TFWA WE 2019
DUTYFREEMAG.COM OCTOBER 2019 · TFWA WE · VOL 29 · NO 3
AN OUT OF THIS WORLD EXPERIENCE IN CANNES Come visit our Mazaya stand - Yellow Village, H53 from 30th of September till 4th of October at the TFWA World Exhibition & Conference Palais des Festivals and chill on our Yacht Princess Iluka. We are waiting for you at the marina for an exceptional experience full of flavours!
Top Brands International acquires Neutral p. 14 Dufry gets a business boost on Brazil border p. 16 3Sixty Duty Free levels the playing field p. 28
Letter from the Editor
Good news at
the border O
ur industry just got a much-needed boost in the Americas as world-leading travel retailer Dufry celebrated the official opening of its first border duty free shop in Brazil, following the final approval of the new regulation by the local Customs authority. Dufry’s debut 850 square meter border store is located in Uruguaiana, one of the most important cities in the south of Brazil, on the Argentinian border. The shop, which began trading on August 22, offers an assortment of prestige international brands, as well as a tasting bar, where customers can try famous wines and spirits, and interactive technologies supporting the selection of perfumes and cosmetics. With the new border store regulation, a total of 32 Brazilian twin-cities have the right to operate duty free border shops, and Dufry says it intends to expand this business in all of these cities, according to Rene Riedi, Divisional CEO Central and South America for Dufry. The South American Association of Duty Free Stores sees Dufry’s Uruguaiana store giving a major boost to the development of the land duty free business in Brazil. So much so, that ASUTIL Secretary-General José Luis Donagaray has organized a November conference that will focus on the new Brazil border business. Donagaray said Dufry’s rapid involvement in the Brazil land duty free business is something to celebrate because it is “a big player. (This means) there is an opportunity for everyone on the border to have very good business.” That’s one of the things ASUTIL hopes to highlight in its November 5-6 border conference in Porto Alegre, Brazil, that it is sponsoring jointly with the Uruguayan Chamber of Entrepreneurs of Free Shops. “We will try to have operators, new operators, potential operators and suppliers to understand how this business will develop and answer questions and take away doubt,” he said. Because the land duty free business in Brazil is so new, non-members of ASUTIL will be able to attend the conference, whether on the operator or supply side. Expectations are that as many as 200 people will attend. All these exciting developments are happening amid the Amazon fires that are raging through the rainforest in Brazil, reaching record levels. Devastating images show the extent of the blazes, and the spread of smoke, which is impacting Brazil’s neighboring countries. What will the impact be on the travel and tourism industry? This question will be weighing on the minds of operators in this region. In a further tragedy playing out in the Caribbean, the Bahamas was struck by Hurricane Dorian in August, leaving the country devastated. As our industry mobilizes to aid those affected, we send our heartfelt wishes to the people of those battered islands. Meanwhile, the general election in Argentina is slated for October 27. Incumbent President Mauricio Macri is running for re-election but the currency plunged on August 12 after the country’s centre-left opposition leader won an election primary. The future may look brighter for operators in Brazil, but with this level of political uncertainty in Argentina, we can only hope this election will clear the air. I look forward to catching up with you in Cannes. Kindest Regards,
Hibah Noor Editor-in-Chief email@example.com
6 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
OCTOBER 2019 · TFWA WE · VOL 29 · NO 3 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. October 2019, Vol 29. No. 3. 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.dutyfreemag.com PUBLISHER Aijaz Khan firstname.lastname@example.org EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor email@example.com DEPUTY EDITOR Jas Ryat firstname.lastname@example.org SENIOR EDITOR Mary Jane Pittilla email@example.com SENIOR WRITER Rebecca Byrne firstname.lastname@example.org ASIA CORRESPONDENT Elena Owyong email@example.com AMERICAS CORRESPONDENT Ronnie Lovler firstname.lastname@example.org ART DIRECTOR Jessica Hearn email@example.com CIRCULATION & SUBSCRIPTION MANAGER firstname.lastname@example.org
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Letter from the Editor
en la frontera N
uestra industria acaba de recibir el necesario impulso en las Américas cuando Dufry, minorista de viajes y líder mundial, celebró la inauguración oficial de su primera tienda duty free de frontera en Brasil, luego de la aprobación final de la nueva regulación por parte de la autoridad aduanera local. La tienda duty free de frontera de Dufry, con 850 metros cuadrados de extensión, está ubicada en Uruguaiana, una de las ciudades más importantes en el sur del Brasil, en la frontera con Argentina. El establecimiento, que comenzó sus operaciones el 22 de agosto, ofrece una amplia gama de marcas internacionales de prestigio, así como un bar de degustaciones, en el que los clientes pueden probar famosos vinos y espirituosos; y tecnologías interactivas que facilitan la selección de perfumes y cosméticos. Gracias a la puesta en vigor de la nueva regulación, un total de 32 ciudades gemelas brasileñas tienen el derecho de operar duty free de fronteras, y Dufry afirma que tiene intenciones de ampliar sus operaciones en todas esas ciudades, según René Riedi, Director Ejecutivo de División Centro y Suramérica de Dufry. La Asociación Sudamericana de Tiendas Libres (ASUTIL) considera la tienda de Dufry en Uruguaiana como un importante impulso al desarrollo del negocio duty free terrestre en Brasil. Tanto así, que José Luis Donagaray, Secretario General de ASUTIL, ha organizado una conferencia en noviembre, que se enfocará en el nuevo negocio de frontera en Brasil. Donagaray afirma que la rápida incorporación de Dufry en el negocio duty free terrestre de Brasil es algo para celebrar porque es “un protagonista importante. (Esto quiere decir) que todos en la frontera tienen una oportunidad de hacer buenos negocios”.
8 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
Ese es uno de los puntos que ASUTIL espera destacar en su conferencia sobre temas de frontera del 5 al 6 de noviembre, que se llevará a cabo en Porto Alegre, Brasil, patrocinada conjuntamente con la Cámara de Empresarios de Free Shops y Afines del Uruguay. “Trataremos de que los operadores, nuevos operadores, operadores potenciales y suministradores, comprendan cómo este negocio se desarrollará. Responderemos preguntas y eliminaremos las dudas”, afirma el Sr. Donagaray. Como el negocio duty free terrestre en Brasil es tan nuevo, las entidades y personas que no son miembros de ASUTIL podrán asistir a la conferencia, ya sea como operadores o como suministradores. Se espera que asistan hasta 200 personas. Estos acontecimientos tan importantes ocurren entre los incendios de la Amazonia que están azotando los bosques lluviosos amazónicos brasileños, alcanzando niveles sin precedentes. Las imágenes devastadoras muestran la extensión de los siniestros y el alcance del humo que está impactando las comunidades vecinas de Brasil. Entretanto, las elecciones generales en Argentina están programadas para el 27 de octubre. El actual presidente, Mauricio Macri, se está postulando a la reelección, pero la moneda nacional se devaluó el 12 de agosto, después que el líder de la oposición centro izquierda ganara las elecciones primarias. Si bien el futuro se avizora más brillante para los operadores en Brasil, con ese nivel de incertidumbre política en Argentina, solo nos queda esperar que esas elecciones aclaren el horizonte. Nos vemos en Cannes. Kindest Regards,
Hibah Noor Editora en Jefe email@example.com
What’s inside Lead Stories 14 Top Brands International Top Brands International acquires Neutral
Top Brands will market the Neutral stores as Neutral by Luryx and will launch a new marketing tool
16 Dufry Brazil
Dufry gets a business boost on Brazil border
Dufry is celebrating the landmark opening of its first-ever border store in Brazil, following a change in regulations that allows operators to trade in the twin cities
20 Dufry Americas
Constant advancement A company well versed in thriving under pressure, Dufry holds strong in Latin America while continuing with substantial growth throughout the rest of the world, including the all-important burgeoning cruise channel
24 Duty Free Americas
A bold step further in Brazil In this keynote interview, Leon Falic, President of Duty Free Americas, reveals how the company is taking its flourishing Brazilian airport business to the border for the first time
28 Sixty Duty Free
Leveling the playing field With its omnichannel approach, 3Sixty Duty Free wants the passenger shopping experience to rival anything else available today, allowing shopping from anywhere to be delivered straight to your seat or your door
32 Brazil’s Border
Advent of land duty free stores in Brazil The first three stores open along Brazil’s border with Uruguay with many more stores expected to open in coming months
38 Features The cruise retail business model FDFA: The conventional wisdom ASUR pursues expansion
10 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
27 34 38
Experiencing retail on the sea Brazil Border Conference on ASUTIL’s agenda
Lead Stories 50 Costa Del Mar
Costa targets sustainable growth Eyewear brand Costa Del Mar attributes its success to owning the space on, in and around the water without losing sight of its green credentials
54 Essence Corp
Facing up to today’s beauty brand challenge Family-owned Essence Corp is steering a steady course through choppy retail waters with its strategy to target niche and innovative brands
56 LVMH Perfume
and Cosmetics Together we go further as one team LVMH’s Perfume and Cosmetics division restructured in 2018 to reinforce partnerships with retailers and embrace the retail transformation
60 L’Oréal Group
The beauty of a powerful brand portfolio In the first part of this illuminating interview, Yannick Raynaud, L’Oréal Travel Retail Americas Managing Director, reveals some secrets of the division’s travel retail success
68 Confectionery Challenges Challenging the status quo
Leading confectionery manufacturers are figuring out solutions to a series of challenges being posed in the travel retail channel
74 Whiskey Tourism in the US A Kentucky hug
American whiskey and bourbon are reaping the rewards of domestic revival and global growth. See why travelers are relishing the Kentucky hug- the ‘mouth feel’ or warmth of a good old fashion American whiskey
Crafting an opportunity on the High Seas Monarq is making the most of the opportunities in the cruise market as it presents a strong channel for its portfolio including Molinari Sambuca
56 Features Bringing fashion to beauty Spotlight on exhibitors Duty Free Dynamics expands Editor’s Picks Buckley London celebrates in style
43 44 46 48 58
Guess goes back to the 80s Confectionery News Anthon Berg continues to reinvent Licor 43 elevates Questionnaire: Rowena Holland
62 64 67 80 86
Top Brands International
TOP BRANDS INTERNATIONAL
acquires Neutral by RONNIE LOVLER
Top Brands will market the Neutral stores as Neutral by Luryx and will launch a new marketing tool
Top Brand’s Luryx store at the Albrook Mall in Panama City occupies a position that is hard to miss at the mall
14 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
As part of its quest to reach out more in its Panama home base, Top Brands has a Luryx store at Panama City’s Megapolis Outlet Mall, the first outlet store in Panama and the region
Top Brand’s Luryx store in Bahamas offers a wide range of perfumes
anama-based Top Brands International is growing its footprint in Uruguay with its takeover in August of Neutral Duty Free. Top Brands’ purchase of Neutral and its entry to the Uruguay duty free scene comes at an opportune time now that land duty free stores have begun operations on the Brazilian side of the border, which is widely expected to generate more business for everyone. In an exclusive interview with Americas Duty Free, company President Danny Yohoros said Top Brands is going all-out to makes its presence felt in Uruguay for duty free shoppers, no matter their national origin. “We want to be the one-stop shop in the area for the Brazilian customers. We want to grow even more in the categories and brands that we carry today,” Yohoros said. “We want to be in the mind of the Brazilians and Argentinians so that they know, when they come to Neutral, they can find all the products they want.” The eight Neutral stores will now trade under the name of Neutral by Luryx, which is how Top Brands began branding all its holdings a year ago. Prior to the
takeover, Neutral had been doing business in Uruguay for more than three decades, with two stores each in Rivera and Chuy, along with shops in Artigas, Bella Union, Rio Branco and Acequá. Neutral was a natural focus for Top Brands as the company began looking to grow its business, Yohoros explained. “We have been looking to expand in the region and to have a bigger footprint. There are two ways to grow - organically or by acquisition. In order to speed up the expansion we had to make acquisitions that would give us faster growth. It makes sense to make acquisitions and look at alternatives and Neutral was one of them,” Yohoros said. This means giving Neutral’s customers more, not just the products customers have always purchased, but “new and interesting products” as well, according to Yohoros. “We are going to support the buying office we have in Uruguay with the one we have in Panama which will automatically add more brands and different products. We have to distinguish ourselves among the operators in the zone. “At the same time we are looking to
offer exclusive brands and we already have signed some of them,” Yohoros commented, although he did not disclose any names. In addition, Top Brands will launch a new marketing tool to coincide with its Neutral acquisition: a loyalty card for Luryx shoppers to use in all their stores. “In terms of marketing we are going to take advantage of the 300,000 people we have [in our database] and start interacting more with them. Our big project for 2020 is a loyalty card for Neutral together with Luryx, where a customer will be able to take advantage and earn points in any of our 80 stores throughout Latin America and the Caribbean,” Yohoros explained. During his conversation, Yohoros described the loyalty card concept, as “a big factor that will give a lot of strength to the brand and to the company, and something that will be difficult for other companies to offer to their customers.” He said the loyalty card is designed to create loyalty, of course, but also to let people know they are getting recognition for being steady customers. “Today people are looking for what is in it for them,” he said. “What are they getting back? Why should they buy from you and not from the other company or from the competition?” And what better time to start a loyalty program than with the approach of the upcoming holiday season? “We have to look for services that attract the customer and it has been proven that people do like to be loyal. Of course they need good prices and promotions, but at the same time, people like gifts and to be rewarded for their business.” The company’s acquisition of Neutral comes at a time when it is already in expansion mode acquiring properties in Colombia, Paraguay and the Bahamas, among other locations, as well as setting up some operations in the United States. With the purchase of Neutral, the company is now in possession of more than 200,000 square feet of retail space in 14 countries, according to Yohoros. Top Brands now has a presence in Panama, the United States, Belize, El Salvador, Costa Rica, Colombia, Chile, Paraguay, the Bahamas, Cuba, St. Thomas, Tortola, French Guiana and, of course, Uruguay.
www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING
Dufry’s debut border shop in Brazil is located in Uruguaiana, the second-largest city in the Brazilian border with Argentina and Uruguay
Dufry gets a business boost on Brazil border Dufry is celebrating the landmark opening of its first-ever border store in Brazil, following a change in regulations that allows operators to trade in the twin cities by HIBAH NOOR
he opening of a border duty free shop in Brazil for the first time is a major achievement and a change in the travel retail landscape in South America. That’s the view of Gustavo Fagundes, COO of Brazil and Bolivia at Dufry, which has just achieved this milestone retail development. Dufry’s first-ever border shop in Brazil covers a retail space of 850 square meters and is located in Uruguaiana, the secondlargest city in the Brazilian border with Argentina and Uruguay. The store is situated in the city’s downtown commercial area and is also close to the bridge that connects the city to the Argentinian side. There isn’t a shop on the Argentinian side of the border, and the closest twin city in Uruguay is Bella Union, located 70 kilometers away.
16 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
The fashion department offers a diverse collection of brand name products found in Dufry’s airport stores
The assortment at Uruguaiana is similar to Dufry’s airport shops, including products of the main traditional duty free categories, such as perfumes and cosmetics, wines and spirits, fashion and confectionery, among others, from the worldwide renowned brands. Also, thanks to Dufry’s close relationship
with the brands, the store will offer customers new launches and novelties, exclusive products and limited editions. To give a few examples so far, Dufry has achieved an exclusivity in its shop for MAC, Bath and Body Works, Sekonda watches, Gap apparel and “soon we will have more”, Fagundes says.
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The spirits and wines department features well-known brands that can’t be found on the domestic market
The electronics category is expected to be popular with the new store’s customers
Milestone for the city
Its customers will be mainly the residents of the city and tourists from both cities in Brazil and neighboring countries. They will look for products, including exclusivities and novelties, from worldwide known brands, that aren’t available on the local market, he notes. Dufry had a soft opening from August 2019 with an official opening on August 22. This is Dufry’s first operation under the border duty free concept in Brazil and the company still needs time to evaluate how the business will evolve going forward. “Having said that, even though the sales period has only been a few days, we have been very pleased with our shop performance so far,” enthuses Fagundes. Dufry held an opening event, attended by representatives from the local authorities and Dufry’s top management from Brazil. “The store isn’t a milestone just for the group but for the city as well, as the local government has also worked for years to make the border shops a reality. As we are entering a different channel, for the first time we will start to advertise Dufry’s border shop on local TV and soon on the web,” reveals Fagundes. The monthly duty free allowance at the store is US$300 for shoppers. Fagundes says he is “comfortable” with this allowance level, “especially because customers can buy above the limit, as
18 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
long as they pay the taxes on the extra amount. Also, Dufry has services that ensure customers can make the best of the opportunities to buy in our store.” The Reserve & Collect service allows customers to pre-order the products they want, guaranteeing the best price and the stock, while members of the RED by Dufry loyalty program have 5% up to 10% discount on their purchases (not cumulative with other promotions and discounts). Last, but not least, customers can pay for their purchases in Brazilian reals and in instalments using a credit card, thus also avoiding local tax. Fagundes is rightly proud of this landmark opening: “The opening of a border duty free shop in Brazil for the first time is a major achievement and a change in the travel retail landscape in South America. The project started in 2014 and last year the Brazilian regulation concluded the process that permits [operators] to open shops in any of Brazil’s 32 twin cities that border variously with Uruguay, Argentina, Paraguay, Peru, Bolivia and Colombia, among other countries. Having said that, we are analyzing the prospects in the twin cities in order to assess the best opportunities for Dufry. However, we cannot disclose further details on our project pipeline.” One thing is for sure: Dufry has succeeded in breaking for the border in Brazil.
