Gulf-Africa TFWA WE 2017

TFWA WE 2017

DUTYFREEMAGAZINE.CA OCTOBER 2017 · TFWA WE · VOL 27 · NO 3

11.09.17 13:44 Lagardère awarded concessions in Saudi p. 8 Dufry opens doors to new-look Sharjah store p. 22 Mazaya looks at new markets p. 44

dav_wsc_lhour_ad_210x203mm_engl_medium_id365864.indd 1

LETTER FROM THE EDITOR

Let’s get

digital I

n the 70 years since Brendan O’Regan opened a shop to sell Irish products to passengers at Ireland’s Shannon Airport, which gave rise to the concept of duty-free retail, the industry landscape has inexorably changed.

It’s no surprise to any of us that the focus of this year’s TFWA World Exhibition & Conference in Cannes is the digital environment, an inescapable and ultradynamic reality that is reshaping the world of retail on every corner of every continent. From a keynote speech

by Wired UK’s David Rowan, on how digital and other technologies are transforming traveler behavior to a dedicated digital focus workshop and the launch of TFWA’s Digital Village, the future of travel retail is being redefined for us.

The latest Middle East and Africa report from m1nd-set Research reinforces the role that technology is playing in the duty free shopping experience. From pre-flight online product research and the delivery of personalized discounts to our handheld mobile devices to tailor-made in-store service offerings, these are the new retail experience fundamentals defining the seamless shopping experience. While travelers are definitely on the ball when it comes to adopting the latest technologies in order to hunt down the best deals and up-to-the-minute offers, airport operators, duty free retailers and brands are still on a learning curve.

The m1nd-set data, which saw the Swiss firm conduct 3,500 interviews at airports across the region from Abu Dhabi to Johannesburg, revealed that 35% of shoppers use their smartphones at airports to obtain more information about products or read consumer reviews while 26% use them to compare prices with online stores. And it’s not just the price-conscious traveler demanding a multi-channel retail experience with over 60% of airport shoppers aged 40 or under requesting better integration of physical store, online and mobile shopping experiences to create a complementary and connected retail environment.

We also can’t deny the flight to value factor affecting consumer retail spend and, again, m1nd-set flags this with interviewees confirming an interest in receiving online discounts/offers pre-flight as well as real-time offers/coupons on their smartphones once in departures.

But there is still the inevitable excitement of finding something new on our travels, and the 2017 TFWA showcase is a repository of the educational, functional and fun.

Read all about Halal Socks, the home-grown Canadian fashion brand taking its fun footwear with a message into airports worldwide, while Jordanian shisha tobacco brand Mazaya, opens up its 50-strong world of fruity flavors as it continues to expand into new markets. Regional industry insight from Lagardère Travel Retail, Bhatia Traders and Dufry’s on-the-ground experts round out our Cannes-exclusive issue. See you on the French Riviera!

Kindest Regards,

Hibah Noor Editor-in-Chief hibah@dutyfreemagazine.ca 4 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

OCTOBER 2017 · TFWA WE · VOL 27 · NO 2

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. October 2017, Vol. 26, No.2. Printed in Canada.

All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2017 Global Marketing Company Ltd.

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

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

CONTENTS

What’s inside

8

LEAD STORIES 8 Lagardère Travel Retail KEYS TO THE KINGDOM

With a trio of concession wins in Saudi Arabia, and the recent launch of its new King Fahd International store in Dammam, Lagardère Travel Retail has its eye on a royal prize

14 Dubai Duty Free ON TOP OF THE TRAVEL RETAIL WORLD

34

Colm McLoughlin, Executive Vice Chairman and CEO of Dubai Duty Free, discusses recent and upcoming retail developments at the world-leading duty free operator

20 Bhatia Traders BHATIA GEARS UP TO GO MOBILE

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

22 Dufry DUFRY OPENS DOORS TO NEW-LOOK SHARJAH STORE

Mid-October marks the completion of Dufry’s top to toe makeover as the UAE airport continues to expand its low-cost carrier network

28 Eraman MEETING CHALLENGES HEAD ON

Eraman has been faced with challenging times and had to constantly adapt to unforeseen circumstances over recent years

34 Halal Socks Inc STEPPING OUT

Newly created company Halal Socks Inc aims to spread peace and joy across the world – including travel retail – one sock at a time, according to its founders

FEATURES ADAC issues EOI Another award for Dubai Airports

18 24

Passenger load hits new record High-tech retail takes hold

26 32

42

48

44 LEAD STORIES 42 Alzawrae Company A SENSORY EXPERIENCE

Jordan-based shisha tobacco brand Mazaya is determined to reflect the rapidly growing popularity of shisha smoking in markets outside the traditional Middle East stronghold

44 China International Duty Free INSPIRING THE MILLENNIAL MARKET

Following its success in the tobacco products category, China International Duty Free is targeting the liquor and wellbeing sectors with its innovative approach

48 Distell GLOBAL LEGACY

Distell may be known for its quintessentially South African wines and liqueur, but the company has move far beyond these confines

50 Diverse Flavours TRADING ON DIVERSITY

Diverse Flavours is in the right place at the right time with its strategy of supplying South African wines to operators seeking something different

52 Diageo LEADING THE CHARGE

FEATURES Furla’s one of a kind Mazaya looks at new markets

36 42

Liquor news J.Cortès’ strong portfolio

46 54

With strong views on the importance of travel retail and some of the biggest spirits brands on the market including the leading whisky, Johnnie Walker, Diageo is in a position to leverage its strengths and increase category spend

LAGARDÈRE TRAVEL RETAIL

Additional space has been committed to popular premium categories such as perfumes and cosmetics and gold

Keys to the Kingdom

With a trio of concession wins in Saudi Arabia, and the recent launch of its new King Fahd International store in Dammam, Lagardère Travel Retail (LTR) has its eye on a royal prize

by CLAIRE MALCOLM

W David Bisset, CEO – KSA, Lagardère Travel Retail

8 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

hile the company may only have put its feet – and first employees – permanently on the ground in early 2017 with the formalization of Saudi French Duty Free (SDFD), the consortium between LTR, Saudia Airlines Catering Company (SACC) and Arabian Ground Handling and Logistics (AGHL), it already had a trading foothold in the Kingdom with five stores in three national airports.

Its existing presence in Dammam, Jeddah and Riyadh will be augmented by a further six stores by year-end including four brand new Aelia Duty Free shops in Dammam and Riyadh.

According to David Bisset, CEO – KSA, delivering world-class retail destinations are the end goal for 2017 as the company scales up its operations in Saudi Arabia, a country with just three years’ duty free operations under its belt. “[It] remains a challenging and complex market to enter and develop, however, for courageous and visionary operators, Saudi Arabia is also a promising market full of growth and opportunity,” he says.

International businesses looking to enter the Kingdom can only operate through a local partnership and Bisset is thankful for the expertise and support of SACC and AGHL in navigating the complexities of operating a start-up in the local market.

The consortium’s new 891-square-metre store at King Fahd International, which made its debut in July, is the result of exten-

The newly opened Dammam space reflects many of the world-class features that Aelia Duty Free stores are known for around the world

sive space remodeling and promises a new and unique passenger journey, as Bisset elaborates: “The retail space development at King Fahd is ongoing with onsite works continuing for the newly opened store and construction already underway on the second retail space.

“This is an exciting time for the business as we begin the rollout of the ‘new format’ Aelia Duty Free stores in KSA, and we look forward to unveiling the full offering towards the end of the year when both stores are complete.”

Bisset explains that the recently opened store also reflects many of the features that Aelia Duty Free stores are known for, with a “Dammam-centric spin”.

“It is the first walk-through duty free store in KSA, and also the first time centralized queuing has been introduced in duty free retail,” he adds.

SFDF is also leading with premium categories such as perfumes and cosmetics and gold, and has expanded beyond the standard allocation for these popular categories.

“I am proud to say we have a world-class offering, with over 80 international and local fragrance brands in the new Dammam shop. This includes Chanel, Dior and Arabian Oud,” notes Bisset.

Another focal point for the space is a dedicated Sound Bar, which is a familiar sight for Aelia shoppers worldwide, as he attests: “Our Sound Bar provides an outstanding opportunity for customers to test big name electronic brands in the shop to ensure they are completely satisfied with their purchase decision.

MADE IN ENGLAND Since 1973

Discover their luxury collections in Cannes Contact Sophie Sponagle at sophie.sponagle@kao.com to secure your appointment or enquire about our daily drop-in sessions

MB0985_Hotel materials_Cannes Ad 2017_DF Gulf_V2.indd 1

08/08/2017 15:36

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING 9

LAGARDÈRE TRAVEL RETAIL

“Our hardware hero brands are Apple, Samsung and Bose, the leaders in this category within the region, and we also offer an assortment of electronic accessories with over 20 brands on offer - and many more under negotiation.”

Beyond the purely commercial and functional, SFDF has designed a store that has a strong sense of place which draws on Dammam’s unique landscape and heritage,” he remarks.

This includes coastal and desert inspiration underpinning the overall store design and an eye-catching centerpiece in the form of a local fishing boat display area.

Bisset continues: “As with any project of this nature, we consider the local environment and how we can incorporate this into the store design to convey a true sense of place. Dammam affords an exceptional environment in which to do this with the interplay of the desert and the sea, and a long and proud history and culture tied to both these disparate landscapes.

“Our marketing and design teams led the store programming project in close collaboration with the airport and its Director General, Turki Aljawini, who has a very strong vision for King Fahd, and whom with we have a strong relationship of collaboration and co-ordination.”

The local offering reflects the uniqueness of the market with SFDF showcasing a collection of products exclusive to Saudi Ara-

More than 80 international and local fragrance brands feature in the new Dammam shop from Dior to Arabian Oud.

10 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

bia. “Our souvenir offer in particular features unique products such as locally handmade prayer mats and prayer beads, which lend a true local, cultural element to our offer,” says Bisset.

“The local gastronomy offer is also unique, led by that quintessential Arabian delicacy – dates. The demand for dates is exceptionally high within Saudi Arabia and we offer customers the biggest and best brand names within this diverse category,” he adds.

Still to come at King Fahd, and elsewhere is tobacco with SFDF working on permissions to sell tobacco products. Says Bisset: “Following the recent 100% excise on these products within the domestic market, this looks to be an exciting and fruitful category that will grow and develop in the next few years.”

The duty free operator will open a second smaller (476-square-metre) new-format Dammam store this October.

With the same look and feel as its sister location it will be located immediately after security, and is designed to capture travelers at the first point of their journey.

SFDF’s KSA-wide agreement with L’azurde to supply gold and jewelry to all its stores across the Kingdom is now live and is adding further weight to its quality-driven reputation.

“As the largest and best-known gold and jewelry supplier and manufacturer in the region, L’azurde provide duty free customers

40 YEARS AND COUNTING

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

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

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

LAGARDÈRE TRAVEL RETAIL

Local food specialities are showcased at the new King Fahd store with dates taking center stage in response to exceptionally high customer demand

with a trusted brand name and outstanding quality. We offer 18, 21 and 24-carat gold jewelry, and diamond and stone-set jewelry,” he notes.

Expansion into any new market demands a solid supporting marketing campaign and Saudi Arabia is no exception.

“Social media is a huge communications platform in KSA and we are looking at ways to expand our reach beyond the shop floor with the unique marketing and communications tools that social media provides. As part of our ongoing strategy for KSA we will use our completed Dammam stores as a launch pad for SFDF’s Riyadh stores will be next to undergo redevelopment with refreshed retail spaces at both terminals our social media platforms and marketing strategy once both new format stores are complete and trading,” says Bisset.

