Duty Free Magazine MEADFA_Nov_Front Cover.pdf
DUTYFREEMAG.COM NOVEMBER 2019 · MEADFA · VOL 29 · NO 3
A N E X P E R I E N C E W O R T H T R AV E L L I N G F O R
A jewel in Muscat’s crown p. 8 IDFS at 30: A Moroccan pioneer p. 14 Prestige Supplies presses ahead p. 30
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Letter from the Editor
NOVEMBER 2019 · MEADFA · VOL 29 · 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 2019, Vol. 29, No.3. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2019 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.dutyfreemag.com PUBLISHER Aijaz Khan firstname.lastname@example.org EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor email@example.com DEPUTY EDITOR Jas Ryat firstname.lastname@example.org SENIOR EDITOR Mary Jane Pittilla email@example.com WRITER & SOCIAL MEDIA COORDINATOR Laura Shirk firstname.lastname@example.org SENIOR WRITER Rebecca Byrne email@example.com ASIA CORRESPONDENT Elena Owyong firstname.lastname@example.org AMERICAS CORRESPONDENT Ronnie Lovler email@example.com ART DIRECTOR Jessica Hearn firstname.lastname@example.org CIRCULATION & SUBSCRIPTION MANAGER email@example.com
Gulf crisis E
very year around the time of the MEADFA conference or any industry event I find that there is some sort of challenge upon us whether it be a natural disaster or a man-made disaster. Or maybe this is just life. After recently reading some reports that indicate the easing of the Gulf crisis, this is music to my ears. Kuwait’s attempt at mending relations between Qatar and the other Gulf states maybe coming to fruition, but time will tell. With the US withdrawal from some key Gulf nations, we can only hope that things resolve themselves for the benefit of our great industry. On a smaller scale, the duty free industry faces challenges in all regions, and the Middle East is no different. In a bid to ensure the continued growth of the industry, the Middle East and Africa Duty Free Association (MEADFA) recently created an Advocacy Group to tackle specific challenges head-on. Under its President, Haitham Al Majali, CEO of Jordanian Duty Free Shops, who was re-elected in April 2019, MEADFA has taken further action to protect its members and stakeholders from threats to the industry. These include the Illicit Trade Protocol (ITP), which requires a global track and trace system to reduce tobacco smuggling. Al Majali stressed that this group will work closely with all stakeholders. The Advocacy Group has been elected from within the Board members and members of MEADFA, together with an external consultancy that will help the association with tackling these issues. “At MEADFA we believe that joining forces with different players in the industry as well as our affiliate members will lead us to a positive snowball effect which will eventually wipe out these challenges we are facing today, only to ensure the prosperity of our industry,” Al Majali stated. In addition, the association is making its industry protection remit wider by creating a new cross-category working group. This group is holding a meeting for suppliers of all product categories at the MEADFA Conference in which it will detail all the threats and challenges across the categories in the Middle East and Africa. This year’s MEADFA Conference in Oman is officially hosted by Muscat Duty Free, whose recently appointed General Manager, Rob Marriott, is interviewed in this issue. The operator has been trading successfully at the state-of-the-art new Muscat Airport for 18 months. Some 16 world-class stores covering around 6,000 square meters have proved a hit with passengers, with average spend per head growing in double digits. This success is largely thanks to its dedicated members of staff, who are known as colleagues. Marriott has kept his colleagues motivated by implementing the intriguingly named HOT Smiles scheme, which offers financial rewards for outstanding service. We are looking forward to experiencing Omani hospitality! We look forward to catching up with you all. Kindest Regards,
Hibah Noor Editor-in-Chief firstname.lastname@example.org
www.dutyfreemag.com GULF-AFRICA DUTY FREE & TRAVEL RETAILING
What’s inside Lead Stories 8 Muscat Duty Free
A jewel in Muscat’s crown Rob Marriott, General Manager of MEADFA Conference host Muscat Duty Free, reveals how the retailer is faring just 18 months into its operation at the new Muscat International Airport
14 International Duty Free Shops IDFS at 30: A Moroccan pioneer
International Duty Free Shops has notched up 30 years as the top operator in Morocco, thanks to its focus on being world class
20 Colm McLoughlin Q&A King Colm
Gulf-Africa Duty Free sits down with Colm McLoughlin, Executive Vice Chairman and CEO of Dubai Duty Free, for an entertaining chat
26 Iraq Duty Free
Iraq Duty Free makes the grade As Ahmed Kamal, CEO, Iraq Duty Free celebrates the opening of more worldclass stores, he reveals the retailer’s plans for operations at a fourth airport
30 Prestige Supplies Inc
Prestige Supplies presses ahead Duty free operator Prestige Supplies Inc reveals its upcoming projects – not least of which is the opening of a new airport shop in Mongolia and an impressive border store in Laos
Features MEADFA protects industry A new Vibe for inflight retail
Guest writer: Leanne Nutter Shazé shines in travel retail
Aer Rianta International: Duty Free Inventor and Innovator
Airport Retail Inspired through... PARTNERSHIP EXPERIENCE
Trusted by our airport and brand partners to deliver award winning retail propositions
We invented duty free in 1947 and continue to be recognised as an industry leader
CONSUMER FOCUS Research driven strategies designed to motivate our diverse consumer base
Our bespoke concepts and designs create a real sense of place and memorable customer experiences.
Lead Stories 40 Hamila Duty Free
Hamila Duty Free flexes its muscles in new operation Hamila Duty Free has unveiled its latest significant opening – Melloula Duty Free – the first border duty free shop in Tunisia and North Africa
44 Beaute Luxe Duty Free Accessorizing Africa
A new distribution company founded by industry veteran David Dayan aims to put the African continent on the map when it comes to selling luxury brands
48 Formawell Beauty Taking the beauty sector by storm
Formawell Beauty’s pioneering CEO Emil Hakim explains how his company is set to make waves in the beauty industry
52 Perfetti Van Melle
Perfetti comes through with flying colors Buoyed by its colorful and fun confectionery assortment, Perfetti Van Melle is boosting its market share in the Middle East market
Serbian cigarette manufacturer Monus is seeking to conquer new markets as it grows steadily on five continents with its wide-ranging portfolio
Harison treats all Ricola gains ground in duty free Majani eyes Middle East
Monus in the fast lane
54 56 57
Royal Agio Cigars ages well in TR 58 Oriental smokes out opportunities 59 Questionnaire: James Kfouri 62
Muscat Duty Free
A jewel in Muscat’s
Muscat Duty Free is a joint venture company between Oman Air and Aer Rianta International Middle East
Muscat Duty Free introduced a mobile cart, designed to maximize the transit passenger opportunity
8 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
Rob Marriott, General Manager of MEADFA Conference host Muscat Duty Free, reveals how the retailer is faring just 18 months into its operation at the new Muscat International Airport by HIBAH NOOR
Rob Marriott, General Manager, Muscat Duty Free
uscat Duty Free, the official host of this year’s MEADFA Conference, is celebrating 18 months of business at the new Muscat International Airport, a state-of-the-art facility with world-class stores. The Omani gateway opened to great fanfare in March 2018 and was officially inaugurated in November 2018. Muscat Duty Free is a 50/50 joint venture company between Oman Air and Aer Rianta International Middle East (ARIME). Established in 2003, Muscat Duty Free is an operator of duty free shops at Muscat International Airport and also operates inflight duty free services on Oman Air flights. The company has completed 18 months of its 10-year contract. At the helm of the new operation is Rob Marriott, General Manager, Muscat Duty Free, who joined in March 2019 with
more than 30 years of retail experience. Before joining Muscat Duty Free, he worked in the UK supermarket sector, rising up the ranks to become Regional Managing Director of Stores at Morrisons, responsible for 130 stores, £4 billion (US$5.2 billion) turnover and 25,000 colleagues. He left the business, joined a food firm, and then landed the key retail role at Muscat Duty Free, as he explains: “I’m a retailer with a passion for food and spent a year running a food business in the UK. I wanted another challenge and an opportunity came to move into duty free in Muscat. I didn’t know much about the region and it was a big move, but it was one of the best decisions I’ve ever made. It’s a beautiful country with fantastic people and I’m really enjoying it.” Marriott says that the duty free retail business is pretty similar to what he’s been doing all his career, but with one crucial difference. “Ultimately, it’s about selling and selling well and giving exceptional service through really motivated colleagues – but in duty free it’s very different in that you’ve only got one opportunity at the passenger, they’re not going to be coming back week in, week out, because they’re at an airport. You’ve got that one moment in time to really impress and maximize the opportunity.” Marriott, who reports to the Board of Directors, seeks to reap the benefits of the 50/50 joint venture, aiming to share ARIME’s expertise for certain elements of business, such as IT, retail systems and standards, and using Oman Air’s regional knowledge, which is “really important”, he says.
