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TFWA WE 2018

DUTYFREEMAGAZINE.CA OCTOBER 2018 · TFWA WE · VOL 28 · NO 3

Greater expansion for Iraq Duty Free p. 8  Pockets of growth in Middle East p. 20 Mazaya’s flavor of the month p. 34


Letter from the Editor

A new hub T

he global travel retail industry is not for the faint of heart. We have no control over most of the concerns that affect sales, from socio-political turmoil to terrorism to hurricanes to government regulations. And despite these setbacks, the industry continues to grow. In recent years the Gulf region has seen its share of challenges, but the phoenix appears to be soaring out of the ashes. Last year’s sales growth in the region was in the strong double digits, and the infrastructure improvement is supporting this growth. The region is already a strong hub for global travel, in part because of its location at the edge of Europe, Asia and Africa. Dubai and Doha have been successful at creating hubs, and that effort has paid off, with capacity growth of 27.3% and 35.1% respectively, from 2014 to 2018. Riyadh’s King Khalid International in Saudi Arabia is the next city set to explode as a hub. The airport, already busy, is expanding to increase its capacity even further. Jeddah and Riyadh are third and fourth on the list of seat capacities, behind Dubai and Doha, and Riyadh is aiming to be much higher. While Riyadh may never pass Dubai as the biggest hub airport in the region, it may move into second place, thanks to the current expansion and its location perfect for local tourism, Saudi Arabian business and as a stopping point between the east and the west. And Saudi Arabia is doing well, buoying the region at +7.7% – above the global average at a time when the region as a whole was slow. Meanwhile, the third terminal at Baghdad Airport is nearing completion, and Iraq Duty Free is ready to serve the new passengers. The travel retailer is not just sitting on its proverbial hands, however. Its other stores at that airport are going through their own transformation, with greater size, a new, modern look and a new category: Liquor. As part of a move to advance business in the county, Iraq Duty Free will also be expanding into other airports throughout the country – those not currently offering a retail environment. Despite these bright lights, the Middle East is not without concern. Qatar’s political tensions have caused a severe drop in air travel to and from the country, with Doha travel numbers down 14.8%. But travel numbers will rise again, and duty free will be there when they do. Read about all this and more in this Cannes edition of Gulf-Africa Duty Free & Travel Retailing. We hope you enjoy the issue and we wish you a successful show. Kindest Regards,

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

4 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018

OCTOBER 2018 · TFWA WE · VOL 28 · NO 3 Gulf-Africa Duty Free & Travel Retailing (ISSN 0954-0592) is published four times a year (Spring, Fall and Winter) by Global Marketing Company Ltd., 26 Pearl Street, Mississuaga, Ontario L5M 1X2 Canada. It is distributed to duty free operators and distributors in the following countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE, Yemen, Algeria, Azerbaijan, Benin, Cameroon, Cape Verde, Djibouti, Egypt, Ethiopia, Gabon, Ghana, Guinea, Iran, Ivory Coast, Jordan, Kenya, Lebanon, Madagascar, Malawi, Mali, Mauritius, Morocco, Mozambique, Niger, Nigeria, Namibia, Pakistan, Reunion, Senegal, Seychelles, South Africa, Sudan, Syria, Tanzania, Togo, Tunisia, Turkey, Turkmenistan, Uzbekistan and Zaire, as well as to duty free suppliers worldwide. Subscriptions: $200 for one year, $300 for two years and $400 for three years. Art and photographs will not be returned unless accompanied by return postage. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor. October 2018, Vol. 28, No.3. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2018 Global Marketing Company Ltd.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING 26 Pearl Street Mississauga, Ontario L5M 1X2 Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemagazine.ca PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@dutyfreemagazine.ca ASSOCIATE EDITOR Jas Ryat jas@dutyfreemagazine.ca ADVERTISING AND MARKETING MANAGER Kevin Greene kevin@dutyfreemagazine.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca CONTRIBUTORS Mary Jane Pittilla Wendy Morley

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca


Contents

What’s inside

8

Lead Stories 8 Iraq Duty Free

Greater expansion Iraq Duty Free has bounced back from its challenges, seeing multi-year double-digit growth that is not only expected to continue, but to increase, with a series of major renovations and upcoming expansion into new airports

14 Qatar Duty Free

11

An experience worth traveling for Qatar Duty Free’s Head of Duty Free explains how exciting new retail initiatives and superlative customer service is paying dividends

18 Turkey

Turkish Airlines takes flight from Istanbul In a historic moment, Turkey’s flag carrier is set to make its first passenger flight from Istanbul’s new airport on October 31

22 Eraman

A year to celebrate As Malaysia Airports celebrates its 25 years anniversary, Asia Duty Free Magazine talks to Zulhikam Ahmad, General Manager of Malaysia Airports (Niaga) Sdn Bhd about his achievements as the Head of duty free retailer, Eraman

37

24 Saudi Arabia Sky’s the limit

Jeddah’s expanded airport, its geographic location and the city’s importance to the cultural, religious and business communities of Saudi Arabia and indeed the world combine to offer the air industry boundless opportunity

28 Nadiya

The king of dates Ambitious date brand Nadiya is seeking to offer high quality products in exciting packaging to travel retail – and all with health benefits

Features Sky’s the limit for Dubai Duty Free 11 Middle East’s growth pockets 20 Loacker builds on gifting 32 Mazaya’s flavor of the month 34

Confecting a sweeter future Vodka with a fashion attitude Liquor news Diverse Flavours’ Japanese sake

36 37 38 43


Strength. Vision. Leadership.

With a passion to succeed and belief in our strengths, we have grown to become leaders in Duty Free Operations; with Duty Free Shops, Seamen’s Clubs and Bonded Warehouses across ports in UAE. Our way of saying ‘Thank you’ to all our stakeholders is to never stop getting better.

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

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


Iraq Duty Free

Newly renovated Iraq Duty Free arrivals shop in the Iraqi Airways Nineveh terminal in Baghdad

Greater expansion by HIBAH NOOR

Iraq Duty Free has bounced back from its challenges, seeing multi-year doubledigit growth that is not only expected to continue, but to increase, with a series of major renovations and upcoming expansion into new airports

C

urrently operating in three airports with a total of eight shops, Iraq Duty Free is on the cusp of great growth. In Baghdad Airport, the retailer operates stores in Arrivals and Departures in both terminals, with the third terminal soon reaching completion. Iraq Duty Free also operates shops in the Arrivals and Departure areas of both Basra Airport and Sulaymania Airport, and more Iraqi airport locations are on the horizon.

Renovations

The retailer has been especially busy since last year, when it received a 10-year extension of its contract to operate within any airport in Iraq. Additionally, Iraq Duty Free is confirmed as the sole operator in any discussion for opening a Duty Free shop in Iraq airports. This contract extension provided the impetus for the company to completely renovate and reconfigure its shops in both currently operating terminals in Baghdad Airport, as the third, Samara terminal, nears completion. The renovations at the arrivals shop in the Iraqi Airways Nineveh terminal in Baghdad served a number of purposes, chiefly that of bringing the store up to a modern standard. “The existing space had a total face lift,” says Fouad A. Jabbour, Iraq Duty Free General Manager. “The new design, chosen from three competing firms, brought us up to the standards of any other Duty Free retail operation in the region.” The renovations include premium fixtures and new displays, including supplier gondolas and special display units for the Liquor room. “Our existing shops are considered outdated and 8 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018

not reflective of the premium shopping experience our frequent passengers are looking for,” says Jabbour. “The renovation is aimed at uplifting the level of shopping experience for our consumers in line with the expansion of our brands assortment and the increase in passengers we are seeing.”

A new category

With this renovation comes the introduction of the Liquor category, which has been given a full 20% of the floor space. “We have added a dedicated area for Liquor after 13 years of absence from the Duty Free Shops, with listings from all the top brands,” says Jabbour. The renovation, which offers easy flow for the customers, expanded the store from 100 to 140 square meters, with the rest of the space divided 35% to P&C, 25% to confectionery, 15% to tobacco (and 5% to storage). “Iraq Duty Free is aiming for a +50% increase in sales at the new Baghdad arrivals store.” Renovations at the Baghdad Arrivals shop began in the latter part of January, and were completed by March. The Grand Opening ceremony in March included the presence of such dignitaries as Iraq Duty Free CEO Mr. Ahmed Kamal, Ministry of Transport Administrative Deputy Ahmed Karim Abd Ayoub, and the Ministry of Transport Office Director for Baghdad Airport, Mohammed Sahib.

