Americas TFWA WE 2014

Ing lés y

OCTOBER 2014 • TFWA WE • VOL 24, NO 4

esp añ ol

TFWA WE 2014 MIXES WITH EVERYTHING, SURRENDERS TO NOTHING

THE WORLD’S FASTEST GROWING PREMIUM GIN*

Volume (9L cases)

GLOBAL SHIPMENTS

’08 3’08 4’09 1’09 2’09 3’09 4’09 1’10 2’10 3’10 4’10 1’11 2’11 3’11 4’11 1’12 2’12 3’12 4’12 1’13 2’13 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q

Q2

Quarters

*Based on IWSR reported % growth from 2012 vs 2011, brands over 25,000 9L cases anually. DRINK RESPONSIBLY

16

Flemingo lands in Paraguay p.

24064 cover 198x180.indd 2

Heinemann

explores Americas p.

24

Update:

64

IAADFS 2015 p.

Top Brands expands p.

70

19/09/14 16:16

visit Armanibeauty.com

Letter from the Editor

The changing face

of travel retail

T

he big news over the summer as Americas Duty Free was hard at work preparing its 2014 TFWA WE issue was, of course, Dufry’s acquisition of The Nuance Group. The deal represents the single biggest consolidation in the history of duty free, and in commenting on the development, CEO of Dufry Julian Diaz noted that it is “a transformational deal not only for Dufry but also for the travel retail industry.”

Indeed, this is the latest, and biggest, in a long line of acquisitions for Dufry in the past decade—twelve to be exact. Despite this, Diaz was quick to quash the notion that consolidations of this nature will result in less choice for consumers: “Dufry has been a key player in the consolidation of the fragmented travel retail industry and we have been delivering significant value through acquisitions,” he said. “We have been consistently delivering synergies and diversified our concession portfolio worldwide step by step, thus avoiding concentration risk for any specific region or location.”

And just as Dufry diversifies its portfolio, one thing that we have learned during the preparation of this issue is that there is still plenty of choice for travel retail consumers in the Americas. With new stores from the likes of Top Brands, important renovations from Mannah Duty Free and a continued focus on differentiation on the part of Neutral to name but a few examples, there will be plenty of new in-store experiences for shoppers in the region over the last quarter of this year.

And the theme of choice continues with the brands. Andrew Meeks of Beam Suntory—another recent consolidation, this time of two major spirits houses—tells us that now is a very exciting time to be on the company’s travel retail team given the great brands he’s working with. Also in the realm of spirits Patrón has released the high-end Roca line, giving travelers more choice in a subcategory that just a decade ago wasn’t nearly as vibrant as it is today.

The above is just a small selection of the innovation we present in this issue of Americas Duty Free. Whether speaking of consolidation, the improvements that we’re seeing in the look and feel of stores throughout the region or the continuous stream of exciting products popping up in essentially every category, it’s clear that a big part of what keeps shoppers coming back—and indeed what differentiates travel retail from the domestic channel—is that there’s literally something new to be found around every corner.

Kindest Regards,

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

6

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

The Americas Duty Free & Travel Retailing magazine (ISSN 0962-0699) is published five times a year March, 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. October 2014, Vol 24. No. 4. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2013 Global Marketing Company Ltd.

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 EDITOR Wendy Morley wendy@dutyfreemagazine.ca ASSOCIATE EDITOR Ryan White ryan@globalmarketingcom.ca OVERSEAS CORRESPONDENT Claire Malcolm claire@dutyfreemagazine.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca CONTRIBUTORS Faye Bartle James De Medeiros David Nusair

ADVERTISING SALES ADVERTISING & MARKETING EXECUTIVE Jacqueline Hammill jacqueline@dutyfreemagazine.ca CIRCULATION & SUBSCRIPTION MANAGER Monica Kucharski monica@globalmarketingcom.ca

R d’ uba

ur

20 Ho n 13 /1 nn 4 e

Letter from the Editor

El rostro cambiante de la industria minorista de viajes

L

a mejor noticia del verano, mientras Americas Duty Free trabajaba intensamente en la preparación de su número dedicado a 2014 TFWA WE fue, por supuesto, la adquisición de The Nuance Group realizada por Dufry. El acuerdo representa la mayor consolidación en la historia del sector duty free. En su comentario sobre el acontecimiento, Julián Díaz, Director Ejecutivo de Dufry, destacó que “es un acuerdo transformador, no solo para Dufry, sino también para la industria minorista de viajes”.

Es, sin duda alguna, la más reciente e importante en la larga lista de adquisiciones de Dufry en la última década. Doce, para ser más exactos. A pesar de esto, Díaz rechazó de inmediato el concepto de que consolidaciones de esta naturaleza darán como resultado menos opciones para los consumidores: “Dufry ha sido un componente vital en la consolidación de la fragmentada industria minorista de viajes, y hemos estado aportando un valor significativo por medio de las adquisiciones”, expresó. “Hemos proporcionado continuamente sinergias, y diversificado paso a paso nuestro portafolio de concesiones en todo el mundo, evitando así el riesgo de concentración en cualquier región o lugar específico”.

Y en la medida que Dufry diversifica su portafolio, un detalle que hemos advertido durante la preparación de este número es que existen abundantes opciones para los consumidores de la industria minorista de viajes en las Américas. Gracias a nuevas tiendas como las de Top Brands, las importantes renovaciones de Mannah Duty Free, y un enfoque continuo en la diferenciación por parte de Neutral, por solo mencionar algunos ejemplos, habrá una amplia gama de experiencias en las tiendas para los compradores de la región durante el último trimestre del año.

8

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Pero el tema de las opciones también se hace eco en las marcas.

Andrew Meeks, de Beam Suntory—otra consolidación reciente, esta vez de dos importantes casas fabricantes de espirituosos—nos reveló que este tiempo es muy atractivo para formar parte del equipo de la compañía que se dedica al sector minorista de viajes, dadas las prestigiosas marcas con la que está trabajando. En el mismo campo de los espirituosos, Patrón dio a conocer recientemente su línea de lujo Roca, que les dará a los viajeros más opciones en una subcategoría que hace una década no era ni por asomo tan vibrante como en la actualidad.

Las noticias mencionadas son solo una breve selección de la innovación que presentamos en este número de Americas Duty Free.

Ya sea con referencia a consolidaciones, a las mejoras que estamos viendo en la apariencia y contexto de las tiendas de la región, o el flujo continuo de atractivos productos que se está llevando a cabo en esencialmente cada categoría, esta claro que gran parte de lo que hace regresar a los compradores—y que diferencia realmente a la industria minorista de viajes del canal nacional—es que hay literalmente algo nuevo que descubrir en cada rincón.

Un cordial saludo,

Hibah Noor Editora hibah@dutyfreemagazine.ca

ysl-parfums.fr

Olivier Martinez

yslbeauty.com

OCTOBER 2014 • VOL 24, NO 4

Contents

international 16 Crossing borders FLEMINGO INTERNATIONAL

While representing only four of the many stores Flemingo will have opened worldwide in 2014, those in LATAM and the Caribbean make a big statement

Cruzando fronteras internacionales Representando solo cuatro de los mucho almacenes que Flemingo abrió mundialmente en el año 2014, los almances en LATAM y el Caribe causaron un tremendo impacto.

38

50 A time to remember MANNAH DUTY FREE

Admist a number of new developments Mannah Duty Free still holds the customer experience as a top priority

52 The more things change…

THE FUTURE OF TRAVEL RETAIL IN LATIN AMERICA

While the world’s economy is entering a period of slower growth, increased travel, rising incomes and a taste for luxury will bode well for travel retail in Latin America

24 Enough to go around

56 Inspired to succeed

Con lo suficiente para avanzar

Latin 58 Deconstructing American aviation

GEBR HEINEMANN

Among other jobs Heinemann wants to accomplish in the Americas, the company is looking to ensure the success of other duty free retailers

Entre los trabajos que Heinemann desea realizar en las Américas, está garantizar el éxito de otros minoristas duty free

34 The earth moved DUFRY

The center of gravity shifted earlier this year when Dufry announced its purchase of another travel retail giant

38 Cruise control

THE LATIN AMERICAN ECONOMY

Argentinean economist Carlos Melconian gives us his take on what we can expect from the Latin American economy in the mid term

42 A new phase BRAZIL

Dufry Brazil COO José Carlos Rosa discusses the changes happening in Brazil and how Dufry is adjusting to meet the needs of a new type of traveler and a new breed of airport operator

Una nueva fase José Carlos Rosa, Director de Operaciones de Dufry Brasil, habla acerca de los cambios que están ocurriendo en Brasil, y cómo Dufry se adapta para satisfacer las necesidades de un nuevo tipo de viajeros, y una nueva hornada de operadores aeroportuarios

NEUTRAL DUTY FREE

Neutral’s CEO Enrique Urioste has just one goal for the company: to be the best

AIRPORTS COUNCIL INTERNATIONAL

Airports Council International’s Rafael Echevarne discusses the Latin American airport business from the perspective of passengers and revenues

enhancing 62 Expanding, and evolving LIMA AIRPORT

Jorge Chavez International Airport in Lima, Peru is on a steep growth curve in line with the region’s economy

64 Unlimited opportunities IAADFS

Americas Duty Free talks with Michael Payne about preparations for IAADFS 2015 and about the prospects for the duty free industry in the Americas

new 66 Breaking ground in the air TOURVEST

Tourvest is not satisfied to just supply an airline with products to sell. It wants to revolutionize in-flight retail, bringing profit to its airline partners and satisfaction to their travelers

SHOP GUESS.COM GUESS?©2014 A R T D I R : PA U L M A R C I A N O P H : Y U T S A I

V I S I T U S AT T H E C O T Y B O O T H I N T H E M A R I N E V I L L A G E / F O Y E R 3

68 The Canadian way

88 Celebrating the good times

70 Bigger and better

90 Visions of the future

74 Timeless appeal

94 A glittering success

FDFA

Whether on its home turf or on the world stage, the Frontier Duty Free Association fosters friendship and knowledge sharing while representing the Canadian duty free industry

TOP BRANDS

Top Brands continues expansion in South America with new stores at ZOFRI and new concept in Rivera

PCI

Equal parts classic and innovative, the Giorgio Armani brand continues its domination of the fragrance category with new launches and continued investment in the Americas

ultimate in 75 The French beauty

L’OREAL LUXE TRAVEL RETAIL AMERICAS

Nearly half a century after Armand Petitjean first meets his muse for the Absolue line of skincare products, Lancôme continues innovating

76 The heat is on ESSENCE CORP

Essence Corp spices things up in the Caribbean with new fragrance launches from Burberry, Montblanc and Jimmy Choo

78 A clear line of sight PERFUME HOLDING

Americas Duty Free speaks with Perfume Holding CEO Dino Pace about the company’s renewed focus on travel retail in the Americas

80 Fragrance frenzy COTY

Coty offers a host of alluring scents for the upcoming season

82 “A sense of freedom” COACH INTERNATIONAL

Coach’s brand values align with the mindset of travelers while at the same time staying true to what made the brand successful in the domestic channel

86 Bringing beauty

L’ORÉAL TRAVEL RETAIL AMERICAS CONSUMER DIVISION

to the masses

With a clear strategy in Americas travel retail and a host of hot-ticket items in its product portfolio, L’Oréal Travel Retail Americas Consumer Division has the goto brands for travelers on the move

FOSSIL GROUP

2014 marks Fossil’s 30th anniversary, and the company is celebrating with new stores in Asia Pacific and Latin America, as well as limited edition product launches

MARCOLIN USA

Marcolin USA engages consumers seeking bolder eyewear with new product lines featuring innovative designs and unique materials

ALEX & ANI

Alex and Ani’s rapid expansion into travel retail has yielded impressive results

96 Fighting for the spotlight SUNGLASS REPORT

With the sunglass category showing positive signs of growth, suppliers share their strategies for making the most of the opportunities that await

airport retail 99 How management impacts stores GUEST WRITER

and category management

The changing landscape of airport management requires a corresponding change in the way travel retailers do business

100 Two icons meet PERFETTI VAN MELLE

Well-known confectioner Perfetti Van Melle readies a range of Chupa Chups products for travel retail that feature the iconic Minnie Mouse cartoon character

102 On the growth path KRAFT FOODS GROUP, INC.

Kraft Foods Group Inc. takes Americas travel retail by storm and lays plans for future growth in the Gulf and Europe

104 All in the family TDL INTERNATIONAL

Husband and wife team expands burgeoning company into travel retail

106 Powering up the business ELECTRONICS REPORT

Electronics and accessories suppliers are introducing innovative products and showcasing the latest technology to help drive category growth

114 Clearly Global GLOBEFILL

Staying true to the legendary crystal skulls that inspired its design, Crystal Head vodka is being found around the world

116 Absolut Warhol comes to life 142 Brave new spirits ABSOLUT

ACTIUM

In what can only be described as a spectacular display of life imitating art imitating life, Absolut’s Andy Warhol edition will soon be available to the brand’s worldwide collectors

Miami-based ACTIUM continues on its mission to distribute the best in luxury spirits throughout the Americas

very exceptional 118 Apromotion BACARDI

Bacardi’s travel retail exclusive Grey Goose VX made its Americas debut in grand style with high-impact promotions at LAX and LAS

120 Consistent and innovative SPI

Tasting bars at Stoli Night Edition promotional events leave Stolichnaya with a good aftertaste

121 From strength to strength RUSSIAN STANDARD

Russian Standard is in for a busy fall and winter, with travel retail exclusives and a whole new region

144 Excelling in the Americas WILLIAM GRANT

Hendrick’s Gin and the Glenfiddich Cask Collection continue to hold William Grant & Sons’ attention in travel retail

146 When art meets cigars DAVIDOFF

CEO Hans-Kristian Hoejsgaard feels Davidoff has found its rightful place as a strong member of the global arts community

148 Carrying legacies forward GENERAL CIGAR

General Cigar Company acquires two established cigar brands and looks to maintain and creatively expand on their original visions

150 Success begets success IMPERIAL TOBACCO

gin 122 Bulldog attacks travel retail BULLDOG GIN

Armed with a new distribution deal with Gruppo Campari, Bulldog gin has ferocious plans to have listings the world over

126 Head of the World Class DIAGEO

Cruise line bartenders up their game when they take part in the Diageo Reserve World Class Bartender of the Year competition

128 Growth through innovation MONARQ

Spurred on by relentless effort and innovative promotional strategies, MONARQ Group sees its year-todate performance increase by over 25%

130 Up and down COGNAC NEWS

Sales of Cognac are up in one region, down in another.

When it comes to Cognac sales, there is no global rule

132 “An exciting time” BEAM SUNTORY

Americas Duty Free learns why now is a great time to be part of Beam Suntory’s travel retail team from Marketing Manager of North America/Caribbean Andrew Meeks

140 Coming up from the cellar RÉMY

Rémy Martin’s Cellar Master’s Selection has proven itself worthy of coming into the light

Imperial Tobacco’s Category Management solutions help retailers make the most of their space, bringing sales up to their potential

152 Coming of age

CONFERENCE REVIEW: ASUTIL

This year was ASUTIL’s 20th anniversary, and the conference focused on both the past and the future as speakers helped delegates consider ways to increase revenue and convince travelers to buy in the coming years

132

SUPERIORITY. COMPLEX. NEW ROCA PATRÓN HAS A COMPLEX TASTE THAT’S HANDCRAFTED USING A COMPLEX PROCESS. COOKED AGAVE IS CRUSHED BY A TWO-TON TAHONA STONE WHEEL, AN ANCIENT, LABOR-INTENSIVE METHOD. THE AGAVE IS THEN FERMENTED AND DISTILLED WITH THE FIBER, RESULTING IN A MULTILAYERED, EARTHY TASTE. EXPLORE THE PROCESS AT PATRONSPIRITS.COM. TASTE HOW IT’S MADE.TM

The perfect way to enjoy Patrón is responsibly. © 2014 Patrón Spirits International AG, Schaffhausen, Switzerland. 42-45% Alc./Vol.

Flemingo International

Crossing

international borders

While representing only four of the many stores Flemingo will have opened worldwide in 2014, those in LATAM and the Caribbean make a big statement

meter space at the arrivals section carries food and beverages in addition to flowers, toiletries, gifts, souvenirs and travel accessories. The business has been steadily growing since the start of the operations and the response from the passengers and airport staff has been very positive.

More stores in the region opened shortly thereafter. In St. Maarten, known as “the gastronomic capital” of the Caribbean, Flemingo secured three food-and-beverage concessions and one fashion concession at Princess Juliana International Airport. The airport, which saw 1.7 million passengers in 2012, awarded a seven-year concession for the F&B operations and a five-year contract for the fashion shop. Flemingo confirms that it will create a true “sense of place” through

design and communication to support the airport’s goal of making St. Maarten the destination for future holiday travelers to the Caribbean.

Flemingo next opened the doors to its duty free shops at the Arrivals and Departures lounge at the Deputado Luiz Eduardo Magdalhães International Airport in Salvador, Brazil. Last year Flemingo won the concession to operate duty free stores at the airport for a period of 10 years. Flemingo’s operation at the airport, which is expected to bring in over US$200 million over its 10-year contract, has a floor space of over 700 square meters and will carry a wide range of goods suitable for many tastes and budgets, including electronics, gifts, accessories, sunglasses and watches.

by

WENDY MORLEY

F

lemingo has rapidly grown into a major player in the travel retail industry. Headquartered in Dubai, the company first established itself throughout Africa, Asia and Europe, finding its niche by focusing on emerging and developing markets in underserviced areas. Begun in 1997, the company has opened over 140 stores in 32 countries in under 20 years, and those figures are continuously increasing.

Flemingo has made no secret of its goal to reach US$2 billion in sales by the year 2020, and its rapid expansion is a strategic part of that plan. The company has also been quite candid in admitting it has its eye set firmly on the Americas, and Latin America in particular, as a major growth target.

This year has been a big one for Flemingo in the Western Hemisphere. The company celebrated the New Year by stepping on American soil at Juan Santamaria International Airport in Costa Rica, opening a Starter convenience store. The 74-square-

In the summer, Flemingo opened its first location in Brazil, in Deputado Luiz Eduardo Magdalhães International Airport in Salvador

16

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Flemingo International Flemingo always offers regional products in its stores.

In Paraguay it is focusing on regional wines

Perfume, cosmetics and fashion accessories will make up a large part of Flemingo’s mix in Paraguay

Crossing into Paraguay

In early October Flemingo opened its latest LATAM stores, in Silvio Pettirossi airport in Asuncion. These stores, measuring a total of 140 square meters, are located in both Arrivals and Departures and offer liquor, tobacco, perfume, cosmetics, confectionery and fashion accessories. It is a very important aspect of the company’s vision and success to establish itself with the local population by providing regional services and products and by offering shopping areas planned very carefully to work for local travelers. In the Paraguay stores, the regional focus will be on South American wines.

Simon Forde, Flemingo’s COO, says: “In 18

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

convenience and F&B, although our concept is ‘global’ the product assortment is very much determined locally. Now that we have been in the region for a year we are learning more. Our Food Services Head, Michael Aldridge, is currently working in the region further developing our understanding of local culture.”

Flemingo’s strategy is to look at all opportunities and evaluate them while staying focused on emerging markets. The company has a team of 15 business development people who find these possible ventures. Forde says: “We were excited by this opportunity in Paraguay and are delighted to open our second store in South America.”

While Flemingo is mainly pursuing duty free in LATAM, with its convenience and F&B it has “a more flexible approach to markets, and are actively seeking opportunities in the broader Americas.” Forde confirms the company’s strategy in the region is the same as in the rest of the world: core duty free, shops, in-flight and diplomatic as well as convenience and F&B concepts. “Our uniqueness is our ability to offer master concessions to airports which allow us to work with them and really grow commercial revenue,” says Forde. It appears that uniqueness is holding them in good stead as they move into ever more emerging countries in the Americas and elsewhere. 

Flemingo International

Cruzando fronteras

internacionales

F

lemingo se ha convertido rápidamente en un protagonista importante de la industria minorista de viajes. La compañía, con sede en Dubai, fue creando sucursales en Africa, Asia y Europa, y encontró su nicho enfocándose en mercados emergentes y en desarrollo en zonas insuficientemente atendidas. Desde su comienzo en 1997, la firma cuenta con 140 operaciones en 32 países y en menos de veinte años. Pero estas cifras están en continuo crecimiento. Flemingo no oculta su objetivo de llegar a US$2 mil millones en ventas para el año 2020, y su rápida expansión es parte estratégica de ese plan.

La firma también ha admitido honestamente que las Américas está en su foco de atención, y Latinoamérica en particular, como un objetivo vital de crecimiento.

Este año ha sido de grandes logro para Flemingo en el Hemisferio Occidental. La compañía celebró el Año Nuevo entrando en tierras de América en el Aeropuerto Internacional Juan Santamaría de Costa Rica, donde inauguró una tienda de artículos

varios Starter. El espacio comercial con 74 metros cuadrados en la sección de llegadas vende alimentos y bebidas, además de flores, artículos de aseo, regalos, recuerdos y accesorios de viaje. El negocio ha estado creciendo continuamente desde el inicio de las operaciones, y la respuesta de los pasajeros y el personal del aeropuerto ha sido muy positiva.

Poco después, se inauguraron más tiendas en la región. St. Maarten, conocida como “la capital gastronómica” del Caribe, Flemingo obtuvo tres concesiones de alimentos y bebidas y otra de modas en el Aeropuerto Internacional Princesa Juliana.

El aeropuerto, que recibió 1.7 millones de pasajeros en el 2012, otorgó una concesión de siete años a las operaciones de alimentos y bebidas, y un contrato de cinco años a la tienda de modas. Flemingo confirmó que creara un auténtico “sentido de lugar” mediante diseño y comunicación, para apoyar el objetivo del aeropuerto de convertir a St. Maarten en el destino de futuros viajeros de feriados al Caribe.

In the summer, Flemingo opened its first location in Brazil, in Deputado Luiz Eduardo Magdalhães International Airport in Salvador

20

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Representando solo cuatro de los mucho almacenes que Flemingo abrió mundialmente en el año 2014, los almances en LATAM y el Caribe causaron un tremendo impacto.

Flemingo abrió posteriormente las puertas de sus tiendas duty free en el salón de llegadas y salidas del Aeropuerto Internacional Diputado Luiz Eduardo Magdalhães en Salvador, Brasil. El año pasado, Flemingo ganó la concesión para operar tiendas duty free en el aeropuerto durante un período de diez años. La operación de Flemingo en el aeropuerto, que se espera produzca más de US$200 millones durante los diez años del contrato, cuanta con un espacio comercial superior a los 700 metros cuadrados, y venderá una amplia gama de mercancías para todos los gustos y presupuestos, como electrodomésticos, regalos, accesorios, lentes de sol y relojes.

Cruzando a Paraguay

A principios de octubre, Flemingo inauguró sus tiendas más recientes en Latinoamérica, en el Aeropuerto Silvio Pettirossi de Asunción del Paraguay. Estos establecimientos, que totalizan 140 metros cuadrados, están ubicadas en las secciones de llegadas y salidas, y ofrecen licores, tabaco, perfumes,

Flemingo International Flemingo always offers regional products in its stores; in Paraguay it is focusing on regional wines

Perfume, cosmetics and fashion accessories will make up a large part of Flemingo’s mix in Paraguay

cosméticos, confituras y accesorios de moda.

Es un aspecto muy importante de la visión y éxito de la compañía darse a conocer a la población local, proporcionando servicios y productos regionales en áreas de compras planificadas con mucha atención para que funcionen con los viajeros locales. En las tiendas de Paraguay, el enfoque regional se llevará a cabo en el renglón de vinos.

“En las tiendas de artículos varios y de alimentos y bebidas, aunque nuestro concepto es “global”, el surtido de productos está determinado fundamentalmente por el aspecto local. Ahora que ya llevamos un año en la región, estamos aprendiendo más. Michael Aldridge, nuestro Director de Servicios de Alimentos, esta trabajando actualmente en la región para perfeccionar aun más nuestra comprensión de la cultura 22

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

local”, expresó Simón Forde, Director de Operaciones de Flemingo.

La estrategia de Flemingo es buscar todas las oportunidades y evaluarlas, enfocándose al mismo tiempo en los mercados emergentes. La compañía cuenta con un equipo de 15 expertos en desarrollo de negocios, encargados de buscar esas oportunidades.

“Nos entusiasmamos con esa oportunidad en Paraguay, y nos complace extremadamente inaugurar nuestra segunda tienda en Suramérica”, añadió Forde.

Si bien Flemingo se propone fundamentalmente operaciones duty free en Latinoamérica, con sus tiendas de artículos varios y de alimentos y bebidas, según Forde “tenemos un acercamiento más flexible a los mercados, y estamos buscando oportunidades activamente a lo largo y ancho

de las Américas”. El alto funcionario de Flemingo confirmó que el enfoque de la compañía en la región adopta las mismas estrategias que en el resto del mundo: duty free convencional, tiendas, operaciones en vuelo y atención a diplomáticos, así como conceptos de tiendas de artículos varios y de alimentos y bebidas. “Nuestra originalidad reside en nuestra capacidad de ofrecer concesiones maestras a los aeropuertos, las cuales nos permite trabajar con ellos y aumentar realmente el ingreso comercial”, agregó Forde. Aparentemente, esa originalidad mantiene la firmeza de sus pasos en la medida que la compañía sigue orientando su dirección hacia muchos más países emergentes en las Américas y otras partes del mundo. 

ENJOY A GLASS FROM ONE OF OUR “ GREAT ESTATES ”

Please enjoy responsibly.

Please visit Constellation Brands at

TFWA Stand D26, Yellow Village.

Heinemann A Little Something, which has the look and appeal of an old-school general store, offers gourmet foodstuffs

Enough to go around by

WENDY MORLEY

Among other jobs Heinemann wants to accomplish in the Americas, the company is looking to ensure the success of other duty free retailers

O

ne of the oldest companies in the duty free world, Gebr. Heinemann began as a chandler, providing tax and duty free supplies to ships in 1879. Over the next four generations the family-owned company weathered many storms as it grew and flourished, establishing itself firmly as a major player in the modern-day duty free market over the last 40 years. Today, the operator specializes in serving passengers as opposed to shipping companies. The vast majority of its business, however, has been in Europe.

That began to change in 2008, when Steffen Brandt was sent to Singapore as the region’s CEO to establish the business throughout Asia-Pacific. During Brandt’s five-year tenure in that region, Gebr. Heinemann was established in 13 countries. Heine-

Steffen Brandt, CEO, Heinemann Americas, is creating a Miami-based team with a vision in line with the company’s global strategies and values

24

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

mann Asia-Pacific has now been passed to the very capable hands of Max Heinemann; in spring of this year Brandt was sent to Miami as CEO, Heinemann Americas, to work the same magic in that region.

While Gebr. Heinemann has no stores or store distribution in the Americas at the moment, the company has been involved in border stores in the past and has been working with MSC Cruise Lines out of Miami as its global supplier—mainly for perfume, cosmetics and confectionery—and so is definitely no stranger to the region. With Brandt’s new appointment and the company’s direction, Heinemann will soon be much more active on this side of the globe.

Distribution plus a lot more

Brandt explains that Heinemann has two major focuses: opening and managing its own duty free stores and providing distribution for others. But for Heinemann, distribution is not just a matter of delivering goods. “We call our services ‘distribution plus,’” says Brandt. “We also take care of training, support for marketing activities, promotion and other needs.”

He explains that if a border store, airport store, cruise line or other concessionaire forms a cooperative agreement with the company, Heinemann will offer an extraordinary level of support. Depending on whether the store is just being created or is already operational, Heinemann will help to produce optimal layout, design,

refurbishment, merchandising and marketing. The company will do this free of any additional charge on top of purchasing products through them. It is in everyone’s best interest for the store to do well and sell as much possible, and so Heinemann will do what it can to help achieve that. “While there are plenty of distributors,” says Brandt, “no other distribution company has the retail knowledge and team of architects, product managers and marketing experts to help make the operation as successful as it can possibly be. We believe that the better we do the job, the better it works for both Heinemann and the retailer.”

Currently Heinemann Americas has some requests for cooperation, which it is reviewing, but the main goal right now is not to rush out and secure business; it’s to be prepared to jump on every attractive opportunity that should arise, whether that opportunity comes as an airport tender or as a cooperative agreement with another concessionaire. Brandt strongly believes “the chicken comes before the egg. We really want to establish something attainable, something that is the best solution for the market.”

Building a successful team

Brandt also needs to make sure his team’s vision is in line with the company’s global strategies and global values. To help fulfill that goal, he brought a few members from his Singapore office, but he is very clear

THE NEW FALSE LASH EFFECT*

LASHES SPREAD LIKE BUTTERFLY WINGS NEW

* From L’Oréal Paris.

W I N G S

n REVOLUTIONARY ASYMETRIC BRUSH: INSTANTLY VOLUMISES AT THE ROOTS AND STRETCHES LASHES OUTWARDS. n UNIQUE «COCOON» FIBERS: ENVELOP AND EXPAND LASHES FOR SPECTACULAR, FLUTTERY VOLUME.

“THIS YEAR, THE BUTTERFLY LOOK IS MY ULTIMATE MUST-HAVE...”

Bianca Balti.

Heinemann

Heinemann’s gourmet food shop at Sydney Airport offers both international and local specialties

that this does not mean he’s come with the idea that his team is better than anyone local. Rather it is to help with the transfer of knowledge and to help instill the Heinemann spirit in the new staff.

“We’re not coming over to tell the rest of the world how it works,” he says. “We believe in local knowledge.” Brandt has hired several people since opening up the Miami office, and he is pleased with their enthusiasm. The office started with five expats from Singapore and now seven additional people have been hired on. They have been working out of an office at the airport, but in December of this year will be moving to new offices in Miami.

Looking for opportunities where they arise

As the Chinese traveler has had the spotlight in Asia, Brandt says in the Americas a similar spotlight is shone on the Brazilian traveler, but the company is certainly receptive to opportunities no matter wherever they appear in the region. Heinemann already has offices in Panama and in Montevideo, and with the establishment of the regional headquarters in Miami it makes sense to explore opportunities in the northern hemisphere, so Brandt is looking to the US and Canada as well. That being said, he admits South and Central America currently have more of his attention.

While Brandt underlines the importance of the region’s human resources, he will look locally for more than just person26

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

nel; he also plans on purchasing from regional suppliers. “I strongly believe that the regional character or brand of an airport will become more and more important in the future. The airport is like a business card. It’s the first thing you see when you arrive in a city and the last thing you see when you leave.”

Therefore, Brandt would like to develop regional concepts with partners as he did in Asia. “Just to give an example, the team in Singapore developed a successful and interesting concept for wine called Vine and Leaf. The atmosphere was inspired by Old World wineries. The store offers tastings of premium wines but also incorporates other innovative ideas such as an interactive touch screen and iPads that offer product

One of the successful and unique concept stores created in Asia under Steffen Brandt was Vine and Leaf, a wine and cigar store

information. In that store we stimulate the traveler’s five senses.”

Brandt is all ears for a potential partner with a solid plan and an original idea, proving once again that he puts no limits on the company’s growth in this region. On the other hand, he’s in no hurry to sign any agreements, preferring to wait until conditions are optimal and the right partner and opportunity present themselves.

“Our goal in this region has been to get properly set up in order to act independently and be 100% functional so we can buy, store and sell products and so we can follow our business model, which is retail and distribution. We want to do everything right and we are getting to that point. Now we are looking and moving forward.”  Bon Bon Voyage in Surabaya is Heinemann’s version of a candy wonderland

HON E YMAN IA

™

H ON E Y FRO M ETH I O PIA The luxurious honey in our range is enriched with the nectar of thousands of flowers

NEW

© 2014 The Body Shop International Plc. All rights reserved Absolutely no reproduction without the permission of the owners ® Registered trademark of The Body Shop International Plc. ™ A trademark of The Body Shop International Plc. INGTRGE031

Heinemann

The store not only offers A Little Something to eat, but also to drink, with an international wine selection

Con lo suficiente para avanzar by

G

WENDY MORLEY

Entre los trabajos que Heinemann desea realizar en las Américas, está garantizar el éxito de otros minoristas duty free

ebr. Heinemann, una de las compañías más antiguas del mundo duty free, comenzó como proveedora, abasteciendo de mercancías con y sin cobro de aranceles a los barcos en 1879. En las cuatro generaciones siguientes, la firma de propiedad familiar pudo capear numerosos temporales en su proceso de crecimiento y florecimiento, para finalmente, en los últimos 40, establecerse sólidamente como protagonista importante del mercado duty free actual, especializada en prestar servicio a los pasajeros, en vez de a las compañías navieras. Sin embargo, la gran mayoría de sus operaciones se han realizado en Europa.