Targeting transit passengers
Moving into the new airport in March 2018 was a “big change”, he notes. “There’s four times more retail space now – it’s a different retail proposition altogether.” The retail square footage of all stores combined is around 6,000 square meters and the retail www.dutyfreemag.com GULF-AFRICA DUTY FREE & TRAVEL RETAILING
Muscat Duty Free
go straight to the next gate, but the cart is a great opportunity to maximize that opportunity at the gates and it’s worked well.” When the operator opened its doors for business in March last year, it had an expectation of passenger numbers and the demographics. Fortunately, the team appears to have hit upon a winning formula from the start. “The initial set-up was very good. Since I’ve been here it’s been about category review and making adjustments in the range. For example, we have a very high Indian subcontinent passenger base and it’s about making sure the offer appeals to them. One of the big things that has been successful for us has been the local food products, so in Muscat Market and in terms of food and confectionery, local products properly displayed in a traditional way have been a superb addition for us. We have a standalone shop as well which we have now really focused on local food products, which I think is right because our passengers are certainly buying it and it seems like the right thing to do because it supports the country, local products and local companies.” Muscat Duty Free offers electronics but does not carry large appliances because of the baggage allowance issue. The items are tailored to what passengers can carry onto the flight, notes Marriott. Average spend per head is growing double digits, he reveals. The main passengers coming through the airport are Indians, GCC travelers, particularly those transiting to destinations such as Qatar, and Europeans. The airport handles a lot of European flights to destinations such as Germany and the UK, and has just
The main passengers coming through the airport and duty free stores are Indians, GCC travelers, particularly those transiting to destinations such as Qatar, and Europeans
space is laid out as 16 separate units. Previously, the old airport offered only liquor and tobacco, food and confectionery, and a Lacoste shop. Today, after walking through security, passengers see Muscat Market, which centers on the food and confectionery offer, with some liquor and tobacco. Liquor and tobacco also has its own space and is an important part of its duty free business, he says. Since opening, the company has made some changes to the perfumes and cosmetics store. “When we opened a year and a half ago, we had a shell around it. It looked fantastic but we’ve taken it down, to give greater visibility to the passengers. It was a barrier.” At the back of the perfumes and cosmetics store is fashion and jewelry, with electronics and toys making up the rest of the offer. Muscat Duty Free doesn’t carry souvenirs, which is managed by a separate operator. Additionally, Muscat Duty Free has three pier shops – one each in Piers A, B and C. It recently introduced a mobile cart – “a first for us”, says Marriott – which is designed to maximize the transit passenger opportunity. “We’ve got a fairly high percentage of transit passengers coming through. Usually as a transit passenger you get off the plane and
In the new airport, there’s four times more retail space totaling 6,000 square meters
10 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
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Muscat Duty Free
started flights to Greece. Asian destinations are also really popular. Last year, the airport handled 15 million passengers. Since he began the General Manager role seven months ago, Marriott has doubled down on executing Muscat Duty Free’s mission statement. “Our vision is clear - it encapsulates what we need to do and how we’re going to do it. Our mission is to provide great availability and value in a safe and legal environment, which delivers exceptional passenger service by highly trained, engaged, motivated and happy colleagues. I’m a great believer that any successful business, and certainly retail business globally, needs exceptional colleagues to deliver the proposition, so we have made sure that we are listening to our colleagues. One of the things we did very early on as well was refer to them as colleagues and not members of staff. My view is that colleagues are more engaged and more committed to the overall success, and that’s been really well received. I’m working really hard on how we get their buy-in, how we get their point of view, so we did a survey to make sure we stayed really focused on what our passengers are saying on the ground at all times.” In addition, the company has really ramped up its colleagues training. In April, Marriott implemented a HOT Smile program, which is short for Hello. Offer. Thanks, “to ensure the company is giving exceptional service to every passenger, whether they are purchasing from us or not and remembering us for the right reasons”. He continues: “We want to make sure everyone has a great experience when they come through our stores. We’re really investing in the service piece. It’s about great value: what’s great value for the business and what’s great value for the passenger as well, and making sure you find that space.” The HOT scheme has many interesting facets. The company has a HOT Smile cheque book whereby all managers can reward great service when they see it, offering cash incentives. “It’s about catching people doing it right rather than catching people doing it wrong. It’s trying to change that focus, so people feel rewarded there and then. It’s a token of our appreciation of what they’re doing and it’s been really well received. There are four HOT Smil-
ers of the Month. Colleagues can nominate other colleagues if they see an example of great service. Anybody who has received a HOT Smile cheque from one of the managers also gets into the awards. The top four people who give exceptional service get a financial reward every month. Then one person per year becomes a Golden Smiler of the Year and they get a significant financial reward as well. There’s an awards ceremony where the cheques get given out by myself and my management team. We make a big thing about it. We recognize our team.”
Inflight continuing to grow
Currently, Muscat Duty Free has no standalone loyalty program but it’s something the company is looking at. It does, however, participate in Sindbad, which is Oman Air’s loyalty program. Passengers who sign up to the scheme accumulate points when they book flights and get free duty free products. Muscat Duty Free runs Oman Air’s inflight duty free program, which has been popular with passengers. “Business is really good, it’s a really important part of the proposition for us. We see it as something that’s continuing to grow… You have to work really hard at it to make sure the ranging is right and the service is right.” Marriott is pleased with what’s been achieved so far at Muscat International Airport in such a relatively short time. “We are in an airport that’s a year-and-a half-old. It’s a fantastic facility – incredible, actually. We are really lucky that we have a strong partnership with Oman Airports who our concession is with and who are supportive.” Are there any plans to expand the operation? “Currently, no,” says Marriott. “We’re settling down on a firm base. There’s an opportunity in the future to make it bigger and continue to improve the offer. The offer is pretty good now for where we need to be.” Marriott’s mission to provide a great offer for passengers has come to pass and he’s busy making sure that remains the focus, day in and day out. A look at Muscat Duty Free’s upscale P&C area
12 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
Treating and snacking, made better for travelers. Better moments with great brands, more fun, and more opportunities to snack on-the-go, treat others, and bring gifts for loved ones.
International Duty Free Shops
IDFS at 30: A Moroccan pioneer International Duty Free Shops has notched up 30 years as the top operator in Morocco, thanks to its focus on being world class
nternational Duty Free Shops (IDFS) is celebrating its 30th anniversary in 2019 as the first and leading duty free retailer in Morocco in partnership with the Office National des Aeroports (ONDA). True to its tried-and-tested philosophy of global expertise and best prices, the company has strengthened its presence in its airport stronghold of Casablanca. In January 2019, the operator began trading at the newly extended Terminal 1 at Casablanca Mohammed V Airport, where it more than doubled its retail square footage. The Level 1 store, a smaller outlet that caters to transit passengers, increased by 396 square meters, while the L2 shop, situated one level up in the boarding area, grew by 547 square meters. Before the T1 expansion, the shops covered 812.69 square meters and now span a total of 1,755 square meters. Last year, Casablanca Mohammed V International Airport counted 4.3 million passengers. T1 is dedicated to two airlines: Royal Air Maroc and Emirates. Some 60% of passengers are carried by Royal Air Maroc, and the other 40% are from all the other airlines. 14 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
by HIBAH NOOR
Since its opening in January, the airport has gone through a transition period of continuous improvements. Recently, new signage has been installed directing travelers from check-in to departure, easing the stress of travel. Speed, flexibility and Christopher comfort in arrivals became the airport’s focus, Tantoco, with the opening of a dedicated area for MorocPresident, IDFS can nationals that is designed to ease the processing of all nationals into Morocco. The new T1 terminal is an extension of the old facility and the new duty free stores are located in this additional space. IDFS prides itself on being customer oriented. In a major development, the retailer is bringing Benefit Cosmetics to Morocco and is the first company to showcase the brand, as it’s not available on the domestic market. “Part of our goal is to introduce new cosmetics brands and be the first to launch in Moroccan duty free. We are very happy with this new partnership with Benefit Cosmetics and its support to launch with IDFS,” says Christopher Tantoco. IDFS’ President. The brand will be available this November in its main airport shops. “Aside from its popularity, Benefit is a good addition to the IDFS portfolio as we aim to grow our cosmetics offering; attracting shoppers, the strong name will draw potential customers into the store for a full look,” he explains.
Aligning with trends
The company’s top-performing product category remains tobacco and cigarettes, followed by perfumes. In comparison to other countries, the distribution and performance of tobacco
Newly extended Terminal 1 at Casablanca Mohammed V Airport, where IDFS more than doubled its retail square footage
products is much higher in Morocco. IDFS notes that the popularity of tobacco is driving overall sales and is the reason for the growth of its other categories. “Our goal is to grow other categories and make new introductions, especially in terms of fashion brands, food brands and local brands,” says Tantoco. When it comes to food brands, IDFS is focusing on snacking options, items that are easy to pick up off the shelf, as well as the introduction of healthy snacking options that align with the lifestyle and well-being trend. This development aims to cater to different customers’ preferences and is in the works for 2020. IDFS recently introduced Loacker biscuits and Wright Tea to its confectionery category. Popular with Europeans, locals and Asians, the cookies are performing well and the tea – despite its British name, it is locally-owned – is available in cafes in Morocco and is exclusive to airports via IDFS. It currently offers the high-end
IDFS is looking to grow its Fashion offering
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International Duty Free Shops
IDFS recently introduced Wright Tea to its confectionery category
brand’s loose leaf tea, with its tea bags and tea champagne in the pipeline. The overall product assortment is also designed to increase the customers’ choice of currency options. The retailer has expanded its portfolio of local products in the categories of snacking, gifting, toys, and souvenirs to carry a wider selection of products which customers can buy using the local currency of Moroccan Dirhams. This year the company is launching many initiatives to mark its 30th anniversary, which Tantoco describes as “a reminder to people that the company is still here to serve the country (in all-sized airports) and stay true to its original promise, to be the customers’ ‘Last good buy before you fly’. Although celebration plans will primarily take place next year, IDFS has already begun marking this milestone with its customers through a 30th Anniversary Savings Promotion focused on curated offerings, providing shoppers with the best deals on top-selling categories. The company’s new website https:// morocco-dutyfree.com/ went live in July 2019 that will serve as a source to find information not only about IDFS, such
When it comes to food brands, IDFS is focusing on snacking options, items that are easy to pick up off the shelf, as well as the introduction of healthy snacking options that align with the lifestyle and well-being trend
16 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
as new products and initiatives, but soon also the country. Aesthetically, the website communicates IDFS’ ‘glocal’ flavor with strong company colors enhanced with a Moroccan touch. It was designed to be simple and easy to navigate highlighting current promotional offers, new collections, brands and product launches, as well as the latest news within the company. “We know how important digital is in travel, so we have many more improvements planned in the coming months, such as the optimization of our Facebook and Instagram pages to connect and engage with our new and loyal customers,” promises Tantoco. This October, IDFS revived its diplomatic business and is serving the community through a digital platform: a new online ordering service where customers can browse through its catalog and place their orders online to enjoy diplomatic prices. “We have received overwhelming feedback from the community, which only highlights the strong relationships we have built as the pioneers of duty free shopping in Morocco for over 30 years,” enthuses Tantoco.
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MEADFA President Haitham Al Majali during this year’s MEADFA press conference held at the TFWA World Exhibition in Cannes last month
takes action to protect industry MEADFA’s President, Haitham Al Majali, has set out his ambitious plans to significantly boost the regional association’s influence by HIBAH NOOR
s it prepares for its annual conference, the Middle East and Africa Duty Free Association (MEADFA) has pledged its commitment to ensuring the continued growth of the industry in the region. And it is now taking further action to protect its members and stakeholders from the challenges that face the industry. Under its dynamic President, Haitham Al Majali, CEO of Jordanian Duty Free Shops, who was re-elected in April 2019, MEADFA has created an Advocacy Group to tackle these challenges. Speaking at a press conference during the TFWA World Exhibition in October, Al Majali explained that MEADFA is keen on expanding its presence and positive influence on the industry. “The Board and myself are keen to develop the association and are currently working on several measures that aim to enhance the association, help recruit more operators as well as setting up an action plan to face the challenges we are facing in the industry. We are moving forward and officially appointed an Advocacy Group to act on our behalf to protect the interests of our members and to tackle any challenges we might come across, and we will work closely with all the stakeholders,” he said. He noted that the main objective is to protect the industry from any challenges and stressed that this group will work closely with all stakeholders. The Advocacy Group has been elected from within the Board members and members of MEADFA, together with an external consultancy that will help the association with tackling these issues. It is made up by the members who are willing to spend their time and concentrate on the specific challenges that it’s facing. Al Majali continued: “At MEADFA we believe that joining forces with different players in the industry as well as our affiliate members will lead us to a positive snowball effect which will eventually wipe out these challenges we are facing today, only to ensure the prosperity of our industry.” The Advocacy Group will tackle challenges such as the Illicit Trade Protocol (ITP), which requires a global track and trace (T&T) system to reduce tobacco smuggling. In 2020, OECD 18 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
member countries will reopen the discussion around the ITP. In 2017, MEADFA was successful in influencing certain countries not to sign up to the ITP scheme. Now, MEADFA is once again working to keep up the pressure on the OECD. In addition, the association will make its industry protection remit wider by creating a new cross-category working group. This group will hold a general meeting for suppliers of all product categories at the MEADFA Conference in which it will detail all the threats and challenges across the categories in the Middle East and Africa.
