AMERICAS DUTY FREE & TRAVEL RETAILING

NOVEMBER/DECEMBER 2012 • VOL 22, NO 4

FDFA 2012

FDFA develops digitally p.

6

Canadian border stores p.

12

FDFA exhibitor spotlight p.

26

ALFA power p.

38

r Letter from the Editor

The Americas Duty Free & Travel Retailing (ISSN 0962-0699) is published four times a year March/April, June/July, October, November/ December) by Global Marketing Company Ltd., 26 Pearl Street, Mississauga,

Growth in the north ccording to the Frontier Duty Free Association’s (FDFA) latest sales statistics at press time, year-on-year sales are up at land border and airport stores across the country. Indeed, the first three quarters of 2012, with all but a few exceptions, have been stellar for Canadian travel retail.

Of course, increased travel and an improving economy have helped kickstart the growth, but those familiar with the industry here are keenly aware that there are other factors which have helped sales. The FDFA’s national marketing campaign, conceived and implemented in cooperation with Matchignite (formerly Match OSL), has effectively given the industry a united online presence by providing travelers with a one-stop website where they can link to specific store sites and learn more about duty free in general.

Examples abound of operators that are working hard to make sure the increased awareness and traffic to their websites are taken full advantage of. Blue Water Bridge Duty Free recently released an iPhone app that gives travelers traffic and customs information in addition to the all-important communication of special offers at the store. The response? Earlier today I checked iTunes and saw only 5-star comments from travelers who downloaded the app.

Peace Arch Duty Free is another land border operator making sure that the increased awareness afforded by the FDFA’s web portal is put to good use. The company regularly communicates special deals on Facebook and interacts directly with consumers on Twitter.

A

I checked their feed today and as opposed to simply tweeting, there are actual conversations taking place, which is great to see.

Of course, all the developments aren’t happening online. In airport news, The Nuance Group has recently worked with both Bacardi and Brown-Forman in two separate activations to bring a little theater to its stores at Pearson. In this issue you’ll also find news on LS travel retail North America, an operator that has rapidly upped its profile in the industry of late by concentrating on flexibility in its retail model and getting results for its airport partners.

When speaking of getting travelers amped up to shop in travel retail, it’s impossible to leave out the suppliers. Whether it’s new products, innovative promotions or a combination of the two, in this issue you’ll see some exciting developments from companies such as Haleybrooke International, ALFA Brands, Distribution GVA, Godiva, DFX Distribution and many, many more.

With sales up, a stronger web presence and plenty to experience in store, it’s a great time to be heading to Niagara Falls for the annual FDFA convention and tradeshow, always a highlight of the year’s event schedule. I look forward to seeing all of you there and listening your 2012 success stories.

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.

Subscriptions: $200 for one year. Art and photographs will not be returned unless accompanied by return postage.

The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor.

November/December 2012, Vol. 22, No. 4. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2012 Global Marketing Company Ltd. The Americas Duty Free & Travel Retailing 26 Pearl Street Mississauga, Ontario L5M 1X2 Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemagazine.ca PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR Hibah Noor hibah@dutyfreemagazine.ca CONCESSIONS, LIQUOR & TOBACCO EDITOR Ryan White ryan@dutyfreemagazine.ca ASSOCIATE EDITOR Melissa Silva melissa@dutyfreemagazine.ca ART DIRECTOR Patrick Balanquit patrick@globalmarketingcom.ca CONTRIBUTORS Andrew Brooks ADVERTISING SALES

Kindest Regards, Ryan White Concessions, Liquor and Tobacco Editor ryan@dutyfreemagazine.ca

ADVERTISING & MARKETING MANAGER Kim Carrera kim@dutyfreemagazine.ca CIRCULATION & SUBSCRIPTION MANAGER Deepa J deepa@globalmarketingcom.ca

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

3

NOVEMBER/DECEMBER 2012 • VOL 22, NO 4

16 12 Contents 6 10

4

32

DFX DISTRIBUTION

36

HALEYBROOKE INTERNATIONAL

38

ALFA BRANDS

46

DISTRIBUTION GVA

ASSOCIATION NEWS

Developing digitally We speak with FDFA Executive Director Laurie Karson about the organization’s marketing campaign and what’s on the table for this year’s convention

THE NUANCE GROUP

Mixing it up In addition to strong sales in key categories, The Nuance Group’s operations at Toronto Pearson Airport are benefitting from a number of high-profile promotions

12

CANADIAN BORDER STORES

16

LS TRAVEL RETAIL NORTH AMERICA

22

26

EXHIBITOR SPOTLIGHT

Border builders For Canadian border stores, one common theme seems to be the impact of new construction activity

Cause and effect LS travel retail North America finds that strong growth is natural result of focusing on driving value for airport partners and engaging consumers

TFWA WE REVIEW

Breaking records TFWA WE 2012 was a huge success, effectively proving the resilience of the industry at a time when the economic situation in Europe is anything but ideal

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

22

Cream of the crop This year’s FDFA show will see abundant offerings from exhibitors, from fragrances, watches and leather accessories to cosmetics and ancillary travel products

Seasoned veterans With a solid foundation based on collaborative relationships, DFX Distribution is ready to take it to the next level

A little help from their friends Haleybrooke’s experience in the duty free arena, combined with distribution partnerships with a number of top spirits brands, spells success in Canadian travel retail

ALFA power ALFA Brands stays ahead by continually ramping up product listings and promotional activities

Something to talk about Distribution GVA sees keeping the cigar category fresh as a prime objective, and as a result sees good performance from key brands in Canadian duty free

Frontier Duty Free Association

Developing

digitally

A recent review of the FDFA’s national marketing campaign reveals that results have surpassed expectations and garnered acclaim from land border operators BY RYAN WHITE

he Frontier Duty Free Association (FDFA) and Matchignite (formerly known as Match OSL) recently completed their 2012 review of the Duty Free Canada national marketing campaign. Good news for the industry in Canada, and indeed for cross-border travelers, is that original objectives have been exceeded on a number of fronts. Americas Duty Free recently sat down with Laurie Karson, Executive Director, FDFA; Jeremy Wright, Vice President – Digital, Matchignite; and Wendy Batchelor, Vice President – Client Services, Matchignite, to get the details on the ground that has been gained over the last half year.

We started by asking about the quantitative

T

“The fact is that we are seeing growth in our sales and as such, our buyers and suppliers will be quite busy this year!”

Laurie Karson, Executive Director, FDFA results they’ve seen. Karson noted that the Facebook portion of the marketing campaign—designed to give consumers basic information about duty free allowances, store hours and the like, as well as keep them informed of contests like last year’s “Road Trip Rules”—was receiving a warm response.

“I’m thrilled with the numbers,” she explains.

“We were hoping to have 5,000 ‘likes’ on Face-

book by the end of the summer and as of the first week of August we’re approaching 16,000 ‘likes.’”

Furthermore, keeping a close eye on Google Analytics has made it clear that the www.dutyfreecanada.com website, launched in early 2011 and designed as a sort of “hub” for Internet users to learn about duty free and then move on to specific store webpages, has been successful at driving traffic to operators’ sites.

The place to be in duty free This year’s annual FDFA convention takes place November 1114 at the Hilton Hotel & Suites in Niagara Falls, Canada. Just a month shy of the event, Americas Duty Free caught up with Laurie Karson for an update on what attendees can expect this year. She told us that to the middle of October a total of 185 people had registered for the convention. “This is very similar to last year and we’re on track to meet 2011’s final numbers,” she explained.

In terms of the trade show portion of the event, Karson noted that 21 vendors will be exhibiting in 31 booths. Furthermore, 47 vendors and distributors representing multiple brands will have suites this year.

Karson also told us that the exhibition element will likely increase in importance in years to come: “We definitely see the trade floor component growing in future years. We plan to maintain our current process of suites and a smaller trade floor in future years as this format simply works best for our membership.

The FDFA prides itself on organizing a friendly, social event that encourages networking

6

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

However, we are looking at moving the convention from 2014 onwards back to more urban centers such as Vancouver, Toronto or Montreal.

“As such, the hotels that would be hosting the show in these locations would have larger facilities to accommodate a larger trade floor,” she continued. “Given the fact that we tend to get more interest from new supplier members in these urban locations, we certainly see the tradeshow becoming an ever-increasing component of the annual FDFA convention.”

The FDFA prides itself on organizing a friendly, social event that encourages networking. Indeed, this year will be no different, with plenty of social activities, such as the welcome reception with charity auction and the gala dinner. Of course, Karson also notes that plenty of business will also get done.

“I think our members can expect a very positive show,” she concluded. “The fact is that we are seeing growth in our sales and as such, our buyers and suppliers will be quite busy this year!”

Frontier Duty Free Association

Gaining ground

Abe Taqtaq, Vice President/General Manager at Windsor-Detroit Tunnel Duty Free and President of FDFA, told us recently that the FDFA’s national marketing campaign couldn’t have come at a better time given the fact that more Canadians are now traveling back and forth to the US. “The FDFA national marketing campaign, which was launched in 2009, has provided the membership with an opportunity to increase the industry’s awareness and the public’s knowledge of the benefits of shopping duty free when traveling to the United States,” he explained. “This has proven particularly useful considering the industry has experienced a reduction in the American traveler and a shift to Canadians traveling south.

“The use of social and modern media will eventually provide the membership with a database to tell our story to the traveling public,” he continued. “Still in its initial stages, I am confident that the investment being made today will prove to have a solid return in the future when it will be fully utilized. We look forward to working with our partners, Matchignite in continuing to build on the program and continuing to provide benefits to our membership.”

“We’ve welcomed over a quarter of a million unique visitors since the website was launched,” explained Karson. “I would like to see a million visitors by the end of next summer and I think that’s achievable.”

Karson tells us that Matchignite manages the websites of six operators and all have noticed a significant uptick in key traffic indicators.

“We’re definitely building a core audience that is proving to be a very active group that tends to explore the operator pages. If you look at our Facebook page they’re asking questions and clearing up misconceptions, which has really opened up a valuable dialogue.”

Of course, Karson notes that the national marketing campaign is just that—a national campaign. The campaign doesn’t replace local marketing initiatives on the part of each operator, and it’s up to FDFA’s operator members to make sure that their websites are up to date so that visitors thinking about shopping at a particular store can find the information they need. The traffic is being driven by the national website and it’s really up to operators as to how they take advantage of the traffic upswing.

In line with the above, Wendy Batchelor tells us that Matchignite has very clearly laid out the campaign’s objectives in a manner that will ensure optimal results. While a couple of contests were run over the past six months to great effect, the main objective is still very much focused on growing the base audience.

“We have a three-year plan,” she explains.

“The first year was really about awareness.

Having said this, it’s clear that we can’t concentrate solely on acquisition. As such, you’ve seen contests like the “Road Trip Rules.”

However, at this point the balance is more heavily skewed toward acqui8

sition and a little bit less toward engagement.

As the acquisition numbers come up you’ll see that breakdown flip, where we’ll continue to do some acquisition but concentrate more heavily on engagement.”

In terms of upcoming contests, Batchelor tells us that consumers can expect something around the holiday season. Furthermore, Matchignite

“As the acquisition numbers come up, we’ll continue to do some acquisition but concentrate more heavily on engagement.”

Wendy Batchelor, Vice President – Client Services, Matchignite

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

“We gather the audience online, make sure we’re communicating with multiple demographics and finally ensure that there is a parallel between what we’re doing online and what’s in the stores.”

Jeremy Wright, Vice President – Digital, Matchignite will up the ante in the New Year by starting to involve specific vendor locations in contests to further engage consumers by region.

While the FDFA and Matchignite make no qualms about the fact that much work is yet to be done, they should certainly be commended for what they’ve accomplished to date, which amounts to nothing less than creating a unified online presence for an industry that desperately needed it in an undeniably digital age. Where before there were only a few forward-thinking operators tweeting away diligently in back offices, unswerving in their conviction in the potential that the Internet offered, there’s now a much more level playing field across a network that spans the entire country. In the end, the true value of the initiative at large will no doubt be gauged by how many duty free retailers take full advantage of the considerable opportunity that c the FDFA and Matchignite offer.

