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SUMMIT OF THE AMERICAS 2019

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DUTYFREEMAG.COM MARCH 2019 · SOTA · VOL 29 · NO 1

MAKE SURE TO PASS BY OUR STAND 601

AT SUMMIT OF THE AMERICAS

Leon Falic talks expansion plans for DFA p. 14  Brazil’s land border stores to become a reality p. 22  Dufry’s Julian Diaz discusses the Americas p. 48 


Letter from the Editor

Mixed reviews L

ast year brought the very first Summit of the Americas to Orlando Marriott World Center – the same location as the former IAADFS show. This year brings the second Summit to a new hotel location at the Hyatt Regency Orlando. We’ve heard from a variety of delegates – big and small – about the move. The consensus is that everyone is waiting to see how things pan out at this show. Concerns and questions surrounding the show seem to come in waves. Some are satisfied with the business opportunity while others have decided not to attend or exhibit. IAADFS President Michael Payne said the Summit organizers, ASUTIL and IAADFS, had worked hard to respond to suggestions from attendees and the supplier community in changing the venue from the Marriott hotel, offering more meeting rooms in addition to the exhibit floor, and providing executive learning sessions. We feel that the organization has come out with all guns blazing and that this year might determine the future of the show. Having said that, the duty free and travel retail industry is always exciting, and each year brings its changes and challenges, whether they stem from socio-political instability, regulation, mergers and acquisitions, or simply a major disruption in the industry, such as this year’s expected introduction of border shops in Brazil, which we examine in depth in our Brazil Border feature. Another challenge for South American duty free association ASUTIL is the proposed change to land border store regulations in the MERCOSUR countries. ASUTIL Secretary General Jose Luis Donagaray and his team are working hard to head off this threat, which would mean product categories such as cigarettes, textiles and shoes could not now be sold at border stores. Given these constant challenges, suppliers and operators all must be continuously on their toes, making it easy for us at Americas Duty Free to bring you lots of exciting news. We hope you enjoy reading about all this and, of course, the newest marketing initiatives from all the top duty free brands. Kindest Regards,

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

4 THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2019

MARCH 2019 · SOTA · VOL 29 · NO 1 The Americas Duty Free & Travel Retailing magazine (ISSN 0962-0699) is published four times a year April, June, October and November by Global Marketing Company Ltd. 26 Pearl Street, Mississauga, Ontario L5M 1X2 Canada. It is distributed throughout Central America, South America, the United States, Canada, U.S. Virgin Islands, U.S. Pacific islands, and the islands in the Caribbean. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or the editor. March 2019, Vol 29. No. 1. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2019 Global Marketing Company Ltd.

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

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca


Success guaranteed The world’s most solid and expert travel retail partner. Over 1,000 suppliers. Utmost attention to detail. Unparalleled customer insights. 2,300 stores utilizing the most advanced technology. Endless reasons to become part of the largest travel retail group in the world.


Letter from the Editor

Opiniones encontradas E

l año pasado se llevó a cabo por primera vez la Cumbre de las Américas en el Orlando Marriott World Center, la misma sede de la antigua exposición IAADFS. Este año, la Cumbre se realizará en otro centro hotelero, el Hyatt Regency Orlando. Hemos escuchado opiniones de todo tipo de delegados– grandes y pequeños – acerca del traslado. El consenso es que todos están esperando a ver cómo se desarrollarán las cosas en esta exposición. Aparentemente, las preocupaciones y preguntas con respecto a esta última vienen en oleadas. Algunos están satisfechos con la oportunidad de negocios, mientras que otros han decidido no asistir o no exponer. Michael Payne, Presidente de IAADFS, afirmó que los organizadores de la Cumbre, ASUTIL y IAADFS, se han esforzado al máximo para tomar en cuenta las sugerencias de asistentes y comunidad de proveedores con respecto al cambio de sede del hotel Marriott, ofreciendo más salones de reuniones además del espacio de exposiciones, y proporcionando sesiones de aprendizaje ejecutivo. Creemos que la organización se está jugando el todo por el todo, y que este año podría determinar el futuro de la exposición. Dicho esto, la industria duty free y minorista de viajes es siempre atractiva, y cada año presenta sus cambios y retos, ya

6 THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2019

sea provenientes de la inestabilidad sociopolítica, regulaciones, fusiones y adquisiciones; o simplemente de una importante alteración en la industria, como la esperada introducción de tiendas de frontera que se llevará a cabo este año en Brasil, un acontecimiento que examinaremos a profundidad en nuestro artículo de fondo sobre la frontera brasileña. Otro desafío para ASUTIL, la asociación duty free sudamericana, es el cambio propuesto a las regulaciones de tiendas de frontera terrestre en los países pertenecientes al MERCOSUR. Jose Luis Donagaray, Secretario General de ASUTIL y su equipo están trabajando infatigablemente para enfrentar esta amenaza, que podría implicar la prohibición de venta de importantes categorías de productos como cigarrillos, textiles y zapatos, en tiendas de frontera. Dados estos retos, los proveedores y operadores deben estar continuamente en alerta, lo cual propicia que nuestra revista, Americas Duty Free, pueda ofrecerles numerosas noticias interesantes. Esperamos que disfruten la lectura de todos los temas anteriores, y, por supuesto, de las más recientes iniciativas de mercadotecnia de las principales marcas duty free. Un cordial saludo,

Hibah Noor Editora en Jefe hibah@dutyfreemagazine.ca


Contents

Lead Stories 22 Brazilian Land Borders

What’s inside

On their way

Duty free stores on Brazil’s land borders are set to become a reality in 2019, and stores on the other side are ready for the challenge

En camino

Las tiendas duty free en las fronteras de Brasil se van a hacer realidad en el 2019, mientras que las del otro lado están listas para el desafío

28 Motta International Full steam ahead

Panama-based Motta International opens new stores in Terminal 1 at Tocumen International Airport, and is ready and waiting for Terminal 2 to become fully operational so it can move ahead with its new duty free, luxury and electronics stores there

34 Top Brands International New ventures

34

Panama’s Top Brands International is eyeing smaller Caribbean islands and the Brazilian border for expansion

Nuevas operaciones

Top Brands International de Panamá contempla expansión a pequeñas islas caribeñas y a la frontera brasileña

38 Frontier Duty Free Association

FDFA builds the pillars of success

In her second interview with Americas Duty Free, Barbara Barrett, FDFA’s new Executive Director, sets out the association’s fresh approach to business

44 LATAM Airports

Growth and expansion Colombia keen on establishing more routes and improved facilities; Panama soon to fully open its second terminal and Chile reconstruction nearing completion

48 Dufry Americas

Opportunity knocks Dufry is always on the lookout for new growth opportunities, and nowhere is that more the case than throughout the Americas, where the travel retail giant is expanding into new cities and new channels, and exploring new concepts

68 Features Anonymous questionnaire Leon Falic talks DFA Heinemann’s cruise space Toronto Pearson makes the grade

12 14 54 56

Baja DF redefines success New horizons for the Summit Island of enchantment Positive equation for Siñeriz

60 62 68 76


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Contents

Lead Stories

82

80 Essence Corp

Essence Corp waves the flag Family-owned fragrance distributor Essence Corp has been busy building both the company and its loyal team over the past year

82 Go Travel

Everything’s a go Go Travel’s global reputation as a reliable supplier is the driving force behind its expansion into the Americas

102 Monarq

Crafting a relevant portfolio One-stop-shop beverage distributor Monarq Group is adding innovative brands to its portfolio to spark retail interest in the Americas

104 Atom Brands

Atom Brands brings a spirited vision to Americas Atom Brands almighty on the way to offer a full portfolio of craft spirits

86

108 Flor de Caña

In the spirit of sustainability Premium rum brand Flor de Caña raises the bar for the global spirits industry

109 Baltika

Tapping the booming beer category Baltika, the largest Russian exporter of beer, is keen to boost its duty free business with its leading brands targeting all tastes

110 What’s in a bottle Love at first sight

100

Does the old adage ‘never judge a book by its cover’ apply to the eye-catching bottles in which spirits brands are presented?

116 Zimpex

Zimpex Marketing captures the Chinese consumer US-based Zimpex Marketing is taking advantage of the influx of Chinese travelers visiting North America

Features Rodenstock’s clear vision 86 Editor’s Picks 88 Summit of the Americas exhibitors 90 Monalisa’s Des beaux arts 94

IBBI sends the right message Confectionery and CSR Whiskey in the Americas All About Edouard Mariotti

96 98 100 118


Anonymous Questionnaire

How can

SUMMIT OF THE AMERICAS show improve?

Ensure all brand owners are exhibiting within the trade floor so that larger vendors can’t get away with just renting side rooms! All visitors will then be forced to come through!

12 THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2019

It would be great to have a snack/ food cart that goes around during the lunch hour, as many people do not want or cannot leave their booth.

Many buyers only come for one or two days at the most, so extended hours on Monday and Tuesday, and an earlier break down time on Wednesday would be welcomed.


One way to attract more buyers is to offer them a free pass like many domestic shows do, to allow retailers to justify bringing more buyers and attract new ones.

Link the show with the ACI show that is often around the same time and attracts other airport retailers.

Reduce show costs to allow more brands to justify exhibiting. The increased costs to exhibit during the downturn, reduced hours for the show floor, and reduced traffic, meant brands had to pull out due to negative ROI.

Perhaps having a show that caters to some domestic retail could entice brands who want to grow in both duty free and domestic markets.

Think outside the box and do more brainstorming sessions to get fresh ideas from the new generation, not just from the large companies, some of whom don’t even participate in the show but are always at their functions.

www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

13


Duty Free Americas

A FORCE to be reckoned with Big-hitting operator Duty Free Americas is spreading its reach across the region and has set the rest of the world in its sights for further expansion

Meet the new generation of Falic businesspeople: From left: Dov, Samuel, Joseph and Miro

P

anama-based powerhouse Duty Free Americas (DFA) is now bigger and stronger than ever. The family-run business has successfully achieved rapid expansion across the Americas, both North and South. And, as President Leon Falic proudly tells Americas Duty Free, “we have more stores than any other travel retailer in the Americas.” The business spans 236 stores offering an extensive range of cosmetics, tobacco, jewelry, wines, spirits and luxury goods in more than 180 locations. It is operated by three brothers – Leon, Jerome and Simon Falic – and is now welcoming the next generation. Dov Falic, Leon Falic’s son, is the Head Liquor Buyer for Latin America; Miro Falic is CFO Latin America; Joseph Falic, Jerome Falic’s son, is Head Fragrance Buyer; and Nily Falic, Leon Falic’s daughter, works in marketing. “Our children grew up in this, seeing what we do. Once they started with the company, they happened to enjoy working with us and continued,” enthused Falic. “I love this business, this is our core business. We have the privilege of selling

by HIBAH NOOR

all these great brands in our stores. We just want to deliver the consumer the best shopping experience. We want the consumer to know that they are getting the right price. That’s what we strive for.”

Panda in Uruguay

Falic’s drive and vision can be seen at DFA’s largest store, measuring 10,500 square meters, which opened in November 2018. Panda Duty Free is a part of the Rio Branco zone on the border of Uruguay and Brazil. “We’re investing heavily in our retail operations and we’re building very large stores like Panda Duty Free,” he says. The expansive space houses a variety of stores and services, including a currency exchange bureau, a pharmacy and an optical shop. Around the store is a busy international bus terminal with gardens and an outdoor play area for children, and a food court. Each section of the store is grouped by theme. DFA offers an exclusive wine cellar with high-end wines. The food and drink area serves a host of alcoholic beverages

14 THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2019

along with chocolate tastings. The fashion and accessories department highlights brand names from Ralph Lauren to Tag Heuer. A large amount of space has been dedicated to the perfumes and cosmetics category, where consumers can find all the sought-after brands names such as Bulgari and Chanel. Other categories include a variety of children’s toys and games, electronics, camping products, tools, and household items.

Miami remodel

Moving to its Miami business, DFA has a major overhaul planned for its key locations in Miami International Airport (MIA), where major investment will be pumped into its stores. “The key locations are located in Miami International Airport’s North and South terminals, including concourses D, F and H,” explains Falic. “We think by mid-year everything will be renovated. “We want to provide a completely different shopping experience. The consumers will be pleased with the results and will spend a little more,” says Falic.


Panda Duty Free in Uruguay’s Rio Branco zone is DFA’s largest store, measuring 10,500 square meters

Thank you to our customers and suppliers for 25 years of continued and loyal support.

1/2 Horizontal

-FABIOGUIDONI-

PLEASE VISIT US AT: Summit of the Americas, March 25-27th 2019, Booth #400. TFWA ASIA PACIFIC EXHIBITION & CONFERENCE in Singapore, May 12-16, 2019 Basement 2—Stand 2-A1. 197 Northwood Court, Lexington, NC 27295, USA, Tel / Fax: (336) 775-2995, ahildreth@alfadutyfree.com

www.alfadutyfree.com

www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

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Duty Free Americas

Panda Duty Free’s fashion and accessories department highlights brand names like Ralph Lauren

“We are looking outside of Americas for business opportunities – watch this space.” - LEON FALIC, PRESIDENT, DUTY FREE AMERICAS

DFA has 19 stores at the Florida gateway, including branded shops such as Ralph Lauren and Victoria’s Secret, and traditional duty free stores.

Tocumen bound

DFA offers an exclusive wine cellar with high-end wines at Panda Duty Free in Uruguay

16 THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2019

At DFA’s home airport of Tocumen International in Panama City, 85% of the airport’s traffic flows through its stores. That’s a lot of traffic, as over 16 million passengers pass through the facility from all over the world each year. “We won two thirds of the block in Tocumen Airport in Terminal 2 for a 10-year contract and opened up multicategory duty free stores last year. We took block one and block two, there isn’t a passenger that doesn’t walk through our stores. Having said that, we do have a competitor, so 85% of passengers go through our stores.” DFA won a third concession, which will begin trading “a little past mid year” in Tocumen T2, adds Falic. It will cover 1,000 square meters, located after security on the right, opposite the Rolex store. “We chose this side because on the left side there are seven gates and on the right side there are 15 gates. Above us is the food court, which will bring us a lot of traffic. We will be selling traditional duty free items, concentrating on fragrance,


Duty Free Americas

liquor, cosmetics and sunglasses and some tobacco.” In T2, DFA has an exclusive contract to operate news and gift stores. In addition, the company will be opening two bars and one restaurant during the year. They comprise a sports bar, a pizza restaurant and a healthy food grab-and-go concept. In Tocumen T1, the company operates two duty free concessions, which opened in 2017, along with a bar. Here, DFA boasts the only Polo Ralph Lauren and Kate Spade stores in the region.

Brazilian takeover

Turning to Brazil, DFA operates duty free and duty paid businesses, as well as news and gift stores with WHSmith. On the food & beverage side, DFA has partnered with leading F&B operator SSP to open a variety of restaurants in different

airports sometime this year, reveals Falic. In January, DFA opened a new landside store in the passenger terminal lounge at Belo Horizonte Tancredo Neves Confins International Airport (Confins International Airport). The store carries duty paid products in perfumes, cosmetics, clothing, accessories, electronics, wines and spirits, watches, chocolates and snacks. DFA currently operates in nine of Brazil’s most important airports. The company says that the new Belo Horizonte store is an important step in DFA’s expansion in Brazil, which has included the recent opening of a new duty free Arrivals store in Salvador, and 11 convenience stores in a joint venture with WHSmith in Rio de Janeiro Galeão and São Paulo Guarulhos airports. In the upcoming months, two brand

new stores in São Paulo Guarulhos Airport, one new duty paid shop in Salvador and a complete renewal of two stores in Porto Alegre will continue to support the expansion plan in Brazil. At the time of the landside store opening at Belo Horizonte, Falic said: “With the largest economy in Latin America, Brazil continues to be a key market in our regional strategy. We are committed to the development of DFA Brazil operations and continue to look forward to a prosperous future together with our local partners.” Giving us a sneak peek into the future, Falic tells Americas Duty Free: “We are looking outside of Americas for business opportunities – watch this space. When asked to specify where in the world, he says: “The world is our playground – that’s all I can say.”

DFA’s duty paid landside store at Belo Horizonte Confins International Airport began trading in January

DFA recently opened this airside convenience store with its partner WHSmith in São Paulo Guarulhos Airport

18 THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2019


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Brazilian Land Borders

On

their way by RONNIE LOVLER

Duty free stores on Brazil’s land borders are set to become a reality in 2019, and stores on the other side are ready for the challenge

T

he year kicked off with numerous political and economic changes in Brazil as President Jair Bolsonaro settled into office. But perhaps what may be of greatest importance for the duty free and travel retail industry is the expectation that land duty free stores will begin operations on the Brazilian side of the border this year. A law permitting Brazilian duty free shops to operate was approved six years ago, but political and bureaucratic issues delayed implementation. Last year, Brazil’s Department of Federal Revenue gave the green light to the project and things began moving forward with steps taken to develop the software and the guidelines required for execution this year. The land border duty free business in Latin America has been dominated by Uruguay, Paraguay and Argentina for decades, with Brazilians traveling to stores in those countries to do their shopping. But with Bolsonaro’s emphasis on free market economies, expectations are high that Brazil border stores will change the economic landscape.

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ASUTIL Secretary General José Luis Donagaray

Panama-based Top Brands International has announced it will be setting up shop in Brazil, which you can read about on page 22 in this edition of Americas Duty Free. Dufry and others are keeping their Brazil border plans under wraps for now, but expectations are that they too will seize this business opportunity.

Final hurdles

In an exclusive interview with Americas Duty Free, Carlos Loaiza Keel, Secretary-General of the Chamber of Commerce of Free Shops of Uruguay, said his organization is anticipating robust activity along the Brazilian side of the border. “Based on our knowledge of the evolution of the Brazilian regime, with the guarantees required and the types of products that can be sold, it’s unlikely that small stores will open on the border. Big chains, on the other hand, do have serious plans,” he said. “All the regulations are in full force. We have learned some applications have been filed with the Brazilian Federal Revenue Service (RFB) by interested businesses, but at the moment none has been authorized or put into operation,” he added. But Loaiza Keel said there are still hurdles to overcome. “At the end of December the MERCOSUR countries reached an agreement to restrict the list of products that can be sold under the regime in Brazil. This implies the need for interpretation, meaning it could take some months until there is total certainty for the investor,” he said.

Loaiza Keel stands with ASUTIL. “We always prefer that the rules of the regime are as broad as possible in terms of products to sell. In this sense, we will always prefer the least amount of possible products to be excluded,” he said.

Net positive

Overall, however, the traditional land border duty free operators who have operated primarily in Argentina, Uruguay and Paraguay on their side of the border with Brazil say they view the upcoming changes positively. One of those is Hilmi Abdullah Neto, Commercial Manager for Siñeriz Shopping in Rivera, Uruguay. “We believe this is a great opportunity not only for duty free on the Brazilian side, but also in Uruguay,” he said. “We believe that in addition to jobs, it will generate a greater transit of tourists to the borders and that they will buy from both sides.” Speaking for his organization, Loaiza Keel said they are ready for Brazil. “The members of the Chamber and the Chamber itself have been assuming the new scenario for several years now. It is not a novelty and the opportunities and challenges are well known,” he said. “Investments and projects on the Uruguayan side have not been slowed down, as evidenced by the projects of Melancia in Rivera or Panda in Rio Branco.” Loaiza Keel believes the forthcoming Brazil land border stores will ultimately help, not hurt, their existing counterparts in Uruguay and the other Spanish-speaking nations that border Brazil. “If our efforts with the governments of the MERCOSUR countries continue to advance and prosper, in the sense of consolidating a balanced and orderly common regime for all MERCOSUR countries, we believe that the new system will bring positive aspects,” he said. “This includes more visibility and strength of advertising and sales, more circulation of people, more certainty for investment, more control over those who abuse the regime with cooperation and exchange of information between tax authorities, and also more opportunities for the logistics role of Uruguay and its suppliers and ports, among others,” he added. “We have a lot of past knowledge to take advantage of the opportunities.” Under the new guidelines, land duty free stores can be established in any of the 32 border twin cities in Brazil. The main activity is expected to occur in Argentina, Paraguay and Uruguay, with some possible spillover into Colombia, Bolivia and Peru.

Negotiations continue

Argentina, Paraguay and Uruguay are full members of MERCOSUR along with Brazil. Venezuela was suspended from membership in December 2016. Bolivia, Chile, Colombia, Ecuador, Guyana, Peru and Suriname have associate memberships. The South American Association of Duty Free Stores (ASUTIL) has already expressed its concern about the new MERCOSUR regulations because of its exclusion of certain products from duty free sales. In an interview earlier this year, ASUTIL Secretary General José Luis Donagaray stated that while the MERCOSUR agreement is a step forward in that it seeks to establish “a harmonious system of border duty free shops with agreed franchises and that there is information exchange between countries,” ASUTIL was opposed to the MERCOSUR decision to eliminate some products from duty free status that are standard offerings worldwide such as cigarettes, textiles and shoes.

Carlos Loaiza Keel, Secretary-General of the Chamber of Commerce of Free Shops of Uruguay www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

23


Brazilian Land Borders

En

camino Las tiendas duty free en las fronteras de Brasil se van a hacer realidad en el 2019, mientras que las del otro lado están listas para el desafío.

