Duty Free Magazine's Confectionery & Fine Food Special Issue 2019 by Paramount Publishing Ltd.

CONFECTI ONERY & FINE FOODS JUNE 2019 · SPECIAL ISSUE

MAÎTRE CHOCOLATIER SUISSE DEPUIS 1845

DISCOVER LINDT FRUIT SENSATION! Category update: Confectionery p. 10 Chocolate faces challenges p. 28 Industry experts comment p. 44

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Letter from the Editor

Sweet music

to our ears C

onfectionery, that’s entertainment. With numerous innovations around destination gifting, premium packaging, displays and sampling, the confectionery world in travel retail encapsulates retailtainment at its best. However, as we can see in this digital issue, many challenges lie ahead – not least the complex subject of sustainability. We speak to the multinational giants Mars and Mondelez, among others, for their take on an issue that’s so vital to today’s picky millennial shoppers. They’re launching billion-dollar programs and schemes with measurable goals, but there’s still a long way to go before their ambitions are reached in the areas of more sustainable and efficient farming, alleviating poverty, and supporting the hard-pressed communities in the major cocoa-producing countries. Labeling on packaging is also a confectionery industry bugbear. Enter the Duty Free World Council (DFWC) and the European Travel Retail Confederation (ETRC), which are promoting their own specially developed digital solution to this growing – and urgent – issue. A number of countries are clamping down on certain ingredients in an effort to tackle the obesity problem, for example, resulting in a packaging headache for manufacturers in travel retail. Whose jurisdiction do they follow? The DFWC and ETRC are proactively lobbying politicians and governments at the highest level on this matter. Our interviews with sugar confectionery makers such as Perfetti van Melle, Ricola, Haribo and Cloetta reveal that lack of in-store space and therefore visibility for this popular sub-sector remains a key issue. How can operators convert browsers into shoppers if their products aren’t displayed to their full potential? Generation Research’s preliminary FY 2018 figure of +9.3% global growth for duty free and travel retail sales is certainly sweet music to the ears of category stakeholders for whom the pathway to purchase is a pick ‘n’ mixed bag of opportunity meets innovation. “With brands continuing to innovate with new flavors and promotions, and eye-catching packaging to attract new and existing customers, the long-term outlook for the category looks very positive indeed,” is TFWA President Alain Maingreaud’s confident prediction. In its latest Confectionery Shoppers Insights, Swiss research firm m1nd-set homed in on the nuances of nationality-based consumer behavior and category opportunity. Asia Pacific’s active travelers lead the way for conversion, with 80% of confectionery browsers making a purchase. Passengers from the Middle East & Africa are just behind at 71%, while US and European travelers are harder to convince at 50% and 52%, respectively. According to Peter Mohn, m1nd-set Founder and CEO, in-store choices have gained significant momentum and represent a significant trend that deserves special attention, as he explains: “This represents huge potential to attract those undecided shoppers with in-store elements such as digital screens, tasting and sampling, brand and retail activations, staff interaction, gondolas, etc. It is especially relevant for confectionery shoppers from the Middle East & Africa who value experiential retail as the primary driver to purchase.” I end this note with the upbeat remarks of Maud Geerbex, Corporate Affairs Director at Mars International Travel Retail, who says: “There’s also a bright side to the story – it’s a fun category that can drive excitement on the shop floor. These [challenging] issues are important, but there’s a lot of fun to be had. Everyone loves chocolate and we shouldn’t forget that!” Kindest Regards,

JUNE 2019 · SPECIAL ISSUE Global Marketing Company Ltd., 26 Pearl Street, Mississuaga, Ontario L5M 1X2 Canada. It is distributed to duty free operators and distributors in the following countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE, Yemen, Algeria, Azerbaijan, Benin, Cameroon, Cape Verde, Djibouti, Egypt, Ethiopia, Gabon, Ghana, Guinea, Iran, Ivory Coast, Jordan, Kenya, Lebanon, Madagascar, Malawi, Mali, Mauritius, Morocco, Mozambique, Niger, Nigeria, Namibia, Pakistan, Reunion, Senegal, Seychelles, South Africa, Sudan, Syria, Tanzania, Togo, Tunisia, Turkey, Turkmenistan, Uzbekistan and Zaire, as well as to duty free suppliers worldwide.

AMERICAS, GULF-AFRICA, ASIA DUTY FREE & TRAVEL RETAILING 26 Pearl Street Mississauga, Ontario L5M 1X2 Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemag.com PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@dutyfreemagazine.ca DEPUTY EDITOR Jas Ryat jas@dutyfreemagazine.ca SENIOR EDITOR Mary Jane Pittilla maryjanepittilla@hotmail.com SENIOR WRITER Rebecca Byrne rebeccabyrne10@yahoo.com.sg ASIA CORRESPONDENT Elena Owyong owyongelena@gmail.com AMERICAS CORRESPONDENT Ronnie Lovler ronnie@dutyfreemagazine.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca CONTRIBUTORS Claire Malcolm

Hibah Noor Editor-in-Chief hibah@dutyfreemagazine.ca 6 JUNE 2019

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

Contents

What’s inside Lead Stories

18 22

10 Confectionery Overview

Category Update: Confectionery Generation Research’s preliminary FY 2018 figure of +9.3% global growth for duty free and travel retail sales is sweet music to the ears of category stakeholders for whom the pathway to purchase is a pick ‘n’ mixed bag of opportunity meets innovation

14 Qatar Duty Free

Hitting the sweet spot International and regional confectionery brands are the stars of the show at Qatar Duty Free stores

16 Dubai Duty Free

Destination Dubai proves a winning formula Although confectionery sales are dipping at Dubai Duty Free’s awardwinning operation, there are many bright spots

20 Lindt & Sprüngli

Lindt & Sprüngli brings the magic to life Gifting specialist Lindt & Sprüngli expands its portfolio to offer a value proposition for every shopping mission – while stopping customers in their tracks

22 Sugar Confectionery Report Spatial awareness

Leading sugar confectionery suppliers spark an engaging debate about how to boost the space given over to the sub-category in travel retail and how to boost conversion

26 Mondelez World Travel Retail Riding the technology wave

Jaya Singh, Managing Director, Mondelez World Travel Retail, talks openly about the challenges of customer engagement

28 Challenges in Confectionery Challenging the status quo

Leading confectionery manufacturers are figuring out solutions to a series of challenges being posed in the travel retail channel

Features Wonderful Pistachios grows 18 IDFS’ Glocal expertise 32 Tortuga’s 35th anniversary 33 Ferrero talks travel retail’s language 34 Hawaiian Host revamps TR offer 36 Carnival time for Godiva 38 Patchi’s gift to savor 40

Nadiya promotes natural dates Industry expert comments Butlers targets Asian tastebuds Anthon Berg’s strategic approach Leonidas’ dark chocolate Questionnaire: Peter Zehnder

42 44 46 47 48 50

Taste Sensations! DISCOVER THE COLOURFUL WORLD OF RITTER SPORT.

NEW

AVAILABLE

SOON

NEW

For further information please contact Managing Director Global Travel Retail •Mr. Jan Pasold j.pasold@ritter-sport.de International Key Account MGMT Travel Retail •Mrs. Simone Weiss s.weiss@ritter-sport.de •Mr. Ignacio Aznar i.aznar@ritter-sport.de www.ritter-sport.com

NEW

AIRLINE EXCLUSIVE

Category Overview

CATEGORY UPDATE:

CONFECTIONERY

Generation Research’s preliminary FY 2018 figure of +9.3% global growth for duty free and travel retail sales is sweet music to the ears of category stakeholders for whom the pathway to purchase is a pick ‘n’ mixed bag of opportunity meets innovation by CLAIRE MALCOLM

lobal travel and tourism contributed a record US$8.8 billion to the world economy in 2018, exceeding the growth rate of world GDP for the eighth consecutive year, while just under 4.5 billion passengers took 45 million flights last year. “With brands continuing to innovate with new flavors and promotions, and eye-catching packaging to attract new and existing customers, the long-term outlook for the category looks very positive indeed,” is TFWA President Alain Maingreaud’s confident prediction as the duty free and travel retail sector picks up steam. In its latest Confectionery Shoppers Insights, Swiss research firm M1nd-set homed in on the nuances of nationalitybased consumer behavior and category

10 JUNE 2019

“

It’s human interaction that really brings the retail experience to life. These offer additional sales opportunities for retailers and brands, as well as the chance to interact and gain further understanding of their customers.” ALAIN MAINGREAUD, PRESIDENT, TFWA

Y T L E NOV 19 20

Color-Rado and Tangfastics favourite resealable pouch range extensions

Category Overview

and promotions to deliver the optimum revenue at all locations,” he says. He adds that imaginative promotions, appealing travel retail exclusives and innovative partnerships with individual airports and retailers are boosting category consumer appeal. And with M1nd-set data revealing that price comparison isn’t a key purchase criteria (31% versus 51% across all categories), the Peter Mohn, M1nd-set opportunities are certainly there. Founder & CEO Gifting remains the category’s primary purchase driver (53%) with destination themed souvenirs and gifts front of mind for 60% of confectionery buyers, who also rate exclusivity as a further incentive (59%). Anna Marchesini, Project Manager, M1nd-set stresses the importance of a well-presented and varied assortopportunity ASPAC’s active travelers lead the way for conversion with 80% of confectionery browsers making a purchase with Middle East & Africa just behind at 71%, while US and European travelers are harder to convince at 50% and 52% respectively. According to Peter Mohn, M1ndset Founder & CEO, in-store choices have gained significant momentum and represent a significant trend that deserves special attention, as he explains: “This represents huge potential to attract those undecided shoppers with in-store elements such as digital screens, tasting and sampling, brand and retail activations, staff interaction, gondolas etc. “It is especially relevant for confectionery shoppers from the Middle East & Africa who value experiential retail as the primary driver to purchase.” ment, with gifting front of mind. “If not Average basket spend is relatively addressed properly, this can easily become aligned between the different demographthe main barrier to purchase.” ics with ASPAC and Middle East & Africa The demanding Millennial customer travelers forking out US$30 on confecis a case in point and has forced the tionery, US consumers at US$29, and industry to embrace new channels of European passengers bringing up the communication and product messaging. rear (US$25). Says Maingreaud: “Millennials are used Consumer relevance and the overto products tailored to their individual whelming need to do more with data, needs, such as barista-crafted coffee, both from analytical and sharing standand that demand is no less strong in the point is becoming a familiar refrain for airport environment. TFWA’s Maingreaud. “We have a wealth “This is being reflected in the duty free of data at our fingertips. Using this so and travel retail market with initiatives that we understand the particular needs such as promotions or location-specific of customers at each airport will enable packaging. Brands should make the most us to provide the ideal mix of products of opportunities to engage with travelers

For Confectionery, M1ndset says ASPAC’s active travelers lead the way for conversion with 80% of confectionery browsers making a purchase with Middle East & Africa just behind at 71%, while US and European travelers are harder to convince at 50% and 52% respectively.

