Gulf-Africa MEADFA 2017 by Paramount Publishing Ltd.

MEADFA 2017

DUTYFREEMAGAZINE.CA NOVEMBER 2017 · MEADFA · VOL 27 · NO 3

MAÎTRE CHOCOLATIER SUISSE DEPUIS 1845

DISCOVER THE NEW LINDT TRAVEL SOUVENIR COLLECTION. 03.11.17 ARI Middle East eyes 2020 vision p. 8 IDFS nears completion of new projects p. 30 Iraq Duty Free on the up and up p. 36

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14:46

LETTER FROM THE EDITOR

Region on the

NOVEMBER 2017 · MEADFA · VOL 27 · NO 3

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. November 2017, Vol. 27 No.3. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2017 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

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

rebound I

f, like us, you’re heading to Lebanon for the Middle East & Africa Duty Free Association (MEADFA) 2017 conference this November, you’ll be doing your bit for global tourism growth as soon as you step off the plane at Beirut Rafic Hariri International Airport. The country’s Ministry of Tourism recorded a 13% yearon-year uptick in the number of tourist arrivals in the first five months of the year, and cash tills are ringing again with a 6% rise year-on-year in general tourist spending in H1 2017 according to research by Global Blue. And it’s good news elsewhere in the Middle East in terms of tourist movement, with the latest UNWTO World Tourism Barometer data heralding a turning point after the disappointing - but not unexpected - 4% decline in 2016, with mid-year figures reporting 9% growth in arrivals across the Middle East. Africa also continues to chart a positive growth curve, registering a healthy 8% rise in tourist arrivals in the first six months of 2017 with North Africa leading the continent at +16% and both Egypt and Tunisia respectively rebounding with a +51% and +32.5% rise in tourism arrivals for the period January to April. So, with 58 million international tourists visiting Africa and 54 million traveling to the Middle East last year, where does the duty free and travel retail industry stand? Saudi Arabia is a focus for Lagardère Travel Retail with its trio of concession wins and recent launch of the new King Fahd International store in Dammam, seeing it scale up its operation as the company taps into new regional retail potential. On a smaller scale, Dufry’s top to toe makeover for Sharjah International has introduced US brand Hudson in a regional first. For Tunisia’s Hamila Duty Free, the way forward is retail opportunity beyond airport boundaries, with the operator diversifying into border stores with the launch of its Melloula Duty Free operation on the border with Algeria pegged for early 2018, first footsteps into duty paid, and the recent unveiling of its Take 5 gas station convenience store brand. Brands across the full category spectrum are in high spirits when it comes to market share growth expectations. Roberto Cavalli Vodka and Beluga both cite the Gulf countries as a hotspot for their super premium labels, and Egypt as a solid performer, while Middle Eastern cigar aficionados in Dubai, Beirut, Qatar and Turkey are key for brands such as Agio, which is putting brand ambassadors on the ground as part of its long-term customer engagement strategy. Adding color to the fashion category, Italy’s Coccinelle reports strong sales in Cairo and Amman, and the 2018 arrival of Cartier into duty free is set to augment Kering Eyewear’s luxury presence across the Middle East where Dubai, Lebanon and Qatar are just three of its travel retail strongholds. Our expert voices in this issue will be joined in Beirut by industry luminaries and thought leaders each with their own unique perspective on the future of duty free and travel retail. Yours truly,

Hibah Noor Editor-in-Chief hibah@dutyfreemagazine.ca www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

CONTENTS

12 LEAD STORIES 8 ARI Middle East ARI MIDDLE EAST EYES 2020 VISION

The leading multi-location travel retailer in the Middle East, ARI Middle East is asserting its regional reach with a raft of new openings lined up for Muscat, Riyadh and Abu Dhabi

12 Hamila Duty Free HAMILA HITS THE ROAD

Tunisia’s Hamila Duty Free is taking its travel retail expertise and branching out into new areas of commercial opportunity from border stores and urban retail outlets to highway rest stops

18 Jordanian Duty Free Shops STRATEGIC DOMINANCE

Jordan is perfectly located to service the Levant, and the company’s ever-growing roster of stores is doing just that

26 Dubai Duty Free STILL FLYING HIGH

Dubai Duty Free is betting on digital, promotions, value pricing and strong passenger traffic increases for continued growth, reveals Executive Vice Chairman and CEO Colm McLoughlin

30 International Duty Free Stores THREE FOR THE COUNT

Time has not stood still in 2017 for International Duty Free Stores with a trio of long-awaited projects finally taking shape in Morocco

36 Iraq Duty Free IRAQ ON THE UP AND UP

A 12-year contract extension, significant double-digit growth at key locations and the resumption of flights between Jeddah and Baghdad are rounding out a positive 2017 for Iraq Duty Free

30 FEATURES Bhatia Traders goes mobile Progress on MEADFA’s agenda

22 40

Oud expertise paying off for Ajmal Clogau in it for the long haul

44 50

CONTENTS

LEAD STORIES 46 Coccinelle PRETTY IN PINK

Coccinelle’s new pink and brushed brass brand identity may be ultra feminine but behind corporate doors the Parma based company is uncompromising when it comes to pursuing its international travel retail growth strategy

48 Shiseido Travel Retail STRONG AND AUTHENTIC

The Middle East is a hot priority market for Shiseido Travel Retail for both its newer and more classic beauty brand portfolio

52 Petit Gourmet SPREADING THE JOY OF CONFECTIONERY

Following a successful revamp, Dubaibased confectionery brand Petit Gourmet has taken a major leap forward in the global duty free industry

59 Beluga BELUGA IN HIGH SPIRITS

Russia’s number one vodka Beluga is blazing a travel retail trail as the super premium segment continues to lead global category growth

60 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

67 Roberto Cavalli Vodka THE FASHION FORWARD SPIRIT Success in the super premium vodka category in the Middle East ticked off the to do list, Roberto Cavalli Vodka is ready to hit US and European shores

70 Oriental Group LIGHTING UP THE MARKET

Oriental General Trading is expanding its retail operations in Asia and seeing success with its tobacco business targeted at Chinese passengers

FEATURES Molton Brown unveils brand manifesto Kering Eyewear launches Cartier SKROSS has eyes on the redesign prize WGS offers solid foundation

51 54 56 57

Agio thinking inside the box Bonfils brings France to the world Davidoff opens of new head office KT International in Middle East

58 64 68 72

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, Seamenâ&#x20AC;&#x2122;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

ARI MIDDLE EAST

ARI Middle East eyes 2020 vision

ew openings aren’t the only focus for ARI Middle East (ARIME), the partnership between Aer Rianta International (ARI) and Global Investments SPC, with concession renewals and refurbishment projects supporting its regional footprint ambitions. Earlier this year the company secured a further four years tenure at Beirut-Rafic Hariri International Airport, where it has worked with local partner Phoenicia to deliver a best in class experience since day one of operation, with high profile crowd pleasing successes such as its iconic humidor. “Beirut Duty Free has had very solid passenger and spend growth over the last 12 months and we are now planning for the next phase at the terminal. Our strategy for the new concession is to further raise the bar to deliver the best customer experience to the sophisticated Lebanese customer,” says Nuno Amaral, CEO, ARI Middle East. A rundown of regional performance over the last 12 months reveals that in Bahrain, where the duty free offering has underNuno Amaral, CEO, ARI Middle East

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

The leading multi-location travel retailer in the Middle East, ARI Middle East is asserting its regional reach with a raft of new openings lined up for Muscat, Riyadh and Abu Dhabi by

CLAIRE MALCOLM

gone extensive refurbishment, Bahrain Duty Free announced 7.5% growth in net profits for the first half of 2017, to reach a record US$9.5 million and Amaral is “optimistic” that this will be similarly reflected in H2 2017 figures. The makeover included a new luxury watch boutique, the unveiling of the first House of Walker concept in the Middle East in the liquor category, the introduction of a coterie of high profile houses such as MAC, Jo Malone and Kilian in perfumes and cosmetics, and larger spaces for luxury brands including Bulgari, Hermès and Dolce&Gabbana. “Year to date sales for Cyprus are up on last year, assisted by strong passenger growth,” says Amaral, adding: “Sales growth is across all the major categories but especially in P&C due to the introduction of high profile brands such as Jo Malone, Kilian and Giorgio Armani Cosmetics. These are all exclusive to Cyprus Duty Free as they are currently not available downtown. As for 2018, sales and spend are expected to grow supported by sales initiatives driven by newness and value.”

Serving the Sultanate Its next big reveal will be in Oman where ARIME will triple its retail space in Muscat International Airport when the new terminal opens at the end of 2018. Says Amaral: “Preparations are well underway for the opening to ensure that we are ready to serve all international passengers. We have over 5,000 square meters of retail space covering

The Bahrain Duty Free revamp features larger P&C spaces for luxury brands including Bulgari, Hermès and Dolce&Gabbana

all duty free categories and are excited to deliver a world-class design with a strong sense of place, which will be supported by investment into leading edge technology to transform the customer experience and set the bar for the entire region.” The product assortment will be a “vast improvement on what we can currently handle at the existing location”, where ARI has been incumbent for 15 years. “In addition to the core liquor, tobacco, confectionery and perfume and cosmetics, we will now have premium branded fashion such Ralph Lauren, Montblanc, Michael Kors, Porsche Design, TUMI, and premium watches as Rolex, Hublot and IWC,” he says. “We plan to add to this assortment as the contract progresses and matures. The shop design is an area where we spent a lot of time understanding exactly what the airport wanted, and it will be a showpiece that we are looking forward to realizing,” he adds.

New horizons The Q1 2018 opening of operations at Riyadh’s King Khaled airport will herald the start of a new seven-year concession in the Kingdom with the 1,000-square-meter space currently in fit-out phase. “We have high expectations for the business and feedback from the airport management company is that passengers are surpassing their forecast with spend within the current facilities in excess of their original expectations, so naturally we’re encouraged and optimistic about the future there,” confirms Amaral.

The push-back of the opening of Abu Dhabi’s US$2.94 billion Midfield Terminal from 2017 to 2019 has meant that ARIME has time to refine its design, if needed, as Amaral explains: “Despite the delay we have worked closely with Abu Dhabi Airport Company (ADAC) to finalize store development plans and designs. We have been faithful to the original design concept and will adapt the design where necessary to ensure that any category developments are captured to ensure that we deliver the most current and exciting retail offer when we do open. “We are aiming to deliver a seamless and hassle-free retail experience from start to finish, both online and offline and will deliver a spectacular, sensational and exceptional experience for passengers.”

Regional vision The challenge of delivering ARI brand standards while ensuring a sense of place for each location is one that Amaral relishes. “Our retail philosophy and business focus is based on creating a uniquely tailored offer for each and every location in which we operate. We never apply a ‘one size fits all’ cookie-cutter approach. We believe our shops should enhance the overall perception of the airport and leave a lasting impression, not only of the airport but also of its host city and country. “We continually challenge our award-winning teams to design, build and fit out our stores to the highest contemporary standards. Our design concepts at each location in the Middle www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

ARI MIDDLE EAST

The introduction of new high profile brands such as Jo Malone, Kilian and Giorgio Armani Cosmetics are exclusive to Cyprus Duty Free

The refurbished duty free offering at Bahrain airport includes a new luxury watch boutique

Concession renewals and refurbishment projects across the region are supporting ARI Middle East’s footprint expansion ambitions

East have been developed specifically for each airport to complement the retail space and our category offering.” In addition to its high profile series of upcoming launches, ARI ME is concentrating on implementing its new 2020 strategy. “Having delivered our profit targets a year in advance of expectations under our previous strategy, our objectives for this year are to deliver this year’s plan but also to embed our new strategy and implement programs such as scale investment in IT and systems, recruitment to spcecifically bolster our operational and buying capabilities, and our refurbishment of existing shops to ensure we have a solid platform to deliver the strategy and plan through to 2020,” elaborates Amaral. “In addition, we are continuing to focus on expansion through new business and gold standard implementation of our new ventures in Riyadh, Muscat, Abu Dhabi. We are happily extremely busy, but equally very focused on our key priorities to deliver growth both this year and prepare the platform for growth in future years,” he adds. With several big implementations and store openings that Amaral is confident will wow partners and new customers, the team at ARIME is excited about the challenges and opportunities ahead. 10

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

“We are not naive to the challenging external environment both within the region and globally that we face. We will respond like we have in the past and focus on the issues, anticipate the challenges, and react and respond in the best way possible,” he comments. Amaral is all too aware of the strictures of the evolving travel retail consumer and environment, and notes: “Even though we also have more passengers traveling through, they tend to have less time to shop and passenger mindset is certainly changing. We struggle to compete for their attention and across our operations in the Middle East we notice huge variations in penetration rates. There are a variety of factors at play but the simple fact remains that the majority of passengers don’t spend anything in our shops.” And ARIME’s proactive strategic approach is key to addressing these challenges. “To ensure that we continue to grow and drive sales we need to continue listening to our customers, be mindful of their needs and introduce a strategic plan to engage them in advance of traveling through our stores,” he concludes.

HAMILA DUTY FREE

Hamila hits

the road Tunisia’s Hamila Duty Free is taking its travel retail expertise and branching out into new areas of commercial opportunity from border stores and urban retail outlets to highway rest stops by

Construction of Melloula Duty Free commenced in October with Hamila confirming a six to eight-month timeline to delivery

HIBAH NOOR/CLAIRE MALCOLM

he 2011 democratic revolution and duo of devastating terror attacks in Sousse and Tunis in 2015 took a heavy toll on Tunisia’s economy and tourism industry with a recorded US$1.1 billion lost tourist revenues and 25% decline in visitor numbers, but this year marked the start of a reversal of fortune. According to figures from the National Office of Tunisian Tourism, July saw a 27% year-on-year increase in visitor numbers to 3.6 million, supported by the Tunisian government’s implemented package of ‘exceptional measures’ and UK government’s decision to relax its anti-travel advisory. And while revenues don’t yet match pre-2015 figures, for operators like Hamila Duty Free, it’s time to look forward rather than backwards. “We have seen 20% growth in passenger numbers this year to date and 2018 looks even more promising as governments and travelers regain confidence in Tunisia as a safe travel destination,” says Tarek Hamila, CEO, Hamila Duty Free.