Coming soon

The next major renovation on the list is the Babylon Arrivals store, which caters to international airlines. “The renovations


Renovations at the Baghdad Arrivals shop began in the latter part of January, and were completed by March. The Grand Opening ceremony in March included the presence of such dignitaries as Iraq Duty Free CEO Mr. Ahmed Kamal, Ministry of Transport Administrative Deputy Ahmed Karim Abd Ayoub, and the Ministry of Transport Office Director for Baghdad Airport, Mohammed Sahib

are designed to offer passengers a better shopping experience, to lift market penetration and boost sales,” says Jabbour. Response to the Baghdad renovation has been overwhelmingly positive, and Jabbour hopes and expects to see the same response to the Babylon renovation. “We have received positive feedback from several parties, including the Civil Aviation authorities, customs authorities and travelers. The image of Baghdad Airport has improved in the views of visitors, officials and diplomats who use the airport for their travels.”

Positive outlook

Sales have increased dramatically since the renovation. “We noticed an increase in sales of +30% immediately after the renovation when comparing the same period in 2017 month to month,” says Jabbour. “Liquor and Tobacco are both selling well, but the top position is still P&C, followed by Confectionery.” After a challenging time in 2014 and 2015, Iraq Duty Free had already been seeing great improvements in the bottom line in 2016 and 2017, at least in Baghdad and Sulaimaniyah, though Basra continued to struggle. In 2016, Iraq Duty Free closed at +24% growth, with Baghdad and Sulaimaniyah registering +28% and +30% respectively while Basra toughed out the year to close at -18%, according to Ali Basim, Head of Sales, Iraq Duty Free in a 2017 interview. As Gulf-Africa Duty Free reported in our 2017 MEADFA issue, the company conducted a thorough analysis of its performance in Basra, concluding that brand assortment, issues with infrequent replenishment and the human factor all needed upgrading.

“We now have well-trained staff in place and have addressed the other issues, which resulted in 60% growth year in the first nine months of 2017,” said Basim. In fact, the company has reported solid double-digit growth for three years running, and 2018 is proving to be a banner year. “For the first half of 2018 vs. the same period of 2017 we are up by 40% sales,” says General Manager Jabbour. “The increase can be attributed to several factors, such as the lifting of travel bans to and from Iraq – which has contributed to an overall increase in travelers throughout the terminals – the introduction of Liquor sales, and a larger assortment of established global brands, with a concentration on the international houses of perfumery, confectionery and tobacco.” Additionally, the renovation of the store has encouraged shopping both because of the more modern, inviting atmosphere and the category management and flow that has been by the new design in cooperation with brands.

Greater expansion

The next renovation on the agenda is the Departures shop at the Iraqi Airways Terminal in Baghdad, which began in August and is expected to be completed for re-opening by the end of November. “The renovation will take place to have a coherent look with the already renovated Arrival shop,” says Jabbour. “The time is www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

9


Iraq Duty Free

Future endeavors

right, as we have operated the existing space since 2004. As with the Arrivals store, the new shop will be able to compete with the region’s top duty free retailers, offering the right environment, easy flow and the international shopping experience desired by our travelers.” This renovation will increase the footprint slightly. “The size will be slightly greater, with 10 to 20 square meters added to our current 508 square meters. The product offering will be upgraded, with new brands such as S.T. Dupont, Caterpillar, Samsonite and the introduction of a much-needed Iraqi souvenir brands company. The design will improve customer flow, to encourage shopping. We will offer more branded furniture and added values. Plus, as with the Baghdad Arrivals shop, we will be adding a Liquor room.”

More upgrades

Iraq Duty Free has agreed to upgrade areas of Baghdad Airport to help improve the traveler experience in addition to offering a benefit to airport staff. “As per our agreement with Civil Aviation, we will improve the passenger seating, making it more comfortable. Additionally, we will help in terms of baggage trollies, and we will offer buses to transport airport staff to and from their cars. Our goal is to provide both airport staff and passengers a way of improving their experience when traveling, with less hassle and an easy flow between home, airport and airplane, whether they are arriving at the airport or departing. 10 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018

Currently, Iraq Duty Free is working towards expansion into other Iraqi airports. “As a local Iraqi company, we are interested in improving the image of all Iraq airports,” says Jabbour. “We will be able to facilitate the passenger shopping experience, offering a variety of items for personal use or as gifts, in addition to improving the image of Iraq airports for all visitors, whether local or international.” Because these negotiations are still taking place, the company is not able to state which airports are part of the discussion. However, Jabbour did mention that the shopping area will be between the 200 and 400 square meters for each airport, depending on the space availability for the duty free shops as well as the size of the airport. Each of the airports in question currently has no operator, so each store will be starting fresh. This offers a chance for Iraq Duty Free to increase its sales to an even greater degree by focusing on a currently unserved market. “Each airport in discussion has its own particular criteria in terms of international travel or as a hub connecting other geographic areas in Iraq, facilitating greater travel options,” says Jabbour. “With these new shops, we are expecting an increase of total Iraq Duty Free sales of +40% over and above any increase from our current shops.” Work on the new airport locations is expected to begin between the last quarter of this year and the first quarter of 2019.

Advantageous for all

“Iraq Duty Free continues to work closely with Civil Aviation authorities as well as the Ministry of Transport to strengthen the advance of business, giving all parties the advantage of growing in terms of exposure and improvement of facilities, and offering travelers the chance to spend their waiting time in a constructive way,” says Jabbour. “Finally we would like to extend our thanks to the Minister of Transportation Mr. Kadhum Al Hamami, and to the General Director of ICAA, Mr. Ali Khalil for their support, encouragement and advice throughout the years. We give additional thanks to the dedicated, trained staff on the floor of the shops, the sales, marketing and purchasing heads, each brand in charge, warehouse staff and many others within the company. It is thanks to all of these individuals that we have reached this level of professionalism.”


Dubai Duty Free

Sky’s the limit

For Dubai Duty Free, liquor, perfumes and tobacco retained the top three category positions

Dubai Duty Free tops US$1billion sales in first half

D

ubai Duty Free has announced a 10% upswing in sales for the first half of the year, with turnover reaching US$1 billion and placing the operation well on track to reach US$2 billion by year-end. Liquor, perfumes and tobacco retained the top three category positions, with liquor showing a 7% increase in the year to date (YTD), amounting to US$151.55 million, while perfumes, which account for 15% of total turnover, reached US$146.46 million. Tobacco sales jumped by 36% over the previous year.

Other notable increases in sales were seen in cosmetics, which rose by 27% and electronics by 25% YTD. For the first six months, Dubai Duty Free recorded 12,769,905 individual sales transactions with average daily sales of US$5.6 million. Commenting on the half-year sales, Colm McLoughlin, Executive Vice Chairman and CEO, Dubai Duty Free, said: “2018 has been a fantastic year for Dubai Duty Free so far. We have continuously grown our business and are happy to see a double-

Electronics sales have jumped 25% in the year to date

12 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018


digit increase for the first half. With new retail areas now operational and ongoing retail developments coming onstream at both Dubai International and Al Maktoum International (AMIA), we are confident that we will reach the US$2 billion mark at the end of December, which also marks our 35th anniversary.�

Accounting for 88% of the total revenue, retail sales in Departures (Dubai International and Al Maktoum International) show an 11% increase over the same period last year, reaching US$889.35 million. Meanwhile, sales across all concourses registered significant increases, with overall sales in Concourse C in Terminal 3 up 60% over last year, mainly as a result of new retail areas opened in recent months. In addition, Concourse A sales were up by 16%, Terminal 2 Departures sales rose 14%, Concourse D sales climbed 8%, and Concourse B was up by 6%. The ongoing major refurbishment of Concourse C, which features newly opened watches and electronics shops, will be completed by year end and will cover a total of 4,700 square meters. In AMIA’s passenger terminal building, the redevelopment of the existing Departures Area has been completed, including a new and refurbished Gifts from Dubai, electronics, perfumes and cosmetics, and liquor and tobacco shops. By year-end, Dubai Duty Free at AMIA will have grown to 4,500 square meters in retail space, from the previous 2,500 square meters. Meanwhile, recruitment at Dubai Duty Free continued in the second quarter of 2018, bringing the number of employees to 6,070, which includes 783 Chinese staff representing 13% of its total manpower. Dubai Duty Free recruited its first Chinese employee in 2006 and has welcomed 190 staff from China this year alone to cater to the growing number of Chinese travelers, who account for 15% of total sales. In the meantime, the operation has a busy events and promotional calendar, which includes the Dubai Duty Free Shergar Cup taking place at the Ascot Racecourse on August 11, followed by the Dubai Duty Free International Weekend on September 21 and 22 at the historic Newbury Racecourse.

