GULF AFRICA Duty-Free & Travel

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S E P T E M B E R / O C T O B E R 2 0 1 1 • T F WA W E • V O L 2 1 , N O 2

TFWA WE 2011

Tourvest talks inflight p.

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ADAC delivers p.

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Jashanmal’s bespoke approach p.

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E-cigarettes: The new alternative p.

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Letter from the Editor

“Creating a future”

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n this issue, two of our major stories covers Tourvest Duty Free, an inflight retail concessionaire making great strides. Most recently, the operator secured an exclusive agreement with British Airways to supply and manage the airline’s inflight retail business, starting November 1.

We also take a look at Abu Dhabi’s luxurious carrier, Etihad Airways, which recently reported its most successful first half year with a 28% increase in revenues amounting to US$1,720 million. The airline attributes the impressive sales to strong performance in both passenger and cargo activities.

We will have an opportunity to learn more about all the activities taking place in the Middle East and Africa during this year’s MEDFA conference, with its theme of “Creating a future.”

In particular, the conference program will examine the current geo-political climate in the Middle East – from the Mediterranean all the way up to the Gulf. The mid-term and long-term effects of the political and social unrest that has hit the region will be discussed, while industry insiders from the affected markets will give an update on how business has picked up in the latter part of the year. Innovation will also be a key theme of this year’s program.

Finally, MEDFA welcomes four new members: Dubai Airport Company, Cowrie Enterprises Ltd, Flemingo International Limited and Etihad Airways.

The MEDFA conference will take place in Dubai at the Al Murooj Rotana Hotel, November 21 to 22, 2011.

Kind regards,

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.

September/October 2011, Vol. 21, No.2. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2011 Global Marketing Company Ltd.

GULF-AFRICA 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 Hibah Noor hibah@dutyfreemagazine.ca CONCESSIONS, LIQUOR & TOBACCO EDITOR Ryan White ryan@dutyfreemagazine.ca MIDDLE EAST CORRESPONDENT Faye Rowe faye@dutyfreemagazine.ca ART DIRECTOR Patrick Balanquit patrick@globalmarketingcom.ca CONTRIBUTORS

Hibah Noor Editor hibah@dutyfreemagazine.ca

Andrew Brooks James Ross ADVERTISING SALES ADVERTISING & MARKETING MANAGER Kim Carrera kim@dutyfreemagazine.ca SENIOR REGIONAL MANAGER Neelma Hasan nhassan@globalmarketingcom.ca CIRCULATION & SUBSCRIPTION MANAGER Deepa J deepa@globalmarketingcom.ca

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

SEPTEMBER/OCTOBER 2011 • VOL 21, NO 2

Contents 12 16 18 20 24 26 28

IN BRIEF Qatar Airways introduces latest in-flight catalogue ■ Aldeasa Kuwait to open new store during second half ■ Muscat Duty Free renovations completed ■ AV Airports wins contract at Medinah Airport

TOP STORY: TOURVEST DUTY FREE

A reputation for innovation Gulf-Africa Duty Free speaks with Selwyn Grimsley about the recent British Airways contract and the importance of ensuring spot on service to all customers

OPERATOR NEWS: DUBAI DUTY FREE

Good, better, best

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Dubai Duty Free continues its winning ways

AIRLINE NEWS: ETIHAD

An unrivaled experience Gulf-Africa Duty Free speaks with Etihad Airways about numerous new developments this year and its Skytrax status as Best First Class Airline in the World

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Riding the wave Qatar Duty Free posts impressive growth in the first half and aims to maintain momentum with a spatial increase in its main store, a new Top 20 shop and attractive promotions

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OPERATOR NEWS: HAMILA DUTY FREE

OPERATOR NEWS: INTERNATIONAL DUTY FREE SHOPS

Evolving with the times

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OPERATOR NEWS: CADF

This too shall pass Cairo Airports Duty Free readies a new store in Terminal 3 and continues with a strong promotional calendar to counter what has been a difficult year in Egyptian tourism

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

MEDFA looks forward to discussing ways of continuing Middle Eastern duty free’s momentum at the 2012 conference in Dubai

OPERATOR NEWS: ADAC

If you build it, they will come With strong sales and traffic in the first half, ADAC is expecting even bigger things in Abu Dhabi now that the refurbishment of Terminal 1 is complete

AVIATION NEWS

“Different realities” The latest statistics from IATA and ACI see passenger traffic varying widely across regions, with the Middle East now posting softer gains and North Africa continuing in the red

COMPANY NEWS: JASHANMAL

Jashanmal’s bespoke approach

COMPANY NEWS: THE ESTÉE LAUDER COMPANIES INC.

Following a rich tradition Estée Lauder’s newest fragrance for the Middle East delivers all that the region favors: a powerful oriental scent enhanced with rare, expensive ingredients

Fighting the good fight Hamila Duty Free continues to register a series small victories in the face of declining tourist numbers in Tunisia

“Creating a future”

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We catch up with Jashanmal about having a flexible approach, strengthening partnerships and achieving PAX growth in the region

OPERATOR NEWS: QATAR DUTY FREE

With the appointment of Revic Tantoco as General Manager of IDFS, the company makes significant changes to its operating model

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ASSOCIATION NEWS: MEDFA

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COMPANY NEWS: AJMAL PERFUMES

Worldly ways Dubai-based perfumer Ajmal chases global gold with latest selections

COMPANY NEWS: TRAVELLER LIMITED

A preferred partner Traveller Limited provides exemplary distribution services for brands and airlines active in the Middle East

BEAUTY BEAT: FRAGRANCES

A blooming business This season promises to surprise you with novel new scents that are sure to fly off the shelves

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Contents

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BEAUTY BEAT: SKINCARE & COSMETICS

Magnificent maquillage Cutting-edge cosmeceuticals and colorful new cosmetics that pack a powerful punch

COMPANY NEWS: ITF

Fashion meets fragrance Massimo Cappini, General Manager, ITF talks about the group’s designer scents, rising stars and how to make fragrances relevant to the Middle East

COMPANY NEWS: PROCTER & GAMBLE

Building future classics With innovative products, engaging advertising campaigns and outstanding in-store execution, Procter & Gamble is focused on creating a holistic shopping environment that blends classic favorites with new innovations

COMPANY NEWS: BEAUTÉ PRESTIGE INTERNATIONAL

The rise of Elie Saab Designer scents are contributing to the growth of the selective segment according to BPI’s Florian d’Hauteville and providing added value to the customer is key to continued success

56 58 62 68 70 72 10

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COMPANY NEWS: EUROITALIA

The rise and rise of EuroItalia Oh Italy; the sights, the smells. Perhaps it is this Amore-fuelled Italian magic that sparks perfumer EuroItalia along on its quest for magnificent fragrances

BAG/ACCESSORY REPORT

The carrying trade This year’s TFWA WE sees plenty of activity in the leather and handbag category

CONFECTIONERY REPORT

A natural fit Fruit and spice ingredients continue to garner attention in the confectionery market

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Different challenges and varied markets elicit innovation at Mars ITR

European heritage provides the touchstone for these important new jewelry collections

Traveling today seems unthinkable without a bag stuffed with electronic devices. Gulf-Africa Duty free reviews this market and the supporting role of travel accessories

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

COMPANY NEWS: DIAGEO

Staying committed Diageo partners with Dubai Duty Free for iconic summer promotion while continuing its commitment to corporate social responsibility in Lebanon

WHISKY REPORT

The spirit of success Promotions, messaging and experience keep these whisky leaders on top in a rising market

BRAND HISTORY

The importance of tradition Communicating the history of a spirit brand to consumers is especially important in duty free, where travelers look for both exquisite liquids and established names

COMPANY NEWS: BROWN-FORMAN

A bit of everything Brown-Forman continues to see success in the MENA region with both tried and true favorites and exciting new releases

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COMPANY NEWS: STG

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TRAVEL ACCESSORY REPORT

Gadgets galore

The Sharper Image collaborates with AM International to explore new markets

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JEWELRY REPORT

The past reborn

A fresh start

COMPANY NEWS: ARNOLD ANDRÉ

COMPANY NEWS: MARS ITR

Challenge and response

COMPANY NEWS: AM INTERNATIONAL

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Staying competitive Arnold André maintains its identity as a family-run business while teaming with the Tobacco House of Sweden and releasing new products ahead of this year’s TFWA WE

Upping the ante STG continues to strengthen its position through acquisitions while still riding high on the success of the Café Crème range in the Middle East

COMPANY NEWS: OETTINGER DAVIDOFF

More than a cigar For Davidoff and its customers, the ultra-premium cigar is a statement that defines success

NEW & NOTABLE Handelsgold Sweet Chocolate Cigarillos ■ The Civilian Fall 2011 Collection ■ Necklace Bolero

In Brief In addition to planning the construction of the new store, Aldeasa Kuwait continues with a regular promotional calendar in its two existing stores at Kuwait International Airport

Aldeasa Kuwait to open new store during second half

Aldeasa Kuwait has a number of operations in Kuwait International end of July sponsored by Hugo Boss. Across locations in Kuwait Airport: two Bye Bye shops near the gates that contain best- Airport, travelers who spend a minimum of KD 35 (US$126) in P&C selling products from various categories; one gold store; one or KD 20 (US$72) in confectionery, toys, watches, leather goods, location that sells dried fruits; one perfumery/boutique shop; and sunglasses, tobacco and/or costume jewelry will receive a scratch one general store. While the retail spaces themselves and the prod- card. Grand prizes include two 24-karat gold tolas (a unit of meaucts contained within each vary greatly, one thing that remains the surement equal to 11.6 g), one for each existing store. same across all of the company’s operations in the airport is the Just as important to Aldeasa Kuwait as running noteworthy proimportance that Aldeasa places on developing innovative promotions motions are the partnerships it fosters with suppliers. In fact, Shisin conjunction with suppliers. hani asserts that the company’s relationships with its supIn a recent interview with Gulf-Africa Duty Free, CEO of Aldeasa plier partners are often the catalyst for new special offers.