Una situación que comenzó a cambiar en el 2008, cuando Steffen Brandt fue asignado a Singapur como director ejecutivo para la región, con el propósito de crear negocios en Asia-Pacífico. Una misión que cumplió a cabalidad. En los cinco años de trabajo de Brandt en la región, Gebr. Heinemann comenzó a operar en 13 países. En la actualidad, la dirección de Heinemann Asia-Pacific ha pasado a las manos extremadamente capaces de Max Heinemann. En la primav-

28

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

era de este año, ; Brandt fue enviado a Miami como director ejecutivo de Heinemann Americas, una región donde seguramente pondrá en práctica su magia efectiva.

Aunque en estos momentos Gebr. Heinemann no cuenta con establecimientos ni distribución de tiendas en las Américas, la compañía ha tenido previamente participación en tiendas de frontera, y ha trabajado con MSC Cruise Lines en Miami como su proveedor global—principalmente en los renglones de perfumería, cosméticos y confituras—por lo que definitivamente no es ajena a la región. A partir del nuevo nombramiento de Brandt y la dirección que está tomando la compañía, en breve Heinemann reportará una actividad mucho mayor a este lado del planeta.

“Distribución plus”

En una entrevista reciente, Brandt le explicó a Américas Duty Free que Heinemann tiene dos puntos principales de enfoque: la apertura y administración de sus propios establecimientos duty free, y proporcionar distribución para otros. Sin embargo, para Heinemann, la distribución no se limita solamente al despacho de mercancías. “Es

un servicio que conocemos como ‘distribución plus’”, afirmó Brandt. “También nos hacemos cargo del entrenamiento, el apoyo a actividades de mercadeo y la satisfacción de otras necesidades”.

Brandt añadió que si una tienda de frontera, de aeropuerto, de cruceros u otras formas de concesionarios suscribe un convenio de cooperación con la compañía, Heinemann le ofrecerá un nivel de apoyo extraordinario. En dependencia de si el establecimiento es de reciente creación o si ya es operativo, Heinemann ofrecerá ayuda para la producción de la estructura, diseño, remodelación, identidad de marca y mercadotecnia óptimas. Además, la firma realizará esta labor sin costo alguno, además de comprarles productos. Como el buen funcionamiento y las mayores ventas del establecimiento son convenientes para todos, Heinemann hará todo lo posible para alcanzar ese objetivo. “Aunque existen numerosos distribuidores”, afirmó Brandt, “no hay otra compañía de distribución con el conocimiento del comercio minorista y el equipo de arquitectos, gerentes de producto y expertos en mercadotecnia para contribuir a que la operación sea lo más exitosa posible.

Heinemann Creemos que mientras mejor trabajemos, mejor funcionará la operación, tanto para Heinemann como para el minorista”.

En la actualidad, Heinemann Americas ha recibido algunas solicitudes de cooperación que está analizando, pero el principal objetivo es no apresurarse y garantizar negocios; y estar preparados para aprovechar todas las oportunidades atractivas que puedan surgir, ya sea en forma de licitación de aeropuertos o como convenio de cooperación con otro concesionario. “Creo firmemente en que la gallina surgió primero que el huevo. Queremos establecer realmente algo alcanzable, algo que sea la mejor solución para el mercado”, agregó Brandt.

Creando un equipo exitoso

Brandt también necesita garantizar que la visión de su equipo se corresponda con las estrategias y valores globales de la compañía.

Y para lograr ese propósito, ha incorporado parte del personal de su oficina en Singapur, aunque tiene muy claro que esto no implica que su equipo sea mejor que los expertos locales, sino como forma de apoyo a la transferencia de conocimientos e inculcar el espíritu de Heinemann en los nuevos integrantes. “No es nuestra intención venir a decirle al resto del mundo cómo funcionan las cosas”, aseguró. “Creemos en el cono-

Vine and Leaf offers premium wine tastings and also incorporates other innovative ideas that stimulate the five senses

cimiento local”. Brandt ha contratado a varias personas desde la inauguración de su oficina en Miami, y está complacido con su entusiasmo. La oficina comenzó sus operaciones con cinco “repatriados” de Singapur, y cuenta actualmente con otras siete funcionarios contratados. Aunque en estos momentos trabajan en una oficina en el aeropuerto, en diciembre próximo se trasladarán a nuevos locales en Miami.

Buscar oportunidades dondequiera que aparezcan

De la misma manera en que el viajero chino es el centro de atención en Asia, Brandt afirmó que en las Américas el principal protagonista es el viajero brasileño. Sin embargo, la compañía es receptiva a las oportunidades que puedan surgir, independientemente de dónde puedan surgir en la región. Heinemann ya cuenta con oficinas en Panamá y en Montevideo, y con la apertura de la sede regional en Miami, tiene sentido explorar oportunidades en el hemisferio norte. De ahí que Brandt también las esté buscando también en los

Candy cane-striping, primary colors and an enormous selection help create a candy lover’s paradise

30

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Estados Unidos y Canadá. Dicho esto, el alto funcionario admite que está dedicándoles la mayor atención a Sur y Centroamérica.

Si bien Brandt destaca la importancia de los recursos humanos de la región, buscará mucho más que personal en el ámbito regional. Además, tiene en proyecto comprarles a proveedores regionales. “Creo firmemente en que el carácter o marca regional de un aeropuerto irá cobrando cada vez más importancia en el futuro. El aeropuerto es como una tarjeta de presentación. Es lo primero que vemos al llegar a una ciudad, y lo último que visitamos a la salida”, destacó.

Por tanto, a Brandt le gustaría crear conceptos regionales con colaboradores, tal y como hizo en Asia. “Solo para darles un ejemplo: el equipo de Singapur creó un concepto exitoso e interesante para el vino Vine and Leaf, con una atmósfera inspirada por las bodegas del Viejo Mundo. La tienda ofreció degustaciones de vinos de calidad, pero incorporó además otras ideas innovadoras como una pantalla táctil interactiva y iPads con información del producto. En esa tienda estimulamos los cinco sentidos del viajero”.

Brandt está bien atento en la búsqueda de un socio potencial con un plan sólido y una idea original, demostrando una vez más que no le impone limites al crecimiento de la compañía en esta región. Por otra parte, no tiene prisa en formar convenio alguno, y prefiere esperar hasta que las condiciones sean optimas, y que aparezcan el socio y la oportunidad adecuados. “Nuestro objetivo en esta región ha sido establecernos adecuadamente para actuar de forma independiente y ser funcionales al 100% para poder comprar, almacenar y vender productos, siguiendo así nuestro modelo de negocios, que es el comercio minorista y la distribución. Queremos hacerlo todo correctamente, y estamos llegando a ese punto.

Ahora estamos observando y avanzando”, concluyó Brandt. 

INTERNATIONALTEAM@ALEXANDANI.COM | 1.212.385.1775 MAD E I N A M ER I CA WI T H LOV E 速 W W W. A L EX A N DA N I . C O M

Retailer News

London Supply inaugurates nursery school on August 26 London Supply officially inaugurated of the “Mother Theresa of Calcutta” nursery school in Puerto Iguazu, Argentina on August 26. The new school is the latest addition to London Supply’s Educational Park project in the underprivileged Primero de Mayo neighborhood.

The project, which was the brainchild of London Supply President Teddy Taratuty, is just one of many initiatives developed by the London Supply Group Foundation with giving back to the Puerto Iguazu community as its principle aim. With the Mother Theresa of Calcutta nursery school now complete, the Educational Park currently offers services to children from 45 days old to 18 years.

In addition to educating children, the complex offers a number of practical programs for families.

London Supply noted that in addition to the Educational Park, a police station and a first aid station were also built and are now fully operational. “These buildings offer essential security and health services to benefit our students and their families,” Taratuty told Americas Duty Free.

“Our goal is to ensure equal opportunities for the communities where our business units are located, and the Educational Park brings us one step closer to this important objective,” Taratuty concluded.

“Our goal is to ensure equal opportunities for the communities where our business units are located, and the Educational Park brings us one step closer to this important objective.”

TEDDY TARATUTY, PRESIDENT, LONDON SUPPLY

Sociedad Protectora del Niño sees strong sales in H1 on the back of unique promotions

Over the summer, Sociedad Protectora del Niño ran a promotion in cooperation with Sony for the FIFA World Cup where shoppers were invited to take penalty kicks on the Sony PlayStation with participants receiving prizes for every goal they scored

32

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Alejandro Asturias, General Manager of Sociedad Protectora del Niño (SPN), tells Americas Duty Free that over the first half of this year the operator saw good year-over-year growth.

“We’re hoping that we can maintain this through to the end of the year,” he explains.

Part of that growth had to do with SPN’s concentration on running promotions regularly to entice travelers to shop. Over the summer, the operator ran a promotion in cooperation with Sony for the FIFA World Cup where shoppers were invited to take penalty kicks on the Sony PlayStation. Participants received prizes for every goal they scored.

“The initiative was very successful,” says Asturias. “It got more people into the store and we also saw impulse purchases of the latest releases from Ron Botran, Solera 18 Years and Reserva 15 Years.”

As the holiday season approaches Asturias assures us that SPN is working diligently to ensure that travelers will see plenty of new products in store and have the opportunity to experience more novel promotions. “While we can’t reveal anything yet, we’re excited about keeping sales up in the second half and we’ve got a lot planned in order to achieve this objective.”

OF SWITZERLAND OF SWITZERLAND

Monseñor Rodríguez, 654 - Ciudad del Este, PARAGUAY - Tel +595 (061) 500 645 Monseñor www.monalisa.com.py Rodríguez, 654 - Ciudad- facebook.com/MonalisaParaguay del Este, PARAGUAY - Tel +595 (061) 500 645 www.monalisa.com.py - facebook.com/MonalisaParaguay

Dufry-Nuance

The

earth moved The center of gravity shifted earlier this year when Dufry announced its purchase of another travel retail giant by

WENDY MORLEY Even before the acquisition of Nuance, Dufry had locations around the world, as the photos over the next two pages from Bali, Houston and Sao Paolo suggest

I

t’s probably safe to say that on June 4th, 2014, a collective gasp was heard throughout the travel retail world as it was announced that Dufry had signed an agreement to acquire The Nuance Group in its entirety for CHF1.55 billion (US$1.72 billion using exchange rates of that day). The deal was financed with CHF1 billion (US$1.11 billion) in equity and CHF550 million (US$612 million) in new debt.

The next month, the Swiss operation issued €500 million (US$646 million) in senior notes and sold five million new shares to help finance the purchase. The company offered 3,623,976 new shares to existing stockholders, while 1,376,024 shares not taken up by existing shareholders were offered to investors in Switzerland and in private placements in certain jurisdictions outside Switzerland in compliance with securities laws. Dufry expected to receive gross proceeds of approximately CHF 810 million (US$906.04) from sales of shares, covering most of the transaction’s cost.

Dufry CEO Julian Diaz engineered what was arguably the most exciting and talkedabout acquisition in duty free history

34

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

The deal is done

On September 9, 2014, Dufry’s acquisition of Nuance was concluded, making Dufry the largest travel retail operator in the world with close to 1,750 shops in 63 countries and on five continents, and presence in 239 airports.

Dufry is now in the process of integrating Nuance into its organization and expects to begin generating synergies in 2015.

The company predicts an improvement of CHF 70 million (US$74.75 million) by 2016. This improvement is expected as a result of improved purchasing power and through the integration of Nuance into Dufry’s supply chain and logistics platform in addition to a consolidation of global and regional organizations and support functions.

GIFTS & ACCESSORIES DESIGNED IN GERMANY.

GIVING PLEASURE

Visit us at TFWA World Exhibition Cannes Red Village

J 23

www .troik a.org

BENNY Keyring teddy bear

Dufry-Nuance Julian Diaz, Dufry’s CEO, commented: “Today, another major step is achieved. With the Nuance acquisition we’re continuing our global strategy of profitable growth and diversification. The combination of Dufry and The Nuance Group strengthens our concession portfolio. It further adds countries and operations that fit well with Dufry’s regional strategy. Thanks to the Nuance acquisition, we increase our presence in Asia, the Mediterranean region, northern and central Europe, and North America.

“We will focus on the integration in the coming quarters. In order to assure a successful process we developed an action plan which will be implemented immediately. I am convinced that combining the best of both Dufry and Nuance’s know-how will generate significant value and will transform the world of travel retail.” Diaz went on to welcome his company’s new colleagues at Nuance. 

This acquisition, the largest in travel retail history, adds Nuance’s strategic locations, especially in Europe and Asia, to Dufry’s already strong global presence

36

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

The Latin American Economy

Cruise control Argentinean economist Carlos Melconian gives us his take on what we can expect from the Latin American economy in the mid term

A by

RYAN WHITE

rgentinean economist Carlos Melconian is certainly the source to turn to for a forecast on what we can expect from the Latin American economy in the future, and Americas Duty Free caught up with him giving a recent talk that centered largely on the concept of “cruising speed” and how it will affect Latin American economies.

Cruising speed, said Melconian, can best 38

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

be explained by looking at the 1990s, when growth was moderate but relatively stable.

During the 1990s the world economy grew at 3.3%, while the Latin American economy was slightly behind at 2.8%. The boom from 2003 to 2007 brought with it worldwide economic growth of 4.8% before the Great Recession of 2008–9 when worldwide growth dipped to 1.2%. As the world came out from the grip of the recession from 2010 to 2013, growth increased to 3.8%. For this year and next, he expects worldwide growth of 3.6% and 2.6% growth in Latin America.

“We’re likely getting back to a world that is at cruising speed,” he said, “very similar to the nineties with annual growth at about 3%.”

This emerging trend, explained Melconian, is characterized by solid growth, albeit at a slower pace than the boom of 2003–7, selective investment and financial markets that are best described as more volatile than risky. “It’s a world that won’t save you, but

it won’t bring you down either,” he said. “As with the last crisis, countries that don’t stay the course and do what they should risk self destruction.”

Melconian said that both booms and crises have the tendency to mask shortcomings. For example, during a boom, a lack of institutional reform or competitiveness, or any number of other inefficiencies, isn’t generally as noticeable given high exchange rates and low liquidity costs. In a crisis, says Melconian, “it’s the world’s fault,” and macro problems become intermingled with the impact from the external shock. Put simply, whether in good times or in bad, the focus isn’t necessarily on what needs to be improved.

“At cruising speed, certain vulnerabilities come to light,” Melconian continued. “It is a world with less ‘clearances,’ less external help for economies. It is not a bad world per se, but things won’t come as easily as they had previously.”

Discover the Duty Free World DUTY Paraguay, Sudamérica

FREE Mannah Duty Free

Aeropuerto Internacional Silvio Pettirossi Asunción - Paraguay Phone: (+595 21) 645 715 / 645 753 Aeropuerto Internacional Guaraní Ciudad del Este - Paraguay Phone: (+595 64) 421 075 dutyfree_asu@mannah.com.py

The Latin American Economy

What it all means

Melconian went on to discuss what effect a world at cruising speed will have on prices of raw materials, worldwide business, the value of the Dollar and interest rates. “In terms of raw material prices, they’ll be less bombastic, largely due to China and its demand for food products,” he said. “Worldwide, we’ll see more competition and protectionism as far as business is concerned, and we should see conditions in favor of the US Dollar and slightly less so for the Euro. Interest rates will rise gradually, but the ceiling will be lower than the historical average.”

He went on to note that in this type of economic environment, it is important that countries confront the economic challenges that they face. Countries must again become very careful about fostering stability and competitiveness in order to operate on the world stage.

Finally, Melconian explored the economic situations in Argentina, Brazil and Mexico. He said that Argentina was in a state of political transition and that the country’s current economy is not sustainable for the future. Similarly, Brazil is also in a state of political transition. Despite the fact that “some changes need to be made within the model,” a complete overhaul isn’t required. He then compared Mexico’s economic model to a “symphony,” noting that the country’s economy is structurally sound and that the outlook for the medium term is good.

Growth may be slowing, but it is importantly stabilizing. The challenge now for Latin America according to Melconian appears to be that certain imperfections in some countries’ processes and systems may now come to light given the fact that the instabilities of the past are largely behind us. 

“We’re likely getting back to a world that is at cruising speed, very similar to the nineties with annual growth at about 3%.”

CARLOS MELCONIAN, ECONOMIST, M&S CONSULTORES

In discussing Argentina, Brazil and Mexico, Melconian noted that Mexico was likely best placed for mid-term growth.

40

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Brazil

A new

phase by

RYAN WHITE

Dufry Brazil COO José Carlos Rosa discusses the changes happening in Brazil and how Dufry is adjusting to meet the needs of a new type of traveler and a new breed of airport operator

C

OO of Dufry Brazil José Carlos Rosa recently gave a talk on the topic of what is happening in Brazil at the moment, what the duty free industry can expect in the future from the country and what Dufry is doing to grow the business there. “Brazil is a constant challenge,” he said. “There are always surprises and every solution presents a new challenge.”

Rosa started by saying that until 2010, the growth of Brazil’s economy was well above the worldwide average. Since 2011, however, growth has become more modest.

“The forecast is that this modest growth will continue in the future,” he said.

Putting things into a worldwide context, Rosa said that we are experiencing a recovery, but to varying degrees depending on the region. In the US, after a slow year

things are improving; the Chinese economy is stabilizing; and Europe is showing signs that it will eventually bounce back.

The middle class emerges

With regard to Brazil specifically, Rosa said that the main challenges had to do with the job market and sub-par productivity. “One piece of data that I find particularly interesting is the distribution of social classes,” he noted. “Clearly, from 2000 to 2010 Classes C and D have grown very strongly.”

Class D is defined as people with a monthly income of R$701 to R$1,159 (US$310 to US$689), and Class C is defined as people with a monthly income of R$1,559 to R$4.635 (US$689 to US$2,049). The expectation, said Rosa, is that these classes combined could reach close to 70% of Brazil’s population. Importantly for the

duty free industry, this is a class that is now starting to fly, both domestically and internationally. “They certainly have an impact on how our stores look and what they contain in terms of products,” Rosa explained.

“I remember when this trend started to emerge a few years ago and there was a lot of talk internally about what we should change in our stores to accommodate this new category of traveler,” he continued. “At

“After 40 years of business in Brazil, we’re going ‘back to school,’ as it were. This is a new stage for Dufry in how we work together with airports and airport operators.”

JOSÉ CARLOS ROSA, COO, DUFRY BRAZIL ON THE PRIVATIZATION OF AIRPORTS IN THE COUNTRY

Class C and D travelers are expected to make up nearly 70% of Brazil’s population; as such, Dufry has thought long and hard about the best way to cater to these travelers

42

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

CEDAR ESSENCE THE NEW FRAGRANCE

Brazil the end we came to the conclusion that these travelers are looking for the same thing as higher-earning travelers: quality, luxury and promotions.”

Rosa explained that while Class C and D travelers can’t purchase in the quantities that higher classes can, they’re looking for the same products. As a result, there were changes to Dufry’s stores in Brazil, but interestingly it was largely an increase in the number and variety of quality luxury products.

“When Class C travelers visit an airport, duty free is their opportunity to experience luxury and promotions that they may not normally see,” Rosa noted. “They buy for themselves, for their families and for their friends because they either can’t find these products on the local market or because the prices are much higher locally.”

Rosa said that what’s happening right now in Brazil can be characterized as a slowdown of the economy, with inflation taking a bit of buying power away from the middle class. “That sense of euphoria for consumption has disappeared,” he explained. “The public plans more these days on how they’re going to spend their money, and this extends to the banks, who are looking more closely at how they lend money and to whom.”

Despite this, Rosa highlighted the fact that growth continues and the country is still very dynamic, with the middle class still purchasing a lot. “People are just more conscious of how they can and should spend their money,” he added.

New agreements overview: Dufry sees its latest round of expansions as a new phase in the company’s growth

The beautiful game

Rosa noted that despite the fact that sports fans all over the world flocked to Brazil— half a million were expected at the time that he spoke—the World Cup itself isn’t as monumental from an economic point of view as the possible after effects that it may have.

“The event itself isn’t changing our lives,” Rosa said. “Sure, we’re going to get a lot of people in the country, a lot of travelers.

Some will arrive in their private jets and pass through special channels and many others will come for the soccer and perhaps buy a t-shirt or a hat at our stores. In addition

44

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

we’re going to get our normal clients—those on vacation or on business—who may take advantage of the fact that the event is coinciding with their trip.”

From Dufry’s point of view, the importance of the World Cup is its capacity to change society for the better—to act as a motor that may, in Rosa’s words, “push things in a different direction.” The hope is that after the World Cup the country will be better prepared for growth, with more hotels, more restaurants, better airports, better transport and more security.

The changing face of aviation

Rosa noted that the changing landscape of aviation in Brazil also has a big impact on duty free given the country’s heavy reliance on air travel. “We don’t have a rail line and we don’t have a reliable highway network,” he said. “As such, travel in Brazil is really done by air.”

Of course, this means that anything that air transport companies do may have a big impact in travel retail and even the country at large. “There were some mergers of companies a while ago—Azul bought TRIP and it is still having an effect on the air transport market in Brazil,” Rosa said. “The two carriers today have about 15% of the domestic travel market. Azul will start flying outside of Brazil in a couple of months; they have the authorization and they bought the planes.”

He also referenced Gol’s acquisition of Webjet and TAM’s merger with LAN as other examples of developments that have far-reaching effects in Brazil. “TAM’s switch from Star Alliance to OneWorld will likely also have some type of impact

on the air transportation network in Brazil,” he explained.

A new airport management model

The final big change within Brazil’s aviation market that Rosa discussed was the privatization of a number of larger airports within the country. Until two years ago management of all Brazilian airports was under the control of Infraero, from the smallest in Amazonia to Guarhulos. Infraero is still a major partner in these new privatization projects, at 49%.

“These private companies are paying a lot of money to run these airports, so from Dufry’s point of view a priority is proving our capacity to invest, ensuring our stores are modern and contain the best products and offering excellent promotions and prices so that we’re considered an ideal business partner,” Rosa said.

And this strategy appears to be working, as Dufry has signed agreements with all the recently privatized airports. In what has been dubbed a new phase for Dufry in Brazil, the operator now has 19,700 square meters of retail space at the country’s privatized airports compared to 6,100 square meters in the same airports previously.

“After 40 years of business in Brazil, we’re going ‘back to school,’ as it were,” concluded Rosa. “This is a new stage for Dufry in how we work together with airports and airport operators. We’re finally getting the store space that we need.

“We’ve developed and grown a lot, especially with concepts like Hudson news,” he added. “The objective now is to maintain this level of growth.” 

Brazil

Una nueva fase by

RYAN WHITE

José Carlos Rosa, Director de Operaciones de Dufry Brasil, habla acerca de los cambios que están ocurriendo en Brasil, y cómo Dufry se adapta para satisfacer las necesidades de un nuevo tipo de viajeros, y una nueva hornada de operadores aeroportuarios

R

ecientemente, José Carlos Rosa, Director de Operaciones de Dufry Brasil, habló detenidamente acerca de lo que está ocurriendo actualmente en Brasil, lo que puede esperar la industria duty free de ese país en el futuro, y lo que hace Dufry para incrementar su negocio allí. “Brasil es un reto constante”, dijo. “Siempre hay sorpresas y cada solución constituye un nuevo reto”.

Rosa comenzó diciendo que hasta el 2010, el crecimiento de la economía de Brasil estuvo muy por encima del promedio mundial. Sin embargo, a partir del 2011, ese crecimiento ha sido más modesto. “El pronóstico es que ese modesto crecimiento continuará en el futuro”, afirmó Rosa.

Poniendo la situación en un contexto global, Rosa añadió que estamos experimentando una recuperación, pero en diferentes niveles de acuerdo a la región. En los Estados Unidos, luego de un año lento, las cosas mejoran. Por su parte, la economía china se estabiliza, y Europa muestra señales de que se recuperará en un futuro cercano.

Emerge la clase media

En lo tocante a Brasil específicamente, Rosa

46

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

afirmó que los retos principales estaban vinculados al mercado laboral, y a una productividad inferior al promedio. “Un dato que considero particularmente interesante, es la distribución de las clases sociales”, destacó. “Con toda claridad, entre el 2000 y el 2010 las Clases C y D experimentaron un sólido crecimiento”.

Se define como “Clase D” a las personas con un ingreso mensual de R$701 a R$1,159 (US$310 a US$689), y la “Clase C” está compuesta por personas con un ingreso mensual de R$1,559 a R$4.635 (US$689 a US$2,049).

Según Rosa, la expectativa reside en que esas clases combinadas puedan constituir casi el 70% de la población de Brasil. Pero lo más importante para la industria duty free es que esta clase está comenzando a hacer viajes nacionales e internacionales por avión. “[Esa clase] ejerce realmente un impacto en cuál es la apariencia de nuestras tiendas, y lo que contienen en términos de productos”, explicó Rosa.

“Recuerdo cuando esta tendencia comenzó a surgir hace pocos años, y todo lo que se hablaba internamente sobre lo que debíamos cambiar en nuestras tiendas, para acoger a esta nueva categoría de viajeros”, prosiguió Rosa. “Al final llegamos a la

conclusión de que estos viajeros buscan lo mismo que los pasajeros con mayor nivel económico: calidad, lujo y promociones”.

Rosa explicó que, si bien las clases de viajeros C y D no pueden comprar las mismas cantidades que las clases más altas, buscan los mismos productos. Como resultado, se realizaron cambios en las tiendas de Dufry en Brasil, pero lo interesante es que los mismos fueron sobre todo en la cantidad y variedad de productos de lujo de calidad.

“Cuando los viajeros de Clase C visitan un aeropuerto, duty free es su oportunidad de contacto con el lujo y las promociones que no ven normalmente”, agregó Rosa.

“Compran para sí mismos, para sus familias y sus amigos, porque, o no pueden encontrar esos productos en el mercado local; o porque los precios locales son mucho más altos”.

Rosa destacó que lo que ocurre actualmente en Brasil puede ser caracterizado como una desaceleración de la economía, donde la inflación está sustrayéndole cierto poder adquisitivo a la clase media. “Esa sensación de euforia consumista ha desaparecido. Hoy día, el público planifica más cómo va a gastar su dinero, y esto se hace extensivo a los bancos, que analizan

Brazil con mayor detenimiento cómo prestan su dinero, y a quién le prestan”, agregó.

A pesar de lo anterior, Rosa enfatizó en el hecho de que el crecimiento continúa, el país sigue siendo muy dinámico, y la clase media no ha dejado de comprar enormemente. “La gente se ha vuelto más consciente de cómo puede y debe invertir su dinero”, añadió.

El juego hermoso

Rosa destacó que, a pesar de que los amantes del deporte de todo el mundo viajaron masivamente a Brasil—se esperaba medio millón en el momento de nuestra conversación—la Copa Mundial es sí no es tan monumental desde el punto de vista económico como las posibles secuelas que podría tener.

“El evento en sí no está cambiando nuestras vidas”, aseguró Rosa. “Por supuesto, vamos a tener muchos visitantes en el país, muchos viajeros. Algunos llegarán en sus aviones privados y pasarán por canales especiales, mientras que muchos otros vendrán por el fútbol, y tal vez compren una camiseta o una gorra en nuestras tiendas. Además, tendremos nuestros clientes normales—los que viajan por vacaciones o negocios—quienes pueden aprovechar la coincidencia del evento con su viaje”.

Desde el punto de vista de Dufry, la importancia de la Copa Mundial es su capacidad de mejorar la sociedad, de actuar como un motor que, en palabras de Rosa, “impulse las cosas en una dirección diferente”. Se espera que al término de la Copa Mundial, el país esté más preparado para el crecimiento, con más hoteles, más restaurantes, mejores aeropuertos, mejor transporte y más seguridad.

The rise of the middle class in Brazil has meant that Dufry has had to rethink its stores and product mix

48

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

El rostro cambiante de la aviación

Rosa añadió que el entorno cambiante de la aviación en Brasil también ejerce un gran impacto en el campo duty free, debido a la gran dependencia en los viajes aéreos que tiene la nación suramericana. “No contamos con líneas férreas, ni tampoco con una red de autopistas confiables. En base a esto, en Brasil se viaja realmente por vía aérea”, dijo.

Por supuesto, lo anterior equivale a que los transportistas aéreos pueden tener un gran impacto en el sector minorista de viajes, e incluso en todo el país. “Hace algún tiempo se produjeron algunas fusiones de compañías. Azul compró a TRIP, y eso sigue teniendo un efecto en el mercado de la transportación aérea de Brasil”, explicó Rosa. “En la actualidad los dos transportistas poseen aproximadamente el 15% del mercado de viajes nacionales. Azul comenzará a hacer viajes al exterior en un par de meses. Ya tienen la autorización y compraron los aviones”.

Rosa también hizo referencia a la adquisición de Webjet por Gol, y a la fusión de TAM con LAN como otros ejemplos de acontecimientos que han producido efectos de largo alcance en Brasil. “El cambio de TAM de Star Alliance a OneWorld también ejercerá algún tipo de impacto en la red de transporte aéreo en Brasil”, aseguró.

Un nuevo modelo de administración de aeropuertos

La gran oportunidad final dentro del mercado de la aviación en Brasil al cual se refirió Rosa, fue la privatización de varios

aeropuertos importantes en el país. Hasta hace dos años, la administración de los aeropuertos brasileños estaba controlada por Infraero, desde los más pequeños en la Amazonia a Guarhulos. Infraero sigue siendo un factor importante en estos nuevos proyectos de privatización, con un 49%.

“Como estas compañías privadas están pagando enormes sumas de dinero para operar estos aeropuertos, desde el punto de vista de Dufry una prioridad es probar nuestra capacidad de invertir, garantizando que nuestras tiendas sean modernas, contengan los mejores productos, y ofrezcan excelentes promociones y precios, para que nos consideren como un socio ideal de negocios”, dijo Rosa.

Una estrategia que funciona aparentemente, pues Dufry ha firmado contratos con todos los aeropuertos recién privatizados. En lo que se considera una nueva fase para Dufry en Brasil, el operador cuenta actualmente con 19,700 metros cuadrados de espacio comercial en los aeropuertos privatizados del país, en comparación con los 6,100 metros cuadrados que tenía previamente en esas mismas instalaciones.

“Después de 40 años de negocios en Brasil, estamos ‘volviendo a clases’ como quien dice. Es una nueva etapa para Dufry en cómo colaboramos con los aeropuertos y los operadores aeroportuarios. Finalmente, estamos logrando el espacio de tiendas que necesitamos”, afirmó Rosa.

“Hemos creado y crecido mucho, especialmente con conceptos como el de Hudson News. Ahora el objetivo es mantener este nivel de crecimiento”, concluyó el alto funcionario de Dufry Brasil. 

There are cumulus, nimbus, and cirrus clouds.

There’s also time to notice the difference.

Maui Jim sunglasses’ UV protection blocks 100% of harmful UV light, for heightened clarity.

Style shown: Baby Beach

For more information, please contact Giles Marks, Director of Global Travel Retail at gmarks@mauijim.com. ©2014 Maui Jim, Inc.

Mannah Duty Free

A time to remember example,” he says, “Iguazu Falls is a one-ofa-kind natural wonder, with over 1 million people a year visiting the region just to see it.

Fortunately, many of these travelers also stop at the border between Brazil and Paraguay to do some shopping.”

The operator is currently investing heavily in its La Petisquera-branded stores in Ciudad del Este, Paraguay to ensure that shoppers looking for the latest and greatest brands will be able to do so comfortably and safely. “As business pioneers here in Ciudad del Este, it’s important for us to do our part in changing the face of the city and attracting more tourists here,” Mannah explains.

“Every year we endeavor to make improvements to both our store and the high-quality products within it that will, we hope, also benefit the city at large.”

New spirits and tobacco manager For Mannah Duty Free, the best way to sell products is to ensure that shoppers are given an unforgettable experience

F

or the majority of duty free shops located on the border with Brazil, the first six months of 2014 weren’t perhaps quite what many expected. With tamer than hoped for economic results from the World Cup and election preparations bringing with them consumers that were more cautious in how and where they spend, for some South American duty free operators the first half of 2014 was unremarkable in many respects.

Mohamed Mannah, President of Mannah Duty Free, tells us that the above situation wasn’t felt so much in Paraguay, given the country’s strong tourism sector. “For 50

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

This year Firás Mannah, Mohamed Mannah’s nephew, has been given the post of Manager of Spirits and Tobacco. He comes to Mannah Duty Free with a degree in Business Administration.

“For me, this new challenge is a real turning point in my career,” Firás Mannah says.

“Since I was a young boy I’ve seen the hard work that my father and uncle have put into the business, and I’m honored to be able to continue in their footsteps.

“We’ve had some great numbers for spirits and tobacco in the first six months of the year and I expect that we will close the year with very positive results,” he added.

Where brands and consumers meet

“Fragrances is a category that keeps growing for us year after year,” Mohamed Mannah

Admist a number of new developments Mannah Duty Free still holds the customer experience as a top priority by RYAN WHITE says. “For this reason we’re heavily investing in the brands and the layout of the department to ensure that shoppers have direct and meaningful contact with the brands.”

