Global Travel Retail Magazine - Special Spirits & Tobacco Issue 2022

ARI toasts positive momentum p. 14 Interview: Thorsten Hartmann at IWSR p. 18 Forging a sustainable and smokeless future p. 32

SPECIAL ISSUE: SPIRITS & TOBACCO

GTRMAG.COM

JUNE 2022 VOL 32 · NO 3

Keeping

Letter from the Editor

our spirits up

W

elcome to our Spirits & Tobacco Report, an in-depth look into two of the most important travel retail product categories.

Let’s take liquor first. Global liquor sales grew 12% by value and 3% by volume last year to reach US$1.17 trillion, according to drinks analyst IWSR. The figures show that value growth is outpacing volume growth and demonstrate that premiumization is driving the international market – and that’s good news for travel retailers.

Global Travel Retail Magazine interviewed Thorsten Hartmann, Director of Custom Analytics at IWSR, who says that the gradual introduction of ‘tasting stores’ in airports worldwide will grow over the next several years, as retailers look for new ways to improve their customer service and meet the expectations of shoppers, who expect richer experiences.

He also believes that duty free exclusives have become increasingly important and will likely continue to drive volume.

This view is shared by travel retail researcher m1nd-set. In its latest report, which looks at travel shopper behavior in 2021 and in Q1 2022 vs. previous years, the company discovered that finding an assortment of products on promotion or perceived as unique (a duty free exclusive) is more likely to boost conversion compared to pre-pandemic. In addition, the in-store experience of alcohol duty free shoppers has increased in importance.

Turning to tobacco, m1nd-set notes that while footfall within the tobacco segment doubled in Q1 2022 vs. pre-COVID, the conversion rate showed a significant decrease.

Challenges remain – including the absence of globe-trotting Chinese travelers, depressed business travel, geopolitical issues and economic headwinds. For many companies, sustainability is on the list.

Tobacco giant Philip Morris International (PMI) recently unveiled its new environmental, social and governance (ESG) framework, based on a sustainability assessment conducted in 2021.

Speaking to Global Travel Retail Magazine, PMI Vice President Duty Free Edvinas Katilius explained its wide-ranging impact: “Our transformation at PMI is not only about substituting one product with another. It also requires transforming our entire value chain, with a broader perspective including the ecosystem of our business partners, as well as the way we engage with society.”

Finally, Rob Marriott, CEO at ARI Middle East, sums up the situation: “Customers are still looking for great value and range, newness, provenance, and travel retail exclusives. ARI’s recalibrated Customer Value Proposition leaves the business best placed to meet these needs and ensure that we can offer an exceptional customer experience at all touchpoints on their journey.”

Kindest Regards,

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

4 GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

JUNE 2022 · VOL 32 · NO 3 Global Travel Retail Magazine (ISSN 0962-0699) is published seven times a year by Paramount Publishing Ltd. It is distributed digitally worldwide, with printed issues in April, May, June, July, September, October and November.The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or the editor. June 2022, Vol 32. No. 3. Printed in Canada.

All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. Paramount Publishing Ltd.

GLOBAL TRAVEL RETAIL MAGAZINE Tel: 1 905 821 3344 www.gtrmag.com PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@gtrmag.com MANAGING EDITOR Jane Hobson jane@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

Contents

WHAT’S INSIDE 24 Lead Stories 8 JTI Interview

A consumer-centric entity GTR Magazine talks to Antonio Vencesla at Japan Tobacco International who urges caution amid “slow” recovery and says as a consumercentric company, JTI has used this time to gather insight into the tobacco segment in order to strengthen its presence in the travel retail channel

32 Philip Morris

International Update

A sustainable & smokeless future In a major announcement in May, PMI released its new sustainability assessment conducted in 2021; its approach to the practice consists of eight impact-driven strategies

42 Tito’s Handmade

Vodka 25th Anniversary

12 m1nd-set: TR Shopping Trends

Purchasing missions & drivers A closer look at m1nd-set’s latest take on the S&T category reveals that some trends in Q1 2022 differ widely from pre-COVID years, often continuing with trends observed in 2021

A quarter century and counting Celebrating its 25th anniversary, Tito’s Vodka asks supporters to share their personal connection to the brand in the ultimate fan contest; the grand prize: a trip to Austin, TX, and the chance to join the team in a three-day celebration to mark the milestone

22 Mazaya Tobacco Brand Identity

14

A pragmatic approach to problem solving Having surpassed 2019 benchmarks, Mazaya relies on transparent communication and the dynamism of its brand portfolio to contribute to the growth of the Spirits & Tobacco category

Features Aer Rianta International Q&A Fraternity Spirits scales new heights IWSR discusses travel suppression and cost of living The backbone of the TR channel

14 16 18 30

Editor’s Picks KTI king of tobacco Distell’s festival-inspired whisky activation

34 46 48

42

Interview: JTI’s Antonio Vencesla

JTI URGES CAU T I O N AMID ‘SLOW’ RECOVERY JTI is committed to providing adult smokers and vapers high quality conventional tobacco products alongside reduced risk products

Antonio Vencesla, Corporate Affairs and Communications Director, Global Travel Retail, JTI

by HIBAH NOOR

A

JTI is well represented at its home airport in Geneva

lthough the global Covid-19 situation has improved in some countries worldwide, the pandemic is by no means over, and it is important to follow the recommendations of local authorities to slow the spread of the virus.

These are the views of Antonio Vencesla, Corporate Affairs and Communications Director, Global Travel Retail, JTI (Japan Tobacco International), who took over from Gemma Bateson last year.

Vencesla previously held the role of Corporate Affairs and Communications Manager at JTI Worldwide Duty Free, based at the company’s Geneva headquarters. This was before he moved to Africa in late 2015 where he helped drive the sustainability strategy for JTI’s global supply chain operations in Malawi.

“We have always been very open and clear that the wellbeing of our employees and their families, communities, customers and partners is the priority during the pandemic, and this remains the case.”

2019 levels in the not-too-distant future.

“We need to be cautious as recovery has been slower than initially planned and a level of uncertainty remains.”

The speed of recovery in each region is also different, emphasises Vencesla. “The reopening of Asia, specifically in China, is still not complete. We continue to regularly re-visit our plans.”

JTI, which provides its products to adult travelers is carefully checking new purchasing behaviours and digital trends to ensure the highest level of consumer comfort as travellers return to duty free stores.

“We continue to look for ways to strengthen our partnership within the travel retail ecosystem, which has proven critical in emerging from the Covid-19 crisis.

“It is clear in our mind that we need to strengthen collaboration and continue building trust among trade partners.

This will help us face new challenges.”

Consumer-centric entity

On the tobacco category specifically, Vencesla believes it continues to drive the recovery as one of the most pre-planned and best performing sectors. “It is proven to be a resilient category in the face of a crisis and continues to play a destination role. Tobacco outperforms when passenger numbers fall and therefore helps the industry at large.”

In the meantime, JTI remains committed to offering high-quality conventional

He adds: “We are a consumer-centric organisation and as such we have taken this time [during the pause period] to gather insights on the category. In addition, we are monitoring ongoing changes in consumer behaviour to ensure we can continue to adapt quickly and remain agile.”

JTI’s ability to be agile and nimble will be crucial, especially if business returns to 8 GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

Best-performing sector

tobacco products, but admits that its Reduced-Risk-Product category is becoming increasingly prominent. “Consumers of today and tomorrow have the chance to make the best-informed choices, which makes for a brighter, more sustainable future for our company and industry.”

Most companies, whatever the industry or product sector have a sustainability strategy and JTI is no exception. Vencesla explains: “We have a global sustainability strategy, and do not differentiate between duty free and travel retail channels, and domestic markets.

“Our approach to sustainability not only focuses on encouraging us to make the right decisions for our company, but also our employees, suppliers, customers, and society, while preserving natural resources.”

Sustainability strategy

According to Vencesla, JTI has four focuses which it considers essential for the sustainability of its business. These are products and services, people, supply chain and regulatory environment and illegal trade.

“There are currently many discussions around sustainability in travel retail.

Airports, retailers, and brands are setting their targets, and it is critical to connect the dots to understand how these interact.

We have a role to play and have joined several industry working groups on sustainability,” he concludes.

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Diageo Global Travel Retail Pop-up

Diageo GTR reveals luxury pop-up at Heathrow At the center of the brand activation, a bespoke sampling bar invites travelers to discover the world-renowned Johnnie Walker Blue Label

D

iageo Global Travel is inviting passengers to enter the luxury world of Johnnie Walker Blue Label at a new experiential hub at Heathrow, Terminal 5. The pop-up brings to life the iconic brand’s new concept via a series of consumer activations and supporting media campaigns. Alongside partners Dufry, Heathrow Airport and JCDecaux UK, Diageo unveiled the pop-up.

At the center of the activation is a bespoke sampling bar, inviting travelers to discover the unparalleled depth of flavor of the world-renowned Johnnie Walker Blue Label. Supported by an LCD display backwall and surround sound headphones, consumers can enjoy the flavors of “this transformative liquid” via an immersive experience.

The space also features a gifting station, which offers unique, hand-crafted personalization touches including gift-wrapping and personalized luggage tags, positioning Johnnie Walker as the perfect gift. A selection of whiskies from the world’s #1 whisky brand in travel retail (cited by IWSR Drinks Market Analysis 2019/2020), will also be on display for travelers to explore.

The launch of the pop-up is supported by an impactful media campaign, which will see Johnnie Walker Blue Label take over high impact screens along the passenger journey in Heathrow T5, encouraging travelers to explore this world of 10 GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

luxury from the point of check-in. This impressive retail space will also be activated at Dubai, Changi and Seoul airports throughout June and July, all supported by high impact media campaigns. Additionally, two new Johnnie Walker Shop-inShops are set to open in Heathrow T2 and T3 this summer.

“I would like to thank our partners at Dufry, Heathrow and JCDecaux UK for this collaboration. We are thrilled to start the roll out of this new brand world for Johnnie Walker Blue Label at Heathrow’s Terminal 5.