The extensive perfumes and cosmetics section has featured MAC as a beauty brand as an exclusive for the new store
Introducing the Spring Summer 2020 Collections
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www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING
Dufry recently opened the refurbished main store in Argentina, Buenos Aires
Constant advancement A company well versed in thriving under pressure, Dufry holds strong in Latin America while continuing with substantial growth throughout the rest of the world, including the all-important burgeoning cruise channel by HIBAH NOOR
ore than most industries, travel is strongly affected by socio-political realities, and if travel is affected by anything, travel retail will be affected even more. It’s no secret that South America is an economically volatile part of the world, but Dufry has had operations there for a long time. This company is one that knows how to thrive in a rainstorm, and you’d be hard pressed to find someone under the Dufry banner who doesn’t express a sense of thoughtful positivity.
Rene Riedi, Dufry’s Divisional Chief Executive Officer Central and South America, has been witness to a number of crises since his tenure in the region began. “I have been in Americas for the past seven years,” he says. “I remember when I started in 2012, the first thing that happened was the collapse of Pluna airline, the flag carrier of Uruguay that had flights between Brazil, Uruguay and Argentina. In one day we had a 50% drop in traffic in Uruguay. This was my first challenge in the Americas.”
He says while, as with everyone, Dufry is seeing the affects of the situation in Latin America, the company is still growing reasonably well. “Things could be much worse. Will we get out of it? Yes. When? That’s a bit tricky. But for Dufry, we should probably see recovery, because the comparable is going to be better.” Riedi reminds us that since 2014 this industry and others have been in constant crisis in South America, first with Brazil, then Argentina. “This is something you have to learn when you are invested in South America – you never have stability,” he says. “This is not like operating in Switzerland and Singapore. External factors are always playing a role in our considerations.” As Brazil’s election was a focus of the LATAM business community in 2018, so is Argentina’s election this year. “The consequence of the elections is that they impact currencies,” he says. “We sell in US dollars. If you sell in dollars and the local currency devaluates, our prices become more expensive in comparison to the local market. That is a risk. The upswing can be very steep again. This is the reality. We are
20 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
used to this pattern; we know what needs to be done to mitigate these issues. We have to have products, offer promotions, and we have to make sure that the staff is motivated and incentivized.” While South America may be a challenging region for the company, it is doing especially well in the Caribbean and North America. “The economy of the US brings tourists into the Caribbean. The situation in Mexico is stable and business is going along as normal. We are happy about what’s happening on the northern side. In the end you have a mixed bag,” says Riedi.
Rene Reidi, Dufry’s Divisional Chief Exectutive Officer Central and South America with Hibah Noor, Editor-inChief, Americas Duty Free, met earlier this month for an extensive interview
Thriving under pressure
During the difficult times in South America, Dufry made substantial investments and this is currently the case in Argentina. “We recently opened the refurbished main store in Argentina, Buenos Aires,” says Riedi. “This is remarkable because if you look at the economic situation in Argentina we have made an effort to invest and upgrade the store in uncertain times, and it has been received very well. We have created an international feel combined with a real sense of place, giving good space to local items like wine or alfajores, the local delicate cookies made with cornstarch.” The Argentina location is one of the company’s New Generation Stores, which use digital technology to create a highly personalized experience for its customers. “Not every location qualifies to be NGS,” says Riedi.
Holland America and Cruise business
The cruise channel continues to grow internationally, and it is an important focus for Dufry. According to the Cruise Lines International Association, the industry is expected to grow +6% in 2019,
with an estimated 30 million travelers. “We are going to try to grow this channel,” says Riedi. “We started three years ago from a base of nine ships and now we have 38. This has been in many ways a major effort and we’ve invested quite a bit.” Recently the company signed a contract to operate duty free shops onboard six new Holland America Line ships. Dufry will now be present on all 15 ships of Holland America’s fleet, with more than 3,500 square meters of retail space. This includes the Nieuw Statendam, the cruise line’s most recent ship, launched last December. The company has developed and implemented an operational IT system that allows for communication with other logistics platform around the world to be able to serve the ships better and more efficiently no matter where they are.” says Riedi. “This simplifies our work by helping with the flow of information and goods.”
Dufry Group saw a slight improvement in Q1 sales 2019 vs Q4 2018, with organic growth at 2% vs 1.8%. The growth is led by Asia-Pacific, Middle East and
North America. As Riedi has noted, the northern part of the Americas has helped buoy the region as a whole. Europe has begun to show improvement, seeing positive growth along with Central America and Africa, whereas South America has remained weak. Julian Diaz, Dufry Group CEO, says: “The improving market conditions seen in the first months of 2019 in all divisions, with the exception of Brazil and Argentina, where the environment remains challenging, have continued and are encouraging.” Dufry is always on the lookout for opportunities – new concessions and other ways of supporting the ongoing improvement in organic growth. Recent highlights include new operations at the MTR station in Hong Kong, the new airport in Perth as well as the addition of new cruise ships. The company has added 9,100 square meters of gross retail space and signed 18,800 square meters to be opened in 2019 and 2020 in existing and new locations across the globe. At the same time, it extended existing contracts and refurbished 14,400 square meters of retail space in the first quarter with plans to revamp a further 34,700 square meters in 2019.
Dufry’s Ezeiza International Airport location is one of the company’s New Generation Stores, which uses digital technology to create a highly personalized experience for its customers
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â&#x20AC;&#x201A;Duty Free Americas
Showing its commitment to the Brazilian market, DFA opened a duty paid landside store at Belo Horizonte Confins International Airport which began trading in January 2019
A bold step further
In this keynote interview, Leon Falic, President of Duty Free Americas, reveals how the company is taking its flourishing Brazilian airport business to the border for the first time by HIBAH NOOR Earlier in the year DFA opened an airside convenience store with its partner WHSmith in SĂŁo Paulo Guarulhos Airport
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anama-based powerhouse Duty Free Americas (DFA) is seeing its impressive operation grow apace on two opposite sides of the world – Brazil and Macau. In Brazil and Latin Americas in general, DFA is “constantly opening and refurbishing stores”, says President Leon Falic, one of the three brothers who own and operate the business. The company operates duty free and duty paid businesses at the country’s airports, as well as news and gift stores with WHSmith. Now, DFA is preparing to open its first Brazilian border store next month in Uruguaiana, a large city on the Brazilian border with Argentina and Uruguay. Located opposite Dufry Brazil’s store, which is already trading, the new shop will cover 800 square meters and will carry the entire range of duty free products. “It’s our start in Brazil on the border. We’re already in Brazil in the airports, so this was a natural move,” explains Falic. When the Brazilian government permitted the opening of border stores for the first time in 2018, DFA scouted the whole border, before selecting Uruguaiana as its first location. A second store will begin trading soon in Falls Iguazu. Depending on how these stores perform, the operator will be looking to open at other border crossings. The first store in Uruguaiana will open end of October, while Falls Iguazu will start trading 30 days later. Asked how DFA will differentiate its offer from Dufry’s, Falic says: “It’s like when you go to the airport and there’s two operators. Every retailer has brands they like to work with and they have their own way of working. I think there’s room for both companies to do well – both of us being the biggest players in the region.” He adds: “We like competition, it brings www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING
Duty Free Americas
more people to the area. Everyone will focus and specialize on different items than we do. Generally, we’ll carry the same items.” And how will this affect business on the other side of the border? “We are the biggest border store on the other side of the border in Uruguay with Panda Duty Free. We are the biggest by far with the best locations. All that real estate is owned by us. We have the biggest gamble because we have the other side. We’re not worried. Both sides have a different offering and a different value chain and we have different consumers. They have two different spending limits on each side.” The Uruguay allowance is US$1,000, and on the Brazilian side it is US$300. “The government wants to see how these border stores will affect local businesses as well before increasing the US$300 allowance,” Falic reveals. “I think they’ll eventually increase the allowance. Brazil is a big country; no matter how much business we do on the border, it’s insignificant to the GDP. It’s not like we’re taking away business.” DFA has a big office in Rio de Janeiro, its headquarters for Brazil. The border stores will be run in conjunction with its Uruguay border store business. Each store has a separate General Manager that heads each project.
20 million customers a year
Meanwhile, over in Macau, DFA operates a large store at The Venetian Macau Resort Hotel that sells mostly cosmetics, skincare, fragrances and liquor. In September 2019, it inaugurated the second-phase refurbishment of the store during a formal opening ceremony attended by The Venetian hotel company chiefs, among many other VIP guests. “It’s a big operation. It was a nice grand opening and everyone came out to support us and we really appreciate it,” enthuses Falic. Talking generally about the store, he continues: “It’s been a great operation for us, high sales, high volumes. We carry different brands in comparison to the Americas, a lot of Japanese and Korean brands, very catered to that market.” DFA has refurbished that store “two or three times”, he reveals. “We expanded it and we changed it around. We felt that we needed to update the current offer for the type of consumer going through there. We have 20 million people going through that store in a year, it’s a big operation.” Big suppliers include the LVMH Group brands, including Dior and Guerlain, as well as L’Oreal, SK-II and Moët Hennessy.
We are the biggest border store on the other side of the border in Uruguay with Panda Duty Free. We are the biggest by far with the best locations. All that real estate is owned by us.” LEON FALIC, PRESIDENT, DUTY FREE AMERICAS
Panda Duty Free in Uruguay’s Rio Branco zone is DFA’s largest store, measuring 10,500 square meters on the opposite side of the Brazilian border
26 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
The cruise retail business model
problem Adrian Pittaway, Head of Retail at MSC Cruises, argues that cruise retailers must introduce new concepts, fresh categories, and more exciting experiences by ADRIAN PITTAWAY
he cruise industry has never been growing more strongly than today. With nearly US$80 billion of capital investment in new ship orders, and over 110 ships on order books, thanks to demand from guests, the industry will continue to grow at an accelerated rate over the next decade. At MSC we are involved in a large proportion of this investment with 13 industry-leading new ships to be introduced before 2027. All of this means that the excitement in the cruise industry has never been higher. For retail, this development is both a great opportunity and a surprising challenge. For new entrants into the cruise retail market, there is plenty of growth potential, new passengers and new markets to be entered and developed. But there will also be a significant challenge. Relevance, space and innovation. As passengers look to a greater range of facilities onboard new and refreshed cruise ships, so our retail channel needs to look afresh to the fact we have to evolve to the new challenge. We are not in an industry like airports, where retailing has become an established part of the DNA. We are in a sector that is much more like
inflight, where the foundations are far less strong. Letâ&#x20AC;&#x2122;s be clear. Cruise passengers are generally not choosing to cruise because of the onboard retail. They are not in need of the retail and do not register it as a key part of their cruise experience after they have disembarked. We are, in truth, an ancillary part of the cruise. This means we have three main challenges: the fight for space, the fight for relevance and the fight for innovation. As cruise ships become broader in their offering, higher revenue areas start to emerge that drive greater guest satisfaction and profit density. Local ports become more competitive to the lure of the cruise passenger, so the traditional cruise retail industry has to fight for their place at the table.
Unique and tailored ranges
So, to concentrate on the challenges of relevance, space and innovation, we have to show our ability to evolve, to change and to adapt to ever-changing guest trends. The insularity of the cruise retail industry means that we can only do this by breaking down some of the barriers and working as a trinity to solve this
challenge â&#x20AC;&#x201C; brands, cruise lines and retailers working together. The art of enlivening our channel with new concepts, new categories, more uniqueness, omnichannel integration and new exciting experiences should be at the forefront of our priorities. Suppliers are keen to enter the channel, guests are showing huge interest in unique and tailored ranges, and the potential is generally always shown to work. But the sheer scale, fragmentation and logistical challenge of bringing this all together means that there is always a sense of frustration in the execution of the concepts. As a key part of the travel retail sector that could grow at an industry-leading rate with the investment currently in place, we, in the travel retail industry, especially as cruise retailers, have to look forward, to generate the maximum penetration and guest interaction. Ultimately, this means broadening the art of selling onboard, increasing the innovation and technology deployed, and improving the categories we can develop and working more hand in hand together to do this.
www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING
3Sixty Duty Free
Leveling the playing field With its omnichannel approach, 3Sixty Duty Free wants the passenger shopping experience to rival anything else available today, allowing shopping from anywhere to be delivered straight to your seat or your door by HIBAH NOOR
Sixty Duty Free Senior Vice President Dylan Cabaldon has particular insight about inflight travel retail. Prior to his current position as head of the airline business with 3Sixty Duty Free, which he has held for two years, he ran procurement and the supply chain for an airline. Given this position with the airline in addition to his earlier department store background, he sees a range of perspectives, from the marketing and commercial side to the operations side of business. He feels to be successful in inflight retail, it’s imperative to understand the way airline executives are currently thinking. “Airlines are facing fierce competition, rising fuel costs, and shifting passenger trends across their route networks.
Airlines value our deep aviation and retail expertise to drive ancillary revenues in the face of all of these challenges. They look to our thought leadership in creating custom-tailored retail experiences both onboard and online.” 3Sixty is no stranger to the inflight space, with over 32 years of experience and a broad portfolio of airline customers around the globe. “We have a strong heritage in the airline business. Yet at the same time, we are pioneers of innovation, reshaping how the business will look in the near future,” says Cabaldon. “With full-service teams on five continents and industry-leading capabilities in omnichannel strategy, data analytics, product sourcing, crew engagement, logistics, and passenger marketing, we want airlines to rely on us to drive ancillary revenue and improve their bottom line.”
3Sixty continuously invests in its crew sales and product knowledge training programs
3Sixty is no stranger to the inflight space, with over 32 years of experience and a broad portfolio of airline customers around the globe
While there is a lot of talk in the industry about e-commerce overtaking onboard sales, Cabaldon brings a different perspective. “The question is not simply e-commerce or onboard. The two business models don’t have to be mutually exclusive. “For airlines with existing inflight programs, we use e-commerce to expand the breadth of the program, both to add more exciting products to the assortment and to create more convenient ways for passengers to purchase and receive their merchandise. Being able to buy before,
28 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
3Sixty Duty Free Senior Vice President Dylan Cabaldon
during or after the flight. That creates an entirely new passenger experience and a whole realm of new revenue opportunities. Airlines are very excited about that. “For airlines without the capacity to support an inflight strategy, e-commerce can be a great alternative to quickly bring shopping to passengers.”
3Sixty is moving quickly with omnichannel retail. It recently entered agreements with Singapore Airlines and Avianca Airlines to design and implement firstto-market airline omnichannel solutions. Singapore Airlines’ omnichannel launched earlier this summer, while Avianca’s omnichannel is expected to launch by the end of the year. “These solutions demonstrate our ability to drive innovation at very large scale in different markets around the globe,” says Cabaldon. “We believe that this model is the future, and we look to move more airlines to omnichannel models in the near future.
There’s no doubt we have the technology and expertise to do it.”
Trained cabin crew
Cabaldon says that even with the growing trends toward e-commerce, 3Sixty hasn’t taken its focus off the importance of cabin crew. “This is a huge focus for us. I think one of the things that might get lost in all this discussion around e-commerce is that many passengers want to be able to choose between self-service and crewassisted shopping, and this choice may change depending on where they are in their travel journey. So while we offer e-commerce solutions which enable passengers to shop with ease pre-flight and post-flight, we also ensure that passengers can continue to enjoy great service from trained crew while onboard. “Our experience has been that passengers continue to welcome the insights and recommendations of crew, and we want crew to feel confident about what they sell. So we are continuously investing in our crew sales and product knowledge
training programs. We also want crew to be excited to sell, so we continue to invest substantially in crew incentives that motivate them.”
The world’s leading inflight duty free retailer, 3Sixty Duty Free is also growing in airport duty free and duty paid retail in the Americas.