Perfection has a darker side.

An extraordinary blend of Patr贸n tequila and the pure, natural essence of the finest coffee.

simply perfect. patronspirits.com

The perfect way to enjoy Patr贸n is responsibly. 漏 2011 Patr贸n Spirits International AG, Schaffhausen, Switzerland. 35% Alc./Vol.

The Nuance Group

Mixing it up

In addition to strong sales in key categories, The Nuance Group’s operations at Toronto Pearson Airport are benefitting from a number of high-profile promotions BY RYAN WHITE

A

mericas Duty Free recently sat down with Andrew Rattner, Vice President Buying, Merchandising and Operations at The Nuance Group, to discuss the operator’s business at Pearson Airport. In addition to strong sales in key categories, Rattner tells us that The Nuance Group is keeping travelers interested with a variety of high-profile promotions.

Americas Duty Free: Can you give us an update on your operations in Pearson Airport?

Andrew Rattner, Vice President Buying,

Merchandising and Operations, The Nuance Group: We currently operate a total of eight stores. Three are in Terminal 1 and five are in Terminal 3. Of the seven shops, five are international duty free stores and three are transborder locations.

ADF: What are your three top-selling categories? Within each of the categories, can you tell us what is performing particularly well?

AR: Our top three selling categories are Perfume & Cosmetics, Liquor and Tobacco. In terms of brands that are selling well, in the liquor category all brands of Icewine are selling well, including offerings from Andrew Peller Estates,

Start your engines Passengers traveling through the Toronto Airport Terminal 3 were able to register to win a 2012 Indian Chief Classic motorcycle in one of the Tax & Duty Free by Nuance stores. This marked the first time Jack Daniel’s has partnered with the legendary motorcycle brand in the duty free channel. The promotion ran through October 31, 2012.

Indian Motorcycle is the first North American motorcycle manufacturer. Like Jack Daniel’s, the company has been around for more than 100 years. The Indian Chief Classic motorcycle is bathed in chrome and Indian Red sheet metal, has a 105ci PowerPlus engine, and a two-into-one stainless steel exhaust system. Beautifully detailed, the Indian Chief Classic provides all you need to cruise the roadways in style and comfort.

“Jack Daniel’s is excited to be partnering for the first time with Indian Motorcycle,” said Sylvia Murray, Brown-Forman Territory Manager, Americas Travel Retail.

“By partnering with Indian motorcycle we have created a very impactful and attractive promotion for travelers in Toronto. Having the actual bike on display acts as a huge draw and really motivates people to consider purchasing Jack Daniel's.”

“Indian Motorcycle, like Jack Daniel’s, has a history and storied heritage like no other,” said Rod Krois, Director of Marketing for Indian Motorcycle. “We are proud to be associated with such an iconic brand for this special promotion.”

10

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

Mike Weir and Inniskillin. Also popular are Canadian whiskies, cognacs and brandies.

In Perfumes & Cosmetics, the big winners are luxury skincare brands like Crème de La Mer and Estée Lauder’s Advanced Night Repair. Sales of these are being driven by the growth in Chinese travelers in Toronto. In addition, we continue to see solid performance from cosmetics brands such as Chanel, Dior, Lancôme and MAC. Fragrances in general continue to do well.

ADF: In terms of purchasing habits, are you noticing any major shifts lately? Who are your main customers?

AR: The most significant shift we have seen

The Indian Motorcycle display at The Nuance Group’s operations in Terminal 3 of Toronto Pearson Airport

Bacardi’s Global Brand Ambassador Marc Plumridge makes a signature Grey Goose cocktail; the activity at the bar was tied to a promotion on Grey Goose at The Nuance Group stores

A proud mom of two boys from Ontario won the signed Wayne Gretzky hockey jersey in one of The Nuance Group’s most recent promotions at Toronto Pearson

Silver screen celebrations

over the last couple of years is the growth of the Chinese passenger in Toronto. The Chinese customer focuses their purchases on luxury skincare, luxury fashion, Icewine, cognacs and brandies and Scottish malts. In addition, we are seeing a decline in spend by Europeans, which is not surprising given the economic challenges in Europe.

ADF: Have you run any noteworthy promotions lately? Which brands were involved and what were the mechanics of the promotions?

AR: Given the growth in Icewine, we introduced the Wayne Gretzky brand in May/June with a large promotion that encompassed our store, as well as concourse space in both Terminals 1 and 3 tied together with our store. We worked with Andrew Peller Estates to create an experience for our customer that would showcase the history of Wayne Gretzky’s career as well as an introduction to the Icewine.

The promotion began with a personal appearance by Wayne Gretzky at the airport activation.

Then, for a two month period within our store, when a customer purchased a Wayne Gretzky Icewine product they received a hockey puck

The Toronto International Film Festival (TIFF) gets bigger and bigger each year, and Bacardi’s French vodka Grey Goose has been a key part of the festivities for four years running, hosting screening parties at high-end venues around town and serving signature Grey Goose cocktails to stars and fans alike. This year, though, Bacardi celebrates its 150th anniversary, meaning that there was more reason than ever to celebrate. As such, the supplier ramped up activities in Toronto with a large-scale activation at Pearson Airport in addition to its usual abouttown events.

In cooperation with HMSHost, the Bacardi Bar in Terminal 1 Departures was rebranded as a Grey Goose bar, complete with trained mixologists serving signature Grey Goose cocktails and hostesses informing travelers of a related promotion on Grey Goose (two bottles for CAD$86) just down the hall at Nuance

stores. Of course, with its annual Cruise Competition, Bacardi is a driving force in promoting mixology, and drinks cards with the recipes of each drink were also available for travelers who wanted to give the signature Grey Goose cocktails a try at home.

The activation continued in Terminal 1 Arrivals, where a sampling bar was set up. Hostesses, trained by Bacardi’s Global Brand Ambassador Marc Plumridge, offered travelers of legal drinking age the Grey Goose Le Fizz, one of the signature cocktails served in Departures and also gave tips on where to see the biggest celebrities during the star-studded week. Handy Grey Goose pocket maps were also given out as a quick resource for movie lovers. The maps highlighted not only areas where the stars go to party, but also on-trade establishments that are recognized by Bacardi as being the best of the best for finding a Grey Goose cocktail.

with Wayne Gretzky’s signature. As Wayne Gretzky is a legend within our country, this is seen as a great souvenir item for our Asian customers to bring home with them.

Along with the gift with purchase, there was also an opportunity to enter a contest whereby the winner would receive a signed Wayne Gretzky hockey jersey from the Edmonton Oilers. The winner was a proud mom of two boys from Ontario, all of which love hockey.

In September and October we ran a promotion with Brown-Forman focusing on the Jack Daniel's family of brands in Terminal 3.

This promotion features all of the Jack Daniel's products and offers consumers a chance to win a motorcycle from Indian Motorcycles. In one of our stores in Terminal 3 we actually worked with the Brown-Forman team and a local Indian Motorcycle dealership to bring the bike into our store for display during the course of the promotion. It is displayed in our store in a corner window that is easily visible to all passengers as they walk through that portion of the terminal.

“The most significant shift we have seen over the last couple of years is the growth of the Chinese passenger in Toronto.”

Andrew Rattner, Vice President Buying, Merchandising and Operations, The Nuance Group

ADF: How did the recent Grey Goose promotion during the Toronto International Film Festival work out?

AR: This Grey Goose-branded bar in Terminal 1 Departures and the tasting station in Terminal 1 Arrivals has been great for the brand awareness of Grey Goose, but within our store we also built on the promotion going on throughout the terminal. We drove incremental sales of Grey Goose during September and October. This is a win on our side because it has brought together the airport, our stores and Grey Goose to tell a cohesive c message to the customers.

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

11

Canadian Border Stores

Border builders

BY

ANDREW BROOKS

For Canadian border stores, one common theme seems to be the impact of new construction activity

S

t. Stephen Tax & Duty Free Store is located at the first new Canada/US border crossing to have been constructed in the last 27 years, near St. Stephen, New Brunswick, where a new four-lane highway crosses the border to Calais, Maine. The highway at the crossing has been under construction for a number of years now, but when Americas Duty Free spoke with President John Marshall, he said completion was due within a month.

Unfortunately the construction has put a bit of a deep freeze on new activity at the store in addition to slowing sales. “We’ve been waiting two years for the completion of the highway,” Marshall says. “With the new highway completed, we’re hoping for an improvement in sales next summer.” Sales so far in 2012 have been fairly flat, and it’s not just the construction—as Marshall points out, a US election year always impacts cross-border traffic.

Promotional activity has been slowed down in a similar fashion, but there are now some positive signs. With the opening last year of a partner duty free store on the US side, Marshall says there will soon be potential for some joint promotional activities. Marshall is optimistic as relations between the two stores are good.

Additionally, St. Stephen Tax & Duty Free has begun a considerable expansion of its tobacco category, including the addition of a new humidor. Tobacco and liquor are the store’s two top sales categories.

And Marshall says that after a couple of years of declining US traffic, he has finally started to see an upswing in US traveler numbers, a development that has given a boost to sales in the gift items category.

Abe Taqtaq, Vice President and General Manager of Windsor/Detroit Tunnel Duty Free, is also hoping for positive impact from new construction activity near the store. “There’s a complete renovation and expansion of the plaza we’re in, and they’re redoing and improving the facilities for the tunnel,” he says. “We’ll be redoing the exterior of the store—remodeling it so it fits with what they’re doing with the

12

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

Liquor is firmly on top as far as sales go at Windsor/Detroit Tunnel Duty Free

new tunnel. We believe this will be very beneficial for us in future.”

Over the past year the store has continued to expand its liquor offering, adding more SKUs in this top sales category. New fixtures have been added to boost fragrances and cosmetics, which is the second busiest category, just ahead of tobacco. The greatest sales growth— by percentage, not raw numbers—has been coming in impulse items and fashion.

“Sales are growing steadily,” Taqtaq says. “We had a rough 5-6 years when sales were down, but this year sales are better than 2011, and we’re optimistic for 2013. We’ve increased the capture rate, and it helps that we’ve added signage on the approaches to the store.”

Over the last 12 months, Taqtaq has overseen a big campaign directed to its Canadian base. Results include increased sales capture on the Canadian customer side, and a loyalty program has also been a big help. “It’s given us a big customer base, and we hope to use this information to

build sales,” Taqtaq says. “We’re really more of a road store than a typical border store. People will cross here a few times a week, so we work with our suppliers and if a customer buys a specific brand we can identify them and tailor our promotions to them or do a GWP. You can’t usually do this in duty free because you only see a customer once, or once in a while.”

Some 20,000 customers are now in the database.

Relations with US partners are one of the bright spots at Peace Bridge Duty Free, which is located in Fort Erie, Some of the signage for Peace Bridge Ontario, at the crossing to Buffalo, New York. General Duty Free’s fragrance Manager Jim Pearce says that the store has been working price guarantee on building strong partnerships with popular US points of interest. “This year we partnered up with many successful US accessories, watches and convenience items. Product selection in the hotels, retailers and attractions to offer exclusive packages and pro- watches category has been expanded to round out the CAD$200 grams,” he says. price range. Pearce says that the store is planning an expansion of the liquor area and a new signage program in the near future.

“We’re showing sales increases similar to the industry,” Pearce Positive promotions Notable among these initiatives was the successful “Stay, Park and Fly” says. “Going forward, we’re planning a substantial increase in averpromotion that Peace Bridge ran with the Days Hotel in Buffalo to age spend as a result of our continued staff trainings, new signage and capture travelers flying out of that city. This offer was exclusive to Peace product offerings.”