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

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Qatar Duty Free

An experience worth traveling for Qatar Duty Free’s Head of Duty Free explains how exciting new retail initiatives and superlative customer service is paying dividends by HIBAH NOOR

Qatar Duty Free offers various makeup and product experiences at pop-up installations throughout the year.

T

habet Musleh, Head of Qatar Duty Free (QDF), is excited to share the latest run of good news for the leading Middle Eastern operator. “Sales are performing very well in all categories and we are seeing year-on-year growth in all areas, including passenger footfall and average transaction value,” he tells Gulf-Africa Duty Free. Musleh puts this success down to the operator’s uniqueness, as the business spans all areas of the travel retail business, as he explains. “We are unique in the region, not only for the fact that we operate all retail and food and beverage at our home and hub Hamad International Airport, but also that we operate the inflight duty free across the Qatar Airways fleet. “QDF is committed to providing passengers with a memorable five-star experience both onboard Qatar Airways and at Hamad International Airport (HIA), which contributed to Qatar Airways winning Best In-Flight Duty Free Program for the Middle East and Africa at the PAX International Readership Awards 2018 in Hamburg, Germany, and which won QDF the title of Airport Retailer of the Year 2018 at the DFNI Global Awards in London.” 14 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018

The accolades look set to continue, as Qatar Duty Free remains committed to delivering a five-star shopping experience through its diverse offer and excellent customer service, and this shapes the way it develops its business. The operator has capitalized on the expansion of Qatar Airways by constantly updating its service depending on new customer demographics. “We constantly strive to deliver ‘an experience worth traveling for’,” he continues. “For example, we partner with brands on exclusive pop-ups, launches and services and regularly implement exciting activations and promotions across the year to celebrate international festivals such as Chinese New Year, religious celebrations including Eid, and global sports events as well as activations in partnership with Qatar Airways and Hamad International Airport to deliver unforgettable experiences to our passengers.” The QDF customer experience contributed to Hamad International Airport being named the fourth ‘Best Airport for Shopping’ and fifth ‘Best Airport for Dining’ at the Skytrax World Airport Awards’ 2018.


The strategy to grow business further includes being aligned with the Qatar National Vision 2030 and Qatar Airways’ sponsorships, while also sponsoring its own global sporting events, including the Total Men’s and Exxon Mobil Women’s tennis tournaments as well as the Golf Masters in Qatar – “and we look forward to welcoming the FIFA 2022 World Cup in Qatar,” Musleh enthuses. During the 2018 FIFA World Cup in Russia, Qatar Duty Free partnered with Hamad International Airport to implement FIFA pop-ups selling official FIFA 2018 merchandise, to support the HIA fan zones where passengers traveling through the airport could watch the World Cup live. Customers who posted a selfie with the official two-meter-high mascot, Zabivaka, had a chance to win return Qatar Airways tickets to the country of the FIFA tournament champion.

Constantly updating and evolving

One interesting new development at Qatar Duty Free is its highly experienced resident tailor, who is located in the First Class lounge in HIA. The tailor also works closely with all the airport’s fashion boutiques, making this service available to all passengers purchasing at QDF. Standard alterations such as hemming can be carried out on the spot. For more complicated alterations, customers can drop off the garments and collect them on their return journey. A further innovation is a makeup and makeover service, whereby professional beauty advisors share interesting tips and

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Qatar Duty Free

Qatar Duty Free wins “Best In-Flight Duty Free Program” for the Middle East and Africa at the PAX International Readership Awards 2018

techniques and provide free professional makeover services. Brands offering this service on a permanent basis include Bobbi Brown, Estee Lauder, MAC, La Mer, Lancôme, Chanel, Dior, Givenchy, Yves Saint Laurent, Clarins, and Shiseido. In addition, in partnership with leading brands, Qatar Duty Free offers various makeup and product experiences at pop-up installations throughout the year. For example, Estee Lauder uses digital technology with its digital iMatch system that helps customers to identify their skin tone and find the right shade of foundation, while Guerlain launched a personalized lipstick line where customers choose

16 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018

their own lipstick shade and box based on their preference to create a unique lipstick color and style. Pop-ups cater perfectly to the on-the-go travel experience, says Musleh. By collaborating directly with various brands to provide the most innovative and effective activations – often firsts in the region or globally – Qatar Duty Free ensures that passengers have something new to experience every time they travel through HIA. “The temporary nature of pop-ups means that we can constantly update and evolve these so that passengers always look forward to discovering what’s new at Qatar Duty Free,” he notes. “Equally, we are able to place pop-ups at strategic locations on the passenger journey through HIA to provide all passengers with the opportunity to interact with some of the world’s best known and most sought-after brands.” During the summer, Qatar Duty Free, in conjunction with Samsung Gulf Electronics, opened a one-of-a-kind Experience Zone for passengers traveling through Hamad International Airport. The Samsung Experience Zone collection, measuring approximately 150 square meters, showcased the newest cutting-edge Samsung products, offering passengers the chance to experience and test the latest Samsung mobile phones and accessories. The zone was located on Concourse C. At the time of the opening, Musleh said: “Qatar Duty Free is proud to be the first airport retailer to introduce the Samsung Experience Zone in the Gulf region. QDF understands the power of technology, innovation and creativity now and for the future, in alignment with the Qatar National Vision 2030.” Turning to developments in the operator’s inflight service, passengers can now pre-order their inflight duty free shopping through the QDF website (www.qatardutyfree. com/preorder) up to 24 hours before their confirmed flight. Their purchase can be paid for onboard and is hand-delivered by cabin crew to their seat. This is made possible through the website being seamlessly integrated with the QDOS (Qatar Airways Duty Free Onboard System) cart management module. “We have seen a great increase in the number of preorder sales since we launched the service in January,” says Musleh. “This is an important part of our digital sales strategy, and with the launch of QDOS app, our passengers can now pre-order in the air through the new crew app for their next return or scheduled flight.”

QDF also awarded “Airport Retailer of the Year” 2018 at the DFNI Global Awards


Turkey

TURKISH AIRLINES

takes flight from Istanbul T

In a historic moment, Turkey’s flag carrier is set to make its first passenger flight from Istanbul’s new airport on October 31

urkey’s flag carrier Turkish Airlines is preparing for operations at Istanbul’s new airport with the first flight due two days after the October 29 opening of the airport. The new airport is due to open on the 95th anniversary of the Republic of Turkey on October 29. The first flight will land in the capital Ankara on October 31, Turkish Airlines (THY) Chairman İlker Aycı said at a meeting on August 9. “We are preparing for the world’s most expansive transport, the largest moving process to Istanbul’s new airport,” he was quoted as saying in the Daily Sabah Istanbul newspaper. “Solely for THY, 5,000 trucks will be deployed in the transfer of all equipment and facilities of the airliner to the new airport, which will last 45 hours under the coordination of the General Directorate of State Airports Authority.” Aycı continued: “Following the massive migration, THY will carry out its first flight to the capital city Ankara,

where the Turkish Republic was founded, at 2pm.” The first overseas flights will be made to the Turkish Republic of Northern Cyprus and Azerbaijan, he noted. Aycı said the new airport would have the world’s largest duty free area with a size of 35,000 square meters. He added that the airline’s lounges in the airport would cover 16,000 square meters. THY will have 43 boarding bridges at the new airport, which will boast a total of 143 bridges. Aycı noted that when subway transportation was integrated with the airport, which is expected soon after the airport becomes operational, it would carry passengers to Istanbul’s city center within 26 minutes. In other news, Turkish Airlines is planning to initiate flights to New York Newark Airport, Aycı announced. Additionally, Cancun, Lapland and Luxor are among the other destinations the airliner is considering flying to, he said.

18 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018

International passenger numbers climb

In separate news, Turkish Airlines carried 43.2 million passengers from January to July this year. The total number of passengers saw a 15.2% hike on a yearly basis, up from 37.5 million passengers in the same period in 2017. The number of domestic and international passengers carried climbed 17% and 13.8%, respectively, Turkish Airlines said. In the seven-month period, the airline’s passenger load factor increased by 3.8 percentage points to 81.2%. In July alone, Turkish Airlines recorded an 85.3% seat occupancy rate. The airline carried 7.5 million passengers last month, a 3.8% yearly upswing. The number of passengers carried in Africa, Europe and the Middle East rose 10%, 9.5% and 8%, respectively. According to the airline’s year-end targets, the company expects to carry 75 million passengers - including 33 million on domestic routes, 42 million on international routes - with around an 81% passenger load factor.