Focus on expansion
During his speech at the press conference, Al Majali revealed that MEADFA is also brainstorming more revenue streams for the association with the aim of expansion. Initiatives also include upgrading the training scheme the association offers to its members. As CEO of Jordanian Duty Free Shops, Al Majali offered to host the graduation ceremony for the first batch of graduates of the training diploma launched last year, the Duty Free and Travel Retail Management Diploma. “We believe that it’s our responsibility to train our manpower in this industry, to enable them to provide better service, and exchange knowledge, to eventually help this industry prosper and expand.” In a further announcement, Al Majali said that MEADFA had renewed its contract with Tax Free World Association to organize the association’s conference for another two years. With this advocacy work and new expansion initiatives under way, the 2019 MEADFA Conference is set to be one of the most proactive and exciting. The annual gathering, hosted by Muscat Duty Free, takes place at the Kempinski Hotel, Muscat and runs from November 24 to 26. Key themes include the rise of new retail in the Middle East, as well as a focus on African travelers with insight from the latest TFWA-commissioned research. Delegates will also hear from a number of the region’s leading retailers and learn more about the latest developments in Oman, Dubai and other important regional markets.
The line-up of speakers includes a host of notable names. Ray Hernan, Chief Executive of Aer Rianta International, will give his first industry address since he took up the top leadership role at the major regional operator. Other speakers will include Dr Khalfan Said Al Shueili, CEO of Oman Aviation Services and Chairman of Muscat Duty Free; Sheikh Aimen Ahmed Al Hosni, CEO of Oman Airports Management Co; Ramesh Cidambi, Chief Operating Officer of Dubai Duty Free; Isabel Zarza, CEO of Dufry Africa; Eugene Barry, Vice President Commercial of Dubai Airports; and Andrew Day, Group CEO of MMI and Emirates Leisure Retail. Commenting on the event location, MEADFA President Haitham Al Majali said: “With a rich and fascinating history, Oman has emerged as a thriving economy enjoying a truly impressive pace of development. We are delighted to be meeting here, and would like to thank Muscat Duty Free, our hosts, for allowing us this opportunity.”
Positive regional performance
At MEADFA’s press conference in Cannes, Al Majali outlined the positive performance of the region’s duty free and travel retail trade over the past few years. According to Generation Research, Middle East sales increased by 6.2% in 2018, reaching US$6.35 billion, compared to US$5.98 billion the previous year. Africa is also a “really promising” market, he said, increasing by 3.7% to reach US$816 million compared to US$787 million the previous year. “In our meeting last year we talked about the growing trend
in international tourist arrivals in the region and our hopes for 2019. Our hopes were met this year with a significant growth in both sales and international tourist arrivals,” he told journalists. According to UNWTO’s annual report, the Middle East showed solid results in terms of numbers. The region grew by 10% in terms of international tourist arrivals last year, reaching 64 million, compared to 58 million the previous year, while tourism spending growth reached US$73 billion compared to US$68 billion the previous year. Al Majali said that some destinations had achieved a robust rebound despite the political and diplomatic situation the region is facing. For instance, Lebanon and Jordan performed “really well” last year, he said. Egypt also rebounded substantially in sales and international arrivals, while Qatar is also showing steady growth in its performance. Africa is also showing a successful pattern of growth, he continued. Last year, the continent grew to 63 million international arrivals, while this year, it showed a similar percentage increase, reaching 67 million international arrivals. North Africa had led this growth and managed to implement a substantial recovery plan. Tunisia lifted negative travel advice and enjoyed an increase in visitor flows from European destinations, while Morocco showed prosperous growth. Likewise in Sub-Saharan Africa, Zimbabwe, Togo and Uganda showed positive performance, unlike South Africa, the most visited destination in the sub-region, which showed relatively moderate growth due to the drought crisis in Cape Town last year.
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Colm McLoughlin Q&A
King Colm by HIBAH NOOR
Gulf-Africa Duty Free sits down with Colm McLoughlin, Executive Vice Chairman and CEO of Dubai Duty Free, for an entertaining chat
olm McLoughlin needs no introduction. This dynamic Irish businessman recently celebrated 50 years in the duty free business and is the man credited with transforming Dubai Duty Free into a powerhouse airport retailer with a turnover of US$2.015 billion in 2018. In this fun and enlightening interview, the Executive Vice Chairman and CEO of Dubai Duty Free talks about his upbringing, his family, his work, his favorite food, and tries to sing his favorite song… Gulf-Africa Duty Free: Where were you born and raised? Colm McLoughlin: I was born and raised on the west coast of Ireland in a little town called Ballinasloe, County Galway. I lived there until I was 17 and we still have my mum and dad’s house there. I left and went to the UK. Did you know that Dubai Duty Free owns the Irish Village in Dubai, where there’s a pretend street, and the post office is Ballinasloe post office. [Laughs.] G-ADF: What motivates you? CM: I like people who work hard and honestly, I like honesty, I like good fun, I like activity, and I like seeing people progress. That motivates me. Getting good results from the things I do and seeing my children progress, and generally seeing progress from everything around me. G-ADF: What’s the best thing that’s happened to you recently? CM: I was recently given a Lifetime Achievement Award in Dubai for my contribution to commerce and tourism and the company I work for – the government of Dubai and Dubai Duty Free [Middle East Hospitality Awards, September 2019 - Ed]. I’m 20 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
McLoughlin is often seen at industry events, with his loving wife Breeda by his side
happy seeing the company progress, and being accoladed in many parts of the world. I’m very, very happy to see many members of our staff taking on other areas of responsibility and being successful. G-ADF: What would you choose as your last meal? CM: Irish stew. G-ADF: Who would make that, or would you go to a restaurant? CM: My wife Breeda would make it for me. If I go to a restaurant, I am a very simple eater and if it’s available, I would order something simple like shepherd’s pie or cottage pie, as you don’t have
Colm McLoughlin Q&A
to work at eating it – if you want to be lazy you can eat it with a fork in one hand. I like to finish my meal with a scoop of vanilla ice cream. I am not a fussy eater, I’m very simple. G-ADF: Favorite song? CM: Bing Crosby’s Christmas song. My favorite song that I like hearing people sing – I can’t sing but my wife can – is an Irish song called the Fields of Athenry. There’s a story behind this song: several hundred years ago, there was famine in Ireland. A man in charge of the Treasury in the UK government called Trevelyan bought some corn from America and it was being stored in a mill in a place in County Galway called Athenry. People were starving, and someone tried to steal some for their children and they were deported to America. [Tries to sing…] G-ADF: How would you rate your memory? CM: In a recent interview, someone asked me what my biggest fault was. To get a view from my colleagues I asked them, and one of the answers was that I have a memory like an elephant. That indicates to me that I have a good memory, and I think I have. G-ADF: What were you like in high school? CM: I was average. Any exam I passed I got honours. In Ireland you have the Leaving Certificate; you had to pass mathematics and the Irish language. You had to have a pass in at least five subjects, and I got honours in each of the five.
McLoughlin posing at The Irish Village in Dubai
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G-ADF: Were you ambitious? CM: When I finished school I went to London in the summer of that year. The plan was to save a bit of pocket money for the winter, but the family plan was for me to return to Ireland to study to become a dentist. I enjoyed working in London and stayed for eight years. I never returned to Ireland to study. I did a variety of jobs, one of which was joining McLoughlin’s ride to the Dubai Duty Free offices Woolworth’s as a trainee manager, but it was not as posh as it sounds. I worked in the stockroom, unpacked boxes, filled up the counters, and learned about the 32 departments. I stayed there for eight years – I became a Deputy General Manager at Woolworths, a Manager at Woolworth’s, and that’s when I went back to Ireland on holiday. I saw an advert for a job in the duty free business [at Shannon Airport] and got it. That’s how I got into the duty free business 50 years ago.
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Colm McLoughlin Q&A
G-ADF: Is there anything you would like to change about yourself? CM: I’d like to be three inches taller, I’d like to be stronger, I’d like to be better at golf, fitter. I smoke cigarettes and I have no intention of stopping but I wish I’d never started. I started years ago – I’m 76 now, so I was about 20.
Colm and Breeda McLoughlin with the Irish Ambassador to the UAE Aidan Cronin and his family at The Irish Village
G-ADF: What do you think about when you’re alone in the car? CM: First of all, I concentrate on the driving. I will be thinking of all sorts of things – the horrible game of golf I just played, the good game of golf I just played, where I’m going that evening, what I have to say and do. I’ll be thinking about my work and leisure. G-ADF: Do you have any deep thoughts, or any regrets? CM: I really don’t have any regrets about what I’ve done, or in my work. I’m very happy with my life to date, and of course I’m only halfway through it. [Laughs.]
G-ADF: What would surprise me to know about you? CM: I don’t think I can answer that. I think I’m a very normal person, a very modest person. I’m sure that people would think I’m an expert on wine or whiskies but I haven’t drunk a glass of whisky for 20 or 30 years. I just drink beer. I’ve had one glass of Champagne in the last month. I have no big secret that people would be surprised by.
G-ADF: If you wanted to know the absolute truth to one question, what would it be? CM: I would like to know how long I’m going to live, how long I was going to stay healthy. I’d like to know what I’d have to do to ensure that at the age of 95 I’d be able to peg off. So I’d like a forecast of my health. I’d like to know the future of my children – one boy and two girls – and the future of my two grandchildren – one is 13 and her brother is eight. I’d like to know what’s ahead in life for them. But I don’t think I would change anything.
G-ADF: When you moved to Dubai, did you have a culture shock? CM: I’d prepared for it – I read about it. I was surprised about how small it was. I was surprised at how little people knew about it – some had never heard of it and didn’t know where it was. I was amazed at how hot it was – the first time I went there was 15 July, 1983. I was surprised at how positive everyone was there, the plans they had, and it was that attitude that made me want to stay there. I thought the place was very ordered. Referring to what we talked about earlier, about regrets, I regret I didn’t make a great effort to learn Arabic. If I were born again, that would be the top of my list. I kind of think it’s too late to bother now, but I would encourage people to do that. The positiveness I experienced at the very beginning I was not wrong about because the story of Dubai is absolutely amazing. The population has grown from 200,000 people to 3.2 million and traffic at the airport has grown from 3 million to 89 million. Dubai Duty Free business has grown from US$20 million in the first year to US$2 billion. G-ADF: What in the world would you like to change? CM: Terrorism is a terrible thing – you read about things and wonder why big, powerful countries don’t stamp out these groups all over the world.