12 JUNE 2019

by sharing compelling stories about their heritage, provenance, sustainability and other subjects about which shoppers feel passionately.” Global confectionery trends are also set to exert growing influence on category strategic focus, as Maingreaud explains: “We need to be mindful of what’s going on in the wider industry where demand for premium confectionery products, gifting and smaller pack sizes is growing and is certain to have an impact on the industry. “In travel retail, passengers are growing increasingly adventurous with their confectionery choices, which has led to the growth in new chocolate flavors such as matcha and salted caramel. We are also seeing a growing trend towards dark chocolate, particularly in Asia Pacific.” Another area where M1nd-set sees room for improvement is staff-customer interaction. “When it does happen, it has a strong influence on the final purchase decision. This represents a missed opportunity and highlights the necessity to encourage and incentivize sales staff, and to provide bespoke advice and service to enhance what should be a special experience,” says Marchesini. Maingreaud agrees and adds: “It’s human interaction that really brings the retail experience to life. These offer additional sales opportunities for retailers and brands, as well as the chance to interact and gain further understanding of their customers. “DFWC’s new training platform, supported by TFWA and created in partnership with the Institute of International Retail, will help to continue to raise standards, and build a community of loyal staff which will positively impact returns.” With ASPAC primed to represent in excess of 50% of worldwide business within the next two years, he says that category stakeholders shouldn’t put all their eggs in one basket. “Other markets are also seeing impressive growth. Our latest Generation Research figures show year-on-year duty free and travel retail sales in Europe increasing 5.8% to US$21.2 billion in 2018, while sales in the Middle East were up 7.2% to US$6.4 billion over the same period, showing there is plenty of scope for further category growth in these regions and that they should not be ignored.”

info-gtr.wpa@wonderful.com Â© 2018 Wonderful Pistachios & Almonds LLC. All Rights Reserved. WONDERFUL, WONDERFUL TRAVEL EXCLUSIVE, the accompanying logos and trade dress are trademarks of Wonderful Pistachios & Almonds LLC or its affiliates. WP180820-01

Qatar Duty Free

Hitting the sweet

spot

International and regional confectionery brands are the stars of the show at Qatar Duty Free stores

ocated at the award-winning transit hub Hamad International Airport and with the hub airline Qatar Airways flying to more than 160 destinations worldwide, Qatar Duty Free (QDF) enjoys a diverse passenger profile. As with all product categories, the operator seeks to cater to all tastes in the confectionery offer in its core stores, express shops and at its concept store Marmalade Market. “To ensure we provide an experience worth traveling for to our customers, we work with global favorites to create innovative activations,” the company tells Gulf-Africa Duty Free magazine. Recently, QDF partnered with premium Belgian chocolatier Godiva to launch its first innovative in-store interactive wall display in travel retail designed to appeal to chocolate-loving passengers traveling through the award-winning Hamad International Airport. Shoppers are asked to answer a series of questions through a built-in concierge application, allowing it to identify the perfect Godiva chocolate gift box to match their tastes. QDF also works with brands to tailor their products to the Middle East and, specifically, to Qatar through bespoke packaging or a twist of flavor. Godiva and Butlers Chocolates, for example, have designed beautiful Qatar-themed boxes of chocolates to take home as a souvenir or as a gift. QDF is keen to give its customers a sense of place and is proud to showcase regional and local brands, products and flavors, including chocolate-covered dates from the Qatari brand Qinwan. For Qatar National Day 2018, the local brand Chopin created an elegant gift box of chocolates with each chocolate individually wrapped with a scene of Qatar. 14 JUNE 2019

QDF partnered with Godiva to launch its first innovative in-store interactive wall display

Each individually wrapped chocolate in local brand Chopin’s elegant gift box features a scene of Qatar

We have been growing kids into Kinder day.

for fifty years now, every

With the same enthusiasm we envisioned The World Above The Clouds for them to experience in Travel Market as a joyful retailtaining universe.

Dubai Duty Free

Confectionery shops in Dubai Duty Free at Concourse D and Concourse A (right), where the destination gift sub-category is growing rapidly

DESTINATION DUBAI proves a winning formula Although confectionery sales are dipping at Dubai Duty Free’s award-winning operation, there are many bright spots

he confectionery category, comprising chocolates, sweets and candies, finished 2018 as the eighth ranked category in Dubai Duty Free (DDF). Confectionery contributed 6.5% to overall turnover in 2018 with gross sales of AED 475.85 million (US$130.37 million). Although this figure sounds impressive, the operator has seen a slide in sales for the first four months of this year. Based on January-April 2019 data, the category is declining at -3.9% against the same period last year, according to Saba Tahir, Senior Vice President Purchasing. The contribution of confectionery to Dubai Duty Free’s overall sales stands at 6.4% with gross sales of AED 160.14 million (US$43.87 million). There are quite a few reasons as to why the sales have been declining. As Tahir explains, the operator is still impacted by the onboard luggage restrictions levied by major carriers whereby the airlines are allowing a maximum carry-on allowance of 7-10 kilograms, which came into effect since the last quarter of 2016. “As a result, we do see a lot of selective buying from our passengers, and most often we do see a lot of food items in general being either returned or lower on the priority list of purchase,” she says. 16 JUNE 2019

by HIBAH NOOR

Also, this year Dubai Duty Free has seen the closure of one of the two runways at Dubai International on account of periodic maintenance from April 15 to May 31, 2019, which has led to flights being diverted to Al Maktoum International in Dubai South. As a result of the runway closure, the company has noticed that major carriers have reduced their total number of flights into Dubai, thereby impacting the confectionery category and company sales in general. Additionally, the recent grounding of Boeing 737 Max flights globally has also impacted Dubai passenger figures and overall DDF sales.

New and unique products

From 2011 to 2019, Dubai Duty Free has been capturing boarding card data and has observed that approximately 32% of its customers in the confectionery category come from the Indian sub-continent, based on 2019 data. Over the years, the percentage has come down from an initial 41% in 2011. Middle Eastern and Asian customers come in second and third, respectively, at around 19% and 14%. Africa accounts for 13%, followed by Europe with 9.6%, Russia 4.7%, and Australasia/Americas make up the balance (2.6%). Middle Eastern and Asian customers are growing in numbers, and very soon DDF will see an increase in average spend per customer with a surge in demand for new and unique products to be retailed in the company’s stores, says Tahir. Westerners – primarily Europeans – are growing in numbers for its food/confectionery souvenir products.

the customers and increase the footfall in the confectionery/ food categories.

Brands trying to enter the market

The Sharing Gift sub-category remains the top sub-category, accounting for around 33% of total sales, followed by Informal Gift (22.6%), Premium Gift (13.6%), Children’s Gift (9.7%), Destination Gift (7%), Self-consumption (6.2%), Budget Gift (2.6%), Liqueur Chocolates (2.4%), Chewing Gums & Mints (1.82%), and Seasonal Gift (0.63%). Premium Gift is currently growing at 3.2% and Destination Gift is growing at a huge 32.3%, as there is a growing demand for indigenous food products as a souvenir to return home with, notes Tahir. “Destination gifting is one of the highlights in our confectionery category. The most important trends and changes we have seen are in the destination gifting category, which has remained fairly static lately compared to the previous years. Premium brands have selected or tailor-made products with specific packaging showcasing the iconic Dubai skyline and landmarks, traditional local heritage, etc.” Innovation has been key over the last 12 months and there has been an increasing number of product launches with new flavors, colors, sours and bite-size varieties. In terms of competitiveness compared to the domestic market, DDF places a lot of emphasis on listing travel retail exclusives to differentiate its offer to passengers. The confectionery category also has the benefit of positioning itself as a souvenir concept, through postcard-type packs and Al Nassma camel milk chocolate to enhance the regional flavor appeal. More theatrical/ feature-driven promotions have been a successful tactic to lure in

Apart from the baggage restriction challenge mentioned above, one major challenge is the availability of space. “As we have more and more brands trying to enter the market, there is only a limited retail area for displays. Another topic is the rising price of cocoa. Being a commodity, we have noticed few suppliers passing this price increase to the end customer,” says Tahir. Other challenges come from price wars happening in the local market, where the big hypermarkets and local retailers offer customers selected products at rock-bottom prices to lure footfall. Fluctuating currency prices are also affecting its sales, as customers are now actively comparing prices globally. Based on January-April 2019 data, DDF’s top 10 confectionery products were: Patchi Paper Box Souvenir Landmarks Assortment (160g), Patchi Square Tin Pistachio (300g), Ferrero Rocher T16 (200g), Lindt Assorted Napolitains (500g), M&M’s Candy Tin (200g), Mars pas-pack offer bag (1.93kg), Patchi Paper Box I love Dubai assorted (350g), Ferrero Rocher T30 (375g), Bounty Mini Pouch (500g), and Galaxy Mixed Minis Pouch (491.5g). Turning to Tahir’s views of the Middle East market, she says it is similar to most other markets, with children’s gifts and premium gifts being the two largest segments among the Middle East customer profile, accounting for almost 25% of overall Middle East passenger sales. In conclusion, Tahir says she works closely with its suppliers to get the best deals for its customers. “The Middle East market very much focuses on product innovation, and Dubai Duty Free encourages all our trade partners to do the same. As being a forefront travel retail operator, we encourage suppliers to do global launches for any novelties, using DDF as the launch pad. Customers are always looking better value for money and at any given point in time, we are continuously seeking better offers and deals from our trade partners.”

Saba Tahir, Senior Vice President – Purchasing, encourages suppliers to use Dubai Duty Free as the global launch pad for any novelties www.dutyfreemag.com CONFECTIONERY AND FINE FOODS

Wonderful Pistachios

Wonderful Pistachios continues strong growth worldwide by REBECCA BYRNE

The new No Shells variety was launched in Cannes 2018

James Kfouri, Director of Sales Global Travel Retail, Wonderful Pistachios

18 JUNE 2019

nack specialist Wonderful Pistachios has seen strong growth in travel retail over the past 18 months, particularly in South East Asia. James Kfouri, Director of Sales Global Travel Retail for Wonderful Pistachios comments: “Our major markets are in Asia and here we have seen growth in key regions such as the Philippines, Malaysia and Indonesia. China of course is a huge consumer of pistachios and our sales through Kowloon train stations through Lagardère have been strong over the past year. The recent listing with Heinemann in Hong Kong International Airport is also proving very successful and we see

Wonderful Pistachios creates niche positioning in duty free supported by growth in sales definite growth in the year ahead.” The company has made inroads into the cruising business in the Americas and hopes to expand into the Asian cruising market in the next couple of years. Already on 20 ships out of Miami and Panama, the product is listed in the snacking area but also alongside the liquor category. This allows the company to piggyback nut sampling onto alcohol sampling, leading to multiple purchases during cruises. Positioning of the snack at airports is more problematic. It is not large enough to support its own snacking segment and as a result tends to be put with confection-

The Philippines is a key market within Asia Wonderful Pistachios

The recent listing with Heinemann in Hong Kong International Airport is proving very successful

Marketing activity, such as these floor graphics at Changi Airport, helps increase sales.

ery. As an impulse purchase, the snacks are placed at the check-out positions and supported by large frontage and sampling. While this has led to incremental sales in the confectionery category, Kfouri believes that there is a viable option to place the product alongside liquor. This was trialed in Argentina and led to a 20% increase in sales. The offering for Wonderful Pistachios is kept simple. There are three SKUs: Roasted Salted; Salt and Pepper; and the new No Shells variety. The latter was launched in Cannes 2018 and covers the segment of the market who do not like the process of opening shells. While it

is more expensive and lighter at 160g as opposed to 300g, it has been a popular purchase and is contributing to a further 25% increase in sales in most airports and more in others such as Qatar Duty Free. Kfouri is focused on maximizing passenger spend saying: “We try to lift the spend into the $30 to $60 range.” Marketing activity has helped increase sales. Effective is floor graphics already found in Changi Airport, Singapore and soon to be installed at Riyadh Airport and Aruba. These bright colored signs serve as a reminder of the product. Looking to the future, Kfouri mentions that there are a number of retailers

that he would like to be listed with. The partnership with Lagardère which started two years ago has been well received, and in the last 18 months Wonderful Pistachios has launched into 70 airports in Europe. He believes that the snacks would be highly successful in South American countries such as Brazil. “I understand that we are an unknown as we are not a chocolate or crisp brand,” he comments. However, he adds that he would be happy to give retailers the opportunity to take minimum orders and trial the product. He adds: “We have yet to find a travel retail store where our nuts have not been successful.” www.dutyfreemag.com CONFECTIONERY AND FINE FOODS

Lindt & Sprüngli Travel Retail

Lindt & Sprüngli brings the

magic to

life

Gifting specialist Lindt & Sprüngli expands its portfolio to offer a value proposition for every shopping mission – while stopping customers in their tracks by JAS RYAT

Lindt follows its goal to source 100% of its cocoa beans through the Lindt & Sprüngli Farming Program (traceable & externally verified)

indt & Sprüngli Travel Retail, like many other brands in the confectionery category, is celebrating a positive uplift in global sales as the category shows substantial growth in comparison to previous years. Although the transaction value can be lower when compared to perfumes and cosmetics and tobacco, confectionery continues to drive footfall and has the power to convert a browser into a shopper due to its universal appeal. “We feel that the general contributing factors to the growth are for everyone, an increase in traveler numbers, and I think this is also due to a close collaboration with retailers,” shares Lindt & Sprüngli’s Head of Global Duty Free Peter Zehnder. “Everyone works closely with retailers on striking POS activations and fixtures, and in our case specifically, a higher level of innovation when it comes to travel retail exclusives, as our sole focus on chocolates makes us rather flexible in bringing to life travel exclusives.”