Saudi French Duty Free’s new 891-square-metre From digital development to the physical, store at King Fahd International in Dammam, is the result of extensive space remodeling with new stores at both King Abdulaziz International terminals in Jeddah plus the Dammam duo of locations, SFDF’s Riyadh stores will be next to undergo redevelopment with the Saudi capital set to enjoy a refreshed Aelia Duty Free experience in both international terminals.

“With the Kingdom’s airports undergoing privatization as part of the country’s 2030 Vision plan for development and growth, operating within the duty free space will continue to provide us with challenges, growth and opportunity,” he concludes.

12 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

DUBAI DUTY FREE

Concourse D is continuing to help grow Dubai Duty Free’s business, delivering healthy levels of penetration

On top of the travel retail world Colm McLoughlin, Executive Vice Chairman and CEO of Dubai Duty Free, discusses recent and upcoming retail developments as the world-leading duty free retailer

D

ubai Duty Free started off well in 2017 with positive results in its first and second quarters. “Currently, we are around 3% ahead and we are pleased with that,” says a satisfied Colm McLoughlin, Executive Vice Chairman and CEO, Dubai Duty Free.

Many factors are behind this success, he reports, including the opening of the 7,000 square meters of retail space in Concourse D in February 2016 and the opening of a new retail area around the Control Tower in Concourse C of about 1,300 square meters in December of last year. More than 60% of the passengers who depart from Concourse C pass through this retail area prior to boarding their flight, and this new retail offer has helped the operator to increase the penetration for passengers using Concourse C. Concourse D is continuing to help grow the company’s business, delivering “healthy” levels of penetration, says McLoughlin.

The sales performance has been very much in line with expectations, generating US$195.34 million and accounting for 21% of half-year sales.

Furthermore, the refurbishment of Concourse B, which began in April 2016, included a much-needed clearing of the Central Spine, allowing for greater navigation by passengers and ease of circulation. The refurbishment also included the upgrade of the Perfume & Cosmetics shop in Concourse B and the upgrade of the Watches shop. Sales in Terminal 3 (Concourse B) reached US$675 million in 2016.

In addition, Departure sales, which account for 87.24% of turnover, reached more than US$811.6 million for the first half, while Arrivals sales generated more than US$98 million and accounted for 10.54% for the first half.

Total half-year sales reached US$930.3 million, which represented a 2.4% upswing over the same period in 2016.

14 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

Colm McLoughlin, Executive Vice Chairman and CEO of Dubai Duty Free, is pleased with the retailer’s performance so far in 2017

Customer-friendly initiatives In terms of category performance for the first half of the year, perfumes continued to be the highest-selling category with sales revenue of over US$147.58 million, accounting for 15.86% of total turnover. During the six-month period, Dubai Duty Free sold 1,412,904 bottles of perfume. Liquor came in second with turnover of US$143.37 million, while cigarettes and tobacco took third position with US$84.55 million.

Dubai Duty Free has run a number of initiatives that have appealed to its passengers, especially during a high volume of traveling traffic. These customer-friendly initiatives included enticing offers and promotions ranging from Buy One Get One (BOGO), gift with purchase and price-off promotions.

Promotional highlights included the tried-and-tested 20% off initiative during both the Eid festivities across various fragrance, fashion and watch brands. Another interesting offer run this year was 20% off (for a limited period of three days) on the purchase of the full allowance in the liquor category at Arrivals stores. The

A new retail area around the Control Tower in Concourse C of about 1,300 square meters opened in December of last year

For the first half of the year, perfumes continued to be the highest-selling category with sales revenue of over US$147.58 million, accounting for 15.86% of total turnover

operator has also extended a special 7% discount to members of travel services provider Ctrip aimed at Chinese customers. Additionally, there is a special 5% discount for shopping online, which is running for the whole year.

In Arrivals, Dubai Duty Free has also focused on a full allowance promotion offering 5% discount on the purchase of liquor.

“All these initiatives have bought in positive results,” enthuses McLoughlin. “In terms of brand promotions, we have seen various interesting promotional concepts run this year, which include the launch of Lindt trolley, Dunhill Dubai Duty Free edition in the cigarettes category, 30% off promotions on Cognac brands such as Martell, as well as various end-of-season discounts across the fashion category. “ Dubai Duty Free has seen growth in the majority of premium categories and brands this year, according to McLoughlin. In terms of the top brands in every category, some brands have over-performed and grown this year beyond expectations. In fragrances, Carolina Herrera, Jo Malone and Versace have shown double-digit growth. Handbag brands Hermès, Longchamp and Montblanc have risen in double digits this year, while watch brands Rolex, Cartier and IWC have also generated double-digit growth. In liquor, brands such as Glenfiddich, Vat 69, Martell and Royal Salute have all grown in double digits compared to last year, and in the confectionery category, Patchi and Al Nassma have both seen a double-digit uplift. In electronics, Apple, Samsung and Huawei have also shown double-digit growth.

Premium South African Wine, award-winning Scotch Whisky and traditional Japanese Sake

S U P P LY I N G D I V E R S I T Y

Taste and discover award-winning wines from South Africa, Scots Gold blended Scotch whisky by Charles Edge London, and Sake from Sakuramasamune−one of Japan’s oldest makers.

Stand L34 Red Village 1-6 October, TFWA 2017, Cannes To schedule a meeting, contact Anthony Budd: +27 71 255 7344 anthonybudd@diverseflavours.com

diverseflavours.com

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING 15

DUBAI DUTY FREE

Challenges and opportunities 2017 has not been without a number of operational challenges, explains McLoughlin. “We have had to work around a few disruptions in Concourse C due to the refurbishment plan under way for the upgrade of both retail and airside operational facilities for aircraft. In Al Maktoum International Airport we have also faced disruptions due to the refurbishment and expansion plans, which luckily has had a minimal impact.”

In terms of market challenges, the stronger dollar has led to price competitiveness issues across some categories, which have been arrested through various interesting and innovative promotions across brands to drive back the footfall. In addition, the company has worked closely with suppliers to mitigate the currency impact.

In terms of opportunities, Dubai Duty Free sees 2018 as a year with great potential. The refurbishment of Concourse C gates is expected to be completed and many retail areas will start becoming operational in 2018 within that concourse. The operator is expecting to see growth due to increased retail facilities close to the customers in Concourse C. Planned developments in Concourse B include major refurbishments across technology, fashion and perfumes and cosmetics with new stand-alone brand concepts. Other opportunities include the planned expansion of the Terminal 3 Arrivals shop, which will see a major boost in both footprint and visibility in the area and is expected to bring additional footfall in those shops once completed. Furthermore, the company is planning to launch some brands that have only been available in Concourse A, such as Chanel and Gucci.

Looking forward, Dubai Duty Free has some other new retail developments in 2017, which include adding around 2,000 square meters of retail space in the passenger terminal building of Al Maktoum International Airport, which will nearly double the retail space in the building. Due to this expansion, Dubai Duty Free is completely re-planning its retail offer in the Departures Watch brands Rolex, Cartier and IWC have all generated double-digit growth this year

16 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

area of this building. These works are expected to be completed in December 2017.

Dubai Duty Free is also completely renovating its retail offer in Concourse C at both apron and Departures level between now and the summer of 2018. Although there will not be a significant addition to total space in this concourse, it is the first full refresh of the retail offer in Concourse C, and every outlet will be new when the renovation is finished in 2018. Also, the outlets will be more aligned to the passenger flow in the concourse for both departing and transit passengers, notes McLoughlin.

Additional storage capacity for fragrances and cosmetics Apart from the major renovations in Concourse C and Al Maktoum International Airport’s passenger terminal building, Dubai Duty Free is also working on three other retail developments which are now in the pipeline. These are the opening in October 2017 of a Dubai Duty Free Shop at Dubai Parks and Resorts; the Concourse B revamp of fashion, technology and perfumes and cosmetics; and the Terminal 3 Arrivals refurbishment.

Operationally, Dubai Duty Free has also recently upgraded its Oracle Retail Systems to Release 16 of Oracle Retail Applications.

“We are pleased to be the first Oracle Retail customer worldwide to go live with this upgrade in July 2017. Also, an expansion of our warehouse automated system is currently ongoing. The expansion will be able to achieve an additional storage capacity by over 25% for the perfumes and cosmetics category by the early part of next year.”

Turning to the hot topic of millennial consumers, McLoughlin says: “The rising growth of millennials is definitely influencing our communication as well as the range of products we carry. We have become more social media-savvy, and in terms of product mix for specific categories such as beauty, we have listed brands like Urban Decay, Smashbox, Diptyque and many others, in order to target the millennial passenger group effectively.”

advertisement removed for legal reasons

ABU DHABI AIRPORTS COMPANY

DFS Group is currently operating stores under the Abu Dhabi Duty Free name

of the opening of Abu Abu Dhabi airport operator Ahead Dhabi International Airport’s seeks expressions of new Midfield Terminal, ADAC is gathering expressions of interest interest for Southside for duty free concessions in Southside Terminal before Terminal in surprise move itslaunching an RFP tender process

A

bu Dhabi Airports Company (ADAC) recently surprised the duty free industry by issuing a request for expressions of interest (EOI) for duty free concessions in its Southside Terminal along with other key locations.

The EOIs were due Thursday, August 17. Subsequently, the airport will launch an RFP tender process.

Currently, DFS Group is the operator at this location. This company’s lease expires in July 2018. The concessions in question are being offered as a short-term lease from the end of the DFS term, and the offering is thought to bring the terms in line with the opening of the airport’s new Midfield Terminal.

The industry as a whole has expressed curiosity about which retailers might be willing to make the investments necessary for such a short lease.

Lagardère Travel Retail and Aer Rianta International won the more typical 10-year duty free contracts at Midfield in December 2015. This terminal’s opening

has been delayed. It is now expected to open in 2019 or even 2020, according to some estimates.

ADAC’s general instructions for EOI and later RFP are as follows: 1. Suitably experienced operators with demonstrated experience in developing, marketing, maintaining, investing and operating high-volume duty free shops are invited to submit their Expression of Interest (EOI).

2. Non-registered suppliers are advised to register with ADAC Sourcing Portal under the “Duty Free-289” category (Concessions Category – Retail – Duty Free) and complete their registration via www.esourcing.adac.ae. For further information, contact 02 5053275 or 02 5053862 during working hours.

3. Registered and interested entities must submit the EOI response for the above project listed under “Current

Opportunities” for (RFI_607) via www. esourcing.adac.ae on or before 12pm on Thursday, August 17, 2017 (UAE local time).

4. Subsequent to this EOI, a separate RFP (tender) process shall follow.

5. Tender fee of AED 20,000/- shall be applicable at the tender stage.

6. Abu Dhabi Airports Company reserves the right to withdraw at any time from the process or any part thereof without giving prior notice. No financial penalty or any obligation will accrue to Abu Dhabi Airports Company in such event.

7. For queries, please write to: contractscpc@adac.ae quoting the tender reference in the subject or call 02 5054888 during working hours.

18 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

BHATIA TRADERS

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

UAE’s diverse port operations Bhatia gears up The demand a one-of-a-kind approach

to go mobile

A

slowdown in regional ship movements isn’t putting the brakes on business for Bhatia Traders with the Sharjah-headquartered company buoyant about year-to-date performance at its eight seamen’s clubs, 10 duty free shops and multiple bonded warehouses at seaport locations.

“We are busy developing our business with other projects in the works as well as ensuring that we have the right mix of products across different categories to satisfy the needs of our diverse client base,” says Rajeev Bhatia, Managing Director, Bhatia Traders.