24 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
McLoughlin accepting the Lifetime Achievement Award during Middle East Hospitality Awards
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Iraq Duty Free
Here’s a look at the renovated Iraqi Airways Departures terminal where Iraq Duty Free saw a 20% sales upswing over last year’s first semester
Ahmed Kamal, CEO, Iraq Duty Free Iraq Duty Free Ascelebrates the opening of more worldclass stores, he reveals the retailer’s makes the grade plans for operations at a fourth airport
I Ahmed Kamal, CEO, Iraq Duty Free
26 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
raq Duty Free is continuing its airport store renovation program across the country as it prepares for the opening of a brand new airport and, with it, two new duty free shops. Currently, Iraq Duty Free operates in three airports, at Baghdad, Basra and Sulaimaniyah. In 2018, the retailer received a 10-year extension of its contract to operate within any airport in Iraq. Additionally, Iraq Duty Free is confirmed as the sole operator in any discussion for opening a duty free shop in Iraq’s airports. This contract extension provided the impetus for the company to completely renovate and reconfigure its shops in Baghdad Airport’s three terminals, where the retailer is experiencing double-digit sales growth. In an exclusive interview, Ahmed Kamal, CEO of Iraq Duty Free, tells Gulf-Africa Duty Free that operations in a fourth airport are on the horizon. Kirkuk International Airport is scheduled to open fully for domestic and international flights in
the end of the second quarter in 2020. In the Arrivals terminal, Iraq Duty Free will operate a 190 square meter store, while in the Departures terminal it will have a 230 square meter shop. Both outlets will begin trading once the airport is fully operational. Kirkuk Airport, located south of the multi-ethnic province of Kirkuk, had been registered as an international airport since 1957, but in 2003 it was used by the US forces as a military base. Towards the end of 2017, the Iraqi government decided to convert it to a civilian airport again and started a project to renovate and expand the facility. The airport has a similar design to Baghdad International Airport and was officially inaugurated in September 2018. Described by Kamal as “fully-fledged” duty free stores, the Kirkuk shops will feature all of the traditional product categories and adopt the same image as the stores in Baghdad, Basra and other airports in which it operates.
Ease of purchase
As projected by the Aviation Authority and Ministry of Transportation, the location of the brand new airport and the new duty free stores will offer easy and efficient accessibility for visitors and full capitalization of the region. “This will give us an extra boost in business, as the airport will be a brand new airport for Iraq in a new location, and thanks to the oil exploration sector, will be a highly frequented destination,” states Kamal. With these two new facilities, Iraq Duty Free will have a total of nine points of sale within the existing and new Iraqi airports. Meanwhile, in the International Airlines Terminal in Baghdad International Airport, a new Arrivals duty free store is scheduled
to open by November 15, 2019 and a revamped Departures shop is set to be operational by the end of March next year, which will result in all Baghdad duty free shops being fully renovated. The Arrivals shop size will be increased from 95 square meters to 135 square meters, while the Departures shop will stay at its current size of 510 square meters. The operator does not expect an increase in the number of passengers, but the alignment of the brands, along with the clear distribution of each category, is set to provide travelers with better access and ease of purchase, resulting in an upswing in revenue, says Kamal. At Basrah International Airport, a new Arrivals store is scheduled to start trading by the end of Q1, 2020, as well as a new Departures shop, located inside the new Emirates Airline Terminal, which will open at the same time. The new Arrivals shop will increase in size from the existing 20 square meters to the new location with 85 square meters, and the new Departures shop at the Emirates Airline dedicated terminal will cover 36 square meters. Regarding the store renovations and the opening of the new duty free stores in June 2020 in Kirkuk, Iraq Duty Free is proud to have the support of General Ali Khalil, Civil Aviation Director. Kamal notes: “All the achievements, renovations and expansions will not take place without the continuous support granted to Iraq Duty Free by Civil Aviation Deputy General, Mr. Ali Taqi and his trust that the results are projecting the new image of Iraq to its travelers. This is being achieved through the renovation and new look of Iraq Duty Free’s shops, elevating the shops’ image to the status of international duty free operators in the world and the region.”
www.dutyfreemag.com GULF-AFRICA DUTY FREE & TRAVEL RETAILING
SHOW 2019 Trinity Forum
STOPPER A successful Trinity Forum unfolded in Doha last month with key delegates in attendance
Snapshots from last month’s Trinity Forum held in Doha, hosted by Qatar Airways, Hamad International Airport and Qatar Duty Free PICTURES COURTESY OF THE MOODIE DAVITT REPORT
28 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
undreds of airport and retail industry leaders from around the world gathered in Doha for the 2019 Trinity Forum, which is jointly hosted by Qatar Airways, Hamad International Airport (HIA), and Qatar Duty Free (QDF) under the patronage of His Excellency Mr. Jassim Saif Ahmed Al-Sulaiti, Minister of Transport and Communications of the State of Qatar. Every year the event is organized by The Moodie Davitt Report, Airports Council International (ACI) and ACI AsiaPacific, the Trinity Forum explores how airports, concessionaires and brands can work together for the benefit of consumers. This year’s edition – a two-day event held at the St. Regis Doha – marks the first time the conference is hosted in Qatar and cohosted by an airline carrier. Qatar Airways Group Chief Executive, His Excellency Mr. Akbar Al Baker, welcomed guests at the opening ceremony.
During his speech, he noted the importance of innovation and creativity within the airport retail industry. H.E. Mr. Akbar Al Baker says: “The retail environment at airports plays an important part in a passenger’s journey, and the Qatar Airways Group is unique in the industry in its ability to manage and deliver an outstanding customer experience across all touch points through our own trinity of airline, airport and retailer. Together, we are able to implement next generation ideas and enhancements. As we expand HIA, it is even more important to provide an airport experience like never before to our passengers. To do this, we will be looking to continue our longstanding relationships with existing partners, as well as introducing new ones. The 2019 Trinity Forum provides a great opportunity to foster new partnerships.”
www.dutyfreemag.com GULF-AFRICA DUTY FREE & TRAVEL RETAILING
Prestige Supplies Inc
Prestige Supplies presses ahead
In this 3D image, Laotian interior design will feature prominently inside the new 11,000 square feet store at Friendship Bridge in Laos
Duty free operator Prestige Supplies Inc reveals its upcoming projects – not least of which is the opening of a new airport shop in Mongolia and an impressive border store in Laos by HIBAH NOOR
restige Supplies Inc, the fast-growing retailer in emerging markets, has been working on plenty of projects since the beginning of this year as it gets set to open at several airport and downtown locations. In a major development, the Dubaibased company is opening a shop in the new international airport in Ulaanbaatar, Mongolia’s capital. The new facility, which is a Japanese construction project, is an exciting prospect, because the company
An interior image of KS Oriental Duty Free Shop, located at Friendship Bridge, Thakhek District, Khammuan Province, Laos
30 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
will be one of the major concessionaires when the airport becomes operational next year. Its suppliers are also looking forward to the opening, according to Tania D’Souza, General Operations & Marketing Manager, Oriental Group. “We’re excited to present this new project to our suppliers of liquor, tobacco, perfumes, cosmetics and confectionery. It’s a great opportunity to showcase their brands at the new airport since it’s a larger space than the old airport. The old airport had seven or eight concessions and they’ve reduced the number of concessions in the new airport and we’re one of them. We’ve talked to them about good brand visibility, so the brand owners are pleased with the upcoming project and are ready to support us. The new shop will be opening in mid-2020. A grand opening will be on the cards.” D’Souza notes that Prestige Duty Free gets good support from the Mongolian government, and Mongolia’s Prime Minister has visited its shop on the Russian side of the border. “We get a lot of support and we’re very grateful,” she says, adding: “We expect good sales on the Russia/Mongolia
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Prestige Supplies Inc
This 3D image captures the liquor department at the new duty free store in Khammuan Province, Laos
border side, as we can accept Mongolian currency.” Also in Mongolia, Prestige Supplies Inc will open a new store in the Zamyn Uud Economic Free Zone on the border with China that will open around June 2020. It is located in Dornogovi Province in southeastern Mongolia.
New Laos border store
Aside from Mongolia, Prestige Supplies is on track to open a new duty free store in Laos on the border with Thailand at the end of this year. It’s a big outlet, covering 11,000 square feet, and has a café/ restaurant inside. “We’re finishing the
interior now and aim for December this year,” reveals D’Souza. The name of the duty free store is KS Oriental Duty Free Shop and it’s located at Friendship Bridge, Thakhek District, Khammuan Province, Laos. The store is bordered with Nakhon Phanom, Thailand. The shop is still under construction and will carry all product categories (liquor, tobacco, perfumes and cosmetics and confectionery) as well as international brands. The company will partner with a local Thai café that will operate inside the duty free store. In separate corporate news, Prestige Supplies has announced that Jude Kumar,
The new Laos duty free store on the border with Thailand, which will feature a cafe operated by a local Thai partner
32 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
who was Head Buyer for perfumes and cosmetics, confectionery, fashion and other categories at Prestige Supplies, is becoming Head of Procurement for all categories. Lukas Coates, who was Head Buyer for spirits and tobacco, is leaving the company after 17 years. During the TFWA World Exhibition in October, the company introduced Kumar to all its suppliers to make the transition smooth. Kumar, who is based in Ho Chi Minh City, Vietnam, has served in the company for two years and has worked in the travel retail industry for 20 years. He was previously a buyer for Muscat Duty Free and Qatar Duty Free.
t’s been an incredible four years for Retail inMotion, the inflight retailer. Not only has the company bagged 14 world-class retail clients (with over 40 technology clients) but it has also created a ground-breaking lifestyle-led retail proposition for Etihad Airways. In an interview with Gulf-Africa Duty Free, Andrea Fiore, Head of Global Sales, Retail inMotion, tells the story of how it all began. The company is based in Dublin because its original client is Irish low-cost carrier Ryanair. “Our original founder had a great idea to get into inflight retail space and we started with retail products – food and beverage, which we call buyon-board. From that work with Ryanair, we started building a fully-proprietary end-to-end technology platform called Vector for clients – American Airlines became our first technology client – we have over 40 now”, Fiore enthuses. The platform was so successful that LSG Group bought the business and said ‘let’s take this to the world’. Since then, Retail inMotion has taken its technol-
Inflight retail specialist Retail inMotion believes it has come up with a winning formula for shopping in the sky by HIBAH NOOR
ogy and inflight retail know-how to various continents. The firm’s first fully-outsourced inflight retail program was for German Turkish carrier SunExpress, followed by Germany’s Eurowings and VivaAerobus in Mexico. It then landed retail contracts with Spirit, Edelweiss, LATAM, the largest carrier in Latin America, and IAG-owned Aer Lingus. Also joined the fast-growing roster of retail clients. Then came SWISS International (out of Geneva), UAE-based Etihad Airways, soon to be followed by Hong Kong flag carrier Cathay Pacific Airways – to be launched in February 2020. The result is a business that’s grown from revenues of US$20 million to over US$200 million annually in just four years, with offices in over 12 countries. It’s based on a full outsource model in which Retail inMotion runs programs for the airlines and then pays back to the airline a certain percentage of turnover or profit. Technology clients pay license fees only.