20 JUNE 2019

aromatically roasted hazelnuts or almonds, surrounded by finest Swiss milk, dark or white chocolate full of nuts. Zehnder feels they have “hit a nerve” as per its successful reception. The iconic LINDOR chocolates are also available in a smaller format to cover all price points. These new products are not substituting any existing business, but rather offering something between €5 to €10 (US$5.50-$11).

Creating the magic

Lindt & Sprüngli develops smaller size packaging at lower price points to offer a product portfolio for all shopping missions

The firm, synonymous with images of the Maître Chocolatier making chocolate creations, comes with almost 175 years of gifting heritage to back it. Although the snacking segment has evolved, gifting remains an important shopping mission and continues to be what Lindt excels at. “We have always been a brand known for gifting. Also, we have some research numbers that support that we are stronger than the average when it comes to gifting. Gifting remains important for the confectionery category as it does increase the average spend of passengers,” explains Zehnder. Lindt & Sprüngli is a very enchanting brand and in being so, it wanted to convey this message to its consumers through magical moments. “If you look at our television advertising, I think that really comes through for us. And also, if you look at our Maître Chocolatier, you see people passing by being totally enchanted by our presentation and the knowledge and the passion that goes into the chocolate making. It’s an art. We wanted to bring this magic to life for the category,” explains Zehnder.

Stopping power

To upgrade its snacking offer, Lindt launched the its Maxi Plaisir 150g indulgent chocolate

Optimizing the offer

Global travel has increased in recent years due to low-cost carriers. One out of three travelers now uses a low-cost carrier and spends less than the average standard carrier passenger would spend. This is not only to do with monetary expenditure, but also to do with luggage restrictions. Lindt has used this information to evolve its brand to offer different size products at different price points to ensure it is capitalizing on converting every browser into a shopper. “We have learned that Lindt & Sprüngli as a brand is really loved, not only for special occasions. Therefore, we needed to work on having smaller size packages available at lower price points and to offer a product portfolio for all shopping missions, including snacking,” says Zehnder. To upgrade its snacking offer, the firm launched the Lindt Fruit Sensation range and the Lindt Maxi Plaisir 150g indulgent chocolate with each tablet comprising minimum 32% of whole

The brand has been working on ways to translate these magic moments to travel retail to increase ‘stopping power’ – the ability to stop a shopper in their tracks. This is crucial to retailers, as increased stopping power usually turns a browser to a shopper. Digital touch points like the Magic Selfie Mirror that creates printable or digital customized passports and traditional personal encounters, like the Maître Chocolatier, all work in unison to bring these magical moments to life. Alongside premium partnerships, Lindt & Sprüngli underscores the importance of seasonal gifting. From its iconic hero products like the velvety smooth red Lindor chocolate balls and milk chocolate bunny produced every Easter, to the, all contribute to increase this stopping power. “We are the number one premium brand in travel retail and worldwide. We are kind of a love brand for many consumers due to our strong commitment to quality. High quality is appreciated a lot, especially by the Asian and Indian passengers. Also, we are one of the few companies that produce from bean to bar,” shares Zehnder. Via the Lindt Farming Program, the firm follows its goal to source 100% of its cocoa beans through the Lindt & Sprüngli Farming Program (traceable & externally verified). Over 60,000 cocoa farmers already participate in the program today. The program enables Lindt to trace cocoa beans, its most important ingredient, back to their origins and support farmers and their communities based on their specific needs. This commitment goes without saying for a premium brand such as Lindt.

www.dutyfreemag.com CONFECTIONERY AND FINE FOODS

Sugar Confectionery Report

Spatial awareness N

o ifs, no buts – sugar suppliers have a bone to pick with travel retailers. In a nutshell, they have an issue with space – or lack of it. The sugar sub-category still accounts for only a 20% share of the total confectionery category in travel retail, with chocolate taking the lion’s share of space, while in the domestic market sugar has around a 50% share of space. All the leading suppliers we talked to for this feature agree: there’s a big disparity here, and while they know that the hallowed half share will never be reached in travel retail, they’re gunning for more space. And here’s how they plan on going about it. Part of the solution to the spatial conundrum lies in the impulse purchase arena of the checkout, many sugar suppliers believe. According to Andreas Reckart, Vice President Sales Middle East & Travel Retail at Swiss herb drop manufacturer Ricola, gifting and sharing are big in travel retail, but the really big potential is impulse purchases for individual consumption. He points to the small products that Ricola has developed specially for cashpoint in travel retail stores – namely, a 75g tin of sugar-free herbal drops in different flavors. “It’s very difficult to get space at the cashpoint,” Reckart admits. “Some retailers understand the potential of this space – they see that it has been maxed out in the domestic market. In travel retail, we are far, far away from that. There’s a big opportunity, in my opinion, to generate additional business – on top of their regular sales. The impulse business is not planned. I believe there’s a lot to be done as an industry.” To make further progress in the ongoing battle for store space, Reckart thinks a joint effort is called for among sugar suppliers. “As a [confectionery] category we talk – but in sugar, there’s no real alignment in our portfolios. For example, some companies are targeting the children’s gifting sector and want big category space, not just at the checkout. Confectionery is a niche and sugar is a niche within that, so we find it difficult to find a voice and to be heard. If there something we can do together, that would be good.”

Driving gum sales

For confectionery giant Mars International Travel Retail (MITR), whose biggest sugar line is Skittles but gum has a lot of potential, and this product line in particular has a role to play at checkouts.

22 JUNE 2019

Leading sugar confectionery suppliers spark an engaging debate about how to boost the space given over to the sub-category in travel retail and how to boost conversion by MARY JANE PITTILLA

Ricola taps the big potential of impulse purchases for individual consumption by offering 75g and 200g tins

Maud Geerbex, Corporate Affairs Director, MITR: “There’s a big opportunity at the checkout in general, and gum is a checkout item – it adds a few extra dollars to your basket. People won’t necessarily buy it from a wallbay. As an industry we can do much more at the checkout, and that will also drive gum sales.” For Perfetti Van Melle (PVM), whose best-selling item is the travel retail exclusive Mega Chup lollipop, the company has specially selected the 10 items that are its top-sellers – including smaller items for the cash till area. Says PVM Brand Manager Travel Retail Femke van Veen: “We have to make sure our new travel retail exclusive products are listed, and cash till items also – it’s a focus for retailers. Consumers expect to find gum at the cash till, and that’s also our focus.” Another part of the solution, some suppliers believe, is listening to what consumers actually want. Cloetta aims to offer a full category solution with both sugar and chocolate products, including its travel retail exclusive ranges. Its best-selling travel retail (hero) brand is The Jelly Bean Factory, targeted

at millennial consumers aged from around 20 to 40, not children. The brand is an all-natural confectionery brand, and is Gluten-free, GMO-free, gelatine-free, free of artificial flavors and colors (i.e. NAFNAC), suitable for vegetarians, and Kosher certified, all big pluses for this choosy demographic group. Besides all these benefits, the brand offers a high-quality taste sensation, and the products include a huge punch of pure flavor. Berend-Jan van Egmond, Senior Market Manager, Cloetta International Markets, believes that the industry needs to follow the trends in consumption. “Everyone loves confectionery and it won’t disappear, but you need to make sure you follow the trends. We see globally a rising demand for more responsible and natural snacking, and our target demographic group is much more aware and conscious on what they consume, and that’s something we as suppliers need to communicate and act on as well. We need to make sure our products are in line with their expectations, and I think it will work.” In 2016, Ricola undertook consumer research at Frankfurt and Hong Kong airports to understand what people would expect to find in travel retail. Both airports – though different – came up with the same results. “Consumers expect small, exclusive packs – different products in a small format. They said they would purchase even more if this were the case,” says Reckart. “We gained a good understanding of the consumer through our research. People are clear about what they expect; as an industry, we don’t want to impose things on consumers that they don’t find relevant.” Following this consumer research, Ricola developed small products and scaled back its gifting and sharing ranges. “We’ve seen a really good response thanks to our findings. We came back to the market with a new portfolio and it’s really falling into place with important retailers such as Gebr Heinemann, Dufry, Lagardere and Dubai Duty Free.” Haribo came quite late to the confectionery category party in travel retail, having only created a dedicated unit some four years ago. Since then, the company has scored two major product hits in the channel. The Haribo Pick and Party variety pack comes in attractive packaging and contains a mix of different brands and flavors. For portion control, the pack contains small sizes.

The Haribo Pick and Party variety pack contains a mix of different brands and flavors

Haribo is anticipating good feedback with its latest range of resealable pouches in exciting flavors including sweet Peaches and zesty Tangfastics

The second top-seller is the company’s iconic Goldbears line – the gummy bears that everyone knows around the world. The company is looking for similar success with its latest range of resealable pouches in exciting flavors including sweet Peaches and zesty Tangfastics. Haribo’s Elisa Fontana, Marketing Manager Travel Retail, believes retailers are aware of the progress the category has made and are happy with what suppliers are offering. “It’s an impulse-driven category and the retailers are trying to give us more checkout space or different locations in-store to allow us to exploit this impulse.” However, Fontana notes that the fine food sector forms part of the confectionery category as a whole and sounds a warning note: “We hope fine food won’t take the space of [sugar] confectionery in-store.” Perfetti’s Chupa Chups brand has obtained impressive global-recognition

www.dutyfreemag.com CONFECTIONERY AND FINE FOODS

Sugar Confectionery Report

Cloetta’s all-natural The Jelly Bean Factory brand targets millennial consumers

Space isn’t the only area of concern among sugar suppliers. For Mars’ Geerbex, the subject of conversion – turning passengers into shoppers – is a pressing issue. According to travel retail data specialist Generation, sales of the confectionery category as a whole have been flatlining in the past few years, with little or no growth. The suppliers we spoke to think this is an issue that must be addressed. Geerbex says the issue of non-conversion is not going away. “In the next few years there will be a lot more passengers, but more will travel with low-cost carriers. We need to think about how we drive confectionery. There might be more opportunity for confectionery as it is a lower-priced product – but how do we really transform the category so that that can happen? It’s not a new challenge, but we have not addressed it. The fact is: the amount each passenger spends on confectionery is not going up.” PVM’s van Veen reports that in general, the sugar confectionery market is showing slight growth, but in the Asian region the confectionery market dipped by 0.2% last year. This was a topic people were talking about at the TFWA Asia Pacific show in Singapore, she says, adding that PVM itself showed “very good growth” in the region of around 10% in 2018. “We grew in a declining market, but we believe there is a great potential for sugar confectionery in the region.” Another challenge for sugar manufacturers is the issue of labeling on product packaging. Driven by the obesity epidemic, regulations are being passed in many domestic markets to try to tackle the problem. For Mars’ Geerbex, this is also a matter For confectionery giant that the industry needs to take in hand, Mars, whose biggest sugar line is Skittles says gum has a lot of potential in the travel retail channel