Furthermore, Mannah understands that every brand has a specific message it wants to transmit to consumers. He knows that his store is the meeting point where brands and consumers come together. “This is a responsibility that we take very seriously,” he explains.

For this reason Mannah Duty Free will be working harder than ever over the second half of the year on the experiential aspect of duty free shopping. “The key to repeat business,” says Mannah, “is giving consumers something that they won’t find anywhere else. Our clients come here for more than just products; they come here for unforgettable experiences.

“It may sound counterintuitive, but in duty free the best way to sell products is to concentrate on making it a memorable experience,” he concludes. 

“Since I was a young boy I’ve seen the hard work that my father and uncle have put into the business, and I’m honored to be able to continue in their footsteps.”

FIRÁS MANNAH, THE NEW MANAGER, SPIRITS AND TOBACCO, MANNAH DUTY FREE

The future of travel retail in Latin America

The more THINGS CHANGE… While the world’s economy is entering a period of slower growth, increased travel, rising incomes and a taste for luxury will bode well for travel retail in Latin America

Country-by-country breakdown

While statistics obviously vary among Latin American countries, the study, titled “Retail in Latin America: Trends, Challenges and Opportunities,” certainly suggests that the fastest-growing age bracket over the next three decades also contains the highest

earners, at least in Brazil, the region’s biggest economy. Furthermore, the outlook for Latin America in general is good.

The University of Navarra study also examined incomes in Mexico, another Latin American powerhouse, nothing that a similar trend to that seen in Brazil is taking place insomuch as spending on non-essentials is on the rise: “As total annual disposable incomes rise (a projected increase of 50.5% in real terms for the period 2009–2020), more of the younger groups will be entering lower middle class status, increasing their expenditure on durable goods. The forecast for the period 2009–2020 is that the country’s lower middle class will experience the biggest expansion.

“This means a shift further away from essentials such as food towards more goods and services such as leisure and recreation,” the study continues. “Tapping this growing revenue stream should be the focus for investors and planners.”

Much like in Brazil, the vast majority of the population earning between US$30,000 and US$150,000 in Mexico are between the

ages of 15 and 59. Findings are similar in Argentina, where the highest income earners in 2010 were in the 35–49 age bracket, accounting for an impressive 61.1% of those who earned US$150,000 or more.

Many duty free stores in emerging markets have seen success with household items recently, and according to the University of Navarra, this trend will be important for retailers catering to Argentineans: “The emergence of a new generation of highincome, younger adults in their thirties [in Argentina] will mean more spending on categories such as household items as many members in this age bracket have young families and will want to replace household goods on a more regular basis.”

Moreover, duty free’s concentration on luxury is well placed given that 21.6% of those that earn US$150,000 or more in Argentina are between the ages of 40 and 44. “These high earners are mostly in managerial positions and are prone to spend on luxury products such as specialized food and drink, as well as leisure and travel,” the University of Navarra says.

Brazil: Selected Income Bands by Age (2010)

% of total earners within income bands

A

mericas Duty Free recently attended a presentation by José Maria Palencia, CEO of World Duty Free Group (WDFG), wherein he discussed the direction that travel retail is headed in Latin America and the evolution of the industry over the years. His insights on travel and economic indicators, gleaned from a variety of reputable sources, paint a generally positive picture for the region’s duty free industry.

Palencia noted that while the over-60 demographic is forecasted to grow throughout the next 30 years in Latin America, by far the biggest increase will be seen in the 15–59 demographic. This bodes well for travel retail; indeed, Americas Duty Free came across a robust study by the IESE Business School at the University of Navarra in Spain that backs up Palencia’s optimism.

The research indicates that nearly 90% of Brazilians earning US$150,000 or more are within the 15–59 age bracket. Furthermore, the 15–59 age bracket makes up approximately 82% of earners who take home US$70,000–US$80,000. The story is similar for those that earn US$30,000–US$40,000.

As such, it can be said that a wide swath of Brazil’s population aged 15–59 is either entering into the middle class or well placed in its upper echelons.

US$1,501-2,500

US$7,501-10,000

US$70,001-80,000

US$150,001+

US$30,001-40,000

30.0 25.0 20.0 15.0 10.0 5.0 0.0 15-19 20-24 25-29 30-34

35-39 40-44 45-49 50-54 55-59 60-64

Source: IESE Business School, University of Navarra, Spain

52

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

at TFWA in Cannes

Please visit us at „Bay Village 11B“!

www.haribo.com

KIDS AND GROWN-UPS LOVE IT SO, THE HAPPY WORLD OF HARIBO

The future of travel retail in Latin America Colombians should also be on travel retail’s radar, with 60% of those earning US$150,000 or more in the 35–49 age bracket. The country’s A social class is expected to see the second-largest expansion to 2020, at 14.7%. The study notes that Colombia’s biggest earners are found at the lower end of the middle-age demographic, underscoring “a new crop of younger professionals generated by an expanding financial services sector. Similarly, this age group is a good target for luxury items.”

And according to Palencia, there are other indicators that suggest Latin American travel retail is well-placed for growth if it can effectively latch onto these emerging trends. While South Asia continues to be the shining star of emerging markets in many respects with forecasted GDP growth of 7.1% to 2030, stable Latin American GDP growth in the realm of 4.2% is expected during the same period. This places the region in front of the forecasted worldwide GDP growth of 3.3% and well ahead of the more mature markets of North America and Europe, which have expected GDP growth over the next 16 years of 2.7 and 1.7% respectively.

Source: World Duty Free Group

Source: Global Insight

Steady increase in aircraft orders

Of course, while many key economic indicators in Latin America are positive for the midterm, airport duty free can’t grow without travelers. Palencia showed a forecast from Boeing which indicates that air travel within Latin America is expected to increase some 6.7% to 2030. Further good news is that travel to Latin America from key regions such as North America and Europe will increase 5.4 and 4.8% respectively over the same period.

As can be expected, the number of aircraft orders in Latin America has grown proportionately in expectation of increased travel within and to the region over the next 16 years or so. Palencia cited statistics, also from Boeing, that put the number of aircraft on order from Latin American carriers at 187 in 2010. This figure is higher than any year in the previous decade and almost eight times higher than in 2000, when aircraft orders from Latin American carriers totaled just 24.

Leaning toward luxury

While the study concedes that luxury retail took a big hit during the economic recession, the good news for duty free in Latin America is that high-end products will continue to be an attractive option for many consumers, although airports stores 54

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Source: ASCEND/Boeing

in the region will have to ensure that they’re providing value for money or differentiating their offer from the domestic market: “Appealing to the aspirational consumer will require a greater focus on the issue of value.

[Nonetheless,] a younger working population… suggests higher levels of interest in luxury goods such as consumer electronics, homeware and furnishing.”

As consumers in Latin America travel more and spend more given rising incomes, it is clear that travel retail will have a real opportunity to continue growing in the region. While value will be more of a con-

cern for some travelers, the industry has always been well-placed to provide an attractive offer, whether through price-offs and promotions or through offering products that can’t be found on the local market.

As the world enters a new phase of more subdued growth, potential still abounds for retailers and suppliers in Latin American airports and along the borders. Fortunately, the key to unlocking future possibilities to grow lies in identifying emerging trends at their outset and evolving in parallel with consumers, something that our industry is particularly good at. 

Neutral

In their initial redesign, Neutral made sure the design would work for both its luxury and mass-market customers

To keep its product mix fresh and unique, Neutral communicates with its customers and continuously asks what they want

INSPIRED TO SUCCEED

Neutral’s CEO Enrique Urioste has just one goal for the company: to be the best

E

nrique Urioste is inspired.

He’s inspired by changes in the industry, he’s inspired by other retailers and he’s inspired by life itself. Asked how he felt when he heard about the giant Dufry-Nuance deal that took place earlier this year, Urioste says: “The world is dynamically changing and it affects every single aspect of the duty free industry. This is the natural consequence of a globalized world that is becoming smaller and smaller. It’s a fact. And it’s exciting.”

Many people feel fear, apprehension or even feel threatened when the status quo changes, and this can bring about stagnation. Urioste feels you need to be motivated by change, or you lose. “The moment you allow fear to paralyze you is the beginning of the end. This is my golden rule that I apply to my personal life, my emotional life, my sports and my business. You need to focus on what you can do. Be convinced of what you can do. Run the race. There will come a time to consider what might have happened, but if you consider this as you’re running you will lose.”

When Urioste, formerly President and CEO of duty free retailer Interbaires, purchased Neutral along with JH Partners, the store was one of many in a certain neighborhood in Montevideo. The stores all had a similar atmosphere and they carried the same items. Neutral’s new owners knew it was necessary to create a unique shop-

56

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

ping experience in order to stand out from the crowd.

To that end, their first step was redoing the stores. They sought a design that would be consistent throughout, and would allow all customers to feel comfortable whether they were shopping for luxury or more mass-market ítems. They doubled the space, from 6,000 to 12,000 square meters. Next, they spent an enormous amount of both time and money on training the staff, which is something Urioste feels is imperative to a store’s success. Their third step was to create a different product mix than others were offering. Urioste explains that this is an ongoing and continuous challenge. To accomplish it they listen to the consumer and continuously ask what he or she wants.

Every category is in a perpetual process of being evaluated and re-evaluated. “As Miguel Angel Alva from Google said, innovation has to be a constant,” says Urioste, referring to one of the talks given at ASUTIL this year.

Innovation is definitely a constant for Urioste, who feels Neutral has helped redefine duty free in the region. Recently, he has been working together with his partners on developing an exciting and unique new experience for their customers at the new Melancia mall in Rivera. He describes it as a driver, a reason for people to come and shop other than the products or the prices.

“We’ve defined the scope of the project,” he

says. “We’ve defined what we need to do.

We’ve been working on it for the past year and a half and we have another year to go.”

Succinctly, he sums up Neutral’s vision from the beginning: “Our vision was to be the best, to be the most professional retailer.

Not to work against the competitors, but just to set the benchmark as high as we could.

Our goal for the future? The same, to be the best.” 

Enrique Urioste, CEO of Neutral and President of ASUTIL

Airports Council International

Deconstructing Latin American

aviation Airports Council International’s Rafael Echevarne discusses the Latin American airport business from the perspective of passengers and revenues

A

t a recent event, Rafael Echevarne, Director of Economics at Airports Council International, presented on traffic and economics in Latin America from an airport perspective. He started out by giving a general overview of overall passenger traffic in 2013, noting that 6.1 billion travelers took to the skies last year. Of that total, travel through the Latin America-Caribbean (LAC) region—defined

by ACI as South and Central America, Mexico and the Caribbean—accounted for 8%, or around 492 million passengers.

Much has been said about the boom in emerging markets over the last few years, and Echevarne underlined this point by explaining that passenger traffic growth in the LAC region has well outpaced growth in many other regions since 2006. In 2013 specifically, the LAC region experienced passenger traffic growth of 4.8%, putting it solidly in third place behind the Middle East (+10%) and Asia-Pacific (+6.4%) but well in front of Europe (+2.6%), North America (+1.3%) and Africa (-0.6%). Furthermore, in terms of passenger traffic growth last year, the LAC region was ahead of worldwide growth, which averaged 4.0%.

A few surprises

Echevarne then went through the Latin American countries that experienced the most passenger traffic growth last year.

Despite Brazil clearly being an economic powerhouse, Venezuela, Colombia and Peru topped the list of best-performers with growth over 10% in 2013.

Mexico and Chile weren’t far behind, having experienced growth in the 5–10% range. In the 1–5% range were Brazil, Argentina and Ecuador, while passenger numbers 58

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

in Honduras, Guyana and Paraguay were essentially flat. Uruguay was the only negative performer among the Latin American countries for which Echevarne provided statistics.

Despite a few surprises with regard to passenger growth in 2013, the top ten airports in terms of total passenger traffic were generally the high-volume aerodromes most people talk about. From highest to lowest, the top ten airports in Latin America for passenger traffic were Guarhulos (36.2 million); Mexico City (31.5 million); El Dorado in Bogota (25 million); Rio de Janeiro (17.3 million); Congonhas-Sao Paulo (17.1 million); Brasilia (16.6 million); Cancun (16 million); Santiago de Chile (15.3 million); Lima (14.9 million); and Simon Bolivar in Venezuela (12.2 million).

It can be seen that despite key countries such as Brazil and Mexico underperforming in terms of traffic growth when compared to Venezuela, Colombia and Peru, these countries—and their airports—are still very much in the mix when it comes to total passengers serviced.

“Brazil has experienced some interesting growth,” explained Echevarne, “but at a slower rate than other BRIC countries.”

Overall, though, Echevarne said that “it’s interesting to see the situation in Latin America because the countries with the stronger economies are the same countries that are seeing strong passenger traffic.”

According to the most recent data available, from January to March 2014, the LAC region overall experienced a 7.9% increase in passenger traffic, significantly outperforming growth in 2013 and nearly double the worldwide average growth for the first quarter of this year.

In terms of a forecast to 2018, Echevarne

sees the LAC region in much the same position that it was in last year as compared to other regions of the world, albeit with increased growth across the board. He expects passenger traffic growth of 5.6% for the region, placing it in third place behind the Middle East and Asia-Pacific, both of which will experience growth of about 7%.

Africa will begin to realize its potential as an emerging market over the next four years and is expected to place fourth behind LAC with 5% passenger growth. Behind Africa will be the more mature markets of Europe and North America with 3.3 and 1.9% growth respectively.

Airport economics

“The surprising thing about this list is not the airports that are on it,” Echevarne noted in regard to the top ten airports in the LAC region. “It’s that none of these airports are in the top thirty airports worldwide for passenger traffic. Especially with regard to airports like Mexico City and Sao Paulo, you would think they’d make the cut.”

One of the most important aspects to an airport’s growth, he explained, is investment in infrastructure. In this regard, he noted that non-aeronautical revenue is crucial to keeping airports running and essential for funding expansion or renovation projects.

He commended the duty free operators in the audience for the work they’re doing, noting that retail—which also includes duty paid—is the highest contributor of nonaeronautical revenue for airports worldwide.

Interestingly, though, he explained that while some airports in other regions are taking full advantage of the opportunity that non-aeronautical revenue represents (Asia-Pacific, for example, with a 50-50 split

Rafael Echevarne, Director of Economics and Programme Development at Airports Council International

DISCOVER BROOKSIDE NEW!

Travel Retail Exclusive Gift Boxes

Soft fruit-flavored centers covered in smooth dark chocolate.

Discover BROOKSIDE at Booth M53, Green Village at TFWA Cannes.

WORLD TRAVEL RETAIL

www.hersheystravelretail.com

Airports Council International between aeronautical and non-aeronautical revenue), as of 2012 non-aeronautical revenue made up only 36% of total airport revenues in LAC, the lowest of any region.

Despite this, Echevarne noted that year after year non-aeronautical revenue—and retail specifically—is gaining ground at LAC-region airports as a proportion of total revenue.

The path to growth

Echevarne also touched on an important point for the future growth of the aviation and duty free industries in emerging markets, noting that while airports on the whole are profitable, a staggering 67% of aerodromes actually operate at a loss. Put another way, the airport industry at large is profitable because only 33% of airports are earning money—enough money, it turns out, to make up for the losses of the other 67%.

To help illustrate this point, Echevarne explained that airports servicing 15-25 million passengers have the highest return on invested capital, at 18%. Next are airports that service 40 million passengers or more, at 16%, followed by 5–15 million (14%), 1–5 million (13%), and 25–40 million (11%).

Airports that service fewer than 1 million passengers have a return on invested capital of -6%.

Moreover, of the airports that are operating at a loss, 93% service fewer than 1 million passengers a year. The key takeaway, explained Echevarne, is that future growth in both the LAC region and worldwide may be stimulated if a way can be found to make these smaller airports profitable.

Referencing the point he had already made about the importance of non-aeronautical revenue to airports’ bottom lines, he urged duty free operators to take a more holistic approach to their businesses by not focusing solely on larger airports.

All in all, the outlook for airports in the LAC region is positive, ahead of the more mature markets of North America and Europe, and in front of the worldwide growth average. Given that growth is slowing in the larger airports in powerhouse countries such as Brazil and Mexico, Echevarne’s suggestion is on point; the next big boom for LAC airports, both economically and in terms of passenger numbers, may very well come from smaller airports that have to date been ignored to some extent, both by carriers and duty free operators alike. 

60

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

The LAC region stood in third place among regions in terms of passenger traffic last year (Source: ACI)

The top ten airports in the LAC region in terms of passenger traffic over 2013

Passenger traffic growth of 5.6% is expected for the LAC region to 2018, placing it in third place behind the Middle East and Asia-Pacific

Lima Airport

Expanding, enhancing and

evolving Jorge Chavez International Airport in Lima, Peru is on a steep growth curve in line with the region’s economy by WENDY MORLEY

H

aving already gone through a major rebuild and expansion in 2005 and 2009, Lima Peru’s Jorge Chávez International Airport has another expansion on the horizon. Lima Airport Partners (LAP), the concessionaire that took over airport management in 2001, is not only planning changes to take place in the current terminal (T1), it is also planning for a second runway and a new terminal (T2) to be built in the coming years.

In 2013 the airport serviced 15 million passengers. This figure has been growing in the double digits each year, though so far in 2014 growth has slowed to about 5%—still substantial. Fiorella Carty Borjas, LAP’s Retail Manager, says this growth reflects the region’s consistently improving economy. While the airport is not over capacity, forecasts show continued growth in the region, and the concessionaire wants to be prepared for the future while remaining focused on optimizing its customer’s satisfaction, both in operations and commercial selection.

Carty Borjas says that early 2014 marked the starting point of this process. “It takes adequate planning,” she says. “You hire the designer, work on multiple alternatives together and make decisions.

Many steps need to be taken to provide the proper infrastructure able to cope with traffic demand as well as requirements from airlines, concessionaires and passengers.”

62

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

The International Departure concourse displays the modern and inviting atmosphere that helps the airport get continuously voted “best airport in South America” by passengers

LAP recently announced that the Dutch firm ARCADIS has been awarded a US$17 million contract for the design of the airport expansion. LAP estimates that the cost for the entire expansion project will reach US$950 million.

Retail continues to grow

Every time the airport has undergone any significant reconstruction or refurbishment, more commercial space has been added.

Retail space increased substantially in 2005 with the new airport, and in phase two of the expansion program, which took place mainly in 2009, more was added. Phase three will mean more retail space still. “As Julian said,” Carty Borjas laughs, in reference to a presentation given by Dufry’s CEO Julian Diaz at 2014’s ASUTIL conference, “airports want more and more and it’s true; we do want more: more shops, more variety, more retail promotions. We will keep diversifying our tenant mix, looking always to have best that hub airports such as Lima have to offer. We are always looking for new opportunities.”

She makes clear that commercial is not the only area receiving upgrades. “We are strongly focused on constantly improving our operations and efficiency. For example, the airport recently increased its number of remote gates because there was no room for more gates with bridges. Operations have always been the first priority,” she says.

While current talks are turning up a number of interesting ideas for the airport’s Domestic and International areas, perhaps the most interesting idea is to increase the commercial area landside. “People argue against this, saying passengers want to pass immigration and security,” says Carty Borjas. “But over the years we have seen that passengers will take some time to shop and find something to take along with them. Domestic and international travelers, their families and airport workers all pass through this point, so commercial before security controls should not be left unconsidered.” However the commercial space ends up being developed, one thing is sure: Lima airport will continue to grow and evolve for years to come. 

LAP’s Retail Manager Fiorella Carty Borjas says the concessionaire’s focus is always on improving operations and efficiency while providing the best atmosphere for passengers and airlines

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

63

IAADFS

UNLIMITED OPPORTUNITIES Americas Duty Free talks with Michael Payne about preparations for IAADFS 2015 and about the prospects for the duty free industry in the Americas by

RYAN WHITE

M

ichael Payne, Executive Director of IAADFS, was kind enough to speak with Americas Duty Free in early August about preparations for the 2015 show and the state of the industry entering into the second half of the year. While it was still fully six months before the next exhibition, we learned that IAADFS has some great ideas on how to enhance next year’s show, as well as clear feedback from attendees on what has worked well year in and year out. Further good news is that Payne feels the travel retail industry in the region is in a good place at the moment if it can take advantage of the growing middle class’ desire to travel and shop.

64

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Americas Duty Free: How are preparations going for IAADFS 2015?

Michael Payne: We’re well underway with preparations for the IAADFS 2015 Show of the Americas. We have the exhibitor prospectus out as well as the registration information and we’re receiving a good response already. We’re trying to give people the space that they’re requesting, whether it’s the same as last year or expanded. It’s a little early to have any predictions about how much space will get utilized, but we are moving forward at a good pace and I’m very optimistic we’ll sell out.

ADF: What learnings did you take away from this year’s show that you’ll use to improve next year’s event?

MP: Through analyzing survey results and ad hoc conversations with attendees we always try to improve every year. One of the items we definitely need to work on is having better food options for people, particularly during lunch. Food quality and options is always a challenge in exhibit hall settings but even more so with the international makeup of our delegates. We have people—and I agree with them—who are asking for free Wi-Fi not just in the exhibition hall but in the rooms as well.

We’ve spoken to the hotel about this over the last few years and have communicated that this is really something that we need to improve for our attendees. It’s a sore spot for many people and I’m in agreement. We’re working on addressing this but it’s a profit center for the hotel so I don’t want them to simply shift the cost elsewhere.

We’ve also gotten some requests about having the exhibition open longer, whether at the end of the day or adding a half day, but for the moment we’ll be sticking with the same format as last year as that seems to work best.

We think the gala dinner that we provided last year was a big hit. We received a lot of positive feedback on it. We’ll try to do the same thing this year, with different entertainment but the same format.

You’ll also remember that we tried some extra sports day activities, but some of them aren’t working. We probably won’t do soccer or zumba anymore. We’ll stick with golf and tennis, and we’re going to have a walk/ run as well. There’s been discussion about making it a charitable effort. I don’t have details yet but we’ll probably try to tie it in with a charity.

Other than that, the feedback that we got last year was generally very favorable—94%

positive, which is a good indication that we’re on the right track.

The other thing we’ll be pushing, of course, is trying to attract more buyers, as that’s obviously a key consideration for exhibitors.

ADF: IAADFS is a must-attend show in the duty free calendar. At this point are tweaks all that are required to the format?

Do you ever envision a major change such as a conference portion or a venue change?

MP: I think that generally the format works pretty well, but it’s not always a question of just tweaking things. We have a dedicated staff that really looks at our surveys and what is happening in the industry at large to see if there’s anything that we need to do, whether that’s a location change, a format change or changes to better reflect what is happening in the industry currently. Either you evolve or you die, so we’re always looking at ways to enhance the show.

I’m not sure that we would add a conference onto the show itself just from a timing perspective—I don’t know when we would do it. I wouldn’t be opposed to adding a conference at a different time. We’re talking about whether there’s an opportunity to do that going forward and mindful of the fact that there’s a lot on the calendar already and we don’t want to create conflicts from a scheduling perspective.

ADF: In terms of scheduling appointments and the buyers that attended, were this year’s exhibitors satisfied?

“

MP: One of the really positive comments that people tend to say about our show is how efficient it is. And I think it is efficient for both exhibitors and buyers, and we don’t want to do anything to take away from that.

People are only there for three days so we don’t want to make it complex; it has to flow.

People want to be able to do their business and do it efficiently, so that’s always our primary focus.

And of course this even extends to registration. For the people who didn’t register in advance we really tried to speed up the process this year and make it as fast as possible and I think we succeeded. These are important considerations—if someone travels from another country or across the US to exhibit or if you’re a buyer and you’re only there for two days, your time is precious and you don’t want to spend your first hour at the show standing in a registration line.

ADF: Do you have any sponsors lined up for the 2015 show at this point?

MP: We have some of the sponsors from last year that have expressed interest in doing something again next year, but until we have a signed agreement I’m reluctant to give specifics. I expect that we will have the same type of high-level sponsors that we’ve had this year. People call and tell us they’d like to do something around this time but generally we don’t get the contracts signed until October.

MP: We work very closely with our other industry partners, and we have for many, many years. TFWA, ASUTIL, ETRC, FDFA are all organizations we’re regularly working with. Of course, now we have the Duty Free World Council which brings us all together, so the coordination is very well established.

We often call on each other if there’s something one thinks another organization can help with. When I first started as Executive Director of IAADFS there wasn’t as much cooperation, but there’s quite a bit now.

Regional issues often vary but we’ve all have the best interests of the industry at heart so there’s a common goal there.

ADF: Duty free in the Americas is now very well established. Where do you feel growth will come from?

MP: Well, the first point I would make is that just because duty free in the Americas is well established doesn’t mean that it can’t continue to grow. If you look at trend lines for duty free in the region there are a lot of positives—increased travel, a growing middle class, expanded airport infrastructure and so on. The future is very bright for duty free. The opportunities are unlimited. 

ADF: How have you been working with other organizations such as TFWA, ASUTIL and FDFA recently?

“We’re well underway with preparations for the IAADFS 2015 Show of the Americas.

We have the exhibitor prospectus out as well as the registration information and we’re receiving a good response already.”

MICHAEL PAYNE, EXECUTIVE DIRECTOR, IAADFS

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

65

Tourvest

Breaking new ground in the air

Tourvest is not satisfied to just supply an airline with products to sell; it wants to revolutionize in-flight retail, bringing profit to its airline partners and satisfaction to their travelers by WENDY MORLEY Tourvest prides itself on discovering and carrying unique items that customers love, such as their new line Artisan Beads, a hand-designed collection of traditional artisan and bohemianinspired jewelry

T Joe Harvey, Chief Sales and Marketing Officer at Tourvest, says the company has a new, fresh approach that will work in the Americas

his has been a year of change for Tourvest, starting with its name, which became Tourvest Inflight Retail Services from Tourvest Duty Free, and adding a simultaneous revamping of its executive team. With that, the company announced its clear plans to establish itself as an industry leader in in-flight retail. If early returns are any indication, the company’s plans are working very well indeed.

Its vast collective experience in all areas of the travel retail industry enables the new executive team to help its airline partners remain at the cutting edge. Of course the in-flight division is also part of the greater company Tourvest, the largest travel and tourism company in South Africa. This allows the in-flight division to look at the customer experience from a more holistic, all-encompassing viewpoint and, ironically, create a more personalized approach. Joe Harvey, Tourvest Inflight Retail Services’ Chief Sales and Marketing Officer, says: “We are using an omnichannel retail design, and we’re embracing big data and customer personalization.

One size doesn’t fit all and recent research shows that 61% of passengers want this.

Transformative technologies will herald a new era in the in-flight duty free experience and we are at the forefront.”

Moving to America

In the Americas, Tourvest is looking to partner with airlines and strategically work with them to create successful ranges. The goal is to be an integrated component of the airline business and not merely a sup66

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

plier. Harvey says the company is in the right position to achieve this because its team understands the traveler’s complete journey. “We have a new, fresh approach that the region needs, especially around our customer personalization program and tailor-made retail programs. We are open, honest and fully transparent with airlines, and we don’t over promise.”

According to Harvey, Tourvest is prepared to push the boundaries of current product and price-point offerings that will effectively separate the company from its competitors. “Our merchandise division constantly seeks out non-traditional travel retail suppliers to add value and innovation,” he says. Indeed, roughly 20% of its 400 suppliers are new to the world of in-flight retail.

The company has launched an incredible 161 new brands to British Airways’ line-up including Bio-Effect, Philip Stein Sleep bracelet and Phillips Picoh pix projector.

Many of these brands then found their way into other airline catalogs. Now, one step ahead of the in-flight travel retail curve, Tourvest recently launched HD Brows, Kiehls and the American fragrance Bond Number 9, and will soon launch the skincare line Egyptian Magic.

Tourvest Inflight Retail Services is focused on creating customized ranges that reflect the airlines’ unique approach, the nuances of different populations and the individual preferences of passengers.

Says Harvey, “It’s that intimate knowledge of the consumer on the move that makes Tourvest such a potentially powerful force in in-flight retail and this is currently missing from the Americas.” 

Frontier Duty Free Association

The

A CANADIAN

WAY

Whether on its home turf or on the world stage, the Frontier Duty Free Association fosters friendship and knowledge sharing while representing the Canadian duty free industry by RYAN WHITE

“This year’s convention and trade show is going to be very special. It has been a long time since it has been held in Toronto so we are anticipating additional attendance this year.”

LAURIE KARSON, EXECUTIVE DIRECTOR, FRONTIER DUTY FREE ASSOCIATION

Anthony von Mandl, owner of Mission Hill Wineries, gave Summit attendees a personal tour of the winery last year

68

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

mericas Duty Free recently had the opportunity of catching up with Executive Director of the Frontier Duty Free Association (FDFA) Laurie Karson to see how preparations for the 2014 convention and trade show, as well as the 2015 Business Development Summit, are coming along.

“This year’s convention and trade show is going to be very special,” Karson told us. “It has been a long time since it has been held in Toronto so we are anticipating additional attendance this year.”

The event will be held from November 16–19 at the Hyatt Regency hotel. Due to the size of the property, attendees are expected to take up most of the rooms and the convention and trade show portions will occupy most of the available facilities.

Although at the time of our interview the FDFA was still relatively early in the planning phase, we asked Karson about sponsors for this year’s event. So far Proximo Spirits has signed on to host the yearly Fun Night, which will be held this time around on the evening of Tuesday, November 18 at Spin, a glow-inthe-dark ping pong/disco.

In terms of other events during the convention and trade show, delegates will be treated to two hospitality lounges on Monday and Wednesday nights with a Speakeasy theme.

“The Welcome Reception also ties into this with a Great Gatsby theme, and of course there’s the Gala Dinner and Gold Standard Award Ceremony,” Karson explains.

In addition to finalizing the details of social activities, when we spoke Karson and her team were working hard to place key suppliers in their suites and trade floor locations. August 31 was the early bird registration deadline, and Karson told us that a large influx of registrants flocked to the website the week before to ensure their discounted rate.

And from the perspective of planning this year’s event, Karson notes that the FDFA feels particularly prepared given that the association is armed with the surveys from last year’s show. This most recent batch of surveys represents the best feedback the event has ever received in its history, indicating that the FDFA is certainly on the right track when it comes to the overall look and feel of the show.

Of course, last year was the last time the event would take place in Niagara, and Karson had nothing but good things to say about the Hilton and the larger Niagara community as the FDFA’s venue of choice for four years running. “We are grateful to the Niagara community and the Hilton for their dedication to our show,” she said. “But of course, a fresh city and hotel is something we are all looking forward to. Our goal is to continually evolve year after year and make it a memorable occasion on the busy travel retail events calendar.”

The windy city

Even as preparations for the 2014 convention and trade show continue, the FDFA is also looking even farther ahead to the 2015 Busi-

The annual Business Development Summit features talks on a variety of topics of interest to Canadian duty free operators, as well as roundtable discussions on issues that affect the industry

ness Development Summit, which will be held in June 2015 in Chicago. “We’re looking at bringing in some keynote speakers and topics that will help enhance the operators’ ability to increase effectiveness at their stores,” Karson said.

We took the opportunity to ask about this year’s Summit, which was held in May in Kelowna, BC. The event, noted Karson, was characterized by a stellar lineup of expert speakers who covered topics such as national credit card rates and enhancing the customer experience. Roundtable talks amongst members also took place where experiences were shared, challenges were discussed and solutions were brainstormed.

“For social activities, we were lucky this year,” explained Karson, “as we were given a personal tour of Mission Hill Wineries from the owner, Anthony von Mandl. The entire Summit proved to be very useful from both business and networking standpoints.”

Working for the industry

Last year’s golf tournament in Kelowna, which coincided with the Business Development Summit, raised CAD$16,000 for breast cancer research; the FDFA is currently planning the 2015 Summit

Of course, the FDFA is about much more than just event planning, having been a proactive participant in the recent formation of the Duty Free World Council. “We’re very proud to be a part of this initiative,” Karson said. “It is crucial in this day and age, when the members of the world’s duty free associations share so many similar challenges, that a body be created whereby we can work together to share learnings and benefit as a whole.”

On the topic of Canadian duty free specifically, the FDFA recently began an intensive government relations campaign to re-educate members of parliament on the importance of duty free as an industry.

“When government officials make decisions that could impact our industry, it’s important that they recognize the value that duty free brings to the Canadian economy and especially border communities’ economies,” Karson explained. “At the end of the day, many people still don’t realize that our land border businesses are owned by Canadians and employ Canadians. This is a vital point that we need to get across.”

Finally, in terms of the national marketing campaign, the FDFA is in the process of re-establishing goals to make sure that the association’s original focus—ensuring its national brand and message to the consumer is as prominent as possible—is brought to the forefront, not only from a digital perspective but also through other marketing methods.

“We anticipate that by 2015 we will be able to showcase some key initiatives,” Karson concluded. “It will be exciting to share the news with our stakeholders and the public when the right time comes. In the meantime, though, there’s plenty to keep us busy! I’d like to take this opportunity to remind readers that registration for this year’s convention and trade show is still open and they can learn more by visiting our website at www.fdfa.ca.” 