Etihad had historically run its inflight program in-house but put the business out to tender two years ago. Two rounds of tenders followed and Retail inMotion finally clinched the contract in April 2018. In November 2018, Retail inMotion took over with Etihad’s Boutique program, which offers fragrances, watches, jewellery, accessories and other boutique & duty items. This was all about introducing new products, developing exclusivities, working with suppliers – and, crucially, driving innovation through its own technology platform. After introducing the “Sweet or Salty” buy-on-
34 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
board F&B program to Etihad six months later, and having initially maintained the previous generic boutique format, Retail inMotion proposed a move to a branded lifestyle proposition. The idea was born after Retail inMotion conducted market research in Abu Dhabi, Dubai and London with frequent travelers, which showed that passengers love brands, and want ease of shopping & transaction, as well as competitive pricing. Under the new Vibe lifestyle brand, Etihad will be able to leverage a variety of additional channels, including “virtual inventory”, which will enable Etihad to sell tickets to events, museums, tourist attractions and other destination-based content. 2020 will also see the launch of a pre-order program, home delivery, and e-commerce – to keep driving the Etihad customer proposition of “choice”. “Vibe is not an inflight catalogue – it will become a multi-channel lifestyle shopping platform or channel,” says Fiore. “Our reference point wasn’t the current inflight magazines – our research showed passengers are weary of the traditional product, product, product catalogue format. Our point of reference are the muchloved Vogue, Red, Glamour for editorial presentation and Ikea, ASOS for lifestyledriven shopping layouts. In conjunction with market-leading publishing house Identity and Etihad, we have developed a consumer-driven, marketing-driven and editorially-driven lifestyle shopping guide. It provides great content to engage passengers on a different level - on the back of that content, we will sell product that becomes more relevant, more topical and more aspirational to the guest. Having conducted a market audit, it’s the first in the market.” The aim is to replicate this brand-led approach on other carriers. In a tough and competitive industry, this new style of lifestyle shopping guide could be just the ticket.
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Some consumers will probably be ordering products on their way to catch their flight, and retailers will have to adapt to that
Generation Z to Generation A A
Leanne Nutter, Head of Client Services at Blackjack Promotions
Leanne Nutter, Head of Client Services at Blackjack Promotions, shares her insight on what different generations expect from retailers and what this might mean for travel retailing 36 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
ccording to an influential study on travel retail conducted by Boston Consulting Group (BCG) on behalf of the Tax Free World Association (TFWA), by 2020, Millennials (those born between 1980 and 1994), also referred to as Generation Y, will account for 46% of business trip spending in the US, an 11% rise from 2013. Meanwhile, says BCG, Baby Boomers and members of Generation X will be retiring and spending more time traveling. A recent presentation by leading operator Dufry identified Millennials as “hyper-connected consumers with increasing purchasing power who shop at all times and on the go.” The dominance of Millennials as traveling consumers has already impacted communications channels used by brands and retailers to engage them, Dufry adds. Millennials are experience-driven and extremely digitally savvy. While traveling, 97% of them use social media and 75% post to social networks at least once a day. And a new report from e-commerce specialists Attraqt, entitled Luxury Retail’s Digital Dilemma: How To Inject The ‘Wow’ Into ‘Buy Now’, suggests that “91% of Millennial and Gen X shoppers are willing to shop around before hitting the buy button. This means that luxury brands striving for traditional brand loyalty find it increasingly difficult amongst this demographic.” But what about the next generation? Gen Z are those born from the mid-1990s, who have never known life without the internet, many of whom are now coming of age and becoming consumers and travelers. To say Gen Z are tech savvy is underplaying it; they are digitally connected to everything. With a smartphone always at their fingertips, they know what they want, and they are extremely knowledgeable. They want to know your
brand story; being authentic and real is important to them, they won’t be mis-sold. A recent article on CMO.com quotes figures from a Bloomberg analysis of UN data, which indicates that Gen Z will be the world’s largest group of consumers by 2020, accounting for 32% of the world’s population, compared with Millennials on 31.5%. Gen Z consumers, even more than Millennials, value experience over physical things. They are also switched on to global issues, such as our impact on the environment. While Extinction Rebellion activists might refuse to fly, there are plenty of other Gen Z individuals who are aware of the impact air travel has on the environment, but rather than eschewing it completely are looking to offset the impact in other ways in an attempt to make their travel more sustainable. The travel retail industry will no doubt see increasing pressure from Gen Z consumers to provide products that are ethically produced, with a reduction in packaging waste. If travel retail outlets and brands want to connect with this generation, they need to be offering relevance and exclusivity, which means savvy data use to tailor-make product ranges and retail displays appealing to Gen Z travelers. If Millennials started the trend of prioritizing experience, if you want to have any chance of reaching Gen Z in airports, products need to be wrapped in a real experience that is optimized for social sharing. We aren’t just talking photo opportunities; augmented reality needs to be incorporated; trying on a lipstick or even an outfit and sharing this online will be commonplace. Every campaign should have a digital dimension. Brand messages need to be seen before the point of purchase; the customer journey with the brand will always need a social aspect, as this is how they initially connect, research and learn. Everything has got to be connected in-store. All the marketing and brand material should have barcodes and be optimized for The rise of the robot doesn’t mean an end to shop assistants and brand ambassadors
38 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
image recognition, so all people have to do is scan a leaflet, a poster or the packaging to be taken to the relevant website. We may start to see each individual product has its own landing page or even a dynamically built mini-site specifically for the individual consumer, creating hyper-relevance. Most of us have got used to the idea of tap-and-go with our bank cards and our phones; but Gen Z will expect to be able to pay for just about anything via Apple Pay or WeChat Pay or – and this is particularly important for the Chinese market – Alipay. There is also a growing demand for stores to allow people to browse on their mobiles, buy using m-commerce and then pick things up at the airport duty free stores. Retailers and brands will have to adapt to that as some consumers will probably be ordering things on their way to catch their flight! Then there is the rise of the robot and the checkout-free store. That doesn’t mean an end to shop assistants and brand ambassadors, though. The human element of face-to-face marketing is more important than ever, but as the expectation for rapid recognition increases, in-store brand ambassadors will need to emulate the brand’s values and be instantly recognizable. Gen Z consumers seek aspirational role models, positive reinforcement and connection with others. There is scope for brand ambassadors in-store to reflect social media influencers; this may affect the way we recruit and train staff at our sites. And what about the generation that’s going to succeed Gen Z, who are being born right now (like my kids!). Some marketers are already calling them Gen A. We probably don’t need to worry too much about Gen A in the short term, as the oldest of them is around seven; but imagine what the world of airports and retail will look like when they’re coming of age around 2040. Electric powered planes? A world ban on single use plastic packaging? Now there’s a real challenge.
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Hamila Duty Free
Hamila Duty Free flexes its muscles in new operation Hamila Duty Free has unveiled its latest significant opening – Melloula Duty Free – the first border duty free shop in Tunisia and North Africa by HIBAH NOOR
A shot of the exterior of the new Melloula Duty Free store
A golden plaque with a Tunisian flag marks the opening of Melloula Duty Free on July 17, 2019
40 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
amila Duty Free recently inaugurated Melloula Duty Free, a border store located between Tunisia and Algeria. The store officially opened July 17 and Mr Tarek Hamila, a well-renowned businessman with a thriving duty free operation, was in attendance. The inauguration ceremony was also graced by the presence of His Excellency, the Prime Minister Mr Youssef Chahed, together with the Minister of Transport, Mr Hichem Ben Ahmed, and the Minister of Tourism, Mr René Trabelsi. Speeches were made by Mr Tarek Hamila, Mr Laroussi Sfar, General Manager, Melloula Duty Free, and Youssef Chahed, the Prime Minister. Melloula Duty Free is a border shop located on the Tunisian/Algerian border, less than 20 minutes’ drive from the famous tourist village of Tabarka, known for its Jazz Festival, beautiful landscape, magnificent beaches and vacation resorts. The new operation is important because it is the first border duty free shop in Tunisia and North Africa.
Melloula Duty Free’s opening ceremony took place on July 17 in the presence of Mr Youssef Chahed, Prime Minister of Tunisia, and Mr Tarek Hamila, CEO, YKH Holding
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www.dutyfreemag.com GULF-AFRICA DUTY FREE & TRAVEL RETAILING
Hamila Duty Free
Important border location
Melloula Duty Free is a 2,000 square meter commercial complex designed to fulfil the specific needs of border passengers. The complex has many facilities, including a 500 square meter duty free shop, where alcohol, cigarettes, wines, tobacco, perfumes, cosmetics and confectionery are available at very competitive prices. Also part of the complex is a restaurant and coffee shop offering a very wide range of snacks and hot meals; a rest and fun area; and a number of other facilities, such as rest rooms and praying rooms. The terminal of Melloula is the biggest border location between Algeria and Tunisia, welcoming 2.5 million passengers annually, of whom 70% are Algerian. Melloula Duty Free is a significant addition to the terminal, as it is the first border duty free shop in Tunisia and the whole of North Africa. Hamila Duty Free was awarded a 10-year concession to build and manage the duty free shops and restaurants in this area. The commercial complex was built in less than six months and opened its doors officially on July 17. Melloula Duty Free employs 60 staff, most of whom come from the region of Tabarka. “We think that this project will create a new dynamic in the region of Tabarka and motivate business opportunities between Tunisia and Algeria,” says Mr Laroussi Sfar, General Manager, Melloula Duty Free. “It is also an open door for local suppliers to promote their products, especially artisanal products, and promote them in the Algerian market, as our duty free shop will be their promotional window,” he tells Gulf-Africa Duty Free magazine in an exclusive interview.
From left to right: Mr Tarek Hamila, CEO, YKH Holding; Mr René Trabelsi, Minister of Transport; and Mr Laroussi Sfar, CEO Hamila Duty Free and Melloula Duty Free
Mr Ali Marmouri, Governor of Jendouba (where Melloula is located); Mr Youssef Chahed, Prime Minister of Tunisia; Mr Hichem Ben Ahmed, Minister of Transport; and Mr René Trabelsi, Minister of Tourism
Duty free leader in Africa
With an expertise spanning more than 30 years, Hamila Duty Free is one of the leading African duty free retailers. In its many stores, the travel retail specialist carries a wide range of premium products ranging from fragrances to cosmetics through designer clothing, jewelry, accessories, leather goods, wines and spirits. Hamila Duty Free has a successful sales operation onboard the flights of the Tunisian airlines, Tunisair, Tunisair Express, Nouvelair and Jasmin Airlines, the ferry boats of the Tunisian Navigation Company, as well as the duty free shops at all the Tunisian airports in partnership with the international operators ATU and Gebr Heinemann.
Melloula Duty Free is a 2,000 square meter commercial complex designed to fulfil the specific needs of border passengers
42 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2019
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Beaute Luxe Duty Free
Africa A new distribution company founded by industry veteran David Dayan aims to put the African continent on the map when it comes to selling luxury brands
very year, David Dayan heads to the MEADFA Conference to meet his business partners and customers. And this year, he is brimming with optimism about the new-found relevance of this event, as he’ll be promoting his new venture to distribute luxury brands in Africa. Earlier this year, the travel retail veteran formed Beaute Luxe Duty Free in Jebel Ali Free Zone in Dubai specializing in the distribution of luxury brands in perfumes and cosmetics exclusively dedicated to selective distribution on the African continent. Dayan has more than 30 years of experience in establishing travel retail brands such as Lacoste, Rituals and Nuxe through Duty Free Development Consulting and Immediat Boarding Consulting. His new venture covers the entire African travel retail market (airports, seaports, border shops, downtown duty free and diplomatic stores). He recently returned from the TFWA World Exhibition in October, where he received excellent feedback. “The MEADFA Conference is for us an opportunity to meet our partners and customers, as every year,” he tells Gulf-Africa Duty Free. “This year we will be happy to announce to them that the TFWA World Exhibition in Cannes was a real success and confirmed that we are heading in the right direction.”