E

l año comenzó con numerosos cambios políticos y económicos en Brasil con la toma de posesión del presidente Jair Bolsonaro. Pero tal vez lo que pudiera revestir la mayor importancia para la industria duty free y minorista de viajes, es la expectativa de que, este año, las tiendas duty free terrestres del lado brasileño de la frontera comenzarán sus operaciones. Aunque hace seis años se aprobó una ley que permite operar a las tiendas duty free brasileñas, varios problemas políticos y burocráticos retrasaron su implementación. El año pasado, el Departamento de Ingresos Federales del Brasil le dio luz verde al proyecto, y todo comenzó a ponerse en marcha, tomándose medidas para crear el software

24 THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2019

y los principios rectores requeridos para su ejecución este año. Durante décadas, el negocio de tiendas duty free terrestres en Latinoamérica ha estado dominado por Uruguay, Paraguay y Argentina, y los brasileños viajaban a tiendas de esos países para hacer sus compras. Pero con el énfasis puesto por Bolsonaro en las economías de libre mercado, hay grandes expectativas de que las tiendas brasileñas de frontera cambiarán el entorno económico. Top Brands International, radicada en Panamá, ha anunciado que va a realizar operaciones en Brasil, una noticia que puede leer en detalle en la página 22 de esta edición de Americas Duty Free. Por su parte, aunque Dufry y otros operadores mantienen en reserva sus planes con


Brazilian Land Borders

ASUTIL Secretary General José Luis Donagaray

respecto a las tiendas brasileñas de frontera, se espera que ellos también aprovechen esta oportunidad de negocios.

Obstáculos finales

En una entrevista exclusiva concedida a Americas Duty Free, Carlos Loaiza Keel, Secretario General de la Cámara de Empresarios de Free Shops del Uruguay, afirmó que su organización está anticipando una robusta actividad en el lado brasileño de la frontera. “En base a nuestro conocimiento de la evolución del régimen brasileño, con las garantías requeridas y los tipos de productos que se pueden vender, es improbable que abran pequeñas tiendas en la frontera. Por otra parte, las grandes cadenas tienen planes serios”, aseguró. “Todas las regulaciones están en vigor. Nos hemos enterado de que varios negocios interesados han hecho sus solicitudes ante el Servicio de Impuestos Federales del Brasil (RFB), pero hasta el momento nadie ha sido autorizado o ha iniciado operaciones”, añadió el alto funcionario. Sin embargo, Loaiza Keel agregó que aun existen obstáculos que vencer. “A finales de diciembre, los países miembros del MERCOSUR acordaron restringir la lista de productos que pueden venderse bajo el régimen en Brasil. Esto implica la necesidad de interpretación, por lo que demoraría varios meses hasta que haya una certeza total para el inversionista”, destacó.

Las negociaciones continúan

Argentina, Paraguay y Uruguay son miembros activos del MERCOSUR,

al igual que Brasil. La membresía de Venezuela fue suspendida en diciembre del 2016. Por su parte, Bolivia, Chile, Colombia, Ecuador, Guyana, Perú y Surinam tienen membresías asociadas. La Asociación Sudamericana de Tiendas Libres (ASUTIL) ya ha expresado su preocupación con respecto a las nuevas regulaciones del MERCOSUR, debido a su exclusión de ciertos productos en las ventas duty free. En una entrevista concedida a inicios de año, José Luis Donagaray, Secretario General de ASUTIL, afirmó que, si bien el acuerdo del MERCOSUR es un paso de avance, habría que establecer “un sistema armonioso de tiendas duty free de frontera con franquicias acordadas, y existe intercambio de información entre países”. ASUTIL se opuso a la decisión del MERCOSUR de eliminar algunos productos del estatus duty free que son ofertas tradicionales en todo el mundo, como cigarrillos, textiles, zapatos, o la “canasta básica de consumidor” de mercancías. Loaiza Keel defiende la posición de ASUTIL. “Siempre preferimos que las reglas del régimen sean lo más amplias posibles en términos de productos a la venta. En este sentido, siempre preferiremos que se excluya la menor cantidad de productos posibles”, recalcó.

Visión positiva

Sin embargo, en general, los operadores tradicionales de tiendas duty free terrestres de frontera que han trabajado principalmente en Argentina, Uruguay y Paraguay, en la parte fronteriza con Brasil, afirman que ven los próximos cambios con una perspectiva positiva. Uno de éstos es Hilmi Abdullah Neto, Gerente Comercial de Siñeriz Shopping en Rivera, Uruguay. “Pensamos que es una gran oportunidad no solo para las tiendas duty free del lado brasileño, sino también en Uruguay”, dijo. “Creemos que generará, además de empleos, un mayor tráfico de turistas a las fronteras, quienes comprarán en ambos lados de las mismas." Loaiza Keel, hablando en representación de su organización, aseguró que están listos para el Brasil. “Los miembros de la Cámara, y la

26 THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2019

propia Cámara, han estado asumiendo la nueva situación durante varios años. No es nada nuevo, y conocemos bien las oportunidades y retos”, aclaró. “Las inversiones y proyectos en el lado uruguayo no han perdido impulso, lo que evidencian los proyectos de Melancia en Rivera o Panda en Rio Branco”. El alto funcionario estima que, en última instancia, las próximas tiendas de frontera que operarán en Brasil ayudarán y no perjudicarán a sus contrapartes existentes en Uruguay y las otras naciones hispanohablantes que rodean al Brasil. “Creemos que, si nuestras iniciativas con los gobiernos de los países del MERCOSUR siguen avanzando y prosperando, en el sentido de consolidar un régimen común balanceado y organizado para todos los países del MERCOSUR, el nuevo sistema traerá consigo aspectos positivos”, aseguró. “Esto incluye más visibilidad y fortaleza de la publicidad y las ventas, más circulación de personas, más certeza para las inversiones, más control sobre los que abusan del régimen con cooperación e intercambio de información entre autoridades fiscales, y también más oportunidades para el papel de logística de Uruguay y sus proveedores y puertos, entre otros”, añadió. “Tenemos mucho conocimiento del pasado para aprovechar las oportunidades”. Bajo las nuevas directivas, se pueden establecer tiendas duty free terrestres en cualquiera de las 32 ciudades gemelas de frontera en Brasil. Se espera que la actividad principal ocurra en Argentina, Paraguay y Uruguay, con alguna ramificación posible en Colombia, Bolivia y Perú.

Carlos Loaiza Keel, Secretary-General of the Chamber of Commerce of Free Shops of Uruguay


T H E NE W F R AG R A N C E F O R H E R


 Motta International

FULL STEAM AHEAD Panama-based Motta International opens new stores in Terminal 1 at Tocumen International Airport, and is ready and waiting for Terminal 2 to become fully operational so it can move ahead with its new duty free, luxury and electronics stores there by RONNIE LOVLER

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M

otta International is growing its presence in Tocumen International Airport, with one store recently opened in the older Terminal 1 and 10 more locations set to debut in the new Terminal 2 when it is fully functional later this year. For the past several years, Motta has been keeping an eye on its international stores while concentrating its efforts in its home base of Panama, taking advantage of the many opportunities for duty free growth with the expansion of Tocumen. “Our businesses in other countries are going well,” said Julio de Leon, Vice President of Sales and Marketing for Motta, in an exclusive interview with Americas Duty Free. “We have stores in Colombia, Nicaragua, Quito in Ecuador, El Salvador, and Trinidad and Tobago. Those are doing very well, but the big challenge for us this year is going to be Panama.”

Home base

Given that the company is based in Panama and staff know the country well, the focus on business in that country is a mixture of economics, good business sense and national pride. “We’re trying to make the best use of our knowledge and strength in Panama,” he said. “Panama is a hub for us; we have all our warehouses and operations here. All our people live here. We are trying to use that as a strength to expand to new business and to other opportunities, both in the airport and locally.”

www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

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Motta International

Although it is not the largest airport in the region, Tocumen is a major connecting point for people traveling in the Americas. The airport is registering significant growth, with numbers closing in on 16 million PAX in 2017. Terminal 2 is expected to bring millions more passengers to and from Panama over the coming years. “Panama is expanding, and we’re trying to take advantage of those opportunities,” said de Leon.

Array of electronics

On February 6, Motta opened an Attenza Duty Free electronics store in Terminal 1 that is 154 square meters in size. “We are confident that the business in electronics at the airport is going to grow,” de Leon said. The selection of consumer electronic goods in the store already puts Motta ahead of the curve, with cell phones and accessories, Apple products, headphones, small travel kits, soundbars, travel goods, rechargeable batteries, speakers, video games and their accompanying Nintendo or PlayStation systems. Personal computers are also in the mix.

On hold

In 2018 the company opened a 700-square-meter traditional duty-free store in the old terminal, which de Leon said is “doing very well. And we also have several smaller stores throughout the terminal.” But while business may be brisk in the old terminal, it continues on hold in Terminal 2, which has yet to become fully operational. While Panamanian President Juan Carlos Varela said the new terminal would open in full force in April, most think late summer is a better bet. “All the major brands are waiting for us to open the stores and buy products from them,” de Leon said. These brands include Attenza Duty Free, Adidas, Cartier, Tory

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Burch, Montblanc and Salvatore Ferragamo and, of course, a plethora of electronics. De Leon says Motta will be operating 10 stores occupying about 2,140 square meters of space all over the new terminal. Motta will have one traditional Attenza duty free store in the new terminal that will total about 1,000 square meters. Other locations include luxury stores that will be in open spaces in the new terminal. “We will have eight to nine Attenza duty free stores,” he said. “Confectionery, luxury goods like watches and sunglasses, sportswear and two electronics stores.”

Contracts begin

Motta has been awarded 10-year contracts for all its new holdings, but the clock won’t start ticking right away. “It will take effect when they give us the space and we begin remodeling, and then open our stores with merchandise and our people,” de Leon said. Once the new terminal at Tocumen International Airport is truly up and running, all indications are that 2019 will be a very busy year in Panama for Motta International.


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Top Brands International

LURYX has locations throughout the Americas, such as this one in Colombia. The company will soon expand to the Brazil border

New ventures Panama’s Top Brands International is eyeing smaller Caribbean islands and the Brazilian border for expansion by RONNIE LOVLER

Top Brands won an airport concession at Oscar Arnulfo Romero International Airport in El Salvador to operate 10 duty free and specialty travel retail stores

T

op Brands International is breaking new ground in the Caribbean and Brazil, with business strategies that will expand its presence and widen its base in locations where it had no stores previously. The Panama-based company, which last year began marketing its multitude of stores under the single name, LURYX, has announced that it will establish franchise operations on some of the smaller Caribbean islands in addition to opening duty free stores at the border in Brazil. This will be under newly implemented Brazilian laws that for the first time are allowing such businesses. Top Brands President Danny Yohoros shared the details in an exclusive interview with Americas Duty Free and said the company expects to reach both goals this year, pointing out that they have already begun laying the groundwork for growth in these two new regions.

Seeking partners Top Brands, as LURYX, is bringing the true duty free luxury experience to smaller islands in the Caribbean, just as it does here with the Chanel brand in Charlotte Amalie in St. Thomas

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Yohoros said Top Brands is seeking entrepreneurs with whom they can do business on some of those islands that, while smaller in size and population, still draw tourists. “We are looking for partners around the Caribbean who are interested in opening duty free stores with us,” he said. “We are going to offer a onestop solution to brands we carry.”


from the cruise lines, which have developed travel retail operations inside the ships,” he said. Another difficulty, with so many small islands, is staffing. Yohoros explained that to help resolve this, they plan to use the company’s resources in Panama and in Miami, where Top Brands has extensive operations, “rather than starting everything from scratch.” Yohoros did not reveal which islands Top Brands is focusing upon for its LURYX franchise, but he did indicate from their perspective the field is wide open, and indicated that the company already has representatives on the ground. “Our biggest challenge is finding how to get the word out as we look for the right partners,” he said.

New possibilities

Top Brands’ new LURYX banner will soon be flying throughout many of the smaller islands in the Caribbean

According to Yohoros, the company began exploring the idea of establishing franchises in the smaller Caribbean nations so it could establish itself in a way that would make the best use of the expertise of its own team combined with that of local business people who know the logistics of the turf and the people in the place they call home. Up until now, the duty free and travel retail industry has concentrated its efforts on larger islands like Jamaica and Puerto Rico, and to a lesser extent Cuba and the island of Hispaniola, shared by the Dominican Republic and Haiti. “The Caribbean comprises many islands, and on every single island we feel there is an opportunity of growing the duty free segment,” Yohoros said. “On the smaller islands the duty free stores are mainly mom and pop shops that have no experience or connection with the duty free world. This offers many opportunities to develop the right concept of travel retail,” he said. “But there is a lack of communication and a lack of knowledge on how to develop the duty free business.” This situation is optimal for an established company like Top Brands to help with growth.

Overcoming challenges

Yohoros noted the inroads being made by the cruise ship industry, which is heavily impacting the smaller islands in terms of duty free sales. “There is so much aggression and competition

In Brazil, Yohoros said Top Brands hopes to take advantage of the new Brazilian law that is allowing land duty free shops to operate on the Brazilian side of the border for the first time. Until this point, all stores on Brazil’s borders have been located in shops outside the country, principally in Argentina, Uruguay and Paraguay. “Right now, we are working on a strategy about where to start,” he said. “Hopefully we should have one store open in the first semester with our rollout plan, and we hope to make that five stores this year.” Yohoros would not say the exact locations where Top Brands is focusing its efforts along the Brazilian border. “We’re not ready to give locations. We are still deciding where.” And while franchising is not a focus there as it is in the Caribbean, he did say to company was “open to speaking with local partners to do this as a project.” All the stores will open under the new LURYX name that Top Brands has been working to establish throughout the region since last year, and will focus on mainstay duty free products such as perfumes, cigarettes, liquors and confectionary. “This will give us a very solid position in the region,” Yohoros said. “We are already in Chile, Uruguay and Paraguay. This will help us to close the cluster in South America.”

Ever growing

In the last few years, Top Brands has expanded its regional business, taking over the Bright Star Duty Free in Asuncion and winning an airport concession at Oscar Arnulfo Romero International Airport in El Salvador to operate 10 duty free and specialty travel retail stores. They have also increased the number of stores they operate in Colombia in the capital city of Bogotá and other locations in the country. In the Caribbean, Top Brands has already begun expanding its presence with the establishment of several stores last year in St. Thomas at the A.H.Riise Mall in Charlotte Amalie. The company acquired duty free businesses in the Bahamas and Tortola in 2016. Currently Top Brands has a presence in the United States, Colombia, El Salvador, Costa Rica, Panama, Paraguay, Uruguay, Cuba, Chile, the Bahamas, Belize, Guyana, the British Virgin Islands and St. Thomas. The family-owned company has been in business for 40 years. www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

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Top Brands International

Swarovski jewelry is a popular choice at Top Brand’s LURYX store in Charlotte Amalie in St. Thomas

Nuevas operaciones Top Brands International de Panamá contempla expansión a pequeñas islas caribeñas y a la frontera brasileña

T

op Brands está preparando el terreno para operar en el Caribe y Brasil, con estrategias comerciales que aumentarán su presencia y ampliarán su base en sitios donde no han existido tiendas con anterioridad. La compañía radicada en Panamá que el año pasado comenzó a comercializar sus múltiples tiendas bajo un solo nombre, LURYX, ha anunciado que creará operaciones de franquicia en algunas de las islas más pequeñas del Caribe, además de inaugurar tiendas duty free en la frontera del Brasil, al amparo de las leyes recién implementadas en esa nación, que permiten por primera vez ese tipo de negocios. Danny Yohoros, Presidente de Top Brands, quien dio a conocer detalles de lo anterior en una entrevista exclusiva con Americas Duty Free en nuestra edición “Summit of the Americas”, afirmó que la compañía se propone cumplir ambos objetivos este año, y puntualizó que ya han realizado trabajos preliminares para su crecimiento en esas dos nuevas regiones.

36 THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2019

En busca de socios

Yohoros reveló que Top Brands está buscando empresarios con los que puedan hacer negocios en algunas de esas islas que, si bien su tamaño y población son pequeños, atraen turistas. “Estamos en busca de socios en el Caribe que estén interesados en inaugurar tiendas duty free con nosotros”, explicó. “Vamos a ofrecer soluciones integrales para las marcas que comercializamos”. Según Yohoros, la compañía comenzó a explorar la idea de crear franquicias en las pequeñas naciones caribeñas para poder establecerse de forma tal que pudiera aprovechar mejor los conocimientos de su propio equipo, conjuntamente con los de negocios locales que conocen la logística del terreno, y los habitantes de esos lugares. Hasta el momento, la industria duty free y minorista de viajes ha concentrado sus esfuerzos en las islas de mayor extensión como Jamaica y Puerto Rico, y en menor medida Cuba y La


competencia por parte de las líneas de cruceros, que han creado operaciones minoristas de viajes en los barcos”, afirmó. Otra dificultad, debido a la cantidad de islas pequeñas, es el personal. Yohoros explicó que para resolver este problema, proyectan el uso de los recursos de la compañía en Panamá y Miami, donde Top Brands cuenta con amplias operaciones, “en vez de comenzarlo todo desde cero”. Aunque el alto funcionario no reveló las islas en las que se está enfocando Top Brands para su franquicia LURYX, sí indicó que, desde su perspectiva, el campo está totalmente abierto, y que la compañía ya cuenta con representantes en el terreno. “Nuestro mayor desafío es lograr que se difunda la noticia, mientras buscamos los socios adecuados”, agregó Yohoros.

Nuevas posibilidades

Top Brands has increased the number of stores it operates in Colombia, now operating under the LURYX brand Fragrance is an important category at the LURYX store in Charlotte Amalie in St. Thomas

Española, dividida entre Haití y República Dominicana. “El Caribe está compuesto por muchas islas, y creemos que en cada una de ellas hay una oportunidad de incrementar el segmento duty free”, explicó Yohoros. “En las islas más pequeñas, las tiendas duty free son principalmente establecimientos familiares improvisados, sin experiencia ni conexión con el mundo duty free. Esto ofrece numerosas oportunidades de crear el concepto adecuado del comercio minorista de viajes”, añadió. “Pero hay una falta de comunicación y de conocimientos sobre cómo desarrollar el negocio duty free”. Esta situación es óptima para que una compañía establecida como Top Brands los ayude en su crecimiento.

Vencer desafíos

Yohoros enfatizó en las intrusiones de la industria de cruceros, que está ejerciendo gran impacto en las islas más pequeñas, en términos de ventas duty free. “Hay mucha agresión y

Yohoros afirmó que, en lo tocante a Brasil, Top Brands espera aprovechar la nueva ley promulgada por esa nación, que permite por primera vez la operación de tiendas duty free en el lado brasileño de la frontera. Hasta el presente, las tiendas de frontera en Brasil estaban ubicadas fuera del mismo, principalmente en Argentina, Uruguay y Paraguay. “En estos momentos estamos trabajando en una estrategia sobre dónde comenzar”, puntualizó Yohoros. “Esperamos inaugurar una tienda en el primer semestre con nuestro plan de creación, y contar con esas cinco tiendas este mismo año”. Sin embargo, el alto funcionario no reveló los sitios exactos de la frontera brasileña donde Top Brands está concentrando sus esfuerzos. “No estamos listos para revelar lugares. Aun estamos decidiendo dónde lo haremos”, explicó. Y si bien en Brasil no están enfocados en franquicias como sí ocurre en el Caribe, Yohoros aseguró que la compañía “está abierta al diálogo con socios locales para hacerlo como proyecto”. Todas las tiendas operarán bajo el nuevo nombre de LURYX que Top Brands ha venido utilizando en la región desde el año pasado, y se enfocarán en productos duty free tradicionales como perfumes, cigarrillos, licores y confitería. “Esto nos dará una sólida posición en la región”, añadió Yohoros. Ya estamos en Chile, Uruguay y Paraguay, lo cual nos ayudará a cerrar el grupo en Suramérica”.

En continuo crecimiento

En los últimos años, Top Brands ha ampliado su operación regional, asumiendo Bright Star Duty Free en Asunción y ganando una concesión en el Aeropuerto Internacional Oscar Arnulfo Romero de El Salvador para operar 10 establecimientos duty free y minoristas de viajes especializados. Además, han aumentado la cantidad de tiendas que operan en Colombia, en la ciudad capital de Bogotá y otros lugares del país. Por su parte, en el Caribe, Top Brands ya ha comenzado a ampliar su presencia, con la creación el año pasado de varias tiendas en St. Thomas en el A.H.Riise Mall de Charlotte Amalie. Asimismo, compañía adquirió el negocio duty free en las Bahamas y Tortola en el 2016. En la actualidad, Top Brands opera en Estados Unidos, Colombia, El Salvador, Costa Rica, Panamá, Paraguay, Uruguay, Cuba, Chile, las Bahamas, Belice, Guyana, las Islas Vírgenes Británicas y St. Thomas. La compañía de propiedad familiar ha estado operando durante 40 años.

www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

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Frontier Duty Free Association

FDFA

FDFA’s board of directors get together to kick off 2018’s convention at the King Edward Hotel in Toronto

builds the pillars of success

In her second interview with Americas Duty Free, Barbara Barrett, FDFA’s new Executive Director, sets out the association’s fresh approach to business

T

he year 2018 was one of profound change for the Frontier Duty Free Association (FDFA), which unveiled a new-format annual Convention, a fresh strategic direction and a new Executive Director. In August 2018, the FDFA Board of Directors named Barbara Barrett as its new Executive Director. Barrett, a high-level public affairs expert, is based in Ottawa, working closely with Impact Public Affairs, a nationally renowned association advocacy firm, to provide members with a full range of lobbying, communications, media and social media support. In her first interview with Americas Duty Free magazine since the highly successful 2018 Convention was held in November, Barrett is brimming with optimism for the future. “We have been very busy. One of the first goals we had when I started here was to get the FDFA back into the conversation and re-establish relationships that may have fallen by the wayside over the last couple of years. We’ve really been working on that, and one of our goals going forward is to continue to build upon those relationships – with governments, with stakeholders and

by HIBAH NOOR

with our members also. We’ve established a plan in order to be successful, and we call those the pillars of success – the most prominent of which is Government Relations, but also includes Stakeholder and Member Relations." When it comes to government relations, Barrett got down to business immediately with a very important issue for the FDFA: the visitor rebate program. Canada is one of the few countries in the OECD that doesn’t have a visitor rebate program, which would give visitors a tax rebate on their purchases in Canada. Barrett explains that Canada used to have one, but it was canceled in 2007. The Retail Council of Canada recently published a 10-year impact analysis on what that has meant for the country and its tourism industry, which Barrett describes as a good platform from which to launch a discussion about re-establishing the program. “The mechanism of how it will work has not been established yet. When we had the program in the past, people were able to go into the FDFA stores and get their reimbursement in the stores. They would often spend their rebate right in the stores.”