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

69

Top Brands

Top Brands recently opened six new stores in Chile’s ZOFRI Mall

Regional realm by

RYAN WHITE

Top Brands continues expansion in South America with new stores at ZOFRI and a new concept in Rivera

T Top Brands’ Fantastic Duty Free concept in Rivera, Uruguay

70

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

op Brands President Danny Yohoros tells Americas Duty Free that the company’s first three El Dorado duty free stores in Iquique, Chile’s ZOFRI mall are performing well. In fact, the operator is now celebrating the opening of six more duty free stores at ZOFRI mall, variously offering candy, chocolate, watches, accessories and spirits.

“Five of the new stores are part of the mall’s new Phase VII area,” says Yohoros.

“We’ll also be opening a multi-brand store in the Phase II area of ZOFRI mall, which will feature a stellar fragrance line-up and a corner shop for apparel.”

Construction of the stores was unfortunately held up due to recent earthquakes in Chile, but Yohoros tells us that work is back underway and the Phase VII stores are now open. “We’re seeing great results so far,” he explains. “The new concept of focusing on one category per store shows real promise.

We’ve got specialized sales representatives

Top Brands for each store, and in-store staff training, organized from our headquarters, is continuous as we strive to ensure our customers receive the very best service possible.”

The Phase II store is unique in that it offers a shopping experience unlike anything else in that particular area of the mall.

The store is considerably larger than those around it, and Yohoros notes that having an attractive, modern design was an important consideration for Top Brands as a means ensuring the best possible experience for shoppers.

“Our new Phase II store is something new for the mall, and the results have been positive,” he explains. “We’re seeing great acceptance from shoppers; they’re finding it to be a great place to make their purchases and we’ve received a lot of good feedback on the high-end brands that we’ve included in the mix, many of which can’t be easily found at other stores.”

Over the last few years, the expansion of the El Dorado brand—both geographically and in terms of the number of stores—has been impressive to say the least. These latest successes at ZOFRI have given rise to further expansion plans. Top Brands recently unveiled a new store format under the Fantastic Duty Free brand name in Rivera, Uruguay. This store also represents the first step in an aggressive expansion plan in cities along the border with Brazil.

“Our goal along the Brazilian border is to build eye-catching, impressive stores,” Yohoros says. “Competition is high there but we’re very confident that we can differentiate ourselves. Our stores will follow the classic duty free format but offer a new twist on the presentation of wines with a modern cellar wherein customers can purchase a wide array of products in this emerging subcategory.”

Yohoros says that after studying the profiles of consumers in the countries where Top Brands operates, the company has determined that this new concept is best-suited to consumers along the border with Brazil. In addition to its formidable wine selection, Fantastic Duty Free Rivera will offer a wide range of brand names and top sellers and a large assortment of spirits, fragrances, health and beauty products, watches, sunglasses and chocolates.

“We’re very excited about this latest development,” Yohoros concludes. “With offices established in Uruguay, we’re well on our way in the development of stores in Chuy and Rio Branco in 2015.” 

72

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Giorgio Armani, Parbel

Timeless

appeal

The latest fragrance release from Giorgio Armani is Code Ice

Equal parts classic and innovative, the Giorgio Armani brand continues its domination of the fragrance category with new launches and continued investment in the Americas

T

here are few brands considered timeless, and Giorgio Armani is certainly one such brand.

Americas Duty Free recently spoke with Sebastien Devallet, General Manager Giorgio Armani and Designer Fragrances at L’Oréal Travel Retail Americas (Parbel), to share the brand’s success story.

“A high-luxury image is definitely a main asset that belongs to the brand’s DNA and where Giorgio Armani has a strong commitment. The fragrance category is the most important one in the Americas and Giorgio Armani remains ‘the maestro’ with his legitimacy.”

The company is working hard to ensure that current activities in the travel retail channel live up to the stellar reputation of the Giorgio Armani name.

The latest fragrance release from Giorgio Armani is Code Ice. True to the spirit of the original Armani Code fragrance, the oriental, aromatic feel of Code Ice permeates the air with a captivating, sensual scent developed by Alberto Morillas, Master Perfumer at Firmenich.

This surge of adrenaline adds an explosion of freshness to the intensity of the fragrance. Tangy citrus notes are combined Sebastien Devallet, General Manager Giorgio Armani and Designer Fragrances at L’Oreal Travel Retail Americas (Parbel)

74

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

with sweet spices that blend into strongly aromatic woods. Lemon, clary sage and tonka bean come together to exalt a delicate and invigorating peppermint aroma.

Fortunately for Parbel, keeping things honest when it comes to the Giorgio Armani brand isn’t hard; the designer is heavily involved in essentially every facet of new product development. “The Code line is actually inspired by Mr. Armani’s tuxedo,” Devallet explains. He tells us that Acqua di Gio also takes its inspiration from Mr. Armani’s life—in this case an island in the Mediterranean where he goes when he wants to escape the hustle and bustle.

Giorgio Armani loves to pay tribute to women. Last February, the brand launched its new feminine fragrance “Si.” The fragrance is Armani’s tribute to modern fraternity, an irresistible combination of grace, strength and independent spirit. Australian actress Cate Blanchett is heading up the campaign.

Enhancing leadership in the Americas

Parbel is investing in the Giorgio Armani brand with a strong television campaign to seduce Brazilian global shoppers, which will in turn make its way throughout Latin America and even to the US. “The new film is a true story that transmits a fresh image to the brand with a young new star, Kris Pine,” says Devallet. He states the film is a mix of “seduction, masculinity and a hint of irony.”

In conjunction with the above, Parbel will also have exclusive point-of-sale material and innovative staging in duty free. A “perfume wall” will feature Aqua di Gio homme, Eau pour homme and Armani

Armani’s ‘Si’ pays tribute to modern fraternity, an irresistible combination of grace, strength and independent spirit

Code Men “so every man can find his style,” Devallet explains.

To complete the Global Shopper vision of the Americas, Devallet states, “Any nationality of global shopper must be able to find its products in any airport store.” Besides the importance the Brazilian passengers, Asian passengers are traveling more and more to the Americas. As such, the West Coast of North America and Hawaii have always been a special focus.

“Asian passengers rank Giorgio Armani in the top three of their most desirable luxury brands,” he says, with the Armani cosmetics line being particularly popular with this demographic. “We are preparing to answer their needs in the make-up and skincare category.”

The best of both worlds

Devallet ended our conversation by noting that sustainable growth is Parbel’s main focus, and fortunately the Giorgio Armani brand is showing just that year in and year out, largely because it represents the best of both classic style and exciting innovation.

“The brand features strong pillars like Acqua di Gio and Code Men, both of which have remained top sellers for years,” Devallet concludes. “Then the new feminine fragrance ‘Si’ has brought exceptional results in 2014 and is already installed as a new classic. I think it’s this delicate balance that keeps consumers coming back to the brand.” 

L’Oréal Luxe Travel Retail Americas

The ultimate in

French beauty Nearly half a century after Armand Petitjean first created the Absolue cream, Lancôme continues innovating and nourishing Absolue’s luxury facets

T

he story of Lancôme’s Absolue skincare line begins with an unknown woman on an afternoon in Paris in 1965. Under a cloudless blue sky, Armand Petitjean catches the eye of a woman—a woman with French elegance and natural sophistication that seems effortless. The sight of this woman with her calm confidence and obvious modernity would never leave Armand. This indefinable charm would become the very goal of the Absolue brand.

“Absolue has been created for the most demanding women in the world—women that today insist on results that push back the frontiers of the possible even further,” says Paul Connors, Lancôme General Manager at L’Oréal Luxe Travel Retail Americas.

“Absolue is a philosophy of excellence.”

The second chapter of the Absolue story opens in 1973 when Georges Delbard, one of the greatest rose specialists in the world, creates the Lancôme Rose. Rare and exclusive, this exceptional flower is born from a complex hybridization process following meticulous hand pollination. A precious alchemy of a magenta and a mauve rose, the Lancôme Rose has an intense and vibrant fuchsia color. Grown to order in the French region of the Châteaux de la Loire, this rose flowers only once a year and is an inexhaustible source of inspiration for Lancôme Research.

Lancôme’s Laboratories are now working on tissues transferred from the Lancôme Rose, called native cells. These are the basis for Lancôme’s 2014 launch, the new Absolue L’Extrait Regenerating Ultimate Elixir-Concentrate. Indeed, the product contains up to two million Lancôme Rose native cells, representing a skincare innovation unlike any other.

Extracted from the heart of the rare and resilient Lancôme Rose using an exclusive, state-of-the-art biotechnological process, these native cells are proven to extend their own exceptional properties to enhance skin’s regenerative potential. Absolue L’Extrait helps reveal firmer, more elastic, more radiant skin for fascinating beauty.

Thriving in travel retail

Connors tells us that Absolue has been performing well in the Americas travel retail,

showing a strong growth. “The brand is booming in North America with an incredible success amongst Asian consumers,” he explains. “In Northwest doors, Absolue has become one of the main growth contributors to the skin care business.”

With the launch of Absolue L’Extrait Elixir in 2012, Lancôme Travel Retail Americas began implementing dedicated Absolue spaces in travel retail doors. Indicative of the success of Absolue, the brand now has 34 dedicated spaces in travel retail in the Americas.

A new ritual

The perfect fusion of science and nature—a voluptuous sensory experience and unique regenerative performance—The Absolue line by Lancôme embodies the quintessence of French luxury and beauty.

And now, Lancôme writes a new chapter in the Absolue legend with Absolue L’Extrait Regenerating and Renewing Ultimate ElixirConcentrate, a precious concentrate whose melt-on texture infuses the skin with a youthful glow. Inspired by the unique treatment rituals performed at the Lancôme Institute, “Absolue L’Extrait Regenerating and Renewing Ultimate Elixir-Concentrate” and “Absolue L’Extrait Ultimate Beautifying Lotion” are backed by a sensory experience and sophistication nearly a half-century in the making. 

The power of regeneration

Lancôme has discovered that like the skin, plants too have stem cells, which represent real reservoirs of life and are able to engender a whole new plant. While a differentiated plant cell only expresses some 20% of its genetic inheritance, a dedifferentiated native cell makes this entire heritage potentially accessible, offering an extraordinary potential for regeneration.

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

75

Essence Corp

The

heat

is on

Jimmy Choo Man is an effervescent fragrance that captures the spirit of the Jimmy Choo Man

My Burberry is made for luxuryminded travelers

Essence Corp spices things up in the Caribbean with new fragrance launches from Burberry, Montblanc and Jimmy Choo

G

uillaume Bona, Executive Sales Director Caribbean at Essence Corp and Antoine Bona, Essence Corp’s Executive Sales Director Travel Retail Americas, are busy men. In addition to the regular business of finding new ways to engage consumers in the highly competitive travel retail industry, they are hard at work rolling out a number of products that are new to the Caribbean region.

Puig, responsible for such brands as Paco Rabanne, Carolina Herrera and Prada to name but a few, and Victoria’s Secret have now been introduced into the Caribbean.

“Both brands are new for us,” Bona says.

“Victoria’s Secret was brought to the region over the summer and Puig in September.”

76

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Engaging the traveler

To date, the response on the part of consumers to Puig and Victoria’s Secret in Caribbean travel retail has been fantastic, and that brought us to the topic what shoppers are looking for these days and how Essence Corp succeeds at engaging them in duty free.

“Travelers are becoming extremely priceconscious and are searching for the most competitive price on the market,” Antoine Bona explains. He notes that duty free is about a lot of things—luxury, differentiation from the local market and creating an experience for shoppers; however, pricing is one of the highest priorities for Essence Corp.

“It’s important to maintain a real price advantage in duty free,” Antoine Bona says.

by

HIBAH NOOR

“Travel sets that offer one free product with the purchase of a regular item are a great example. Promotions that run in conjunction with the operators are also great ways of making sure that pricing in duty free is where it needs to be.”

Streamlining the portfolio

Another way that Essence Corp is making sure that travelers stay interested is by streamlining its portfolio in order to highlight certain offerings—My Burberry, launching in September, and Montblanc Emblem, launched in June, are two great examples.

From its striking presentation to the liquid within, My Burberry is made for luxury-minded travelers. The glass bottle

reflects iconic details of the trench coats for which Burberry is known: a bold hornfinish cap echoes its distinctive buttons and the hand-tied bow is English-woven gabardine, honoring the fabric invented

by Thomas Burberry over 100 years ago.

The gun flap-shaped inner part of the glass brings softness and femininity to the iconic bottle. The collar is in gold, engraved with the Burberry check design.

The scent itself is also inspired by the trench coat and its heritage of British design and craftsmanship. My Burberry captures the fragrance of a London garden after the rain. Top notes of sweet pea and bergamot fuse with a heart of geranium, golden quince and freesia, rounded out with a rain-tipped Damask, Centifolia roses and patchouli. The result is a beautifully crafted grand floral with a touch of edge.

Montblanc Emblem, on the other hand, conveys a powerful aura for men with strong notes that are contrasted while at the same time harmonious. From grapefruit and

clary sage notes to elegant leaves such as cinnamon and violet with hints of Tonka beans and precious woods, Montblanc Emblem is the epitome of refinement.

The bottle, a sophisticated object of art in its own right, encapsulates the elegant masculinity and refinement of the fragrance within.

In addition to the above, another key launch for Essence Corp this year is Jimmy Choo Man. Expanding the lifestyle offering, Jimmy Choo Man is an effervescent fragrance that captures the spirit of the Jimmy Choo Man: an effortless attitude and a confident, overtly masculine style with a refined sense for detail and a rebellious sense of humor. Jimmy Choo Man is a woody aromatic fougère which opens on lavender notes blended with mandarin. In the heart, crisp notes of geranium accompany pineapple leaf, resulting in a vibrant scent.

Finally, the most beautiful part of patchouli, patchouli heart, is a sophisticated signature of the fragrance.

Representing the brands

Another important element of the equation that Essence Corp continues to concentrate on is beauty advisors. The company did one beauty advisor seminar for the Caribbean in June and it has another scheduled for October. Essence Corp also just did one beauty advisor seminar for travel retail in August.

In addition to being able to advise consumers on a number of difference levels—from the shopper who wants to try something new to the die-hard fan—beauty advisors play another important role in travel retail, says Antoine Bona.

“Travelers do not have much time to purchase so we need each collection to properly stand out,” he notes. “The shopping experience needs to be easy for them. We want knowledgeable and friendly beauty advisors greeting each potential customer as much as possible as this is great way of driving traffic toward our brands.

“It’s all about catering to the customer and making their decision to purchase as easy as possible,” Bona concludes. 

Essence Corp continues to concentrate on its beauty advisors with educational seminars

Essence Corp has recently introduced Puig brands such as Paco Rabanne, Carolina Herrera and Prada to the Caribbean market

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

77

Perfume Holding

A clear line of sight Americas Duty Free speaks with Perfume Holding CEO Dino Pace about the company’s renewed focus on travel retail in the Americas by HIBAH NOOR

“O

ur focus for 2014 is to reassess our organization in order to strengthen the relationship with our duty free partners, especially in the Americas,” Dino Pace, CEO of Perfume Holding told Americas Duty Free ahead of this year’s TFWA WE show in Cannes.

Indeed, Pace believes that duty free—and specifically the channel in the Americas— will be the engine that drives growth for the company in the near future. And his opinion is well-founded; the Americas represents 22% of Perfume Holding’s overall business. Moreover, the company has a leading market share in some very key countries, including Brazil and Mexico.

“Our growth strategy is mainly on Ferrari as the main pillar of the portfolio,” Pace explains. Perfume Holding is taking a threepronged approach which includes protecting its market share where it is the market

Dino Pace, CEO, Perfume Holding

78

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

leader; entering new markets where it sees a high potential for the Ferrari brand given its strong worldwide appeal; and exploiting new distribution channels where its brands aren’t yet present. An example of the latter would be duty free and department stores in the US.

Staying ahead of the game

Of course, the luxury segment in travel retail is extremely competitive. As such, Perfume Holding strives to stay ahead of the game by ensuring that its new products are state of the art in essentially every way, from the perfume itself and the packaging to offering good value for money, which is often a consideration for consumers when shopping duty free. The company also focuses on developing eye-catching merchandising solutions that will stand out in stores.

Pace notes that logistics is also an area of concentration as efforts in product development and merchandising mean little if new launches don’t reach stores in a timely manner: “We’ve streamlined our organization to ensure that we’re a fast and efficient solution for our partners,” he says.

And the company has ventured into social media as well, seeing it as an important way of engaging younger generations.

“Next fall we have already committed to strong web/social media advertising in Brazil to support our Ferrari Black fragrance,” Pace says.

Latest and greatest

The newest projects that Perfume Holding is working on include a new merchandis-

Perfume Holding is working on a new merchandising concept for Atkinsons

ing concept for Ferrari and Atkinsons. The concept is expected to be implemented first in Changi Airport next fall. Furthermore, new Ferrari Essence Collection travel retail miniature sets will be on shelf by the first quarter of 2015.

“The pipeline in 2015 will be full of initiatives, especially for Ferrari,” Pace tells us. “We will reinforce the brand’s premium product offer, launching the new Essence EDT collection in spring and a new blockbuster in fall. I can only tell you that we are talking about unique products—real masterpieces in the fragrance industry—and we are really enthusiastic to live this moment in our company’s life.”

We ended our conversation by asking Pace what retailers can do to help Perfume Holding reach its goals for the rest of this year and next. “We are asking to be given the opportunity to show just how well our brands—Ferrari and Atkinsons primarily— can perform. Wherever we have the right space and the right assortment, our numbers are definitely interesting and retailers are cashing out.” 

Coty

Fragrance

Coty offers a host of alluring scents for the upcoming season

FRENZY Nautica Life Description: The new men’s fragrance from Nautica pays tribute to the lifelong journey of love, from the exhilarating, heartpounding beginnings, to the comfort and joy of an enduring partnership, says the company.

Nautica Life was created as a romantic blend of uplifting freshness, mysterious aromatics, and seductive woods.

Killer Queen’s Royal Revolution by Katy Perry Description: Tantalizing top notes of pink freesia and nectar of ruby-red pomegranate captivate the senses. Middle notes of sandalwood balanced with sheer orange flower and velvety jasmine petals create a soft, delicate floral heart guarded by the blackthorn. Musk and soft vanilla orchid linger on the skin, ensuring an unrivaled and unforgettable dry-down.

Beyoncé Heat Wild Orchid Description: An enticing, mouthwatering fragrance that emits a fierce, feminine energy. The heart is created with Butterfly orchid, enveloped by a mélange of fruits, florals and woods to create a captivating and memorable scent.

80

GUESS Night Access Description: The woody and masculine notes were made to capture the sexy and adventurous lifestyle of the GUESS guy in a bottle, says Paul Marciano, GUESS Chief Executive Officer and Creative Director. The scent is a woody fougere oriental mix.

GUESS Dare Description: Perfumer Bruno Jovanovic of IFF was inspired by sexy, daring 70s icons like Charlie’s Angels, Bond Girls and Peggy Lipton in the Mod Squad, choosing a unique blend of notes that captures the spirit of the GUESS Girl.

This is the first green and fruity floral in the house of Guess Parfums.

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Coach International

“A sense of

FREEDOM” Coach’s brand values align with the mindset of travelers while at the same time staying true to what made the brand successful in the domestic channel by

HIBAH NOOR

A

The Fall 2014 Collection keeps Coach’s strong tradition and heritage intact, while at the same time offering a modernized and reinvented perspective for a new audience

82

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

mericas Duty Free recently had the pleasure of interviewing President of Coach International Giorgio Sarné to learn about the company’s latest developments. He began by stressing the importance of the travel retail channel to Coach’s overall business.

“The development of our travel retail business in the Americas is a key strategic priority for Coach,” says Sarné.

As with many businesses, there are synergies between the domestic and duty free markets, and Sarné notes that this is especially true for Coach where Latin America is concerned: “Travel retail is complementary to our sustained development in the domestic market in Latin America. It’s also a key part of our plan to reinvigorate our business in the US.”

Tapping into trends

Another part of ensuring that Coach’s business in travel retail stays strong is picking up on current and emerging trends. And surely no trend is more pervasive around the world than mobile phones.

Given the fact that most travelers can now quickly compare duty free prices and availability with the domestic markets in their home or destination countries via mobile phone, Coach is making sure that its travel retail offer is up to par. However, for Sarné it’s about more than just pricing and special editions; for Coach, the quality of the offer is of paramount importance and duty free is anything but an afterthought.

“We see that travelers are more savvy about products—they have access to all sorts of information through their smartphones,” he explains. “They know more about the brands and the fashion trends. As a result, it is very important that we can offer a shopping experience in travel retail that is comparable to the one we offer in domestic markets in terms of the product selection and offering the very best quality.

Coach International

“We are enhancing our shopping experience in travel retail so that the consumer can have the same level of service they receive in any other Coach shop throughout the world,” he adds. “We also offer exclusive travel retail products, which are always a compelling offer.”

Aligning with travelers’ needs

Of course, travel retail is as much about the experience as it is about the products, and Sarné says that Coach aligns well with the adventurous mindset that many people possess when traveling: “Coach offers something unique—a modern approach

84

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

to luxury that I think is unlike any other brand,” he says. “Coach is about feeling good—a sense of freedom and authenticity. This aligns well with the way many travelers feel when they’re in an airport.

“Fashion is always changing and reflects w h at i s h app e n i n g around us,” Sarné continues. “At Coach, our designs feel fresh. This is what we’re about and it’s an exciting challenge to be able to communicate this to our consumers. We have a clear DNA, a long heritage and a great creative team.”

To help keep the mood high in airports across the globe, Coach is launching a new collection this fall, the first designed by Stuart Vevers, the company’s new Executive Creative Director. The Fall 2014 Collection keeps Coach’s strong tradition and heritage intact, while at the same time offering a modernized and reinvented perspective for a new audience.

Sarné explains: “Rich fabrics, refined leathers and finishes mixed with utilitarian ideas—luxurious craftsmanship mixed with functionality. It’s about an ease and effortlessness that is rooted in American sportswear.”

Underscoring Sarné’s notion of keeping the travel retail channel on par with domestic, Coach will launch the collection in both markets at the same time. “We want to communicate to consumers that our travel retail shops have the latest and best products available,” he says.

In discussing how Coach marries its domestic and travel retail businesses, Sarné gave the example of the company’s experience in US duty free. Over the last two years, Coach has opened up several shops in the country and has seen success with both international and US travelers. He credits Coach’s retail partners for helping ensure that the physical characteristics of its travel retail stores closely match those of its domestic retail outlets. Sarné is adamant that this synergy between duty free and domestic has been fundamental in Coach’s success in travel retail.

Getting it right

Of course, as much as airport retailers have helped Coach reach the heights that it enjoys today, there is always more that can be done. Sarné notes that space—always a prime concern for suppliers and store owners alike—can make all the difference in the world when it comes to attracting shoppers.

“We want to offer a seamless shopping experience across all our shops, so we need to have the right sized real estate coupled with a compelling environment,” he says.

“Our goal is always to reproduce in travel retail what consumers have come to know and trust in their home markets.”

Sarné cites LAX’s Tom Bradley International Terminal, where Coach is among the many retail options available, as exemplary of the exciting developments happening where specialty retail is concerned. “We are hopeful that we will continue to see new developments like this, where attractive shopping environments play a key role in growing brands.

“In the end, it’s the partnership between brands and retailers that makes the shopping experience better for the traveler,” concludes Sarné. 

Giorgio Sarné, President, Coach International

L’Oréal Travel Retail Americas Consumer Division

For the first time ever at L’Oréal Paris, the company has released a mascara brush that is asymmetrical with the launch of False Lash Wings Mascara

Bringing

beauty to the masses by

HIBAH NOOR

With a clear strategy in Americas travel retail and a host of hot-ticket items in its product portfolio, L’Oréal Travel Retail Americas Consumer Division has the go-to brands for travelers on the move

A

mericas Duty Free recently spoke with Sebastian Levi, General Manager at L’Oréal Travel Retail Americas Consumer Division (which handles L’Oréal Paris, The Body Shop, Roger et Gallet, Maybelline and Essie in travel retail), about what consumers can expect from the company in the second half of the year. He tells us that at the company’s consumer division, the mantra of increasing penetration and generating sales is more relevant than ever.

L’Oréal Travel Retail Americas Consumer Division is accomplishing these goals through developing new products for travel retail and continuing its successful foray into hair care; focusing on cross-category merchandising; ensuring convenience for travelers; keeping prices competitive; enticing consumers to make impulse purchases; and making sure the company’s products are available at a wide range of stores.

“Air traffic in the Americas is doing ok, but there are fewer people entering the stores,” says Levi. “Even fewer are buying.

This could be for many reasons, including the devaluation of local currencies versus the US Dollar in South America; new restrictions for Argentineans using their credit card abroad; and just a general air of cautiousness given the global economic context.”

86

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Color Riche L’Extraordinaire Lipstick is another new release from L’Oréal Paris offering consumers daring, extraordinary lips that are lustered, enhanced and dramatic

Top on L’Oréal’s list of activities to help mitigate the effects of waning consumer confidence is developing new products that pick up on hot trends. Hair Care is a perfect example of this. L’Oréal first burst into the category in 2013 and it has proven to be a big success for the company.

“There is definitely a need in travel retail, especially in South America, and we are happy to have launched this category with key operators such as Dufry, Grupo Wisa, Motta Internacional and London Supply with tremendous success. This range already accounts for 12% of our total sales, and they are of course purely additional sales—not only for us but also for the operators.”

Research and innovation

Of course, L’Oréal Paris isn’t stopping there.

The company has a number of new releases this year in other categories as well, and chief among them are make-up and skincare. In 2014 L’Oréal Paris aims at strengthening its global leadership in cosmetics with a stronger portfolio of products and cutting-edge innovations captured in sensorial textures.

The brand dedicates 4% of its global annual turnover to research and innovation with the ambition of making the latest scientific and technological advances accessible to all women and men.

Affirming its “color authority” in all make-up segments, L’Oréal Paris is offering complete looks to empower women, whether they need an everyday cover-up or to get ready for a red carpet night out.

Developed with and used by the most recognized make-up artists, L’Oréal Paris offers must-have colors and beauty looks inspired by catwalks and red carpets all around the world.

For the first time ever, the company has released a mascara brush that is asymmetrical with the launch of False Lash Wings Mascara. The product promises wide-spread lashes that “take flight with an aerial volume.”

Color Riche L’Extraordinaire Lipstick is another new release from the company offering consumers daring, extraordinary lips that are lustered, enhanced and dramatic. With Color Riche L’Extraordinaire, L’Oréal Paris has created a new generation of lipstick with a more intense color than a lipstick, a more sophisticated luster than a gloss and a more absolute comfort than a balm. For the first time, L’Oréal Paris combines the most precious micro-oils and the richest pigments for an intense color infused with light and a unique feeling of comfort.

Finally in the realm of make-up, L’Oréal has launched Couture Madame and Cou-

Age Perfect Extraordinary Oil, now available in duty free, allows traveling consumers to discover the secret powers of essential oils

ture Mademoiselle Make-Up Palettes. The company invites consumers to discover these all-in-one make-up palettes, the first that contain a full-size mascara and a BB powder inside a luxurious black and gold pouch. Four sophisticated eye shadows and three lipsticks have been carefully chosen to complete a glamorous look.

The evolution of skincare

This year, L’Oréal Paris has embarked upon a new era in skincare, delivering the most advanced technology to all women with new, luxurious packaging, magical textures and addictive fragrances.

Age Perfect Extraordinary Oil allows traveling consumers to discover the secret powers of essential oils. The product is a concentrate of eight essential oils with anti-aging and antioxidant properties. This exquisite formula, lightweight and nongreasy, leaves the skin radiant and intensely nourished.

Adding a few drops of this magical elixir to one’s daily skincare routine can result in multiple benefits, including a radiantlooking glow in the morning; cashmere-soft skin at night; and intensely nourished skin if used on dry zones.

The Couture Madame Make-Up Palette contains a full-size mascara and a BB powder inside a luxurious black and gold pouch

L’Oréal Paris has also released Revitalift Magic Blur. Not a moisturizer or primer, Revitalift Magic Blur is described as an instant skin smoother. Opti-Blur Technology diffuses light on skin for an instant blurring effect, and the miraculous skintransforming texture blends in seamlessly to create a perfectly smooth surface. Revitalift Magic Blur instantly erases the look of lines, wrinkles and pores, making skin look and feel smooth, leaving a velvet soft matte finish that lasts all day.

Covering all the bases

Apart from the products themselves, L’Oréal is also looking at where in the store they’re being sold in order to ensure it is reaching the widest number of consumers possible.

“We will start this fall to put some small, flexible fixtures of Men’s Care L’Oréal Paris in the Liquor and Tobacco section,” Levi explains. “The idea is to generate additional sales from male passengers that are not necessarily attracted to the cosmetics category.”

Levi says that down the road the company may also run cross-category promotions such as buy a bottle and get a discount on a L’Oréal Men’s Care product.

And also related to the location of L’Oréal products in store is the impulse buy. Indeed, confectionery has proven how potent a tool this can be for increasing overall category sales, and L’Oréal is also interested in cashing in as consumers are cashing out.

“Many passengers will enter a store and will not even stop by or look at the Cosmetics category,” Levi

explains. “We believe it is our role to attract them until the very last minute they’re in the stores. That’s why presence at the cash registers can be a great way to boost our sales and those of the operators.”

Levi cites L’Oréal Travel Retail Americas Consumer Division’s presence with Maybelline and The Body Shop at cash registers in Brazilian duty free as a great example of how the company is boosting sales in the channel. He says that consumers can expect to see more of L’Oréal’s products strategically placed near cash registers in Americas duty free as time goes on.

Finally, Levi notes that travelers are often looking for a very specific set of criteria in the products they choose to buy in travel retail. He says that exclusivity, convenience, pricing and accessibility are key ways in which L’Oréal tries to differentiate its products from the rest of the pack.

L’Oréal has created travel retail exclusives in the Hair Care category that feature three products (shampoo, conditioner and treatment) bundled together. The company has done something similar in its Men’s Care line, bundling shampoo, deodorant, shaving foam and moisturizer together in a handy travel pouch. “These sets are designed not only for the convenience of our customer but also to give them an exclusive product,” Levi explains.

And just as important as exclusivity for many travelers is value for money. As such, L’Oréal Paris regularly offers promotions and price-offs—such as its “Break the Barrier” promotion with Dufry or regular special offers with World Duty Free Group.

“This is part of our DNA and we understand that we need to play this card, especially when times get tough, like many parts of the world have experienced this year,” Levi says.

“But accessibility isn’t just about the pricing,” Levi concludes. “No store is too small for our brands; it’s about making sure that we’re in every location so that passengers can find our products wherever they travel.” 

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

87

Fossil Group

Celebrating the

GOOD TIMES

M

att Tilley, Vice President, Latin America and Travel Retail at Fossil Group tells Americas Duty Free that the Middle East and Asia Pacific are two top-performing regions for the company. Sales are doing “extremely well,” he says, on the back of the company’s strong portfolio and the recent openings of a number of shop in shops.

The company also opened a Fossil store with Nuance at Changi Airport, and in keeping with the emerging-market theme, Tilley tells us that the very first Fossil store in Latin America was opened in Albrook Mall in Panama.

The Changi store, which was opened June 7, measures 34 square meters, while the Albrook Mall location, opened the day before on June 6, measures 98 square meters. Tilley says that the reaction to the new locales has been excellent.

“We have received great feedback on both stores and customers have been really excited to experience Fossil’s unique product assortment and compelling brand experience,” he explains. “From refurbished vintage props to the famous tin wall, Fossil is meticulous

88

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

2014 marks Fossil’s 30th anniversary, and the company is celebrating with new stores in Asia Pacific and Latin America, as well as limited edition product launches by

HIBAH NOOR

about each and every detail. We focus on our visitors by enriching their experience through thoughtful personal attention and of course our impeccably curated collection of vintage-inspired products.”

Zeroing in on sales

In terms of customers, Fossil is focusing on Russians, Arab and Chinese consumers given these groups’ higher than average spend. “We’re not necessarily focusing on a particular region,” Tilley explains, “but rather taking a global approach. It is extremely important to focus on the passenger profile and to understand their buying habits.”

“The Asian consumer, specifically the mainland Chinese shopper, represents a huge growth opportunity for us, particularly in Swiss-made watches,” Tilley notes. “Fossil group has invested significantly in our Swiss-made design capabilities and infrastructure over the past decade and now have a venerable portfolio of Swiss-made brands including Burberry, Emporio Armani and Tory Burch to satisfy global consumer demand for fine Swiss craftsmanship.”