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and she warns that travel retail is not being taken into account when these regulations are being made. “No-one really thinks about travel retail or about the specifics of the category. We won’t be able to comply with hundreds of regulations in different countries – we need to start talking about that.” She continues: “The measures governments are taking will only continue – we need to act as an industry, and consider how do we speak up? How do we sell in a responsible way and tell the regulators this is what we are already doing, were not oblivious to the issue. We’ve excluded trans fats and saturated fats, for example, and we do not market to child under 12, etc. We need to sell confectionery responsibly – this industry is not immune and we need to wake up to that. Up to now we haven’t responded strongly enough.” Geerbex notes that the European Travel Retail Council has a confectionery group that meets for regular discussions and has initiated a labeling pilot. During the TFWA Asia Pacific fair in May, the Duty Free World Council confectionery group kicked off. In Latin America, the industry body ASUTIL is also tackling the issue. Despite these concerns, suppliers agree that there is also a bright side to the story. It’s a fun category that can drive excitement on the shop floor, and they all agree: everyone loves confectionery and we shouldn’t forget that.

We wish your throat travels smooth and easy.

Mondelez World Travel Retail

Travelers challenge one another to a game of digital air hockey at London Stansted Airport

Riding the technology

wave

The travel retail exclusive Cadbury Biscuits Collection

Jaya Singh, Managing Director, Mondelez World Travel Retail, talks openly about the challenges of customer engagement

t’s an exciting time for confectionery suppliers. That’s according to Jaya Singh, Managing Director, Mondelez World Travel Retail (WTR), one of the leading manufacturers in the industry with power brands such as Toblerone and Cadbury. In this wide-ranging interview, he discusses the major opportunities ahead and the challenges of keeping confectionery sales on an upward growth path. Americas Duty Free: How is your travel retail business performing overall? Jaya Singh, Managing Director, Mondelez World Travel Retail: Our travel retail business is performing very well. Leveraging our powerful brand portfolio and accelerating our in-store engagement – particularly digital – have been delivering the expected results. In addition, our innovative concepts, such as the establishing of the biscuits category and secondary placements, have generated incremental revenue in the channel. Our commitment to our Delighting Travelers category vision has helped Mondelez

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WTR to increase its market share and grow considerably faster than the total confectionery category. ADF: Can you give us a breakdown of growth in World Travel Retail per region (Europe, Gulf, Americas and Asia)? JS: While we experienced our strongest growth in the Americas, we’ve also maintained solid and steady growth in both Europe and Asia Pacific. The Gulf has proved challenging, but our overall outlook is positive. ADF: During your time at Mondelez/ Kraft, when have you experienced the most challenging/best times for confectionery? JS: Over the years with all the different challenges, I have come to the position that there are two types: structural and operational. By structural, I mean the external forces that have a direct impact on our industry, of which confectionery is only a part. Specifically, these refer to the Gulf wars, SARS, the abolition of duty free in the European Union, etc. These

have brought discipline as well as innovation and overall change for the business as a result. The second is operational. Here’s a past example: perception and role in retailers’ minds. Our category vision and the elements within have gone a long way in establishing the category in its rightful place within the total travel retail offer, and the shopper experience is key. The experience is a totality of which innovation in product development, promotions and engagement are essential drivers of the elevated experience leading to category growth. I am proud to say that today, all major retailers are champions of the category because we have addressed prior challenges in creative and compelling ways that have yielded clear benefits to all stakeholders. As for the best time for the category, I believe it is right now. There is so much excitement and so many opportunities unlocked by new consumer trends, such as digital. Today, we’re able to get closer to our consumers than ever before. In parallel, major investments in aviation

Personalized Toblerone sleeves at the new Istanbul Airport

and rising standards in retail mean that the shopping environments and experiences themselves are better than ever before. Reaching the shopper or traveler goes beyond what it was before when the prevailing mindset was “get them at the airport”. Now, it’s way beyond that. Not just in terms of digital, but really about riding the technology wave that is changing social as well as economic behavior pre-, during and post-travel. Digital is only a part of this – the entire framework is, and will continue to, rapidly change. Exciting! ADF: In your opinion, what does the industry need to do to keep up with domestic markets in terms of offering an omnichannel approach? Does travel retail have a long way to go? JS: The travel retail offer no longer demands a monopoly on the attention of travelers, and therefore it requires a whole new approach to engage them. While domestic markets may be far more developed in terms of the omnichannel approach, we need to find a way of target-

ing travelers that helps us overcome the difficulties inherent to our channel. Travelers are now connected at every point of their journey, which creates new touchpoints for us to engage with them and promote what travel retail has to offer. Digital engagement has become fundamental to Mondelez WTR’s strategy. We believe in leveraging the power of technology to help take our immersive brand experiences to the next level and beyond the shop floor. As the category leader, we’re continuously stepping up our game in this regard: from actual games like the digital air hockey activation that supported the launch of our new Cadbury Biscuits Collection in London Stansted, to taking personalization to the next level with our brand-new Toblerone digital sleeve printer at Istanbul Airport. We apply a 360-degree approach to our activations to drive consumers into stores with geo-targeted advertising and to create lasting memories of the travel retail experience by including social media sharing components.

ADF: What are some new confectionery trends? JS: Personalization is big. Consumers and shoppers these days simply do not just buy a product. They want to be an integral part of it. Brand ownership is not a monopoly. It is all-inclusive, and when we can harness the ways in which we can personalize the product and brand, then we get closer to the heart of the shopper. The heart is the key to the economics. We have made big strides in this area and have enjoyed solid ongoing success. We are also very pleased with the progress that we are making in establishing biscuits as a standalone category. We have seen a robust double-digit sales increase since rolling out our biscuits roadmap in 2018. Our Milka Biscuit Collection sales more than doubled and Oreo continues to achieve great results. We are excited to see our portfolio expand with the recently launched travel retail exclusive Cadbury Biscuits Collection, consisting of Cadbury Nibbly Fingers, Cadbury Break Bar and Cadbury Roundie. This segment really has so much potential: our studies revealed that biscuits are growing at four times the rate of chocolate, and 26% of potential shoppers who do not otherwise buy confectionery products in travel retail are willing to purchase biscuits. ADF: What has been your most recent digital activation that you’re proud of? JS: We’re very proud of the Toblerone digital sleeve printer that we introduced with Gebr Heinemann and its partner, Unifree, at the recently opened Istanbul Airport. For the first time, travelers can create their own Toblerone 360g bar by printing any name or message onto the iconic sleeve to produce a one-of-a-kind memento or a unique gift. The Toblerone sleeve printer launch is supported by a pop-up zone that is distinguished by multiple digital elements to appeal to next-gen travelers. It is complemented by a new digital 4D photo box – an enhanced version of the phygital tool that has become a hallmark of digital engagement in Toblerone’s travel retail activations – for social media engagement. We’re very excited about this next step in our digital journey as we continue striving to inspire travelers and provide an unrivaled experience with lasting memories.

www.dutyfreemag.com CONFECTIONERY AND FINE FOODS

Challenges in Confectionery

Challenging the status quo by HIBAH NOOR

Leading confectionery manufacturers are figuring out solutions to a series of challenges being posed in the travel retail channel

The cocoa harvest in Cote d’Ivoire, where Mars seeks to play a role in increasing opportunities for people in the workplaces and communities that it touches

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A Mars wind farm in Scotland generates cleaner power

here’s no denying confectionery is a fun and gift-worthy category, but dig deeper and there are challenges ahead for all suppliers, big or small. Let’s take the issue of sustainability as a prime example. Manufacturers across industries – and across the world – are tackling a thorny issue that’s high up on the agenda of the millennial consumer shopping today. Suppliers understand that they can’t ignore this subject and hope it will go away. That’s certainly the view of Maud Geerbex, Corporate Affairs Director at Mars International Travel Retail, who says cocoa sustainability is a major issue for one of the largest users of cocoa. “We’re putting US$1 billion into sustainability projects. There are a lot of issues to tackle holistically, like poverty and deforestation, which is a big issue. We’ve signed a deforestation commitment.” The latter pledge, made in 2014, sees Mars launching new commitments to preserve forests, as part of a drive towards a sustainable cocoa supply chain that is fully traceable and deforestationfree by 2025. Mars is also empowering women in Cote d’Ivoire, one of the main cocoa-producing countries – as per an announcement that was made on International Women’s Day (March 8, 2019). “We’re building a marketplace for women, as it’s important to empower women locally,” says Geerbex.

Challenges in Confectionery

Fighting climate change

In April 2019, Mondelez International announced its commitment to deliver 100% of the cocoa volume needed for the company’s chocolate brands by 2025 through its Cocoa Life sustainability program

The US confectionery giant’s Sustainable in a Generation Plan addresses key areas of the United Nations’ Sustainable Development Goals and features ambitious goals informed by science and rooted in The Five Principles. Its plan focuses on three key areas: Healthy Planet, Thriving People and Nourishing Wellbeing. Using data from thorough reviews of its resource use, Mars has set Healthy Planet ambitions linked to climate action, water stewardship and land use to reduce its environmental impacts in line with what science says is necessary to keep the planet healthy tomorrow. The firm believes it can and should play a role in increasing opportunities for people in the workplaces and communities that it touches. Its Thriving People ambition focuses on increasing income, respecting human rights and unlocking opportunities for women to improve the working lives of 1 million people in its value chain. In addition, Mars believes people should have access to the products and information they need to maintain healthy lifestyles. Its Nourishing Wellbeing ambition is its commitment to advance science, innovation and marketing in ways that help billions of people (and their pets) lead healthier, happier lives today and into the future. The Sustainable in a Generation Plan is already working, to the extent that the energy Mars uses to make all its M&M’s worldwide is now is fully offset by wind power.

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Speaking to Jaya Singh, Managing Director, Mondelez World Travel Retail (WTR) about the subject of sustainability for this magazine, he opines: “It is big on our agenda. It has the potential to level up the socio-economic field of play. At its heart, it’s all about responsibility and inclusiveness on a much broader platform. This will yield the above outcomes that will ensure sustainability for all.” In April of this year, Mondelez International announced its commitment to deliver 100% of the cocoa volume needed for the company’s chocolate brands by 2025 through its Cocoa Life sustainability program. This follows promising results in the program’s first six years. Cocoa Life helps to create a thriving cocoa supply chain by increasing yields on existing farms, building resilience in cocoa-growing communities and preventing deforestation. Through Cocoa Life, Mondelez is leading the way in the fight against climate change in the cocoa sector and playing an active role in securing sustainable supplies of key raw materials.