New borders Following this challenging and prolonged economic downturn, Hamila Duty Free is seizing every opportunity to ensure that its travel retail business is well positioned to take advantage of a hopeful resurgence in visitor numbers - and this isn’t confined to traditional airport duty free. “As a result of our sustained efforts and government lobbying, which has seen the relaxation of legislation allowing for border operations, we signed a 10-year contract to operate a border shop between Tunisia and Algeria. This will take the form of a 1,200-square-meter facility situated directly after customs and just before the Algerian border,” he says. Located in the Melloula region, around 1.5-2 million people travel between the two North African countries each year making the operation “airport size”, according to Hamila, who elaborates: “We’ve been working to make this a reality for quite some time and it’s an important development for us, and for

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

HAMILA DUTY FREE

the country. The modern two-storey space will include three branded fashion stores plus restaurants and fast-food retailers in a food court setting. “We collaborated with a Tunisian architect on the aesthetic design, who did a fantastic job, and mandated that the fit-out be executed by local companies, so it is truly a 100% Tunisian project – while being very modern - and in this way is also supporting the local economy. It’s also the first border shop in North Africa, apart from Egypt, so expectations are high.” Construction of Melloula Duty Free commenced in October with Hamila confirming a six to eight-month timeline to delivery, with operations scheduled to begin in the second half of 2018 and 50 staff members to be recruited. He says that the passenger demographic will be primarily Algerian (70%) with the remaining 30% Tunisian nationals, but expected per capita spend is a relative unknown at this stage. Says Hamila: “We honestly don’t know what to expect as this is the first border operation of its kind between our countries. If we have correctly priced out the duty free offer to match the traveler demographic, which will be frequent business travelers and not just summer season tourists, then we should be well placed to see strong performance. “With such huge traveler volume it’s a great word of mouth channel, and with a modern duty free shopping experience in place, we believe that this has the potential to drive interest and new traffic through this specific border point. In this way, we fully expect an increase in visitor numbers once the shop is open.” Looking long-term, Hamila sees this as the first in a series of border duty free stores, which it will manage logistically through its main warehouse in Tunis. A loyalty program may also be on the cards for the future and while Hamila is eager to be at the forefront of global retail trends, the company – and indeed the country – is not in a position as yet to implement mobile pay and digital wallet services such as Apple Pay. Social media presence is another area where he sees future opportunity, having set the wheels in motion by setting up a Facebook page, with the longer term aim of integrating new communication channels into the company’s existing marketing strategy, which relies heavily on traditional print advertising in on-board duty free magazines. 14

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

Fashion forward objectives Hamila Duty Free has also added another string to its corporate bow, in the second of three game-changing strategic moves, by entering the duty paid market. According to its CEO, the recent signing of two high profile contracts with very important contracts with a brace of wellknown Turkish fashion labels. Established in 2003, DeFacto is one of Turkey’s leading fashion brands and the second-largest ready to wear apparel company in the country with 329 domestic and 110 international stores. “We are confident that in bringing DeFacto to Tunisia that the brand will perform very well in the fashion apparel market. We’ve opened two stores in the country, a 1,000-square-meter location in Tunis and a further store in Sousse, which is the second-largest city in the south,” says Hamila. “We signed a contract to open five stores in total, but for the moment we have two up and running as it’s been just one year since we took on the brand.” So confident is Hamila, in fact, that he is thinking of putting the brand into Melloula Duty Free as one of the three fashion anchor stores. DeFacto is one of Turkey’s leading fashion brands and Hamila Duty Free has opened two stores, one in Tunis and another in Sousse

ENJOYED EVERYPLACE, MADE IN ONE. EVERY DROP FROM A SINGLE SOURCE – LYNCHBURG, TENNESSEE. P L E A S E D R I N K R E S P O N S I B LY JACK DANIEL’S AND OLD NO. 7 ARE REGISTERED TR ADEMARKS. ©2017 JACK DANIEL’S TENNESSEE WHISKE Y 40% ALCOHOL BY VOLUME (80 PROOF). DISTILLED AND BOT TLED BY JACK DANIEL DISTILLERY, LYNCHBURG, TENNESSEE. JACKDANIELS.COM

HAMILA DUTY FREE

CEO of Hamila Duty Free Tarek Hamila with Oillibya General Manager, Saleh Abdali

Fueling strategic growth Hamila Duty Free hasn’t stopped at border stores and duty paid in terms of diversifying its commercial base for the long term, as Tarek Hamila explains: “The third major decision we made as a company was to cater to passengers once they leave the airport. With physical or product presence on the plane, at the airport, aboard boats, at port shops and cruise shop of La Goulette Port, covered, the missing link was obviously travel by car within Tunisia. “So by mapping the travel patterns of our customers, we decided to speak to the gas station companies and ended up knocking on the door of Oillibya, which has 200 gas stations in Tunisia, with a business proposal to manage all their non-oil revenue generating activities.” Oillibya agreed to the gutsy proposition and Hamila is now in the process of rolling out its new ‘Take 5’ gas station store concept, which is part convenience store and part fastfood restaurant. The team considered introducing a big brand franchise to anchor the fast food aspect, but decided to run with a smaller home-grown concept and own brand food and beverage offering. “We’ve kept it simple with items that appeal to a broad customer base, from morning croissants and sandwiches to fresh fruits, pizza and meat/fish/poultry hot dishes,” explains Hamila. The first store, staffed by a team of 15 employees, opened in early October in Tunis and Hamila’s plan is to add a succession of up to five additional locations along major highways before branching off onto small secondary highways and also into city centers. In total the company is targeting to open up to 10 stores in the upcoming two years. A one-stop convenience store, Hamila has also thought long and hard about the customer surroundings, providing landscaped outdoor seating and kids’ areas. “The beauty of this project is that there is no real need to create external awareness or invest in advertising because your

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

customer comes directly to you and can see what we offer as soon as they drive into the gas station,” he says. “We’ve obviously applied our years of duty free retail expertise to an entirely different domestic retail environment and I can say that we are bringing something quality driven and it’s going to be a positive change for gas stations across Tunisia,” he concludes.

Hamila Duty Free is rolling out ‘Take 5’ gas station store concept, which is part convenience store and part fast-food restaurant

U-change

Simply change the case to suit your mood

TAKE TWO

TRAVALO is proud of launch the exclusive inﬂight Take-2 sets with limited edition of the sleek colors for mix and match. It’s perfect gift and easy to buy products for all the travellers

Highly upgraded TRAVALO Couture, equipped with ofﬁcial Swarovski skins and bring the shinny Atomizers into another level and class. It’s perfectly ﬁt for the Duty Free Shops, Selective Beauty and Perfume Shops

www.travalo.com Genie-S International Ltd. Tel: +852-2889-9088 sales@genie-s.com Room B, 16/F, Cheung Lee Industrial Building, 9 Cheung Lee Street, Chai Wan, Hong Kong

JORDANIAN DUTY FREE SHOPS

Amman Duty Free shop also known as “Boulevard” because of its location is based in prime business district in Amman, Jordan

Strategic

dominance

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

Jordan is perfectly located to service the Levant, and the company’s ever-growing roster of stores is doing just that by

HIBAH NOOR

With the newly rebuilt store, Boulevard’s floor space grew from 400 square meters to 1350 square meters

urrently celebrating its 20th anniversary, Jordanian Duty Free has grown substantially from its beginnings with one store in Amman, opened in 1997, to 21 store outlets at borders around the country, occupying the duty free landscape from land to sea to air. The company is also taking part in the trend toward downtown duty free, opening a store in downtown Amman. “Technically the name of the store is Amman Duty Free shop, but everyone calls it Boulevard, because of its location,” says Haitham A. M. Al-Majali, CEO of Jordanian Duty Free Shops. “Boulevard is the prime business district in Amman, and that is where our store is located. With this newly rebuilt store, our Boulevard floor space grew from 400 square meters to 1350 square meters. Our sales are about 40% higher now.” The new location offers considerably more space, and the area is very busy, with plenty of traffic. “When we moved there we were able to offer more products. This helps bring in people who are not accustomed to shopping in duty free. They see our sign, go in and enjoy shopping.” But Jordanian Duty Free is experiencing growth across the board, not just in its Boulevard store. “We are seeing year-onyear business growth exceeding 20% in all shops,” says Al-Majali. “We have very good relationships with our suppliers. They have

the confidence to offer aggressive promotions with us. That helps to increase our footfall, the number of people who purchase and also the size of the shopping basket.” Al-Majali states that these passengers are made up of a good mix of locals, others from the Middle East and those from all over the world. The store continues to see great success from the traditional duty free core categories such as liquor and tobacco, and also offers some accessories. “We have been looking to work a little more with fashion, but in that category the purchasing power is getting weaker. I don’t want to have products that are fashionable but don’t sell. But we will always offer a good variety in different products that are affordable.” The stores also offer a good selection of local products such as olive oil. Jordanian Duty Free has embraced the digital age. The new website will enable travelers to purchase online and pick up at their specified store. The company is also becoming active on social media, with an Instagram account, for example. Jordanian Duty Free is making use of other new technology to encourage customers to shop. “When you come to Jordan you will receive messages about our shops,” says Al-Majali. The company’s border business is going exceptionally well, and the company is the only one on Earth to manage and run 21 stores in one country. And they accomplish this from only one warehouse. www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

JORDANIAN DUTY FREE SHOPS

Jordanian Duty Free is a publicly traded company. “It’s number one in the stock market in Jordan by value of the shares,” says Al-Majali. “Currently it’s worth US$40 per share. There is no public share holding company in Jordan that has exceeded our number.” Profit is important for any business, but for Al-Majali and Jordanian Duty Free, it’s also incredibly important to give back. “We contribute greatly to charities and social activities.” The company offers considerable support for the cancer center, as one example. “We also complete renovations for schools in the villages. We participate in helping some citiies like Gaza.” As CEO, Al-Majali sets the tone for everyone at Jordanian Duty Free, and the charity is as strong within the store and office walls as without. The company sponsors employees’ children when they go to university, and the team as a whole has a fund they contribute to, in order to help anyone who needs help with health care, for example.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

Al-Majali also contributes in a multitude of ways to the industry at large. He is chairman of a national tourism company that owns hotels around the country but licenses the hotel to operators such as Intercontinental, Holiday Inn and ISG. He also is instrumental in facilitating education that will improve the industry in the region. “I’m a member of the board for Amman Applied University College. In cooperation with our company, the college is offering a Training Diploma in English and also a Training Diploma in Trade and Travel Retail Management. The objective of this training diploma is to prepare to work in trade and travel retail business. Topics will include a variety of contemporary issues. This diploma, which will take seven months to complete, guarantees employment in duty free shops and retail businesses worldwide.” The program begins later this year, and Jordanian Duty Free is sponsoring 15 employees to work toward the diploma.

BHATIA TRADERS

Top performing categories across Bhatia Traders’ seaport locations are led by alcohol and tobacco, followed by electronics, gold jewelry and fragrances

Bhatia gears up

to go mobile

slowdown in regional ship movements isn’t putting the brakes on business for Bhatia Traders with the Sharjah-headquartered company buoyant about year-to-date performance at its eight seamen’s clubs, 10 duty free shops and multiple bonded warehouses at seaport locations. “We are busy developing our business with other projects in the works as well as ensuring that we have the right mix of products across different categories to satisfy the needs of our diverse client base,” says Rajeev Bhatia, Managing Director, Bhatia Traders. Its partnership with Fujairah National Group to support the Flying Angel floating duty free service at the Port of 22

The UAE’s diverse port operations demand a one-of-a-kind approach to duty free sales and Bhatia Traders has the answer by

CLAIRE MALCOLM

Fujairah anchorage is now in its third year and is just one example of Bhatia’s mobile approach to business development. “An ‘historic’ onboard experience for visiting seamen, the Flying Angel, which was recently renamed the FNSA-6, now has an even wider range of products, larger retail space footprint and a dedicated focus on meeting individual requirements with all the major categories covered including electronics, confectionery, fragrances, gold and watches,” he says. At Mina Zayed in Abu Dhabi, Bhatia Traders is celebrating its first year of operational success with performance already exceeding forecast, as he explains: “When we launched, Mina Zayed was in the first stage of development, with a lot of work being done inter-

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

nally as part of Abu Dhabi Ports’ portfolio development strategy. “Our role as a key service provider is set to enter a new phase of retail offering

Rajeev Bhatia, Managing Director, Bhatia Traders

POPULAR GUESTS AT ANY PARTY

CHOCOLATE LIQUEURS

CHOCOLATE COFFEE LIQUEURS

CHOCOLATE COCKTAILS

YOU CAN NEVER BE TOO GENEROUS

BHATIA TRADERS

in the first half of 2018 with a mobile duty free service in the final planning stages.” The 500-square-metre duty free shop and seamen’s club offers more than 5,000 products across the usual categories with onsite leisure facilities including multi-cuisine dining, entertainment with a live band, complimentary Wi-Fi, two pool tables, table football and an outdoor patio set-up for live barbecue stations for the cooler months. The diverse nature of port operations in the UAE comes with its own challenges. Says Bhatia: “We have a very comprehensive range of products and are still adding to our basic categories. Even though we are very experienced in terms of port operations we still learn ‘on the move’. You have to remember that the UAE has a unique maritime industry with different port operations from break bulk cargo to oil and gas, commercial cargo and car ships – and this obviously means a mixed demographic in terms of customer.” The new mobile service will see Bhatia Traders customer service agents visit individual vessels at multiple berths in the different port locations to service personnel duty free requirements with both physical products and pre-order via a customized hi-tech sales platform. Bhatia elaborates: “The team will have tablets with full details of all our products across the various categories linked to our new e-commerce portal, so they can take individual orders and then arrange for direct delivery. “Our new e-commerce platform is currently under development and we have already completed work on the payment gateways, the overall look and feel, and product category breakdown. The next stage is the test phase.” The support of Abu Dhabi Ports has also been instrumental in bringing the project fruition, as he explains: “The local authorities have been involved at every stage in terms of co-operating and collaborating with our team to develop the business. They take a very proactive approach in asking us what we believe can be done to make things better. “This extends from information sharing so we better understand the complexities of the port operation through to detailed analysis of the type of customer that comes through Abu Dhabi. By working together in this manner, we are able to

develop a tailor-made service that fulfills the needs of visiting seamen.” Bhatia Traders’ product portfolio is evolving in tandem with developments at Mina Zayed and elsewhere. “In the wines and spirits category, which is very trend driven, we are seeing increased demand for white spirits plus the Japanese malts are also coming into play as well as a resurgence in the cognac sub-category,” says Bhatia. “Gin is a key mover with more and more brands offering premium small batch labels, and the seaports are now asking for this,” he adds. Bhatia also lists Jim Beam and Jack Daniel’s’ diversified portfolios as a consumer hook with products like Jim Beam Honey and Jack Daniel’s Tennessee Fire driving additional sales. “Customers will always pick up their favorite products, but if they love a particular brand, they will also look out for new variations within that range; and we keep an eye on this in order to make sure that we are offering these products at relevant locations,” he remarks. The trend towards stronger perfumes, such as oud based fragrances, and a consumer willingness to experiment is also positively benefiting the perfumes and cosmetics category, with Bhatia also noting a “huge increase” in demand for gold and jewelery. “This category is always in demand, especially for new designs or new ways of

wearing accessories. We are also seeing more rose gold coming through from the various brands this year,” he notes. Top performing categories across Bhatia Traders’ seaport locations are led by alcohol and tobacco, followed by electronics, gold jewelery and fragrances. Bestselling products in H1 2017 from the top down were Fundador Brandy, Johnnie Walker Black Label, Marlboro Red cigarettes, the Apple iPhone 7, 22-carat gold jewellery pieces and Carolina Herrera Good Girl perfume. New launches for 2017 include JBL Bluetooth speakers, Monotheme Fine Fragrances and Zippo sunglasses. As 2017 enters its final quarter, Bhatia is gearing up for several new announcements in 2018. “We are in discussions with players in the industry for joint ventures and acquisitions,” notes Bhatia. “We are also in conversation with the port authorities to provide additional services, such as cafés and restaurants, to port employees and visiting seamen.” And expansion outside its traditional UAE border remit is still on the ‘to do’ list. Says Bhatia: “We see ourselves expanding into territories outside the UAE. Our seaport facilities are firmly in place with a continuous improvement process, which gives us time to expand into seaport opportunities within the wider GCC and seize any other duty free retail opportunities.”