What consumers want

And the latest Tory Burch watch collection is among Fossil’s recent launches. These newest products making their way to duty free are the result of Fossil’s consumer-centric focus and keeping an ear to the ground, so to speak, with regard to what’s hot with the traveling public.

Inspired by vintage jewelry, color, art and travel, the Tory Burch collection includes seven timepiece groups, made with the highest level of Swiss artisanship and precision.

Each watch is named after a member of Tory’s family and is infused with signature Tory Burch design elements, from decorative fretwork and unique geometric details to saffiano leather straps and the iconic double-T logo. The launch coincides with Tory Burch’s 10-year anniversary because in the world of watches, timing is everything.

Now available, the collection includes The Tory, the epitome of tomboy chic—a classic, sporty style with a round case and a bold bracelet, making the watch effortlessly versatile; The Buddy Classic, named after Tory’s father and vintage-inspired with a polished square case in smooth, gold-tone stainless steel; The Reva, named after Tory’s mother

Fossil released the newest Tory Burch collection of Swiss-made watches in selected travel retail locations in October

and defined by Tory Burch’s iconic double-T logo dial, available in a full spectrum of colors; The Izzie, graphic and modern, featuring a bold, clear square case inlaid with geometric fretwork; and The Buddy Signature, named after Tory’s father and vintage-inspired with textured and smooth cases featuring singleor double-wrap leather straps.

And of course, travel retail is the perfect place to feature products that travelers can’t find everywhere, and for this reason Fossil is offering three new limited edition Michael Kors watches with selected global partners.

“These very special watches will launch at the end of November,” Tilley explains.

The new Michael Kors offerings include a stunning Darci watch which features a jewelry-inspired bracelet and a genuine turquoise dial, available with Little Switzerland; the latest version of the Channing, a distinctive menswear-inspired watch which combines drama and delicacy through a luminous midnight shimmer dial and a clean, modern design with Roman numerals and a lovely rose gold-tone bracelet; and a bold, two-tone update to the Layton that features a world map on the dial, perfect for the international traveler.

And of course, the holidays are on the horizon, and whether home for the season or off on a winter getaway, Fossil has curated a stellar selection of gifts sure to make the season bright. From classic styles in an essential neutral palette to vibrant stocking stuffers and gifts that are truly out of the world, Tilley assures us that travelers will find the perfect packable present this holiday season, and the fortunate few attending Cannes this year will have an opportunity to see many of the holiday releases ahead of time.

Maximizing opportunities

“We are aligning globally with our worldwide regions—LAC, EMEA and APAC—as well as our global partners,” Tilley tells us.

“This will allow us to maximize opportunities and concentrate our efforts as a team. We continue to focus on elevating our brands’ image through shop-in-shop initiatives.”

And speaking of making the most of opportunities, 2014 marks Fossil’s 30th anniversary, and the company is celebrating with innovative artist and designer collaborations, in-store events, limited and

special edition products, and promotions.

Fossil is an American lifestyle brand rooted in authentic, vintage-inspired and classic design,” Tilley says. “We will host events throughout the world to celebrate our brand’s heritage.”

Ever focused on ensuring an exceptional shopping experience for travelers, Tilley notes that the concentration for Fossil’s 30th anniversary celebrations is centered in on limited edition products and the store experience. “The inclusiveness of the Fossil experience, from a friendly welcome to expert advice, it’s the unique approach of providing a timepiece for everyone that fits their style, personality and budget, all with the same exact attention to detail in the design—whether it’s an entry price point or our Fossil Swiss. The sales associates, the product, the lighting, the decor and the whole brand experience is about elevating people’s personal style,” he says.

“It’s the consumers who got us here in the first place,” Tilley concluded. “It’s only right that giving them the best possible travel retail experience is the focus of this year’s celebrations.” 

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

89

Marcolin USA In keeping with popular culture trends, the hashtag makes its impact on eyewear as the Diesel brand will be debuting the #DENIMEYE collection

Visions of the future Another one of Marcolin’s designs that showcases its commitment to using unique materials comes from its Timberland line. It’s specially crafted using 55% bio-based plastic procured from plant oils

F

abrizio Gamberini, Marcolin USA’s Chief Executive Officer, recently indicated to Americas Duty Free that classic looks and themes are at the forefront of emerging trends in the luxury eyewear industry. “For travelers, the visual experience is critical,” explains Gamberini.

Therefore, Marcolin, which manufactures luxury eyewear for such brands as Tom Ford, Ermenegildo Zegna, Roberto Cavalli, Balenciaga and Swarovski, has commenced a strategy for engaging travel customers that relies on the fine art of storytelling.

Gamberini says, “by educating our sales force about collection inspirations, limited editions, new color releases, and brand heritage (especially strong with Roberto Cavalli and Balenciaga), in addition to the materials used, our consumers are able to learn about what they are buying, and carry on that same story in their own way.”

Further illustrating that sometimes the best insights into the future come from reflecting on history, Gamberini notes that “it seems we are back to the past: more and more people like to stand out.” To meet their

90

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Marcolin USA engages consumers seeking bolder eyewear with new product lines featuring innovative designs and unique materials by

HIBAH NOOR

needs, he explains that unique colors have found their way to the top of consumer wish lists whether they’re appearing on mirrored and flash lenses, or on frames.

Not to be overlooked, though, elegant shapes are also in vogue. Gamberini indicates two of the leading brands in elegant eyewear include Swarovski and the Roberto Cavalli collection that are noteworthy for their signature looks featuring eye-catching crystals, as well as brilliant animal and snake prints, respectively.

Engaging consumers

However, while bolder, classic-styled eyewear may be trending, Marcolin has its sights firmly set on the future. And, the future is now with an approach accentuated by consumer choice. Whether a consumer is looking for something sporty, fashionable, luxurious, or if they desire more polarized lens styles, Marcolin aims to present a wide assortment of options to meet its customers’ diverse interests.

One of the ways Marcolin accomplishes this is through the use of wall displays dedicated to showcasing its brands and

the varieties they each have to offer. For example, in Mexico City Airport, the company has a customized Tom Ford wall.

In the Dominican Republic’s Punta Cana airport, Gamberini indicates they’ve not only established an “expanded presence,” but it has also showcased five of its brands on a prolific wall featuring an impressive 20 pieces of eyewear from each brand. The wall enables Marcolin to not only spotlight different brands, but also exhibit an extensive assortment of styles. Gamberini adds that Marcolin has “many other opportunities in the works that will allow travelers to experience our brands in their entirety.”

Style and substance

Just as consumers look to boldly stand out, Marcolin seeks to do the same in the eyewear industry. Gamberini notes that Marcolin’s usage of unique materials and innovative designs in its sun and ophthalmic products are particularly important components in keeping the company at the forefront of the eyewear category. One of the most recent beneficiaries of Marcolin’s design- and material focused approach is

IS YOUR SKIN HUNGRY? Nourish your face with Be fine food skin care.

A beautiful range of naturally sourced skin care products that work the way your body works.

Allergen Free Fragrance • Paraben Free • Vegetarian Protein Clinically tested. Proven safe and effective for all skin types. No animal testing.

(732) 356-4949 • www.befine.com For Information please contact David Tillman - Beauty2Market - 914-815-0031

Marcolin USA

GUESS women’s eyewear line offers animal-inspired tortoise colorations alongside eyewear with iridescent metals

established and accepted goal is vital, but we also want storytellers and merchandising experts,” he explains. “We love our brands and we want them to be properly positioned.

Nothing is worse than seeing semi-empty walls or out-of-style fixtures.”

Maximizing exposure Fabrizio Gamberini, Chief Executive Officer.

Marcolin USA

the Balenciaga eyewear line. Its recent surge in popularity can be attributed, Gamberini suggests, to Marcolin’s ability in “leveraging new technologies and amazing colors.” He adds that the forward-looking company is “wholly dedicated to learning what is the most appealing now to the public and working to predict what will be on trend six and twelve months from now.”

However, the importance of product display, as well as the notion of forging a relationship with travel and luxury retailers, is not lost on Gamberini. “A mutually

92

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

While following trends and working closely with retailers has been instrumental in Marcolin’s success, it only represents a couple of facets of the company’s approach. Gamberini explains that Marcolin also tactically uses its resources to keep its finger on the pulse of consumer desires and product awareness. As a result, he says Marcolin is effectively able to be “strategic about where we push marketing and visual strategies, and define a strong plan to raise attention where it’s needed.”

Its ability to succeed in raising attention will be of paramount importance as the company rolls out several new eyewear lines from a variety of different brands. In keeping with popular culture trends, the hashtag makes its impact on eyewear as the Diesel brand will be debuting the #DENIMEYE collection. The line will feature eyewear made using Diesel denim, as well as a unique melting acetate treatment derived from cold welding.

Another one of Marcolin’s designs that showcases its commitment to using unique

materials comes in the form of two new Earthkeepers sunglasses. The Earthkeepers eyewear, part of the Timberland line, is specially crafted using 55% bio-based plastic procured from plant oils.

Similarly, GUESS men’s eyewear will have a decidedly nature-based look and feel as the brand redefines its men’s eyewear using colored camouflage and wood-grain textures. The bold, nature-based trend extends into the GUESS women’s eyewear line where animal-inspired tortoise colorations are offered alongside eyewear with iridescent metals.

These are just some of the new eyewear products that Marcolin will soon be making available. Some of its other notables includes new eyewear from the Tom Ford collection that recently captured the attention of major United States department stores when Marcolin unveiled the line at an exclusive June 2014 preview.

Of course, all of this comes on the heels of Marcolin’s acquisition of the Americas’ second largest and the world’s ninth largest eyewear company, VIVA International, in December 2013. Marcolin followed that up earlier this year by announcing that they had renewed licensing agreements with Catherine Deneuve and SKECHERS, while also signing new exclusive licensing agreements for such brands as Emilio Pucci, AGNONA and Emenegildo Zegna. 

For Information on beauty2market please contact: David Tillman Tel: 914-815-0031 Email: dctillman@beauty2market.com

Alex and Ani

A

glittering success by

HIBAH NOOR

Alex and Ani’s rapid expansion into travel retail has yielded impressive results

S

ince Alex and Ani’s inception in 2004, the fastest growing Rhode Island-based lifestyle brand has become a force to be reckoned with in the jewelry industry.

In 2013, the company yielded revenue of US$228 million; quite the achievement for a brand that started with just five cocktail rings. Founder, Creative Director and CEO, Carolyn Rafaelian, named the company after her two eldest daughters. Since 2004, Alex and Ani has expanded product offerings into a full line consisting of necklaces, earrings, rings and bangles.

Continuing with product line expansions, in March 2014, Alex and Ani launched its Scent 7 Beauty Collection. Also, this fall, the company is launching its first leather goods line, The Gabriel Collection; expanding the home collection including beauty and candles; as well as new Precious pull chain bracelets, necklaces, and rings. As Alex and Ani’s product offerings and reach continue to grow, the brand keeps a deep focus on spirituality and integrity by spreading positivity and empowering wearers.

94

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Alex and Ani’s growing reputation as a first-class purveyor of trend jewelry has resulted in a seamless transition into the world of travel retail, and the company has already experienced a great deal of success in the United States, Europe, and the Caribbean Islands. The latter has proven to be an especially lucrative region for the growing corporation, as there are currently over 50 Alex and Ani point-of-sale outlets in the Caribbean, in addition to airport locations including Barbados Airport and Montego Bay Jamaica Airport.

“While the travel retail and duty free market is rapidly expanding, we see a huge potential for Alex and Ani to broaden its presence in international markets,” says Omar Ajaj, Vice President of International Business Development, Alex and Ani. To that end, the company is in the process of expanding into more travel retail locations than ever before, with Alex and Ani set to open new outlets at airports and aboard cruise ships in 2015.

In terms of the company’s cruise ship presence, products are currently available on board two Norwegian cruise line’s ships, the Jewel and the Dawn. There are also ongoing talks with an additional four cruise lines for possible collaboration in 2014, says Ajaj.

“We continuously look to identify global expansion opportunities for Alex and Ani.” The company is especially enthusiastic about its recent collaboration with leading travel retailer Nuance Group, which will allow the brand to push even further into the world of travel retail and duty free. Explains Ajaj, “with [Nuance’s] help, we will be able to recreate the Alex and Ani shopping experience and introduce the brand across major airports in Germany, Switzerland, and Sweden, and we look forward to a successful partnership in 2014.”

While Alex and Ani continues to move into new territories, the company is looking at broadening its reach into the St. John, Tortola, St. Croix, Bonaire, and Trinidad in 2014. Alex and Ani’s top priority in travel retail is its presence in airports across the globe. The collaboration with Nuance has already begun to reap rewards in this arena, as the company’s products are now available at Zurich Airport, Hamburg Airport, and Stockholm Arlanda Airport.

Additionally, the company is looking at opening locations at St. Maarten Airport and St. Kitts Airport, with the current renovations at Antigua’s V.C Bird International Airport paving the way for Alex and Ani’s presence in the existing Sterlings retail

outlet. Such initiatives are all part of the company’s ambitious plans to take its name and reputation further and further.

“We have secured strong consumer brand loyalty and grown our brand consistently,” says Ajaj. Aside from its various travel retail initiatives, Alex and Ani has taken great strides to promote its products among customers outside of its target demographic, which it has accomplished by forming a series of partnerships with well-known names in other fields.

Alex and Ani’s presence can be felt in a wide variety of philanthropic endeavors.

In addition to hosting charity events for non-profits across the United States, the company, which boasts a charity department called Charity by Design, has participated in a profitable campaign that has provided funds to various nonprofit organizations, including the Hasbro Children’s Hospital.

Charity by Design has also donated US$1 million each, to both Bryant University and Rhode Island College, with the company’s generous spirit also benefiting more than 135 other organizations.

Travel retail is a large initiative for Alex and Ani. “The key driver to travel retail growth for Alex and Ani is to duplicate the same shopping experience and properly

communicate our brand concept through our investment in building Alex and Ani shop-in-shop concepts, which mimic our domestic retail locations.

“We ensure that the experience replicates that of the Alex and Ani aesthetic,” concludes Ajaj.  Omar Ajaj, Vice President of International Business Development, Alex and Ani

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

95

Sunglass Report

Fighting for the

spotlight by

Marchon’s Nike sunglasses; Marchon believes a wider brand assortment and a clearer segmentation would benefit the end consumer and drive sales of the sunglass category to higher levels

S

unglasses are a travel retail staple —who hasn’t purchased an emergency pair of shades while dashing through the airport or taken the chance to browse the latest designer styles at cut prices? As we all turn our attention to the category that’s showing healthy potential, it’s easy to see how efforts to win sales are seriously heating up.

With consumer expectations peaking, retailers are striving to build a proposition that is even more enticing than on the high street. Marchon is an authority on the latest trends and prides itself on being at the cutting edge of what’s desirable.

“Flash lenses are one of the hottest trends in sunwear this season,” says Erwan Le Guennec, International Travel Retail Direc-

Omar Hagi, Head of Global Travel Retail, Safilo

96

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

HIBAH NOOR

With the sunglass category showing positive signs of growth, suppliers share their strategies for making the most of the opportunities that await tor, Marchon. “You see them on the runway and on the street. The lenses are very colorful, reflective and have a futuristic feel.”

Matte finishing is also highly sought after.

“It gives eyewear a cool and funky look,” says Le Guennec. “Some styles are flat matte while others appear very textured, almost giving the impression of wood. We are also seeing the use of contrasting finishes as a strong trend. A subtle pairing of matte and gloss captures the light as well as people’s attention.”

Of course, timeless classics are also an important part of the selection. Tortoiseshell shades are brought up to date with gradient blacks and browns for a fresher feel. In addition, styles with masculine touches, high fashion shapes like round lenses, and

bright and translucent frames are proving popular. For those with a more compact space in which to showcase sunglasses, Le Guennec has the following advice.

“Out of all the current trends, the must have items include aviators with flash lenses, styles with contrasting finishes and classic styles—Wayfarers, round lenses and tortoiseshell shades are all sure fire hits,” he says.

Retailers that still need assistance in picking the perfect selection will be pleased to learn that there is now a technologically advanced way to ensure they are making the right choice.

“We are working on a merchandising software solution to improve the assortment selection process and provide merchandising guidelines and product information in a more sophisticated and systematic way to our partners,” says Le Guennec.

Of course, once the selection is finalized, all those invested are upping the ante when it comes to engaging customers.

“Many of our partners are starting to dedicate relevant spaces for this category and, at the same time, are looking for new communication tools such as animations and videos to capture the consumer’s attention,” says Omar Hagi, Head of Global Travel Retail, Safilo.

Current trends Safilo rates include retro styles featuring lightweight materials and “courageous” use of patterns and color combinations. There’s also a growing preference and appreciation for polarized lenses, according to Hagi. To showcase them in

Safilo’s personalised column showcasing Carrera is an example of the company’s work to strengthen its permanent fixtures

the best possible light, Safilo is working on smart collaborations, which the company refers to as “a fresh approach to eyewear”.

“This is best demonstrated by our licensed brand Bobbi Brown, which advises women how to choose the shape and color of their sunglasses in a similar way to how they pick make up,” said Hagi. “This approach is very original and consumers are showing a great appreciation for it.”

Personalizing the shopping experience and making it more fun for shoppers will undoubtedly help consumers to navigate the many style options that are available through the channel. Maui Jim certainly takes a “go big or go home” approach to business.

“Customized fixtures are key in securing valuable airport space and creating brand visibility,” said Giles Marks, Director, Duty Free Sales, Maui Jim. “We recently ran highprofile promotions at Gatwick Airport and Düsseldorf Airport. Lasting for one month, the promotions showcased not only our sunglasses but our Hawaiian culture. We had a broader range of styles compared to our traditional locations, allowing customers to try on the complete range. Overall, the high visibility led to enhanced sales

and heightened the brand exposure both in travel retail and in the domestic markets. We will continue to aggressively pursue other global airport opportunities.”

While promotions such as these can substantial time and cost to set up—Maui Jim’s took three months of planning—as suppliers get more experienced at setting up unique presentations in a dedicated space, the lead time can be cut by up to half, says Marks, which makes the pay off even richer and more efficient.

Setting sights on the Americas

There is space to grow around the world, although the Americas is a top priority for many suppliers with each one following a unique path in order to reach their goals.

“Specifically for the Americas, the sunglass category is one of the few that is growing this year—and that’s under conditions that many of them have seen the overall business in decline since the beginning of the year,” says Hagi.

Already successful in Asia and Europe with brands such as Dior and Gucci, Safilo inaugurated its Travel Retail Americas divi-

Giles Marks, Director, Duty Free Sales, Maui Jim says Maui Jim is planning continued strategic marketing projects to support its existing locations and introduce the brand into high profile airports globally

Literature explaining the “How to find your perfect frames” campaign organized

by Safilo and its licensed brand Bobbi Brown

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

97

Sunglass Report

Maui Jim’s dedicated advertising targeting Miami, JFK, and Denver airports is just a small part of its 2014 marketing campaign

sion in April this year to focus on additional growth. This is being achieved by establishing sustainable partnerships with retailers that, in turn, will help to strengthen the company’s presence and build sell out.

“A large part of our efforts is to focus on permanent fixtures,” says Hagi. “We already finished some and are working on more projects. Besides that, we are offering our customers new ways to animate the sunglasses and ultimately grow the category.

One of the most successful pioneer projects, conducted in travel retail in Europe, was the cross-category promotion of sunglasses and fragrances. We carried out pilot projects with Gucci, collaborating with P&G, by promoting the two categories together. This achieved extraordinary growth results. We are aiming to extend this best practice around the world.”

As an American company headquartered in New York, Marchon has a very strong US flavor to its our portfolio with brands such as Calvin Klein, Nike, Nautica, Nine West and Dragon to name just a few. Hence, the Americas is a key market and the company is looking to improve its market share in the region.

“We believe that a strong and balanced portfolio of brands with leading names in the sports, lifestyle, fashion and luxury segments coupled with an already high and constantly improving level of service for our partners

98

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

will continue to drive our growth and market share in the future,” says Le Guennec.

Maui Jim recently targeted Miami, JFK, and Denver airports specifically for the first time in its history with dedicated consumer advertising.

“We are working very closely with our US advertising company to take the Maui Jim message directly to the consumer,” says Marks. “The airport adverts were only a small part of our exciting 2014 marketing campaign that saw Maui Jim invest in television advertising combined with major consumer magazines for the first time.”

Erwan Le Guennec, International Travel Retail Director, Marchon

In terms of what the future holds, working together for better results is a foolproof move.

“Brand-building is becoming more crucial and we are working on finding different ways of transmitting the brand experience to the shopper at the point of sale (POS),” says Hagi.

“Our role, together with our retail partners, is to make correct choices by benchmarking the customer profile at the POS and offering the best possible selection of brands and products that is tailor made for that POS. Our proprietary brands are definitely our focus and we will continue investing in them and expanding in travel retail.” 

Guest Writer

How airport retail management impacts stores and category management The changing landscape of airport management requires a corresponding change in the way travel retailers do business by

DAVID FERREIRA, head of global travel retail, cross

A

irport management and ownership are changing around the world. Indeed, many airports are privately owned, with the business model progressively changing in the travel retail industry.

Nowadays, more airports are privately owned and looking to generate cash from non-aeronautical sources. Travel retail growth will assure them steady revenues for the coming decades. This has opened the way to new types of RFPs (Requests For Proposals) and airport layouts.

Duty free RFPs often used to be for several airport terminals. Now, more and more of them break airports and terminals into pieces. We also see RFPs per category (P&C, Liquor & Tobacco, Accessories, and so on). Although this makes sense from a financial standpoint as it allows the airport owner to raise more revenue, it does not always translate into what makes sense for the passengers.

With many new airports being opened or renovated, we also see more and more walkthrough concepts. These are usually very appealing to operators and brands as it ensures maximum exposure of the products to the passengers. This is what makes the most sense commercially, as it is a good way to increase footfall and consequently non-aeronautical revenue. A multi-category walkthrough store is a fantastic way to

engage consumers and allow them to see the products. A consumer may enter a store to buy a perfume or liquor but ends up being exposed to other categories like chocolates, reading glasses or gifts, and could end up buying more than planned by impulse.

Category management

Some decide to focus on fewer brands, concentrating only on the larger names.

Although this is easier from the category management standpoint, this removes many smaller brands from the mix.

Small brands are often the ones that can drive innovation and disturb established players. Furthermore, fewer suppliers means higher dependence on them. For each category operators should have at least two main suppliers in order to constantly challenge them.

A recurrent comment from passengers and recently featured at the ASUTIL conference in one of Peter Mohn’s studies is that airport stores all look alike. Passengers request more variety, more choice. This is a very complex matter for operators because major brands are often the ones generating the highest revenue so they feel entitled to a certain amount of store space, which is fair. Category managers also prefer working with less SKUs. However, this reduces the amount of brands and products being offered and leads to similar assortments throughout the world.

Some stores offer a local look and feel but this is rather in the design as opposed to the assortment of products. Many category buyers have their purchases decentralized from the stores, especially when working with global brands. This is more challenging for brands with regional strengths when they have to convince a buyer located in a different continent with different knowledge or perception of a brand.

The brands passengers remember are usually the leading ones and the ones where there is a certain predisposition to buy. Consumers usually do not remember brands that are mainly sold as impulse buys because these were not in their minds when they entered the store to begin with.

These products, even if they are present in many stores, do not convey an image of “the same thing everywhere.” What drives that perception are usually the brands with strong exposure, often seen in shop-inshops and boutiques.

The travel retail landscape is constantly changing. Airport owners define the type of retail environment they want for their airports. Although more and more issue RFPs based on revenue, some airports still give high importance to what is best for their passengers.

For comments, please join the Travel Retail Forum Group on LinkedIn at the following address: http://tinyurl.com/mjytxkf. 

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

99

Perfetti Van Melle

The Minnie Mouse Mega Chups contains 15 fruit flavored lollipops with a hairband enabling girls to look like Minnie Mouse The Minnie Mouse Heart comes with three functions, including lollipops to eat, a game to play and a figurine to decorate or accessorize

Two icons meet

Well-known confectioner Perfetti Van Melle readies a range of Chupa Chups products for travel retail that feature the iconic Minnie Mouse cartoon character

P

erfetti Van Melle (PVM), the sugar confectionery and chewing gum specialist, has announced that it will be exhibiting its new products at this year’s TFWA World Exhibition at stand P17 Mediterranean Village.

On display will be PVM’s new Mentos Gum Nano bottles, positioned to be an alternative gift for adults. The Mentos Gum Gift Pack contains five mini bottles with five different functional Pure Fresh flavors. Aligning with the current health trend, the gum is sugar free yet does not disappoint on flavor.

The assorting packaging allows travellers to sample each of the five flavors—Fresh Mint, Spearmint, Euca Menthol, Bubble Mint and Lime Mint—which have all proven in the past to be popular with traveling consumers. With no gift item currently present for gum in travel retail, PVM notes that this innovative product is sure to be a popular confectionary item.

Minnie hops aboard

children’s category. We have experience in licensed merchandise and know that the right character can really drive sales.

“Combine this with the ever growing importance of a strong assortment for children within the travel retail confectionery category and we have a win-win offer for retailers,” De Vree continues. “Disney’s Minnie Mouse is known globally and is instantly recognizable by both adults and children, and fits perfectly with the fun nature of the Chupa Chups brand.

“We are confident that Minnie Mouse will be the perfect attraction for our target market, further driving sales growth,” De Vree adds. “Minnie Mouse has been around since the 1920s—she is a classic character with continuous growing popularity.”

The Chupa Chups Minnie Mouse range includes three products. First is the Minnie Mouse Heart, an ideal travel companion for any Disney loving girl. This heart-shaped box comes with three functions, including lollipops to eat, a game to play and a figurine

PVM was recently awarded the license for the world-renowned Disney character Minnie Mouse. Like Mickey, Minnie Mouse was introduced to audiences in 1928 and since that time has appeared in nearly 100 cartoons with Mickey and Pluto, making her one of the most recognizable animated characters ever.

Susan De Vree, PVM Global Travel Retail Manager, discusses the importance of having such a recognizable on the company’s products: “We are very aware of the attraction of well-known characters when it comes to kid appeal—and this applies as much to confectionery as any other

100

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

The Minnie Mouse Suitcase is a functional, reusable suitcase that contains 10 lollipops and 6 Minnie Mouse stickers

to decorate or accessorize. With 12 different figurines to collect, the Minnie Mouse Heart turns into a collectible item for children.

Next is the Minnie Mouse Suitcase, a functional, reusable suitcase which is perfect for any girl who likes to be independent.

This cute suitcase contains 10 lollipops and 6 Minnie Mouse stickers.

Finally, PVM is offering the Minnie Mouse Mega Chups, a limited edition in Minnie Mouse design with a real size hairband. The Minnie Mouse Mega Chups contains 15 fruit flavored lollipops, with the hairband enabling girls to look like Minnie Mouse.

With an emphasis on fun and excitement, PVM will also be showcasing its new Chupa Chups Party Pack. Aimed at both boys and girls, this high-quality fun pack is for use whether at home, during travel or at the final destination. Featuring six lollipops, a reversible mask and three funny mouths, this pack is perfect for children that like to dress up and have fun. 

Kraft Foods Group, Inc.

On the

growth

path

Kraft Foods Group Inc. takes Americas travel retail by storm and lays plans for future growth in the Gulf and Europe by

HIBAH NOOR

K

raft Foods Group Inc. has taken a focused approach to travel retail, both with regard to regions of concentration and the products it offers.

As befits a channel as unique as duty free, the company is looking at what elements of its strong portfolio—which includes such confectionery favorites as Planters peanuts, Kraft Caramels, Maxwell House International, Jet-Puffed marshmallows, Gevalia coffee and many more—fit best in which stores and then moving aggressively to secure shelf space in key areas of the Americas, particularly in Central and South America.

Martin Caminos, Commercial Director, Kraft Foods Group, Inc., tells Americas Duty Free that while the company's brands are available in some duty free outlets, there is plenty of room to grow: "We are currently developing our brands through local and regional travel retailers, mostly located in Mexico, Central and South America border

102

Planters is a leading snack brand with a portfolio that includes peanuts, cashews, pistachios and nutrition mixes

areas and major airports,” he says. “Our brands are present in some airports and exclusive resorts in the Caribbean region, and we are expanding to Central America, Mexico and North America. Although our brands do not have a significant presence in the Gulf and Asia markets today, both offer potential for brand exposure and growth."

Indeed, Kraft Foods Group Inc. is banking on the significant fame of its brands in the domestic market to help it make inroads in travel retail. Planters is a leading snack brand with a portfolio that includes peanuts, cashews, pistachios and nutrition mixes, while Maxwell House International and Gevalia offer a variety of exclusive, premium and mixed coffee flavors that come in very attractive packaging. Furthermore, Kraft Caramels and Jet-Puffed Marshmallows provide solutions for both personal consumption and gifting opportunities, certainly a key consideration for the duty free channel.

"All of these brands have extensive dis-

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

tribution in the US retail marketplace and a presence in many retail markets through export from the US," Caminos explains.

"All of our products enjoy incredible brand equity and prestige developed throughout many decades in the retail marketplace in the US and international markets, creating a strong foundation for success in the travel retail segment."

Catching their eyes

As with any other company looking to make its mark in duty free, Kraft Foods Inc. is keenly aware that grabbing consumers' attention from the outset is key for closing the sales. As such, everything from packaging to placement within the stores is up for consideration. Kraft Foods Group Inc. is also looking at dedicated furniture if space permits, as well as seasonal presentations for holidays such as Christmas and Easter.

And with regard to promoting the products, Caminos notes that a collaborative approach works best: "Brands, retailers and

airport operators can work together through developing specific promotions, displays and sampling opportunities whenever possible. Of course, further to this we will also work with retailers to better accommodate their own commercial plans by collaborating to find novel solutions for new or renovated stores."

Staying competitive

Martin Caminos, Commercial Director, Kraft Foods Group, Inc.

Maxwell House International offers a variety of exclusive, premium and mixed coffee flavors

With retailers now coming on board given the strong growth of the confectionery category in recent years and the continued potential that it shows, competition is heating up as more and more confectioners enter travel retail to try to get a piece of the pie.

Fortunately for Kraft Foods Group Inc., while it participates in the sugar confectionery category, it also has a strong collection of brands that fall into other subcategories. For Caminos, this flexibility is one of the keys to competing with other brands.

“Although we participate in the confectionery category with Kraft Caramels, our portfolio also includes snacks, with Planters, and coffee, with Maxwell House and Gevalia in the Americas,” he says. “This positions us very well to compete.”

For Kraft Foods Group Inc., the future is wide open. The company already has a limited presence on airlines and cruise lines as Planters is an obvious fit for both since it offers a snacking opportunity for any time of the day and comes in convenient sizes and flavors. Caminos notes that this as a possible growth area for the future. For the moment, though, with plenty of ground yet to cover in duty free in the Americas, the company hasn't even scratched the surface in terms of growth potential given its strong stable of known and loved brands.

Opportunities abound

And Kraft Foods Group Inc. isn't stopping at the Americas. Caminos tells us that there's plenty of opportunities in other areas of the world as well. The Gulf is another booming emerging market and while Europe has taken a back seat recently to the exciting growth stories in other regions, it is still a large, established aviation market and a key region of concentration for duty free retailers and suppliers.

“Our plans for the rest of 2014 include an aggressive geographic expansion through distributors in the travel retail stores in the Americas, and we are already working to expand the presence of our brands in Europe and the Gulf in 2015,” Caminos concludes. 

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

103

TDL International

All in the family Husband and wife team expands burgeoning company into travel retail

TDL International’s COO Mike Guerra and wife President, Nathalie Betances

F

or COO Mike Guerra and wife President, Nathalie Betances, TDL International has been a labor of love that's grown in leaps and bounds since its initial inception. The company has been a toplevel distributor of beauty products in the Caribbean, with TDL boasting a line-up of brands that includes household names like L’Oréal, Garnier, Revlon, Finesse, and Soft Sheen Carson.

With the company's profile expanding exponentially, the couple realized that the time was right for TDL to start moving into other areas - specifically travel retail. "Five years ago, we entered the travel retail arena with confectionery distribution as a way to grow our company," explains Guerra. The business started with Cadbury chocolate and eventually grew its roster to boast such major manufacturers as Mars, Hershey’s, Nestle, Perfetti Van Melle, Ferrero Rocher, Mondelez, and Kraft.

TDL's entry into travel retail has been met with great success thus far, says Guerra, with the company filling a niche in the Caribbean by offering a wide range of brands. It's a strategy that allows TDL's customers to place bigger orders without having to deal with a full container of product, as the company buys containers directly from the manufacturer and splits the product into smaller quantities. "TDL is able to advise its customers on what kind of quantities of the various products they should purchase," which, says Guerra, ultimately winds up reducing waste spending while maximizing profit margins.