Kuwait Hassan Shishani spoke about what travelers in Kuwait Inter“Thanks to our close relationship with suppliers, national Airport can expect in terms of promotional activity. He also we can offer our customers promotions on star prodconfirmed that the company is planning on opening a new store ucts on a regular basis,” he says. “Needless to say, it’s during the second half of the year. The location will measure 140- essential to work together with suppliers in order to square-meters and offer products from traditional duty free cate- offer the best products at competitive prices.” gories such as P&C, tobacco and confectionery.

“Kuwait International Airport is currently building an extension that will see four gates added,” Shishani says. “The store will be opened in the second half, but an exact date hasn’t yet been specified.”

Shishani tells us that the socio-political situation has been “difficult” this year. As a result, the company continues to concentrate on keeping promotions and product mix in the existing stores predominantly geared toward high spenders such as Indians and Egyptians traveling to Kuwait for both business and pleasure.

Aldeasa Kuwait recently ran a scratch and win promotion to the Hassan Shishani, CEO, Aldeasa Kuwait

“Kuwait International Airport is currently building an extension that will see four gates added. The store will be opened in the coming months, but an exact date hasn’t yet been specified.”

TAV Airports wins contract at Medinah Airport Turkish aviation group TAV Airports recently led a consortium that has won a 25-year buildoperate-transfer (BTO) contract at Prince Mohammad Bin Abdulaziz Airport in Medinah. Local companies Al Rajhi and Saudi Oger were the other parties involved in the bid. It was noted that core elements of the project include increasing capacity at the airport from 4 million to 8 million passengers yearly and constructing a new terminal.

The General Directorate of Civil Aviation gave approval to the consortium—

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which submitted the best financial offer and scored the highest number of technical points—in mid-August.

Sani Sener, TAV Airports President & CEO, was quoted in local press as saying that TAV Airports is “proud to have won the operating rights for an airport in Saudi Arabia, one of the most important economies of [the] Arabian Peninsula and the Middle East, increasing the total number of airports we operate to 11.

“Mecca, along with Medinah, is the most

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

significant city of the Islamic world,” he continued. “We are very happy to be in the position to build and operate the gates of entry and exit to such a city. We were involved in the project along with the two most powerful players of the region, Al Rajhi and Saudi Oger. This project in the Holy Land will have a special meaning to us.”

In Brief

Qatar Airways introduces latest in-flight catalogue Qatar Airways has introduced its latest inflight duty free magazine, Shopping Extravaganza, offering passengers a greater choice of onboard products than ever before.

The new-look 112-page glossy magazine features 155 exciting products and over 80 new items, of which seven are available exclusively onboard Qatar Airways. In addition, the programme includes the return of a special promotion: Save US$15 when you buy any two fragrances.

Passengers flying on Qatar Airways’ extensive network of over 100 diverse business and leisure destinations worldwide can choose from a range of in-flight products available for all age groups. Commenting on the new magazine, Qatar Airways Chief Executive Officer Akbar Al Baker said: “Our priority is always our valued passengers and so we are delighted to be able to provide them with this new edition

of the in-flight duty free magazine offering such a fantastic range of duty free products onboard all our flights.

“The magazine means that our passengers can browse through an extensive variety of products and make essential and gift purchases from the comfort of their seat,” he continued.

A wide selection of premium fragrances, including best sellers and the latest collections by Dior, are on offer. Time-conscious travelers can find new and exclusive GF Ferre and Rotary watches available onboard.

Exquisite gold-plated jewelry and watches

by Folli Follie are also available.

To make the shopping experience better, Qatar Airways’ cabin crew have received training for improved product knowledge from some of the airline’s brand partners— Traveler, Dior, Al Maserve, Swiss Time and La Prairie. Furthermore, passengers can now easily make purchases onboard with credit cards thanks to new software that allows for authorization while in the air.

“This technology has already been tested on our flights successfully,” says Qatar Airways. “We are in the advanced stages of

procuring the hardware that will be required to implement it across the Qatar Airways fleet. By the end of the year we will be the first airline in the world to implement this technology.”

The Shopping Extravaganza magazine is available in the seat pocket onboard all Qatar Airways’ flights and passengers can also view the entire magazine online at the carrier’s website.

Qatar Airways’ new-look 112-page glossy magazine features 155 exciting products and over 80 new items

Muscat Duty Free renovations completed Just ahead of press time, Muscat Duty Free held the soft opening of its refurbished outlet at Muscat International Airport in Oman.

The full refitting and refurbishment places the location “alongside the best duty frees in the world, with the revised layout providing for a thoroughly engaging and visually stimulating shopping environment,” the company says.

The highlight of the new layout is its walk-though ambiance. The makeover also focused on increasing product selection, with the perfumes and cosmetics section, a dedicated malt section and a wine section among the highlights. The new layout offers over 1,600-square-meters of space and also features a new-look

souvenir section in addition to an “Aquathemed watch” section. The shops now also offer a more extensive range of products across other categories, including liquor, beauty accessories, electronics, toys, confectionery and tobacco.

“With this revamp, we believe we have created a very exciting shopping environment that even the seasoned traveler will find appealing,” says Tom Byrne, General Manager of Muscat Duty Free. “The shop navigation is very intuitive with seamless access and integration between floor areas of different categories. So now not only can you get exceptional deals and exclusive products, you also have a worldclass shopping environment to enjoy.”

With a renewed emphasis on retail and promotional communication, Muscat Duty Free kicked off their soft launch with a summer promotional campaign which gave shoppers a chance to win US$25,000.

“We are constantly running exciting promotions at Muscat Duty Free,” explains Byrne. “We feel passionate about the customer experience in our shop. We also run seasonal campaigns, for example in summer, at Christmas or during Eid, when passenger movement is high.”

A full-fledged opening ceremony for the store is scheduled in the near future, which will also highlight the launch of Muscat Duty Free’s new e-commerce integrated duty free website.

Want more? Visit us online to catch up on regional industry developments in our e.Newsletters and read recent print issues. www.dutyfreemagazine.ca 14

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

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Top Story: Tourvest Duty Free

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reputation for innovation

Gulf-Africa Duty Free speaks with Selwyn Grimsley about the recent British Airways contract and the importance of ensuring spot on service to all customers BY RYAN WHITE

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s reported in Gulf-Africa Duty Free’s e-newsletter in July, South African based in-flight retail concessionaire Tourvest Duty Free (TDF) has secured an exclusive agreement with British Airways (BA) to supply and manage the airline’s in-flight retail business. TDF will launch its new in-flight retail program on November 1 across BA’s fleet of 229 aircraft, serving both short- and long-haul destinations.

Gulf-Africa Duty Free had the pleasure of speaking to Selwyn Grimsley, CEO of Tourvest Duty Free, about the BA contract, another recent contract with Vueling, an update on business in South Africa and what we can expect from the company in future.

Gulf-Africa Duty Free: Can you tell us a bit about the recent British Airways contract and what this means for Tourvest Duty Free?

Selwyn Grimsley: It followed a lengthy RFP process. BA went to great lengths to validate that we were the right partners to appoint.

By the time we launch it will have been two years from the start of the request for information, so needless to say it was a very detailed process.

For Tourvest Duty Free it’s a validation that we’re best of breed to have secured that account against significant competition. I think our success had a lot to do with illustrating our capabilities and our responsiveness to BA’s specific needs, namely transparency and adapting our model to suit their requirements.

GADF: What are some of the requirements BA had?

SG: BA operates both long and short haul flights. They put up in excess of 110,000 duty free flights a year. It’s a very substantial operation, to say the least. They have high informational needs and want to remain very much informed and in joint control of the

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duty free business. We’re in the process of setting up a system that will allow for the transfer of data to meet these requirements.