Its partnership with Fujairah National Group to support the Flying Angel floating duty free service at the Port of

to duty free sales and Bhatia Traders has the answer

by CLAIRE MALCOLM

Fujairah anchorage is now in its third year and is just one example of Bhatia’s mobile approach to business development.

“An ‘historic’ onboard experience for visiting seamen, the Flying Angel, which was recently renamed the FNSA-6, now has an even wider range of products, larger retail space footprint and a dedicated focus on meeting individual requirements with all the major categories covered including electronics, confectionery, fragrances, gold and watches,” he says.

At Mina Zayed in Abu Dhabi, Bhatia Traders is celebrating its first year of operational success with performance already exceeding forecast, as he explains: “When we launched, Mina Zayed was in the first stage of development, with a lot of work being done inter-

20 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

nally as part of Abu Dhabi Ports’ portfolio development strategy.

“Our role as a key service provider is set to enter a new phase of retail offering

Rajeev Bhatia, Managing Director, Bhatia Traders

in the first half of 2018 with a mobile duty free service in the final planning stages.”

The 500-square-metre duty free shop and seamen’s club offers more than 5,000 products across the usual categories with onsite leisure facilities including multi-cuisine dining, entertainment with a live band, complimentary Wi-Fi, two pool tables, table football and an outdoor patio set-up for live barbecue stations for the cooler months.

The diverse nature of port operations in the UAE comes with its own challenges. Says Bhatia: “We have a very comprehensive range of products and are still adding to our basic categories. Even though we are very experienced in terms of port operations we still learn ‘on the move’. You have to remember that the UAE has a unique maritime industry with different port operations from break bulk cargo to oil and gas, commercial cargo and car ships – and this obviously means a mixed demographic in terms of customer.”

The new mobile service will see Bhatia Traders customer service agents visit individual vessels at multiple berths in the different port locations to service personnel duty free requirements with both physical products and pre-order via a customized hi-tech sales platform.

Bhatia elaborates: “The team will have tablets with full details of all our products across the various categories linked to our new e-commerce portal, so they can take individual orders and then arrange for direct delivery.

“Our new e-commerce platform is currently under development and we have already completed work on the payment gateways, the overall look and feel, and product category breakdown. The next stage is the test phase.”

The support of Abu Dhabi Ports has also been instrumental in bringing the project fruition, as he explains: “The local authorities have been involved at every stage in terms of co-operating and collaborating with our team to develop the business. They take a very proactive approach in asking us what we believe can be done to make things better.

“This extends from information sharing so we better understand the complexities of the port operation through to detailed analysis of the type of customer that comes through Abu Dhabi. By working together in this manner, we are able to

develop a tailor-made service that fulfills the needs of visiting seamen.”

Bhatia Traders’ product portfolio is evolving in tandem with developments at Mina Zayed and elsewhere.

“In the wines and spirits category, which is very trend driven, we are seeing increased demand for white spirits plus the Japanese malts are also coming into play as well as a resurgence in the cognac sub-category,” says Bhatia.

“Gin is a key mover with more and more brands offering premium small batch labels, and the seaports are now asking for this,” he adds.

Bhatia also lists Jim Beam and Jack Daniel’s’ diversified portfolios as a consumer hook with products like Jim Beam Honey and Jack Daniel’s Tennessee Fire driving additional sales. “Customers will always pick up their favorite products, but if they love a particular brand, they will also look out for new variations within that range; and we keep an eye on this in order to make sure that we are offering these products at relevant locations,” he remarks.

The trend towards stronger perfumes, such as oud based fragrances, and a consumer willingness to experiment is also positively benefiting the perfumes and cosmetics category, with Bhatia also noting a “huge increase” in demand for gold and jewelery.

“This category is always in demand, especially for new designs or new ways of

wearing accessories. We are also seeing more rose gold coming through from the various brands this year,” he notes.

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

Bestselling products in H1 2017 from the top down were Fundador Brandy, Johnnie Walker Black Label, Marlboro Red cigarettes, the Apple iPhone 7, 22-carat gold jewellery pieces and Carolina Herrera Good Girl perfume.

New launches for 2017 include JBL Bluetooth speakers, Monotheme Fine Fragrances and Zippo sunglasses.

As 2017 enters its final quarter, Bhatia is gearing up for several new announcements in 2018.

“We are in discussions with players in the industry for joint ventures and acquisitions,” notes Bhatia. “We are also in conversation with the port authorities to provide additional services, such as cafés and restaurants, to port employees and visiting seamen.”

And expansion outside its traditional UAE border remit is still on the ‘to do’ list. Says Bhatia: “We see ourselves expanding into territories outside the UAE. Our seaport facilities are firmly in place with a continuous improvement process, which gives us time to expand into seaport opportunities within the wider GCC and seize any other duty free retail opportunities.”

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

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

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING 21

DUFRY

The actual footprint for the category space is slightly less than before but has a stronger focus on brand and product adjacencies

Phase one of the remodeling project saw P&C relocated from one side of the space to the other – a major undertaking

Dufry opens doors to new-look Sharjah store Mid-October marks the completion of Dufry’s top to toe makeover as the UAE airport continues to expand its low-cost carrier network

by CLAIRE MALCOLM

I

nternational travel retailer Dufry is re-animating the retail landscape scene at Sharjah International Airport as it wraps up an intensive period of refurbishment with a refreshed concept.

Passengers traveling through the emirate’s busy airport are already able to enjoy the new-look perfumes and cosmetics, fashion and watches, jewelry and accessories categories, with the introduction of Dufry’s Hudson store brand set to be the icing on the cake.

Iain Forrest, General Manager, Middle East, India & Subcontinent, Dufry, helmed the project, which saw phase one include the relocation of the entire P&C section from the left-hand side of the original store layout to the right-hand side. The expanded brand line-up welcomes Cartier and Benefit with the existing Bobbi Brown bar also undergoing a complete makeover.

Says Forrest: “The actual footprint for the category space is slightly less but much more focused on brand and product adjacencies, and the introduction of further niche fragrances will also be introduced as the shop evolves.

“Brands have either installed their latest design concepts or will feature on our new generic furniture.”

22 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

In the near future, Omega, Rado, Longines and Tissot watches will boost the existing watches inventory with regional brands such as Bateel and Patchi to feature in the food category.

The decision to relocate the portfolio of luxury products (watches, jewelry, fashion and accessories) from the previous standalone shop to a new position adjacent to the P&C categories, was done to create better synergy in terms of the customer experience, and has resulted in double-digit growth in these categories according to Forrest.

Despite the challenge of maintaining a 24/7 operation while creating a new passenger journey, Forrest reports a smoothsailing project experience overall. “With passenger numbers continuing to grow it was important to keep customer disruption to a minimum, which we managed to do. Business trading during phase one actually increased, which came as a pleasant surprise as we had expected some decrease solely due to the relocation of products,” he says.

The remodeled space includes a first for the region in the shape of a 110-square-meter airside Hudson shop. The convenience brand is currently being rolled out across the US and Sharjah will be a showcase for Hudson in the Middle East.

Dufry reports an unexpected increase in trading during phase one of the refurbishment process

Brand partners have the choice of either installing their latest design concepts or featuring Dufry’s new generic furniture

Says Forrest: “This will be the last piece of the refurbishment jigsaw. The concept is proving very popular [in the US] and also on an international scale with the convenience format already exported to over 80 locations outside North America.

“The Hudson shop will bring a new shopping channel to Sharjah’s airside location, filling a void that was previously missing, but that is expected by today’s international traveller.”

Sharjahs’ expanding passenger base is also evolving in terms of shopping desires, patterns and general preferences.

“Our customers are always looking for something new and gifting continues to be the number one reason for most purchases. Food is a category that is enjoying brand development with more and more exclusive items being sourced to keep travel retail different from the domestic markets. In addition we are seeing a shift to more luxurious brands, especially within the watch category,” he says.

A calculated move by Dufry to increase the number of regional products on its shelves to add to the sense of place and create a strong focal point is something that Forrest says is “becoming ever more important in the customer purchase thought process”.

New technology also has a role to play in driving customer engagement, as he explains: “The new shop will feature more than 30 digital screens which will convey product and marketing elements depending on what is current in the shop.”

And with free wifi now available throughout the terminal, Dufry will capitalise on this to target customers as they journey through the airport in tandem with the promotion of its Red by Dufry app.

The proprietary app also gives passengers access to up-to-theminute information on different flight destinations and various airport concession discounts.

On-the-ground developments at Sharjah International, as part of its ambitious expansion strategy, are also boosting Dufry commercial numbers with initiatives such as the new smart gate system streamlining passenger movement.

“A total of 16 smart gates have been introduced in departures and arrivals, which allows passengers to pass through immigration in less than 20 seconds. We have already seen a massive improvement to customer dwell time which of course can mean

more time in duty free and other airport facilities,” confirms Forrest.

The airport saw 5.5 million passengers pass through its facility in the first six months of 2017, representing a year-on-year increase of 2.9%, and Forrest reports an increase on last year’s performance in H1 2017 with high hopes for the remainder of the year.

“Traditionally, the second half of the year is stronger due to an increase in the number of local holidays in the GCC and India and the early signs are that the new shop refurbishment is also looking very positive, so we expect a significant improvement over H2.”

At its other regional locations, both Amman and Kuwait also continue to trade ahead of 2016 figures, and Forrest anticipates this trend will continue.

New destinations are always under consideration, and while Forrest remains tight-lipped overall, he says: “As always we consider every business opportunity on its merit to deliver a sustainable business model and will continue to do so. Saudi Arabia will continue to be an area of opportunity as and when new tenders become available.”

#NEEDTOKNOW Officially launched in July 2017, Dufry’s media campaign to support the UN’s 17 Sustainable Development Goals was successfully trialled at Geneva, Heathrow and Zürich airports in late 2016, and is now featuring in its Middle East locations.

The project, which aims to communicate the importance of the goals to two billion travelers by the end of this year, is being rolled out to an initial 80 airports including Amman, Kuwait and Sharjah.

Says Forrest: “They will all participate in this very worthwhile campaign, with the full support of our airport partners. Kuwait has already started to display content on its digital in-store screens and will shortly be followed by Sharjah and Amman.

“In addition, in Sharjah we will have additional marketing space allocated by the airport to highlight this campaign.”

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING 23

DUBAI AIRPORTS

Paul Griffiths, CEO of Dubai Airports poses with the trophy after the awarding ceremony in Dubai on Sunday

Another feather in Dubai Airports’ cap Dubai Airports voted Aviation & Transport Company of the Year at Gulf Business Awards

D

ubai Airports, operator of Dubai International (DXB), the world’s number one airport for international passengers, and Dubai World Central (DWC), was voted as the Aviation & Transport Company of the Year at the Gulf Business Awards 2017, which were announced at a ceremony held in Dubai in September.

The Gulf Business Awards recognize the very best in companies and business lead-

ers in industries including aviation and transport, banking, healthcare, energy, technology, real estate, retail, media and marketing, and tourism and hospitality.

Awards were also given to across other special categories to recognize innovation and CSR, while a new category, Happiness & Positivity Company of the Year, was also introduced this year.

Dubai Airports was chosen from a shortlist of the region’s top five aviation and transport companies, for its leadership and massive contribution to the growth of the aviation industry not just in the UAE but across the 240 international destinations that it connects through its two airports.

24 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

The awards – judged by an independent panel comprising industry leaders such as Dr. Amina Al Rustamani, group CEO of Tecom Group; Arif Naqvi, founder and group CEO of The Abraaj Group; Mark Beer OBE, CEO of DIFC’s Dispute Resolution Authority; Ian Fairservice, Motivate managing partner and group editor-in-chief; and Neil King, editor of Gulf Business, and public voting – sought to celebrate excellence in the corporate world and recognised companies and business leaders across nine industries. Awards were also given to across other special categories to recognise innovation and CSR.