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Barbara Barrett, Executive Director of FDFA

Although there is no specific timeline for the program’s introduction, and the details are yet to be hammered out, Barrett points out that this is an election year, “so we have to be sure we’re in the minds of the parties that are setting out their election platforms”.

Rebate program high on the priority list

As part of the lobbying process, Barrett has been holding conversations about the mooted rebate program with the Minister


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Frontier Duty Free Association

of Tourism, Mélanie Joly, and some of the stakeholders within the tourism industry, including Destination Canada, the tourism authority, and other government officials. “There seems to be some interest in re-establishing the program, so that’s one of the conversations we’re having.” For the coming year, Barrett describes the rebate program as “high, high on the list of priorities”. Other issues discussed at the Board’s first meeting of the New Year, held in Toronto in January, were tobacco issues and making sure there are fair rules for stores, she adds. Turning to the 2018 Convention, which introduced a new format, how satisfied was she? “On a scale of one to 10, it was a 10, with the caveat that there is always room for improvement. We’re thrilled because our members, suppliers and everyone involved seemed to be very happy with it and felt that they got value out of it. Value for our members is of utmost importance and we really felt that was accomplished this year with the Convention. I don’t take any credit, as I joined the FDFA towards the end [of the

organizing process], but I know that our convention committee and Board listened to our members and made the changes they called for to make it a success for our members.” Goals for the upcoming Convention, which will be held from November 11-14, are now being set. “We want to build on that success of 2018 and continue that momentum making sure that our members and suppliers are getting the meetings that are most valuable to them so that their time is well used, and also making sure that our suppliers have the right space to hold these meetings. It’s important that the space is conducive to their product line,” she observes. As part of the revamped 2018 event, the conference was divided on a category basis, a move the FDFA said would allow for more efficient time planning for suppliers and operators. Monday and Tuesday were devoted to liquor and cosmetics, Tuesday saw the first tobacco and ancillary appointments, with these meetings continuing into the Wednesday. These dedicated days per category

A highlight all delegates look forward to during the annual FDFA convention is the association’s Gold Standard Awards

40 THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2019

went “quite well” for the most part, says Barrett, noting that it will work better going forward because people will be familiar with it and will be able to plan around it. “This year people weren’t used to it, so they weren’t as useful as they could have been,” she admits. The contract with the King Edward Hotel in Toronto will run for another two years, confirms Barrett. Later this year, the Board will examine the possibility of moving the venue to another city. “Obviously, Toronto works very well, but we have to make sure we’re being fair to all our members,” she says.

Upcoming Parliament Hill event

Turning to Impact Public Affairs, Barrett explains that the advocacy organization provides “a whole suite of support”, providing FDFA with innovative and wide-ranging services that will help our association deliver long-term results. Impact has a depth of experience to bring to FDFA in effective communications to government officials, the public, and key stakeholders. Impact also supports the FDFA with some internal processes such as, its newsletter, which is published every other month, as well as developing other member engagement programs. 2019 promises to be an exciting one for Barrett, with a Parliament Hill Day government relations event slated for May during the Board’s semi-annual meeting in Ottawa, which operators will attend. “We will coordinate member meetings on the Hill with their Members of Parliament while they’re here for the semi-annual meeting. We’ll be splitting it up – the operators meeting will be in the morning on Wednesday and then we will head to the Hill for the afternoon and the next day. It will also include an evening reception with MPs.” The semi-annual meeting with operators will review the association’s activities, its goals and discuss any major topics. Continuing the association’s close relationship with the Canada Border Services Agency, it is expected a representative will attend to keep members apprised on any issues and regulations. Meanwhile, Barrett will be attending this year’s Summit of the Americas in Orlando with FDFA President Abe Taqtaq for best practice learnings and relationship building.


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Every day, our employees, partners, and operators are innovating to create a better travel experience. Count on Pearson to put passengers first and make the airport more than just a place where planes land and take off. Thank you for being a part of our journey. We’re proud to be a part of yours.

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LATAM Airports

Growth and expansion Airports in Latin America are in flux: Colombia is keen on establishing more routes and improved facilities; Panama is soon to fully open its second terminal; and Chile reconstruction is nearing completion by RONNIE LOVLER

A

irport facilities, passenger services and the number of flights being offered are up, up and away in Latin America and the Caribbean as passenger traffic including tourism, business flying and other travel are taking off in the region. Colombia, Panama and Chile are leading the way in terms of new construction and increased passenger capacity at their airports. In Brazil, further airport privatization is on the agenda, and passenger numbers are up again in the Caribbean following the 2017 devastation wrought by Hurricanes Irma and Maria.

Greater access

Airports Council International (ACI) ranks Colombia fourth worldwide out of countries with the highest growth projection over the next two decades, according to a news release issued by Colombia’s Civil Aviation Authority. Only Vietnam, India and Iran are ahead. Colombia hopes to double its annual passenger capacity to 100 million by 2030. “The dynamism of the air sector and the growth of international passengers, which has already reached 11.9% (in 2018), leads us to think about the commercial airline industry we will need in the coming years

to guarantee air transport services and be more competitive in the airport and aeronautical infrastructure,” said Civil Aeronautics General Director Juan Carlos Salazar Gómez. Colombia is also working to establish more routes and facilities in order to offer greater access to remote and previously inaccessible parts of the country. “Air connectivity strengthens the country's competitiveness and economy, and with the opening of new air routes, Colombia becomes a benchmark for tourism and commerce and, in turn, more and Colombians have better access to their destinations in the region,” said Minister of Transportation, Ángela María Orozco. “This translates into greater equity, so that we can build a better country,” she added.

Coming soon

Panama is generating a lot of excitement with the limited opening in January of the second terminal at Tocumen International Airport. The new terminal partially opened when five gates were made available to receive visitors who flooded Panama for the visit of Pope Francis in late January. Work on T2 has been ongoing for years. Panamanian President Juan Carlos

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Varela has stated that the new terminal would be officially inaugurated in April, though this opening will still be limited. Travel retailers are eager to see the work completed. “Terminal 2 is not ready yet,” said Julio de Leon,Vice President of Sales and Marketing for Motta International, in an interview with Americas Duty Free. “The government says there will be partial operations from now until July 2019 but we actually don’t know when we will receive spaces to begin remodeling our stores,” de Leon said. When the new terminal is fully operational, Tocumen, which calls itself “the hub of the Americas” because of its large number of connecting flights, will have the ability to handle 25 million passengers a year, up from the 15 million passengers that now pass through the airport. Tocumen and Copa, the country’s national carrier, also are winning praise for punctuality and on-time performance. The British Official Airline Guide recognized Tocumen as the most punctual medium-sized airport in the world in 2018. The same organization also lauded Copa as the most punctual airline in Latin America for the fifth consecutive year. Tocumen, one of the busiest airports in the region, currently sees an average of


Crowds make their way through Concourse D of Miami International Airport, where most flights to and from Latin America operate from

43,000 passengers pass through the facility each day, with 400 daily flights making connections to 87 destinations in 36 countries in the Americas, Europe and Asia. During 2018, some 15.6 million passengers passed through Tocumen, with about 70% of them connecting to other destinations.

Nearing completion

lines, one of the biggest carriers in Africa. In a briefing with Chilean media, David Dueñas, General Secretary of the Chilean Civil Aeronautics Board, said the interest is due to “specific initiatives taken by the airport concessionaire Nuevo Pudahuel. We have worked together with them in the Public-Private Alliance of the Air Industry (APPIA). Our policy of open skies also helps make the country attractive.”

#buckleylondon

Santiago’s Comodoro Arturo Merino Benitéz Airport is expected to be the big-

gest in Latin America when its construction and expansion project is completed next year. It will have 175,000 square meters of operating space to accommodate the 35 million passengers who now pass through the airport annually. Expectations are that by 2045, the airport will be handling 55 million passengers each year. While work continues, eight new airlines are seeking to enter the Chilean aviation market, including Ethiopian Air-

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LATAM Airports

In December, the Colombian coffee company Juan Valdez opened a store in Espigón 3, the first stage of the new terminal, already in operation. The event was considered so high in profile that Chilean President Sebastiân Piñero was in attendance.

Accolades and changes

But Chile, Colombia and Panama are not alone in accomplishments. Three of what are considered to be the world’s best airports are in Latin America: two in Brazil and one in Ecuador. Air Help Score compared 141 airports worldwide. Coming in seventh is the International Airport in Viracopas, 14 kilometers from Campinas and 99 kilometers from São Paulo. Gilberto Freyre International Airport in Recife came in ninth and Quito’s Mariscal Sucre International Airport ranked tenth. These kudos for Brazil come at a time when changes are in the offing. President Jair Bolsonaro, who took office in January, has already announced his plans to privatize 12 of Brazil’s airports, including those in Rio de Janeiro and São Paulo, and four seaports. The Brazilian Center for Aviation reports that Bolsonaro eventually plans to privatize 44 Brazilian airports. This comes after partial privatization already took place during airport renovations leading up to 2014’s FIFA World Cup and 2016’s Olympic Games in Rio.

Expanded service

Miami International Airport, considered the US gateway to Latin America, surpassed 45 million passengers in 2018, up by nearly one million passengers from the previous year, setting a new record. Miami hub carrier American Airlines launched new flights to Caribbean destinations and Colombia, while Brazilian low-cost carrier GOL began offering daily flights to Fortaleza and Brasilia and Colombia’s Viva Air expanded service to other Caribbean destinations. And in a sign of recovery in the Caribbean, Mexico’s Grupo Aeroportuario del Sur, which has operations at Luis Munoz Marin International Airport in San Juan, shows a sharp increase in San Juan air traffic year-on-year from December 2017 to the same month in 2018. ASUR reported a 41.3% increase in international traffic and an 18.9% increase in domestic traffic for the same period in San Juan. The Puerto Rico numbers are an indication of the recovery and resumption of normal passenger traffic after

Mexico’s Grupo Aeroportuario del Sur, which has operations at Luis Munoz Marin International Airport in San Juan, shows a sharp increase in San Juan air traffic year on year from December 2017 to the same month in 2018

Hurricane Maria, which hit the island in September 2017 with a devastating blow.

Mexico’s reevaluation

While the region’s airport infrastructure offers lots of good news, Mexico City is one spot of blight, with a government decision to halt construction on the new international airport. The airport, which was a third of the way complete, was set to cost over US$13 billion. The project was halted in late 2018 when the party of nowPresident Andres Manuel Lopez Obrador held a poll on the project and participants voted against it. The current plan is to convert a military air base into a commercial airport and overhaul the existing airport and another in the nearby city of Toluca. But despite this setback, overall prospects for regional air travel are looking good.

Vital industry

Airports Council International (ACI) and ACI Latin America-Caribbean noted an economic recovery in 2017, with year-onyear passenger growth of more than 4% in 2017.

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“Aviation is a vital industry in the Latin America-Caribbean region, supporting 7.2 million jobs and providing US$156 billion in economic value,” said ACI World Director General Angela Gittens at the organization’s 2018 Miami conference. “Global demand for air services is growing, and the aviation industry must come together to respond to these challenges and help to ensure communities continue to reap the social and economic benefits of air service growth.” At the same meeting, Martin Eurnekian, CEO of Corporación América Airports, President of Aeropuertos Argentina 2000 and ACI Latin AmericaCaribbean President, said airports must prepare to meet the challenges of passenger traffic growth. “It is heartening to see that passenger traffic growth in our region is showing strong signs of revival, but with this comes challenges that we must all work together to overcome,” he said. “With the expected growth of demand in our region, airports are experiencing capacity challenges similar to those faced in Europe and North America.”


Dufry Americas

Opportunity

knocks by HIBAH NOOR

Cancun was Dufry’s first location in the Americas for its cutting-edge New Generation store, but the second will be opening soon in Argentina

Dufry is always on the lookout for new growth opportunities, and nowhere is that more the case than throughout the Americas, where the travel retail giant is expanding into new cities and new channels, and exploring new concepts

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Julian Diaz, CEO of Dufry Group

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wiss travel retailer Dufry was in an exceptionally strong position in the Americas even before its major acquisitions over the past few years rocketed the company securely to the top rung of the industry ladder. Dufry already had firm control over the airport shops throughout Brazil, and since 2008 it has also owned Hudson Group. The Hudson Group operates nearly 1000 convenience stores, bookstores, cafés and other retail operations throughout North America, and the company has now brought this concept into Latin America. Dufry’s acquisition of Nuance in 2014 and World Duty Free in 2015 significantly increased its dominance both globally and within the Americas. The Americas are of great importance to the company. While Dufry had already revised its divisions after the acquisition of World Duty Free, it is currently beginning a new redistribution, created in order to keep balance relatively equal throughout the company. The new setup sees four divisions globally, down from five: Europe & Africa; Eastern Europe, Middle East, Asia & Australia; North America and Latin America, including Central & South America and the Caribbean. “The Americas already represent a relevant share of our business and we will continue working to consolidate and expand our presence in this part of the world, focusing on driving further growth from the existing business and potential new opportunities,” says Julian Diaz, the company’s CEO.


Dufry Americas

Over the course of the Olympic games throughout Brazil in 2014 and the World Cup in Rio de Janeiro in 2016, for example, the company both renovated and opened stores, including the two important new domestic concepts Dufry Shopping and Hudson convenience, which had not existed in Latin America until that point. “Dufry is currently assessing a pipeline of potential opportunities of 8,295 square meters in Latin America and 6,320 square meters in North America,” says Diaz. “Currently, one of the main opportunities in the region is the border duty free business in Brazil, where the first shops should be opened during the first half of the year.”

Brazil and its borders

In December 2018 Dufry inaugurated the Dior Beauty Boutique at Guarulhos International Airport T3, the first of its kind in the America’s travel retail

In order to consolidate and develop even further its already strong position, Dufry is expanding beyond airports – particularly into cruise lines and border shops. As the company is already firmly rooted in Brazilian soil, it is in a strong position with regards to the new land border shops now in the offing, with new regulations finally opening up this possibility in Brazil. “With respect to the border shops, the final frame conditions – based on the regulations and requirements already defined by the government – have been passed by the states and the opening of the first shops are now being prepared,” says Diaz. “The border shops are also part of our strategy going forward. Specifically in Brazil, this new channel will help us not only consolidate our presence, but also help to drive sales in the whole region.” Last but not least, given that domestic travelers represent the vast majority of airport travel in Brazil, Dufry is constantly working to develop its duty paid channel. The Dufry Shopping and Hudson concepts help to offer domestic passengers the same world-class shopping experience and convenience that is provided to international travelers.

While the Americas are important for Dufry, the company is also important to the Americas. “Dufry plays a key role in this context, being the biggest travel retail operator in the region, present in more The Dior Beauty Boutique introduced the Maison Christian than 20 countries,” says Diaz. Dior concept for the first time in As of September 2018, the Latin Brazil, offering exclusive products America region represented 19% of Dufry’s global business, while North America accounted for 22%. “This is a key region not only for Dufry, but also for the travel retail industry in general. It has great potential, especially regarding its tourism sector, due to its beautiful and diverse landscapes and cultural heritage,” says Diaz.

Constant assessment

Quite aside from its major acquisitions, which always make big news, Dufry is constantly assessing and evaluating its market opportunities, and making moves both big and small to improve its market share and profitability. This includes anything from acquiring smaller shops to opening brand new stores and exploring other channels altogether.

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Dufry Americas

The cruise channel

Dufry has made no secret about its decision to move strongly into the global cruise sector. “As the cruise channel is a strategic growth area, we have a dedicated Cruise Services center, which gathers the market knowhow and the necessary structures and resources and centrally coordinates all our cruise activities around the world,” says Diaz. “This allows our divisions to provide, at a local level, the services needed by our cruise line partners.

New Generation

Dufry’s innovative New Generation stores make extensive use of cutting-edge digital technology to boost customer engagement by “talking” to the most represented nationalities in their own language and addressing the individual preferences of the different passenger profiles. As well as generating a unique shopping experience, digitalization within the store also helps support sales staff when they are advising customers on brands and product ranges, with the assistance of new tablets that provide information on product characteristics, customs allowances and many other points of interest in several languages. In 2017 Dufry opened its first New Generation stores, including one in the Americas, in Cancun, Mexico. “Our operations at Cancun have been performing very well, especially with the New Generation stores,” says Diaz. “Cancun was the first location in the Americas to welcome this concept, which has proved to be very successful in terms of attracting passengers to our stores and driving the spend per passenger. Our top-selling product category in this airport is wine and spirits, with Hennessey, Tequila 1921 and Don Julio among the most preferred brands. As for customer nationalities, Americans, Canadians and British account for the majority in our Cancun shops.” The company is expanding this concept to Argentina, where a New Generation store will soon be opened in Ezeiza Airport in Buenos Aires.

Brands and boutiques

Dufry has seen great success with its brand partnerships, some of which are completely new to the region. “Following the success of the Dior pop-up shop opened in 2017, in December 2018 Dufry inaugurated the Dior Beauty Boutique at Guarulhos International Airport T3, the first of its kind in the America’s travel retail,” says Diaz. “This shop also introduced the Maison Christian Dior concept for the first time in Brazil, offering exclusive products.” To further extend the product assortment for the domestic travelers in Brazil, Dufry introduced two new brands to its duty paid stores: Kerastase and Guerlain, says Diaz: “Kerastase is present in the mega Dufry Shopping at Guarulhos Airport T2, while Guerlain is available across the main airports in Brazil.”

Other markets

Dufry entered the Colombian market in 2017, presenting different retail concepts including a general duty-free store, specialized shops and an extensive duty paid and convenience offer with the Hudson concept. “The shops have been showing a good performance during this first year of operations,” says Diaz. “Domestic passengers from Colombia account for a relevant part of our customer base, alongside travelers from other South American locations such as Ecuador and Brazil. The main product categories in Bogota largely follow the same trend seen for the whole group, with perfumes & cosmetics, luxury goods, wine & spirits, as well as food & confectionery and catering.” As Dufry is constantly updating its stores. Recently the company refurbished its shop space at Commodore Arturo Merino Benítez Airport in Santiago, Chile. The store now features a walkthrough concept and covers a total retail space of 1,360 square meters. Additionally, the shop at Brasilia International Airport was also refurbished, and now covers a retail space of 1,209 square meters.

Dufry always works to provide a sense of place in its stores, and to offer local items popular both as souvenirs and gifts

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 Carnival Cruise Line

New spaces

Heinemann uses customer insight to offer brands never offered before, such as Shinola watches along with other favorites

After winning the contract for four Carnival ships in the Caribbean and AsiaPacific, Heinemann went straight to work renovating its shopping space aboard Carnival Liberty, which operates between Florida and the Bahamas

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by HIBAH NOOR

ne of the largest cruise operators in the world, Carnival Cruise Line has a fleet of 26 ships that sail to the Caribbean, Mexico, Alaska, Hawaii and now in Asia-Pacific, carrying 5.2 million passengers annually. While the Caribbean remains the largest region for the cruise industry, the Asia-Pacific region is becoming increasingly important, with the highest growth rate. Early in 2018, Gebr. Heinemann announced that it was set to enter both the largest and the fastest-growing markets by partnering with Carnival Cruise line as the retailer on four Carnival cruise ships, represented by its subsidiaries Heinemann Americas and Heinemann Asia Pacific.

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The first retail space Heinemann took control of was on Carnival Liberty, which sails between its homeport of Port Canaveral in Florida and The Bahamas. The two stores on the ship total 299 square meters. Heinemann Asia Pacific will operate the largest of the new cruise shops, spanning 424 square metres, on the Carnival Spirit. The Carnival Spirit sails the Pacific Islands and New Zealand for cruises of up to 10 days. Then the travel retailer will operate three shops, with a total of 249 square metres, on both the Carnival Fantasy and Carnival Ecstasy respectively.


Renovation complete

While the retail spaces will all be redesigned in time, the shopping area on Carnival Liberty has already had its renovation completed – one of the most significant and ambitious duty free remodels on any Carnival ship to date – with the announcement of the new shopping experience made in November of 2018. “This is one of the most extensive store renovations that has been executed across any of the ships in our fleet,” said William Butler, Carnival’s Vice President of Retail Services, at the announcement. “Our most recent re-imagined shopping experience is another key milestone in our relationship with Heinemann Americas, and further reinforces our collective commitment to Carnival Cruise Line retail and guest satisfaction.” For this and upcoming redesign of the retail spaces, the focus is on the concept of a “local sense of place,” which has already been implemented at the Heinemann airport shops around the world.