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Advent of land duty free stores
in Brazil The first three stores open along Brazil’s border with Uruguay with many more stores expected to open in coming months by RONNIE LOVLER
he duty free and travel retail industry in South America is going through a period of transition now that land duty free stores are a reality on the Brazilian side of the border. The altered scenario is prompting reevaluation, reorganization and a general rethinking of how best to nurture what could be a growth industry. “It is the culmination of a long process, which we followed closely,” Carlos Loaiza Keel, Secretary of the Chamber of Entrepreneurs of Free Shops in Uruguay, explained during a recent conversation with Americas Duty Free. “We consider that, if there is equality in the competitive conditions, it will bring more people, more prosperity and more development.” The “competitive conditions” to which Loaiza Keel refers have to do with making sure that no country can sell different products than its neighbor in terms of category and that conditions on tariffs and duty free limits are equal. “The Uruguayan government and we [the Uruguayan free shop chamber] have been very involved in the of negotiating with Brazil and the MERCOSUR countries equal conditions in terms of franchise and goods that can be sold,” he continued. “We are disposed to match the competitive conditions of free shops already installed on the Uruguayan side so that jobs and economic dynamism are preserved.” Three land duty free stores have already opened on the Brazilian side of
the border and more are in the pipeline. It is such a significant change to the South American duty free landscape that the South American Association of Free Stores (ASUTIL) will be holding a twoday conference in November to focus on Brazil’s land duty free stores. “We are working with the Uruguayan government to adjust Uruguayan internal regulations to maintain competitive conditions,” Loaiza Keel said. “Basically, those related to taxation and operational aspects. Naturally for this, the Uruguayan government was waiting for duty free shops in Brazil to be a reality, since the process had already taken a long time.” Of the border countries involved, Uruguay has had perhaps the strongest relationship with Brazilian consumers engaged in land duty free shopping, and without question the equation will be changing now, in a way that goes beyond the shops themselves. Loaiza Keel commented that this is “not only in what is strictly linked to the stores of border free shops, with its distribution chain and suppliers of logistics, goods and services, but also in associated gastronomic, hotel and tourism ventures, as can be seen with thermal projects in Rivera.” In July, a new well boasting thermal waters was launched in Rivera to kick off a project being undertaken with the neighboring Brazilian city of Santano do Livramento that is expected to boost tour-
30 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
ism, as well as real estate development, for both cities. Rivera has a significant presence in land duty free shops and if that city is able to make the adjustment to having Brazilian operators on the other side of the border, it is expected that other cities will be able to adjust also. There is some concern in Uruguay that competition from Brazil may heighten the crisis in the latter’s duty free sector, where sales are reported to be down by 30% since 2018. Some of the past concerns in Uruguay stem from discrepancies over what can be sold in the land duty free stores. Traditional merchants worried that if everyday products like flour, milk and eggs could be sold duty free, they would be priced out of the market. Standards were formalized following Mercosur meetings in Uruguay earlier this year and a list of products prohibited for duty free sale was prepared, including elements of the “basic (food) basket” as well as large household appliances, weapons, cars, and vehicles. Still a concern for Uruguay is the need to ‘level out the playing field’ in terms of permitted duty free expenditures by nationals of a given country. Brazilians will be able to shop in their duty free stores and spend up to US$300 a month. But in Uruguay, that country’s nationals are not allowed to shop in their own duty free stores.
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The conventional wisdom In an interview with Americas Duty Free, Barbara Barrett, Frontier Duty Free Association’s Executive Director, reveals details of the 2019 FDFA Convention in November
Barbara Barrett, Frontier Duty Free Association’s Executive Director
by HIBAH NOOR
rontier Duty Free Association’s Board of Directors are busy organizing the FDFA annual convention and Gala this November. The Canadian duty free industry’s annual convention is an exclusive premier event for members, media and industry stakeholders. It takes place from November 11-14, 2019 at the Omni King Edward Hotel in Toronto, Ontario. In this interview, her third with Americas Duty Free magazine since her appointment almost a year ago, Barbara Barrett, Executive Director, FDFA, discusses plans for the convention. The FDFA opened early-bird registration in July and Barrett expects record registrations, as last year. “Things are ramping up – we’re already ahead of where we were at this time last year,” she enthused, “with over 35 operator/buyers (expecting 65), and nearly 70 suppliers (expecting 140+) already registered (end of August, at time of writing). She’s excited about this year’s program, as last year’s convention was judged to be a major success, according to all reports. “We’re very happy with the Toronto hotel venue – it’s very conducive to hosting a convention, as it has good private meeting
spaces as well as good networking areas,” she said. Regarding the latter, the FDFA is building what Barrett calls a Central Hub for the first time this year. She describes it as a mini tradefloor and central area with a happy hour bar for relaxed networking. She explains that some suppliers would prefer selling “out in the open” rather than in a private suite. “We’re not doing away with private suites, but we’re combining them with a central meeting area that has a tradefloor and a bar.” This mini tradefloor is responding to feedback from certain suppliers. Labatt Breweries has signed up to sponsor a bar area, there will be a Diageo Tasting Station and a liquor company bar is yet to be determined. FDFA is looking to fill the area with ten other new suppliers but details are still being confirmed. Additionally, FDFA changed the new buyer registration format this year to a “per store” format with the goal to encourage stores to bring as many buyers as possible. Early-bird registration closes at the end of August. To boost registration numbers, the association sends out reminders, a newsletter, and is being more active on social media.
Ribbon-cutting ceremony from last year’s successful FDFA show held in November in Toronto, Canada
32 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
The overall program has shifted by one day to start on Monday, so people don’t have to give up their weekend. The association has also added an airport/supplier meeting day, giving airport members an opportunity to meet with suppliers on a specially designated day. Airports will still be able to meet with suppliers on other days. The FDFA is also streamlining the ever-popular Gold Standards Awards. “We’ve modernized the Awards and it’s a work in progress,” she said. The association also added two new awards: Star of Show will be determined at the FDFA convention. Suppliers are encouraged to nominate a new product for display in the showcase, which will be located at the FDFA registration and Opening Cocktail. Duty free buyers will vote for the Star of Show for a chance to win the displayed products and will be voted by Duty Free Buyers attending the convention. Outstanding Contribution Award has been created to recognize an individual or company that has made outstanding contributions to the Canadian Duty Free industry. While the recipient of this award may have made an outstanding contribution within the last year, potential winners may also be evaluated based on outstanding contributions made over the life of the Canadian Duty Free Industry. Both operator and supplier members are eligible for this award and will be voted by the FDFA Board of Directors. The new Gold Standards program offers expanded eligibility, streamlined voting, the addition of two awards. Details for all awards, including criteria and online voting, is available on the FDFA website.
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2019 FDFA CONVENTION DRAFT PROGRAM
Finalists will be announced October 30, winners will be recognized at the Imperial Gala & Awards Evening, November 13 in Toronto.
The FDFA Convention is slated for November 10 to 14, 2019 and takes the theme of Beyond all Borders – Partnering for Growth. This is the draft program, subject to change:
Visitor rebate program
The FDFA has been working hard with stakeholders on lobbying to bring back Canada’s visitor rebate program. In July, it made a pre-Budget submission to the federal government, focusing on the need for the program to be reinstated and for the FDFA’s members to administer the scheme in their stores. A social media campaign has been launched to this effect to educate the public and let them know that the association is working to bring back the program. In the Fall, before the election, the FDFA will lobby the political parties that are contesting the election. The association is using both the FDFA social media channel and that of Duty Free Canada for its communications. The FDFA is also working closely with the Canadian Border Services Agency (CBSA), which is currently in the middle of digitizing its systems. This electronic initiative is called the CARM system – CBSA Assessment and Revenue Management. “The Border Services Agency is looking to make everything digital and modernizing it. They are interacting with us to make it streamlined and as easy as possible for operators going forward.” Any other challenges? Barrett replies: “The visitor rebate program is our biggest challenge. Because it’s an election period, a win now would be to get on an election platform. Obviously, we don’t know which government will get into power, so we’re not going to see immediate results.” After almost a year as Executive Director, Barrett says she feels “really good” about the progress that has been made. “We’ve done a lot of things this year – we’ve made a great drive with our advocacy efforts. We’ve established a strong and collaborative relationship with the CBSA. We’ve done a lot with the convention – but there’s more to do. We’re working as a team to move forward to make sure operators have a strong business.” The convention will take place in Toronto until 2021 but beyond that date, Barrett would not be drawn on the next venue, as it has not yet been decided by FDFA members.
SUNDAY, NOVEMBER 10 Registration/Information MONDAY, NOVEMBER 11 Operators’ Breakfast (operator/buyers, media and guests) Central Hub networking area Registration/Information, sponsored by Turkey Hill Sugarbush Ltd. Land Border Operators’ Meeting (land border operators only) Breaks sponsored by House of Horvath Airport/Associate Supplier Meetings Media Appreciation Day Operators’ Lunch (operator/buyers only) Opening Cocktail Reception: Sponsored by Bacardi Canada; Labatt Breweries of Canada; Mark Anthony Wine & Spirits; Pernod Ricard Travel Retail Americas; and Peter Mielzynski Agencies. TUESDAY, NOVEMBER 12 Central Hub networking area Registration/Information, sponsored by Turkey Hill Sugarbush Ltd. Café Bar, sponsored by Diageo. Happy Hour, sponsored by Labatt Breweries of Canada Breakfast Buffet Exhibit Stations Supplier Meetings Open TFWA Welcome Lunch – Brought to you by Tax Free World Association JTI Lounge – Sponsored by JTI-Macdonald WEDNESDAY, NOVEMBER 13 Central Hub networking area Registration/Information, brought to you by Turkey Hill Sugarbush Ltd. Café Bar, sponsored by Diageo Happy Hour, sponsored by Labatt Breweries of Canada. Breakfast Buffet Exhibit Stations Supplier Meetings Open Lunch Buffet Imperial Gala & Awards – Sponsored by Imperial Tobacco Canada; Hospitality Lounge – Brought to you by: ALFA Brands; Bacardi Canada; and BHI. THURSDAY, NOVEMBER 14 Central Hub networking area Registration/Information, sponsored by Turkey Hill Sugarbush Ltd. Café Bar, sponsored by Diageo. Breakfast Buffet Exhibit Stations Supplier Meetings Open Lunch Buffet Convention Closed
A social media campaign has been launched for the visitor rebate program to educate the public and let them know that FDFA is working to bring back the program
34 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
Passengers walk by the Sky duty-free shop on the way to their gates at the Medellin International Airport in Colombia
pursues expansion A new tech- on -the -go duty free store has opened at the San Juan International Airport
36 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
The Mexico-based airport company is expanding its reach in the Caribbean and Latin America with a sharper focus on the duty free and travel retail business by RONNIE LOVLER
rupo Aeroportuario de Sureste (ASUR) is expanding its operations outside Mexico as business grows at its airports in Puerto Rico and in Colombia, due to increasing passenger traffic as well as the company’s new holdings in the duty free and travel retail sectors at both locations. Passenger traffic rose +20.7% in June 2019 when compared to June 2018 at ASUR’s Medellin International Airport, Colombia’s second largest airport after Bogota. During the same month, traffic was up by +1.9% at San Juan International Airport, where ASUR is the majority shareholder, and overall by +3.4% at ASUR’s Mexican airports, including Cancun, for the same period. “Overall we are going through a very good year in terms of passengers in all the airports,” said ASUR Commercial Director Manuel Martin Gutiérrez Sola. “We are having our best year in Medellin where we will reach over nine million passengers.”
In Puerto Rico, ASUR expects at least 9.5 million passengers will transit through San Juan International Airport. “We are having our best year in terms of passengers; the best month of May ever… and June and July as well,” he commented. The numbers reflect both domestic and international traffic in Puerto Rico, an indication of how well Puerto Rico is recovering from the devastation of Hurricane Maria in September 2017. However, Mexico-based ASUR sees its biggest numbers in its home base of Cancun, with 26 million passengers in 2018, and at Merida, ASUR’s second largest Mexican airport, with 2.6 million passengers last year. His predictions are that Cancun will top 27 million passengers this year and Merida will reach three million. Medellin is growing because airlines are adding more flights to and from the airport, Gutiérrez Sola said. “We added Orlando, Ft. Lauderdale and Cancun, and we have flights with Aeromexico directly from Medellin. We have Interjet to Mexico City, as well as more flights with
Avianca from Medellin to other cities.” However the most significant change at Medellin International Airport is the new look and feel of the facility. “We have increased capacity with the airlines but also there are huge check-in areas. We have increased [the number of gates] and now we have the commercial program with travel retail, duty free and VIP lounges,” he said. “We have completely modified the commercial programs, with enhanced duty free and travel retail. Now we have destination shops and convenience stores. We also have all new food and beverage offers. It’s completely different from what we had before,” he concluded. Duty Free Partners (DFP) is operating the duty free stores in Medellin, which “includes a walk-through duty free store in the international terminal and a duty paid store in the domestic terminal,” Gutiérrez Sola explained. In terms of travel retail, Medellin Airport also boasts the Tomo convenience stores and a Coco Santo jewelry store.
www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING
Dufry operates the walk-through duty free store at the San Juan International Airport which is majority-owned by ASUR
There is also significant change on the duty free front at San Juan International Airport where Dufry is the main operator. “We have made together several changes in the duty free program allowing more luxury brands into the area, with initial offers of rums from Puerto Rico in all three terminals,” he said. Also available in San Juan are the new technology stores, which are run by Dufry on a duty free basis. “We have added brands like Bose and Apple inside techon-the-go stores and they are performing well,” he said. Other additions include wine cellars in three terminals and a sunglass store in Terminal A, all under Dufry management, according to Gutiérrez Sola. He added that Cancun Airport is doing well, maintaining the same duty free and travel retail offerings already in place with no big changes in the offing. It is clear that 2019 has been, and is set to continue to be, a very good year for ASUR.
38 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
Starboard Cruise Services
Experiencing retail on the
high seas by CHRIS MADDEN
Starboard Cruise Services will launch on two new ships later this year with a focus on creating an elevated shopping experience for passengers
tarboard Cruise Services, the leading retailer in the cruise industry, will bolster its fleet as it unveils more than 1,100 square meters of retail space across two new launches this autumn. Costa Smeralda will launch in October and sail throughout the Mediterranean and the next month, Norwegian Encore will launch for cruises in the Caribbean. The two new additions promise to bring a range of new releases and firsts to the market, along with giving Starboard the opportunity to showcase its latest onboard retail innovations. The LVMH-owned retailer has plenty to draw on for its new stores. It already operates across more than 70 cruise ships around the world, offering more than 700 brands. Starboard promotes its message as providing, and encouraging travelers to buy products which will “forever remind them of the joy of their vacation”. It is an ethos which the company currently applies across eight cruise lines which it works in long-term partnerships with. Later this year, two of those cruise lines – Costa and Norwegian – will benefit from the retailer’s expertise as the company strives to meet current customer demand for experiential retail which is not just a facet of the trip, but a part of the holiday itself. Robin Rosenbaum-Andras, Senior Vice President Marketing, Starboard Cruise Services says: “Norwegian Encore and Costa Smeralda offer brand activations that transform the cruise journey through unique, highly experiential retail,
40 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
with opportunities for immersion and connectivity that creates treasured vacation memories.”
Crafting a lasting memory
Indeed the two new ships showcase not just the innovation but the versatility of Starboard’s offer. Across more than 464 square meters, the Costa Smeralda offer will focus on Italian heritage and sustainability. “Costa Smeralda’s Galleria Shops will have more than 464 square meters of retail space, featuring the best of Italian heritage, style, and hospitality at sea, with handpicked brands that elevate the cruising journey,” Rosenbaum-Andras explains. “Guests will enjoy an immersive retail experience that includes dedicated boutique areas across a variety of retail categories.” As cruise lines place a higher importance on sustainability, and the environment is a central focus for travel retail in general, it is an opportunity that is reflected across Starboard’s operations. “The retail offerings will also reflect [Costa Smeralda]’s ecoconsciousness with a focus on a sustainable product selection and stewardship,” Rosenbaum-Andras says. Norwegian Encore, meanwhile, offers 650 square meters of retail space across The Tradewinds Shops. “It will feature a selection of brand firsts, expanded retail space, dedicated boutiques, a rotating assortment of “discovery” brands, limited-edition inaugural items and collections created exclusively for Norwegian Encore,” Rosenbaum-Andras enthuses. “It will also include the most elevated Swiss timepieces area on any ship. Emulating Norwegian’s environmental commitment, sustainability is also central to the retail experience with brands that are aligned with the cruise line’s philosophy.” With international awards to its name, the power of the LVMH group at its back and two new floating retail experiences set to hit the market, Starboard will continue leading the way for one of travel retail’s major growth markets.
ASUTIL’s Brazil Border Conference
Brazil Border Conference on agenda for ASUTIL ASUTIL is to take a leadership role in preparations for the new reality of Brazil land border duty free stores
ASUTIL SecretaryGeneral José Luis Donagaray
by RONNIE LOVLER
he South American Association of Duty Free Stores, better known as ASUTIL, will sponsor a two-day conference in November on the new Brazil land border duty free stores. ASUTIL Secretary-General José Luis Donagaray said the conference would be held November 5 to 6 in the Brazilian border city of Porto Alegre. In an exclusive interview with Americas Duty Free, Donagaray said it is imperative for ASUTIL to take a leadership role to help its members and others understand and work within the new reality created by the Brazilian land border duty free stores. “The idea of the meeting is to work on the border issues with technicians, suppliers, and others to answer a lot of questions and improve communications,” he said. “This will be a two-day meeting with speakers and networking time so that new operators and suppliers can introduce themselves,” he added. “We want to help develop the business in Brazil. We want to have a clean business and a safe business for everyone.” The first Brazilian land duty free stores began operations in late July and in August at three locations. Dufry Group, the global duty free giant and a leader in South America, opened its first Brazilian border duty free store in August in Uruguaiana, the second largest city on the Brazilian border with Argentina and Uruguay. The 850-square-meter facility is easy to spot, right next to the bridge to Argentina. Two smaller operations were the first to break the border barrier in late July. Emporio Duty Free opened a 200-squaremeter outlet in Barra do Quarai, near the border with Uruguay, while Caraballat Free Shop opened a 400 square-meter store in Yaguarao, also bordering Uruguay. Both stores are selling Brazilian and imported products. Legislation allowing for the creation of land duty free stores in Brazil was approved years ago, but it was only last March that Brazilian customs officials gave the green light to the establishment of the stores on the Brazilian side of the border. Up until now, all the duty free action has been on the other side of the border, primarily in Argentina and Uruguay, where the largest land duty free stores attracting Brazilian customers operated. But the new law will allow land duty free stores to open in Brazil in any of 32 Brazilian cities bordering Argentina, Paraguay, Peru, Colombia, Bolivia, French Guiana, Uruguay, Guyana, Venezuela and Surinam.
