of all arrivals in the region. In all, this sub-region called “The Other Caribbean Countries,” recorded the fastest growth rate of the region at 7.4%. In the “Other Commonwealth Countries” and the “French Caribbean” sub-regions, growth rates were approximately equal to the regional average, at +4.3% and +4.2% respectively, so their respective shares remained steady at 21.9% and 3.5%. The Other Commonwealth Countries sub-region totaled approximately 6.4 million tourist visits. The best performance showed in Belize,

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Bermuda, Guyana and the Turks & Caicos Islands. Arrivals to the OECS countries (Anguilla, Antigua & Barbuda, British Virgin Islands, Dominica, Grenada, Montserrat, Saint Lucia, St Kitts & Nevis and St Vincent & Grenadines) grew by 3.1% to 1.5 million. The net effect for the Commonwealth countries as a whole was growth of 4.1% for the year.

The cruise industry While growth of the cruise industry in the Caribbean has slowed, it is still showing a positive growth rate of 1.3% for a cruise passenger arrival total of 26.3 million in 2016. The region received 33.7% of global cruise deployments during the calendar year. A number of countries in the region continue to enhance ports and offer new attractive destinations, helping to keep demand high. Tempering growth were fears about the Zika virus and adverse weather, which forced several ports to be circumvented. While cruise passenger growth was moderately positive, this increase was far from uniform across the region. Only 12 destinations registered growth, with the best performances occurring in the Dominican Republic (+59.4%), the British Virgin Islands (+35.4%) and Grenada (+16.3%). Belize, with an increase of +4.9%, recorded over one million cruise passenger visits for the first time. The Dominican Republic had such strong growth and

with an already strong base, it weighed heavily to bring up the numbers for the whole region. While 12 destinations reported growth, 13 destinations fell into negative territory, with losses ranging from -0.3% for the Cayman Islands to -19.1% for Guadeloupe. The popularity of destinations varied widely, but the four main regions remain relatively equal in terms of cruise passenger distribution. Growth was recorded in both the Western and Northern Caribbean, at +4.9% and +2.5% while the Eastern Caribbean, which is the largest sub-region for cruise passenger arrivals, and the Southern Caribbean, which is the smallest sub-region, registered losses of -1.6% and 0.9% respectively. Further expansion of the cruise industry is expected in 2017, with 26 new ocean vessels carrying over 30 thousand passengers at capacity. The anticipated rise in cruise passenger arrivals to the region is estimated to be between 1.5% and 2.5% for the coming year.

Tourist source markets With a strong US economy, low unemployment and high consumer confidence, outbound trips by Americans grew, and the Caribbean received a substantial share of that market. With Canada and Mexico removed from the stats, only Europe received more outbound US passengers than the Caribbean, at 17.3% and 9.8% respectively. The US is the Caribbean’s top source market, with a growth rate of 3.5%, and an estimated 14.6 million stay-over arrivals came from the United States. Outbound travel from Canada dropped -3.4% in 2016, due mainly to the unfavorable exchange rate with the US dollar. Trips to the US declined by -7.3%, although outbound travel to other regions saw a +3.5% increase. The Caribbean saw a decline from this normally robust market, with a -3.4% decline over 2015 numbers. Seventeen of 24 reporting destinations saw a decrease in Canadian tourists, though the Turks & Caicos islands saw a substantial increase of +23.2% from this source market, and the Dominican Republic – the main destination for Canadians reported a small growth of +2.7%. Despite the general decline, Canadians continue to make up an estimated 11.3% of tourist visitors to the Caribbean, with a total number of 3.3 million. Tourist visitor contributions from the European region showed strong positive growth every month in 2016 over the same month in 2015. The number of visitors from this region totaled 5.6 million, with double-digit growth of an estimated 11.4%, the strongest growth among the main markets. Continued economic and political instability in two of three main South American source markets (Brazil and Venezuela) meant the region saw negative growth of tourist arrivals at -

10.6% compared to 2015. In 2016, South American tourist arrivals were received primarily by the Spanish and Dutch speaking destinations. Tourist travel by Caribbean residents to other destinations within the region increased by an estimated 3.6% during 2016, the second consecutive year of growth. Intra-regional travel continues to have its challenges, however, with fragmented service. The Dominican Republic, Trinidad & Tobago and Barbados were the main winners of this local international travel, with strong growth also reported in Guyana (39.1%), St. Vincent & the Grenadines (14.1%) and the Turks & Caicos Islands (13.5%). Seven destinations recorded decreases, ranging from -2.5% in Trinidad & Tobago to -43.6% in Suriname.

Ending on a high note While there is substantial variation in the region, overall 2016 saw new record levels of tourist arrivals, cruise passenger arrivals and visitor expenditure, which grew 3.5% in 2016 over 2015, and has grown over 20% since 2013. Despite these positive figures, some new political and economic realities have led to uncertainties. For hotels in the region the “sharing economy” poses a threat. Meanwhile, big and possibly surprising political changes in both the US, with the election of a new Republican administration, and the UK, with the referendum mandate to leave the European Union, could impact the performance of tourism going forward, and the effect remains to be seen. Forecasts show tourist arrivals to the Caribbean will continue to grow in 2017, but at a slower rate of between +2.5 and +3.5%.

l a m b r e t tawatch es.co m

Welcome to experience our Timeless Desires in booth 831 at the IAADFS Show in Orlando. Modern fashion accessories with a retro twist, inspired by the 1950-60’s and the glorious days of the Italian Lambretta scooters.

www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

ESSENCE CORP.

Getting a head start After celebrating a good year in the Americas, family-owned fragrance distributor Essence Corp is tackling 2017 with gusto, thanks to a series of exciting new launches

ssence Corp is well known for its incredible team work, often demonstrated in the company’s charitable endeavors, as highlighted in Americas Duty Free’s IAADFS report last year. What has this independent, family-owned fragrance distributor got in store for 2017? Antoine Bona, Executive Director Travel Retail Americas reveals that the firm held its internal meeting at the beginning of January, where all 73 Essence Corp team members gathered in the Miami office to “get a head start on the year”. Bona is clear about the meeting’s objectives: “Our goal is to work together with exceptional team work. We want to capitalize on synergies between all company departments and divisions in order to build our brands and serve our customers. As an independent family distributor we have the ability to make

Essence Corp’s leading men, Antoine Bona, Executive Director Travel Retail Americas (left) and Guillaume Bona, Executive Director Caribbean

Moschino Fresh Couture Pink will be diffusing the color pink across the Americas travel retail shelves this year

quick decisions and we want to capitalize on this competitive advantage.” To get the New Year off to a flying start, Bona is promising a lot of great fragrance launches, starting with the Mr Burberry edp being introduced on the anniversary of the Mr Burberry edt launch in April 2016. Additionally, the company will be introducing Jimmy Choo Man Ice, Moschino Fresh Couture Pink, Montblanc Emblem Absolu, Abercrombie & Fitch First Instinct Woman, and Versace Dylan Pour Femme featuring Gigi Hadid. Essence Corp is continuing the roll-out of Coach throughout travel retail.

permission to expand retail concepts in Cuba,” he says. “This is harder for American brands today, but we see the market constantly evolving there and do foresee opportunities in the near future.” In terms of customer profile, Latin Americans are strong beauty consumers in travel retail, especially for fragrances compared to Asian passengers who are stronger in cosmetics, notes Bona. For now Asians are mostly traveling to the West Coast, Canada, Detroit, Chicago, and New York, but the company has seen other regional airports adding flights from Asia.

Growth expected to come from South America

Digital activities and social media interaction

Looking at the Americas region specifically (excluding the Caribbean – for which, see below), Essence Corp’s top 10 airports for fragrances are New York JFK, Newark, Miami, Mexico City, Cancun, Panama, Bogota, Sao Paulo, Rio de Janeiro, and Buenos Aires. Sales in these airports are mostly driven by Latin American passengers. Cruise ships and Mexican borders also have strong weight in its sales portfolio even though the latter have faced recent challenges. Bona expects growth to come from South America as currencies have slightly rebounded after strong currency devaluation during the last two years. For example, the Brazilian real has appreciated +25% versus the beginning of January 2016. Cuba is another potential highlight. “We do see some brands being granted

To target the millennial demographic group, Essence Corp is implementing more digital activities with its promotions. “Millennials are drawn towards interactive digital promotions that we implement using touch screens, iPads or TVs, photo booths, and creating interaction with their social media accounts.” After a difficult 2015 in turnover terms, Essence was proud to announce positive growth after closing 2016. “We grew +14% in travel retail thanks to some markets recovering and strong launches such as Mr Burberry, My Burberry Black, Montblanc Legend Spirit, Moschino Fresh Couture, Versace Dylan Blue, and Abercrombie & Fitch First Instinct,” he says. A global trend in the last couple of years is price-driven promotions in travel retail. As savings shrink in travel retail due to currency fluctuations and retailers

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

ESSENCE CORP.

The Mr Burberry is being introduced across the Americas on the anniversary of the Mr Burberry edt launch in April 2016

adding price premiums at point of sale, many brands have started implementing price-offs on some of their classic lines in order to drive the impulse, price-sensitive consumer. “It has been successful for some of our brands, but we must ensure we are not cannibalizing regular sales and maintaining growth and profitability,” he asserts.

mainly target our local market customers and develop, in collaboration with our retailers, strong marketing plan for locals (massive sampling, engraving, VIP events, cocktails, launches). Grenada is one of the fastest-growing islands in the Caribbean. Growth comes from high-end tourism, mainly coming from the UK, and a strong local market.”

Strong marketing plans for Caribbean locals

Investing in new and traditional media

Essence Corp has always been proud to work hand in hand with its Caribbeanbased retailers and brands and will continue to do so in 2017. So says Guillaume Bona, Executive Director Caribbean, when asked about the independent family-owned beauty distributor’s key focus for this year for the islands. Indeed, his team has already started traveling to all Caribbean islands to implement marketing calendar strategies for each of its brands. Looking at the Caribbean specifically, Bona explains that Essence Corp has always considered the islands to be a mix of three distinct markets: cruise ship, stayover passengers and locals. The Aruba and Curacao retail business is suffering due to the Venezuelan crisis, he says. The rest of the Caribbean is mostly driven by US trends and the US economy. Besides Aruba and Curacao, the main islands are the Bahamas, Bermuda, Cayman and Trinidad. American tourists are buying less than previous years, Bona observes. “We

The Caribbean beauty market has been declining for the last two years, says Bona, who puts this down to two main factors: over-distribution of fragrance brands in

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the US, as well as the political crisis in Venezuela. As market research firm NPD Group does not cover the Caribbean, Essence Corp’s estimations based on its retail sales and trends provided by its retailers are -15% in 2016 for fragrances. Essence Corp and its retailers are already switched on to the important millennial market, who are being targeted via new media and traditional media, due to the Caribbean islands’ unique characteristics. As Bona explains: “We all know that millennials’ main source of information is their smartphone. Most of our retailers are communicating with their younger clientele via Facebook, Instagram, Twitter and all new social media. Launches, exclusivities, in-store animations, special incentives are communicated via social media, but we keep investing in traditional media such as radio. Populated islands such as Martinique, Guadeloupe, Trinidad and Jamaica have congested roads and highways, and since they are not supposed to use their phone while driving, millennials also listen to the radio in their cars.” Looking to the future, Bona echoes the words of his cousin Antoine Bona, citing Cuba and its 12 million habitants as an obvious opportunity to gain external growth. “The real potential of the Cuban market is difficult to predict, but their hunger for consumption and discovering international brands is an amazing opportunity,” he enthuses.

Jimmy Choo Man Ice is one of many great fragrance launches slated for 2017, says Antoine Bona, Executive Director Travel Retail Americas, Essence Corp

POL AROIDNA SONČNA OČAL A , VEDNO POL ARIZACIJA. DOŽIVITE JO TAKOJ. / ОЧКИ ПОЛАРОИД . ЛОВИ МОМЕНТ БЕЗ БЛИКОВ! / L’EXPÉRIENCE INSTANTANÉE. LES LUNE T TES DE SOLEIL POL AROID, TOUJOURS POL ARISÉES.

INSTANT EXPERIENCE

POLAROID SUNGLASSES ALWAYS POLARIZED

FACE MASKS

Facing

facts Three leading cosmetics companies report on their face mask developments – a booming category among the allimportant millennial consumer group

L’Oréal Travel Retail Americas Consumer Division Emilie Poisson, L’Oréal Travel Retail Americas Consumer Division’s General Manager, describes the mask category as a great recruiting and cross-selling category. The company has noticed an increase in demand as more than one in five women use a mask at least once a week. Face mask searches online have tripled in the last five years and appear as one of the most trending topics in social media. New product development is accompanying and anticipating those needs. La Roche-Posay, will launch a mask under the Effaclar franchise and L’Oréal Paris is launching three new Clay masks. Both innovations will be available in travel retail, Effaclar being launched in the Derma-Center in South America and L’Oréal Paris Clay masks in more than 300 travel retail locations across the continent. One of the most noticeable trends is “multi-masking”, says Poisson. This consists of mixing and combining different masks in one use which allows the consumers to tailor the treatment to each area of the face, such as the T-zone, cheekbones, etc. L’Oréal Paris, by launching three different clay masks – to purify, detox and smooth to “mix & mask” – promote a playful spirit adapted to the millennial target audience. Masks are popular because they promise immediate results, Poisson says, and have multiple benefits for various skin flaws and respond to the need of women for pampering in a stressful and fast-paced environment. La Roche-Posay mask is integrated within the acne-prone skin franchise to create a 3 step routine Routine Cleansing-Mask-Care. The USPs of La Roche-Posay-Effaclar mask: unclogging, purifying, sebo-regulating mask

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The L’Oréal Paris Pure Clay mask offers three pure clays in a tailormade concentration for pure skin, glowy or to exfoliate, detox, purify.

La Roche-Posay’s Effaclar mask are unclogging, purifying, and sebo-regulating. The product is described as their first mask to cleanse skin from all impurities, even invisible. The mask creates no irritation and there is no sebum rebound effect. On L’Oréal Paris, the new masks will be associated to hydration/entry skincare franchise as the masks have a strong recruitment power. The L’Oréal Paris Pure Clay mask offers three pure clays in a tailor-made concentration for pure skin, glowy or smooth. The clays are selected for their complementary properties: kaolin, to trap impurities, toxins and oil; montmorillonite, to boost oxygenation and reduce imperfections; and ghassoul, to improve skin texture and clarity.

BioMiracle

The Coffee Jelly Mask, part of the BioMiracle Slim Coffee Brown Sugar Collection, is a soothing sheet mask for all skin types that purifies pores and removes excess sebum without irritation and delivers moisture

BioMiracle offers a variety of different skincare products that appeal to all skin types. The brand’s focus is not just on antiageing, but affordable at-home skincare that is convenient for consumers. “We want our consumers to know skincare isn’t a chore, but can be enjoyable,” says Mary Bang, Founder and General Manager, BioMiracle. As consumers have busy lives, the company wants its products not only to be affordable, but also not to be time-consuming. Furthermore, it is offering a product that can be used at home while still being productive in a woman’s daily routine. BioMiracle says: “We’ve been competing in this industry for over 30 years. We always strive to develop the best product, working with some of the best developers and Scientists from Korea. Our products are natural and, multifunctional. Our goal is to continue to grow and keep up with emerging trends, and to keep our consumer engaged in our products.” Luxury Activating Charcoal Mask is an advanced type of salon modeling mask. The product consists of five sets of activating liquid and powder, so it’s easier to use as you don’t need to measure the amount of water to pour. The result is skin that looks and feels younger. The mask is applied on the face and neck for soft and smooth skin. Other USPs include anti-ageing properties and luxury skin foundation; effectively dilutes redness, removes splash, evens out skin tone; and makes skin silky smooth, firmer, radiant, revitalized and youthful looking, helping to reduce the ageing effect. The mask also brightens the complexion and has a cooling effect to reduce facial redness, while cleaning and tightening pores. Luxury Activating Gold Mask is also described as an advanced type of salon modeling mask. The individually packaged product consists of five sets of activating liquid and gold modeling powder. It’s easier to use as you don’t need to measure the amount of water to pour. Containing 24 carat gold, ginseng, hyaluronic acid and collagen, the product is applied on the face and neck for soft, smooth and younger looking skin. It is said to

Luxury Activating Charcoal Mask brightens the complexion and has a cooling effect to reduce facial redness, while cleaning and tightening pores

effectively dilute redness, remove splash, even out skin tone; and makes skin silky smooth, firmer, radiant, revitalized and youthful looking, helping to reduce the ageing effects. It also has a brightening and cooling effect to reduce facial redness. BioMiracle’s Coffee Jelly Mask has deep hydrating, anti-wrinkle and brightening effects. This coffee gel mask is a soothing sheet mask for all skin types that purifies pores and removes excess sebum without irritation. It is good for blemishes, large pores, and oily skin, producing a clearer, healthier-looking complexion. The new gel formula provides a thick gel-like serum to super hydrate problem areas helping to reduce puffiness. The product has antioxidants which help fight premature ageing and is good for wrinkles, sun spots and fine lines. Containing a premium Arabica coffee extract from Colombia, the Coffee Jelly Mask provides moisturizing, nourishment and protection for your skin. It is enriched with various natural botanical ingredients such as aloe extract, green tea extract, and Portulaca Oleracea extract to nourish and moisturize. Caffeine, Betaine and Adenosine (anti-wrinkle functionality certified by the Korea

Containing 24 carat gold and collagen (ginseng), BioMiracle Luxury Activating Gold Mask is applied on the face and neck for soft, smooth and younger looking skin www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

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FACE MASKS LETTER FROM THE EDITOR

Aveda’s powerful 97% naturally-derived masques for face and eye are formulated to work at night while skin is at rest for brighter skin the following morning

Tulasāra Wedding Masque Overnight is an ultra-rich creme masque, while Tulasāra Wedding Masque Eye Overnight is a similar masque just for the eye area. They both contain curcuminoids, a potent extract from Ayurvedic turmeric root, helping to brighten skin and leave it luminous and radiant. A powerful blend of three plant stem cells work together to help support skin’s natural repair processes at night, and there are over half a million plant stem cells in every 50ml jar. Organic apricot seed oil works with the skin cells’ natural circadian rhythm to help support the skin’s natural repair processes that happen at night. The eye masque also contains algae extract blend, which helps diminish the look of eye area puffiness and dark under-eye circles. Tulasāra Wedding Masques Overnight both contain an artfully-crafted aroma with certified organic jasmine, chamomile and grapefruit oils, known in ancient Ayurvedic tradition to balance the skin, mind and spirit.