“The luxury consumer base in the travel retail industry is a key growth driver for the channel so we’re delighted to bring a luxury icon such as Johnnie Walker Blue Label to the table. We The immersive experience is supported by an LCD display backwall and surround sound headphones

The centerpiece of the activation is a bespoke sampling bar, inviting travelers to discover the unparalleled depth of flavor of the world-renowned Johnnie Walker Blue Label

understand shoppers expect outstanding service, attention to detail and premium gifting solutions and we have worked closely with our partner agencies at Bulletproof and Circle Square to bring these ambitions to life through the pop-up experience.

“Gifting is a key pillar of our pioneering Category Strategy and our commitment to creating a stronger travel retail industry. We’re pleased to be able to provide our shoppers with the latest premium gifting service from this muchloved brand,” says Nick Cook, General Manager, Europe & Americas, Diageo Global Travel.

The activation is now live in the World Duty Free store at Heathrow, Terminal 5 until June 19.

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m1nd-set: TR Shopping Trends

m1nd-set shares its latest take on Spirits & Tobacco Based on data collected via its B1S tracking survey, GTR Magazine takes a closer look at m1nd-set’s recent Spirits & Tobacco report, which highlights TR & DF trends 2021 & Q1 2022 vs. previous years

by LAURA SHIRK

This graph displays purchasing missions for alcohol duty free shoppers; sharing and gifting showed contrasting paths with significant changes

L

eading up to the release of Global Travel Retail Magazine’s Spirits & Tobacco Report, the publication took a closer look at m1nd-set’s recent report, which highlights travel retail and duty free shopping trends (2021 & Q1 2022 vs. previous years). Outlined by the team at m1nd-set, the scope of the report: main trends in consumer behavior across TR shoppers and a focus on international airport travelers. The leading agency in global travel research collected data via its B1S tracking survey, which includes a current sample of 120,000 respondents. It should be noted by readers pre-COVID (up until Q1 2020), m1nd-set practiced face-to-face recruitment and as of postCOVID (Q1 2021) it conducts on online recruitment to collect data. Quotas by nationalities are defined based on traffic

data to represent key nationalities that have been traveling during the relevant period of time.

Focus on alcohol

According to m1nd-set, some trends in Q1 2022 differ widely from pre-COVID years, often continuing with trends observed in 2021. Footfall within the alcohol segment is almost two times higher in Q1 2022 compared to pre-COVID (2017 – 2020). To read an overview of the category, see below: • Post-pandemic alcohol duty free visitors are more likely to browse and less likely to convert into buyers • Alcohol shoppers have become more specific in their purchase planning,

nearly 50% know what product or brand to search while shopping duty free; impulse purchasing in Q1 2022 is described as “almost non-existent” • Alcohol shoppers are more inclined to purchase with a sharing purpose; this trend showed contrasting paths with significant changes compared to gifting • Finding an assortment of products on promotion or perceived as unique (a duty free exclusive) is more likely to boost conversion compared to pre-pandemic • The in-store experience of alcohol duty free shoppers has increased in importance; interaction with the sales staff has become more frequent and

Although less frequent than before, more than 1 out of 3 tobacco shoppers still have a tendency to plan their purchase

12 GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

Top 10 drivers of purchasing alcohol goods in Q1 2021; despite a significant decrease in importance, value for money is still among the top three purchasing drivers

influential in terms of final purchasing decisions; post-interaction almost 9 out of 10 alcohol purchases in Q1 2022 are influenced by the sales staff

Focus on tobacco

Similar to the alcohol segment, according to the report, some trends in Q1 2022 differ widely from pre-COVID years, often continuing with trends observed in 2021. Footfall within the tobacco segment doubled in Q1 2022 vs. pre-COVID – the same figure as in 2021.

The conversion rate showed a significant decrease in 2021, which continued into Q1 2022.

• Although less frequent than before, more than one out of three tobacco shoppers still have a tendency to plan their purchase and know what product

Compared to 1 out of 6 buyers pre-pandemic, today, only 1 out of 25 alcohol duty free shoppers buy on the spot

or brand to search while shopping duty free; impulse purchasing declined in Q1 & Q2 2021 before normalizing in the second half of the year • Tobacco duty free shoppers are significantly more inclined to purchase with a sharing purpose compared to gifting; purchases made on request are more frequent in the first quarter of 2022 • Following an increase in 2019 in the importance of finding an assortment of products on promotion or perceived as unique (a duty free exclusive), the figures returned to pre-COVID levels in Q1 2022 • Although the influence of the sales staff on tobacco duty free shoppers declined in Q1 2022 vs. 2021, it’s still

This graph displays purchasing missions for tobacco duty free shoppers; following an increase in 2021, self-purchasing has significantly dropped in Q1 2022

greater compared to pre-COVID; this means that the in-store experience and staff interaction continue to drive final purchasing decisions

Drivers to purchase

Examining the top ten drivers to purchase of both the alcohol and tobacco segment, value for money remains in the top three in both cases. Behind self-treating and staff recommendation, value for money is listed as the number three driver at 24% among alcohol duty free shoppers (down from 37% in 2017 – 2020). In comparison, value for money is the leading driver at 40% among tobacco duty free shoppers (up from 30% in 2017 – 2020). Worth noting, brand loyalty holds significantly different value across the two segments, ranked at number ten and number two, respectively.

Top 10 drivers of purchasing tobacco goods in Q1 2021; unlike the alcohol segment, attractive packaging and special format make the list

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

13

Post-covid Q&A with Aer Rianta International

ARI toasts positive momentum

Rob Marriott, CEO, ARI Middle East

A

s Rob Marriott steps into the role of CEO at ARI Middle East (ARIME), the former head of ARIME’s Muscat Duty Free business talks to Global Travel Retail Magazine about the resurgence of the liquor and tobacco categories after the Covid-19 crisis, together with his colleague Paul Hunnisett, Global Head of Category, Liquor, Tobacco & Confectionery.

Paul Hunnisett, Global Head of Category, Liquor, Tobacco & Confectionery, ARI

Aer Rianta International’s liquor and tobacco business is getting back to normal post-pandemic amid a changing passenger demographic, supply chain challenges and a return to offering newness in these two important product categories

by MARY JANE PITTILLA

14 GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

Global Travel Retail Magazine (GTRM): Can you pinpoint the key elements which are driving the recovery of the spirits and tobacco category, and why?

Rob Marriott: We are delighted to see a return to passenger growth as borders around the globe have reopened, albeit some on a more gradual basis than others. Since many have not traveled for so long, passengers now want to maximize their experience and travel retail plays an important role in this. We have seen a change in the demographic of travelers over the past two years, notably with less families traveling, which has resulted in different purchasing patterns.

Paul Hunnisett: As people are returning to travel, many have

more disposable income, which is driving the passenger average spend in liquor as customers trade up. In tobacco, more passengers are enjoying duty free shopping as a result of Brexit, for example those traveling from Cyprus or Ireland to the UK who can now avail of duty free prices.

GTRM: What are the main challenges facing the spirits and tobacco category, and why?

PH: Supply and fulfilment in both spirits and tobacco have been hugely challenging across ARI’s global estate. We have been

Now we are returning to business as usual with a return to our diverse range, in-store tastings, great promotions, and newness coming back to the category. We continue to share insights and data with our brand partners and align our strategic objectives to grow the category.

RM: Collaboration has been integral to

Craft and niche whiskey brands are beginning to flourish again at ARI stores

working closely with our brand partners and our own supply chain teams to work through these challenges and ensure that we can keep stock on our shelves.

RM: Across the business we utilize annual

forecasting as we work with our brand partners to overcome these supply chain issues. These forecasts are regularly revisited and adjusted accordingly, which in turn helps our brands’ production scheduling. It’s important that we maintain open channels of communication and work together to try to mitigate these issues.

GTRM: How did you work with your spirits and tobacco suppliers during the pandemic to ensure all parties could hit the ground running once the recovery ensued? How are you collaborating with them now?

PH: In 2020 we made the decision to reduce our range by 35% across liquor and to rationalize our promotion strategy, focusing on key internationally recognized brands. Overnight, tastings and samplings were eradicated, meaning that customers leaned towards the brands they were familiar with. This really affected niche and craft brands, while more established brands benefited.

navigating through the pandemic and positioning the category to return to growth as we re-emerge. We work closely with our brand partners to increase engagement with our customers both in-store and in the earlier stages of their journey pre-travel. This means working together to deliver exclusive activations, providing great value and promotions, and adding value to the overall customer experience. Online, we can utilize social and digital media and our e-commerce sites to engage with customers before they travel.

Currently, we are working closely with our brand partners to understand and mitigate supply issues and logistics challenges. We’re hopeful that these will be overcome very soon.

to conventional cigarettes – for example, heated tobacco and vaping solutions. In liquor, local and sense of place are the key drivers of newness and innovation within the category. Already we are seeing craft and niche brands begin to flourish once again. This is especially true for whiskey, and we continue to work with our brand partners to provide a platform for new and exclusive NPD (new product development) for travel retail.

RM: Broadly speaking, we expect to see

the return of many of the pre-pandemic trends. Customers are still looking for great value and range, newness, provenance, and travel retail exclusives. ARI’s recalibrated Customer Value Proposition leaves the business best placed to meet these needs and ensure that we can offer an exceptional customer experience at all touchpoints on their journey.

GTRM: What proportion of overall business did the spirits and tobacco segment account for pre-pandemic?

Do you expect this percentage to change soon, and why?

RM: Liquor and tobacco remain two of our most important categories for the business, and thankfully we are seeing positive momentum by way of recovery since travel restrictions were lifted. There is still a way to go before we return to prepandemic levels, however the indications are so far positive.

GTRM: How do you expect consumers’ buying habits to evolve as far as liquor and tobacco is concerned, and why?

RM: Customers are increasingly environmentally conscious, and sustainability concerns will continue to influence purchase decisions across all categories, from recyclable and reduced packaging to the ethical sourcing of ingredients.