The project management process around the launch is incredibly detailed and very robust, requiring very high levels of commitment from us to develop plans to deliver the service. We’ve had to adapt and be very responsive to their needs in preparing for the launch.

GADF: Can you tell us a bit about the inflight offering onboard BA flights?

SG: With any of our customers, we embrace their views and we entertain their requirements. Ultimately, however, they’re outsourcing to us because we’re the retail specialists. We engage with the customer and the crew to get as much intelligence as possible about passenger preferences. Of course, we must also align the offering with the airline’s brand values.

The latest Virgin Atlantic in-flight magazine

Tourvest Duty Free’s in-flight catalogue for South African Airways The cover of Vueling’s in-flight duty free catalogue

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Tourvest Duty Free’s in-flight retail program with British Airways is on track to be up and running on November 1

In the end, we work hand in hand with the designated people in the airline to ensure that we’re getting the right offering onboard so we can maximize the revenue for our mutual benefit. Having said that, I can’t yet speak about the specific offering onboard BA or any learnings from our research.

GADF: What phase are you at in the development of the BA program?

SG: As of the beginning of August, we’re at the post-contract, pre-launch phase. It’s a fivemonth process and I can tell you we’re on track. We’ve finalized the first product range that we’ll put on board and we’ve placed all non-stock equipment orders as well. We’re also well on the way to putting in place the account management team of eight people and a support infrastructure that consists of another 14 roles dedicated to the BA account.

The key account manager has been on board since the beginning of July and we’re now working through the process of filling the other roles, with the more critical and strategic roles being filled first.

We’re also currently taking over the warehousing facility that BA has been using and implementing our proprietary processes and systems to make sure that come launch date there’s a seamless transition. We’re expecting nothing less than a successful commercial launch and a successful change of the businesses.

GADF: What about your other contracts?

For example, how are sales onboard South African Airways since the initial boom brought about by the World Cup? SG: We’re very happy with the level of sales, but from a macro perspective, the problem with tourism is a global issue in the sense that the volumes of tourists are not at the level that anyone would like them to be. Of course, this extends to leisure destination markets such as South Africa.

What makes it more difficult for us in the South African context is that the currency is so strong, as emerging market currencies generally are. We’re seeing strengths in the currency that we haven’t seen here in many

“The most important key to growing our business is our reputation.”

Selwyn Grimsley, CEO, Tourvest Duty Free

years because of the well documented problems that the first world is experiencing. A lot of people are investing in emerging markets, including South Africa, and this has strengthened the currency, which has made it an expensive destination for our traditional source markets.

GADF: Are you where you want to be in terms of the overall trajectory of Tourvest Duty Free over the 12 years since its inception?

SG: The vision for the business is that we become a global in-flight retailer. In 12 years we’ve made enormous strides. Securing BA’s business means that we’re now on the global stage with one of the world’s most highly sought after in-flight retail programs. Really what that does is—provided we do a very good job for BA and at the same time keep our other customers pleased with our performance and the value we generate for them—put us in a good position to start looking at the next phase in our growth.

We’re very strong in Africa and we’ve created a similarly strong platform for our business in the UK. We’ve launched with Vueling, so we’ve now made inroads into the Spanish market. We’ve got good coverage in the core market of Africa and the extension of that core, which is Europe.

GADF: In which areas of the world do you see the most possibilities at the moment?

SG: We’re looking at opportunities of scale.

To put an in-flight retail operation down in a new region of the world requires a busi-

ness opportunity of size. There aren’t that many of those opportunities out there. One just needs to look at the size of airlines around the world that still run their own programs or who might be dissatisfied with the concessionaire that’s currently in place.

We’re keeping our options open and looking at markets around the world for those opportunities of size that would enable us to put down an operation dedicated to that airline and create a base to expand in the region.

GADF: Would it be fair to say, then, that you’re focusing more on emerging markets such as the Middle East or Asia as opposed to the US given recent economic developments?

SG: If the right opportunity came up in any of those three regions, we would pursue it.

Of course, it’s important to note that before we go bounding off into a new frontier, we will ensure that we’ve first and foremost launched the BA service effectively and that we’re comfortable that we’re running a very effective business. It’s not a mad scramble for world domination. Rather, it’s a planned, progressive growth of the business.

We’ve got a very full plate at the moment, so we’re really focusing right now on delivering for Vueling and BA, as well as keeping our service levels up for all our existing customers. The most important key to growing our business is our reputation, and how we solidify our reputation is by doing the best job possible with our existing customers so that they become advocates for us.

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

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Operator News: Dubai Duty Free

Good, better,

best I

Dubai Duty Free continues its winning ways ANDREW BROOKS BY

When Superbrands, the independent trade organization dedicated to promoting and maintaining excellence in branding, bestowed its coveted “Brand of the Year” award on Dubai Duty Free in July, it set a new high water mark for leading brands everywhere. This was the first time any brand had won the award twice. Dubai Duty Free did it in typically high-flying style, making it not just the second time, but the second time in a row.

It was all part of what’s turning out to be a banner year, and this is only the halfway point. Dubai Duty Free’s sales for the first half of 2011 amounted to US$698 million, a 16.6% increase over the first half of 2010. With passenger traffic expected to grow by 8% this year, signs are good that the operator is poised to maintain its practice of regularly setting records and then breaking them. As it released the figures, Dubai Duty Free also announced that for the third year running it occupied top spot as the largest single airport retail operation in the world, with yearly turnover of US$1.27 billion in 2010.

Setting the bar higher has become something like standard operating procedure for the largest single duty free operation in the world. Over the course of 27 years, Dubai Duty 18

Dubai Duty Free’s electronics display in Terminal 3

Free has won more than 200 national and international awards for customer service, pioneering retail campaigns and marketing.

“We’re extremely pleased that 2011 has shaped up to be such a positive year for the operation,” says Colm McLoughlin, Executive Vice Chairman of Dubai Duty Free.

“We’ve also seen significant increases in sales across all three terminals for both arriving and departing passengers, all of which is encouraging for year-end figures.”

For the first half of this year, the three best selling categories continued to be perfumes (up 20% to US$99 million), liquor and gold (up by 24% to hit US$79 million). Electronics sales surged by 22% for the first half of the year, reaching US$54 million, while watch sales climbed by 41% to US$47 million. Luxury products have posted significant spikes, thanks in large part to the strong influx of affluent Indian and Chinese travelers, along with an observed increase in consumer confidence among other nationalities.

Staying on the figures for the first half of 2011, sales increased in all terminals, with duty free sales in Terminal 2 turning in a 31% increase. Sales in Terminals 1 and 3 rose 15% and 16% respectively, while overall arrivals sales rose by 16%.

Dubai Duty Free’s strategy is focused on building the per-passenger spend, which means toppling some already impressive benchmarks like the 45% penetration rate among departing passengers. The arrivals offer has been the focus of some intense work too, as the operator creates greater visibility and understanding of the offer among arriving passengers. “Now more than ever the traveler is looking for added value, and we will continue to work towards providing that,” McLoughlin says.

McLoughlin’s recent appointment as Executive Vice Chairman gives him overall responsibility for the airport retail operation and its subsidiary businesses. At the same time,

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Executive Vice Chairman of Dubai Duty Free Colm McLoughlin (left) and President George Horan

George Horan has been named President, with responsibility for day-to-day running of the retail operation. Some other appointments were announced at the same time, as the organization recalibrates in anticipation of further growth opportunities.

Notable among these is the 50% expansion in retail space that will come with the opening of Dubai International’s Concourse 3 next year. “The new terminal will be dedicated to Emirates Airlines and will provide our retail operation with around 8,000square-meters of additional retail space,” McLoughlin says. In addition, plans have been announced for a new fourth terminal, which will boost airport capacity to 90 million passengers a year, a massive increase over the 51 million expected this year. c

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Airline News: Etihad

Etihad’s premium Manchester Lounge

An

unrivaled experience

Gulf-Africa Duty Free speaks with Etihad Airways about numerous new developments

BY RYAN WHITE this year and its Skytrax status as Best First Class Airline in the World

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tihad Airways recently reported its most successful first half year with revenues up 28% to US$1,720 million driven by solid performances in both passenger and cargo activities. A 2% reduction in costs per available seat kilometer, despite large increases in oil prices, also

helped deliver a positive EBITDAR in the six months from January 1 for the very first time. The results mark continued progress towards the airline’s goal of breaking even this year and moving into sustainable profitability in 2012.

Gulf-Africa Duty Free sat down with Anna Brownell, Manager In-flight Duty Free at Eti-

had, to discuss everything from duty free sales and some impressive innovations onboard to new partnerships and recent accolades from Skytrax. While a lot of exciting things are happening across literally every aspect of Etihad’s business, it’s clear that the end goal of any initiative the airline undertakes is rooted in a passion for customer service.

