Gulf-Africa MEADFA January 2018

MEADFA 2018

DUTYFREEMAGAZINE.CA JANUARY 2018 · MEADFA · VOL 28 · NO 1

Dufry Sharjah celebrates revamped space p. 6 Dubai Duty Free celebrates 34 years p. 10 Le Clos hits the red carpet at DIFF 2017 p. 14

40 YEARS AND COUNTING

Over the years we have grown into a multi-faceted business organization; leading the space when it comes to operating Duty Free shops, Seamen’s clubs and Bonded Warehouses across seaports in UAE We strive towards our mission to be the partner of choice for our customers and suppliers ...and we are getting better at it everyday!

P.O. Box 5968, Sharjah, UAE Tel: +971 6 5634033 Fax: +971 6 5634022

Email: customercare@bhatiatraders.com Web: www.bhatiatraders.com

LETTER FROM THE EDITOR

JANUARY 2018 · MEADFA · VOL 28 · NO 1

Gulf-Africa Duty Free & Travel Retailing (ISSN 0954-0592) is published four times a year (Spring, Fall and Winter) by Global Marketing Company Ltd., 26 Pearl Street, Mississuaga, Ontario L5M 1X2 Canada. It is distributed to duty free operators and distributors in the following countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE, Yemen, Algeria, Azerbaijan, Benin, Cameroon, Cape Verde, Djibouti, Egypt, Ethiopia, Gabon, Ghana, Guinea, Iran, Ivory Coast, Jordan, Kenya, Lebanon, Madagascar, Malawi, Mali, Mauritius, Morocco, Mozambique, Niger, Nigeria, Namibia, Pakistan, Reunion, Senegal, Seychelles, South Africa, Sudan, Syria, Tanzania, Togo, Tunisia, Turkey, Turkmenistan, Uzbekistan and Zaire, as well as to duty free suppliers worldwide.

Subscriptions: $200 for one year, $300 for two years and $400 for three years. Art and photographs will not be returned unless accompanied by return postage. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor. January 2018, Vol. 28, No.1. Printed in Canada.

All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2018 Global Marketing Company Ltd.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING 26 Pearl Street Mississauga, Ontario L5M 1X2 Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemagazine.ca PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@dutyfreemagazine.ca SENIOR EDITOR Wendy Morley wendy@dutyfreemagazine.ca ASSOCIATE EDITOR Jas Ryat jas@dutyfreemagazine.ca SOCIAL MEDIA COORDINATOR Eman Khan eman@dutyfreemagazine.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca CONTRIBUTORS Claire Malcolm

Realizing huge

potential A

fter November’s postponement as a result of political uncertainty in the original host country of Lebanon, MEADFA is all set to stage its next conference in Dubai on the rescheduled dates of January 28-30, 2018.

Confidence is running high among the organizers of this must-attend annual event. Dubai Duty Free is the official conference host, and the stellar speaker line-up includes Dubai Duty Free Chief Operating Officer Ramesh Cidambi; the former CEO of SA Express Airways and aviation consultant Inati Ntshanga; broadcaster, branding and African business expert Victor Kgomoeswana; Oman Airports General Manager Commercial Operations Samer Ahmed Al Nabhani; and Counter Intelligence Retail Research Director Stephen Hillam.

Industry leaders agree that the Middle East and Africa region offers enormous potential. Passenger numbers have strengthened in 2017 in the Gulf region, showing a 9% upswing in tourist arrivals after a disappointing decline in 2016.

Throughout Africa, meanwhile, the negative growth in recent years has turned around sharply in 2017. North Africa leads the way at +16% growth as a sub-region, with Egypt and Tunisia holding the high end at, respectively, +51% and +32.5% growth in tourism arrivals for the period of January to April 2017. The Sub-Saharan Africa tourist market is also bullish, with new airports and operations supporting this upward travel trend for a promising duty free market.