Digital labeling solution

Labeling on packaging is another challenge for all confectionery makers, large or small. In response to challenges caused by increasing labeling requirements in duty free and travel retail, the European Travel Retail Confederation (ETRC) initiated a pilot project last year to develop a digital platform to provide product information in multiple languages across several product categories (spanning perfumes and cosmetics, alcohol, food and confectionery) in a format that is useful and relevant to travelers, allowing shoppers to access product information by searching for a product’s name or scanning the product barcode using a mobile device. The ETRC believes this pilot forms the basis for a pragmatic solution which takes into account the specific characteristics Sustainability has the potential to level up the socio-economic field of play, says Jaya Singh, Managing Director, Mondelez World Travel Retail

of the travel retail industry, is relevant to an international audience, while still meeting policy objectives and regulatory requirements. The organization is actively engaging with EU policy-makers to seek a legislative solution that would formally allow for product information to be provided off-the-pack. This solution also has the potential to be expanded beyond Europe where necessary, the ETRC added. Currently, sugar confectionery group Cloetta is taking an “informing not warning” approach to labeling. With The Jelly Bean Factory, its key brand, it’s important for the Swedish confectionery company to communicate that its premium, adult-targeted brand is gluten, GMO and gelatinefree, free of artificial flavors and colors (i.e. NAFNAC), suitable for vegetarians, and Kosher certified, asserts Berend-Jan van Egmond, Senior Market Manager, Cloetta International. Similarly, for German sugar confectionery company Haribo, most of its products sold in travel retail contain no colors or flavoring, according to Haribo Travel Retail Marketing Manager Elisa Fontana. Its strategy is to help consumers indulge with control – allowing travelers to control their consumption through mini packs in its sharing party size product, for example. It clearly states the size of the bag and defines what a portion is: a handful is 25g. Asked what is the biggest challenge for chocolate confectionery overall in travel retail right now, Singh at Mondelez WTR believes that while the amount of space given to confectionery has increased over the years, it is still under-represented compared to other categories. “Furthermore, it requires visibility and high-profile placements. When you factor in the incremental revenue opportunity through biscuits and secondary placements, we feel strongly that many retailers should consider devoting more space to this dynamic category.”

IDFS Morocco

Glocal expertise and best prices

IDFS Morocco has been enjoying a healthy momentum from it’s Confectionery business

oroccan retailer International Duty Free Shops (IDFS Morocco), which is celebrating its 30th anniversary, has major operations at Casablanca and Marrakech airports, among others. It recently established two stores at the newly opened Casablanca Airport Terminal 1. The company’s confectionery category has been on a continuous upward curve since January 2019, and as of May 2019 sales were up 25.4% versus last year. Over the years, the confectionery category has evolved to include food. The category’s growth has been mainly driven by new product introductions and development, premium offers and a duty free exclusive range. Due to this evolution, IDFS Morocco has added to its portfolio quality local products such as Delights of Morocco biscuits and Wright Tea. These products aim to highlight the excellence of Moroccan confectionery and food while promoting national brands. Its customers purchase these local items to serve as souvenirs or for gifting. The company has also added healthy options through the wide range of Bayara snacks and dates, which have had a significant impact on the overall growth of the category. Finally, it is set to introduce 32 JUNE 2019

IDFS Morocco’s annual confectionery turnover is showing healthy 25% growth. Here, its Merchandising Director reveals why the popular Loacker brand this June to add to its “thriving” biscuits offering. A number of activations and promotions have succeeded in driving growth in the confectionery category. “We will continue to use our range of knowledge and focus, where we can make the biggest difference, to deliver the best offers,” says Rivic Tantoco, Merchandising Director, IDFS Morocco. As IDFS’s advantage is its pricing policy, the operator remains vigilant in ensuring that it is competitively priced while offering products that are exclusive to travel retail. The company’s top 10 best-sellers are (ranked in order): Mars M&M’s Peanut 440g, Mars M&M’s Candy Fan, Nestle Smarties Giant Tube 130g, Delight of Morocco Croquants Pepites Chocolat, Kinder Schoko Bons 320g, Chupa Chups Crazy Plan, Pickup! Choco 28g, Delight of Morocco Nougat 120g, Mentos Pure Fresh Gum - Fresh Mint, and Delight of Morocco Roules Pur Beurre 150g. Turning to challenges, IDFS Morocco says the hand luggage restrictions have not affected it much due to its wide range of offerings – from entry products to superpremium packs available at different price ranges. This buying policy allows customers to purchase according to their budget.

The company admits it faces other challenges. The restrictions in space for the confectionery and food category limit the range that can be offered to its customers. However, the main challenge is to keep the balance between being competitive in terms of price and offers while driving the growth of the overall business. IDFS has noted interesting consumer trends in Morocco. Its customers tend to purchase local and healthy products more than premium products. Also, Tantoco reveals that the Middle East/Africa market differs from other markets in several ways. In 2019, the company observed that sales in the EU market have grown by 16% vs. 2018. However, Middle East/Africa customers purchase more confectionery than EU shoppers (61% Middle East/ Africa; 29% EU). Furthermore, Middle East/Africa customers purchase more European brands such as Ferrero and Lindt, while for the first time, EU customers are buying more American brands such as Mars/M&M’s. 2019 marks the 30th anniversary of IDFS in Morocco. “We will be reminding the market what IDFS is known for – our global expertise and best prices,” Tantoco enthuses.

Tortuga Rum Company Ltd.

TORTUGA RUM CO commemorates 35th anniversary Tortuga Rum Company Ltd is celebrating 35 years of bringing consumers a distinctive taste of the Caribbean islands by JAS RYAT

Timeline of Key Milestones Tortuga Imports, Inc. opened in Miami BDA – Tortuga Rum Cake Company by Marcus & Monique Simmonds

Robert and Carlene Hamaty founded the Tortuga Rum Company Ltd. In Grand Cayman

Tortuga Rum Cake Co, INC 5000 fastest growing businesses in US, INC Magazine (first of 4 consecutive years)

“20 Under 40 Award” from Gourmet News, a leading specialty food trade publication

Articulated Company Vision: Partnership discussion 2016 SQF Certified New Factory Built in Kingston Jamaica

Formed Tortuga International Holdings, Ltd – part of the Jamaica Producers Group of companies ($100M public company)

Top 100 Diversity Owned Businesses in Florida Top 100 Women Owned Businesses in Florida DiversityBusiness.com

1984

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MSNBC coverage at International Fancy Food and Confection Show

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Tortuga Caribbean Rum Cakes named Best Cruise Caribbean Gift, Editor-In-Chief Awards Porthole Cruise Magazine (first of 10 consecutive years)

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“Desserted Island” four page company/family story and photos - Coastal Living magazine

Top 50 Women-Led Businesses in Florida: The Commonwealth Institute and FIU

Tortuga Rum Cake is introduced

aribbean-based Tortuga Rum Company Ltd (Tortuga) is marking its 35th birthday this year with an expanded portfolio and an ever-growing market presence. The cake company, billed as The World’s Best Rum Cake, is famous for honoring its deep Caribbean heritage and conveying a taste of the islands. Tortuga was founded in the Cayman Islands in 1984 by a former employee of Cayman Airways, Robert Hamaty, and his wife Carlene. For years, Carlene had baked rum cakes for special occasions, using a four-generations-old family recipe. The authentic and staple Caribbean rum cakes instantly became a coveted item, and today, Tortuga Rum Cakes are the top-selling export of the Cayman Islands and the leading souvenir gift in the Caribbean. To mark this occasion, Tortuga has updated its packaging with celebratory brand messaging. “We created a commemorative seal and had our best-selling Tortuga Golden Original Rum Cake boxes reprinted with our 35th anniversary seal to celebrate this important milestone. We have ongoing promotions and new visuals

Recognized Among Top Small Businesses in United States; and Top 100 Small Businesses in Florida by DiversityBusiness.com

2010

2011

Jamaica Observer 2011 Business Leader Awards finalists Marcus & Monique Simmonds, FIU College of Business Administration, 2011 Entrepreneurship Hall of Fame inductee: Monique HamatySimmonds, (BBA ’96) CEO, Tortuga Rum Cake Company – May, 2011

and signage at all our points of sale and a website highlighting how proud we are that ‘The World’s Best Rum Cake is Celebrating 35 Years’,” shares Natalia Garcia, Marketing Manager, Tortuga Rum Co. Today, Tortuga is a world-renowned brand that continues to build on this message every year by intensifying its penetration in the travel retail market by opening new doors and having higher visibility points of sale at the airports in both North America and the Caribbean. Says Garcia: “We also want to provide our customers with innovative and new options, and we feel that we are on the right track.” 2018 witnessed the launch of the highly successful Tortuga Rum Cake Bites in the travel retail space, with three different types of packaging – standard tapered box (5oz), Cruise Exclusive (9oz), and Travel Retail Edition (12oz). “This year, we launched two specialty “provenance” rum cakes for the travel retail market in the Dominican Republican and Mexico – called the Tortuga Mamajuana Rum Cake and Mexican Vanilla Rum Cake, respectively,” says Garcia. “The Mamajuana Rum Cake is

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“Best Cruise Souvenir” Porthole Cruise Magazine For 10 consecutive years

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2019

Winner of Porthole Cruise Magazine’s “Best Cruise Souvenir” Award for 14 Years

inspired by the traditional and cultural Dominican beverage featuring rum, wine, honey, herbs and cured tree bark, all mixed together to create this delectable flavor that resonates with the Dominican people and tourists alike. Meanwhile, the Mexican Vanilla Rum Cake is inspired from distinct and bold flavors born purely out of the Mexican vanilla bean.” Travel retail is an ever-growing market providing an important source of revenue for the brand. By positioning Tortuga in this sector, it will continue to be top-ofmind for passengers globally and can provide customers with iconic Caribbean treasures that are ideal for gifting or self-consumption. “We are proud of our deep Caribbean heritage and our world-famous Tortuga Rum Cakes, award-winning Tortuga Rums and our ever-growing selection of Caribbean gourmet products and gifts,” says Garcia. “Our chocolate and confectionery treats, including our rich and premium Chocolate Rum Turtles with Sea Salt, Chocolate Rum Balls and Chocolate Rum Fudge, are a delicious extension of our core product, the rum cake.”

www.dutyfreemag.com CONFECTIONERY AND FINE FOODS

Ferrero Travel Market

Talking TRAVEL RETAIL’S language Ferrero Travel Market is rolling out travel-exclusive products, displays and promotions that aim to add value to the confectionery category – and travel retail as a whole by HIBAH NOOR

The Tyrannosaurus dinosaur pack from the new Kinder Surprise T3 Jurassic World collection

errero Travel Market, the travel retail arm of Italian manufacturer Ferrero, is introducing a pipeline of innovations to the trade, based on the global success of its power brands Ferrero Rocher, Kinder, Nutella and Tic Tac. The company is keen to offer something for everyone while engaging different travel groups, explains Davide Barresi, Head of Marketing, Ferrero Travel Market. For premium chocolate gifting, there’s Ferrero Rocher; Kinder – the preferred choice for kids gifting; Tic Tac with fresh brand new concept appealing to millennials, and not forgetting Nutella, - the world’s favorite hazelnut spread. 34 JUNE 2019

Among the highlights of this fresh focus on product development is a new visibility concept for gifting brand Ferrero Rocher. Taglined Golden Celebration, the concept centers on gold-themed packaging and activations. Ferrero Rocher pralines are focused on uniqueness, luxury and the premium packaging. It’s all highly relevant to travel retail, where gift-buying is a core driver of sales. Meanwhile, top-selling sugar brand Tic Tac also gets new packaging and a fresh marketing concept. Presented to buyers at the 2018 TFWA World Exhibition in Cannes, Tic Tac is rolling out its first-ever storytelling packaging with iconic pill-

characters endorsing the brand vision. The new multi-flavour pack with four new fruity flavors (Lime, Strawberry, Banana and Red Apple) features a classic moment at the passenger arrivals presented in a humorous Tic Tac way. The travel-themed Tic Tac range is targeted at the younger generation of millennials. “We are trying to find the language to engage them in the travel market. The design is cool, fresh and modern and designed for youth appeal,” enthuses Barresi. Meanwhile, with Kinder, the focus is on kids and traveling parents seeking gifts for their children. On show for the first time at the TFWA Asia Pacific show in

The Kinder Surprise Minions Around the World packaging can be transformed into a giant Minion

May were travel-friendly Kinder Surprise skus (see sidebar). In addition, the company has begun to take advantage of its popular hazelnut spread brand Nutella. After a successful launch of Nutella gifting range Ferrero this year is completing the portfolio with the introduction of the biscuit snack Nutella B-ready, introduced at the Cannes duty free show in 2018. “We are starting to have good feedback on our Nutella line extensions. It’s such a big brand, and now we have innovation that’s relevant to travel retail,” he says.

