Global Travel Retail Magazine SOTA April 2022

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GTRMAG.COM

April 2022 SUMMIT OF THE AMERICAS VOL 32 · NO 1

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Dag Rasmussen discusses 2022 plans p. 12 Top Brands experiences a strong 2021 p. 22 Essence Corp expects 2019 numbers this year p. 24


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Letter from the Editor

Americas

W

revival

e in travel retail have been through quite a time together. How especially grateful we therefore are to be able to meet in person in West Palm Beach, catch up with each other, network and, most important, work toward our collective business future in travel retail. Here in the Americas —not making light of the challenges we have faced and continue to face — we are lucky to have moved more firmly into the recovery stage than in some other regions. In some cases sales have moved back into 2019 territory. All this is to say, this live Summit of the Americas event is well timed for our region to take strides into the future. In this issue of Global Travel Retail magazine, we speak to business and association leaders about how they’ve weathered the storm and about what’s coming for them now the world is opening back up. For MONARQ’s Robert de Monchy, his previous decision to diversify meant a successful two years he’s now ready to build on. For Lagardère Travel Retail’s Dag Rasmussen, precise management and a clear strategy helped the company to be in its current expanded position in LATAM. Top Brands’ Danny Yohoros reports a year that actually rivaled 2019 for sales as the company now readies to open a couple of important new stores in Paraguay and Chile; Essence Corp’s Antoine Bona found 2021 to be better than expected, with 2022 on course to hit 2019 figures once again. And through it all, new and former President of TFWA Erik Juul-Mortensen and his team will be supporting all regional associations, Duty Free World Council and the industry at large in any way they can. We’ve seen it and said it often: our industry is resilient. With planning and strong business acumen we manage to make it through any and all socio-political strife and natural disaster. Before long we will surely be back to our pre-pandemic sales and then some. Additionally, the pandemic brought about some positive results that should manifest for a long time: As ASUTIL’s José Luis Donagaray says, the Duty Free World Council was incredibly important during the past two years, and the regular communication it fostered between regional associations will continue. The pandemic also taught us what’s most important, and that is human relationships, whether between family members, friends or business colleagues. Let’s hope we never take them for granted again. We at Global Travel Retail magazine wish you a very successful Summit of the Americas, and we look forward to seeing you there.

APRIL 2022 · VOL 32 · NO 1 Global Travel Retail magazine (ISSN 09620699) is published eleven times a year by Paramount Publishing Ltd. It is distirubted digitally worldwide, with printed issues in March/April, June, October and November. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or the editor. April 2022, Vol 32. No. 1. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. ©2022 Paramount Publishing Ltd.

GLOBAL TRAVEL RETAIL MAGAZINE Tel: 1 905 821 3344 www.gtrmag.com PUBLISHER Aijaz Khan

EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@gtrmag.com EDITORIAL AND DEVELOPMENTAL DIRECTOR Wendy Morley wendy@gtrmag.com DEPUTY EDITOR Laura Shirk laura@gtrmag.com SENIOR WRITER Rebecca Byrne rebeccabyrne10@yahoo.com.sg SENIOR EDITOR Mary Jane Pittilla maryjanepittilla@hotmail.com ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

Kindest Regards,

HIBAH NOOR Editor-in-Chief hibah@gtrmag.com

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Contents

12

WHAT’S INSIDE Lead Stories 12 Lagardère Travel Retail Update

A shot of adrenaline Amid the challenges caused by the Covid-19 pandemic, Lagardère Travel Retail has steadied the ship by managing everything as precisely as possible. This provided the perfect platform to secure key new Latin American contracts in places such as Peru and Chile

22 Top Brands’ Renewed Future

Proceeding as planned While the entire industry was gravely shaken in 2020 and many retailers are still down well below 2019 numbers, that is not the case for Top Brands. After a very successful 2021, the operator is projecting along a streamlined path into a renewed future

24 Interview with Essence

16 Update from TFWA

The future is now Our industry may be still experiencing some bumps on the road back to something akin to where it was, but TFWA is fully present in helping it get to its bright new horizon

18 Update from IAADFS

Support and excitement After a heartbreaking cancelation in 2020 and a virtual event in 2021, the industry was excited to learn that Summit of the Americas is back, this time in West Palm Beach. It is not exactly as before, but rather set up in a way that makes the most sense for the times. Here, President and CEO Michael Payne discusses the event and the industry at large in this region

Corp’s Antoine Bona

Essence Corp experiences ‘better than expected’ 2021 performance The emergence of the Omicron Covid-19 variant is deemed little more than a hiccup for Miami-based fragrance and cosmetics distributor Essence Corp, which believes the company will hit 2019 sales figures this year following a turbulent period caused by Covid-19

34 Sebastien Levi

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22

Features Latin America on road to recovery Dufry captures concessions Cruise sails into 2022 FDFA argues testing Duty Free Dynamics’ master plan Aphrodite DF opens two stores

7 20 23 30 32 36

Confectionery Report Tito’s sees things picking up Beam bounces back Brown-Forman ready for recovery MONARQ’s plans & goals Tourism Tech

38 40 42 44 46 50

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ASUTIL

Resilient REGION LATIN AMERICA ALWAYS HAS ITS SHARE OF CHALLENGES; THESE DAYS IT HAS THE REST OF THE WORLD TO KEEP IT COMPANY. ASUTIL’S JOSÉ LUIS DONAGARAY TELLS US WHAT’S HAPPENING IN LATAM CURRENTLY AND HOW ALL REGIONS CAME TOGETHER DURING THIS TIME by WENDY MORLEY

J

osé Luis Donagaray. Secretary-General of ASUTIL, says that as of this writing the borders of LATAM are basically open with restrictions becoming overall more flexible, despite some countries such as Chile remaining more difficult than others. “Land borders are recovering faster than airline traffic because it's much easier to move in a car or a bus from one side of a border to the other. Also, the flights have not yet returned; the number of international flights continue significantly below those of 2019,” he says. “I would say we are about 50% down in airlines and flights compared to 2019.” Donagaray says land border traffic is now only slightly lower than pre-pandemic, while the same cannot be said of flights. ASUTIL will present air traffic numbers for the region during Summit of the Americas. Despite things running more smoothly than previously, Donagaray confirms that discrepancies continue from country to country with such things as which vaccines are accepted, hindering recovery to varying degrees. “Latin America is not like the European Union. Each country does what they want. You may have one agreement on vaccines with Argentina and another different agreement with Brazil and Brazil has another different agreement with other countries. So it's not easy. We always want to be slightly complicated,” he says.

Much to contend with

José Luis Donagaray, Secretary-General of ASUTIL, is hesitant to discuss comparisons to 2019 until next year, but enthuses about the role of DFWC throughout these challenging times

While at least one retailer has stated that sales in 2021 were very good, Donagaray says this is an anomaly. Sales might be starting to improve across the board as travel returns, but he says, “We have to remember that the pandemic situation was not just a health situation. People lost their jobs. Many companies have had difficulties. So the turnover is slower and the amount of the average ticket was lower than 2019.”

Increased allowances

Brazilian allowances at the airport increased from $500 to $1,000, and the allowance at Brazil’s border stores for the country’s residents went up from $300 to $500. Meanwhile, Uruguayans are now able to spend $1,000 at the airport as opposed to $650. This extra allowance is a temporary measure brought about because of the pandemic, but ASUTIL is working to make it permanent. “Internal inflation, the US dollar, and other things affect buying power so it’s necessary to continue having adequate allowances that take into consideration the increase in prices,” Donagaray says. “We are working on it. First thing is we need to end this pandemic situation, and then have the economic recovery. Afterwards I think things will move.”

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

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ASUTIL

Given that the Brazil border stores came to be shortly before the pandemic began and in addition Brazilian allowances increased, Donagaray says it is very difficult to judge the effect they may be having on neighbouring countries’ border stores at this point. “I think we will see some impact. But we will have to wait until next year to get a good idea of what their effect will be.”

Argentina and London Supply

Argentina was one of the most fully locked down countries in the region, but it has fully opened, and London Supply began operating again in December. “There is movement at that border,” says Donagaray. “There is movement because the Iguazú Falls is a very popular place for tourists. A lot of people go there to see them. So they are slowly but I would say very firmly recovering the traffic and the sales. We expect that the second semester of this year will be a good semester for them.”

Complex conditions

As the region enters into recovery, the situation is complex. Flights are increasing, but flight prices are also increasing. The invasion of Ukraine has now complicated things further; Donagaray believes LATAM may benefit as a tourist destination due to its location far from the troubles, but at the same time fuel prices have increased dramatically. While the region is benefiting from the increased cost of commodities, internal inflation and currency values are countering these benefits. All of this together creates conditions that are challenging to predict. That being said, while the speed of recovery might be in question, recovery is sure.

ASUTIL at events

Recently, Donagaray announced that the ASUTIL Conference will be back next year as an event. More information will be Details are scarce for now, but Donagaray says next year’s ASUTIL event will take place in early June, somewhere in the Caribbean

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forthcoming, but for now he says it will be held at its traditional time in early June, and it will be in the Caribbean. “The Caribbean is good because you have good flight connections and frequent flights. You have good hotels, a reliable infrastructure and relatively logical prices,” he says. While ASUTIL is not officially part of the Summit of the Americas this year, members of the association will certainly be there. “We’re doing a presentation and an update of Latin America,” says Donagaray. “We’ll give a lot of information during our session, and we look forward to seeing a lot of friends in the industry to meet with personally. I think is this is the first step of the recovery. To see each other, to have meetings, chat, have a drink, go for lunch and dinner. It’s a first step. Not a big step, but it's the first step. It's a big step psychologically.”

Duty Free World Council

Donagaray is not alone in singing the praises of the Duty Free World Council during this time, but he is enthusiastic. “Something I really want to share with you is that one truly good thing came about on behalf of the pandemic situation,” he says. “The Duty Free World Council played a very important role during the pandemic, and now we have meetings every month. We got together virtually and held a lot of discussions and webinars. We worked often with people from ACI, from IATA. So I think the pandemic brought about one thing very good for our industry. Now we’ve launched the Academy and we have various working groups such as our confectionery group. We are also working together on the tobacco issue. “Everyone shared that we need to all be at the same table working together very closely on the issues that affect us all. I think that World Council held an important role during these months during the pandemic, and I hope it will continue in the next years.”



Lagardère Travel Retail Update

Speaking candidly to Global Travel Retail Magazine, Dag Rasmussen, Chairman and Chief Executive Officer, Lagardère Travel Retail says: “I am extremely proud of what our teams have done. Profitability increased, but the result was still negative, which is why I said [at the time the results were published] that 2021 was not our best year but was certainly a great one.”