An exemplary passenger experience Guests in Etihad’s Diamond First Class and Pearl Business Class can often be found enjoying any number of high-end spirits such as wine, champagne or premium whisky and rum cocktails. Among Coral Economy Class guests the most popular spirits are whisky, gin and wine. However, it can be said that a relaxing drink is only the beginning of the experience for passengers aboard Etihad flights. The journey truly starts with the planes themselves.

At the Farnborough International Air Show in 2008, Etihad announced what was at the time the largest aircraft order in commercial aviation history for up to 205 aircraft—100 firm orders, 55 options and 50 purchase rights. Etihad plans to take delivery of one A330 by the end of 2011; 20 A320s between 2011 and 2015; 10 Airbus A380s from 2014; 25 A350s between 2017 and 2020; 31 Boeing 787s between 2014 and 2020; and 11 Boeing 777s between 2011 and 2013.

Currently Etihad offers passengers a wide range of unique experiences onboard its flights. The airline plans to transform in-flight dining this year with the introduction of qualified international chefs dedicated to food service excellence in its Diamond First Class cabins. This development will enable Etihad to offer a five-star restaurant style of service in the sky, with First Class guests receiving unparalleled attention and choice, such as the opportunity of having a personal chef tailor make dishes based on their particular tastes and preferences.

In addition to this onboard role, chefs will contribute to menu development for both lounges and flights in order to orchestrate a more consistent culinary experience for guests. Etihad is recruiting 100 chefs this year, and has already started looking for fully qualified professionals with formal culinary training and experience in esteemed hotels, 20

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

restaurants and culinary institutions from around the world.

The new chefs will be introduced on selected routes from October and will be available on all flights offering First Class by the end of the year. At that point, says Etihad, “food & beverage managers will then be dedicated to service in Business Class, ensuring attentive and personal service throughout the aircraft.”

Also new this year for premium passengers are the Dublin and Manchester Premium Lounges, which feature private shower rooms, fivestar dining, full bars, business centers and family rooms. Brownell says that plans for future lounges will be announced later this year.

Other details that make for an unrivalled experience aboard Etihad flights include new male and female First Class amenity kits that include Swarovski-detailed cosmetic purses for ladies that contain La Prairie products, as well as black leather cufflink boxes for men that include a Schick Xtreme 3 razor and shaving cream; this year’s introduction of Etihad Chauffer service in Mumbai, Delhi, Bangalore, Hyderabad and Chennai, bringing the total number of cities where this service is available to 24 destinations across 16 countries; a retrofitting of existing aircraft that includes the addition of Etihad’s new Diamond First Class Suites containing Poltrona Frau upholstery, 80-inch extra wide flatbed seats, 23-inch in-flight entertainment screens, minibars and wardrobes; additional pickup locations for Etihad Express luxury coaches, available on a complimentary basis to all Etihad passengers traveling through Abu Dhabi International Airport; and this year’s introduction of new in-flight kid’s packs that feature color-in finger puppets, sliding puzzle key rings, activity books, colored pencils, card games, tic tac toe games and stickers.

Etihad’s First Class seating

Boosting ancillary revenue In this day and age, the importance of the ancillary revenue that onboard duty free sales provide airlines cannot be underestimated. Brownell tells us that the channel is a growing source of revenue for Etihad. As such, the airline places emphasis on making sure that its offering is up-to-date with the latest in luxurious brand releases.

“We refresh our onboard retail product offering across our entire network every four months, changing up to 70% of our products,” Brownell says. “This frequent change helps us to remain competitive with ground airport retailers and allows us to regularly realign our in-flight product offering with the needs of our guests. Passengers will find the products that they already know and love, as well as many new and exciting brands.”

The July issue of the in-flight catalogue features new additions such as Links of London, Folli Follie, HEX, Silhouette, Adidas and more. Fragrances, jewelry and electronics are popular products, in addition to Etihad’s sponsorship items for Manchester City Football Club and the F1 Etihad Airways Abu Dhabi Grand Prix.

Brownell notes that products supported by global marketing campaigns always sell strongly onboard given the fact that passengers aren’t able to handle the products being sold in air. Despite this difference between onboard duty free sales and ground-based operations, Etihad tries to replicate the ground retail experience closely in the sense that it offers the latest products available on the market.

Etihad’s onboard retail offering is changed up every four months to ensure that the latest products on the market are available to passengers

The cover of Etihad’s August in-flight duty free catalogue

azine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

21

Club includes naming rights for the stadium, surrounding grounds and facilities and an extension of the successful shirt sponsorship

Airline News: Etihad

A freshly-painted Manchester Citybranded A330-200 aircraft in the club’s signature sky blue color is now serving destinations across the network

The recent agreement with Manchester City Football Club includes naming rights for the stadium, surrounding grounds and facilities and an extension of the successful shirt sponsorship

Powerful partnerships Etihad Airways continues to build its presence in France with the signing of the new commercial agreement with French Railways (SNCF). The deal, Etihad’s 32nd, allows Etihad passengers to travel to destinations beyond Paris Charles de Gaulle Airport by connecting onward to SNCF’s 2,000 kilometer high-speed TGV rail routes and vice-versa.

The seamless air-rail connections comprise 20 cities in France, including Bordeaux, Le Mans, Lille, Lyon, Marseille, Nantes, Rennes and Strasbourg. The new codeshare services are on sale and tickets can be booked online via the Etihad Airways website, via one of the airline’s global contact centers or through travel agents selling Etihad tickets.

Additionally, Manchester City Football Club and Etihad Airways have announced an exciting new 10-year comprehensive partnership agreement significantly expanding the existing commercial relationship. The agreement was signed on July 8 by Etihad’s Chief Executive Officer James Hogan and Garry Cook, Chief Executive Officer of Manchester City, before the team departed for a pre-season tour to the US on an Etihad charter flight. The agreement includes naming rights for the stadium, now known as Etihad Stadium, surrounding grounds and facilities, now known as Etihad Campus, and an extension of the very successful shirt sponsorship. A freshly-painted Manchester City-branded A330-200 aircraft in the club’s signature sky blue color is now serving destinations across the network as part of the airline’s extended partnership.

Worthy of the honor With all the developments of late at Etihad, it’s no wonder the company was named Best First Class Airline in the World by Skytrax earlier this year. The annual survey also named Etihad the number six airline in the world. This is the second year running for both honors for the Abu Dhabibased carrier.

During the 10-month survey period, 18.8 million air travelers from more than 100 countries shared feedback on all aspects of their travel experience via email, online interviews, questionnaires and phone interviews. They voted on their experiences on the ground, at the airport and onboard, as well as the quality of customer service delivered by each of the airline’s staff. In the end, it’s more than fitting that those who chose Etihad as the Best First Class Airline in the World—the travelers themselves—are the very people the airline originally set c out to please at its inception in 2003.

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Operator News: Qatar Duty Free

A number of categories in QDF’s main store will benefit from an expansion that is currently underway

Riding the wave

BY

RYAN WHITE

Qatar Duty Free posts impressive growth in the first half and aims to maintain momentum with a spatial increase in its main store, a new Top 20 shop and attractive promotions

Q

atar Duty Free (QDF) Senior Vice-President Keith Hunter recently sat down with Gulf-Africa Duty Free to talk about the numerous new developments the company has on the go at the moment. Despite the impending move to the New Doha International Airport, QDF continues to renovate the existing main store with recent changes made to many key categories. The operator is also on the tail end of a highly successful summer promotion that saw a partnership with MasterCard keep sales up after an impressive first half.

QDF has been hard at work renovating the watches section of its main store. Renovations are scheduled to be completed by the end of September, at which time more display space will be available for popular brands. The expansion will give mid-range watches a total of 128-square-meters, while the space dedicated to premium watches— 68-square-meters—will remain virtually unchanged.

“The purpose of redesigning the watches section was doubling the display area,” Hunter told us. “We have already added a number of new brands in the last couple of months and they are performing very well.

We have had a record number of sales in the watches category for the month of July.”

Bigger and better Other categories will benefit from a general expansion of the shop’s floor area. The wines, confectionery and P&C categories will increase by about 15% each. Of course, flow is always an important concern and Hunter says that some of the added space will benefit the store overall as opposed to specific categories.

“Some of this expansion will be strategically used to rearrange the passenger flow and avoid bottlenecks, which we experience quite often during busy times,” he explains.

When asked about possible new additions to the wines, confectionery and P&C categories, he says that QDF’s first priority is to 24

“enhance the existing range,” although more new entrants will be added in the future.

Look up, way up As a result of the reorganization in the main store, the electronics category will be moving upstairs near the promotional area that QDF uses regularly there. Hunter says that there shouldn’t be any problems with having this category out of the main store: “This area is easily accessible to customers going upstairs towards the F&B facilities or the boarding gates,” he says.

Customers using their MasterCard for purchases of US$150 or more receive a scratch and win card and double entry into the grand prize draw. The first month of the promotion saw a Greek national win the grand prize.