Checkout plans

Ferrero Travel Market prides itself on offering retailers a full category approach of sugar, chocolate, children’s confectionery and snacking items. Now, it has started to offer travel retailers a specific solution for the checkout area, because the key way in which duty free sales can grow is to stimulate impulse purchasing, Barresi believes. In terms of where the confectionery business is going, Barresi says the biggest challenge the travel retail channel faces is adding value and being different from regular domestic stores. “For many years the whole channel relied on passenger numbers growing – that dynamic is not so true now,” he says. “We are seeing new travelers with low-cost airlines who want to buy lower-priced products. We need to start thinking about what’s the added value for our channel. The price perception of duty free is different now. Before, people thought they could find something that was good value. If we don’t give good value, we lose customers.”

The main problem to solve is how to bring people in-store, he continues. The conversion rate once people have entered a store is good, but the level of engagement needs to be stepped up with enticing products, displays and events. “People must believe there’s something they want to see and we must convince them there’s something to find there. We must satisfy people’s desire to see or do something different.” Barresi is also calling for a fresh approach to category management, across the board. “Let’s try to improve category management. We are focused on presenting brands in different spaces – there might be opportunities to think beyond brands.” He gives the example of an area in-store for kids’ gifting, featuring different types of products. Moving forward, Ferrero Travel Market is exploring cross-category partnerships to create engaging new ways of presenting these products, focusing on the celebration and gifting angles. “We want to join force with different categories on promotions that would offer good value for both sides – suppliers and retailers. This way, we can also amortize our costs.” Barresi reveals that, according to Generation’s latest TRIC Confectionery data, Ferrero Travel Market now commands third position in the confectionery category. “Ferrero is available on a global scale – we are growing a lot. And Kinder is growing fastest in the category, having earned more market share in the past few years.” Barresi says there’s still a lot to come from Ferrero Travel Market. “We still have a lot of things to say in this business,” he smiles.

Full of big surprises Ferrero Travel Market unveiled Kinder Surprise products designed exclusively for travel retail at the TFWA Asia Pacific exhibition in May. The Singapore show was the platform for the launch of a big partnership between Ferrero and the giant entertainment company Universal. The collection will feature a Kinder Surprise T3 Jurassic World, the T6 Minions around the World giant multi-pack and the collectible T3 Adventure Girls clutch bag. The Kinder Surprise T3 Jurassic World collection brings dinosaurs to modern travel retail. Styled as the head of a Tyrannosaurus, a Triceratops or a Velociraptor, each pack contains three Kinder Surprise chocolate eggs containing one of eight dinosaur toys, each of which opens to reveal its skeleton. Travel retail is the only channel in which this collection features 100% licensed Jurassic World toys. The travel-exclusive Minions Around the World collection focuses on the world of travel. Each Minion-shaped gift pack contains six Kinder Surprise chocolate eggs. Inside each egg is a yellow barilotto containing a travelrelated Minion toy. Travel retail is the only market worldwide in which the toys in the gift pack are exclusively Minions. The yellow barilotto itself can be turned into a Minion using stickers provided. The Adventure Girls gift bag, which looks like a clutch bag, contains three foil-wrapped chocolate eggs; inside each is a figure of an Adventure Girl. Their outfits can be mixed and matched.

The Kinder Surprise Adventure Girls gift pack contains three cute characters and comes in the style of a clutch bag www.dutyfreemag.com CONFECTIONERY AND FINE FOODS

Hawaiian Host

Hawaiian host revamps offering for travel retail

Hawaiian Host’s new President explains how the chocolate and nut specialist comes into its own by REBECCA BYRNE

Edward Schultz, President of Hawaiian Host

hocolate and macadamia nut snack specialist Hawaiian Host highlighted its new look Mamoru Takitani Founder’s Collection at the TFWA Asia Pacific Exhibition. The range was met with a positive reception in the region’s domestic market and it is expected that the collection will be just as successful in travel retail. Edward Schultz, the new President of Hawaiian Host, explained the decision to revamp the packaging saying: “Hawaiian Host is a great gifting brand globally and we wanted to rededicate ourselves to that with relevant upscale packaging which still honors where we come from.” Established in 1927, the company is Hawaii’s oldest and largest consumer products

36 JUNE 2019

company. But, as Schultz points out, it is important that the Hawaiian roots do not define the company. With the Founder’s Collection packaging, the emphasis is on a premium confectionery company using locally grown macadamia nuts. The contemporary packaging differentiates the product from a holiday souvenir to an upscale gift. The updated range will launch in Asian duty-free stores from June. It will be displayed in redesigned gondolas that reflect its authentic image. In place of the holiday theme, the new showcase will be more subtle and, in keeping with the packaging, a heritage feel. Hawaiian Host has also partnered with an artist in Singapore to create a series of destination packaging exclusively for duty free. This will be premiered in Singapore and Taiwan, and then move on to Hong Kong and Korea. Shultz adds that with the focus on the gifting market, Hawaiian Host had neglected the sharing and self-consumption market. In September this gap will be filled with the launch of a nine-piece sharing bag in milk chocolate. White and dark chocolate versions will follow. Recently in Asia, its target market, the company has made inroads into China through China Duty Free in Pudong

Hawaiian Host has launched its new look Mamoru Takitani Founder’s Collection

airport. Shultz recognizes the challenges of listing in China and is looking at how to make the product more appealing to the Chinese, who traditionally prefer darker chocolate. The company also listed with Eraman in Kuala Lumpur airport. Looking forward, Hong Kong is a target market, due to the success on the domestic market, Vietnam, Cambodia and Indonesia. Schultz comments on the trend towards more authenticity, traceability and sustainability in the production of cacao and nuts. Hawaiian Host has had long relationships with its farmers and nut growers and can ethically manage its supply chain. Another trend he mentions is the rise in popularity of vegan chocolate. Already prevalent in Europe, he believes the demand will soon grow in Asia. Being an exotic product from an isolated location presents a range of challenges for Hawaiian Host says Schultz. The high freight costs transporting the product together with the pressure on margins needed to be gained in travel retail for the rents drive up the price of the product. As a result, it is important to be perceived as a premium product and Schultz believes that the new packaging and presentation will be instrumental in portraying this image.

Godiva

Inspired by carnivals around the world, the Godiva Carnival Collection shows off the creativity of the brand’s chefs

Carnival time! Belgian luxury chocolatier Godiva is getting great retail feedback on its new foray into the informal gifting category by JAS RYAT

Matthew Hodges, General Manager Global Travel Retail, shares the global strengths of the brand as it expands its portfolio

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odiva is going from strength to strength as it seeks to grow its gifting assortment in 2019. The Belgian chocolatier is well known for its emblematic gold boxes, which generate huge interest in Asia. And now, its focus has turned to more informal gifting moments. Matthew Hodges, General Manager Global Travel Retail, Godiva, tells Asia Duty Free that the company has two main priorities in travel retail. The first is to grow its sharing and selftreat business. “We are known as a gifting company, selling boxed chocolates for formal occasions, and we are very successful at that. But in recent years we have launched Napolitans, Chocolate Domes, and new flavors like double chocolate, raspberry and coconut are coming. We are really getting great feedback, so making Godiva more accessible for more occasions is the first thing we are doing product-wise.” The other big opportunity is the F&B side. In travel retail, Godiva already operates a number of cafes: in Asia, Godiva has 12 locations, which carry product, as well as serve coffee and ice cream. The company also has a cafe onboard the Queen Mary 2 ocean liner. Through the course of this year, Godiva will celebrate some openings in China, though Hodges did not give further details.

ous years, the products focused on other parts of the world. “It’s nice to see something that focuses on the Americas as well as the other markets,” he smiles. Another major new product for informal gifting, Chocolate Domes, was launched globally at the end of 2018. “They are doing really well. Feedback is very strong in Western Europe; in Paris and London they are doing well, and they are doing very well on the East Coast [of the US]. It’s performing extremely well in Hong Kong, and we are still in the first couple of months.” As an example of an informal gifting occasion, Hodges cites Chocolate Domes as being designed to take back to the office or home after a trip. “The packaging opens up, making it convenient to leave open at the office or at home, and everyone can help themselves.” In terms of regions, the biggest portion of Godiva’s business remains in Asia. “We are planning for double digits [in sales] this year. Historically we have always done big business in Japan domestically, and we have a thriving business in China as well. Godiva is available in all the leading Asian airports.” Why the popularity in Asia? “I think because of the gifting culture,” he says. “It’s part of the tradition of gifting, certainly in China. And Godiva has been part of that for 30-40 years, and the gold color works very well in that culture.”

Challenges and opportunities

Godiva Chocolate Domes were launched late 2018

In April, Godiva will begin trading on about 17 new ships with a customer in the Caribbean. Also in the cruise sector, Godiva was present aboard Norwegian Cruise Line’s Norwegian Joy, which was the world’s first ocean liner designed specifically for the Asian market, before it was moved from China to the US.

Star products for 2019

There is a big focus on Godiva’s new Carnival collection, inspired by carnival colors and vibrancy all around the world. “It is really a great opportunity to take the iconic gold box and bring some color and excitement,” enthused Hodges. “The box is part of it, but the pieces are the most exciting part. They all have interesting names, so you have fire, you’ve got passion, you’ve got dance, and fun is the one with the popping candy in it.” Launched in March/April, the Carnival collection was developed to show off the creativity of Godiva’s chefs. The colorful pieces have interesting shapes, with several different fillings in each product, which is quite a feat for the chefs to achieve, he says. It’s Godiva’s big gifting launch for this year and will be launched globally. The Americas teams are very excited about this launch because there are so many carnivals in the Americas. In previ-

One of the challenges is that the travel retail market structure is reliant on a small number of retailers and their specific strategy or focus. “Generally speaking, they do a very good job,” says Hodges. Another challenge is the geopolitical situation. “Over on the West Coast, we are seeing something of a decline of Chinese visitors because of the relationship between America and China. That hits us,” he says. One of the areas of “real growth” for Godiva is the news and gift business. The company’s partnership with Hudson News, for example, is “really going excellently”, he says. “It’s because we have more of the sharing product that is offered at an accessible price with a brand name on it. So we are finding there is a really warm reception to that product in that channel.” Unlike in other continents, the US has a big news and gift business in travel retail, he continues. In any given airport terminal, there may not be a duty free store, but there will always be a news and gift shop, and food service offerings, so that’s a huge opportunity for Godiva, he believes.