A shot of

adrenaline Amid the challenges caused by the Covid-19 pandemic, Lagardère Travel Retail has steadied the ship by managing everything as precisely as possible. This provided the perfect platform to secure key new Latin American contracts in places such as Peru and Chile by HIBAH NOOR

Dag Rasmussen, Chairman and Chief Executive Officer, Lagardère Travel Retail

12 GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

Lagardère Travel Retail secured a long-term concession in 2021 to open three Aelia Duty Free stores at Jorge-Chávez international airport in Lima, Peru. The shops, which began trading in January, cover 3,000 square meters and are spread across arrivals and departures

L

agardère Travel Retail revenue may have increased by 33.1% on a reported basis (+34.3% like-for-like) to €2,290 million (US$2.4 billion) in full-year 2021, but the improved performance may not have been possible if it wasn’t for surging Q4 reported sales of 97.1% (+94.1% like-for-like) to €749 million (US$829.4 million), major cost control efforts and the optimisation of opening hours in its reopened shops. According to Lagardère Group’s full-year 2021 results released in February, the travel retail division (duty free and fashion, travel essentials and food service), which still posted a -46.1% revenue decrease in full-year 2021 versus 2019 prepandemic levels, saved €1.698 million (US$1.9 billion) in costs compared to 2019. The decrease in the cost base included a €563 million (US$623.3 million) reduction in fixed costs – of which €381 million (US$421.8 million) linked to fixed lease concession payments. Concession terms were renegotiated, point of sale operations were adapted in line with air traffic trends, and nonessential costs were slashed.


Contents

The pandemic was more like a shot of adrenaline, and we really wanted to make the most of this crisis to come back even stronger.” DAG RASMUSSEN, CHAIRMAN AND CHIEF EXECUTIVE OFFICER, LAGARDÈRE TRAVEL RETAIL

Speaking candidly to Global Travel Retail Magazine, Dag Rasmussen, Chairman and Chief Executive Officer, Lagardère Travel Retail says: “I am extremely proud of what our teams have done. Profitability increased, but the result was still negative, which is why I said [at the time the results were published] that 2021 was not our best year but was certainly a great one.” Rasmussen also pinpointed the company’s ability to keep flow-through under 12-13% (the actual flow-through figure was 11.8% in full-year 2021) as ‘an extremely good result.’ Flow-through is calculated by dividing the change in recurring operating profit of fully consolidated companies (recurring EBIT) by the change in revenue. This indicator is used by the Group in the context of the Covid-19 pandemic to measure the impact of the revenue decline compared with 2019 on recurring EBIT. After the initial shock following the onset of the pandemic, focus turned to rebounding stronger. “The pandemic was more like a shot of adrenaline, and we really wanted to make the most of this crisis to come back even stronger.

Precise management

“We managed everything precisely on a store-by-store and hourby-hour basis, optimizing everything, reviewing processes, and prolonging our contracts. “I have always believed in the strong future of this industry. It is the ultimate brick and mortar retail experience. We are lucky enough to not have to ask people to spend their Friday or Saturday afternoons in our stores. They are here already. “Our challenge is to bring the greatest store to them, the best digital experience, the best product offer and assortment and best service.” Coming to terms with falling business again following the emergence of new Covid-19 variants was a challenge. The emergence of the Omicron variant last year, for example, came at a time when the retailer was beginning to recover in places such as the US and China. “We always knew the industry was great and that we would survive,” Rasmussen remarks. “Right from the start, we were confident that things would return to 2019 figures in 2023. With our new business development and acquisitions globally, we will be able to reach those 2019 numbers.”

Making inroads in Latin America

The openings in Peru were soon followed by the unveiling of five foodservice outlets at Arturo-Merino Benítez airport in Santiago de Chile, in partnership with Chilean company Global Group Corporation. Since March 1, 2022, passengers passing through the new international terminal at Santiago Airport have been able to dine in the La Maestranza, La Picá, Uncle Fletch, Lulupok and Yogen Früz restaurant and food concepts. The announcement in March also revealed that three additional concepts were soon be implemented, the exact timings depending on traffic recovery. These are the Krossbar beer and pizza concept, Kaki (Asia woks) and Beercode (beer concept). Looking ahead, Lagardère Travel Retail is hoping to be operating 20 restaurants at the airport by 2023. On the expansion of the retailer into Latin America, Rasmussen enthuses. “Today in Latin America, we have duty free in Lima and foodservice operations in Santiago. There is room for more exciting growth opportunities in the region. “It is a continent that is very new to us, but in both countries, we entered the market in such a way which maximized our chances of being highly successful. “We have also entered into a pioneering profit-sharing business model with our partners in Peru, and so we are sharing risks and rewards.” Another important continent for Lagardère Travel Retail is Africa. The French travel retailer first entered Africa in Dakar, Senegal at Blaise Diagne International Airport, which opened in December 2017. This was after securing the 10-year contract to run a 1,000 square meter duty free store and 100 square meter Relay outlet. Rasmussen comments: “Africa has enormous potential. We entered through Dakar, with the idea of having great stores. We want to offer travelers on the continent the best level of travel retail experience, and deliver the same operational excellence we deliver elsewhere. “We decided that if we entered Africa, we would do so with retail excellence. We have a significant foot print in Africa with stores in Senegal, Gabon, Mauritania, Gambia, Tanzania and Kenya. We continue to grow and are looking for new opportunities as well.” www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

13


Lagardère Travel Retail Update

At the time of writing in early March, the operations in Mauritania and Gambia were just a month old, so further expansion on the continent was not the main priority. The company’s global international coverage remains important as it tries to recover from Covid-19, with China at the forefront. “We continue to have this holistic worldwide strategy focusing on China where we have this great partnership with JD.com and started working with the China National Service Corporation (CNSC).” The partnership between Chinese e-commerce player JD.com and Lagardère was first established last year when JD.com and two Chinese public investment firms secured a minority stake in Lagardère Travel Retail North Asia.

North Asian acceleration

From a Lagardère Travel Retail perspective, the strategic partnership helps accelerate its growth into North Asia (Mainland China, Hong Kong, and Japan) through digital and omnichannel retailing. In February this year, Lagardère Travel Retail and JD.com strengthened their alliance by partnering with CNSC. The purpose of the co-operation with CNSC is to build a more convenient and reliable duty free shopping experience for customers, according to a JD.com statement seen by Global Travel Retail Magazine. Reflecting on the evolution of the operator’s Chinese business, Rasmussen is satisfied with how things have progressed since beginning to operate in the country in 2007. Last year, Lagardère Travel Retail also made a significant statement as far as its Chinese operations are concerned with the opening of the second largest downtown duty free store in Sanya on Hainan island.

Opened in partnership with Hainan Tourism Investment Development, the 30,000 square meter complex is spread over five floors and offers product categories including perfumes and cosmetics, fashion, accessories, watches, jewellery, wine, and spirits. China aside, things are developing well in the US and Europe. “The US is a very strong strategic focus,” Rasmussen explains. “It is one of our largest businesses, and we are developing very nicely with travel essentials and food. “In Europe, we will continue to grow. Our strategy is based on strong local empowerment. That is how we manage all these developments. If everything was centrally run, we would be unable to do everything simultaneously. Our strategy is operational excellency.” He adds: “In the past 10 years up to 2019, we registered sales growth of 10% per year and profitability of 18%. It would be great if we can continue like that.” Corporate Social Responsibility is another key part of the company’s strategy. In partnership with Geneva Airport, Lagardère Travel Retail opened the world’s first eco-responsible store in the Aelia Duty Free network in March. The concept has been designed to embed lofty standards of sustainability, from store materials and furnishings up to the product offering, according to Lagardère. It also features a popup developed in partnership with the United Nations’ Perception Change Project to raise passengers’ awareness of Sustainable Development Goals. The outlet is located in the airport’s new East Wing, developed to meet the highest standards of energy performance using advanced technologies.

Rasmussen says: “Corporate Social Responsibility has been within our strategy for a while. It is not just the environmental aspect. We have developed a program called PEPS (Planet, Ethics, People and Social). We are really committed to having a positive impact on the environment, but also on the communities we serve.”

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TFWA update

THE FUTURE IS NOW Our industry may be still experiencing some bumps on the road back to something akin to where it was, but TFWA is fully present in helping it get to its bright new horizon by WENDY MORLEY

T

he travel retail world was hit with a surprise in January of this year when it was announced that long-time TFWA President Erik JuulMortensen would come out of retirement to take on the role once again. At the time, he stated that he felt given the global situation the role required someone who could dedicate full-time hours, which he could. Juul-Mortensen says he was very pleased with the TFWA team. At the time the focus was on preparing for the TFWA Asia Pacific Exhibition & Conference in Singapore, which has now become the networking event, TFWA Asia Pacific Live. While the event may not be exactly as all had hoped, it promises to offer an opportunity for many in the industry to meet in person for meetings, as has been so lacking. “The past few months have shown us that as restrictions have begun to ease, there is an enormous pent-up demand for travel that has been growing steadily over the past two years,” he says. “The appetite for travel hasn't diminished, and this will of course have a knock-on effect on the duty free and travel retail industry. As anyone who knows me will know, my belief in the duty free & travel retail channel is in my DNA, and as it continues in its regrowth, there is every reason to believe the channel will come back stronger than ever.”

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Hindering inconsistencies

One of the things that until now has held back relatively simple international travel is the lack of consistency with border restrictions. “If the last two years have shown us anything, it is that it is incredibly difficult, if not impossible, to make any prediction on what a specific government might decide,” says Juul-Mortensen. “What I can guarantee, however, is that as an association we will be working as hard as we can with the relevant authorities across the globe to support endeavors for travel restrictions that are as convenient and as consistent as possible. There is little doubt that in the short and medium term, travel will continue to be very different from what we have known before. We see it as our personal responsibility, and duty, to offer our support to campaigns that make sure that the duty free and travel retail industry is afforded as much protection as possible.”

When will travel return

Early predictions were for a recovery of domestic travel worldwide by 2023 and for international travel to return by 2024. New variants and differing decisions on disease control have affected these timelines and also made them less predictable. “It is still too early to say with confidence exactly when traffic will return to pre-pandemic levels, and the picture varies considerably by region,” says Juul-Mortensen. “But there are certainly

encouraging signs. According to IATA, in the period around 8 February the number of air tickets sold represented 49% of the amount during same period in 2019. This is eleven percentage points ahead of the figure at the end of January. So, although the recovery is not happening at the pace any of us would like, we can at least say that it is under way.”

Consistency is key

Juul-Mortensen says with international travel getting closer to a full return each month, consistency is key. “It is imperative that we work together as an industry to hold to a uniform process that minimises confusion as travel returns to its pre-pandemic form. Nations and governments must align their health protocols as best they can to make for a simpler and more consistent travel experience. Ideally, this would consist of simplified procedures with barriers removed for vaccinated travellers and pre-departure testing for non-vaccinated passengers. Ensuring the implementation of digital solutions to process passengers’ health information would also be a huge step in the right direction.”