Visit us at the TFWA World Exhibition & Conference in Cannes Stand L57 at Green Village Pure goodness!


Middle East Air Traffic

Cautious optimism Middle East slows but there are some growth pockets

T

he Middle East has traditionally been a buoyant market for global air traffic development. Key airports and their carriers – particularly Emirates at Dubai International Airport and Qatar at Doha’s Hamad International Airport – have been successful in creating hubs in the region. This is reflected in the growth of seat capacities. According to actual and forecast data from air travel intelligence group, OAG, between 2014 and 2018, capacities at Dubai and Doha have risen by 27.3% and 35.1% respectively. They have helped to shift air connections away from the northern European hubs, while the extra transfer passengers have been good news for the duty free business in the Middle East.

20 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018


In 2018, these airports are the top two in the region based on available airline seats (see chart), followed by Jeddah and Riyadh’s King Khalid International – both in Saudi Arabia. King Khalid has pushed Abu Dhabi International into fifth place. This is partly thanks to King Khalid’s own strong development, but also due to a slowdown at Abu Dhabi, as well as hub carrier Etihad’s own strategic review and reduction in seat capacities since 2016. Overall, across more than 140 Middle East airports monitored by OAG (the analyst uses the IATA geographical definition which includes Israel), seat growth between 2014 and 2018 has averaged 33.7%. But this year it is expected to be just 0.9%, with flat or negative seat availability among the top five airports. The best capacity growth is forecast to be from King Khalid International (1.9%). Looking further down the list of the top 15 airports, the sixth seventh and eight-ranked airports – Ben Gurion Airport in Tel Aviv, Kuwait International and Muscat International – look to be strong bets for duty free sales. Capacity growth in 2018 is forecast at 15.6%, 8.2% and 6.7% respectively, while all three have seen above-average seat growth in the four years to 2018. However, seats don’t tell the whole story. Qatar Airways, for example has continued to increase its capacity despite a blockade

against Qatar by GCC member countries due to political tensions that are now over two years old. According to ACI World, Hamad International has suffered badly with total passengers falling by -14.8% in the five months to May 2018. This compares with an average Middle East traffic downturn of -0.8% over the same period. Looking ahead to next year, the picture is somewhat mixed, but it looks as though Saudi Arabia will buoy the region. Its 27 airports witnessed a passenger traffic rise of 7.7% to 91.8 million in 2017, according to the General Authority of Civil Aviation. This was at a time when Middle East traffic grew by +4.7% (below the world average of 6.4%) based on ACI data. Meanwhile Dubai’s domination (88.2 million passengers in 2017) will not be challenged. “It is twice as large as its nearest competitor and I would expect to see growth of between 4-5% into 2019,” says John Grant, OAG’s Senior Analyst. “Doha will be pretty flat unless the current dispute with the other GCC members is resolved and they start flying to those destinations again in which case there may be some growth.” He notes that both Emirates and Etihad have “a quite significant order book of deliveries for 2019” which will likely mean more capacity going into 2020 and could see a resurgence for Abu Dhabi – provided those seats can be filled.

TOP 15 MIDDLE EAST AIRPORTS BASED ON ONE-WAY* SEAT CAPACITIES, 2018 Rank 2018

Airport

Seats 2017

Seats 2018

2018 vs 2014 (%)

2018 vs 2017 (%)

1

Dubai International

57,326,612

57,318,205

27.3

0.0

2

Doha

24,719,899

25,095,922

35.1

1.5

3

Jeddah

23,986,641

23,864,708

27.8

-0.5

4

Riyadh King Khalid Intl

17,991,788

18,336,016

37.4

1.9

5

Abu Dhabi International Apt

15,285,314

14,000,142

5.6

-8.4

6

Tel Aviv-yafo Ben Gurion International

11,174,641

12,920,069

59.5

15.6

7

Kuwait

10,197,902

11,038,492

45.6

8.2

8

Muscat

9,576,599

10,214,101

74.7

6.7

9

Tehran Mehrabad International Airport

7,714,009

7,871,006

53.3

2.0

10

Dammam

7,271,485

7,065,730

94.8

-2.8

11

Bahrain

6,574,594

6,616,742

9.0

0.6

12

Amman Queen Alia International Apt

5,280,569

5,611,302

14.7

6.3

13

Beirut

5,389,857

5,605,056

32.4

4.0

14

Sharjah

6,148,233

5,531,104

11.0

-10.0

15

Madinah

5,051,667

5,282,948

62.2

4.6

Source: OAG * Double the numbers for the total seats available in and out.

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

21


 Eraman

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

A year to celebrate As Malaysia Airports celebrates its 25 years anniversary, Asia Duty Free Magazine talks to Zulhikam Ahmad, General Manager of Malaysia Airports (Niaga) Sdn Bhd about his achievements as the Head of duty free retailer, Eraman by REBECCA BYRNE

What has been the biggest challenge for you since taking on the job? My biggest professional challenge was making the leap from the local convenience store and retail chain industry to General Manager of Malaysia’s largest travel retail operator in the duty free industry. Building new business networks, collaborating with people from this industry, as well as engaging them for mutual benefits to spur business growth was indeed a challenge. Gaining the trust and support from stakeholders in the industry such as the airports and brand principals was hard back then when I just joined Eraman in 2015. However, that was a challenge I was prepared to face and overcome despite all odds.

in KLIA, klia2 and Kota Kinabalu, Eraman recorded its highest ever revenue and contributed a healthy growth in sales and profitability.

What has been your greatest success? To see Eraman back in a healthy position from the crunch period in 2014 and 2015 due to the twin airline tragedies which seriously impacted passenger traffic through Malaysia’s main airport, KLIA in particular. The business slowly picked up in 2016 and 2017 was a year of achievement where Eraman saw a huge and strong growth in terms of sales and profitability. With the growth in passenger movements for all Malaysian international airports and the persistent demand for duty free merchandise rising particularly

What are your plans for the year ahead? Currently, Eraman is focused on both consolidation and expansion. We are rolling out a refurbishment program for most of our outlets in all international airports in Malaysia. These outlets, which comprise of all our product categories from core products and lifestyle to F&B, will undergo a facelift both externally and internally in line with our objective to generate even greater customer awareness and spend both at our retail shops and F&B outlets. In Q3 2018, Eraman introduced four monogram concept boutiques for

What changes have you seen since becoming GM? A closer collaboration and partnership between the retail operator, landlord and brand principals. A true tripartite collaboration has contributed to better sales for Eraman and enhanced the commercial landscape for Malaysia Airports and Eraman as a whole. This continued effort will be an initiative that we will strive to deliver in order to create better offerings and choices especially for the travelers passing through our stores in all international airports in Malaysia.

22 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018

renowned brands M.A.C, La Mer, Tom Ford and Jo Malone at Kota Kinabalu International Airport. This achievement is another milestone for Eraman, as it is our first boutique concept outside of KLIA. In mid-September 2018, Eraman Duty Free Emporium, which is located at Contact Pier KLIA has undergone renovation works. Renowned brands such as Gucci, M.A.C and Jo Malone will be welcomed by our customers who are looking for more international brands and luxury products. We are continuing our brand refresh with a co-ordinated approach. From the first quarter 2019 onwards, the website, uniforms and all through the stores will be refreshed in phases. What were the highlights of 2017 and 2018? 2017 was a year of strong growth for Eraman due to increased passenger movements at all Malaysian international airports. This led to increased duty free sales particularly at KLIA, klia2 and Kota Kinabalu. The category sales growth for 2017 was strong, led by Perfumes & Cosmetics and Chocolates which constituted 15% and 12% respectively of the total Eraman sales. While favorable passenger movements is an instrumental part of this growth, we also formed strong marketing partnerships and collaboration with major financial players. Furthermore we imple-


mented joint campaigns and promotions with brand principals alongside umbrella campaigns and contests. Last year we launched the Eraman Shopping Extravaganza “Buy & Win” Contest for its second consecutive year. This contest, held in three phases, ended in May 2018. It was instrumental in reinforcing Eraman’s brand value and attracted customer participation with its attractive prizes worth more than RM1 million throughout its duration. The first two phases of the contest that ran during 2017 saw more than 300,000 entries with majority of participants from Malaysia, China, and India. This demographic is consistent with the nationalities that spend the highest at our stores. To cater for the increasing Chinese visitors to the country, Eraman partnered with Alipay, the world’s largest online and mobile payment platform as well as Union Pay International, the fast growing global payment network. Both strategic partnerships saw attractive offerings in-stores for customers whilst giving the convenience in payments and enhanced customer experience.