Suppliers understand that while the entire region is worth exploring, the Middle East in particular offers opportunities hard to find elsewhere, for super-premium items in all categories – the perfect marriage of luxury items and eager consumers.

The MEADFA conference is a vitally important fixture in the industry’s calendar, and we at Gulf-Africa Duty Free look forward to seeing you at the event.

Meanwhile, we hope you enjoy this issue, learning from industry insiders and garnering valuable information to help you reach even higher levels of success. Please feel free to share with your colleagues.

Kindest Regards,

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

Hibah Noor Editor-in-Chief hibah@dutyfreemagazine.ca

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

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CONTENTS

What’s inside LEAD STORIES

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6 Dufry Sharjah DUFRY CELEBRATES STATE-OFTHE-ART RETAIL AT SHARJAH Gulf-Africa Duty Free takes an illuminating walk around Dufry’s newly refurbished retail operation at Sharjah International Airport

10 Dubai Duty Free DUBAI DUTY FREE UPS THE ANTE

Dubai Duty Free celebrates 34 Years of retailing success with US$54 million sales in three days

12 Bahrain Duty Free A NEW PARTNERSHIP

Bahrain Duty Free was named Gulf Air’s exclusive inflight supplier starting August 2017

14 Maritime & Mercantile International STAR STRUCK

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Le Clos hits the red carpet at DIFF 2017 with exclusive launch of Patrón en Lalique

16 Brown Forman ON THE ROAD WITH JACK

The nucleus for Brown Forman’s regional operations, the UAE is the company’s commercial top performer, but with a newly consolidated India, Middle East & North Africa set-up, its priorities are shifting

18 KT International GROWING CONCERN

For Bulgaria-based tobacco company KT International, the Middle East has been an important region since the company began addressing international trade. This is highlighted by a stronger position at MEADFA this year

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DUFRY SHARJAH

Dufry has localized its fragrances, with more focus on the oud scents for the Arab customers, which is proving successful

Dufry celebrates state-of-the-art retail at Sharjah

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING JANUARY 2018

Gulf-Africa Duty Free takes an illuminating walk around Dufry’s newly refurbished retail operation at Sharjah International Airport by

HIBAH NOOR

D

ufry has completed its renovations at Sharjah International Airport, where the leading international duty free operator has created a state-of-the-art airside retail space.

The company started the revamp in May 2017 and the first section that opened was fragrances and cosmetics. The refurbishment then moved into the confectionery area, followed by the alcohol section. The last department to undergo a refresh was the cash desk area. And more is to come. In January 2018, Dufry will start building its Hudson shop covering 110 square meters, which will be in an airside location that’s new to the airport. Dufry already operates a Hudson store in the landside area. The new space should be ready by the end of March.

Speaking to Gulf-Africa Duty Free recently inside the stunning walkthrough boutique, Iain Forrest, General Manager, Middle East, India & Subcontinent, Dufry, says the business is performing well. “We are happy, and the good thing was we did not see any drop in business during the renovation, so business remained stable and increased towards the end.”

Passenger numbers at the UAE airport this year are also stable, and are set to reach 12 million, growing by 2% year-on-year.

The average spend depends on the nationality, but GCC passengers, particularly from Saudi Arabia, are the highest spenders

Expanded selection of brands Turning to the customer demographics, Forrest is seeing more passengers from Iran and Syria traveling through Sharjah Airport, and also more Russians visiting the country as tourists.

This is impacting the product mix. “Syrians are very much into perfumes and gifting perfumes; it’s the same with Russians, but Russians are not spending like they use to,” he observes. “They are coming on vacation and spending money on hotels and not so much in the shops. But certainly the Syrians and Iranians are spending in the shops on products like sunglasses and watches.”

In a bid to entice customers, Dufry has boosted the number of brands offered at Sharjah. On the cosmetics side, Benefit is new and “working very well”, he notes, as are Bobbi Brown and Cartier. The company has localized its fragrances, with more focus on the oud scents for the Arab customers, which is proving successful. The range of Tom Ford products has also been extended.