Other priorities

While for all in travel retail managing the environment created by the pandemic is paramount, but this is not the only priority. “Prior to the pandemic, sustainability was a high priority for TFWA, and


it continues to be so. We feel it is very important for us to lead by example on this issue, and we are looking at measures to make our operations as sustainable as possible,” says Juul-Mortensen. “Also the financial health of TFWA has always been of extreme importance to me. Over the coming months we will be doing all that we can to ensure TFWA continues in a strong position to serve the industry.” The industry he speaks of has truly come together while being physically far apart, and the importance of the Duty Free World Council should not be underestimated. “As an Association TFWA will continue to support as much as possible the valuable work done for the industry through the trade associations,” Juul-Mortensen says. “I very much believe that the cooperation between the different trade associations has improved. Relationships forged in the heat of any crisis are not easily broken apart. Many solid alliances have been formed during the struggle of the past two years and I expect most in the industry will be incredibly grateful to have established new relationships as well as seen old allegiances grow even stronger.

Since our original conversation, Erik Juul-Mortensen added this comment. “The Board, Management Committee and permanent staff at TFWA have been shocked and saddened by the developments in Ukraine. Ours is a truly global industry, and we all have friends, colleagues and industry partners who live and work in Ukraine and Russia. Our thoughts are with those who have been affected by this tragedy. TFWA has a long history of supporting humanitarian causes, particularly those that help vulnerable women and children. TFWA will support any humanitarian initiative of our members that brings relief to those suffering from the war against Ukraine. We join the global community in calling for peace.”

What the future brings

Going forward, Juul-Mortensen says TFWA will look at the very best of what the association has done in the past and build on those successes. “This means providing outstanding physical events with ample opportunities for delegates to meet in person, and making sure we continue to deliver value to our members by consistently adding new elements to the offer. These include innovations which will help shape the future of the industry such as TFWA i.lab, making events accessible and worthwhile for virtual viewers, along with adding new dimensions to the TFWA 365 digital platform. Our TFWA World Exhibition & Conference in Cannes last year, was a success in what were clearly not ideal circumstances, and we are very much looking forward to making it even bigger and better this year.”

APRIL 2022 17


IAADFS

The ribbon cutting ceremony at the last live Summit of the Americas event, held in 2019

Support & excitement

After a heartbreaking cancelation in 2020 and a virtual event in 2021, the industry was excited to learn that Summit of the Americas is back, this time in West Palm Beach. It is not exactly as before, but rather set up in a way that makes the most sense for the times. Here, President and CEO Michael Payne discusses the event and the industry at large in this region by WENDY MORLEY

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A

fter waiting on tenterhooks for the announcement, we heard welcome news in November that Summit of the Americas would indeed take place as a live event this year. The new format came about because of the realities of these days moving into post-pandemic and also from IAADFS speaking with members about what exactly would serve them best. “We sought out and listened to feedback about how we’re managing the space, what we’re doing with programs and the whole registration process,” says IAADFS President and CEO Michael Payne. “We surveyed focus groups and supplier advocacy groups we've been working with, just to make sure we understand how people want this to go before making decisions. We put every effort into listening and responding as best we could.”


The Summit

IAADFS President and CEO Michael Payne exclaims how happy the association is to be having the event in person this year. “Everyone I’ve spoken to has expressed excitement about coming, and the need to get back together. The question of whether the industry is supportive answers itself, because they’re coming.”

Recovery is now

Payne says it’s clear that travel is improving. “This might not be a very helpful comment in terms of data, but clearly there are more flights, and the restrictions on travel are getting a little less cumbersome. That does depend a little bit on which country you're coming from, but I think certainly there are more east-west flights being added internationally. The trend line is right, but it's clearly not back to where it was pre-COVID. It’s probably not going to get back there for another two or three years depending on who you talk to and whose data you want to believe, but it's certainly moving in a positive direction and I think that's important for everybody.” He adds: “It's been a roller coaster, though.” As for the Caribbean, Payne says it’s hard to generalize. “Each island had a different approach. There was not one way of dealing with the virus and there’s not one uniform way of dealing with it now, but certainly the direction is good. More of the islands are loosening up their restrictions, but again some have not done that yet. The other tell sign for the Caribbean is the cruise industry. While it’s not yet where we would like, it’s starting back up. That’s going to be really important for the Caribbean.”

US borders – two different tales

North-south travel has been relatively good throughout the pandemic, and that includes the US-Mexico border. Payne says that border stayed busy throughout the pandemic, though the same cannot be said of the US border with Canada. Until very recently when first the PCR test requirement and then even the antigen test requirement was dropped for vaccinated travelers, Canadian border store business was still down over 90% from pre-pandemic times, according to Canada’s duty free association FDFA. “You really can’t compare the two,” says Payne. “There’s still been considerable traffic going back and forth between US and Mexico even during the toughest parts of COVID. There was still a tourism business, and there was still considerable traffic. With spring break there’s even more. The lifting of testing requirements at the Canadian border removes one barrier for sure, but fuel prices will also have an impact on where people will travel; I think it's still early to know.”

Payne says he’s feeling pretty good about how things are going, despite an understandably slow pre-registration process as companies wait to see current infection rates and travel restrictions. “We started really late with this process and we didn’t really open up registration until around Thanksgiving, and then the holidays hit. So it's been a slow beginning, but we actually planned for that,” he says. “In every meeting, people have said they’re waiting as long as they can to register. It’s the nature of the beast right now.” Payne says early numbers were looking good and they expect to have a lot of on-site registration. “Some people want to come just for one day, two days, and you can’t preregister for that so I think the numbers will definitely go up.” IAADFS made the decision early on to not have the historically huge exhibit trade show. “We have space for it but we don’t think the industry would be ready for that,” Payne says. “Rather we’re restricting the number of exhibitors and we hope people can meet in some of the private rooms. The exhibit space was capped at around 48; those spaces sold out and we have a waiting list.” As of writing, the association was still figuring out the best way to utilize the private meeting room space.

Plenty of buyers

While admittedly the large teams sometimes seen in the past might not be present, Payne says the event is seeing a healthy representation of buyers. “Every major retailer is signed up and sending people in. I feel good about that,” he says. “There's a lot of support for the event. Companies might be a little more conservative on sending eight or nine people and not 20, but we are having the live event. Exhibit space is sold out. So I'm happy. I’m happy the buyers are coming. I’m not looking to get the numbers I had in 2018 or 2019. I myself will be interested to see what the final push will be.” Payne says they’re encouraging people to come even if they’re not exhibiting as they might have in the past. “There are plenty of opportunities to meet with buyers. We’ll have networking sessions and we’re going to have an area where people can have a coffee, sit down and visit with each other and talk, a place that will stimulate that kind of conversation.”

Education sessions

In another break from years past, Summit is offering more educational content sessions. “We partnered with several organizations and some of the media, including your company, and so there are different content sessions — three on Monday and three on Tuesday,” Payne says. “We’re happy to be offering lots of opportunity for further learning and education. “I think people are going to find it valuable. I think they’ll find it much more flexible than they have in the past in terms of what they want to do — do they want to go to sessions? Or do they want to just make appointments with exhibitors? Or do they want to meet with people in the Summit lounge area and just sit and have a conversation? And then we'll make the right decisions soon on whether we go back to that much larger trade show next year.”

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

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DUFRY

DUFRY CAPTURES

two new concessions in the Americas

Dufry has been awarded two fiveyear concession contracts at the new Mexico City International Airport

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ufry has been awarded two five-year concession contracts at the new Mexico City International Airport, Felipe Ángeles (AIFA) in Santa Lucia. Initially the contract will be to operate a commercial area of 652 square meters with a mix of both duty free and duty paid shops. A further increase of retail space will be considered by AIFA in line with the growth of international and domestic passengers, the Swiss operator said. Felipe Ángeles International Airport is located 35 kilometers from the current Benito Juarez International Airport. It will have two runways, one for civil service

20 GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

and one for military service, helping to ease the volume of traffic that Mexico City Airport handles. The airport has been created to meet the demand for civil airport services for the next 50 years, by serving 100 million passengers per year at its peak. Dufry has operated successfully in Mexico for 25 years and this new contract win helps further increase the company’s footprint in this region. The commercial offer will include all the core product categories such as fragrance and beauty, liquor, tobacco and food, with a wide selection of international brands and local products.

Commenting on the new contract, Juan-Antonio Nieto, Chief Operating Officer for Dufry in Central America, the Caribbean and Mexico, said: “We are proud to have been awarded this important concession at the recently completed Felipe Ángeles International Airport. We would like to thank AIFA for the trust they have shown in us and, as the leading global travel retailer, we will use our extensive knowledge and expertise of the sector and of the Mexican market in particular to take the shopping experience in this impressive new airport location to an entirely different level.”


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Top Brands

In April-May of this year, the new 1,000-squaremeter Luryx store will open at Paraguay’s Silvio Pettirossi International Airport

Proceeding as planned While the entire industry was gravely shaken in 2020 and many retailers are still down well below 2019 numbers, that is not the case for Top Brands. After a very successful 2021, the operator is projecting along a streamlined path into a renewed future by WENDY MORLEY

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ccording to Top Brands CEO Danny Yohoros, 2021 was a surprisingly good year, with sales comparable to 2019. The country opened to vaccinated travelers without having to quarantine last year, and as has been the case throughout the world, this caused an immediate increase in traffic. Recently, more flights have been added back, and Yohoros says foot traffic is increasing. On the whole, retailers globally have found per-person spend to be higher throughout the pandemic despite numbers being low, with the expectation that spend will return to previous levels following the return of traffic, but Yohoros says spend remains high. “The conversion rate is still good with traffic picking up,” he says, adding that in LATAM travelers tend to plan ahead. Currently, Top Brands has about 100 stores under the Luryx banner, with some

22 GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

Perfume & Cosmetics continue to be the strongest sellers in Luryx stores, including this one, rebranded Neutral by Luryx after the acquisition of Neutral by Top Brands in 2019

additional boutiques in partnership such as MAC cosmetics. The company carried out an executive decision to solidify all locations under the same name in 2018 as part of an overall strategy on brand recognition for marketing purposes.

New Luryx location

Top Brands will soon be opening a new Luryx location at Paraguay’s Silvio Pettirossi International Airport. Put on hold last year because of the pandemic, this is a 1,000 square-meter store that travelers requested. Carrying all duty free categories, the store will be located in departures, and will open in April. Also in April or May of this year, Luryx will open a new store in Chile’s Punta Arenas duty free area, which is a tourist attraction in itself. This 500-square-meter store will act as a anchor, and will carry all duty free categories.

Digital offering

Top brands is currently investing a lot in technology and software. It’s apparent that the consumer increasingly expects a strong digital footprint, both for online purchasing and in the support of brick and mortar and items for sale within. Top Brands is currently building a substantial digital omnichannel offering in house, which is expected to launch in later 2022.

The more things change

With all the changes in the world recently, Top Brands’ best-selling categories remain the same: Perfume & Cosmetics, and Liquor. And Yohoros is fully confident that travelers will be back as before. “I have no doubt that travelers will come back to pre-pandemic numbers,” he says. “Business travelers might come back more slowly, which was predicted, but people want to travel. And now, they appreciate the ability to do so.”