Eraman also fostered strong relationships with its brand partners especially the leading beauty houses. In October 2017, the company worked with Dior to introduce an innovative Perfumes & Cosmetics boutique at Contact Pier, KLIA. Other brands such as Gucci, M.A.C, Tom Ford, Jo Malone and LA MER will be opened in Q3 2018. In the F&B category, we won several awards including the Kulinary Top 25 Dining Choice Award 2017 for Bibik Heritage and Food Garden. The brands involved were Mamak Kandar Rice, Pantai Timur, Nyonya Taste and Selera Nusantara. Eraman also received the ‘Best Supporting Partner’ award during the 2017 Concessionaires Conference. In August 2017, we expanded our F&B franchise business under Gloria Jeans Coffees brand with the introduction of a kiosk at the Arrival and Departure Halls in KLIA. What new marketing initiatives are you doing to celebrate the anniversary? To enhance value as part of our customers’ shopping experience and in conjunc-

tion with the Eraman 25th Anniversary, we have embarked on a strategic marketing campaign called Eraman Shopping Extravaganza #25AmazingYears. This four month campaign from July until October 2018 offer prizes totalling more than RM1.2 million. With a minimum spend of RM350 at any Eraman participating outlet, customers can win not one but two luxury cars and many lucrative prizes. Among others, Eraman will be giving away international holiday packages for two to Scotland, Austria, and Switzerland, gift vouchers, designer handbags and jewelleries as well as points for Petron Miles Card. In addition to this marketing campaign, Eraman continues to collaborate with leading international and local banks, reaching out to their premium card regional database with a preferential incentive to generate greater sales revenue. The privileges apply to merchandise such as fragrances, cosmetics, chocolates, liquor, fashion apparels and accessories, and will soon cover selected F&B as well.

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

23


Saudi Arabia

Sky’s the limit Jeddah’s expanded airport, its geographic location and the city’s importance to the cultural, religious and business communities of Saudi Arabia and indeed the world combine to offer the air industry boundless opportunity by WENDY MORLEY

T

he second-largest city in Saudi Arabia after Riyadh, and the nation’s largest port, Jeddah is also the region’s second-largest business center, after Dubai. Goods flow through Jeddah to the rest of the country, including imports heading to holy cities Mecca and Medina, but that is only a small part of the city’s importance on the business landscape. Jeddah is Saudi Arabia’s commercial capital, with a number of first-rate conference, exhibition and convention centers. The city is also ranked high in terms of science and innovation, is a prime tourist destination and is geographically close to Mecca and Medina. Jeddah itself has a substantial population of about four million, but its airport services the city of Mecca and its surrounding province, with a population over six million, and Medina, with a population of over a million. The local market and international visiting market are therefore both strong—an important key to the success of any hub—but the city is also in an optimal position in part because of its physical location and in part because it is in a sixth freedom market, wherein passengers and cargo are able to fly from a second to a third country after stopping in Saudi Arabia.

Airport of the future

In addition to these important positive factors, Jeddah’s King Abdulaziz International Airport (KAIA) is reaching the completion of its expansion, which began in 2006. It will have the capacity to serve 80 million passengers annually once it’s fully operational. The official opening is currently set for January, 2019. Also at that time will be the official opening of the Haramain high-speed rail project network, a 453-kilometer transport system connecting the airport to the holy cities Mecca and Medina and to the King Abdullah Economic City. KAIA can accommodate more aircraft than any other airport in the world, and once the expansion is complete, will be the physically largest airport. The airport already has an award-winning terminal specifically designed to service the large number of Hajj pilgrims, up to 80,000 people at any given time. Given all of this, then, it should come as no surprise that market analysis by Boeing has shown Jeddah to offer significant opportunities as an international hub.

24 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018

Temporary turbulence

As a region, the Middle East has shown itself to be a bit rocky over the past couple of years, with traffic affected by lower oil prices and geopolitical instability, including the Yemen war and a deterioration of Qatar’s relationship with its neighbors. Abu Dhabi International Airport has suffered declines given these realities. Despite this, the outlook for the Middle East continues to be bright, and any slowdown is seen by the air community at large as temporary. The region is in a highly advantageous geographic location, as a link between Europe, Asia and Africa. Local airlines have fundamentally strong business fundamentals, and have evolved with the changing times: Etihad Airways has restructured its international assets, and Emirates has launched the flydubai brand. The foundational strength can be seen by purchasing orders of local airlines; Omani budget airline SalamAir has signed an agreement to add six A320neo aircraft to its fleet, and Qatar Airways has ordered five 777 freighters from Boeing. US$46.4 billion work of deals were inked on the first day of the most recent Dubai Airshow, with the vast majority of that— US$43.6 billion—for civil aircraft.


Jordanian Duty Free Shops

TFWA President Erik Juul-Mortensen and DFWC President Frank O’Connell attend the launch of the training diploma program with Jordanian Duty Free Shops CEO Haitham Al-Majali and other dignitaries

Level up U

nder the patronage of his Excellency, the Minister of Labor of the Hashemite Kingdom of Jordan, Mr Samir Murad, Jordanian Duty Free Shops (JDFS) celebrated the launch of the training diploma program “Trade & Travel Retail Management”, in cooperation with Ammon Applied University College. Guests of honor included Tax Free World Association (TFWA) President Erik Juul-Mortensen, and Duty Free World Council (DFWC) President Frank O’Connell. During the event, held on July 26, a memorandum of understanding was signed between JDFS CEO Haitham AlMajali and Nadim Al-Mu’asher, Chairman of the Jordanian Hospitality and Tourism Education Company, representing Ammon Applied University College (AAUC), to announce the beginning of the training diploma. This diploma will focus on a variety of carefully chosen topics enabling graduates to operate efficiently and effectively in today’s highly dynamic competitive environment in the fields of industry, trade and retailing, and in particular the duty free and travel retail business, JDFS said. In pursuit of his continuous efforts to enhance the level of the industry in the MEA region, Mr Majali, President of the

Jordanian Duty Free Shops launches travel retail training diploma for graduates

Middle East and Africa Duty Free Association, said: “We are 100% positive that with our combined efforts, the diploma will grow nationally and internationally, affecting thousands of industry colleagues from the retail sector, trade and travel retail, all set to enhance and improve their knowledge and skills, and be a huge leap in the field of trade and travel retail business.” Juul-Mortensen added: “I am delighted to be part of this event, and to witness the launching of this diploma, that I trust will enhance the knowledge, skills and capabilities of participants coming from many different retail companies and organizations from Jordan and across the region. I look forward very much to see-

TFWA President and guest of honor Erik Juul-Mortensen is pictured with Jordanian Duty Free Shops CEO Haitham Al-Majali at the launch of the diploma

26 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018

ing, in time, the benefits of this initiative reflected throughout the industry.” Speaking at the event, O’Connell stated: “The launching of this diploma course in travel retail represents a significant milestone for our industry and demonstrates a real commitment to driving high professional retail standards and to ensuring the long-term prosperity of those working in the industry. “This partnership between business and academia is very much in line with the DFWC’s educational objectives and I congratulate Haitham and his team in Jordan Duty Free Shops and the AAUC on their initiative and wish them every success. It was a privilege to be present at this unique event.”


Nadiya

The king of dates Ambitious date brand Nadiya is seeking to offer high quality products in exciting packaging to travel retail – and all with health benefits by HIBAH NOOR

Nadiya’s new White Chocolate Coated Dates

The Dubai-based company offers a range of beautifully packaged luxury chocolate, stuffed and whole dates

28 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018


DISTILLED IN SCOTLAND BOTTLED IN DENMARK

YOU CAN NEVER BE TOO GENEROUS


Nadiya

He continues: “Dates is our culture and heritage, so how come they are so poorly presented? So we decided to start Nadiya and offer exciting packaging, high quality products and better processing of the date itself.” The company entered travel retail 12 years ago. “We grew with the customers, we grew larger than others in terms of market share. To give you perspective, we were number 25 in the food and confectionery category with Dubai Duty Free and now we’re number seven out of 250 companies.” Nadiya operates in 11 airports, primarily in the Gulf region. He cites Jeddah, Riyadh, Dammam, Dubai, Abu Dhabi, Muscat, Bahrain, plus Istanbul.