Traffic patterns have remained steady over the past few years, Bridge Duty Free, promising that lower prices couldn't be found anywhere online and featuring value-added products and services. Pearce says. He believes that the decline in US traffic, due in part to The objective was to get travelers to stop and shop duty free before passport restrictions, has bottomed out, and anticipates a steady leaving Canada with a CAD$5 Peace Bridge Duty Free Gift Certifi- increase in numbers.

The primary new activity at Boutique Hors Taxes De Philipsburg cate included in the package. Another goal was to build general Duty Free has been the hiring of a marketing agency to improve inawareness of Peace Bridge Duty Free as an option.

Another notable initiative was a fragrance promotion. “This year store marketing and the store’s web page, says Buyer Nancy Enright. we made a very conscious decision to really promote our fragrance The store is located in Quebec on the east side of Lake Champlain pricing and guarantee the lowest price against any major US or at the crossing between Montreal and Boston. Roadside signage is now Canadian retailer on all our fragrances,” says Marketing Manager Bon- being improved to give drivers more advance notice that they’re getnie Gates. “To achieve this, we first made certain that our prices ting close to the store. The store’s exterior and interior signage is also being reworked. could compete with both the Canadian and US retail market.”

“On the website side, we’re still developing it,” Enright says. “But Peace Bridge offered a guarantee that if a customer found a lower price on any fragrance at any major US or Canadian retailer, the store the focus is similar to the national site, highlighting the benefits of would refund the difference plus an additional 10%. Staff were moti- duty free, reiterating the exemptions, the activities and promotions vated to get behind the program, providing customers with a contact in-store, and so on.”

Philipsburg is especially active with promotions in the fragrance number they could use to call if they found a lower price somewhere else. “We’ve turned the staff into promoters of the program,” Gates says. department during the peak summer season, dedicating a month each A high level of promotional activity is a hallmark of Peace Bridge’s to big lines like Estée Lauder, Lancôme, Clarins, Dior and others. “Durapproach, Pearce says. “We’re very active and have promotions targeted ing the month we complement the GWP provided by the company at different demographics, different seasons. The promotions that with an in-store incentive for staff and our customers,” Enright says. add benefit are most successful in terms of customer retention and “This is a very successful promotion for us—our customers are now profitability. I think we've all beaten price down for short-term gains, asking which month will feature their preferred products.”

Store sales are up slightly over last year. The most notable sales but with little sustainability.”

The main duty free commodities—liquor, beer, wine, fragrances, increases have been in accessories—handbags, jewelry and watches. cosmetics and confectionery—continue to be the top sales drivers. “It’s definitely a growing category,” Enright says. The top seller The store has also seen a good increase off lower volumes in fashion remains fragrances, a category that includes skincare and cosmetics. www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

13

Canadian Border Stores Philipsburg Duty Free is upgrading signage inside and out

Philipsburg’s monthly brand blitzes on names like Estée Lauder and Dior have generated great customer response

Beating breakage One especially interesting initiative has been a new wrapping service that the store offers for liquor buyers. “Many customers through our port are flying out of the airport in Burlington, Vermont,” Enright says. “Burlington doesn’t have a duty free store, so we’re in fact the duty free shop for the airport, which is 45 minutes from here. We often heard the comment that customers didn’t want to buy alcohol because they knew they’d have to put it in their luggage and breakage was an issue.”

In response the store purchased bubble wrap that could be used on bottles but wouldn’t add weight to customers’ luggage, and offered to wrap bottles for customers who were headed to the airport. The store also developed signage to advertise the service. “Customers appreciated our proactive move, and we’ve seen an increase in sales as a result,” Enright says.

Peter Raju, President of Peace Arch Duty Free, at the border crossing in Surrey, B.C., is a bit ahead of the game when it comes to benefiting from new construction. Here a significantly upgraded crossing has been in place for a while now thanks to development activities associated with the 2012 Winter Olympic Games held in Vancouver last February.

“There’s more traffic because the border crossing is now complete,” Raju says. “We now have more lanes going over into the US.” While spend capture is down somewhat, the increased traffic levels have ensured that net sales numbers are around 8% higher than last year.

Cosmetics have shown a huge sales increase, as has the store’s unique lineup of designer watch brands. Among notable new listings have been the latest Michael Kors handbags and watches, which Raju says have proven to be extremely successful.

“We’re seeing more younger customers and a lot more Asian customers, which is why we’re up on cosmetics and expensive designer watches,” Raju says. The new customers have deeper pockets and are going for lighter drinks—the vodkas and rums rather than the scotches. Raju says they are also driving an increase in cigarette sales.

14

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

For Woodstock Duty Free, located at the road crossing in central New Brunswick to Houlton, Maine, sales for 2012 have been up over last year’s numbers by about 5%. Manager John Slipp is looking for similar growth in 2013, but his enthusiasm is tempered by a couple of factors.

“There’s been a higher degree of traffic growth than I’ve captured in sales, so we’re not getting the sales penetration that I’d like,” Slipp says. “This relates to border lineups. With the high volume of Canadian traffic, especially during busy periods, our entrance area is totally blocked off by traffic going into US customs, so that’s an ongoing issue with customer access. But we can’t do much about it at the moment.”

Woodstock incentivizes its customer base with direct mail, and is making a strong effort to capture more sales through a noticeable increase in motor coach traffic over the last couple of years. Confectionery has been a lead category for Woodstock, while fragrances sales have been flat or in a slight decline. In addition to confectionery, liquor and spirits, gifts, jewelry, travel accessories and perfume continue to be strong performers for the store. There’s been a change on the tobacco side, with more sales now going to generic brands like Canadian Classics and John Players Standard. Notable new product listings include wine presenters from Pronto, jewel scarves from Carmel, “My Family Car” stickers from The Sticker Family, assorted activity pads from Melissa & Doug and Silver Forest earrings For Canadian customers, liquor remains top dog, and Woodstock is serious about keeping prices very low. “One thing we do here is compare our pricing to New Hampshire tax free liquor stores and the State of Maine and Duty Free Americas,” Slipp says. “We work very hard to make sure they won’t find cheaper prices on liquor products. Yes, it’s tough on margins, but we’ve identified liquor as a key volume category to attract customers into the store to buy other things.” c

LS travel retail North America

Cause and effect

With tablets, MacBooks and a wide range of electronic accessories, iStore has become a onestop shop for travelers who prefer electronic media over more traditional forms

LS travel retail’s iStore in Boston Logan Airport

LS travel retail North America finds that strong growth is a natural result of focusing on driving value for airport partners and engaging consumers BY RYAN WHITE

t’s been a stellar year and a half for LS travel retail North America (LS). The operator has opened 14 retail locations since the beginning of 2011 and another 8 to 10 stores are set to open to the traveling public in the coming months. Across the company’s various retail concepts, including Relay convenience stores, Boutique iStore and some innovative automated retail solutions for airports that don’t have the space for a full-sized iStore, LS currently operates a staggering 270 retail locations in Canada, the US and the Caribbean.

The operator has proven to be exceptionally versatile in the depth and breadth of its retail offerings and very proactive in its dealings with airport operators, and President and CEO Gerry Savaria tells us that the company has no plans to stop at the current number of locations. Upcoming is a recent deal to open two 7-Eleven stores at Dallas Ft. Worth Airport (DFW), a partnership with Hudson’s Bay Company that will see the first Hudson’s Bay Company airport store in the world opened at Toronto Pearson Airport later this year, continuing plans to open more automated Boutique iStore retail locations in cooperation with Zoom Systems and a greater concentration on the F&B side of the business.

I

list is a clarified strategy that places creating value for airport partners as a prime objective. “We believe that we now have a good game plan— one that is in alignment with LS travel retail globally but also targeted to address the needs and opportunities of our specific region,” Savaria says.

LS recently underwent a personnel reorganization that was designed to ensure that resources were organized appropriately in order to fully support the company’s newly laid out game plan. Vadim Motlik, previously CFO, was assigned the responsibility of managing development activities. Furthermore, Ivana Krpan was promoted to VP of Finance. As a result of her promotion, other internal changes were also made. LS also recruited a Director of Marketing in Tod Dalberg.

Staying on the ball The growth the company has experienced of late is due to a number of factors, but high on the 16

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

“While we are getting involved in many areas of the business, we only do so where we can deliver on our commitments.

In the end, we are there to help our airports achieve their goals in terms of driving experience and revenues.”

Gerry Savaria, President and CEO, LS travel retail North America

THE BEST PART OF TRAVELLING THE WORLD IS

STOPPING TO ENJOY IT.

LS travel retail North America has turned the decreasing demand for traditional printed magazines and books into an opportunity to reorganize the product offering in its Relay stores according to traveler needs

LS travel retail North America

A rendering of LS travel retail’s Porsche Design shop; the operator focuses on luxury when demographics indicate a significant proportion of affluent travelers

“These appointments are there to support the deployment of our strategy, including very specific activities with our airport partners, our brands and a strong focus on the travel retail consumer, in addition to supporting ongoing organic growth,” explains Savaria.

Clearly as a certified reseller of Apple products, LS knows the value of innovation, but staying one step ahead isn’t just a quality that the operator values in the products it sells to consumers; for Savaria, the last piece of the puzzle in terms of managing growth and ensuring continued success is making sure LS is innovating behind the scenes as well.

“We continue to invest in innovation to stay ahead of how our customers evolve, whether it's with technology through the deployment of a new enterprise resource planning system and point of sale technology or through initiatives focused on concept R&D,” he explains.

Closing the deal Of course, operators can plan extensively and have a large network of stores across a given region, but it really all comes down to closing the sales at the point of purchase. Organically, growth for the first half of this year has been primarily in Canada, but Savaria expects to see sales pick up in the US over the second half on 18

the back of the slowly improving economy.

Additionally, hopes are high for the company’s new operations in Jamaica’s Sangster Airport.

As a gateway to Jamaica—a major international tourist destination elected “Caribbean’s Leading Destination” by the World Travel Awards for the past several years—Sangster International Airport serves in excess of 3.2 million passengers each year. It is the busiest of Jamaica's three international airports and one of the largest and more modern airports in the Caribbean.

LS first opened a Relay store and a Caribbean-tailored concept called Island News & Coffee. These initial store openings were followed in May by a second Relay store. All three locations represent a grand total of 280 square meters of retail space. Featuring merchandise assortments perfected by decades of travel retail experience, the two Relay locations offer an extensive selection of reading materials as well as a wide range of convenience-related products, health and beauty items, travel-related accessories and Jamaicanthemed gifts and souvenirs.

Of course, it should be noted that in the age of tablets and smartphones, LS is in a particularly enviable position in that its Relay stores cater to those looking for a more traditional paperback or newspaper, while its Boutique iStores offer the latest in tablet technology for

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

those who prefer their reading material in electronic format.

“In terms of consumer spending, we have seen a shift since 2011 from the traditional categories of reading materials into categories of merchandise such as electronics accessories,” Savaria says. “That is why we have been developing the iStore concept, which generates very high sales productivity. We actually sell not only iPads but even MacBooks as we have the right demographics to spend $1,500 just because we're saving them a trip to the mall.”

Tailoring the offer In discussing sales across geographical locations, Americas Duty Free also asked Savaria about which nationalities are purchasing the most and how LS caters its offering depending on the airport. He tells us that each geographic location really has its own identity in terms of the travelers’ and airport’s needs.

“Sometimes the profile of an airport in the US will be closer to that of a Canadian airport as opposed to another US one,” he explains. “We therefore use a methodology aimed at capturing these unique identities and specific needs to tailor our concepts, brands and product offering around them.”

For example, Savaria says LS will position a brand like Porsche Design in a large international terminal irrespective of the country and conversely an affordable fashion and accessory concept in a less affluent, similar-sized airport. He does note, however, that there are no catch-all solutions for determining what will work best in a given location.