Cruise News

Back on track Royal Caribbean’s new Wonder of the Seas, which had her maiden voyage in March 2022, is the largest cruise ship ever to set sail, with a passenger population rivaling that of a decent-sized town

New ships, positive future

The cruise industry took a massive hit due to COVID, but despite ongoing concerns due to outbreaks this winter, passengers remain positive and even anxious to book

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by WENDY MORLEY

t’s not news that the cruise industry was affected to an even greater degree than air travel over the past two years; while air travel is often referred to as being “all but shut down,” cruise was fully and completely shut down, and for an extended period of time. People who like to cruise were by all accounts chomping at the bit to start cruising again. When bookings reopened sales for future cruises were record breaking despite continued warnings. The majority of cruises were running again by fall, but those in the cruise industry found celebrating were doing so a little prematurely. Once the Omicron variant reared its ugly head, four ships once again found themselves unable to dock as 90 then-sailing ships reported outbreaks in late-December 2021. The CDC officially warned against cruise travel.

Quick change

Luckily, this was a mere hiccup compared to March of 2020 when ships were unable to dock for weeks as passengers and crew

were left floating at sea for weeks. Also luckily, the Omicron variant worked in a fast, furious manner, infecting so many that the numbers tumbled rapidly post-peak. The cruise industry had claimed it could manage COVID well, and it has proven this to be the case as on-board outbreaks were kept in check. Cruise lines implementing strict protocols guidance from the CDC and other health experts, and procedures are in place to deal with any cases. Because of these protocols and because the overall risk of contracting the virus becoming significantly lower in the Americas, the CDC has again lowered its warning, currently at level 2 — the lowest it’s been since the pandemic began. The health agency does request that all passengers be vaccinated and indeed for most ships this is a requirement for boarding. More cruise ships are now back sailing with guests onboard, and cruise ships operating in US waters are doing so under the CDC’s voluntary program.

The cruise industry is once again gaining momentum. As of March 2022, 264 ships are operating from 68 cruise brands. This is the largest number of ships in operation since the pandemic began. At full capacity, these 264 ships represent over 450,000 total berths, and just recently Carnival Corporation announced that some of its ships are indeed at full capacity. Meanwhile, the industry’s new ships ordered well in advance of the 2022 season are here. On March 4, Royal Caribbean launched Wonder of the Seas — the biggest cruise ship ever built, with a capacity of 6,988 guests. Among the other greatly anticipated ships already launched or launching this year are Viking Octantis, which set sail in January; Disney Wish, setting sail in July (Disney’s first in 10 years); Norwegian Prima, setting sail in August; and MSC World Europa — which rivals Royal Caribbean’s Oasis class in number of berths — setting sail in December. While there is no doubt some passengers may not have had exactly the experience they’d hoped, during December 2021 in particular, there is no shortage of cruise passengers who are anxious to book. Pent-up demand in 2021 caused a huge spike in bookings for sailings in 2022/2023 that shows no sign of abatement.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

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Interview with Essence Corp’s Antoine Bona

Essence Corp experiences ‘better than expected’ 2021 performance The emergence of the Omicron Covid19 variant is deemed little more than a hiccup for Miami-based fragrance and cosmetics distributor Essence Corp, which believes the company will hit 2019 sales figures this year following a turbulent period caused by Covid-19 by HIBAH NOOR

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emaining positive is anything but easy due to the challenges associated with Covid-19 but try telling that to Miami-based beauty distributor Essence Corp, which is bullish in its projections for 2022. “As a company, I think we’re going to hit 2019 numbers this year,” Antoine Bona, Vice President Sales, Essence Corp tells Global Travel Retail Magazine. “2021 was better than expected. We estimated the travel retail beauty trend in the Americas to be around -30% to -45% versus 2019, which is definitely a big improvement on 2020 numbers.” While Bona notes that some Latin American airports reported sales of -65% last year compared to 2019, Essence Corp reported ‘great performance’ at airports in Cancun and Mexico City, along with those in North America, Miami and Atlanta. Border sales in South America even held up quite well, performing at -20% compared to 2019. “We have a very strong fragrance portfolio which performed extremely well in 2021. Essence Corp depends less on Chinese travelers and more on those from America and Latin America. Sales were strong in Panama and Colombia.”

Positive outlook Antoine Bona, Vice President Sales, Essence Corp

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The outlook for 2022 is positive as alluded to above, despite the emergence of the Omicron Covid-19 variant. The first case of this new Omicron variant was reported to the World Health Organization from South Africa on November 24, 2021. Different mandates and protocols, implemented to mitigate against the impact of Covid-19 are the biggest challenges when it comes to air travel, according to Bona. “If you take the Canadian border, for example, there were a lot of people going to the US to visit an outlet or simply to eat lunch. Now, you need a negative antigen test to cross the border, so people may decide not to go.


BROADENING ITS HORIZONS

The Covid-19 pandemic has prompted DF&TR players to diversify and pursue new opportunities and Essence Corp is no exception. Last May, the company was appointed global travel retail distributor for Bath & Body Works. The agreement meant Essence Corp would branch out of the Americas for the first time. A distributor of L Brands for Bath & Body Works and Victoria’s Secret in the Americas since 2014, Essence Corp promised to maintain its same qualitative distribution standards outside the Americas. The family-owned fragrances and cosmetics distributor was planning to exhibit at the 2022 Tax Free World Association Asia Pacific Conference and Exhibition in Singapore before the event's cancellation due to the continued seriousness of the Covid-19 situation. “With added value that offers expertise in beauty distribution and established relationships with key clients, the company looks forward to broadening its historical presence worldwide,” a statement read.

“Mexico had no Covid-19 protocols from day one and because of that we see very strong passenger numbers. People don’t need to wonder what they need to do to travel to Mexico.” Business at US/Mexican border stores has been strong. He adds: “Mexican department stores were closed in 2020, so all the Mexican Americans (Americans of Mexican heritage) used to travel freely along the border and shop at the border stores. “With goods in short supply, people are seeking products to purchase and cross the border in order to do so.” Regarding Essence Corp’s fragrances portfolio, Bona highlights two new additions which he believes will take the company forward. “Interparfums New York will take over DKNY’s license fragrance, effective 1 July 2022 and Michael Kors has moved to Euroitalia.” “These are big fashion brands and we believe these are big opportunities for them and us.” Developing and expanding the travel retail footprint of French niche brand Parfums De Marly is another key focus for 2022. “We started distributing Parfums De Marly in June 2021,” Bona explains: “It is a beautiful French niche brand which has a strong presence in the US. It is a disruptive brand and prominent in department stores.” He adds: “We didn’t have anything niche in our portfolio and have been looking at this brand for many years. It's currently being launched in Latin America and is present in Europe and the Middle East.”

Leveraging relationships

As retailers look to diversify their offerings and seek innovation, Essence Corp has leveraged its relationships with some of the key DF&TR players in the region and increased Parfums De Marly’s presence in the channel.

“We’ve launched the brand with Penha Duty Free Aruba, Penha Duty Free Curacao, Motta Internacional and 3Sixty Duty Free.” Amid adding to its portfolio and trying to maximize various opportunities, Essence Corp has been forced to contend with supply chain and production issues. “Logistics have been a nightmare and the cost of shipping has doubled. It has also been hard to book containers. “The port of Miami and other US ports are extremely congested and a 45-day lead time from Europe is now taking over 90 days. We are also facing supply issues from our manufacturers.” Assessing the impact of the pandemic from a geographical standpoint, Bona suggests the Caribbean did not suffer too much. “When cruiselines stopped sailing to the Caribbean, which obviously impacted the economy over there, we focused on the local business,” Bona comments. “The population there is over 30 million and it is like a small domestic market. It is not easy for locals to travel to the US as they need a visa. It has been even harder for them to do so during the pandemic.” Caribbean locals have tended to shop at nearby outlets such as John Bull, Penha, Kirk Freeport and The Yellow House, which were only closed for around a week or two. Bona says: “These retailers became more tech-savvy and started implementing preorder and curbside pick-up concepts which boosted sales.” Shipping directly to the Caribbean from the US can be logistically challenging. “Many islands in the Caribbean do have import duties and some have sales tax, making it harder for the US e-commerce websites to ship to the Caribbean,” Bona concludes.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

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China Watch webinar

China: “The market opportunity is still massive”

Zeng Qun Grace, Deputy General Manager, Wangfujing Duty Free, describes Gen Z-ers as more global, easily influenced, more demanding, and seeking experiences

Fresh opportunities abound in the Chinese travel retail sector, driven by a new generation of young consumers

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ig retail opportunities beckon in China, even amid ongoing pandemic-driven lockdowns and the changing behavior of a new generation of demanding consumers who prefer experiences to products. That was the key takeaway from Tax Free World Association’s China Watch webinar, titled “New opportunities, new generation” on the TFWA 365 online platform. The speakers explored developments in China travel retail and consumer trends driven by the emerging Generation Z cohort. Eudes Fabre, CEO North Asia, Lagardère Travel Retail, acknowledged that 2022 would be a “tough” year in China due to the impact on traffic of the localized lockdowns and believes it will take a while for the situation to normalize. But he remains positive about the long-term future of the Chinese travel retail market, even in Hong Kong, which has been hard hit by the pandemic. The medium-term challenges include the consumer demand for new brands and 26 GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

by MARY JANE PITTILLA

new categories. Fabre cited sportswear as an example, thanks to the Beijing Olympics. He said that airport retail had become less transactional and was more about experiences – including those not normally found in airports. He also noted the keen interest in high quality local Chinese brands, especially among younger Chinese. Turning to suppliers, Fabre said that most brands were focused on China and were putting in more resources to understand the Chinese consumer. “More brands are treating the market separately and taking a customized approach.” Lagardère Travel Retail works with brands to take advantage of the specificities of the Chinese travel retail market, which he noted was different from the domestic market.