42 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
Donagaray sees the Brazilian development as a good thing. “Absolutely, because it’s new business.” he stated. And that’s the primary reason ASUTIL is pushing forward with its borderconference initiative. “When you have competition, someone is going to suffer,” Donagaray acknowledged. “But it is good because it upgrades the business.” He also said the presence of the Brazilian stores should not hurt operators in Uruguay, Argentina or other countries because Brazil has placed a monthly US$300 spending limit on purchases Brazilians can make in their domestic border stores. “If they want more, they will have to go to shops on the other side of the border,” Donagaray commented. Donagaray said ASUTIL is also working on other issues related to the border stores that have to do with “harmonizing the rules” between the Mercosur nations of Brazil, Argentina, Uruguay and Paraguay, all full members, to make sure there is agreement on the kinds of products that can be sold in the duty free stores and the purchase allowance for nationals of a given country. ASUTIL is also involved in meetings with international commissions in the tax and health arenas that control and regulate the sale of tobacco and spirits. “We are in a business that is very controlled,” he said. “The product is always controlled. We have officials on hand from Customs and from the Tax authorities.” While there are some concerns about illicit trade involving both tobacco and spirits, Donagaray emphasized that this is not a duty free issue. “The problem is in another place, perhaps on the borders,” he said. “It is not a problem with duty free stores. “We need to study the development and implementation of traffic and trade,” he added. “The commitment we decided on in the Duty Free World Council is that every association must play a role and participate in all these studies in the development phase of all these issues.” Finally, Donagaray told Americas Duty Free that the ASUTIL board is working closely with the board of the International Association of Airport Duty Free Stores (IAADFS) to plan the 2020 Summit of the Americas in Orlando next March. But for now that project is still a work in progress.
A new brand endorsed by supermodel Kendall Jenner is aiming to bring professional hair tools to travelers at an affordable price
nternational Brand Builders Inc (IBBI), the well-respected agency company headed by Katherine PatchSleipnes, has inked a deal to represent a new brand of hair tools in travel retail throughout the Americas. And not just any beauty devices – they are endorsed by a supermodel. California-based JH Group, Inc. just launched Formawell Beauty in collaboration with top model Kendall Jenner, aiming to bring professional-grade hair tools to all consumers at an accessible price. The company’s official launch for duty free will be at the upcoming TFWA World Exhibition in Cannes. It attended the DFNI cruise conference and has a lot of interest from this channel already, according to Ron Razeggi, COO of Formawell Beauty. In terms of local distribution, Formawell Beauty x Kendall Jenner launched with stores such as Ulta Beauty, Macy’s and others in April 2019 and just rolled out to other doors such as Kohl’s, and perfumery and beauty chain stores and shops all over the US. The products are available worldwide. The firm just signed with a large distributor in UK which will be handling most of the EU, and has individual distributors in Ireland, the Scandinavian countries, the Netherlands, Russia, Middle East and Asia. Formawell Beauty has selected IBBI as its exclusive sales partner for the Americas travel retail region. IBBI has a team in place throughout the region and has already started sharing the brand with its retailers. The two firms have worked together to create some travel exclusive sets with travel-friendly packaging, as well as merchandisers suited for the travel retail environment. Formawell Beauty is also exclusively working with the UK’s High Street Group TV, Inc’s travel retail division handling
Formawell Beauty in collaboration with top model Kendall Jenner is aiming to bring professional-grade hair tools to all consumers at an accessible price point
all European airports, Merlin Digital in the Middle East market that is taking care of all the airports in the Middle East, including India, Singapore and Amsterdam Airport. Formawell Beauty has ambitious goals for the upcoming Cannes show. “We look forward to showcasing our unique products at our booth Yellow village E32, and also on our yacht for private meetings and a cocktail party for VIP guests. Our goal is to find retail partners globally in travel retail to expand our brand in the global market,” says Razeggi. The company is confident of success because it has identified three main ingredients in its product line: first, professional quality tools made with highest standards and by developers with over 25 years’ experience in the tool industry; second, the products are offered at a price that everyone can afford; and three, the
range is promoted by the supermodel Kendall Jenner with international name recognition. “Travelers are an important target audience for us since Kendall Jenner is a global celebrity and the Kardashians have been the most exciting news and brought many successful products to the market place,” explains Razeggi. “One example is Kylie Jenner and her lip gloss, which became the most successful product and made her the youngest billionaire in the world. Travelers will pay attention to the name and ultimately [want] to own a piece of a celebrity. This is a plus for duty free retailers to bring excitement and a new category to enhance their shopper’s experience. Besides the name recognition, we have created special packaging and exclusives for the travel retail market, which is very easy to handle and carry throughout their journey,” he adds.
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Spotlight On Exhibitors
Oribe Hair Care to preview its collection for travel retail The luxury brand Oribe, which is known globally for its high-pertogether two of the most important concepts in the travel forming products, signature Côte d’Azur fragrance and craftsmanretail channel—luxury and exclusivity.” style packaging, is planning to curate exclusive on-the-go sets for Oribe Hair Care is currently distributed in high-end salons the well-traveled consumer. and spas, premier retailers and apothecaries as well as luxury The assortment will include both full and travel-size products e-commerce sites. The brand will be showcasing its unique in packaging customized for travel retail. Every detail of Oribe’s product lineup to the global travel retail market at the J.W. packaging is inspired by fragrance design with a nod to the future Marriott in Cannes. and a hint of the past. The bottles, tubes and tubs create an emoFor more information or to set up a meeting, please tional reaction and spark interest, which will be reflected in these contact Kemper Brennan, Vice President of Travel Retail at exclusive sets. email@example.com. In order to reach multiple segments, the sets will focus on several different consumer categories including grooming and body care. Color care, texture and treatment collections will also be available. Additionally, Oribe will provide styling sets that offer the essentials to create different looks, from bombshell blowouts to effortless beach waves. These bespoke sets ensure the consumer never has to compromise on their luxury beauty products while traveling. “The Oribe team is looking forward to meeting with retailers to discuss the potential for new travel sets and product offerings,” said Sid Katari, Oribe General Manager. “LaunchOribe Hair Care, luxury hair care brand and global beauty authority, is set ing into this segment will allow us to bring to debut its product offerings in Cannes this October
Mavala unveils Nutri-Elixir anti-age skincare Swiss supplier Mavala has introduced a new Nutri-Elixir anti-age skincare range. The Swiss-made range for dry or mature skin is described as lipid-replenishing skincare that is scientifically proven and dermatologically tested. The products are said to improve the natural lipid replenishment system of the skin thanks to a patented pro-lipid booster, re-moisturizing the skin with nutri-protective lipids thanks to Swiss linseed oil particularly rich in omega 3, 6 and 9. The ingredients are combined
with a complex of bioactivated vegetal oils to smooth skin and help reduce the signs of ageing. The products are made without mineral oil, phthalates, or sodium laureth sulphate. Anti-Age Nutrition Absolute Night Balm (65ml tube) is a fine cocoon-like balm that lipid-replenishes the skin and re-densifies it. Skin recovers bounce, comfort and elasticity. The Ultimate Cream (45ml airless pump tube) for Face and Eyes is a lipid-replenishing and fortifying skin fusion day and night cream that provides silkiness, glow and elasticity. Also tested ophthalmologically. Anti-Age Nutrition Essential Serum (30ml airless pump bottle) for Face and Eyes is a crystal-like serum which quickly becomes one in the skin, delivering the power of its lipid replenishing and revitalizing properties. Skin regains density, glow and elasticity. It can be used as a massage in case of intense dryness. The product is fragrance-free and tested ophthalmologically.
Mavala’s Nutri-Elixir Anti-Age Nutrition Absolute Night Balm is said to lipid-replenish the skin and re-densify it
44 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
â&#x20AC;&#x201A;Duty Free Dynamics
Master of the
UNIVERSE Master franchiser Duty Free Dynamics reveals its plans for the next 18 months and pinpoints brand trends by JAS RYAT
Duty Free Dynamics has partnered with LEGO to provide a solution for travelers shopping for children
uring the TFWA World Exhibition in October 2019, Duty Free Dynamics (DFD) is hosting a large showroom in front of the Palais des Festivals in Cannes. With more than 200 square meters, the space also counts as a meeting suite for private meetings in a relaxed atmosphere. In this showroom, the American distributor-turned-master-franchiser will be presenting all the novelties of the brands carried in its portfolio, organized by product category. The growing list of categories includes watches, outdoor, lifestyle, apparel, footwear, toys, and electronics.
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In 2019, Panama-based DFD restructured its team with the creation of a new position: Brand Manager/Business Developer (BM/BD). As for 2020, the new internal structure of Brand Managers/ Business Developers is going to allow DFD to increase the integration of new brands in each category of its portfolio. The companyâ&#x20AC;&#x2122;s goal is to develop the non-traditional categories within the channel by offering to the trade a comprehensive range of brands per category, with complementary products covering different segments of price points.
Contemporary backpack brand Osprey offers functionality as Duty Free Dynamics expands its growing list of categories
The company’s focus next year will be to repeat this approach in all the other categories that it handles, such as outdoor apparel, footwear, electronics, travel gear, sunglasses, and other types of accessories. The latest addition is the confectionery category. In the case of apparel and footwear, for instance, DFD will be running up a new multi-brand retail concept, which focuses on the basics of very iconic brands.
Expertise and added value
DFD focuses only on travel retail in the Americas and the Caribbean. Historically, the Caribbean region has always been a strong market for DFD. Lately, this trend is reinforced by the growth of its business with the cruise ships. In the past two years, thanks to the integration in its portfolio of brands like Osprey, Lego and Spy, its business is also showing increasing results in the North American region, especially the border zones between the US and Canada and the US and Mexico, where these brands are really well received. The firm is increasing its ship count “pretty aggressively” in these areas, says Arnaud Ryser, Duty Free Dynamics’ Business Development Manager. DFD has also enlarged its staff based in Miami and hired one Key Account Manager in Houston to cover the West Coast. DFD’s partners in the travel retail channel of the Americas have very different profiles as they run from the biggest international players to the smallest shop owner in the port of a small Caribbean island. Between these extremes, there is a large diversity of operators that the company works with. “In each case, our partners are looking for our expertise and our added value as a sole contact point for premium brands in the Americas region, saving the operator time and valuable resources,” Ryser added. Also, the recent incorporation of new categories of products into DFD’s brand portfolio has helped it grow the number of partners and key accounts in the region. Currently, watches still are the strongest product category, as that is the most established. However, Ryser says that if the same question is asked in one year, he projects that watches will not represent more than 18-20% of its business. Recent researches revealed that 30% of travelers travel with kids. The remaining 70% have kids at home, grandchildren, or have contact with kids. Duty free purchases are an impulse. DFD realized there are not very many offerings for kids in duty free
stores, so one of the first categories DFD needed to diversify in, were toys. DFD is the master franchiser for Lego, which is the number one toy manufacturer in the world. This business alone will hopefully be US$35 million in two or three years, Ryser forecasts. In terms of trends, he says that the brands are looking for retail footprint in the travel retail channel. They need dedicated space in order to communicate with their customers, according to their standards and requirements. Today, more than ever before, airports have become the new and biggest shopping malls of the world. Traffic in domestic shopping malls is falling, especially in the US and around the globe very fast, and passenger traffic in airports is growing. Ryser goes on to explain: “The product offering in airports is still somehow limited and DFD plans on offering innovation by partnering with the operators and then teaching them how to handle new categories. It has always been the focus of DFD since its creation. We started with the watches category using the old-fashioned wholesale distribution model, but since 2019 we are changing our business model and shifting to become a regional master franchiser of non-traditional brand initiatives for the Americas travel retail channel. So we no longer call ourselves a distributor, we call ourselves a master franchiser. In that sense, DFD’s strategy is to partner with operators in the region and offer them franchise opportunities within many different brand categories. We educate the operator, and that makes us part of the value chain because we are adding a lot of value,” Ryser enthuses.
The Osprey Farpoint 55 shown here in Jasper Red
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Above and beyond
Duty free innovations rise to the occasion to reach new heights
5 4 1. Crabbie’s Yardhead: The first new single malt distillery opened in Edinburgh for over 100 years brings you Crabbie’s Yardhead Single Malt Scotch Whisky, a single malt intended for mixing. Brought to consumers by Halewood Wines & Spirits, this distinctive single malt is designed for today’s consumers.
4. TOMS: Duty Free Dynamics brings travelers the iconic TOMS slip-on shoes. This simple yet classic design makes them perfect for travel. The Alpargatas are designed for laid-back comfort, featuring ash canvas upper with toe-stitch and elastic “v” for easy on/off, a suede foot bed and a rubber outsole for traction.
2. Bottega Pomegranate: Bottega introduces Bottega Pomegranate, an aromatic sweet liqueur produced to cater to trends of health conscious customers looking for nutrient-rich ingredients. Bottega Pomegranate has a bright ruby red color, a delicate and fruity bouquet and a fresh taste that is finished with tartness.
5. Seiko Prospex: A trusted name, the Seiko Prospex challenges every limit, with a collection of timepieces for sports lovers and adventure seekers whether in the water, in the sky or on land. Since launching Japan’s first diver’s watch in 1965, Seiko’ innovative technology has changed global standards. Seiko is constantly striving to bring ever greater reliability and safety to both professional and recreational divers.
3. Tea Forte Jardin Collection: Tea Forte’s limited-edition Jardin Collection brings an assortment of organic teas curated in collaboration with The New York Botanical Garden (NYBG). With designs hand-picked from NYBG’s collection of rare floral prints, this collection includes five organic tea blends, each packaged with a custom botanical artwork. This box contains 10 pyramid tea infusers, 2 of each blend: Chamomile Citron (Herbal), Chocolate Rose (Black), Green Mango Peach (Green), Strawberry Hibiscus (Oolong) and Vanilla Pear (White)
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6. Molsheim & Co’s Crystal Fragrance Collection: The familyowned French fragrance house specializes in creating unique fragrances targeting the niche market. Its packaging is inspired by the art of celebration and is designed to be glamorously displayed as an art piece
7. Wonderful Pistachios No Shells: Wonderful Pistachios launches a Roasted & Salted 160g bag of its ‘No Shells’ variety in travel retail around the globe. The convenient No Shells variety features bright green packaging and brings all the unique taste and health benefits of pistachios, but without the need to crack open the shells, making it perfect for travel.
10. Bombata Aviano: The Bombata Aviano by Fabio Guidoni is part of the 2019-2020 Collection. The bag is ideal for traveling with your laptop. Available in a variety of colors, the outer material is a camouflage-patterned weatherproof fabric making it the perfect accessory for both men and women. This case has plenty of folders and pockets to store extra items, such as documents, files and laptop cables.
8. Cocoa Selection Deluxe: Ritter Sport’s Cocoa Selection Deluxe is a unique gifting proposition of 3x100g Ritter Sport square bar varieties encased in a hot foil-embossed, jungle-inspired box that makes a hero of the cocoa fruit. Exclusive to travel retail, this single-source chocolate is made from sustainable cocoa from traceable sources in Ghana, Nicaragua and Peru. The selection offers one bar each of 55% Smooth, 61% Fine and 74% Intense.
11. GNC Melatonin ON-THE-GO: Wellness brand GNC introduces its premium Melatonin to travel retail; helping travelers to get restful sleep and combat jet lag while on the journey. The new compact design allows display for counter or wall. Other travel-related GNC supplements are also now available in travel retail.
9. M&M’s® Crunchy Caramel: M&M’s® brand has developed an alternative play on its popular chocolate treat with a new crunchy and caramel flavor. Perfect for any sharing occasion, a crunchy caramel center is surrounded by smooth milk chocolate and a colorful sugar shell to create an M&M’s® treat to follow up on the success of the Salted Caramel limited edition earlier this year.
12. Dublin Liberties Copper Alley 10 year old single malt: Dublin Liberties Copper Alley 10 year old single malt, recent winner of the double gold at The International Spirits Challenge (ISC) 2019, is a single malt Irish whiskey, matured for 10 years in bourbon barrels and finished in 30 year old sweet oloroso sherry casks. It is one of a range of five luxury whiskeys which make up The Dublin Liberties range for travel retail.