The diverse nature of port operations in the UAE comes with its own challenges, namely portfolio diversity and logistics

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

Bhatia’s operation covers eight seamen’s clubs, 10 duty free shops and multiple bonded warehouses

DUBAI DUTY FREE

Still flying high

Dubai Duty Free is betting on digital, promotions, value pricing and strong passenger traffic increases for continued growth, reveals Executive Vice Chairman and CEO Colm McLoughlin by HIBAH NOOR

ubai Duty Free may be the world’s largest single airport retailer by sales volume, but it’s all down to the efforts of a dedicated team helmed by Colm McLoughlin, Executive Vice Chairman and CEO, who stay on top of retail and product trends. Two major retail buzzwords today are omnichannel and digital – and Dubai Duty Free is right there in the action. In terms of recent online activities, Dubai Duty Free introduced a click-and-collect system in the last two years, and now has 5,000 items offered. People can collect their shopping on arrivals or departures. “The service is expected to generate about AED70 million (US$14.6 million) in sales this year, so we are happy with that,” McLoughlin says. To promote the service, the operator uses advertising media and has installed desks around its duty free emporium. Turning to the retailer’s use of social media, Twitter has grown in importance generally. In addition, the company uses similar social media sites to reach out to the Chinese. “We will be much more active on it. We started last November; now we are getting

CTRIP MOU signing with Salah Tahlak and Nic Bruwer together with Ms. Shishi Xing and Mr. Xiang Gao - CEO Global Shopping of CTRIP in October 2016

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

increased followers and doing very well,” he says. Other platforms that are performing very well for Dubai Duty Free are Facebook, where the operator posts a lot of video content, and Instagram. “Our followers like that [video content] and we do personalized messages. Instagram again is very visual. We haven’t done Snapchat yet. We need to get into that.” Other sales initiatives include the introduction of mobile phone payment, Apple Pay and Samsung Pay. With Apple Pay, Dubai Duty Free has enabled over 400 of its points of sale in stores across Concourse A, Concourse B, Concourse C, Concourse D and Terminal 2 to offer departing and transiting passengers the ability to pay using iPhone and iPad. Apple Pay is also available on the operator’s e-commerce site.

Partnerships with Chinese firms As for other recent developments, Dubai Duty Free signed a contract in 2016 with Ctrip, the Chinese online travel agency. As an incentive, Ctrip members flying to Dubai International Airport could avail a 7% discount (terms and conditions apply)

E-commerce booth for Click and Collect Service

DUBAI DUTY FREE

Dubai Duty Free Shopping Complex at Al Maktoum International Dubai World Central

while shopping at Dubai Duty Free beginning January 17 until 31 December, 2017. “This is very helpful to us and helpful to the passengers. We have been promoting it. We’ve also gone into partnership with China’s UnionPay for future marketing tie-ups. “These partnerships offer such a huge marketing base. We are marketing ourselves to their Chinese customers, so we are reaching the Chinese before they even think of traveling, which has been very beneficial.” Turning to the subject of millennial customers, McLoughlin is sanguine about their effect on travel retail sales. He says many of Dubai Duty Free’s customers are in an older age group or are much more experienced travelers. “They are not going to take over the world until we are all gone,” he smiles. “We heard at the conference [during the TFWA World Exhibition in October] that older travelers have time and they have money. They are the ones you have to get – you can’t just put them to one side.” One trend that is affecting the whole business, including Dubai Duty Free, is that payment cards are being used more than cash. McLoughlin reports that last year was the first time more than 50% of its business was from cards. “Five years ago, 60% of our business was cash, but now it’s changed.”

Preparations for Expo 2020 Newness is continuing apace at Dubai Duty Free. The new concourse D at Dubai International Airport, which opened last year, has been working very well, he says. The company continues to do in-house promotions and special promotions when it can, while pricing is monitored to make sure it remains competitive. In addition, the company highlights events that are happening around Dubai, such as school holidays or major trade fairs, and offers customers special promotions around these events. “I know it’s a long time away, but we are all very excited about Expo 2020 in Dubai,” he says. “There is huge work going on already for that, so we keep on trying to really satisfy our customers and offer them good value. If we find something being offered at a better value price, we negotiate with the supplier or

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

we drop the product. We continue to market things that we sponsor and promote and link them [back to the stores].” The new, tighter hand baggage allowance introduced in the region last year has been an issue, he admits. “Well, that’s a problem, as a lot of the landlords are not allowing extra hand baggage. We are advising our customers. It happens mostly with heavy goods like confectionery, and where there is dissatisfaction we give refunds. We don’t argue. We are talking with some airlines to see if we can book some space for luggage in the airplane that people can check in at the gate and have it loaded. It’s work in progress. “We had a situation where there was 7 kilograms allowed and now it’s 10 kilograms, so it has progressed a bit. Our discussions caused that to happen.” Another issue is taxation in the GCC. On October 1, 2017, tax was introduced on tobacco, energy drinks and similar products. The rates vary, from 50% on some soft drinks, 100% on tobacco, and 100% on energy drinks. McLoughlin confirms that the increases have not affected Dubai Duty Free because the operator is exempt from this tax. Additionally, on January 1, 2018, VAT of 5% will be introduced in the UAE, but McLoughlin believes this will make Dubai Duty Free even more competitive. Meanwhile, Dubai International Airport continues to expand. By 2022 there will be capacity for 135 million passengers. Passenger numbers at the airport were 84 million last year, and this year just under 89 million are expected. This passenger upswing is hugely benefiting Dubai’s second airport at Dubai South (formerly known Dubai World Central) in Al Maktoum International, says McLoughlin. Recently there has been an agreement with Emirates Airline and Flydubai to use the airport as a dual hub, along with their code-sharing partners. One benefit of this agreement is that all passengers can go to the same desk, whichever airline they are flying on. With Apple Pay, Dubai Duty Free has enabled over 400 of its points of sale in stores across Concourse A, Concourse B, Concourse C, Concourse D and Terminal 2 to offer departing and transiting passengers the ability to pay using iPhone and iPad

Candy Tin

new collectable item in the iconic Goldbear shape

INTERNATIONAL DUTY FREE STORES

Three for the count Time has not stood still in 2017 for International Duty Free Stores with a trio of long-awaited projects finally taking shape in Morocco

IDFS’ 300-square-meter level one store in Casablanca’s new T1 will focus on ‘grab and go’ mixed category opportunities

The level two store in Casablanca T1 will deliver a more relaxed retail browsing experience with IDFS dominating the retail opportunity and surrounded by F&B outlets

Casablanca T1 focal points include a highend walk-in humidor and chocolate bar

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

hey say that all good things come in threes and for Casablanca-headquartered International Duty Free Services (IDFS) it’s been a busy year so far. The opening, after much delay, of the new terminal at Marrakech Menara International at the end of 2016 saw Christopher Tantoco, IDFS’ President – General Manager heave a sigh of relief, but the retail offering is still very much a work in progress, as he explains: “It’s been a long journey with some design challenges along the way, and we had to adapt our walk-through concept so that rather than us being able to control the passenger journey through the space, we were asked to implement a wider direct pathway directly through the middle. “As our original concept built the shopping experience around a more interactive journey this meant that we needed to rethink the orientation of the space and so we split the delivery into two phases in order to get it right.” While operational fine-tuning is ongoing and exclusive headline brands Longhcamp and Lacoste have only recently opened, Tantoco reports that business in general is looking good across the company’s 996-square-meters of retail space. “We haven’t been able to realize our full potential just yet, and still need to address the store orientation issue, but we have been incredibly active on the marketing front,” he says. “We’ve put a lot of effort into directing traffic into the space through different marketing tactics and we also have decent animation space to utilize. A spin and win promotion with the grand raffle prize of two flights to a dream destination just concluded and was very successful in driving business,” he adds.

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INTERNATIONAL DUTY FREE STORES

At Fès–Saïs Airport, where IDFS again faced delays with the 153-squaremeter space finally debuting at the end of May 2017, it’s early days still but business is meeting expectations according to Tantoco. “One advantage we have is that we are located right Christopher Tantoco, President after immigration and – General Manager, IDFS there’s a lot of action in this area, with cafés and other facilities. The airport only has six gates, and we are sited between gates one and two, so we are pretty much unmissable,” he notes. Third time hasn’t been a charm quite yet, with IDFS’ duo of stores at the new Casablanca T1 terminal awaiting a confirmed operational date, which Tantoco hopes will be sometime in Q1 2018. “Everyone is excited about the new spaces at Mohamed V Airport as we more or less had free rein to run with our design concept, which is incredibly vibrant with a bold color palette so it will really visually position the stores from a passenger visibility perspective,’ he says. IDFS worked with Dash Design on the project, which also delivered its T2 space. Says Tantoco: “While the Marrakech brief was very precise with an airport mandate that we integrate the luxury positioning of the facility, which saw us use black and dark wood, here we have blended functionality with a bright, energetic feel that still plays on Morocco’s spirit and mystique. “The airport authority signed off on our plan on day one and are very excited to see it go live. It’s a labor of love especially when you consider that one of the challenges the designer faced was in sourcing materials with a multitude of different requirements for the various areas and fixtures – and they’ve done a great job.” The announcement that Royal Air Maroc will operate out of T1, with all other carriers using T2, has put the pressure on to create a signature retail environment.

IDFS’ new Longchamp boutique at Marrakech Menara International Airport is a key fashion anchor brand for the company

IDFS debuted its new 153-square-meter space at Fès–Saïs Airport in May 2017

Menara International Airport is ongoing but Tantoco report positive business performance across the 966-square-meter space

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

INTERNATIONAL DUTY FREE STORES

Almost six months into the operation it’s still early days for IDFS at Fès–Saïs Airport, but business is meeting expectations

Location is everything and IDFS has a prime location at Fès–Saïs directly after immigration

IDFS’ 300-square-meter level one store, with its faceted ceiling canopies and use of abstracted 3D textures, will focus on ‘grab and go’ mixed category opportunities due to the expected fast flow of traffic and absence of complementary leisure facilities, with Lacoste anchoring the fashion component. Dash Design has created a generously curved open walkthrough market concept punctuated by boat-like gondolas and large-scale wall displays across the four different merchandising areas. Lifestyle towers will be introduced to disrupt the usual sightlines, topped by moving video displays. Up on level two, it will be a more relaxed retail browsing experience with IDFS dominating the retail opportunity and surrounded by F&B outlets. Tantoco explains that a bridge will connect T1 with T2 allowing passengers to move freely between the two locations, presenting additional retail capture potential. Design is centered on a series of interconnected octagonal merchandise rooms with a feature experience at the heart of each and a series of deconstructed Moorish arches adding a heritage element. “The high ceiling has meant that we have a pendant log as a clear visual identifier. With 600 square meters of space to play with we have several focal points including a very high-end walk-in humidor that is the feature for our tobacco space and chocolate tasting bar in confectionery,” he remarks. For the brand breakdown, IDFS is taking a different approach in Casablanca, with Tantoco making the decision to rationalize the product selection in each category to home in on key topselling brands and a more focused sales experience. Once Casablanca is up-and-running, will Tantoco and the team be taking a well-deserved break? He laughs, and says: “Although the physical challenge of bringing these locations to life will be done and we can breathe a little easier, there are new challenges and opportunities to tackle. “Our strategy for 2018 is two-pronged. Staff training is a huge priority and as well as having a full-time corporate trainer on staff, we also plan to introduce a digital training program so that we can engage more frequently with our teams across the country.” Looking longer term, Tantoco is also keen to add new emphasis to IDFS’ partnerships in Morocco, and leverage the company’s extensive on-the-ground expertise to take stakeholder relationships to the next level. 9.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

In Marrakech, IDFS has put a lot of effort into directing traffic into the space using interactive marketing activations

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IRAQ DUTY FREE The contract extension for Iraq Duty Free at Baghdad International Airport was the motivation for the company to renovate and develop its shops

Iraq on the up and up

A 12-year contract extension, significant double-digit growth at key locations and the resumption of flights between Jeddah and Baghdad are rounding out a positive 2017 for Iraq Duty Free

ncumbent through to 2029 following the recent 12-year extension of its contract at Baghdad and Basra airports earlier this year, Iraq Duty Free is set to embark on a new phase of physical and commercial growth. “The contract extension, which has significant ROI potential, was the motivation for us to renovate and develop our shops. Three companies submitted bids for the new store design, and we will start with a full renovation at Baghdad International Airport, beginning with the arrival shops at both terminals,” says Ali Basim, Deputy General Manager, Iraq Duty Free.