Building customer connections

To target today’s digital-savvy consumer, Lagardère Travel Retail is developing a “travel-centric, omnichannel approach” to maintain the growth of the business

and service the needs of brands who want to build customer connections. He referred to the operator’s joint venture with JD.com, which recently entered into a co-operation agreement with China National Service Corporation (CNSC) to develop e-commerce. Regarding Hainan, Fabre described the duty free hotspot as “an interesting, pioneering location in omnichannel and digitalization of duty free.” “Hainan is experimental in new approaches to the omnichannel business and customer relationships,” he said, adding that the fundamentals of Hainan’s business would remain strong thanks to these innovations, even when outbound Chinese travel resumes. “The Hainan market opportunity is still massive for international and local brands.” Fabre also observed that customer service was an important focus, particularly as more customers were coming from Tier 1 cities, where expectations of customer service and quality were high. Another commercial opportunity for travel retailers are high-speed railway


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China Watch webinar

stations. As high-speed rail links become popular in China since tourists are seeking more cultural experiences, stations remain a major strategic focus for Lagardère Travel Retail. Already boasting a decade of experience in operating in this sphere, the company is improving the retail offer and introducing new brands. “We’re on the cusp of a revolution in the high-speed railway network,” he enthused. In a message to brands, Fabre urged them to take risks and explore new business models, citing fresh opportunities on the mainland, such as enabling the Chinese to purchase pre-departure and purchase online overseas. “Experiment with new business models and take bigger risks to make sure we’re part of the future,” he said. Fabre’s comments about the importance of customer service and experiential retail were echoed by Zeng Qun Grace, Deputy General Manager at respected Chinese retailer Wangfujing Duty Free, one of the new entrants to the Chinese travel retail market, which obtained a duty free licence in 2020. The operator is set to open its first travel retail store in the near future and is embracing Gen Z in China, Qun said, as they make up 19% of China’s population (260 million people) and account for

13% of total household expenditure. Qun described Gen Z-ers as more global, easily influenced, more demanding, and seeking experiences. They are more demanding from brands in terms of features, style and convenience, and appreciate product customization for uniqueness. Social media, such as Little Red Book and TikTok, are among the preferred online platforms for this group, which use them to connect with opinion leaders. Speaking from Hainan, Jason Cao, of the Duty Free Expert blog, spoke of “Offshore Duty Free 2.0,” as the Hainan market develops. There are now five licence holders with 10 shops on the resort island, and major store expansion is taking place. More local brands are entering the market from China and other parts of Asia, and lots of new brands are being presented “each week,” he said, with pop-ups, events and other activities. He also noted the development of the social media/online sales and marketing channel. Rocky Chi, Head of Planning at Emerging Communications, a leading agency specializing in China market trends, discussed young Chinese consumers. According to research, and contrary to popular belief, 90% of this cohort make “considered” purchase decisions and believe that “less is more”, as they would

rather spend more on an item to get quality. They do “detailed homework” before a trip and compare prices, and more than 80% adopt the strategy “research online, purchase offline” in duty free shops. Chi also identified the growing popularity of KOCs (key opinion consumers), who are seen as more authentic more authentic than the KOLs used by brand for professional endorsement and brand awareness. The webinar audience also heard from Nancy Dai, Market Analyst at travel trends specialist ForwardKeys, who observed that Tier-2 cities are recovering faster in domestic Chinese travel than the Tier 1 hubs. She noted that Hainan is more popular for affluent travelers from Beijing and Shanghai, while Macau is increasingly attractive to couples, who prefer longer stays.

More brands are treating the Chinese market separately and taking a customized approach” - EUDES FABRE, CEO NORTH ASIA, LAGARDÈRE TRAVEL RETAIL

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FDFA

F D FA A R G U E S IT’S TIME TO SCRAP TESTING

Following the impact of Omicron, the association is lobbying the government to extend support into the fall and establish an industryspecific financial aid program by LAURA SHIRK

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ollowing a whiplash effect caused by the spread of the Omicron variant and the reversal of health and safety protocols in December, Frontier Duty Free Association (FDFA) continues to call for action and demand policy change. Ahead of the change in test requirement from PCR to rapid antigen for fully vaccinated travelers entering Canada, Global Travel Retail Magazine (GTR) connected with Barbara Barrett, Executive Director at FDFA, to discuss the leading association’s advocacy role throughout the pandemic. When GTR last spoke to Barrett pre-Omicron, the federal government had just lifted the PCR test requirement for fully vaccinated travelers returning to Canada following trips less than 72 hours and named FDFA as qualifying under Tourism – allowing it to benefit from the Tourism & Hospitality relief program (Bill C-2). Described as back-to-back wins, the celebration didn’t last long. Following the detection of the variant, the PCR test requirement was re-instated in less than six weeks. Suddenly, the long road to recovery seemed never-ending. Considering the impact of Omicron, Barrett says in retrospect, she is especially thankful that FDFA and its supporters lobbied as hard as they did to protect the travel and tourism industry.

A step in the right direction

FDFA, Coalition of the Hardest Hit Businesses, tourism boards and border communities are calling on the government to end all testing requirements

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Although the re-instatement at the end of 2021 was “extremely disappointing,” Barrett notes that FDFA has always been on the side of keeping Canadians safe. However, fast forward two months, the Executive Director explains because Omicron mainly spreads among community residents vs. international


(Left) Barbara Barrett at FDFA says after two years of border closures, land border business and cross-border tourism have been decimated across the country (Below) Marco Mendicino, Minister of Public Safety, and Gary Holowaychuk, Owner at West Coast Duty Free, discuss the need to change policy and protect the travel and tourism industry

travelers, it appears that neither test is working to keep Canadians safe. With this in mind, FDFA, Coalition of the Hardest Hit Businesses (CHHB), tourism boards and border communities are calling on the government to end all testing requirements. Barrett believes that the recent announcement made by Federal Health Minister Jean-Yves Duclos noting that travelers can choose to present a negative rapid test at the border is only a step in the right direction. Across the country, provinces are not only easing, but also removing restrictions altogether. How is it that thousands of people can gather to attend a sporting event or concert without showing proof of vaccination, but they can’t travel across the border to visit family and friends without showing a negative test? The association argues that this trade-off still requires travelers to find a testing site, schedule an appointment and pay for a test. The government says the mandate will be re-assessed regularly; however, Barrett says doing so even on a monthly basis is not acceptable.

Cross-border tourism & industry-specific support

When asked how operators are still successfully navigating current challenges and offsetting their losses, Barrett acknowledges that she has received calls from businesses wondering how they’re expected to pay their heating bill this month. FDFA and CHHB are working to ensure that depending on the COVID situation, the government has legislative ability to extend support into the fall. Currently, the association is lobbying the government to establish an industry-specific financial aid program to keep small business owners from continuing to tap into their personal funds to stay afloat. After two years of border closures, land border business and cross-border tourism have been decimated across the country. In addition to the ongoing talk about testing, duty free shops on both sides of the Canada/US divide seriously suffered in February due to a six-day blockade by “Freedom Convoy” protesters, during which the Ambassador Bridge and a number of other crossings were forced to shut down. At the center of the anti-vac-

cine mandate demonstration, thousands of protesters occupied Canada’s capital city for more than three weeks bringing business in downtown Ottawa to a standstill. Post-crackdown the government committed to offering up to $20M (CAD) to support the re-opening and safe operation of local businesses affected by the protest. As part of the program, small businesses may be eligible to apply for up to $10,000 in non-repayable funds. Barrett goes on to compare the impact of the three-week long demonstration to that of the long-drawn-out land border closure. FDFA is seeking financial support of the same value.

Too early to tell

Looking ahead, Barrett says it’s too early to commit to plans for this year’s FDFA Convention & Trade Show. “The impact of COVID has crippled the travel and tourism industry and many of its family-owned businesses. Since the duty free sector is highly regulated by the government, its personnel doesn’t have the ability to similarly pivot compared to other business models,” concludes Barrett.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

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A

Duty Free Dynamics expansion

master plan

Nicolas Dobry, CEO, Duty Free Dynamics

At its inception, DFD’s road map showed business consolidation, global expansion and brand re-positioning by LAURA SHIRK

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ounded in 2015, Duty Free Dynamics (DFD) successfully recognized a gap in the travel retail channel between the saturated core categories and the underdeveloped non-core categories. Initially localized in Latin America & the Caribbean, DFD realized that there was an opportunity to introduce new product categories into travel retail and created a business model focused on non-core categories such as lifestyle, fashion and accessories. At its inception, DFD’s road map showed business consolidation, global expansion and re-positioning as a wholesale distributor to become a commercializer of retail concepts. Presently, DFD distributes ten categories and plans to double its brand portfolio in the next 24 months. Bringing its vision to fruition, the leading distributor unveiled its new strategic plan: DFD Master Plan 2022 – 2023. Describing travel retail as a sales conversion that is regularly influenced by opportunity and price point, Nicolas Dobry, CEO, Duty Free Dynamics, notes that even though the channel consists of brick-and-mortar retail, it will be protected from the downturn of traditional retail. With DFD having secured its success among non-core categories and achieved vertical coverage of the Americas, it's planning to gradually become immersed in travel retail core categories – starting with Fragrances & Cosmetics. Dobry adds from a business perspective, brands want to have more control of the point of sale and competitive advantage when it comes to bypassing some parts of the value chain.

A global solution

Anticipating globalization from the get-go, DFD plans to officially debut in EMEA this year – from its recently inaugurated office in Barcelona, Spain – and reach APAC in 2023. This will mainly be accomplished utilizing DFD’s global operational infrastructure and its proprietary technological tools. As globalization progresses in the world of distribution, Dobry says the closer the 32 GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

brand is to the consumer, the more accurate the consumer data and the more efficient the data collection process. “The decision to globalize our operations generated from the brands that we represent. After benefitting from Duty Free Dynamics’ performance across the Americas, many requested that we propose a global solution consistent with our level of efficiency. Furthermore, our partner operators – namely those with a worldwide presence – reached out at the same time with a similar request,” he explains. Moving forward, DFD will continue to develop its brand lineup within active categories, while also incorporating new ones. With a soft launch taking place in EMEA at this time, the company will continue to monitor the current political climate.

A shift in business

Looking to assume a more relevant role in the travel retail value chain, DFD will be re-directing its business model. Until now, the company has been a traditional wholesale distributor with a significant value-added proposition. However, as outlined by its Master Plan, DFD will be re-positioning to become a commercializer of retail concepts based on turn-key business models and brands that can navigate a mono-brand retail environment. This will primarily take place by establishing different types of joint ventures with existing business partners and building new partnerships with those, subject to satisfactory knowledge and experience necessary for the long-term success of this specific business model.


LEGO, the LEGO logo and the Minifigure are trademarks of the LEGO Group. ©2022 The LEGO Group.


Moroccanoil

A natural EXTENSION

Complementing the re-launch of Moroccanoil’s Body range, the brand is also releasing a number of products such as hand wash, hand cream and body lotion

DESCRIBED AS A BRIDGE BETWEEN HAIR & BODY AND FRAGRANCE, DRY HAIR & BODY MIST SUPPORTS MOROCCANOIL’S MISSION TO PRIORITIZE EXTENSION AND ACHIEVE BRAND CONSISTENCY by LAURA SHIRK

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ollowing the global launch of Moroccanoil’s Dry Hair & Body Mist in October 2021, Global Travel Retail Magazine (GTR) connected with Sebastien Levi, Vice President of Global Travel Retail at Moroccanoil, to discuss the market’s reception of the product and the luxury brand’s continued focus on body care. Featuring its Dry Hair & Body Mist and extension into the fragrance category at TFWA Cannes 2021, Levi says considering the constant sampling of the product and spraying of Moroccanoil’s signature scent, the show served as a walking advertisement. Derived from popular demand, Dry Hair & Body Mist impressed business partners and consumers alike. Since its launch, the product has been listed as a top seller at Sephora and confirmed a future spot in the brand’s travel set – whether as a promotion or permanent addition in the local market and/or travel retail channel is to be determined.

product and category at the right time, Levi says it was only logical to coincide its extension into the fragrance category and the re-launch of Moroccanoil’s Body range. Offering more sustainable packaging and more affordable pricing, the renovated Moroccanoil Body Soufflé and Moroccanoil Body Butter deliver a slightly altered formula. Complementing the re-launch, the brand is also releasing a number of products such as hand wash, hand cream and body lotion. With six luxurious scents to choose from – including original – the new argan oil-infused line promises to take consumers on a sensorial journey through the Mediterranean. According to Levi, the wide range of available fragrance options demonstrates Morrocanoil’s commitment to body care. The brand plans to offer the full range of options via digital and the original fragrance (plus one) via brick and mortar.