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Costa Del Mar
COSTA TARGETS sustainable growth by HIBAH NOOR
As part of the ongoing commitment to cause, Costa is paying tribute this spring to the sharks that help keep ocean ecosystems balanced with eight new Costa OCEARCH Optical frame and sunglass styles
Eyewear brand Costa Del Mar attributes its success to owning the space on, in and around the water without losing sight of its green credentials
50 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
osta is on fire! We continue to grow year on year. We are doing really well.” This is the verdict of Monty Montañez, Director – Global Travel Retail, Costa del Mar on the eyewear brand’s performance over the past three years. “The difference between when I started in 2016 and today is that we have developed not only the product, but also the brand message to appeal not only to our core performance consumers and retailers, but also to the coastal consumer and the coastal retailers,” he explained to Americas Duty Free. “Those retailers generally focus on fashion - fast fashion and lifestyle. They now see an opportunity to include a brand that is a really good bridge between performance and lifestyle without cannibalising sales, because other brands segment in a different way.” Since it was founded in 1983, Costa Del Mar has focused on the performance sport market and claims to build the best sunglasses on the planet for those who live to be on the water. It is known for its range of high quality polarized lenses and lens treatments, including ‘C-WALL’, a patented oleophobic technology that dispels water from the lens. “We have had that technology for many years,” said Montañez. “It is our technology. It doesn’t exist with any other
Costa Del Mar
brand. When it comes to anything on, in or around the water, we essentially own that space. The great thing is that there is a lot of seashore, there is a lot of shoreline all around the world, and most people live near the water.” Discussing the brand positioning of Costa sunglasses, Montañez commented: “It is the same person that would love to buy a luxury sunglass to go to brunch. That same person may want to go to the beach or the pool. I think that is why Costa is a fantastic alternative for someone who has that luxury pair or that lifestyle pair, but wants something that is more performance and high quality. That is where that premium product opportunity comes for Costa.” Over recent years US-based Costa has extended its distribution across North and Central America, Latin America, and the Caribbean. Its focus is now turning towards Canada, Mexico and Australia, three key markets where they see a natural evolution of the brand. Once established domestically, the next step will be travel retail. Costa already has a global agreement with Dufry and the brand is now in Toronto, Vancouver, the USA and several points throughout Latin America. Australian travel retail is in its sights also, once the brand has established more of a footprint in domestic market there. Born on the water, the Costa brand considers protection of the ocean, conservation and sustainability to be key tenets of every aspect of its business. “We love to say, as far as Costa is concerned, that we are a brand that is focused on community, on cause, on conservation
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and, guess what, we have a really cool product too, explained Montañez. “We incorporate that in the product as well. I believe that is why we see millennials connecting with the brand, because there is an authentic message there. Our frames are bioresin and we have capsule collections such as Bureo, where the frames are made from recycled fishing nets. “We are always focusing on new and better ways to ensure that our products minimize our carbon footprint,” he continued. “Our messages of sustainability and conservation and cause are always very well integrated into our product lines. Even moving into many of our accessories, you will see a lot of the same messages being delivered in the way that we develop and produce the products. So that relevance in terms of Costa is a message that people connect with, and that is why we will continue to do that. It is who we are, so hopefully people will appreciate that.” Besides using recycled materials in production and committing to a new green headquarters campus in Daytona, Costa has initiated global conservation campaigns such as ‘Kick Plastic’. “We are trying to give back,” Montañez concluded. “For me very often, not just in eyewear but across other industries, people in other companies, other products, even services are trying to connect with some sort of corporate social responsibility, and then take that and communicate to the world that they are participating in the community. That is definitely a trend now, but it is also a part of a way of life moving forward. The difference between us and a lot of these other companies is that it is authentic when we do it. It is who we are.”
Facing up to today’s beauty brand challenge by HIBAH NOOR
Essence Corp’s team building event on the dunes in Miami Beach supported the ocean preservation work of the Surfrider Foundation
Family-owned Essence Corp is steering a steady course through choppy retail waters with its strategy to target niche and innovative brands
ntoine Bona, the third generation of family-owned beauty distributor Essence Corp, was in fine fettle when we met at his office on swanky Brickell Avenue, Miami. Bona works in the company, now headed by Jean-Jacques and Patricia Bona, alongside two family members Guillaume Bona and Laetitia Piedra. He’s Executive Sales Director with responsibility for a team of 15. Essence Corp was established in 1988, after Jacques Bona, his grandfather, founded an agency company in Paris in 1953, exporting luxury brands to the Caribbean and Central America. Jacques Bona is credited with introducing Dior, Rochas, Azzaro, and Givenchy in the region. That’s some history. Essence Corp has become a leading supplier of fragrances to travel retailers in North and South America and the Caribbean. It also supplies fragrances and cosmetics brands, both makeup and skincare, in the Caribbean region. The company now counts a multicultural team of more than 70 staff, based in Miami and out in the field. Antoine Bona tells Americas Duty Free magazine that business has been “good”,
adding: “We’ve been partnering with new groups and brands that have been successful in the market.” But he is quick to add that the first semester has proven to be “difficult”. However, he is more optimistic about the second semester. He explains that the challenge stems from being mostly a fragrance distributor in Travel Retail that’s heavily dependent on Latin American markets. “The domestic market isn’t doing well for economic and political reasons. Argentina, Brazil and even Mexico have had a slowdown in growth. [This has happened] over last two years – and especially with the new President [Andrés Manuel López Obrador of Mexico] that took over at the beginning of the year. Our business has been tough in the first semester.” Bona cites the strong US dollar and the unstable economy in Argentina and Brazil. Essence Corp has also been hit by the volatile exchange rates, as travel retail pricing is listed in US dollars. Having said that, the company is leveraging the key pillars that have built up the family company over 66 years. They include its good relationship with Interparfums and Euroitalia, whose
54 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
Antoine Bona, Executive Sales Director, Essence Corp
leading brands Essence Corp manages in travel retail Americas and the Caribbean. Essence also distributes L Brands products in the same territories. In 2019, years after Jacques Bona introduced LVMH-owned Dior and Givenchy to the Caribbean region, the company has come full circle. LVMH-owned brands Dior, Benefit, Givenchy and Kenzo have joined its portfolio. “Our partnership with LVMH started two or three years ago with Loewe and Acqua di Parma. Right now, we’re working with Dior, Givenchy and Kenzo. We’re very excited, as years ago my grandfather introduced these brands in the Caribbean, but throughout the years we lost them as they were acquired by conglomerates. We have regained the distribution and it’s nice, as we have come full circle. We have strong expertise in the region.” Bona describes Benefit as an “exciting and dynamic” brand. “Lower-priced makeup is driving sales,” he reveals.
“Consumers are looking for innovation and brands that are a little bit disruptive and I think the retailers are finally catching on and they’re giving adequate spaces to these types of brands. And we’ve finally been able to market them, which probably wouldn’t have been the case five years ago. I don’t think the retailers would have been open to these types of brands. Even though Benefit was extremely successful five years ago, I don’t think the retailers in the Caribbean would have been as open as they are today.” Benefit, which is a top performer in the eyebrow category, is “very strong in travel – they have a lot of grab-and-go items and really unique travel retail sets. They have a really strong strategy for travel,” he says. Since last year, Bona has also been proud to work with Rituals, another hot brand. This innovative, home and body care brand has disrupted the beauty sector and sparked a whole new category of wellness-related beauty. “These types of lower-priced products do well in travel retail – the category has been underdeveloped in travel retail. L’Occitane has a very strong position, and now you see other players introduced within this category,” he says. Looking to the future, Essence Corp is “looking for more makeup brands and more specialty skincare” to join its robust portfolio. He adds: “In the Americas, retailers are looking for young makeup brands that are disruptive, that are strong on social, that are popular with celebrities. In North America they’re looking for specialty skincare or skincare that’s very well known with a hero sku.” Bona is quick to point out that the company devotes the majority of its energy to its existing brands and serving loyal customers. “That being said, we always listen to what the market needs and we try to search for brands that would complement our portfolio nicely. Rituals is a great addition to our portfolio, and we’re able to add it to our very strong fragrance portfolio – like Interparfums and Euroitalia – and they don’t compete for the same type of market share. Skincare and haircare would be a very nice complement to that. We’re not actively looking for more fragrance brands.” Fragrances contribute 75% of Essence Corp’s sales. The company distributes mostly fragrances in travel retail, but in the Caribbean region it supplies its nowhot makeup and skincare brands. As well
as Benefit and Rituals, these also include Shiseido, Clarins and Bare Minerals. Rituals has sparked “fantastic feedback” with the opening of its first store in Americas travel retail at London Supply’s Puerto Iguazu border store earlier this year, in partnership with Essence Corp. “We started with Rituals last year, but we’ve been in touch with Rituals for over five years. At that time, they didn’t have a presence in the US, but now they have a subsidiary and close to 20 boutiques and a strong relationship with Macy’s and Ulta Beauty. Once you have visibility in the US market, you can expand in the wider region. The Latin American markets look towards what brands are happening in the US, whereas Argentina looks more to Europe. “Having a presence in the US really helps. Rituals has a large shop-in-shop in Macy’s Aventura [in Florida] a big flagship in Miami, which is important. The price points are low – it’s a whole different category – and it’s geared towards a younger clientele. It’s a very young, inclusive and dynamic brand. It has a great story to tell for people who are traveling – slow down, relax, and convert your routine into a ritual… The products are mostly natural and mostly manufactured in Europe. Retailers are now seeing that in order to compete in such a competitive environment – e-commerce and specialty retail, department stores, the wider retail market – it’s about offering different products to their consumers. They need to introduce innovation to drive retail.” Essence Corp has also latched on to the small but growing haircare segment. “We’ve just started with the Phyto brand. At the end of last year we started distribution in the Latin American domestic markets, and we have the opportunity to go into travel retail when the brand gains further visibility,” reveals Bona. “Haircare is a strong category in Latin America – it’s definitely the new skincare. You take care of your face and body, so why not treat your hair, which covers most of your head… Consumers are looking for more natural ingredients in this category.” Turning to the subject of CSR, Essence Corp plays a trump card. “CSR has always been very important to our family and our company. We work very hard and it’s nice to take time out and dedicate it to the environment. We do lots of things in Miami, for example. In January, we orga-
nized a beach clean-up. We did a dune restoration that helps the natural habitat and protects the beach from erosion. We had a team of 72 [the whole company – Ed] going inside Miami beach in January, which was amazing.” Essence Corp participated in the Mercedes-Benz corporate run at the end of April. The team ran for the Miami Project. “It was our own initiative. For every participant we donated money and then for everyone who donated we were able to match it. This encouraged people to participate.” The Miami Project foundation was started by Nick Buoniconti, who was a famous professional footballer in Miami. His son Marc had an accident playing football in college and became a quadriplegic, and his mission was to cure paralysis. “I have a very good friend from high school who is also a quadriplegic. He’s a financial planner and we lend him office space. He’s worked here over 10 years, so we ran to raise money for a cure for paralysis. Around 50 of our team participated in the corporate run out of a total of 61 staff based in Miami.” Thanks to the efforts of the Essence team, some US$5,000 was raised. Each January, Essence Corp holds a companywide seminar with presentations. Even here, the staff participate in socially responsible activities. Throughout the year, the firm raises money for causes such as The Susan G. Komen Breast Cancer Foundation, The Miami Rescue Mission, and the Movember Foundation – the moustache movement that raises awareness for men’s health. And the list goes on.
From left: Antoine Bona, Patricia Bona, JeanJacques Bona and Guillaume Bona
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LVMH Perfume and Cosmetics
Together we go further as one team LVMH’s Perfume and Cosmetics division restructured in 2018 to reinforce partnerships with retailers and embrace the retail transformation by HIBAH NOOR
Flower by Kenzo Eau de Vie
Givenchy’s L’Interdit EDT
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ust over a year ago, LVMH’s Perfume and Cosmetics unit created a new travel retail structure to manage the group’s portfolio of cosmetics brands. Among the luxury brands in the portfolio are such luminaries as Givenchy, Guerlain, Benefit Cosmetics, Kenzo, Acqua di Parma, Loewe and Fresh. Parfums Christian Dior and Bulgari are not included in this structure. Americas Duty Free caught up with Julien Ottenwaelter, Managing Director Perfumes & Cosmetics Travel Retail Americas, and asked how the new structure is working out. “It’s a new culture, a completely new approach, because we used to work individually by brand,” he said. “The most important thing for us is to protect and highlight each brand’s DNA, respect our ‘maison’, each individual brand.” With a portfolio of some 15 perfumes and cosmetics brands, the LVMH group is organized vertically and each brand is
Julien Ottenwaelter, Managing Director Perfumes & Cosmetics Travel Retail Americas
responsible for its own results. The new organization was put in place by Gianluca Toniolo, Managing Director Global Travel Retail at LVMH, in early 2018. It was intended to leverage the strength of that vertical structure to develop the business of the whole group’s fragrance and beauty portfolio. The goal was to develop new and stronger partnerships with the key retailers. “In general, and especially in travel retail, there’s consolidation among the operators and we were losing a business opportunity – losing the opportunity for space and visibility – to our main competitors,” explained Ottenwaelter. “So in the last 18 months we have needed to learn to work together, while respecting the individual brands. My job is to give more visibility, more share of voice, more share of media generally to all the brands, even those which are quite small.” Retailers have welcomed this new approach. “The feedback from retailers is that we are better organized, more straight to the point,” he commented. “We can use synergy when trying to negotiate space, using the power of the group, and it’s working pretty well.” And this is just the beginning. The plan is that between Q4 2019 and Q4 2020 we will be enlarging our portfolio in travel retail,” explained Ottenwaelter. Mentioning Fenty Beauty by Rihanna, an exciting addition to the portfolio, he commented: “If you take Fenty Beauty by Rihanna, for example, we are going to launch in Asia in September 2019 in some specific locations. And – to be confirmed – there will be a rollout in Q3 or Q4 2020 for the Americas.” Skincare brand Fresh and perfume brand Acqua di Parma are also set to be
LVMH’s Perfume and Cosmetics’ dream team: From left: Javier Rodriguez: Regional Director- Americas at Loewe, Carlos Rodriguez, Regional Director - Travel Retail Americas at Guerlain, Meliha Lozano, Regional Director - Travel Retail Americas at Benefit, Julien Ottenwaelter- Managing Director- Travel Retail Americas at LVMH Perfumes & Cosmetics, Edouard Mariotti, Regional Director - Travel Retail Americas at LVMH Fragrance Brands
successful in travel retail. “We have a few key doors already for Fresh with DFS in Americas and Asia, and we are working also on Acqua di Parma which we are putting into New York JFK – one of the first doors in the Americas.” Participation at industry trade shows is a key element for the future, according to Ottenwaelter. “Last year was the first year for the new LVMH organization at Cannes [TFWA World Exhibition]. It was a rush, but we met a lot of buyers from all regions. We had amazing feedback from all visitors to the new booth. The Orlando show is also on the radar for next year. “Our wish is to help and sustain regional initiatives,” he said. “We want to put the Americas back in the game, back in our strategy.” Edouard Mariotti, Travel Retail Americas Regional Director, LVMH Fragrance Brands, who joined the new organization in July 2018, agreed. “The new collaborative approach with retailers means that each director, marketing team and commercial team can present the strategy of their own brand, but we have a share of voice with all of the brands at meetings. We go together to the retailer meetings as a group.” “The new structure is a success,” Mariotti added. “Our people are the most important aspect. We have a super-motivated and dynamic team – we are all part of something bigger.” Mariotti believes that the new structure has revolutionized the way LVMH deals with its partners and its consumers. “We are getting more client-centric and consumer obsessed,” he said. “We are also reinforcing our business intelligence. This is new and very productive. Previously, brands had their own research, whereas now we align on the findings about trends, market insights, and so on. And finally, we are working in closer collaboration with our retailers.”
We have also adapted our field structure to be close to our markets,” Mariotti revealed. “We have Mandarin, Portuguese and Spanish field executives to understand and be close to our consumers. We are also leveraging the collaboration with our Latin American subsidiaries by having our travel retail teams based within the subsidiaries to be close to their markets.” LVMH Fragrance Brands has around 20 people in the Americas travel retail department. Some resources, such as the digital and retail design team, are shared with the export and local markets. “We have a common approach between travel retail and the local markets. We share the same consumer, so we have to target them with one voice.” Conscious of the retail transformation brought about by the digital revolution, LVMH created a position of E-Retail and Digital Manager and hired a specialist in 2018 to spearhead the development of LVMH in digital. “We started with DFS, Duty Free Americas and Dufry, developing online activations to be aligned to in-store animation. Next will be e-boutiques and e-retail partnerships,” Mariotti revealed. “To us, this is very new; we have not done that before.” To mark the anniversary of the new integrated structure, LVMH Fragrance Brands staged an event in Miami in the summer under the banner ‘Together we go further as a team’. The motivational event gathered all the teams together for presentations on market trends, big client analysis, fashion and couture trends, new perfumes and cosmetics competitors, with an opportunity for each brand to present their strategy and performance. “The event enabled us to align and fine-tune our strategy. It was important to have all our people at the same time – all the teams together. It was great,” enthused Ottenwaelter.
www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING
BUCKLEY LONDON celebrates in style Ring pendant, friendship bracelet and earrings from the new Cleo collection for SS20
Renowned British jewelry brand celebrates 30 successful years and prepares to launch its latest collections in global travel retail
eading British jewelry brand Buckley London is this year celebrating its 30th anniversary and shows no signs of slowing its development. To mark the event, the brand launched a commemorative ‘Legacy’ collection as part of the Autumn Winter 2019 range. The 6-piece collection was designed with a nod to the 80s and represented the brand’s remarkable journey over three decades. This autumn at TFWA World Exhibition, Buckley London will unveil its latest collections, which demonstrate that its creative spirit is as vibrant as ever. The Spring Summer 2020 range consists of four women’s collections, an abundance of new gifting pieces plus additions to the current men’s collections. Tones of silver, gold and rose gold run throughout the collections, beautifully finished with twisting, quilting and Aztec pattern details. The delicate, feminine ‘Eternal’ collection, for example, takes inspiration from artistic and naturally forming sculptures, with flowing, abstract shapes interlinked and finished in silver plating and rose gold tones. Inspired by ancient Aztec themes, the ‘Mayan’ collection of
pendants and earrings was designed with intricate cut-out detailing and finished in silver plating. Delicately twisted, gold plated rings entwined together form the basis of the ‘Cleo’ collection. The travel retail exclusives range is set to expand, with innovative additions to the inflight range, including mesh charm bracelets, travel inspired pieces and a vibrant rainbow collection. Seven new pieces join the men’s collections, such as Novello and Logan, with semi-precious beaded bracelets and steel cuffs carved with intricate patterns, among other contemporary designs. Christina Lenihan, Design Director for Buckley London said: “TFWA Cannes is our biggest show of the year and the perfect opportunity to meet with customers both current and new, whilst showcasing our fantastic range of jewelry. The SS20 collections are such a strong move forward for the brand and we are super excited to be exclusively unveiling the new collections in September.”