Asian consumer interest

In travel retail, Nadiya offers celebration tins, presentation boxes and resealable pouches

L

eading date brand Nadiya is on a mission to make its products as popular and international as chocolate in the travel retail channel. Nadiya has a food heritage, and is very focused on quality and taste. Nick Papadopoulos, General Manager, Nadiya, wants to emphasize the global nature of the brand and put paid to the idea that dates should only be targeted at traditional consumers in the Arab countries. Nadiya’s product concept is based on the fact that dates can be gifted and are something of real quality. The Dubai-based company offers a range of beautifully packaged luxury chocolate, stuffed and whole dates, reflecting its local heritage and the traditions of Arabian hospitality. Among its many prestigious customers are duty free operators in Dubai, Saudi Arabia, Oman and Istanbul, leading regional airlines, Dubai Government departments, major retailers and many international hotel groups. Papadopoulos explains “We try different goods and we thought we should up the game in the Arab world and make sure that our dates were delicious. We use the finest Saudi Arabian dates, we get nuts from the US, we get pistachios from Iran and packaging from China/India. Our product is a global product.”

Maghreb, Tunisia, Morocco, but the best dates are the Saudi dates. We buy farms and we source externally to get the best of breed and different varieties.”

Focus on health benefits

In travel retail, Nadiya offers celebration tins, presentation boxes and resealable pouches. Its newest offer for travel retail is White Chocolate Coated Dates – dates covered in white chocolate, containing natural fruit flavors. The production process also seeks to offer “the best”, says Papadopoulos. “From the washing, the fumigation, the process with Belgian chocolate, the best pistachios from Iran, the best almonds from US, everything has to be prime and premium.” The dates are grown on trees, and once a year there is a harvest, with each tree yielding 100 kilograms of dates. Depending on how the tree is trimmed, it would provide a mix of large, medium and small dates. Most dates sold at retail are medium in size. The company has a factory in Saudi Arabia, which carries out the pre-processing. The dates are washed, fumigated, treated and packed, and then they are transported by truck to the UAE to its other factory in Dubai, the main factory for processing, based in Jebel Ali. With such a focus on health, quality and gifting, expect to see much more of Nadiya in the future.

Nadiya was introduced in Asia when the company discovered that it was one of the biggest confectionery brands in Dubai Duty Free. The operator analyzed its sales statistics to see who was buying the dates and found there was a lot of interest from Asian consumers, especially from the Chinese. “They want something new. Instead of having the regular chocolates, they want something different,” says Papadopoulos. Asia is a natural progression. Papadopoulos acknowledges that there are many countries in the region with different characteristics. He points to Indonesia and Malaysia, which have some of the biggest Muslim Nick Papadopoulos, populations. “Pre-, postGeneral Manager, Nadiya Ramadan and during Ramadan they’re very big on dates. They start with Ramadan and see a different quality of date, and then throughout the year we can offer different items.” Other countries, such as China, Hong Kong and Singapore, have very high disposable income and they want something new and exciting. “We offer specialized confectionery; instead of buying the regular chocolate brands, you can buy something different.” Papadopoulos contends that a chocolate date is healthier than just chocolate. “Our Saudi Arabian dates are the king of dates. There are dates from throughout the region, from Iran, Iraq,

30 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018


ALL NEW

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The travel pillow that stops your head from falling forward and side-to-side.

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 Loacker

LOACKER

builds on gifting by JAS RYAT

Loacker sweetens the deal with new confectionery assortment at TFWA World Exhibition

Loacker Choco Minis are available in a convenient pouch bag to enjoy while on the go

The decorative Loackini Assorted Giftbox is filled with bite-size, cream-filled, ultra-thin wafers coated in milk or dark chocolate

32 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018

I

talian confectionery brand Loacker returns to the TFWA World Exhibition with the new Loackini Giftbox and the Choco Minis Pouch Bag. The Loackini Assorted Giftbox features bite-size, cream-filled, ultra-thin wafers coated in milk or dark chocolate. The single-piece, exclusive flow packaging makes Loackini a unique product, the company said. On the shelf, Loackini aims to stand out with its eye-catching square design featuring gold decorations. Loacker’s 10g Loackini are made with 100% Italian hazelnut cream, selected and roasted in-house. The 60% dark chocolate is mixed with soft cocoa cream. The intense flavor is combined with the crispiness of the cocoa wafer, while the decorative box makes for an ideal gift for friends and family. The brand is also highlighting its Loacker Choco Minis, presented in a handy pouch bag for enjoying on the go. The mini chocolate specialties, with a heart of crispy and light wafer, are available in four flavors: milk, dark, milk creme and napolitaner. The Loacker wafer is covered in ultra-fine chocolate and offers a light and crisp treat. Specialty lines milk creme and napolitaner have a surprising layer of rich cream surrounding a crisp of Loacker wafer, covered with the high-quality chocolate. Loacker products feature the best natural, raw ingredients, selected recipes and gentle production processes involving state-of-the-art manufacturing technology. The ingredients are produced 1,000 feet above sea level in the heart of the Dolomites in Italy, where the air and water are considered to be purer and fresher, adding to the quality of the product.


Nadiya in Travel Retail

Available at the following Duty Free Shops: Dubai, Abu Dhabi, Riyadh, Jeddah, Madinah, Istanbul, Bahrain, Muscat, Cochin /NadiyaDatesArabia

/NadiyaDates

www.nadiyadates.com


Mazaya

Flavor of the month Shisha tobacco supplier Mazaya’s long-term approach to building shisha in travel retail sees immediate success

Mazaya shisha tobacco comes in different flavors, such as watermelon mint, which attracts younger adult consumers

34 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018


F

or leading Jordanian shisha brand Mazaya, TFWA World Exhibition is a key week in its ongoing strategy to build shisha sales in global travel retail. This year sees the company entertain guests onboard its luxury Princess Iluka yacht in addition to its exhibition stand (Stand number: Yellow Village H53). “Building travel retail distribution for our shisha tobacco outside the Middle East is a long-term strategy but we are most definitely finding that retailers in Europe, Asia and the US are becoming more and more interested and receptive to the concept,” says Mazaya Brand Manager Rawan Elayyan. “In Cannes we will introduce new customers to our best-selling flavors, such as two apples, lemon mint, blueberry, mint, gum mint, grape mint and watermelon mint. We usually recommend five of these to start with in a new listing, building as the brand becomes better known within the region.” Investment to bring Mazaya shisha to the attention of the global travel retail industry remains high. Once listed, support from the company through promotions such as gwps and price-off is seen as critical to growth. “This year we’ve run promotions for customers in

At the TFWA World Exhibition, Mazaya will introduce new customers to its best-selling flavors, such as two apples

Amman, Dubai and Sharjah airports and have scored high growth rates in all as a result,” says Elayyan. “We have a new listing with Abu Dhabi that’s due to go in during August and will run a promotion in September.” Elayyan emphasizes that Mazaya has potential for retailers across the globe. “Of course, the Middle East/Gulf remains our core and key sales region and we continue to build our distribution across airports here, but we know that the potential for shisha in other regions is massive, particularly where the local market demand continues to rise rapidly such as in the UK, Europe, the US, South America and parts of Europe,” she says. “Naturally, we are all aware of growing restrictions for all types of tobacco smoking but, nevertheless, according to a recent study by Wise Guy, the hookah (shisha) tobacco market is expected to see a CAGR of 17.99% from US$734,06m in 2017 to US$2,757.94m by 2025. “Driving this growth is the increased themed-based cafe culture and the fact that it comes in different flavors, which attracts younger adult consumers.”

Dedicated sales and marketing team

According to the report, Europe is expected to dominate growth, followed by North America, with Latin America demand also growing as the cafe culture grabs hold. Demand is expected to stay strong in the traditional markets such as the Middle East and parts of Asia Pacific. “Based on these facts, it really makes sense for global travel retailers to get onboard the shisha market phenomena and dedicate some floor space to this growing trend,” continues Elayyan. “It’s an opportunity not just for airport shops but for border shops, cruise ships and ferries as well.” Mazaya will be present in Cannes with a growing team dedicated to the global travel retail market. “We are increasing our business and, in line with that, have expanded our dedicated sales and marketing team and are now dealing directly with operators rather than through agents or consultants,” she says. “We are very keen to meet new potential customers in Cannes and look forward to introducing the world of Mazaya shisha to a new audience as well as our valued existing customers.”