The confectionery section has changed a lot more, with an expanded selection of local foods, which were not available

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING JANUARY 2018

before. There’s also more exposure to the big global brands like Mars, Nestle, etc, which Forrest notes are very popular in this market.

The standard range of souvenirs, which are mostly bought by Russian CIS customers, is set to move into the new Hudson store, as the company aims to keep the main shop specifically for more premium products.

The average spend depends on the nationality, but GCC passengers, particularly from Saudi Arabia, are the highest spenders, he says.

Further retail expansion is also on the cards for Dufry, according to Forrest. This will include remote locations such as kiosks.

The firm will know in the first quarter of 2018 what the additional space should be.

Transformation of the shopping environment Supporting Dufry’s retail renovations are a raft of improvements undertaken by the airport authority, helping to boost business and passenger comfort. For example, the immigration process

The confectionery section has evolved with an expanded selection of local foods, which were not available before

was virtually automated this year, which has eased the movement of passengers through the airport and reduced the long delays at passport control. Improved lighting has also “really transformed” the shopping environment, enthuses Forrest. The airport authority has started expanding the Departures terminal by adding more seating areas, food courts, and gates.

Further major expansion of the space at Sharjah will take place in 2018 in a phased process, starting with adding gates to ease the way for passengers and separating out the departing passengers, thereby reducing congestion. These works are scheduled to be ready by 2020.

Forrest is quick to praise the airport landlord, with whom Dufry has an “excellent” relationship. “We are very fortunate, we have been here nearly 30 years and we have a long-term contract until 2034. We work together and they are very involved in our business, as we are in theirs. If there are expansion plans they ask where we want to put the retail. We work very closely with the authority and it works well. We are very lucky to have the partnership.”

Focal point of the shop Walking through the refurbished store, Forrest points to one of the 30 video screens across the terminal that Dufry can adapt to all the local promotions and national days.

All the Arab products have been placed on the right hand side, which is very much the focal point of the shop. “Sharjah was the first walkthrough shop in the Middle East 20 years ago. It’s in a fantastic location as well,” he smiles.

He points to Cartier, which was brought in for the Saudi customers, and notes that Dufry was the first retailer to feature Victoria’s Secret in a duty free shop in the Middle East some three years ago.

In a further development, Dufry added more checkouts in November 2017. The operator has yet to add Samsung Pay or Apple Pay, but Forrest says that the company’s Hong Kong team are looking into these digital payment apps. “The Asian market is very comfortable [with payment apps] and the Indian market is comfortable, so it’s something we could look at to have here because 50% of our passengers are from the Indian continent.

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

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DUBAI DUTY FREE

DDF’s anniversary discount for 72 hours resulted in a spending spree at Dubai International

The 34th anniversary also saw a series of celebrations led by Colm McLoughlin, Ramesh Cidambi and members of the senior management team who conducted the Millennium Millionaire and Finest Surprise draws as well as other promotional activities

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING JANUARY 2018

DDF’s executive team awarded a Certificate of Appreciation to long-serving employees who have been with the company for 20 years, 25 years and 30 years

Dubai Duty Free’s Executive Vice Chairman & CEO, Colm McLoughlin and Ramesh Cidambi, Chief Operating Officer along with other senior management joined excited employees in cutting ceremony for its 34th anniversary in Concourse B

Dubai Duty Free

ups the

ante Dubai Duty Free celebrates 34 Years of retailing success with US$54 million sales in three days

D

ubai Duty Free marked its 34th anniversary in style as it welcomed passengers traveling through Dubai with a special 25% discount on a wide range of merchandise over three days which began at midnight on December 18, 2017 and continued until the operation’s anniversary day on December 20, 2017. Total sales for the three days reached US$54 million.