INTERNATIONAL AIR TRANSPORT ASSOCIATION

Up the ante Passenger load factor hits record in July, says IATA

G

lobal passenger traffic results for July show strong but moderating demand growth, according to the International Air Transport Association (IATA).

Total revenue passenger kilometers (RPKs) rose 6.8%, compared to the same month last year, down from 7.7% yearover-year growth recorded in June.

All regions reported solid or better growth in passenger volumes over the past year. Capacity (available seat kilometers or ASKs) increased by 6.1%, and load factor rose 0.6 percentage points to a July record of 84.7%.

Alexandre de Juniac, IATA’s Director General and CEO, said: “As is evidenced by the record high load factor in July, the appetite for air travel remains very strong.

However, the stimulus effect of lower fares is softening in the face of rising cost inputs. This suggests a moderating in the supportive demand backdrop.”

International passenger markets July international passenger demand rose 6.2% compared to July 2016, which was a slowdown compared to the 7.6% growth recorded in June. Total capacity climbed 5.5%, and load factor edged up 0.5 percentage points to 84.6%.

European carriers posted a 7.5% rise in traffic for July compared to a year ago, down from 8.8% annual growth in

June. Capacity rose 5.9%, and load factor climbed 1.3 percentage points to 88.7%, highest among the regions. The economic backdrop in Europe has strengthened; however, on a seasonally-adjusted basis, the upward growth in travel demand has moderated sharply since February, IATA said.

Asia Pacific airlines’ July traffic rose 5.9% over the year-ago period, a deceleration compared to June growth of 8.8%.

As with Europe, carriers in the region are seeing a slowing of demand growth.

Capacity increased 6.7% and load factor slipped 0.6 percentage points to 81.0%.

Middle East carriers had a 4.5% increase in demand for July. This was an acceleration from the 3.6% annual growth seen in June, but was still well off the fiveyear average pace of 11.2%.

The Middle East to North America market has been affected by a combination of factors in 2017, including the recentlylifted cabin ban on large portable electronic devices, as well as a wider impact from the proposed travel bans to the US. Traffic growth on the Middle East-US route was already slowing in early 2017, in line with a moderation in the pace of expansion of nonstop services flown by the largest Middle Eastern airlines. July capacity climbed 3.6% compared to a year ago and load factor rose 0.7 percentage points to 81.5%.

North American airlines’ traffic

26 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

climbed 3.5% compared to July a year ago.

This was down from 4.4% growth in June, but still ahead of the five-year average pace (2.9%). Outbound travel is being supported by the relatively solid economic backdrop in North America. However, anecdotal evidence suggests that inbound demand is being negatively influenced by the additional security measures in place for travel to the US. July capacity rose 3.8% with the result that load factor slipped 0.3 percentage points to 85.9%.

Latin American airlines recorded the strongest growth among regions, posting a 10.5% demand rise compared to July 2016. Capacity increased almost as fast, up 10%, and load factor climbed 0.4 percentage points to 84.9%. International volumes between North and Central America continue to strongly trend upward while traffic on the North-South America market segment has also started to trend upwards, in part helped by the healthier, albeit still fragile, economic backdrop in Brazil.

African airlines experienced a 6.5% increase in traffic compared to a year ago, down from 9.8% demand growth in June. Capacity rose 1.7%, and load factor jumped 3.4 percentage points to 74.1%.

Conditions in the region’s two largest economies continue to diverge, with South Africa in recession, while business confidence levels are at a two-year peak in Nigeria.

ERAMAN

Meeting challenges

head on

Faced with challenging times, Eraman had to constantly adapt to unforeseen circumstances in recent years

by REBECCA BYRNE

90% of Eraman’s business is at Kuala Lumpur Airports

I

t has been two years since Zulhikam Ahmad came on board Malaysia Airports (Niaga) Sdn Bhd as General Manager.

His appointment came after the three airline disasters in 18 months, which seriously impacted passenger traffic through Malaysia’s main airport, KLIA, in particular from China. His hiring also happened to be just at the time of the klia2 opening. It was as Zulhikam says “a tough year for us.” Up until then, growth had been double digit but 2015 was crunch time.

“We had become comfortable as we were in a dominant position in our retail environment and the number of shops we operated had doubled. So when the downturn hit us, it was hard.

We had to assess our marketplace and we had to rightsize the growth.” Just as Malaysian Airlines had to realign its routes to grow, Eraman reduced the number of outlets to become smaller but more profitable.

Zulhikam Ahmad, General Manager, Malaysia Airports (Niaga) Sdn Bhd

28 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

In 2013 Eraman had become the main concessionaire in the newly opened klia2. However, due to the unforeseen disasters that ensued, passenger numbers did not meet expectations. Eraman had tendered aggressively for the contract at the airport, expecting higher numbers, and when this did not translate, tough decisions had to be made. Zulhikam points out that they were not the only retailer affected; other high profile names also had to close stores in the Emporium.

This rightsizing strategy has already shown benefits as Eraman is now in a much more competitive position and made a double digit sales growth in 2016 in comparison to 2015 when Eraman still grew, but not profitably. During 2017 first quarter, KLIA international movements were up 12% as customer confidence in Malaysia Airlines recovered. Malindo Airlines’ move from klia2 to KLIA has also helped.

90% of Eraman’s business is at Kuala Lumpur Airports.

However, the other international airports in which it operates are growing, in particular Kota Kinabalu. This is because of an upsurge in international flights, in particular from China due to the increasing popularity of the eco-tourism in the region. Penang also attracts Indonesian travelers for medical tourism.

Eraman is implementing a far-reaching rebranding program that is being rolled out in a co-ordinated approach, covering the website, stores, brands and uniforms. This will be done in line with the end of tenancies, which come up for renewal in 2019. In the meantime, Eraman will upgrade where possible, refreshing layouts and bringing in new activations. Recently the company has opened Express, a newly renovated and rebranded store in KLIA. The company is also expanding its food and beverage franchise business under the Gloria Jeans Coffee brand, with two kiosks opening in August. These Gloria Jeans Coffee kiosks are located at level 3 International Arrivals hall and level 5 International Departures of KLIA.

POPULAR GUESTS AT ANY PARTY , t B7 a s u e Find e Villag Blu

CHOCOLATE LIQUEURS

CHOCOLATE COFFEE LIQUEURS

CHOCOLATE COCKTAILS

YOU CAN NEVER BE TOO GENEROUS

ERAMAN

Recent initiatives to drive business include the Eraman Shopping Extravaganza Buy & Win Campaign

The fastest growing categories remain perfumes and cosmetics followed by confectionery. Liquor & Tobacco is growing, but not as quickly as confectionery. Malaysians make up 60% of the purchasers followed by the Chinese, and increasingly business is done on arrival. Zulhikam points out that they are looking at maximizing arrival business with the use of digitalization and visual merchandizing.

Eraman is also looking to reintroduce its ecommerce offering.

Zulhikam says: “We have a big data analytics project looking from the airport perspective to improve the total airport experience for everyone.

Zulhikam also has his eye on new partnerships. At the recent TFWA conference in Singapore he was particularly impressed with companies that had innovative new booths, such as Coty, as they made much more of an impact. He also commented on the companies that are now going direct to retailers. “It is exciting that we can now work direct with some brands such as Carolina Herrera, Paco Rabanne, Nina Ricci and Valentino under the House of Puig, so we can have a much closer collaboration.

Access to brands is key for us.”

In 2013 Eraman became the main concessionaire in the newly opened klia2

30 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

He enjoys the challenges of the ever-changing environment in which he operates, saying, “We have been forced to change, and I am very open and receptive to change, I always try to challenge myself, my team and my partners – I am always looking for ways to grow. We are always looking for new partners and opportunities to engage with them. Space is a constraint now; when we have more space we will go out and pitch for new spots.”

Eraman contributes a significant portion on non-aeronautical business to its owner Malaysia Airports Holdings Berhad, of 17.7%. There has been a consolidation in the industry and Eraman is only present in Malaysia, so could the next step be overseas? Zulhikam is pragmatic in response to the question.

“We have grown Eraman and we do need to grow more, but strategic partnerships will depend on our parent company, MAHB. But anything is possible in the future.” However for now Zulhikam says Eraman is concentrating on the present, working closely with partners and suppliers to grow profitably in the domestic market.

Recent initiatives to drive business and reinforce the value it offers to shoppers include the Eraman Shopping Extravaganza Buy & Win Campaign held over 2017 and 2018. The company has been working with Malaysia Airports Holdings Berhad (MAHB) to create more excitement in the airport by offering a bigger and better prize like a BMW 318i car for each of the three cycles of the campaign: July/August 2017; November/December 2017; and April/May 2018.

This Buy & Win promotion will also be part of Malaysia Airport’s 25th Anniversary celebration campaign, which is designed to create better experiences for travelers. Coveted prizes on offer for all customers in this anniversary campaign include a prestigious Lamborghini car.

Zulhikam comments that since he has come on board, he has tried to do things differently and make Eraman more aggressive in its industry. “I came to Malaysia Airports for a challenge from five years at 7Eleven Malaysia. I believe that constant change is good. I am changing the way I run my business this year compared to last year. We like to challenge not just ourselves, but also our suppliers and our distributors. We need to move faster to grow better and capitalize where we can.” With Zulhikam at its helm, Eraman looks poised for a successful future.

The fastest growing categories at the KLIA remain perfumes and cosmetics followed by confectionery

M1ND-SET RESEARCH

High-tech retail

takes hold Technology is playing a major role in the shopping experience for duty free shoppers in the Middle East and Africa, research firm m1nd-set has discovered

S

hoppers from the Middle East and Africa want to see a seamless, omnichannel retail experience from duty free operators, according to the latest research from specialist Swiss-based analyst m1nd-set Research. And technology – including the use of smartphones in-store – is gaining ground among travelers from the region.

Setting the scene, m1nd-set has analyzed the passenger flows at airports including Dubai, Doha, Jeddah, Abu Dhabi, Cairo, Tel Aviv, Kuwait, Muscat, Riyadh, Johannesburg and Bahrain. Passenger numbers at most of these airports grew strongly across the board over the last 12 months, with Doha, Tel Aviv and Muscat showing the highest annual traffic upswings at 14.4%, 12.9% and 15.5%.

32 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

Passenger forecasts for the next 12 months show a more mixed picture, with several airports set to register double-digit growth and some expected to register declines. According to m1nd-set’s figures, Tel Aviv is forecast to see an upswing of 18.6% in traffic growth in the next 12 months, with Cairo at 12.6%, while Riyadh is expected to see a decline of 7.1% and Jeddah a fall of 8.1%.

for a specific purpose. Almost half (45%) cited convenience, while 39% were asked to buy the product by a different person.

Of the people who bought a duty free product, 47% compared prices with either downtown stores, other airports or online.

The 18-25 age group seemed to be most active in comparing prices. Some 57% of non-buyers compared prices with downtown stores, other airports or the internet.

Decision to buy made in-store

Using smartphones to compare prices

The following shopper behavior data from m1nd-set is consolidated information for the Middle East and African region. The insights are based on 3,500 airport interviews conducted in 2017.

Asked about when they decided to purchase a specific product in duty free, 29.5% of travelers said before leaving for the airport at home, while 14.7% said before leaving for the airport at the destination, 7.3% on the way to the airport, and 16.1% in the airport but before going into the store. Many passengers made the decision while in-store. More than a quarter of passengers surveyed (25.9%) said they decided to purchase in the store after looking round, while only 3.2% said they decided to purchase after listening to advice given by store staff, and 3.3% said in the store after buying another category.