This follows the 2016 store refurbishment and expansion of its duty free space at Baghdad’s third (Samara) terminal, which to date remains unopened but is “ready to go” according to Basim. Along with a refreshed look, Iraq Duty Free has also gained an additional 50% footprint as part of the grand plan to improve facilities at Baghdad International, but increased concession charges have necessitated a strategic rethink for Basim and his team. “We are putting in place a solid plan to offset the impact of the raised concession fees. The full store renovation with

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

premium fixtures will allow us to expand our brand assortment in the short term, thus improving performance and profitability and hopefully growing our arrivals business,” he says. “In addition, we are reintroducing the liquor category at Baghdad International with dedicated space and listings representing the top brands in the category. After perfumes and cosmetics, liquor is the second ranked category historically, and in doing this we have high expectations for global business in 2018,” he adds. The duo of upgraded retail hubs are slated to go live in the second half of 2018 and investment into marketing activities is being added to the mix with Basim confirming the installation of dedicated video wall units both in-store and within the general retail area. He says: “We are also working to improve our online platform by ensuring that both Baghdad and Basra International Airports offer online pre-order services for customers traveling through our locations.” In 2016, Iraq Duty Free closed at +24% growth, with Baghdad and Sulaimaniyah registering +28% and +30% respectively while Basra toughed out the year to close at -18%. Says Basim: “We conducted a thorough analysis of the weak points we believed were impacting our performance in Basra, which was our brand assortment, issues with infrequent replenishment and the human factor. We know have well-trained staff in place and have addressed the other issues, which has resulted in 60% growth year in the first nine months of the year.”

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IRAQ DUTY FREE

Along with a refreshed look, Iraq Duty Free has also gained an additional 50% footprint as part of the grand plan to improve facilities at Baghdad International Airport

“The high levels of growth meant that we have faced some supply chain obstacles in terms of stock maintenance, which slightly affected performance,” he clarifies. While 2017 is still in play, Basim

reports solid double-digit growth for the third year running, with +10% year-todate overall across its three aviation hubs, and a positive outlook for 2018. “Our flagship shops located at Baghdad International Airport are witnessing a

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

solid growth of 11.4% year tot date, leading global travel retail performance in Iraq,” he explains. “In Basra, as mentioned, we’ve seen fantastic growth compared to the challenges of 2016. This level of evolution is expected to continue the trend through to year end,” he adds. The current international carrier flight ban at Sulaimaniyah International Airport, which was imposed in late September, is having an obvious impact on business and Basim also reports supply chain issues deliveries from its main Baghdad warehouse to the Kurdish region store affected. Basim highlights perfumes and cosmetics as Iraq Duty Free’s star player, with tobacco, confectionery and the 2018 restocking of liquor equally crucial for future market share growth. Positive performance across its main retail locations comes with a unique set of local market challenges, as Basim explains: “The parallel market issue is a major challenge for any duty free operator and with an absence of proper governmental censorship to maintain legal channels for the entry of genuine products into Iraq, this results in a local market loaded with fake, illegal versions sold at highly competitive prices. “While this affects us to a certain degree, our solid reputation in the market for retailing genuine products, sourced directly from trusted suppliers and international partners, has helped us forge a strong bond of trust with frequent travelers passing through our facilities.” Basim is looking forward to 2018, and is equally bullish about business prospects, commenting: “Next year we expect more international airlines, led by the European carriers and governments, to reverse travel bans and resume direct flights to Iraq. “Just this October, Saudi Arabian Airlines announced the resumption of flights between Jeddah and Baghdad following a 27-year ban imposed during the Gulf War; which will boost traffic for Baghdad International and business into the country.”

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MEADFA

Strong advancement MEADFA President Haitham A. M. Al-Majali has progress on his agenda, with plans to help make the association, the conference and the regional industry better than ever by

HIBAH NOOR

n March of this year, Haitham A. M. Al-Majali, CEO of Jordanian Duty Free Shops, was elected President of the Middle East & Africa Duty Free Association (MEADFA) for a two-year term, in a role and within an organization that together carry great responsibility. “We play a major role in keeping the industry vibrant and viable, and in protecting the industry from any challenges and threats, including regulation,” he says. Security concerns have been of great concern throughout the world, and nowhere is that more the case than in the Middle East. Al-Majali feels the period of instability is coming to an end. “These fears were more valid before, but now we are moving into a better environment. Haitham A. M. Al-Majali, President of the Middle East & Africa Duty Free Association and CEO of Jordanian Duty Free Shops

Groups like ISIS are losing their power. Tourism and travel as a whole are getting back to normal. The Jordan-Syrian border shops have been closed for the past six years, but now we are preparing to re-open them. Throughout most of the region we are all working and fighting for peace. People are fed up with what’s been happening. They want to live their lives and get back to normal. We definitely see that the region is becoming better and more stable. We hope that this will very soon be a secure, stable region and that stability will attract business. Duty free and other businesses will boom.” In addition to dealing with these important issues, conferences will also be a focus for the association, according to Al-Majali. “We will be focusing great concentration on the conferences,” he says. “Our goals are comprehensive, and include improved quality as a whole, improved performance and an improvement in the topics covered. This is all in process currently for this year, and will continue.” A passionate leader, Al-Majali is strongly focused on progress. “We do a lot of brainstorming to try to introduce new topics and new models,” he says. “I discuss these ideas with the board. Ultimately, they decide on any changes and direction,

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

but from my perspective we need to make decisions that will attract more delegates and greater participation.” Anecdotally, industry insiders have been expressing the growing importance of the MEADFA Conference. This is especially true as the African continent grows in significance to the duty free industry. Whereas the Middle East has traditionally been seen as the region’s powerhouse, Africa is gaining the interest of many brands and retailers as its traveling public and infrastructure both embark on a strong growth trend. Al-Majali confirms there is renewed emphasis on attracting members from Africa. “Of course!” he exclaims. “MEADFA is the Middle East and Africa Association, so we are working hard on a plan to attract more operators to join MEADFA. Board member Mr. Tarek Hamila will represent MEADFA at ARI Africa, and will work to influence and attract more Africans to join MEADFA.” This year is the first time the Lebanese capital, Beirut, will welcome leading players from across the duty free and travel retail industry at the annual MEADFA Conference, organized by TFWA. The Lebanese President of the Council of Ministers H.E. Saad Hariri will headline the event, which is being held under his

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MEADFA

patronage. The conference will be held at the historic Phoenicia Hotel, one of Beirut’s landmark venues, on 20th and 21st of November 2017. As Al-Majali has mentioned, topics for discussion at this year’s MEADFA are increasingly relevant, and include the rapidly changing, increasingly youthful consumer base in the Gulf and the Levant, and the future of duty free and travel retail in African airports. Delegates will hear an exclusive report on the business outlook in the Middle East from EMIR (Emerging Markets Intelligence & Research) Founder and Chief Analyst Trevor McFarlane, in addition to consumer insights from experts from within and beyond the industry. Other honorable speakers at the event will include Phoenicia Trading Company Chairman Mohamed Zeidan, who is one of the pioneers of the regional industry; the Secretary-General of ACI Africa, Ali

Tounsi; and South African business expert and broadcaster Victor Kgomoeswana. Networking is an integral part of the event, and there will be numerous opportunities to take part in this activity over the three days. Dufry will host the Opening Cocktail at the Phoenicia Hotel on Sunday 19th November, and then the official host Beirut Duty Free will welcome delegates to a spectacular Gala on Monday 20th November. Of the conference, MEADFA President Al-Majali said: “We are honoured to have an esteemed roster of industry leaders speaking at our event and have no doubt our delegates will find their insight fascinating. We look forward to welcoming our guests to what I’m certain will be another successful conference.” Erik Juul-Mortensen, President of TFWA, said; “Lebanese hospitality is renowned, and we are delighted to be bringing this event to one of the region’s

most vibrant and cosmopolitan cities. There is a huge opportunity for growth in duty free and travel retail in the Middle East and Africa, and this event is a key point in the calendar for anyone with an interest in this market.” The event is supported by the Ministry of Tourism. Other sponsors include platinum sponsors Aphrodite Duty Free Shop, Jordanian Duty Free shops, Dubai Duty Free, Kings Tobacco International and Nadiya, and gold event sponsors Oriental General Trading, Aer Rianta International and Lagardère Travel Retail. Exhibitors include Imperial Tobacco, Nadiya, Philip Morris and Beverly Hills Polo Club. The coffee break on 20th November will be sponsored by Nestlé and on 21st November by Le Petit Gourmet. The event’s smoking lounge will be sponsored by JTI.

MEADFA Board of Directors

MEADFA board members from March 2017 to February 2019

For the term running from March 2017 to February 2019, MEADFA members selected the board, and the new board then selected the committee officers.

Treasurer: Tarek Hamila, Hamila Duty Free Secretary General: Sherif Toulan, International Duty Free and Trading Agencies Ltd

President: Haitham Al Majali, Jordan Duty Free Shops Vice President: Nuno Amaral, AerRianta International Middle East

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

Other board members: Sean Staunton, Dubai Duty Free Luis Gasset, Qatar Duty Free Company John Reynolds, Chalhoub Group

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AJMAL PERFUMES

Six decades of oud expertise paying off

Ajmal’s exquisite bottles and more contemporary packaged offerings are found on duty free store shelves from Abu Dhabi to Muscat and onbaord a growing list of major carriers

for Ajmal by

CLAIRE MALCOLM

The 75ml Taj Al Raas EDP is a prime example of Ajmal’s innovative approach to oud based blends using saffron, cardamom, leather and myrrh

Despite fierce competition from international brands, Ajmal registered year-on-year growth of 30% for 2017 to date

A 66-year perfumery pedigree has given Dubai-headquartered Ajmal Perfumes a nose for scoping out new business opportunities for its Oriental inspired fragrances and the company’s bespoke approach is winning over new customers from Dubai to Romania Abdulla Ajmal, Deputy CEO, Ajmal International

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

ts exquisite jewelled bottles and more contemporary packaged offerings are found on duty free store shelves from Amman, Abu Dhabi, Bahrain and Cairo to Cyprus, Muscat and Qatar, as well as on board major carriers such as Etihad, Ethiopian Airlines, Gulf Air, Oman Air, KLM and British Airways. “Exclusivity in travel retail is key as it enables us to cater to an international audience that is quite different from our regular Arab clientele,” says Abdulla Ajmal, Deputy CEO, Ajmal International. “As a relatively small company we have the ability to produce bespoke products for special markets, meaning that both the operator/retailer and consumer are guaranteed a truly exclusive purchase,” he adds. That’s not to say that certain products don’t travel further with Ajmal taking some high performing items to a wider audience after a specified period of time. Says Ajmal: “It’s easier to transcend into travel retail if we have a domestic top seller, but we have extremely open relationships with all our travel retail

As a relatively small company, Ajmal is able to produce bespoke products for special markets as well as original lines such as Luminescence Him and Luminescence Her

partners and this helps us in pruning our collections. Given that we have far more launches than international brands, this also ensures a high novelty factor.” The essence of the company’s fragrance philosophy – and its six decades of success - is high quality oud. Says Ajmal: “In recent years we’ve seen the big brands launch their own versions of oud style fragrances but for us it is the basis of our formulations, and our experience and heritage association with oud is second to none. “Since oud became a global fragrance trend we are increasingly supplying it as a raw material to perfume companies that produce fragrances for major brands. Now that more people are actually using real oud rather than a mix of ingredients that resemble it, more and more customers are demanding the real thing. For us it’s a win-win on both fronts.” When it comes to authenticity (none of its EDPs contain less than 15% raw materials), Ajmal is also moving in a new direction. “We are now creating product formulae that are very difficult to copy by using ‘captive ingredients’ developed at raw mate-

rial stage, in house. In this way, we can stay ahead of the game as at the end of the day, however beautiful the product packaging or attractive the price, what people come back to buy is the juice.” He also says that due to regulatory reasons people tend to spend more time at airports before they fly and, with many becoming destination experiences, this additional voluntary or enforced terminal dwell time is piquing traveler curiosity about the brand. This is half the battle according to Ajmal, with the other 50% of the sales success equation contingent on the ability of sales consultants to personalize the buying process. Unlike international perfume companies, Ajmal isn’t taking a swing at the Millennials demographic. “We believe that to be niche means having a certain taste and that only comes with experience and maturity, and adapting what we offer to suit Millennials would only dilute our brand,” he says. “Our focus is on the discerning consumer with a certain level of disposable income who knows exactly what they are looking for. These customers tend to be very educated and life experienced plus they know a thing or two about the raw materials.” Despite fierce competition from international brands, year-on-year growth of 30% for 2017 puts the company on an exceptionally healthy footing and Ajmal reports that new market opportunities both on the ground and in the air are flying. “Looking back at the last 12 months, we’ve entered Romania, made it to the number one listing spot with KLM and marked our on board return with Etihad. The great thing is that we have very quickly managed to get to the top 10 in most avenues we are present in.” He attributes this stellar growth to a combination of perseverance, relationship building and the fact that the distinctive quality-led Ajmal brand portfolio speaks for itself. “The global consumer is far more educated about fragrances compared to 20 years ago, wants quality, and is less swayed by advertising. Demand for niche fragrances is growing and domestically they account for 20% of the world perfumery market - and this is cascading into travel retail,” he says. “We can see from our figures that conversion rates for first time buyers are fantastic. While duty-free is often all about convenience, people are also willing to try something new, and once they do they appreciate the quality and uniqueness. In a way we almost have a kind of cult following.” Expansion into major European locations is on the radar for 2018 and Ajmal is also exploring opportunities in North and South America, as he elaborates: “We started domestically on the east coast of the US last year, and while Americans aren’t as experimental as other nationalities we are seeing a lot of interest from certain cultures who identify with our fragrances. “We are also entering Brazil on the domestic front and growing our Africa presence with product on board South African Airways, Kenya Airways and Ethiopian Airlines. Interestingly, we are seeing very strong interest from airlines across the board.” Compared to global legacy brands, Ajmal’s customer base may be much smaller but he says that, compared to their contemporaries, “nobody comes close to us.”