Program development

“Heading into 2019 we are focused on developing and expanding our kids’ category with brands such as Lego, Mattel, Ty and other licensed products,” says Nadine Heubel, CEO of Heinemann Americas. “In partnership with Carnival Cruise Line, we will also further refine our apparel collection, which will bring Carnival’s ‘Choose Fun’ campaign to life.” Meanwhile, Heinemann’s watch program remains one of the strongest at sea, and Heubel says the company is now carrying new brands such as Seksy by Sekonda, Deep Blue, and Kyboe!, complemented with a collection of smart watches from multiple brands. “We look forward to further developing the category and continue to bring the unexpected to cruise guests.” The company’s strategies appear to be working well. “We have continued to meet – and exceed – our sales expectations in the region,” says Heubel. In addition, she says the company has “some exciting new partnerships in the works that we will be announcing later this quarter.”

New opportunities

A store on a cruise ship offers opportunities to reach customers that are simply unavailable in an airport location. “Because customers are aboard a cruise ship for so much longer when compared to the airport model, and Carnival Cruise Line offers many popular vessels with repeat travelers, we can create new and exciting experiences every day to keep travelers engaged,” says Heubel. “This includes activities such as tasting events, creating custom jewelry, and social media contests.”

Unique mixes

Heubel says there is no specific secret to category success across all ships. “Each cruise market and cruise ship is unique. Based on customer insights and requests from travelers, we develop a unique mix of goods aboard each ship across categories such as Liquor and Fashion Jewelry + Watches.” Heinemann carefully crafts duty free offerings for the US cruise market that includes both discovery brands and brand favorites, using consumer insight and feedback. “The cruise environment allows us to develop and execute innovative shopping experiences and promotions to keep our passengers entertained,” says Heubel. “For example, our liquor activations aboard Carnival Liberty are simple yet engaging, providing photo opportunities for passengers to come in and discover our shops as well as our liquor events via our life-size bottles and in-store tasting bar.” Heading into 2019, the company will further develop seasonal events, so guests can take advantage of additional savings during popular holidays such as Valentine’s Day and Mother's Day. Heinemann will also offer exclusive events that bring together cross-category promotions.

Different needs

As the environment is so different for cruise ships and airports, visitors to the onboard stores also have different requirements than those of airport travelers. “Based on the needs and requests of on-board guests, Heinemann Americas and Carnival have made several exciting additions to the overall retail offerings,” says Heubel. “For the first time in its history, Carnival Cruise Line now offers products such as Shinola watches, Tiffany & Co fragrances, Dr. Jart Beauty and Coeur de Leon jewelry, as well as liquor brands such as Bruno Mars’ Selva Rey Rum, Florida Craft Spirit Timber Creek Whiskey, Malfy Gin and Jack Daniels Single Barrel Program – all of which are Heinemann exclusive liquor programs.” The companies also carefully curated an expansion of key Carnival Cruise Line favorites such as watches from Tag Heuer, Tissot, Movado and Invicta, plus Swarovski jewelry and Victoria’s Secret fragrances. The ability to offer more discovery brands and other unique offerings is an exciting part of the onboard mix. Heinemann has offered a number of discovery brands such as the rum, whiskey and gin mentioned above, all a first to the cruise channel. Heubel adds: “Our partnership with Jack Daniels has led to successful results from our Single Barrel Program, another first in the cruise channel by Heinemann, Fragrances are always a popular category, and the Carnival and one that will soon be the basis of a new customer Liberty’s newly renovated shopping area offers a beautiful place to showcase new brands and perennial favorites activation program.”

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GTAA

Toronto Pearson

makes good on its promise to passengers

Canada’s largest airport backs up a recent customer service award from Airports Council International with retail, F&B and service enhancements across both terminals by JAS RYAT

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oronto Pearson International Airport begins 2019 with reason to celebrate as it has been voted by passengers for the second year in a row as the Best Large Airport in North America serving more than 40 million annual passengers. This recognition is from Airports Council International’s (ACI) Airport Service Quality (ASQ) program, the only global benchmarking survey that assesses passenger satisfaction at the airport on the day of travel. To anyone who has passed through Toronto Pearson, it is difficult not to notice the evolution in the retail and dining facilities. Duty free is a critical part of the airport’s business and has become an expected part the passenger experience at Canada’s largest airport. Americas Duty Free spoke to Giovanna Verrilli, Associate Director, Commercial Development, Greater Toronto Airports Authority (GTAA), to walk us through this everprogressing environment. “We continue to evolve our duty free program by introducing new brands and experiences. There are new and exciting offers, developed in cooperation with Dufry, our duty free partner, coming in 2019,” enthuses Verrilli. Last year witnessed the opening of several new offers for Toronto Pearson’s traveling public, including the launch of a new duty free walk-through store in the Terminal 3 US sector. The enhanced space offers US-destined passengers new liquor,

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cosmetics, perfumes and accessories brands that were not available previously. Duty free is one of the largest retail components of the airport’s commercial platform. With a mix of dynamic brands including Burberry, Bulgari, Chanel, Estee Lauder, Gucci, Longchamp, MAC Cosmetics, and Michael Kors, the airport aims to provide a wide selection. “Our duty free program continues to grow financially and evolve in brand presence. It is our expectation that our commercial platform never stands still – and that includes our duty free offer. We continually work with our partners on new designs, concepts, experiences and offers to ensure we remain relevant and appealing to our consumers,” says Verrilli. A number of bespoke duty paid stores have also been opened. For example, passengers traveling through Terminal 1’s newly redeveloped domestic node will find Dylan’s Candy, offering experiential candy and gifting to passengers with a sweet tooth. This store represents Dylan’s Candy’s first entry into Canada and enhances the airport’s offer to domestic passengers. Apparel store Johnston and Murphy offers passengers a choice of apparel and accessories, while Genesis, in partnership with Toronto Pearson, has introduced the first-ever car showroom that allows passengers to experience the Genesis brand and touch and feel one of its automobiles.


FRAME / Retro R3307 D

Toronto Pearson’s ongoing commitment to enhancing customer experience has doubled down on its title of Best Large Airport in North America for second straight year

The new duty free walk through for Terminal 3 US sector is designed to capture US-destined passengers with shopping enhancements that were unavailable before

A taste of Toronto

Travelers can now experience Toronto, known for its culinary expertise, without stepping outside the airport. “Our F&B platform is always evolving. When we originally redeveloped the program we wanted to focus on local culinary experiences and creating a sense of place. Our ultimate goal has always been to provide quality offers, variety and choice,” explains Verrilli. Toronto Pearson continues to introduce high quality, quick-service options as time is valuable to its passengers. It is also important to maximize space and therefore integrate dining, shopping and overall experiential space to provide the best options. And the airport understands that the dining experiences should fit with the flow of the passenger journey. Says Verrilli: “We will be introducing new food halls that allow us to maximize the variety of options to passengers while continuing to focus on great local culinary offerings and what Toronto means from a food standpoint. Working with international brands that speak to the diversity of passengers that utilize us as their international connections airport continues to be a priority.”

RODENSTOCK HQ MUNICH | GLOBAL TRAVEL RETAIL. Visit us at booth # 719. 2019 Summit of the Americas in Orlando.

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GTAA

[Our ASQ recognition] demonstrates how our passengers can count on Pearson to deliver a great travel experience and get them to their destinations smoothly, reliably and comfortably.” HOWARD ENG, PRESIDENT AND CEO, GREATER TORONTO AIRPORTS AUTHORITY

The Distillery food hall is located in the new Terminal 3 US sector and fosters the downtown Toronto Distillery District ambiance at the airport. The food hall offers choice and a comfortable environment for passengers traveling to the US. This opportunity allowed Toronto Pearson to work in unison with partners on bringing eclectic sit-down dining experiences from the urban center and creating the same culinary choices in a quick-service environment. “This is the best kind of example of how street-based concepts and an airport can bring the best of their experience together to develop innovative hybrid models,” explains Verrilli.

Toronto Pearson’s winning streak

And the above work is making a positive difference to the passenger experience at the airport. In fact, Toronto Pearson was earlier this month voted by travelers as the Best Large Airport in North America serving over 40 million passengers as part of ACI’s ASQ survey program. This is the second straight year that Toronto Pearson has received this recognition. “We’re extremely grateful to our passengers, who took time out from their travels to give their feedback and for choosing

Toronto Pearson as the best large airport in North America again this year,” said Howard Eng, President and CEO, Greater Toronto Airports Authority, “This achievement is possible thanks to the collaboration and innovation of the 50,000 airport colleagues and partners who made a commitment to creating a better airport experience for our passengers and who continue to work every day to bring that vision to life.” While Toronto Pearson’s retail and F&B offering has certainly played a significant role in its ASQ recognition, passengers voted based on 34 key performance indicators across the entire airport journey. Toronto Pearson’s ongoing commitment to enhancing the passenger experience spans a wide variety of initiatives, such as continued collaboration with the Canadian Air Transport Security Agency (CATSA) to introduce new, faster CATSA Plus security screening lanes; the opening of 27 new retail and food and beverage locations across both terminals; the recent revitalization of all 80 washrooms in Terminal 3; continued work toward improving the cleanliness of terminals; the introduction of more than 400 new digital screens across both terminals; enhanced ground transportation options to and from the airport; a 10x speed and capacity upgrade to Toronto Pearson’s free WiFi; the installation of state-of-the-art Mamava nursing pods; the introduction of world-class Changing Places Assisted Changerooms; the continuation of the YYZ Live series of in-terminal musical performances; and the introduction of St. John Ambulance Therapy Dogs to the Toronto Pearson Welcome Team Volunteer Program. Toronto Pearson was also recognized with another 2018 ASQ Award – the Most Improved Airport in North America – for demonstrating the greatest year-over-year improvements of any North American airport participating in the program. This second recognition is testament to Toronto Pearson’s commitment to continued improvement toward achieving its vision of becoming the best airport in the world. While Toronto Pearson is honored to receive the awards, these recognitions are not a destination in and of themselves, but rather a signpost along the way indicating that the airport is on the right track toward achieving its objectives. For Toronto Pearson, enhancing the airport’s services and offerings is an ongoing effort that is sure to result in new experiences for passengers whenever they pass through Canada’s gateway to the world.

The Genesis automobile showroom is an example of how Toronto Pearson is staying ahead of the curve with experimental concepts for today’s traveler

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Baja Duty Free

Baja Duty Free

redefines success Two top executives at Fairn & Swanson Inc highlight a different take on what success means to their business by JAS RYAT

B

aja Duty Free will soon celebrate its 30th anniversary. With nine locations on the US/Mexican border, the subsidiary of Fairn & Swanson Inc (F&S) has proven its strength and success by navigating through the constant economic and political changes that occur. Americas Duty Free spoke with Fairn & Swanson executives Nicole Uhlig, President, Elisa Castro, VP of Retail and Irene Rojas, Marketing Manager, to highlight an important aspect of how their business model defines success. F&S is involved in charitable activities throughout the year. Castro notes that although not always the front-runner in industry news, the charities that they are involved in are an integral part of the company’s DNA. “We are proud of the caring culture our F&S and Baja teams have in helping others in need and in sharing the news. Continuing with our tradition, last year our teams were able to help many organizations in the different markets were we operate,” she says. During the last 16 years, the Baja Duty Free stores have encouraged customers to be generous by accepting the challenge of granting wishes, improving children’s futures and even saving lives. All organizations are non-profit and are located in Mexico. The firm partners with a children’s hospital, orphanages, rehab centers, and a home for boys living on the streets. Toys for Tots is another charity supported for the last 10 years through the American Legion #82 in San Mateo, California. “We set up a station in our headquarters office where people drop off unwrapped gifts. We also have participation in charitable auction donations for local food banks, including GRIP (Greater Richmond Interfaith Program),” says Uhlig.

Baja Duty Free launched Buchanan’s Malts Edition, the newest addition to the Buchanan’s portfolio in partnership with Diageo

In addition to the annual charitable contributions made by Baja Duty Free, GRIP and Toys for Tots, F&S has expanded its giving to include the children of Haiti. During the last three years, clothing and school items have been sent to Haiti through the charity Futures4Haiti. Futures4Haiti is a nonprofit organization created by American Airlines flight attendants in response to the 7.0 earthquake in 2010. The charity organization sponsors over 25 homeless children and families with food, medicine, clothing, and education. Each quarter, a group of flight attendants fly to Haiti to distribute the donated items to children and families.

Business as usual

Continuing last year’s successful collaboration with global spirits leader Diageo, Baja Duty Free launched Buchanan’s Malts Edition, the newest addition to the Buchanan’s portfolio. Buchanan’s Malts Edition is exclusive to southern

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border stores. A first of its kind in the Buchanan’s collection, this blend of single malt Scotch whiskies from Scotland offers a rich and complex flavor profile featuring oak notes combined with the lightness of fresh malts. The launch event took place at two California locations: the Gateway store located in San Ysidro and the Calexico store. Guests included customers, local associations, media influencers and Diageo representatives. Says Rojas about the in-store activations: “It makes such a big impact. We have experienced an increase in sales. There is a permanent hostess always in the area promoting the brands. The customers enjoy having more of a collaborative experience as the promotions are presented via a tasting bar and iPads, all allowing for better interactions with the brands.” She concludes: “We will continue promoting the new Buchanan’s Malts Edition in all stores through floor displays, staff trainings and in-store tastings.”


Summit of the Americas

Snapshots from Summit of the Americas in 2018

New horizons Michael Payne speaks out on details for Summit of the Americas show by HIBAH NOOR

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ichael Payne, President & CEO of the International Association of Airport Duty Free Stores (IAADFS), has shared details of the 2019 Duty Free & Travel Retail Summit of the Americas, which will be held March 24-27 at a new venue, the Hyatt Regency Orlando, in collaboration with South American duty free association ASUTIL. Speaking with Americas Duty Free, Payne promised a series of “fascinating” executive conference sessions during the event with a top speaker line-up. And, during the wide-ranging interview, he shared an important message for the industry. 62 THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2019

On Monday, March 25, the executive conference sessions will open with comments from ASUTIL President Gustavo Fagundes and IAADFS Chairman Erasmo Orillac. Monday’s panel session will be called “Plotting a Positive Travel Retail Future in An Uncertain World” with Yannick Raynaud, L’Oreal, Mariana Stangl, JT International SA, Marshall Farrer, Brown-Forman Beverages Worldwide and Rene Riedi, Dufry Americas, moderated by Martin Moodie of The Moodie Davitt Report. “The panel sessions should be really fascinating,” said Payne. “People from each product category will talk about the industry, the opportunities, the challenges, how they are looking at the Americas, in a really in-depth exchange. And we’ll have also have an airport operator, Rene Riedi from Dufry. We’ll put this panel on for a solid hour, and let them air their views and answer questions.” On Tuesday, March 26, Barbara Wold of Barbara Wold International will talk about some of her demographic research in a session called “Meet the Millennials: The Tourists to Change It All.” This session will be followed by a session featuring Peter Mohn and Anna Marchesini of m1nd-set, who will speak on “Duty Free and Travel Retail Shopper Behavior and Expectations of the Different Generations”. They will reveal their research


Summit of the Americas

on the shopping behavior of Chinese customers and will include discussions about spending habits in the Americas. On Wednesday, March 27, Pedro Helibron, CEO of Copa Holdings and Copa Airlines, will present “Copa Airlines Overview and Latin America Aviation Outlook.” Helibron will be followed by Carlos Melconian, Director of M&S Consultores, who will provide key market intelligence in his presentation, “What Do We Expect from the United States, Brazil and Argentina in 2019? Good News or Bad News.”

More than 100 companies assigned

“I’m feeling very optimistic about the Summit,” enthused Payne. “We haven’t reached the deadline for registration yet. We’re still receiving applications for Dufry's CEO, Julian more exhibit space and meeting rooms. Diaz spoke at last year's executive We have well over 100 companies conference sessions assigned and we have others who are just waiting for assignment. “I think we’re making really good progress, and I’m interested to see how it all shapes up over the next several weeks or so as we get closer.” In a change to the event’s format, he said this year’s show would feature a combination of traditional exhibit areas and more private meeting room space. “We’ll have a lot of follow-up contacts. We have had some good help from some of the media in terms of making sure people are aware of the dates and new locations and the opportunities that the Summit offers.” In terms of exhibitors, he said the core companies from last year’s show would be attending again this year. Essence Corp. shows company spirit during the "fun walk/run" social event

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“We have some companies returning, and that’s encouraging, like Pernod Ricard, which is important for us, Monarq Group and Lindt. Pernod Ricard has not been for a couple of years so were delighted to welcome them back, and we are also excited to welcome some new exhibitors.” Perfumes and cosmetics and spirits will be the two biggest categories in terms of exhibition space. In the perfumes and cosmetics category, L’Oreal and Estee Lauder have confirmed space, alongside with Essence Corporation, EuroItalia and other important companies. “On the spirits contingent we have all the major brands represented,” Payne confirmed.


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Summit of the Americas

A lot of positive news

During the interview, Payne was honest about the opportunities and the challenges of organizing this year’s show. “I’m totally optimistic about the region in terms of duty free and travel retail – we’re approaching a US$14 billion piece of that pie. Every day you read a new story about infrastructure development in some new airport or expanded airport. The number of people traveling is up, so there’s a lot of really positive news going on. I think the economy in certain pockets will be challenging – whether that’s currency exchange rates, or other economic challenges.” Payne said the Summit organizers, ASUTIL and IAADFS had worked hard to respond to suggestions from attendees and the supplier community changing the venue from the Marriott hotel, providing more meeting rooms in addition to the exhibit floor, and providing executive learning sessions. On the challenges, he said: “We’re still pulling against an economic trend that’s not going to change – and that is the consolidation and merging of the industry on the buyer side and the supplier side, that’s the reality. “We’ve got to ensure we give people the opportunity to conduct the business connections they need. Some prefer to show those products in the exhibit areas, and some prefer more private meetings. We will be examining and analysing those trends after the Summit, and react accordingly.” He added: “We just have to make sure we get the right concentration of buyers that people want.”

An advocacy-oriented effort

He emphasized that all the changes the organizers had made this year had been driven by the feedback of both past show attendees and the supplier advisory board. On the possibility of moving the show to another country, he explained: “There’s nothing from a policy perspective or a geographic perspective that’s stopping us if we want to do that, but if the meeting stays the same size, it’s difficult to find the right spot. There are a number of places you can bring 5-600

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people, there are not many that can handle 2,000-plus, and also get the products in and out in an effective way. We analyzed that before we made this switch. Quite a number of suppliers have their exhibit materials and products stored in the Orlando area, or South Florida, so that’s a big consideration for us as well. You don’t want to add any excess costs. We haven’t raised the rates for a while - everybody has asked us not to. All these items are up for discussion, based on what people’s feedback is.” Finally, Payne sent out a message to the industry on why the show is important. “I want to make sure the message is getting out to people that the tradeshow is not just about the gathering of the industry. This is about the way to fund activities that enhance and support the growth of the industry. All the work we do, ranging from allowances to liquids and gels, tobacco challenges, trying to simplify Customs, regulatory requirements, working with airport counsels in both North and South America, and working with governments on issues that affect duty free, and potential government regulatory restrictions – all that is possible because of revenue we get from this Summit, and I think sometimes that gets lost on some people. I don’t think it gets lost on the big decision makers for a lot of these companies. I think they understand that this is what it’s all about – it’s an advocacyoriented effort.” “The tradeshow is just a vehicle, a mechanism to make sure we’re getting the funding to represent the industry, and I would just encourage people to continue to focus on that fact and think about ‘I should go, I need to be there.’ The advantages of being there are huge in terms of efficiencies and seeing lots of buyers and suppliers over a three-day period, and we think the executive learning sessions component is really huge, and that’s what they’ve asked us for. “It’s hard to quantify the value of the networking and the social activities, but the real reason is this is how we are able to represent the industry, which is going to be under continued threats, and these threats are not going to go away.”


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Puerto Rico

Island of enchantment The dry forest on Puerto Rico’s southeast coast gets only about 30 inches of rain per year. It is a safe home for many species and has been designated as United Nations International Biosphere Reserve

As Puerto Rico works hard to re-establish its economy after the devastation wrought by Hurricane Maria, tourism is out and the “visitor economy” is in by RONNIE LOVLER

T A swimmer leaps from a rock into a natural pool in one of Puerto Rico’s natural getaways

A view of Old San Juan from the centuries-old Spanish fort that guards the entrance to the city

he visitor economy is bringing new life to Puerto Rico – not just in places that traditionally draw visitors such as Old San Juan and the nearby beaches, but also far from the capital city in the mountains and on other coastal locations. It begins – but does not end – with “Discover Puerto Rico,” the island’s new nonprofit destination marketing organization (DMO) that officially kicked off operation in July 2018, just 10 months after Hurricane Maria devastated the island nation. “The visitor economy is poised to come back bigger and better than ever before,” said Brad Dean, Discover Puerto Rico’s CEO in an exclusive interview with Americas Duty Free. “Today tourism is more important to the island’s success than ever before. “I have observed that there is a common recognition that we can turn this crisis into an opportunity for Puerto Rico,” he continued. “It is more about what people are doing after Maria than about what Maria did to the island.”