A sensorial journey

During the next several months, Levi explains that merchandising is going be central – especially in travel retail where beauty consultants aren’t present at every location. The practice will focus on increasing personalization, promoting brand education and glorifying lead-

Described as a bridge between hair & body and fragrance, Dry Hair & Body Mist supports the company’s mission to achieve brand consistency and prioritize extension. With the mindset that it’s all about zeroing in on the right

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Professional brand positioning

ing products. Levi adds that it will also emphasize the brand’s visual identity: a combination of its key ingredient, signature scent and traditional color of blue. “It’s crucial to convey this image at the point of sale in order to form an immediate connection. Moroccanoil is going to amplify this in 2022 – and use this amplification to further educate the consumer about the brand within both hair care and body care and then the journey between hair and body. Whether at a hair salon, retail store or travel retail location, it’s important to effectively communicate with the consumer at the POS,” he says. Recognizing that broadening from hair to body is a natural extension, Moroccanoil remains rooted in professional, which gives the brand credibility and legitimacy. Founded on a strong partnership with hairdressers and stylists, the brand strongly benefitted from the re-opening of salons, spas and studios post-pandemic. “Any marketing initiative that reinforces the professional positioning of Moroccanoil supports its full product range and multiple channels. Although the brand is now omnichannel, the team at Moroccanoil will never forget its professional roots – it’s not something of the past, it’s still considered a vibrant and vital element,” concludes Levi.


2022 SUMMIT OF THE AMERICAS APRIL 10-13, 2022

· WEST PALM BEACH, FLORIDA

E X P LO R E T H E E N D L E S S P O S S I B I L I T I E S Join IAADFS and your colleagues from the duty free and travel retail industry in West Palm Beach, Florida, for the 2022 Summit of the Americas. Take advantage of valuable opportunities for learning, networking, and business-to-business meetings taking place in exhibit stands and private meeting rooms. Visit www.2022summitoftheamericas.org to learn more, register, and book your room reservation for this important industry event!

2022 SUMMIT OF THE AMERICAS April 10-13, 2022 Palm Beach County Convention Center West Palm Beach, Florida


Beirut Port Stores

THE SUN NEVER STOPS SHINING IN LEBANON

A rendering of the new Beirut Seaport Duty Free store with state-of-the-art design and feel

Mariem Mersni, the respected and dynamic duty free executive, is bringing her 20 years of expertise in the channel to one of the most inspiring projects currently under way in the Middle East by HIBAH NOOR

Mariem Mersni, General Travel Retail Director at Aphrodite Duty Free

36 GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

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unisian businesswoman Mariem Mersni, a veteran in the duty free industry, has been tapped by Aphrodite Duty Free to manage two important new seaport stores that will begin operating soon in Beirut and in Tripoli. Not only are they state-of-the-art stores, but they also carry a message of hope, optimism and renewal. Aphrodite Duty Free’s founders and owners are the Lebanese businessmen and brothers Karl and Jad Raphael, who own and operate travel retail stores in seaports, border shops and airport shops specializing in luxury products. Mersni enthuses: “I feel very proud to be able to work with Karl and Jad. I have known them my entire career in duty free and I have the utmost respect for these professional and honest businessmen.” The brothers’ retail business began in the mid-1990s when they built up a solid travel retail infrastructure in West Africa. Since then, Aphrodite Duty Free has shown continuous growth and has successfully created a dynamic retail environment. At the beginning of 2009, the company expanded its operations to cover Lebanon where it launched its stores and warehouses in the Beirut seaport duty free zone covering a total space of 875 square meters. Aphrodite stores sell the world’s best-selling brands of cigarettes, cigars, liquors, wines, perfumes, cosmetics, consumer electronics, high-end and collectible lighters, mobile phones, souvenirs and confectionery items.


The new stores in Beirut and Tripoli will offer the world’s best-selling brands of tobacco products, liquor, wines, perfumes, cosmetics, consumer electronics, mobile phones, souvenirs and confectionery

Strong and dynamic infrastructure

Aphrodite’s retail locations work in synergy to provide an exciting consumer experience and effective sales results in diverse travel retail sectors. Aphrodite Duty Free has become one of the leading companies in its sector through the creation of new business co-operations and its international product range. Its main customers are embassies, the United Nations ship chandler, cruise lines and other tourists. The goal is to expand into the international market. After the Beirut explosion in 2020, when the shop was completely destroyed, Aphrodite’s Chairman and CEO Karl Raphael decided to not give up, believing in the strategic location and its potential to rebound as a profitable business with a new concept store. Mersni, who is the General Travel Retail Director at Aphrodite Duty Free, describes the new store as “very unique, inspiring elegance, professionalism and modernity”. She is upbeat on the location, too, despite the tragedy that took place in 2020. “Lebanon is the center of the Middle East and is the liveliest country in the world. Most tourists are from Europe and the Middle East. We will carry all product categories. The embassy has a quota for buying, and they will order from us.” She adds: “It’s like creating a new baby, as the store was totally destroyed by the bomb.” While the Beirut store replaces the original shop, Aphrodite’s Tripoli location is brand new.

The color yellow has been chosen for the new store interiors, signifying the sun and Aphrodite Duty Free’s optimism about the future

The best duty free experience

Mersni, who divides her time between Beirut and Paris, believes she is the perfect fit for this position with her strong experience in the duty free business. Her immediate goal is to get the businesses going at the ports as soon as possible. “The port shops will open in the next two months with a grand opening in May or June. I’m extremely enthusiastic about this project. No matter what Lebanon goes through, the country never gives up hope. The yellow and gray color scheme used throughout our stores signifies the sun and that the sun will rise again. The sun never stops shining in Lebanon.” Speaking about her new role, she enthuses: “I do the purchasing, strategizing, marketing and budget planning. I will be visiting potential suppliers during the IAADFS Summit of the Americas show in West Palm Beach, Florida, in April and also at the TFWA World Exhibition in Cannes. I look forward to spending one-on-one quality time with all the suppliers I’ve known over the past 20 years during my time in the industry.” Mersni tells Global Travel Retail Magazine: “You know my profound passion for the duty free business. While I will continue with my company’s usual activity, Aphrodite Duty Free will be my premium focus, and I will put my all in to making it the best duty free experience!” *Mariem Mersni can be contacted on mobile in Lebanon: +961 71 039 050; France: +337 87 75 40 58; or email: mariem@transaholding.com.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

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Confectionery Report

Valuing a

sustainable economy

As of September 2021, Ferrero Rocher T30’s improved sustainable pack contains 100% recyclable material

GTR reached out to brands across the confectionery category to find out how leading companies have continued to prioritize and practice sustainability by LAURA SHIRK

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Loacker has released new paper-based packaging for its Gardena Mini Mix Duty Free Pouch

onsidering the ongoing impact of the pandemic and disruption of the supply chain, Global Travel Retail Magazine (GTR) reached out to brands across the confectionery category to find out how leading companies have continued to prioritize and practise sustainability. For a closer look, GTR spoke with representatives of the following key players: Ferrero Travel Market, Ritter Sport and Loacker. Despite shared challenges, it’s apparent that consumer expectations remain the same – shoppers continue to value a sustainable economy and purchase based on brand transparency. As discussed, none of the brands listed have had to compromise their practices in order to meet expectations or drive sales. On the contrary, all of them have further committed to ensuring full visibility, traceability and circularity across their supply chain. At the top of their list: sourcing raw materials, increasing forestation, implementing eco-friendly packaging and expanding brand education.

From farmer to factory – and beyond

Despite the COVID-19 situation, Ferrero Travel Market redesigned the packaging of its top sellers in fall of last year. As of September 2021, Ferrero Rocher T30’s improved sustainable pack contains 100% recyclable material with -38% plastic reduction and -30% carbon footprint reduction. From farmer to factory – and beyond, Ferrero’s integrated sustainability approach includes the development of its POS system. 38 GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022


During the pandemic, Ritter Sport accelerated its timeline to focus on sustainability and established a new packaging concept for its Travel Retail Edition ranges

“Our passion for creating the highest quality products defines our everyday activities all the way back to sourcing the very best raw materials. The ‘very best’ not only in terms of product excelling, but also in terms of rigorous criteria in sustainability. We apply these all along our value chain in partnership with a multitude of stakeholders,” explains Giovanni Ferrero, Executive Chairman, Ferrero Group. According to Sergio Salvagno, General Manager, Ferrero Travel Market, Ferrero also strives to use only the best in modern technology in order to save energy and use water reasonably and responsibly. In addition to sourcing and packaging, while the company intends to achieve 100% recyclable, reusable or compostable packaging by 2025, it’s working to bring attention to food safety and climate change. Presently, Ferrero has achieved its full food safety certification for group production sites and reached 100% green electricity purchased in Europe. Since the first phase of Ferrero’s sustainability strategy came to a close in 2020, the company is experiencing a period of transition. Salvagno says the brand is defining its new commitment(s) and target(s) that will drive the next phase (until 2030). Looking ahead, he adds it’s important to be flexible in order to adapt on a global scale – the concept of sustainability is constantly evolving and it's necessary to react quickly and accordingly.

Doing the right thing

During the pandemic, Ritter Sport accelerated its timeline to focus on sustainability via a new look and feel of its packaging. The brand believed it was time for its Travel Retail Edition ranges to “stand out” with its own packaging concept. According to Jan Pasold, Managing Director of Global Travel Retail, Ritter Sport, the updated propeller logo signals the feeling of wanderlust, serving to translate the new color-coded design and encapsulate its sustainability strategy.

“The new travel retail exclusives’ brand identity and packaging design sets out to position Ritter Sport as the most colorful, impactful and innovative travel retail confectionery pioneer, while we continue to develop our range of chocolate bars and individually wrapped chocolate products designed for the TR gifting and snacking purchase opportunity,” says Pasold. Described as the next step in combining the colorful world of Ritter Sport with its focus on sustainability, its new retail merchandising units and travel retail activation debuted at Zurich International Airport in November 2021. The company wants to underline its brand purpose in physical form as part of the consumer experience: doing the right thing to create really good chocolate. “Ritter Sport wants to amplify its sustainability purpose via new packaging that serves to educate the consumer. Our first step is creating an on-pack QR communication space on all packaging. Travelers have the opportunity to learn about our sustainability engagement via a quick scan of their device. Core topics include 100% certified sustainable cocoa supply chain, FSC-certified packaging and climate neutrality. “Our goal is to communicate to the global traveler the evolving sustainability credentials of Ritter Sport products through a constantly updated narrative via digital tools,” adds Pasold. With sustainability at the heart of Ritter Sport’s evolving brand message, the company aims to complete its updated packaging journey from plastic to paper across its entire range by 2025. The goal: to use packaging made from renewable materials that can be recycled as a valuable material.