The vast majority of travelers (84%) cited value as the principal reason why they purchased a duty free product, 68% cited experience in-store, 65% said the products were exclusive/different, and 61% said the suitability of the product

When asked why they used smartphones at airport shops, around one-third (35%) of shoppers from the Middle East/Africa said to get more information about products/read consumer reviews, etc, with a similar number (31%) using a phone to call family or friends to ask their advice.

Just over a quarter of travelers (26%) used their phone to compare prices with online shops, with 22% using it to compare prices with regular downtown stores, and 23% getting advice from friends on social media.

Many passengers are requesting a multi-channel retail experience. More than half (60%) of airport shoppers in the Middle East and Africa under 40 years old say integrating store, online and mobile shopping experiences are the areas where retailers need the most improvement.

Real-time communication is another area in demand. Nearly three-quarters (73%) of women from the Middle East and Africa say they would be interested in receiving offers/coupons on a smartphone while at the airport.

Internet influences purchasing decisions Asked why they were motivated to searching information online about airport shops before their trip, a high number (66%) of travelers wanted the possibility of downloading vouchers to be used at the duty free shop, while 57% wanted more information on special offers/deals, with 53% wanting information on prices. More than a third of travelers wanted more information on the brands/products available, more user-friendly navigation, and more visually appealing content.

Regarding content, 79% of millennials in the Middle East and Africa believe user-generated content is a good indicator of product quality, and 35% use social media to consult friends or colleagues before purchasing.

Some 71% of travelers from the Middle East and Africa say posts from their friends directly influence their purchase decisions, and 54% say posts by companies on brand websites influence their purchases.

Information gleaned on the internet had an influence on every product category in duty free, according to m1nd-set’s research. The majority (66%) of passengers said online information had an influence in shopping for electronics. The percentages for other product categories were as follows: perfumes (52%), skincare (47%), fashion (58%), accessories and jewelry (53%), make-up (46%), confectionery (50%), fine food (51%), alcohol (36%), books, newspapers and magazines (44%), and tobacco (34%).

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING 33

HALAL SOCKS INC

Halal Socks caused a media frenzy when Canadian Prime Minister Justin Trudeau wore its colorful Happy Eid socks at Pride, Toronto

Stepping out Newly created company Halal Socks Inc aims to spread peace and joy across the world – including travel retail – one sock at a time, according to its founders 34 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

H

alal Socks Inc may only have been formed earlier this year, but the Canadian sock brand has already hit the headlines across the globe with its unique and meaningful designs.

Shehryar (Sherry) and Sara Qureshy are the husband-andwife team behind the Toronto-based company. Halal Socks was formed after Sara had difficulties finding a festive gift for her husband, Sherry, during the last Eid Ul-Fitr festival. Knowing his passion for socks, she went looking for Eid-themed ones. “After hours of searching online, I couldn’t come across anything even remotely close to what I was looking for. This is when Sherry and I had a light bulb moment and Halal Socks was created.”

Halal Socks has been mentioned in the Times Magazine, Washington Post, New York Times, Toronto Star, Al Jazeera, Huffington Post, and Vogue

The start-up company extends beyond the sole purpose of traditional socks, as Sara Qureshy, Co-Founder and Lead Designer of Halal Socks, explains. “While keeping your feet warm with the highest quality fabric, our designs represent the values and ideals of the modern Muslim. That means promoting tolerance and acceptance of people from all walks of life, inclusivity, and pride in being Muslim at a time where the political climate is often very anti-Islam. Hoping to unite people one step at a time, Halal Socks donates a percentage of every sale to charities that align with the company’s vision.”

The couple say their greatest fun comes from creating something fresh, fun, and – most importantly – respectful to the Muslim community. They hope Halal Socks is part of the first wave of better representation for Islamic choices for holidays, celebration, and clothing that showcases Muslim pride.

“As socks are clearly visible when praying, the Halal Socks brand lets you add a little bit of individuality and celebration of Islam with every step,” says Qureshy, who, along with designing the socks, also markets the products through social media and endorsements. “Our socks are made from the world’s finest combed cotton and are crafted with pride. While impossible not

to notice, the luxurious feel of the material is a dream to wear and are guaranteed to fit you better.”

Immediately after launch, the brand caused a media frenzy when Canadian Prime Minister Justin Trudeau wore its colorful Happy Eid socks. “Our first and biggest achievement was to see Canadian Prime Minister Justin Trudeau flaunt our Happy Eid socks at a publicized event,” says Qureshy. “To see an honorable leader like Trudeau connecting with and showing support for the Muslim community on such a personal level, it was incredibly humbling to say the least.”

Then in July, the CEO of Toronto-based Paramount Fine Foods, Mr Mohamad Fakih, was seen wearing the world’s first pair of Shawarma Socks – by Halal Socks – while gifting the second pair to Mr Trudeau. “To have these two prominent individuals wear our socks was definitely one for the books,” she smiles.

The above achievements led to Halal Socks being mentioned in the Times Magazine, Washington Post, New York Times, Toronto Star, Al Jazeera, Huffington Post, Times Magazine, and Vogue. In addition to these articles, the Qureshys were interviewed by Ben Mulroney on ETalk. Halal Socks has also been featured in MacLeans, MangoBaaz, and The National.

“While these accomplishments are quite impressive for a start-up, our ultimate goal is to spread peace and joy across the world, one sock at a time,” she says.

The Qureshys believe the brand will do well in duty free because due to high demand, the brand’s unique designs are rapidly gaining international attention. Having them available at duty free locations would make them more easily accessible. In addition, the Solidarity collection consists of designs that are specifically catered to creating awareness around anti-Islamophobia in western countries. While they make great conversation-starters, souvenirs, and gifts, these socks seek to promote peace and unity.

Currently, Halal Socks is available at five retailers in the Greater Toronto area: The Date Palm, Modah, Isna Canada, Studio 89, and Nur Shop. The brand is also available at Siraj Store in New Jersey, US. Halal Socks is looking for distributors in the travel retail market, as Qureshy explains. “The global travel retail market was valued at US$63.5 billion in 2014 and has only increased since.

As we continue to expand internationally, we would love to have distributors in the travel retail market so that Halal Socks can be a small portion of that growing figure.”

Halal Socks Inc Founders Sara and Sherry Qureshy donate a percentage of every sale to charities that align with the company’s vision

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING 35

FURLA

One of a kind Travel retail shopping must provide value-added services combined with good merchandising, says Gerry Munday, Global Travel Retail Director of Italian brand Furla

The Spring/Summer 2018 collection focuses on intense colors, ranging from vibrant and dark lagoon-like blue and green tones to more feminine bright pinks that reflect Venetian terraces

T

his year Furla has been continuing to build its presence in travel retail with the opening of new travel retail stores globally. Gerry Munday, Global Travel Retail Director, notes that since 2011, the Italian company has grown from 30 travel retail locations globally to having 262 doors in 63 countries. “All regions are performing well for us, particularly Asia, and we haven’t perceived any location to be especially challenging. Obviously some regions perform better than others,” she says.

Furla expects travel retail sales growth rates to continue in an upward curve as they have done over the past six years. The strategy is to continue growing the brand’s presence, where the space and environment enable it to reflect its DNA.

Dramatic change in how consumers shop Gerry Munday, Global Travel Retail Director of Furla

36 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

Turning to consumer shopping behavior, Munday says that the combined effect of the digital world and globalization is dramatically changing how consumers shop. “We’ve long talked about travel retail being a global shop window for a brand, and that’s as true today as it has ever been, but equally, we all know the high operating costs of the travel retail footprint for a brand, particularly at the airport. An empty travel retail shop with no sales can

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

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

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

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

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

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

lagoon-like blue and green tones to more feminine bright pinks that reflect Venetian terraces. Floral brocades and jacquards are interpreted in bright colors that give a fresh look to materials created by traditional machines.

The collection plays with both solid and hollow designs, inspired by the architecture of Venetian buildings. Geometric forms mix with softer shapes, such as the new scallop shield closure lock featured on the new Ducale line that resembles a noble family emblem. Trendy and contemporary, the Ducale line features saddle bags and satchels. The leather shoulder straps are adjustable so the bag can be worn on the shoulder or as a cross-body.

The delicate scallop design gives a romantic touch to the Merletto and Scoop lines, both inspired by the famous Museo de Merletto (Burano Lace School). Scoop has a luxurious look, enriched by an iconic closure system, contrasting metallic details and reversible functionality.

The second delivery features a more delicate color palette that is lighter and transparent like Murano glass. Its print themes celebrate seasonal summer fruits, and are feminine and playful, yet with a twist of irony.

A new addition to the Stacy line is the Casanova bag, available as a drawstring or tote. The woven panel of Vit. Venice smooth calf leather creates an eye-catching color-block and is available in both squared or striped graphics.

The popular Metropolis line has been updated with special variations and a new small cross-body featuring a leather and chain strap with a phone pocket. New Metropolis bags feature a variety of prints and fabrics, including Jacquard, Butterfly and Rainbow, to create a unique look for Furla’s most successful line to date. The fun Candy line also returns with a new mini crossbody style. be a very high price to pay for image awareness. But conversely, there is an argument to say that retailers who are digitally savvy, offering e-commerce, social media, etc, as does Furla, do this in part to help drive traffic into stores. It works both ways.”

She continues: “The difference between the high street and travel retail is, of course a mindset. Airport shopping is now part of the travel experience and the mindset is different. In travel retail we have to target the consumers who may have been made aware of a brand digitally and now find it ‘live’ at the airport. The consumer who wants to explore the shopping opportunities at the airport, or downtown, or on the cruise ship, ferry, inflight.

Who looks for newness, innovation, something different. We need to focus on the traveling consumers for whom shopping is because of want, rather than need, and who enjoys the personal service and experience of live shopping that he/she simply can’t get online. I believe travel retail shopping must provide valueadded services combined with good merchandising.”

Bringing a touch of Venice to Cannes During the 2017 TFWA World Exhibition, the company will bring a touch of Venice to Cannes. The Spring/Summer 2018 collection focuses on intense colors, ranging from vibrant and dark

38 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

More focus on men’s products Furla is also putting more emphasis on its men’s collection in travel retail. The latest range follows the same theme and trends as the women’s collection. The best-selling Atlante line sees the addition of new Arazzo, Ippocampo and Grifone prints created exclusively by Furla’s design team. New styles and sizes join the Marte business line, with a new cross-body zip-top, small messenger and a new briefcase with collapsible handles for increased functionality.

The Ulisse leisure features revised shapes and functionality, including nylon bags in solid and printed versions with animal animations that provide a fun and quirky feel. A new four-ways bag has been added to the Icaro collection, offering practical and multifunctional usage.

There are also many handcrafted designs typical of the Italian tradition, such as baskets and crochet in multicolored variants.

“The Furla Spring/Summer 18 is absolutely fabulous, and just screams summer,” Munday enthuses. “The design team have worked extremely hard to bring unique and trendy prints to truly make the collection one of a kind. We are thrilled to be showcasing it at TFWA World Exhibition and look forward to a rewarding week with clients, colleagues and friends.”