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

COCCINELLE

Pretty in pink by

CLAIRE MALCOLM

Romantic feminine colors accented by the use of pastel suedes, rattan and delicate two-tone lace touches define the SS 2018 line-up

A Emanuele Mazziotta, Head of Global Travel Retail, Coccinelle

subtle brand refresh and the introduction of a ladylike palette of colors destined for its physical stores is ushering in a new era of commercial expansion in travel retail for the premium bag and accessories company in 2017. Coccinelle entered the travel retail market a mere three years ago, but since 2014 it has seen the channel grow from strength to strength. “We’ve worked hard to grow the sector in terms of price point and product, and that won’t change, but the time was right to leverage the iconic status of our designs and, with that, present a new face for Coccinelle,” says Emanuele Mazziotta, Head of Global Travel Retail. “Travel retail is basically a window to the world and as a company we are 100% behind the channel and take it very seriously,” he continues. The SS 2018 collection took pride of place at this year’s Cannes showcase.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

Entitled ‘Face of Nations’ it was a medley of feminine colors, details and prints with an air of romanticism highlighted by the use of pastel suedes, rattan and delicate two-tone lace touches. Says Mazziotta: “What we are seeing in travel retail currently is that whereas in the past we needed to showcase a wider assortment, now consumers are focusing on our iconic themes: Ambrine, Arlettis and Liya.” In the first nine months of 2017, Coccinelle added 20 new global travel retail doors to its portfolio in Europe, Asia Pacific, the Middle East, and also in the cruise channel. “We are opening a new location every month in travel retail. In late September we relaunched our 70-square-meter Milan Malpensa T1 boutique with the refreshed store concept that showcases our new pink and brushed brass color palette,” says Mazziotta. The design of Coccinelle’s newly

Design details were carefully considered in order to ensure that Coccinelle’s bags and accessories were kept center stage

The refreshed store concept showcases Coccinelle’s new pink and brushed brass color palette

The newly relaunched 70-squaremeter Milan Malpensa T1 boutique

refreshed concept explores the space following a minimalist approach that comprises a series of unique and precious interior design touches; from fabric-effect wallpaper to floors deluxe light stonecovered floors and the brushed brass finishing of the wall mounted showcases. All of these details have been carefully considered in order to highlight Coccinelle’s bags and accessories, giving the sensation of a fluid and refined environment suffused with gold lights. Also in Italy, Coccinelle added a 40-square-metre boutique at Naples International Airport and a second opening at Zurich International Airport was followed by launches at Hamburg International, Oslo Gardermoen International, Dubrovnik International and Minsk International Airports. Outside of its European stronghold, new Coccinelle locations include Queen Alia International Airport in Amman, Jordan; Cairo International Airport,

Egypt; Astana International Airport, Kazakhstan; and Taipei-Taoyuan International Airport, Taiwan. Says Mazziotta: “We are very pleased with the Cairo and Amman locations, and Jordan is doing particularly well. In Cairo we have a small eight-square-meter back wall corner while Amman is 20-25 square meters and a really good brand environment.” New openings in the pipeline for the coming months include Russia among other locations, as he explains: “Our priorities in the last three years were first of all to reinforce and consolidate our position in Europe and then penetrate Asia where we are now well represented in Korea, China, Taiwan, Thailand and the Philippines with additional new regions also coming soon. “We are also now turning our attention to travel retail opportunities in the Middle East. Domestically we are opening in Saudi Arabia and already have boutiques

in Abu Dhabi, Dubai, Kuwait and Lebanon, and travel retail is a focus moving forward.” Cruise line business growth has seen the company welcome new locations aboard MSC Crociere vessels in the Mediterranean and presence on additional Costa Crociere ships in Asia, as well as with Royal Caribbean, Sky Golden Era and Dream Cruises. Says Mazziotta: “The cruise business works extremely well for us, and this is a market where we are very active in terms of development, from the Mediterranean to Asia.” Coccinelle sees travel retail as an invaluable channel through which to catch the eye of potentially millions of passengers passing through airports and on board cruises etc., with Mazziotta calling it a “fantastic communications opportunity,” as well.

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

SHISEIDO TRAVEL RETAIL

Strong and

authentic

Shiseido Travel Retail does take into account specific regional preferences such as the oud fragrance trend. Some fragrances targeted at Middle Eastern consumers include Dolce&Gabbana Velvet Desert Oud, Narciso Rodriguez’s Rose Musc and Amber Musc fragrances, as well as some dedicated lines from Issey Miyake with amber tints

The Middle East is a hot priority market for Shiseido Travel Retail for both its newer and more classic beauty brand portfolio by

HIBAH NOOR

“T

he heart of my division’s business today is the Middle East,” declares Olivier Decazes, General Manager, Europe, Middle East & Africa (EMEA), Shiseido Travel Retail. Shiseido Travel Retail is present in all the main Middle East markets, including Dubai, Qatar, Lebanon and Saudi Arabia, with both its cosmetics brands such as Shiseido and NARS, and fragrance brands like Narciso Rodriguez, Elie Saab, Dolce&Gabbana and Issey Miyake. The company is also strong in Israel, a “very dynamic” market especially for Dolce&Gabbana and NARS.

“The Middle East is a strategic region for us,” he explains. “For two years, our business here was challenged because the region is pegged to the US dollar, making it less competitive than Europe, the UK and sometimes even Asia; and not as attractive as a travel destination for consumers.” Now, he says, the Middle East is coming back with strong growth, partly due to the fact that the US dollar is weakening as compared to the Euro.

Tailor-made super-plan In terms of fragrances, Shiseido Travel Retail is doing strong business with the Dolce&Gabbana brand. “We took over Dolce&Gabbana a few months back and we are starting off again with proper supply and introducing new marketing initiatives. The Middle East is a really key market for the brand.” Narciso Rodriguez, which is growing in double digits worldwide, is also particularly strong in the Middle East, as is the flagship Shiseido brand. “The rejuvenation of Shiseido is critical in the Middle East,” says Decazes. “One key example is Dubai International, the most important airport in the region, where we have implemented a tailor-made super-plan for the Shiseido brand target-

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

ing Chinese passengers. The dedicated promotional plan received strong support from Dubai Duty Free and its wide network of beauty consultants. Next year, this will include a comprehensive digital campaign with key Chinese networks.” “In the first half of 2017, we opened our first two NARS counters in Dubai Airport, including the first NARS flagship store in Middle East travel retail. The results are absolutely delightful and we are enjoying fantastic performance, not only with the Chinese, but also with local consumers,” he enthuses. Meanwhile, the Elie Saab brand is strong in Lebanon (where the designer Elie Saab was born) and in Dubai. “Every year, in Dubai and Beirut, we give the brand great exposure through mega-podiums and high-profile promotions. We’ve had a successful launch recently with a new fragrance called Girl of Now, which is targeted at new consumers – younger ladies from the millennial generation. We’ve achieved great results.” Although its brands are positioned in the global prestige segment, Shiseido Travel Retail does take into account specific regional preferences such as the oud fragrance trend. Some fragrances targeted at Middle Eastern consumers include Dolce&Gabbana Velvet Desert

In the first half of 2017, Shiseido opened its first two NARS counters in Dubai Airport, including the first NARS flagship store in Middle East travel retail

Oud, Narciso Rodriguez’s Rose Musc and Amber Musc fragrances, as well as some dedicated lines from Issey Miyake with amber tints. Decazes reports that consumers in the Middle East continue to buy fragrances more than other product categories. In addition, the makeup category is very dynamic. “We want to be part of the momentum of the indie, edgy brands. I think the success of NARS in Dubai is a very good example. NARS is a very cool French/American-style brand targeting premium consumers, and we are reaching out to them and benefiting from its growth. With the launch of Shiseido’s brand new make-up collection in the second half of 2018, we want to further connect with consumers who are looking for new and edgy makeup.” Shiseido Travel Retail handles the whole Middle East and ISC region from an office in Dubai Design District, where there is a full team dedicated to its travel retail customers. This includes two specialist retail managers, who are very close to its customers in-store. To build brand awareness, the company is implementing a lot of creative animations, especially in Dubai Duty Free. Its 360° media communication plan includes advertising on TV, out-of-home

and in pan-Arab publications. It also leverages its retail partners’ websites and social media platforms. “When we have a major launch, we will organize a full takeover of the airports where we promote our brands and showcase our latest novelty. We have two mega-podiums every year in Dubai Airport – it’s a complete takeover of the airport with extensive media coverage and a huge number of promoters.” “This year’s mega-events took place in March and August. We are talking about 30-40 locations across the airport with full set-up and personalization of the space.” Decazes says that thanks to the company’s diversified portfolio of brands, its customers range from female millennials, whom it is targeting with NARS; to women in their 40s and 50s with Shiseido skincare, which also appeals to men and a diverse range of age groups and nationalities.

Delving into the digital sphere Shiseido Travel Retail’s best-selling fragrances in the Middle East include Dolce&Gabbana The One and Narciso Rodriguez For Her Fleur Musc. The mega-event to launch the latter fragrance took place in Dubai Airport in March this

year, and since then it has been performing extremely well. In terms of Shiseido skincare, Ultimune Power Infusing Concentrate is a star product while the White Lucent range, available exclusively in the Middle East in EMEA travel retail, is a favorite among Asian consumers traveling to the region. For NARS, bestselling products include the “super fast-moving” Radiant Creamy Concealer as well as The Multiple, which can be used as a blush or a lipstick. While NARS appeals to younger consumers, Shiseido is a more historical brand which the company is rejuvenating with new and innovative products that specifically target millennials. Today, in response to customer requests, the company is delving into the digital sphere and increasingly integrating digital elements into its stands and animations. The year ahead will see Shiseido Travel Retail offering a host of novelties across all its new brands. “In 2018, we will have new collections, novelty products and new looks on seasonal items. We are strong, authentic, and we are here to stay,” asserts Decazes.

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

CLOGAU

In it for the long haul

The Welsh gold brand presented a total of 40 new travel retail exclusives in Cannes at this year’s TFWA World Exhibition

Aran Turner, International Customer Service Manager for Clogau talks about the Welsh gold brand’s 10 years of travel retail experience

he challenges and opportunities that come with translating a successful domestic fine jewelry brand into a successful travel retail model haven’t dissuaded Clogau from pursuing the traveling consumer around the globe. “We’ve been active in travel retail for a decade now and we still see it as a fantastic entry point to new markets and customers for Clogau,” says Aran Turner, International Customer Service Manager, Clogau. “Travel retail has facilitated entry into new domestic markets where we’ve developed regional distribution through retail partners in Asia as a direct result of the work we’re doing on airlines, airports and cruise ships,” he adds. With a managing director at the helm who is passionate about the travel retail channel, Turner says that Clogau is in it for the long haul. He says: “When we started, 90% of our business was airlines, we started with UK flag carriers British

Clogau’s brand history, classic designs and product quality resonate well within the cruise channel

Airways and Virgin Atlantic, and it progressed from there. “Airlines remain key to future growth, but we’re also enjoying rapid growth in the cruise market. We are currently aboard more than 20 liners including P&O, Cunard, Fred Olsen, Royal Caribbean, Saga and Thomson.” The history behind the brand, the classic design and product quality resonates well within the cruise channel, notes Turner. “It’s fine jewelry, precious metals combined with precious and semi-precious stones, which make it an heirloom jewelry purchase and perfect for the cruise market.” The UK and Europe remain key markets, with Asia also a key region for potential brand growth. At TFWA Asia Pacific 2017 in Singapore, Clogau secured listings with Singapore Airlines, Silkair, NokScoot and Thai Smile, as well as marking its entry into Kuala Lumpur International Airport. Pop-up store opportunities are some-

Aran Turner, International Customer Service Manager, Clogau

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

thing Clogau has trialled with a seasonal pop-up at Manchester Airport recently concluding after a successful summer run. “It’s a great flagship vehicle to show other retailers and operators what we can do,” remarks Turner. In the last few years Turner reports a trend towards a more accessible product price point, with the impulse buy mindset of the flying consumer necessitating a different approach to both portfolio and price. “Today, a high percentage of jewelry on board airlines is plated, which means consumers can pick up something for as little as US$20. As a fine jewelry brand, we have historically retailed on airlines at price points in excess of US$200, but we’ve had to adapt in order to compete with the growing number of costume jewelry brands on board airlines today. Our latest travel retail exclusive range retails from US$109-$129,” he says. Clogau presented a total of 40 new travel retail exclusives in Cannes last month. Playing on its regal connections, the 2017 tie-up with royal wedding dress designer David Emanuel forged a popular collection that incorporates Swarovski crystals. Its line of charms also continues to perform well in travel retail, again with scaled down versions of the domestic offering priced from US$109-$189. Says Turner: “Although the charms segment is quieting down somewhat, in the last year we’ve secured listings with around six airlines including Thomson Airlines and Singapore Airlines.” Clogau also partnered with the UK’s Historic Royal Palaces charity to launch a range of pendants, earrings, bracelets and rings inspired by design details found in various palaces, with a percentage of sales going to the charity.

MOLTON BROWN

London calling

The new year will see Molton Brown unveil a refined brand manifesto, which puts renewed focus on its fragrance expertise and collaboration with master perfumers, as the company continues its global expansion strategy

Molton Brown’s colorful new travel retail airline exclusive set

Molton Brown’s refined brand manifesto places renewed focus on its fragrance expertise and collaboration with master perfumers

rand messaging will re-emphasize the UK provenance of the heritage brand, which first debuted in 1973 and has grown in the last four decades to become a global business but one that remains true to its London roots. “The fact that we are a London-born brand with a beautiful story and collection of products, and not a company that adapts to different markets, is extremely important. We stand for something and, as a customer, you buy into this so that it becomes authentic and relevant to you,” says Victoire Versluys, Brand Manager, Molton Brown. Outside of the UK and Europe, Molton Brown is working hard to grow brand

awareness, as Versluys explains: “The hotel world is often where people first come into contact with the brand. Having an omni-channel approach that includes retail and wholesale, e-commerce, travel retail, as well as hotels, is our way of building brand awareness. “We are not a brand that invests heavily in or focuses on advertising, and for this reason we are adopting an omni-channel approach, from physical stores and travel retail channels to online, so that we have a complete solution for customers in every location.” The 2018 manifesto centers on refining the company’s approach to ensure its products are hero-ed while always highlighting the destination behind the blend through the display environment. In the last few years, the team has targeted direct access markets from Australia, and Japan through to the Nordic countries, Benelux and the Germanspeaking DACH nations of Germany, Austria and Switzerland; along with distributor-led markets including Greece, Italy, Turkey Cyprus and the Middle East. Its domestic presence in the Middle East includes Qatar, Saudi Arabia and the UAE and an Arabic language e-commerce site is also in the works. The brand will shortly open the doors of a flagship store in Delhi, with several other Indian cities in the pipeline. Molton Brown entered the travel retail arena four years ago and the channel currently accounts for almost 6% of total business. “Distribution is our best brand ambassador and our strategy is to look at

where the new frontiers and organically grow our presence are places where it makes sense to be present. Last year travel retail was our fastest-growing channel, finishing at +57%,” remarks Versluys. At airport locations where space is always at a premium, Molton Brown is working in partnership with its retail partners to maximize opportunities. The recent refit at Gatwick North freed up some additional square meters and a small shop-in-shop was introduced, allowing for more experiential activities such as the signature hand and arm massage and gift concierge service. Says Versluys: “In the UK we get the kind of counters that allow us to actually bring the Molton Brown experience into play, whereas internationally we are mainly on back walls or gondolas, so we are limited in what we can do. The product mix in travel retail echoes Molton Brown’s domestic stores with body wash and body lotion dominant, and only a limited 100ml offering. Versluys elaborates: “Travelers aren’t necessarily looking for smaller sizes although the 100ml work well as impulse purchases when you are queuing. We’ve seen fantastic demand for our 300ml products and recently, the home fragrances, which are actually the fastest-growing category for us. “Home fragrance is barely developed in travel retail. Even thought they take up more space, they are popular as gifts and we’ve seen very positive results so far, so this is an area of opportunity and at Cannes there was a lot of interest from the airport retailers.”