ARI’s five-year environmental, social and governance (ESG) strategy is a commitment to our customers, our brands and our team to deliver a more conscious and responsible shopping experience.

We also expect that the rising cost of living and geopolitical conflicts will continue to impact the passenger profile, and some locations will undoubtedly be more affected than others.

PH: Share of trade has improved in almost

PH: In line with our Customer Value

all regions, albeit at different paces since countries reopened their borders to international travel on a gradual basis. Much of the growth in tobacco can be attributed to customers capitalizing on opportunities from Brexit.

GTRM: Which brands/products/liquor and tobacco sub-categories do you expect to take center stage in the weeks and months ahead, and why?

PH: In tobacco, we are working hard with

suppliers to offer customers alternatives

Proposition, we expect to see a continuation of the self-treating and gifting trend, so maintaining a strong gift offering is essential. We see the broader consumer trend of drinking less, but better continuing to drive the growth of premium liquor and increase passenger average spend as customers trade up.

While healthy lifestyle trends such as lower ABV and non-alcoholic products are important in the wider market, they are still filtering through to travel retail.

We are excited to watch how they influence and grow the category.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

15

Fraternity Spirits Brand Portfolio Update

Fraternity Spirits scales new heights with Japanese whisky

Kiyokawa Co Ltd is a blender and distiller based in the mountains of Nagano Prefecture, near Iiyama city, Japan

The Costa-Rica based drinks developer welcomes the craft spirit Nobushi Japanese whisky to its portfolio

by MARY JANE PITTILLA

The market for this Tequila Corralejo Extra Anejo is “exploding” in the US, says Fraternity Spirits World CEO, Raffaele Berardi

16 GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

F

raternity Spirits World, the Costa Rica-based drinks developer with a representative office in Mexico which, is best known for supplying innovatively packaged spirits such as Corralejo tequila in travel retail, has added a distinctive new brand to its portfolio: Nobushi Japanese whisky.

Nobushi is a craft spirit made by Kiyokawa Co Ltd, a blender and distiller based in the remote and picturesque mountains of Nagano Prefecture, near Iiyama city, where untouched scenery depicted in popular Japanese songs can be found. The distillery is located amid the region's rich natural landscape where a unique history and culture have flourished. This area is known for its fierce winters and heavy snowfall, followed by a hot summer climate.

These big atmospheric pressure changes follow through the seasons, with high variations even being seen in a single day. As a result, the whisky represents more of the barrel's wood flavors and natural color. Kiyokawa's commitment to craft production results in distinctive expressions of Japanese whiskies.

Importantly, Kiyokawa was the first to bring the art of distillation into the region, and was the first Japanese distillery to develop and grow mountain barley on its own farms as the main ingredient for the production of Japanese single malt whisky.

This new brand therefore has a unique story to tell, as Raffaele Berardi, the Owner, Founder and CEO of Fraternity Spirits World since 1994, can attest. Recalling how the Japanese whisky venture came about, he tells Global Travel Retail Magazine: “The distillery began production in the mountains based on the deep

The main ingredient for the production of Nobushi Japanese whisky is the mountain barley grown on Kiyokawa distillery’s own farms (Left) Raffaele Berardi, Owner, Founder and CEO of Fraternity Spirits World

knowledge of the region and the love for quality spirits. We started to create the brand a few years ago and today it’s distributed all over Europe.”

And not just Europe. Thanks to Fraternity Spirits World’s existing network, Nobushi is also distributed globally in domestic markets across the US, Canada, Mexico, Central America, India and Dubai, and distribution is starting now in South America and Asia. “Asia and Australia are top of our list. We will expand to countries including South Korea, Thailand, Hong Kong, Vietnam and Singapore.

“We’re very excited about the brand, it’s been very successful, and the category is well accepted,” enthuses Berardi.

Nobushi’s international success has not been without challenges, as the brand was launched in 2019, just before the outbreak of COVID-19. The pandemic stopped the process of travel retail expansion – but now it’s full steam ahead in this channel, with distribution starting in Central and South America, including Colombia and Panama, and Dubai.

Berardi points out that Nobushi Japanese blended whisky is targeted at the “accessible, mainstream” price point of around

US$40-50. The company also offers a single grain whisky and a pure malt expression under 5 years old, ranging from US$60 to US$90. A new 5yo pure malt will be launched at the end of this year.

Commenting on the potential for Nobushi whisky, Berardi says: “When you look at the competitor market, there is a huge opportunity. We’re working with the only mountain-based distillery that produces its own malt in the mountains – no one has ever done that before. This is one of the most significant facts about this brand – the higher-altitude, mountain-based crop is used in the distillery by the master blenders, and the local water is pure and high in minerals. It’s a unique product.”

Nobushi is present in the Japanese domestic market, where it competes with the major brands, but it’s the exposure in the international market that interests Berardi. “We want to make the brand visible in the rest of the world. It’s a relatively new brand that is new to travel retail, and we’re looking forward to expanding in travel retail.”

Turning to the Mexican tequila brand Corralejo, which Fraternity Spirits World has supplied to travel retailers for many years, a high-end heritage line has been developed, comprising 1810, 1821 and 1755 expressions. These ultra-premium tequilas are all related to the history of Mexico and Hacienda Corralejo and have been launched only in the US domestic market due to the limited supply.

Also new – and available in the travel retail channel – is Tequila Corralejo Extra Anejo (40%abv), retailing at US$78, which was launched at the beginning of this year and is doing “extremely well”, according to Berardi, particularly in the US, where the market for this high-end tequila is “exploding”. “This unique liquid and the bottle are very attractive to the consumer,” he says.

Fraternity Spirits World is hoping to replicate this success with another brand new product in a unique bottle from the Hacienda Corralejo group – namely, a Mexican 100% malt whisky called Ley Seca (“dry law” in Spanish), referring to the 1919 Prohibition that banned the production of liquor in the US and resulted in the smuggling of spirits across the Mexican-US border. The whisky is distilled in a separate facility from the tequila factory and will be launched worldwide in June 2022.

Additionally, Fraternity Spirits World also recently introduced to the US market a Corralejo tequila product made with a higher agave sugar content, bottled at 40%abv. This smooth, sipping tequila has a sweeter taste and is already available in Mexican travel retail.

As for Ron Prohibido, Berardi reports that the Mexican rum brand is performing very well in Europe, Canada, Mexico, Australia and Japan, and Fraternity Spirits World recently extended its distribution to Italy.

Berardi acknowledges the uncertain global outlook as inflation looms on the horizon, and as business in Russia and Ukraine has stopped due to the Ukraine invasion, but he remains positive. He believes tequila is becoming more attractive, both in the US and the rest of the world, and he is planning an aggressive roll-out over the next few years for Nobushi Japanese whisky, particularly in the US, Latin America and Australia.

So, what is Berardi’s recipe for success? “First, quality. Second, differentiation from other products, and third, the unique packaging.” It sounds as simple as sipping tequila.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

17

Interview: Thorsten Hartmann at IWSR

Thorsten Hartmann, Director of Custom Analytics, IWSR Drinks Market Analysis

A POTENTIAL RAY OF LIGHT IN THE FORM OF TASTING STORES & HOLIDAYMAKERS Thorsten Hartmann at IWSR says airports are looking to create dedicated shelf space to showcase a “value” offering to target budgetconscious travelers

18 GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

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by LAURA SHIRK

eading up to the release of Global Travel Retail Magazine’s Spirits & Tobacco Report, a member of its team connected with Thorsten Hartmann, Director of Custom Analytics at IWSR Drinks Market Analysis (IWSR), to learn more about trends driving the recovery of the spirits category. Hartmann notes that given the importance of Chinese nationals in relation to duty free expenditures, their favorite spirits including cognac, malt scotch and baijiu have been hardest-hit.

Due to the continued lack of Chinese travelers at this time, recovery of these categories will likely take some time.

As an off-premise channel, global travel retail has always catered toward the at-home occasion, whether in the form of a gift, a personal treat or simply, a discounted duty free purchase. With this standard in mind, he explains that because consumers are more informed than ever before, the landscape has evolved.

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Interview: Thorsten Hartmann at IWSR

“The gradual introduction of ‘tasting stores’ in airports worldwide will grow over the next several years, as retailers look for new ways to improve their customer service and meet the expectations of shoppers, who expect a richer range of experiences,” says Hartmann.

Along with transforming the established concept of sampling, there are signs that airports will increasingly gear up to create dedicated shelf space to showcase a “value” offering, which would be aimed at budget-conscious travelers. In this situational context, the “persistent absence” of the business traveler remains evident.

– especially within Europe and North America. Holidaymakers might start to move away from hotel stays to self-catering holidays abroad; in essence converting their holiday from an on-premise to an off-premise occasion. This would give GTR at least an opportunity to participate as an off-premise component. This would also be particularly advantageous for channels such as ferries and border stores where a family might max on its duty free allowances and where a car is available,” shares Hartmann.

Travel suppression & significant headwinds

A snapshot of our conversation includes the following takeaways: • The primary motivation for consumers to shop travel retail is moving away from cost-saving; duty free exclusives have become increasingly important and will likely continue to drive volume

When asked about the main challenge facing the category – and industry – Hartmann refers to travel suppression.

Looking beyond the resumption of leisure travel in early 2022 – particularly in Europe – the analyst brings attention to a number of “significant headwinds” such as delayed recovery in Asia Pacific, the reducing of business travel budgets and the missing of Chinese air travelers across the GTR circuit. Although this list is already a lot to digest, he ranks the rising cost of living and inflationary pressures as most significant.

“One ray of light might come from the possibility of a change in leisure travel

Key takeaways & sustainability cues

• Established subcategories in each region will continue to prevail, but consumers will require a wider product range in accordance with growing expectations • North American consumers are more inclined to purchase wine, Eastern European & Nordics consumers are more inclined to buy products across

spirits subcategories such as vodka and Japanese consumers are more likely to take home some type of whisky – specifically US whisky.