Work cut out

Anyone who visits the island today will see that despite the difficulties, Puerto 68 THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2019


This mural of a bird and a Bienvenidos (welcome) sign is the new look at Punta Santiago on Puerto Rico’s eastern coast in Humacao, one of the communities devastated by Hurricane Maria

Rico is surviving and moving ahead. Rather than buckling under the impact of Maria, the strongest storm to hit the island in almost a century, Puerto Rico is rising up. “When you consider what Maria did to the island, when you look at the industries that carried Puerto Rico in the past (pharmaceuticals, manufacturing), you see the country will have a challenge to grow its economy in the future,” Dean said in an extensive conversation. “So now is the time for the tourism industry to step up and lead the recovery, taking tourism to new heights.”

Celebrities rally

Puerto Rico can count on a number of celebrities to support its post-Maria efforts. Favorite son Lin-Manuel Miranda, the creator of the Broadway musical Hamilton, reprised his role along with members of the original cast for three weeks of performances in January to raise funds for Puerto Rico’s postMaria recovery efforts. “People are going to come to Puerto Rico because of Hamilton, and hopefully spend a lot of money here in small businesses on the island,” Miranda said at a news conference after Hamilton’s opening night in Puerto Rico. “But they're also going to see how much work is left to be done.” Late night talk show host Jimmy Fallon was there for the Hamilton performance and stayed to do a special on Puerto Rico that garnered national attention. More than his celebrity interviews, Fallon and his crew showed so many delightful images of the island that anyone watching might have been tempted to go immediately out to the airport and board the next flight to San Juan. “Jimmy Fallon’s tribute to the island was a fun hour of music, dance, entertainment and food, delivered Puerto Rico style,” Dean said. “The national publicity is very helpful in demonstrating that we are eager and ready to welcome visitors to the Island. And it also reminded viewers of just how far Puerto Rico has come [since the hurricane], due in large part to the resiliency of the people.”

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REVISION

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Puerto Rico

A water skiier takes to the ocean for a day of sun and fun in Puerto Rico

Visitor vs tourism

Some visitors take a dip in one of the many refreshing waterfalls found in Puerto Rico

The whole island

The aim of Discover Puerto Rico is to allow people to do just what its name implies. “Perhaps the most interesting thing is that so many visitors step off a cruise ship, stroll through Old San Juan and think they have seen Puerto Rico. But there is so much more to the island than the metropolitan area” Dean said. Dean wants to pivot on the brand to promote the entire island, prompting a major change from the old way of doing things by simply promoting Old San Juan and beaches and sunshine. “The rich vibrant culture of Puerto Rico – its arts, history, architecture, dance, and music – will position the country to attract more visitors than ever before.”

The foundation

Discover Puerto Rico is working in tandem with the nonprofit Foundation for Puerto Rico, which sees its mission as “transforming Puerto Rico into a destination for the world.” The foundation was founded in 2011, years before Maria hit, with the goal of finding a way to spark a stagnant economy. “The low hanging fruit was the visitor economy,” said Arnaldo Cruz, the foundation’s director of research and analytics, who also gave an exclusive interview to Americas Duty Free. “Puerto Rico had a lot of tourism assets, and we thought, let’s convince everyone that the visitor economy was the most optimal strategy to help grow the economy in Puerto Rico in the short term.”

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While tourism refers to people traveling for pleasure, often to do things they cannot do at home, with economic impact measured only by direct engagement, the visitor economy, as defined by the World Travel and Tourism Council, is any direct, indirect, and induced economic activity resulting from visitors’ interactions with their destination. “At the host level, tourism looks at hotels and restaurants, for example, focusing on direct impact and is limited to the direct interaction tourism has with visitors,” Cruz said. “However, the visitor economy also measures all the linkages and supply chains for the direct provider. Therefore, it also takes into account all the indirect impacts the tourism economy has.”

Bottom Up

The foundation has spearheaded a community-based development program that it is calling Bottom Up Destination Recovery Initiative that helps communities become more resilient in order to sustain their own recovery, and also develop the infrastructure needed for growth. “Once the hurricane hit, we started to work to see how to test the policy at the ground level,” Cruz said. “We used some of our Hurricane Maria Recovery funds to create community development programs that focused on tourism. Be it rivers, lakes or culture, all these assets could be used to attract visitors and increase economic activity in these areas.”


Cruz said the foundation created a kind of pilot program to enhance recovery by using tourism activity in different communities in the mountain area of Orocovis and the coastal region of Humacao. They also requested funding from the U.S. Economic Development Administration (EDA) to help more municipalities around the island, winning a US$ 5.58 million grant, the first of its kind in Puerto Rico. “As we speak, teams on the ground in four municipalities are implementing this Bottom Up program. We are doing this in stages in four municipalities – more like a Peace Corp approach than a traditional destination planning strategy,” he said. The four towns are all on Puerto Rico’s west coast, which is often ignored by visitors: San German, Cabo Rojo, Aguadilla and Isabela. “This is groundbreaking work using the visitor economy as a way forward in these communities,” he said. Eight

other municipalities are also targeted for assistance, Camuy, Arecibo, Barceloneta and Manati on the central northern coast, Adjuntas and Utuado in the mountains, and Naguabo and Ceiba on the east coast. The initial recovery towns of Orocovis and Humacao remain in the mix.

The digital age

Both the Foundation for Puerto Rico and Discover Puerto Rico are relying on digital marketing, developing a dynamic presence on the web through PR and social media. Discover Puerto Rico’s Dean said the DMO is relying heavily on earned media and public relations. “We recognized that we didn’t have a lot of money for large, global marketing campaigns, and so have worked with local communities to tell their stores that haven’t always been told,” he said. In August 2018, Discover Puerto Rico’s #covertheprogress campaign went live to

Welcome to

attract national and international media to cover positive stories about Puerto Rico in part spurred by what people in the small community of Punta Santiago in Humacao did to get their message out after the hurricane. “They were essentially stranded in own community and painted a message on the street corner for the helicopters hovering above,” Dean said. “I can’t even imagine the desperation they felt to paint the message to attract attention.” Community members painted a big sign on the street that said, “SOS, We need food and water.” Five days later their plea went viral. Now one year later, they are inviting people back and on the same street a sign is painted that says, “Welcome. #covertheprogress.” For Dean and others that is the message: the people of Puerto Rico are making this work. “This was the community’s message. We just became the storyteller. And we want to help the people of Puerto Rico tell their story,” he said.

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 China Overview

Channeling

China 72 ASIA THE AMERICAS DUTY FREEDUTY & TRAVEL FREE &RETAILING TRAVEL RETAILING MARCH 2019 MARCH 2019


C

hina’s economy is on a go-slow, registering its lowest growth in three decades last year at 6.6% (with the World Bank forecasting a further dip to 6.2% in 2019) and softening consumer demand, yet travel is still very much on the agenda. During the 2018 Golden Week period, official government figures revealed that tourist numbers grew 8.2% to reach 6.94 million with a spending average of RMB7,300 (US$1,089), but Ctrip research revealed that just 12% of travelers had shopping on their to-do list “Despite this, we are continuing to see positive growth in the Chinese duty free and travel retail market,” notes TFWA President, Alain Maingreaud, with operations such as China Duty Free Group’s (CDFG) Sanya International Duty Free Shopping Complex at Haitang Bay registering 2017 sales of US$920.9 million - a 29% increase on the previous year. Ctrip lists Japan, Taiwan, South Korea and Thailand as top destinations in 2018 with CITS, China’s largest travel agency, reporting a surge of demand in European destinations as US travel numbers plummet.

World of WeChat

WeChat smart retail tie-ups, trade wars with Trump, economic wear and tear and a weakening in traveling consumer spend should be giving travel retail operators new impetus say industry experts by CLAIRE MALCOLM

The multipurpose app with over one billion active monthly users, travel retail tie-ups with WeChat are becoming a prerequisite to supporting Chinese traveler marketing strategy with the likes of DFS partnering up on destination focused mini programs. The cross-border WeChat shops give travel operators new ways to promote goods and engage with travelers. Ivy Shen, Managing Director of International Business for Shenzhen based e-retail consultancy Azoya Group, says: “The US consumer only needs to come across a brand four times before they make a purchase, but it’s more like eight times for Chinese consumers. “In traditional travel retail environments there is a very limited timeframe for consumers to get to know and trust a new brand. Stores are often crowded, and people don’t want to wait, so the cross-border WeChat store model effectively provides another purchase channel and is especially relevant for smaller emerging brands.” According to the group’s 2018 Customers Come First report for Japan, Chinese consumers tend to spend on personal care, P&C, health and nutrition, and additional data from 100ec.cn reports that import cross-border e-commerce sales have grown fourfold since 2013 to touch US$277 billion in 2017. A Bain & Co. study points out that by 2025, 100% of Chinese consumers will look for online inspiration before making an offline purchase, which makes a solid omnichannel strategy an industry imperative. Shen also puts a different spin on it. “From a customs clearance perspective, consumers can also end up paying up to 60% tax on something like a Chanel bag if they purchase the traditional way.” Switching sides, concerns that while this new channel increases post-travel sales opportunities bricks and mortar spend may not fare quite as well in the future, are addressed by Maingreaud, who says: “This is a challenge that is not unique to China, but something that the entire industry is confronting. Potential shoppers are increasingly aware of the many opportunities to purchase elsewhere, notably online.

www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

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China Overview

demands of the shopper rather than basing strategic decisions on previous consumption patterns,” remarks TFWA’s Maingreaud. China’s population demographic is ripe for innovation given the growing spending power and influence of 18 to 30-year old consumers and potential of the aspirational Tier 2 city traveler. “Tier 1 consumers are already used to the idea of buying luxury products, while in Tier 2 cities they aspire to owning certain brands,” says Shen, noting that Tier 2 city travelers from Fuzhou, Hangzhou, and Wuhan increased year-on-year spending by 70%, 50%, and 31%, respectively, against 2017 Golden Week sales. She suggests that travel retailers also look at diversifying their merchandising approach, offering SKUs that travelers can’t get at home or aren’t widely available. Ivy Shen, Managing Director of International Business for Shenzhen based e-retail consultancy Azoya Group

“Price transparency is an issue that our industry must address. We have to make airport shopping convenient and attractive in China, as elsewhere.”

Daigou in decline

China’s new e-commerce law, which came into force on January 1, is directly targeting the daigou grey market, but its long-term effect on travel retail sales is yet to be seen. The decline of the daigou is an area where Azoya Group sees a shifting dynamic. “The upside for the duty free industry is that travel retailers now have more direct access to genuine Chinese customers. Previously, with so many daigou coming through the stores, market trends were being manipulated. It’s also a golden opportunity for the industry to adapt local infrastructure with payment channel improvements or the establishment of other direct sales channels specifically for Chinese consumers,” notes Shen. She believes that some daigou may go the affiliate marketer route, selling through larger licensed organizations, but says that “with active WeChat groups and a strong trust factor, a lot of people regard daigou as having a personal [retail] assistant, so it’s hard for them to scale up but still retain a close consumer relationship.” But a drop in daigou business has mixed blessings, as Maingreaud explains: “We expect that further government restrictions on daigou traders will create further challenges for retailers. “It’s worth remembering that these purchasers often receive substantial discounts for buying in bulk, and therefore while daigou sales have helped notch up some impressive figures in terms of volume, profitability may not have been so healthy. And many brands that are conscious of their image may welcome the restrictions.”

Follow the (opinion) leader

For Shen, Chinese influencers hold more weight than in established western markets due to low brand loyalty and the fact that consumers are often overwhelmed by product choice, thus turning to key opinion leaders for advice. “In Japan we work with leading department store Matsuya. We’ve taken major Chinese influencers to their locations and live streamed their journeys on social media, twinned with promotions and discounts, which adds a unique personal touch that is especially important when providing a premium customer experience. The conversion rate is double the norm and this is something that could also work in some travel retail locations,” she says. Adds Maingreaud: “Chinese celebrity influencers or ‘Wang Hong’ as they are known, can bring considerable kudos to duty free and travel retail brands and open up new possibilities for brands to engage with younger, social media-savvy shoppers. We have seen Korean travel retailers, in particular, harness the power of celebrity endorsements.”

Domestic advantage

Growth in the Chinese domestic luxury market and the accompanying shrinking luxury goods price gap is a clear clarion call for a travel retail strategic rethink. “A fall in confidence among Chinese consumers has meant that luxury brands may well come under increasing pressure. It is therefore imperative to have real understanding of the shifting 74 THE AMERICAS DUTY FREE & TRAVEL RETAILING MARCH 2019

TFWA President, Alain Maingreaud


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Siñeriz Shopping

Positive equation by RONNIE LOVLER

Siñeriz Shopping, an enormous complex in Rivera, is on a constant journey of reinventing itself. This keeps the company ahead of the curve whether its challenge is a recession or the coming of new Brazilian border stores

A view of the Uruguayan style hamburger stand that now offers a casual, fast yet good-quality food option to customers

More potential customers

Numerous items with “kid appeal” are part of the mix available to customers looking to buy something for their children

T

here’s a lot happening on both sides of the border in Uruguay and Brazil in 2019. Siñeriz Shopping, in Uruguay’s border town of Rivera, is poised to confront the challenges and take advantage. Siñeriz operates what may well be the largest land duty free center in LATAM, laying claim to a

10,000-square-meter duty free sales area within a 22,000-square-meter complex. Services include not just shopping, but also gourmet and casual dining, a child’s playground, a movie theatre, and a center that handles all the immigration and customs transactions that a customer making a land border crossing might need.

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Duty free stores are expected to open in numerous locations on the Brazilian side of the border in 2019, under the new government of President Jair Bolsonaro. Although it is not certain when a store will begin operations in Santana do Livramento, on the Brazilian side of the border across from Rivera, when it happens it will change the equation for Siñeriz Shopping. But Siñeriz Shopping Commercial Manager Hilmi H. Abdullah Neto says he and others on the company’s management team are not worried. “We believe this is a great opportunity not just for duty free in the Brazilian market, but in the Uruguayan market as well. We think that in addition to generating jobs, it will generate a greater movement of tourists to the border areas because they will be able to buy from both sides.”


Siñeriz Shopping

While the shopping complex has exciting things to come in that regard, Siñeriz Shopping has no specific plans to announce just yet. “We will stick to our policy of making disclosures when the plans stop being plans and become a reality,” as was the case with Siñeriz Shopping itself, Abdullah Neto said, referring to the opening of the mega-complex in 2012.

Constant change

Still, without being too specific, Abdullah Neto said Siñeriz Shopping has great hopes for 2019.,“We expect it to be a year of great affirmation with solid steps forward. We expect an increased number of shoppers and that business will be able to prosper and really take off.” He adds: “We always change, either to improve, to adapt or to anticipate needs and consumer trends. With a crisis or without, we always change.” He adds that an example of this could be seen in 2018. “We opened a Chiviteria – Uruguayan hamburger stand – in our food court, with homemade sauces and craft beer, appealing to customers looking for a more informal space to gather with friends or for a quick, inexpensive but better-quality dinner,” he said. This was added to other dining choices that include a gourmet restaurant, La Perdiz, crêpes and coffee at Fragola Café, or good old-fashioned fastfood options at a Burger King.

a complete remodeling of the space for bicycles, tools and accessories for hunting, camping and fishing,” Abdullah Neto said. “The toy sector traditionally changes every year with whichever toy is in style at the moment. It could be Hot Wheels or ‘princesses.’ It was Star Wars and now it is Baby Alive.”

Trend watcher

Siñeriz Weekend

But, while entertainment and dining options at Siñeriz Shopping are a way to enhance the experience for customers, as the name implies, Siñeriz Shopping is, at heart, about shopping. Within the store itself there were significant changes in 2018. “We had major renovations in spaces such as perfume, with the entry of MAC products, and outdoor offerings, with

The M.A.C display area has an ample choice of merchandise for customers

Abdullah Neto said Siñeriz Shopping is also likely to continue offering special weekend sales options, though specific dates are unspecified as of this writing. “Thinking about the need to do promotions on Black Friday weekend and a couple of others as well, we created the Siñeriz Weekend,” he said. “By putting our name on an event, it makes us stronger, it forces us to do something very impactful,

An overview of the Siñeriz Shopping complex in Rivera, Uruguay, perhaps the largest land duty-free center in Latin America

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and maintain the tradition of doing things seriously. In this case we announced the weekend event exactly one week before, and that was enough for many people to travel more than 1,000 kilometers to visit us without knowing what would be in promotion, since we only published the list of available items on the day,” he said. Siñeriz Shopping offered discounts of up to 70% on some items, and customers went away happy. “People appreciate when we meet their expectations,” he said. And meeting expectations is exactly what Siñeriz Shopping has been doing since it opened its expanded complex in 2012. The company has been in Rivera since 1987 when duty free legislation first went into effect in Uruguay, but its mega-complex revamped the border retail scene in Rivera to what it is today.


Essence Corp

Essence Corp waves the flag

Essence Corp’s team building event on the dunes in Miami Beach supported the ocean preservation work of the Surfrider Foundation

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Family-owned fragrance distributor Essence Corp has been busy building both the company and its loyal team over the past year

E

ssence Corp, the Miami-based master distributor of fine fragrances and cosmetics for Americas travel retail markets, started the New Year off with a bang – and a helping hand for the local community. As every year, the company held its annual internal seminar on January 14, when all employees – now totalling 72, including all those that are not based in Miami – came for the week to participate in the main seminar, plus many meetings and workshops, and team building activities. There was plenty of news to report at the annual session as the company continues to grow. Established in 1988 by the dynamic Bona family, and now run by Jean-Jacques as President and Patricia as Vice-President, Essence Corp is a leading distributor in travel retail Americas and the Caribbean, counting top-name brands in its portfolio, from houses such as Interparfums, EuroItalia, Clarins Group,

Hermès, Bulgari, Puig, Shiseido, Dior, Benefit Cosmetics and Limited Brands. A few days after the well-attended seminar, Essence staff participated in a team building session to help the Surfrider Foundation (www.surfrider.org) in its effort to restore a very fragile habitat in South Florida – the coastal dunes located near the firm’s Miami headquarters. The dedicated team spent the morning of January 17 eradicating a section of dunes in Miami Beach of its invasive plants. Over the years, the dunes have been either altered by non-native plants or decimated by hurricanes and beach erosion. The Bona family have been supporting the Surfrider Foundation - Florida chapter for a very long time, especially Essence Corp Travel Retail Executive Director Antoine Bona, who is an active member and frequent participant in local activities. Since its first iconic win in 1984 to defend Malibu’s famed surfing break, the Surfrider Foundation has worked to

preserve the ocean, waves and beaches. Today, it is one of the largest non-profit grassroots organizations with a volunteeractivist network dedicated to ensuring the beaches are accessible, the water is clean, preserving the ocean and the coasts, and keeping plastic from polluting the waterways. “Protect what you love today, tomorrow, and for generations to come,” is its motto.

New website launch

For the New Year 2019, Essence Corp has also launched a new website with a whole new look (https://essence-corp. com/). Designed to be cleaner and more modern, the site includes some additional information on its logistics facility, its organizational structure, and its involvement with the local community (corporate responsibility). “So far, we have received a lot of positive feedback from our team and customers,” enthuses Antoine Bona.

Essence Corp’s growing, multicultural team of 72 pictured at the company’s annual seminar in January 2019 www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

81


Go Travel

Everything’s

a go Go Travel’s global reputation as a reliable supplier is the driving force behind its expansion into the Americas by JAS RYAT

T The new Hybrid Pillow offers an inflatable base that packs down to a small size, making it essential for travel

ravel accessory company Go Travel has reason to celebrate as it recently passed its monumental 40th anniversary and extended its range of travel accessories, including the revolutionary Hybrid Pillow. 2019 begins with a focus on the Latin American market as production of its memory foam pillow products will commence on US soil. With production starting in Spring 2019, the move will not only help to maintain high production standards and satisfy ever-increasing demand, but will also allow Go Travel to offer

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stable pricing for continued competitiveness in the Americas. The move will also improve the firm’s carbon footprint as it no longer needs to ship from China, while at the same time, supporting US manufacturing and creating jobs for US citizens. For many, Go Travel’s 40th anniversary will come as a surprise, given that it has only been present in the region for the last eight years. However, during that period, it has undergone huge growth, applied significant resources and has gained significant achievements in Latin America. Big markets such as Panama have provided stability, producing some of Go Travel’s largest customers in both travel retail and downtown, while the Caribbean region, particularly the Dominican Republic, has seen growth in hotels and tourist stores. The self-standing Go Travel kiosk at Lima Airport has been a stand-out success and reports constant increases year-on-year, according to the firm. Overall, Go Travel has seen doubledigit increases in the region this past year.

Natural fit

Now a leading manufacturer of travel accessories, Go Travel first introduced its collection back in 1978. The knowledge and experience gained over the years has given the firm a distinct advantage in designing products that are beneficial to travelers. An example is the new Hybrid Pillow, which combines the comfort of memory foam with the maximum convenience of air, so that it packs down to


Go Travel

Go Travel expands its travel accessories business with its sights set on Latin America

palm-size – ideal for a duty free customer. The extensive and diverse range offers suitable products for every type of traveler, from family to business. Go Travel’s focus has always been heavily centered on duty free and travel retail, and it remains the company’s largest channel. The sector offers a very organic fit with its typically impulsepurchase products. The targeted collection of over 350 products aims to capture most travelers at a specific point in their journey. Landside points of sale highlight luggage products and security, and in duty free, the focus is more on comfort, tech and products that improve the journey. It makes travel retail not only an important business for travelers in that moment, but also when it comes to repeat and local business. Although typically associated with planes, trains and automobiles, Go Travel products aim to cross over into everyday life. Travel pillows are equally good for daily usage.