Kiehl’s unveils soothing addition to masque range

Food and Drug Administration) penetrate the skin to restore elasticity and firmness from the inside out. In addition, Rosa Centifolia flower water and green tea extract help retain moisture and improve skin tone, making skin brighter and younger. For more information visit Premier Global Trading (booth 429 at IAADFS). This company is owned by Elizabeth Taylor who handles Caribbean, Central American and selected accounts. Taylor is pleased to represent Biomiracle and CITRA Inc.

Aveda (The Estée Lauder Group of Companies) Estée Lauder-owned brand Aveda has introduced the new Tulasāra Wedding Masques Overnight, harnessing the brand’s pure flower and plant essences. The powerful 97% naturallyderived masques for face and eye are formulated to work at night while skin is at rest for brighter skin the following morning. Inspired by the Haldi beauty ritual from India, which is a key part of the Hindu wedding ceremony, both masques deliver wedding-day skin in a way that has been time-tested in Ayurveda, the ancient wellness art of India, for generations. “Haldi refers to the paste that is used in the traditional Indian wedding Haldi ceremony, which is a mixture of turmeric (Haldi means turmeric in Sanskrit), chickpea powder, and rose water,” explained Divyesh Patel, Aveda Director of Skin Care Research and Development. “During the ceremony, family members who are already married spread the paste onto the face, hands, arms, legs and feet of the bride and groom the day before the wedding as an offering of good luck. Turmeric is a known skin brightener, so the Haldi helps the bride and groom look their best on the big day. It is even said that if the bride or groom touches an unmarried person of marrying age with the Haldi, he or she will be the next to tie the knot.”

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Beauty brand Kiehl’s has launched a new masque product containing the soothing natural ingredient calendula. Calendula & Aloe Soothing Hydration Masque is a gel masque, formulated with calendula flower petals and aloe vera, to provide a refreshing surge of cooling hydration upon application. Specially formulated for all skin types, including sensitive skin, Calendula & Aloe Soothing Hydration Masque leaves skin feeling hydrated, soothed and refreshed after only five minutes, making it a quick and simple addition to any skincare regimen, the company said. The masque can be used regularly up to three times per week, or as an instant skin pick-me-up after a long flight, a stressful day at work, or a sleepless night. Its calming yet revitalizing properties make it beneficial for skin that is dull, tired or dehydrated. Chamomile and lemon essential oils add a soothing, fresh aroma to the paraben-free, colorant-free formula. “Work, stress, lack of sleep and other factors can cause skin to look and feel dry, rough and tight,” said Helen Sung of Kiehl’s Product Innovation team. “A gentle skin remedy, Calendula Masque was developed to refresh, revitalize and hydrate all skin types.”

Specially formulated for all skin types, including sensitive skin, Kiehl’s Calendula & Aloe Soothing Hydration Masque leaves skin feeling hydrated, soothed and refreshed after only five minutes

INTER PARFUMS INC

Millennial instinct Inter Parfums Inc is introducing the new Abercrombie & Fitch women’s fragrance, the latest successful launch for the apparel brand loved by millennial consumers

blooms coupled with uplifting grapefruit zest to awaken the senses, while passion fruit adds a sweet dewy brightness. The mid note is wild orange flower, while butterfly orchid blends with water lily to round out the heart of the fragrance. The warm amber base note is heated by a contrasting blend of creamy tonka and addictive musk.

Exciting tension and pure addiction

The brand awareness of Abercrombie & Fitch in the Americas is strong especially amongst the millenials

he Abercrombie & Fitch success story continues for Inter Parfums Inc, which recently launched the New York-based apparel brand’s feminine fragrance, First Instinct for Women, in UK travel retail. The new fragrance was exclusive to World Duty Free in March, and a worldwide roll-out is planned for April to all approved retailers. “The brand awareness of Abercrombie & Fitch in the Americas is strong,” says Herve Bouillonnec, Vice President Global, Inter Parfums Inc. “The brand is aspirational to millennials, and millennials are the core target for this brand. Our communication is mainly on social media to appeal to this target group. Our interactive in-store animation as well as the visual campaign were developed to attract these customers.” Many activities have surrounded the new fragrance launch, including a media campaign, interactive animations, and sampling. Previous Abercrombie & Fitch fragrances have performed well in duty free. “We launched very successfully last year First Instinct for Men with a limited distribution with main partners like DFS

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in the US and Asia, Duty Free Americas in the US and Dufry in UK,” enthuses Bouillonnec.

Playful, feminine, and alluring Abercrombie & Fitch’s latest launch, First Instinct for Women, is inspired by the first moment of attraction, when a spark is ignited. The Abercrombie & Fitch woman is described as original, effortlessly beautiful, and knows how to follow her first instinct with innate style, charm and femininity. Developed by Fabrice Legros of Studio Pi, the packaging design is “based upon a rectangular construction, yet with roundness that conveys femininity”. It has a clear glass undulating surface, a light pink metal cap and an Abercrombie & Fitch plaque. “I feel that First Instinct for Women is at once playful, feminine, and alluring,” says Master Perfumer Laurent le Guernec of IFF. “With a sensual opening, a sparkling development and a trail of irresistible yet effortless seduction, this formula was crafted to ensure captivation.” A floriental fragrance, First Instinct for Women has top notes of magnolia

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

First Instinct for Men is targeted at men who are “bold yet humble, and whose masculinity is seen in his natural charm and his ability to express his feelings”, the company says. Dubbed modern, addictive and irresistible, the top notes are electric gin and tonic combined with Kiwano melon, amplifying the excitement, adrenaline and fresh, youthful optimism. The mid note of aromatic pepper ignites the spark to heat up the magnetic attraction, while violet leaves bring depth and an interesting citrus twist to capture warm, textured masculinity. At the base, sueded musk mingles with sleek raw amber, seeking to build an exciting tension and pure addiction.

32nd Annual 32e Congrès Convention annuelle Canada’s Exclusive Duty Free Convention

Congrès exclusive de l’association hors taxes du Canada

GUEST WRITER

Finding happiness in the

smallest of things Welcome to the world of Rituals Travel Retail. We help you slow down, to find happiness in the smallest of things. At home, away and on your travels we help you find high quality products at competitive prices, providing ultimate comfort and unparalleled luxury by

NEIL EBBUTT, Director Wholesale, Rituals

he Rituals company was founded in 1999 when Raymond Cloosterman decided to create a global lifestyle brand inspired by ancient eastern traditions. The philosophy behind the Rituals brand concept is to create products based on these ancient rituals, using their traditional ingredients, which can transform everyday personal and domestic routines into soothing, relaxing rituals. Today, we have over 400 Rituals products in our portfolio. The first Rituals store opened in 2000 in Amsterdam. Rituals operates more than 500 stores and 1,500 points of sale in luxury department stores and leading perfumery stores all over the world. We also recognized that the travel retail market, which is constantly on the look-out for brands with a point of difference for their customers, would welcome a brand with a point of difference like Rituals and, from our point of view, travel retail could provide a unique platform for Rituals to generate incremental sales and accelerate global brand awareness. Rituals Director Wholesale, Neil Ebbutt

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We entered travel retail in 2012 determined to use our unique lifestyle proposition to offer a 360-degree lifestyle concept that connects with the traveler on each leg of their journey – a journey that begins at major airports with duty free standalone stores all Rituals stand-alone store over the world and also at Stansted Airport includes airlines, cruise We also sail the international waters ships and hotels. as well, allowing the traveler to enjoy the Currently, Rituals has seven standindulgence of the Rituals lifestyle in all alone airport stores, two airport spas and its facets onboard more than 120 luxury more than 150 shop-in-shops in airports cruise ships and ocean-going liners. where we present products from our Finally, in more than 1,400 different specially designed fixtures. At selected hotels worldwide we aim to create amazairport locations we operate a spa for ing hospitality that feels like home. The hand and foot treatments. Rituals hotel collection presents warm Our tailored services continue and inviting products including a colleconboard major airlines such as Qatar tion of specialized products for hotel Airways, TUI, Saudi Arabian Airlines spa treatments. and Virgin Atlantic with customizable This omni-presence in the face of travairline products to make the passenger journey as pleasant as possible. The airline elers creates maximum opportunity for them to find and experience our products. sector has become increasingly significant Today’s shoppers, especially the new milfor Rituals. lennials about whom so much is currently We began by supplying passenger being written, are influenced far more by amenity kits but airlines soon discovered an experiential connection with a brand that it’s not just the Rituals amenity kits than by traditional marketing methods. that can relax and pamper their passenIn many ways the Rituals brand philosogers – Rituals products can also be found phy has anticipated this consumer trend in their premium cabin washrooms, towards demanding products with values too. Airlines are now choosing Rituals’ built around integrity and authenticity. onboard sleepwear and putting Rituals This 360-degree experiential presence products in the washrooms in their airin front of the traveler is good not only for port premium lounges as well, to enhance us but equally good for our retail partners, the end-to-end experience they want their because the more we position ourselves as premium passengers to enjoy. Rituals is supremely relevant to travelers, at whatdemonstrating its 360-degree product relever point in their travels, the stronger our evance at every key touch point between the airlines and their passengers, in the air appeal to them when they find us in travel retail outlets, whatever the channel. and on the ground.

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

DUTY FREE DYNAMICS

Building up

STRENGTH

Panama-based distributor Duty Free Dynamics is using its great location and experienced management team to forge a growing business in the Americas and Caribbean

uty Free Dynamics, the specialist distributor of duty free merchandise in the Americas and Caribbean, has big, bold ambitions – just like the latest brand to join its growing portfolio. In late 2016, Duty Free Dynamics expanded its business through a strategic partnership with TW Steel, the global Dutch watch brand, which dominates the oversized watch segment. The agreement involves the exclusive distribution of TW Steel for the travel retail channel in the Americas and the Caribbean. With its name meaning ‘The Watch in Steel’, TW Steel is firmly established as a big, bold, global lifestyle brand. Its timepiece collections are suitable for all tastes and occasions with innovative design and luxurious styling paired with Swiss build quality and an affordable price point.

Efficient and cost effective distribution Duty Free Dynamics was created in 2015 to cater to brands aiming to establish

a solid presence in the travel retail segment throughout the Americas and the Caribbean. The firm is part of the Liberman Group, a major player in a vast array of industries including energy in Central America, olive oil and winery in Argentina, finance and banking in Uruguay, hospitality with Hyatt Hotels, and real estate. Guy Bodart, the CEO of Duty Free Dynamics, has over 20 years’ experience in the management of the luxury industry throughout Latin America with Chanel, as President of Chanel Mexico and later as CEO of Chanel Brazil. In addition to TW Steel, Duty Free Dynamics is the exclusive distributor of Guess watches, Braun watches and clocks, Mattel toys and Havaiana flip flops for the travel retail channel in the Americas and Caribbean. The company is also in the process of closing negotiations with several other brands in the accessories segment. Explaining the company’s role, Bodart says: “Duty Free Dynamics is dedicated to travel retail market distribution, providing all the necessary tools to distribute merchandise in this channel in the most efficient and cost effective way possible. DFD takes part also as a brands representative, since we make sure that visual merchandising of all the brands we represent is in compliance with their guidelines at the POS. Duty Free Dynamics prefers the distribution model rather than agency, to ensure quick and efficient supply of the products throughout the region.”

More than 50 years of industry experience Guy Bodart, CEO, Duty Free Dynamics, has over 20 years’ experience in the management of the luxury industry throughout Latin America with Chanel, as President of Chanel Mexico and later as CEO of Chanel Brazil

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Bodart adds that the company is open to working with any product category, and not just accessories and toys. Indeed, Duty Free Dynamics has a team of seasoned professionals with more than

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Duty Free Dynamics has struck a strategic partnership with TW Steel, the global oversized watch brand, involving the exclusive distribution of TW Steel for the travel retail channel in the Americas and the Caribbean

50 years of industry experience in the high-end fashion and luxury industry. They have expertise in the travel retail market distribution of all major product categories. The company has a local presence in each sub-region to ensure quick and accurate implementation of the brand’s marketing and sales strategy at the POS. Additionally, modern and efficient logistics allow orders to be processed and shipped within 48 hours. Duty Free Dynamics’ headquarters in Panama plays a key role in its distribution strategy as it harnesses Panama’s major airport network, the hub of the Americas, and port facilities in both the Pacific and Atlantic Oceans. This allows quick and efficient access to more than 400 POS in the region, according to Bodart. Panama is also an important banking center, fueled by an US dollar base economy which facilitates commercial activities in the region. Panama also hosts the Colon Free Zone, one of the most important free-trade zones in the world, where Duty Free Dynamics maintains its warehousing facilities. Since its establishment, Duty Free Dynamics has procured some big clients. In the Caribbean, the roster spans John Bull, Watch My Watch, Flagship, The Old Freeport Shop, Island Companies, Boolchand’s, among others. Also, panregional accounts include leading operators such as Dufry, Duty Free Americas and Motta Internacional.

EDITOR’S CHOICE

Top treats Our Editor-in-Chief picks her favorite products from the travel retail shelves this season

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1. Cavicchioli Prosecco: This fresh and delicate Prosecco from Treviso shows an intense aroma of candied fruits and sweet flowers, and is ideal as an aperitif with appetizers and fish-based dishes

4. Hawaiian Host MacNut Crunch: These decadent, king-sized milk chocolate bars will satisfy your sweet tooth. The bar is made of macadamia nuts and crisp rice coated in milk chocolate

2. Clé de Peau Concentrated Brightening Serum: This reformulated serum has been enhanced with Illuminating Complex EX which promises to moisturize and retexturize skin while reducing effects caused by environmental stress, boosting radiance

5. Pretzel Pete Nuggets: This tasty Parmesan Garlic treat is made from non-GMO ingredients and contains no saturated or trans fat. Perfect for the health-conscious snacker

3. Porsche Design and KEF Space One headphones: These sleek, noise-canceling headphones feature a bold and use of aluminum in their shells, with a sandblasted titanium finish

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6. White Tea by Elizabeth Arden: This refreshing new fragrance promises to put you in a zen-like state. The fragrance features crisp and sparkling Italian mandarin complemented by sensual notes of sea breeze accord

7. Pixie Crew backpack: Pixie Crew adds a new level of fun, creativity and personalization to this backpack, which comes with a set of colorful silicon Pixies to create unlimited designs that can be changed time and time again 8. Toblerone Messages: Mondelez brings you an exciting series of exclusive packaging, featuring emotional messages. Available for the 360g milk bars, travelers can express their personalized feelings through a classic gift 9. Zippo GlorioU.S.: The brand famous for its lighters is now bringing you Zippo GlorioU.S. men’s fragrance. The design is reminiscent of the classic Zippo lighter and features the stars and stripes of the American flag 10. Reese’s Peanut Butter Cup Miniatures: Part of Hershey’s World Traveler Collection that is exclusive to travel retail, this compact gift box contains 460g of assorted Reese’s flavors (milk chocolate, dark chocolate and white)

11. Love X Infinity – LXI: This new carded gift concept was created to convey the feelings we want to express. A piece of jewelry accompanied by a sentimental message is presented in beautiful packaging 12. Safe Skies BLUETOOTH Lock: No small keys to carry around from flight to flight, and no combination to remember. Access the TSA Safe Skies BLUETOOTH lock with the push of a button. Approved by US, UK, Swiss, Canadian, Australian, Israeli, New Zealand, and German airport security. 13. Daniel Wellington’s Classic Petite Melrose: The brand’s first ever mesh watchband is made from stainless steel. Classic Petite is available in rose gold and silver and with a black or white dial. Defined by its contemporary look and sophisticated design, this 32mm watch is a must-have for every modern icon. www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

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ACTIUM

Cruising to success US-based distributor Actium is celebrating a number of big travel retail business wins involving some of the world’s best luxury names

ctium, the leading distributor of luxury goods, has added a string of new brands to its portfolio from topflight names including Tea Forté, Thomas Sabo and Kering Eyewear. Tea Forté, the global luxury tea brand, has appointed Actium as the company’s exclusive representative for travel retail worldwide including Latin America and Caribbean domestic markets. Actium officially started this collaboration on February 10, 2017. Enjoyed in over 35 countries, Tea Forté is available at leading travel retail operators, hotels, restaurants, prestige resorts and luxury retailers. The brand offers handcrafted teas and designdriven accessories. Tea Forté believes the agreement with Actium will “bring more added value to our business relationship with our customers and clients around the world and accordingly allow our business to go to the next level”.

Gucci eyewear collection opens opportunities Also new to the Actium portfolio, as of late 2016, is Kering Eyewear. The company

will distribute Kering’s eyewear brands to travel retail, onboard cruise lines, and at Shopping China. In January 2017, Kering finally launched its first Gucci eyewear collection to be produced in-house, following the French conglomerate’s decision to terminate its licensing agreement with Safilo and bring the brand’s eyewear business back into the group. Previously, Kering brands’ eyewear collections were created through licensing agreements with external companies. But now eyewear for Gucci, along with Yves Saint Laurent, Bottega Veneta, Alexander McQueen, Stella McCartney, McQ and Puma, is produced in-house by Kering Eyewear. The excitement of the launch of Gucci has opened opportunities onboard Starboard Cruise Services, Princess Cruises, and Dufry’s Flagship Division. Actium says, the Italian brand will also hit the shelves soon at Shopping China stores.

New engravable jewelry concept As of October 2016, Actium is acting as agents for Thomas Sabo for US travel retail and cruise lines. Thomas Sabo, established in 1984, is an innovative, international supplier of jewelry, watches

Tea Forté has appointed Actium as the company’s exclusive representative for travel retail worldwide including Latin America and Caribbean domestic markets

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Actium has added Kering Eyewear to its portfolio, as of late 2016

and accessories that designs and globally markets lifestyle products for fashion-oriented, trend-conscious men and women. Thomas Sabo develops high-quality products that tell a story and reflect the identity of the wearer. Brand collections encompass materials such as sterling silvery, 18 carat gold, gold plating, selected precious stones and diamonds. The new engravable jewelry concept within the Love Bridge collection is inspired by the romantic practice and concept of ‘love bridges’ around the world. Thomas Sabo’s 2017 initial new launches are found on Princess Cruises and the Hard Rock Hotel and Casino in Las Vegas.