It's a strategy that's paying off considerably, with TDL experiencing an improvement of 10% in sales this year over the same period in 2013. The company's focus on all facets of travel retail in the Caribbean, including airlines, cruise ships, and hotels, has accelerated its growth in the region, although, says Guerra, TDL has effectively ensured that its commitment to

104

quality and customer service has remained at peak levels. "TDL prides itself on being service driven," continues Guerra, and the busy executive notes that the goal is for the company to become a one-stop shop for all things confectionery in the Caribbean for its customers.

TDL's impressive line-up of confectionery products continues to expand, with the company recently acquiring distribution rights to Swiss chocolate brand Goldkenn which is slated to launch in the fall of 2014.

The product marks the first brand carried

by TDL that offers liquor chocolate, as Goldkenn offers chocolates containing Jack Daniels, Remy Martin, and Grand Marnier.

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

The confectionery business has been so solid for TDL, in fact, that Guerra says the company has no immediate plans to expand into other areas. "For the time being we're going to stay in confectionery," he says. "We have a lot of growth potential there."

TDL has come a long way since its early days as distributor of beauty products, with the company's family business atmosphere playing a tremendous role in its success.

"We are young, energetic, best friends, and business partners, and people are impressed we have accomplished as much as we have. We work very hard for our customers and love what we do," concludes Guerra. 

TORONTO 29 Annual Convention th

“Canada’s Exclusive Duty Free Convention”

November 16 – 19

2014

Toronto, Ontario Canada

For information visit:

www.fdfa.ca

Electronics Report

Powering up the

business Electronics and accessories suppliers are introducing innovative products and showcasing the latest technology to help drive category growth FAYE BARTLE

W by

e’ve all been there —rushing to the airport, you carry out a final check of your hand luggage in the back of the taxi only to realize that you’ve forgotten your power adaptor. Do you go back for it? Of course not. Even if you had the time, there’s simply no point considering suppliers and retailers are making it easy and affordable to purchase all the latest technology and accessories at the airport.

From core staples such as plug adaptors to smartphones, laptops and professional grade cameras, travel retail is becoming a legitiPeter Wiggers, Managing Director Royal Capi-Lux

106

mate shopping experience for gadget fans.

“We fulfill a need for travelers,” says Sandra Akkaoui, Sales Manager Global Duty Free, WorldConnect. “We focus on discovering new concepts that will help travelers have enough battery throughout the day, rather than simply providing an adaptor plug. Although we do have these products in our portfolio, we prefer to highlight items such as the power pack, which is simple to use and is sold with a detachable SOS battery to load any mobile or portable device.”

WorldConnect’s approach injects an element of fun into the category yet recognizes that a vast number of sales are driven by basic needs. Like other “switched on” suppliers, World Connect is fostering a deeper understanding of the category, which is helping brands and retailers to think outside the box.

“People still shop for convenience and out of necessity,” says Les Hansen, VP, Latin America Sales, Design Go. “Buyers often point out that the majority of consumers buy their electronic and travel accessories in the local market but forget to carry them when they go on a trip, making it necessary to repurchase when traveling, rather than specifically selecting these products as an impulse buy.”

It figures then that the British company’s Go Travel products are presented in a way

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

that highlights “essential” buys like adaptors with a supporting cast of technological innovations to encourage impulse buying.

“Today’s trends are very closely aligned with movements in the electronics market,” says Hansen. “The consumer values electronic accessories that make it easier to travel with a multitude of devices. Products that consolidate the number of heavy chargers required have seen a real spike in sales, for instance.”

The market has influenced Design Go’s product development in its Go Travel brand and, for 2014, has inspired the company to update one if its bestselling adapters—the Worldwide + USB. Now slimmer and lighter with integrated USB ports, it is suitable for use in 150 countries and it can charge two devices at once. Innovations such as this are undoubtedly help to move the category forward.

Drawing on a 60-year heritage and multitude of international design awards, Philips is strengthening its position as a market leader by launching a new range of saloninspired beauty innovations at this year’s TFWA World Exhibition. Among the new creations is VisaCare, an innovative, antiaging skin-resurfacing tool. In addition, there’s the Lumea Essential hair removal system that uses Intense Pulsed Light to prevent the reappearance of hair. An at-home

“Retailers love the Skross Power Pack— it retails for around US$70 and is the most useful adapter you can find on the market as it’s an all-in-one adapter, charger and pocket power bank,” SANDRA AKKAOUI, SALES MANAGER GLOBAL DUTY FREE, WORLD CONNECT

facial device developed in collaboration with Japanese facial massage experts, as well as a hydrating hair dryer and straightener also feature in the line-up.

“The introductions are part of Philips’ global travel retail strategy to offer beautifully designed tools that give women access to the latest technology to complement and upgrade their beauty regime,” says Steven van Dortmond, Global Channel Manager Travel Retail, Philips Consumer Lifestyle.

“The new range provides a clear demonstration of how we are improving women’s lives through meaningful innovation so that they look and feel more beautiful every day.

A fantastic example of which is the Philips VisaCare, the most recent innovation in our skincare portfolio and our first exciting venture into microdermabrasion.”

The sleek products are sure to pique the interest of buyers looking to bring an attractive and technologically advanced product range into their portfolio and the good news is that consumers are digging deep to get their hands on the latest kit.

“Overall, the market is improving and people are willing to pay a little more for a quality product,” says Denz Vanderlist, International Sales Director, Cabeau. “As airlines continue to eliminate comfort amenities, or charge extra for them, travelers are now looking to purchase products that will

make the trip more comfortable.”

Hence, Cabeau’s Memory Foam Evolution Pillow is a key sales driver. Recognizing this allows the company to cash in on its success and invest in building more variety in its portfolio.

Try before you fly

As retailers can appreciate, showcasing the latest technologies is an effective way of luring customers into the stores. As a case in point, Capi-Lux is showcasing the Explorer Edition of Google Glass in its airside stores at Amsterdam Airport Schiphol. The customer response has been encouraging.

“Travelers have reacted very enthusiastically—people were literally standing in line to catch a glimpse of the novelty,” says Peter Wiggers, Managing Director Royal Capi-Lux. Something of a spectacle, pardon the pun, is exactly what consumers expect to see at the airport nowadays according to Wiggers. Plus it brings added value for the airport.

A successful promotion in Capi stores at the moment is wearables—a product group that comprises fitness bands and smart watches.

“Connectivity in general is big and travelers will find the latest and best mobile devices and accessories at Capi stores,” says Wiggers. “We also have plans to extend and enhance our personal care section. Several weeks ago, we added several new beauty products to the range to engage a female audience. Dutch electronics giant Philips is working closely with us to set up experience tables where customers can try out and test beauty products.”

Indeed, building good relationships with top brands means the company is often the first to present new product innovations.

“During the last five years, however, electronics have become very price competitive,” adds Wiggers. “In response, Capi has developed a retail concept especially for travelers with competitively priced, quality products from well-known brands presented in an inspiring setting.”

Refining how the category is marketed to shoppers can help to win business—it can even inspire a new approach.

“We have noticed that the electronics and travel accessory industries have slowly started to merge together, particularly in airport concessionaire locations,” says Vanderlist. “Although Cabeau is staying focused on travel and comfort, we have begun to develop innovative electronic

travel accessories, like our universal travel adapter line, in order to make the transition and maintain a competitive edge.”

Clicking with consumers in the US

As one of the most vibrant regions for electronics and accessories the Americas present huge scope for brands to develop their offer. WorldConnect is working with Dufry in Latin America (Brazil, Argentina and Uruguay) via its local partner CTI. The goal is to increase in-store visibility through innovative POS such as desk boxes and dispensers.

Go Travel’s new Power Bank range is sure to be popular amid new security advice around electronic products

Go Travel’s bestselling Worldwide + USB adaptor in action

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

107

Electronics Report “This provides us with a larger space to communicate key messages so shoppers can easily see what Skross products are all about,” said Akkaoui. “We started to build a distribution strategy with CTI in July 2013 and our presence has grown from one to 12 locations in Hudson, North America, which is a great start.”

Cabeau’s Evolution Pillow drives its sales, although the company is striving to develop more products that to cater to unmet needs in the marketplace

WorldConnect’s Skross World Adapter Pro + USB is a must have for frequent travelers

WorldConnect is now available in 60 locations in the Americas, with marked growth in North America in particular.

With more business on the horizon, it is a priority to place its products in every international airport.

Design Go’s success in Latin America has boosted the visibility of the Go Travel brand in that destination and overall, but it’s the quality of the product that is helping to win sales.

“Many people will go to a Go Travel stand in search of an adapter or pillow but find themselves picking up a selection of exciting new products,” said Hansen.

“Each year, we introduce a wealth of interesting new accessories to reach out and grab passengers’ attention.”

New this year is the Power Bank range that provides access power during a trip.

“It is a particularly useful gadget for people traveling to the US following recent advice from the Transportation Security Administration, which specifies that all electrical items must have enough charge to switch on. Our product allows passengers to charge an item in advance of clearing security, so

there’s no unnecessary delays to their trip.”

Currently Design Go is investing heavily in POS for the Go Travel brand by reworking its existing formats to promote better visibility of the brand, drawing on its 35-year heritage. The upgrades will be applied to all graphics at its self-standing kiosk in Lima, Peru.

“As a company, we are committed to strengthening our position in Latin America and to drive forward in the regions we have not yet reached,” says Hansen. “Our successes in the local markets provide excellent case studies for new retail and distribution partners. Globally, we are concentrating on communicating our heritage and experience with new point of sale and consistent messaging in all markets.”

As suppliers carve a niche for themselves, being brave enough to strike out in a new direction can help to cultivate a culture of success.

“Change will make or break you. We have found that those more willing to change are more likely to succeed,” says Vanderlist.

“Our challenge, and the challenge of most businesses, is based on retailers doing or trying something different. Whether it’s a new product, POP display, or pricing strategy—we continually ask our distributors and retailers to work with us to test new ideas and initiatives. Those who have done so have consistently seen their sales and profits rise.” 

Capi’s flagship store in Lounge 1, Amsterdam Airport Schiphol; the company keeps a close eye on what’s happening in the food and fashion industry for inspiration

108

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Vodka News Killer Queen Lead singer and flamboyant front man of the enormously popular ‘70s and ‘80s glam-rock band Queen, the late Freddie Mercury apparently loved vodka and kept it with him on dry ice while he toured. The surviving members of the band therefore thought it fitting to “honor Mercury’s invaluable contribution to music” and celebrate the 40th anniversary of their massive hit “Killer Queen” with a vodka bearing the same name.

The vodka is distilled seven times and filtered four times. The first three times it is filtered through quartz sand and birch charcoal. Information about the fourth and final filtration the band will not disclose, as that would be giving away the secret to what makes the vodka original.

The premium liquid, which has no additional sugar and which uses water from an artesian well, is made by SPI, the company that produces Stoli, Queen’s partner in this venture is RnR Brew.

The painted glass bottles, available in 700mL and 750mL sizes, are adorned with Queen’s lyrics and a label declaring that the vodka was “inspired by originality,” in reference to a Mercury quote that the whole point of Queen was to be original. The 80 proof premium vodka will be moving into international markets later this year.

Queen’s lead guitarist Brian May said in a statement. “Killer Queen Vodka is the perfect tribute to Freddie. Using Killer Queen as the brand name was the perfect choice for us, and we know Freddie would have approved.”

Killer Queen vodka was created to honor Freddie Mercury’s contribution to music

110

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Proceeds from items such as the Tito’s Handmade Vodka dog toy go to support Emancipet, an organization that helps create affordable and accessible pet care

Tito’s Vodka for Dog People If you know Tito’s Handmade vodka you may know that owner Tito is a dog lover; you’re just as likely to see a picture of him with a dog as with his vodka. And he has always let his team know they are welcome to bring their own dogs to work. But Tito’s dog story has become greater than this.

When he built his distillery 18 years ago with his white shepherd mix, Gio, beside him, Tito did not realize that the building, situated next to an open field, would be a beacon for so many abandoned dogs. Over the years Tito and his employees have rescued and often fostered many of these dogs.

Late last year, Tito’s vodka took its self-imposed responsibility to another level when it partnered with Emancipet to launch VodkaForDogPeople.com. Emancipet is an Austin, Texas-based organization devoted to making spaying/neutering and preventative veterinary care affordable and accessible to all pet owners. Through its initiative, Tito’s Handmade vodka is helping to bring Emancipet to more communities nationwide.

“Emancipet has been a part of the extended Tito’s family for many years.” Tito says. “They’ve cared for almost all the 31 rescue dogs who’ve come our way through the distillery. We are excited to take the partnership to the next level and help them grow, just as they have helped us and so many others.”

On the site VodkaForDogPeople.com, the company sells dog-related items.

Proceeds go toward helping Emancipet provide affordable pet care beyond its current borders. Tito also has a blog called “Tito’s Dog Blog,” which talks about the company’s distillery and office dogs as well as the Tito’s team’s rescue adventures.

Vodka News

Still the Ultimat Since the 15th century, Poland, widely considered the birthplace of vodka, has been producing the clear liquid that is often referred to as the “water of life.” Therefore, it should come as no surprise that Poland’s own Ultimat vodka brand has brought something exquisite to the vodka industry.

While vodka is usually made using either grains or potatoes, Poland’s three most important crops, wheat, rye and potatoes, are distilled to create Ultimat. The rye used is derived from Poland’s warmer western region, which allows it to fully ripen. The wheat gives Ultimat vodka its distinctively smooth taste. While Poland ranks as one of the world’s leading potato producers, the company uses only the highest-quality potatoes, found in Poland’s Wielkopolska region. These provide the vodka with its rich body.

Ultimat ultra-premium luxury vodka is distilled four times. This clear, grain-based beverage has a smooth texture and subtle taste and is bottled in a cobalt blue crystal decanter. Patrón Spirits International, a company that boasts a large roster of ultrapremium spirits, markets and imports Ultimat vodka worldwide. Ed Brown, Patrón Spirits International’s president and CEO, indicated that the company “looked at over 100 different vodkas, but only Ultimat deliberately combines the richness of potato, the smoothness of wheat and the complexity of rye into a perfectly crafted, exceptional high-quality spirit.” He added that Ultimat vodka is “an exquisite combination of taste and beauty” and he sees “great potential for this brand throughout the world.”

Presented in a stunning cobalt blue crystal decanter, Patrón’s Ultimat vodka is continuously voted one of the best in the world

The small-batch vodka is a corn-based, gluten-free, kosher product that comes in Chocolate Mint, Crème Brûlée and Cucumber flavors in addition to the original Iceberg

Naturally smooth and flavorful Iceberg vodka is handcrafted using the world’s cleanest and purest form of naturally melted water that is literally harvested each spring off the coast of Newfoundland in Canada, where icebergs naturally break away from age-old glaciers. Once harvested, the chunks are melted and the resulting pristine water is then combined with triple-distilled neutral spirit. The small-batch vodka is a corn-based, gluten-free, kosher-certified product.

With only a year to go until the brand celebrates its 20-year anniversary, the 100% Canadian-produced Iceberg vodka has introduced a new line of flavored drinks called Iceberg Fusions.

Vodka is the most popular cocktail spirit in the Americas, and

112

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

now the flavored vodka market has grown to such a degree that it makes up close to 10% of vodka sales. The Iceberg Fusions line, made using all-natural ingredients, gives the consumer exciting, mixable flavor options that are limited only by individual imagination.

Iceberg Fusions is available in three flavors: Chocolate Mint, Crème Brûlée and Cucumber. The Crème Brûlée flavor presents consumers with the unusual treat of drinking their dessert. Everyone loves chocolate; throw in vanilla, caramel and fresh peppermint and the Chocolate Mint flavor is sure to be a favorite. In this year’s ontrend cocktails, cucumber is a star ingredient. Iceberg Cucumber vodka gives that same refreshing taste.

THE ORIGINAL Only the purest ALPHA SPIRIT is used to make Stolichnaya®, DISTILLED JUST THREE TIMES to preserve the smooth flavour and character of our Russian wheat and rye, much of it grown on our own farms in Tambov. After distillation and purification, our Alpha spirit travels to the Baltic city of Riga. Here, in the magnificent LATVIJAS BALZAMS DISTILLERY it is blended with pure artesian well water and FILTERED JUST FOUR TIMES through quartz sand and charcoal.

CONTROLLING THE PROCESS FROM GRAIN TO BOTTLE, Stolichnaya is the original premium vodka and its standard is the benchmark bartenders rely upon to make the world’s most original cocktails.

.com DRINK WITH CARE. STOLICHNAYA® PREMIUM VODKA 40 % Alc./Vol. 100 % Russian Grain Neutral Spirits. © 2014 Spirits International, B.V.

Globefill

Clearly Global Staying true to the legendary crystal skulls that inspired its design, Crystal Head vodka is being found around the world by

WENDY MORLEY

C

onceived in 2006 and brought to market in 2008, Crystal Head vodka was a hit from day one. Travel retail organically followed domestic growth around the world, but the company had not made a conscious decision to target travel retail until this past year.

Globefill Inc., Crystal Head’s parent company, made the decision to centralize its approach to travel retail, and to that end has invested in key personnel. The company feels that its unique, ultrapremium brand is a natural for the travel retail market, and customers’ reaction to Crystal Head is very positive.

Despite industry-wide softening of some global spirits markets, brands that are categorized as premium and above are leading the growth, and again Crystal Head fits in. “A Crystal Head drinker is someone who wants a superb vodka and is not afraid to be noticed,” says Brian Meret, the brand’s Vice President Caribbean and Latin America.

“So we perform well in the On Trade at bottle service bars, for example. The travel retail buyer also wants to make a statement, and Crystal Head works well for gift giving or home consumption.”

Globefill has been busy building this channel in 2014.

It took part in IAADFS and ASUTIL, and the company hopes to secure space at both TFWA WE in Cannes and TFWA AP in Singapore. The product is on a test run with DFS in the US and is on the verge of being listed with a number of other major global retailers.

114

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Writer, actor, producer and musician Dan Aykroyd has always strived to be the best, so when he began noticing that many vodkas were not as pure as he thought they should be, he set out to make a better one

Exclusives and special packaging

In 2012 Globefill was approached by the Rolling Stones to create a limited-edition pack with an exclusive double live CD to help commemorate the band’s 50th anniversary. The pack, now sold out, was not created specifically for travel retail but did perform well.

Beyond exclusives, the brand’s bottle demonstrates that the company is no stranger to special packaging. A striking new three-liter bottle of the same design has recently become available, and the first production sold out quickly. At the other end of the size spectrum, Crystal Head’s 50 ml bottle is the number-one SKU for

two major retailers, one domestic and one travel retail. At this point the company is considering range extensions but since Crystal Head is still branching into some parts of the world, feels the original bottle designed by John Alexander is ample as an attention getter for the time being.

Promotions unnecessary

Because of the extraordinary bottle, Globefill has not felt the need to do any special promotions; the bottle speaks for itself when merchandised appropriately. The Crystal Head vodka contained inside also speaks loud and clear, having won numerous gold, double gold and best-inshow prizes. That being said, Dan Ayk-

An interview with Crystal Head owner Dan Aykroyd Dan Aykroyd has never done things halfway. A writer and actor on Saturday Night Live in its heyday, he went on to create some of the most memorable characters, movies and TV shows of the next few decades as actor, writer and producer. As if that weren’t enough, he also threw in a number-one record. His hunger for perfection did not wane when Aykroyd moved in a whole new direction with the creation of Crystal Head vodka.

Q: You have put so much thought into every tiny detail of Crystal Head, from the number of filtrations to the gluten-free aspect to, of course, the extraordinary bottle. Is this a reflection of your personality?

A: I have always strived to be the best. When I began noticing that vodka often displayed over-viscosity, unnatural sweetness, too much glycerol or citrus oil, for example, I thought surely a better, naturally smooth taste and mouthfeel were achievable. That inspired me to create Crystal Head vodka. I never allowed for compromises, from the craftsmanship, purity and quality of the liquid to the unique and special bottle designed by my close friend John Alexander, based on our shared fascination with the legend of the 13 Crystal Skulls.

Q: When you first decided to create a vodka, did you know anything about the process? About what makes one vodka superior to another?

A: Like most vodka drinkers I assumed it was naturally pure. I didn’t know most vodkas contain oils, sugars and sometimes chemicals until I began researching. I knew exactly what I wanted, which was a smooth, additive free, pure vodka. I didn’t want an oily aftertaste and I was willing to spend the money to make something really great. My team and I worked continuously with a master distiller to create what is now Crystal Head, an ultra-pure, ultra-premium vodka, a process that took over a year. It was an eye-opening experience and I have learned a lot because of it.

Q: The making of the Crystal Head decanter is highly laborious and results in a great deal of loss. You could make a similar decanter in a more cost- and labor-effective manner. Why do it this way?

royd actively participates in bottle-signing events. For example a signing in Sydney, Australia was a huge success. Nuance’s strong and positive team helped foster large crowds and high sales both during and after the event.

Crystal Head has made great inroads globally, but Meret says much of the progress has been the brand establishing itself.

While it is true that much of the world remains to be conquered, the company’s goal is to focus on building on its core markets and strengthening the base. In the coming year, Globefill hopes to secure business with the majority of global travel retailers, feeling this step can be extremely beneficial for all.

A: It took two years to develop a mold for this bottle, and then no glass manufacturer around the globe would try to make it; they didn’t know where to start. Finally Bruni Glass in Milan accepted the challenge. Bruni declared our bottle to be of “unsurpassed design and complexity.” Each bottle contains superfine crystal for clarity, and takes up to 16 times longer than a regular bottle to create.

But to be better and truly unique comes at a cost. Our customers have a true appreciation for quality and a sense of fashion. With a customer like that you can’t and shouldn’t cut corners.

Q: Are you pleased with the business’ progression?

A: We had very modest expectations. The global economy was suffering quite badly. Premium established brands were lowering prices and still losing sales and we decided to launch an ultra-premium vodka in a skull bottle. Some people thought we were crazy.

Needless to say Crystal Head quickly surpassed our forecasts and expectations. So far we have been happy with the direction of the brand and we intend to continue to build upon our success.

Q: What would you like to see in the coming years? Do you foresee creating other products, for example?

A: We have definitely thought about it, but there are so many things we still need to accomplish with Crystal Head and its potential is so high that we really don’t want to lose our focus on another product. Our focus will continue to be finding customers that refuse to compromise on quality and that have a true appreciate for quality, fashion and design. 

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

115

Absolut

Absolut Warhol

comes to life In what can only be described as a spectacular display of life imitating art imitating life, Absolut’s Andy Warhol edition will soon be available to the brand’s worldwide collectors by WENDY MORLEY

A

bsolut has been strongly associated with art since 1986, when it first commissioned Andy Warhol to create a work based on the iconic vodka brand. Warhol, who was the leading figure in the contemporary art and culture movement and whose influence endures to this day, was famous for his depictions of everyday objects and events. Therefore Warhol may have been the obvious choice to help Absolut usher in an era of collaborative efforts with distinguished artists.

A vodka history in art

To celebrate nearly 30 years of its strong association with art, Absolut has come full circle with its Andy Warhol edition

Since that time Absolut has commissioned more than 850 works by over 550 notable artists, and that vast collection is now permanently displayed in Sweden’s Historical Museum of Wine and Spirits. The seemingly endless array of artists Absolut has collaborated with includes Keith Haring, Kenny Sharf, Damien Hirst, Jean-Paul Gaultier, Louise Bourgeois, Stella McCartney, Versace and Swedish House Mafia.

Earlier this year, the company collaborated with Brazilian illustrator Rafael Grampá on Absolut Karnival, an orange-blossom and passion-fruit-flavored beverage that is the company’s latest global travel retail limited-edition product.

Past and present intersect

Andy Warhol’s original piece commissioned by Absolut in 1986

116

Given Absolut’s rich and ever-growing evolution since its first collaborative effort with Andy Warhol, the company decided the timing was right to celebrate its chosen direction. Fittingly, Absolut drew on that rich history and developed a tribute to its very first commission with the newly released Andy Warhol Edition. Johan Rudström, Global Marketing Director at Absolut Vodka, says: “The Andy Warhol Edition transforms Warhol’s original painting into

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

the three-dimensional shape of the Absolut bottle and allows for anyone to bring home their very own Warhol.”

The company indicates that to support the launch of the new Andy Warhol Edition, it will soon be adding two more fresh concepts to its stable of supportive organizations: the Andy Warhol Art Exchange by Absolut, and the Warhol Spirit by Absolut in New York. A portion of the proceeds generated by these organizations will go as royalties to The Andy Warhol Foundation for the Visual Arts, a non-profit, charitable organization established in 1987 with a mission to advance the visual arts. Today, the organization is recognized as being among the leading supporters of contemporary art.

Absolut Vodka is manufactured exclusively in the company’s home base of Sweden and is the fourth largest premium spirits brand in the world. While the Andy Warhol Edition is not an exclusive to the travel retail industry, it will be made available for global travel retail along with other worldwide retailers in October, 2014.  Earlier this year, Absolut created a distinctly Brazilian travel retail limited edition

vodka exceptioNNelle FiNiSHed WitH a HiNt oF pRecioUS coGNac

e N J o Y R e S p o N S i B lY .

l

WWW.GReYGooSe.coM

©2014 GReY GooSe, tHe GooSe device aNd tHe GReY GooSe vx tRade dReSS aRe tRadeMaRkS. SpiRit dRiNk. aBv 40% (oF WHicH vodka 95% aNd coGNac 5%). pRodU ct oF FR a N c e

Bacardi

A very exceptional promotion by

WENDY MORLEY

Bacardi’s travel retail exclusive Grey Goose VX made its Americas debut in grand style with high-impact promotions at LAX and LAS

A

t TFWA AP in Singapore in May of this year, Bacardi presented a truly unique new vodka, Grey Goose VX. The “VX” in the name stands for “vodka exceptionelle.” This is borrowed from the world of Cognac, and with good reason: Grey Goose creator and Maitre de Chai Francois Thibault, who began his career as a cellar master in Cognac, created this brand new liquid by adding a few drops of precious Grand Champagne cognac to ultra-premium Grey Goose vodka. The result is a smooth sipping vodka with a flavor and mouthfeel not found elsewhere.

Introduced to the world in Paris, this new travel retail exclusive recently took center stage in some high-profile promotions in the US. Tailor made for the industry with its combination of superior quality and uniqueness along with a sleek, rounded bottle reminiscent of a crystal decanter,

Grey Goose VX was a strong presence at both Los Angeles and Las Vegas McCarran International airports.

Feature concourse experiential activations outside the main duty free stores led travelers inside, where in-store glorifiers and branded light boxes kept their attention.

Grey Goose brand ambassadors explained the unique story behind the brand and served the sipping vodka in dramatic fashion that emphasized its quality and exclusivity by wearing white gloves as they extracted the tasting liquid from the decanter using elaborate glass pipettes.

Geoff Biggs, Regional Director Americas, Global Travel Retail comments: “These are among the largest experiential activities Bacardi has ever activated in the Americas travel retail market. This is a key region for Grey Goose as leader of the super-premium vodka category in both US domestic and in travel retail markets. This is an important The striking Grey Goose VX promotional display attracted plenty of attention from travelers

118

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

The Grey Goose VX bottle resembles a crystal decanter, with a collectible bottle stopper

strategic channel for us to share our brand stories and to introduce consumers to exciting innovations such as Grey Goose VX. “With Grey Goose as a clear leader of super-premium vodka, it is best placed to lead the growth of the vodka category in Travel Retail. We believe Grey Goose VX is a disruptive category innovation as witnessed by the incredibly positive reaction of shoppers.”

Grey Goose makes its own appearance

The original Grey Goose super-premium vodka made a star appearance in Bacardi’s US promotions in partnership with DFS, again at LAX, with its Cocktails of the World promotion.

This bespoke promotion, which ran for the month of July, featured signature cocktail serves for several brands in the Bacardi portfolio as part of a broader promotion to encourage purchase of two bottles of the featured brands.

The marble-topped corner unit, situated at the front of the main store in the Tom Bradley International Terminal, created a natural bar setting where travelers could order their perfect cocktail and have it created by a brand ambassador using luxury cocktail accessories and then served on a silver tray.

Bacardi’s Grey Goose vodka was the first super-premium vodka, already well known for its quality and a good travel retail selection. Its new exclusive expression Grey Goose VX has taken that a step further, solidifying the brand’s place on the travel retail top shelf and upping the ante in the white spirits category. 

PURE SPIRIT T R AV E L R E TA I L I N Q U I R I E S - P L E A S E C O N TA C T B R I A N @ C R Y S TA L H E A D V O D K A . C O M W W W. C R Y S TA L H E A D V O D K A . C O M © 2 0 1 4 C R Y S TA L H E A D A N D T H E C R Y S TA L H E A D B O T T L E D E S I G N A R E R E G I S T E R E D T R A D E M A R K S O F G L O B E F I L L I N C .

PRODUCT OF CANADA.

VODKA DISTILLED FROM GRAIN 40% ALC. / VOL.

SPI

Stoli’s line of indulgent flavors continues to grow; Chocolate Razberi, launched in 2012, is a standout favorite

Consistent and

innovative

Tasting bars at Stoli Night Edition promotional events leave Stolichnaya with a good aftertaste

S

tolichnaya (Stoli) has made travel retail a priority in recent years.

That decision has been reflected in the company’s sales, which have increased in double digits over the past year. According to Stoli’s Global Duty Free & Travel Retail Director, Jean-Philippe Aucher, a significant portion of that boost can be attributed to the massive success of the Stoli Night Edition promotion the company put on with Heinemann.

In the first quarter of 2014, the company achieved an increase in sales of 350% during the Stoli Night Edition promotion, which saw Stoli and Heinemann create tasting bars in airports throughout Germany. These tasting bars, which highlighted the glow-in-thedark Night Edition label, offered Stolichnaya premium cocktails, Stolichnaya Chocolat Razberi from the indulgent-flavor line and elit by Stolichnaya; the ultra-luxury vodka was highlighted by a specially designed elit pillar.

A vodka trailblazer Served to travelers as part of the Stoli® Night Edition promotion, elit

by Stolichnaya has cemented Stoli’s place at the higher end of the vodka spectrum

120

Stoli has always been a trailblazer in the vodka category. It was not only the first premium imported vodka, but also the first vodka to introduce flavors. The introduction of Stoli Gold in 2008 further solidified the company’s premium image. This affords the company a slight upper hand in a category where innovation and premiumization are considered paramount. Therefore it’s perhaps not surprising that elit by Stolichnaya has been a standout among premium vodkas and has exceeded expectations.

Stoli’s indulgent flavor line has also emerged as a company strength. In the past three years it has introduced four new additions: Chocolat Razberi in 2012, along with Salted Karamel and Sticki in 2013. These new flavors have helped sales increase 163% over a three-year period, and the company responded to this success by introducing a new flavor this year: Chocolat Kokonut.

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

by

WENDY MORLEY

Untapped potential

North America is the biggest travel retail market for Stoli, which is unsurprising considering how strong the brand is in the Canadian and United States domestic markets. But according to Aucher, a look south shows huge untapped brand potential in Latin America. Currently Stoli is the area’s third most imported vodka brand and its position in Brazil and Mexico is strong and growing.

Stoli is also focused on the Near and Middle East, where it is the leading vodka brand in Lebanon, Israel and the UAE. In the European market, the company has seen tremendous growth attributed in part to the great results that have been achieved in the Nordic region, as well as with Heinemann and WDFG. Similarly, the cruise business has been very positive for Stoli. It is the top brand in the United States and the Caribbean and quickly growing in Europe. The company expects to see sustained growth in this area over the coming years.

The consistent vodka

Stoli has had many promotions worldwide so far in 2014 and these will continue throughout 2015. Company focus will be on tasting bars for Stoli Premium, the indulgent flavors and elit by Stolichnaya.

In Cannes the company will introduce a new version of Stoli Night edition, featuring a bottle decorated with temperature-activated ink that reveals a pattern when the bottle is chilled to temperatures below 15ºC/60ºF. In early September, the company unveiled a unique global marketing campaign positioning the Stoli brand as “The Vodka.” The campaign draws attention to the fact that Stoli has remained consistent throughout the years rather than changing its bottle with the fashion. It’s that consistency that Stoli feels helps give the brand a level of authenticity that separates it from its competitors and the power to keep the sales trend moving upward. 

Russian Standard

From strength

to strength by

.

Zubrówka launches a limited-edition travel retail exclusive sleeve this fall, celebrating its Enchanted Forest advertising identity

WENDY MORLEY

Russian Standard is in for a busy fall and winter, with travel retail exclusives and a whole new region

T

his fall is an especially exciting time for Russian Standard in travel retail. Both the Russian Standard and Żubrówka brands of vodka have special limited-edition sleeves launching at TFWA in time for the holidays.