PETIT GOURMET

Spreading the joy of confectionery by

HIBAH NOOR

Like other Petit Gourmet products, Premium Handmade Baklava (800g) offers an extensive shelf life without the use of any preservatives

Following a successful revamp, Dubai-based confectionery brand Petit Gourmet has taken a major leap forward in the global duty free industry

Petit Gourmet’s star product is a no added sugar premium baklava, with agave organic natural sweetener as a replacement

Petit Gourmet is always developing flavors and packaging to suit passenger requirements

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

lthough Dubai-headquartered BMB Group has been producing Mediterranean sweets for over 35 years, only within the last 10 years has it forged a strong presence in the duty free market, thanks to its Petit Gourmet confectionery brand. Petit Gourmet was created in conjunction with Dubai Duty Free 10 years ago, and then expanded immediately to Sharjah Duty Free, Abu Dhabi Duty Free and, soon after, Qatar Duty Free. With each location, the company has partnered on a variety of activations, all helping grow the brand presence and provide it with a wealth of knowledge. “Since attending the TFWA World Exhibition in Cannes last year, we understood that to take our business global, some changes had to be made, so we went through a facelift exercise,” explains Rishi Dhealley, Brand Manager, Petit Gourmet. “We made improvements to every aspect of our product – from packaging,

Petit Gourmet recently launched premium chocolate dates with almonds

to display, to the product selection, even offering destination-specific packaging.” The decision paid off. Over the last year, Petit Gourmet has opened and is working with the likes of Mumbai Duty Free with Flemingo (plus other locations in India and Africa), Beirut Duty Free, Muscat Duty Free, Lagardère in its KSA locations (Riyadh, Damman, Jeddah), Iraq Duty Free, Hyderabad Duty Free, Bali Duty Free, Cambodia Duty Free and Bangalore Duty Free (with Dufry), Algeria and soon Malawi Duty Free (with GFS). Many more listings are on the horizon, Dhealley says, adding that the Michigan office is also very close to tying up a deal for many locations in the US.

Incredible growth The local UAE market is performing very well, as is India, Dhealley notes. “I would put this down to the palate and familiarity of the products. We are new to certain markets, and so are always developing the flavors and packaging to suit the passenger requirements.” Sales forecasts are equally buoyant: “I expect to double my sales from the previous year, and then double the year

after that. This brand has had incredible growth over the years, with 2017 being our most successful – even with the economic instability. We have built strong strategic partnerships with key operators over the last year expanding to new very exciting markets. Also, our consistent product development helps our growth,” says Dhealley. BMB Group, which offers private label chocolates globally, works in multiple channels and has offices and distribution points in the US, Russia, Kingdom of Saudi Arabia, Lebanon, Qatar, Spain with its head office and production facility in Dubai. Dhealley is confident about why the brand will remain successful. “Petit Gourmet will be the leader in the duty free/travel retail market (if it isn’t already) because we are always listening to what the consumer wants (destination-specific/ travel retail exclusive packaging, destination-specific flavors, product selection, etc). We can turn around new innovations quickly and very importantly have the facility to accommodate global market requirements. Also, we are able to provide an extensive shelf life – without the use of any preservatives.” Some 90% of the company’s range is exclusive to travel retail – another plus point. In terms of new product development, Petit Gourmet recently launched natural flavored baklava, tailored for the Asia Pacific and Indian subcontinent,

a premium stuffed dates box, premium chocolate dates and no added sugar premium baklava, with agave organic natural sweetener as a replacement. “This is my star product,” says Dhealley of the latter 350g item. Explaining why the product has been popular, he says: “We changed our whole approach with this product, offering something more natural and organic, packaged in an environmentally friendly, recycled carton paper box. We emphasize the health benefits on a gift card attached. I believe the success is down to the general conscious shift towards healthier lifestyles and the environment.” Also, a key performer is the chocolate dates box: single-origin premium Belgian chocolate enrobing a premium date paste centered with an almond nut.

Listening to what the industry wants Petit Gourmet is sponsoring the MEADFA coffee breaks in a bid to expand its presence and also learn from the industry experts. “Listening to what the industry wants and then taking quick action is the most important thing for us. The contacts and relationships we are able to build also helps a lot,” he says. Turning to industry trends, Dhealley points to online/digital platforms as “very exciting”. “I had the pleasure of spending time with some very interesting people in Cannes who I believe will completely change the industry. Some markets are more advanced than others, but I am seeing a general shift across the board.” Additionally, health and well-being is a big consumer trend, and the company is currently developing more lines to adhere to this shift. Dhealley believes it is very important is it to pursue an active digital media and social media channel strategy when it comes to the confectionery category and the duty free/travel retail environment. “My current digital/social media platform needs work – but we understand the value of connecting and understand the consumer. As people seem not to have too much time these days, if we can make the sale prior to them stepping foot on the floor, then this is a huge step in the right direction. This is something we are working on and will continue to work on.”

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

KERING EYEWEAR

The quality of available space, rather than the square footage, is the basis for Kering’s category presence

Seeing is believing by

CLAIRE MALCOLM

stablished a little over two years ago, Kering Eyewear has been ruffling the feathers of the rapidly growing eyewear category from its own luxury niche since day one. “The focus from the beginning from the Kering group perspective, was to add quality and value to a category that we saw having a lot of potential,” says Omar Hagi, SVP Global Channels, Kering Eyewear. While the group’s established portfolio of luxury brands were already strong performers in core categories, eyewear was a different story. Apart from Gucci, according to Hagi, brands such as Bottega Veneta, Saint Laurent and Alexander McQueen were simply not being exploited and he puts this down to the evolutionary nature of the category and the nuances of the traveling consumer, both of which required a unique travel retail approach. “In eyewear specifically, we saw that there was distribution potential so we decided to internalize the category and spent an entire year traveling the world to explain what Kering Eyewear was about and our mission,” he says. And 48 months later, that mission is now realizing global success, as Hagi explains: “All the retailers and our partners were very involved in the project right from the beginning. When you come to this industry and say you want to be a game changer, you have to act consistently and coherently, so we started by listening to what the market needed. “This enabled us to deliver product tailored to different regions and desires, from Asian consumers and capsule 54

With Cartier the latest exclusive launch for Kering Eyewear, the company is all set for another eye-catching success story, but is also on a mission to change the face of this fast-moving category in travel retail

collections to travel retail exclusives, all of which were heavily supported by big channel marketing campaigns.” Bottega Veneta was the first brand to debut under Kering Eyewear, swiftly followed in 2016 by Gucci. Hagi and the team also chose to ‘go big’ from the outset, launching with a travel retail campaign targeting Chinese New Year and the country’s high spending, luxury loving consumers. Momentum is critical and for Hagi, consumer engagement is both the start and finish point to carry this through. “We need to engage at all levels and in all forms, and create emotion in-store. When people are traveling they have limited time and want to invest it wisely. The ‘selling ceremony’ is extremely important, so we teach the staff how to sell using a storytelling approach and use activations to really engage the customer. “It’s also vital that we have products that make the customer want to buy right there in the moment, and the retail environment plays a pivotal role in personalizing the experience.” With the success of Bottega Veneta and Gucci already under its belt, 2018 will see a step change for Kering Eyewear with the launch of Cartier eyewear. Says Hagi: “In the Middle East in particular, Cartier is the most iconic brand and will further elevate our position as a luxury leader. It’s a really strong statement for Kering Eyewear, as well as for travel retail, and we are also providing additional qualitative ways for retailers to expose and display the brands we put in store.”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

A lack of innovation in eyewear category display is something that Kering is keen to address – and change - as Hagi explains: “We are more interested in the quality of available space rather than the square footage. If you benchmark against other categories in terms of display evolution, the eyewear category is stuck in the past. “We believe there is space to add quality in the way the category is exposed, and to translate emotion into efficiency and drives sales. Shop-in-shops and luxury corners are the way forward and we are already experimenting with some retailers with mono-brand shop-in-shops.” Distribution for Cartier eyewear will be crucial and the team is currently evaluating locations, with only those that measure up to Kering’s exacting luxury standards destined to carry the exclusive collection. “With the addition of Cartier we have even more responsibility to drive the category in a luxury direction and this market niche is expanding. If you look at Asia and the Middle East, the two leading luxury eyewear markets, with both Gucci and Cartier available you are talking significant market share,” he comments. In the Middle East, Dubai, Lebanon and Qatar are just three current Kering Eyewear strongholds and destinations that Hagi confirms match brand and company ambitions. “The Middle East is very important for us and, domestically, the GCC is the market with the highest penetration of eyewear products per capita in the world,” he adds.

A SHOW OF STARS

The Festive Limited Editions

SKROSS

SKROSS has eyes on the redesign prize The market leader for on-the-move connectivity is planning a major design makeover to put function and form on the same page Ahead of its 2018 big reveal, SKROSS reports positive performance in key markets and a number of new partnerships

The SKROSS portfolio includes world travel adapters, USB chargers and power banks, as well as practical charge and sync cables

he travel retail technology brand behind the first patented all-in-one world adapter, SKROSS, was keeping things under wraps at this year’s TFWA World Exhibition and Conference with plans for a major product portfolio redesign the strategic focus for 2018. “We are working with the team at Jacob Jensen Design to revitalize our product design and all our efforts in recent months have been concentrating on setting the wheels in motion ahead of our big reveal next summer,” says Pia Kautz, Corporate Communication, SKROSS. The thought process behind the project is to refresh brand perception as Kautz elaborates: “People know us as a reputable brand and when they see or hear the SKROSS name they think of us a technology leader with a reputation for creating high quality products that are also guaranteed in terms of safety, which isn’t always the case with travel adaptors. “While our products are functional and practical, we decided that the time is right to rework the design side of things so that the quality of the product is accurately reflected in the design.” SKROSS chose to work with Jacob Jensen Design because of the company’s excellent track record on high profile design briefs like the Danzka vodka bottle redesign and brand revitalization. Successful projects in other sectors including domestic appliances and lifestyle accessories also helped seal the deal. An “evolution rather than a revolution”

according to Jakob Kjaer Nielsen, Global Design Director for Jacob Jensen Design, the overarching objective is to create a harmonious inside-out synergy between function and form. “We have similar values. Both companies stand for authentic, reliable, lasting and durable products and because we have like-minded attributes we connect very easily and this is already creating amazing synergies,” remarks Kautz. The SKROSS portfolio of travel tech essentials includes world travel adapters (with and without USB charging capabilities), USB chargers and power banks, as well as practical charge and sync cables. “We hope to strengthen the brand by adding a new level of quality and style, on top of which we will continuously adjust our products in order to reflect market feedback and consumer demand. Faster charging is one area we are looking at as well as wireless charging,” says Kautz. “Also, with USB devices increasingly commonplace and people having multiple devices that tend to run out of energy at the same time, travel adaptors with multiple USB ports are really important. And while travel adaptors remain our core product we complement this product category with our family of power peripherals, which includes power banks, cables and chargers, in order to provide more mobile power solutions,” she adds. Even without a product design makeover, SKROSS reports positive performance in key markets and some interesting new partnerships. “In the US we’ve embarked on a

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

partnership with Design Go, and as well as adaptors we are exploring opportunities for our power peripherals – so it’s covering the whole eco-system,” explains Rodolfo Müller, Duty Free & Travel Retail Manager, SKROSS. “The Middle East & Africa region is very important. If you take Dubai as one example, this is a flagship location for SKROSS and we also produced a private label adaptor for Dubai Duty Free in the past,” he adds. SKROSS also has a global agreement with WH Smith, which is boosting brand awareness “tremendously” and both Russia and Japan are promising new markets for the company. Pia Kautz, Corporate Communication, SKROSS

WILLIAM GRANT & SONS [WGS]

Solid foundation

The portfolio of William Grant & Sons offers plenty of fortitude for markets in the Middle East and India, with a selection of quality blends and single malts in a range of price points. by

WENDY MORLEY

The just-launched Glenfiddich Finest Solera, developed in collaboration with Baccarat fine crystal, offers opportunity for the whisky collector to own a truly remarkable item

illiam Grant & Sons (WGS) has the benefit of carrying superior single malt brands in their portfolio along with a good selection of quality blends. This puts the company in an especially strong position throughout the Gulf region, India, where the blended malts market is a true force and single malt sales are growing. “William Grant & Sons has seen very strong growth in India global travel retail (GTR) during 2017 across our whole brand portfolio and we are forecasting continued grow in 2018,” says Ifan Jenkins, Head of Marketing, GTR for WGS. “Both internationally and domestically Indian passengers continue to trade up into the single malt category, so Glenfiddich and The Balvenie are benefiting in particular.” In GTR in the region, the focus for the company is on the Glenfiddich Cask Collection. “The Cask Collection (Select Cask, Reserve Cask and Vintage Cask) is extremely popular with passengers throughout the region, and the upgraded packaging has exceeded expectations in 2017,” says Jenkins. “Monkey Shoulder, a 100% blended malt made for mixing, is performing very well with Indian passengers around the world so this is likely to receive extra focus as we move into 2018.” Along with these across-the-board brand features, the company also changes its offerings based on location. “We pursue different strategies for different brands from our portfolio depending on each airport and the passenger profile,” says Jenkins. “For instance, while in North India Glenfiddich and The Balvenie take the lead along with Grant’s and Hendrick’s, it works differently in South India

where a Bangalore market passenger’s shopping behaviour can be vastly different from a Chennai market passenger.” Price point strategies are also inconsistent across the region. “Some of the markets are a bit more price sensitive than the others, and we position our portfolio accordingly as per the store and market requirement.” As India has become increasingly important as a market, WGS has been carrying out promotions in the country’s airports. “Last year we partnered with Hyderabad Duty Free to run a highprofile, high-value Glenfiddich megapromotion celebrating the Diwali festival at Rajiv Gandhi International Airport,” says Jenkins. “The promotion offered passengers the chance to win a Nissan Terrano car when they spent over US$90 on Glenfiddich products in Hyderabad Duty Free and participated in a simple

quiz. Each passenger who took part was also treated to 10% off the Glenfiddich Cask Collection.” This year the company once again decided to run high-profile activations in key Indian airports linked to festive Diwali promotions, and Jenkins says he’ll be interested to see the performance when numbers come in. Another item the company will have available for collectors in the region is the recently launched Glenfiddich Cask Collection Finest Solera. “This is the first in a series of rare whisky expressions by Glenfiddich developed in collaboration with Baccarat – world famous manufacturer of the finest crystal glassware,” says Jenkins. “This is the latest and rarest expression in the Cask Collection series, a range exclusive to travel retail, and is presented in a unique, hand-blown, numbered and signed Baccarat decanter.”