Three independent business units Actium is a US-based company with offices in Miami, Mexico, Panama, Chile and France. It is a leader in the retail and distribution of luxury brands in Latin American and Caribbean domestic and travel retail channels (including airports, airlines, cruises and border stores), as well as North America travel retail. Actium operates three independent business units sharing back-office synergies: distribution of premium wines and spirits from Whyte & Mackay Group (Dalmore, Jura, etc), Laurent Perrier Champagne, VOSS Water, and RumChata; distribution of perfumes, cosmetics and accessories including L’Oréal Luxury Division, Puig, Hermès Parfums, Sisley Cosmetics, Kering Eyewear, and Thomas Sabo; and retail for high-end fashion, accessories, watches and jewelry brands in partnership with Panama-based Saint Honoré. The latter business includes Hermès in Panama and Chile, Gucci in Panama and Chile, Cartier in St Barth and St Marteen and Michael Kors in Chile.

the spirit of

New orleanS It's a new day for founder M.W. Heron's smooth-drinking whiskey, rooted in the local flavor and vibrant soul of one of the most unforgettable places in the world – New Orleans. With new leadership, new packaging and a bold new investment that has Southern Comfort poised for long-term success.

Distributed in the Caribbean by Stansfeld Scott Booth #201 Distributed in Global Duty Free by Edrington Webb Booth #923

IAADFS EXHIBITOR NEWS

Go Travel extends its pillow assortment with the Flexible Memory Foam Pillow Go Travel brings comfort on your next journey with the new Flexible Memory Foam Pillow. The latest addition to the accessory expert’s extensive range of comfortable and supportive travel pillows, the Flexible Memory Foam Pillow pairs its patent-pending, custom-fit design with advanced memory foam padding to provide travelers with the ultimate in comfort and support. Featuring a revolutionary, new design, the Flexible Memory Foam Pillow can be used as either a neck or a lumbar support while on the move. Simply bend-to-shape, the construction can be quickly and easily molded to ensure a snug and supportive, personalized fit that delivers maximum comfort. For even greater performance, the pillow is enhanced with Go Travel’s proven high-density memory foam which moulds to the contours of your neck and shoulders for a luxurious and fully tailored experience. Covered in a plush fabric that surrounds the face and neck in softness, the Flexible Memory Foam Pillow makes it easy to rest and relax while traveling. The pillow features larger side panels that are ideal for resting your head to the side, while the slimline back panel sits unobtrusively and won’t push your head or neck forwards. Integrated pockets on the exterior of the pillow provide a convenient place to keep glasses, a mobile phone or iPod close to hand while relaxing on your journey. Whether travelling by plane, train or car, the Flexible Memory Foam Pillow features anti-slip beads on its rear panel to anchor it more securely and prevent it from slipping down during use.

An integrated elastic strap means that the pillow can be conveniently attached to your suitcase for hands-free portability during your journey. For more information visit www.go-travelproducts.com.

Flexible Memory Foam Pillow can be used as either a neck or a lumbar support while on the move

Zoofy International debuts inflatable fort brand for children Zoofy International LLC, the manufacturer and exclusive worldwide distributor of Fortsy inflatable forts for children, will debut

this new brand to the travel retail industry at the IAADFS show in Orlando (Booth 541). Fortsy has an inflatable tube structure for a frame, so no assembly is required. The product is all one piece, including the cover/carrying case. It is inflated with the included pump and has a 5 feet x 5 feet x 3 feet play area. The machine-washable fabric is flame retardant and meets all CPSIA regulatory standards. “Kids love to create a place of their own and forts give them an environment where imaginations can run wild,” said Zoofy International President Chris Hattenbach. “We’ve taken the hassle out of erecting a fort with a safe, sturdy, inflatable design that eliminates the need for rigid poles or sharp objects.” Zoofy will showcase three Fortsy Designs, including the Royal Castle, Pretty Playhouse and Fortsy Zoofy International’s Fortsy Inflatable Play Structure Emojination.

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Elizabeth Arden drives growth with new travel retail exclusive program Elizabeth Arden is emphasizing its commitment to the travel retail channel as it prepares to introduce a new wave of Travel Retail exclusives at the 2017 IAADFS Duty Free Show of the Americas (Booth 623). The company embarked on the repositioning of its Travel Retail Collection in 2016 with the launch of a whole new look for the collection of sets. Mary-Beth Mazzotta, Vice-President of International Trade Marketing for Elizabeth Arden, comments: “We needed a clear statement and attractive pull strategy to engage travelers in the brand and give them the value offers they are looking for. The travel retail exclusive set category is the perfect platform to service existing customers and attract new ones, so over the past year we have been very busy transitioning our shelves to the new assortments and packaging.” The introduction of a recognizable travel retail exclusive insignia and the new consistent packaging design is aimed to help grow Elizabeth Arden’s brand awareness and affinity amongst global shoppers. “We want travelers to view Elizabeth Arden as

‘THE’ skincare brand to buy, as well as recognize our products in the glimpse of an eye”. This year is an exciting year for Elizabeth Arden, as the legacy brand has upgraded their iconic Ceramide Youth Restoring Face Serum for the first time in decades. The new Advanced Ceramide Capsule Daily Youth Restoring Serum is formulated with advanced technology for a youth-restoring boost helping to moisturize, preserve and strengthen skin’s integrity for a firmer look. Its first-of–its-kind single-dose capsule is a favorite amongst travelers and will be offered to them exclusively in the NEW Advanced Ceramide Capsules Replenish & Restore for Face skincare set. The set will comprise of the same top-selling 3 x 30 capsule design but will be enhanced with the new and improved formula and updated packaging. The easy ‘pack and carry’ Advanced Ceramide Youth Restoring Serum face capsules are also featured and available exclusively to travelers in a 30 Capsule tower as well as, the Advanced Restorative Skincare Solutions three piece skincare set. Elizabeth Arden remains committed to elevating the global customer experience. As we look ahead to the Fall 2017 range, Elizabeth Arden will launch an upgraded Advanced Ceramide Capsules Replenish & Restore for Eyes Trio and Advanced Ceramide Daily Youth Restoring 30 piece Face Serum/ 30 piece Eye Serum duo with the company’s renovation of the ADVANCED Ceramide Capsules Daily Youth Restoring Eye Serum.

Elizabeth Arden has upgraded its iconic Ceramide Youth Restoring Face Serum for the first time in decades

Safe Skies recognized as luggage lock for New Zealand airports New Zealand Aviation Security Service (AVSEC) has signed an agreement with Safe Skies, the worldwide travel lock technology firm. The partnership recognizes Safe Skies as an accepted luggage lock for travelers to, from and within New Zealand. Safe Skies luggage locks allow security personnel to open and relock baggage when physical inspections are needed, providing passengers with peace of mind. The company supplies a comprehensive selection of combination locks, padlocks and luggage straps. “The safety of our visitors and New Zealand residents is unequivocally our top priority, so we’re constantly looking for the most innovative tools and technology that will enhance our security and keep travelers’ minds at ease,” said Mark Wheeler, General Manager, AVSEC. “With Safe Skies luggage locks, AVSEC security personnel have the master tools to unlock and inspect baggage without damaging the passenger’s property. The locks help keep our operations more efficient and our travelers happier.” Protected by multiple patents, Safe Skies Locks display the proprietary torch symbol, allowing baggage screening officers to easily identify these locks, open them and re-lock the luggage if

a physical inspection is required. In addition, all Safe Skies locks come with a lifetime warranty and a hassle-free replacement policy. “Travelers lock their luggage for protection, and expect their bags to arrive in the same condition as they were left off – Safe Skies locks will help ensure that happens,” said David Tropp, Founder of Safe Skies. “Our patented technology makes it easier for security officers to perform physical inspections without having to cut off the locks, something both AVSEC and travelers appreciate. We all want to feel safe when we travel, and that’s part of Safe Skies’ goal.” Safe Skies is recognized by both the United States Transportation Security Administration (TSA) and the airport security services of the UK, Switzerland, Israel, Canada, Australia, New Zealand, and Germany. For more information visit Safe Skies at IAADFS, booth 1203.

Safe Skies luggage locks allow security personnel to open and relock baggage when physical inspections are needed, providing passengers with peace of mind www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

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IAADFS EXHIBITOR NEWS

Mars International Travel Retail gives retailers something to smile about in Orlando At this year’s Duty Free Show of the Americas, Mars International Travel Retail (MITR) will continue to focus on driving category sales growth through its rein-vigorated Power of a Smile category vision. This captures the collective wisdom of more than 100 years of experience in the confectionery category, unlocking pene-tration with lighter buyers through three key pillars: Range - offering the right, yet tight, assortment to deliver across the key traveler need states of ‘For Me, For US and Gifting.’ Display - MITR advocates clear, engaging displays of blockbuster brands and SKUs to drive sales, supported by strong consistent offerings in multiple locations throughout the shopper journey. Activation - Disruptive activations tailored by location that bring the magic of the category to life through the biggest global brands. “Confectionery currently represents 6% of the travel retail business, and with only 9% of passengers buying today the category has huge headroom to grow. Through the Power of a Smile category vision and the world’s largest confection-ery and gum brands, we have a great platform from which to continue to drive

growth of this exciting category,” explains Matt Boulter, Global Category Director MITR. To better address the travelers needs with its leading brand, MITR is delighted to present new confectionery products exclusive to travel retail including: M&M’s Stand Up Pouches available in four flavors: M&M’s Peanut (14oz), M&M’s Choco (14oz), M&M’s Peanut Butter (14oz), and M&M’s Almond(10oz) ideal for sharing and now available in the Americas. Mars International Travel Retail can be found on Booth 523.

Halewood and Haleybrooke to build business in duty free in the US and Canada Whitley Neill London Dry Gin and The Pogues Irish Whiskey will be in the spotlight in their new travel–retail exclusive one litre bottles at booth 207 at the IAADFS Duty Free Show of the Americas. Inspired by Africa and created in England, Whitley Neill is an award-winning pre-mium gin which contains nine botanicals, including aromatic African Cape goose-berries and the citrus fruit of the baobab tree. Whitley Neill (ABV 43%) is handcrafted in a traditional copper pot still, ensuring only the heart of the distillate is collected for the finest taste and the smoothest finish. Whitley Neill has been at the heart of the premium gin category boom as it has spread across European markets. Starring alongside this award-winning classic will be the capricious new arrival in the Irish Whitley Neill is handcrafted in a traditional whiskey category. copper pot still, ensuring only the heart of the distillate is collected for the finest taste and the smoothest finish

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Created by the artisanal West Cork Distillers in association with the rebellious Celtic punk band from which it takes its name, The Pogues Irish Whiskey is a smooth, light blend combining the finest Irish malt and grain whiskies. The Pogues (ABV 40%) is made from barley from the lush fields of southern Ire-land and pure Irish spring water. Triple-distilled for purity and non chill-filtered, it is matured to perfection in American bourbon barrels before bottling for travel retail in striking black one-litre bottles. Already creating a stir in North America, these unlikely bedfellows collected more than a dozen new listings at the FDFA convention last autumn and are set to at-tract plenty of attention at IAADFS in Orlando. Backing these showstoppers will be other luminaries in the Halewood Wines & Spir-its portfolio, including Liverpool Gin, Whitley Neill Quince Gin, Whitley Neill Orange Vodka and the JJ Whitley flavoured gin and vodka collection. Halewood has partnered with Haleybrooke International to build the business in duty free in the USA and Canada with the emphasis on The Pogues and Whitley Neill Gin. For further information, contact Simon Roffe on +44 7940 303497 or simon.roffe@halewood-int.com or visit booth 207 at IAADFS. For North America duty free, contact Patrick Nilson at Haleybrooke on +1 845 981 7240 or p.nilson@haleybrooke.com.

GREETINGS from HAWAI‘I.

EATINGS from HAWAI‘I.

THE PURE TASTE OF ALOHA Discover Hawai‘i ’s original chocolate covered macadamias and fine island confections. Stop by our booth and sample the delectable f lavors we have waiting for you!

Hawaiian Host Chocolates | 15601 S. Avalon Blvd | Gardena, CA 90248 Phone: 310-532-0543 | Fax: 310-532-0667 | www.HawaiianHost.com

COSTA SUNGLASSES

The Reefton style features co-molded temples, Hydrolite nose and temple pads and cam-action hinges that will remain on the face even in rough waters

The classic Cook model for large-sized faces has lightweight, corrosion-free frames, with a springfree hinge that makes these glasses durable

Focused on conservation Costa Sunglasses aims to offer a distinctive, premium brand for outdoor adventurers, while at the same time protecting the oceans its customers love to explore

osta Sunglasses, the manufacturer of polarized sunglasses for all outdoor pursuits, made its travel retail debut at the 2016 IAADFS show in Orlando with a distinct, premium proposition and unique collection of best-selling sunglass styles, all featuring Costa’s patented 580 colorenhancing lenses. The US brand’s proprietary multi-patented technology – which the company calls “HD for the eyes” – effectively manages light by absorbing harmful highenergy blue light (HEV), enhances reds, greens, and blues and filters out harsh yellow light to reduce glare and enhance the overall visual experience. After the launch, Costa was successfully established in premium travel retail accounts across the US, Caribbean islands and Latin America, namely Top Brands International, Duty Free Air & Ship Supply (DFASS), and Hot Look. Since then, the brand has contributed strong growth within the performance eyewear category, offering a distinctive product targeted to water-loving and outdoor consumers who want the clearest sunglasses for life’s adventures.

with a focused team, customized assortment and increased investments to activate at point of sale. Monty Montan̄ez, Director of International Sales & Business Development, joined Costa in October 2016, and will represent the company at the 2017 IAADFS show with a clear intent to expand the business across the Americas region. “The travel retail environment is the perfect fit for Costa, offering exceptionally knowledgeable staff who can share our unique story and technological features and provide a shopping experience that will express the full power of the brand,” says Montan̄ez. “Our vision is to capitalize on the strong awareness Costa has in the US and extend this loyal following to new territories, especially tourist destinations where our water lovers are sure to explore and can experience the full benefit of our Costa 580 technology.” “Our goal in five years is to build a global platform for Costa as the performance sunglass brand for water lovers everywhere. We will do this by delivering the best brand experience, the clearest lenses on the planet and by establishing strong retail partnerships,” he enthuses.

A focused team for the travel retail channel

Corrosion-free frames

As a result of its successful launch last year, Costa made the strategic decision to invest in the global travel retail channel 120

New styles for 2017 that will be exhibited at IAADFS include the Reefton, Tasman Sea, Shipmaster, Cook and Oyster Bay. The Shipmaster features corrosion-free

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

titanium frames that fit best on largesized faces. The frames are flexible and lightweight, and Hydrolite technology on the nose and temple pads keeps them comfortably on your face. The retail price runs from US$219 to $299 (prices vary among lens options). The classic Cook model is also made of premium titanium materials and is lightweight. The spring-free hinge makes these glasses durable, and they fit best on largesized faces (retail price: US$219-$299).

Partnerships with national conservation organizations An intrinsic part of the Costa brand is its desire and efforts to protect the waters they call home. Costa launched the Kick Plastic campaign to rid the oceans of plastic trash. The company has made efforts to reduce its plastic consumption and encourage its vendors to do the same. In addition, Costa uses bio-resin in many of its sunglasses frames, which is made from reclaimed castor oil instead of petroleumbased plastics. This campaign sends a message to consumers that keeping plastic out of the ocean is imperative for longterm health and sustainability. Costa also has partnerships with nationally recognized conservation organizations such as Trout Unlimited, The Billfish Foundation, and the Coastal Conservation Association. They are the founding partner of OCEARCH whose goal is to collect and share scientific research on sharks to better understand this species and the health of the oceans. “Our cause and conservation efforts are our north star and what guides our brand,” says Montan̄ez.

Monty Montan̄ez, Director of International Sales & Business Development, will represent the company at the 2017 IAADFS show with a clear intent to expand the business across the Americas region

GUEST WRITER

Celebrating

Executive Director of Travel Blue, Jonathan Smith, shares his travel retail experience over the last 30 years

30 YEARS in travel retail JONATHAN SMITH, Executive Director, Travel Blue

No internet, no mobile phone, no smartphone, no laptop, no personal computer, only landline phone, fax, telex and written letter. Was the business world a better place with such minimal communication?

ne thing for sure is, the now ‘global village’ was a global city, and the pace of life was slower. With no internet, we had to find information through books, newspapers and networking. The international traveler had to wait and see what was on offer at the airport or inflight, when they arrived. Apart from the local high street, there was no competition to duty free, and the consumer perception was a genuine saving of duty and tax at the airport and inflight. Airlines and airports had no need to co-operate with each other and were competitors.

30 years on Our industry has shown consistent increases in passengers. We have had wars and health scares and now terrorism, but this has not dramatically changed global travel. What still amazes me is that over the past 30 years we have still not managed to significantly increase the percentage of passengers buying anything in travel retail. Still over 50% buy nothing – a missed opportunity! Now, the younger millennial consumer uses social media to communicate everything they are doing in their busy lives, they are very savvy when it comes to shopping online and know what they are looking for before they arrive at an airport.

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The travel retail channel needs to change to cater for them, with more interaction, information and opportunities for the consumer to experience at an airport shop and inflight. More choice at the click of a button! Travel retail represents many opportunities for success, with the number of passengers set to double within the next few years. Catering for the next-generation consumer needs to be the main focus.

Key changes in the industry in 30 years Online shopping: With the ever-increasing threat of online shopping diluting sales in travel retail, the industry – airports and airlines especially – needs to unite. Both airports and airlines sell to the same consumer/passenger. With the vital consumer data information the airline has and co-operation between the two, the airport retailer could motivate (re-directing the consumer away from online) the passenger to buy before and after they fly, showing offers and experiences that await them at the airport. Another key point is that with this co-operation, the airline can offer a much wider range, not restricted to the bar trolley, available for collection on arrival at the airport. By working together, this is a winwin situation for all.

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Increased rent and minimum guarantees by airport authorities Retail operators are having to stump up more in fees to airport authorities for increased space rental and minimum guarantees, despite currently some decline in passenger spend, placing much more demand on suppliers to increase their margins to retailers. The most challenging change is the consolidation of global retailers over the past decade. It’s important to make sure we – the suppliers – are working with all the major operators. Travel Blue is working with nine out of 10 of the top global operators and is the world leader in travel accessories, selling in over 100 countries and in more duty free airport outlets across the globe than any other supplier. Our Tranquillity Travel Pillow boasts a clever combination of luxury memory foam and lightweight design. The ergonomically designed pillow enables total relaxation for the traveler whilst generating impressive demand and sales. For nearly three decades, the company has stayed ahead of the game, innovating and developing its entire range of accessories to provide travelers with the ultimate in comfort, safety and convenience with a brand they can rely on for excellence in both product quality and customer service.