US customer behavior

Speaking about the purchasing behavior of Americans, compared with Asians, Hodges reveals that Americans tend to be a little more conservative in their taste preferences. “There is certainly a preference for milk chocolate as opposed to dark chocolate. So the further east you go, the darker the chocolate preference gets. Where we have the more exotic flavors, they tend to do well everywhere. But there are some flavors in our collection that are much more suited to Asia, matcha for example.” In terms of packaging, larger piece counts perform better in the Americas, whereas individual pieces and smaller piece counts pieces do well elsewhere. Overall, Godiva is looking forward to a sweet future imbedded with growth through various channels. www.dutyfreemag.com CONFECTIONERY AND FINE FOODS

Patchi

At the TFWA Asia Pacific show in Singapore, Patchi showcased its travel retail portfolio, in addition to pre-packed gifting lines from its retail boutiques

A gift to savor Having climbed to the top of Dubai Duty Free’s chocolate sales rankings, Dubai-based supplier Patchi is going places in travel retail

trendsetter since 1974, and a chocolate gifting specialist, Patchi is a premium brand with a distinctive heritage, established in over 20 countries around the globe, including North America, Europe, North Africa and Asia Pacific. The Chairman and Founder is Mr Nizar Choucair, who pioneered the introduction of a new gifting concept in Lebanon over 45 years ago and expanded rapidly across the Middle East and the world. Striding in his father’s footsteps, CEO Mr Oussama Choucair has a bold vision to expand the travel retail division into new horizons. Fast forward to 2003, when Patchi launched its first travel retail collection in Dubai Duty Free. Since then, it has ranked among the operator’s top chocolate brands. This year, Patchi reached number one at Dubai Duty Free, among over 150 chocolate and confectionery brands, a record-breaking accomplishment which marks the brand’s determination to strengthen its travel retail presence, having already gained major market share as a premium chocolatier in the region.

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Well-established retail network

Patchi Travel Retail has a major presence at Dubai Duty Free, which it describes as a key player that supported the brand and the business from the start. Today, Patchi has a well-established network of over 214 boutiques in 21 countries across the world. It currently has a presence in the UAE, Lebanon, Thailand, and soon in Moscow duty free. Today, the company is in talks to expand across Asia and Europe. Patchi has a selection of travel retail exclusive products and will be launching new lines with Gebr Heinemann in Moscow and with Lagardere in Abu Dhabi. “We frequently introduce new seasonal skus including Chinese New Year, Mother’s Day, Easter, Christmas, Ramadan, Diwali and others to ensure we always have a wide selection for travelers,” says Patchi’s Head of Travel Retail, Sharbel Barhoush. “We also carry in our travel retail portfolio destination boxes adapted for the different cities we are in, which are one of the best performing skus.” At the TFWA Asia Pacific show in Singapore – the brand’s debut travel retail trade fair – the company showcased its

Sharbel Barhoush, Patchi’s Head of Travel Retail

travel retail portfolio, in addition to a wider selection of pre-packed lines from its retail boutiques, including the Patchino line targeting younger travelers. Barhoush will certainly be busy over the next year. “The travel retail sector is a growing business for us, and we currently have a presence in the UAE, Lebanon, Thailand, and soon in Moscow duty free, and we are in talk for new expansion in Asia Pacific, India and Europe. “We are very excited about our new expansion in the travel retail sector, and we are confident of the potential yet to unravel in this growing market, especially with our unique offerings,” he enthuses.

WORLDâ&#x20AC;&#x2122;S BEST RUM CAKE CELEBRATING 35 YEARS

Nadiya

Upwithto date consumer trends Ajwa Dates (750g) are part of Nadiya’s new collection of octagonal gift boxes introduced at the TFWA Asia Pacific show in May 2019

Nadiya’s Khodri Dates (750g) were introduced to travel retail buyers at a more affordable price point

Nadiya Ltd is promoting its new range of whole, natural dates as a healthy snack that makes a great gift in duty free by HIBAH NOOR

n light of the GCC region experiencing a general economic downturn, Middle Eastern confectionery company Nadiya has decided to offer a more affordable product range to consumers. The octagonal gift box range of dates caters to the developing interest in snacking on natural products. The gift boxes contain pure dates, without chocolate, fillings or additives, and are attractively packaged, with international design influences. The high quality whole dates undergo the same rigorous production process in Jeddah, Saudi Arabia as the firm’s luxury Arabian date range. The range was introduced in mid-2018 in Saudi Arabia and recently gained listings at several duty free shops. The entry retail price is US$5-6 for a 400g gift box. As Nadiya sets its sights on expansion outside of its Middle Eastern stronghold, the company is looking at overseas markets, especially east towards China and Asia. It recently gained a listing in Mumbai Duty Free, which Nick Papadopoulos, General Manager, considers a key market in the region.

First Dufry listing Nadiya’s new octagonal gift box range caters to the developing interest in snacking on natural products

42 JUNE 2019

Furthermore, Nadiya has supplied its first shipment to the new Istanbul Airport, which it also believes will generate substantial business. The brand was previously available in the Turkish city’s old Ataturk Airport. The company has recently received some

Al Mealim’s Arabian sweet mix (500g) contains top quality treats in an attractive gift box

This Finest Arabian sweet mix (450g) forms part of Al Mealim’s best-selling range at Dubai Duty Free

good news, as Papadopoulos explains: “We also got a heads up to list with Dufry Sharjah in the autumn. This will be our first presence in the Dufry family.” “This is a major development for us,” enthuses Retail Sales Executive Mohammed Inam, speaking with Asia Duty Free magazine at the TFWA Asia Pacific show in May. Finally, Nadiya is gearing up for the opening of the new Abu Dhabi Airport towards the end of this year, where Nadiya will have a “significant” presence, Papadopoulos reveals. At the Singapore trade fair in May, Nadiya opened discussions with operators from Malaysia and Indonesia, and is hopeful of listings in due course – but perhaps not rapidly, as he explains: “Duty free is a great market but you have to invest a long time with people to build a relationship – to find the appropriate timing and space, and [for them] to list your product at the right price. It’s not a 100 meter sprint, it’s a marathon. You have to appreciate that and be patient and believe in your brand. It’s a long waiting game, but we believe Nadiya has a clear space in the specialist confectionery category – as proven in Mumbai. This is not a natural market for dates but we’re offering dates with and without chocolate – they want to have something different.” He adds that consumers are increasingly interested in

the health aspect of dates, as it’s a natural product for snacking, providing a much-needed energy boost. Nadiya will be exhibiting at the TFWA World Exhibition in Cannes in October 2019, as it seeks to crack the duty free market. “Duty free is a natural progression for us, and the best market,” Papadopoulos continues. “Our shareholders believe that the brand should be international and more people should share the culture and heritage of dates – and treat dates in a different way. Our mission is to convince operators around world that this is the way to go and there is a space for dates in global duty free. We have a motto we truly believe in: ‘Taste the world in one bite’.” He further emphasizes that Nadiya’s dates are a truly global and multi-ethnic product, containing chocolate from Belgium, and nuts from the US and India. At the Singapore show, Inam introduced travel retailers to the Al Mealim brand of Arabian sweets. Al Mealim is Nadiya’s sister company and has common shareholders. Al Mealim offers the highest quality baklava and other sweets made from the finest ingredients. This brand is already performing very well in regional duty free shops – not least at Dubai Duty Free, where it is one of the best-selling items. The 500g box of top quality sweets is attractively packaged for gifting and retails at US$20. While the past year has been challenging in the region, Papadopoulos reports that the company’s Dubai Duty Free sales have held up and are slightly ahead of last year. Elsewhere in travel retail, turnover is stable. It seems it’s steady as she goes for this Middle Eastern confectionery company and it keeps on getting its message out onto the global stage.

Al Mealim chocolate-coated Mamoul Arabian sweets are presented in a 230g pouch www.dutyfreemag.com CONFECTIONERY AND FINE FOODS

Industry Expert

Is it confectionery’s turn to take center stage? The global confectionery market is showing positive growth following a tough transitional period. We ask industry experts whether retailers are offering the platform that this entertaining category deserves David Ferreira Vice President of Sales for Tea Forte, a Jacobs Douwe Egberts company Selling confectionery in travel retail differs greatly from one category to another. This is a category that gathers a wide variety of products, so there is no miracle approach that works for all products. Other categories such as perfumes or tobacco, for example, are sold pretty much the same way. In confectionery, you do not sell a chocolate like you sell a luxury tea. You also have a higher proportion of local products in confectionery/gourmet that are completely unfamiliar to travelers. More and more operators understand that confectionery – and I would say gourmet in general – has huge growth potential, but creating an experience in the store is key. In the case of luxury tea, for example, people want to be able to taste or smell – in short, using as many senses as possible in the store. It is similar to perfumes and cosmetics, where you will sell far more perfumes if you have a tester where people can smell the perfume versus just a pretty box without much information. Even in the situation where travelers are buying tea for a gift, they want to make sure it will taste good for the recipient. Confectionery, although a large category as whole, is quite fragmented, so not easy, outside maybe chocolates. Unless operators make efforts in offering the right experience for the sub-categories, it will always remain quite challenging and niche in each sub-category.

Jan Pasold Managing Director Global Travel Retail, Ritter Sport In my opinion, most of the retailers are not offering the platform the brands deserve. When we focus on the consumer we have to ask ourselves, what are the expectations? Duty free and travel retail is about brands and brand experience. It is very difficult with the approach of the majority of the retailers, having generic merchandising units with a small logo, to execute this at the POS. So, in order to create an exciting environment and a brand experience, brands have to invest, of course, but not only in HPPs. It has to be also within the category. At the same time, retailers have to give the brands a certain kind of freedom in order to create a brand world and experience at the POS. This is what differentiates duty free and travel retail from domestic markets. We are currently far away from it as an industry, but we have to get there so that retailers and brands create the shopping environment and experience consumers expect.

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Amy Hildrith Operations Manager, ALFA Brands Inc The confectionery and fine foods category, in North America, typically manages to capture around 8% to 9% of sales. In general, we find that the retailers allocate adequate and comparable floor space to this category, as well as strategic locations for displays and promotional areas. Effectively allocating shelf space to a brand is important, and it requires a great deal of consideration by the retailer, as many factors come into play, such as the productivity of the allocated space, inventory turns, displays/merchandising fixtures, and how overall store sales will be affected. Obviously, retailers give more space to those brands that contribute more to the bottom line. Strategic shelf location and displays increase visibility and therefore sales of a brand within a store; it goes without saying that price incentive promotion has the most positive effect on store sales. Consumers seem to purchase greater quantities when there is a price discount on multiple unitsbased offers, as confectionery purchases often occur on impulse and convenience. Also, a very large percentage of consumers are motivated by promotions and discounts, and in conjunction with tastings, sales would significantly increase. Merchandising confectionery in prominent locations such as end aisles or the front of the store encourages people to buy more than they intended to. Shoppers are looking for a deal and value, so promotional activities such as price discounts on volume-based offers that are straightforward for the customer will drive sales and help maximize the number of items in their basket.

Sharbel Barhoush Head of Corporate, Patchi Chocolate and confectionery brands have a very wide range of products and offerings for travelers and are very promotionallydriven, but due to their relatively lower contribution to total travel retail sales compared to perfumes and cosmetics and tobacco and spirits, they donâ&#x20AC;&#x2122;t get the same attention or space as the rest. The other categories have much higher marketing budgets allocated to their travel retail division, which gives them stronger leverage over the others, and retailers tend to support them more.