Reaching the Summit

Go Travel’s Latin American business is still in its relative infancy. The firm looks at the Summit of the Americas as an opportunity to showcase its skills, demonstrate its service capabilities to those that are not yet familiar, and showcase new additions to the range. Latin America continues to show growth potential, but there is still plenty of room for expansion and space to grow with existing customers, so the Summit of the Americas provides a platform to engage with all the key players in the region. Travel retail continues to be a main focus since Go Travel began and will continue to be a primary target in Latin America. The brand has withstood the test of time by expanding in-roads in what is an often volatile market, leading Go Travel to expect more large-scale growth in the future. Typically, Go Travel will not enter a region until it has all the logistics in place to fully support rapid expansion. Moves such as the shift to US production

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are part and parcel of guaranteeing this seamless service. 2019 will largely be focused on the new memory pillow designs. They include the Hybrid Pillow, which offers a deep, plush memory-foam top with an inflatable base that provides personalized comfort and also ensures that it will pack down to the smallest size to fit in any bag, and the American Dreamer, which is launching to celebrate the new US production facilities and will be the first pillow of the line. The American Dreamer is 100% memory foam with an elasticated front closure for an individual fit. The design gradually tapers at the rear, allowing the head to slope gently backwards and provides an ideal resting position for upright sleeping, while the elasticated straps secure the position and minimize head movement. This year will also produce a selection of handy organizational products, such as packers and dry bags, while the adaptor range continues to evolve to meet the ever-changing needs of tech advancements.


Taste Sensations! DISCOVER THE COLOURFUL WORLD OF RITTER SPORT.

NEW

AVAILABLE

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For further information please contact Mr. Jan Pasold (Head of Global Travel Retail) j.pasold@ritter-sport.de Mrs. Simone Weiss (International Key Account MGMT Travel Retail) s.weiss@ritter-sport.de www.ritter-sport.com

AIRLINE EXCLUSIVE


Rodenstock

A crystal-clear vision Rodenstock, the licensee for Porsche Design sunglasses, explains how the high-end German lifestyle brand has forged a successful niche in a competitive travel retail market by MARY JANE PITTILLA

Petra EckhardtKoestler, Head of Travel Retail, Rodenstock

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odenstock’s travel retail chief has spoken of the successful introduction of the company’s licensed Porsche Design sunglasses brand into travel retail. The vision? To become the number one brand in the men’s high-end sunglasses market; achieve significant distribution in travel retail sunglasses stores; and be a solid, reliable partner to travel retailers. That’s the strategy currently being implemented by Petra Eckhardt-Koestler, Head of Travel Retail, Rodenstock, which renewed its licensing agreement with Porsche Design for 10 years in 2017. Since entering the travel retail channel in 2015, Germany's leading manufacturer of lenses and frames has rolled out a global strategy for Porsche Design sunglasses with 10 key travel retail partners – all major industry players. Speaking to the media about the stellar travel retail progress of Porsche Design sunglasses, Eckhardt-Koestler explains

that the first prong of the strategy – launching the brand into the inflight sector – had been achieved. The sunglasses proved a sales hit onboard airlines such as Lufthansa, KLM, SAS in Europe and carriers in China. In the past four years, she says that the brand has “overachieved” its goals and the roll-out with the 10 selected operators had been smooth. Today, Rodenstock is focusing on selective distribution with high-end ground stores operated by leading travel retailers, and Eckhardt-Koestler has identified two major growth hotspots for the brand – the Americas and Asia Pacific. In a major coup in the Americas market, which Eckhardt-Koestler describes as the brand’s biggest achievement, power player Hudson Group has introduced Porsche Design sunglasses to its airport store network, instantly giving the brand high visibility in a key region. Rodenstock is careful to align itself with the Porsche Design strategy in both the product design and retail distribution process. Eckhardt-Koestler believes that the key to Rodenstock’s success with Porsche Design sunglasses is down to producing special collections for retailers that differ by operator and by region; marketing support; and innovative online concepts. “Travel retailers can customize the brand. For example, we work well with China Duty Free Group and we supply them with a different collection than Dufry.” Rodenstock’s ability to forge successful retail partnerships was skilfully demonstrated with Beirut Duty Free. Rodenstock

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Porsche Design sunglasses are available in the brand’s color of the year

partnered with the operator to offer delegates to the MEADFA Conference in November 2018 a chance to win one of 300 pairs of sunglasses on their departure. Eckhardt-Koestler says of the collaboration: “We had a fantastic response to the promotion. The sunglasses shop at Beirut Duty Free is an excellent example of how to showcase the category in the very best way, so it is the perfect location for this activity.” In Asia Pacific, the brand is growing fast in markets such as Taiwan and South Korea. Rodenstock has a solid relationship with China Duty Free Group and Porsche Design sunglasses are available in half a dozen locations, including the resorts of Sanya and Macau and Beijing and Shanghai International Airports. Other notable markets are Vietnam and Cambodia. “For the Chinese New Year holiday season, we will develop a special approach for China Duty Free,” reveals Eckhardt-Koestler. Because Porsche Design’s clientele is lifestyle-oriented, global and cosmopolitan, Rodenstock does a lot of training with retailers so they can tell the brand story. “This year, Porsche Design has launched new concepts, centered on uniqueness and limited editions, so we are building these concepts in-store,” she says, noting that Porsche Design Eyewear celebrated its 40th anniversary last year. Following the successful implementation of the Porsche Design brand, Rodenstock is also turning its attention to its own eponymous eyewear brand, which Eckhart-Koestler believes has big potential in the sunglasses and reading tools categories – both growing segments in travel retail. Watch this space.


Editor’s Choice

Off to a flying start A journey is always measured in miles – or the things you pick up in duty free

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1. The Evolution S3: Cabeau introduces a state-of-the-art pillow that combines patented ergonomic design with high-technology features and fabrics, and presents an innovative, patent-pending seat strap system that enhances travelers’ comfort 2. Mentos Gum gift pack: This is a perfect gifting item for young adults and teens when it comes to staying fresh. The pack contains a variety of five popular Pure Fresh flavors: Fresh Mint, Lemonade, Bubble Fresh and Spear Mint 3. Five Farms Small Batch Irish Cream Liqueur: This awardwinning, farm-to-table spirit from TBrands is sourced and bottled in County Cork, Ireland, and contains 10% Irish whiskey and 50% higher butterfat than other category offerings

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4. Classique Cabaret: Puig adds to its feminine fragrance line with the limited-edition Classique Cabaret from the Jean Paul Gaultier range. Inspired by the fun and frolicking of the cabaret, the oriental orange blossom fragrance features amber, ginger and vanilla notes 5. Wild Tiger Coco Rum Liqueur: Wild Tiger Rum introduces the third variant from its portfolio Wild Tiger Coco Rum Liqueur. Produced in the state of Kerala, dubbed “Coconut Paradise”, this is the first rum based liqueur from India. The blend of Indian rum with Kerelan coconut flavors, bottled at 21% Alc, produces silky sweet notes that are perfect for tropical cocktails. Each bottle comes in hand crafted furry bottle, and a replica tiger claw.


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9. Spy Optic HELM 2: No matter the adventures you seek out, your eyes need sleek protection. Slide on this optic evolution of this popular Spy Optic Helm 2 model and get after it 6. Tortuga Rum Cake Bites Travel Retail Edition: This bite-sized version of Tortuga Golden Original Rum Cake comes in a travel retail resealable pouch that makes a perfect gift from the Caribbean with 24 individually wrapped rum cake bites to lock in the freshness

10. Turkey Hill Sugarbush’s Maple Cream Cookies: These awardwinning cookies are made with real Canadian maple syrup, making a decadent treat for the family or a great gift with its attractive packaging

7. Plantation Xaymaca Special Dry: Stansfeld Scott presents Plantation Xaymaca Special Dry from Maison Ferrand, one of the world’s premier boutique producers of fine spirits. The spirit revives the quintessential Jamaican-style, 100% pot still rums of the 19th century

11. Night Body Serum from Moroccanoil Body: This luxurious overnight body serum aims to firm and smooth the skin. Infused with argan and tsubaki oils, vitamin C and basil extract, it nourishes and protects against environmental aggressors encountered when traveling

8. Blossoming Tick & Ogle: This nature-inspired timepiece collection from Scandinavian brand Tick & Ogle offers chic and feminine fashion accessories featuring designs with eye-catching accents, paired with leather or stylish textile straps

12. Bella Rosa: Oscar de la Renta's new feminine and flirty fragrance exudes top notes of pink pepper, freesia and mandarin, entwined with a seductive heart of pink rose, jasmine and orris, and base notes of patchouli, sandalwood and amber

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Spotlight On Exhibitors

Butlers Chocolates engages Americas in partnership with ALFA Brands Irish family-owned chocolatier Butlers Chocolates has the worldwide profile of Butlers and with the support of our announced its entry into US travel retail. The brand, established accounts, we look forward to grow the brand presence, in our in 1932, will be showcasing its product range at Summit of the markets, at a rapid pace,” shares Franco Gabriele, ALFA Brands, Americas in partnership with distributor ALFA Brands. Inc President. Butlers Chocolates is well established in international travel In Orlando, Butlers will showcase its well-known and retail and is available in over 60 high profile airport locations popular collections of award-winning luxury assortments, worldwide. International travelers are familiar with the brand impulse lines, sharing boxes and Irish liquor-inspired collections, and the wide range of premium chocolates and confections on including Irish Cream, Irish Whiskey and Irish Gin. Visit Butlers offer. This year will see Butlers Chocolates working, in conjuncChocolates at the ALFA Brands booth #400 during Summit tion with ALFA Brands, to develop its brand within US of the Americas. travel retail. “We are very excited to start working with ALFA brands in developing our Travel Retail business in the US and to presenting our most popular lines at next month’s show in Orlando,” enthuses Aisling Walsh, Butlers Chocolates Marketing Director “For quite some time now, we have been searching for a premium confectionary brand to add to our portfolio, and Butlers Chocolates fills that void perfectly. We are grateful for this important partnership, and very enthusiastic that we'll be able to introduce it at the Butlers Chocolates enters US travel retail in partnership with ALFA Brands Summit of the Americas next month. Given

Sprayground unleashes the rebel within US brand Sprayground is exhibiting at the Summit of the Americas tradeshow in Orlando. The brand is known for creating, designing, and selling rebellious and innovative trendsetting product to a youth-oriented streetwear, fashion and lifestyle market. Americas Duty Free spoke with Sprayground Account Executive Danielle Gover about the value of attending the Orlando show. “It is important to connect and build relationships with a new market of customers that have yet to be targeted,” shares Gover. Sprayground has achieved growth in duty free and travel Sprayground backpacks offer a trendy yet functional travel option

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retail. Aside from this channel, the biggest opportunities are the girls’ and women’s markets and the apparel category. The Americas has proven to be a standout region for the brand when it comes to international travel. North America takes the majority of the market share at over 50%, with Mexico and Europe trailing close behind. The next step is to expand the luggage category as the brand gains traction. “With the addition of the trolley to our bags for easier traveling, we’ve seen not only an increase in bags, but in luggage as well. It’s opened more doors for more opportunities in travel accessories, such as garment bags, laptop bags and travel bags,” says Gover. Undoubtedly, Sprayground’s products have a differentiating appeal from other bag and accessory brands found in travel retail. Its backpacks, bags, luggage and travel accessories aim to appeal to people interested in the sport, music, fashion and art worlds. Gover says that the bags connect everyone from the entrepreneur to the world traveler. “We understand when you wear our backpacks, use our luggage or carry our accessories, it gives you an emotional benefit, of empowering, of self-confidence, of expressing yourself, of being acknowledged and seen, and standing out from the crowd.” Sprayground is connecting with its target consumer through online and social media, using advertising and influencer marketing. The brand intends to continue with its mission to bring thought-provoking bags and accessories that have been built on a foundation of rebellion, individuality and creativity around the globe.


Unilever brings mane attraction with launch of Living Proof in Orlando Unilever launches its Living Proof range of haircare products into travel retail with its return to the Summit of the Americas Exhibition in March. (Coral Spring II) Living Proof is the #1 Prestige haircare brand in the US domestic market (source; NPD 2017). This breakthrough science Unilever's Living Proof range of haircare products address root cause of an untamed mane

and patented technology originating from The Massachusetts Institute of Technology (MIT) to solve common hair issues such as frizz, damage and fullness. With combined efforts of stylists and biotech scientists who wanted to overcome lackluster conventional products, the brand aims to solve hair problems differently, by directly addressing their root causes. Living Proof promises to deliver visibly healthier hair and styles that last. All Living Proof products are free from silicones, parabens, phthalates, and are not tested on animals. They are also safe for use on colored and chemically treated hair. The Living Proof portfolio includes at least 20 patents and over 50 different products, which have won more than 150 awards to date. The Perfect HairDay Dry Shampoo is currently the #1 Prestige haircare SKU in the US domestic market and is anticipated to dominate travel retail sales. Living Proof ’s top seven best sellers are also available in travel size, offering convenience to travelers. Unilever says it has identified a huge opportunity for Prestige haircare in travel retail and intends to launch in major US airports in Q2 of this year.

KROMA a natural fit into duty free Before the word natural became prevalent in the beauty community, KROMA makeup had already built a niche business model based on people with sensitivities that still crave a highperformance product with stability and color range. As the brand continues to excel in duty free, KROMA returns to the Summit of the Americas to put its products into the hands of consumers domestically and internationally. Lee Cristou, KROMA Founder, recently engineered the brand’s entry into the hotel industry, as this was the next organic relationship with travelers. “We've connected with major brand names like the Hilton, and since we've always catered to the traveling client, we found it ideal to respond to their needs in that type of setting due to the nature of the hotel guest,” she says. “Also, it’s particularly gratifying for us since we've long operated a Professional Makeup Studio, to bring that internal value by educating and launching events which we feel is vital for their success, along with providing consistent support.” The goal for KROMA is to be exclusively available in select locations, as quality is more important to the brand than quantity. KROMA wants to continue to offer that boutique feel and attention to detail to each retailer. KROMA has always advocated an ethnic range, making it a natural fit to international travelers, as the brand has the knowledge and confidence to cater to all women. “They've put their trust in us over the years, and our less than 1% return rate not only proves product reliability but consumer loyalty,” says Cristou.

Top sellers for the brand include refillable options that offer great color-payoff, sensitivity-free natural formulas and customization to fit the consumer’s specific needs – something that has always kept KROMA ahead of the curve. Telia FaceLifting Primer and Botanical Foundations are the best sellers in duty free. The evolution of KROMA in duty free will continue as innovation in products and displays leads the way. Says Cristou: “We have a new eye-catching display to accommodate the consumer and retailer needs that we're excited to launch, and are in the midst of collaborations with new interest.” The Summit of the Americas is the next step to connect with new partners and help take the brand to a wider level nationally and internationally.

KROMA makeup’s range does not compromise on highperformance products while addressing customer sensitivities

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Core Home

The future of HYDRATION IS HERE Manna Hydration, represented by Core Home, will be showcasing its wide range of aesthetically pleasing hydration products at this year’s Summit of the Americas tradeshow by JAS RYAT

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hile hydration is essential, staying hydrated on the go isn’t always the easiest. Manna Hydration is here to change that with their wide variety of products catered to people with all lifestyles. Manna Hydration is being represented by first time exhibitor, Core Home Core Home’s brand, Manna Hydration, has built its reputation on challenging the

status quo with fashionable hydration and sustainable products on the market. Whether you’re going on your morning run or headed into your office, Manna’s extensive collection of insulated bottles ensure your beverage remains hot or cold for more than 12 hours. From the stylish Retro bottles to the Muse Bluetooth Speaker bottles to the Carafes, that are perfect for wine – there is something

Manna Hydration’s collection of insulated bottles provide convenience on the go

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for everyone and their activities. All materials used are eco-friendly and actively help the planet by reducing waste. Manna has also recently expanded their brand to include new mixedmaterial hydration accessories including the Ultimate Bottle Brush™ and reusable straws. This product extension allows for the elimination of dirty bottles and disposable straws. The award-winning Ultimate Bottle Brush™ is Manna’s answer to flimsy bristles found on standard bottle brushes. The new BPA and lead-free brush, offers a dual-texture design that includes durable and effective bristles, perfect for removing stubborn debris. Also available is a smaller, narrower reusable straw brush that easily cleans without scratching the interior of any straw and is flexible enough to accommodate all materials. Manna Hydration’s reusable straws include an assortment of brightly colored flexible silicone straws plus an option for those who prefer a firmer material. The clear Tritan™ plastic straws have the look of clear glass without the fragility and are BPA free, food safe material. Manna Hydration takes everything into account when constructing their products, including ease of use and the safety of the environment. Visit MannaHydration.com for more information.


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Please visit us at the Summit of the Americas at our booth

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Monalisa

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beaux arts It’s not an accident that the Monalisa art gallery has the look and feel of a Parisian garret

In its new art gallery, Monalisa offers its customers a chance to purchase objects of art from a wide collection of paintings, sculptures and high-end furniture by RONNIE LOVLER

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onalisa is bringing a whole new concept to its customers at its Cuidad del Este location – the chance to view and purchase from a large and rich collection of paintings, furniture, sculptures, rugs and other art and design items at one of Paraguay’s best-known duty free and luxury stores. The items on display at the Monalisa Art Gallery give visitors a chance to “journey through time” with items imported from Europe, primarily from Paris. This is the latest labor of love from Monalisa entrepreneur and visionary Faisal Hammoud, who created the space after extensively researching the market as part of his continuing effort to bring his customers something new and different.

Travel was inspiration

Hammoud said he was inspired by the numerous international trips he has had the opportunity to make throughout his life. “By knowing dozens of different countries, customs and cultures, I felt an urgency to share with clients some of the objects of beauty I encountered, and

thus create in a single environment a new space in time, full of the most charming works,” he said. “This vision is apparent in the gallery, which highlights the artistic delights that Hammoud has seen and appreciated in his travels over the years. “The pictures and designs offer something akin to the poetry of Prévert, the seriousness of Bragues or the infant-like joy of Chagall, a kind of magic that appeals to children and adults,” Hammoud said. The gallery itself offers a free and open space with visual displays that “contradict the notion of painting destined for public spaces,” he said. “These pieces embellish and warm of the walls of the environments in which we stay.” The new gallery creates an appealing environment and tells a new story to those customers interested in exploring this latest addition to the Monalisa story.

The history

Monalisa began as a small retail store in Cuidad del Este in 1972 after the Friendship Bridge between Brazil and

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The art gallery contains more than just paintings and pictures; also on offer are sculptures, furniture and even rugs

Paraguay opened in 1965. Since its inception, Monalisa has been recognized as a luxury retail outlet, introducing novelties in almost all categories of consumer products. In 2016, Monalisa expanded its operation to Asuncion by opening a second store in the flagship shopping center Paseo La Galeria. The company defines its mission as an effort to “import and distribute luxury products, in order to enrich the lifestyle of our customers. We create opportunities to contribute to the growth of our country, ensuring individual and collective success.” And that is exactly what Monalisa is doing with its Cuidad del Este Art Gallery.


International Brand Builders Inc

Sending

the right message

The minimalistic design of Tru Virtu’s new Click & Slide wallet offers quick access to cards and money

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atherine Patch Sleipnes, President of Americas travel retail distributor International Brand Builders Inc (IBBI), is all set for a strong showing at the Summit of the Americas with new collections and fresh brands added to its affordable luxury portfolio. In line with the retail trend for personalization, Infinity & Co England recently partnered with IBBI to boost its distribution in the Americas. The company offers two unique lines: Infinity & Co fashion jewelry at affordable prices and Love X Infinity (LXI) message jewelry gifts-on-cards that offer retailers a chance to personalize messages unique to their passengers and destinations. “With more and more retailers focusing on sense of place and experiential travel, LXI is the perfect combination of souvenir and high-quality jewelry,” stated Sleipnes. “Working closely with the Infinity designers, we have developed collections relevant to our market and we are looking forward to sharing these and other trendsetting products with our partners very soon.” Meanwhile, building on the success of Capella Industries’ Lambretta watches, IBBI is launching new Tick & Ogle timepieces that focus on fashion at a friendly price point. The brand Tick & Ogle was created for fashion-conscious and valuedriven consumers, making it a perfect product line for the Americas. “Starting at only US$29, we believe this will be a strong proposition for our region,” said Sleipnes. IBBI is also showcasing the new collections from Lambretta - Italy, launched at

Regional distributor International Brand Builders Inc is bringing to market trendsetting new products offering retailers a sense of place

the TFWA World Exhibition in October 2018, including the Marco sports watch and Piccolo Women’s additions.

A new trend for the future

IBBI is also introducing in the Americas Tru Virtu Hi-Tech Wallets. Tru Virtu is an innovative premium accessory brand from Germany, focused on wallets that protect against illegal data theft of NFC/ RFID chips and card demagnetization.

Love X Infinity (LXI) message jewelry gifts-on-cards offer retailers a chance to personalize messages unique to their passengers and destinations

The minimalistic design of the new Click & Slide wallet offers quick access to cards and money while being not much larger than a credit card itself. IBBI will also showcase its new mobile phone holders. “We are excited to launch in the Americas and build on their global success onboard airlines and in other regions. We believe this is the new trend for the future and are excited about the possibilities,” Sleipnes noted.