The anniversary discount for 72 hours resulted in a spending spree at Dubai International and at Al Maktoum International with sales figures on December 18 reaching US$10.117 million and US$10.196 million on December 19. On the anniversary day itself, December 20, Dubai Duty Free daily sales reached US$33.291 million in the 24-hour period.

From a category point of view, Perfume was the highest selling category with sales of US$12.4 million followed by Cosmetics with sales of US$10.775 million and Watches with sales of US$9.606 million.

Commenting on the success of 34th anniversary, Colm McLoughlin, Executive Vice Chairman and CEO of Dubai Duty Free said: “The anniversary celebrations spread over three days were fantastic. We are glad to see such positive sales results across all the concourses. Extending a 25% discount to our customers is our way of saying thank you for their support throughout the year.”

During the three-day 34th anniversary sales, Dubai Duty Free’s Distribution Centre issued over 2,283 pallets of merchandise and conducted 212 trips from the warehouse to the airport.

The highest number of pallets was issued on 14th December with 897 pallets being delivered in 85 trips.

The total number of picks in the warehouse during this period was 22,077 for 882,559 units of merchandise, with the highest picks on 19th December for over 411,685 units of merchandise.

Over the three-day period the cash registers recorded a total of 375,000 sales transactions with nearly 107,000 sales transactions alone on December 20.

The Dubai Duty Free anniversary promotion is now a highlyanticipated event with many travelers choosing to travel on the days when the 25% discount is offered. The first anniversary sale Dubai Duty Free introduced was on its 20th Anniversary in 2003.

The 34th anniversary also saw a series of celebrations in various locations over three days led by Colm McLoughlin, Executive Vice Chairman & CEO, Ramesh Cidambi, Chief Operating Officer and members of the senior management team who conducted the Millennium Millionaire and Finest Surprise draws as well as other promotional activities.

It was an early Christmas present for Lynette Williams from Australia who won a US$1 million dollars in series 259 with ticket no. 4317. Williams who bought the winning ticket on her way to Australia was lost for words and simply said: “I’m speechless”, when advised of her fortune.

Another fortunate winner to win US$1 million in Series 260 is Suleyman Cem Gunal, a Turkish national from Istanbul and holder of ticket no. 3447. Gunal, a regular participant in Dubai Duty Free’s Millennium Millionaire and Finest Surprise promotions, bought his lucky ticket online.

Three more winners were also unveiled, when Dubai Duty Free Finest Surprise draw was conducted.

The Dubai Duty Free staff also enjoyed a special ‘Staff Surprise’ draw which resulted in a total of Dhs90, 000 being won by employees. In addition, the executive team also awarded a Certificate of Appreciation to long-serving employees who have been with the company for 20 years, 25 years and 30 years.

Dubai Duty Free currently employs over 5,900 staff and of the original 100 staff who joined in December 1983, 27 remain in active service and are referred to as the ‘Pioneers’. www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

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BAHRAIN DUTY FREE

Gulf Air Deputy Chief Executive Officer Captain Waleed Abdul Hameed Al Alawi and Bahrain Duty Free General Manager Bassam Al Wardi sign the inflight retail agreement

A new partnership Bahrain Duty Free was named Gulf Air’s exclusive inflight supplier starting August 2017

B

ahrain Duty Free has been appointed as exclusive onboard supplier of inflight retail for Gulf Air. The new partnership with Bahrain’s national carrier went live on August 1, 2017, and comprises 143 products that offer Gulf Air passengers in-seat access to an assortment of on-trend gifts and travel essentials.

The official signing ceremony was held at Gulf Air’s Muharraq headquarters in the presence of Gulf Air Deputy Chief Executive Officer Captain Waleed Abdul Hameed Al Alawi, Bahrain Duty Free General Manager Bassam Al Wardi and representatives from both organizations.

The extensive range boasts worldclass fragrances and cosmetics, jewelry, watches and sunglasses. It also includes

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must-have electronic gadgets and the latest travel essentials.