Considering the push for digitalization and personalization within the GTR scene, Hartmann says by and large clickand-collect within the spirits category has not caught on and physical shopping remains paramount. Reluctance on the part of operators – or landlords – to allow in-store tastings stems from existing ones that have morphed from poured tastings into takeaway miniature sets, slightingly reducing the opportunity to interact.

Touching on the topic of sustainability, the growing presence of environmentallyproduced products in duty free and travel retail reflects this change taking place in domestic markets – primarily among the LDA (legal drinking age and compliance) audience. Hartmann says this means the same cues will resonate.

“Having said that, air travel – and especially leisure air travel – is not currently seen as a particularly environmentallyfriendly mode of transportation. It remains to be seen whether sustainability cues find the right audience in the post-pandemic air traveler or indeed, find an enhanced audience, who might want to pick up a better-for-the-world product, perhaps in compensation,” he concludes.

Elaborating on travel suppression, Hartmann at IWSR says the rising cost of living is the main challenge facing the spirits category – and industry

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Mazaya’s New Brand Identity

Elevating its identity After navigating the worst of the pandemic through ‘transparent communication’ with retailers and a calm and pragmatic approach to problem solving, shisha brand Mazaya is working on the roll-out of a new brand identity in domestic and travel retail markets

by HIBAH NOOR

F

or Jordanian shisha brand Mazaya, developing existing listings in shops showing positive signs of recovery from Covid-19 and supporting operators in locations requiring more attention were the main focuses of 2021.

This year, however, the aims are simply growth, expansion and reaping the benefits of all the arduous work undertaken last year in preparation for the re-start.

Rawan Elayyan, Global Travel Retail Manager, Mazaya tells Global Travel Retail Magazine: “We are very proud to say that we’ve surpassed 2019 benchmarks when everything indicated that the travel retail channel would not return to 2019 figures until at least 2023.”

She adds: “Of course, the rate and speed of recovery differs between locations. Some shops were struggling until Q4 2021 and have only just started noticing signs of recovery, but what is important is that we are continuously drawing on our learnings from the pandemic.”

New knowledge and insights

The brand has already surpassed 2019 benchmarks in the early part of 2022

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Mazaya has used new knowledge and insights to implement tailor-made strategies for shops still requiring its support.

“The key learning was that a dynamic business model and open-minded approach are crucial to adapting to the everchanging market, especially in times of high uncertainty.”

Further reflecting on a challenging 2021, Elayyan recalls how the brand was able to work closely with retailers and adopt a new flexible approach.

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Mazaya’s New Brand Identity

Mazaya’s French tobacco leaves are known for their high absorbing characteristics, according to the brand

“Consistency and transparency were our main objectives when communicating with retailers [during the pandemic] which has always been the case.

“We highlighted problems rather than dodged them which is important especially during times when it is easy to be myopic.

In addition, we tried to sort them out in a way that benefitted both parties.

“Obviously, this was not possible in some cases as losses had to be endured, but we still succeeded in overcoming obstacles through consistent and transparent communication with retailers.

“Adding to that, retailers were supportive and understanding in locations where there was very low or even no passenger flow.”

Partnership approach

Strong partnerships with retailers and operators are clearly among the brand’s main strengths, acknowledges Elayyan.

“We work closely with operators to continuously optimise our portfolio and enhance our business model, be it in areas of forecasting, demand planning, shipping or logistics.”

Understanding consumers’ behaviour is another key attribute which has served the company well. Mazaya strongly believes that understanding its consumer base and studying demographics will enable it to sell products better. “This is something we stress and acknowledge through our intensive market and retail studies.

“Of course, related outcomes are always translated into tangible solid action plans, and this is one of our definite strengths.”

The dynamism of the brand’s portfolio is also a major plus point. “Adding new blends and mixes to our portfolio in the duty free stores will increase basket size for the operator without mar-

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Shisha consumption remains a growing trend and will help increase the tobacco category’s basket size and generate more profit

Mazaya’s New Brand Identity

ginalising the standard flavours. This contributes to the growth of the tobacco category and increases turnover.”

In addition to offering ‘premium ingredients’ and ‘innovative flavours,’ Mazaya is committed to working closely with operators to continuously optimise its portfolio and enhance its business model. “This can be in relation to forecasting, demand planning, shipping and logistics,” Elayyan comments.

Mazaya also leaves no stone unturned in trying to deliver a smooth and enjoyable shopping experience to its travel retail customers. “This is achieved through properly merchandised fixtures, eye-catching on-ground activations to build memories with the brand, and a fleet of highly trained brand ambassadors to assist shoppers with all queries.”

Supply chain issues

Pressed by Global Travel Retail Magazine on the biggest challenges facing the business, Elayyan pinpointed ongoing supply chain problems as a major issue. “This is a problem facing all brands and categories,” she remarks. “Global supply chain and distribution challenges continue to put stress on our supply chain and increase costs, which is the case with most other suppliers.

“This has many consequences for our business including the increased cost of ingredients and raw materials which leads to higher costs of goods sold, higher shipping costs and limited availability, less accurate sales forecasts and longer lead times.”

As supply chain issues, for example, continue to persist, Mazaya is always seeking solutions to overcome such challenges.

“Fortunately, regulatory travel procedures and precautionary actions taken by various countries have been moderately stable.

Sales estimates and forecasting accuracy have also been notably enhanced, which is key to tackling the remaining challenges.”

On the business front, Mazaya secured important listings last

Natural Lemon with Mint molasses is among Mazaya shisha brand’s classic/standard flavors

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year with Lagardère Saudi Arabia (Riyadh, Jeddah, and Dammam) and Dufry Morocco (Casablanca and Marrakesh) and the brand has picked up where it left off in 2022.

“We have successfully kick-started 2022 by confirming listings with Iraq Duty-Free, Heinemann Egypt in Sharm al Sheikh, and more recently Dufry Egypt in Cairo. Further interesting locations are in the pipeline.”

Expansion plan

In addition to new listings, expanding its travel retail portfolio is also on the agenda. “Our observations indicate that more and more consumers are eager to experiment with new flavours, so having a variety of flavours in the duty free shops is key,” Elayyan explains.

Mazaya has always had two major consumer categories. One is those preferring classic/standard flavours (for example two apples, lemon mint, grape, and grape mint), while the other is consumers favouring new innovative flavours such as Ruby Crush, Candy Drops and Blueberry Exotica.

“We have not really observed a change in flavour preference where it is linked to the pandemic timeline, but flavour preference does change due to other factors.

“Millennials, for example, are open to trial and experimentation which, by default means new flavours are required to keep this consumer segment pleasantly served.”

Given the importance of a diversified portfolio and flavours meeting different consumer tastes and preferences, Mazaya says it always has new flavours in the pipeline. “One particular flavour we are extremely excited about and is already listed in a few shops is a new variant of the Two Apples flavour called Two Apples Masri. This has been performing strongly in many domestic markets including Levant, North Africa and GCC.”

Mazaya’s New Brand Identity

An exterior shot of the Mazaya yacht at the TFWA World Exhibition in Cannes last year

Covid-19 recovery

As the recovery from Covid-19 gathers pace in many parts of the world, the sense of optimism in the greater Middle East area, an important market for Mazaya, is providing a sturdy base to build from in 2022. “Expo 2020 Dubai achieved a massive milestone of 20 million visits [in March 2022] and we experienced a considerable spike in our sales at Dubai Duty-Free from Oct 2021 to March 2022.

“Qatar is gearing up to host the FIFA World Cup 2022 (21 November 2022 to 18 December 2022) and visitors are expected to exceed 1.2 million.”

Amid all the ‘hype’ around Mazaya in the region, the brand is not resting on its laurels and currently working on various initiatives. “The state-of-the-art HPP that Mazaya is known for will soon be back on the shop-floor after a long pause to delight travellers.

“We are also expanding our fleet of brand ambassadors to assist and educate shoppers and provide them with a smooth shopping experience.”

Mazaya is now in the process of elevating its brand identity.

Its current identity is inspired by special moments shared with family and friends because the company believes shisha smoking is a social activity which brings people together. This is emphasised by the brand’s logo which shows two faces bonding with affection.

Elayyan explains: “The uplifted identity will still connect with Mazaya’s vision of special moments shared by people. The rollout of the new brand identity will start in domestic markets and then be applied to our marketing and advertising collateral in travel retail.”

High-quality ingredients

The quality of the brand’s ingredients is one of several factors which helps create those all-important special moments, she emphasises. “Our French tobacco leaves are known for their high

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absorbing characteristics. In fact, they are the most premium in the industry.

“Blended with food-grade flavours, high-quality glycerine, and natural honey, Mazaya molasses guarantee an enjoyable and long-lasting shisha smoking session. We also pride ourselves on our ability to manufacture products in highly advanced production facilities with state-of-the-art equipment.”

As alluded to previously, placing consumers at the heart of its strategies is a key part of the brand’s vision and helps distinguish it from competitors. “We acknowledge the importance of understanding our consumers’ needs and catering our products accordingly.

“Our portfolio comprises over 150 flavours and is, therefore, altered to meet diverse consumer tastes with a superior quality of ingredients.”

As shisha smoking continues growing in popularity worldwide, Elayyan is certain shisha molasses can add significant value to the tobacco category and drive its recovery.

“Throughout the various locations where we are listed, Mazaya has succeeded in growing the shopper’s basket size and proved an important revenue stream for duty free retailers and operators. This is crucial in accelerating the overall recovery of the tobacco category.”

Growing trend

Shisha consumption remains a growing trend, which will help increase the category’s basket size and generate more profit. “The good news is that many operators have foreseen this trend and acknowledged the untapped potential of the shisha sector.

“For this reason, along with our strong commitment to the channel, shisha has dramatically developed its position within the tobacco category over the past five years.

“Many operators, however, are yet to realise this which is something we at Mazaya want to address and highlight in 2022.”