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As more aspects of our lives become digitalized, IBBI is offering B+D Blue Ban readers. With a trendy design that combines fashion and eye care, the readers incorporate high-quality lenses with a special protective coating that filters the blue light emitted from digital devices. They aim to help reduce eye strain, redness, irritation, or dry eyes, and they provide UV 400 protection. They are available in all magnification strengths as well as zero magnification for younger eyes. Capitalizing on the success of its newly launched beachwear range, scarf specialist Morgan & Oates will be returning to the show with an array of vivid and tropical cotton sarongs. Made from soft breathable cotton, the sarong is easy to wear and versatile – it can be tied and draped in a variety of different ways, making it the ideal accessory for any traveler. New designs and colors have also been added to Morgan & Oates’ best-selling wraps and scarves, with styles to suit both men and women. Additionally, IBBI represents Misaki Monaco pearl accent jewelry and Baylis & Harding bath and body products, which are not exhibiting this year. “IBBI has always focused on bringing affordable luxury brands to market, and we believe that our brands continue to add innovation and value for travel retail shops,” enthused Sleipnes. “We are pleased to present these new collections in the new Hyatt Orlando venue at booths #721, 819, 821, 918, and 920, near the buyer’s lounge.”


Confectionery CSR

Confectionery strives for a sweeter future Consumers are changing the definition of value when it comes to the confectionery category by JAS RYAT

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he desire for sustainability has become a key influencer for consumers in duty free when making purchasing decisions. This not only highlights the importance of a brand’s corporate social responsibility (CSR) program, but also strengthens the value proposition the brand is selling to the potential consumer. CSR programs have become a main talking point when quizzing most brands in the confectionery category. Here, the main players Mars Wrigley Confectionery, Ritter Sport and Nestle International Travel Retail provide a better understanding of what is being done across the board to ensure that the cocoa plant is here to stay.

Cocoa for Generations, a plan introduced by Mars Wrigley Confectionery, aims to place the interests of the farmers at its center, protect children and the forests, and create a safe environment for cocoa-growing communities to thrive. Cocoa for Generations is backed by an investment of US$1 billion over 10 years and is incremental to the Sustainable in a Generation Plan investment Mars announced last year. Cocoa for Generations consists of a two-pillar plan: Responsible Cocoa Today and Sustainable Cocoa Tomorrow. Responsible Cocoa Today aims to have 100% of its cocoa from the Responsible Cocoa program responsibly sourced globally and traceable by 2025. Responsible Cocoa means having systems in place to address deforestation, child labor and higher incomes for farmers. The latter part of the plan, Sustainable Cocoa Tomorrow, allows the brand to demonstrate that a step-change in farmer income and livelihoods is possible. In partnership with an initial global group of 75,000 cocoa-farming families and cocoa suppliers, Mars plans to test ways to increase productivity, income, resilience, and overall sustainability through crop and income diversification, gender programs, and farm development plans.

Plan for sustainability

Mars Wrigley Confectionery introduced Cocoa for Generations to implement a positive environment for those involved in production of cocao

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German family company Ritter Sport is focusing on cocoa as the core of a new brand strategy, as it aims to anchor the variety and value of cocoa as a raw material more strongly in the consumer’s consciousness. The brand has also been active with its Cacaonica program in Nicaragua for almost 30 years, where it works closely with around 3,500 cocoa farmers. Since early 2018, Ritter Sport has been the first and as yet only major chocolate bar manufacturer to use 100% certified sustainable cocoa for its entire range – a milestone not only for the company but also for the industry as a whole. Last year, 90% of this cocoa was certified


to UTZ and 10% in accordance with Fair Trade standards. For the first time, its own cocoa plantation in Nicaragua is likely to supply up to 190 tons of sustainably farmed cocoa for Ritter Sport chocolate in 2019. This is a major achievement. This year, up to 80% of cocoa is to come from partnerships in the countries of origin, Nicaragua, Peru, Ivory Coast, Ghana and Nigeria. Ritter Sport invests around €11 million (US$12.5 million) a year in the sustainable procurement of cocoa. Nestlé-owned KitKat was one of the first global chocolate brands to be sourced with 100% sustainable cocoa since 2016. The Nestlé Cocoa Plan aimed to enhance the lives of cocoa farmers and the quality of their products by improving productivity and adopting good agricultural practices. Better farming will inevitably lead to a better income for the farmer, the company believes. The Nestlé Cocoa Plan allowed the distribution of 2.16 million higher-yield-

ing cocoa plants and also trained 57,000 farmers in field schools. This approach led to a better life for the local people and better quality cocoa. Nestlé is currently working with over 70 co-operatives and over 40,000 farmers in the Nestlé Cocoa Plan in Côte d’Ivoire. Nestlé is also determined to tackle the global problem of child labor as an extension of this plan. According to the International Labor Organization, about 168 million children are involved in child labor, and 73 million of these children are between 5 and 11 years old. The brand is aware there are children working on farms in Côte d’Ivoire in areas where cocoa is sourced. No company sourcing cocoa at that location can guarantee they’ve eliminated the risk of children working in their supply chain, but Nestlé is determined to resolve this problem.

Conveying the message

Most brands have developed packaging that reflects the changes taking place, pro-

Ritter Sport recently announced that it is the first and only major chocolate bar manufacturer to use 100% certified sustainable cocoa for its entire range

KitKat was one of the first global chocolate brands on board with 100% sustainable cocoa

moting sustainability, fair trade and better living standards for local people. Mars will continue to work with industry, governments and other civil-society partners to seek shared solutions and mutually-beneficial results for cocoafarming families. To find out more about the plan, visit: https://www.mars. com/global/sustainable-in-a-generation/ our-approach-to-sustainability/rawmaterials/cocoa Ritter Sport recently included an “Our Cocoa” section on all packaging with a link to the brand’s homepage, which details its approach to cocoa sustainability. Consumers can delve deeper into the Nestlé Cocoa Plan on its website at www. nestlecocoaplan.com, which includes details of the CSR program. Some of confectionery product packaging carries The Cocoa Plan symbol to educate consumers on the company’s commitments. By taking leadership in the production of the cocoa plant, these global organizations are sending a message that the consumer matters. Consumers want ethically sourced ingredients across the board, research shows. The definition of value may be changing for today’s consumer. Value cannot always be defined by price sensitivities; in fact, today’s consumers are proving that their perception of the value of the cocoa and its supply chain is more powerful than price alone.

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Whiskey in Americas

Whiskey

business British, Irish and Scottish settlers started making whiskey in Kentucky, US, in the 1700s. Today, the spirit holds its own in a saturated category, backed by tradition and quality. Americas Duty Free speaks to industry experts to see if American whiskey pushed to the forefront can withstand the limelight by JAS RYAT

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merican whiskey, a phrase sometimes synonymous with bourbon, is making waves across the globe. American whiskey is a natural fit in the craft movement as it comes fortified with American heritage and nuance. Whiskey has also become an integral part of the global cocktail scene due to its versatility, leading to sky-rocketing demand for the brown spirit across the globe. Americas Duty Free surveyed some of the leaders in this category for their insight on why American whiskey has been on the rise, and where they see future trends. Carole Soulard, Beam Suntory Customer Marketing Manager, Kenneth Chapman, Sazerac Inc Global Travel Retail Manager, and Aude Bourdier, Brown-Forman Global Travel Retail & Developed Asia Pacific Marketing Director, all leaders in the whiskey category, share their thoughts on this booming trend. Soulard, well versed in both Japanese and American whiskey, attributes the category’s growth to the amount of varieties available. “In the course of the past decade, whiskey in general has experienced a renaissance, with the number of distilleries to choose from going through the roof and the different types

Jack Daniel’s 100-proof Bottled in Bond Tennessee Whiskey has now become a permanent fixture in the brands portfolio

of whiskies, such as Japanese, becoming more popular. Also, we have seen more and more small brands emerging – especially in American whiskey – and taking advantage of the craft trend. This allows the consumer a greater array of choices,” explains Soulard. She notes that premium and super-premium segments are the ones that benefitted most from this whiskey movement. Globally, the whiskey business is alive and well. Whiskey is making a comeback as consumers are reviving their interest in traditional drinks like Old Fashioned and Manhattan cocktails. Sazerac Inc’s Chapman highlights the fact that whiskey has made a resurgence on the cocktail scene, which only serves to reinforce the spirit’s popularity. “The trend has been on fire lately because more and more consumers are discovering the different flavors bourbon has to offer. From heavy wood to light vanilla notes, each batch/type of bourbon is uniquely different with wide varieties, young to old.” Bourdier thinks the trend may not actually be considered a trend, as the category shows indications of sustained growth. “Actually, American whiskey has been on fire for some time now and its popularity is being fueled overwhelmingly by Jack Daniel’s Tennessee Whiskey and Woodford Reserve Bourbon. The good news is that there is every indication – barring some unanticipated development – this popularity surge will continue into the foreseeable future.”

Trending now

Super-premium and exclusives have readily led most categories in duty free, especially when focusing on the spirits category. This is where Soulard feels American whiskey has an advantage. “I strongly believe the premium and super-premium trend will continue for American whiskey in Americas travel retail. Most big retailers are still focusing on it for 2019 as the consumer keeps asking for more. I think we might see an even greater appeal towards the more special expressions of premium and superpremium, such as barrel programs and distillery exclusives.” Sazerac Inc’s portfolio keeps expanding as the bourbon category reached double digit growth globally in 2018 and will continue into 2019 with 100% Rye blends trailing close behind

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premiumization, and Baccarat ratchets that reputation up to an even higher level,” she enthuses.

Here to stay

Maker’s Mark 101 is a Travel Retail Exclusive for Maker’s Mark only found in travel retail or at the distillery in Kentucky. Maker’s Mark 101 represents Maker’s Mark’s signature bourbon bottled at a higher proof for a bolder taste

In 2018, Brown-Forman released its Jack Daniel’s Bottled in Bond, a permanent extension to the Jack Daniel’s line. Its entry into travel retail came at the right time, as the heritage story linked to the brand resonated with today’s consumers. “The international traveling public can fully expect to see the continued introduction of travel retail exclusives, such as our popular Jack Daniel’s Bottled in Bond and the Woodford Reserve Baccarat Edition,” says Bourdier. “Jack Daniel’s Bottled in Bond – which is the first major travel retail exclusive in the Jack Daniel’s family and the latest premium addition – has proven to be an enormous success with the international traveling public. Also, we can’t really say enough about what an important addition Woodford Reserve Baccarat is, both to our travel retail portfolio and to the Woodford Reserve Collection. Since its inception, Woodford Reserve has set the bourbon standard for quality and

Beam Suntory focuses on three major demographics in duty free and travel retail. The first consumer knows what he wants and is just looking to replenish his stock. The next one may need a little convincing, as he wants to explore and may be enticed into trying a new expression to widen his horizon. And finally, the third one is a collector. He wants to have every expression of a brand available on the market and is very fond of limited editions, special vintages and duty free/travel retail exclusives. Chapman doesn’t think there is one particular consumer that can be pinpointed as the newest consumer in travel retail for American whiskey. “You have your newbies just trying to get a good deal for the first time, your classic collector looking for that rare bottle at a great price, and the general whisky enthusiast stepping out of the Scotch category and into the American whiskey category,” he explains. The popularity of brands such as Jack Daniel’s and Woodford Reserve cuts across such demographics as age, income or education. “Their appeal stems in part from both a recognized authenticity as well as a reputation for premium high quality,” shares Bourdier. “The fact that Jack Daniel’s is the number two spirit in travel retail and Woodford Reserve is the top super-premium bourbon in the world indicates that those who purchase them are legion in number and fiercely loyal in nature.” American whiskies are certainly backed by history and reputation. They represent authenticity that has clearly carved out its own niche, pitching them against the heavy hitters in the industry. Although the resurgence has highlighted what America has to offer, American whiskey has always had a piece of the pie in the spirits category and has proved that it will reap continued, sustainable growth.

State your case: Convert a seasoned Scotch whisky aficionado who is cruising the aisles of duty free to purchase your whiskey/bourbon: “Most Scotch whisky aficionado think age is everything. They are going to look for a blend or single malt. For a true Scotch whisky drinker, I would step them in to Eagle Rare 10. It is a single batch; single barrel aged for 10 years and holds numerous awards. For the best dollar value, it is priced for under USD$49/bottle.” Kenneth Chapman, Sazerac Inc Global Travel Retail Manager

“There are two key differences between Scotch and Bourbon. The first is the dominant grain used to make the whiskey. Bourbon is a corn-dominant whiskey whereas Scotch uses malted barley. Corn is a sweeter grain, making bourbon a sweeter whiskey. The second key difference is the barrel used. By law, Bourbon uses only new, charred-oak barrels, scotch is aged in used barrels. Bourbon gets a lot more color and flavor from using new oak barrels in a much shorter time vs Scotch. Overall, bourbon is every bit as complex as Scotch while being slightly sweeter and more versatile.” - Joshua Steely, Buffalo Trace Brand Manager

“The fastest growing spirits in the world are American whiskies - again through the leadership of Jack Daniel’s and Woodford Reserve. There are many reasons for this surge in popularity including the fact that they are iconic American brands that are celebrated in movies, music and popular culture. But the fundamental cause of the popularity of any spirits brand is taste. So next time a consumer of fine spirits products is browsing the aisles of a bustling travel retail outlet we suggest they visit the American whiskey section and purchase one of the Jack Daniel’s family of brands or a member of the Woodford Reserve collection and give it a try. There is a good chance that by enjoying a glass of Jack or Woodford they will open their taste senses to a new and special drinking experience.” Aude Bourdier, Brown-Forman Global Travel Retail & Developed Asia Pacific Marketing Director

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Monarq

Crafting a relevant portfolio One-stop-shop beverage distributor Monarq Group is adding innovative brands to its portfolio to spark retail interest in the Americas

Monarq is distributing new flavored gins such as Bloom Jasmine & Rose and Lemon & Elderflower

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onarq Group, the alcoholic beverage importer, distributor and marketer in the Americas, has a lot to look forward to in 2019 as trend-setting brands join its portfolio. Robert de Monchy, Managing Director, reports that the company has signed up a number of exciting new brands. First, it has extended its partnership with Zamora International to include Caribbean and US duty free channels. The portfolio boasts brands such as Licor 43, Villa Massa limoncello, Lolea Sangria, Martin Miller’s gin, Yellow Rose American whiskey and famous Spanish wines Ramon Bilbao and Mar de Frades. Additionally, Monarq recently started working with Samson & Surrey, one of the largest craft spirits companies. Founded in 2016 by former executives of the Bacardi Group, its portfolio includes brands such as FEW spirits, Widow Jane Whiskey, Bluecoat American Gin and Brenne French single malt whisky. Meanwhile, Monarq will be launching The Dead Rabbit Irish Whiskey and new flavored gins such as Bloom Jasmine & Rose and Lemon & Elderflower, which are part of leading international spirits business Quintessential Brands. Monarq has also recently started working with super-premium Tequila Ocho. Furthermore, it has strengthened its Japanese portfolio with The Kurayoshi Whisky, including what de Monchy calls “a beautiful special duty free line”, and Hitachino Japanese beer. “This is a funky Japanese craft beer which performs very well internationally,” he says.

by MARY JANE PITTILLA

Plugging into the hard soda trend

During the Summit of the Americas in Orlando, Monarq will also be launching Bravazzi Italian Hard Soda, inspired by gourmet Italian sodas bursting with citrus flavor. Bravazzi is described as a refreshingly tasty, naturally sweet, fizzy and fruity, gluten-free hard soda with 4.2% alcohol. The hard soda category has gained recent prominence in the US. De Monchy has been “closely watching” the trend of hard sodas/seltzers and analyzed which brand would be the best fit in its portfolio and with its customers and consumers. “Bravazzi came out on top and we are happy to have recently signed a long-term distribution agreement with this wonderful, new, exciting brand,” he enthuses. De Monchy has been forging ahead with the same brand strategy since the company started in 2006. “Our portfolio consists of leading premium brands in each of the relevant categories. We highly value our partnerships; most of the brands from the early days, like Heineken, Lucas Bols, Molinari, Crystal Head Vodka, Zubrowka, Fernet Branca and Luxardo, are still with us today.” He continues: “We are always looking for the newest trends and for meaningful

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brands that are ahead of the curve. For example, within our competitive field, we were to first to bring Japanese whisky, Japanese craft beer, malt whisky from India, mezcal, and many others.“ Monarq is present in all domestic and duty free markets in Latin America, including Mexico, plus US duty free, and is expanding the distribution footprint of its brands on a daily basis. De Monchy is quick to praise his “great team of high-level professionals and great individuals”. They include Melinda Gomez, who joined last year to head up US duty free. Gomez has 20 years’ experience in this channel and is based in its Miami office. Nicoline van Woerkum also joined the company as International Marketing Manager. She is an experienced international spirits marketer and has also worked in the Caribbean for a number of years. Monarq’s main goal has always been to be the number one regional importer, distributor and marketer of a premium, leading – and innovative – alcoholic beverage portfolio. “We aim to bring the highest level of service to both brandowners and distributors/duty free operators,” he concludes.

Monarq Group has signed a long-term distribution agreement with the Bravazzi brand of Italian hard soda


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Atom Brands

ATOM BRANDS

brings a spirited vision to Americas Atom Brands almighty on the way to be a one-stop-shop for a variety of craft spirits by JAS RYAT

Award-winning Ableforth’s Bathtub Gin is the perfect answer for travelers looking for quality spirit in a bespoke bottle

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pirits distributor Atom Brands is set to replicate the success it has garnered globally in the Americas. The UK-based brand is showcasing its product portfolio in Orlando at the Summit of the Americas tradeshow to share its simple philosophy: “We craft liquids that are world-beating, package them in a way that’s awe-inspiring and get them into the hands of discerning consumers across the globe,” says Claire Keene, Global Travel Retail Manager. Atom Brands underscores the opportunities offered by the Americas, as thousands of travelers pass through and often seek ways to remember their trip. The firm has staged a successful activation at Sydney Airport that features an exclusive Sydney gin, which is distilled with native Australian botanicals such as finger limes and wattle seed. The response to the exclusive gin is an extension of the love affair travelers have with Sydney, enthuses Keene. Atom Brands is driving the craft movement in global travel retail across multiple categories. “Our approach is to bring unique offers to another level in the form of bespoke gifting and bespoke spirit offers as our norm,” shares Keene. Currently, the firm’s footprint stretches from Australia to New York, with Thailand, Hong Kong, Singapore, Israel, the Nordics, India and Dubai in between, all within the last eight months of trading. The company’s global travel retail offer answers directly to travelers’ desire to purchase 'different from usual' products, as highlighted by the latest Duty Free World Council quarterly KPI Monitor. Key reasons for buying in duty free shops after price advantage and value for money

are because the products are ‘not found at home’ and ‘different from usual.’

One-stop-shop

“All our spirits encompass the finest artisan methods in production, world-leading spirit quality and a point of difference in travel retail,” says Keene. Flagship brands include Ableforth’s and That Boutique-y Drinks Company, which encompasses a gin, whisky and a rum brand. Ableforth’s Bathtub Gin is a worldclass, award-winning gin that’s now available in over 20 markets globally, including travel retail. Meanwhile, That Boutique-y Drinks Company offers a range of independently bottled, limited-batch releases from the world’s best distilleries. The Summit of the Americas tradeshow will allow Atom Brands to meet with buyers and distributors from all over the globe to really drive home why it offers a one-stop-shop for all their craft buying needs. “We’ll also be showcasing a

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range of exclusive bespoke bottling from That Boutique-y Gin Company from all over the globe,” explains Keene. Travel retailers have so far given a warm reception to Atom’s brands, as buyers are looking for something different. Keene believes that there is a need for bespoke quality spirits and Atom Brands aims to meet their requirements. “We are not followers, we are leaders. 100% of our travel retail portfolio answers directly to this trend. We refuse to compromise. We are a one-stop for craft and innovation in global travel retail. We only play where the spirit growth is,” says Keene. The biggest opportunity for Atom Brands is its ability to innovate and customize. The firm is focused on innovation and bringing new, exciting craft products to market. “2019 will dive deeper into creating bespoke bottling that speaks to specific places in the Americas and potentially airport-specific bottling, too,” Keene concludes.


Demerara Distillers

The kindred spirit of Guyana Demerara rum, hailing from Guyana, is ready to share its past to further its future by JAS RYAT

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uyana-based Demerara Distillers is attending the Summit of the Americas tradeshow to connect with travel retailers and to unveil its oneliter bottle of El Dorado rum. Demerara rum stands strong in the Caribbean market, and now Demerara Distillers is looking to expand its footprint in the Americas with the addition of the new sized bottle. The story of Demerara rum started in Guyana in the 1640s with the introduction of sugar cane by the early European settlers. Not until distilling was introduced by the British in the 1650s was the foundation of Demerara rum laid. Rum fast became a popular export and by 1670, every sugar estate in Guyana had a small distillery attached to it, resulting in over 300 independent estates with over 300 distilleries, each producing its own unique marque of rum. Over time, plantations consolidated and by 1940, there were only nine distilleries remaining. Fast forward to the 20th century, when Demerara Distillers is now the only producer of Demerara rum and operates the last remaining distillery in Guyana at Plantation Diamond on the East Bank of the Demerara River. Here the firm has consolidated all the old original stills and traditional skills that make Demerara rum so distinctive. The distillery operates with

Demerara Distillers is the last remaining distillery in Guyana at Plantation Diamond on the East Bank of the Demerara River

nine different stills, making it the only one worldwide to do so. Today, Demerara Distillers boasts an array of award-winning rums, which are a result of honing the craft for over 300 years of rum making. The portfolio includes El Dorado, which consists of a diverse range of blended aged rums, including rums aged from 3yo to 25yo.