Dayan, who is CEO of the new firm, understands that each perfume and cosmetics brand has high expectations on the African continent and is looking for the right partner with increased knowledge of the travel retail sector and a solid infrastructure across the continent. During his meetings at Cannes in October, he thinks his company has largely met their expectations in terms of commercial development, marketing, merchandising and communication, and he is on track to announce many new collaborations with major players in the sector very soon. In addition to these exciting collaborations, Beaute Luxe Duty Free’s brand portfolio will expand into fashion and accessories, as Dayan explains. “Accessories and sunglasses are fast-growing categories, especially in travel retail. The potential for Africa is strong and mainly untapped. It is a category that we know well, so we naturally presented our project to the main players who were very pleased and interested. The fashion and accessories category will be a clear asset in helping us in the development of travel retail in African airports and to offer a wider range of products to travelers,” he enthuses. Dayan’s team will also continue to grow thanks to these new partnerships. Strong investments have already been
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David Dayan, CEO of Beaute Luxe Duty Free
made in the sales staff, who are specialists in the various product categories, and beauty advisors, to ensure high standards across its retail operations. He also has big ambitions for the future. “We will continue to invest in communication at the points of sale with all our partners. We want to create airport events such as shows created by make-up artists that will allow passengers to learn the secrets of successful make-up. We also want to create ‘pop-up skincare’ for our partner brands and our cosmeticians, who will provide passenger skincare routines in a few minutes.” The company’s future investments will also focus on digital marketing, which is key today and very important for the passengers and operators in Africa. “All these activities will allow passengers to enjoy a unique airport experience,” promises Dayan.
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Shazé is one of India’s leading brands, present in more than 35+ locations in all the country’s top shopping malls and top thirteen airports
Shazé shines in travel retail
here’s a bold new lifestyle brand on the block with big plans to expand in the duty free market. Shazé is a luxury lifestyle brand with a focus on all the product categories, spanning jewelry, watches, men’s and women’s accessories, fragrances and their recently launched exclusive luxury hosting collection. Shazé - which strictly subscribes and adheres, the tagline Shine by Design - is one of India’s leading brands, present in more than 35+ locations in all the country’s top shopping malls and top thirteen airports. Every year since 2014, it has won awards for being the best brand focused on design, according to Zain Alvi, Head of International Business, Shazé. “We have been awarded the Extraordinaire Brand for 2018 and our recently launched Luxury Hosting collection had one product bagging the Best Design Product a few weeks before,” he tells Gulf-Africa Duty Free. The world of luxury is moving towards experiences, and in line with this trend, Shazé is focused on creating products that create unique experiences. These elegantly designed, ultra-modern statement pieces have bold silhouettes. The collection targets elite customers, aiming to deliver theatrical magic through their form, function, features and finish. Alvi believes Shazé has potential in
Indian luxury lifestyle brand Shazé is getting set to bring its dramatic designs to MEADFA and beyond
the Middle Eastern duty free market. “The Middle East market is quite near to international standards of growth for personal luxury goods. Dubai remains one of the world’s top luxury destinations for Middle Eastern consumers, as well as for Chinese and European visitors. In the travel market, this trend shows no signs of slowing down. Both Saudi Arabia and the UAE are expected to witness a significant increase in sales over the next few years. It is therefore clear that the future of the luxury industry is very bright in the Middle East, despite hurdles which are short-term. Yes, younger consumers and digital disruption will continue to affect brands, but for those brands who are willing to accept disruption, adapt and respond, the prospects are very positive, an area where Shazé excels and consistently challenges itself.” Alvi also sees great potential in the markets of Asia Pacific, Russia, Europe, and the UK for long-term, sustainable growth.
As Shazé gears up for growth in the Middle East and beyond, the company has decided to showcase its brand during the MEADFA Conference, where it is a Gold Sponsor. “Shazé has already been successful in the travel retail industry, with lifestyle luxury products, presence
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across locations and platforms through good partnerships with companies such as Flamingo, GMR and others in India. As we expand internationally, and with the Middle East being one of our key target regions, MEADFA offers us a unique platform to showcase our brand and serious intent to the key players of the Middle East duty free market ecosystem. We look forward to discussing and exploring partnership opportunities and creation of a long-term win-win relationship.” Product-wise, Shazé recently launched its new Hosting Collection of barware and brew ware, and luxury watches designed by one of the globally well-known international design expert Seymour Powell, based in the UK, focused on creation of astutely crafted products. Also new are the Switch Collection of jewelry; the AERO Collection of luxury designer watches for men and women; and new cufflink collections, featuring different representations on both sides, with drama and flamboyance. In a few months, the company will launch a new collection of luxury hosting ware as well as perfumes in early 2020, so there’s plenty of action to come for this ambitious brand. And let’s not forget its glamorous sponsorship of the Vogue India Beauty Awards in September 2019. Today Bollywood, tomorrow the world.
Formawell Beauty says it wanted to reach every woman in the world and having Kendall Jenner as its face was a perfect choice
by storm Formawell Beauty’s pioneering CEO Emil Hakim explains how his company is set to make waves in the beauty industry by HIBAH NOOR
mil Hakim, the CEO of Formawell Beauty, has an ambitious vision – to revolutionize the beauty industry with a truly unique offering. The California-based company specializes in professionalgrade haircare and skincare. All the products are one-ofa-kind and designed to hit the beauty industry by storm. Formawell Beauty is embarking on its bold mission with a line of hair styling tools endorsed by one of the planet’s most famous faces – supermodel Kendall Jenner, who has no less than 116 million followers on Instagram. Formawell Beauty introduced the styling tools in Emil Hakim, the CEO April 2019 and has already attracted a lot of interest of Formawell Beauty in the travel retail industry. The Ionic-Gold Fusion range, which includes a straightener, curling iron and blowdryer, was showcased at the TFWA World Exhibition in October 2019, where this dynamic CEO tells Gulf-Africa Duty Free how he intends to go about bringing a retail revolution to the duty free shelves. Hakim and his experienced team have more than 30 years of experience in the beauty business, bringing cuttingedge Japanese hair-straightening technology and the first ionic hairdryer to the market for the first time over those years. They started to build Formawell Beauty in 2013 to bring something
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novel to the market, as Hakim explains. “Formawell is a name with a story and a reason. It’s a mix between English and Italian, meaning we can form you well. The idea is to be unique and a brand with something no one else has.” Hakim understands that the competition is super-hot in the beauty industry, but he believes that with its never-before-seen product lines, Formawell Beauty will blow its competitors out of the water. “We’ve come up with a brand in a short period of time and we have enough equity to be the leader in the industry. Companies like L’Oréal, Estée Lauder and Paul Mitchell all play in the same court and compete – and competition is huge in this industry. I like to create my own world and my own court and run by myself. It will take people time to run with me in my court. We compare ourselves to penicillin in the pharmaceutical industry – the whole industry flipped because something new came and changed it. Also, Nike was not a big brand but it brought something unique – the Air sole – and became the biggest sportswear company in the world.” He continues: “Our focus is to be number one – we like to be number one and not to compete with anybody. We have the equity and the materials to be unique and different with products introduced for the first time in history.”
Three keys to success
The haircare line is so new because it was developed to benefit the hair, which Hakim believes is different from the current offerings in the market. To maintain the hair in beautiful condition, all the products work from the outside, incorporating healthy, natural, chemical-free ingredients. Other products, he argues, offer a temporary solution and can have side effects. Hakim cites the example of formaldehyde, which mummifies the hair. In direct contrast, Formawell aims to bring the hair back to life with its specially developed formula that benefits the hair with continued use. “This has never happened before in history,” he states. None of the products contain sodium chloride or silicone, another quick-fix solution that Hakim says does not produce a long-lasting effect. So how is Formawell going to outsmart the big guys? Well, it centers on a product proposition that highlights quality, combined with a focus on affordability for everyone, and is endorsed by a celebrity supermodel. Hakim believes these three elements are the keys to success.
Formawell Beauty introduced its hair styling tools in April 2019 and has already attracted a lot of interest in the travel retail industry
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Why did Formawell choose Kendall Jenner to be the face of the haircare line? Hakim’s reasons are clear: “We want to reach every woman in world, and there’s no better person than Kendall Jenner. Every generation of women knows her. She has the strongest name in the industry with 116 million followers on Instagram.” The latter factor is important, as Formawell wants to move from old retail business model to the new millennial- and Generation Z-friendly business of online promotion and social media influencers’ involvement in the industry. A crucial factor is affordability. Hakim gives the example of IBM, who disrupted the computer industry in the 1970s to make computers affordable in every household for everyone. To attain the best price in the market, Formawell Beauty has reduced the number of distributors. Another important factor is the high-end gift box packaging, signalling that this is a luxurious brand. Turning to his travel retail ambitions, Hakim states his mission: “Our main target is to be in every single airport and to give maximum exposure to duty free shops in airports and airlines.” Formawell is currently working on opening a door at Amsterdam Schiphol, an important hub for the company. Backed by a heavy marketing plan, Formawell is going all out to dominate the Asian market, believing the product will do well because of the overall growth of the brand and also because of Kendall Jenner’s connection to Los Angeles, a magnet for many Asian tourists. In addition to haircare, Formawell Beauty offers a full line of skincare. The company previewed this collection in April 2019 at the Cosmoprof trade fair and will introduce the products to the market at the beginning of 2020. Like the haircare line, the skincare products are patented, making them unique. Both lines are made in California, US, where the company is based. The skincare formula contains natural active bee venom ingredients, using the highest concentration of bee venom on the market. Hakim is confident of success for both product categories. “There’s no success without a vision or a dream. We’ve built the brand to compete with the established industry players. We’ve succeeded in reaching every country with our skincare and haircare products that have a benefit in their formulations and offer an unbelievable result.”
We wish your throat travels smooth and easy.
The Chupa Chups backpack range gets new characters this year
PVM comes through with flying colors Buoyed by its colorful and fun confectionery assortment, Perfetti Van Melle is boosting its market share in the Middle East market
erfetti Van Melle (PVM) boasts a wide presence in the Gulf region. The confectionery company’s colorful products are listed at all airport and border stores across the Middle East, where its main focus is optimizing the assortment and increasing in-store visibility. Business all over the region is stable versus last year up to September 2019, according to Rolf de Hoogh, Area Manager Global Travel Retail, PVM. However, the company expects to exceed its 2018 result by the end of the year. In 2018, PVM was the second fastest-growing company in percentage growth terms in the Middle East and it boosted its market share. de Hooghe puts this success in the region down to its high-visibility approach in-store with the great tools it employs to display the brand’s colorful and playful items. “Currently we have a big visibility project going on at Dubai Duty Free, that will hopefully be realized by the end of the year,” he reveals, adding that it was a major step forward in its partnership with number one operator in the region. Another factor in PVM’s success is that travelers can find PVM items at many touchpoints inside the store: the brand offers kids’ items that can be placed either in the regular duty free stores on-shelf, personalized display/gondolas/wall bays, or in the kids’ stores/section. The sugar-free Mentos Gums and Mints can be found at the cash till area for direct consumption/instant refreshment.