Bahrain Duty Free General Manager Bassam Al Wardi said: “Gulf Air is continuously working to enhance its incredibly successful product and service offering, and that extends to onboard shopping opportunities. Bahrain Duty Free has worked hand-in-hand with the Gulf Air team to create an exciting collection of products that speak directly to passengers’ needs and desires.”

He continued: “The inflight shopping experience is an intrinsic element of the onboard experience, and Gulf Air’s new product portfolio reflects its forwardthinking approach to the passenger journey evolution and our commitment to delivering tailor-made duty free retail

GULF-AFRICA DUTY FREE & TRAVEL RETAILING JANUARY 2018

solutions that engage passengers and drive sales,” he added.

Speaking at the signing ceremony, Captain Waleed Abdulhameed Al Alawi said: “Gulf Air guests expect an exceptional level of service and quality onboard our aircraft – and that extends to their inflight shopping experience, which is a core element of the onboard experience.

We are delighted to partner with Bahrain Duty Free to deliver a wide range of superior duty free products to our passengers.”

He added: “As you can see from the range chosen for our passengers, there truly is something for everybody who flies with us. This is important for us as an airline, as we appreciate every passenger that chooses Gulf Air as their airline of choice.”

MARITIME & MERCANTILE INTERNATIONAL

Le Clos was the main hospitality sponsor of the VIP lounge at DIFF 2017

Star struck Le Clos hits the red carpet at DIFF 2017 with exclusive launch of Patrón en Lalique

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ubai-based fine wine and luxury spirits retailer Maritime & Mercantile International’s (MMI) Le Clos announced its association with 2017’s Dubai International Film Festival.

Over the course of the 8-day festival, Le Clos, main hospitality sponsor of the VIP lounge at DIFF 2017, will host international film stars including Olga Kurylenko, Cate Blanchett and Adrien Brody as well as Puerto Rican star of Despacito, Luis Fonsi.

Bollywood stars Sonam Kapoor and Irfan Khan will also be attending through the week along with rising American stars Madison Iseman and Ser’Darius Blain, leading regional actresses Muna Wassef, Yousra, Saba Mubarak and Yasmeen Raess, and a host of others at the exclusive Le Clos Lounge in Mina A’Salam.

Highlights included the launch of an exclusive release of Patrón’s celebrated collaboration between Mexico’s premier tequila maker and the master of French crystal, Rene Lalique for the unveiling of the limited-edition Patrón En Lalique Serie 2 which retails for US$7,000.

The week will also celebrates Patrón’s partnership with Oscar winning filmmaker Guillermo Del Toro. As one of the most gifted storytellers of his generation, Del Toro’s influence on the design of Patrón special limited-edition bottle brings his intricately designed and fantasy

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inspired creativity to this unlikely canvas.

MMI’s Andy Gould said: “We’re immensely proud to be a part of DIFF 2017 and see this as a regional celebration of authenticity and craftsmanship both on screen and behind the scenes.

Through our sponsorship of the VIP Gifting Lounge and the launch of Patrón en Lalique Serie 2 alongside the Patrón

by Guillermo Del Toro, we saw a unique platform to showcase these meticulously

GULF-AFRICA DUTY FREE & TRAVEL RETAILING JANUARY 2018

Award-winning Indian Bollywood actress Sonam Kapoor was amongst the VIP crowd

crafted creations and welcome some of films’ biggest and rising stars.”

Le Clos has a well-established reputation for bringing rare and unique products to market and Patrón En Lalique Serie 2 and Patrón by Guillermo Del Toro are a continuation of this brand direction and the company remains dedicated to delivering world-class service and exceptional customer experiences.

Luis Fonsi, singer and songwriter best known for his worldwide hit song “Despacito” attended DIFF 2017

DUTY FREE & TRAVEL RETAIL SUMMIT OF THE AMERICAS March 18-21, 2018 Orlando World Center Marriott Orlando, Florida

ASUTIL and IAADFS are collaborating to present the Duty Free and Travel Retail Summit of the Americas The summit brings together the best from the former ASUTIL and IAADFS events. Join us to take advantage of the vast potential of this vibrant market: The region includes 40 countries with a total population of more than 950 million.