There’s no doubt that QDF has mastered the art of treating its customers right, as indicated by a 22% increase in sales in the first half of this year as compared to the same period in 2010. Despite possible challenges ahead, Hunter is optimistic about the future and places his trust firmly in QDF staff and the operator’s supplier partners.

“It is important to continue offering a memorable shopping experience to our customers to gain their appreciation and loyalty.”

Keith Hunter, Senior Vice-President, Qatar Duty Free

Finally, in terms of store-related developments, QDF is opening a Top 20 express store next to the electronics area upstairs and changing up the assortment in the existing convenience store on the upper level.

Summer fun Another way QDF continues to attract shoppers is a summer initiative that began in July and is scheduled to end this month. In partnership with MasterCard, the operator is offering customers the change to win instant prizes that include laptops, mobile phones, gold coins, travel accessories and discount coupons redeemable in store.

In addition to the above prizes, one grand prize—a business class ticket to Qatar, two nights’ stay in a five-star hotel and a US$20,000 shopping voucher redeemable at QDF—has been given out every month of the promotion.

In addition to smaller prizes, each month of QDF’s summer promotions will see one lucky shopper win a business class ticket to Qatar, two nights’ stay in a five-star hotel and a US$20,000 shopping voucher

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

“Getting this growth rate consistently for the next six months will be our objective,” he says. “The difficult times ahead in some of the markets in the world are looming large upon all of us so it is important to continue offering a memorable shopping experience to our customers to gain their c appreciation and loyalty.”

Operator News: Hamila Duty Free

Fighting the good fight

Hamila Duty Free continues to register a series small of victories in the face of declining tourist numbers in Tunisia BY RYAN WHITE

A

t press time, Hamila Duty Free had just closed the books on July, a month that Marketing Director Karim Mahjoub calls “the most important of the year.” Indeed, sales during the month generally represent a significant portion of the company’s total yearly turnover. Unfortunately, in addition to the political and social issues in Tunisia and neighboring Libya, Hamila was hit with another challenge— strikes at Tunise Catering.

“Tunise Catering handles our onboard trolleys,” Mahjoub explains. “Their employees were on strike for approximately four months. Furthermore, decreases in monthly passenger numbers to July 2011 sometimes dipped as low as -50%.”

Despite these challenges, Hamila Duty Free’s diversified offering—the company sells duty free onboard Tunisair and Nouvelair, on ferries and in numerous landbased stores—helped the operator reach its goals for the month. Spend per head increased 3% on the ferries, 11% on Tunisair and 13% in the company’s port shops.

Hamila did its part to try to help sales along this past summer with a promotional action plan that was customized based on the type of traveler—airline or maritime. Hamila invested in targeted and aggressive communication to make sure that passengers knew what was on offer. The plan included distribution of flyers at ports, catalogues on each chair in the ferries and ample magazines in aircraft cabins.

The operator went one step further this year by publishing online catalogues on both

Tunisair and Nouvelair websites. “We actually prepared ahead of time to try to offset any major problems that could affect our duty free business,” Mahjoub explains. “Fortunately this helped quite a bit with sales.”

Hamila concentrated on scaled promotions this summer, with travelers saving more when they bought more. Cigarettes, spirits, and perfumes were key focus categories. Brands from Pernod Ricard, Diageo, Philip Morris, Heineken, Pacific Creation and P&G were just some of the many items

on offer. For Ramadan, Hamila took much the same approach to its promotional activities, although the initiative obviously didn’t extend to the spirits category.

Despite recent hardships, Hamila Duty Free remains positive in its outlook. “Since June we’ve seen an increase in the number of Libyan and Algerian visitors to Tunisia,” says Mahjoub. “This does, however, tend to benefit the local market more than duty free. Despite an overall dip in tourism, this is at least one positive sign that we can only hope will mean an eventual increase in other travelers to the country.”

The state of affairs

The depth and breadth of the challenges that companies like Hamila are currently facing was recently illustrated by Director General of the Tunisian National Tourism Board (ONTT) Habib Ammar. He reported a “lack of visibility” for the next period of the tourist season, blaming this vagueness on the lack of accurate tourism-related information.

Ammar said last-minute bookings will be crucial to revive Tunisian tourism, particularly given the positive effect that the ousting of Moammar Gaddafi in Libya is expected to have on neighboring Tunisia. He said operations to promote Tunisia as a tourist destination will focus on new and promising sectors such as cultural tourism, thalassotherapy (the use of seawater as a form of therapy) and Saharan tourism.

He also announced that talks are underway for the amicable termination of promotional contracts signed between the ONTT and foreign companies, saying that from this point on priority will be given to Tunisian companies, presumably to help mitigate job losses in the country.

To August 20, 2011, tourist arrivals to Tunisia reached 2.771 million tourists compared with 4.539 million during the same period in 2010. This represents a staggering drop of 38.9%.

As for total overnight stays, hotel occupancy fell by 46.3% to August 20, representing 1,210.3 million Tunisian dinars (US$885.6 million) compared with 2,155 million Tunisian dinars (US$1.57 billion) in 2010 Twenty-four hotels representing 7,544 beds have been closed since January 14, resulting in the loss of 3,019 jobs. The decline in tourism also resulted in the elimination of a significant number of seasonal jobs, particularly in tourist regions most hit by the crisis.

Fortunately for Hamila Duty Free, its diversified business helped offset dips in sales (pictured is one of the company’s stores at Enfidha Airport)

26

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

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Operator News: International Duty Free Shops

This year, IDFS will concentrate on four key areas: customer research, corporate branding, performance metrics and updating the management system

Evolving with the times With the appointment of Revic Tantoco as General Manager of IDFS, the company makes significant changes to its operating model

I

nternational Duty Free Shops (IDFS) in Morocco has announced the appointment of Revic Tantoco as General Manager. She previously held the position of Retail Operations Division Manager. The appointment marks the threeyear anniversary of Tantoco joining the company. In her new role, she will report directly to the President and Executive Vice President of IDFS. “I’m very honored to be appointed to the position of General Manager,” says Tantoco.

“Given my previous role in the company, I’ll continue to be involved in the operational side of the business, but I also look forward to streamlining the company through a concentration on business development, fostering a good relationship with the Government of Morocco and various other organizations in the country, ensuring the sustainability of the business as a whole, meeting the company’s financial objectives and making sure all departments are aligned toward the common goal of continued growth.”

Core areas of concentration Tantoco notes that she is concentrating of four core areas moving into the second half of the year, which include customer research, corporate branding, performance metrics and updating the management system. “The importance of researching passenger preferences has been proven time and again, and I feel that further activities in this area will only help our customer services initiatives,” she says.

“Furthermore, it’s important to communicate the hard work we’ve put into our stores in terms of aesthetics and product mix,” she continues. “IDFS is a world-class retailer and we need to let travelers know this.

“Additionally, across the entire operation, we’ll be examining what we’re doing right and redoubling our efforts in this regard. We’ll also be looking at what can be improved and making the necessary changes.

Finally, updating management practices in terms of both people and technology will allow us to implement many changes smoothly. Now is a time of innovation and evolution for IDFS.”

Continued growth In addition to the above, IDFS has a number of new retail projects in the works. The company opened a new store measuring 170-square-meters at Rabat-Salé Airport in August, and this month saw the opening of IDFS’s fifth Lacoste boutique in Fes. “The boutique was operational in August, but the grand opening took place in September after Ramadan,” Tantoco explains.

In Casablanca Airport’s Terminal 2, IDFS will be opening a standalone watch boutique that will measure approximately 40square-meters. The company is currently searching for a design firm that shares its vision for the news stores. Tantoco notes that the location will carry high-end watches,

“I see these improvements as a clear statement on the part of IDFS that we’re here to stay and we’re a major player in the region.”

Revic Tantoco, General Manager, IDFS 28

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

BY

RYAN WHITE

saying that more information will be forthcoming as the project develops.

In addition to the above, IDFS was recently awarded 200-square-meters of additional space in Casablanca Airport’s Terminal 2.

“The space is located in front of Gates 21 and 22,” Tantoco explains. “Right now it is vacant and we feel that we can put the space to good use. The area is currently broken down into different environments and we’ll be keeping this setup, which will allow us to focus on four different categories. Right now we’re looking at fragrances, wine and spirits, cigarettes and gifts as the most likely possibilities. The retail space should be opened by the third quarter of this year.”

Further investment IDFS is also in the process of building an up-to-date warehouse that measures 8,000square-meters, fully twice the size of its current warehouse. The new building will be located near Casablanca Airport in the freight zone, not far from IDFS’s existing warehouse.

“It will be modern in every sense of the word, from the space itself to the technology employed,” Tantoco says. “Logistically, this will make a big difference in terms of faster transactions, not to mention simply making life easier.”