Nature and the environment

Reiterating the fact that most consumers are more likely to purchase products that allow them to personally contribute to creating a sustainable world, Juan Miguel Cabrera, Business Director Duty Free & Travel Retail, Loacker, states nowadays people are more attentive to what they consume and how their purchase(s) impact nature and the environment. “We are firmly convinced that outstanding product quality, protecting the environment, adhering to social and ethical principles and economic success do not have to represent conflicting goals. “At Loacker we try to work in all areas in a resource-saving manner and we are committed to social and environmental issues in our supply chain,” concludes Cabrera. www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

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Tito’s Handmade Vodka

vital

REMAINING

Tito’s Handmade Vodka sees things picking up in the Americas region as the company continues with its long-run sustainability and other initiatives that helped land a major new cruise contract by WENDY MORLEY

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n comparison to the most of the world, travel retail in some key airports in the US and Caribbean have been showing good signs of recovery, according to John McDonnell, Tito’s Handmade Vodka Managing Director – International. These include Miami, DFW, Puerto Rico, Aruba and Cancun. “I’m hearing that the cruise channel is back to about 60% of its 2019 business, so that’s encouraging as well,” he says. “We recently signed with the new Virgin Voyages to supply Tito’s Handmade Vodka on those ships – I’m proud to say that in deciding to take Tito’s onboard, they were particularly impressed with our commitment to sustainability and social responsibility.” McDonnell says Tito’s Handmade Vodka has been focused on sustainability from day one. One of the largest privately owned solar arrays in Texas helps cover a substantial portion of the company’s energy needs. “We also have a 600,000-gallon rainwater collection system to support our water usage for landscaping and organic farm irrigation, and approximately 99% of our production packaging waste stream is captured and recycled in our production facility.” He adds that these efforts are not limited to the company’s production efforts, as the company is involved in sustainability efforts across the world. As one example, Tito’s funds the operation of a river interceptor run by The Ocean Cleanup, to help prevent plastic from reaching the sea via the Ozama River in the Dominican Republic.

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Tito’s annual red white and blue bag for Independence Day has always proven to be a big hit. This one celebrates the company’s 25th anniversary

Supply chain

As with virtually every supplier, McDonnell says the company has encountered significant supply chain issues, especially in Asia, but managed to deal with them in advance. “Early on as we started to see some of these supply chain issues begin, we made several proactive moves to load up our Miami warehouse to prevent out-of-stock situations for Tito’s in the Caribbean, and that has helped us tremendously,’ he says.

Promotions and initiatives

Two of the more popular promotions for the company are Tito’s red, white, and blue bag for American Independence Day, July 4, and Tito’s ugly sweater for the holidays. McDonnell confirms these two will run again this year, and he says the company will also be running ads in-store in several markets. Giving back has been part of Tito’s DNA from day one, with particular focus on dogs, with the company’s Vodka for Dog People efforts aiding animal welfare organizations across the region. “It’s been

a real challenge in the region, and across the world, with people giving up pets that they adopted during COVID,” says McDonnell. “These pet welfare organizations are doing incredible work caring for and finding new homes for these neglected pets.”

What’s needed now?

McDonnell says our industry needs to focus on ecommerce. “It’s amazing to me that I can land in practically any city in the world and with the tap of my phone can order an Uber to come pick me up, yet we still haven’t been able to find a solution to ecommerce in travel retail,” he says. “It’s incumbent on all of us – from suppliers and retailers, to our trade partners at IAADFS and TFWA – to work together on an industry-wide platform for online purchase and contactless payments. I’ve been advocating for this for some time – long before the pandemic – that an integrated ecommerce solution is vital if this channel is to remain relevant and competitive.”



Beam Suntory

Bounce

back

Beam Suntory introduced the uniquely global blend, House of Suntory’s Ao, in 2020

After an all-but-silent 2020 in the channel, Beam Suntory’s Global Travel Retail Marketing Director Manuel González and his team brought exclusives and activations back to in 2021; that will continue at an even stronger pace in 2022 and beyond by WENDY MORLEY

Beam Suntory Global Travel Retail Marketing Director Manuel González says after some tumultuous times the world is shifting into a ‘new normal’

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s with virtually all companies worldwide who operate in travel retail, Beam Suntory went “through some tumultuous times,” says Manuel González, Beam Suntory Global Travel Retail Marketing Director. “Fortunately, in the past year we have seen a welcome bounce back, with fewer restrictions and an increase in the overall number of international travellers across all regions, with the world shifting into this ‘new normal,’” he says. He adds that historically the Americas has been a key focus area, especially for American Whiskey. This category is well represented within the company’s portfolio, as Beam Suntory owns such brands as Jim Beam and Maker’s Mark in addition to other premium whiskeys such as Booker’s and Basil Hayden’s. Traffic in the region is returning, and when asked about how the pandemic and the recovery might affect the company’s plans, González says, “Our focus remains to support our customers and bring our business back to pre-pandemic levels of success.” The company had several initiatives in the works over the past year in preparation for this day, including bringing the ultra-premium Jim Beam Lineage to market. “We also introduced category solutions to ease consumer navigation through our portfolio. An example is the recent JBBDCo units recently installed in Chicago Airport.” González reports that the company is sharing its attention equally on popular destinations around the world, including Asia where, he says: “A tailored strategic approach is required to successfully target key demographics in the likes of China.”

Premium channel

Travel retail has recognized the value of premiumization, and that focus steadfastly remains. “We will continue to drive our 42 GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022


In line with the travel retail trend toward premiumization, limited edition exclusive Bowmore Design by Aston Martin has proved to be quite popular in the channel

marketing initiative was virtually nonexistent in 2020; González says the company lost the ability to bring the brands to life and provide an immersive experience at this time. “Fortunately, in 2021, we saw the return of these initiatives, from launching a Sipsmith Wimbledon activation in London, to global activity for Bowmore and Maker’s Mark in Chicago and New York. With more passengers returning to airports, we expect and look forward to partaking in even more airport activations in the near future,” he says.

2021 brought activations back to airports, such as this one in Changi. Activations in the Americas include Bowmore and Maker’s Mark in New York and Chicago

premiumization strategy by offering a combination of exclusive products, limited editions and lucrative activations for our shoppers,” says González. “We will also concentrate our efforts on expanding our brand presence through unique premium shopper experiences and brand visibility.” In the Americas, Jim Beam and Maker’s Mark are the most popular brands in the company’s portfolio, but González says that in line with the company’s global portfolio approach, it is dedicated to driving other categories forward. “We introduced Ao to this market towards the end of 2020, which is of course a supreme liquid developed by our well-known House of Suntory brand. Working alongside our colleagues in the domestic markets we will also address booming categories, such as gin, through our different brands, like Roku and Sipsmith.”

Travel exclusives

González says Beam Suntory will indeed be offering exclusive items to travelers. “Providing exclusive items to Global Travel Retail is a big focus for us as we continue to strive to address our shopper needs to purchase extraordinary products while travelling,” he says. “Some recent examples of our limitededition exclusives include the launch of Bowmore Design by Aston Martin, which has proven extremely popular with our customers. Innovations and line extensions are a key driver on our portfolio strategy, and something we will continue working on in the future.”

Airport activations

Activations are an essential part of airport marketing, which in turn helps drive sales of new products globally. This type of

A better tomorrow

While borders are opening and air tickets are selling, 2019 numbers remain a distant vision. “Based on current trends and assuming a certain level of volatility, we are confident 2024 will be the time where our industry will return to its former glory,” says González. “Of course, with the global scope of our channel, this will differ across regions, and we need to remain cautious of any further developments in the ongoing pandemic that might impact the travel industry.” While the pandemic may not have been brought about by the world’s unsustainable practices, somehow it brought their reality to the surface. Sustainability has become a hugely important issue for humans around the globe, including not only consumers but also those involved in the businesses that serve them. Beam Suntory is no exception. “A major pillar for our business is our commitment to making sustainability a real long-term focus for ourselves and our partners. Having announced the Proof Positive initiative last year, which involved pledging to invest $1 billion as part of a new sustainability initiative, we are fully dedicated to our long-term 2030 environmental targets as a business. From employee impact groups driving change, to our leadership team being accountable for their own individual sustainability goals, we are doing everything we can on both a micro and macro level to turn these goals into a reality,” says González. www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

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Brown-Forman

Ready for

recovery

Brown-Forman’s travel retail team stayed busy through the last challenging couple of years, preparing to tear out of the gate when the time was right, and it looks like that time is now by WENDY MORLEY

Brown-Forman’s team was busy during the pandemic, working on such initiatives as the partnership with Gebr. Heinemann on TR exclusives Sweet &Oaky and Bold &Spicy

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or Brown-Forman, the future in Americas travel retail is looking very bright indeed, says Montgomery (Monte) Wilson, VP Director - GTR Americas & APAC. “The recovery in the Americas is progressing well and is approaching pre-pandemic conditions faster than expected,” he says. “Air travel is up and the US airports serving Mexico, the Caribbean and Latin America are enjoying strong duty-free sales including Miami, Atlanta, JFK, Chicago, Houston and Dallas.” Wilson adds that in 2021, five of the top ten air traffic routes in the world were from airports in the Americas to major tourist destinations including Cancun, Punta Cana and Panama City. He also mentions the southern border between the US and Mexico as having fared well even during the worst days of the pandemic 44 GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

because of relatively easy passage and no stringent regulations. This was not the case on many borders and certainly the border between US and Canada, where mandatory quarantines and other government restrictions closed cross-border passage to non-essential travel for lengthy periods of time; in fact it is very recent that the testing requirement was dropped for vaccinated travelers into Canada. Another area with a positive outlook, according to Wilson, is cruise. “Cruise line travel in the Americas shows great promise and is on a pace to return to pre-lockdown passenger capacities much sooner than other regions,” he says. “In fact, these positive trends supported by consumer’s strong desire to cruise again has prompted several cruise lines to reposition their ships to the


Aude Bourdier, VP Managing Director - Global Travel Retail for Brown-Forman, says the lockdown increased consumer appetite for authenticity, a trend that works well with the company’s portfolio

United States from other global ports. This promises fuller ship passenger manifests and thus a return to duty free sales on the high seas. As expected, the greatest rebound in the cruise industry has and will continue to occur in the Caribbean.”

Popular brands in the region

Brown-Forman’s portfolio allows the company to move into the travel recovery phase with strength and purpose. “While we are very pleased with the increased pace and volume of travel retail in the Americas, we intend to build on that momentum during the coming year by focusing on the strengths of our portfolio,” says Aude Bourdier, VP Managing Director - Global Travel Retail. “As such you can be sure that Jack Daniel’s and Woodford Reserve will be receiving a lot of attention, as will Old Forester – a truly outstanding bourbon that is beginning to catch the eye of savvy spirits drinkers among the traveling public.” While American Whiskey has been the traditional liquid for the company, in recent years Brown-Forman has become increasingly strong with other important liquids. “We will make every effort to capitalize on the growing interest in tequilas across the Americas by bringing focus to the taste, history and authenticity of Herradura and el Jimador – two of the top-selling tequilas in Mexico,” says Bourdier. “Finally, as the reputation of our single malts continues to spread we will increase our marketing efforts on their behalf in various markets across the region.”