In 2015, 2.29 billion passengers traveled through airports in the Americas and Caribbean, up 5.3% from 2014.

Total 2016 duty free and travel retail sales in the Americas and Caribbean were USD $10.7 billion (17% of worldwide market sales).

No matter the size of your business, suppliers and store operators will have opportunities to meet, network, learn at executive education sessions, and conduct business, all under one roof!

Save the date for THE most important business-to-business event in duty free & travel retail. www.2018SummitoftheAmericas.org

BROWN FORMAN

On the road with Jack

Jack Daniel’s Old No. 7 Tennessee Whiskey is Brown-Forman’s commercial “calling card”

The nucleus for Brown Forman’s regional operations, the UAE is the company’s commercial top performer, but with a newly consolidated India, Middle East & North Africa set-up, its priorities are shifting by

CLAIRE MALCOLM

R

obinson Brown IV swapped Miami’s eclectic skyline for Dubai’s correspondingly diverse architecture just 18 months ago, and hit the ground running in his new role as Director and General Manager of Brown-Forman’s India, Middle East & North Africa operation.

Oil price volatility and currency fluctuations reinforced an acknowledged need by the company to look at reprioritizing its regional investment strategy and further diversify the business mix outside of its UAE market stronghold.

“While the UAE is clearly our largest piece of business, and Jack Daniel’s the second largest whiskey in the country performance-wise, we started to reallocate investments into smaller markets like Lebanon and Morocco, both in the duty free channel and local economy,” he says.

Brown admits that his competitors are “a little farther along” with their own regional diversification goals, but is quietly confident when he says that the potential of the company’s calling card - Old No. 7 Tennessee Whiskey – is “nowhere near realized”.

“The reason for us merging India and the Middle East together as one unit is the significant [domestic] consumer and passenger crossover between certain Gulf

countries and India. We wanted to align our thoughts around how we write key programmes and concepts that would touch the consumer who lives in either country or travels between them,” he elaborates.

Long-term strategic planning is in Brown-Forman’s DNA and Brown and his team are already thinking ahead to 2025.

He says: “As a family-owned business with a 147-year-old track record we’ve always had a long term perspective, so the long-term strategic vision comes from the culture of our leadership.

“It drives a lot of our behavior. Here, we are six months into the 2025 strategy and it’s very exciting as it challenges us to think outside the box. So while we may be small today in certain markets, we don’t expect to be in the next few years. It also keeps us very focused and also ensures we don’t make short-term decisions around trying to steal market share or do something that could be detrimental in the long term.”

Follow the leader Jack has its feet firmly under the table across the Gulf, with significant presence in key airports and cities and a large consumer following. Says Brown: “The focus here is on growing the rest of the portfo-

Brown-Forman’s focus in the UAE and Gulf is on growing the rest of its portfolio, whether it’s Sinatra Select, No.27 Gold or special packs

The company’s tequila portfolio includes Casa Herradura and El Jimador, both of which it is introducing to India

lio, whether it’s Sinatra Select, No.27 Gold or special packs.”

Jordan, while clearly not on the same level as the UAE, is also performing well with Jack Daniel’s’ market share extremely generous in comparison to market size.

Algeria is another destination where Jack is on a domestic roll, buoyed by a strong import partner, and Brown also sees significant future opportunity in Iraq.

Elsewhere, Egypt may be in the doldrums but Brown says that despite the massive downturn in business in recent years, the company hasn’t cut back on investment, as he explains: “We didn’t cut a penny and that’s because when business does come back, we need to ensure we haven’t lost any visibility or educational opportunities. It’s also important to remember that there’s a sizeable local population that enjoys Jack Daniel’s.