Founded by Adrian Buckley in 1989, Buckley Jewellery Limited was built upon the values of a family company and has retained this ethos throughout its journey.
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Based in Leeds, West Yorkshire, the company has over 40 employees at its central hub, including the in-house design team who create all of Buckley London’s designs in the UK. Buckley London is now stocked in over 1,000 retail locations worldwide, including more than 120 airport locations, 108 airlines and over 100 cruise ships. Always a supporter of charitable causes, Buckley London has worked closely with the Royal British Legion since 2010, raising over £5 million to date through the sale of the exclusively designed crystal poppy brooch as part of ‘The Poppy Collection®’. The official poppy brooches have been worn by celebrities and influential figures, including the Duke and Duchess of Cambridge, Angelina Jolie and Lady Gaga. In 2012, the Adrian Buckley Charitable Trust was established, funded by donations and charity events. The trust’s first project was the opening of the Kyasira Home of Hope in 2013, a school and orphanage in Uganda which has hugely improved the lives of the local Kyasira people. In 2018 a new kitchen and dining hall were built to further improve living conditions at the orphanage. Adrian’s passion for developing a pioneering costume jewelry brand continues to flow throughout the business and its employees, leading us to anticipate further success for Buckley London in the future. With its interlinked abstract shapes the Eternal collection takes inspiration from artistic and naturally forming sculptures
The Americas is a polarized region, with the North capturing Chinese and American travelers mostly and a big skincare market, according to Yannick Raynaud
The beauty of a powerful brand portfolio In the first part of this illuminating interview, Yannick Raynaud, L’Oréal Travel Retail Americas Managing Director, reveals some secrets of the division’s travel retail success
Yannick Raynaud, L’Oréal Travel Retail Americas Managing Director
by HIBAH NOOR
’Oréal Group Worldwide has been celebrating the best sales growth in a decade, including in travel retail. In the Americas, the French beauty giant is fighting fire with water – namely the iconic La Vie est Belle, Aqua di Gio, Si Passione and also the Cologne Absolue… These are just four of the myriad products in the company’s ever-growing brand portfolio targeted at all travelers, whatever their age, gender or demographic group. We met Yannick Raynaud, L’Oréal Travel Retail Americas Managing Director, in her Miami office. Like many in our industry, she is a well-traveled executive, having worked for two-anda-half years in that position in Miami. Before that, she was in UK for three years, New York for five years, along with stints in Paris, Brazil and Venezuela. Commenting on L’Oréal’s dynamic worldwide – and marketbusting – performance over the last 10 years, Raynaud says: “I’m not only thrilled by it but very proud to be part of it; it’s the consolidation of hard work, vision and passion of thousands of individuals in all subsidiaries. Yet beyond that, it is our incredibly powerful brand portfolio, which is the winner in this game – it is the main driver of this success. Indeed, we have the most diversified portfolio, from luxury brands to more accessible brands, from dermocosmetics to haircare brands, from legendary icons to exciting novelties… We address all consumers’ needs and, in travel retail, all travelers’ needs. Our mission is to offer ‘Beauty for all travelers’.” 60 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
Digital shopping experiences
Another driver of the group’s performance is the early bets on digitalization. Raynaud is crystal-clear about the importance of the internet in driving sales and creating digital shopping experiences online and offline. “Very early on we were able to seize what was starting, which is by the way a famous L’Oréal motto.” In travel retail in the Americas, digital activations that stand out have included onboard Celebrity Edge, the first Edge-class cruise ship operated by Celebrity Cruises. Celebrity Edge, constructed in France with a reported cost of US$1 billion, had her maiden voyage in December 2018, and is a paean to the travel experience. Enter L’Oréal Travel Retail, whose Atelier Cologne brand premium gifting fragrance has just been launched in travel retail Americas. This French Maison de Parfum, created in 2009, focuses on pure, natural fragrances, based on the legendary Eau de Cologne that both men and women can wear. The brand has really captured the zeitgeist with its genderless, ageless brand story and focus on gifting. Raynaud says it was an exciting challenge to animate the Atelier Cologne brand on a cruise ship, which she calls a “digital floating door”. The permanent activation started in January 2019 and was developed specially for Celebrity Edge. It enables shop-
pers to learn all about this new-generation brand using a digital screen. When you pick up the fragrance, the screen explains the natural ingredients, the different notes, and you can compare fragrances. “It’s self-service in many ways,” explains Raynaud. “The screen is animated and allows you to make the best choice. Gifting is key: when the fragrance is selected, you will choose a complementary leather case in a selection of eight colors that can be engraved with any message you want on-site, using a bespoke engraving machine. Your gift is then wrapped in a beautiful blue box with ribbon.”
L’Oréal Travel Retail has also incorporated digital elements in its pop-up spaces. For example, with Kiehl’s, the US skincare brand focused on helping the local community. You can select a design for your complementary tote bag and see it printing live. “This engagement uses digital to personalize your own experience and it’s working stunningly well,” she says. “In our Hawaii flagship with Lancôme we’ve integrated L’Oréal’s ModiFace augmented reality technology so consumers can discover different lip shades, try them on and be playful. You can discover them and buy them on the spot or back at home.” Turning to the all-important e-commerce sector, Raynaud highlights Dufry Brazil’s click-and-collect service. L’Oréal has created brand pages and shop-in-shops so its brands are displayed in a “unique and engaging” way. “We are recruiting another type of consumer. They are all about planning, convenience and reassurance to get the products on their way back home. It’s friction-less.” Another exciting Dufry partnership took place recently in Brazil with famous DJ Ansel Elgort for the launch of Polo Red Rush by Ralph Lauren. “Creating a desire for what’s exclusive and scarce, Ansel signed a selected number of bottles and we designed a consumer journey around it online, activating Dufry’s social media. You had to get this precious bottle.” This type of influencers’ initiative in pop-ups and events will continue.
Atelier Cologne is in the top fragrance sales onboard the new Edge-class cruiseship Celebrity Edge
All these digital initiatives undoubtedly help to recruit new consumers and engage loyal ones.
YSL’s “The Slim” lipstick has been a worldwide phenomenon generating incredible enthusiasm in its immersive pop-up in Los Angeles International Airport in partnership with DFS. YSL’s Black Opium fragrance is also “on fire” after its launch in Brazil, she enthuses. And Lancôme’s iconic Genifique, the bestseller, is expected to meet new success this year with the upcoming major Microbiome scientific innovation. Atelier Cologne, which met such success on the Edge-class cruise ship as mentioned above, has been launched in key airports with big Chinese traffic such as Vancouver, Los Angeles International (LAX), Montreal and New York JFK. “Atelier Cologne is going from strength to strength. It’s an exciting new brand, with a unique proposition, bringing additional revenues for the shop… and already a brand favorite for the Chinese passengers loving the personalization and giftability,” Raynaud enthuses.
Boosting American spend
One challenge the travel retail team faces is to engage North Americans more, as they don’t tend to shop much outside their domestic market. The US is the biggest beauty market in the world (Source: internal panel), but recently released m1nd-set figures showed that only 2% of international American travelers buy beauty in airports. “There is a big potential here, yet it is certainly the most difficult to crack. Travel retail offers need to be adapted to the mindset of this specific traveler, to the ecosystem surrounding him/her and be more disruptive. Proofs of concept have been done in LAX and New York, where results were promising. As long as there is disruption, a relevant offer and a unique experience: it works.” Asked about how Americas travel retail differs from other regions, Raynaud notes that the Americas region captures global shoppers with a strong diversity of passengers, both in traffic and spend. It is also a polarized region, with the North capturing Chinese and Americans mostly and a big skincare market, while in the South, the main travelers are Brazilians and Argentinians and the leading category is fragrances. “In the Americas, with the powerful and diversified portfolio of brands we manage, we will continue developing this market with relevant offers for all travelers,” Raynaud concludes.
YSL’s Black Opium fragrance is “on fire” after its launch in Brazil
www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING
Inter Parfums USA
GUESS GOES BACK TO THE
Inter Parfums USA is introducing the new Guess 1981 Los Angeles fragrance advertising campaign to celebrate the jeans brand’s heritage
nter Parfums USA has launched its first Guess fragrances for men and women, harking back to the 1980s. The Guess 1981 Los Angeles fragrances are rolling out now, with an advertising campaign that introduces actress, model and global influencer Amy Jackson. She stars alongside Italian model, DJ and music producer Andrea Damante. The campaign, art directed by Paul Marciano, Creative Director of Guess? Inc, and shot by Los Angeles-based photographer Josh Ryan, aims to underscore the inspiration behind the Guess 1981 Los Angeles fragrance – a time when the jeans brand’s heritage was born. Photographed in California’s Malibu Canyon, the campaign channels the elegance of the iconic Guess Girl. The new fragrances for men and women are translated into the campaign photo shoot by pulling inspiration from the Los Angeles mountains, deserts and seascapes at sunset. This carefree, sensual embodiment of California seeks to embrace the adventurous spirit of Guess.
Cultivating premiere fragrances
“Our new fragrance, Guess 1981 Los Angeles, is the first in our partnership with Inter Parfums and CEO Jean Madar, who has had incredible success in build-
ing and cultivating premiere fragrances. Their diverse portfolio is the perfect home for the Guess brand,” says Marciano. Campaign star Amy Jackson enthuses: “I have dreamt of being a Guess girl for as long as I can remember, and I’m thrilled to join the Guess family for the launch of their new fragrance Guess 1981 Los Angeles. It was an unforgettable day filming from a remote location overlooking the ocean. We had a stunning view over LA, it was magical.” Andrea Damante adds: “I have always looked admiringly at the Guess campaigns, which made me dream about a world of style and happiness. When Paul Marciano asked me to be the face of the new Guess fragrance campaign, of course I said yes! It’s like being one of the heroes I remember looking at when I was young.” Guess 1981 Los Angeles Women is made with a succulent mélange of redcurrant, juicy mandarin and a touch of pear. Sun-drenched jasmine petals, blush peonies and orange flower glisten at the heart of the fragrance, while apricot nectar adds a bit of sweetness to the scent. Vanilla, praline and sensual musk from the base add to the sophisticated warmth of cedarwood and Ambrox. Channeling the modern Guess man and the dualities of LA, Guess 1981 Los
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Angeles Men completes the duo with its fresh, masculine and sexy energy. The textural top notes deliver an aromatic combination of pepper, plum and bergamot, boosted by bracing spearmint and ginger. The warm, woody background adds exciting contrast with its perfectly blended notes of tobacco and amber. The campaign images broke March 2019 in top fashion and lifestyle magazines, at www.Guess.com, on Guess’ social platforms, in Guess retail stores, outdoor media, online, and on collateral materials. Established in 1981, Guess began as a jeans company and has since successfully grown into a global lifestyle brand. Guess? Inc designs, markets, distributes and licenses a lifestyle collection of contemporary apparel, denim, handbags, watches, footwear and other related consumer products. Guess? products are distributed through branded Guess? stores as well as better department and specialty stores around the world. As of November 3, 2018, the company directly operated 1,108 retail stores in the Americas, Europe and Asia. The company’s licensees and distributors operated 584 additional retail stores worldwide. As of November 3, 2018, the company and its licensees and distributors operated in approximately 100 countries worldwide.
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Perfetti Van Melle brings bevy of newness to Cannes Perfetti Van Melle (PVM) returns to the TFWA World Exhibition this year armed with an abundance of products and the unveiling of new brand Fruittella. Backed by a strong heritage, Fruittella is a trusted brand made with natural flavors and natural colorings, resulting in a rich and juicy taste. PVM is launching a Fruittella Jumbostick containing eight single sticks of the strawberry flavor in all travel retail channels, focusing on families with children aged four to 12. PVM has new launches for its Chupa Chups range, including Chupa Chups Funny Friends – eight mini lollipops in fox, duck and dog plush pouches, ready for release March 2020. Two new characters join PVM’s popular Chupa Chups Backpack range – Tiger and Panda. The plush backpacks feature 16 fruit lollipops and are available in all travel retail channels. PVM officially has a Snoopy character license for its line of Chupa Chups markers. Snoopy joins Hello Kitty while replacing the license for Smurfs. The Snoopy Marker Pack contains seven fruit lollipops, eight markers and one booklet and will be available in travel retail in March 2020. The Chupa Chups Cash Till Box, containing six assorted fruit lollipops, was created specially for the cash till point and targets young adults. It will roll out in travel retail in March 2020. The Mentos brand has expanded its portfolio with the Mentos 2H Clean Breath, allowing breath to stay fresh up to two
hours. The sugar-free three-layer tab contains magnolia bark extract and zinc and is available in Intense Mint, Peppermint, and Lemon Mint flavors. The practical and thin format of the tin makes it convenient for on-the-go consumption and is ideal for social occasions, PVM said. The Mentos Pure Fresh Gum range has been extended with a new Watermelon flavor. Containing 45 pieces and ideal for the cash till point, the new watermelon flavor will be available in travel retail from March 2020.
Perfetti Van Melle is now licensed for Snoopy, allowing for a fresh take on the Snoopy Marker Pack full of treats and activities
Butlers showcases distinguished portfolio Butlers Chocolates is coming to the TFWA fair in Cannes with a number of new chocolate gifting exclusives. Following the success of the award-winning Platinum Collection range introduced in 2016, Butlers has added a dark assortment. The dark chocolate variant includes 14 chocolates, including Coconut Caramel & Almond Crocant, Dark Chocolate with Green Tea and an intense Midnight Truffle.
Butlers Platinum Collection range grows with the addition of a dark assortment
64 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
The metallic box is encased in a rich mahogany clutch-style sleeve with a subtle metallic shimmer and tied with a chocolate brown ribbon. Designed for gifting, this box is expected to entice passengers of all nationalities. As dark chocolate appeals to those who enjoy less-sweet tastes, the flavors are expected to target chocolate lovers from the Asia Pacific region in particular. The selection of chocolates is alcohol-free and this gift is available in a 200g format from September 2019. Combined with this new release is the Butlers Chocolate Collection Tin, a keepsake extension to the successful Chocolate Collection range. The gold tin contains a collection of luxury chocolate truffles and pralines crafted with the finest of ingredients using interesting and contemporary flavors, including Spiced Chai and Mango & Lemongrass. Butlers Chocolates, an Irish family-owned company, has been making luxury chocolates in Dublin since 1932. The long-established luxury chocolatier is firmly pledged to sustainable and ethical practices across the business, such as a commitment to local sourcing, using recyclable packaging and the reduction of single-use plastic. All chocolates are made using sustainably sourced cocoa, verified under the Cocoa Horizons Initiative. The Butlers factory in Dublin has zero waste to landfill and hosts Ireland’s largest solar panel installation on its roof, which since installation has produced the energy to manufacture 6 million chocolate bars.
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Lindt & Sprüngli’s sweet reign over confectionery category Lindt & Sprüngli continues to be a leader in the confectionery category as it has proven that Lindor is one of the most versatile brands, meeting different passenger needs including gifting, sharing and self-treating, according to research from NPD and PI Insights. Lindt will continue to embrace this trend by unveiling new products in its Lindor range at the TFWA World Exhibition, including Lindor 70% Dark Chocolate Mini Tube 175g. Furthermore, 2019 closes on a sweet note as Lindt & Sprüngli was named Best-In-Class confectionery supplier in the 2019 Advantage Report Global Travel Retail. The Advantage Report Global Travel Retail is an annual study based on qualitative and quantitative research, which this year saw more than 385 key stakeholders from 87 retailers evaluate the performance of their suppliers. Lindt achieved top-tier ratings across all seven performance areas: Overall, Strategic Alignment, People, Category Development, Trade & Shopper Marketing and Customer Service. Within the regions, Lindt ranked first in the Americas and the Middle East, second in Europe and third in Asia Pacific. Lindt highlights its innovations in personalized gifting including the Lindor Charms Station and Lindt Magical Selfie Mirror, which will be available for visitors to try at the Lindt booth in Cannes.
The latest additions to the Lindt Napolitains World Traveller Collection will be featured with a Cannes-themed display, as well as debuting new novelties for its Christmas 2019 and Chinese New Year’s 2020 ranges. Lindt will also introduce a new brand to the travel retail market, Caffarel – an Italian specialty product containing fine chocolate and Piemontese hazelnuts.