Also sure to make operations run smoother is the implementation of a new ERP (Enterprise Resource Planning) system in the coming months. “This will help everyone to be on the same page,” says Tantoco. “A lot of activities will be automated and the new system will facilitate the flow of information across divisions.”

The exciting changes taking place at IDFS on every level are tantamount to an evolution in the way the company does business, Tantoco notes. “I see these improvements as a clear statement on the part of IDFS that we’re here to stay and we’re a major player in the region.” c

Operator News: CADF

CADF’s perfume store in Terminal 3

This too shall pass

Cairo Airports Duty Free readies a new store in Terminal 3 and continues with a strong promotional calendar to counter what has been a difficult year in Egyptian tourism BY RYAN WHITE

T

he ongoing political and social tension in Egypt has been difficult to say the least for tourism and duty free this year. As Egyptians wait for an election in the hopes that the situation will improve, duty free operators at Cairo Airport are left to do the best they can by working with what they have.

In a positive move that underscores a firm belief that better times will again grace the country’s tourism industry sooner rather than later, Cairo Airports Duty Free (CADF) is investing in a new 140-square-meter store that will be located in Terminal 3. The location will be dedicated largely to strong categories such as confectionery, alcohol and tobacco.

“The furniture is currently being constructed and the store will be up and running before the end of the year,” says Nadia Rashad, Managing Director of CADF. “Among the many attractive aspects of the store will be a walk-in humidor.”

While the opening was originally planned for June, CADF has taken some extra time to ensure that each category gets the space it deserves. While confectionery, alcohol and tobacco were always intended to play a major role in the shop, Rashad asserts that strong sales of these products prompted CADF to re-design the layout with even more space dedicated to the categories.

At press time sales were up 42% YTD for CADF. While the increase certainly appears impressive, especially given operating condition in Egypt of late, Rashad notes 30

that during the first half of 2010 the company was only operating out of Terminal 1 as Cairo Airport refurbished Terminal 3.

Although perfume sales have “calmed down” this year, she says that tobacco sales, both cigarettes and cigars, have been a particularly bright spot in 2011.

In terms of traffic at the airport, July saw a year-on-year drop of 5% in Terminal 1 and an increase of 4% in Terminal 3. “We’ve almost broken even in terms of traffic,” Rashad says. “The drop in traffic in Terminal 1, which generally handles flights from within the Middle East, is indicative of the problems in some parts of the region at the moment—less people are flying.”

Of course, CADF has lately become accustomed to taking the good with the bad. The positive indicator is that international traffic is up slightly in Terminal 3. Due to the instability in the region at the moment, Rashad notes that it’s difficult to provide any kind of forecast for the second half of the year.

Although looking ahead has been made somewhat more difficult for CADF, it’s clear from speaking with Rashad that the company is still overwhelmingly positive that tourists will eventually return to Egypt as the country continues to stabilize. In addition to the new store opening, CADF will be renovating its stores in Terminal 1 with an emphasis on its perfume shop.

“We’ll be adding about 24-squaremeters and bringing the store up to date aesthetically,” Rashad asserts. “While the

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

spatial increase isn’t a lot, it’s certainly enough to let us add some new brands and have more room for displays. Skincare and cosmetics will be on gondolas and wall space will be dedicated to perfumes. This will be a complete step change for us given what the store currently looks like.”

Other changes in Terminal 1 include CADF’s gift shop, which was originally opened in 2004. The operator will be changing out furniture and generally updating the location.

In addition to store openings and renovations, CADF continues with a strong promotional calendar. For Ramadan the company distributed flyers to passengers and concentrated on perfumery offers to help boost sales. Furthermore, the Christmas season will see more promotions across categories in both Terminals 1 and 3.

“We continue to work hard,” Rashad concludes. “We’re doing the best we can and hoping for the best. Hopefully by the end of the year things will improve. It’s been a difficult time, but we have faith that it will pass.” c CADF continued this summer with a strong promotional calendar giving travelers great deals across all categories

Association News: MEDFA

“Creating a future”

MEDFA looks forward to discussing ways of continuing Middle Eastern duty free’s momentum at the 2012 conference in Dubai

BY

n a recent media communication, the Middle East Duty Free Association (MEDFA) noted that the duty free and travel retail industry in the region “continues to overcome the challenges of the global economic slowdown. The performance of the Gulf and MENA region continues to be encouraging.”

Indeed, the association pointed to some impressive statistics. Over the past years the growth of the global duty free and travel retail sector has developed strongly, with travel retail sales reaching US$39 billion last year.

The Middle East accounts for a very respectable 7.4% of the mix.

Global passenger traffic grew by 6.6% in May, driven by strong international demand across all regions with the exception of Africa (-16.5%), where key markets like Egypt continue to feel the impact of political unrest.

Total international traffic grew by 7.4% to 137.9 million passengers in May and by 8.5% to 611 million passengers in the first five months of 2011.

MEDFA also noted that its role is to “pre-

even management’s approach to staff.

This year marks the tenth anniversary of the MEDFA conference. The event will take place in Dubai at the Al Murooj Rotana Hotel, on Nov 21-22. MEDFA has offered its thanks to early bird sponsors, including Emirates Airlines (the official carrier of the conference) and social events and platinum sponsors Dufry Sharjah, Dubai Duty Free, Traveller Limited, Patron Spirits and LeSportsac.

Media partners for the conference include Gulf-Africa Duty Free, Duty Free News International, Travel Retail and Duty Free Markets, Frontier, Travel Retail Business, Travel Retail International, The Moodie Report and The Decision Makers.

MEDFA also welcomed its new members, which include Dubai Airport Company, represented by Eugene Barry, Vice President Commercial; Cowrie Enterprises Ltd, represented by CEO Mariem Ben Cheikh; Flemingo International Limited, represented by Managing Director Rasik Thakker; and Etihad Airways, represented by c Anna Brownell, Manager Duty Free.

I

32

sent the region and its potential to a wide audience.” Indeed, those in the industry are well aware that the annual MEDFA conference has established itself as the most important duty free and travel retail event in the region, attracting in excess of 400 highranking executives from around the globe.

The 2012 conference The theme of this year’s MEDFA conference will be “Creating a future.” The conference program will examine the current geo-political climate in the Middle East from the Mediterranean up to the Gulf. The mid- and long-term effects of recent political and social unrest will be discussed, while industry insiders from the affected markets will give an update on how business has picked up in the latter part of the year.

Innovation will also be a key theme of this year’s program. A number of sessions will look at how all stakeholders can create a brighter future for the business, be it through innovating the product mix, the retail design, the staff ’s approach to the customer and

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

RYAN WHITE

Crafted with care. Please enjoy responsibly.

Operator News: ADAC

Work on the refurbishment of Terminal 1 finished at the end of August; ADAC expects a boost in sales over the second half now that both Terminals 1 and 3 are open

If you build it, they will come

With strong sales and traffic in the first half, ADAC is expecting even bigger things in Abu Dhabi now that the refurbishment of Terminal 1 is complete

A

bu Dhabi International Airport recently revealed its duty free sales for the first half of 2011, announcing a total of AED 293 Million (US$79.7 million) in sales and a robust 7.5% increase in comparison with the same period last year. The duty free shops in Terminal 3 in particular saw an impressive 59% increase, driven by the excellent performance from its 19 luxury boutiques. The Beauty & Fragrance shops also performed strongly supported by six different first in the Middle East product launches. Sales performance is expected to continue rising over the second half of 2011 as shops in Terminal 1 have now reopened following refurbishments.

Mohammed Al Bulooki, ADAC’s Chief Commercial Officer, explained: “We are committed to continuously improve the duty free offerings at Abu Dhabi International

Airport. This year, we’ve witnessed an increase in sales and look forward to even further growth in Q3 and Q4. Our renovation plan ensures that we keep the unique structure of Terminal 1 whilst offering our increasing numbers of travelers the most convenient and enjoyable airport shopping experience.

“We are expecting strong numbers in the next six months as a result of the completion of the refurbishment of Terminal 1, creating a world class shopping environment,” he added.

While awaiting the completion of Terminal 1, travelers passing through the terminal this past summer were still able to enjoy several food & beverage facilities, along with many of the new duty free shops that were already opened, including the popular electronic outlet Sharaf DG, which recently reopened after undergoing a renovation to align with its latest retail concept.

“This project will deliver the same quality level of shopping experience delivered at the newly opened Terminal 3.”

Mohammed Al Bulooki, Chief Commercial Officer at ADAC, on the refurbishment of Terminal 1

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

BY

RYAN WHITE

Unlimited options Just ahead of the completion date for the Terminal 1 refurbishments, Gulf-Africa Duty Free spoke with Al Bulooki about what passengers can expect when traveling through the new terminal. It boasts 24 stores in total, with DFS operating the fragrance, beauty, food and candy, liquor and tobacco, watches, sunglasses and toys & souvenirs locations.