“The good news is, that through our partners we know that tourism is slowly picking up and a lot of countries have eased their travel advisories. I’m very bullish about Egypt and we look forward to its resurgence.”

From Levant to the Maghreb The behemoth that is the UAE market aside, while Lebanon and Morocco aren’t

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING JANUARY 2018

bility is to educate around the Jack Daniel’s trademark – the heritage story, how it’s made, and why it’s mixable but also delicious on the rocks,” he notes.”

India on the cusp

Robinson Brown IV, Director & General Manager, BrownForman India, Middle East & North Africa

huge markets right now, Brown says they “could be”.

The Jack consumer in the Levant is “basically everybody” and Lebanon’s 500,000-case whiskey market represents untapped potential for Brown-Forman, which currently has less than 3% market share.

“Lebanon’s whiskey business has grown significantly in the last five years and we are stepping up our investment to reach more consumers,” he notes.

Morocco, on the other hand, is a market with more of a learning curve, as he explains: “In the last two years our business has almost doubled there, and that’s partly due to the support of our local partner, Ebertec. We put a 2020 strategy in place 18 months ago and they’ve done an amazing job in delivering on various elements.

“We already had brand awareness and pretty high recall, but the issue for us was distribution. We wanted to make sure we could get onto menus in the on-trade and build direct relationships with bartenders as well as bringing brand ambassadors into the market to help us develop education around Jack.”

Education is a priority across all emerging markets and while Jack Daniel’s is familiar to most consumers, Brown reports a need to impart more information on its provenance and versatility.

“As a Tennessee whiskey it’s practically a category in its own right. Our responsi-

Brown’s eyes light up when talk turns to India. “India is definitely the biggest opportunity in the region, and with an extremely strong team on the ground there I am extremely optimistic about their future success.

“While Jack Daniel’s is showing strong double-digit growth every year, we are in a very different phase. It has great brand recall but, to be frank, compared to our competitors, we are underindexed in both size and volume.

The Scotch brands in particular are well seeded and, on top of that, the Indian consumer has a tendency to go Scotch first before trying other whiskies.

As with his strategy for Morocco, the Tennessee whiskey provenance angle is one he is keen to exploit, and with good reason, as he explains: “This has afforded us protection when there have been price wars among the Scotch brands, as we haven’t had to follow suit and have been able to continue to slowly seed our unique taste profile across the country.

“If you look at Scotch, it has all that heritage authenticity and a lot of wonderful stories, but it’s very hard to mix. At the other extreme you have vodka, which is very mixable but most vodka brands are limited with their heritage and generally not consumed straight – so with Jack Daniel’s we have an advantage of both aspect.”

GTR presence in India is enormously important with the average price of a bottle of Jack in the local market at US$60, and reaching as high as US$95 in the south, according to Brown.

“In duty free it’s US$35 and if you look at the country, 70% of duty free business is arrivals, so we are very keen on ensuring that we are properly building presence with arrival sales in particular.

We know our consumer and we also want them to then go into a five-star hotel or the local pub and order a Jack, so that’s why GTR is so important in the short term,” he comments.

Brown-Forman is also expanding its GTR head count to support this strategic focus and hiring brand ambassadors for airports across India, as well as further ramping up executions and education in 2018.

Long-term strategic planning is a requisite for sustained success in this and other markets and Brown’s India vision is on countdown, as he explains: “The local economy is fairly undeveloped but growing double digits, so that’s where our long term strategy comes in.

“From 2018 to 2020 we will focus heavily on GTR and seeding the local economy, so that from 2020 to 2025 we can increase investment into the local economy. We will also pick key cities over the next seven years and when we achieve a certain market share, we will go to the next set of cities.”

Jack and friends Brown-Forman’s liquid hero has set the tone for development in the region and Brown says that once consumers everywhere are up to speed on the Jack story, they can come in on the back end with premium expressions such as Sinatra Select or Jack Daniel’s No.27 Gold.