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Oettinger Davidoff on Building Success

Oettinger Davidoff launches Davidoff Limited Edition 2022

Cigar sector

‘the backbone of the channel’ Swiss cigar supplier Oettinger Davidoff is building on the success of 2021 with a strong start to the year across its duty free and travel retail business, which remains a key focus for the company

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by HIBAH NOOR

fter a positive 2021 for Swiss cigar supplier Oettinger Davidoff, the early part of 2022 has confirmed the acceleration of the recovery from Covid-19 in duty free and travel retail.

This is according to Jean-Christophe Hollay, Head of Partner Markets & EMEA Duty Free, Oettinger Davidoff, who tells Global Travel Retail Magazine that all elements relating to strategy, portfolio dynamics, market positioning and customer relationships have combined well to deliver ‘fantastic growth’ for the category.

He adds: “We are proud to say that Oettinger Davidoff has enjoyed a great start to the year in the channel in all regions, perhaps with the exception of Asia where government measures to counter Covid-19 are still affecting people’s mobility and travel in general.”

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Oettinger Davidoff had a busy start to the year with the launch of the Davidoff Limited Edition 2022, but also the 10th and final extension of the AVO Improvisation series. Over the past decade the series has honoured the life of the brand’s founder, Avo Uvezian, an Armenian American cigar manufacturer, jazz pianist and composer who passed away in 2017.

“The AVO Improvisation Limited Edition 2022 will be present in major airports,” Hollay remarks. “This 10th and final release made to celebrate the legacy and lifestyle of Avo Uvezian will be on shelves during the summer of 2022.”

Category management project

Oettinger Davidoff ’s main duty free and travel retail commercial project, however, commenced two years ago and is well advanced. He comments: “The project is focused on our category management

Jean-Christophe Hollay, Head of Partner Markets & EMEA Duty Free, Oettinger Davidoff

approach. The cigar category still has important unexploited potential in travel retail.

“We have developed a unique commercial tool, possessing the capability to reconnect cigar shoppers with the total retail offer. We are currently deploying this approach with several major players.”

Assessing the recovery of the cigar segment in comparison with other categories, Hollay describes the sector as one of the essentials in the channel. “It is part of the backbone of the channel. Today, we know that tobacco is recovering faster than other travel retail categories and

that cigars are outperforming other tobacco segments.

“Our figures have been confirming this trend for several months already and we expect strong development in the cigar category.”

During the pandemic, Oettinger Davidoff utilised the pause period to significantly reinforce its partnerships and relationships with operators worldwide.

“This has allowed us to benefit from the current 'after pandemic' momentum.”

Travel retailers understand how the cigar segment can benefit their total offer, according to Hollay. “The cigar category is an exciting, high value-generating travel retail segment. The cigar shopper profile is extremely attractive for retailers and can help increase average basket spend, not only in terms of quantity, but also in quality.

“Travel retail remains mainly a channel for top brands. Brands and reputation in terms of quality are still leading the category. We are continuously working with major travel retail operators to optimise

“We have developed a unique commercial tool, possessing the capability to reconnect cigar shoppers with the total retail offer. We are currently deploying this approach with several major players.”

JEAN-CHRISTOPHE HOLLAY, HEAD OF PARTNER MARKETS & EMEA DUTY FREE, OETTINGER DAVIDOFF

the presence, merchandising and revenue of the category."

Balanced product selection

“The major trend for the future will be around the perfectly balanced selection

of products, simplification of the portfolio, clarification in terms of merchandising and extension of the distribution.

Gifting and limited or exclusive editions will obviously remain key.”

The lifting of travel restrictions worldwide, means there is a clear appetite to travel and spend. “We therefore expect shoppers to be back in numbers with the willingness to treat themselves well.

The cigar segment will benefit from this momentum,” Hollay emphasises.

On the importance of the duty free and travel retail channel for the company, the sector is and will remain strategic.

“Oettinger Davidoff has a global spread in terms of distribution and notoriety and has been present in this channel almost from the beginning.

“We will continue leading the category through dedicated activity programmes and a precise selection of offers, while supporting partners with our total category experience. The channel is key for us in terms of consumer engagement, brand visibility and revenue.”

Oettinger Davidoff’s 10th and final extension of the AVO Improvisation series

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

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Philip Morris International: A Lifestyle and Healthcare Company

FORGING A SUSTAINABLE AND SMOKELESS FUTURE Philip Morris International is pivoting its business to become a lifestyle, wellness and healthcare company as it introduces a new environmental, social and governance (ESG) framework

by MARY JANE PITTILLA

Edvinas Katilius, PMI Vice President Duty Free

I

n a major announcement in May 2022, Philip Morris International Inc (PMI) released a new environmental, social and governance (ESG) framework, as well as details of its strategic vision.

The content of its newly published third annual Integrated Report was informed by a formal sustainability assessment conducted in 2021.

Jacek Olczak, Chief Executive Officer of PMI, said: “Sustainability and business performance are fully interrelated and mutually reinforcing. Our actions – grounded in data, science and facts – speak louder than words. PMI is committed to serving as an agent of change and advocate of positive values.

We understand that our business must become a provider of effective alternatives to continued smoking for adult smokers who don’t quit.

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According to PMI’s new ESG report, 67% of contracted farmers supplying tobacco to PMI make a living income, up from 48% in 2020

“To achieve this, we are positioning ourselves at the forefront of consumer-centricity, technology, science and innovation. With an eye to the long term, we are also expanding our business into areas beyond tobacco and nicotine such as wellness and healthcare.”

PMI’s long-term goal has shifted from doing less harm to having a net positive impact on society as it aims to become a lifestyle, wellness and healthcare company.

Following the company’s 2021 sustainability assessment, PMI has redesigned its ESG framework, recognizing two areas: those related to PMI’s products and those related to its business operations.

PMI’s new approach to sustainability consists of eight impactdriven strategies – four aimed to address the impact of PMI’s products and four aimed to address the company’s operational impact – accompanied by a framework of nine governancerelated factors.

PMI’s 2025 Roadmap was revamped accordingly. It consists of 11 goals linked to these eight strategies, explaining the social and environmental impacts PMI aims to achieve.

To assess progress, PMI has introduced 19 KPIs. Altogether, these KPIs make up the company’s new Sustainability Index, which links 30% of the company’s long-term compensation program to ESG performance.

Said Emmanuel Babeau, Chief Financial Officer of PMI: “I’m proud to be able to say that our executive compensation program now reflects our commitment to put sustainability at the core of our corporate strategy. PMI’s Sustainability Index aligns us even further with the interests of shareholders and other stakeholders, forming a strong link between our executive compensation practices and the company’s short- and long-term ESG performance.”

PMI reports an 86% recycling rate of IQOS devices returned to its centralized recycling hubs vs. 84% in 2020

Speaking to Global Travel Retail Magazine, PMI Vice President Duty Free Edvinas Katilius added: “Our transformation at PMI is not only about substituting one product with another. It also requires transforming our entire value chain, with a broader perspective including the ecosystem of our business partners, as well as the way we engage with society.”

In its 2021 Integrated Report, PMI organized its description of progress into two categories: product impact and operational impact. Highlights include the following:

Product impact: •

21.7 million total adult users of PMI’s smoke-free products as of December 31, 2021, of whom 15.3 million have switched and stopped smoking; up from 18.3 million and 13.0 million, respectively, in 2020.

•

29.1% of adjusted net revenues derived from smoke-free products, which were available for sale in 71 markets worldwide by year end; up from 23.8% and 64, respectively, in 2020

•

99% of adjusted R&D expenditure on smoke-free products totaling US$566 million, consistent in proportion but 14% higher in dollar terms than the US$495 million spent in 2020.

•

86% recycling rate of IQOS devices returned to its centralized recycling hubs vs. 84% in 2020.

The new IQOS ILUMA PRIME smoke-free device is a premium and stylish addition to the PMI portfolio

Operational impact: •

39.7% of management positions held by women, on track to achieve the 2022 target of 40%.

•

Five human rights impact assessments conducted since 2018 in highest-risk countries and action plans being implemented, up from four in 2020.

•

67% of contracted farmers supplying tobacco to PMI make a living income, up from 48% in 2020.

•

Reduced total value chain CO2e emissions by 18% and emissions from direct operations by 33% vs. 2019 baseline.

•

100% of tobacco purchased at no risk of deforestation of primary and protected forests.

Jennifer Motles, Chief Sustainability Officer at PMI, said: “2021 was a year full of achievements, but challenges remain.

As we continue to transform, learn and discover better ways to develop solutions that have meaningful impact, we hope our transparency and willingness to engage will spark dialogue with those who can help accelerate the pace of change.”

PMI’s 2021 Integrated Report considers guidance of international standards and frameworks, including the Global Reporting Initiative, the UN Global Compact and the UN Sustainable Development Goals.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

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Editor’s Picks

Editor ’s Choice

PERFECT FOR SUMMERTIME SIPPIN’

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1. Penderyn Faraday: Presented in Pend-

3. Flor de Caña 25-YO Centenario:

eryn’s bespoke 70-cl bottle, this travel retail exclusive was released in 2018. The whisky is matured in ex-bourbon casks, finished in ex-ruby port casks and bottled at 46% abv. It’s named after the distillery’s unique Faraday, which continues to produce a pure, fresh and flavorsome spirit at an industry high of 92%. Faraday won The Spirits Business “Global Travel Retail Masters” Gold Medal in 2021.

Indulge in this luxurious sipping rum aged to perfection during a quarter of a century in bourbon barrels at the base of an active volcano. Carbon Neutral and Fair Trade Certified, this 25-YO rum has been sustainably crafted at a fifth-generation family estate in tropical Nicaragua since 1890. It’s naturally aged without sugar or artificial ingredients and distilled with 100% renewal energy.

Offering a memorable sensorial experience with its complexity of flavor and aroma, its long and exquisitely smooth finish conquers the palate. Best enjoyed neat or on a rock and paired with a 70% cocoa chocolate.