INTERNATIONAL BRAND BUILDERS INC

Building on local knowledge

Baylis & Harding’s Christmas collections will be more varied and stronger than ever

Miami-based marketing firm IBBI has boosted its portfolio with two new affordable luxury brands that are sure to make the region’s travel retail shelves pop watch, is equipped with a quick-release pin for easy strap changing. The watch is also available as stylish watch and strap duo sets and as elegant watch and jewelry duo sets with matching leather bracelets. The new Imola 44 is a 1960s racing chronograph inspired by the classic Lambretta Grand Prix models, combining rugged, sporty style and function.

Baylis & Harding boosts holiday collections

nternational Brand Builders Inc (IBBI) recently expanded its brand portfolio, continuing a mission to bring affordable luxury brands to the travel retail arena. With this, IBBI is also strengthening its sales force, to include local coverage throughout the region. During the IAADFS show in Orlando, the Miami-based marketing specialist will present Baylis & Harding. The leading English bath and body brand was launched last fall into selected doors throughout the Americas and fills a gap in the travel retail market for impulse gifting, with retail prices from US$5 to US$35. IBBI President Katherine Sleipnes, a well-respected industry veteran, says: “We are already taking orders for the holiday season and it is best when clients can see the various collections in person. There is a wide range of sets to select as well as hair care and home fragrance items.” IBBI will also be showcasing the new collection of Lambretta Watches from Capella Industries. From fun and stylish fashion watches to classic and elegant chronographs, all are modern accessories with a retro twist that are fun and easy to sell, according to Sleipnes. IBBI continues its representation of Buckley London Jewellery Ltd, Obaku Denmark watches, and Cerruti 1881 leather goods, which will not be presenting at the 2017 IAADFS show.

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Strengthening the Lambretta Watches brand in the Americas Starting April 2017, Capella Industries and IBBI will team up to strengthen the Lambretta Watches brand in the Americas. Capella CEO Jonas Dahlgren says: “We are very happy about our new cooperation with IBBI, and are positive that this will be a very good and important step for Lambretta Watches’ growth in the region. Local knowledge and presence are key ingredients today for a successful business, and not least for supporting our retailers.” The 2017 Lambretta Watches collection is inspired by the 1950s and 60s and the glorious days of the Italian Lambretta scooters. The new Cielo 34 model is smaller and slimmer. This feminine fashion accessory has leather straps or elegant mesh bracelets and Swarovski stone indexes. Exclusive watch and jewelry duo sets are also available with glamorous, matching crystal bangles included. The updated Cesare 42, a modern interpretation of a classic 1950s men’s The 2017 Lambretta Watches collection is inspired by the 1950s and 60s and the glorious days of the Italian Lambretta scooters

Baylis & Harding has new ranges launching in time for the festive season, and its Christmas collections will be more varied and stronger than ever. In line with current market trends and consumer demand, Baylis & Harding launches its first well-being brand – Escape. The striking yet simple cerise packaging showcases the delicate Japanese Cherry Blossom & Jasmine fragrance – a de-stress gift for mind, body and soul. Also new for 2017 is the Baylis & Harding Floral Collection. The muted floral packaging design with hints of gold and deep red are designed to complement the Black Raspberry & Fig, Verbena & Chamomile and White Rose & Vanilla fragrances. Baylis & Harding’s very own boutique inn, The Fuzzy Duck, located near the Cotswolds in England, has inspired a range of toiletries, including the new, festive Mulberry & Mistletoe Collection. This year also sees the launch of the new Fuzzy Duck Men’s grooming collection. The clean masculine scent of Wild Sage & Cedarwood is available in gift sets, including the on-trend beard grooming kit.

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CONFECTIONERY NEWS

New Haribo Goldbear Tin doubles as a souvenir Haribo has launched this year’s Haribo Goldbear Candy Tin 120g, which doubles as a souvenir for travelers. The range of bear-shaped tins, each containing 10 mini bags (12g) of Goldbears, is available in three bright, shiny colors: red, green and yellow. The tins are available three versions: standard, Halal and US Food and Drug Administration-compliant in a 96g version. The Haribo portfolio has also expanded with the Haribo Travel Bag 800g. The travel bag full of Haribo best-sellers is designed for sharing. It is made of wipe-clean PEVA plastic with zip fastening and contains 100g bags of Goldbears, Happy Cola, Starmix and Tropifrutti. The bags feature a Goldbear motif and shoulder strap, making an accessory for children. Special versions of the Travel Bag are available to suit specific travel retail markets such as Scandinavia. Elisa Fontana, Travel Retail Manager, Haribo, said: “Haribo now has a delightful travel retail portfolio designed to suit a wide range of consumers. Our aim in 2017 is to develop our partnerships with retailers and distributors worldwide and to roll out this portfolio in Europe, Middle East and the Americas, including our Halal range and the regional variations like the Scandinavian selection.” She continued: “Haribo has had a good year in 2016 with healthy growth in both volume and value, although the effects of the market slowdown became evident in the last quarter. We are continuing to strengthen our market share in Europe, especially in Continental Europe and the UK. “Our Americas-specific travel retail range was launched in 2016, starting with the US followed by South America, and the first results are promising. “This year we want to continue extending the range in this region and enlarging our distribution, entering new markets like Brazil and increasing our presence in North America.”

Jelly Belly gets playful with Trolls gift collection Jelly Belly is launching a range of jelly beans inspired by the new Trolls film by DreamWorks. Inspired by the fun personalities of the Trolls, the Trolls Collection has a variety of options to choose from: 1oz bags, 2.8oz Grab & Go bags, 7.5oz Grab Bags and 4.25oz Gift Box packages. They will be available at the end of this month.

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Each compartment of the Jelly Belly Trolls Gift Box is filled with Jelly Belly jelly beans to represent a lovable lead in the movie: a mix of Berry Blue and Cotton Candy for the fashion twins Satin and Chenille; Mixed Berry Smoothie for practical Branch; Jewel Very Cherry for the exuberant Poppy; Orange Sherbet for upbeat DJ Suki; and Blueberry for Biggie and his companion, Mr Dinkles. It is shipped in 12 count cases. The 1oz bags come in playful packaging. Each bag features one of four main characters: Poppy, Branch, DJ Suki or Biggie with Mr Dinkles. Both the 2.8oz Grab & Go bags and 7.5oz Gift Bags are designed for gifting. The Grab & Go bag showcases Poppy, Branch and Biggie with Mr Dinkles. The Gift Bag features lead duo Poppy and Branch, and has a vibrant pink foil-like finish. All bags feature Hugfest Mix, an assortment of Berry Blue, Jewel Very Cherry, Lemon, Lime and Orange Sherbet Jelly Belly bean flavors.

E L B A L RESEA HES POUC

CONFECTIONERY NEWS

Guylian offers more gifting Temptations Belgian chocolatier Guylian has added three new flavors to its popular Guylian’s Temptations line. The portfolio has been given a complete makeover and adds three new flavors. The individually wrapped Sea Horse chocolates have added Caramel, Crunchy Biscuit and Latte Macchiato to their existing flavors of Original Praliné, Milk Truffle and Dark Praliné. Caramel offers artisanal soft caramel filling covered in the finest Belgian milk chocolate. Crunchy Biscuit is a white Belgian chocolate cream with a hint of natural vanilla blended with crunchy feuilletine biscuit. Finally, the Latte Macchiato has notes of an Italian-style espresso balanced by a touch of frothed milk. The packaging has also been revamped to bring consistency to the range. The new assortment will be available in a variety of gifting formats: Pouch Pack 232g (24 chocolates), Turbo 3169 (33 chocolates), Transparent Gift Box 307g (32 chocolates) and Sharing Gift Box 290g (30 chocolates). The Impulse Pack is ideal for self-indulgence with 13 individually wrapped Sea Horse chocolates inside. All formats are filled with a mix of the six indulgent flavors.

Gifting made easy with Ritter Sport Ritter Sport is bringing its four latest travel retail exclusives designed with today’s travelers in mind to this year’s IAADFS show in Orlando. The Ritter Sport Smiley Gift Box (300g) contains 18 individually wrapped Ritter Sport minis in the signature travel retail exclusive varieties Marzipan, Fine Milk Chocolate, Praline, Cornflakes, Hazelnuts and Butter Biscuit. The Ritter Sport mini Heart Gift Box (300g) is an indulgent treat, while the compact, travel-friendly Ritter Sport Travel Box (433g) is filled with three 100g varieties (Alpine Milk Chocolate, Hazelnuts

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and Butter Biscuit), as well as eight mouth-watering minis. The Ritter Sport minimeter (1,200g) is packed with 72 tasty minis. Top-selling items available at the show include the Ritter Sport mini Pouch (500g), which contains 30 mini bars of six assorted flavors and is a perfect impulse purchase for a snack on the go. The Ritter Sport 100g Tower (1000g) offers 10 assorted 100g bars. And finally the Ritter Sport mini Tower selection box (250g) contains 15 mini bars of assorted flavors.

Happy moments deserve

Visit us at Booth 322 www.guylian.com

ÂŠ 2017 Chocolaterie Guylian N.V., Belgium

Guylianâ&#x20AC;&#x2122;s Finest Belgian Chocolates.

HABANO FESTIVAL

Celebrating the

Habano by

WENDY MORLEY

Possibly the biggest event in the Cuban calendar each year, the Habano Festival brings the world to this Caribbean island famous for its hand-rolled cigars

Some of the most famous Cuban artists are honored to perform at the Gala Evening each year, framed by talented dance performers

Equal parts business and pleasure, the trade show floor was packed with cigar aficionados every day

Havana’s famous American classic cars still thrive in the city

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Wednesday’s Quai D’Orsay evening was engaging, with spectacular Cuban musicians and dancers

Guests at the Habanos Festival Welcome Night enjoyed an H. Upmann cigar while listening to Cuban musicians on a tropical evening

One of the more popular events during the week is the International Habanosommelier contest, where professional servers compete for the title

cigar and, toward the end of the year, the opening of the market with the US. While the opening of the US market was certainly a topic of conversation throughout the week and while many of the attendees are in the business of selling cigars at some level or another, the Festival del Habano is all about celebrating and enjoying what Cuba might be most famous for: the Habano, and for most of the people there, enjoyment was the clear focus.

Welcome Night for H. Upmann The first evening’s Welcome Night cocktail event took place at Club Habana, a stately mansion that once housed the city’s yacht club. This evening was devoted to the H. Upmann Sir Winston Gran Reserva 2011. Guests were ushered up the divided staircase to the bars, lounges and balconies above, where they were entertained by wonderful local musical artists, of which Cuba has many. After some champagne, Havana Club rum or other cocktail and a seemingly endless and definitely bottomless buffet, a marble staircase led down to the outdoor patios, where guests enjoyed the fine selection of cigars.

Other events

A master roller demonstrates her skills at the Habanos booth on the trade show floor

or the 19th consecutive year, cigar aficionados from the world over descended on Cuba for the annual Festival del Habano at the end of February, a week filled with business, seminars, tours, learning and parties. As those taking part in the trade show were preparing their booths for opening day Monday morning, the press conference began. Dozens of film cameras recorded the proceedings, and hundreds of international press took their seats, greeted with a Montecristo cigar, which many lit up and enjoyed throughout the conference.

A successful year While luxury goods as a whole had a tough year in 2016 with flat growth, that was not the case for Habanos, whose sales grew 5%, to US$445 million globally. Habanos’ Vice President for Development Javier Terres stated that the reason for this growth rate was the “recovery” of the company’s traditional market base – mainly France and Spain – while increasing business in developing markets such as Eastern Europe, Asia-Pacific, the Middle East and Latin America. He affirms that the company will be putting efforts into increasing business in these regions in the coming years. Terres responded to Americas Duty Free that the duty free/ travel retail channel is incredibly important to the company. This channel is Habanos’ second largest market after Europe, with 24% of its sales overall. According to some of the people in the industry who attended the H. Upmann Welcome Night, in the Gulf region up to 70% of Habanos sales come through this channel – an incredible figure. The company had a couple more boons in 2016 as well, including the highly celebrated 50th anniversary of the Cohiba

Tuesday early morning the buses headed off out of the city to the plantations of Vuelta Abajo, Pinar del Rio, where guests learned not only about growing different tobacco leaves but also about drying and other treatment methods. Thursday morning’s visit was to the factories of La Corona and H. Upmann. They say from plant to cigar, a hundred pair of hands touch every single Habano, and that begins to become apparent throughout these visits. Creating a Habano is both a science and a work of art. Throughout the week each year Habanos offers many seminars and conferences. This year’s offerings included talks on Habanos and the Arts, a Masterclass on rolling techniques and Pairings of cigars with rums and with brandy, among other popular events. One of the highlights of each festival is the International Habanosommelier contest, where outstanding servers from around the globe prove their knowledge of the Habano by offering cigar and cocktail pairings to suit individual tastes and preferences. Wednesday’s Quai D’Orsay evening at El Laguito was a lovely sit-down multi-course dinner highlighted by continuous offerings of this cigar brand just revamped for the global market, and the French market in particular. The quality entertainment was varied and interesting, with a number of well-known Cuban musicians and dancers. While perhaps not as flashy as the gala evening to come, it’s safe to say this evening was eminently enjoyable.

The Gala Evening The highlight of the week was Friday’s Gala Evening. The impressive event took place at the PABEXPO, where an orchestra backed up some of the country’s most famous performers, including Haila, David Torrens and Vania, with a special, dazzling performance by the incredible half-rock star, halfclassical Spanish-Lebonese violinist Ara Malikian. The evening celebrated the Montecristo and its new Linea 1935, and ended with the highlight of the Festival every year, the auctioning of the humidors. These incredible pieces of art are designed and handcrafted by Cuban artisans and filled with cigars. This year’s auction raised approximately US$1.27 million to benefit the Cuban health care system.

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DIAGEO

The experience of shopping by

In coming months Diageo will be announcing more GTR exclusives such as the very well-received Baileys XC, geared toward the traveler seeking a little indulgence

n July, 2016, Dayalan Nayager was named Managing Director Global Travel for Diageo during a time of change as the department moved from Singapore to London. “It has been a busy time!” says Nayager. “I’ve been inspired by the commitment and determination of our Global Travel team and I am confident there are great things

Since being named Managing Director Global Travel, Dayalan Nayager has been very busy working with an inspirational, committed and determined GT team

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WENDY MORLEY

As the leader in the spirits category, Diageo’s Global Travel team has a solid handle on what works in the channel

ahead.” He confirms that travel retail is a vitally important channel for Diageo. “It is the channel in which we showcase our iconic brands, set the benchmark for retail excellence and create engaging shopping experiences for travelers through strategic partnerships with our customers.” Nayager sees the channel as being a huge opportunity for growth in coming years, but also as a challenge. “While shoppers in travel retail have more dwell time than in traditional retail, the competitive environment between other retailers and, equally, personal entertainment devices and distractions will have an impact on how brands engage with shoppers,” he says. According to the Diageo Global Shopper Study (2015), of 100 people who go into an airport, currently only 12 will buy alcohol, a number Nayager would like to see increase. “We are the market leaders in category management, using consumer insights and innovation to help shoppers find the products they want with minimal effort. This will continue to be a motivation. We’ve therefore been focusing on improving the shopper experience.”

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Luxury, TR exclusives and whisky Diageo has found what works in the channel, and will continue with this strategy: premiumization, innovation and developing the luxury opportunity. “Real growth opportunities exist across our Super Deluxe and above brands. We’ll continue to invest in our Reserve portfolio, which has grown by 9% over the first half of the year, in order to build the best luxury drinks business in the industry,” says Nayager. The Scotch category also continues to perform well for Diageo, up +6% in the first half of the year. “We are continuing to invest heavily in both blended and malts. In particular Johnnie Walker, currently ranked the best-selling Scotch whisky in the world, [1] remains a key priority for us,” says Nayager. “I am confident in the potential of Johnnie Walker to lead the growth of Diageo’s premium spirits in the travel retail channel. Malts are also a priority. “In the past 12 months we have witnessed exceptional growth in this category, driven by innovations including Talisker and Singleton. [1] International Wine and Spirit Research 2016 (IWSR)

We see this as a huge opportunity for the future and will continue to offer travelers a unique range of Malt whiskies with distinctive flavors that span across various price segments. Building the whisky category with our retail partners is critical to our long-term success and we are fully committed to doing this.” While Nayager won’t divulge future location plans, he says the creation of Johnnie Walker Houses remains a key priority in terms of extending a luxury footprint within the channel. Last year Diageo opened its first Johnnie Walker House in Europe at Amsterdam Airport Schiphol, the first permanent Johnnie Walker House in the Middle East, in Bahrain Duty Free, and three new boutiques in Asia, bringing the total travel retail footprint to 15 activations. “Through Johnnie Walker Houses our ambition is to transform the luxury spirits category within the global travel environment across leading airports around the

world, while generating incremental sales and further establishing Johnnie Walker as a luxury icon. Through our Houses, we strive to provide a platform where like-minded individuals can gather for meaningful conversations around Scotch whisky, and ultimately become the world’s embassy for luxury Scotch whisky.” Diageo believes the key principle to winning in travel retail is to offer the consumer something they cannot buy at home. “We have created a range of differentiated liquids exclusive to travel retail, across all spirits categories,” he says. “Johnnie Walker Island Green, Baileys XC, The Singleton of Glendullan Range and Talisker Neist Point are just a few recent examples of differentiated channel exclusives that have proven popular with airport shoppers. We’re really pleased with the consumer reaction to Baileys XC, which is designed to appeal to those shoppers looking for something unique and indulgent. With the rise in popularity

of luxury liqueurs, we see the indulgence trend growing, and Baileys with it.” Over the coming months, Diageo will share more information on exciting new travel retail exclusives from some of its leading brands.