“We’ve also just acquired three distilleries in Scotland, so will have some new single malt brands to slowly introduce across the region very soon,” he notes.

While vodka is also gaining ground in India, which bodes well for Finlandia in the long term, it currently accounts for less than 1% of the spirits market. And with whiskey accounting for 40 out of the 50 million cases added to the Indian spirits market between 2011 and 2016, it’s whiskey first for Brown-Forman for the foreseeable future.

“However, Finlandia is a huge priority for us globally, particularly in places like Eastern Europe, Russia and other regions where vodka is heavily consumed and the leading category. In the Middle East, Israel is a great example where we are the leading brand in terms of per capita consumption,” he says.

“We also have an amazing tequila portfolio. Casa Herradura is the second largest tequila house in Mexico, and along with El Jimador we are introducing both to India, but it’s more about seeding than feeding,” he adds.

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

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KT INTERNATIONAL

Growing concern

Corset’s Shell Pack has been a hit in TFWA AP in Singapore and TFWA WE in Cannes; MEADFA will be its introduction to GTR in the Middle East

For Bulgaria-based tobacco company KT International, the Middle East has been an important region since the company began addressing international trade. This is highlighted by a stronger position at MEADFA this year by

WENDY MORLEY

F

or well over a century, the ancient city of Plovdiv has been at the heart of the tobacco industry for Bulgaria and the Balkans, and KT International (KTI) continues this tradition. Within the first two years of its inception in 2008, the company’s sales began far outpacing its factory’s capacity, so in 2014 the young company built a new state-of-the-art facility, currently employing over 460 people and with an annual capacity of 20 billion sticks.

While, unsurprisingly, the company began by selling to the domestic market, it took no time for export to become a major goal. KTI first established itself throughout Europe and then began to focus on the Middle East, where it has gained a solid and secure foothold. Travel retail is a key component of the company’s international drive into new markets, so it’s no surprise that MEADFA is an important event for KTI.

New sponsorship This year KTI is a Platinum Sponsor for the second consecutive year.

“We have been a supporter of MEADFA for a number of years now,” says Teodor Penev, KTI’s Trade Marketing Manager, MENA. “We took on the role as Platinum Sponsor for two reasons: First, to give support back to the travel retail industry in the Middle East. Second, we value it as a platform to showcase our brands and innovation to a select, targeted audience – namely premium customers across this region.”

creating a more buoyant climate. For this reason we have firm plans in place for the African continent, where our philosophy of being flexible to local consumer needs has already shown high consumer acceptance for our brands.”

Strong regional growth

Brand innovation

“Our business has grown in the Middle East by around 50% in 2017 over last year,” says Penev. “This is not due to one customer group, but rather to our diversified portfolio of brands catering to a number of consumer segments. We pride ourselves on our flexibility to meet local consumer needs and our philosophy of giving more value at every price point.”

While business is solid and growing in the Middle East and Europe and also expanding into Asia, the company is now targeting other regions, including Africa. “As a relatively young company with high growth, we have not historically been in a position to target all continents, but we recognize the significant changes accruing across Africa,” says Penev. “The growth of Ethiopian airlines as a credible transport hub has opened up travel for many customers. We see the investment in infrastructure across many sectors

Innovation is key for the success of the company now and moving forward. The brand Corset has helped, with its sleek, feminine image, and now the Shell Pack is truly breaking new ground. “We showcased our Corset Shell Pack in Singapore TFWA Asia Pacific followed by Cannes, and now our first showing of the innovation in this region will be at MEADFA,” says Penev.

The company also created a limited edition Corset package specifically for Dubai Duty Free. “We did this to show our support to the region and industry, and to recognize this region is unique; customers often want something reflecting the characteristics of the local environment and not just a standard pack from a standard global brand.” Penev says the company has a number of exciting new items to be revealed when the time is right.

KTI created a limited edition Corset package exclusively for Dubai Duty Free

18

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