Pouch bags under pressure
de Hoogh acknowledges that there are challenges in the Gulf region, citing
regional geopolitical instability and hand luggage weight restrictions, which is putting pouch bags and other volume concepts under pressure. He says the best-selling products in the region are its Chupa Chups Mega Chups Lollipops and Back Pack in the kids’ segment. Within the impulse/cash till section he observes some “great” performances for the Mentos gums and mints.
PVM is seeing some changes in consumer behavior in the region. “We do see that the impulse segment is getting bigger and that retailers are looking at some best practices from the domestic markets and implementing this in duty free. This was an underestimated sense of place and retailers do recognize the potential of it, which also fulfils the needs of consumers nowadays,” says de Hoogh.
The Fruittella Jumbostick contains eight single sticks of the strawberry flavor and focuses on families with children
A new brand joins PVM portfolio PVM returned to the TFWA World Exhibition this year with an array of new products and a new brand: Fruittella. Fruittella is a sharing candy made with only natural flavors, natural colorings and real fruit juices. The Fruittella Jumbostick contains eight single sticks of the strawberry flavor and focuses on families with children aged 4-12. New launches for its Chupa Chups range are the Chupa Chups Funny Friends – eight mini lollipops in fox, duck and dog plush pouches. Aimed at the gifting sector and the cash till point, the Funny Friends are due to launch worldwide in March 2020. Two new characters join PVM’s popular Chupa Chups Backpack range. The tiger and panda plush backpacks feature 16 fruit lollipops and are now available in travel retail. Additionally, PVM recently gained the Snoopy license for its line of Chupa Chups markers. The Snoopy Marker Pack contains seven fruit lollipops, eight markers and a booklet and will be available in travel retail from March 2020. Also new is the Chupa Chups Cash Till Box targeted at young adults, which contains six assorted fruit lollipops and was created for the cash till point. The Mentos brand has also been expanded with the Mentos 2H Clean Breath. The practical and thin format of the tin makes it convenient for on-thego consumption.
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One pack six worlds of pleasure. Pure goodness!
Harison Chocolates is targeting every type of chocolate lover with its travel exclusive, value-for-money proposition The Harison chocolate brand achieved doubledigit growth in travel retail sales in 2018
Harison is made by the best chocolatiers from the topproducing countries, such as Belgium, Italy and Switzerland
Mr Shibu Thomas, CEO, Harison Chocolates
hocolates for all” is the mantra of travel retail exclusive brand Harison Chocolates. In the past five years, Harison has achieved distribution in 40 airports in 15 countries. “We’re competing with the giants but I’m very happy that we have a commendable position in travel retail,” says Mr Shibu Thomas, CEO, Harison. Describing Harison as “ever-expanding”, Thomas said the brand had achieved double-digit growth in 2018 and forecasts the same performance this year. Thomas created the brand to serve travel retail consumers’ specific demands. “Consumers are looking for something exclusive and something to surprise
people when they give something as a gift. Many of the big brands are sold in the domestic markets and in all channels, but people are looking for something special and they don’t easily find it. They want something new, and quality at an affordable price,” he explains. Harison is made by the best chocolatiers from the top-producing countries, such as Belgium, Italy and Switzerland. “We have the best recipes in one brand,” he adds. Thomas is keen to offer shoppers a variety of options so they can always find something they want to buy in duty free. “Because we’re a young brand, people can surprise their recipient by saying: ‘I haven’t seen this – where did you get it?’ There’s a warm feeling created.” Best-selling products include a 700g sharing bag of Italian truffles. “These chocolates come in an elegant bag at a value-for-money price. There are plenty of chocolates for your family and friends,” says Thomas. Consumers today are demanding premium gifting products and big-value packs for sharing. “Sharing is what family is all about – they want big packs. Millennials definitely want this,” he says. Thomas is perceptive to appeal to all demographic groups in every socioeconomic segment with his products. “Our products are for everyone: Harison
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is a premium chocolate experience at an affordable price.” The brand is successful with Chinese consumers, and he cites one tourist location where 60% of the buyers are from China. The product portfolio consists of gift boxes, sharing bag, resealable pouches and 100g tablets. The range also includes destination confectionery products for various operators across the globe. The uniquely packaged PVC box has a destination sleeve and doesn’t feature any branding so it can be reused. To tempt consumers, Harison develops a lot of promotions such as multi-packs, while backpacks are offered as GWPs. “We’re very consumer-oriented and devise many projects,” he says. Recently, Harison has started using social media channels, airing commercials to drive shoppers to the duty free stores. The brand also promotes its products with social media influencers and recently staged an Instagram campaign. As a travel retail exclusive brand, has Thomas got a message for duty free operators? He certainly has. “We’re a partner in travel retail. We keep people informed about our products so customers have to go to the duty free stores to buy it, and we create travel retail promotions. It’s helping the whole industry and the confectionery category.”
A REFRESHING CHANGE for travel retail Ricola is gaining ground in duty free stores with its unique range of Swiss herbal drops
Ricola’s Alpin Fresh 75g tin of Swiss herbal drops is one of the brand’s best-selling flavors
One opportunity lies in China, where Ricola has just gained a listing with CDFG. The plan is to be in five outlets throughout 2020. Meanwhile, in Europe, Lagardere is testing the products in Paris and Rome airports.
Small impulse item Andreas Reckart, Head of Global Travel Retail & Middle East at Ricola
wiss herbal drops supplier Ricola is celebrating a 25% upswing in travel retail sales compared to the previous year, thanks to existing customers and new clients. The latter category includes China Duty Free Group (CDFG) and South Korean operator Shilla, which have recently listed the products. “I’m very with happy with how business is going,” says Ricola Head of Global Travel Retail & Middle East Andreas Reckart, speaking at the TFWA World Exhibition in Cannes, where the company was exhibiting its products. “We have a healthy mix of existing and new customers, and there’s lots of opportunities to grow further.”
Experience has so far shown that as sales grow in the domestic market, there will be travel retail demand. The challenge for Reckart, however, is that operators are sometimes unwilling even to test out the products in their stores. That seems to be because Swiss herb drops aren’t an established product segment in travel retail, despite the consumer megatrend for health and wellness products. “It’s a pity, but it’s the limitation we’re dealing with. It’s just frustrating that some operators are unwilling to try different things.” Reckart understands that retailers are under pressure to deliver on targets, but as he notes, “If you don’t try, you don’t know if there’s an opportunity.” He believes that Ricola offers a functional proposition for travelers and therefore has a place on the shelves.
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Ricola’s brand of Swiss herbal drops works as a small impulse item, particularly the 75g tins retailing at €4-5 (US$4.40-5.50) each. In a cash till location, they perform extremely well, he argues, in no matter which market. “Give it a try” is his key message to travel retailers. “We believe in our products and are ready to do any type of test.” Despite the travel retail space challenge, Reckart is optimistic that Ricola will break through. Europe and Asia are the areas of focus for the brand. Ricola is sold in the Middle East at Dubai Duty Free, the biggest operator, through a local market distributor in the UAE, giving the brand plenty of scope to expand its presence in the region. Inflight is a future opportunity, but the priority today is the global airport channel. Reckart notes that the company is currently working on an entry into the Indian market. Buoyed by Ricola’s success with the 75g tins, the company is coming up with a multi-pack of the best-performing flavors next March. The three 75g tins will be packed with a cardboard outer sleeve emblazoned with the words: The Herbal Travel Essential.
treat A chocolate
for a sweet tooth Adding a page to its great story, Majani, the oldest chocolate company in Italy, is looking to increase its presence in the Middle East
escribed as a welcomed challenge, Majani is aiming to increase its presence in the Middle East by building a flagship store. However, this mega move requires a lot of time and investment – especially for a company that’s in the process of establishing a dedicated travel retail department. Small in size, Majani has big plans in the works. Andrea Pigni, Travel Retail Manager, Majani, says they need to find the right people and the right place in order to move forward. The well-established chocolate brand team attended the TFWA Exhibition & Conference in Cannes this year to promote its duty free catalogue and meet with several business contacts to talk travel retail. Featuring a selection of products and travel retail exclusives, its duty free catalogue shared the spotlight in terms of major talking points. The common question among attendees: why choose the Middle East as a growing market? In addition to personal experience and the presence of niche brands, the brand will benefit from strong local connections & competitors in the region. Appreciating quality products, the Middle East consumer has a tendency to indulge in sweet treats and pay a high price point. Born in Bologna in 1796, Majani is the oldest chocolate company in Italy – and one of the oldest producers of the luxury product in all of Europe. Fun fact: its original shop is still in service today. “For more than 220 years and 7 family genera-
tions, the firm has always been driven by the passion in making excellent products, using the best cocoa and raw materials to create its sweet masterpieces,” explains Pigni. With strong ties to European aristocracy and clergy throughout the late 1790s, there is great meaning behind the placement of “1796” and the royal family emblems in its brand logo. While Majani provides a wide range of main products, with a special line dedicated to travel retail, its most signature creation is the iconic FIAT cube. Created in 1911 to celebrate the launch of the prestigious Fiat Tipo 4, the Cremino Fiat is the first four-layer bonbon that tastefully combines classic hazelnuts and almonds with cocoa paste. Looking for a competitive way to greet potential customers, the early automobile company reached out to collaborate with the best-known producer of chocolate at the time. As a family-run business with a great history, Majani has an interesting story to tell. A century later, the presence of FIAT in the confectionery category remains a symbol of Majani. “Even today Majani chocolate is realized following the ancient and traditional from bean to bar method, processing up to 20 different cocoa varieties (the 85% is fino de aroma) to get a high quality final product, characterized by an amazing organoleptic profile. The packaging also testifies the unmistakable uniqueness of the Italian style that always mixes beauty, tradition and innovation,” adds Pigni.
While Majani provides a wide range of main products, with a special line dedicated to travel retail, its most signature creation is the iconic FIAT cube
The well established chocolate brand with a long history attended the TFWA 2019 to promote its duty free creations
www.dutyfreemag.com GULF-AFRICA DUTY FREE & TRAVEL RETAILING
Royal Agio Cigars
Royal Agio Cigars ages well in travel retail A successful activation and new limited editions are keeping Royal Agio Cigars at the forefront in the Middle East by MARY JANE PITTILLA
ell-established tobacco supplier Royal Agio Cigars is performing well in the Gulf region, buoyed by a very successful brand activation at Dubai Duty Free. Royal Agio Cigars partnered with the biggest operator in the Middle East earlier this year in a high-profile Balmoral Añejo XO campaign. To celebrate Chinese New Year at Dubai International Airport, Royal Agio Cigars selected 50 boxes of its premium Balmoral Añejo XO Gran Perfecto FT Limited Edition. The promotion resulted in a 40% sales upswing for the premium Balmoral Añejo XO cigar range. The campaign targeted travelers during the airport’s Chinese New Year festival month, taking place from February 5 to 19. All selected cigar boxes featured the number eight, symbolizing prosperity and good fortune in Chinese culture. The limited-edition boxes, containing 10 handmade cigars, were placed on an eye-catching and prominent display,
More travelers are looking for special editions such as the Balmoral Anejo XO Oscuro Lancero FT 10
manned by a dedicated brand ambassador. Agio offered a cigar case for three cigars as a gwp.