Travel Retail Americas In partnership with Attenza Duty Free, the company recently opened the largest Diageo-exclusive store in the International Departures concourse of Motta Internacional. “As the largest personalized duty free store in the region for Diageo and the first of its kind for Motta, the shopping area is designed to inspire and stimulate travellers with eye-catching personalized branded wall bays featuring regional best-sellers Johnnie Walker, Buchanan’s, Old Parr and Zacapa,” says Nayager. “Our overarching aim for travel retail in the Americas and elsewhere is to create brilliant shopping experiences by creating stand-out retail and ease of shopping for consumers in order to make their purchasing decision a simple one. The future for all our luxury brands lies in bigger, bolder activations that are disruptive and capture the imagination of our shoppers.” He adds that the Americas is a vital region for Diageo’s travel retail business as it benefits from both developed markets in North America as well as strong emerging markets in central and South America. “This allows us to drive growth across our global brands like Johnnie Walker as well as more local brands like Crown Royal and Buchanan’s.”

Global shakeup Diageo recently opened the largest Diageo-exclusive store in the International Departures concourse of Motta Internacional

Through Johnnie Walker Houses Diageo is providing a platform where like-minded individuals can gather for meaningful conversations around Scotch whisky

Recent years have brought some volatility to global markets for both geopolitical and demographic regions. Nayager says that’s something the company simply has to adapt to. “In Asia for example, while China continues to be a key driver of PAX growth, there is a significant shift in where passengers are flying from: in 2011, 66% of Chinese PAX departed from Shanghai, Beijing or Guangzhou; by 2015 this had dropped to 26% with the balance flying from less affluent ‘second tier’ cities*, which clearly has an impact on purchase intent. We are working with our customers in this region to make sure we have the right programs and offerings in place to address this challenge.” *Air4casts 2015 www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

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EDRINGTON

A shared

vision

n January 2017, Edrington Global Travel Retail (GTR) appointed Igor Boyadjian as Managing Director. Boyadjian was no stranger to Edrington, as he had already worked with the company for a very fruitful decade. “My partnership with Edrington dates back 10 years when I first started to distribute Edrington brands in the Middle East travel retail channel,” he explains. “I then established a joint venture with Edrington in 2013 which paved the way for a full takeover and control from Edrington last year. So it’s been a great and successful entrepreneurial journey and over the years I developed a strong connection with Edrington people, brands and values. That’s the reason I decided to take on this new challenge.” Since Edrington’s GTR department came about in 2014, its experienced and entrepreneurial team has delivered good growth for its brands in a difficult environment, he says. “It’s now time for me to build on this legacy, further strengthen our organization, and continue to build in-house expertise and capabilities. So I’m not here to change course, but rather to reinforce and accelerate.”

Optimism in a challenging trading environment The trading environment remains challenging, notes Boyadjian, but The Macallan single malt Scotch whisky remains high in demand, and the firm can easily sell all the liquid it has available. “We have also been able to roll out exciting new initiatives, like

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As Igor Boyadjian begins his new role at the helm of Edrington Global Travel Retail, the seasoned executive explains how he will navigate the opportunities

the opening of our first Macallan Boutique in Taipei Airport with our partners Ever Rich in Taiwan, and the launch of a limited edition of Rare Cask Black. The Boutique has posted outstanding initial sales, especially in our prestige range, with its stock of exclusive Macallan Fine & Rare bottles selling out within the first month, and the Rare Cask Black limited edition has already created buzz and excitement in the first points of sale where it has been made available.” The global environment has changed, but the company’s ambition in this channel remains very strong for the long run, with commitments from the business to invest behind its core brands, emphasizes Boyadjian. “I’ve recently read a lot of articles predicting major challenges ahead for travel retail, but the fundamentals of the channel remain strong for the future, and we believe we can continue to build the equity of our brands in this strategic channel.” The Macallan is showing strong momentum throughout the world. Asia remains the brand’s main market and is a high priority, fueled by initiatives such as the Taiwan Boutique mentioned above, the shop-in-shop at the new DFS Terminal 2 store in Changi Airport in Singapore, and some exclusive launches. The Middle East has shown great development, he adds, thanks to infrastructure development. The Americas region is still growing fast, although from a smaller base, and the company is capturing opportunities such as the developing cruise line business. In Europe, the firm is building on its strong position

Edrington is always on point with activations such as this one for The Macallan

supported our cruise line partners with on-premise activations and the development of Brugal cocktails for bar menus.” Edrington is always active when it comes to new launches, innovations, and activation concepts, Boyadjian points out. “The latest to roll out has been the sixth edition of The Macallan’s Masters of Photography series, an exclusive collaboration with renowned photographer Steven Klein, a true master of visual ambiguity. Working with such world-leading collaborators takes our vision, values and alchemy to a higher level. This collaboration has also extended to a limited edition of our very successful Rare Cask Black, which features the art of Steven Klein and comes with a Wintersmiths Ice Ball Maker. This ice ball maker produces crystal clear ice spheres, adding to the unique alchemic experience. “It has been very exciting to see this concept and product come alive in airport activations, such as the latest launch in Taiwan at the end of 2016, and we will continue to see it in other airports across the world soon.”

Building the right partnerships

and market share for The Famous Grouse blended Scotch whisky and increasing focus behind its single malts and its brands with strong regional presence, such as Brugal rum and Cutty Sark blended whisky. “The Macallan is indeed our number one priority and has enjoyed a good momentum despite a very competitive and deteriorating environment. We have a powerful brand equity behind which we’ll continue to invest and a solid ambition to grow our value share in the channel. So the focus will continue, and we have some very exciting projects in the pipeline,” he enthuses. He goes on to describe Highland Park single malt Scotch whisky as “a gem, which has a lot of potential to grow”. It answers consumers’ needs for brands offering strong quality credentials and a solid heritage they can relate to, he says.

Growing Brugal in the cruise channel Brugal is also getting some attention in the travel retail channel. The rum brand has always enjoyed a very strong position in both the Caribbean, particularly in its home market the Dominican Republic, and in regional markets like Spain, says Boyadjian. Over the last few years the brand has enjoyed positive developments around the world, in markets like the US for example. “Our current opportunities lie in the support we can provide the domestic market development of the brand, as well as capturing opportunities where the travelers from these markets are. A great example of this is the cruise line channel, where we have strongly

So what does Boyadjian have planned for this year, now he has been appointed to Managing Director of Global Travel Retail? Speaking to Americas Duty Free in early 2017, he says: “It might be a bit premature to answer as I’m only a few weeks in the role! However, at this stage I can say without too much hesitation that I’m likely to follow the existing trajectory, with a strong ambition to build the equity of our brands in the channel, especially The Macallan, while continuing to develop the skills and expertise of our organization. I’m a firm believer in consistency, so I do not have any intention to change course for the sake of it. The destination is clear, only the route to get there might change to better adapt to the environment. “It is also worth emphasizing the importance of building the right partnerships, with key retailers, airports and customers. I believe in win-win partnerships built on a shared vision and an aligned strategy. Working closely together with our partners is the only way to win in the long term, in what remains a challenging environment.” He concludes: “As a final note, I would simply say that I’m delighted to be joining a great team of people. It’s an exciting time for Edrington, with great challenges ahead, so I’m grateful for the trust and confidence placed in me and really pleased to be part of the family.”

This limited edition of Rare Cask Black features the art of Steven Klein and comes with a Wintersmiths Ice Ball Maker.

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BEAM SUNTORY GTR

A priority

platform

With its diverse portfolio, Beam Suntory Global Travel Retail is perfectly positioned to take advantage of the boom in bourbon and Japanese whisky sales

he past couple of years have been a big transition after the acquisition of Beam by Japanese liquor group Suntory. But now that the dust has settled, Michael Cockram, Marketing Director Global Travel Retail, says that building the company’s capabilities in the important global travel retail channel is a key focus for Beam Suntory, and the combined strengths of its legacy businesses are driving its success in global travel retail. “As a company, we have an expanded, world-class premium portfolio, with sophisticated routes to market across the globe Experiential activity is key for Beam Suntory’s Courvoisier Artisan Edition’s promotion “A Toast of Paris” Beam Suntory is bringing back age statements with this GTR exclusive range

and a deep commitment to quality, heritage, and innovation. There is no doubt that together, we can make a compelling proposition to legal-age consumers and our retail partners in travel hubs around the world,” he says. Last year was not a great year in global travel retail for some companies in several regions, but 2016 saw a number of successful launches for Beam Suntory GTR. Cockram cites The Chita, Maker’s Mark Cask Strength, Jim Beam Double Oak and the unveiling of Jim Beam’s first-ever global packaging redesign as examples. Global experiential activity at key airports across the world spotlighted the Bourbon Legends platform and Courvoisier Artisan Edition ‘A Toast of Paris’, where the brand recreated the base of the Eiffel Tower at Paris Charles de Gaulle Airport.

Bourbon gains increased traction Beam Suntory is in a great position to take advantage of the explosion in popularity of bourbon and Japanese whisky across the world, as the company has a strong portfolio in both of these liquor categories. Cockram explains that when the first distillery in Japan, Suntory, was founded 92 years ago, very few people in the country drank whisky. The founder, Shinjiro Torii, understood the importance of making a smooth, approachable spirit that was distinctly different from the strong smoky whiskies of Scotland. Beam Suntory’s Japanese whiskies today are characterized by this same exceptional smoothness, depth of flavour and long, slightly sweet aftertaste. The release of The Chita in global travel retail last year, the first time outside of its domestic Japan, reflects

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Beam Suntory has an exceptional Japanese whisky portfolio, allowing the company to take advantage of this growing market

ily peated single malt Laphroaig: Four Oak, available now, and The 1815 Legacy Edition, available from April 2017. Both new expressions aim to demonstrate Beam Suntory’s dedication to the distillery’s long tradition of whisky making. Making a return to age statements for the first time in five years, Bowmore’s new range is inspired by the distillery’s legendary No.1 Vaults, the world’s oldest Scotch whisky maturation warehouse. Available exclusively in global travel retail, the range seeks to demonstrate Beam Suntory’s dedication to providing a unique offering of outstanding quality, innovation and tradition in the channel. Matured in the finest oak casks, these age statement whiskies have been hand-selected, allowing the brand to bring Bowmore’s legendary No. 1 Vaults to life for travelers around the world. Cognac remains an important focus for Beam Suntory GTR and in 2016 the company launched a new exclusive Courvoisier Artisan Edition range for travel retail, which focused on its craft credentials and luxury cues, including the traditional maturation processes that come together to create one of the world’s finest Cognacs.

Red-hot Japanese category

the artistry and diversity of The House of Suntory Whisky, he says. “With our rich history of innovation and award-winning Japanese releases, global travel retail will continue to be a priority platform to showcase innovative new products from the Beam Suntory portfolio to the rest of the world.” He continues: “Beam Suntory GTR takes a category leading approach, focusing on educating consumers and expanding our bourbon footprint across the world through the Bourbon Legends platform. American consumers are naturally more educated on bourbon, therefore there is generally a greater desire for discovery and exploration within the category in the US market; however, whiskey enthusiasts can be found everywhere. With the rise of educational programs and the expansion of Maker´s Mark and Knob Creek distribution, bourbon is gaining increased traction across a variety of different markets.”

Exclusive new Scotch releases for travel retail The travel retail team has also been highlighting its Scotch whiskies with the help of Beam Suntory Global Brand Ambassador Gordon Dundas. Cockram explains the strategy: “Malt Scotch whisky is a key component of global travel retail and we continue to invest in the category including a bold return to age statements and two new skus from our single malt brands, immersive education on peated whiskies and ground-breaking global activations from Auchentoshan single malt whisky’s recently launched Distilled Different platform.” Following the discontinuation of Laphroaig An Cuan Mor at the end of 2016, Beam Suntory GTR has expanded its portfolio of Islay whiskies with two exclusive new releases from the heav-

The focus in the Americas will continue to centre around Beam Suntory GTR’s whisk(e)y portfolio, specifically bourbon, Japanese and Scotch. “As the home of bourbon, we are afforded the opportunity to develop the category even further, as knowledge of American whiskey and bourbon, in particular, is still in its infancy in many places,” notes Cockram. “It’s really exciting to be able to grow the category as a whole with brands like Maker’s Mark and Jim Beam Black, two of the finest in the world. Add in the greater Jim Beam portfolio and Knob Creek and you have a robust family of products that consumers love. “We additionally want to take advantage of the red-hot Japanese category and the momentum we have with our launch of Hibiki last year. We will be adding The Chita this year, a beautiful expression that’s perfect for the traveler looking to access Japanese at a great price point.” The US and Caribbean markets continue to be consistent performers for Beam Suntory GTR, and the firm is actively investing in growing its market share in both. “Mexico is continuing to make strides in growing spirits categories and Latin America will be a focus for growth in 2017 as we look to expand our portfolio with key retailers there. Lastly, Canada is a market that we are looking to grow in as well, as it is home to some of the region’s premier international airports,” he reveals. Meanwhile, Cockram describes the Asia region as “incredibly exciting and dynamic” with so many countries’ travel habits increasing and airports being built. “Of course, China is just a massive market but then we have Malaysia, Indonesia, Thailand, Cambodia, and of course Australia loves its bourbon! And now India seems to be finally entering duty free.” He adds that the emerging middle class in India and China is expected to fuel year-on-year growth as they continue their intra-Asian travel. “These emerging market travelers are moving away from traditional products and instead seeking out new and unusual categories that they can share within their social networks. As emerging market travelers seek out new and interesting products, we anticipate continued growth within the bourbon category across the Asia Pacific region,” he concludes.

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BROWN-FORMAN

Across the

POND

Bourbon and other whiskeys remain the fastestgrowing segment of spirits globally; Brown-Forman’s Jack Daniel’s and Woodford Reserve lead the way

After well over a century distilling quality liquid in the US, Brown-Forman brings its high standards to new distilleries in Scotland and Ireland by

MAX MISHLER

he demand for whiskey appears insatiable. It has been a strong sales driver in the United States and with an expanding market abroad the future looks bright for brown spirits. According to a November 2016 Moody’s Investor Service report, bourbon and whiskey will remain the fastest growing segment of the spirits industry globally in volume and in sales. The growth “will be driven by innovation, globalization and an emerging middle class that will benefit companies such as Brown-Forman.” This is certainly welcome news for Brown-Forman, whose portfolio includes the classic Jack Daniels Tennessee Whiskey, Woodford Reserve Kentucky Bourbon as well as its new Slane Irish Whiskey and Glendronach, Benriach and Glenglassaugh single malt Scotch whiskies. Global travel retail plays a key role in the company’s growth strategy. Last year, 2016, marked the 20th anniversary of the decision by BrownForman senior management to formally enter the global travel retail business. According to Eric Helms, marketing director at Brown-Forman for Global Travel Retail, the company’s commitment to travel retail “has never been stronger” and the GTR contribution to BrownForman’s bottom line “has never been greater.” After a strong performance in 2016, Brown-Forman is naturally optimistic about duty free sales in 2017. “The thirst for brown spirits, particularly North American whiskeys, remains remarkably high and that plays into the strength of our portfolio,” says Helms. Indeed, Brown-Forman commands 68 percent of the US whiskey volume share in duty free and 75 percent of US whiskey value share.

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If duty free were a country, it would be one of the top six contributors to the company’s overall sales. A strong US dollar and fluctuating currencies in Brazil and other parts of Latin America continue to present challenges, however, and predictable travel patterns continue to prove elusive. To meet these challenges, BrownForman has dedicated more people and resources around the world to travel retail than ever before, and employ a dual strategy catered to North American and Latin American markets respectively. Monte Wilson, Director of Americas and Global Key Accounts for BrownForman Travel Retail, explains that the company has introduced innovative products such as Jack Daniel’s Fire, Woodford Reserve Master’s Collection and Sinatra Select to more developed markets in Canada and the United States while staying “focused on building core Jack Daniel’s Tennessee Whiskey and Woodford Distiller Select brands” in Latin America. Wilson also sees US duty free retail as a key route for introducing American whiskey to international travelers eager

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

to bring a piece of America home with them. Through coordinated efforts with partners in travel retail, Brown-Forman has introduced innovative experiences and activations for duty free customers at key locations in the Americas. This past year, the company celebrated the 150th anniversary of the Jack Daniel’s distillery through special Jack Daniel’s packaging, in-store Jack Daniel’s barrel hunts and social media engagement at airports, airlines, borders and cruise ships from Argentina to Canada. In addition to its staple American whiskeys, Brown-Forman has recently acquired Slane Irish whiskey and Glendronach, Benriach and Glenglassaugh single malt Scotch whiskies. The market for Irish whiskey and single malt scotch has expanded dramatically since 2010 in conjunction with the emergence of new micro-distilleries that are generating a lot of excitement among consumers. These acquisitions ensure Brown-Forman’s place as an industry leader in the global whiskey sector. “Irish whiskey has been one of the fastest growing whiskies in

Jack Daniel’s 150th anniversary last year provided ample opportunity to promote the brand around the globe

the spirits industry. We think a premium and authentic whiskey like Slane will be a fierce competitor in the category,” says Eric Helms. The fact that Brown-Forman is the only major spirits company that owns and operates its own cooperages represents a distinct advantage for Slane Irish Whiskey because they can bring some unique expressions to Slane drawing on their on-going barrel experimentations – similar to what they have done with Woodford Reserve and Jack Daniel’s. The Slane distillery is nearing completion and is expected to open during the summer of 2017. Helms sees the Slane facility as a “state-of-the-art whiskey distillery and a soon-to-be very popular tourist destination.” Similar distilleries in Ireland draw hundreds of thousands of visitors annually so there is every reason to expect this interactive aspect of Slane Whiskey to be a success. Brown-Forman’s expansion into Irish and Scotch whisky, however, should not be conflated with an abandonment of its American heritage. Jack Daniel’s, Woodford Reserve, and Old Forrester remain the pillars of the company’s duty free strategy. It has introduced a new Woodford Reserve Master’s Collection and the Woodford Reserve Double-Oaked Bourbon, cementing Woodford Reserve as a cornerstone of Brown-Forman’s portfolio. Eric Helms explains that “Woodford

Reserve’s role in our GTR strategy cannot be overstated.” It is currently the number one super premium bourbon globally and in travel retail, and “one of the bedrocks” that has helped Brown-Forman maintain its leadership role since the introduction of Old Forrester in 1870. What distinguishes Woodford Reserve from Old Forrester? Chris Morris, the company’s master distiller, sums it up this way: “Old Forrester is a wonderful traditional bourbon in that it is robust, full-bodied and tastes terrific in a classic cocktail like a Manhattan or an Old Fashioned. Woodford Reserve, on the other hand, is a more contemporary bourbon, smoother in taste and ideal neat or on the rocks.” The Woodford Reserve Master’s Collection, first introduced by Morris in 2006, involves the annual release of oneof-a-kind bourbon with a very limited production run. Each release is highly sought after by collectors and whiskey aficionados because “when the last bottle is sold – that’s it.” The most recent, 11th release is the Brandy Cask Finish, which hit shelves domestically and in travel retail in November, 2016. Woodford Reserve Double-Oaked Bourbon, by contrast, was the first permanent line extension of Woodford Reserve. It is twice barreled and matured in White Oak handcrafted barrels created at the Brown-Forman Cooperage. Woodford Reserve Double-

Oaked Bourbon is distributed throughout America’s duty free, where it has proven to be remarkably popular, and is being introduced into other duty free markets. Both products capture the heritage and craftsmanship of premium Bourbon while offering customers exceptional value. As innovative technologies, such as social media, connect customers to companies, consumer interaction is fast becoming an important part of overall brand strategy. This is no less true for the duty free market than for the domestic market. As Eric Helms notes, “today’s international traveler is more knowledgeable” and demands sophisticated, authentic interactions over gimmicks. “They want real products, made by real people in real places,” says Helms. “Woodford Reserve meets all of those standards.” It is in that spirit that Woodford Reserve offers customers who visit the distillery in Versailles, Kentucky, the “homeplace experience.” The Woodford Reserve distillery, which recently celebrated its 20th anniversary, is nestled in the foothills and among the famous thoroughbred horse farms of Central Kentucky. A visit to the distillery allows customers to learn firsthand about the history of bourbon and how their favorite brand of bourbon is produced. This unique heritage promises to keep Brown-Forman among the industry’s leaders.