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

35


Perfetti Van Melle

Confecting a sweeter future

Sugar confectionery specialist Perfetti Van Melle is highlighting new innovations for retailers and their sales staff at the TFWA World Exhibition by JAS RYAT

P

erfetti Van Melle (PVM) returns to the TFWA World Exhibition with its strategy of ‘confecting a sweeter future’ for international travelers. The strategy will include the launch of new products and a growth plan focused on expanding the sugar confectionery category in travel retail. New products for 2019 focus on core brands Mentos and Chupa Chups. Mentos Jumborolls will be introducing Mentos Mix on the Beach, eight single rolls containing a mix of fruity drink flavors. Also new is the Chupa Chups Cupcake, a sweet plastic baking cup holder with 24 cupcake baking cups and 10 mini Chupa Chups lollipops on top, packaged in a small box. “The Chupa Chups Cupcake is a great gift for kids,” says Femke van Veen, Brand Manager Global Travel Retail. A line extension of the Chupa Chups Smurf Markers is the Chupa Chups Hello Kitty Markers, available in 2019. The Smurf Markers have been very successful in travel retail, reports van Veen. The brand plans to appeal to an even broader range of young children on their journey.

Perfetti Van Melle gives out beach vibes with its new fruity drink flavors Mentos Mix on the Beach

The new 600g Mix of Minis Silo, including Fruit-tella, Dummies, mini Chupa Chups and mini Mentos, is designed to be the right size and price point for border stores.

Importance of visibility

PVM is introducing these new lines into a distribution channel where the sales ratio between chocolate and sugar confectionery continues to buck the global trend at 87%:13% compared to 55%:45% in the domestic market. This presents both a challenge but also an opportunity for PVM. To increase the retail focus on sugar confectionery, PVM’s focus remains on its ‘Must Have’ assortment, a selection of bestselling Mentos and Chupa Chups products that are perfect for gifting. “We want to make sure that these products are available at all major airports to all international travelers,” explains van Veen. “Visibility is very important for confectionery products because 60% of purchasing decisions are made at the airport; shoppers are killing time, and for confectionery this means that seeing is buying.” This assortment will be supported by a suitcase display especially designed for this range. Furthermore, it will be supported with a new promotional tool, an interactive multitouch screen with fun games that requires consumers to work together to win. PVM also wants to highlight its cash-till assortment. “As we see in other industries, the sales opportunity at the cash register is still undervalued but has great potential. 75% of cash-till purchase decisions are made in-store, which makes the POS very impulse-driven. The only planned cash-till purchases we have been able to identify are for refreshment products such as gum and mints,” adds van Veen. These smaller products are impulsedriven and usually only require a small investment, making them ideal for this placement. Research by m1nd-set Shopper Insights shows that 36% of confectionery shoppers interact with sales staff and 60% of these shoppers are influenced by this interaction in their purchasing decisions. To ensure sales staff stay well informed, PVM has developed an eLearning system that covers the company and its products via a 20-minute interactive training session. The eLearning tutorial will be available on a multitouch screen at the Cannes show (Stand number: Mediterranean Village P17).

Chupa Chups Cupcake is a bright keepsake that holds 10 mini Chupa Chups lollipops

36 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018


Roberto Cavalli Vodka  

VODKA

with a fashion attitude A new boutique showcasing Roberto Cavalli Vodka is the blueprint for future stores that Mariem Mersni Ben Cheikh, CEO of International Travel Retail, wants to open in the duty free channel

The new La Casa della Vodka boutique in downtown Beirut offers Roberto Cavalli spirits in a white interior design that gives out positive vibes

M

ariem Mersni Ben Cheikh, CEO and owner, International Travel Retail, distributes Roberto Cavalli Vodka globally in duty free, and has just opened a concept store for the brand in Lebanon. La Casa della Vodka, the first Italian spirits boutique, opened on July 5, 2018 in the heart of downtown Beirut, where Mersni resides. “La Casa della Vodka is in the most trendy street, Avenue Fosh, where all the famous fashion brands are, and in the middle of the most trendy pubs and bars,” she enthuses. La Casa della Vodka exclusively sells all spirits from the Italian fashion designer Roberto Cavalli, namely vodka, wine, grappa, and a unique gin called Ginarte. “The boutique’s white interior design gives out a lot of positive vibes, keeping the fantastic product I am offering in the ideal atmosphere,” she adds. Mersni’s background and experience is in duty free – a channel that she loves for its luxury aesthetic. She has been distributing Roberto Cavalli Vodka globally in duty free via her company International Travel Retail for seven years now. “I am fully in love with it, because I am selling a unique quality and taste with the best design,” she smiles. Since she took on the distribution, the brand’s performance has been higher than expectations. In fact, it has shown doubledigit growth yearly since the start.

Inspired by Italian fashion and lifestyle

Speaking further about why she took on the brand, Mersni states: “I was also inspired by the Italian elegance and the fine concept. I am attracted by Italian fashion, the Italian lifestyle, and the Italian cities, especially Florence and Milano.” Mersni is also proud to observe “the professionalism, humble and classy attitude of the Cavalli family, and especially Tomaso Cavalli, Roberto’s son, with whom I appreciate collaborating each day.” Tunisian-born Mersni loves Beirut, where she has been living for nine years in what she describes as “a city full of life, of exclusivity, positive vibes and joy”. It was only natural that she would want to open a store for Roberto Cavalli Vodka in the city she adores. Her Tunisian origins have also played a part in her company’s success, she notes, as it is “the country of jasmine, with a warm welcome and beauty.” The idea for La Casa della Vodka was born from all these factors. Now, Mersni plans to export the concept to Turkey, Greece, Spain France and Germany in the coming five years. She describes La Casa della Vodka’s signature as “a fashion attitude, because coming to this boutique is a moment of pleasure, like enjoying wonderful shopping, and also because I am selling the

A model wearing Roberto Cavalli Vodka branded wings poses outside the new Beirut store on the opening day in July 2018

fashion on the rocks with Roberto Cavalli Vodka.” La Casa della Vodka aims to offer the best vodka, gin and wine. “It offers a dream, pleasure and a unique welcome that make you feel like home… A casa, as the Italians say.” Mersni concludes: “My aim is also to see La Casa della Vodka corners in all airports where travelers can enjoy this beautiful concept and product.”

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

37


LIQUOR NEWS

A tour of rums around the world Wild Tiger Rum has brought its “Think outside the bottle” philosophy to TFWA World Exhibition in Cannes this year. The company is unveiling the Rumtastic Rum Box, an experience dubbed “Around the world in 20 Rums”. This exclusive collection of 20 miniatures features carefully curated rums from around the world. Featuring rums of every style and variant’s with strong provenance, the Rumtastic Rum Box is one’s passport to travel the world of rum in a fun, engaging and experiential manner, which has already received significant pre-orders from travel retail operators. Gautom Menon, Founder and Brand Owner of Wild Tiger Rum, says: “We are optimistic about the opportunities in the tax free industry, which we believe will see the next new wave of Asian consumers and millennials embracing unique and standout rums as their drink of choice.” The Rum Box will feature a different and distinctive selection each year in two variants, one with 20 rums and a 10-pack variant, which is aimed more at inflight listings and cruise ships, where space is limited. Wild Tiger is also working on limited-edition versions of the Rumtastic Rum Box to celebrate participating nations of the

Ladoga Group showcases world’s most expensive vodka Ladoga Group, famous for its Imperial Gold vodka created in 1721 to impress Peter the Great, will showcase for the first time its entire portfolio of prestigious spirits at TFWA World Exhibition and Conference 2018, in Blue Village, stand H3. The portfolio includes Imperial Collection Faberge vodka, one of the most expensive in the world, thanks to its superrefined distillation process, highest quality ingredients and unique Fabergé-egg style container. Water from Ladoga Lake, the largest freshwater lake in Europe and the biggest source of the purest drinking water is used to create the vodka alongside the best quality wheat and rye from central and southern Russia. After distillation, the vodka goes through 12 filtration processes, similar to those used in the best Cognac houses in France.