Boosting the exclusive assortment
Elsewhere in the region, Gertrude Stormink, Royal Agio Cigars Global Travel Retail Manager, reports that sales in Qatar, Lebanon and Israel are picking up. She adds that Turkey is a big market; the company does good business with Gebr Heinemann at the new Istanbul Airport and with the other operators at the various Turkish airports. Speaking to Gulf-Africa Duty Free at the TFWA World Exhibition in Cannes, Stormink reports that Agio’s strengths in the region include good relations with retailers and the good performance of Balmoral handmade cigars. However, she notes that the tax increase on arrival in Dubai Airport has been a challenge.
New to the travel retail assortment are the Balmoral Anejo XO Travel Exclusive humidor gift box and four-count cigar packs
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Agio’s best-selling products in the region include Balmoral Anejo XO travel retail assortment, Collection 12 and Private Collection 25. Its Panter, Mehari’s and Tip travel packs maintain their established position. To boost its travel retail selection, Agio is introducing a travel exclusive assortment box of its upscale Balmoral Anejo XO cigars, retailing at €45 (US$50). The five handmade cigars are presented in a brown humidor gift box, consisting of two Petit Robusto FT, two Rothschild Masivo and one Gran Toro. They are made from an intensive blending process of exceptionally aged tobaccos from the Dominican Republic, Nicaragua and Brazil and crowned with a Brazilian Arapiraca wrapper. Also new are four-count packs of Petit Robusto FT, Rothschild Masivo and Gran Toro. Stormink is seeing a change in consumer behavior in the region as more travelers are looking for special editions, for example the Chinese New Year edition and limited editions such as Gran Perfecto and Oscuro Lancero. Agio recently introduced a limitededition 10-count humidor gift box for its Balmoral Añejo XO Lancero, retailing at around €135 (US$150). There are 2,600 numbered boxes available to retailers all over the world. Stormink reports that this product launch has attracted interest from the leading duty free operators, adding that “it opens the door to other retailers.” Stormink has high hopes for this travel exclusive product and ends with a note of optimism, saying: “We would like to thank our partners in the area for the nice cooperation and confidence in our products.”
Oriental General Trading Inc
OPPORTUNITIES Having established its Chinese cigarette brands in travel retail, Oriental General Trading Inc is focusing on its international lines
riental General Trading Inc, the fast-growing manufacturer and distributor of cigarettes, has its eyes trained on the international cigarette segment in travel retail. The company already has a range of cigarettes targeted at Chinese consumers that’s carried by several duty free operators as travel retail exclusives. Now, it’s expanding its portfolio into the international segment. These international brands include Oris Pulse, Oris Pulse Fusion and are offered in all sizes Super Slims, Nano, Queen Size and King Size. “With these brands, operators can target all nationalities. Our Oris Pulse range is popular with Eastern Europeans, Middle Eastern nationalities Indians and Asians,” says Tania D’Souza, General Operations & Marketing Manager, Oriental General Trading. The cigarettes are already established in the domestic market in all these regions, especially in Africa, in the Middle East, and in parts of Asia. The company is now looking towards expanding Oris Pulse in travel retail. D’Souza explains that as of August 1, UAE cigarette manufacturers and distributors have had to implement the track and trace system known as DTS or Digital Tax Stamps. She notes that some skus have had to be delisted in the UAE
Oriental introduces Oris Pulse cigarettes for the international segment
Duty Free outlets because they could not comply with the new regulations, fortunately Oriental has complied, and by mid-August, the company re-introduced its Chinese brands with the digital tax stamp at Dubai Duty Free, Dufry Sharjah and DFS Abu Dhabi. The operator has also listed the Oris International version, namely the Oris Pulse Apple Mint, Oris Pulse Orange Mint and the Oris Pulse Fusion with Double Capsules. “In a month and a half we were able to produce really good numbers for an entirely new brand – the brand has gained popularity namely with Eastern Europeans, Indians and Arab passengers,” says D’Souza. The brand is available in Abu Dhabi Duty Free with DFS, Sharjah Airport with Dufry, Dubai Duty Free and in the Maldives.
A basket of brands
Oriental General Trading is currently talking to major operators such as Gebr Heinemann, Dufry, DFS, and Qatar to add its international range to its existing portfolio and explain the difference – that it’s an entirely different target consumer. The response has been “positive so far,” notes D’Souza. “Most of the operators have seen this brand around the domestic market and they know these brands will work with the target consumers.”
When talking to operators about listing the brands, the company asks about the types of nationalities that pass by their airport or stores and identifies the type of cigarette that would work well with those consumers. “We’ve basically created a basket of brands and skus that would work well with them. The response has been great and we hope to see the brand in many new markets over the next couple of months,” she says. On the subject of tobacco regulations and labeling, D’Souza says: “Every day is a new challenge. We understand why governments are implementing Track and Trace; it is an important system, but at the same time, Travel Retail is a controlled well regulated channel. With the support of the travel retail industry and its associations we are working on bringing this to light with the authorities and the regulators.” She notes that trade bodies such as TFWA and the Duty Free World Council have supported all the tobacco companies in talking to governments and explaining the difference between the domestic market and travel retail. As the company gets set to move to a bigger expansion plans at the end of this year, it’s onward and upward, despite the regulatory hurdles.
www.dutyfreemag.com GULF-AFRICA DUTY FREE & TRAVEL RETAILING
in the fast lane
The Monus company strategy is aimed towards business expansion outside its home country, the opening of new markets and increasing its share in the existing markets of Europe, Asia, Africa and Latin America
Serbian cigarette manufacturer, Monus, is seeking to conquer new markets as it grows steadily on five continents with its wide-ranging portfolio
onus, the leading manufacturer of cigarettes in Serbia, is busy targeting travel retail business expansion outside its home country, opening new markets and increasing its share in existing markets. The Belgrade-based company, whose best-selling brand is Fast cigarettes at home and in many of its export territories worldwide, strives to follow global trends by communicating with its consumers and developing design solutions, nurturing its existing brands and also investing in new ones. Its brands include Opposite, which is made from the finest tobacco and is described as the embodiment of the modern day spirit, reflecting the attitude of young consumers who know what they want. De Santis is a premium cigarette brand that offers a pleasant aroma, a stylish design and a perfect taste. De Santis represents luxury and elegance combined in the most modern octagonal packaging, with a balanced blend. Monus is a fine blend of the finest tobacco, which proudly carries the company name. The Monus family offers five different versions of slim cigarettes. Smokers can choose between the classic tastes, fresh icy menthol, green apple or fruity grape notes. Nero Gold is a premium Virginia blend created for demanding customers from Asia. Nero is also available as an affordably priced American blend for smokers who like a strong taste. Other value-priced lines include Floyd, Happy, Story and East.
The Monus company strategy is aimed towards business expansion outside its home country, the opening of new markets and increasing its share in the existing markets of Europe, Asia, Africa and Latin America. In Europe, Monus successfully cooperates with Dufry Serbia, Armenia and is in the process of entering Russian airports. In Africa, it is represented in duty free shops in Egypt. Monus, which is part of INVEJ Holding, the largest holding company in Serbia, has become the fastest-growing cigarette manufacturer in Serbia. Established in 2005, it has a state-of-the-art cigarette factory in Indjija with an annual capacity of 18 billion sticks with six production lines and ISO certification. The company pays particular attention to environmental protection, using modern technology in the production process.
“We are a big and serious company and we are looking for serious partners,” says Tatjana Agrez, Director of the Export Department. “We are primarily interested in business arrangements with traders, importers and distributors.” The company offers a wide range of cigarettes directly from its factory at a very competitive price, Agrez tells GulfAfrica Duty Free. Monus produces King Size (hard pack and soft pack), 100’s (hard pack), Slims (octagonal), octagonal classic and is in
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the process of introducing two new line formats, Nano and Queen. The firm can produce versatile blends for each market, as well as private labels. “Our company is consumer-oriented, which means that we put all of our efforts in understanding and satisfying the needs of our consumers,” says Agrez. “Following the contemporary trends in the tobacco industry, we constantly strive to deliver better-quality product than our competition and exceed the expectations of those who get in touch with our products for the first time.” The company’s main advantage is flexibility, prompt reaction and implementing new ideas and strategies. Following the latest market trends and consumer wishes, it has built a portfolio suitable for all markets, ages and different demographic groups.
All about James Kfouri,
Director of Sales Australia, SE Asia & Global Travel Retail Where were you born and raised? Born in London, raised in Africa, the Middle East and educated in the UK.
What motivates you in life? Challenge, adventure and a little bit of fear.
What’s the best thing that’s happened to you this year/month/week? Seeing my kids when I returned from my last trip to Cannes, the welcome from my Labrador is a close second.
What would you choose as your last meal? Something French, shared with my wife.
What’s your favorite ’90s jam and why? Rolling Stones live in Paris with Bon Jovi as support band.
How would you rate your memory? I never forget a friendly face but always fail to remember the shopping list.
James Kfouri, Director of Sales Australia, SE Asia & Global Travel Retail is a man of the slopes, taking on snow adventures around the globe
What do you think about when you’re alone in your car? Mostly I think about staying out of an accident but also a feeling of contentment, life is good and that I do not have to commute on the roads every day.
What in the world would you most like to change? For people to respect and care for one another, poverty, war, state of our planet. There are many things that need changing.
Are you more of a hunter or a gatherer? Hunter.
What about yourself would you most like to change? I would like to exercise more and eat (and drink) less.
Do you prefer country or city? That’s a tough one - I love the great outdoors but eating out is a passion, particularly in a ‘foodie’ city like Melbourne. Simple solution would be to live in French Alps where I can get the best of both worlds.
What is your favorite place to vacation? Anywhere where I can ski with my family, Hakuba in Japan was a most memorable vacation.
What do you work toward in your free time? Planning the next snow adventure, there are so many places I have yet to visit like Alaska.
What were you like in high school? Shy, focused on sport.
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What is the most important piece of advice anyone ever gave you? Work hard and also treat other as you like to be treated.
What is something about you that most people would find surprising? I can’t think of anythingI’m an open book!
If you could know the absolute and total truth to one question, what question would you ask? Nothing keeps me awake at night. So no need to ask the question.
If you had the opportunity to meet one person you haven’t met, who would it be, why, and what would you talk about? No one in particular as I meet interesting people every day and everyone has a story, you just have to give them the time.