Russian Standard’s St. Petersburg sleeve, the brand’s second limited edition in the Russian heritage-inspired series, celebrates the city’s rich artistic heritage; indeed, St. Petersburg is known as the “Venice of the North.” The city, established in 1703 by Peter the Great, is renowned worldwide for its opulent beauty, which is reflected in the delicate filigree pattern of the sleeve. This limited edition is especially significant, because St. Petersburg is home to Russian Standard vodka. The St. Petersburg limitededition sleeve is a travel retail exclusive and will be available globally in November 2014, just in time for the gifting season.

Meanwhile Żubrówka, the bison grass vodka, has its own travel retail-exclusive limited-edition sleeve coming out globally in November. The design, which is an extension of the brand’s “Enchanted Forest” advertising imagery, invokes the Białowieża Forest, which is the bison’s home in eastern Poland. “Żubrówka’s unique advertising imagery lends itself perfectly to this limited edition sleeve,” said Andrew Notcutt, Global Travel Retail Marketing Director for Russian Standard, which manages Żubrówka’s travel retail.

A big launch in the Americas

The Enchanted Forest sleeve while exciting is not the only major launch for the brand this fall; Żubrówka itself is being launched in the Americas through Rémy Cointreau. Żubrówka, which is marketed as ZU in the United States, will compete in the premium

The St. Petersburg limited-edition travel retail exclusive is especially significant since the city is Russian Standard’s home

flavored vodka segment thanks to each bottle’s hand-placed blade of grass, which lends a fresh, grassy flavor to the liquid.

Notcutt is prepared for a very successful launch in the region, where vodka is especially strong. “We continue to go from strength to strength in the Americas, with double digit growth across the region,” he says, adding that Russian Standard performs exceptionally well in Brazil, Argentina, Canada, the Caribbean and the US. With distribution in more than 80 countries, Russian Standard saw sales of a number of its vodka brands increase significantly in 2013 to over 200,000 mine-liter cases.

Notcutt feels Żubrówka will suit the Canada-US border stores especially well.

The brand had a very successful promotion elsewhere in the world with an eye-catching prairie-field display complete with “grass” and a large freestanding bison. Notcutt hints that similar displays are likely to make their way into travel retail in the Americas. “Cer-

tainly I think retailers and consumers alike will enjoy some Żubrówka bisons in-store to bring the brand to life,” he says.

A strong and growing category

Vodka is an important and growing category to the retailer and the consumer. “We believe Żubrówka will continue to grow the vodka category in global travel retail, supported by this fall’s exclusive packaging, which provides unique gifting opportunities,” says Notcutt.

Along with other Russian Standard brands, both Żubrówka and Russian Standard were featured on Drinks International’s 2014 Millionaires list in multiple categories.

It’s appropriate that this company, one of the top five alcohol producers globally and the second-largest vodka producer by volume, should be so recognized. If Notcutt is correct in his predictions, that number should soon increase significantly. 

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

121

Bulldog Gin

BULLDOG GIN

ATTACKS

Bulldog gin’s sleek and muscular bottle with its spiked dog collar is sure to stand out on duty free shelves

travel retail Armed with a new distribution deal with Gruppo Campari, Bulldog gin has ferocious plans to get listings the world over by WENDY MORLEY

The next target: travel retail

Until now, Bulldog gin was available in travel retail only in small pockets. Its reach in the industry is expanding, and that is exactly what Vohra wants. “Duty free is an incredibly ripe platform for the brand’s growth,” he states. “We view this channel as primary to our business and will invest accordingly.”

Andrew Holmes, Global Travel Retail Director of Gruppo Campari, agrees.

“Bulldog is well positioned Founder and to capitalize on the growth CEO Anshuman Vohra views travel of super-premium gin in retail as primary travel retail. It has a good to the company’s business model price point, strong leadership behind the brand, and a modern and intriguing look and charulldog gin took its first trip across the Atlantic to arrive in acter. It will definitely stand out.” The look New York City in 2007, but its is modern, with Bulldog’s sleek, muscular distribution in the Americas black bottle set off by a spiky “dog collar” and US specifically remained around its neck. The company’s marketing very limited. The gin company’s fortunes is trendy, young and attention getting. changed markedly for the better in 2014 as its global distribution agreement with Setting the foundations Gruppo Campari went into effect. “The The company has not yet held promotions in brand’s performance, global reach, cred- travel retail, concentrating instead on setting ibility and routes to market have been the foundation to support future growth. elevated tremendously via this partnership,” “We need to focus on the basics before says Anshuman Vohra, Bulldog’s Founder beginning any promotional activity,” says and CEO. “Sales are up 75% year over year Vohra. “We need to ensure correct product through August and the brand will likely location in stores, optimal pricing structures cross the mark of 100,000 nine-liter cases and permanent visibility.” sold globally in 2014.” And the brand is on One promotional activity the company the move. It is now available throughout is investing heavily in, however, is staff most of the Americas and by the end of training. Vohra feels it’s imperative that 2015 should be available across the board. the front-line staff be empowered to up-sell

B 122

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

the brand to target customers, and that will only happen if the staff is prepared. Besides, highly trained staff can only be a positive when the company does start its promotional activity in 2015, which will focus on sampling and customer awareness. The objective will be to attract new customers to the category by appealing to a younger demographic, but without alienating the current customer base. “We will look to educate staff, shoppers and consumers on the varied and exciting serving suggestions for Bulldog gin, outside the traditional drink of choice and occasion,” says Vohra. This will be achieved through value-added and educational packs, staff brand inductions both in person and online, and staff incentives and reward programs.

Bulldog gin presents a huge opportunity in the re-energized gin category, which is very current and on trend. In the coming year the company’s goals are to have leverage and success in southern Europe and Latin America, to expand dramatically in the US and Canada, and to be well on its way to full distribution in travel retail and the domestic market. “Momentum is very strong as we are gaining important distribution this year,” says Vohra. “Next year will bring much greater A&P investment behind the brand.” 

Knob Creek® Kentucky Straight Bourabon Whiskey, 50% Alc./Vol. ©2014 Knob Creek Distillery, Clermont, KY. All trademarks are the property of their respective owner.

Gin News Premium gin is moving on up Not since 18th century London has the world seen such a gin craze. Called a white spirit, although it often comes in colors these days ranging from amber to blue, this botanical-filled liquid has become a favorite of mixologists and cocktail lovers over the past two years.

Premium gin has done the best, with sales figures the top half of the market improving much more than those at the bottom half.

Younger drinkers are leading the way in the gin revival, preferring premium brands and willing to experiment. According to the Spirits Business, some head bartenders at the trendy bars think gin is the drink of the future.

New research shows their forecasts are spot on. Research recently released shows that a poll of over 1,000 people found that 52% thought themselves most likely to order a mixed drink over the coming holiday season, and the most popular choice, according to the survey, was a gin and tonic. The selection of a mixed drink as their holiday choice was most common among those aged 35 to 44.

The findings follow recent on-trade research, where 44% of bartenders from renowned London bars said that premium gin had become the most important spirits category in their venue.

Outside of the UK, America and Canada are the top gin-consuming countries in the world. The beverage has yet to establish a stronghold in South America, but that is slowly changing with the region’s popular cocktail culture.

Premium gin is becoming the most important spirits category for bartenders

The world is blue

The blue color of The London No. 1 gin comes from macerated gardenias, but that does not mean it has a flowery taste

124

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

One of travel retail’s newest premium gin brands, The London No. 1 had an eye-catching stand at TFWA AP in Singapore, where passers-by were dazzled by the striking black and backlit-blue display that was fronted by talented Singaporean mixologist Bryan Tan. The brand, owned by González Byass, one of Spain’s largest wine and spirits companies, will also have a stand at TFWA WE in Cannes.

The striking blue gin recently received a Gold Medal at the Los Angeles International Spirits Competition. As a Gold Medal winner, they were invited to represent The London No. 1 by pouring the gin for the “Cheers” event on Saturday, June 21, 2014. This event is the public unveiling and tasting of the gold medal-winning spirits, wines and beers of the Los Angeles International Competition, bringing in over 1,000 people.

While some gins are sold in a blue bottle, The London No. 1 gin is actually a turquoise blue, a color that comes from a maceration of gardenia flowers. Though it is made with flowers, the gin does not have a flowery taste and lends itself to cocktails as easily as martinis. The gin is triple distilled in a traditional pot still in small batches by Master Distiller, Charles Maxwell.

Replete with botanicals, the liquid features juniper, coriander and angelica. The first two botanicals impart fragrance and spice while angelica, together with orris root, give body and structure to the other botanicals. Licorice root adds zest. The London No. 1 is unique in that it also has a final fusion of bergamot oil in the mix – the same instantly recognizable aroma as in Earl Grey tea. Add fruity flavors of orange and lemon peel, offset with aromatics of savory and the spicy notes of cinnamon and cassia bark. With so many flavorful ingredients the gin might be overpowering, but that is not the case. The blue gin has been very well received and expects to be seen regularly on the travel retail stage from this point on.

VIS IT U S AT GR AT AY D

CAN NES TFW A

T ’AL HE UN BIO D N H ERBE R OT EL, G SUI RUE TE DES , SER B

ES

97 POINTS AT THE ULTIMATE SPIRITS CHALLENGE, NEW YORK

“Broker’s Gin is extraordinary.

We give it our highest recommendation.”

F. Paul Pacult, Chairman of the Judges.

Diageo

Head of the World

Sandra Vaucher and Louise Higgins, from Diageo, recognized a huge opportunity in working with cruise lines but both were pleasantly surprised at the number of bartenders to enter the contest this year

Class Agus Gandu Adyana, from Celebrity Cruises, making as many cocktails as he can in five minutes

Cruise line bartenders up their game when they take part in the Diageo Reserve World Class Bartender of the Year competition by

WENDY MORLEY

The semifinals to find the Best Cruise Line Bartender took place at Diageo’s Bar 396 in Miami

126

I

n 2009, Diageo launched a unique and very large-scale bartending competition that takes place not in one location or with one group of people but all over the world. In the Diageo Reserve World Class Bartender of the Year competition, bartenders from around the world submit cocktail recipes to enter. From each country taking part in the contest, the field is narrowed down to a semifinal, where the winner for that country heads off to compete in the global final, which this year started in Scotland and ended in London, where the Diageo World Class Bartender of the Year was selected.

The competition did not include cruise lines when it began, but Sandra Vaucher, Director, Customer Team at Diageo and Louise Higgins, Regional Marketing Director Global Travel Western Region at Diageo, recognized the long-term potential should they include cruise ships’ bartenders in the event, and they have been proven correct.

Diageo expected the number of entrants to grow this year; for one reason, the company

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

had partnered with two more cruise lines, increasing its cruise partners to four. Also, the company figured word of mouth would inspire more bartenders to enter. Therefore they expected that the number of entrants might triple, from 600 to 1,800. They were pleasantly surprised when the final number of entrants came in at 5,500—a testament to the quality of the program.

Diageo and the cruise lines have a valuable partnership

Solid partners to the industry, Diageo worked together with the cruise lines to host training sessions, truly upping the caliber of behind-the-bar talent. As Jen Baker Manager, Beverage Operations at Princess Cruises, states: “At some point a Piña Colada is just a Piña Colada, a Margarita is just a Margarita. You need to move ahead with the industry and this is exactly the type of program that helps with that.”

The cruise lines couldn’t be happier with the partnership, the training provided

Shekhar Grover, chosen the “Best Cruise Line Bartender” in Diageo Reserve World Class Bartender of the Year competition, poses with some of Diageo’s representatives at the event

The four semi-finalists anxiously awaiting the verdict

by Diageo and the excitement the whole process engenders. “Our bartenders in the program used to deliver great cocktails to masses, and now they deliver exceptional cocktails to the masses,” says Baker.

To cruise lines, the Diageo Reserve World Class Bartender of the Year competition is priceless. With the training Diageo offers as part of this competition, the company causes excitement throughout the ships, first with the bartenders and then infectiously spreading throughout the rest of the crew and passengers. Another benefit seen by Chanelle Duarte, Manager, Beverage Development at Celebrity Cruises at the time of the semifinal event, is that: “This program helps to validate being a bartender as a career. At Celebrity we want our crew with us for a long time. We want them to grow their education and grow their career, and this competition helps make that happen.”

For Diageo, the cruise lines offer massive opportunity to show the company’s brands the way they should be shown. Higgins says, “We’ve got the best brands in the world,

Eventual winner Shekhar Grover, from Royal Caribbean, looks calm and collected though racing against the clock

and we want them to be showcased in the best possible way—how they’re mixed, how they’re served and the way people enjoy them, partly through recipes and partly through the excitement and atmosphere created by the bartender. The great thing about this program is that you take people with basic strength, the cruise line bartenders, and you work together to make them even stronger.” Diageo’s Vaucher and Higgins agree that this program will only get bigger.

The semifinals determine the Best Cruise Line Bartender

At Diageo’s Bar 396 in Miami, the semifinals were held to decide who would be sent to compete for the coveted title of Diageo Reserve World Class Bartender of the Year at the Global Final in the UK. Guests were treated to the drinks created by the semifi-

nalists: representing Princess Cruises, Carlos F Lintag Jr, from The Philippines; representing Norwegian Cruise Line, O’Neil Anant James Pandit, from India; representing Royal Caribbean International, Shekhar Grover, 27, from India; and representing Celebrity Cruises, Agus Gandu Adyana, 27, from Bali.

These bartenders were put through their paces in exciting timed contests, and in the end Shekhar Grover was chosen as winner.

While in the end he did not win the final, the experience was life-changing for him, offering enormous opportunities within the Royal Caribbean family and beyond.

To Roseann Grippo of Royal Caribbean, who looked as thrilled as her bartender when he won the semifinals, the event is “like the Academy Awards. Diageo really knows how to make everyone feel special.” 

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

127

MONARQ

With over 30 flavors, Bols liqueurs make some exciting cocktails

Growth through innovation by

MONARQ Group, a company whose Spurred on by relentless name is inspired by the monarch butterfly, effort and innovative was founded in 2006 and represents an promotional strategies, impressive roster of top-selling spirits, wines MONARQ Group sees its and beers including Heineken, Dos Equis, year-to-date performance Baron Otard Cognac, Cachaca 51, Fernet Branca, B&B and DOM Benedictine, Bols, increase by over 25% Oxley gin, Żubrówka, Crystal Head vodka, hen a premium bever- Seagram’s, Molinari sambuca and many age, distribution and more. With that ever-growing roster and marketing company the team’s tireless efforts, the company is strengthens its orga- able to continually form new partnerships, nization by recruiting including perhaps their most recent, signed new members who work to better serve with Bacardi Caribbean/Atlantic.

De Monchy says that with this agreetheir distributor network and the various brand owners they represent, that company ment, MONARQ Group is “responsible generally expects to see its business improve. for the domestic and duty free distribution Not surprisingly for MONARQ Group, and marketing execution of a premium that expectation was realized. Accord- portfolio of brands” throughout the majoring to Managing Director and MONARQ ity of the Caribbean islands. He indicates Group company founder, Robert de Mon- the partnership was formed because of the chy, MONARQ’s business has “developed brand-building expertise MONARQ has very well” over the past year. The company’s displayed in the premium segment of that current year-to-date sales have increased market in the region, effectively focusing on by more than 25% when compared to 2013. duty free retail, on-trade and select off-trade.

“We have the structure, Molinari partners, dedication Managing sambuca Director and and perseverance to is one of company MONARQ’s make things happen in founder Robert core brands de Monchy this part of the world,” explains de Monchy.

W

Strategic innovation

Another significant aspect of the company’s success this year has come from the numerous promotional strate-

128

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

WENDY MORLEY

gies it has employed in the Americas. In August, the company ran a highly successful Heineken promotion at London Supply’s Central Plaza flagship Puerto Iguazu store.

MONARQ has also run a tasting program that has been met with significant success partnering with retailers such as Grupo Wisa and Shopping China.

MONARQ Group recently ran several duty free retail promotions on the Brazil borders with its Crystal Head vodka and Limoncello di Capri brands. A popular aspect of the Limoncello di Capri promotion was the innovative use of sorbet machines. De Monchy indicates that use of the machines translated into “substantial additional sales.”

With MONARQ’s mounting success has come the addition of three strong new listings to its growing portfolio: Ole Smoky Tennessee Moonshine, Teeling Irish whiskey and Nonino grappa. Since 1897, Italy’s Nonino family has produced arguably the world’s most famous grape-based pomace brandy known as grappa. Teeling Irish whiskey has a rich history dating back to Ireland’s Teeling family in 1782. Ole Smoky Tennessee Moonshine, a leader in its category with 10 different flavors, holds the distinction of being the first-ever distillery of spirits in East Tennessee history, and is the mostvisited distillery in the United States.

MONARQ is in advanced discussions about these brands with numerous duty free operators throughout the Americas. If history is any indication, the company’s hard work should ensure that they will soon find their way onto a growing number of duty free retailer shelves. 

Cognac report

Up

and

Down

I

The number 001 decanter of Dupuy Auguste was recently sold at auction to a cognac collector for €11,000. The company has now launched its Dupuy Auguste decanter

n the tumultuous time since the world economic crisis of 2008, Cognac has been riding a virtual roller coaster. According to IWSR, sales of the liquid plummeted in 2008 and 2009, decreasing by 7.6%, but in 2010 recovered most of the lost ground, increasing sales by 6.9%. Between 2010 and 2012 sales continued to increase, from 4.6% to 5.8%, but in 2013 worldwide sales dropped once again, by 3.2%. This time the drop was caused by China’s austerity policy.

In China, until that point Cognac’s biggest market, sales fell by 11.2% in 2013.

Until the austerity policy took affect, global sales had been increasing mainly on the backs of China and the US. While sales have slowed drastically in China, that has not been the case in the US where Cognac, contrary to its popular image, is young and urban.

Continued robust sales in the US and increasing sales throughout Americas may have been part of the reason Rémy Cointreau chose to launch its Cellar Masters Selection in the region, waiting a full year later to release it in Asia and Europe.

Throughout the region, this new travel retail exclusive has done very well, often outselling the now-domestic-only brands it is replacing.

Some up, some down

By the end of 2013, North America had regained its position as top Cognac market in terms of volume, and company coffers since then have been determined to a great degree by where a company does its busi130

Sales of Cognac are up in one region, down in another. When it comes to Cognac sales, there is no global rule by

WENDY MORLEY

ness. China is not the only Asian market to drop. Markets throughout Asia have declined significantly over the past decade, and sometimes drastically. Also, while Europe is not a huge Cognac market, the region’s continued downward trend is not helpful for offsetting falling sales in Asia.

Cognac Frapin, however, continues to do well in Europe. “Business in 2014 has suffered from the new Chinese policy on luxury spending. However, due to the European markets, always a strong region for Frapin, shipments have been in line with forecast,” says Cognac Frapin owner Jean-Pierre Cointreau.

A positive autumn

Bache Gabrielsen, meanwhile, had a thrilling September. First the company won two awards at the 2014 Cognac Masters: Bache Gabrielsen’s XO Cognac won the Master award and its Sérénité EXTRA won the gold award. Immediately thereafter, the number 001 decanter of Dupuy Auguste was sold at auction to a cognac collector for €11,000, far exceeding the estimated amount of €2,800.

The company took this as an opportunity to officially launch its Dupuy Auguste decanter, now available worldwide. In Cannes Bache-Gabrielsen will mainly be showing its new Dupuy Tentation Vintage range, but will of course showcase other best-selling products such as the Master award-winning Bache-Gabrielsen XO and Dupuy Tentation XO, both in one-liter sizes. The company

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Cognac Frapin has seen a downturn in Asia, though its European market remains strong

currently has one travel retail exclusive, Thomas Prestige, which is available in 50cL and 100cL, though it is currently working on other exclusive products.

While these news items may bode especially well for the company in 2015, in general business has been stable for its two main brands, Bache-Gabrielsen and Dupuy.

Bache-Gabrielsen is the company’s main brand in Europe and America, whereas Dupuy is its focus for emerging markets.

“Sales volume has remained at 1.3 million bottles per year,” says Hervé Bache-Gabrielsen, Owner and Chairman of his namesake company. “In general our two main brands did very well in 2013, especially when you consider the Cognac downturn in Asia.”

While sales of Cognac in Asia have dropped considerably, despite the downturn it is an important region and will continue to be so. But the real story now is in the Americas, where Cognac sales are comfortable in their upward trajectory. 

®

®

Inspired by the Paris Golden Age, Extravagance celebrates an era of artistic freedom when Courvoisier® was the official toast for the opening of the Eiffel Tower, and savoured by Napoleon III.

This rare, complex and exquisitely aged Fine Champagne Cognac was awarded Gold in the 2014 Cognac Masters, and is ideal for sharing and celebrating.

Courvoisier®, the Napoleon device and Le Cognac de Napoleon are trademarks of Courvoisier® S.A.S. ©2014 Courvoisier® S.A.S. All trademarks are the property of their respective owner.

Beam Suntory

“ exciting time” An by

Bourbon is a booming category for Beam Suntory, which has a large Bourbon portfolio that includes Knob Creek and Basil Hayden’s

RYAN WHITE

Americas Duty Free learns why now is a great time to be part of Beam Suntory’s travel retail team from Marketing Manager of North America/ Caribbean Andrew Meeks

T

he liquor world was rocked earlier this year when Japanese liquor giant Suntory acquired another giant, Beam Global, for US$16 billion. One would think a sea change like that would cause great upheaval in operations, but not according to Andrew Meeks, Marketing Manager, North America/Caribbean.

“When you really stop to consider the incredible scale and scope of this merger, it’s easy to assume that it would be chaotic, slow going or confusing,” Meeks says. “However, from my point of view—and granted, I am not in the day-to-day inner workings of the transition—the acquisition has been handled absolutely flawlessly.”

For the Global Travel Retail division of Beam Suntory, the focus has been on the route to market of the Suntory portfolio of brands, which includes Bowmore, Auchentoshan and a stable of Japanese whiskies led

by Yamazaki and Hibiki. While these are still early days, Beam Suntory is currently developing the brand planning for Bowmore and Auchentoshan as they’re already in the duty free channel.

Strong where it matters

“Looking to the future, we are incredibly excited about our position in both the Bourbon and Malt categories,” Meeks explains. “We have the largest collection of bourbons of any company in the world and have grown our malt stable to include a tremendous selection of brands.”

Indeed, both Bourbons and Malts have been increasing in popularity in duty free,

132

and Meeks gives credit where credit is due, noting that before the acquisition Suntory and Morrison Bowmore Distillers did an excellent job of building the equity of their brands. “This is an incredibly exciting time for Beam Suntory as a whole and especially for the Travel Retail Division,” Meeks says.

“We are perfectly positioned to grow the brands to new heights.”

In fact, Meeks tells us that the company’s Bourbons and Malts have played a significant role in the most recent sales figures. Growth in Bourbons has been led

by Beam Suntory’s premium line, which includes Knob Creek, Basil Hayden’s, Jim Beam Signature Craft and Maker’s Mark, to name but a few. In the Malts category, on the other hand, Laphroig has been a standout.

But wait, there’s more!

Meeks is quick to point out that Beam Suntory has an impressively varied portfolio in addition to those bestsellers: “We are also doing well in tequila and rums and look forward to some exciting new offerings in the channel next year, including Sauza 901, our collaborative effort with Justin Timberlake,” he explains. “Sauza 901 should hit shelves in spring 2015.”

Despite aged stock issues for most cognac brands, Beam Suntory is positioning itself for sustainable future growth with that spirit. In fact, the holiday season will bring with it a new Courvoisier travel retail exclusive, called Extravagance, coming in at the cordon bleu level. “It is an incredibly rich and complex liquid and we know it will do very well,” Meeks says.

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Meeks declined to comment about special and limited editions for other brands in the portfolio. He did, however, note that the company has plenty up its sleeve. “I think customers and partners at Cannes will be really pleased to see what we are developing for the future and the ideas that we bring to the table,” Meeks concluded. “For me, it’s a very exciting time to be in travel retail at Beam Suntory.”  Sauza 901, Beam Suntory’s collaborative effort with Justin Timberlake, will hit shelves in spring 2015

Distributed by: World Equity Brand Builders Travel Retail in North America

w w w. w e b b m i a m i . c o m

Liquor News Diageo and Beckham: a perfect combination Diageo recently unveiled the world’s first-ever travel retail activation for Haig Club, the company’s hotly anticipated and newly launched single grain Scotch whisky. Soccer star David Beckham made an appearance at the unveiling in support of the launch, which took place at DFS in Singapore’s Changi airport. At the launch, advertisements featuring David Beckham and shot by Peter Lindbergh were revealed along with striking displays.

Beckham, a partner in this venture along with Diageo and Simon Fuller, entrepreneur of numerous TV talent shows including American Idol, is the central figure in the promotion of the new whisky. Haig Club was available exclusively at this location for the first month, where it is enjoying substantial promotion.

The Haig Club is the most recent offering from the House of Haig.

The new Scotch is said to have an ultra-smooth flavor that should appeal to longtime whisky drinkers along with people who’ve yet to adopt the beverage as a favorite. It was created by Master Distiller Chris Clark at Cameronbridge, Scotland’s oldest grain distillery.

Simon Fuller and David Beckham have both been actively involved in the development, positioning and strategy of Haig Club. Some have gone so far as to state that the partnership and launching of the highly anticipated Haig Club could help reshape the mainstream perception of Scotch whisky for years to come.

Haig Club’s striking display at DFS in Changi Airport was surrounded by crowds there to see David Beckham

The green fairy is flying around the world La Fée is launching a new tasting set, which comes with a traditional absinthe spoon.

This will allow consumers to sample the company’s Vert and Blanche styles.

136

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Associated with bohemian culture, absinthe was vilified and made illegal for many years in numerous countries throughout the world. Only in the past 20 years or so has the liquid become legal again as the arguments against it were proven false; the truth was, absinthe had become so popular in France that it was a serious rival to the wine industry.

La Fée Absinthe, the first commercial absinthe distilled in France since the 1914 ban, is currently on a world tour. Owner George Rowley will host master classes providing absinthe information and education. These events will soon come to South America, the US, Canada and countries around Europe.

Named for absinthe’s French nickname “la fée verte” or “the green fairy,” La Fée is also launching a new Absinthe Tasting Set, which will give consumers the chance to enjoy both traditional absinthe styles, Vert and Blanche. The kit contains a 50mL bottle of La Fée Parisienne, a 50 mL bottle of La Fée Blanche and a Sheffield stainless steel absinthe spoon. In the 19th and early 20th centuries, it became customary to place a specially designed spoon over the absinthe-containing glass, releasing sugar and water into the liquid below and slowly changing it from its signature green color to opaque white.

Made of all-natural ingredients and based on an original 19th-century recipe, La Fée is the only absinthe endorsed by the Musée de l’Absinthe in Auvers-sur-Oise, France. The museum’s founder Marie-Claude Delahaye approves each batch before bottling takes place. The leading duty free absinthe in the world in the travel retail market, La Fée is listed with Dubai Duty Free, World Duty Free Group, King Power and Dufry Americas. It comes in a UV resistant bottle to protect its natural color.

Award-winwning Richland rum is made with only two ingredients: sugar cane syrup and water from Georgia’s aquifer

No halfway measures For Illva Saronno, 2014 is a big year. Not only is it the company’s first year with a booth at TFWA WE Cannes, it has almost too many announcements and launches to mention. Perhaps most exciting, the company will be displaying the second in a series of limited edition Disaronno bottles, this one designed by Versace. Last year’s partnership with Moschino saw over 1.5 billion bottles sold worldwide.

The bottle, inspired by the Versace Home Collection 2014, will appear in key airports from October. Augusto Reina, CEO of Illva Saronno, comments: “After our very successful partnership with Moschino last year we are extremely thrilled to be linking with Versace this year for our second limited-edition bottle of Disaronno.

Versace is one of the world’s leading international fashion houses, with its iconic logo instantly recognizable on fragrances, clothes and accessories. We see this collaboration as very positive for Disaronno in our ongoing aim to stay fresh and innovative.”

The initiative will again benefit the charity Fashion for Development (sponsored by the United Nations) through a donation of its profits to help the development of this unique initiative in Africa.

Illva Saronno has also branched out considerably in its portfolio. This is the first year the company has owned a whiskey brand, having purchased family-owned Walsh Whiskey Distillery, based in Carlow, Ireland, late last year. Walsh’s line of superpremium and ultra-premium Irish whiskey, The Irishman, will be presented in Cannes alongside Illva Saronno’s incredibly well known namesake liqueur, DiSaronno, its popular coffee-flavored liqueur Tia Maria and its herbal aperitif Zucca. Illva Saronno also owns a number of successful domestic brands such Artic vodka and Isolabella sambuca. It has announced the exciting launch of a new addition to its spirits portfolio, but is keeping mum in the weeks leading up to the unveiling.

While Illva Saronno itself does not carry wines, its sister company Duca Di Salaparuta Group does. In keeping with the exciting trend, this year the company is bringing its three wine brands, Corvo, Duca di Salaparuta and Florio, to the world of travel retail. In Cannes, the Illva Saronno booth will present the Duca di Salaparuta and Florio lines. The highlight is Duca Enrico, the first single varietal wine made from Nero d’Avola grapes in the history of Sicilian commercial wines. Produced for the first time in 1984, it is therefore celebrating its 30th anniversary. As part of the celebration, visitors to the booth can sample three vintages of the wine. According to the company, these three years, 1987, 1997 and 2008, are especially representative of each decade.

Illva Saronno has made massive success of its brands, and its plans for TFWA WE leave no doubt; the company does not go in halfway.

Disarrono’s readily recognized bottle is wearing a new outfit designed by Versace

Old Georgia meets the world

Georgia’s handcrafted single-estate Richland rum has announced an agreement with MONARQ Group to market and distribute its product in the duty free channels of North America, the Caribbean and Latin America. MONARQ will offer strategic guidance and full service support in channeling Richland rum to duty free retail and on board cruise ships.

The multi-award-winning rum is made with only two ingredients: whole sugar cane syrup (not molasses), and water from Georgia’s aquifer. Every step of production, from sourcing and processing the sugar cane syrup to distillation and bottling is handled in house. After a slow fermentation, the rum is distilled in single-day batches in a copper pot still and aged in virgin American oak barrels. Richland rum is not blended or mass produced; it is all natural and contains no preservatives, spices, flavor enhancers, coloring or additives of any kind.

Erik Vonk, Founder and Owner of the distillery, says: “We are thrilled to see a rum renaissance and to be one of the few distilleries in America fully dedicated to hand crafting domestic, authentic rum that is savored by whisky and bourbon fans, Cognac and brandy connoisseurs and aficionados of aged spirits in general.”

Recent awards for Richland rum include Gold Medal, 2014 International SIP Awards; Gold Medal, 2014 Fifty Best Aged Rums; Gold Medal, 2014 International Crafts Awards, Gold Medal, 2014 Beverage Testing Institute; 94 points–The Tasting Panel and 2014 Flavor of Georgia Winner. Located in historic downtown Richland, Georgia, the distillery is open to the public. Visit www. richlandrum.com for more information.

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

137

Liquor News

UP CLOSE AND PERSONAL Using a digital camera and high-powered microscope, Paulo Eduardo Dulla, a creative photographer from São Paulo state, captured the soul of a Cachaça 51 Caipirinha. The brilliant shades of yellow, blue and green prove that the DNA of Caipirinha truly is Brazilian.

For this project, a Caipirinha was frozen to approximately 20 degrees below, Celsius. The drink was then crystallized on microscope slides and photographed.

The unique photos show a mix of green, yellow and blue colors that bring the Brazilian flag to mind. “We wanted to appreciate the famous Brazilian cocktail in a new way,” says Darleize Barbosa, Export Manager of Cia Müller de Bebidas, the producer of Cachaça 51.

Cachaça 51, the world’s leading brand of this definitive Brazilian liquid, has been very busy this year. In addition to its unique cocktail art project, the brand sponsored the 76th Volta a Portugal Liberty, the largest sports event in Portugal.

During this event, which took place from July 30th to August 10th, cyclists raced along a route of 1613.4 km between Fafe and Lisbon.

As a world leader, Cachaça 51 has also just launched a new website in English dedicated to the international marketplace. Its colorful, modern interactive layout offers a blog, exclusive cocktail recipes, information and a gallery of images. “The launch of the new website is a further step in the direction of our brand global communication. We want a practical and accessible website, ready to expand our participation in the International market,” says Barbosa.

In this creative project, a Cachaça 51 Caipirinha was frozen and crystallized on microscope slides. Photographs revealed colors that bring to mind the Brazilian flag

Vintage milestone Ruffino, an iconic Italian wine and part of Constellation Brands' portfolio, launched the Ruffino Riserva Ducale Oro Gran Selezione earlier this year to much fanfare.

Following the 2010 vintage of the wine, Ruffiino’s preeminent luxury line transitioned to a new title, the Chianti Classico Gran Selezione. This transition effectively places the wine at the top of the Chianti Classico lineup.

Only 500,000 bottles of the award-winning 2010 vintage were produced.

Decanter magazine gave it a 90-point score, while American wine critic and former editor of Wine Spectator magazine, James Suckling, awarded it 95 points.