Plethora of opportunities

More recently, Demerara has introduced El Dorado Single Still Rums, which showcases its more popular marques. “Premium aged rum is still a relatively young category. It is way behind other premium brown spirits, but it is a growing category. Consumers of ‘sipping rums’ are discerning and want to be more aware of what they are drinking. They want to know their brands, where they come from, understand the history,” says Komal Samaroo, Chairman, Demerara Distillers. These are the consumers that El Dorado speaks to.

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The Americas region has a thirst for premium aged rums. This gives Demerara the opportunity to capture a new consumer in the region with the company’s vast portfolio. “In the past we have been noted for our blends of premiums aged rums, but more and more connoisseurs have been demanding our single distillate rums and cask strength offerings,” explains Samaroo. “As consumers explore not only the range but the depth of our rum portfolio, we continue to see tremendous demand for our Rare Collection, Single Still and Special Finish releases.” Demerara has seen modest growth in travel retail for the last year, but hopes to accelerate growth with the introduction of the new one-liter bottle. The firm will continue to innovate – not only by releasing limited-edition products to showcase its versatility in producing a diverse range of complex rums, but by extending this into a wide range of ageing profiles.


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Flor de Caña

In the spirit of sustainability by JAS RYAT

Flor de Caña rum has become one of the first global spirits brands to be Fair Trade certified

Premium rum brand Flor de Caña raises the bar for the global spirits industry

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lor de Caña, a fifth-generation single family estate Nicaraguan rum brand, comes to the Summit of the Americas with a message of sustainability to share with the duty free industry: it has become one of the first global spirits brands to be Fair Trade certified. This world-renowned certification is defined by excellence in labor conditions, economic opportunity for workers, community development, and environmental sustainability. The certification was issued by Fair Trade USA after verifying that the raw ingredients used in the production of the Nicaraguan rum are made in compliance with over 300 rigorous social, environmental and labor standards.

“In the spirits industry, the trend toward environmental sustainability and social responsibility is just beginning,” said Paul Rice, President & CEO of Fair Trade USA. “Flor de Caña is one of the early trailblazers in this space, and is one of just a few spirits companies to adopt Fair Trade practices in their supply chain. We’re excited by this partnership and the ripple effect that it’s poised to create.” This core value of sustainable growth through the brand’s 125-year history also places importance on the environment, its employees and its local community. Flor de Caña’s commitment to the environment can be seen through the company’s practices, as the rum has been distilled using 100% renewable energy for over a decade. The team at Flor de Caña has planted 50,000 trees annually (an area twice the size of New York City’s Central Park) for the past 12 years.

The rum brand is ready to share its core values when it comes to social responsibility

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Since 1913 the company school offers free education to 600 children of its employees, and since 1958 the company hospital has offered free medical attention to employees and their families (over 2,500 births to date). In addition, Flor de Caña has been the main donor of APROQUEN, a Nicaraguan non-profit that has provided over 500,000 free medical services to child burn victims and children with a cleft lip or palate. At a time when consumers are making purchasing decisions based on a desire for sustainability and value for money spent, it is important to share these values and educate consumers on the entire ‘from field to shelf ’ story. Flor de Caña, named 2017 Global Rum Producer of the Year by the IWSC, is present in over 70 countries with ambitions to expand its green footprint.


Baltika 

Tapping the booming

BEER category Baltika, the largest Russian exporter of beer, is keen to boost its duty free business with its leading brands targeting all tastes

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altika Breweries was established in St Petersburg, Russia in 1990. Baltika has been the number one brewer in the Russian market since 1996 due to its state-of-the-art equipment and application of advanced technologies to produce the high quality products. With approximately 9,000 employees, Baltika is one of the largest consumer goods companies in Russia and the market leader in the beer sector with the share of more than 32.7% of the market (according to retail audit Q1 2017 Nielsen Russia in respect of both Urban Russia and Rural Russia markets. 2016 data). Baltika products are also exported to more than 75 countries globally, including Western Europe, North America and Asia Pacific. Now, the company has the duty free business firmly in its sights for growth. Throughout its history, the company has developed and acquired breweries, built new ones from scratch and actively expanded its sales network. Today, Baltika Breweries is part of Carlsberg Group, one of the leading brewery groups in the world. The company has an extensive product line. It offers beer to suit any taste: pale and dark, lager and ale, alcohol-free and stout, locally and internationally brewed. Its wide brand portfolio allows even the most sophisticated taste to be satisfied. Apart from the key Baltika brand, the

Russia based Baltika Breweries is set share its extensive portfolio to duty free

company produces more than 40 beer brands, including Arsenalnoye, Tuborg, Zatecky Gus, Carlsberg, and eight nonbeer brands. Its Baltika brand is ranked in first place in Europe in terms of sales (source: Euromonitor 2015). Different varieties of the brand are produced under license in the CIS countries and abroad. Furthermore, the company’s brands have received more than 670 Russian and international awards in professional and consumer contests. Now, as the largest Russian exporter of beer, Baltika is determined to boost its footprint. As part of its grand plan, the company has a special interest in expanding its presence in the burgeoning US beer market. “The United States is a huge country that stretches from the Atlantic to the Pacific Ocean, and its geographical diversity determines differences in people's personalities and preferences. Not surprisingly, the US market is one of the largest imported beer markets in the world. That is why, of course, America is of special interest to our company.” Adding to its appeal, Baltika also notes that the US is a market where craft and specialty beer is popular, and where multipacks are in demand.

Baltika moved into the export sector in 2000, and now boasts an extensive worldwide distribution. “We have continuously expanded our distribution network and channels, and hope that the Summit of the Americas in Orlando will help to strengthen our presence in duty free stores,” says the firm. Baltika has been actively developing the duty free channel since 2016. The company’s main business is currently in Russia’s major airport hubs, St Petersburg and Moscow. The company's products are presented in duty free stores at the airports of Pulkovo (St Petersburg), Moscow Sheremetyevo, Domodedovo and Vnukovo, as well as on ferries and duty free shops in the Baltics and the Middle East. Today, the company's products can also be found on ferries in Latin America (ferries HSC Francisco) and on the ferry SPL Princess Anastasia (St PetersburgTallinn-Helsinki). So what can we expect from Baltika in 2019? “Our main awards are received from consumers who prefer our beer to dozens of other brands. So we will please and surprise our customers in 2019,” the company says.

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What’s in a bottle

Love at first sight P Does the old adage ‘never judge a book by its cover’ apply to the eye-catching bottles in which spirits brands are presented? by JAS RYAT

Crystal Head vodka uses its thick glass skull to the brands advantage

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icture yourself perusing the aisles in a duty free shop looking for another spirit to add to your already effervescent collection of spirits at home. What is it that initially catches your attention? Is it the story behind the brand, the reputation that precedes the liquid before you, or the unique bottle that dominates the shelf it’s presented on? For many, the bottle speaks volumes for the liquid it holds. Take Canadian-born Crystal Head vodka, known for its distinctive skull bottle. This bottle began as a sketch by artist and co-founder, John Alexander. Together with his co-founder, the actor Dan Aykroyd, they created the vodka. The crystal-clear specialty bottle is a reflection of the detail and quality of the product, and its design is meant to inspire creativity and tell the story of the additive-free, pure spirit.


What’s in a bottle

“Our bottle is what initially separates us from our competitors. The unique skull bottle plays an important role in how we identify as a brand. It represents our high-quality product and the endless possibilities of what can be created,” shares Daniella Vizzari, Marketing Coordinator at Crystal Head supplier Globefill Inc. Often, the bottle is a representation of the brand’s story and provides the customer with the initial taste of what is inside. Canadian brand Iceberg Vodka recently redesigned its label to better reflect its modern craft brand while remaining true to its Newfoundland heritage, and the 20,000-year-old icebergs that go into the bottles. “Much like an iceberg itself, the label appears modern and minimal on the surface, but beneath tells a deep and rich story through a hand-drawn illustration that evokes Canadiana. That handdrawn quality extends into many elements of the design, including the redesigned logo,” explains Steve Ciccolini, Chief Operating Officer at Iceberg Vodka. “The new Iceberg label doesn’t just represent our brand image, it tells our brand story: Canada’s Vodka.” Ciccolini believes the new labeling will help Iceberg Vodka stand out: “In a cluttered category, full of folklore and such, it seemed like such a missed opportunity to tell such an authentic story. When people discover that we’re made from real icebergs, they immediately have more

respect and interest for the brand, and our current label didn’t effectively communicate ‘Canadian’ or our USP ‘made from Iceberg water.” If you’ve traveled the globe in the last few years, you’re sure to be familiar with the roar of a certain tiger. Wild Tiger rum has defiantly caught the attention of those looking for a stand-out collectible, special edition by default or distinctive gift. Every bottle features a unique stripe design, just like every tiger. “It was very important for us to capture the spirit and image of India through our packaging. The Majestic Tiger is the national animal of India. In fact, India is known as The Land of Tigers, as it’s a refuge to around 2,200 of the last 3,900 remaining wild tigers of the world. We knew the packaging was going to be bold and of tactile nature,” says Gautom Menon, Founder and Chief Brand Officer, Wild Tiger Rum.

Purchase. Drink. Repeat?

How far will this initial purchase, based on looks alone, get a brand? The longevity of the product, in this case the spirit, has to be strong enough to create the repeat buyer relationship. The bottle design alone, the heritage of the brand and initial wow factor will eventually wear off, leaving the spirit to speak for itself. Menon believes that bottle design is extremely important for first-time buyers but not so much for repeat purchasers.

From old to new. Iceberg Vodka’s new label (right) offers more of an personalized appeal with direct correlation to the iceberg it was made from

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Like the real animal, Wild Tiger rum features unique stripes on the bottle ensuring no two bottles are alike

Says Menon: “The liquid has to be enticing for a consumer to become a loyalist.” Not surprisingly, Crystal Head is the one of the most repurposed bottles on the market. “We know how important our bottle design is for our customers,” says Vizzari. “They are able to create the most amazing art with the skull once the vodka has been enjoyed. We have seen everything from paintings, lamps, vases and so much more. We love that our bottles are being reused and displayed in people’s homes. We hope to inspire creativity and symbolize the memories created while drinking Crystal Head Vodka.” There is no shortage of beautiful, distinctive spirit bottles on duty free shelves today. Whether the brand is trying to portray its craft heritage, its luxe-liquid or quirky back story, it’s important to remember the primary introduction may lead to the proposal, but the spirit inside is what establishes the marriage.


Oris

Oriental General Trading 

China brand fashions further success Oriental General Trading’s focus on globetrotting Chinese smokers is paying dividends as the brand gains traction worldwide by HIBAH NOOR

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Oriental recently introduced its Oris Fashion double-capsule, super slim cigarette, which boasts two flavors in one, as well as the latest Orange peel capsule flavor range in both the Panda and Peace variants

riental General Trading Inc, the maker and distributor of tobacco and spirits products for Chinese travelers, is ending 2018 with a flourish, as it prepares to move its headquarters by the end of the year. Following the successful launch three years ago of its Oris China cigarette brand targeted at Chinese smokers, the company recently introduced its Oris Fashion double-capsule, super slim cigarette, which boasts two flavors in one, as well as the latest Orange peel capsule flavor range in both the Panda and Peace variants. The company’s latest product innovation was launched in the fourth quarter of 2018 and immediately secured a listing at the new Dufry MTR location in Hong Kong. Oris China secured listings with Zhuhai Duty Free in September 2018, a major promotion took place with the operator during the Mid-Autumn Festival in September featuring Oris-uniformed promoters and a special display at the front of the store. “We’ve done really well since our launch in September and we’ve already gotten repeat orders,” says Tania D’Souza, General Operations & Marketing Manager, Oriental General Trading Inc. In addition to the Oris Fashion brand, Zhuhai Duty Free carries the Oris Peace Queen Size, Oris China Nano packs, King Size and Super Slims. Recently, the Oris China brand was also launched in a big way at the new Dufry MTR duty free store, where it will soon have a dedicated wall bay.

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Oriental General Trading

Although Oris China is targeted at Chinese travelers, D’Souza has observed that many international passengers at Dubai Duty Free also purchase the brand, especially the Panda version and the Super Slims. She explains: “We’ve noticed that the packaging appeals to non-chinese passengers as well, as it is quite unique, and the blend is fit for non-Chinese smokers. A popular SKU is the blue Panda nano packaging, which is a popular size for middle-eastern smokers.”

Trained brand ambassadors in-store

To gain brand visibility in duty free stores, Oriental signs up for promotional periods, offering special promotion packs or a 10% discount. The company endeavours to have a dedicated brand ambassador working in every duty free store, as D’Souza explains. “Purchases by Chinese travelers are usually planned, but if they aren’t planned, they feel more comfortable speaking with sales staff who can speak Chinese and who understand the brand. When they travel, they are out of their comfort zone and need to converse with someone who speaks the language. If they’re not sure about a product, they won’t buy it. If they don’t know the brand, our trained brand ambassadors do a great job of explaining the brand to them as well as the differences between each SKU, flavor and blends.” The company introduced the Oris China brand after gaining a lot of experience distributing Chinese brands in the Middle East, Africa and travel retail some 15 years ago. The company has experience in distribution of Chinese tobacco and liquor products and understood what Chinese travelers were looking for. “We saw an opportunity because we could tell smoker trends in China were changing. The older generation are brand loyal and prefer to smoke the same thing, but young adult smokers are always searching for something new. They want international brands to smoke that are lighter, they want packaging that’s different, unique and trendy. We wanted to create a combination between a traditional Chinese packaging and international packaging for to appeal to our target consumers as well as still maintain the Chinese elements of the brand.” As a result of its travel retail presence, Oris China has gained “huge” brand recognition, says D’Souza, who oversees the Oris China brand. The rest of the sales team is based in Dubai, in Asia Pacific, and in North America. Oriental also has listings with Dufry and DFS at San Francisco, Los Angeles International Airport, New York JFK, Hawaii and DFS Abu Dhabi. The brand is listed with King Power in Bangkok as well as in Cambodia, Vietnam, Singapore, Japan, Maldives, Sri Lanka and South Korea, and is set to launch in Taiwan soon. Macau and Malaysia are upcoming projects.

Beating off the competition

The company’s two main challenges are competition and regulation. The latter is a “big” challenge, says D’Souza. The company has joined the lobby against the WHO’s initiative to ban sale of tobacco products in duty free channels because of alleged links to illicit trade. Other difficult issues include the requirement for plain packaging in certain countries – as the attraction of the brand is the packaging – and countries that change their health warnings every year, which can be quite costly for the firm.

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To fight off the stiff competition, Oriental makes sure its packaging and product are of high quality, and available at the right price. It offers different price ranges – high, middle and low-end. “We can also compete through our duty free marketing, brand ambassadors, promotions and visibility,” she notes. Chinese travelers are quite focused on using apps such as WeChat, to learn more about product offerings in the airport duty frees. This has proven to be good measure of brand awareness. “For instance, at DFS in Abu Dhabi and at Dubai Duty Free, we’ve noticed that when Chinese people who smoke our product are going abroad, they have a picture of our product on their phones when referring it to the sales staff, which shows a positive growth in brand awareness.” As its business expands, D’Souza has a message for travel retailers. “We are flexible and we work super-quick. Wherever brand support is required, we’re there. We are a one-stop-shop, if retailers need promotions, brand ambassadors, merchandising support, or require special limited edition packaging for a specific airport locations or Chinese New Year.” She cites the example of Oriental’s Dubai Duty Free-exclusive gift box packaging featuring the UAE skyline for Chinese New Year that made its debut in January 2018. In the future, the company plans to develop travel retail exclusive products for Chinese New Year as well as other occasions, featuring special packaging.


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Zimpex

ZIMPEX MARKETING

captures the Chinese consumer US-based Zimpex Marketing is taking advantage of the influx of Chinese travelers visiting North America

I

by JAS RYAT

ncreased outbound tourism from China has prompted US-based marketing specialist Zimpex Marketing to capture and capitalize on this opportunity. The company has recognized the need for an agent that will work with brand owners to help develop marketing strategies when entering markets and to ensure that those markets can reach their maximum potential. Zimpex Marketing provides financing, logistics coordination, planning, marketing and brand promotion among its wide variety of services. The main target customer of the majority of the brands it represents is the Chinese traveler. Americas Duty Free spoke with Michael Chang, Zimpex Marketing Vice President. “Many of the brands we represent are national brands, and all of the brands we represent are top performers in their categories in the Chinese domestic market, like Liqun, Huanghelou, and Guiyan.” The firm’s reputation of working with brand owners as strategic partners with solid success stories has resulted in organic growth. The same strategy, coupled with the strong brand recognition it engenders among its target consumers, allows the firm to open doors to more markets every year, says Chang. He acknowledges that the brands Zimpex is targeting in East Asia are at a point of oversaturation and the competition among brands is fierce. But the potential remains huge, as markets elsewhere have room to grow. “We are pushing into as many markets as we can,” shares Chang. “We try to

Zimpex Marketing’s global footprint

increase visibility where we can with signage, or running promotions; we also cooperate with the operators to forge forward in some digital platforms by working with them to list our brands in electronic kiosks, tablet formats, etc. This can make the buying experience less intimidating. Most of the operators we work with also have Chinese-speaking staff on the floor to ensure the customers get the comfort of the personal touch.”

North American appeal

With the recent political tensions developing between North America and China, it’s easy to question how the trickledown effect will influence businesses like Zimpex Marketing. While in 2018 the number of travelers from China looks to be stagnant compared to 2017, the firm feels it has not reached the volume in this market to feel the effects of this. “We would also have to figure in a strong US Dollar, which is also a real hurdle for US operators. Overall our 2018 performance was stable and we were

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happy with our performance,” says Chang. He sees no threat in the near future. However, the Chinese brands Zimpex represents strictly target Chinese consumers. “If there aren’t Chinese travelers moving through the points of sale, our products will not move,” he admits.

Bright future ahead

The company’s main focus for 2019 is to promote brands outside of East Asia where there is potential for growth, considering the increasing reach of Chinese travelers. The next step is to introduce other top-performing brands like Kuanzai into travel retail markets. The goal is to expand its footprint to all destinations where target consumers are traveling. “With our continued approach of forward thinking and working with our strategic partners, we will try to ensure the business can be successful for all parties. We will also continue to support the travel retail industry when and where we can,” concludes Chang.


Booth # 501

Booth # 501 Patrick Nilson +1 845 981 7240 p.nilson@haleybrooke.com Roger Thompson + 1 203 322 9691 r.thompson@haleybrooke.com


Questionnaire

All about

Edouard Mariotti,

Travel Retail Americas Regional Director, LVMH Fragrance Brands Where were you born and raised? I was born in Les Sables d`Olonne, France, a city famous for its beautiful coastline and as the start/arrival port of the Vendée Globe, a nonstop yacht race around the world without assistance – pretty cool!

Do you have a passion in your life (or more than one)? What? I love sports. I’ve done several triathlons including Ironman, and I ski and surf. I also enjoy cooking inspired by my mother and Anthony Bourdain, and everything related to travel.

If you attended post-secondary school, what did you study? I graduated in International Business at the ECE- INSEEC in Bordeaux, France. I also did a study-abroad program as part of the Business Administration program of the University of Macquarie in Sydney, Australia, where I studied international sales.

Do you have a pet (or more than one)? If so, what animal and name? I love all pets but too active to have one for now.

Are you married? Do you have children? I am not married and I do not have any children for the moment. What is your favorite movie? That’s a tough one! I would pick The Grand Bleu because even if I was probably five when I saw it, it had an impact on me forever. The movie relates the rivalry between Enzo and Jacques, two free divers and childhood friends. A must see! What is the last book you read? Cien años de soledad, by Gabriel Garcia Marquez. What would you choose as your last meal? Definitely a seafood platter from my hometown! Your favorite drink? Red wine from the left bank of Bordeaux.

Do you prefer country or city? I would pick “city,” but one by the ocean. What is your favorite place to vacation? Somewhere by the beach with waves or mountains. I just came back from the Alps and this would definitely be one of my favorite places for a vacation. What’s the first thing you do in a new place? I look for the local places to have a typical lunch/dinner experience. If you could choose any place in the world to live, where would it be? I would love to live in Tuscany (Italy), next to a winery and back to my roots. My great grandparents were Italian (hence the family name). Which living person do you most admire? Not one but two: my parents for their dedication in my education, daily support and encouragement.

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Which historical figure do you most admire? Hubert Bonisseur de la Bath, sacré Hubert! Where and when were you happiest in your life? Now: I have a loving family, and a fascinating job in a fantastic industry. What in the world would you most like to change? Hmm. This is a hard question but currently living in Florida I would revert the climate change.

What about yourself would you most like to change? I feel blessed. I don’t think it is constructive to wish something was different. If you are wishing to change something then go for it!

What is the most important piece of advice anyone ever gave you? Don’t make decisions when you’re angry. Don’t make promises when you’re happy. What is something about you that most people would find surprising? I’ve been listening to Vivaldi, Metallica and Daft Punk while answering these questions.


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Profile for Global Marketing Company Ltd

The Americas - Summit of the Americas 2019  

The Americas - Summit of the Americas 2019