{ NEW COLLECTION }

misaki.com

ANTHON BERG

Buying chocolate

experiences In an exclusive interview, André Haunsø Kampmann, Senior Brand Manager of Anthon Berg International, reveals the confectionery company’s recipe for success

Celebrating the 50th anniversary of its Chocolate Liqueur Bottles, the new Chocolate Liqueur Collection comprises 21 favorite miniature bottles from Anthon Berg’s three concepts

Two of Anthon Berg’s latest concept products, Chocolate Liqueur Bottles Drinks Time and Chocolate Cocktail - Cocktail Hours, are presented in a premium gold sleeve as a dual pack

40 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

A

nthon Berg is one of the leading suppliers of chocolate containing alcohol. Its Chocolate Liqueur Bottle concept is “a silver bullet line” with very few competitors, according to André Haunsø Kampmann, Senior Brand Manager, Anthon Berg International.

The firm targets both male and female consumers and has created a strong range within formal and informal gifting, sharing, self-indulgence and trial purchase situations. “We continue to work around this sure-shot product line, by developing new items we know the consumers want. Our strong partnership with the leading liqueur brands in the market puts us ahead of the game,” he says.

When speaking about the company’s recent performance, Peter Dige, Travel Retail Director, offers: “We came out of 2016 with quite acceptable sales figures with a very strong Q4 performance. And we have had a fantastic seven months so far in 2017. We are seeing a steady growth in all regions despite some challenges for certain customers. Qatar has been challenged on sales because of the unfortunate boycott by the Arab Emirates. This has resulted in a decrease in number of passengers and, due to this, fewer purchases. Despite this we are generally very satisfied.”

50th anniversary milestone In 2018, Anthon Berg celebrates the 50th anniversary of its Chocolate Liqueur Bottles. At this year’s TFWA World Exhibition, it is launching two new products in the category. The Chocolate Liqueur Collection comprises 21 favorite miniature bottles from the three concepts: Chocolate Liqueur Bottles, Chocolate Cocktails and Chocolate Coffee Liqueurs. This broad-targeting product is aimed at gifting, trial, sharing and self-indulgence.

In addition, two of its latest concept products, Chocolate Liqueur Bottles - Drinks Time and Chocolate Cocktail Cocktail Hours, are presented in a premium gold sleeve as a d ual pack. Each box contains 12 liqueur-filled chocolate bottles – one for every hour around the clock. “Together they give consumers 24 hours of luxurious chocolate liqueur moments,” enthuses Kampmann.

Another new product for 2018 is the Deluxe Series (Travellers Exclusive), in Sweet Caramel and White Nougat flavors. The Deluxe Series make up a large percentage of the brand’s Nordic sales. The Travelers Exclusive line contains three sleeved boxes of individually wrapped, chocolate-covered marzipan treats.

“The two newcomers have big global potential, as we are basing the taste on nougat and caramel rather than marzipan – a Nordic favourite,” Kampmann says. The new products are targeting non-alcohol requirements and can stand alone as a dual concept as well as part of the full range. The Deluxe Series targets informal gifting, sharing and self-indulgence.

Travelers Exclusive products in demand Looking at the latest sales figures, the company has great expectations for growth this year. “We are seeing a steady rise in number of passengers throughout the regions. The big job for the stores is channeling the traffic through the stores and creating ideal purchase situations. As a supplier, our job is to create

more experiences for the consumers. We work closely with the concessions’ owners in doing this to create innovative concepts to attract the attention in the shops,” explains Dige.

As low-cost airlines are driving the majority of the growth in passenger numbers, Anthon Berg is continuing to develop luxury products at a price point suited for the more price-conscious consumers. “So from where we stand this year looks good so far,” says Dige, adding that one uncertainty is the impact another terror attack would have on the travel retail business.

Going forward, the company’s strategy to drive growth this year is to deliver the best chocolate products on the market that contain alcohol, notes Dige.

Turning to consumer trends, Anthon Berg continues to see a demand for premium products at different price points and tailored to various purchase occasions. Travellers Exclusive products continue to be in demand, so it is also a focal point in developing new products.

Kampmann has a lot to say on the importance of millennial consumers and their mindset. “Millennials do not buy stuff, they buy experiences, which is just what Anthon Berg products are all about. Our brand universe Generosity (You Can Never Be Too Generous) is tapping right into the mega-trend of generosity, which is a big driver for millennials’ self-perception. We bring this brand to life by running promotions that tap into millennials’ demand for exclusivity, authenticity and diversity, which encourages them to interact and which sparks conversations. The latter being key to life they lead on social media.

“A few years back certain media was targeted at specific markets, but the global citizens millennials represent are crossing physical borders online by the minute. This means that everything we put out there is instantly available to consumers on all markets. This allows us to interact e.g. via Facebook with all markets at once and gives us the opportunity to create a scene for brand engagement by global ‘virtual tribes’ of Anthon Berg fans,” says Kampmann.

Successful promotional campaigns The promotional strategy is to run various types of activations. This year, it has had great success with its gwp promotion ‘Buy three Anthon Berg products and get a free wine cooler’.

Another successful campaign called The Generous Teaser took place in spring 2017 in Copenhagen Airport. The promotion was a spin-off of its brand universe You Can Never Be Too Generous. When buying two Anthon Berg products or more, shoppers got a pink gift bag for the products to write a generous teaser message for the recipient. A photo wall of one of the most famous tourist scenes in Copenhagen (Nyhavn) was put up with a classical Copenhagen bench in front. The consumers could take a selfie holding the bag with the message and tagging the recipient on social media.

In September 2017, Anthon Berg ran a branding promotion at Copenhagen Airport titled Spin The Bottle. Travelers were invited to spin the bottle physically at the airport and win plane tickets to a destination of their choice. A similar promotion took place when the Chocolate Coffee Liqueurs were launched, which proved a great success.

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING 41

ALZAWRAE COMPANY

At the TFWA World Exhibition in Cannes this year, Mazaya aims to showcase the top 50 flavors, along with a new range that targets Europe and America specifically

A sensory experience Jordan-based shisha tobacco brand Mazaya is determined to reflect the rapidly growing popularity of shisha smoking in markets outside the traditional Middle East stronghold

M

azaya, the shisha tobacco brand owned by Alzawrae Company, is on a mission to bring the shisha smoking trend to travel retail and is now present in 10 duty free shops.

They include its home country of Jordan (border and downtown retailers, inflight with Royal Jordanian Airlines, and airport retailers); Lebanon, at Rafic Hariri Airport Beirut Duty Free Shop; Dubai Duty Free; Najaf Duty Free Shop, Iraq; Kuwait Airport; Doha Airport, Qatar; Tehran Airport, Iran; and at airport shops in Egypt.

“Mazaya’s sales are progressing very well with Dufry’s duty free shop at Amman Queen Alia International Airport in Jordan, witnessing a year-on-year growth of approximately 280%,” says Rawan Elayyan, Brand Manager, Alzawrae Company.

“We at Mazaya have been focusing our effort to gain market share, drive higher sales, and becoming the brand leader in this particular shop.”

The main reason for this progressive growth is due to several

42 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

factors. The brand equity has been increasing considerably in the region, driving up overall demand for the product. The shisha tobacco specialist has also focused on creating aggressive offers for customers at the airport to benefit from the price advantage over the local market price.

At Dubai Duty Free, sales growth reached up to 956% during promotional offers this year, along with its efforts to create awareness at the airport with sponsorship of plastic bags and screen advertising with JCDecaux. “We are keen to promote the brand and push the sales even further with Dubai Duty Free, especially since it’s considered one of the top duty free shops in the world,” says Elayyan.

Capturing the true essence of the flavors In 2018, Mazaya will be targeting Turkey, Western Europe, South America, and North Africa. The company has been studying the local markets closely in 2017 in order to find the best penetration strategy for the travel retail business.

Dubai Duty Free, sales growth reached up to 956% during promotional offers this year, along with its efforts to create awareness at the airport with sponsorship of plastic bags and screen advertising with JCDecaux

Mazaya’s star performers are the classic flavors, which include Two Apples, Lemon with Mint, Blueberry Exotica, Mint and Gum with Mint, depending on the regional consumer behavior.

At the TFWA World Exhibition in Cannes this year, Mazaya aims to showcase the top 50 flavors, along with a new range that targets Europe and America specifically. “However, this year the experience will be more sensory than last year to make sure that visitors capture the true essence of the flavors,” says Elayyan.

Mazaya will also be presenting various pack sizes available to travel retail. Alongside the tobacco, Mazaya can also supply prestigious glass shishas in various sizes along with its handy portable size shisha that is targeted at consumers looking to experience this growing trend for the first time.

Providing valuable promotions So far this year, sales figures are showing huge increases compared to last year’s turnover, thanks to a lot of promotional activity. “Sales are increasing dramatically with our year-on-year growth and that is due to many reasons, including our focus on end consumers by providing direct valuable promotions to them, and enhancing our brand perception by sustaining our presence and position in those duty free shops.”

Elayyan adds: “We always seek to provide engaging promotional areas to have a direct link with our consumer base and provide them with appealing promotions to allow them to have maximum benefit from their shopping experience.”

Smoking shisha is becoming a worldwide phenomenon that is no longer specific to the western culture. “The social media globalization effect has made the world a smaller place for everyone to meet. You will find that shisha smokers now connect on review platforms where they share the flavors experience. We are now securing our presence locally in Europe, America, and North Africa specifically, so the next step would be travel retail.”

Millennial consumers make up to 80% of Mazaya users, according to a recent study the company has conducted. “Mazaya as a brand is shaped to serve this generation specifically with

the variety of flavors, sizes, and accessories offered to cater to a personalized experience,” notes Elayyan.

In addition, the firm is restructuring its digital presence to cater better to their needs, and the results will be unveiled in 2018. A digital presence is vital for Mazaya as a shisha tobacco brand since this will give the buyers an easy way to recognize and verify the brand and the product online.

As for customer experience, in 2017, the company has started driving offline activations online, mainly deployed in Dubai Duty Free with its “I wish I could shisha in the sky” campaign.

Other point of sale duty free activities have included a special set-up for each month and during special occasions such as Easter, Ramadan, Eid Al Fitr, and Spring at Queen Alia International Airport with Dufry. Also, the company is using billboard, signage and mupis (advertising panels) at Dubai Airport and Najaf Duty Free in Iraq.

In October, Mazaya will be introducing an activation titled “Step out of this world and relax with Mazaya”. Elayyan describes this promotion as “an oasis of relaxation in a clean, light and modern space for passengers” at Dubai International Airport Concourse A in partnership with JCDecaux. “We are looking forward to it,” he says.

Consumers will be invited to relax in Mazaya massage chairs, enjoying fruit scented vapor aromas which relate to shisha flavors while listening to soothing music through personal headphones.

Charging points allow them to recharge various mobile devices at the same time as recharging themselves. Brand ambassadors will encourage each customer to have a photo taken which can be shared on social media with related hashtag. Brand ambassadors will also hand out product information and give each participant a free gift of a Bluetooth speaker and duffel bag.

The company will also continue to promote Mazaya abovethe-line through industry media advertising, via industry exhibitions, events and conference sponsorship, plus customer giveaways to ensure it is the shisha brand of choice for travel retail internationally, concludes Elayyan.

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING 43

CHINA INTERNATIONAL DUTY FREE

CIDF has a wide and well-balanced portfolio of Chinese tobacco products, such as the Ashima brand family

Inspiring the millennial market

C

hina International Duty Free (CIDF), the independent distributor and marketing specialist, is expanding its travel retail reach beyond its core Chinese tobacco product range.

From its offices in Dubai, Singapore, Hong Kong, Zhuhai, San Francisco, Vancouver and New Delhi, CIDF continues to fulfil retailer needs primarily in the tobacco category, but this is rapidly changing and the balance shifting, in line with its strategic plans, to encompass also both

Following its success in the tobacco products category, China International Duty Free is targeting the liquor and wellbeing sectors with its innovative approach

liquor and wellbeing, according to Fiachra Mullen, Marketing Director, CIDF. “Our work in all three categories shares the commonalities of being by definition disruptive – i.e. by offering craft spirits within the liquor category – and offering a category management approach (customized portfolios of high-growth/premium brands) to help retailers more easily manage such up-and-coming but difficult-tocoordinate categories,” she explains.