“Canadian airports are constrained by the breakdown of traffic into three zones—Domestic, US and International—which often make them less efficient than US airports of similar size from a traffic exposure viewpoint,” he says. “In the Caribbean islands, duty free becomes the dominant offering while the rest

SUBSCRIBE TO AMERICAS DUTY FREE MAGAZINE

ONE YEAR – 4 ISSUE AND 24 ENEWSLETTERS

Subscribe to Americas Duty Free & Travel Retailing Magazine and its monthly eNewsletter to keep you informed of the latest news. Simply fill out and return this subscription card to the following address, or fax with your credit card details to +1 905-821-2777

TWO YEARS – 8 ISSUES AND 48 ENEWSLETTERS

US$200.00 US$300.00

SUBSCRIPTION FORM

company name

Please fill out this form and fax to 1-905-821-2777 or email to deepa@globalmarketingcom.ca

date

name

Americas Duty Free & Travel Retailing magazine 26 Pearl Street, Mississauga, ON Canada L5M 1X2 Tel: 1-905-821-3344 Fax: 1-905-821-2777 email: deepa@globalmarketingcom.ca

mailing address

city

province/state

country

postal code/zip

(

) area code

( phone

❑

SIGN ME UP! I would like to receive a subscription to magazine ❑ One Year US$200.00 ❑ Two Year US$300.00

) area code

fax

❑

Enclosed is a cheque or money order made payable to Global Marketing Company Ltd.

❑

Bill me

email

❑

❑

❑

expiry date

m

m

y

y

credit card number signature

date Paym ent in U. S. funds m us t ac c om pany this s ubs c ription c ard.

LS travel retail North America

All Black Dog products reflect the brand’s maritime-related, nautically inspired lifestyle.

of the mix is tailored for visitors often flying on charter airlines and therefore features a significant share of souvenirs and grab-andgo food items.”

With regard to the highest spending travelers, it’s no surprise that Asians top the list.

“They’re brand-focused and for them bringing items back from their travels is part of the culture,” says Savaria.

In terms of top-selling products and categories, LS considers the move towards digital readers an opportunity to make changes to the offering and ensure that popular products are readily available in its Relay stores. “There has been a repurposing of space to ensure that strong trending products like Beverages, Confectionary and more recently Electronics flourish within our stores,” Savaria tells us.

Changing times Changes in the core news and convenience business have also led LS to explore various other initiatives outside of the Relay concept.

Earlier this year LS announced that a venture between the company and the Dallas-based Sierra Airport Concessions was awarded a retail package of four locations as part of a Request For Proposals for new concessions in Dallas/Fort Worth International Airport (DFW). Already the winner of a package in Terminal A last year, LS will now operate an additional 288-square-meter concession space in Terminals B and E. Ranging from convenience, news and coffee, gifts and souvenirs, and apparel and accessories delivered through a blend of national and international brands, the new stores are expected to generate about US$40 million in sales throughout the term of the contract.

Located airside in Terminal E, 7-Eleven will combine convenience and coffee to provide DFW guests with everything they need from magazines and health and beauty items to sandwiches and beverages, including the brand’s signature Slurpee and coffee to go.

Complementing Terminal B’s Specialty Retail offering, Texas Territories and ARTIZAN will offer unique gifts and souvenirs.

Created specifically for DFW, Texas Territories 20

Changes in the core news and convenience business have led LS travel retail to explore various initiatives outside of the Relay concept, such as the forthcoming 7-Eleven stores at DFW

will feature a full range of Texas and Dallas/Fort Worth-themed gifts and memorabilia, clothing and accessories, food items and toys, all sourced from local manufacturers, while ARTIZAN—one of North America’s premier jewelry and accessories retailers— will offer DFW fashion-savvy customers the latest trends in clothing and accessories.

Finally, already present in DFW, Sierra News is teaming up with Ruta Maya Coffee to offer DFW Terminal B guests the latest news and travel-related items, combined with locallygrown and fairly traded organic coffee.

A Canadian classic Perhaps the biggest news for LS lately from a Canadian perspective is this month’s opening of the first ever Hudson’s Bay Company airport store at Toronto Pearson Airport’s Terminal 1. The Pearson Hudson’s Bay Company store will carry the most sought-after fashion and home accessories from the Hudson's Bay Company Collection, which includes everything from artisanal candles to classic sweaters for men, women and children, with each item rooted in quality, style, heritage and craftsmanship. Inspired by the company's unique history, the line is anchored by the popular HBC Point Blanket and features the iconic signature stripes in green, red, yellow and indigo.

With an unrivalled 342-year history in Canada, The Hudson’s Bay Company is renowned for its historical role in the development of the country. Today, the retailer is Canada’s leading department store and has established a reputation for quality, service and style, and the partnership with LS is a clear indication of how hard the operator has worked to stay on its game in the competitive world of airport retailing.

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

“Hudson’s Bay Company is indeed an iconic brand, not only in Canada but also abroad, and we are quite excited to launch it at Toronto Pearson,” Savaria says. He also hinted at the possibility of other Hudson’s Bay Company locations in the future. “[Hudson’s Bay Company] has such a vast heritage and recognition that it would be a pity not to offer this brand to other airports. There are indeed plans for more but nothing that I can disclose at this stage!”

Savaria also told us that plans are ongoing to open other retail concepts throughout North America. Upcoming projects include Boutique iStores planned for Indianapolis, JFK New York and Toronto Pearson T3 before the end of the year. In addition, renovations and relocations will be happening at Austin, Vail, Toronto Pearson and Montreal Trudeau Airports this year.

We concluded our conversation with Savaria by asking about what’s next for LS. “You should expect us to start moving gradually more into the food and beverage side of our industry where there are lots of opportunities to enhance the experience for travelers and airport operators alike,” he explained. “Having said that, I can tell you that we have airports and brands approaching us and sometimes it feels like we are running out of bandwidth to pursue all these opportunities simultaneously. LS travel retail is indeed a large group but we don't have unlimited supplies of people, time and capital so ironically an important part of our job is also to decide what not to pursue.

“While we are getting involved in many areas of the business, we only do so where we can deliver on our commitments,” Savaria concluded. “In the end, we are there to help our airports achieve their goals in terms of driving c experience and revenues.”

23"#,*2)&% *. "+&-". 2 "0,& 1/%4$32 $/.

3*.4& 3/ 2&15& '"-*,*&2 6*3) ". ",, ."341", (//%.&22 -"%& '1/- 041& *.(1&%*&.32 ".% ."341", ',"5/12 '1/"."%" 2 01*23*.& -"0,& '/1&232 "341",,8 '/13*'*&% 6*3) ".3*/7*%".32 -*.&1",2 24$) "2 $",$*4- 5*3"-*.

9*.$ 0/3"22*4- ".% -"(.&2*4- "+&-". 2 "0,& 1/%4$32 "1& " %&,*$*/42 ".% )&",3)*&1 26&&3 ",3&1."

3*5& !)&. 8/4 6".3 3/ 2"3*2'8 8/41 26&&3 3//3) %/. 3 '/1(&3 3/ $/.2*%&1 42*.( -"0,& 28140 3 $/.3"*.2 '&6&1 $",/1*&2 ".% " )*()&1 $/.$&.31"3*/. /' -*.&1",2 3)". )/.&8 &1'&$3 '/1 0".$"+&2 6"'',&2 *$& $1&"- $".%*&% 5&(&3"#,&2 '14*3 -&"32 ".% &5&183)*.( *. #&36&&.

Voted

Canada’s Best Tasting Maple Syrup

"+&-". 2 "0,& 1/%4$32 1*,,*4- *.& &"$)5*,,& .3"1*/ "."%" )/.& : "7 -"*, -"18 3)&-"0,&23/1& $/-

TFWA WE Review

Breaking records

TFWA WE 2012 was a huge success, effectively proving the resilience of the industry at a time when the economic situation in Europe is anything but ideal BY RYAN WHITE

T

FWA World Exhibition, which closed on Friday, October 26, 2012 in the Palais des Festivals in Cannes, exceeded expectations across the board, reports the organization. A record 462 exhibiting companies, of which 39 were new to the show or returning after an absence, displayed thousands of products at this the 28th show, compared with 457 companies last year.

For the first time, the number of trade visitors to the exhibition and conference event exceeded 6,000. A total of 6,074 people—up 4% from last year—from 2,877 companies (+5%) visited the exhibition during the week.

This compares with a final figure of 5,868 people from 2,737 companies last year.

Of the above total, 4,260 (70%) were key duty free and travel retail operators, landlords and agents from 1,726 companies. The top ten originating countries of the visitors were France, UK, Germany, UAE, USA, Korea, Russia, Netherlands, Spain and Italy.

The Conference on Monday, October 22, entitled “A Brand New Dimension,” was attended by a record 894 people who crowded into the auditorium to hear fascinating presentations by Dr. Madeleine Albright, former U.S. Secretary of State and Chair of the Albright

22

The Conference on Monday, October 22, entitled “A Brand New Dimension,” was attended by a record 894 people

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

* Krispy Kernels only uses premium-quality U.S. peanuts

Crunch. Go nuts.

TFWA WE Review

Stonebridge Group; Jean-Charles Decaux, CEO of JCDecaux; Kjell A. Nordstrom, economist and author; and Erik Juul-Mortensen, TFWA President.

The two focus workshops organized by TFWA were fully booked, with the Airline and Retailer Workshop entitled “Touchpoints: communicating with customers in travel retail” attracting 149 people and the “China, Russia and Brazil Market Watch” drawing in 167 delegates.

The week started with a range of pleasant leisure activities on Sunday, October 21, which were designed to get delegates re-acquainted with business colleagues. Golf, jogging, hiking, pétanque, a perfume workshop, a wine tasting and soccer gave over 280 delegates the chance to network.

The elegant Opening Cocktail at the Palm Beach, attended by 1,406 people (more than last year), was lit by a fireworks display courtesy of the City of Cannes. The Scene private after-hours venue was moved to a smart new location at La Gare Maritime. On Thursday evening the White Cats performed live before a packed audience of show delegates.

The most glamorous event organized by TFWA during the week for about 800 guests was Le Premium Evening on Thursday, October 25 at the Palm Beach. The theme of the event was “Viva la Vida” and an energetic display of Hispanic music and dancing by Manolo and the Gypsy Guitars was enjoyed by all.

A number of popular technological aids were installed this year for the benefit of all delegates, including navigation touchscreens in the exhibition villages, apps for Blackberrys and iPhones, an online TFWA Product Showcase and an online TFWA Press Photo Service.

Next year TFWA World Exhibition will take place from October 20 to 25 in Cannes.

Before then members of the duty free and travel retail community will assemble at the MEDFA Conference on November 26 and 27 in Dubai; at the inaugural Industry Conference on China in Beijing from March 5 to 7, organized by TFWA and APTRA; and at the TFWA Asia Pacific Conference & Exhibition from c May 12 to 16 in Singapore.

24

From supplier events to TFWA-organized evenings, the 2012 Cannes show provided plenty of opportunities for networking

Given the sheer number of exhibitors at the show, attendees walking the floor saw no shortage of new and innovative products

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

Savor your Journey with Godiva Souvenir Collection An ideal gift for family, friends, colleagues, or a treat for yourself!

Godiva’s Souvenir Box contains an assortment of 15 delicious chocolates from Godiva’s core collection.

Godiva’s Souvenir Collection allows you to share precious travel memories through the delectable taste of chocolate.

Discover more!

Exhibitor Spotlight

Cream of the crop BY

MELISSA SILVA

This year’s FDFA show will see abundant offerings from exhibitors, from fragrances, watches and leather accessories to cosmetics and ancillary travel products

In the know

A

CI brands, distributors of Guess Jewelry, Stila Cosmetics and most recently Kenneth Cole Reaction business cases, luggage, handbags and wallets, has lots of news in duty free and travel retail, all reflecting the company’s strategy of focusing on quality, selection and pricing.