Al Bulooki told us that there will also be 7 boutiques selling products from such names as Bvlgari, Mont Blanc, Swarovski, Burberry, Givenchy, Ferragamo and Guess. The Burberry, Ferragamo, Givenchy, Bulgari and Mont Blanc boutiques were opened just ahead of the terminal’s completion. Other concessions available are a Relay location, Pure Gold, Sharaf DG, World of Cigars and Bins Sina pharmacy.

“In August 2010 ADAC launched the Terminal 1 refurbishment project, which included a complete remodeling and new fittings for the retail and F&B areas in the duty free,” Al Bulooki explained. “This project […] will deliver the same quality level of shopping experience delivered at the newly opened Terminal 3.”

With regard to the food & beverage aspect of the terminal, passengers will find Starbucks, Culto Café, Costa Coffee, McDonalds, Briccocafe and Sky Bar. Just as with the retail operations, Al Bulooki says that ADAC’s objective was to “offer a more varied choice,” and with 1,000-square-meters of F&B and 2,373-square-meters of retail space, there’s sure to be something to please everyone in the new terminal.

Abu Dhabi International Airport registered an 11.7% increase in traffic during the first half of the year as compared to the same period in 2010

by carrying out more improvements and developments at the airport as it aims to deliver the best services to travelers, ensuring the best in speed, comfort and satisfaction.”

The report revealed the top routes from Abu Dhabi International Airport during the first half of this year to be London, Bangkok, Manila, Doha and Jeddah, generating collectively 20% of the traffic at the Capital’s airport. Furthermore, the Far East achieved a 40% share of passenger movements, followed by the Middle East with 26% and Europe with 20% during the same period.

Top honors Terminal 1 at Abu Dhabi International Airport boasts 1,000square-meters of F&B and 2,373-square-meters of retail space

Strong growth in traffic Abu Dhabi International Airport’s passenger statistics for the first half of the year are as impressive as ADAC’s sales. The airport reported serving 5,742,283 passengers during the period between January to June 2011, registering an 11.7% increase in traffic compared to the same period in 2010. Aircraft movements also grew in tandem by 3.5% compared with the first half of last year, with a total of 56,888 movements taking place at Abu Dhabi International Airport.

The report further indicates a steady growth in cargo throughput at Abu Dhabi Airport as the volume reached a total of 231,733 tons in the first half of 2011, registering a 10.4% increase versus that of the same period

in 2010. June recorded a strong growth with 983,096 passengers using Abu Dhabi International Airport and registering a 13.6% increase compared to the same in June 2010.

ADAC attributed the recent growth to the beginning of the summer holidays together with additional frequencies of Etihad and the other airlines, including the new services of Cathay Pacific to Hong Kong.

“Abu Dhabi International Airport continues to enjoy a healthy and steady growth in passenger numbers as the Emirate of Abu Dhabi continues to grow as a major business and leisure destination internationally,” said Ahmed Al Haddabi, Chief Operating Officer at ADAC. “ADAC is working relentlessly to support this trend and drive it a step further

TRAFFIC SUMMARY TRAFFIC

JUNE 2011 This Year Last Year

Passengers (000) Aircraft movements Cargo (tons)

983

JANUARY-JUNE 2011 % Var

This Year Last Year

866

13.6%

9,329

9,182

1.6%

56,888

36,883

36,837

0.1%

231,733

5,742

Abu Dhabi Airport benefited from strong passenger numbers in the first half of this year; ADAC is banking on further sales increases now that Terminal 1 is open

% Var

5,141 11.7% 54,988

3.5%

209,958 10.4%

Even before the opening of Terminal 1, Abu Dhabi International Airport was presented with the “Best Airport in the Middle East” and the “Best Airport for Tax Free Shopping, Globally” awards in the Business Destinations Travel Awards 2011. The awards acknowledge ADAC’s continuous commitment towards promoting a culture of excellence throughout Abu Dhabi International Airport, from customer service through to future expansion plans.

At the time of the win, James E. Bennett, Chief Executive Officer for ADAC, commented: “ADAC is delighted to accept this prestigious ‘Best Airport in the Middle East’ award for Abu Dhabi International, which is testimony to our enduring culture of quality and excellence. We remain committed to driving sustainable growth in Abu Dhabi International Airport through investment, growth and building on our high levels of customer service, to ensure we see more similar awards and many more happy business and leisure travelers in years to come.”

In February this year, Abu Dhabi International was also ranked “Second Best Service Provider” in Airports Council International’s (ACI) ASQ Survey results for the Middle East Region. The award was given for excelling in operational efficiency and the c quality of service offered.

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

35

Aviation News

Different realities

The latest statistics from IATA and ACI see passenger traffic varying widely across regions, with the Middle East now posting softer gains and North Africa continuing in the red BY RYAN WHITE

T

he most recent passenger and cargo statistics from the International Air Transport Association (IATA) and Airports Council International (ACI) indicate a mixed bag of sorts across various regions of the world. IATA’s traffic results for June showed a slight softening in demand for both air travel and freight markets. Compared to June 2010, passenger demand was up 4.4% while freight demand was 3% lower.

The trend for passenger travel remains upwards, says IATA, but at a slower pace than the post-recession rebound which was at an annual rate close to 10%. The slowdown reflects slower economic growth and increased costs resulting from higher jet fuel prices and increased taxation in some countries.

Freight volumes have not grown since July-August 2010. May 2010 was the postrecession restocking peak, compared to which the June 2011 international freight market was 6% smaller. While world trade is expanding at 7% a year, the benefit is being realized more by modes of transport other than air, says IATA. “Compared to May both passenger and cargo markets contracted by about 1%. For passenger traffic, this is a speed bump in a gradual post recession improvement. But air cargo continues in the doldrums at 6% below the post-recession peak,” said Tony Tyler, IATA’s Director General and CEO. Middle East carriers recorded a 6.4% increase in demand against a capacity increase of 8.4% for a load factor of 74.8%. For the second consecutive month both demand and capacity increases by Middle East 36

carriers have fallen behind those of Europe and Latin America.

African carriers continue to experience the weakest demand with a 2.9% fall compared to June 2010 levels. The continued political unrest in North Africa is the primary driver of the poor performance, which is also reflected in load factors that stood at 64.7%, or 3.9 percentage points below the previous year’s levels.

ACI noted the same problems afflicting North Africa even as the Middle East fared relatively well against other regions of the world. Latin America/Caribbean, with particularly strong growth in Brazil and Mexico, had the highest rate of growth of the six regions in terms of passenger numbers with 9.4%. The Middle East followed with 8.9% as Abu Dhabi, Dubai and Muscat all showed double-digit growth.

Europe came in at 6.7% with high growth at many regional airports and steady growth at the major hubs. Once again Turkey’s airports registered high growth, with Istanbul’s two airports both up double digits. In northern Europe, Helsinki showed impressive growth and Oslo and Stockholm both rose sharply as well. Among the major hubs Amsterdam led the way. In North America, bright spots were Las Vegas, Ft. Lauderdale, Los Angeles and Vancouver.

In ACI’s air freight statistics, Africa saw declines paralleling the drop in passengers, with the volume down 12.8%. Asia/Pacific and Europe, however, were also in negative growth for the month. North America and the Middle East had negligible gains over June 2010 and Latin America/Caribbean was a bit stronger at 2.2% growth.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

“The industry is living in several different realities,” said IATA’s Tyler. “With high load factors and an upward growth trend, the passenger business is doing better than cargo. But regional growth patterns are shifting. The Middle East carriers have moderated to a single digit expansion and tighter economic conditions have slowed China’s growth. Meanwhile, Latin America is leading the industry expansion followed by Europe, which is growing strongly despite its currency crisis. And North America is underperforming the industry on growth but leading on load factors.”

Discussing the general outlook for 2012, ACI World’s Director of Economics Andreas Schimm noted that “strong global economic growth in the latter half of 2011 should propel our sector to another good year. But even against the backdrop of growth, there is considerable uncertainty about oil prices, concern over sovereign debt, volatility in exchange rates, and in the US slowing growth and persistent unemployment.

“All told, there is a lot to worry about, particularly in the developed economies,” he continued. “Growth in emerging and developing nations, however, is expected by the IMF to continue at a rapid clip, giving us considerable reason for further optimism about the remainder of the year.”

In ACI’s recent 2010 World Airport Traffic Report, the Middle East had the highest gains in passenger numbers at 12%. Africa also fared well with increases of 9.5%, suggesting that the region certainly has the capability to bounce back in the second half if social and political tensions ease in the comc ing months.

Company News: Jashanmal

Jashanmal’s bespoke approach We catch up with Jashanmal about having a flexible approach, strengthening partnerships and achieving PAX growth in the region

W

ith activities in the UAE, Kuwait and Bahrain, Jashanmal is known for its bespoke approach to travel retail. As well as supplying newspapers and magazines, books, tobacco, luggage/travel accessories and fashion accessories to the channel, the company works with duty free operators under a variety of models, from wholesale supply arrangements to concessions and franchise deals to operate Relay stores in the region. But is this flexibility paying off?