2. Crafter’s Wild Forest by Liviko: Crafter’s Wild Forest gin pays homage to the mythical Nordic wilderness. At the heart of its crisp botanical mix is a coniferous trio of juniper berries, spruce thorns and pine shoots. A gentle blend of late summer heather flowers and blueberry shoots adds a fruity, floral character. The focus of its craftsmanship – sustainably distilled juniper – makes this gin perfectly unique and kind to the environment. With a distinctive touch of smokiness, bold, earthy flavors define Crafter’s Gin Evergreen Recipe No. 27. Best served with a quality tonic and a lemon peel.

34 GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

4. Glenfiddich Grand Cru by William Grant & Sons: The Grand Cru expression brings a new and radical edge to a whisky praised for its art of experimentation and re-defining of celebratory moments. Featuring notes of sandalwood, brioche and pear sorbet, this limited-edition expression has been matured for 23 years and elegantly finished in rare French curvée oak. Glenfiddich recently collaborated with Australian fashion

designer Jordan Dalah to launch Grand Cru into the travel retail market exclusively at the Heinemann Tax & Duty Free shops at Syndey International Airport. The Glenfiddich x Jordan Dalah box set contains a Grand Cru 23-YO 70-cl bottle at 43.4% abv, a pair of black tinted crystal coupette glasses and a postcard signed by Dalah.

5. Bowmore 30-YO Vault Series: Owned

by Beam Suntory, the latest aged and rare vintages from Bowmore Distillery’s highly successful 50-YO Vault Series, Bowmore 30-YO (45.1% abv) and Bowmore 40-YO (48.7%) demonstrate the brand’s essential appreciation as to how each moment can impact the character of the single malt whisky. Bottled in 2000 from vintage 1989 stock, its 30-YO (45.1% abv) has been nurtured for three decades in the finest sherry hogsheads and bourbon barrels. This limitedrelease celebrates Bowmore’s rich, fruity and smoky style. Burnished gold in natural color, the whisky provides aromas of ripe apricot,

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charred pineapple, mango and butterscotch.

Tropical fruits and honey sweetness unite with hints of eucalyptus to ensure a warm and lingering finish.

6. Bowmore 40-YO Vault Series: Inspired by the coastal region of the Bowmore Distillery, the colors and textures of Islay’s ancient store and bleached driftwood are encompassed within this limited-edition 40-YO whisky. Bottled at a cask strength of 48.7%, the expression is a deep reach mahogany color, offering aromas of honey, treacle and exotic fruits combined with beeswax and caramel. On the palate, pipe tobacco and chocolate unite with spices, chestnuts and leather to give the whisky a long, lingering and luxurious finish.

7. Lanson Le Rosé Champagne: With notes of red fruits – strawberry, raspberry, blackberry and blueberry – this fresh, fruity and flavorful rosé champagne is balanced by notes of citrus. The combination aims to

remind consumers of the delicate scents of fruit market stalls. Champagne Lanson has recently introduced a new concept for 2022: Le Rosé Fruit Market, a special-edition gift box for its emblematic Le Rosé. Designed to echo the variety of fruits that is uncovered during the tasting of the champagne, this exclusive offer showcases a cuvée of great finesse uniting freshness and vitality – perfect for sharing on a summer’s day.

8. Templeton Rye: Owned by Infinium Spirits, Templeton Distillery has earned a reputation as a leader in high quality rye whiskey. Known for making whiskey behind closed doors during Prohibition, this is a title that makes the residents of Templeton, Iowa, proud. More than 100 years later, the team at Templeton has consistently adapted to the ever-changing industry. With a 95% rye & 5% malted barley mash bill, this spirit is aged in new American oak barrels.

9. Skrewball Peanut Butter Whiskey: Developed by a husband-and-wife duo, Skrewball Peanut Butter whiskey is the original peanut butter flavored whiskey – and unmatched in the spirits industry. Bottled in California and made with premium ingredients, this whiskey can be enjoyed as a shot, on the rocks or in a variety of delicious, premium craft cocktails.

10. Fèis Ìle Abhainn Araig by Bunnahabhain: Owned by Distell Group Limited, Bunnahabhain’s Abhainn Araig takes its name from the Araig River on Islay, a vital source for the distillery. This limited-edition 23-YO whisky is available in a 700-ml bottle, non-chill filtered and bottled at 50.8% abv.

Symbolizing the Bunnahabhain spirit, it’s been matured in ex-Pedro Ximenez sherry in a selection of octave casks. The bottling has a velvety rich texture, with notes of chocolate, powdered ginger and cigar box on the nose and dark toffee and spicy cinnamon on the palate.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

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Swedish Match in New TR Territories

Swedish Match strikes

OUT

Boosted by its marketleading position in the Nordic countries, Swedish Match has begun to venture into new travel retail territories, where it sees big potential for its smoke-free products

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by MARY JANE PITTILLA

wedish Match has forged a successful travel retail business in the Nordic region over many years. Now, the company that specializes in snus (an oral smokeless tobacco product popular in Sweden and Norway) and nicotine patches is taking its smoke-free philosophy to other areas, with promising results so far, particularly in the US market.

Johannes Varhelyi, Sales Manager, Travel Retail & International at Swedish Match, believes it’s a good time for the

Johannes Varhelyi, Sales Manager, Travel Retail & International at Swedish Match

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firm to expand its presence in the travel retail tobacco category, and he’s optimistic about the future of this product group as travel resumes post-lockdown. “There are good signs of a general recovery in the travel retail sector as people return to travel, and tobacco is no exception,” he tells Global Travel Retail Magazine.

“As restrictions ease around the world, it is becoming clear that once people are allowed to travel, they will do so – and they will also shop. There is no doubt that tobacco will continue to play a key role in this market going forward; in some locations spend per traveler increased in 2021, so the potential for tobacco is clearly still there.”

He continues: “This is good news for Swedish Match as snus and nicotine pouches continue to be a strongperforming category in duty free. We have already seen good recovery in the Nordic cruise market, for example, and while the airport sector is somewhat slower to recover, we are positive about the future, and that is why we are currently expanding our presence within travel retail.”

Swedish Match has seen changes in the underlying dynamic among travelers following the pandemic lockdown, with

tourism and leisure travelers returning faster than business travelers. That being said, it has not identified large-scale changes in shopper behavior as customers come back into travel retail, and consumers are not trading down, according to Varhelyi. “What we have identified, however, is an increased demand for nicotine pouches, both from retailers and consumers, in line with general trends in society. The perils of smoking have been known for a long time, and now there are many significantly less harmful products on the market, such as nicotine pouches that smokers can use as an alternative.

As a company that divested its cigarette business decades ago, this is good news and 100% in line with our company vision of ‘a world without cigarettes’. As a result, we see shoppers demanding a wider range of reduced-risk products such as nicotine pouches in-store.”

Shifting to a smoke-free world without cigarettes is “at the very center of our brand vision,” he says, and Varhelyi thinks travel retailers should take note. “The fact that smoker numbers are declining creates an opportunity for new, more modern and less harmful ways of enjoying nicotine. As nicotine users are valuable consumers within travel retail, retailers

Swedish Match in New TR Territories

should be exploring ways of building this interesting new category. Swedish Match is a market leader in producing oral nicotine products. As a result, we are already seeing positive results even outside our home market of the Nordics, as Swedish Match now occupies the number one position in the US market. We believe this stands us in a good position to expand in travel retail with an offer which is both different and a proven commodity in the international market.”

New travel retail products

Swedish Match has only recently launched in travel retail outside of the Nordics, but initial interest from the market has been good, says Varhelyi, in line with the growing demand from shoppers for smokefree products and the company’s standing as the established leader in the sector.

“We will have new travel retail releases to announce later this year, so watch this space,” he enthuses.

As a supplier, Swedish Match is grappling with legislative challenges facing the duty free and travel retail tobacco category. Varhelyi is very clear on this subject: “From a European Union per-

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spective, it will be interesting to see how the EU’s member states will address these new reduced-risk products with regards to excise, and we also expect changes to the rules on cross-border acquisition on excised goods for private individuals. It is also likely that nicotine pouches will be included in the next tobacco products directive which is the horizontal EU framework for tobacco and similar products. As nicotine pouches are a new category, there are still not many countries that have regulated the product.

Swedish Match strongly believes that there is a need for pragmatic regulations.

With huge demand for these products from both retailers and shoppers, clear guidance is needed to allow this category to fulfil its potential in the market, while at the same time ensure a high level of public health protection.”

Like all tobacco suppliers, Swedish Match is heavily regulated when it comes to promoting its products digitally, but that doesn’t stifle innovation. “Our whole business is an innovative solution,” he states. “As I have mentioned, shoppers are looking for more smoke-free ways to engage with the tobacco sector and that is

our whole vision: A world without cigarettes. This is our passion and our focus.”

A good example of this is its recent campaign with Viking Line to offer dedicated recycling bins for its nicotine pouches and cases. These clearly-marked bins ensure it cuts down on waste in the market, which is a key issue for all stakeholders, he notes.

Turning to travel retail exclusives, Varhelyi believes these products are an important part of travel retail, but in the tobacco and smoke-free sectors, range is becoming equally important. As this market grows, shoppers want to see a wider offer from retailers.

In travel retail, the company’s bestseller is Zyn, its leading brand of nicotine pouches, which is poised for “excellent growth” in travel retail due to the firm’s experience in this sector and proven track record in key domestic markets.

“It also speaks to a growing demand from shoppers; opportunities to smoke or vape in a travel environment are often limited and this product offers customers a new way to use tobacco without smoking,” he concludes.

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Brown-Forman Talks Full Recovery

BROWN-FORMAN

draws on ‘popularity and strength’ of travel retail portfolio During the pandemic, BrownForman’s planning and operational strategies have revolved around its firm belief that the duty free and travel retail industry will eventually make a full recovery.

In a wide-ranging interview, Aude Bourdier, Vice President, Managing Director, Global Travel Retail, Brown-Forman, tells Hibah Noor how the company has navigated the turbulent Covid-19 period

Brown-Forman expects to strongly focus on its American whiskeys led by Jack Daniel’s

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Aude Bourdier, Vice President, Managing Director, Global Travel Retail, Brown-Forman

“While we are experiencing an increase in business travel, we still have a bit of ground to make up before we reach pre-pandemic levels. Everyone is keeping an eye on Covid developments, as well as the critical situation [involving Russia and Ukraine] in Eastern Europe.”