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BUSHMILLS

Irish Whiskey has a bright

of two rare and unique caskmatured Bushmills whiskeys, Sherry Cask Reserve and Port Cask Reserve. Marking the 125th anniversary of the maiden voyage of the SS Bushmills, Sherry Cask Reserve has been exclusively matured in first-fill Oloroso sherry butts to deliver additional spiced honey, dark chocolate and rich dried fruit flavors. The bottle is presented in a distinctive maritime-designed Bushmills sees huge packaging featuring a replica potential in its exclusive illustration of the famous Bushmills steamship. The second and Steamship Collection latest edition in the Bushmills by MAX MISHLER Steamship Collection – Port Cask Reserve – has been fully matured in ruby port pipes which impart luscious and complex flavours of the port wine into this unique whiskey. The result is the Bushmills trademark rich, complex and smooth tripledistilled single malt whiskey with subtle elegant notes of damson, black coffee and almonds. Bushmills Master Blender Hellen Mulholland says “The Steamship Collection has a truly unique story to tell and we are thrilled to offer duty free shoppers a glimpse into the world of flavor exploration and experimentation form Ireland’s oldest distillery.” The Steamship Collection is only available for now in New York, Chicago, and Newark (in addition nearly doubled between 2009 and 2013, to various European destinations), but according to IWSR data, giving the comJosé Cuervo plans to expand distribution pany an amazing point of entry into the throughout the Americas. Last year, the lucrative Irish whiskey market. Bushmills company partnered with International is made in Northern Ireland and is still Shoppes at Terminal 1 of JFK to deliver triple distilled, resulting in a smoother daily live tastings of the Steamship finish. Global travel retail, particularly in Collection, complimented by customthe United States and Canada, represents ized signage outside the main shopping a significant channel for Bushmills over thoroughfare. They also partnered with the next couple of years, so that subDufry at O’Hare International Airport region can expect exclusive duty free and Newark Liberty International Airreleases and special activations. ports to deliver daily lives tastings in an effort to attract millennial consumers. Steamship Collection Both Bushmills Black Bush and Bushmills In 2016, Bushmills launched the SteamSteamship Collection will be featured ship Collection – a new range of limited prominently at IAADFS as Bushmills is edition Irish whiskeys inspired by the “keen to strengthen their presence across extraordinary voyages of the SS Bushmills key North American Airports.” steamship. Available exclusively in select duty free outlets, the collection consists

future

Helen Mulholland Master Blender of Bushmills Irish Whiskey

n global spirits the story for the past year has really been whiskies – Scotch, American, Japanese and Irish, and it’s safe to say Irish whiskey is currently the big news. The Irish whiskey category grew 12.9% in 2015 alone and has posted double-digit growth for 13 straight years. Since 1990, it has remained the fastest growing spirit in the world in terms of percentage gains. The endurance of heritage Irish brands such as Bushmills and the growth of micro-distilleries has brought a renewed excitement to the world of Irish whiskey. In 2015, Jose Cuervo acquired Bushmills from British liquor giant Diageo PLC in what chief executive Juan Domingo Beckmann called “the most important purchase made by Cuervo in its entire history.” Indeed, sales of Bushmills

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PATRÓN

Finger

on the pulse Patrón’s provenance, heritage and ideals all bring the company directly in line with current trends by MAX MISHLER

equila sales continue on an upward trend, with the global tequila market forecast to grow at a CAGR of 3.55% in revenue and 3.01% in volume over the period 2014-2019. Meanwhile, a strong trend for the millennial consumer is exclusive, high-quality craft tequila, and the millennial is certainly the customer most companies are seeking to attract. As one of the original craft-tequila producers, whose share of the global tequila market has grown steadily over the past decade, the future is bright for Patrón. Global Travel Retail plays a central role in Patrón’s growth strategy. “If GTR were a country,” says John Kilmartin, Vice President, Global Travel Retail Director at Patrón Spirits International, “it would be our No. 2 country outside of the USA.” While the company had strong sales in 2015, because of political and economic challenges Kilmartin was only cautiously optimistic about 2016. Despite these challenges, however, Patrón spirits posted +13.5% growth in 2016. Given these results and the recovering markets, Kilmartin is hopeful that he can deliver similar results this year. To achieve continued success, he aims to expand Patrón’s presence into Brazil and Latin America, where there is significant growth potential.

Spirits innovation Patrón is no stranger to innovation in terms of the range of spirits its brings to market. From its Patrón XO Café Liqueurs to Bordeaux barrel-aged Gran Patrón Burdeos, the company has been 142

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developing new and innovative products for many years. In 2016, it released a new Patrón Cask Collection Sherry Añejo, which is a duty free exclusive for now, and will continue to focus on the Cask Collection for 2017. The Sherry Añejo, like all of Patrón’s ultra-premium tequilas, is handcrafted with the highest-quality 100% Weber Blue Agave and produced using artisanal methods. “It is the aging that truly sets it apart,” says Kilmartin. Patrón is currently experimenting with other types of barrels, with plans to introduce new varieties of Cask Collection spirits in the future. Patrón is also working with its GTR partners to introduce exclusive 1L duty-free bottles of Patrón Silver, Reposado and Añejo, and Patrón liqueurs into their stores.

In touch with the customer In 2017, Patrón released its third Chinese New Year tin, and will soon release a second limited-edition tin celebrating Mexico’s vibrant artistic and cultural heritage. The company has also introduced additional tins celebrating the cultural Patrón is working with its GTR partners to introduce exclusive 1L bottles of its core line and its liqueurs

Patrón plans to continue producing special tins including Chinese New Year, Mexican Heritage and more.

heritage of Australia, Israel and Brazil. This exclusive packaging complements efforts to increase Patrón’s visibility in key retail outlets, including recent activations in Cozumel and in London Supply’s Iguazu store, where customers interested in learning about the distillation of Patrón tequila can take part in the Virtual Hacienda Tour. The virtual reality tour brings viewers from across the world to the distillery in the Highlands of Jalisco, Mexico, to see the production process and learn about Patrón’s craftsmanship and commitment to environmental sustainability. This investment in preserving the heritage of Mexican tequila has led them to introduce a new web feature – KnowYourNOM.com – which will allow viewers to learn more about which companies are behind the growing number of tequila brands. As Kilmartin notes, there are only about 150 licensed tequila distilleries in Mexico but an ever-increasing number of brands. While some distilleries produce several brands, Patrón “only produces Patrón.”

KAVALAN

Ian Chang, Director of Global Export, is in charge of Kavalan’s global travel retail business, which is a growing market for the brand

Making a

splash

Ambitious Taiwanese whisky distillery Kavalan is breaking out onto the world stage with its high quality single malt whisky portfolio – including a travel retail exclusive product

aiwan is well known as a strong whisky market, so it’s perhaps not surprising that a superior whisky distillery has been created in the country. But Kavalan has really taken the world by storm, staging big promotions in the US. In 2015, its Solist Vinho Barrique Whisky was named “the best single malt whiskey on earth”, according to the World Whiskies Awards (WWA). That is quite an accomplishment, especially given that the distillery was only completed in December 2005, and produced its first spirit in March 2006. So what is the secret to the success of the distillery, which is located at Yuanshan Township, Yi-Lan County. Chang explains: “Without the climate and natural resources of Yi-Lan, we would not be able to produce these high quality Kavalan whisky expressions. The combination of our craftsmanship and great cask selection contribute to the unique flavors of Kavalan whisky. Moreover, we could not make it without the help and the endeavors of the whole Kavalan team and management. We’ve been greatly encouraged by receiving the prestigious WWA awards twice in a row in 2015 and 2016, and these accolades have made people within the industry and consumers alike seriously take notice of us, which in turn encourages us to continue promoting Kavalan and doing our best to make quality whisky.” The two-row malted barley used by the distillery is from Scandinavia and from other parts of Europe and mixed together in the mashing process. In terms of products, the company 144

offers both unpeated and peated whisky. Kavalan Distillery Reserve Single Cask Strength Single Malt Whisky - Peaty Cask is matured in peated malt barrels. The company has even started experimenting with smoking barley itself in Taiwan. Beside that, all of its expressions are unpeated whisky.

Curious and openminded drinkers Kavalan made a big splash at the TFWA World Exhibition last year. The company promoted Kavalan Original – a very limited expression crafted exclusively for global travel retail – to large numbers of potential duty free and travel retail operators in Cannes and was highly praised and appreciated by them, enthuses Chang. Ian Chang, Director of Global Export, is in charge of the global travel retail business. However, due to a prior commitment in London, his colleagues Emma and Kellie will attend the IAADFS show this year. Travel retail is a developing market for Kavalan whisky, says Chang. “According to Airports Council International, the top 50 international airports’ passenger traffic in 2015 was around 2.6 billion. Hence, it is a very good opportunity not only to build a brand image, but also to expand brand awareness in the global travel retail market.” Chang believes that as there are more and more curious and open-minded drinkers who have a thirst for information behind the label and experiences, there are good opportunities for the firm. “Since the start of its global expansion in 2012, Kavalan has exported to more than

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60 countries,” notes Chang. “Kavalan was awarded the Best Single Malt in 2015 and the Best Single Cask Single Malt Whisky in 2016 by the World Whiskies Awards, which means we have become more and more popular and well known in the industry. All of the retailers are very supportive and very keen to promote Kavalan whisky to their customers. Kavalan, both in Asia and outside of Asia, has become a stable growing whisky brand.” To this end, in March 2017, Kavalan is planning to stage an official launch event in the US for its new line of sherry casks, which are Amontillado, Manzanilla, PX, and Moscatel. The distillery’s Master Blender Ian Chang will host a master class to explain how these special expressions are crafted. In addition, as part of its push into the US market, Kavalan’s awardwinning whiskies were at time of writing being projected onto the Thomson Reuters Building at No. 3 Times Square, central Manhattan. The company’s hopes are running high. With the addition of its second distillery, its annual capacity could reach 10 million bottles, enabling it to keep releasing different types of barrels to satisfy consumers and meet the rising demands of Kavalan whisky globally. “As Kavalan becomes more and more recognized as a premium whisky brand in the world, we shall keep delivering a spirit of good and consistent quality. The production of high quality whisky sets the foundation and is the first step towards establishing a millennium distillery,” concludes Chang.

Kavalan Original single malt whisky is a very limited expression crafted exclusively for global travel retail

STOLI

Line expansion After its earliest days as the global vodka and the past few years re-establishing itself in this light, some new brands are adding depth to the company’s portfolio by

he craft revolution that began with beer has definitively spread to the world of spirits. While whisk(e)y represents the bulk of the craft spirit market, vodka, rum and tequila have each seen its share of the market grow significantly over the past three years. Stoli Group, which already offers exceptional craft-vodka products such as elit® by Stolichnaya, is expanding into craft rum and tequila with the addition of Bayou Rum and KAH Tequila to its distribution portfolio. The company sees duty free, particularly in cruise lines and North American airports, as a key channel for building these new brands, and remains very optimistic about achieving growth in 2017.

Cruise and the Americas Although 2016 had its fair share of challenges, Stoli Group successfully secured new menu listings, cocktails of the day, and exclusive partnerships with cruise lines that delivered strong results across the board. Dayna Dennington, Regional Director North and Central America – Caribbean Duty Free, says: “We expect to see continued growth in cruise lines, a very dynamic channel for us.” In the challenging retail environment, the company will continue to focus on offering unique shopping experiences and selections for the discerning international airport traveler. North America continues to be the leading travel retail market for Stoli, and the region where the company anticipates the most growth over the next few years, 146

but it’s also seen steady growth in Latin America, where Stoli is now the thirdlargest imported vodka brand – a trend driven by the Mexican and Brazilian markets. The acquisition of Bayou Rum and KAH Tequila, both of which will be featured prominently at IAADFS 2017, provides Stoli with a new avenue into these markets.

New lines Bayou Rum, which has already carved out a niche in the cruise line channel and will be launching in airports very soon, is a handcrafted, pot-distilled American rum produced from fresh Louisiana sugarcane and offering four SKU’s: Silver, Spiced, Select, and Satsuma liqueur. Stoli Group is excited to be at the center of a growing craft rum category with an Americanmade craft rum that is direct from Louisiana. “We believe this gives Bayou added appeal,” says Dennington, who adds that the rum’s quality “makes it as good to sip as any premium whiskey.” Multiple award-winning KAH Tequila, meanwhile, was designed to pay reverence and honor to Mexico and its people. It features four expressions, each crafted from hand-selected 100% blue agave and each presented in its own uniquely decorated, handcrafted and spirited skull bottle. Dennington says KAH Tequila is “made for duty free with its unique packaging design, super-premium positioning, and great liquid.”

Activations and experiential events To promote Bayou Rum and KAH Tequila, Stoli is focused on the integration

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MAX MISHLER

of interactive, multi-sensory activations and experiential events that leave a lasting impression. These 360-degree activations build on Stoli Group’s airport activations for vodka products, including the recent Stoli Gluten Free activation at the Las Vegas McCarran International Airport with customer Dufry. Dennington explains, “With a strong emphasis on Stoli Gluten Free ingredients and production processes, we successfully introduced this innovative product to consumers through tastings, GWPs and on-shelf promotional pricing.” Noting market trends, Stoli successfully introduced a gluten free vodka to the market last year

MONARQ

Proven method

Having completed 10 full years of growth in Americas travel retail, MONARQ’s future plans are to continue with what it does best by

WENDY MORLEY

s MONARQ celebrated its 10th anniversary in 2016, the company had experienced year upon year of often phenomenal growth that seemed to always soar far above regional growth patterns. Despite 2015-2016 being a difficult time in global travel retail as a whole and in Latin America in particular, for MONARQ this trend has continued. While the company’s CEO Robert de Monchy stated early in 2016 that sales had leveled off, in the end the year turned out positive. “I’m happy to report that 2016 has been another amazing year, showing a solid double-digit growth rate,” he says. “We celebrated our 10th anniversary with our best year so far.” While 2016 may have started slow, 2017 is already showing signs of being a banner year, with early sales figures substantially above the same time last year.

Strategy that works Undoubtedly, one of the keys to MONARQ’s success is its portfolio strategy, and that portfolio continues to grow. According to de Monchy, the company’s strategy is to offer a wide but not deep portfolio of unique and/or leading premium brands, giving a wide range but specific focus. “We are focusing on selective brands in each of the relevant alcoholic beverage categories. We recently started with a portfolio of independent Japanese whiskies, namely Togouchi, Mars/IWAI and Akashi. We also began representing the iconic Anchor Steam Beer, Gosling’s Bermuda Rum, Paul John Indian Single Malt Whisky, Knappogue Castle Single Malt Irish Whiskey and the BB&R portfolio, including The Glenrothes Speyside Single Malt.” MONARQ’s portfolio continues to evolve and grow, and the IAADFS show is an important milestone for the company each year. “We are aiming to finalize an

agreement with one or two other leading brands before IAADFS,” de Monchy affirms. “We use the show as a platform to show new brands and products to our customers.”

Strong in LATAM The Caribbean has been a stronghold for the company from day one, but despite its recent economic situation, Latin America is the strongest growth region for the company these days. “We have seen an impact of the Brazilian crisis on the duty free border stores, especially in Uruguay and Paraguay,” says de Monchy. “However, other markets, like a rebounding Argentina, Peru, Colombia and Chile, have been performing well.” The company’s cruise line business has been showing very strong growth. “Our current portfolio is doing very well in this channel, and we have new listings for many of our brands: Luxardo, Bols, Carpano Antica Formula, Fernet Branca, Molinari and Anchor Brewery craft beers, to name a few. Anchor Steam Beer has recently been listed on board Holland America line. We’ve seen a trend towards an increase in demand for craft products on board cruise lines and our portfolio lends extremely well to this.”

For its portfolio, MONARQ focuses on select brands that happen to fall in line with the current trends toward the unique, crafted and authentic. Mars whisky also works with the growing market for Japanese whisky

uniqueness, local/regional and craft. “Single malt, specialty whisk(e)y and gin are categories that are jumping out,” he says. “Despite still being relatively small, regional products such as rum, cachaça, tequila and mezcal are in increasing demand,” he adds. For the coming year, MONARQ’s focus will be “to continue what we are best at,” says de Monchy, “being ahead of the curve, speed in execution and tremendous dedication. We just want to be the best possible partner to both suppliers and our distribution partners.”