With sales up over last year, the company says that its customer base has increased, with more interest in Guess Jewelry—ACI’s bestseller— Stila's Stay All Day and its Stila Cosmetics division.

10-in-1 HD Beauty Balm is a priming The Stila brand has launched balm that improves skin’s appearance three successful duty free accounts while creating a within the last year. “We have been flawless canvas for makeup fortunate to work with great teams application and have had great support and exposure at store level,” says Christine Tessaro, Sales and Marketing Manager for Stila. “We will continue to source gift and travel sets that bring value and exclusivity to the duty free market as well as provide store level support through events and educational demonstrations this coming year.”

The Stila palettes have been the biggest success for ACI in the duty free environment, and the company plans to launch a new matte shadow palette as well as the Stila 10-in-1 HD Beauty Balm which is on par with cosmetic trends for fall, and already a bestseller in the Canadian market.

“Stila’s famous pallets are ever evolving with the latest runway trends in color and texture along with its famous eyeliner,” says Tessaro. The Stila division will be taking appointments for makeup applications at this year’s FDFA show.

In addition to featuring Stila, ACI will be launching its new line, Kenneth Cole Reaction business cases, luggage, handbags and wallets, at the exhibition.

The products from the line will be offered at introductory pricing, and the company feels FDFA will serve as an excellent platform for advertising and generating brand awareness.

Stila's In The Know eye shadow palette “The FDFA has contains 10 matte done an excellent job shades, Smudge advertising and edu- Stick Waterproof Eye Liner and look book cating the consumer about duty free and its benefits,” says Cathy Wilson Account Manager, ACI Brands Inc. /Star Case Canada Inc. “With the Canadian dollar doing so well, border traffic is up and people are learning that it pays to make a stop at the duty free location before they cross the border.”

26

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

Michel Germain’s two – fragrances, new séxual – fleur and séxual – séxual noir pour homme

– strategizing séxual

I

t’s no secret that duty free customers are price driven, which is why companies in the industry must develop pricing strategies for border duty free stores. Fragrance company Michel Germain took this approach with its decision in June to base the prices of its two new séxūal fragrances on US retail pricing.

“Our new duty free prices are a 40% savings for the Canadian duty free shopper,” says Anne MacDonald, International Travel Retail Region Manager for the Americas and Caribbean, Michel Germain. “We expect a surge in sales because of this saving.” Michel Germain’s expectations were fulfilled, with the company reporting an increase in sales over the past few months compared to last year thanks to the price change.

“We wanted séxūal to be more competitively priced in the duty free market, where the customer is very price driven,” MacDonald explains.

The two new fragrances, which will be launched at this year’s FDFA show, are séxūal fleur and séxūal noir pour homme.

Séxūal fleur opens with pink grapefruit, macadamia nut and pink daisy, building to a heart of purple plumeria, pink freesia, Egyptian jasmine and plum. The fragrance rounds off with musk, wood and dulce leche. The fragrance is available in a 75ml and 125ml eau de parfum vaporisateur spray and as a four-piece gift set.

Séxūal noir opens with Italian bergamot, crisp grapefruit and cardamom and builds to a heart of wild coriander, lavender, orange blossom, musk and honey. The juice rounds off with notes of moss, sweet tobacco and tonka bean. The fragrance is also available in a 75ml and 125ml eau de toilette vaporisateur spray and as a two-piece gift set.

Although prices have changed to reflect American pricing, the product is first and foremost Canadian, which is something Michel Germain wants to emphasize. “One of the key goals of Canadian duty free shops is to promote the Canadian economy,” explains MacDonald. “Selling Canadian products such as Michel Germain’s séxūal fragrances achieves this goal.”

© 2012 MICHEL GERMAIN®, Ltd. SEXUAL®

Introducing

BLOOMINGDALE’S MACY’S THE BAY MICHELGERMAIN.COM

info@michelgermain.com

Exhibitor Spotlight

Citizen savvy

W

atches have become the new jewelry lately, with consumers making watch purchases to satisfy the need for both a statement accessory and timepiece. Accordingly the demand for stand-out designs has increased, and watch company Citizen is taking note.

“Watches are an adornment. They are ‘jewelry that works,’” says Douglas B. Irwin, Vice President Sales, Canada, Citizen. “Consumers today want to wear a watch that reflects their personal style. We are not just selling timepieces anymore; we are selling an accessory.”

In order to appeal to this new trend, Irwin says Citizen—known for its technical watches—is “doing more with color,” specifically black ion Citizen’s Blue Angels plating and rose gold ion plating.

World Chronograph AT watch, an Eco-Drive radio“White ceramic for women is controlled chronograph world timer, featuring nonselling well. Colored straps in reflective sapphire crystal leather and polyurethane make a statement. Big oversized technical watches are still a staple of our brand and larger ladies’ chronographs and even ladies’ diamond watches with 35mm and 40mm cases are selling this season,” says Irwin.

The bar has been raised when it comes to design, but pricing must be lowered, or at least adjusted accordingly. Without an attractive price, fashion-forward timepieces will only go so far. For a mid-priced watch brand like Citizen, having a range in both price and style is a key contributor to success.

“We offer a range of styles and price points through duty free retailers across Canada,” says Irwin. “Consumers seem to appreciate the value that they find at duty free retailers when purchasing our more expensive technical watches and diamond models. A bestseller for us is just a simple titanium dress watch with a domestic retail of CAD$375 (US$383). It is a bestseller everywhere.”

Sales for Citizen Canada have continued to grow each year in the duty free channel with an increase of 18% as of the end of August 2012.

This fall Citizen is launching a powerful advertising campaign leading up to the holiday season, making 1.8 billion impressions with print advertisements and seven consecutive weeks of commercials on Sunday NFL coverage on FOX and NBC. Citizen’s brand ambassador, New York Giant quarterback Eli Manning, will be featured in the campaign along with ambassadors Matt Kenseth, Dion Phaneuf, Paula Creamer and Victoria Azarenka, who joined Citizen in August as the company’s newest international brand ambassador.

The number one player on the WTA Tour, Azarenka joins the others as brand ambassador for the Citizen Eco-Drive Unstoppable media campaign.

Citizen made the announcement on the occasion of its 20th anniversary as the Official Timekeeper and official watch of the US Open Tennis Championships, held in Flushing Meadows, New York.

Citizen has signed a multi-year agreement with Azarenka that covers North and South America, the United Kingdom, Ireland, Oceania and Asia. Print media will break in late fall along with television, digital and in-store platforms.

At the FDFA show, Citizen will be previewing its Spring 2013 collection of Eco-Drive light-powered watches. Eco-Drive watches are fueled by light and never require a battery. Also set for display is a new collection called Drive by Eco-Drive, which is aimed at Generation Y. It is sporty, fun and colorful and takes some design and color inspiration from the automotive industry with green, blue and matte black ABS over stainless steel with a clear coat chroma finish.

Citizen will also introduce a new light-powered perpetual calendar chronograph timepiece called Proximity with Bluetooth 4.0 LE, which can synch with the iPhone 4S and the new iPhone 5.

“We will also add a new radio-controlled watch called the World Chronograph AT, which is the most accurate watch in the world,” says Irwin. “The Blue Angels World Chronograph AT is particularly striking with its blue and yellow accents.”

Potent practicality

W

ith its airport store sales up this year over 2011, manufacturer and supplier of small leather goods and accessories CBM Inc. is confident that it has a good handle on what the duty free customer wants. The company’s bestsellers include ticket wallets, ladies’ clutches and handbags.

“Customers are looking for practicality,” says Louisa Brito, Senior Sales Manager, CBM Inc. /Meade Ray International. “We really see this with our handbags, with customers being driven towards the crossbody style with easy access compartments for full functionality for traveling.”

At this year’s FDFA, CBM will be introducing its Spring 2013 Club Rochelier handbag line, which includes the Zoey collection.

Brito describes the new line as trendy, colorful, functional and valueoriented.

“We will be having special show prices at the FDFA, which will allow customers to get the best possible price for our products,” she says.

Also set for display are small leather goods in the Roots and Club Rochelier brands as well as lightweight scarves.

28

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

A large orange tote bag from Club Rochelier’s Zoey collection, featuring braided detail

Club Rochelier’s new collection features bright colors, like this blue satchel with braided detail

in t e r n at io n a l asso o f airp c iat io n o rt d u t y fr ee sto re s

2013

Duty Free S how of t he

Americ as

April 7 -10, 2013 O rl an d o Worl d Cente Or lando,

rM

Florida arriott , USA

Pack your bags to join us for the most important week for your business.

“I’ve been attending for over 25 years and it always pays for me to be present.”

“Exceeded all expectations, we will be back in 2013 for sure.”

“Very impressed with the show in terms of the decision makers that attend this event.”

- 2012 Attendees

The Duty Free Show of the Americas is THE place to do business, with all primary show events taking place in one venue. Visit www.iaadfs.org/dutyfreeshow for more information and registration, or call +1-202-367-1184 for assistance.

The Duty Free Show of the Americas is hosted by the International Association of Airport Duty Free Stores, representing the duty free industry for more than 45 years.

Exhibitor Spotlight

Pronto’s progress

F

or Gary Hause, Executive Vice President of Pronto Innovations, two features are regarded as “hallmarks” in the duty free industry—quality of manufacturing and craftsman-grade packaging.

The company’s double-digit sales increases in 2012 reflect its attention to both factors.

Pronto’s Travel Club Program continues to be one of its bestsellers, contributing substantially to the company’s 2012 increases. Complementing the Travel Club line and sales is Pronto’s broad range of wine presenters. Hause says the highest new growth area for FDFA members is the Jos Van Arx Collection, which he says presents a great variety of gifts at an attractive price range.

The Jos Van Arx executive gift line comprises a line of cufflinks, pen sets and chronograph watches, and will be on display at FDFA. Pronto will also be launching new products in its Canada souvenir range,

Pronto’s “biker” wine presenter

which includes ceramic gifts and Canadianadesigned felt organizers. The company will also be offering special dated programs and pre-book offers at the convention.

Aside from gifts, Hause feels the consumer is always on the lookout for travel accessories such as converters, power adapter plugs, and comfort and organization items. “In these areas, the leading product choices are our Comfyzzz pillows, Universal Adapter with USB port and our recently launched Folding Back Pack,” he says. “The gifting area is also very strong, where our functional Canadiana coffee mugs and tea pots are checking out at record levels.”

Jos Von Arx gift set including leather-strap watch (Movado Movement), cufflinks, rollerball pen (Cross ink refill) and silverplated keychain

Travel Club’s universal travel adapter with USB port

Comfyzzz travel pillow in blue

Want more? Visit us online to catch up on regional industry developments in our e.Newsletters and read recent print issues. www.dutyfreemagazine.ca 30

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

The head office for BHI—parent company of DFX— is located close to Pearson International Airport and consists of 2,300 square meters of warehouse and office space, showroom and support facilities

DFX Distribution

Seasoned

With a solid foundation based on collaborative relationships, DFX Distribution is ready to take it to the next level

D

FX Distribution (DFX) is exhibiting at the FDFA convention for the 25th consecutive year in 2012. To commemorate the company’s 25th anniversary in the Canadian duty free industry, DFX will run special promotions that President Michael Beler hopes will highlight the core values that the company was founded on: price, presentation and promotion.

“We are very proud to be a part of the Canadian duty free industry and we thank all of our suppliers and clients for their continued support,” says Beler.

To ensure the company has adequate coverage to support these new lines, Beler tells Americas Duty Free that DFX will be expanding its team by bringing additional brand managers on board.

“DFX is constantly striving for efficiencies and better ways to serve their clients,” explains Beler. “To that end, additional senior staff was hired to focus more on operational efficiencies with an aim to generate an immediate impact.”

Speaking of support, Beler says that the success of DFX is largely due to its great team of people who understand the duty free business, namely Vice President of Marketing and Sales Alexandria DeBellis and her marketing team,

Michael Beler, President, DFX Distribution

32

MELISSA SILVA

veterans

“We are very proud to be a part of the Canadian duty free industry and we thank all of our suppliers and clients for their continued support.”