The key drivers remain

Bourdier says authenticity and premiumization not only remain key drivers for travel retail, but the pandemic has only increased consumer appetite for this range. “Trends have historically demonstrated that the travel retail consumer demands authentic spirits of a premium nature. There is every indication that the lockdown served to sharpen the interest in authenticity as newly regained freedoms have been deemed too valuable to waste on gimmicks or products of lesser quality,” says Bourdier. “American whiskey remains the channel leader, led by Jack Daniel’s and Woodford Reserve along with Old Forester. There is also good interest in Single Malts such as BenRiach, The GlenDronach and Glenglassaugh, and high-end tequilas such as Herradura are enjoying increased popularity across the Americas. All of these spirits are of a premium nature and boast the highest credentials of authenticity.”

Montgomery (Monte) Wilson, Brown-Forman’s VP Director - GTR Americas & APAC, has a positive outlook for the coming year, pointing out that the recovery in Americas is progressing well

Business travel slower to return

Throughout the pandemic and around the world, it’s been noted that the shopping traveler has skewed younger than in the past. Bourdier says this is because of the type of traveler: “Airport passengers and duty free shoppers are skewing younger primarily because leisure travel has rebounded at a considerably faster rate than business travel,” she says. “It appears that the corporate world is still somewhat cautious regarding international travel and content to rely on virtual meetings and other forms of remote communication.” She adds that business travel is beginning to tick upwards steadily. “In my opinion, a nearly complete rebound is inevitable given the need for face-to-face contact and interpersonal communication for successful business relationships. In the meantime, leisure travel continues to pick up at a more rapid pace powered partially by young travelers who are looking for the adventure and excitement travel can bring to their lives.”

Energized and ready

Bourdier says the Brown-Forman travel retail team remained active throughout the pandemic despite the channel’s severe challenges. “Our team worked very hard in preparation for the highly anticipated return of international travel and commerce,” says Bourdier. “We are now beginning to see the fruits of our labor. An example of this hard work coming to fruition would be our partnership with our friends at Gebr. Heinemann to launch our travel retail exclusive whiskies under the Jack Daniel’s banner – Sweet &Oaky and Bold &Spicy. As expected, these were met with considerable enthusiasm and success. Over the coming months, you can expect similar partnerships across the Americas as well as other regions of the world.” As for the coming year and years in this important postpandemic times, Bourdier says the team is charged up and ready. “After enduring this global challenge that appears to be coming to an end, let me assure you that the Brown-Forman Global Travel Retail team is highly energized and eager to fully get back to business and devote our considerable knowledge and expertise to meeting the needs and demands of the eager and motivated traveling public,” she says.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

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MONARQ Group

Exciting times by WENDY MORLEY

Among some of MONARQ’s popular recent additions to its diverse portfolio include Pernod Ricard’s Malfy Gin

A DIVERSIFIED PORTFOLIO AND ACTIVE PLANS INCLUDING THOSE FOLLOWING CURRENT DEMOGRAPHIC TRENDS HELPED MONARQ GROUP TO SEE ITS BEST SALES EVER IN 2021, WITH 2022 SET TO BE BETTER STILL

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he Duty Free retail and cruise channels have been particularly challenging during 2020 and 2021, but MONARQ Founder and Managing Director Robert de Monchy says he has learned to spread out both risks and opportunities throughout the company’s history, leading to MONARQ Group’s supplying both duty free and domestic channels in the Americas with the exception of domestic USA and Canada as a whole. “We have seen a lot, from natural disasters, to political overtakes, humanitarian crises and pandemics, and over the past 15 years our strategy has proven increasingly strong,” he says, adding: “Moreover, we don’t depend on a specific category as we are supplying spirits, wines, beer and a number of non-alcoholic beverages.” Although the industry continued to be strongly affected by the pandemic in 2021, the year was MONARQ Group’s best yet, and de Monchy says 2022 is following the same trend. “We see growth in basically all main categories and spread over all channels,” he says. “Some categories are excelling, such as rosé and sparkling wine, beer, RTDs and premium spirits,

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especially tequila and whisk(e)y, including bourbon. Premium rum has started to gain traction as well.” The company has welcomed a number of new prestigious premium brands to its portfolio in recent days, including part of the Pernod-Ricard portfolio, namely Lillet, Del Maguey and Malfy Gin, in addition to Bollinger Champagne, Barbancourt Rhum, Born Rose and, most recently, Uncle Nearest American Whiskey.

The new customer

De Monchy says consumer patterns are changing. “Millennials and now Generation Z have become the new consumer groups,” he says. “They have different interests and buying patterns, and prefer different drinks and brands. The lines between alcoholic and non-alcoholic drinks are blurring, depending on the occasion.” It’s not only what this group buys that has changed, says de Monchy, but also how. “The market and its supply chain are changing to target and service these new generations. This is due to the strong growth of social media, e-commerce and hybrid distribution models. Trends and

life cycles are much shorter these days, which makes our job more exciting than ever before.”

Plans and goals

MONARQ Group has a number of new exciting plans, projects and brands in the pipeline, says de Monchy, but the company focus remains strongly on the existing portfolio. “We are looking forward to the new cruise season towards the end of the year, and we continue to invest in our company, our team and our systems,” he says. “In 2022, we will further grow our organization in, amongst others, marketing, regional management, customer service and compliance.” De Monchy says the company’s goal is to continually increase its presence and impact on the business in its territory, both qualitatively and quantitatively. “At the same time, we are very aware of our environmental footprint and ensure we operate and compensate to achieve full carbon neutrality as a company,” he says, adding his goal specific to the Summit of the Americas: “As always, we welcome our friends and potentially new customers to our booth and present them our portfolio, including our new brands.”



Digital retail with Epeexx

TECH SAVY

Epeexx is a fullservice touchscreen monitor that can display, sell, advertise and educate cruise and airport passengers on various product lines

New technology aims to enhance the future of cruise and travel retail

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new digital retail display called Epeexx has been launched that is billed as “a 21st century virtual retail game changer”. The virtual display system aims to expand retail hours and increase product choices for passengers, brands, cruise ship, airport, and other travel retail operators. The patent pending touch-screen display solution is described by Epeexx Inc as “merging an improved take on the digital shopping experience with the convenience and ease of in-person retail browsing”. The system is designed to expand the shopping experience, so customers can browse through a wide selection of options presented to them in a way that is more intuitive, real and visual than the typical online experience. The solution enables cruise and airport passengers to shop outside the store hours at their leisure, when the ship is stopped

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at the port, or after duty free shops closing hours at airports, and in airline lounges. It offers more options and products without the trouble of physically carrying those products/bottles through the airports. Epeexx also offers the convenience of receiving their purchases at home. Epeexx is a full-service touch-screen monitor (ranging from 42 to 65 inches) that can display, sell, advertise and educate cruise and airport passengers on various product lines. It expands the retail hours and offers more brands to come onboard ships or at the airport or other travel retail stores with no risk to the retailer. The new system will also provide a complete turnkey retail sales opportunity.

Epeexx benefits: •

Zero wasted square footage for products on shelves;

No attendant needed to operate Epeexx;

Completely self-sufficient, zero maintenance and upkeep;

Sell products while the ship is at port or outside of duty free shops’ hours at the airport;

No added inventory for the retailer/can carry a broader selection of products;

Avoids hassle of carrying purchases home from a trip;

Fresh and authentic products conveniently and professionally shipped directly to their home;

Toll-free help desk for passengers to provide shipping updates and customer service;

• Better advertising and product knowledge opportunities to targeted captive audience;

Easier and more affordable training and education that will reach more associates and passengers alike.

Epeexx (www.epeexx.com) is launching the travel retail version in Fall 2022 and currently testing with select retailers. Ron Razeggi, Founder/President, Epeexx Inc, and Katherine Sleipnes, Travel Retail Director, Epeexx Travel, will be available for meetings at the upcoming Summit of the Americas in Palm Beach, Florida. To set up an appointment, Sleipnes can be contacted on mobile tel: +1 954-557 8638.



TravelMate

TOURISM

TECH Travel guides are easy to come by, but Stratos Baschenis came to realize that finding comprehensive, interesting, easy and knowledgeable content in one’s own language at an affordable price was another matter altogether

In the airport in Bergamo (near Milan) flights go to Athens, Amsterdam, Berlin, Rome, Madrid, Prague and more, thus the products sell in departures for these locations

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ravelMate owner Stratos Baschenis launched the app two years ago with the goal of providing a richer travel experience offered in the user’s own language. TravelMate acts not only as a tour guide but also as a concierge, providing information on services and virtually anything you might need when visiting a city — something you can’t get from a guidebook. And all this at an affordable price point. “We don’t want to be a traditional audio guide as the one you can find in a museum but something different like a touristic companion who tells you the most important things of the most important venues of the city visited,” says Baschenis. More than 200,000 people have now used the company’s apps, with more than 3 million files listened to. The products are performing especially well given that the company launched just as the pandemic was beginning. “Given that our products were all brand new and launched in the COVID period, we’ve had strong sales. We have been performing well in airport shops, in travel agencies, money change companies, with tour operators, and with ticketing companies that combine our products to the ticket entrance —for example in museums, parks, leisure venues,” he says. 50 GLOBAL TRAVEL RETAIL MAGAZINE APRIL 2022

by WENDY MORLEY

Current cities available: Amsterdam, Assisi, Athens, Barcelona, Beijing, Bergamo, Berlin, Cinque Terre, Dubai, Florence, Hong Kong, Lecce, London, Madrid, Miami, Milan, Moscow, Naples, New York, Palermo, Paris, Pisa, Prague, Rome, Saint Petersburg, Santorini, Singapore, Tokyo, Trento, Turin, Venice, Verona and Washington DC Languages available: Italian, American-English, Spanish, French, German, Mandarin and Russian

Why TravelMate

Baschenis says while you can find audiocontent within the Google play store and Apple store, it’s mainly in English. “We have invested in translating and speaking with professionals in seven languages. Then we decided to sell our content not only via apps on the App stores but also to allow people to find our audiocard and audiopack in physical shops.” The audiocard is simply a card with a hidden pin code that allows the user to download the app and enable the content of the city he will want to visit. The audiopack is a box that contains earphones for android smartphones, an adapter for Apple smartphone plus the audiocard. Baschenis feels the TravelMate audiopack can capture some earphone sales, as it offers not only the earphones but also a digital companion for the city the traveler will visit. While TravelMate is a tech product that competes with earphones,

however, it’s also a hybrid in that it could compete with the Lonely Planet book. “In our airports we have a specific place at the entrance of the store,” he says.

Easy integration

Because of the company’s innate tech abilities, it has developed API integration to allow partners to integrate the sale of our digital content through their booking engine. “In this case we don’t ask money to buy any PIN code in advance, but we work with a win-win method,” Baschenis states. “For example we are integrated in Booking.com, so travelers can buy our TravelMate audiocontent in the experience sector. In this case the user pays Booking.com directly, and Booking pays us and keeps its commission. We could certainly replicate the same business model with airlines, hotels, air booking agencies and more.”




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