CIDF has a wide and well-balanced portfolio of Chinese tobacco products,

spanning the value, premium and superpremium segments. Sourced from China’s biggest state-owned manufacturers and leading manufacturers in Hong Kong and Taiwan, this range can meet the demands of any consumer profile mix.

The company’s current star performers continue to be those products that are exclusive to the global travel retail channel, and beyond this, those products that are exclusive to CIDF, as Mullen explains. “The rationale for the former is well-understood in the industry, but we also find that bringing CIDF-exclusive brands to market allows us to better control pricing, promotion and consumer engagement, leading to more sustainable growth and longer-term success in the market. On the increasingly rare occasions when we bring products to market which are available through a wide range of suppliers, we see repeated dangers of ‘races to the bottom’ in terms of price and inconsistent in-store activation from location to location.”

Millennials seeking innovation

Chairman Mao’s Cigarillo was developed exclusively for Chairman Mao, and was created in two different variants in the hometown of cigars in China, Shifang

44 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

CIDF will be in attendance during the TFWA World Exhibition in Cannes, discussing opportunities across tobacco, liquor and wellbeing, but due to the disparate nature of its three product categories, Mullen says its offering is not well-suited to the in-show exhibition approach.

A close-up of the Ashima Eternal Love Superslim pack

In the tobacco category, CIDF has seen a recovery this year from the impact of the downtrend in the Chinese domestic market during 2016. Millennial consumers are increasingly seeking innovation in packaging and product performance, such as resealable and innovative size formats, and capsules/twist filters, etc.

As for the craft spirits and wellbeing categories, huge domestic growth in these sectors is driving an equivalent surge for CIDF in global travel retail. Interestingly, Mullen notes that the impact in the travel retail channel is regularly even bigger for these categories than in the domestic market, due to the ability to offer bigger sizes and unique variants in liquor, and a safe, trusted environment to buy health supplements and wellness products.

Millennials are increasingly important for CIDF in all three categories, across which the company has customized portfolios specifically for this target market. Mullen acknowledges that engagement of millennials needs an alternative approach to the traditional marketing strategy, and CIDF is increasingly seeking to engage them digitally, where allowed, although this is not often permitted in the tobacco category.

Aside from the tobacco category, Mullen considers it of paramount importance to pursue an active digital media and social media channel strategy in travel retail. The company has innovated in this respect with in-store beacons and other ways to communicate with customers before their journey.

“CIDF helps our brand partners bridge the gap between digital/social activation they complete in their home markets, and the digital engagement we can bring to the global travel retail environment,” she explains. “We have introduced beacons in certain locations to do just that, and explored pre-engagement of consumers before they even begin their trip to the airport.”

This Flavors of Life stick highlights one of CIDF’s innovations for millennial consumers

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING 45

LIQUOR NEWS

Second edition of Patrón en LALIQUE is released In 2015, renowned luxury tequila distiller, Patrón, and illustrious French crystal art glassmaker, LALIQUE, together created a breathtaking collaboration, Patrón en LALIQUE. That limited edition crystal decanter was influenced by founder René Lalique’s early Art Nouveau style, which he pioneered in the late 19thth century.

This year, once again the two esteemed companies will release a beautiful collaboration. For Patrón en LALIQUE: Serie 2, LALIQUE’s master artisans have created a stunningly elegant crystal decanter inspired by Lalique’s signature Art Déco design, which has both a French and Mexican pedigree.

Only 299 bottles of Patrón en LALIQUE: Serie 2 have been created, each skillfully handmade and individually numbered at LALIQUE’s glass factory in Wingen-sur- Moder, in Alsace, France.

The bottle, inspired by the Weber Blue Agave plant, from which tequila is produced, displays the lines that are both straight and offer the feel of delicate curves – quintessential Art Deco. The decanter’s rounded crystal stopper is amber in color, to complement the extra añejo tequila inside the bottle, and features Patrón’s iconic bee emblem, detailed in pure gold enamel. The elegant display case rotates to reveal the bottle and stopper, making for a truly dramatic presentation.

The bottle and display case are just the beginning. Tequila is challenging to age, but Patrón’s master distiller Francisco Alcaraz and his talented team have created a masterpiece, aging the tequila for, on average, over seven years in three different types of barrels: American oak, French oak, and Spanish Sherry. The exceptional liquid has the perfect balance of oak and roasted agave flavor, with notes of apple, banana, pear, vanilla, light agave, raisin and pecans.

WGS flagship brand Glenfiddich has regained the number-one single malt position in value and volume sales

46 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

Mexican luxury meets French luxury in the new release: Patrón en LALIQUE: Serie 2

WGS introduces new expressions after recordbreaking year William Grant & Sons (WGS), now the 6th largest brand owner in travel retail, is bringing new expressions to Cannes following a record year in 2016 and continued growth in 2017.

Continuing with its trend toward premiumization, WGS will introduce a number of new expressions to the travel retail sector for core brands Glenfiddich, The Balvenie and Tullamore D.E.W. in Cannes this year.

Along with offering the new expressions in Cannes, WGS is reporting a great deal of good news. Glenfiddich, the flagship brand for WGS, has regained the number-one single malt position in value and volume sales last year, according to IWSR figures, enabling it to enter the top-10 spirit brands in the channel. Additionally, The Balvenie, growing +23.8%, is the 4th largest single malt in travel retail, Hendrick’s remains the strong leader in super premium gin with a 56% share, Monkey Shoulder grew value sales +95%, Drambuie value sales grew +18% in a flat category and Sailor Jerry spiced rum grew value sales +18% ahead of the category.

WGS held a series of reveals leading up to TFWA WE, with its main Glenfiddich brand story theming its annual party on Tuesday October 2nd.

advertisement removed for legal reasons

DISTELL Distell continues to promote and raise funds for the preservation of the African elephant, most recently with Phase II of “Name Them Save Them,” for which 400,000 original packages were produced

Global legacy

W

hile both continuing to proclaim its quintessential South African heritage and reaching out to other traditions, Distell has been becoming ever more visible in the global travel retail industry and the world at large. The company’s roots are clearly seen in its glorious wine range and with its shining star, Amarula, a cream liqueur made from the fruit of the native Marula tree. Taking heritage to a whole other realm, Distell brought “proudly South African” Bain’s Cape Mountain whisky to the world. In recent years the company has made great strides outside of these more regionally traditional selections.

Distell’s portfolio includes an increasingly significant whisky range along with Bisquit Cognac.

African improvement For a number of brands Africa has become a real focus as travel growth rates move into positive territory and a surge in airport reconstruction announcements has made the continent more appealing for long-term plans. Unsurprisingly, Distell is in a strong position in the region, though economic and political uncertainties are an inevitable reality. Andrea Baumgartner, Head of Marketing Global Travel Retail at Distell, says: “Africa as a region is in flux at the moment with various socio economic and political instabilities. Nevertheless, the resilience of this region keeps on surprising us all, with growth experienced in spite of these challenges.” Angola is one of the company’s strongest markets in the region, but is currently dealing with economic strife caused by a drop in commodity prices in addition to political strife caused by a recent election.

Distell may be known for its quintessentially South African wines and liqueur, but the company has move far beyond these confines

Baumgartner feels Africa’s changing travel market is ripe for the industry to pick. “Activity and competition are definitely heating up where traditional supply channels and formalized trading environment exits, but this environment is lacking in many markets, and indeed offers a great opportunity!”

Baumgartner says the Gulf region has improved, though certain challenges remain. “The region has stabilized, with key geographic groups such as the Russian travelers recovering from the slump of recent years, although they are spending less. We have seen a slight recovery in our wine business, although our Amarula business is still under pressure.”

New announcements The company has made a couple of new pre-Cannes announcements, and Baumgartner hints that we will learn about another new launch during the event itself.

Distell is launching a third Bunnahabhain travel retail exclusive, An Cladach, in Cannes, joining Eirigh Na Greine and Cruach-Mhòna. This new exclusive is available in a 1L format with bespoke gift tube, designed using an illustration which conveys the story of a fishing boat navigating the rough seas on its way to Bunnahabhain Bay. The new “World Traveller Exclusive” statement in silver foil further highlights the edition’s exclusivity to travel retail and supports the brand’s essence of embracing the journey and destination.

The company has also upgraded the packaging of the whole Bunnahabhain range. The new design enhances the brand’s premium craftsmanship and stands out on-shelf, all while honoring the distillery’s remote coastal location and seafaring history.

48 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

Distell has upgraded the packaging of the whole Bunnahabhain range, reflecting the distillery’s remote coastal location and seafaring history

TAKING PLACE AT

Showcase your products to over 800 airline buyers...

WTCE, the leading global event for travel catering, onboard retail and passenger comfort has a dedicated ‘Focus on World Travel Retail’.

Don’t miss the opportunity to promote your products and services for sale inflight to international airlines, concessionaires and distributors.

Including, Emirates, Singapore Airlines, Korean Air and Tourvest.

DISCOUNTED STAND PACKAGES FOR NEW EXHIBITORS

Book your stand now Call Mara Veith +44 (0)20 8910 7193 worldtravelcateringexpo.com/travelretail Co-Located with:

Organised by:

DIVERSE FLAVOURS

Trading on

diversity

by JAS RYAT

Diverse Flavours is in the right place at the right time with its strategy of supplying South African wines to operators seeking something different

Ernie Els Proprietor’s Blend and Big Easy Red are two of Diverse Flavours’ best-selling wines in Asian and Middle East duty free shops

A

Diverse Flavours Managing Director Anthony Budd trained 200 promoters in a series of training sessions carried out in Everrich and Tasa Meng duty free shops at Taoyuan, Kaohsiung and Taichung airports in Taiwan

50 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

nthony Budd, co-founder and Managing Director of South African wine supplier Diverse Flavours, has built a niche for his products in the Middle East and Asia, chiming with the consumer’s desire for newness in these travel retail markets.

Diverse Flavours prides itself on catering to all levels of the Middle East market. “We cater to the varying tastes and price points that the diverse consumer segments require in the core Middle East locations.

“We are very excited by the future, as we see very good and growing demand for our range of South African wines. We are also very lucky that the operators we work with in the region are very keen to explore new products and ideas,” says Budd.

Diverse Flavours has a wide range of South African wines selling very well in Dubai Duty Free, including wines from the Ernie Els Winery from Stellenbosch; Cederberg, the highest winery in South Africa; Avondale, the top biologic/organic wine; Groot Constantia, the oldest winery in South Africa dating back to 1685; 88 Vineyards, a medium sweet Merlot for consumers seeking an easy-drinking wine; Tamboerskloof award-winning Syrah; and the Raats Family Wines, one of the top Cabernet Franc wineries.

In the inflight market, Emirates is pouring the MR Compostella from Raats Family Winery in First Class; and Etihad has been pouring the Delaire Graff Banghoek Reserve Chardonnay across First and Business Class.

Cederberg Cabernet Sauvignon currently being poured on Singapore Airlines in Business Class)

The unique and successful Groot Constantia Rood and chocolate pairing pack is available at Dubai Duty Free

At the TFWA World Exhibition, Diverse Flavours will be showing and tasting wines from: Avondale, Cederberg, Delaire Graff, Ernie Els, Groot Constantia, Ghost Corner, Kleinood, Mt Vernon, 88 Vineyards and Napier.