Last year’s Diwali mega-promotion promotion Rajiv Gandhi International Airport saw one family win a Nissan Terrano car

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AGIO

Agio thinking inside the box by

CLAIRE MALCOLM

With price points sitting in the €32-€45 (US$38-$53) range, the newest Balmoral assortment is designed for self-enjoyment or as a thoughtful gift

A move from the gondola into the humidor is giving Dutch cigar specialist Agio’s premium Balmoral collection a different lease of life

he latest extension to Agio’s portfolio, its travel retail exclusive Balmoral Añejo XO gift box is adding even more value to the company’s already hugely successful Balmoral range. “Our success with Balmoral began with the Balmoral Dominica Selection 12s gift box, the Balmoral Private Collection 25 with its distinctive lacquered wooden box presentation and our travel retail-friendly five pack; and based on this, we decided that it was time for us to go into the humidor,” says Gertrude Stormink, Global Travel Retail Manager, Agio Cigars. According to Stormink, feedback from the different operators was that the 20-piece boxes were too big for the humidor, so the decision was made to develop a line of smaller packs with different assortments. The new range of premium Dominican Republic handmade cigars features four new products, all of which are presented in travel-friendly packs. Three single variety four-packs of Gran Toro, Rothschild Masivo and Petit Robusto FT cigars sit alongside an exclusive travel retail gift box containing an assortment of five handmade cigars: two Petit Robusto FT, two Rothschild Masivo cigars and a Gran Toro. “Since we believe global travel retail and duty free is a channel of critical and increasing importance for premium cigars, we are very pleased with the introduction of this exclusive wooden gift

box with its five cigar selection,” says Stormink. “Having the four-count cigar parks featuring the same three vitolas is the perfect solution for consumers who want to enjoy a specific cigar format,” she adds. With price points sitting in the €32-€45 (US$38-$53) range, the newest Balmoral assortment is designed for self-enjoyment or as a thoughtful gift. Says Stormink: “There aren’t really a lot of gift options in the humidor so Balmoral Añejo XO is perfect for the travel retail space.” The exclusive appeal of the collection starts from the very beginning, with just nine couples tasked with working on the Balmoral Añejo XO at Agio’s factory in the Dominican Republic, and the four-

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

piece cigar packs are beautifully presented in matt finish packaging with the fivecigar gift box reflecting the gifting charm of the range. According to Stormink the Añejo XO line continues to receive high ratings with Boris Winterman, CEO, Royal Agio Cigars, commenting: “Cigar Journal recently rewarded the Gran Toro with an exceptional 92 rating. And the Rothschild Masivo was rewarded by Cigars & Spirits with a phenomenal 93 rating.” Interest from key partners at Cannes was extremely positive, and Agio also plans to present the new Balmoral Añejo XO range at TFWA Asia Pacific 2018 in Singapore. In the Middle East, Agio reports strong performance with its existing portfolio at Dubai Duty Free where it has also put a dedicated brand ambassador on the retail floor. “Because Dubai is such a high profile destination it was important for us to maximize consumer brand awareness, which we know from general feedback is growing. With the presence of a brand ambassador we can deliver a wellrounded and personalized presentation, and this will become increasingly more important as we develop more handmade products,” says Stormink. She reports that the brand is also doing well in Beirut and Qatar, adding: “In Turkey and the Middle East the seven-inch Churchill is a popular choice as consumers appreciate a bigger cigar.” The company also has a full suite of support services for its Balmoral customers with ins-store display units, staff training and educational guides.

Agio’s travel retail exclusive Balmoral Añejo XO gift box is adding even more value to the company’s already hugely successful Balmoral range

BELUGA

Beluga in high spirits Russia’s number one vodka Beluga is blazing a travel retail trail as the super premium segment continues to lead global category growth by CLAIRE MALCOLM

Beluga reports “aggressive growth” in the Middle East with products such as Gold Line leading the way

ollowing its recent rebrand from Synergy Group to Beluga Group, with the aim of consolidating its international standing, the Russian company registered overall year-on-year export sales growth of 35% for H1 2017. “Beluga is growing more aggressively than ever in the Middle East, which is an important market for us and this reflects the ongoing global trend for the super premium segment,” says Pavel Ulyukaev, Export Director, Beluga Group. “If you look at the vodka market, in general it’s stable with a slight decrease in some segments, but the trend for super premium is strong. This is largely due to the culture of consumption, cocktails and the ‘show off ’ night club bottle cul-

ture; and the Millennial consumer is also another big trend supporting growth,” he adds. According to Ulyukaev the super premium market may be small but is nonetheless competitive, and Beluga is nipping at the heels of the bigger players such as Grey Goose, Belvedere and Ciroc to grow its market share, and outperforming them in a number of key international markets. Industry-wide, duty paid and duty free success is largely mirrored in all markets in which the company is present, mainly due to the high percentage of local travelers, but the Gulf region has its own nuances, as Ulyukaev explains: “If you take the UAE, for example, there are a lot of transit passengers. There are also a high percentage of Indian consumers who love Beluga, both for duty paid and duty free, and we have to take this into account when planning promotions etc. “In terms of market performance, Tel Aviv Ben Gurion with James Richardson is currently number one for us followed by Dubai Duty Free where Noble Russian and Gold Line are real ‘locomotives’ in terms of sales.” Where possible, the company prefers to work directly with retail operators. “Obviously this isn’t possible in places like Korea and the majority of Middle East locations. And with players like A&E, this opens the doors to numerous different locations,” he remarks. In North Africa, Cairo is a solid performer, despite market challenges, but Beluga is yet to break into Morocco and Tunisia. Says Ulyukaev: “We’re undeveloped in the domestic market there due to pricing issues. The taxation system favors

EU products so non-EU brands pay higher taxes, which elevates the price by a further 35%, making it hard to compete. We are looking at ways around it though.” The African continent is also on the company radar. “If you draw the Beluga map, everything is covered apart from Africa and that’s a top target for us. We see strong potential in the region. Ciroc and Grey Goose lead this region versus Grey Goose and Belvedere elsewhere in the world,” he explains. Beluga has signed up to participate in a spirits exhibition in Kenya. Ulyukaev elaborates: “This could be viewed as a rather ineffective investment if you compare it to Cannes, for example, where we always have back-to-back meetings with known partners. However, as an unknown entity in Africa we will participate with the same stand and with the objective of presenting the brand to the market.” While vodka is the core focus for Beluga, its Hunting duo of high-end herbal and berry bitters was on show in Cannes, and although we won’t be seeing it on shelves in the Middle East or Africa anytime soon, the €32 product is flying elsewhere. “We could see the bitters category booming and decided to take a chance on it. It is currently available in very mature markets like Russia and the CIS, where we don’t have brand awareness issues; and Germany is also a target where bitters are an active category,” he says. The company also showcased its new Noble Russian special travel edition, which comes with a caviar dish. A oneliter version will be exclusive to travel retail and is the latest in the line of limited edition presentations.

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BROWN FORMAN

On the road with Jack

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

CLAIRE MALCOLM

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

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

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BROWN FORMAN

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.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

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.

BONFILS

Legacy of excellence With a multi-generational tradition of growing the best grapes in the best terroir and making the best wines, Bonfils is bringing the south of France to all the world by

WENDY MORLEY

Chateau Capitoul exists in a magical place on the Etangs of the Mediterranean and at the foot of the Pyrenees mountains. La Clape, where the chateau, vineyards and winery are located, is a famous, protected and controlled winemaking region

or some people, France means one place only: Paris. For many others, France means an entirely different place. Paris might be the spot for cafés, nightlife and shopping, but it’s the south of France where one can walk through fields of lavender, cypress trees and olive groves; a place of leisurely breakfasts by the Mediterranean; of snow-capped mountains, and winding roads through picturesque villages; and of endless fields of grape vines. This region, Languedoc, has the country’s lifeblood coursing through its earth, and it is one of France’s main wine-

producing regions. And for the Bonfils family, one of France’s most well known multigenerational winemaking families, this land, its vineyards and its chateaux form the lifeblood that courses through their veins.

Superior provenance The Languedoc region was the very first area of France where grapes were grown and wine was made. The first grapes were planted here in fifth century BC, soon spreading and ultimately starting the tradition in the rest of the country. This is the single largest wine-producing region in the world, and is responsible for more

Some of Capitoul’s oaked wines, aging in a highly controlled environment

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

than one-third of France’s total wine production. The combination of soils in the region along with the Mediterranean climate make this region perfect for growing a large number of different grapes, from international varieties to Rhone varieties and others unique to the region, making Languedoc a superior location for producing wine blends with singular taste characteristics.

Superior grapes, superior wines The Bonfils story begins with Honorine Bonfils in 1870. The first woman in French history to receive the prestigious French Order of Merite Agricole in recognition for her pioneering work in viticulture, she passed this knowledge and love to her family, which has only increased as one generation passes the vineyards and winemaking legacy on to the next. All Bonfils wines are estate grown, vented, and bottled at the Domaines, Chateaux, or wineries owned by the family. The family is so superior at viticulture that Bonfils sells grapes to a number of well-known wineries. The family’s focus throughout its wineries’ close to 150 years of existence has been on growing the very best grapes and creating the very best wines, and this focus continues. Bonfils wines have won more than 500 medals in the last five years, including awards by the most prestigious magazines and institutions in the industry. Chateau

France and throughout South America, and are available domestically in 40 countries globally – throughout all of Europe, some countries in the Americas and in China, Japan and Malaysia. Laurent Bonfils, CEO, and Lorena Andreu, GTR Marketing Director, are both excited about bringing Bonfils wines to other regions, beginning with the Middle East.

Dedicated commitment to GTR

Chateau St. Pierre de Serjac, formerly a monastery, has undergone a magnificent transformation. Guests can stay in beautifully appointed rooms in the chateau or in one of the magnificent houses that surround it. Roads and trails lead through the 220 hectares (nearly 550 acres) of vineyards. The cave offers wine tasting, the restaurant offers delectable local fare, and an infinity pool and spa cap off the experience

Capitoul Rocaille 2015 won a Platinum medal in the 2017 Decanter World Wine Awards, with 95 points from Robert Parker and the Best Value Languedoc Red award.

The Bonfils chateaux There is only one thing as traditional as the vineyards and terroir, and that is the chateaux. Jean-Michel Bonfils, Honorine’s great-grandson and the grandfather of the current CEO, Laurent Bonfils, began acquiring chateaux – along with their

vineyards – during the mid-last century. The family now owns 22 chateaux and has thousands of hectares of vineyards. The chateaux are being beautifully, lovingly, tastefully renovated, and they are as much a part of the Bonfils story as the vineyards. The chateaux feature prominently on newly designed labels currently rolling out, in addition to other marketing material that will be used throughout the global travel retail (GTR) channel. The wines are already strong in travel retail in

“The authentic story of the family, the vineyards, the wines and the chateaux come together to create the perfect French ‘Art de Vivre’ [art of living] atmosphere,” says Andreu. In global travel retail, the focus will be on three Chateaux wineries, each with an incredibly beautiful chateau that welcomes guests and offers the ultimate in a French-Mediterranean experience: Les Carrasses, www.lescarrases.com Capitoul www.chateaucapitoul.com and Chateau St. Pierre de Serjac. www.serjac.com. “In addition to offering our incredible award-winning range, we are creating a GTR-exclusive collection of wines, to be released in the spring,” says Andreu. These wines will not only have GTR-exclusive packaging, but they will have been chosen and created specifically for the channel, offering something unavailable in the rest of the world. “Commitment to quality and continuous improvement are keys to our mission to bring exceptional wines to the everyday,” says Laurent Bonfils. “Our quest is to share our love and passion for wine and the French-Mediterranean lifestyle around the globe.”

An impromptu wine tasting in the lounge at St. Pierre de Serjac gives an idea of the range offered by the company

A peaceful and romantic location for wine tasting while visiting Chateau Capitoul, with vineyards, the waters of the Mediterranean and the Pyrenees mountains in the background

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LIQUOR NEWS

Bacardi celebrates Diwali Diwali is one of the world’s biggest celebrations, and this year Bacardi helped celebrate that festive period with a major whisky campaign in six airports in four countries in Asia and the Middle East, including Bangkok, Delhi, Dubai, Kolkata, Mumbai and Singapore. The promotion, which ran through September and October, offered gifting opportunities across the Dewar’s premium portfolio, including a special limited edition Dewar’s gift box. Dewar’s is a key brand for Indian travelers, and during Diwali there is a surge of travelers into and out of India. Dubai, Singapore and Malaysia all have large Indian populations, making them and nearby hubs especially important places to capture those traveling for the holidays. The campaign, presented within the John Dewar & Sons Fine Scotch Whisky Emporium, offered tastings. Also, new disruptive Dewar’s vapor jars were available in several locations, driving penetration, adding fun and excitement to the festivities and encouraging shoppers to try Dewar’s. The activation and promotion focused on Dewar’s 12YO, 15YO and 18YO, all of which were available in limited edition Diwali 2017 celebration packs.

Dubai has a particularly large number of Indian visitors, and was therefore a key strategic location for the Dewar’s Diwali promotion

Highland Park launches GTR exclusive Voyage of the Raven

The striking packaging and extremely limited release will make Highland Park’s Voyage of the Raven especially attractive to collectors

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

Edrington’s Highland Park, a whisky that celebrates the ancient Viking heritage of its home on Orkney Island, has just launched a new Global Travel Retail exclusive, Voyage of the Raven, which highlights the association. For the Norse Vikings, the raven was a powerful mythological symbol of victory in battle, success on a voyage and loyalty to their god, Odin, whose two ravens – Huginn and Muninn (thought and memory) – were his eyes and ears in the Viking world. Fittingly, the new single malt is rich, dark and spicy. It features Highland Park’s signature aromatic smokiness, which is produced by the distillery’s unique woodless peat, hand-cut from Hobbister Moor. Trees do not grow naturally on Orkney, so the peat is made from heather and grasses, which gives it uniquely smooth characteristics. This new expression marks the start of the transition between the current Warrior Series and a brand new Travel Retail exclusive range that will be launching by Spring-Summer 2018. The fixed volume and extremely limited quantity, combined with the striking packaging, will make this a highly collectible Highland Park release.