New for 2020 will be the Canada and Argentina novelties of the Lindt World Traveller Collection
Leonidas expands impulse gifting assortment Leonidas Maître Chocolatier has created a third masterful collection of chocolate pieces to complete the trio of ‘FOR YOU’ gift boxes. In keeping with the mission of Leonidas ‘to spread moments of happiness for all’, the FOR YOU box collection is the perfect little treat for oneself, for one’s nearest and dearest, or just to say “thank you”. The latest addition is the ‘FOR YOU’ Hearts 6-piece assortment, a vibrant red gift box containing two blond chocolate hearts with exquisite coffee dulce de leche filling, two milk
chocolate hearts filled with velvety vanilla cream and two dark chocolate hearts with an intense dark chocolate ganache filling. This new six-piece box joins the FOR YOU Louise and the FOR YOU Duetto assortments, which were launched earlier this year and have proved very popular with shoppers looking for an indulgent self-treat or a delightful small gift. The FOR YOU Duetto assortment showcases the more exotic side of Leonidas with three types of Duettos: the unusual Duetto Yuzu & Dragonfruit piece, a white chocolate covered ganache with yuzu and dragon fruit filling, alongside dark chocolate Duetto Strawberry & Balsamic and milk chocolate Duetto Nougat & Sesame. The FOR YOU Louise assortment delights the more traditional taste buds with Louise White caramel flavored praliné with caramelized hazelnuts, Louise Milk caramel praliné and Louise Dark caramel praliné. The trio of FOR YOU gift boxes, which are ideal as check-out or cross-merchandising items to drive basket spend, will be showcased at TFWA World Exhibition at stand D24 Blue Village. Created in Belgium, Leonidas chocolates contain 100% cocoa butter, 0% palm oil and only fresh ingredients for moments of pure happiness. FOR YOU box collection by Leonidas
66 THE AMERICAS DUTY FREE & TRAVEL RETAILING OCTOBER 2019
Hero products and new concepts Anthon Berg continues to reinvent its recipe for success by updating packaging and celebrating new partnerships
The Cognac Selection presents a partnership with five of the world’s most renowned Cognacs, Rémy Martin VSOP, Camus VSOP, Courvoisier VS, Louis Royer VSOP and Gautier VSOP
nthon Berg, global leader in bottle-shaped chocolates, continues to prosper with existing and new partnerships with some of the most famous original liqueur brands in the world. Launched in 1922, Chocolate Liqueurs continues to be the brand’s hero product. This was followed by the Chocolate Cocktails line, launched in 2004, and most recently the Chocolate Coffee Liqueurs in 2014. The three lines are now being relaunched for the 12-pieceand the 21-piece pcs Chocolate Liqueur Collection which is a mix of the three concepts.
Window of opportunity
The strategy for this relaunch is a trinity of attracting attention, sparking curiosity and convincing consumers to buy. The main tool to increase shelf-impact is the unique window front. This allows the consumers to see that they are buying actual miniature bottle-shaped chocolates wrapped and labeled like real bottles. The
by JAS RYAT
bottles are now lined up, as on the shelf in a liqueur cabinet, which gives the boxes a more compact and filled appearance. The company has also resized the boxes to suit the product range better and differentiate it from the 21–piece box. The Anthon Berg Chocolate Liqueur Collection is being relaunched as a slide sleeve rather than a lid box for a more premium feel which gives the impression of sliding open the bar cabinet. A quality seal, showing the unwrapped bottle with liqueur inside and stating ‘The Original Chocolate Liqueurs – since 1922’, has been added to help the consumers understand the concept quickly. This also underlines the fact that Anthon Berg is the world’s leading brand within liqueur filled chocolate. The product’s USPs are also added on the front in hot foil reading ‘premium dark chocolate’ and ‘genuine spirits in liquid centres’.
Where Cognac reigns
Following the success of the Single Malt Scotch Collection, Anthon Berg has partnered with some of the world’s best-known brands to present The Cognac Selection. Teaming up with five of the world’s most renowned Cognacs, Rémy Martin VSOP, Camus VSOP, Courvoisier VS, Louis Royer VSOP and Gautier VSOP, the firm promises to take the consumer on a tasting journey through the world’s most famous wine region - Cognac on the west coast of France. Chocolate in combination with Cognac
creates the perfect culinary marriage, according to the brand. With the Cognac Selection, Anthon Berg has continued the journey that started in the Scottish Highlands with the Single Malt Scotch Collection into the French countryside while creating a strong concept equally suitable for gifting, sharing and self-consumption.
Match Made In Chocolate Heaven
With one of the most anticipated partnerships of the year, Anthon Berg has announced it is teaming up with Baileys Irish Cream to launch a travel retail exclusive range. Five of the bestselling varieties of Baileys Irish Cream are transformed into pralines with creamy fillings encased in Anthon Berg premium chocolate. The milk chocolate pairings consist of Baileys Original, Baileys Coffee and Baileys Salted Caramel; while the dark chocolate pairings include Baileys Chocolate Luxe, and Baileys Strawberry & Cream. In the Baileys Irish Cream Collection the five pralines are to be found in different combinations in a choice of six products.The premium gift box Treat Collection is a mix of the five different pralines. The Chocolate Treat is a ‘tower’ with a window on the front, which shows off the twist wrapped pralines insid. This pack comes in two varieties: Original, Salted Caramel and Coffee; Original, Strawberry & Cream and Chocolate Luxe. The Baileys Irish Cream range is completed by three mono gift boxes of Original Flavour, Salted Caramel and Strawberry.
Anthon Berg presents the perfect match: The Baileys Irish Cream collection is to launch as a travel retail exclusive www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING
Challenges in Confectionery
Challenging the status quo by HIBAH NOOR
Leading confectionery manufacturers are figuring out solutions to a series of challenges being posed in the travel retail channel
The cocoa harvest in Cote d’Ivoire, where Mars seeks to play a role in increasing opportunities for people in the workplaces and communities that it touches
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A Mars wind farm in Scotland generates cleaner power
here’s no denying confectionery is a fun and gift-worthy category, but dig deeper and there are challenges ahead for all suppliers, big or small. Let’s take the issue of sustainability as a prime example. Manufacturers across industries – and across the world – are tackling a thorny issue that’s high up on the agenda of the millennial consumer shopping today. Suppliers understand that they can’t ignore this subject and hope it will go away. That’s certainly the view of Maud Geerbex, Corporate Affairs Director at Mars International Travel Retail, who says cocoa sustainability is a major issue for one of the largest users of cocoa. “We’re putting US$1 billion into sustainability projects. There are a lot of issues to tackle holistically, like poverty and deforestation, which is a big issue. We’ve signed a deforestation commitment.” The latter pledge, made in 2014, sees Mars launching new commitments to preserve forests, as part of a drive towards a sustainable cocoa supply chain that is fully traceable and deforestationfree by 2025. Mars is also empowering women in Cote d’Ivoire, one of the main cocoa-producing countries – as per an announcement that was made on International Women’s Day (March 8, 2019). “We’re building a marketplace for women, as it’s important to empower women locally,” says Geerbex.
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Challenges in Confectionery
Fighting climate change
In April 2019, Mondelez International announced its commitment to deliver 100% of the cocoa volume needed for the company’s chocolate brands by 2025 through its Cocoa Life sustainability program
The US confectionery giant’s Sustainable in a Generation Plan addresses key areas of the United Nations’ Sustainable Development Goals and features ambitious goals informed by science and rooted in The Five Principles. Its plan focuses on three key areas: Healthy Planet, Thriving People and Nourishing Wellbeing. Using data from thorough reviews of its resource use, Mars has set Healthy Planet ambitions linked to climate action, water stewardship and land use to reduce its environmental impacts in line with what science says is necessary to keep the planet healthy tomorrow. The firm believes it can and should play a role in increasing opportunities for people in the workplaces and communities that it touches. Its Thriving People ambition focuses on increasing income, respecting human rights and unlocking opportunities for women to improve the working lives of 1 million people in its value chain. In addition, Mars believes people should have access to the products and information they need to maintain healthy lifestyles. Its Nourishing Wellbeing ambition is its commitment to advance science, innovation and marketing in ways that help billions of people (and their pets) lead healthier, happier lives today and into the future. The Sustainable in a Generation Plan is already working, to the extent that the energy Mars uses to make all its M&M’s worldwide is now is fully offset by wind power.
Speaking to Jaya Singh, Managing Director, Mondelez World Travel Retail (WTR) about the subject of sustainability for this magazine, he opines: “It is big on our agenda. It has the potential to level up the socio-economic field of play. At its heart, it’s all about responsibility and inclusiveness on a much broader platform. This will yield the above outcomes that will ensure sustainability for all.” In April of this year, Mondelez International announced its commitment to deliver 100% of the cocoa volume needed for the company’s chocolate brands by 2025 through its Cocoa Life sustainability program. This follows promising results in the program’s first six years. Cocoa Life helps to create a thriving cocoa supply chain by increasing yields on existing farms, building resilience in cocoa-growing communities and preventing deforestation. Through Cocoa Life, Mondelez is leading the way in the fight against climate change in the cocoa sector and playing an active role in securing sustainable supplies of key raw materials.
Digital labeling solution
Labeling on packaging is another challenge for all confectionery makers, large or small. In response to challenges caused by increasing labeling requirements in duty free and travel retail, the European Travel Retail Confederation (ETRC) initiated a pilot project last year to develop a digital platform to provide product information in multiple languages across several product categories (spanning perfumes and cosmetics, alcohol, food and confectionery) in a format that is useful and relevant to travelers, allowing shoppers to access product information by searching for a product’s name or scanning the product barcode using a mobile device. The ETRC believes this pilot forms the basis for a pragmatic solution which takes into account the specific characteristics Sustainability has the potential to level up the socio-economic field of play, says Jaya Singh, Managing Director, Mondelez World Travel Retail
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of the travel retail industry, is relevant to an international audience, while still meeting policy objectives and regulatory requirements. The organization is actively engaging with EU policy-makers to seek a legislative solution that would formally allow for product information to be provided off-the-pack. This solution also has the potential to be expanded beyond Europe where necessary, the ETRC added. Currently, sugar confectionery group Cloetta is taking an “informing not warning” approach to labeling. With The Jelly Bean Factory, its key brand, it’s important for the Swedish confectionery company to communicate that its premium, adult-targeted brand is gluten, GMO and gelatinefree, free of artificial flavors and colors (i.e. NAFNAC), suitable for vegetarians, and Kosher certified, asserts Berend-Jan van Egmond, Senior Market Manager, Cloetta International. Similarly, for German sugar confectionery company Haribo, most of its products sold in travel retail contain no colors or flavoring, according to Haribo Travel Retail Marketing Manager Elisa Fontana. Its strategy is to help consumers indulge with control – allowing travelers to control their consumption through mini packs in its sharing party size product, for example. It clearly states the size of the bag and defines what a portion is: a handful is 25g. Asked what is the biggest challenge for chocolate confectionery overall in travel retail right now, Singh at Mondelez WTR believes that while the amount of space given to confectionery has increased over the years, it is still under-represented compared to other categories. “Furthermore, it requires visibility and high-profile placements. When you factor in the incremental revenue opportunity through biscuits and secondary placements, we feel strongly that many retailers should consider devoting more space to this dynamic category.”
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Whiskey Tourism in the US
American whiskey and bourbon are reaping the rewards of domestic revival and global growth. See why travelers are relishing the Kentucky hug- the ‘mouth feel’ or warmth of a good old fashion American whiskey
by JAS RYAT in Kentucky
Home of Buffalo Trace Bourbon, the 440-acre Buffalo Trace Distillery sits along the Kentucky River, the original buffalo migration route
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rom the minute you land at Louisville International Airport in Kentucky, there’s no doubt you’re in a bourbon state. Wall-to-wall displays of the brown spirits immerse you in the local culture and stories behind each brand. The shops showcase gondolas of the local liquid and the airport houses a massive Bourbon Academy Tasting Room on the upper level. And rightfully so. Bourbon is revolutionizing Kentucky’s tourism by welcoming over 70% of visitors from outside this East South Central state. Last year alone, Kentucky exported over US$450 million in spirits – an export value which has tripled in the last 20 years. European countries make up nearly half of the whiskey exports coming from Kentucky. Americas Duty Free visited the birthplace of bourbon to see how Kentucky plans on navigating global waters, as American whiskey demand is in full swing. KDA, (Kentucky Distillers Association) a non-profit trade group, created the Kentucky Bourbon Trail in 1999 to give visitors the full bourbon experience and has now become one of America’s fastest-growing tourism attractions with a record 1.4 million visits in 2018. Today, the Frazier Kentucky History Museum houses an exhibition that celebrates all things bourbon whiskey and is regarded as the starting point of the Kentucky Bourbon Trail.
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Whiskey Tourism in the US
Old Forester Distilling Co on Whiskey Row in Louisville, KY has found its roots again to highlight its history to capture the future
First stop is Old Forester Distilling Co on Whiskey Row in Louisville, KY. The distillery, a US$45 million facility owned by Brown-Forman, is home to America’s first bourbon, originally created in 1870. In an effort to reap the rewards of current trends, the brand has refreshed its portfolio by offering The Whisky Row Series for travel retail. The series offers Old Forester 1870 Original Batch, Old Forester 1897 Bottled in Bond and Old Forester 1920 Prohibition Style, all of which are designed to offer premium product at an achievable price point. “Old Forester found its roots again with a brand new distillery and line extensions that honor its history,” shares Marshall Farrer, Senior Vice President, Managing Director, Global Travel Retail & Developed Asia Pacific at Brown-Forman. “The Whiskey Row Series really brings the consumers back to a time when whiskey had a profile that was bolder and bigger for these specific dates that we targeted.” Although Brown-Forman planned to develop Old Forester in travel retail, accessing the quantities the channel required were not up to speed. Thus, Old Forester has been more centric, with success in Europe, Germany and Australia travel retail to date. “We are going to look to build on Old Forester as America’s first bourbon as it has outstanding stories and is a great product. We’ve been patient in order to let it grow into itself a bit,” says Farrer. Brown-Forman looks forward to the brand joining its global travel retail portfolio, along with its successful counterparts Jack Daniel’s and Woodford Reserve.
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Next stop was The Campus, otherwise known as Brown-Forman’s head office, located in Louisville. The Campus has nine office buildings, one production facility and four warehouses, including two, the Garneau Building and The Forester Center which are historical landmarks in the state. The Campus is also home to Farrer’s office and the ever-evolving Brown-Forman team. Farrer attributes much of the tourism growth in Kentucky to the development of global recognition for American whiskies. There is no better place to hear the story behind the brand like the place it originates from.
“American whiskey has been growing [market] share internationally and domestically for a number of years now. Today’s consumers are very attracted to authentic stories, mixability, and also the fascinating history told through the stories,” explains Farrer. A growing number of younger, affluent travelers are visiting distilleries in Kentucky. Whiskey tourism takes place in 152 cities, 49 states, two US territories and 11 foreign countries across five continents, according to IQS Research. Is this level of tourism sustainable? According to Farrer – absolutely. “The thing about trends is that they take the same amount of time to make as whiskey. Whiskey is an aged product and so we
Meet Old Forester’s statement piece. The fully functional Old Forester still is 24 inches wide and 44 feet tall, weighing in at 4700 lbs and plays a key part in creating the spirit
Whiskey Tourism in the US
have to plan way ahead and lay down our whiskies. But when you have invested in the infrastructure that the industry has, particularly in Tennessee and Kentucky, you’ve got gorgeous facilities and in beautiful locations, with ageing whiskies that give a sensory experience,” he explains. “They are on par with any others that you will find in the world. People are changing their travel plans to be a part of it and take advantage of it.” American whiskies and bourbons can also be more approachable for the novice whiskey drinker. The profiles are often less intimidating when compared to their Scotch or malt counterparts, as they are more distinct. The charred barrels that bourbon is aged in result in more compatible expressions like caramel and vanilla, guiding new consumers into the beginning of their affair with whiskey. Whiskies and bourbons also play well into the resurgent cocktail trend as they allow for mixability. America has recently been in the news for threatening – and in some cases – applying significant tariffs on trade with Europe, China, Mexico and Canada. Farrer suggests that although the tariffs themselves have not had any impact on
tourism, they have diverted the firm’s focus. Says Farrer: “One of the biggest challenges has been the diversion of our management’s time and efforts, and I can’t understate enough how much time and energy has to go into mitigating the impact or finding alternative solutions to offset the problems.”
When Woodford met Baccarat
Nestled in the rolling hillside, Bluegrass Region and home of the thoroughbreds sits Woodford Reserve in Woodford County. Following Woodford Reserve Baccarat Edition’s global launch in May, it made sense to speak with the Master Distiller for Woodford Reserve, Chris Morris. Like a humble artist reflecting on his painting, he describes the inspiration behind his US$1,500 masterpiece. “The wonderful story behind the origins of Kentucky and to honor the individuals and their contributions to our state and country, we brought together the best of Kentucky Bourbon Woodford Reserve and the best of French Cognac,” explains Morris. “We created a new expression of our whiskey, and thus we take fully matured Woodford Reserve and finish it in XO Cognac casks for three years.” Originally the expression was to be named Woodford Reserve La Fayette, but changed to Woodford Reserve Baccarat Edition after the invitation was given to partner with French fine crystal brand Baccarat. Morris confirms the partnership has been a great honor as it has resulted in the production of 5,000 bottles as a duty free exclusive.