In addition, it will also showcase Japanese sake from Sakuramasamune – one of Japan’s oldest sake producers – and finally, Scots Gold Scotch whisky from Charles Edge London.

Tremendous room for growth

Tamboerskloof Viognier has been selected by All Nippon Airways for First Class pouring from later this year

The company also has a wide range of wines in the Barracuda shop, Sharjah Airport, and Oscars retail shop.

Dubai airport retailer Le Clos is also listing Eagles’ Nest Syrah and Merlot from Constantia, and Ghost Corner wines from Elim, the southernmost location for producing wines in South Africa.

Special chocolate pairing and wine pack Among the best-performing wines in the Gulf and Asia regions, Budd cites Ernie Els Wines, which are well known among Europeans, Americans and golf lovers, as the winery is owned by the famous golfer and four-time Major winner Ernie Els. Cederberg wines are also well known with European and Asian consumers, and its wines have been poured on many airlines. Budd cites as examples its Sauvignon Blanc onboard All Nippon Airways (ANA) and Asiana; Chenin Blanc – Etihad; Shiraz – Cathay Pacific; Merlot-Shiraz – ANA; and Cabernet Sauvignon – Singapore Airlines.

Groot Constantia is widely known by Chinese consumers – over 100,000 mainland Chinese visit the winery in Cape Town every year. “We launched the special, unique chocolate pairing and wine pack with Groot Constantia Rood and this is now selling in Dubai Duty Free. The chocolate is specially made to match only that wine – very unique,” he enthuses.

88 Vineyards Merlot Medium Sweet is also performing well as it caters to consumers seeking an easy-drinking experience.

On the company’s future performance, Budd is optimistic: “Because we are in an emerging category in our offering of South African premium wine, the future growth expectations are very exciting. We are still only distributing our wines in Asia and the Middle East, and not in all parts yet, so we have tremendous room for growth.

“In addition, we are yet to talk to anyone from the Americas (North or South), or even Europe – a well-established market for South African wines – so this is really an open book.”

He adds that the company’s business model of flexibility, speed and service offers its customers the opportunity to consolidate great wines from multiple wine estates with ease and reliability. The strategy is to be a long-term partner, where its service is built to fit the individual client requirements.

One recent example was a series of training sessions carried out in Ever Rich and Tasa Meng duty free shops at Taoyuan, Kaohsiung and Taichung airports in Taiwan. Budd trained 200 promoters over four days. “I really believe we need to educate the promoters in the shops, so these sessions which last two hours are great. I give them info on South Africa, the South African wine industry, the wine estates, the wines, and of course we have a tasting. Great interaction and all the promoters are really enthusiastic!” he says.

When it comes to what consumers are demanding, the company is in the right place at the right time. “I believe we are in a very good space with our offering of South African wines, as the demand for wine by the traveling consumer is increasing and they are looking for new experiences, which South Africa offers. The diverse range of consumer groups from different countries and cultures makes it very exciting, as we see a broad range of consumers buying our wines,” he enthuses.

The strategy remains one of regional focus but the company is looking at the possibility of offering its South African premium wines to Europe and the Americas. It is also targeting the interest in Japanese products through its sake range.

Speaking about how different the Gulf duty free consumer is compared to other markets, Budd says they’re a perfect fit for his company. “Because of its geographical position and the entrepreneurial nature of the region and the development of hubs, the Gulf duty free consumer is one of the most diverse in the world. This is perfect for Diverse Flavours!” Please find the Diverse Flavours team at booth L34 Red Village during TFWA WE in Cannes.

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING 51

DIAGEO

Leading the charge

by WENDY MORLEY

With strong views on the importance of travel retail and some of the biggest spirits brands on the market including the leading whisky, Johnnie Walker, Diageo is in a position to leverage its strengths and increase category spend

Master Blender Jim Beveridge created the multi-awardwinning Johnnie Walker Platinum Label, now Johnnie Walker Aged 18 Years

I In time for Cannes, Diageo is releasing a new flavor addition. CÎROC French Vanilla will have a starring role in the Cîroc-Star Martini serve, being rolled out in the on and off trade across global markets and will be available in GTR from October 2017

Johnnie Walker Platinum Label has recently been rebranded as Johnnie Walker Aged 18 Years

52 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

f ever a company has invested in global travel retail, Diageo is it. Dayalan Nayager, Managing Director Global Travel for the company, says: “Travel retail is a vitally important channel for Diageo – it is the channel in which we showcase our iconic brands, set the benchmark for retail excellence and create engaging shopping experiences for travelers through strategic partnerships with our customers.”

While it’s imperative for travel retail brands to invest in promotions, packaging, signage and more, Diageo takes that many steps further. “We recognize the consumer landscape is continuously changing and the global travel industry must evolve with these changes,” says Nayager. “In line with our strategic focus on premiumization, innovation and developing the luxury opportunity, we’ll continue to invest in offering shoppers products across the pricing ladder: from our premium core portfolio, to recruiting the emerging middle class into our reserve portfolio brands.”

He says improving the shopper experience and having the best visibility across top airports around the world will continue to be motivations for Diageo. “We have stepped up our investment in luxury retail activations, taking a leadership position in transforming the category into a more engaging environment.”

airports such as Chennai, Hyderabad and Calcutta have made a difference. We will look to capitalize on this with regional partnership opportunities.”

Johnnie Walker is the most famous whisky in the area, and Mumbai airport is the lucky location for one of Diageo’s famed Johnnie Walker Houses.

Global travel trends

Diageo’s Johnnie Walker Houses bring an interactive and educational environment to whisky novices and aficionados alike

According to Airport Council International figures for 2016, global international air passenger numbers increased by 6.5%.

Despite tough trading conditions continuing into the first half of 2016, IWSR figures show liquor sales returned to normal when the year is regarded as a whole. “The Scotch category continues to perform well and is an area in which we are continuing to invest heavily, both blended and malts,” says Nayager. “Building the whisky category with our retail partners is critical to our long-term success and we are fully committed to doing this.”

Launches and innovations

In the very first instance of co-branding, Johnnie Walker and Shui Jing Fang, Baijiu made in China’s oldest distillery, share space in the Johnnie Walker House at Beijing Capital International Airport

Digital reality Nayager says the company understands that the digital world has had and continues to have massive impact on consumer purchasing. “The technology revolution is continuing to change the way people socialize and share information as well as their relationship with brands and how they make purchases,” he says.

“There is now a full generation of millennials who were ‘born digital,’ and this has massive implications on how we should do business,” he says. “We are operating in a world where consumers expect their content to be device and channel specific and see no difference between content and commerce. We have to embrace digital by establishing a platform that changes how our consumers discover and buy our brands as well as supporting us to make more informed decisions through the use of digital data. We aim to create stronger alliances with the stakeholders involved in the traveler’s journey to offer unique, personalised and engaging shopping experiences.”

India of interest As with many companies currently, India is of particular interest to Diageo. “Aside from the Americas, we see India as an exciting opportunity,” Nayager says. “Passenger numbers continue to grow strongly and significant upgrades in a number of smaller

Johnnie Walker Blue Label Rooster Pack was released in time for Chinese New Year at the beginning of this year, and Diageo recently released the GTR-exclusive Johnnie Walker Island Green. “The Scotch whisky showcases the same blended malt craftsmanship as the critically acclaimed Johnnie Walker Green Label, but with a greater influence of smoky, maritime malt whisky,” says Nayager. “We’re truly excited for the new release; it is set to transform the Scotch category, helping Scotch drinkers explore malts through a trusted and well-known brand.”

The company also rebranded its multi-award winning Johnnie Walker Platinum Label with the launch of Johnnie Walker Aged 18 years.

In time for Cannes, Diageo has just announced a new flavor addition: Cîroc French Vanilla. To celebrate “arrival” moments in fashion and popular culture and playing with the “arrival” of passengers in airports, The launch of French Vanilla is the latest news from the Cîroc #onarrival campaign.

The celebration flavor is being launched with a hero CîrocStar Martini serve – a combination of smooth vanilla vodka mixed with an array of vibrantly tangy ingredients, topped off with a dash of champagne. The vodka and martini will be rolled out in the on and off trade across global markets and will be available in GTR from October 2017.

The coming years Looking forward, Diageo is in an exciting position to leverage its expertise, innovations and brands to make the most of the growing opportunity. “Millennials and the emerging middle class will have a major impact on the travel retail landscape,” says Nayager.

“We see this as a huge opportunity for growth. Diageo’s ability to build ecosystems of partnerships and ‘platforms,’ where our skills and expertise combine with those of others to create new sources of incremental value, is pivotal. We will also continue to leverage the scale of our Premium Core range amongst brands such as Smirnoff and Baileys. Additionally, the increase in demand for luxury and innovation will support our ambition to drive forward our brands within the Reserve portfolio such as Tanqueray 10, Zacapa, Cîroc and Bulleit.”

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING 53

J CORTÈS

The acquisition of Oliva handmade cigars was an inspired move that has helped open doors for the company

Strong portfolio The long-lived cigar company J Cortès has combined its strengths as a world leader in machine-made cigars with the highly respected handmade Oliva cigars, opening doors for both

G

lobal and duty free business for J Cortès has improved dramatically with its acquisition of Oliva handmade cigars last year. “Feedback has been good,” says Thomas Gryson, Export Manager & Travel Retail Coordinator at J Cortès.

“Travel retailers tend to be more interested in handmade cigars than machinemade,” says Gryson. “Oliva opens doors.

We are now in talks with Dufry for several airports, and we have listed many more SKUs with other retailers such as DFA.” For many years J Cortès has a successful cooperation with Lagardère-Aélia for the brands Neos and J Cortès. This good relation resulted also in the first official listing in Charles de Gaule and Nice airport of Oliva with Lagardère-Aélia – the first successful step in the launch of Oliva in global duty free.

Oliva is an especially well known cigar in the US but in general known to aficionados in the rest of the world. “You will find Oliva in any specialty tobacconist,” says Gryson, “but they are not well known like, for example, a Cuban cigar.”

Since J Cortès has very strong global distribution and is available in over 80 countries, the acquisition is helping sales in both directions: Oliva is helping J Cortès to get listings, which extend to its Neos Selection 50 cigars and flavor collection

in duty free retail, and the already strong distribution system is helping to bring Oliva to the world.

Machine-made challenges The story isn’t all positive, however.

“Retailers in GTR prefer handmade over machine-made cigars. Where we used to have gondolas we now have small shelf space. Retailers rationalize cigar priority and they are not as interested in machinemade and cigarillos, so it’s difficult to get new listings. Difficult but not impossible.”

The company has launched a new SKU that has had an immediately positive effect in this regard, however. The Sumatra Collection 9 Cigars is a beautiful wooden box containing an assortment of nine different sizes of J Cortès cigars – perfect as a gift. “This has just launched at Brussels airport and has been selling well,” says Gryson. “In fact I was in the airport and saw someone buying one, which was very gratifying.”

Five-year plan Until now duty free has been a very small portion of the company’s sales volume, though it has been slowly increasing and duty free is part of the company’s five-year strategic plan. “We are three years in, and have made great headway,” says Gryson.

“We set a goal for duty free of 2% of sales.

We are not there yet, but we are slowly getting the attention of retailers – large and small. We will stay with our plan and continue to offer our Neos Selection 50 cigars and flavor collection in travel retail while also presenting such items as the Sumatra Collection and, of course, handmade Oliva cigars. Together this makes a strong portfolio that creates a nice range for the retailer.”

54 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

The Sumatra Collection, which comes in a beautiful wooden box, offers a selection of quality J Cortès cigars in different sizes, making it the perfect gift for the cigar lover

advertisement removed for legal reasons