Brown-Forman’s planning and operational strategies during the pandemic revolved around its strong belief that the travel retail industry would eventually make a full recovery.

“With that as our guideline, the Brown-Forman travel retail team put in place key strategies and initiatives designed to be implemented as the business environment improved,” Bourdier explains. “A good example would be the partnership formed with our friends at Gebr. Heinemann to launch a pair of unique whiskeys carrying the Jack Daniel’s label – Sweet & Oaky and Bold & Spicy (August 2021).

“This travel retail exclusive addition to our portfolio has been a remarkable success and you can expect similar announcements and partnerships in the near future.”

Burgeoning premium spirits sector

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entucky-based wine and spirits producer Brown-Forman Global Travel Retail may not be expecting a quick revival of its Asian duty free business but is at least observing signs of promise.

Speaking candidly to this publication, Aude Bourdier, Vice President, Managing Director, Global Travel Retail, BrownForman said Hainan Island remained an economic bright spot in Asia. She also praised the South Korean government for abolishing the KRW6076/US$5,000 purchasing limit for outbound Korean nationals at Korean duty free stores, effective 18 March.

Bourdier comments: “South Korea made a positive overture to travel retail by increasing available spend in that country. Hong Kong also announced in March that it would ease some border restrictions for international travelers, beginning this spring.”

In anticipation of better times ahead for the Asian duty free market, Brown-Forman retail partner DFS Group held its 10th annual Master of Wines and Spirits exhibition in Macau (February to April 2022) for the first time. Bourdier, however, remains cautious: “Overall, it appears the rest of the region will be slow in returning to its former business vibrancy,” she remarks.

Robust H2 2021 performance

Reflecting on the past year or so, Bourdier suggests the company’s overall duty free and travel retail business has recovered “fairly well,” with particularly robust performance at the start of H2 2021.

“As disclosed by our financial releases, net sales in the travel retail channel during the first half of the 2022 fiscal year increased +38% (+64% underlying). This was primarily due to a favorable prior-year comparison, which was significantly impacted by travel bans and restrictions related to the Covid-19 pandemic.”

The sales recovery is mainly attributed to Europe, the Middle East, and the Americas, according to Bourdier. “Thus far, the sales momentum established in the latter part of last year has continued into 2022 and appears to be accelerating.

“Air travel across these regions has grown considerably and is overwhelmingly led by leisure travel versus business travel.

As the rapid growth in popularity of the premium spirits sector continues, much like it was before the pandemic, Brown-Forman expects to strongly focus on its American whiskeys led by Jack Daniel’s, Woodford Reserve and Old Forester.

“After all, these are the brands that set the highest standard for the category by being authentic premium spirits of the highest quality with a great taste and mixability,” Bourdier comments.

“Single malts have also developed a strong following in the travel retail industry, so you will also notice considerable emphasis on Benriach, The GlenDronach and GlenGlassaugh.

“Finally, we will make every effort to capitalize on the growing interest in tequilas by bringing focus to the taste, history, and authenticity of Herradura and el Jimador, particularly in the Americas.”

The popularity and strength of the Brown-Forman portfolio stood the company in good stead even during the darkest days of the pandemic. “Our attention and efforts remained focused on promoting and highlighting the authenticity and premium standards of our brands that has made them among the top-sellers in the travel retail channel.”

A trend among passengers to increase their basket size during visits to travel retail outlets, was one of the main positives to emerge from the pandemic. Bourdier believes the increased basket sizes were most likely driven by an uncertainty among shoppers as to when they could shop again.

She says: “As travel apprehensions give way to a gradual return to normalcy the continued higher basket spend could very well reflect an effort to make up for lost time as well as a sense of wellearned indulgence given the experiences of the lockdown.”

Meanwhile, Brown-Forman is maintaining a strong emphasis on sustainability, which has been ingrained in the company’s culture for a long time. “For many years, we have crafted our core brands (Jack Daniel’s, Finlandia Vodka, Tequila Herradura etc), keeping in mind a range of sustainable practices from zero waste production in Tennessee, to water stewardship to protect the health of key watersheds in our communities.

“Part of our sustainability prioritization strategy includes a more active consumer-facing marketing element. This is because there are multiple ways to conceive and implement better and more eco-friendly initiatives in travel retail.”

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

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Tito’s 25th Anniversary

A quarter century and counting

Throughout its 25-year history, Tito’s Handmade Vodka has become a staple at big-ticket events across the USA and an advocate of charitable giving

Celebrating its 25th anniversary, Tito’s Handmade Vodka asks supporters to share their personal connection to the brand in the ultimate fan contest

by LAURA SHIRK

42 GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

The brand’s “Vodka for Dog People” initiative supports animal wellbeing and sponsors “Yappy Hours” around the world to support this cause

To build a sense of excitement among consumers in TR, the spirits brand created a special limitedtime commemorative bottle label

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McDonnell at Tito’s Vodka points out that even though the company has grown since day one, it remains committed to delivering the same quality product

ounded by Bert “Tito” Beveridge in the late-90s, Tito’s Handmade Vodka is produced in Austin at Texas’ oldest legal distillery.

Rooted in experimental research, Prohibition-era snapshots and gift-giving, the one-man show evolved into an originator of the microdistillery movement and a leading success story within the world of spirits. Distilled and bottled by Fifth Generation Inc., Tito and his team continue to dominate “the same land where the whole venture started.”

After years of relying on homestyle recipes and word of mouth, Tito’s Vodka is celebrating its 25th anniversary by holding an online ultimate fan contest.

Supporters of the brand are invited to register and upload a short essay, photo and/or video explaining their personal connection to Tito’s. The grand prize is a trip to Austin, TX, and the chance to join the team in a three-day celebration to

mark the milestone. The runner-up will receive a signed and framed Tito’s 25th anniversary print.

Earlier this year, the company celebrated the occasion by hosting a cocktail party at IAADFS Summit of the Americas 2022 in Palm Beach, Florida. Building a sense of excitement among consumers in the travel retail channel, Tito’s created a special limited-time commemorative bottle label and red, white and blue bottle bag.

A commitment to quality product & community welfare

When asked how Tito’s has evolved throughout its 25-year history in order to stay relevant, John McDonnell, Managing Director, International, Tito’s Handmade Vodka, elaborates on the company striking a balance between staying true to its brand story and growing involvement in big-ticket events including Lollapalooza, Bonnaroo, Governors Ball and Austin

City Limits Music Festival. He points out that even though the company has grown since day one, it remains committed to delivering the same quality product.

This season, Tito’s will be showing up at festivals across the USA generating brand awareness and soaking in the good vibes only. In the past, the company has been responsible for constructing branded performance stages, designing a dedicated Tito’s Lounge, giving away custom merch and mixing drinks for music-goers and musicians alike. The team introduced its Love, Tito’s program to fans at Gov Ball, inviting them to join its efforts in supporting the non-profit Musicians On Call.

Describing Tito’s as a charitable organization that just happens to produce and sell great vodka, McDonnell brings to light its presence as the leader of a long list of local initiatives and support programs. According to its site, over the previous year, Love, Tito’s has participated in 11,600+ charitable events across 50 states, 31 countries and 5 continents. Driven by Beveridge’s desire to “make a ripple in the world,” the company works to improve animal welfare, disaster and hunger relief, LGBTQ+ and racial equality and more.

“Our commitment to community and social responsibly is core to who we are at Tito’s Vodka. I’m especially proud of our ‘Vodka for Dog People’ initiative, which supports animal wellbeing. We have recently partnered with animal shelters in Saint Kitts and Aruba and we sponsor ‘Yappy Hours’ around the world to raise money to support this important cause,” says McDonnell.

Supply chain & digital convenience

With the company’s next chapter in mind, the Managing Director touched on Tito’s past and present challenges. Similar to other retail brands across the channel – and domestic market – Tito’s is experiencing supply chain issues. This means that the company has had to beef up its inventory in overseas warehouses and transfer its increase in warehousing costs to consumer prices.

“Another challenge that we all face in travel retail is digital convenience – now, more than ever, consumers prefer to purchase online. As an industry, we need to do more to overcome this challenge, support the shift to e-commerce and make the consumer experience more seamless and convenient for those shopping duty free,” concludes McDonnell.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

43

Duty Free Global Retailtainment

Duty Free Global: “We want to create excitement” INNOVATION, EXPERIENCE AND AMBITION COMBINE TO GREAT EFFECT AT DUTY FREE GLOBAL, THE FAST-GROWING BRAND REPRESENTATIVE HELMED

BY BARRY GEOGHEGAN

by MARY JANE PITTILLA

Limited-edition bottles for Fireball Whisky will be released in summer 2022

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Duty Free Global’s gin range includes Drumshanbo Gunpowder Irish Gin Exclusive Limited Edition Sardinian Citrus Gin

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uty Free Global (DFG), the Ireland-based brand representative founded by liquor industry expert Barry Geoghegan, is on a mission to bring much-needed fun and retailtainment to the liquor category after a crisis-hit few years. With innovative brands ranging from Fireball Whisky (made by Sazerac Company) to Drumshanbo Gunpowder Irish Gin, DFG seeks to appeal to the younger generation and the curious traveler keen to try something new.

Irish-born Geoghegan looks back at the Covid-19 pandemic with positivity. His team took the time and the opportunity to work closely with both brand partners and travel retailers. “We found it a useful time to engage and have quality meeting time with travel retail operators and take them through each of our brand partners’ portfolios. Once the restrictions had lifted in certain regions we found the operators very open to listing new products,” he tells Global Travel Retail Magazine.

The pandemic was also a time for partnership-building, which has always been so important in the duty free and travel retail sector. “We feel our partnerships are stronger than ever, having been built during difficult times,” he says, revealing that the company even took on new brand partners during the pandemic.