Looking ahead, DFX plans to pay close attention to inventory management at both the warehouse and client level. “Our objective is to achieve fill rates of at least 92% across all of our lines with a turnaround of three to five days,” says Beler. “We anticipate the introduction of several new lines next year—some of which we will present during the FDFA convention—to complement our existing range.”

BY

along with Vice President of Operations Cassandra Cassar and her operations and IT team.

DeBellis, who is just starting her 20th year with DFX, has encountered many challenges in the industry over the years, including SARS, 9/11, the cancellation of the GST rebate program, the new passport regulations regarding travel between Canada and the US, and of course the economic crisis. This year has been much more promising for the company,

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

according to DeBellis, due to the new higher Canadian allowance and the new influx of Chinese tourists.

“You are only as good as your team,” says DeBellis, “and I believe we have an amazing team of people that have been very supportive and extremely understanding, which has made my job more rewarding and fulfilling.”

Cassar, who has worked for DFX for 16 years, feels the company’s mission has always remained the same—to be as automated and efficient as possible. “I would say every other year or so, we find a way to be more efficient than in previous years,” says Cassar. “Our great team is also what makes DFX run as well as it does.”

In addition to DFX’s core team, Beler also recognizes the direct impact of its beauty advisors and demonstrators, all of whom are integral to the company’s success. “Their spirit, enthusiasm and passion makes all of us look good—we can’t thank them enough, we are so lucky to have them,” says Beler.

“Keep up the great work!”

DFX takes great pride in its partnerships with what Beler calls the “passionate professionals in the industry,” and he’s grateful for the suppliers as well as the marketing and sales team of dedicated professionals that he and his team have worked with over the years. It’s the continued support and enthusiasm of DFX’s retail partners that Beler also feels is essential to the company’s progress. “We look forward to a ‘scent- sational’ future in all categories,” he says.

As DFX's focus is the Canadian duty free market, Beler explains that the company will continually strive to strengthen its role as a key player in travel retail. “We will continue to pursue our goal of becoming the biggest and the best distributor in the industry.” c

Confectionery News

Sugar rush Maple Syrup producer Turkey Hill Sugarbush has been performing well in the Canadian duty free market this year, with sales to Frontier Duty Free operators increasing by 11.7% over last year. Sales for the com-

Candy craze Perfetti Van Melle (PVM) has had a busy year on both the sales and management fronts.

The company recently announced plans to restructure its travel retail management team, effective December 1, 2012. The changes are in response to the continuing growth of the travel retail market for PVM and its core brands Mentos and Chupa Chups, as well as ongoing global expansion.

Susan de Vree will take over the role of Director Travel Retail, replacing Mark Laros who will focus exclusively on the rapidly growing domestic business. De Vree has been working with PVM since 2003 in various sales and marketing roles and most recently was responsible for the Chupa Chups Toys & Gift range worldwide.

Regarding the Canadian travel retail market, PVM is currently working to plan. The company’s Canadian exclusive distributor DFX Distribution has worked diligently at getting the company’s Mentos and Chupa Chups items listed at most of PVM’s border stores and airports. PVM’s number one product in the market is the Mentos Jumbo rolls.

Area Manager for Global Travel Retail Eric Vermetten is convinced that the six new items PVM plans to launch at the FDFA show will contribute to the company’s goal of increasing its brand visibility. The six items set for launch are: Mentos Jumbo roll in Tutti Frutti flavor, Meller White Jumbo roll, new characters Chupa Chups Cool Friends Backpack, Chupa Chups

34

pany overall have increased by 20%, thanks to its bestselling products—maple cream cookies and maple syrup.

At this year’s FDFA show, Turkey Hill Sugarbush plans to introduce new glass bottles featuring a maple leaf motif along with the expansion of its maple chocolate line.

Pouch Bag Exotic Tropic, Chupa Chups Smurfs Markers and a Mix of Minis bag.

The new Chupa Chups Smurfs Markers is a travel pack containing eight markers and seven lollipops and one Smurf coloring book which will be hitting duty free shops in April 2013. The Chupa Chups Pouch Bag Exotic Tropic consists of 25 lollipops in two flavor combinations: banana and strawberry and coconut and pineapple. The lollipops are covered with little spots that offer a different flavor sensation. The Chupa Chups Backpacks are available in a red monkey and a blue crocodile with yellow straps for children.

The Mix of Minis Bag is a combination bag of PVM’s bestselling sweets: Mentos Mini rolls and Chupa Chups Mini Lollipops (both in strawberry/orange/cherry and cola flavors) and Fruittella pixels. Each Mix of Minis bag contains 36 pieces in total.

Russian brand Meller’s White Jumboroll is a combination of chewy caramel with a soft, white chocolate filling on the inside.

Looking ahead, PVM plans to increase its visibility. “Next year we will need to take the next steps with retailers by optimizing our assortment and increasing the visibility for our products,” says Vermetten. “This will for sure allow the confectionery category to grow, especially sugar confectionery.

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

Turkey Hill Sugarbush’s maple cream cookies

The company feels the show is an excellent venue for brand exposure.

Turkey Hill Sugarbush believes that maple syrup is transitioning from a Canadian symbol into a global “superfood,” a trend that bodes well for the company’s future.

The Chupa Chups Mix of Minis bag contains an assortment of PVM’s bestselling sweets The Chupa Chups Smurfs Markers travel pack contains eight markers, seven lollipops and one Smurf coloring book

Godiva’s Souvenir Box is

part of its Souvenir Collectio

n

Chocolate bound For Godiva, chocolate has meant one thing for the last 86 years: good business. And in duty free, that business has recently gotten even better, as Godiva has experienced a 20% increase in sales this year compared with 2011. As Godiva offers a wide selection of novelty and gift items that can’t be found in the domestic market, it’s probable that sales will continue to grow.

At this year’s FDFA, Godiva will be introducing a Souvenir Box from its Souvenir Collection made specifically for Canadian customers. Inspired by iconic images and key landmarks from locations around the world, the Souvenir Collection includes destinations such as Paris, Brussels, Amsterdam, Hong Kong, Italy, US, Canada and others.

The boxes are described as “quirky yet stylish,” and have been designed by graphic design students from La Cambre, one of the most prestigious art and design schools in Belgium. Students drew on their own travel experiences to create a sense of nostalgia for the consumer.

“The Godiva partnership was interesting

as they really encouraged the students to generate very innovative ideas—there was a wide range of possibilities, they could play with the ideas, the cities and the destinations.” says Aline Baudet, Professor at La Cambre.

Consumers can interact with the boxes through their Smartphones by scanning the QR code, which offers information about the Souvenir Collection and plays a short film showing the students’ artistic process and the inspiration behind each box design.

The Souvenir Box contains an assortment of 15 chocolates from Godiva’s core collection. Flavors include smooth praliné, dark chocolate, caramelized hazelnut, velvet

ganache, milk chocolate, rich coffee, passion fruit, macadamia nut, white chocolate, Madagascar vanilla, roasted almond and shortbread biscuit.

Already introduced to several airport locations in Canada, the Souvenir Box has proven to be a top seller for the brand. “The Canada Box is one of our newest destination products and is exceeding our sales expectations in every location where it is sold,” says Diane Buchanan, International Travel Retail Region Manager for the Americas and the Caribbean, Godiva.

The Souvenir Box will be positioned on special fixtures, and tasting events will be held featuring chocolates from the collection.

Canadian crunch Syrup savvy

Krispy Kernels has been producing health-oriented Since 1876 Jakeman’s Maple Products has specialized in maple syrup products. That spesnacks for 60 years. Although 2012 marks its first year cialization is paying off, as sales have increased in the travel retail market, the company has already 13.6% this year over 2011. made impressive strides, with the opening of five new Bestsellers for the company in Canadian locations. Krispy Kernels plans to double that numduty free include maple mints, maple cream ber with the exposure it will gain at this year’s FDFA. cookies, maple popcorn—its newest product— The company will launch Almond Trio, a new and of course, maple syrup. almond mix, at the show. Mixes have done well for With a strong demand for products made the brand, as its bestsellers in the Canadian duty with natural ingredients that don’t sacrifice free include a new deluxe mix, which Krispy Kernals’ flavor, Jakeman’s has responded by altering new almond mix, features almonds, cashews and pisAlmond Trio and the ingredients of its maple cream cookies, tachios, and Vitality, its new fruit and Almond, Cashew using only natural, non-hydrogenated oils and and Pistachio mix nut mix. Its salted cashew and fruit no food coloring. mixes are also performing very well.

Jakeman’s newest The maple cream cookies will be on display product and bestseller, With consumers continuing to show a prefMaple Popcorn at FDFA along with Jakeman’s maple popcorn erence for healthy and convenient snacks that and maple icewine syrup. The syrup, made with pure maple syrup don’t compromise on taste, Krispy Kernels and Canadian icewine, looks to be in a profitable Mary Jakeman and son Devin accepting the recently won the Ontario position.

Ontario Premier’s Award for Agri-innovation Premier’s Award for Agri“There is also a trend innovation presented by towards luscious, deluxe Ontario’s Ministry of Agriand savory mixes, and this culture, Food and Rural is where we shine with Affairs. The award recour innovative nut mixes, ognizes innovators who such as Vitality, Soy City contribute to the sucMix and Almond, Cashew cess of Ontario’s agriand Pistachio mix,” says food sector.

Julie Rivest, Brand Manager, Krispy Kernels. www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

35

Haleybrooke International

A little

help from BY

RYAN WHITE

their friends Haleybrooke’s experience in the duty free arena, combined with distribution partnerships with a number of top spirits brands, spells success in Canadian travel retail

R

oger Thompson, Vice President of Haleybrooke International, tells Americas Duty Free that if business keeps up in Canada during the fourth quarter of 2012, the company will end up closing the books on its best year to date in the country. Indeed, a number of different factors have intersected of late to Haleybrooke’s advantage, including a general upswing in Canadian border and airport duty free sales, as well as a consumer tendency toward higher-end spirit expressions. Perhaps most important to Haleybrooke’s success, though, is its strong portfolio, which includes brands such as Patrón Tequila, Louis Patrón’s premium Royer Cognac, Distilleria Bottega and Paul Sapin. vodka brand Ultimat; While the above brands are well known Haleybrooke asserts throughout Canada, it should come as no sur- that listings of the spirit are picking up across prise given 2012 sales statistics from the FronCanadian duty free tier Duty Free Association (FDFA) that Ontario, British Colombia and Quebec are the three provinces where Haleybrooke is enjoying the highest sales. Nonetheless, the company isn’t putting all of its proverbial eggs in one basket. Travelers across the country can find its products in most every Canadian border store they enter.

“We have one or more of our main brands in almost every land border store from coast to coast, but sales are particularly impressive at Peace Arch Duty Free, Peace Bridge Duty Free and Blue Water Bridge Duty Free,” says Thompson. “With the airport operators, we are very happy with our business in Canada with Nuance, World Duty Free Group and Aer Rianta. This said, and because of the makeup of the Canadian duty free arena, it is important that each and every one of the Canadian duty free operators be recognized for their support of our products.”

Standing out Unique offerings and shelf standout are particularly important in duty free, and luckily for Haleybrooke its brand partners make a point of finding ways to set their products apart from the pack. With the holidays just around the corner, traveling consumers can now find Patrón’s limited edition tins in store, Distilleria Bottega’s award-winning and unmistakable gold packaging, Paul Sapin’s lightweight and unbreakable MLP bottle format and Louis Royer’s gift-ready boxes for its XO and Extra expressions.