MONARQ often offers travel retail exclusives such as the plinth and glasses offered with multiple-awardwinning Tomatin Highland Single Malt Scotch

Current trends De Monchy says he sees a clear trend towards authenticity, provenance,

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BACARDI

Strong in channel Bacardi’s age-statement whiskies featured in its John Dewar & Sons Fine Whisky Emporium are helping drive global travel retail sales

Niche whisky brands like Craigellachie are becoming more popular with consumers in Latin America

n early 2014, Bacardi announced that it would begin making strides to improve its profile in the Scotch whisky category. At TFWA WE in Cannes later that year the company presented both its whisky strategy and its John Dewar & Sons Fine Whisky Emporium, and it appears to have been an inspired creation. The John Dewar & Sons Fine Whisky Emporiums began opening in airports in early 2015, and it’s safe to say the strategy has worked well. In Bacardi’s Americas report, Geoff Biggs, Regional Director Americas, Bacardi Global Travel Retail said: “We are pleased with the growing success of DEWAR’S 15 YO and our Single Malts aged range as we secure broader distribution for them across the Americas.” Biggs says in Latin America the market is growing. Consumers are keen to make discoveries in blended and single malts, especially niche brands with great intrinsics. Because of this, the company will be using the John Dewar & Sons Fine Whisky Emporium to showcase the range and to engage new malts consumers in the region, offering several travel retail exclusives including ABERFELDY Single Malt Whisky 18YO and 28YO, AULTMORE® Single Malt Whisky 21YO, CRAIGELLACHIE® Single Malt Whisky 19YO and 31YO and GLEN DEVERON® Single Malt Whisky 16YO, 20YO and 30YO.

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WENDY MORLEY

White spirits Of course whisky is far from the only spirit offered by Bacardi. In travel retail in the Americas, the company’s brandbuilding focus will be on channel-exclusive white spirits GREY GOOSE® vodka Interpreted by Ducasse and STAR OF BOMBAY® gin. “GREY GOOSE continues to lead the growth in super premium vodka in the Americas travel retail and, when we have optimal shelf positioning and with campaigns such as with DFS at LAX from January to February 2017, we are driving greater category performance for the retailer,” says Biggs. “STAR OF BOMBAY® is very popular, boosted by its exclusivity in Travel Retail. There’s strong growth in Argentina and Brazil, especially driven by the home cocktail making trend and the strength of the Brazilian real.”

direct with consumers. They are excited and motivated by the kudos of reaching the global finals and competing against the world’s leading professional bartenders from the world’s top city bars.” Land borders often have strong sales of spirits, and that is certainly true of the Canada-US border. “In recent months, our business in border stores including Blue Water and Peace Bridge have benefited from the exchange rate between the US and Canadian dollars. We continue to collaborate closely with retailers at these locations on a sustained category management program to meet shopper and consumer trends. The result is optimized range visibility and ease of shop, which are helping to drive curiosity, interaction and sales across the category.”

Other channels Cruise lines have long been a focus for Bacardi, and Biggs confirms the company is increasing its long-term investment and premium range in this channel. “Our dedicated team of cruise brand ambassadors are driving greater traction for us, direct with consumers and in training cruise line staff,” he says. “The BACARDI Cruise Legacy Competition is a key platform for us to engage with the growing numbers of professional bartenders in the cruise sector, helping recognize and reward the incredible brand-building job they deliver

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Brand ambassadors at John Dewar & Sons Fine Whisky Emporium help travelers learn more about single malts, and striking packaging helps inspire them to purchase

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EWTRA

A year of

enthralling activations After celebrating a successful 2016, Edrington Webb Travel Retail Americas is gearing up for an equally fruitful year for its premium product portfolio

drington Webb Travel Retail Americas (EWTRA) continues to increase its footprint in travel retail, including the cruise ship sector, and is now one of the leading distributors of premium wines and spirits in the channel in the Americas. After another successful year, EWTRA now represents a number of premium global brands from all categories including The Macallan, Highland Park, Brugal, Disaronno, Tito’s Handmade Vodka, Tia Maria, Licor 43, Luc Belaire, Mionetto, Blanton’s, Buffalo Trace, Fireball, Southern Comfort, and wines from The Wine Group and Ramon Bilbao. A number of exciting activations have been staged to help boost sales. For example, Tito’s Handmade Vodka, one of the fastest-growing vodkas in the US, has seen its presence increase in stores with a vigorous campaign that highlights the brand’s craft essence and authenticity from Texas. HPPs, light boxes, gondola ends, and branding spaces are appearing in key airports throughout the US, including a recent activation in New York JFK Terminal 8.

The Macallan celebrates the golden age of travel The Macallan has unveiled its latest Lalique collaboration with The Macallan Golden Age of Travel series. Exclusive to global travel retail, this collectible range relives the glamour of the 1930s and celebrates the first era of international travel. The second release features a rare period Macallan, distilled in 1937. This Macal-

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Tito’s Handmade Vodka is running a vigorous campaign that highlights the brand’s authenticity from Texas, including a recent activation in JFK Terminal 8

lan vintage was bottled in 1972, and rebottled in 2016. The whisky is showcased in a handcrafted Lalique crystal decanter, of which only 48 have been made. This year, Steven Klein also marks the The Macallan - The Boutique, pictured here at Dufry Mexico, is a destination where travelers can purchase a range of travel retail exclusive sixth release of The expressions, while bringing to consumers a deeper insight into the brand Macallan’s award-winning Masters of Photography series, which combines the art of cess in travel retail, and didn’t only give whisky making with the artist’s interpreta- consumers a premium gifting option over tion of the world of The Macallan as seen the holidays but also gave back funds through a photographer’s eye. to the charity Fashion 4 Development The brand furthermore introduced (F4D), according to Anette Mourier, Mara new retail experience in key airports keting Director, Edrington Webb Travel creating not only a destination to purRetail Americas. chase a range of travel retail exclusive At EWTRA’s stand 923 at IAADFS, the expressions, but to bring consumers a company will showcase all the limited edideeper insight into the brand once the tions from Disaronno. new distillery opens in 2018. This was Beginning October 1, 2016, EWTRA launched in Mexico City and will constarted managing key global brands in the tinue to expand to cities such as Sazerac portfolio including Buffalo Trace, New York, Miami, and Brazil. Blanton’s, Eagle Rare, Del Maguey Mezcal Brugal Rum, another brand from and Fireball Cinnamon Whisky. Those the Edrington house, is going through brands join Sazerac’s Southern Comfort, an exciting re-launch for the high-end which was awarded to EWTRA April 1, expression Brugal 1888. To see the new as well as Paddy Irish Whiskey. bottle visit EWTRA stand 923 at IAADFS. EWTRA invites buyers, suppliers and partners to visit stand 923 at IAADFS in Orlando to see what the company is Limited edition planning for 2017. They can also visit the success for Disaronno stand for a ‘Happy Hour with a purpose’ Meanwhile, Italian liqueur brand Disaon Tuesday, March 28 at 4-6pm to particironno featured its fourth limited edition pate in a silent auction of some rare lots over the holiday season in 2016 following with proceeds going to the Lotus House an affiliation with fashion designer ETRO. in Miami. Disaronno Wears ETRO saw a great suc-

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

RÉMY COINTREAU

In good

spirits by

The travel exclusive Rémy Martin Cellar Master’s Selection Cognac range appeals to shoppers who are looking for a unique gift or product to trial

MARY JANE PITTILLA

French liquor group Rémy Cointreau is reporting solid growth in the Americas across its core Cognac brands as well as the new spirits that have joined its global travel retail portfolio

ebastien Devallet, Director Global Travel Retail Americas at Rémy Cointreau, has reason to be cheerful as he presides over a growing portfolio of brands that are registering high double-digit growth figures. “Rémy Cointreau has a diverse portfolio and in Americas Global Travel Retail we have seen positive results across all segments in 2016. Our core range, including Rémy Martin VSOP and XO and the travel exclusive range including Cellar Master’s Selection, are driving Cognac category growth. The roll-out of our new progressive brands such as our premium gin, The Botanist, is pushing high doubledigit growth figures,” he says. Devallet notes that South America will remain challenging despite the potential for growth, which is mainly in Brazil. In 2017, the company is investing in the Brazilian market to accelerate the growth of its strong Cointreau business and also to educate Brazilian passengers about its other products: Cognac, premium gin and single malt whisky. “These are growing categories and we have the right products to satisfy the consumers,” says Devallet.

Investing in US brand-building By contrast, US growth has been robust, especially the Cognac category, which benefits from a strong awareness and demand. Rémy Cointreau has adapted its strategy to capture a larger share of the American travelers wherever they travel abroad, within the Americas region, on borders and cruise lines. “The first months’ results of this strategic decision have been very positive and we will continue investing in building our brands,” he says. “Besides Cognac, we enjoyed positive results in the liqueur category following a similar trend in the domestic market.” Devallet sees great potential for both The Botanist gin and Bruichladdich single malt Scotch whisky in the region. “The Botanist is showing impressive results since we launched the product and we are very confident in positioning the brand as a leader in premium gin in the coming years in the Americas. The growth is tangible in the entirety of the Americas. Bruichladdich single malt whisky is facing other challenges because of very great competition in the strongest category. We are nevertheless very confident of building our brand in the long term, looking at the high interest in the single malt whiskies as well as the strong sales growth.”

A Cognac range to satisfy any nationality Rémy Martin Cognac has performed very well in the Americas. Based on shopper insight, both Cognac ranges are appealing to two distinct consumer needs: the Classic range appeals to the consumer who wants to buy their customary brand in travel retail, and its travel exclusive Cellar Master’s Selection range appeals to shoppers looking for a unique gift or product to trial. Rémy Cointreau is confident of building the Bruichladdich single malt Scotch whisky brand in the long term across the Americas region

Rémy Martin has also added two new Cognac products targeting specific nationalities as part of its Global Shopper Strategy: 1738, which targets US travelers, and Rémy Club, aimed at Chinese travelers. “We now offer a complete range of Rémy Martin Cognac to satisfy any nationality,” he says. The French spirits group’s main objective in 2017 will be to consolidate the growth of its pillars in every brand, bringing some new marketing activations and fresh experiences to its customers. It will also focus on retail excellence to grow its presence in stores.

Targeting the millennial market The millennial market is also on the radar screen. “As far as millennials are concerned, I think we need to talk their language and be more active through social media and digital communication,” explains Devallet. “We are working on it. We also currently work with our domestic market headquarters in New York, as we have a common interest in understanding the millennial customers better. We also need to offer them a true experience in their purchase act and to accompany them after their purchase.” Devallet is upbeat about continued growth in the US market. “The US is definitely a good contributor to our bottom line. We have to challenge ourselves constantly to find the best way to continue growing our brands in the right territories to be able to finance and fuel our development in other ones.”

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LIQUOR NEWS

Marie Brizard shows new bottle The past two years have been big for Marie Brizard, with new packaging and marketing for all its brands, a daring new offering – SHOTKA – and a new focused global travel retail team. This year in Orlando the new revived look for the company’s namesake liqueurs range will be on display. A brand popular with bartenders as an ingredient, Marie Brizard liqueurs have now come forward as the main attraction. Over the past year, the company has created a new standard look for all of the brand’s liqueurs and associated messaging, highlighting its origin and its nonconformist background. Marie Brizard L’Originale Anisette was created in 1763 by Marie herself. The new look highlights freethinking and refinement, bringing to mind the French coffeehouses where art and enlightenment thrived. Marie Brizard’s strong personality is apparent, with a look that cleverly brings some set traditions into play while breaking others. Along with the new look and new messaging, the Marie Brizard team has created a number of signature cocktails that keep Marie in the spotlight. At IAADFS the MBWS team will also be focusing on the controversial cannabis-flavored SHOTKA, its highly regarded Gautier Cognac range, and its multiple award winning Sobieski vodka, which has seen continuous growth since its international launch in 2001. The Americas is a very strong region for the company, which has been seeing huge growth regionally and expects SHOTKA to be a big hit when it launches in the US this spring.

The new Marie Brizard design and campaign freethinking and refinement, bringing to mind the French coffeehouses where art and enlightenment thrived

Tito’s Handmade Vodka pioneers craft spirits offering in Americas Duty Free Few movements in the liquor industry have been as powerful as the movement to craft spirits, and Tito’s Handmade Vodka is a true success story in that mileu. This has made Tito’s a choice of the millennial. Add in Tito’s back story and the company’s already strong position is strengthened even more. At IAADFS this year, Tito’s International will share its American Dream story with customers, emphasizing the importance of craft spirits and the buying power of millennials. According to Tito’s International there are 1.75 billion millennials globally who spend a majority of their disposable income on travel and entertainment. Having seen great success in US duty free shops, Tito’s is looking to expand its footprint and grow the craft spirits category in the Americas, catering to consumers looking for quality brands with authenticity. The company will focus its efforts in South America – Chile and Argentina in particular. As part of its expansion in the category, Tito’s International is working with its retail partners to establish exciting and engaging craft spirit displays to attract the lucrative millennial consumer and help boost sales. These types of displays have been especially effective in the United States, which continues to be an important market for the brand, as travelers are looking to take a piece of America back with them to share with friends and family.

Tito’s Handmade Vodka and its American Dream story are a perfect combination for the millennial shopper

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ALFA Brands Booth Number 526

CANADA'S VODKA

LIQUOR NEWS

Illva Saronno brings new packaging to Orlando Illva Saronno will be back at IAADFS this year with its world-renowned brands Disaronno, Tia Maria and Rabarbaro Zucca. The center of attention is likely to be the new packaging for iconic coffee liqueur Tia Maria. This evolution of the bottle was brought about through great deliberation, testing with consumers through the use of an innovative research method based on neuromarketing. Researchers measure what occurs in the human brain when it is subjected to stimuli related to products or brands, in a blend of neuroscience, psychology and traditional marketing. The new elegant shape offers a contemporary twist, with a deep red label on the black bottle, making the bottle more visually prominent and making it more relevant for the younger generation. With the trend for bitters growing over the past five years, Illva Saronno will also be introducing its iconic Rabarbaro Zucca into the duty free channel in the Americas. Made from an infusion of true Chinese rhubarb root and rare herbs, Rabarbaro Zucca offers a unique and delicate flavor. Last year Rabarbaro Zucca received a platinum medal in the tastings.com 2016 awards and a silver medal in the Los Angeles International Spirits Competition. Not forgetting the company’s most well-known brand, Illva Saronno will also showcase its Disaronno Riserva, the innovative result of combining fine Scotch whisky with Disaronno, and of course its Disaronno wears Etro special release. This annual Disaronno-fashion icon bottle has become a hotly anticipated event, each year’s sales outperforming the previous year’s, and North America and the Caribbean are two of the top performing regions. Tia Maria has been well known for generations; the new look based on neuromarketing has been developed to appeal to a new generation

Amarula’s continued elephant conservation The African elephant has been the symbol for Amarula Cream Liqueur since its inception, but this pachyderm has always been more than just a symbol for the South African brand. The company has been involved for many years in conservation efforts focused on saving the African elephant. A global outcry caused by the slaughter of an elephant that had been named “Cecil” became the impetus for Amarula’s “Name Them, Save Them” campaign, which launched its first phase last October. The idea is that once an endangered animal has a name, people will care more about it. Phase One was an online visit to a digital African savannah, where visitors could decorate and name a virtual African elephant. Participants could then share their named elephant with friends and fellow conservationists as a means of raising awareness to the plight of these intelligent and magnificent animals. To date, over 500,000 elephant lovers from around the world have visited Amarula’s digital African savannah – a number greater than the actual population of African elephants currently living in the wild. The cream liqueur company is donating US$1.00 to elephant conservation efforts for every digital elephant created on the site. At IAADFS in Orlando this year, Amarula is rolling out Phase Two of “Name Them, Save Them.” In Phase Two, the elephants created by these visitors to the site will be brought to life on the labels of 400,000 individualized Amarula bottles, one bottle for each of the earth’s remaining African elephants. Each of these individualized bottles will display a named elephant and information regarding the actual animal living on the savannah. Amarula will showcase a number of these one-of-a-kind bottles at IAADFS before they are distributed around the world. The Amarula bottles carrying the name and information on the digitalized elephants will be available beginning in late spring and early summer of this year in Global Travel Retail as well as South Africa, Germany, Brazil, Canada, the United Kingdom and the United States. For more information, visit www.amarula.com. On display at IAADFS will be the individualized bottles launched as part of Amarula’s “Name Them, Save Them” campaign for elephant conservation

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LIQUOR NEWS

Waldemar Behn brings super premium DANZKA THE SPIRIT to Orlando

Further emphasizing THE SPIRIT’s super premium positioning, it is presented in a matte black, sleek, modern evolution of its classic aluminum bottle, created by renowned Danish designer Jacob Jensen Design

Exclusive to travel retail, Waldemar Behn’s Super Premium Vodka DANZKA THE SPIRIT will be launched to the Americas at the IAADFS Duty Free Show of the Americas in Orlando, booth 223. A brand new, totally pure Vodka created on the original traditions of vodka distilling, DANZKA THE SPIRIT was developed by Rüdiger Behn, a passionate fourth generation distiller, together with Timothy Jacob Jensen, Chief designer of Jacob Jensen Design, combining the highest distilling arts with Scandinavian design traditions. Since its launch in October in Cannes, DANZKA THE SPIRIT has been listed with King Power, Dubai Duty Free, Gebr. Heinemann, Dufry, Lotte, Shilla, Mauritius, with more to come in the coming months. Behn’s Americas travel retail business continued positive in 2016, and the company is enthusiastic about its business in the region for 2017. “Promotions featuring the new DANZKA communication platform were extremely well perceived and accepted,” says Behn. “We are optimistic that Latin America will recover; even though the economies have not really recuperated yet, the consumer is gaining confidence, perhaps by accepting and adapting to their new reality. DANZKA managed to maintain its presence and participation in this market and sales are slightly improving. We featured DANZKA with Dufry at Rio de Janeiro Airport during the Festive Season in February 2017 and we will support the brand and the promotion further throughout the year.” Behn’s main ambition for the Americas duty free market in 2017 is to continue to increase the distribution of its core brand DANZKA and launch DANZKA THE SPIRIT in new markets throughout the region. To support the launch, Behn has more promotions planned at Dufry and Heinemann Americas locations throughout North America, the Caribbean, and Mexico in 2017.

The Last Drop Distillers crafts a vintage spirits brand The Last Drop Distillers, the luxury independent bottler of rare and old Scotch whisky now owned by Sazerac, is set to introduce its super-premium craft products to buyers at the IAADFS show. James Espey founded The Last Drop Distillers business with Tom Jago in 2008 following successful careers in the spirits industry. As The Last Drop Distillers, they have released seven rare Scotch whisky and Cognac bottlings, the youngest of which was 44 years old.