Today, the duty free and travel retail wine and spirits category is on the up, he believes. “It certainly seems to be in recovery mode and scaling up at pace with operators placing positive orders.”

Five Farms Irish Cream from McCormick Distilling is attracting attention from retail buyers

Silent Pool Rare Citrus Gin will be introduced to travel retail in 1-liter bottles this summer

Geoghegan believes there is demand for sustainable products such as Silent Pool Distillers’ Green Man Wildwood Gin, which was the first spirit packaged in a cardboard bottle

Geoghegan says all the company’s brand partners are feeling “very positive” about the duty free and travel retail channel as they see passenger numbers increasing in airports and travel returning to most regions. “Operators are seeking out new brands to add to their assortment, which is positive for our brand partners.”

DFG’s brand partners include: Sazerac Company – Buffalo Trace Distillery bourbon whiskey, 1792 Bourbon, Southern Comfort whiskey liqueur, Paddy Irish Whiskey, Fireball Whisky, Sheep Dog Whiskey, Myers’s Jamaican Rum, Jung & Wulff Trinidad Rum; McCormick Distilling – Five Farms Irish Cream and Broker’s London Dry Gin; Silent Pool Gin; Drumshanbo Gunpowder Irish Gin; The House of Somrus Cream Liqueurs; and Wakefield by Taylor Family Wines.

Successful masterclass

The recent Summit of the Americas, held in April 2022, was a successful event for the firm. “Duty Free Global found it very beneficial to meet with the American travel retail operators face to face and introduce new brands and novelties. We also held a really well attended Buffalo Trace Distillery Masterclass with Master Distiller Drew Mayville,” says Geoghegan.

Looking ahead, the company has a number of new releases and formats coming out this summer. They are: Silent Pool Rare Citrus Gin in 1 liter; Gunpowder Sardinian Gin in 1 liter; Myers’s Premium Expressions Rum; and Fireball Whisky limited-edition bottles. In addition, a new range of wines from Wakefield is launching in time for the TFWA World Exhibition in Cannes in October 2022.

“Further premium wine producers will also be joining the DFG portfolio – watch this space,” adds Geoghegan.

In terms of trends emerging in the wine and spirits sector, Geoghegan believes there is “a real demand” for sustainable products such as Silent Pool Distillers’ Green Man Wildwood Gin, which was the first spirit packaged in a cardboard bottle.

He also notes that operators are looking for “small formats” and “fun novelties”.

Speaking about his wines and spirits portfolio, Geoghegan is positive about the brands’ ongoing contribution to the channel: “We have a fantastic premium gin portfolio with distilleries from around the world which creates interest from operators. The team at Sazerac have a fantastic number of premium bourbons which are very much in demand. Our creams are offering a real point of difference from the market leader and are attracting attention from buyers,” he enthuses, adding that the company is currently adding “premium wine producers with the correct approach for travel retail” to its portfolio and will be launching them this year.

Looking ahead to 2022 and beyond, Geoghegan has two clear aims. The first is to grow the brand portfolio in line with consumer trends and the needs of travel retail operators. “We want to create excitement and theater with our activations for the traveler both in person and digitally. We want to take on like-minded brands that understand the channel and can enhance it.”

“Second, DFG is looking to create strong partnerships with local teams in different regions. “Our team is traveling to visit and engage with operators around the world,” he says.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

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KT International’s Innovation Strategy

Stuart Buchanan, Chief Commercial Officer, KT International

KTI aims to be crowned

King in Asia European tobacco products specialist KT International is re-focusing on the Asia market this year with new portfolio expansions and innovations

by MARY JANE PITTILLA

46 GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

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ollowing good results in 2021, independent tobacco products company KT International (KTI) has started 2022 with its best-ever first quarter, driven by an “exceptionally strong” performance in domestic markets supported by signs of recovery in its travel retail and duty free business.

The company, which emerged from the break-up of the Bulgarian State Tobacco Corporation in 2008, is now re-focusing on expansion in the Asian travel retail and duty free market, after the COVID-19 pandemic paused its plans.

“Asian travel retail is a very small part of our business,” KT International Chief

Commercial Officer Stuart Buchanan told Global Travel Retail Magazine. “We had extensive plans in place for 2020 and 2021 with a number of Asia specific innovations developed which we had to put on hold due to the COVID crisis. We have re-planned this for 2022, so this year our plan is to re-focus our efforts to build our Asian footprint.”

Last year, KTI introduced two new additions to its King and Corset cigarette ranges, specifically to target the Asian market. The smaller-format King Compact pack design aims to offer quality and value. The King Compact contains American style cigarettes and comes in a slimmer format in line with the latest

The new King Compact pack design comes in a slimmer format in line with consumer demand

consumer demands. For extra flavor, KTI has created The King Pop Compact. The King Pop features the same well-balanced blend complemented with the newest generation capsule flavored filter. Two taste options are available – menthol and blueberry, which can be activated on demand.

For Fall 2021, the Corset brand presented the latest capsule collection for its premium American blend cigarettes.

Inspired by the vibrancy of the design of the Shellpack range, the brand has altered the look and feel of Corset Deux and Corset Double to match the premium quality and high-fashion sense demanded

by KTI’s consumers. Corset Deux comes

with a single menthol capsule, while Corset Double tastes of menthol glaze and blueberry blush.

KTI developed these ranges specifically for Asia, and while they were introduced to many markets, the delayed return of global travel meant that its implementation and brand activations were limited.

Eco-friendly initiatives

Another hitch has been the long shipping times from Europe to Asia caused by the continuing pandemic. “Whilst we have high expectations for 2022 with these ranges, we are finding shipping and transport lines from mainland Europe to Asia severely delayed,” noted Buchanan.

“Average shipping times have gone from six weeks to 14 weeks for some Asian markets and this, coupled with the situation in Eastern Europe, has meant that we could delay these plans further.”

But he remains optimistic: “Asia is strategically important for us and we are confident that our brand philosophy of global brands, international quality and accessible pricing, coupled with the innovations we have developed specifically for Asia, will be a success, so we really hope that the macro socio/economic environment stabilizes in Q2 to allow us finally to start fulfilling our Asian ambitions.”

With the global move to sustainability, KTI is working on eco-friendly ranges for both its King and Corset brands which will be ready in Q3. And more is in the pipeline. “The real excitement for us is what we are doing across our production and office facilities which will be another world first for KT International and demonstrate our real commitment to sustainability. Watch this space as we will announce this late Q2/Q3 and it will be really something beyond the ordinary,” enthused Buchanan.

Right now in travel retail, KTI is working on recovering its volumes and positioning from pre-Covid when the firm started 2020 with its best-ever results in the channel. “We have managed to keep our good partnership relations with our travel retail customers and clients during the pandemic despite the drop in sales and operations, and we are now focusing on reopening those businesses,” explained Buchanan. “During the last two years we were also working on expanding our customer database and we have managed to approach not a small number of new clients and partners that we are now to further develop the business with.”

Looking ahead, KTI is also eyeing the Americas travel retail market for growth.

It has seen the signs of recovery there and has resumed its business with existing and new customers.

Meanwhile, the focus remains on Europe where KTI has a significant footprint domestically as well as on Eastern Europe and the Middle East where the company has managed to get back on track.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

47

Distell International Fèis Ìle Experience

This promotion gives travelers the opportunity to taste the whisky and snap a photo in a space that mirrors the festival experience

Bunnahabhain Fèis Ìle 2022 Calvados Cask Finish 1998 Pack

Distell launches festivalinspired whisky activation Distell’s Fèis ìle experience at Glasgow Airport showcases two new limited-edition 23-YO whisky releases: Fèis ìle Abhainn Araig and Fèis ìle Calvados Cask

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istell-owned whisky brand, Bunnahabhain, is bringing Scotland’s Islay Festival, a gathering of whisky drinkers from across the globe, to Glasgow Airport with a couple of new limited-edition releases and a maritime-themed activation. This promotion gives travelers the opportunity to taste the whisky and snap a photo in a space that mirrors the festival experience.

Held at the island’s distilleries, The Islay Festival, known as Fèis Ìle, takes place annually during the last week of May and draws whisky fans from all over the world. Visitors of Bunnahabhain Distillery can taste whiskies directly from its casks.

The brand’s Fèis Ìle experience at Glasgow Airport showcases two new limited-edition 23-YO whisky releases: Fèis Ìle Abhainn Araig and Fèis Ìle Calvados Cask. Available in a 700-ml bottle, non-chill filtered and bottled at 50% abv, Abhainn Araig takes its name from the Araig River on Islay. The spirit has been matured in ex-Pedro Ximenez sherry casks. The bottling has a velvety rich texture, with notes of powdered ginger on the nose and dark toffee and spicy cinnamon on the palate.

The 1998 Calvados Cask Finish is also available in a 700-ml bottle, non-chill filtered and bottled at 49.7% abv. Finished in Calvados brandy casks, this bottle matured on Bunnahabhain’s

48 GLOBAL TRAVEL RETAIL MAGAZINE JUNE 2022

shores for two decades before spending the last couple of years in casks that once held fine French Calvados. Tawny in color, this dram contains notes of barely sugar, pear drops and toffee apples on the nose, and green apples, pear candies and toffee on the palate with a lingering floral finish.

Launched in markets across the globe, only 850 bottles of Abhainn Araig are available in travel retail, while 140 bottles of Calvados Cask can be purchased across the channel.

Travelers who pick up the products at the activation and join the Coterie Club at no cost will receive a free maritime mug with their purchase.

“Fèis Ìle is a coming together of like-minded, passionate individuals who journey to taste exclusive drams, share in conversation and meet new people from the global whisky community.

“We know not everyone is able to make this pilgrimage, and so these limited-edition whiskies allow us to share Fèis Ìle with the world. We are also proud of the fact that Bunnahabhain’s Distillery, which forms part of the festival’s attractions, is currently on track to become Islay’s first distillery with a net zero emission distillation process,” comments Luke Maga, Head of Europe & Global Travel Retail, Distell International.

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