36

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

Louis Royer XO, complete with a gift box just in time for the holiday season, has been gaining momentum in Canada given the large number of Chinese tourists visiting the country

In fact, Haleybrooke points out Louis Royer as a significant up and comer in Canadian duty free given its success in Asia-Pacific and the large numbers of Chinese travelers passing through key land borders and airports. Another product that is expected make waves is Mickey Finn Irish Apple Whiskey, which Haleybrooke will showcase at this year’s FDFA show. “This brand has just launched in the US domestic market successfully and capitalizes on two hot trends in North America: Irish Whiskey and Flavored Whiskey. We believe it will do very well in duty free in Canada and the US,” says Thompson.

In addition to the latest launch, Haleybrooke has secured a number of new listings for its existing brands.

Paul Sapin’s MLP wines have recently been brought on at Blue Water Bridge Duty Free, Niagara Duty Free, Ambassador Duty Free, Boutique Hor Taxes Philipsburg and Boutique Hor Taxes de la Beauce. Furthermore, Patrónowned Ultimat Vodka and Distilleria Bottega’s wines are cited as products that are steadily being listed at more and more points Paul Sapin’s of sale in Canadian duty free.

2008 Château As Haleybrooke is also very Blomac in an active in US duty free, we andunbreakable lightweight MLP bottle ended the conversation by asking Thompson about his opinion on the general state of affairs in travel retail throughout Canada. He tells us that the unique nature of the land border model in the country, combined with a vibrant airport retail environment, has made for some excellent supplier-operator collaborations in the past and will no doubt pave the way for more in the future.

“I can only speak for our brands, but business for Haleybrooke International in Canadian duty free is growing as fast as anywhere else,” Thompson explained. “We’d like to thank our many operator partners for their continued support.

We’re looking forward to building on this with the end goal of even bigger success for everyone involved in c years to come.”

Great Maple Wine, Canadian Style

Sapling Sparkling Wine

Ontario / Western Canada CALIBER FINE WINES & SPIRITS Tel: 905.859.8205 caliber@winevintages.com www.winevintages.com

Quebec VINIPASSION IMPORTATIONS INC. Tel: 514.383.2221 sandro@vinipassion.ca www.vinipassion.ca

Venerable White Wine

USA Joseph Cramarossa Tel: 416.919.4696 iconjoe@rogers.com

EUROPA TENTUE SANTARELLI ITALIA Tel: 011.39.085 62842 info@tenutesantarelli.com www.tenutesantarelli.com

Maple Ice Wine

www.tenutesantarelli.com

ALFA Brands

ALFA power

ALFA Brands stays ahead by continually ramping up product listings and promotional activities BY

MELISSA SILVA

ALFA Brand’s President Franco Gabriele with Operations Manager, Amy Hildreth

D

istributor ALFA Brands has made good progress in the Americas travel retail market this year, especially when it comes to brand representation, thanks in large part to strategic additions to its team and its product portfolio.

ALFA recently welcomed new Sales and Marketing Coordinator Shawna Fallmann, along with Bernie McCloskey, a former Davidoff Cigars executive who will focus primarily on ALFA’s tobacco lines: Ashton Cigars, Rocky Patel Cigars and Accessories, Ray Tobacco, Murano Cigarillos, Speedway Cigarillos and Vendetta Flavored Cigarillos in the Americas.

The agent has opened up several new accounts for Jelly Belly this year, and sales continue to be strong for the brand.

On the liquor front, ALFA is increasing distribution and promotions with Iceberg Vodka in the US. Amy Hildreth, Operations Manager, ALFA Brands, tells us Iceberg Vodka is revamping its label. On the new label, a maple leaf will be printed with a thermal ink so that the color of the leaf will change from white and teal to a shade of red when the bottle is chilled. “This will be the first vodka to have a label that changes color when chilled,” says Hildreth.

The new label will be printed with a holographic foil to create maximum impact on the shelf and back-bar. The font was custom designed for the front label, which reads “Made with Pure Iceberg Water.”

The bottles will have neck hangers printed to advertise this key feature.

The Iceberg cap will feature Iceberg Vodka’s new tagline “Break the Ice” and “Made with Icebergs” to reinforce the key point of differentiation from other brands on the market. “We have new marketing, POS and promotional material available to support this new label,” Hildreth says.

In terms of confectionery, the natural line from King Henry’s continues to be popular, posting a 14% increase in sales from last year.

The company also continues to offer Pillitteri Estates Winery’s Exclamation! Icewine Decanters, which are available in a Gewurztraminer Riesling and a Sauvignon Blanc, packaged in a 250ml Red Leaf Icewine gift box. Both wines are duty free exclusives.

Boosting the brands With plans to expand its already impressive portfolio, ALFA Brands has sought out a number of brands to help diversify its product offering. “We

ALFA Brands recently implemented instore tastings for its Girls’ Night Out wine from Colio Estate Wines, which will continue for the remainder of 2012

give attention to all of our brands,” Hildreth tells Americas Duty Free. “When we launch a new brand or line extension, we try our best to make sure our customers and the media are aware of it.”

Also new for the company is Piedmont Distillers, producers of Junior Johnson Midnight Moon and Midnight Moon Fruit Inclusions.

Midnight Moon is handcrafted in small batches, made from American corn and triple-distilled to produce a smoother, “clean-tasting” spirit.

“We introduced the Duty Free Industry to Piedmont Distillers’ Junior Johnson's Midnight Moon Moonshine at the IAADFS, and we just shipped our first order to the Ontario Land Border stores and the product is now in distribution,” Hildreth says.

Introduced last year, The Midnight Moon Fruit Inclusions is moonshine infused with pieces of fruit such as cherry, strawberry, blueberry and cranberry. “We don’t put artificial flavors and colors in the bottle and call it a day,” says notable moonshiner and NASCAR Hall of Famer Junior Johnson. “We put whole pieces of real fruit in each jar which release their natural color and flavor into the spirit, so you get a true all-natural fruit flavor.”

Duty Free Americas listed Junior Johnson's Midnight Moon Fruit Inclusions—Apple Pie (70 proof) and Strawberry (100 proof)—on the northern border and the product is now on the shelves, Hildreth adds.

Piedmont Distillers also produces Catdaddy Spiced Moonshine, “Catdaddy” being the name given to only the finest moonshine during prohibition. Unaged, Catdaddy is also made from American corn and is triple-distilled and handcrafted in small batches. This Carolina concoction is infused with a proprietary blend of natural spices and flavors, such as vanilla, nutmeg and cinnamon, making for a spicy yet sweet taste.

Diamond Estate Wines and Spirits has also been added to ALFA’s portfolio, bringing with it an array of products including 20 Bees, Dan Aykroyd Wines, Hat Trick NHL Alumni Wines, EastDell Estates, Lakeview Cellars, De Sousa Wine Cellars, Fresh Wines and Sundance Wines.

Rounding out the portfolio is Torie and Howard Organic Hard Candies, distributors of hard candy made with all-organic, natural ingredients. “The packaging is very unique and eye-catching with designs lending itself to great gifts as well,” says Hildreth.

Eye candy ALFA has been busy creating effective instore displays and interactive promotional activities. The company recently installed a Jelly Belly floor display unit for International Shoppes at Logan International Airport in Boston and is currently working on a floor display in the Philadelphia store.

On the interactive front, ALFA started a Jelly Belly sampling program this past summer with key accounts, which saw staff don Jelly Belly aprons and serve samples to consumers in stores during peak hours. Also this summer, the company implemented in-store tastings of its Girls’ Night Out wine from Colio Estate Wines, Rocky Patel's Deluxe Toro Tubo Sampler

ALFA Brands’ Jelly Belly floor display unit for International Shoppes at Logan International Airport in Boston

which will continue for the remainder of 2012.

In order to boost sales in Canada, ALFA offered operators a 5% discount on Pretzel Pete products during the summer months.

Looking forward, ALFA Brands has many more promotions planned. These include two bottles of Pravda Vodka for CAD$55 (US$56) until the end of the year and an Iceberg Canadian Vodka discount of CAD$2 in Americas duty free stores until December 1. And a similar discount on one bottle of Midnight Moon Moonshine through November and December at Duty Free Americas stores.

At this year’s FDFA convention and trade show, ALFA Brands will be exhibiting a number of products from its three main categories—Tobacco (cigarettes, cigars and accessories), Liquor (wines and spirits) and Confectionery & Fine Foods. A number of the products set for display are new additions to the company’s portfolio, including the array of wines and spirits already mentioned.

Notable among the new brands is Rocky Patel Cigars and Accessories, specifically its premium cigars. The blender is known for producing premium cigars with high-end tobaccos. ALFA Brands has been selected as Rocky Patel’s duty free/travel retail agent, and recent offerings include the Deluxe Toro Tubo Sampler and the Limited Edition 50th Anniversary gift pack.

“This newly formed strategic partnership with ALFA Brands will help us expand the distribution of our products in duty free and travel retail stores, and in order to gain additional trademark recognition we’ll develop exclusive packaging and product selection for this market segment,” says Rocky Patel, President and CEO of Rocky Patel Premium Cigars.

“This is a terrific opportunity for us and we are honored that they have chosen ALFA Brands as their agent,” says Franco Gabriele, c President, ALFA Brands.

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

39

St-Rémy à la Crême displayed at Peninsula Duty Free in Canada; Rémy Cointreau GTR is planning a larger rollout to the US for the highly popular brandy liqueur

Liquor News Rémy Cointreau GTR innovates across its portfolio St-Rémy à la Crême has enjoyed success north of the US border and Rémy Cointreau is now hoping to continue this success in other parts of the world. The variant was released in Ontario, followed

by Quebec and BC, with a fabulous “agri-cool” display of cows and grass to pick up on the creaminess of the brandy liqueur. “We expect to release it in the “fertile meadows” of the US markets soon,” says Matthew Hodges, Marketing and Business Development Director for Rémy Cointreau GTR. It’s no secret that Rémy Cointreau’s brands, especially the Cognacs, are outperforming their respective categories in Asia, and

thankfully the not insignificant number of traveling Asians is picking up the slack from the still slow economy in the US: “All our brands, but particularly Mount Gay Rum, Rémy Martin and St-Rémy, are performing pretty well across the Americas market with growth from Asian consumers compensating for the downturn in sales to travelers from Europe,” he explains.

With more innovations in the pipeline, including another limited edition Rémy Martin bottle designed to appeal to the Asian traveler, it appears that Rémy Cointreau GTR is in a good position moving into the last quarter of 2012.

Prowood offers premium Arman Cognac from France, Kilikia brandy from Ararat California-based Prowood Wine & Spirits’ (PWS) offering in Cannes this year was steeped in the mystique and luxury of premium spirits. The brands showcased were led by the aromatic and spicy but delicate Arman Cognac from France and an Armenian brandy called Kilikia, made from finest grapes grown in the Ararat Region.

The importer and distributor of exclusive brands for the United States, Canada and Mexico, PWS is billing Arman Cognac, available in both the XO and VSOP expressions, as the jewel in its portfolio, with the “Signature of a royal man.”

The company says Arman Extra Old Cognac is a blend of a hundred rare and selected eaux-de-vie from the premier growing areas of France kept in oak barrels for 20 to 50 years to achieve perfection.

Kilikia brandy, on the other hand, is available in the XO expression and is named after the Armenian kingdom called Kilikia or “Little Armenia.” This Brandy is aged for 10 years. After tastings, experts described it as strong yet delicate, while at the same time leaving a definite hint of toasted wood and touch of cinnamon.

40

“Since we established PWS in 2003, we have continued to expand the portfolio by responding to consumer's desire for quality and exceptionally smooth spirits,” says PWS owner and President Henrik Sargsyan. “And that is why we observe the market situation with attention, to do our best to provide quality spirits with excellent taste and one of a kind packaging.”