Nelly Sannwald Global Travel Retail Manager, Leonidas Some retailers are resistant to the appeal of confectionery due to its limited margins compared to high-end perfumes, for example. But the volumes are impressive and we know that confectionery is a great footfall driver in-store with high rates of impulse purchase. Most retailers have the vision to see this and position confectionery accordingly.

www.dutyfreemag.com CONFECTIONERY AND FINE FOODS

Butlers

A leap in the dark Following extensive consumer research, Butlers Chocolates is targeting Asian tastebuds with dark chocolate product innovations Big US focus

Butler’s new dark chocolate collection presented in a mink-colored box

Aisling Walsh, Marketing Director, Butlers Chocolates

rish manufacturer Butlers Chocolates is on a mission to boost its dark chocolate portfolio. The company, already known in many countries worldwide for its famous Irish whiskey and Irish Cream liqueur flavored chocolates, is turning to the dark side, thanks to the Asian consumers’ penchant for dark chocolate. “We’ve taken products that have performed very well and we’ve made a dark chocolate platform out of that,” Aisling Walsh, Marketing Director, Butlers Chocolates, tells Asia Duty Free. Among the gift-worthy highlights are a rigid box with an upscale dark-colored sleeve containing a dark chocolate selection. “It’s 46 JUNE 2019

the ultimate dark chocolate gift with a clear product proposition. It’s clear to the customer what the difference is [from our current range].” The new dark chocolate collection takes its inspiration from Asia with flavors like Green Tea and Mango & Lemongrass, presented in a mink-colored box with a dark sleeve. The company is seeing success in many markets for Butlers Mini Bars, launched two years ago. Now the tablets come in a new dark format and new variants: 70% salted caramel, 78% dark and 85% dark. The product comes in two sizes, the smaller of which retails at around €15 (US$17). Butlers has built its travel retail reputation on the gifting sub-category, but sharing is also important to the firm and the Mini Bars fit the bill in this regard. The Mini Bars are also individually wrapped, so the consumer can monitor their consumption. In a bid to tempt the Asian consumer’s tastebuds, Butlers has undertaken research in Shanghai showing among other trends that dark chocolate is the chocolate of choice for Chinese consumers.

Butlers’ key international regions for travel retail sales are Asia Pacific, where the brand has grown very strongly in recent years, and the Middle East, where sales are also performing well. In the latter region, Butlers, which operates a number of cafés in its home market of Ireland, opened a similar chocolate café retail concept at Riyadh Airport at the end of last year. “The cafe is beautiful and it’s a really exciting development,” enthuses Walsh. “We’ve had a great reaction to it and we’re always looking at other international opportunities. People like the concept and our core offer and think that we bring something unique, as we give free chocolate with the coffee. People like that as a little treat when they’re traveling, and then there’s the gifting element as well.” The café concept is also useful from a consumer feedback perspective, as people choose the individual chocolate they want to eat with their coffee, helping the company understand current and evolving tastes and preferences. The next step in Butlers’ travel retail expansion strategy is the US, which will be an important focus for Walsh in the next few months. “We’ll try to build the brand in US airports. Our products work well in airports across the world. It’s a new market for us, but people traveling will be familiar with our products. We have a good domestic business in the US and we’re pretty close to the US consumer. Americans love our Irish whiskey and Irish Cream range. These products work really well and I would expect them to work in travel retail as well.” The Butler’s team looks forward to creating new innovations for the upcoming TFWA Cannes Exhibition later this fall.

Anthon Berg

Anthon Berg’s strategic approach Anthon Berg rises to the occasion when it comes to creating confectionery experiences by JAS RYAT

anish confectionery giant Anthon Berg continues to make the connection with consumers that are looking for a high quality product supported by a one-of-a-kind experience. Early this year, Anthon Berg immersed duty free travelers in the whisky trend by introducing a new concept for its world-famous liqueur-filled chocolates: The Single Malt Scotch Collection. Anthon Berg teamed up with five of the world’s most renowned single malt Scotch whisky brands and created a unique tasting experience in this collection. The concept taps right into the global whisky trend by taking customers on a tasting journey through Scotland’s legendary whisky regions: Speyside, the Highlands, the Islands and Islay. “By launching the Single Malt Scotch Collection we are speaking directly to the consumer who wants not only a high quality product, but is seeking to engage in a unique product experience. By adding a high-profile branded whisky concept to the international scene, our product range is even more in line with the market trends which in the end drive sales,” shares André Haunsø Kampmann, Senior Brand Manager, Anthon Berg International. Fueling this momentum, Anthon Berg recently promoted The Generous Call campaign in Gebr Heinemann’s shop at Copenhagen Airport in time for Mother’s Day on May 12, 2019. Anthon Berg asked travelers the question: “When was the last time you said I love you?” Hovering above the 20 square meter pink-floored promotion area was a halo sign reading: “Call someone you love & get free chocolate”. Beneath the sign was a pink British-style phone booth catching the attention of busy travelers and encouraging them to think of someone

Playing off the whisky trend, Anthon Berg recently released a line of Single Malt Scotch Whiskies

they love and make a free call to that someone – wherever they may be in the world. Dubbed The Generous Call, the promotion aimed to tap into powerful emotions and take travelers back to what matters in life, according to Anthon Berg. Kampmann explained: “By turning the purchase situation upside down and making it all about someone else rather than the consumer, we nudge travelers to tap into emotions of love and appreciation – two powerful emotions – and therefore efficient tools to connect consumers to the Anthon Berg brand.” He continued: “The promotion is easy to decode, attempting to try to offer value before an actual purchase. This creates a low entry point for the traveler to participate. Product samples are handed out in the promotion area for further involvement.”

The activation promoted the travel retail exclusive Fruit in Marzipan range counting Strawberry in Champagne, Plum in Madeira, Blueberry in Vodka, Raspberry in Orange Liqueur, and Apricot in Brandy. The Single Malts Collection as well as liquor filled chocolate bottles like Chocolate Liqueurs, Chocolate Cocktails and Chocolate Coffee Liqueurs were also available. The firm has delivered on its promise to strategically present uniqueness and quality, while offering consumers a connection to the brand. The firm will maintain a focus on product launches and innovations, and Kampmann has a clear strategy in every different continent, focusing on displays and promotions. The spotlight continues to be on Anthon Berg giving consumers a travel retail exclusive, which is a main driver for the brand. www.dutyfreemag.com CONFECTIONERY AND FINE FOODS

Leonidas

Leonidas strikes

a sweet note with dark chocolate Leonidas is tapping into the potential of the Asian region with new presentations for its chocolate gift boxes and tablets

elgian chocolate brand Leonidas is seeing double-digit travel retail sales growth as it continues to expand its footprint in Asia, having recently opened markets in Myanmar and the Philippines. In Q4 2018, the company boosted its presence in the Middle East with its first listing with Dubai Duty Free. Leonidas generates about 70% of its travel retail sales from Europe, 15% from Asia, and the rest from the Middle East and Africa, according to Nelly Sannwald, Global Travel Retail Manager. In order to drive future growth Leonidas is expanding its travel retail team, with Joanne Chew, Travel Retail Manager Asia Pacific, joining in July 2018 hot on the heels of Cybil Dubois who was appointed Travel Retail Manager EMEA in late 2017. Chew is based in Singapore to support clients and partners across Asia while Dubois is in Brussels. Speaking to Asia Duty Free, Sannwald sees great potential for Leonidas in Asia. The brand will be celebrating Chinese New Year with a Year of the Rat collection in 2020 and, for the first time, two different skus will be offered. The first offers 20 irresistible chocolates, including dark chocolate ganache with Robusta coffee and Mexican-origin ganache topped with cocoa nibs, which are presented in an elegant red gift box for good luck, circular in shape symbolizing prosperity and decorated with a lotus flower. The second, contemporary gold in color, presents a classic selection of white, milk and dark chocolate with ganache, praliné and caramel fillings. The products will be rolled out in major Asian airports including Hong Kong, Bangkok, Beijing, and Shanghai. Sannwald forecasts listings in Europe also in locations with high volumes of Chinese traffic. To support the festive season further in 2018/19, Leonidas offered as GWP a delicate red-golden envelope – the red packet or Hong Bao - which was really appreci48 JUNE 2019

ated, she says, and the company will look to repeat this next year.

Unique market positioning

Chinese middle class travelers are seeking good quality, authentic products, which Sannwald believes is where Leonidas scores as an authentic Belgian chocolatier. “Our positioning is unique in the market as we offer really superior quality at a price point that doesn’t break the bank – we offer a significant saving of 30-50% over other premium brands,” she says. Leonidas’ marketing team works with local communications agencies in Asia to ensure local habits are reflected in its PR material, and it uses popular digital channels such as WeChat. Commenting on trends in confectionery in Asia, Sannwald noted that the Asian consumer has a preference for dark chocolate. Also, while ballotins are popular in Europe, Asians tend to purchase gift boxes. In the gifting sub-category, Sannwald notes that souvenir products offering a

sense of place perform strongly. The Thailand box hit the shelves in May, joining cities such as Rome, Athens, and Dubai. In April, Leonidas has launched a new ALL DARK selection, Brussels by Night, alongside its already existing Brussels gift box. During the TFWA Asia Pacific show in Singapore, Leonidas presented its revamped tablet range featuring more visible color-coding to help shoppers understand the different flavors. The dark chocolate trend is supported by five varieties, ranging from plain to textured tablets at different cocoa content levels. With a premium look and feel and gold embossing, the tablets incorporate both the Belgian flag and ‘Made in Belgium’ wording. Conscious of its social responsibilities, Leonidas partners with the Cocoa Horizon Foundation, which seeks to improve the livelihood of cocoa farmers and their communities.

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ALFA Brands, Duty Free Agent, Tel: (336) 775-2995 ahildreth@alfadutyfree.com | www.alfadutyfree.com

Questionnaire

All about

Peter J. Zehnder,

Head of Division Global Duty Free / Intl. Distributors at Lindt & Sprüngli Where were you born and raised? I am “Swiss made”, born & raised in Switzerland.

What do you think about when you’re alone in your car? Listing to inspiring Ted Talks.

What motivates you in life? Spending time with people, sharing good moments together and in business follow a mission with purpose, overcome challenges, achieving goals and celebrate it.

Are you more of a hunter or a gatherer? I am always curiously hunting for new ideas & inspirations in the market, driving my team sometimes crazy.

What’s the best thing that’s happened to you this year/month/week? 1997/08/30 married my wife Tanja… and raised two adolescent “teenagers” Simon 19 years and Sara 16 years old.

Do you prefer country or city? A bit of both… combination of broad range of possibilities in the city with relaxing outdoor activities in the nature.

What would you choose as your last meal? Beyond Meat burger with Sweet Potato Fries.

What is your favorite place to vacation? California the Sunshine State! A few personal highlights: San Francisco / The Mission District, Silicon Valley, Point Lobos, Carmel.

What’s your favorite ’90s jam and why? Tears in Heaven – Eric Clapton, it’s a sad story, but seeing Eric Clapton live with his band was my best concert ever… and I remember traveling down-under when this song was released early 90s. How would you rate your memory? Fast thinking elephant memory.

What were you like in high school? I would say, I had an exponential learning curve from primary school to university… the more business related and practical it got, the better.

50 JUNE 2019

What do you work toward in your free time? Spending some time with friends on our terrace, having an interesting discussion over a glass of red wine or traveling with my family, discover new places and share unforgettable moments together. What in the world would you most like to change? Introduce a “face scanner” at airports and abolish security and passport control in order to have more duty free shopping time.

Peter J. Zehnder takes a snapshot with friend airport AI

What about yourself would you most like to change? Get some more time to improve my poor Golf Handicap of 26. What is the most important piece of advice anyone ever gave you? The Sun is always shining… look behind the clouds. What is something about you that most people would find surprising? I have been practicing Yoga for more than 15 years. If you had the opportunity to meet one person you haven’t met, who would it be, why, and what would you talk about? “Happiness in Life” with Nobel Prize winner Dalai Lama. Nearly every time you see him, he’s laughing and he makes everyone else around him feel like smiling.

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