2020 Olympics in Tokyo, Japan, and for Chinese Year of the Tiger in 2022. Wild Tiger aims to introduce products through innovation, a compelling back story and a strong point of differentiation, to add value to travelers and increase sales opportunities for operators. The Rum Box is a unique collection of various rums from around the globe. Available in a 20-pack and a smaller 10-pack variant to accommodate for limited inflight space

Visitors will see all eight of the exquisitely designed Fabergéegg style presentation cases. These are made of metal alloy enrobed in enamel of different colors and decorated with 24 carat gold gilding and colored crystals. Each case contains a 75cl decanter of Imperial Collection vodka coupled with four glasses all made of Venetian glass. “Every element of our Imperial Collection Fabergé range is totally unique and presents a very special opportunity for the global travel retail market,” explained Ruslan Grigoryev, Export Director for The Ladoga Group. “There is no other vodka like it and its majestic presence on-shelf creates interest and talkability amongst consumers in-store.” Having experienced year on year growth and currently the best-selling vodka in Russian airports duty free, Ladoga is looking to replicate the success of its Imperial Collection range in the global duty free arena. “There is a huge appetite for premium and super premium vodka within the global travel retail market and we are looking to capitalise on this trend with our unique portfolio of products and recipes developed almost 300 years ago,” said Grigoryev.

Ladoga Group’s Imperial Collection Faberge vodka boasts a super-refined distillation process

38 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018


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Agio Cigars

AGIO

is a smoking success Dutch cigar brand Agio proves it’s no slouch when it comes to global expansion and brand building by JAS RYAT

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ollowing the success of Agio Cigars’ Balmoral Añejo XO handmade cigar range at the TFWA World Exhibition in Cannes, the firm took the opportunity at the Singapore show to highlight the gift box, allowing it to drive brand awareness and build a stronger foundation in the region. Asia is proving to be a strong region for the Dutch cigar maker as it continues to strengthen relationships with operators. The proof is with the constant rotating product within the stores. “We do very well in Malaysia,” says Gertrude Stormink, Global Travel Retail Manager, Agio Cigars. “They are already ordering the product for the second time, so it’s doing very well there. Normally in a humidor you have to display many brands. As Balmoral is very new in the humidor, consumers may have to get used to the brand. But it’s rotating without activation.” Agio recently made the decision to offer smaller, travel-friendly cigar packs in a humidor format to maintain the flavor and freshness of the product. “Our success with Balmoral began with the Balmoral Dominica 12s gift box, the Balmoral Private Collection 25 with its distinctive lacquered wooden box presentation and our travel retail-friendly five-pack. Based on this, we decided that

The Balmoral Dominican Selection Private Collection 25 was the cigar brands entry to success in the df & tr platform

it was time for us to go into the humidor,” explains Stormink. The brand has listings at Kuala Lumpur airport (with Eraman and Dimensi), both of which carry the Balmoral Añejo XO Travel Exclusive. Stormink cites the importance of these relationships with operators as they are the frontline representing Agio. “The product is wonderfully displayed and they have excellent staff that are able to talk to the consumers directly. This gets consumers coming back every time when they travel to airports,” says Stormink. She continues: “For me, that is a really good way to monitor the sales and to see if it’s working well. We can do promotions with them and go in and train the staff. Now we are introducing the staff to the humidor, so that is slightly new.” Agio also has its eyes set on China Duty Free this year with big projects planned in Hong Kong, Beijing and Shanghai. The goal is to expand into all Chinese airports as the market presents a huge opportunity for the brand. This is expected to increase brand awareness in the area, resulting in higher sales. Agio is already listed with Sunrise/CDFG in China. Chinese New Year continues to contribute to Agio’s growing sales. The

Agio Cigars’ Balmoral Añejo XO handmade cigar’s are being well received in duty free with signs of expansion across the globe

40 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018

Balmoral Dominican Selection is a Private Collection of 25 sticks that is offered in beautiful packaging with a carrier bag to help travelers. The cigars are presented in gold and red packaging and are designed to make a great gift for the season.

Doubling in Dubai

Dubai has also been good for Agio. The brand has seen double-digit growth in the country thanks to rising demand. The company continues to partner with the airport operators for activations as they are performing well with the Balmoral Añejo XO range. Agio has also invested in a Brand Ambassador who maintains the humidor and manages sales. The brand is soon starting a promotion in Dubai consisting of a GWP, whereby customers spending US$50 or more would receive a cigar etui made to protect any size of Balmoral cigars. The key this year is to be a wellrecognized brand by securing listings, increasing distribution and becoming a globally recognized brand synonymous with high quality cigars and appealing travel retail concepts. All these factors will potentially protect the brand with labeling restrictions on the horizon. Looming talks of plain packaging with health warnings may hinder the potential buyer. However, Stormink feels by establishing its positioning within the top five brands offered by retailers, Agio should be able to head off this challenge. Agio is coming with the right product backed by high quality and solid positioning. Stormink optimistically concludes: “People still want to enjoy cigars; it may just be about readjusting the message about the great things Balmoral has to offer.”


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Diverse Flavours

Diverse Flavours champions Japanese sake

Miyamizu No Hana is a well structured sake that is created with 100% Yamadanishiki Rice from Hyogo and gives a mellow and semi –dry with a crisp aftertaste

Japanese sake is being propelled to the forefront of global travel retail thanks to ambitious distributor Diverse Flavours

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iverse Flavours, the independently owned distributor of fine wine and spirits, is paving the way for a pioneering liquor category in global travel retail – Japanese sake. The company will highlight Japan’s famous rice wine at the TFWA World Exhibition in Cannes, including new products from Sakuramasamune, one of Japan’s oldest sake makers from Hyogo prefecture, and a completely new range from Kinshi Masamune from Kyoto. Anthony Budd, Managing Director of Diverse Flavours, is on a mission to establish Japanese sake in travel retail with the same passion he employed to bring South African wine to the forefront of the channel. “We have been introducing sake for two years now, and the initial uptake was slow. We listed about five products in DFS in Hong Kong until the recent concessionaire change-over, and during this time DFS ran some very successful Japan festivals,” says Budd. He adds that there has been a “dramatic” rise in interest from all the large operators in Korea, Sin-

Handmade Daiginjo is brewed with a special variety of rice called Yamadanishiki. This well balanced sake offers aromas of apple and melon, and smooth texture with a crisp after taste

gapore, Hong Kong, China, Malaysia, and Middle East, and among airlines. This rise of interest coincides with an influx of travelers that are looking to purchase products based on the story or heritage behind them. Sakuramasamune is an old, historical sake brewery dating back to the 1600s. It is from one of the most important and famous sakeproducing areas in Hyogo prefecture and uses the purest spring water, highest quality rice, and ancient yeast strains. It is highly regarded in Japan for its quality and historical past, so it has high potential in travel retail, believes Budd. Diverse Flavours will also introduce Kinshi Masamune from Kyoto this year.

Interest in Japanese culture and experiences

The rise in tourism in Japan has also helped generate interest in Japanese sake with travelers. The Japanese government is actively encouraging tourists to visit Japan, explains Budd. “I think global travelers are falling in love with Japan – its culture, its people, its landscapes and geography, its food, and its wide array of spirits, wines, sake, and liqueurs.” Approximately 28 million tourists have visited Japan this year and a target of 40 million by 2025 is giving all things Japanese a huge boost. Budd feels the interest in the culture and experiences will cultivate the desire to purchase sake

42 GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2018

in duty free shops. Nationalities keen on purchasing sake include South East Asians, Chinese, Koreans, Europeans and Americans, and there’s strong interest from a younger audience. Budd feels the challenges center on supply logistics and lead times, and education or knowledge, as sake can be a bit complicated. Sake may be intimidating for new consumers as there are different qualities or grades of sake, various styles (whether it’s drunk hot or cold), and packaging written only in Japanese. Although the main focus for Budd at the moment is Asia and the Middle East, there is a growing interest from many European operators. TFWA World Exhibition will give Diverse Flavours the ideal platform to discuss the opportunities sake presents in travel retail. Budd expects to generate some interesting conversations with buyers on how Diverse Flavours can bring the Japanese experience into their duty free shops. “These days we want experiences – visiting Japan is an experience, and eating and drinking sake in Japan is the ultimate experience. Job done,” enthuses Budd. To taste and experience the Sakuramasamune and Kinshimasamune Sake, and the Diverse Flavours portoflio of South African wines visit Stand L34, Red Village and/or contact Anthony Budd at anthonybudd@diverseflavours.com or Telephone +27 71 255 7344.


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Gulf-Africa TFWA WE October 2018  

Gulf-Africa TFWA WE October 2018