In the US, the company also actively targets different markets with strong promotional media support and sponsorships. It sponsored the USA and World Bartenders' Championship in 2006 and participated in the "internationally spirited vodka sipumentary." The company says that over the past few years it also has become one of the largest importers and distributors of Russian vodka in the US. PWS is billing Arman Cognac as the jewel in its portfolio, while Kilikia brandy is aged for 10 years and described as strong yet delicate with hints of toasted wood and cinnamon

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

1.877.862.5868 1.877.862.5868 1.877.862.5868

A AAl’ls’s

PPERDOMO PERDOMO ERDOMO

M M OO NN TT SIS IN N IN M O N T EESE OO

in inDuty Duty DutyFree Free Free in Cigar CigarSelection Selection Selection Cigar

1 1

###

Liquor News

BBBarfly set to bring some

flair to the duty free industry While bartending nearly five years ago, Sales Manager and cofounder of BBbarfly Brian Becker noticed that although flair bartending was gaining in popularity, most of the impressive moves and related paraphernalia were confined to the activity of mixing cocktails. As most bars sell more beer than mixed drinks, Becker was continually struck by how mundane the act of opening a bottle of beer was, even when that bottle was served by a skilled flair bartender.

What started as a rough sketch on a napkin of an instrument that looked like a cross between a butterfly knife and a bottle opener has now grown into big business for BBbarfly. Needless to say, bartenders all over the world first began to take notice, but it soon became apparent that the openers were more than just a tool of the trade made for a select few in the drinks industry—the general public caught on and the company began taking orders via its website from both individuals and companies around the world. A good indication of the product’s fast-growing popular-

ity is that the openers are now available at Beer Stores across Ontario.

Given the feedback from domestic retailers regarding the product’s ability to attract shoppers at the point of sale, BBbarfly has begun targeting the duty free industry as a matter of priority, says Becker. “I feel the openers are suited perfectly to duty free given the industry’s concentration on new, unique products and offering the customer quality items that aren’t yet available everywhere,” he explains. “Furthermore, it’s already clear from speaking with consumers in the domestic market that our bottle openers make great gifts and we see the gifting opportunity as huge in duty free.”

Notably, BBbarfly is able to print nearly any conceivable logo

Appleton Estate targets young trendsetters and experienced connoisseurs alike in Canadian duty free Appleton Estate Jamaica Rum recently debuted a new ad campaign enticing consumers to “Live Exceptional.” Peter Hottmann, Appleton Estate’s Sales and Marketing Manager – NAFTA Region, tells Americas Duty Free that this latest development fits in with Appleton’s goal of growing the brand aggressively across domestic and duty free markets over the next year. Given the fact that third quarter sales are up significantly in Canada and the US, it certainly appears that the objective is well within reach.

The campaign is aimed at recruiting new, younger consumers, says Hottmann.

Victoria Day saw the launch of a racy TV ad that features a trendy couple at a nightspot with the tagline “We like our friends like our rum. Genuine, full of character and naturally spicy.” The ad was directed by LA-based director Cliff Skelton and features music from Chin Injeti of Base is Base fame.

Of course, Hottmann notes that Appleton Estate Jamaica Rum has always prided itself on offering something for every type of rum drinker, and while the ad campaign targets young trendsetters, the launch of Appleton Estate 50 Year Old Jamaica Rum in Canadian duty free is sure to delight more experienced rum drinkers. It’s well known in the spirits industry that the pop42

ularity of rum—and particularly rum with higher age statements—has skyrocketed in recent years, and travelers looking for an ultra premium rum-drinking experience will be able to find this sought-after expression in select Canadian duty free shops in time for the busy holiday season.

The rums that make Appleton Estate 50 Year Old Jamaica Rum were specially set down over 50 years ago and very carefully managed over time to create the minimum aged 50-year-old rum to celebrate the 50th Anniversary of Jamaica’s Independence. The expression is packaged in a bespoke hand crafted, crystal decanter, the design and shape of which was inspired by Appleton Estate Jamaica Rum’s iconic bottle. The etchings and gold screen printing on the bottle take their cue from Jamaica’s National Symbols and it is finished with a gold finished brass and cork stopper and presented in a black lacquered gift box with gold finished brass hinges.

A commemorative booklet that outlines Jamaica’s march to Independence and the journey of the Appleton Estate 50 Year Old Jamaica Rum is also included.

“The new ad campaign

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

will help drive sales in Canadian and US duty free,” says Hottmann, “and the launch of Appleton Estate 50 Year Old Jamaica Rum in Canadian duty free is sure to capture the growing number of rum connoisseurs who appreciate craftsmanship, tradition and rarity in the spirits they choose.”

BBbarfly’s unique bottle openers are customizable and made to order from food-grade stainless steel

or design on the openers, making them perfect as GWPs or standalone items in travel retail. “We’re already well versed in working with a variety of companies on promotions, and I see BBbarfly as being a very good option for operators and suppliers that want to give travelers a quality branded product related specifically to the wine and spirits category,” Becker continues.

BBbarfly bottle openers are constructed using food-grade, high-quality stainless steel and are guaranteed never to rust. Furthermore, the company produces the openers on-site as a means of ensuring quality and promptness in shipping.

Liquor News

Intrabrands finds success

in Canadian duty free with portfolio of high-end spirits

Barry Parkinson, President of Intrabrands, tells Americas Duty Free that the company has seen a significant upswing in the sale of spirits at The newest spirit that Canadian duty free stores over Intrabrands is representing in Canadian duty free is the last year or so. Of course, it Ungava Gin, distilled using doesn’t hurt that the company is 100% natural ingredients harvested by the Inuit responsible for the distribution of a number of high-profile brands, including Forty Creek Whiskey, Crystal Head Vodka, El Dorado Rum, Broker’s Imported Gin and Iceberg Vodka.

The newest spirit that Intrabrands is representing in Canadian duty free is Ungava Gin, which Parkinson says is now available for order.

Particularly suited for gifting in Canadian duty free, Ungava is distilled using 100% natural ingredients harvested by the Inuit. The gin is infused with Nordic juniper, wild rose hips, cloudberry, crowberry, Arctic blend and Labrador tea, which the brandowners say impart a distinctive color and “fresh, floral and spicy flavor.” The bottle has a contemporary design, with a sleek shape and clean lines. Furthermore, the thick, pristine glass gives the brand strong on-shelf stand-out value.

Whether talking about gin or any of the other spirits in Intrabrands’ portfolio, Parkinson tells us that there is a lot more interest lately on the part of consumers when it comes to higher-end spirits. “El Dorado is a great example in the sense that travelers are now looking for premium rums with higher age statements,” he says. “Given El Dorado’s commitment to making some of the world’s best sipping rums, in addition to variants that are perfect for mixing cocktails, duty The tendency toward free shoppers are sure to find the higher-end rums has made El Dorado right expression for their needs.” expressions such as Also fitting perfectly into the 15 YO popular among airport and border trend toward upmarket spirits is travelers in Canada Forty Creek Whisky. The brand continues to receive accolades from the industry and brandowner Kittling Ridge has now sold off the wine portion of its business to focus solely on the whisky, which has become a real player in North America both domestically and in duty free.

And speaking of well known brands in Canada, Parkinson tells us that vodka aficionados will have a chance to meet Dan Akroyd when he signs bottles of his Crystal Head Vodka at Peace Bridge Duty Free on November 16. “We’re very pleased to offer such a unique event to cross-border travelers,” Parkinson says. “It’s a great way to add value for both consumers and our operator partners, which is always the end goal.”

44

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

Distribution GVA Smaller pack sizes are a hit in duty free, such as this offering from Luis Martinez

Something to talk about

Distribution GVA sees keeping the cigar category fresh as a prime objective, and as a result sees good performance from key brands in Canadian duty free BY RYAN WHITE

D

istribution GVA has been known for many years as the go-to distributor for retailers in Canadian duty free when it comes to higherend cigars. As such, the company is a good reference point to determine cigar trends in Canadian duty free airport and border shops. Americas Duty Free recently spoke with Luc Dumulong, Vice President of Sales and Marketing at Distribution GVA, about this popular travel retail category and how it’s performing in Canada specifically.

“One of the constants in the marketplace is that Davidoff cigars remain one of the cigar category's most vibrant brands,” Dumulong says.

“Generally speaking it represents up to 50% of cigar sales in duty free.”

“We just recently began offering Davidoff cigars at Vancouver Airport,” Dumulong explains.

“There are huge opportunities right now. Based on our sales, it’s safe to say that Davidoff is moving a lot of product. It's taken a while to get these cigars listed with WDFG but we’re very happy with the results.”

Staying in line with trends Because Distribution GVA imports several other world-renowned brands, the company has been able to work with its associates to introduce a lot of new products never before seen in the duty free channel in the country, both at border shops and airports. Dumulong

brand and has been introducing it in Canadian travel retail over the course of this year.

Along with the trend toward tubos and smaller packs, Distribution GVA has also introduced Arturo Fuente’s King four-pack in a bespoke tin; Opus X Chateau de la Fuente in a three-pack; Louis Martinez in a sampler pack; Perdomo, Ashton and VSG cigars, also in smaller packs; and Brick House Samplers.

The benefit for retailers While the stores that enjoy a higher traffic volume tend to be the ones that carry a wider variety of cigar brands, Dumulong tells us that many of Distribution GVA’s smaller operator partners have benefited in a big way from ensuring that the cigar smokers who pass through their shops have a respectable selection of product from which to choose.

“We’ve started to build a rather large database of smaller shops that are now starting to cater to cigar aficionados,” says Dumulong.

“It's very important for retailers and suppliers alike to keep the category dynamic. This is why we're always looking to give operators new lines and products in order to keep the offering fresh.”

Luc Dumulong, Vice President of Sales and Marketing, Distribution GVA

According to Distribution GVA, bundles are also very popular in many Canadian duty free stores

This, of course, has to do with the quality of the cigars in addition to the savings that duty free offers. While most products tend to be less expensive in duty free given tax savings, the gap is particularly noticeable with Davidoff cigars. As such, it’s no wonder that connoisseurs are taking advantage of the considerable tax savings by purchasing at the border or in airports.

46

notes a trend toward smaller packages, including sampler packs that contain six, five or even four cigars. Also popular are tubos, especially sought after by travelers because they are convenient and don't damage the product.

“In response to this need we've introduced more tubos and smaller packs,” Dumulong explains. “We've introduced a longfiller cigar handmade in Nicaragua called Santa Ana, which is a very convenient Corona-sized tubo that has a lot of body and is a lot stronger than most cigars.”

Of course, strength means nothing without taste, and Santa Ana cigars strike a perfect balance between these two all-important characteristics. Distribution GVA owns the

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2012

Of course, in many of the smaller shops, more affordable brands are popular. Fortunately, despite focusing largely on premium brands, Distribution GVA also has a wide selection of cigars for nearly every price range.

In line with this, Dumulong notes that the company has seen great success with bundles from brands such as Quorum.

“For us, it's like in any category,” Dumulong concludes. “It's very important for retailers and suppliers alike to keep the category dynamic.

This is why we're always looking to give operators new lines and products in order to keep the offering fresh. It's encouraging that we're getting such a positive response from so many c of our valued retailer partners.”

They sell as good as they taste

Mars ITR is a leading player in the confectionery category. We combine insights, vision and global strength with powerful brands to create fantastic in store opportunities. Take M&M’s for instance, the great promotions, shop in shop concepts and fun merchandising makes the brand a very powerful sales driver.

Contact your local account manager and see what M&M’s can do for you!

Let’s face it, if consumers can’t resist M, how can you?

Importing and Transportation Management Specialists PROVIDING COMPLETE AND INNOVATIVE SOLUTIONS

We have over 30 years experience in the Canadian duty free market and a commitment to excellence. BILSI staff are experts in Canada Customs regulations, transportation management and 3rd party logistics. Our mission is to provide our clients with the highest level of customer service covering their shipments to and within Canada and the USA.

F O R M O R E I N F O R M AT I O N C O N TAC T U S AT 9 0 5 . 6 0 6 . 2 2 2 2 | I N F O @ B I L S I .C O M W W W. B I L S I . C O M