ROBERTO CAVALLI VODKA

The fashion forward spirit Success in the super premium vodka category in the Middle East ticked off the to do list, Roberto Cavalli Vodka is ready to hit US and European shores by

CLAIRE MALCOLM Every year, Roberto Cavalli Vodka launches a new collectible limited edition bottle

Mariem Mersni Ben Cheikh, Global Duty Free & Travel Retail, Roberto Cavalli Vodka and Owner, International Travel Retail

n eight-year-old brand with five years travel retail credibility, Roberto Cavalli Vodka has seen year-on-year double-digit growth, thanks to its core product, but has more to offer the white spirits category. Its distinctive trio of stunning bottles includes the original plus two Mediterranean-inspired flavors, rosemary and Sicilian orange, which together replicate the colors of the Italian flag. “The bottle design is very elegant and even has its own name: ‘fashion on the rocks’. It’s become something of a collectible, especially the limited editions, but at its heart is the super premium Italian vodka,” says Mariem Mersni Ben Cheikh, Global Duty Free & Travel Retail, Roberto Cavalli Vodka and Owner, International Travel Retail. Initially launched in the US in 2006, where it won a gold medal at the 2006 San Francisco World Spirits Competition, the small batch-bottled vodka is making a name for itself with an international audience. A strong performer in the Middle East and Gulf region, and entering into Africa, Ben Cheikh reports that vodka sales are “booming” with the brand ranked at number two on Middle East Airlines and available on board Tunis Air and Nouvelair, as well as at Dubai Duty Free, Jordan Duty Free, Istanbul Duty Free and Qatar Duty Free among others. The company produced a special edition red bottle for Dubai Duty Free and each year launches a new limited edition bottle into the market.

“Our bottles are a work of art and are beautiful decorative pieces, even when empty,” says Ben Cheikh. This year’s limited edition, the one-litre Roberto Cavalli Vodka Night Edition Total Black, symbolizes sophisticated elegance and was inspired by the seductive beauty of women that often emerges from the encounter between darkness and light. Coated in organic ink cured with UV light, the bottle features white and black serigraphy, also made using organic ink, with the hero logo in hot silver. Says Roberto Cavalli: “A fashion vodka, because black is fashion. Sexy and mysterious, just like the women I love.” Clear, with subtle flavor notes, the grain-based vodka is sweet, soft and balanced on the palate, with a silky texture and delicate aftertaste from the different ingredients. Roberto Cavalli Vodka also took home a trio of awards at the 2017 Los Angeles International Spirits Competition, securing a Gold Medal and also taking home the top prize in Best Category (vodka) and Best Division (vodka distilled from grain). Its unique flavor profile makes it a clear winner in taste trials and Ben Cheikh recommends that the vodka is best enjoyed on its own, but with a collection of Roberto Cavalli-designed cocktails also available online, it holds infinite appeal across different audiences. Ben Cheikh says the aim is to copy paste the Middle East business model and take it to the US and European travel retail market in 2018. She is also keen on ensuring that display presence for the brand meets strict

The 2017 limited edition Roberto Cavalli Vodka Night Edition Total Black symbolizes sophisticated elegance

positioning criteria with special gondola placement the desired goal. Rounding out the Roberto Cavalli duty free offering is its Degli Dei Toscana IGT Cavalli Selection wine. Presented in yet another one-of-a-kind bottle, the exceptional Tuscan wine is the result of a collaboration between Cavalli and his son, Tommaso, who owns a 25-hectare vineyard in the heart of the Chianti Classico region of Italy.

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

DAVIDOFF

Something

new

At TFWA in Cannes, Oettinger Davidoff AG showed a host of new items including its new Sir Winston Churchill-inspired humidors, and now after two years, the company has also announced the opening of its brand new head office The walk-in humidor and cigar lounges are designed to bring to mind the Dominican Republic, where a large part of Davidoff’s production and workforce is located

avidoff seems to always have news, whether that means announcing the international artists accepted to its Art Residency in the Dominican Republic, launching new cigars and accessories, holding sessions for women and cigars around the globe or any number of other newsworthy items. Recently the Swiss company released its Winston Churchill “The Late Hour” cigar, based on the famous leader’s propensity to stay up into the wee hours contemplating his important decisions. After that release came “The Late Hour” accessory line. And at TFWA WE in Cannes, Davidoff revealed “The Davidoff Humidors, Inspired by Sir Winston Churchill – The Statesman.” The two humidors in this line are created to reflect Winston Churchill’s witty and unmistakable character. The “Union Jack” design offers the easily

recognizable British ensign, with the Winston Churchill icon visible in a piece of marquetry made of a darker shade of tulip wood. The “London” humidor represents Churchill’s command center and his continued impact on the city. The many facets of Sir Winston Churchill inspire the “London” design, which shows the city landscape within the iconic profile on beige tulip wood. These humidors are offered in the Ambassador and Primos sizes. The Ambassador has a capacity for between 70 and 90 cigars, and is created for cigar aficionados with a large assortment. The Primos humidor has a capacity of 25 to 35 cigars, perfect to build a first collection or as a second, compact humidor. Both humidors are handmade by a French atelier, and contain the Davidoff Slim Regulator to maintain a stable relative humidity level of 70% to 72%. These regulators are designed and crafted by Swiss engineers with a two-way humidity system, to guarantee a stable humidity level. The humidor interiors are made of okoumé, an odorless and tasteless wood from Gabon, on Africa’s west coast.

New head office

Davidoff’s new humidors are designed to reflect Sir Winston Churchill’s wit and strong personality

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

Oettinger Davidoff AG has opened a new head office. The newly constructed Maison

WENDY MORLEY

Davidoff is located at 73 Nauenstrasse in Basel, replacing the company’s 1930 building on the same site. The old building, which had previously been remodeled several times, served the company for over 85 years. Construction lasted two years, from April 2015 to July 2017. According to Beat Hauenstein, CEO of Oettinger Davidoff AG, the new building, designed by Diener & Diener, will encourage inter-divisional collaboration and promote creativity, productivity and innovation. Open, communicative work areas and reception rooms have been built across seven floors with a total area of 7,667 square meters, and the space is completed with showrooms, a modern cigar lounge, a cafeteria, and parking for 24 vehicles. Maison Davidoff was designed to fit into the Basel cityscape in a way that is modern and natural. The interior, designed by Lassoudry Architects GmbH, was created to evoke a sense of well being in the daily working environment, but also to exude a Caribbean feeling of warmth and authenticity, reflected in Davidoff ’s motto: Time Beautifully Filled. The walk-in humidor and the cigar lounges are intended to bring to mind the Dominican Republic, where a large part of Davidoff ’s production and workforce is located. Artworks created by artists from the Davidoff Art Initiative adorn the walls, reflecting the cultural artistic heritage and contemporary art scene in the Caribbean.

ORIENTAL GROUP

Lighting up the market Oriental General Trading is expanding its retail operations in Asia and seeing success with its tobacco business targeted at Chinese passengers by

HIBAH NOOR

O Oriental’s own brands are designed according to Chinese culture, so it offers Oris Dragon packs, a premium line priced between US$55$60 per carton

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

riental Group is predominantly a tobacco company and since 2000 has had a thriving Chinese tobacco business, as the Chinese tobacco and liquor supplier for many duty free stores in the Middle East and Africa. “We have a great relationship with many duty free operators including Dubai Duty Free, Qatar Duty Free, Dufry and African operators,” says Tania D’souza, General Operations Manager, Oriental Group. The company has a wide portfolio and is the authorized distributor of Chinese brands like Nanyang Brothers Tobacco, Huanghelou, Furongwong and other leading Chinese tobacco brands. It also offers Moutai, the national spirit of China, and manufactures its own brands, such as the travel retail exclusive brand Oris, targeted towards Chinese smokers. When it comes to understanding the China market and the trends of Chinese smokers, Oriental has deep market knowledge and expertise. “Oriental thrives to develop and understand the changing consumer behaviors and

call him the modern day Chinese panda because he has a cool, retro 3D pixelated effect. The Nano range has a price point ranging between US$14 and US$16 per carton.” Oris is now listed in almost 20+ outlets so far following its recent launch in January 2017. Operators listing the brand include Dufry, DFS, Dubai Duty Free, Qatar Duty Free, and Heinemann. The company is also building up distribution in the Asia region. “Oris in Dufry Bali is doing extremely well; we are topping sales every month and it continues to grow far beyond what we had expected, which is quite a feat for a brand that is not even a year into the market,” enthuses D’souza. “We are only targeting travel retail at the moment and we want to build this into a global travel retail brand.”

Chinese New Year initiatives In late September, Oriental Group launched its Oris Nano range called Oris Panda, spanning Panda Black, Panda Menthol and Panda White (lights)

is well aware that the Chinese are the key consumers in today’s world,” says D’souza. “With Oris China, we aim to touch the heart of Chinese consumers and their culture through our beautiful and intricate packaging. “The price point of the cigarettes is also an important factor because the Chinese buy it for gifting and for business purposes as well, so they really need something trendy and innovative.”

Early success for new launches This means that Chinese cigarettes can be expensive, ranging from US$20 up to US$1,000. Oriental’s own brands are designed according to Chinese culture, so it offers Oris Dragon packs, a premium line priced between US$55-$60 per carton. The range includes a hollow filter that gives a strong, intense flavor. In addition, the Oris Peace is its queen size range, launched in early January 2017. Oris China is a travel retail exclusive product. A brand new product is the Oris Dragon Double Capsule range, retailing

at around US$38 per carton, which also offers a very intense smoke. This product launched in early October in retail outlets such as Dubai Duty Free, Dufry at Bali Airport and Nur Duty Free at Addis Ababa Airport. “The response has been positive and overwhelming for the new range that launched just before the 2017 TFWA World Exhibition in Cannes,” reports D’souza. “This is our double capsule Dragon range. It’s in Dufry Bali and in Dubai Duty Free as well, and it’s the first Chinese cigarette brand to launch a double capsule. The range has two variants, Spearmint & Menthol capsules and Spearmint & Strawberry capsules.” In late September, Oriental Group launched its Oris Nano range called Oris Panda, spanning Panda Black, Panda Menthol and Panda White (lights). “The panda is a symbolic animal in Chinese culture; they are referred to as a symbol for friendship and peace. Many tobacco companies have panda symbols as part of their packaging. However, we wanted to create a very different panda that’s modern, contemporary, edgy. We

Distribution-wise, Oris is set to enter several markets such as the CIS markets, North America and South America markets as well. Tobacco regulations vary by territory and can be a challenge that most tobacco companies face. However, Oriental Group can be flexible and offers duty free operators ample support when it comes to marketing, merchandising as well as a customized portfolio with health warning-specific Oris brands. Oriental has a major initiative coming up for Chinese New Year, as D’souza explains. “We are going to launch an exciting, exclusive limited-edition product for certain markets like Dubai Limited Edition as well as for Asian markets.” D’souza says that Chinese consumer trends are changing. “Millennial smokers are not as loyal to a particular brand. When they are traveling they want to try something new or buy something unique as a gift for when they travel back home. The great thing about Chinese consumers is that they love to combine their purchases with other categories.” D’souza concludes with some food for thought for travel retailers. “Duty free operators should consider dedicating a section of their retail space to Chinese brands such as tobacco, liquor, etc, which can make a positive impression on Chinese travelers and can entice them to shop not only for Chinese brands but for international brands as well.”

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

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

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

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 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

TOBACCO NEWS

Habanos Introduces New Línea Retro at 35th Havana International Fair The Havana International Fair, which took place this year from this newly introduced Partagás Capitols, Partagás is once again October 30th to November 3rd at the EXPOCUBA exhibition center. introducing the Mareva into the brand’s regular portfolio. The fair, which has been held consistently since 1983, is Cuba’s With the expected success of these two new items, Habanos most important multi-sector trade fair and is considered one of the hopes to introduce the concept of a metal-boxed Línea Retro vermost important of such fairs in Latin America and the Caribbean. sion with its other brands. Habanos’ latest release, which was introduced at the Havana International Fair, is the new Línea Retro. As its name suggests, the Línea Retro has a retro, The new line consists of mid-century look reminiscent of the golden years of Partagás Capitols and Romeo y Julieta Club Kings, offered in the Rat Pack’s visits to Havana. The two items on offer Habanos’ most popular size, are Partagás Capitols and Romeo y Julieta Club Kings. presented in a retro metal box The new Línea Retro metal box presentation is inspired by the pocket cigar holders that became so popular during the past century, and which are now highly valued and sought after by collectors all around the world. The Partagás Capitols and Romeo y Julieta Club Kings cigar cases feature a bespoke design developed and used exclusively for the Línea Retro product launches. Each case holds five Habanos, with the vitola de galera Mareva (42 ring gauge x 129 mm length). Mareva is possibly the most popular format in the history of Habanos, and its dimensions have been for a long time considered the “standard” size. With

Imperial Tobacco launches Davidoff Magnum Elite Legend At this year’s TFWA in Cannes, Imperial Tobacco revealed the third in its duty free exclusive Davidoff Magnum Elite series, Magnum Elite Legend. The ultra-luxury cigarette targets high-spending travelers through a few selected airport retail locations worldwide. With Davidoff Magnum Elite Legend, Imperial Tobacco aims to underline the brand’s premium position within the duty free environment, and is marketed primarily toward Asian travelers. Presentation is key for the luxury item, and every box is individually numbered. Every Davidoff Legend is crafted using the finest tobacco leaves, harvested at their optimum and matured for up to nine months. After this, the master blender creates the signature Magnum Elite Legend blend, containing Burley tobacco for strength, Virginia tobacco for sweet character, and sun-dried Oriental for a hint of the exotic. Magnum Elite will be promoted as part of Imperial Tobacco’s ‘For the Hunters’ campaign, which is ramping up. ‘For the Hunters 2.0’ is pushing more boundaries, ensuring that the Davidoff cigarette stands out even more. For the new Davidoff Magnum Elite Legend, Imperial tobacco has created the tagline: “For those who reveal the fire within”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2017

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