Daily tours enrich visitors from around the world in the history and creation of Woodford Reserve
Says Farrer: “The reception has been strong throughout, ever since we introduced it. It was the right item with the right execution at the right time. We have modest expectations as we are breaking through price thresholds and packaging that is very unique. The objective is to get more visibility as the brand grows with consumer affinity.”
Woodford Reserve is one of Kentucky’s oldest bourbon producing distilleries
(L) Marshall Farrer, Senior Vice President, Managing Director, Global Travel Retail & Developed Asia Pacific at Brown-Forman proudly showcases Woodford Reserve Baccarat Edition with Chris Morris Master Distiller for Woodford Reserve
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Mark Brown, President & CEO of Sazerac Company Inc
Every bottle of Maker’s Mark is still hand-dipped with its trademark red wax topper
Tastes like heaven. Burns like hell. Sazerac’s Fireball Cinnamon Whisky has set a blaze to duty free
Some 55 miles from Louisville lies Buffalo Trace Distillery, located in Frankfort, KY. The award-winning distillery, owned by Sazerac, is over 200 years old. The 440-acre distillery sits along the Kentucky River, the original buffalo migration route, hence its name. The distillery is home to brands like Buffalo Trace, Eagle Rare and Sazerac Rye. Americas Duty Free connected with Mark Brown, President & CEO of Sazerac Company Inc, to get his take on the global growth and domestic revival of the brands that fall under the Sazerac umbrella. Like many in the industry, he touches on the fact that the heritage and nuance around bourbon has always existed, but is only now being communicated properly. “Distillers are now properly communicating the amazing product story – quality, heritage, craftsmanship and time that goes into making each bottle of bourbon, and it’s every bit as complicated as making
fine wine,” Brown explains. “It is very sustainable. The global opportunity could last for 100 years.” Sazerac brand Fireball Cinnamon Whisky is notably one of the most popular brands in the Americas regions. The value-based spirit performs well in duty free as it appeals to a large demographic of travelers. “Fireball has become a firm fan favorite across the entire consumer spectrum and global market, quite remarkable, and we feel honored,” says Brown. “We have been very pleasantly surprised with sales of Fireball in the duty free channel given current channel trends. It reinforces to us the universal appeal of the brand as it has become a staple brand in our consumers’ entertainment repertoire.”
“If we could make it faster, we wouldn’t”- Maker’s Mark
Located in picturesque Loretto, KY, an hour-and-a-half away from all civilization
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Whiskey Tourism in the US
(or so it seems) is hidden gem Maker’s Mark on Star Hill Farm. The bourbon, famous for its hand-dipped red wax topper, is aged for six years at the distillery. The limestone-filtered 10-acre springfed lake at Star Hill Farm was integral to Bill Samuels Sr’s, the fourth generation distiller of Maker’s Mark, acquisition of the property and one reason Maker’s is so focused on sustainability efforts and protecting the watershed. This designated water sanctuary reflects its commitment to improving plant diversity, preventing erosion, increasing groundwater infiltration and providing wildlife habitat. Margie Samuels, wife of Bill Samuels Sr, is credited with making this distillery much more visitor friendly – essentially enabling the birth of bourbon tourism. Carole Soulard, Customer Marketing Manager at Beam Suntory Americas Travel Retail, states, “Maker’s Mark is a pioneer in Bourbon Trail Tourism – Maker’s Mark offers the most authentic bourbon experience on the trail.” Distillery visits today reflect the handcrafted elements the brand is noted for, like handmade labels, hand-dipped wax toppers, and the practice of rotating bourbon barrels from top to bottom bunks to ensure temperature-controlled ageing.
Every aspect of Maker’s Mark production exudes a craft feel supported by a rich history
Investing in the future
The brand was also one of the first spirits in 1961 to partner with American Airlines to offer bourbon onboard, opening the channel for others to follow. The year 2010 welcomed Maker’s 46 into travel retail as the firm’s first new bourbon in almost 60 years. As well, Maker’s Mark 101, a travel retail exclusive that has been out since 2018, is now also available at the distillery.
There is a resounding message of confidence that tourism is on the rise, the total bourbon inventory as of January 2019 is 7.5 million, underscoring the fact that all brands are heavily invested in the growth of the tourism channel. “We have been delighted to welcome well over 1.0 million visitors to our Kentucky distilleries. We believe, given Kentucky’s location, that the opportunity for continued expansion of tourism is very large indeed,” says Brown. Farrer shares his optimism: “You’ve got the agricultural components, the production components and you’ve got the home place lifestyle and the story that goes with it. It’s a full sensory experience and there are many ways to get involved,” he concludes. Although not as far along on its developmental curve when compared to Scotch whisky, American whiskey shows no signs of slowing down as it embraces travelers in a Kentucky hug.
The limestone-filtered 10-acre spring-fed lake at Star Hill Farm is an integral part of Maker’s Mark
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“Drinking too much makes you poorly, drinking poorly is even worse, drink a little, drink in style, drink Molinari”. Angelo Molinari, 1968
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elevated through provenance Licor 43 shares its heritage through a new campaign by JAS RYAT
icor 43 answers to millennial foodies looking for provenance, heritage and natural ingredients with its new ad campaign. The campaign is designed to promote the 70-year-old secret family recipe of 43 natural ingredients that are blended to create Licor 43 with the tagline ‘Tastes Better Together’. The ads will also feature recent range extensions Licor 43 Baristo and Licor 43 Orochata, both fusions of the essence of Licor 43 Original with coffee from the Canary Islands and tiger nut milk from Valencia. Zamora Company, the family-owned drinks business that has been producing Licor 43 since 1946, has invested €6 million (US$11 million) behind the campaign to elevate the brand’s position as the fastest-growing premium liqueur in the world. The new campaign is now rolling out in above-the-line and below-the-line print and digital media across its key markets, including Spain, Mexico, Germany and the Netherlands.
“Millennial foodies account for 2.3 billion people worldwide and will be 75% of the global workforce in 2025,” says Julian Fernandez, Global Marketing Director of Spirits at Zamora Company. “These consumers are interested in the provenance behind and ingredients in a brand, so it’s important we position ourselves as the product we are: an on-trend liqueur with a long, strong heritage that has always, and will always, be a fusion of natural ingredients.” The new campaign will also see the circle from the Licor 43 logo become the key signifier for the brand and hero graphic for the ads, running through all visual communications and social media, and featuring in photography and brand installations. Says Fernandez: “The Licor 43 circle has long been an integral part of our branding and now we’re making it the symbol of how Licor 43 tastes better together with the best ingredients, and the best company.”
(TOP) Licor 43 Baristo, (MIDDLE) Licor 43 Original and (BOTTOM) Licor 43 Orochata
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Stoli Group heads for Cannes armed with new releases Stoli Group has revealed details of new products and plans for travel retail as it prepares for the 2019 TFWA World Exhibition in Cannes (Stand number: Beach Village, Beach 6). The company is showcasing the first brand refresh for Elit Vodka. Stoli has positioned the brand at the heart of modern luxury spirits with a fresh identity, new bottle, new global campaign and a renewed focus on the travel retail market. Stoli Group has announced new limited releases of its American whiskey brand, Kentucky Owl Bourbon, into travel retail
outside of the US. The releases are for the Confiscated, Rye 3 and Bourbon 9 expressions. A new craft-aged rum expression will be released from Bayou: Single Barrel #2. New products will be introduced for Stoli’s tequila brand, Cenote: a clarified, aged Cenote tequila expression named Cristalino and Cenote Green Orange Liqueur A second Stoli tequila brand, KAH, is also having a brand refresh for travel retail with a striking new bottle and packaging. In further news, Stoli will be releasing the vodka Stoli Lime – which has achieved a 96 points rating from the Beverage Tasting Institute – into travel retail outside of the US for the first time in January 2020. Jean-Philippe Aucher, Stoli Group Global Duty Free/Travel Retail Director, said: “As a business, we’ve really done our homework on the products which will succeed in travel retail and duty free. It’s so exciting to be able to present so many new lines in Cannes from some of our great brands including Elit. “I’m particularly looking forward to seeing the reaction at this great TFWA show to our brand refresh for Elit, which I believe will really cement our place in the top echelon of spirits in vodka’s growing super-premium category.”
Super-premium Elit Vodka has a fresh identity, bottle and global campaign
Halewood to introduce Crabbie whisky innovations at Cannes fair Halewood Wines & Spirits is launching Crabbie Single Malt Scotch Whisky into travel retail focused on product innovation. Established in 1801, John Crabbie & Co of Leith, Edinburgh, was a pioneer in the Scotch whisky industry, blending, distilling and exporting whisky globally until the early 20th century. In 2017, under a dynamic new management team, Crabbie launched a range of limited-edition single malts whisky from the Highlands and Islands of Scotland. Products include the lightly peated 12yo from the Scottish Islands and Crabbie 8yo, 25yo and 40yo Highland Single Malts from Speyside. In May 2018, John Crabbie & Co opened its own distillery, the first new single malt distillery in Edinburgh for 100 years. A larger home is under construction nearby in Leith and production will start later this year. Noting that the strongest driver of growth in the Scotch whisky market is non-aged malts, John Crabbie & Co is launching this month Crabbie’s Yardhead, named after the original site of Crabbie’s distillery in Edinburgh. New Crabbie’s Yardhead and Crabbie 12yo Single Malt Island Whisky will be the backbone of Crabbie’s travel retail offer. Described as delicate and mellow, Crabbie’s Yardhead (40%abv) is a Highland single malt Scotch whisky aged in ex-bourbon casks. It is designed for long drinks and whisky cocktails.
Yardhead will be launched exclusively in travel retail in oneliter bottles at around €35 (US$39). Crabbie’s 12yo Single Malt Island Whisky is a lightly peated spirit matured in refilled sherry casks and bottled at 43%. It will retail in duty free and travel retail at around €38 (US$42) per 70cl bottle.
Recently launched non-aged Crabbie’s Yardhead Highland single malt Scotch whisky, named after Crabbie’s distillery in Edinburgh
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2020 Duty Free & Travel Retail B U S INE S S
» E X E C U T I V E C O NF E R E N C E » C O NNE C T A ND NE T W O R K
Join ASUTIL and IAADFS, along with all your duty free and travel retail colleagues, for the premier event for international operators and suppliers doing business in the Americas and Caribbean. At the Summit of the Americas, you will be able to:
» » »
Discover the latest products by browsing the trade show ﬂoor featuring a vast
array of exhibitors showcasing their most innovative products.
Learn the challenges and opportunities surrounding the most recent trends
affecting the duty free and travel retail industry during executive conference sessions with expert speakers.
Grow your business by making new connections and building upon your existing relationships at the numerous exhibit opportunities and networking functions throughout the Summit.
Start planning your trip to Orlando for the most important business to business event in duty free and travel retail for the Americas and Caribbean! Learn more at 2020SummitoftheAmericas.org
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Crafting an opportunity on the
High Seas Monarq is making the most of the opportunities in the cruise market as it presents a strong channel for its portfolio including Molinari Sambuca
by CHRIS MADDEN
aking a mark in the duty free spirits sector today through craft is the goal for drinks distributor Monarq. The number of brands fighting for limited shelf space growing every day, however the recent boom in craft spirits and the cruise sector are presenting new openings for brands and suppliers. Faced with so many options, many retailers are doubling down on proven and big-name brands as they seek to ensure good returns from their shelf space. But the travel retail sector’s burgeoning cruise market offers an escape from the confinements of airport travel retail. This space and opportunity are not lost on Monarq and the company is well aware of the value of offering something new and different when the chance arises after reaping the benefits of being ahead of the game on the trend for Japanese whisky. But Managing Director Robert de Monchy admits it is not always easy to convince retailers to give space for a new or niche product. “It depends on the type of duty free business, channel or outlet,” he explains. “For example in airport duty free retail, the focus is mostly on leading categories due to limited space. But the opportunities lie on board cruise ships for on-board consumption or in border stores, where we there is generally more shelf space and opportunities to implement programming.” Such programming is a vital facet of the spirits business, particularly when seeking to attract shoppers to an unknown or new product with a particular provenance. Getting space to promote and introduce such spirits is not always easy.
“Luckily there are still entrepreneurial duty free retailers that want to separate themselves from the pack,” de Monchy says. “For example, there is a development towards craft spirit sections, which are generally speaking very successful for these retailers.”
Meeting craft demand
Into this demand for craft spirits, Monarq can offer its Molinari Sambuca brand, which bridges the gap between a genuine craft spirit and a broader market appeal. The Molinari name is inextricably linked with Sambuca. While the aniseed spirit has existed for centuries, it was only first produced commercially in the 1800s and Angelo Molinari created the first true Sambuca brand in the mid 1900s. Since then, Molinari has become the premier Sambuca in the world. This heritage and provenance are key to Molinari’s appeal to the duty free and travel retail markets and push it to the front of the line in a Sambuca category which often cannot command enough space on the shelf to allow for more than a couple of iterations. De Monchy explains: “The message is simple, if you list a sambuca, list the original one. “Molinari is the number one spirit in Italy, with a great history behind it and the great-tasting product comes in a nice pack at an attractive price.” He continues: “In many cases, there is place for one sambuca, so why not carry the Italy’s number one?! The original Sambuca. Fortunately for Monarq, Molinari’s current growth in travel retail broadly reflects the company’s own. With the Caribbean remaining its largest market,
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Molinari’s success in travel retail broadly reflects Monarq’s own
Monarq is currently focusing on South America and Mexico and is seeing good growth in Latin America, Mexico, the United States and the South Florida and California cruise market. This matches Molinari, which is growing in South America and Mexico, while making waves on high seas. “We are gaining presence on board the cruise ships,” de Monchy says. With the cruise sector booming, and increased investment and development of the fleets in progress, Monarq’s growth in cruises will only be boosted by the presence of a true artisan brand which can make the most of the space on offer.
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All about Row Holland,
Managing Director For Essential Communications Where were you born and raised? I arrived on Saturday December 6th, 1958 at my parent’s home in Selsdon, Surrey. What motivates you in life? Without a doubt my family. I have four amazing (adult) children who I am incredibly proud of. I also love the business I’m in and what we do as a company. This year will mark my 35th time in Cannes (one event was in Nice) in 36 years. What’s the best thing that’s happened to you this year/month/week? This year: Workwise, regaining my very first client in this business after a three year gap. Personally, I think the amazing trips I have had with friends as we all celebrate being in our 61st year: Vienna, Seville, Vietnam and Marrakesh. What would you choose as your last meal? To be honest, I’m really not a foodie at all. Definitely eat to live rather than living to eat. Chocolate fudge brownie; a bagel with ten tons of peanut butter; three cheese pizza; Stilton and broccoli soup. Not necessarily in that order! What’s your favorite ’90s jam and why? You Oughta Know by Alanis Morrisette. Great lyrics – and, unfortunately, quite appropriate ones!! How would you rate your memory? What was the question again? Hmmm…great for things that happened or that people said 40 years ago. It’s not too bad, apart from when I go upstairs for something and then can’t remember what.
What were you like in high school? I went to an all girls’ school. I guess I was fairly conscientious, well behaved, worked hard and achieved ok results– but found it all a bit boring. What do you think about when you’re alone in your car? All sorts of things – too much about work, probably! Are you more of a hunter or a gatherer Apparently hunters can be seen as focused short-term thinkers who excel at a single task. Gatherers are multi-taskers who have to focus on the big picture while taking care of a wide variety of tasks. On that basis, I’m definitely a gatherer! Do you prefer country or city? Country, without a shadow of a doubt. I’d really like to live further out and hope to be able to within the next few years. What is your favorite place to vacation? I love South East Asia and always try to use TFWA Asia Pacific and Singapore as a springboard to then explore somewhere new. Thailand, Malaysia, Vietnam, Cambodia, Myanmar, Laos have all been fantastic too. What do you work toward in your free time? Mostly trying to increase my fitness levels – or at least maintain them now I’m in my 60s. Q: What in the world would you most like to change? “Earth provides enough to satisfy every man’s need, but not every
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man’s greed”. I think that just about sums up most of the world’s problems today. What about yourself would you most like to change? Apart from the size of my nose, ears and hips you mean? My tendency to take responsibility for other people’s problems and to learn when to say ‘NO’. What is the most important piece of advice anyone ever gave you? I take my advice from the author – and friend - John C. Parkin who argues in his first (of many) books F**k It: The Ultimate Spiritual Way that saying ‘that word’ is the perfect western expression of the eastern ideas of letting go, giving up and finding real freedom by realising that things don’t matter so much (if at all). What is something about you that most people would find surprising? My age possibly. Some people seem quite surprised about that! If you could know the absolute and total truth to one question, what question would you ask? Is there life after death? I’m pretty sure there is, but I’d like to double check. If you had the opportunity to meet one person you haven’t met, who would it be, why, and what would you talk about? I’d like to meet my great Grandfather George Frederick Morgan who led a rather amazing life with three wives and numerous money making schemes. My brother recently found a picture that appeared in The Penny Illustrated Paper on the 17th of April 1897.