The company is now run by their daughters Rebecca Jago as Creative Director, and Beanie Espey as Sales & Marketing Director. Their mission is to “seek out and find remarkable whiskies that have been thought long-lost, if not forgotten, and bring them to our discerning drinkers. There may only be a cask or two left but that’s enough for us – if it’s right.” The company believes that The Last Drop Distillers brand can be developed into the world’s preeminent global luxury spirits brand. “We want the TLD trademark to be a hallmark of excellence for our consumers – who will be encouraged to explore new, varied spirits categories, guided by their experience of the brand, and their confidence in our ability to sniff out outstanding product,” they said. The Last Drop 50 Year Old Double-Matured Blended Scotch Whisky was the major release of 2016, and the product line is set to grow. “We also hope that with the support and investment of our new owners, Sazerac, we will have access to rare bourbons and Canadian whiskeys too… that said, we believe Scotch whisky will always be our heartland,” said the firm. The target consumers are spirits aficionados and collectors.

James Espey founded The Last Drop Distillers business with Tom Jago in 2008, and it is now run by their daughters Rebecca Jago as Creative Director, and Beanie Espey as Sales & Marketing Director

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GOSLINGS RUM

On the crest of a wave Malcolm Gosling proudly stands behind the Goslings Rum brand as it continues to grow in the travel retail market.

Goslings Rum has a busy year ahead as the Official Rum & Official Ginger Beer of the 35th America’s Cup yacht race, which takes place in its home island of Bermuda in May & June by

JAS RYAT

oslings Rum, the Bermudabased award-winning rum specialist, is gearing up for a thrilling summer of brandbuilding as the America’s Cup yacht race descends on the island in May & June. Fittingly, the 211 year old family-owned company’s travel retail plans for 2017 are to continue to focus on American duty free, where its activities surround its sponsorship of the America’s Cup. Goslings is the official rum and official ginger beer of the 35th America’s Cup, so the brand can really showcase all its products during the event. The official America’s Cup logo is stamped on the neck of each bottle and highly visible on all Goslings Stormy Ginger Beer cans. “We are looking forward to the America’s Cup, and this is an excellent way of

Goslings Flagship Black Seal Rum, winner of the Platinum Award, followed by the Gold Seal Rum and the rare Goslings Family Reserve Old Rum

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building brand awareness of Goslings in markets such as New Zealand, Australia, among many others. So many sailors are Australian and love to watch the America’s Cup,” says Malcolm Gosling, President & CEO, Gosling – Castle Partners, Inc.

Driving demand in travel retail In travel retail, the company’s products are sold on board cruise ships, at Duty Free Shops in North American airports, and in border stores along the countries of Mexico and Canada all handled by Chase International. Sales for the Caribbean Islands, Central America and South America are being managed by the MONARQ Group. “Our duty free brokers are working hard to promote our partnership with the America’s Cup,” says Gosling. The strategy is to get established domestically in North America, and then build the brand globally from there. The America’s Cup – a global event, with the oldest sporting trophy – is crucial for brand exposure. “Even though we are 211 years old this December, a very old company, we are still relatively new in the international market compared to our global competitors. We are still at the building stage. It’s obviously something we want to progress to,” he explains, adding that the company is looking at expanding into continental Europe and Asia. He notes that continuing to work in the domestic market will drive demand in travel retail.

THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017

Gifting is key The customer profile in travel retail is people looking for gifts. “Goslings blended aged rum is the only product where every last drop is created in Bermuda. It makes a great gift, and in North America we have good awareness. Customers want to drink the product at home, and the price is attractive, but at the same time it’s an added arm of distribution for those people that have heard of Goslings; even if people have not tried it, they have certainly heard about it and heard the high ratings.” Goslings Black Seal Rum has won the highest honor and award in the spirits industry, the Platinum Award. He continues: “Goslings has a long history. The Black Seal rum blend was developed in 1850, and is a product of Bermuda, but at the same time you see everyone from millennials to the mature drinkers enjoying this rare rum, it’s so versatile.” The Dark ‘n Stormy® cocktail is a classic drink, very popular among all ages, he adds. The Dark ‘n Stormy® is a trademarked cocktail and the national drink of Bermuda.

Targeting the millennial market In order to target the millennial consumer group, Goslings does a tremendous amount of social media, spearheaded by Malcolm Lloyd Gosling, the eighth generation of the family. “If you take a look at what interests millennials: credibility, heritage, authenticity, this is what differentiates us from other brands out there. Presentations, social media, tours, all play a role in communication with millennials,” he says. Turning to sales performance, the company has posted a slight increase in turnover for 2016 compared to the previous year. In terms of new product development, there is something in the pipeline, which may be an exclusive single barrel item available at certain duty free shops, but it is too early to reveal details. Gosling will be attending the IAADFS show in Orlando to showcase his family’s top-of-the-range Family Reserve Old Rum, which continues to get accolades, but is very limited in stock. Gold Seal and Black Seal will also be on display.

BOTTEGA

President of Bottega, Sandro Bottega, looks forward to a promising future

Inspired by exclusivity Forging ahead with new, exclusive products and developing cross promotions with other major brands are on the agenda for Italian liquor specialist Bottega by

JAS RYAT

2017

is shaping up to be an interesting and busy year for Italian liquor supplier Bottega, headed by Sandro Bottega as President. This year, the company is focusing on collections with special, exclusive packaging and on cross promotions with other major brands in the global travel retail industry. Following last year’s successful product launches, Bottega Bacûr Gin and Crema di Pistachio, more launches are coming up for 2017, Bottega says, without giving further details. Described as a smooth and balanced gin that warms the palette, Bacûr is produced in Italy using botanicals such as juniper berries, sage and lemon zest, ensuring it stands out with its fragrant and natural ingredients. Meanwhile, Crema di Pistacchio is a vegan liqueur made from pistachios grown on the foothills of Mount Etna. These new additions join the company’s striking product portfolio, which includes the popular presentations Bottega Gold Prosecco and Bottega Rose Gold Pinot Noir sparkling wine.

sophisticated packaging to appeal to them; increasingly engaging them with our social media channels and other communication activities; and planning special training programs to teach them how to recognize the quality,” says Bottega. All this is already benefiting the company’s bottom line, as Bottega reports its growth in the duty free market at 10-15% year-on-year. The firm’s main new developments are the Bottega Prosecco Bar, its exclusive restaurant concept, which aims to have a strong presence in F&B that can support the brand’s duty free sales. In addition, Bottega has improved its sales organization dedicated to airlines, cruise operators and ferry lines. Bottega says he is eager to work together with his airport partners to drive growth. The company is working on a number of fronts: developing cross promotions, hiring dedicated staff, creating special products exclusively for the segment, producing special displays, and introducing a new gwp.

The brand’s growth markets are in Asia, where it is expanding its presence at all major Chinese and Japanese airports. Looking at Asia specifically, Singapore Changi Airport is leading the way for the brand in terms of duty free/travel retail presence, thanks to the luxury and sales support which “really helps the consumer”, says Bottega. Dubai International Airport is Launched in 2016, Crema di Pistacchio is a vegan liqueur also prominent in this made from pistachios grown regard, he adds. on the foothills of Mount Etna Asked who is buying Bottega items in duty free stores, he explains: “Our main target audience is happy customers: people who already want to buy, not people who are forced into buying. Those consumers look for unique products that they can only find at airports. They buy something they need – although they didn’t know or remember it – for example, a gift.” Bottega has taken steps to address the growing purchasing power of the important millennial consumer segment. Over the past two years, the company has hired a new generation of experts, in order to grow its relationship with the millennials. “We are working on three sides: studying a new, more

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ORIENTAL G.T.

Tapping into the new wave of Chinese smokers By addressing a gap in the market for an international Chinese tobacco brand that’s rooted in heritage, Oris China is winning listings around the world

here are more than 300 million smokers in China, according to World Health Organization – that’s nearly a third of the world’s total – but creating a brand that meets their unique preferences can take years of experience. While both homegrown and foreign cigarette brands have found success in the country, the latest player on the scene, Oris China by Oriental G.T., is bridging the gap between these two worlds. As such, the brand has quickly gained an impressive number of listings in travel retail since its launch in November 2016. “Our knowledge and experience in the tobacco business allowed us to grasp the growing needs and demands of Chinese consumers to cultivate our own brand – one that speaks directly to this target market,” said Tania D’souza, Marketing Manager, Oriental, which is headquartered in Dubai. The company, which has been in the Chinese tobacco industry for more than 15 years and was one of the first suppliers of Chinese tobacco and liquor to travel retail in the Middle East and Africa, launched Oris China at MEADFA 2016, marking a bold statement to the industry. The idea for the concept had only come about 18 months prior. “We saw a window of opportunity where we could foresee the unpredictable nature of the Chinese tobacco and liquor industry and nature of Chinese travellers outside of China,” said D’souza. “The influx of Chinese travellers in the last few years has grown exponentially, particularly in areas where their presence was, at one stage, quite small. Thanks to the expansion of airports and overall growth in the aviation industry, Chinese travellers now find it much more convenient to travel abroad whether for tourism or business.” The move certainly seems to be paying off. Oris China is already listed and available in Dubai Duty Free, Qatar Duty Free, Qatar Airways Inflight Duty Free, Nur Duty Free – Addis Ababa Airport Ethiopia, King Power Duty Free – Bangkok, Don Muang and Phuket, King 158

THE AMERICAS DUTY FREE & TRAVEL RETAILING

Oris China Peace is the first queensized Chinese cigarette in the market

Power Duty Free Macau and Lotte Duty Free Jakarta. “Oris China was established to provide Chinese smokers with the perfect combination of an international brand that respects and adopts the vital cultural values with the product preferences of modern-day consumers,” said D’souza. “Our aim is to capture the attention of Chinese travellers on a global scale exclusively through travel retail and tax-free channels such as airport duty free shops, border and downtown stores.”

Each of the six variants satisfy different price segments. In the premium to mid-range line of king-sized Oris Dragon Empire, for instance, The Noble Dragon (purple pack) is a premium product with a price range of US$55-$60 while The Classic Dragon (red pack) is priced between US$40-$45. Oris Peace costs around US$25-$30 per pack. For the affordable super slims line – Oris Chao Society, Oris Chao Lights and Oris Chao Menthol Flavour Lights – prices range from around US$15-$20.

Cultural connection

Igniting the future

A substantial amount of research has gone into ensuring every detail of Oris is at its most appealing to Chinese smokers. The word Oris (pronounced Hao Li Shi in Mandarin) means prosperity, luck and good fortune. What’s more, each of the designs convey special a meaning. The cigarettes themselves, which come in six variants, were designed and developed in China by Oriental’s dedicated team of Chinese tobacco experts. Another significant feature is highlighted by the Oris Peace variant, which is the first queen-sized Chinese cigarette in the market. “Queen-sized packaging is common for international brands but not for Chinese brands,” said D’souza. “This further reiterates the core values that Oris China brings, namely, our determination to provide something for various segments of Chinese smokers, whether they prefer a traditional or more modern smoking experience.”

Oriental aims to launch Oris not only in all the major, well-established travel retail outlets but in those tax-free channels where there is a high demand for Chinese products that’s unsupported due to a lack of choice. Well-timed promotions are already helping to raise awareness on the brand. To mark the Chinese New Year, for instance, promotional ‘Rooster edition’ boxes have been available to buy in Dubai Duty Free, Qatar Duty Free and Ethiopia Duty Free. Looking ahead, Oris will be exhibiting at IAADFS in Orlando in March. “For us, travel retail outlets in the Middle East, Africa and especially Asia are the main focal points for the brand,” said D’souza. “Destinations such as Dubai, Abu Dhabi, Qatar, Hong Kong, Singapore, China, Korea and Japan are desired locations. The major growth markets, however, are Africa and South America, where there is a huge population of Chinese people to reach.”

Tania D’souza, Marketing Manager, Oriental, at the launch or Oris China at MEADFA 2016

ALZAWRAE

Full steam

ahead

Mazaya, Jordan’s fast-growing brand of shisha tobacco, has quickly established a strong duty free distribution

Mazaya, the fast-growing shisha tobacco brand, is going all out to woo travel retailers with its new product developments and major investments

lzawrae is continuing its travel retail offensive for the Mazaya shisha tobacco brand with investment and promotional activity both at trade and consumer level. Mazaya, Jordan’s fast-growing brand of shisha tobacco, available in many different fruit flavors, has quickly established a strong duty free distribution base in the Middle East with airport listings in Lebanon, Dubai, Egypt, Qatar and its home base with Dufry at Queen Alia Airport in Jordan. For 2017 the company plans to strengthen its presence in the travel retail business, entering new markets both within the Middle East and further afield, both East and West. Mazaya is busy developing new products to appeal to travel retailers. The new Portable Hookah, which has already been listed with Dubai Duty Free, is designed to be used on the go. Easy to use, it enables shisha to be enjoyed anywhere and at any time. A variety of flavors are available, including Lemon with mint, Blueberry Exotica, Grape, Watermelon, and Cherry.

Premium product with colorful packaging The company uses visuals on the packaging to highlight the flavor, with 30% of the pack design bringing the ingredients to life in a colorful, impactful way. Mazaya is positioned as a premium product made for the mass market but marketed at an affordable price. Shisha continues to gain popularity outside its traditional Middle Eastern stronghold, including with customers from as far as Brazil. The millennial generation, particularly in South America, likes to experiment when it comes to flavor combinations, the company says.

As part of its travel retail plans, Mazaya is to sponsor the opening cocktail at this year’s TFWA China’s Century conference in Guangzhou (March 7-9) and promises delegates “a modern, cool and sophisticated dedicated space where Mazaya’s wide variety of shisha flavours can be tried and more can be learned about this on-trend lifestyle concept”. Says Brand Manager Rawan Elayyan: “Shisha is very popular in China and we believe there is great potential for Mazaya in travel retail as travelers look for quality, authentic products in a wide range of flavor combinations.”

High profile airport promotions At airports, Mazaya is investing heavily in branding and promotion with pillar and gondola advertising and consumer activations. The festive period saw a number of promotions at Queen Alia Airport in Jordan that offered a free glass shisha on the purchase of any Mazaya product. “We know that high profile promotions such as these will not be possible in many airports due to tobacco restrictions, but wherever it is possible we plan to create as much theatre and excitement as we

can to capture the attention of travelers and introduce the world of shisha,” continues Rawan. “In the meantime we will also continue to promote Mazaya through industry media advertising, via industry exhibitions, events and conference sponsorship, plus customer giveaways to ensure we are the shisha brand of choice for travel retail internationally.” The Mazaya brand was launched in 2010 by fast-growing Jordanian tobacco company Alzawrae. Through Mazaya, Alzawrae aims at revolutionizing the production of tobacco-molasses, presenting to their customers a diverse and innovative selection of high quality products, distinguished by their distinctive ingredients that include pure honey, natural food grade flavors and premium quality French tobacco. Pioneers in the production and supply of high-end tobacco-molasses and innovators in hookah technology to international quality standards, Mazaya has expanded its presence from three markets to 30 markets in just five years and seeks to expand the base of its success globally. And that includes conquering travel retail.

The line-up of flavors available as Mazaya shisha tobacco reads like a tropical cocktail menu

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PET PICTURES

Our faithful

friends

Travel is a must in our industry. Americas Duty Free & Travel Retailing is here to give you a glimpse of the loyal pets that wait for their well-traveled owner upon their return

Amy Hildreth, Operations Manager at Alfa Brands, is greeted at the door by Max. This Yorkie terrier may be small in size, but he is definitely the big boss in her house!

Diane Buchanan, Regional Head of Global Travel Retail Americas & Caribbean for Godiva Chocolatier, loves her not-so-small 128lb German Shepherd Buddy. Buddy loves to play ball. But not just any ball. He is very specific and only wants to play with large green balls

Karen Estrada, Director of Luxury Goods at Artco Group, wants to write a special message for the family’s dog Chewy, who passed away this year: “For the past 14 years you brought us so many smiles and great laughs. You’re my best of friends and I owe you so much. I love you and may God bless your beautiful soul. RIP”

Eman Khan, Global Marketing’s Accountant, loves to gaze into the future with her puppy Lorenzo. Although Lorenzo is a new addition to the family, he’s quickly become a favorite

Katherine Patch Sleipnes, President of International Brand Builders Inc, cuddles her seven-year-old Weimaraner named Jeger. Jeger is a German hunting dog, who loves to be everywhere Katherine is and is part of the family

Les Hansen, Vice President, Latin America Sales at Design-Go Inc, adores her rescued cats. She received Max as a kitten and he’s been through some obstacles, but with lots of love, is back to normal

Steven Candries, Sales Director of Guylian, thinks he owns the most stand-out pet. Her name is Jules and she’s a nine-yearold Belgian (Brabant) draught horse

Angela Startman, Product Manager at Perfetti Van Melle Global Travel Retail, loves coming home to her playful golden retriever Luna. Luna is an energetic and enthusiastic companion that loves the attention of all that pass by

Maria Villarreal, Marketing Director at Duty Free Dynamics, plays with her adorable dachshunds Chester and Nala. They both like to run errands with her and are trained to grab their leashes when Maria says “vamos”

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IAADFS – Duty Free Show of the Americas March 26-29, 2017 – Orlando, Florida

Patrick Nilson +1 845 981 7240 p.nilson@haleybrooke.com Roger Thompson + 1 203 322 9691 r.thompson@haleybrooke.com

Visit us at booth # 207 IAADFS

A MIXED BAG

It’s in the bag

Calling all fashionable adventurers: these practical yet luxurious novelties will help you pack stylishly this season 7

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1. Carrera Pace sunglasses: These trendy double bar bridge aviators are functional and fashionable. The lightweight acetate frame makes them perfect to travel with

5. Travalo Take 2 set: Featuring the patented and innovative Genie-S refill system, the compact Take 2 Set, comprised of two 5ml bottles, is easy to fill with your favorite fragrance

2. Coach Turnlock Chain tote: This double-duty accessory offers the functionality of a wallet, while transforming into a compact tote when you’re on the go

6. Mercedes-Benz Man: Created by the Master Perfumer Olivier Cresp, this new, timeless and sophisticated aromatic woody fruity fragrance embodies masculine elegance

3. Desigual Varsovia Splash saddle bag: This tie-dye design bag is large enough to tuck all of your travel essentials into, yet small enough to tote around the world

7. Extra Mint gum: This exclusive 8-pack of Extra gum comes in a premium and portable box. The 8 x 10 packs are available in Extra Spearmint, Extra Peppermint, and Extra Whitesweet Mint flavors

4. Mentos Choco: Mentos Choco is now available in this generous and convenient jumbo pack. Each jumbo roll contains six tasty Mentos Choco rolls

8. Troika Safe Flight: This convenient case keeps documents safe and secure while traveling. The case features fraud prevention (for RFID chips) and 12 interior compartments

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THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2017