The wine combines camphor, clove and aniseed notes with powerful black fruit aromas, big and dense with juicy fruit flavors and spicy finish. It is complex, with plenty of character and personality.

One of the key aspects of the Gran Selezione designation is the fact that the wine must be entirely estate produced. Additionally, it must have at least 13% alcohol content and must be aged for six months longer (30 months in total) prior to its release. The Riserva Ducale Oro is traditionally aged for 36 months. At this point, the Riserva Ducale Oro represents roughly 20% of the Gran Selezione wine category.

The Riserva Ducale Oro front label has been updated to reflect the Gran Selezione status. Also, the back label has incorporated an emblem signifying its placement in the Chianti Classico lineup. This wine is unquestionably a standout on any shelf.

Iconic Italian wine manufacturer Ruffino received 90 points from Decanter and 95 points from James Suckling for the 2010 vintage of the company’s preeminent luxury wine, Riserva Ducale Oro

138

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Rémy Cointreau

Coming up

Cellar No. 16 and Cellar No. 28, which replace Rémy Martin VSOP and XO in duty free, respectively, have shown very healthy depletion rates

from the

CELLAR Rémy Martin’s Cellar Master’s Selection has proven itself worthy of coming into the light by

WENDY MORLEY

R

émy Cointreau carries a large range of well-known and respected beverage products including Metaxa and St. Rémy brandies, Passoã liqueur, Mount Gay rum, Bruichladdich Scotch whisky and of course Rémy Martin cognac and Cointreau liqueur. This year, the company’s focus in travel retail has been set firmly on the Rémy Martin Cellar Masters Selection, first introduced in April 2014 and replacing the company’s VSOP and XO expressions in duty free.

Both the Rémy Martin Cellar No. 16, which replaces the VSOP, and the Rémy Martin Cellar No. 28, which replaces the XO, were launched this spring. While the

occasional VSOP or XO bottle remains on a shelf because of leftover inventory held by some retailers, they have not been shipped since March of this year, and for the most part the transition is complete.

By all accounts these new travel retail exclusives are doing very well. François Van Aal, Regional Director, Rémy Cointreau Travel Retail Americas, says: “Where the new Rémy Martin Cellar Masters Selection is fully present it is showing very healthy depletion rates, often stronger than the former VSOP/XO. The qualitative feedback we are getting from the trade and from the sales associates in the stores is extremely positive. Travelers are seeing this exclusive travel retail offer as a clear, unique and premium proposition thanks to the luxury packaging, the concept and the taste.” The company has been conducting a survey with an outside partner, focused on the traveler.

The results will be analyzed in the coming weeks and months.

High-profile promotions boosted sales for new products

François Van Aal, Regional Director, Rémy Cointreau Travel Retail Americas, has helped ensure the success of the Cellar Master’s Selection by holding high-profile promotions and training thousands of sales associates

140

While the range has done well everywhere it has been rolled out, unsurprisingly it has done especially well in those US airports where the company held high-profile promotions with tastings. In addition to tastings—at point of sale whenever possible— the company has promoted the launch with many other activities including extensive

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

training of 2,000 sales associates across the US, and investing in visibility with banners, shelf talkers and information cards.

The company’s goal in the coming year is to firmly establish the new Rémy Martin Cellar Masters Selection as the core range in global travel retail. Until spring of 2015 the range will have been available only in travel retail in the Americas, but next year it will launch in both Europe and Asia, again replacing Rémy Martin VSOP and XO in the duty free channel. “Such a transition always brings some challenges in the short term, but we know we have a winner and we are confident we will see the growth unleashed in the future thanks to the new Rémy Martin Cellar Masters range,” says Van Aal. The concept of this range is that each aging cellar holds unique environmental qualities that affect the characteristics of the eaux-de-vie used to make cognac, similar to the way in which growing conditions each year affect the characteristics of wine. The Cellar Master understands and works with these characteristics to create a superior product. Pierrette Trichet, Rémy Martin’s former Cellar Master, developed this range.

In spring of this year she passed the baton to Baptiste Loiseau.

According to Van Aal, Rémy Martin will be adding a third expression currently in development. This new expression, developed around the same concept, will be announced soon and available on shelves in 2015. 

advertisement removed for legal reasons

ACTIUM

Brave new spirits

Dalmore’s Constellation Collection, available at JFK International Airport, contains the complete spectrum of Dalmore’s vintages from 1964 to 1992

Miami-based ACTIUM continues on its mission to distribute the best in luxury spirits throughout the Americas

A rare and precious whisky, the Dalmore 25 won gold at the 2013 International Wine & Spirits Competition

A

CTIUM has had a busy year in its stylish and decidedly wellplanned offices in Miami. In the summer of 2014, for example, this 10-year-old company established a new bonded warehouse for its beverage division, allowing independent duty free retailers in the Caribbean an easier supply of ACTIUM’s luxurious beverage offerings such as The Dalmore and Jura.

To the brave

With its Scottish history, Dalmore’s new motto “To the Brave” brings to mind warriors fighting the seemingly endless ancient battles of that rugged land and of Scots who have thrived despite the country’s inhospitable ground, but you don’t have to be a warrior for the motto to speak to, and about, you.

Bravery is defined differently at different times and under different circumstances.

Dalmore’s motto speaks of those who are brave in more modern times: brave enough to be true to themselves, to do the right thing and to fight past the fear for what they believe in and know to be right.

142

For the truly brave, Dalmore has a special offering, The Dalmore 25. This rare offering, unveiled at TFWA WE in Cannes in 2013, won Gold at the 2013 Hong Kong International Wine & Spirits Competition.

Master Distiller Richard Paterson crafted “a jaw-dropping addition to the Dalmore core range,” as reviewed by Master of Malt.

“The Dalmore 25 is utterly incredible.” The rich, complex flavors that include exotic fruits, vanilla bean, fig cake, chocolate orange and marzipan are created using an odyssey of casks, from white oak to sherry to first-fill bourbon barrels and then spending the final part of the flavor journey in port pipes.

Only 3,000 bottles of this precious rare whisky are produced annually. The Dalmore 25 will join the 12, 15, 18, Cigar Malt Reserve and King Alexander III selections as a permanent addition to the collection.

This spectacular liquid will make its first Latin American appearance in Mexico, where select retail partners will each carry a couple of bottles to display.

A constellation of fine whisky at JFK

The Dalmore 25 is not the only story in the ACTIUM-Dalmore narrative. ACTIUM has now introduced the Dalmore Constellation Collection to JFK Airport’s Terminal 1 International Shoppes flagship store. The Dalmore Constellation Collection contains the complete spectrum of the distillery’s vintages created between the years of 1964 and 1992. Aged in the finest casks from around the world, these whiskies display a range of flavor and color profiles

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Jura’s entire core range, including Original, is now available in a 20cL size perfect for sampling

reflected in their hues, which extend from the honey-colored 1990 vintage, with taste notes of vanilla, gooseberry and honeyed pear, to the rich cherry-wood hues of 1960s vintage, with its flavors of roasted coffee, orange zest and spicy cinnamon.

This elite selection of 21 bold individual releases retails for an estimated US$270,000 as a complete set, and the vintages are also available as individual releases.

Perfect for sampling

Another plot line in ACTIUM’s epic whisky tale is the release of Jura’s new 20cL bottle, available for each of Jura’s four core malts— Origin, Superstition, Diurachs’ Own and Prophecy—which is the perfect size as a trial offering. Jura encourages pairing its whiskies with craft beers, stating that many craft breweries create good pairing partners for its authentic Scottish whiskies.

With this assortment of fine Scotch whisky offerings, ACTIUM’s new warehouse is sure to be a busy hub as it supplies the connoisseurs of exceptional whiskies throughout the Americas. 

advertisement removed for legal reasons

William Grant & Sons

Excelling in the Americas by

WENDY MORLEY

Hendrick’s Gin and the Glenfiddich Cask Collection continue to hold William Grant & Sons’ attention in travel retail

W

William Grant excels at creating fun, talk-worthy promotions like the G.O.S.H vintage hair salon at Changi airport, where travelers are misted with the botanicals found in Hendrick’s gin

illiam Grant has seen great success in the Americas travel retail industry in 2014, with two brands in particular excelling—Hendrick’s Gin and the travel retail exclusive Glenfiddich Cask Collection. The growth of Hendrick’s Gin has been “astonishing” both in domestic and travel retail, according to Ian Taylor, William Grant & Sons’ Head of Marketing, Global Travel Retail.

The entire Americas region is strong for the company, with perhaps their greatest success found in Brazil, Panama and, in keeping with many other companies these days, Colombia. Strong tourist and passenger traffic flow has also helped boost performance in the Caribbean to strongerthan-expected levels this year.

received excellent response. The company is also seeding two other core brands: Tullamore Dew Irish whiskey and Monkey Shoulder, a blended malt Scotch whisky that Taylor says is “creating quite a buzz.”

Meanwhile, Hendrick’s Gin has had a fun promotional year with its barber shop activation at TFWA AP in Singapore and in Changi Airport. The company’s primary trading partners in the Americas region, Dufry and Motta, helped them acquire a number of key airport locations for similar permanent unique merchandising space that Taylor says, “will not only build greater brand recognition, but will also help set the tone in line with what our domestic-market partners are doing.”

Kick-starting the collection at the World Cup

Overall business has been good for William Grant in 2014, but growth in Latin America is slowing. In addition to economic challenges in the region, the political environment can’t help but affect business. Argentina is in a massive debt crisis and Venezuela is in such an extreme state that not only is a negative sales environment inevitable, even

Earlier this year, the company launched the Glenfiddich Cask Collection during soccer’s World Cup event in Brazil with their trading partner, Dufry, whom Taylor says did a great job. He indicates that the product has been well received and that key customers have been very supportive, providing the company with all they required to make the launch a success. William Grant considers the exposure the collection received during the World Cup as being invaluable, and customer response has been positive; all three expressions—Select, Reserve and Vintage—have performed better than expected.

While the Glenfiddich Cask Collection has been the company’s main whisky drive in travel retail this year, William Grant also launched higher-end malt variants Glenfiddich 25 and Balvenie 25, both of which have 144

Economics and politics make interesting bedfellows

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

product availability is dicey. Brazil’s recent halving (from US$300 to US$150) of allowances permitted at land border stores may also have a severe impact on sales.

While those changes are negative, on the flipside some countries are discussing the possibility of increasing their import duties, which could have a positive impact on future duty free sales. Additionally, Taylor suggests that investment in the region from China and other Asian countries should provide the company with excellent opportunities to showcase their brands.

Although the company is having great success with new products as mentioned earlier, in the coming months the focus for William Grant’s promotional activity will remain on the Glenfiddich Cask Collection. “We are 100% committed to our customers and consumers in providing them with a fully supported launch plan for the Glenfiddich Cask Collection,” states Taylor.

Presently, launches of the range are planned in Brazil, Panama and Uruguay in LATAM, and also in the Caribbean and the United States. At TFWA WE in Cannes, Hendrick’s Gin will again be prominently featured at a hush-hush event that takes place on Tuesday, October 28. 

The travel retail exclusive Glenfiddich Cask Collection has proven to be a huge success for William Grant in the Americas and around the world

advertisement removed for legal reasons

Davidoff

When art meets cigars CEO Hans-Kristian Hoejsgaard feels Davidoff has found its rightful place as a strong member of the global arts community

C

igars and art are a natural pairing, says Oettinger Davidoff CEO Hans-Kristian Hoejsgaard. “Everything about cigars is made by hand —the cigar itself, the humidor,” he says.

And cigar aficionados, he has noticed, have a connection to the art world. “From our database we know that many of our customers are interested in art,” he says. “Some are very big art collectors.”

In 2011, the year Hoejsgaard came on as CEO, the company was reviewing its sponsorships. Oettinger Davidoff had two CEO Hans-Kristian Hoejsgaard has spearheaded the unique relationship between Davidoff, Art Basel and the art world at large

146

by

WENDY MORLEY

major global sponsorships in music and sports that were coming up for review. Since he had realized how much sense the association would make, Hoejsgaard suggested looking at Art Basel. It was a perfect fit, he thought. The two companies have the same home, Basel, Switzerland, they are both global and Hoejsgaard had observed this art-cigar connection.

Art Basel, an organization begun in 1970, stages three art shows annually, in Basel, Hong Kong and Miami. It is now considered the premier international art show in the world, providing a platform for hundreds of artists and galleries each year. The organization’s role, as it states, is to bring together artists, galleries, collectors and public institutions, recognizing the importance of these members of the arts community and their involvement with each other. Over the course of three or four days at each location, Art Basel does just that, and also invites the public at large to experience what art can do.

While money certainly exchanges hands in the art world, art organizations are not businesses and they normally spend a great deal of effort and energy trying to find sponsors. One can only imagine the offices of Art Basel that day in 2011 when the phone call came from Davidoff that the company was interested in a large sponsorship role.

With that, Davidoff became one of Art Basel’s main sponsors, along with Absolut, Audemars Piguet, Axa Art and Netjets.

Thus began Davidoff ’s connection with

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Dominican artist Polibio Diaz works with video, performance art and photography, as seen here with his “Entrada a la Ile Saint-Louis”

the art world. But it certainly was just the beginning. Davidoff and its CEO Hoejsgaard were not satisfied with just throwing in money as a sponsor. If the company were to involve itself, it would jump in with both feet.

The Davidoff Art Initiative

Davidoff has a strong relationship with the Caribbean, especially the Dominican Republic. The company’s tobaccos are grown there and its cigars are crafted there. Of the company’s more than 3,500 employees worldwide, 1,800 of them are located in the Dominican Republic and Honduras.

Oettinger Davidoff as a company feels strongly the need to give back to the community. In 2011 it already had a number of social initiatives that address those who live there, and has always enjoyed a positive relationship with the area’s residents.

Meanwhile, Hoejsgaard was well aware that the Caribbean has a vibrant art community often overshadowed by that of bigger countries. Given its new association with Art Basel, the company saw the next logical step in its social responsibility evolution was to found the Davidoff Art Initiative.

Announced during Art Basel Miami in December of 2012, the Davidoff Art Initiative came into being with the help of András Szántó, a lecturer at Columbia University and a consultant in areas of art, business and strategy. He helped define what was possible and helped the company write the strategy.

Davidoff’s Collector’s Lounge at Art Basel in Hong Kong was home to the company’s first two commissioned cigar boxes

The initiative rests on four pillars

The strategy Szántó helped to write was based upon four pillars. The first pillar and nucleus of the initiative is the art residency in the Dominican Republic, where emerging and mid-career artists will be offered an opportunity to spend an extended period of time working in a different social and creative environment from their own. “The Davidoff Art Residency serves as a conduit for professional mobility, cultural immersion and creative exchange,” says Hoejsgaard. The groundbreaking took place in March of this year and the first five visiting guests, chosen from a pool of applicants from around the world, will stay there from January until April, 2015.

The second pillar is to send Caribbean artists to art residencies. As Davidoff brings talented artists from around the world to the Caribbean, it will also be sending Caribbean artists around the world. A total of five artists from the region each year will be sent to residencies abroad, one each to the International Studio & Curatorial Program (ISCP) in Brooklyn, the Künstlerhaus Bethanien in Berlin and Red Gate in Beijing. This program will soon extend to another residency in Europe plus one in South America.

The third pillar is to provide small grants for arts organizations in the Caribbean.

Some recent examples include a grant to an art school, allowing the building of a floor, to an art magazine in St. Vincent that

had been run completely by volunteers, providing enough to hire an employee, and to a photography conference, allowing organizers to invite international exhibitors.

The fourth and final pillar is to commission artworks by Caribbean artists. This year Davidoff commissioned an artist to create cigar boxes for a special limited edition. This limited edition cigar was released during Art Basel Hong Kong this year in the Davidoff lounge.

For Davidoff this is about something beyond corporate daily life. The company has begun holding informational art dialogues for collectors, though Hoejsgaard is quick to point out they are not experts. They have a field of experts—an international advisory panel—who help them choose worthy artists and also suggest to artists that they apply. The hope is that each year Davidoff will be able to assist artists from all over the world who work in many types of visual art.

Hoejsgaard feels that in art the company has found its place of equilibrium between commercial, corporate and corporate responsibility. Davidoff is becoming firmly established as part of the art community and he feels it’s gratifying to help artists.

“You have to take a long-term view with sponsorship,” he says. “Every year Davidoff will help 10 artists to experience the world and learn from others.” 

Jorge Pineda is an artist from the Dominican Republic chosen for Davidoff’s residency program

The centerpiece of the Davidoff Art Initiative is its residency, built at the Altos de Chavón School of Art and Design

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

147

General Cigar

Carrying Legacies

General Cigar Company acquires two established cigar brands and looks to maintain and creatively expand on their original visions

Forward by

S

eptember was a particularly noteworthy month for the Virginia, US-based General Cigar Company. Over the course of one week the company announced the acquisition of two companies and the hiring of a new Cigar and Blend Specialist.

Long-time partners

On September 11, 2014, the company announced that it had acquired Miami-based Toraño Family Cigar Company. This acquisition is expected to not only strengthen General Cigar’s international and domestic market positions, but also to enhance its portfolio and overall product mix. Toraño’s history dates back to Cuba in 1916 and includes virtually every area of the industry, such as manufacturing and growing its own tobacco. The portfolio comprises Casa Toraño, Reserva and the popular Exodus in addition to the Vault and Master Collections, which will remain unchanged.

Toraño Family Cigar Company President, Charlie Toraño, stated: “General Cigar and Toraño have a long-standing and proud history of partnership dating back to my family’s exodus from Cuba. There is no other company I would rather have continue my family’s legacy and I look forward to seeing the Toraño brands prosper under General Cigar’s expertise.” General Cigar President, Dan Carr, said the company plans to “carry forward the vision, passion and innovation that is synonymous with the Toraño name while also leveraging our resources to bring 148

WENDY MORLEY

General Cigar’s Foundry Tobacco Company has designs based on Victorian-era science fiction and other oddities

even greater excitement and reach to our trade partners and consumers.”

Foundry Tobacco Company, an eccentric division that was the brainchild of General Cigar’s Creative Director Michael Giannini, is a perfect home for its unconventional new Cigar and Blend Specialist Sam Leccia

Unconventional character

Less than a week later, on September 17, 2014, General Cigar announced both the hiring of Sam Leccia as the company’s Cigar and Blend Specialist and the acquisition of Leccia Tobacco Company as an appropriate addition to the unconventional Foundry Tobacco Company. General Cigar will immediately begin marketing and distributing Leccia’s Black, White and Luchador lines.

Last year General Cigar formed the Foundry Tobacco Company, a whimsical if not eccentric division that was the brainchild of General Cigar’s Creative Director Michael Giannini. His inspiration was Victorian-era science fiction and other oddities. Foundry’s cigars and cigar boxes are unique and playful, and the design has a feel that’s somehow both antique and futuristic. Foundry is the perfect home for the Leccia Tobacco company. Sam Leccia was not raised in the cigar industry; he became fascinated with it as an adult, studied the craft and promptly turned it on its head. In Leccia’s new role with General Cigar he will continue to develop his brands and will also be expected to create fresh new premium cigar products.

Leccia is thrilled with this development.

“I’m beyond excited for the opportunity to take my passion for this business and my love of delivering the unexpected and put

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

them to work for General Cigar. Having creative freedom, access to the resources of General Cigar and the ability to work with the company’s master blenders and tobacco experts is like a dream come true.”

President Dan Carr stated that he’s impressed with Leccia’s achievements thus far. “He broke into the industry, worked tirelessly for years and made a name for himself by developing interesting cigar brands.” He added that Leccia “will provide additional creative talent to complement the expertise of our existing team, enabling us to build on the success of his and our current brands. I look forward to his contributions in helping us accelerate our plans for Foundry Tobacco Company, and to the personal perspective he will bring to our entire brand portfolio.” 

Imperial Tobacco

Success begets success

I

mperial Tobacco went in a bold new direction this year, presenting its new concept at TFWA AP in Singapore.

The company has made it clear that it wants to help retailers optimize their space and at the same time help them to understand their customer base, wherever those customers are from.

Shoppers behave differently in duty free stores than they do at home. The average international customer is traveling for leisure and does so less than twice per year, so most travelers are not especially savvy in the world of duty free. And international travelers are often confronted with things they don’t understand well: unfamiliar selling units, import allowances, languages and currencies, for example. These travelers may become frustrated and feel lost. Useful segmentation is essential to best handle the complexity of a multinational target group coming together in the “melting pot” of a duty free outlet. In addition, according to current travel trends the duty free customer is ever more likely to be from one of the emerging countries, with even less travel retail shopping experience than average.

Maximizing sales

In order to maximize the customer’s shopping basket and realize the potential of the massive international traveling market by turning more travelers into browsers, more browsers into shoppers and to encourage more spend, it is crucial to understand different nationalities’ product preferences, shopping habits, tendencies and triggers— both to spend and not to spend. “This is a challenge for retailers,” says Simone Horn, Trade Marketing & Category Development Manager, Global Duty Free at Imperial Tobacco. “They cannot have the in-depth knowledge of all their shoppers’ homemarkets in every category they sell.”

Imperial Tobacco has created a plan to help the travel retailer achieve peak sellthrough with its Category Management solution. According to Horn, this is “an

150

objective way of handling the category to create sustainable growth, for the retailers and for the industry. A good merchandising solution should support shopper navigation, using proper product segmentation and reflect shopper behaviour.

Tobacco drives sales

Imperial Tobacco’s Category Management solutions help retailers make the most of their space, bringing sales up to their potential by

WENDY MORLEY

Horn says: “Cases like Australia‘s prove the importance of the Tobacco category and its influence. When tobacco allowances were significantly reduced, retailers saw a doubledigit plunge in overall spend. India recently reduced its duty free inbound allowance by half, to 100 sticks, 25 cigars or 125 grams of tobacco. The unexpected move has had big repercussions on Arrivals duty free in the country and on duty free tobacco sales to India-bound passengers. It proves once again that it is important to proactively engage on tobacco issues, because they turn into issues for all categories.” 

Category management is especially important for the Tobacco category; it is an important footfall driver in duty free, but complex in its portfolio. Within this category, different nationalities have completely different preferences. Not only are certain brands more popular in one country over another, populations tend to have preferences for different Simone Horn, Trade tobacco blends, different Marketing & Category Development Manager, strengths, different filters Global Duty Free at and different packaging.

Imperial Tobacco, says to maximize sales The Chinese shopper, as categories must be is so often talked about, managed in a way that drives footfall and is more likely to purchase encourages spend as a gift, whereas the British shopper is more likely to purchase for his or her own use.

But a good merchandising solution is not just about one category. This program has been created to help maximize the retailer’s sales over a store‘s complete portfolio.

Based on shopper behaviour, Imperial Tobacco will help the retailer understand the roles of the different categories and then optimize the store’s layout in order to increase footfall and maximize basket size.

Good category management will help one category support another, creating success for all – especially in challenging environments.

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Please visit us at TFWE – Red Village K16

Conference Review: ASUTIL

COMING OF AGE This year was ASUTIL’s 20th anniversary, and the conference focused on both the past and the future as speakers helped delegates consider ways to increase revenue and convince travelers to buy in the coming years by WENDY MORLEY

B

oth ASUTIL Secretary General José Donagary and President Enrique Urioste felt the 2014 ASUTIL Conference, held at the Hilton Reforma in Mexico City, went supremely well. The delegates totaled 344, one more than in 2013. The speakers were relevant and well received, and the events were well attended. Although Donagary admits that every year brings something to improve upon, he quips that the biggest change he would make in retrospect would be to postpone lunch until dinnertime in order to let Julian Diaz, CEO of Dufry, continue speaking.

The past 20 years

Donagary kicked off the conference on Thursday with a few words on the meaning of this year’s theme: Strengthening the Future. He suggested that with growth slow-

152

ing after a dynamic few years, the industry must work toward renewing itself and being more innovative. ASUTIL president Enrique Urioste then spoke about how things have changed in the region:“What has happened in the past 25 years is stability,” Urioste said, remarking that this stability has lead to the greatest economic increase the world has ever seen. He believes the current slowdown is simply part of the normal ebb and flow of economics.

Understanding the mind of the shopper

Dr. Peter Mohn, owner and CEO of m1ndset, took the stage next. He had been commissioned by ASUTIL to conduct research on the border and ferry shopper in Brazil, Uruguay and Argentina. The research provided data on customer demographics and purchases, but more importantly it

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

The Opening Cocktail Party, sponsored

by WDFG, was a chance for delegates to relax and unwind after a busy day of travel and networking, and a chance to catch up with old friends

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

153

Conference Review: ASUTIL

offered reasons customers do not purchase, such as the fact that a large number of those who don’t buy in travel retail were looking for a more authentic local product. Mohn also gave information on why they do buy.

For example, travelers in this region like to receive a gift with purchase. Mohn’s information is available to ASUTIL members.

Innovation in its many forms

Miguel Ángel Alva, Marketing Director of Google Mexico and Colombia, spoke next about innovation. He said businesses must ask, “Why are we here?” and think about more than just the bottom line. Companies should always keep in mind what they are providing. He suggests that a company needs to set aside 20% of its work time to discuss creative and even crazy ideas.

Just as ASUTIL delegates were arriving in Mexico City, news broke that Dufry was purchasing Nuance, so it’s no surprise that the crowd was especially interested in hearing from Julian Diaz, CEO of Dufry. Diaz spoke of many challenges operators face, and he offered his opinion that consolidations like the one he had just engineered are the way of the future.

Slowing growth and stabilizing governments

Although economics sounds dry, that word does not describe Carlos Melconian, Director of M&S Consultores, who offered delegates a dynamic and engaging experience.

For the coming years in Latin America Melconian predicts an even keel and a steady growth rate of around 3%. He has great hopes that a new government in Argentina

154

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

After an emotional speech by ASUTIL President Enrique Urioste, awards were given out to the founding members present

SUBSCRIBE TO ASIA DUTY FREE MAGAZINE

ONE YEAR – 4 ISSUE AND 12 ENEWSLETTERS

Subscribe to Asia Duty Free & Travel Retailing Magazine and its monthly eNewsletter to keep you informed of the latest news.

Simply fill out and return this subscription card to the following address, or fax with your credit card details to +1 905-821-2777

TWO YEARS – 8 ISSUES AND 24 ENEWSLETTERS

US$200.00 US$400.00

SUBSCRIPTION FORM

company name

Please fill out this form and fax to 1-905-821-2777 or email to deepa@globalmarketingcom.ca

date

name

Asia Duty Free & Travel Retailing magazine 26 Pearl Street, Mississauga, ON Canada L5M 1X2 Tel: 1-905-821-3344 Fax: 1-905-821-2777 email: deepa@globalmarketingcom.ca

mailing address

city

province/state

country

postal code/zip

(

) area code

(

phone

) area code

❑

SIGN ME UP! I would like to receive a subscription to magazine ❑ One Year US$200.00 ❑ Two Year US$400.00

fax

❑

Enclosed is a cheque or money order made payable to Global Marketing Company Ltd.

❑

Bill me

email

❑

❑

❑

expiry date

m

m

y

y

credit card number

signature

date Paym ent in U. S. funds m us t ac c om pany this s ubs c ription c ard.

Conference Review: ASUTIL post-election will make the tough economic decisions that will help decrease inflation and bring the country back into the progressive South American fold.

Why they buy

ACI’s Economics and Programme Development Director, Rafael Echevarne, took the stage next. He indicated that Latin America collectively carries 492 million passengers per year, or 8% of the world’s traffic, and that number is growing at 4.8% per year.

Despite the region’s growth, its airports are not profiting as much as they could from travel retail.

According to Echevarne, 26% of those planning to buy duty free do not. What makes people buy, in order of importance,

156

are: kind and helpful store employees, shops that are easy to locate, quick service, good selection of products, good choice of shops and value for money. The good news is that over the past few years, passengers have become more satisfied with the service and selection they’ve found in airport duty free shops. The bad news is, Latin America non-aeronautical income and per-passenger spending for its airports are very low.

Celebrating history

Following a talk about the new reality of Brazil by José Carlos Rosa, COO of Dufry, and Pedro Castro, International Operations Director of World Duty Free Group (WDFG), came an emotional closing. The founding members who were present, Sam-

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

uel Kauffman, Walter Zeinal, Daniel Pomiés, José Carlos Rosa and Victor Hugo Bonnet, were invited on stage. The microphone was handed to each man in turn as he discussed ASUTIL’s journey over the past 20 years.

Each man was then given an award, and the conference came to a close.

The association asked delegates for their opinions on next year’s venue from the following options: Santiago, Lima and Montego Bay. As it turned out, however, at the ASUTIL board meeting on September 23, the board selected Panama City as 2015’s location. Donagaray confirms that the conference will be in Buenos Aires in 2016 and then Rio de Janeiro in 2017, and says he is looking forward to another successful conference next year. 

SUBSCRIBE TO AMERICAS DUTY FREE MAGAZINE

ONE YEAR – 5 ISSUE AND 24 ENEWSLETTERS

Subscribe to Americas Duty Free & Travel Retailing Magazine and its monthly eNewsletter to keep you informed of the latest news. Simply fill out and return this subscription card to the following address, or fax with your credit card details to +1 905-821-2777

TWO YEARS – 10 ISSUES AND 48 ENEWSLETTERS

US$200.00 US$300.00

SUBSCRIPTION FORM

company name

Please fill out this form and fax to 1-905-821-2777 or email to deepa@globalmarketingcom.ca

date

name

Americas Duty Free & Travel Retailing magazine 26 Pearl Street, Mississauga, ON Canada L5M 1X2 Tel: 1-905-821-3344 Fax: 1-905-821-2777 email: deepa@globalmarketingcom.ca

mailing address

city

province/state

country

postal code/zip

(

) area code

(

phone

) area code

❑

SIGN ME UP! I would like to receive a subscription to magazine ❑ One Year US$200.00 ❑ Two Year US$300.00

fax

❑

Enclosed is a cheque or money order made payable to Global Marketing Company Ltd.

❑

Bill me

email

❑

❑

❑

expiry date

m

m

y

y

credit card number

signature

date Paym ent in U. S. funds m us t ac c om pany this s ubs c ription c ard.

Questionnaire

ALL ABOUT Michael Payne, Executive Director, IAADFS Q: Where were you born and raised?

A: In the Carolinas. My family lives in Charleston now.

Q: Do you have a passion in your life (or more than one)?

A: My family, travel, the beach, tennis, golf.

Q: If you attended post-secondary school, what did you study?

A: History, journalism and political science.

Q: Do you have a pet (or more than one)? If so, what is the animal and name?

A: Chloe, a golden doodle. She’s actually human.

Q: Are you married? Do you have children?

A: Yes, so far happily. I’m married to Maggie Simpson and we have three children Jack (17), Sarah (15) and Turner (12).

Q: What is your favorite movie?

A: Hopefully I haven’t seen it yet.

Q: What is the last book you read?

A: The Invention of Wings by Sue Monk Kidd.

Q: What would you choose as your last meal?

A: I choose to die in my sleep and not have to make a selection.

Q: What is your favourite drink?

A: Wine.

158

Q: Do you prefer country or city?

A: Country.

Q: What is your favorite place to vacation?

A: The Isle of Palms or Provence.

Q: What’s the first thing you do in a new place?

A: I find food and wine.

Q: If you could choose any place in the world to live, where would it be?

A: On the ocean.

Q: Which living person do you most admire?

A: Pope Francis, and I’m not Catholic. I believe he genuinely cares about everyone.

AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2014

Q: Which historical figure do you most admire?

A: Gandhi.

Q: Where and when were you happiest in your life?

A: That’s a toss-up between college and now.

Q: What in the world would you most like to change?

A: I’d eradicate hunger.

Q: What about yourself would you most like to change?

A: Everything and nothing, but definitely my golf game.

Q: What is the most important piece of advice anyone ever gave you?

A: Never look back.

Q: What is something about you that most people would find surprising?

A: I used to be a prison guard. 

2015

International Association of Airport Duty Free Stores

DutyFree Show of the

AMERICAS MARCH 22–25, 2015 Orlando World Center Marriott

Orlando, Florida, USA

The most important week of the year for your business Join us for the 2015 Duty Free Show of the Americas — your chance to connect with more than 160 exhibitors showcasing thousands of brands to more than 300 duty free store companies from over 60 countries!

Conduct business on the tradeshow floor, and enjoy additional networking opportunities provided by IAADFS social events. Come see why attendees and exhibitors consistently say that our show is “the” place to do business.

www.IAADFS.org/DutyFreeShow |

See what attendees are saying about the show!

“We made very valuable contacts in the industry, from buyers to travel retail agents.”

“The most promising part was the new business generated, as well as contacts to follow up on.”

“We got great response from travel retail operators in the Americas.“

Follow us on Twitter @IAADFS

The Duty Free Show of the Americas is hosted by the International Association of Airport Duty Free Stores, representing the duty free industry for more than 45 years.