“Different segments have been performing at different rates,” said Narain Jashanmal, General Manager - NPP, Books & OCS, Jashanmal. “For instance, our CTN stores at Abu Dhabi International Airport (AUH) are performing very well, significantly exceeding PAX growth. We’ve seen healthy growth in the books category as well as in snacks, confectionery and soft drinks.”

Similarly, the company’s newspapers and magazines business at Dubai International Airport (DXB) is growing and is more-orless in line with PAX growth. “Here, sales of writing instruments are also up,” added Jashanmal.

As many of us may suspect, the story is slightly different in Bahrain International Airport (BAH), - mainly due to political and social tensions during the first four to five months of the year. However, the good news is that Jashanmal has seen a bit of a rebound in the past two months, during the summer travel season - especially in the magazines and books business.

“Newspapers, magazines and books are all showing positive signs with business and current affairs titles like The Economist and

38

Arabian Business doing well and also technology titles related to the iPhone, iPad and Android mobile operating system,” said Jashanmal. “It’s intriguing to see that people are very interested in reading about technology in an offline environment like an aircraft – I think it helps them feel like they’re connected while not actually being connected.”

Among books, traditionally it’s business titles that do well, while self-help books continue to underpin the entire category.

“With our other products, Cross writing instruments are doing very well and also a newly launched range of Delsey branded travel accessories,” said Jashanmal.

The positive results underline that notion that, in travel retail, flexibility is key. “We’ve built great partnerships with the airport and duty free operators in the region so a lot of what we do involves trying to better understand and cater to their needs, whether that’s from within our existing portfolio of brands and products, or if it means venturing into new categories,” said Jashanmal.

Indeed, being a distributor, wholesaler and retail operator is a key part of Jashanmal’s DNA as it allows the company to maximize value along various points of the supply chain.

Looking at how shopping habits are evolving, Jashanmal is confident that people are

FAYE ROWE

traveling more and are thus spending more time in airports.

“People expect to find a more diverse, novel and engaging retail environment when they travel,” said Jashanmal. “Working with Abu Dhabi Airports Company, we were the first retailer to introduce the standalone CTN store concept into the region in the form of globally recognized brand like Relay and I think everyone involved: airport operator, brand owner, us as the franchisee and, most importantly, the customer, are very happy with the results as it addresses a key need among travelers.”

To keep up productivity, the company places a huge importance on striking a balance between range, value, quality of the offer and strength of the display at the point of purchase.

“The biggest part of an operator’s job is delivering PAX growth and I think it’s safe to say that this is something that all the region’s operators are very focused on and hence have been very successful at achieving,” said Jashanmal. “Travel retail by nature is built on partnerships: between brand owners, airport operators, airlines, duty free operators, vendors and other suppliers. I think nurturing, developing and maintaining those partnerships is key.

We see travel retail as a key growth area and will continue to invest into it so expect to see more new standalone concepts, new products c and also entry into new territories.”

“Newspapers, magazines and books are all showing positive signs with business and current affairs titles...”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

BY

Narain Jashanmal, General Manager NPP, Books & OCS, Jashanmal

BLACK

BLACKER

NEW

The JOHNNIE WALKER, BLACK LABEL and DOUBLE BLACK words, the striding figure device and a s s o ciate d lo go s a re tr a de ma rk s . © J O HN WA LKER & S ONS 2010

Company News: The Estée Lauder Companies Inc.

Following a rich tradition

Wood Mystique

by Estée Lauder

Estée Lauder’s newest fragrance for the Middle East delivers all that the region favors: a powerful oriental scent enhanced with rare, expensive ingredients BY HIBAH NOOR

I

nspired by the rich heritage of the Middle East, Estée Lauder unveils Wood Mystique, a unisex fragrance that exclusively targets consumers in the region’s travel retail channel.

Estée Lauder Wood Mystique, which launches in October 2011, is the result of the Middle East consumers’ desire for lavish, elegant fragrances that communicate quality and good taste.

It taps into the rich, distinctive olfactive palate of the typical consumer in the region – a part of the world that has long immersed itself in scent.

Fragrance is a part of Middle Eastern life in a myriad of ways. There are both cultural and environmental factors, such as the strong spices used in food preparation and the high heat, which results in fast evaporation.

The second element of inspiration was the Middle Eastern preference for strong, lavish, luxurious fragrances. In Western countries, the idea or definition of diffusion and a presence means one thing. In the Middle East, it is a signal of far more – quality, wealth and good taste – in a very different way than it is thought of in the West.

“Part of our fragrance strategy is to address local cultural tastes and preferences which provide the opportunity for a very unique connection with our consumers,” says Karyn Khoury, Senior Vice President, Corporate Fragrance Development Worldwide, The Estée Lauder Companies Inc. “Estée Lauder Wood Mystique was inspired by the very specific, rich and identifiable olfactive palate of Middle Eastern consumers and their desire for a highly luxurious fragrance with strong diffusion and presence.

Sparing no expense, this fragrance uses the most rare, expensive and noble ingredients - the iconic pillars of classic perfumery.”

The oriental woody fragrance is a blend of the iconic rose at the heart of the mixture.

The process of steam distillation, first discovered in the Middle East more than a mil-

40

lennium ago, releases the vital essence of the rose, showcasing its olfactive characteristics.

The agar wood, prized in the time-honored traditions of the Middle East for its ceremonial and aromatic role, brings a resinous dark aroma to the fragrance.

Estée Lauder Wood Mystique begins with purified rose and peony petals that wrap the spiciness of pink pepper.

At the heart is an extravagant bouquet, Rose de Mai Absolute, sourced from Grasse and blooms throughout the heart of the scent.

A rose infusion imparts the earthy, primal elements of this “Queen of Flowers.” Egyptian jasmine absolute is blended with mimosa provence absolute, orris Morocco and ylang.

Patchouli and leather are combined with Indonesian benzoin, cedarwood SFE (a new ultra smooth cedar extraction being used here for the first time in perfumery, according to the company) and a hint of raspberry for an impression of dramatic mystery and richness.

The rare agar wood, distilled from the heartwood of the Aquillaria tree, brings a deep balsamic woodiness. Prized for its ceremonial and aromatic role, agar has a centuries-old tradition of use as both a perfume and an incense, where its rich sensual smoke is drawn into one’s hair and clothing.

The Middle East is known for its rich fragrance culture, unique and specific to this part of the world. “Its heritage aligns well with Estée Lauder’s own understanding and heritage of richness, luxury and the art of perfumery, and because of this we wanted to create a unique and intimate connection with this consumer,” says Khoury. “We spent significant time and resources researching, studying and partnering with local counterparts to completely understand and then fulfill Middle East consumers’ desires for a luxurious, rich fragrance comprised of

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

“Part of our fragrance strategy is to address local cultural tastes and preferences which provide the opportunity for a very unique connection with our consumers.”

Karyn Khoury, Senior Vice President, Corporate Fragrance Development Worldwide, The Estée Lauder Companies Inc.

exquisitely rare and precious ingredients, crafted with artisanal techniques, and which immerses the wearer in olfactive luxury.”

The juice is encased in a premium black and golden bottle. The Estée Lauder cartouche is silkscreened in black to convey the strong creative heritage of the company and its commitment to fine fragrances.

Intended for display like a piece of jewelry, the bottle features a solid translucent grey cap topped off with a gold beveled plaque that snaps closed.

Gold and black have significance in Middle East, where the two colors convey luxury. “It was important to incorporate these colors into our package design to convey the richness of the fragrance and to appeal to the local consumer,” explains Khoury. c

Company News: Ajmal Perfumes

Worldly ways BY

HIBAH NOOR

Dubai-based perfumer Ajmal chases global gold with latest selections

A

jmal Perfumes of Dubai has launched a series of new fragrances for men and women. The 60year-old perfumer is accustomed to making news, and over the decades Ajmal has made constant and steady inroads into the travel retail market. The newly released fragrances are designed to reinforce the global strategy Ajmal has been pursuing since last year’s TFWA WE in Cannes.

Male expression – Accord Boisé

The release notes say that this fragrance was inspired by the earmarks of male confidence and centers on the notion that a man “who has the world wrapped around his finger with absolutely nothing getting between him and the achievement of his goals” will be impossible to hold back.

“Boisé” is French for “with wood,” and in this context the term is a reference to the fragrance’s woody base of ginger and patchouli, which underlies the heart of sage and incense and resolves the opening notes of coffee and pepper.

Boisé also comes in a 75ml size.

Aurum’s golden youth “Aurum” is Latin for “gold,” and Ajmal says that its new fragrance of the same name aims to capture the spirit of youth, self-indulgence and glamour. Described as light yet deep, fresh yet seductive, Aurum features fresh fruity top notes, including lemon, raspberry and orange blossom, a spicy, fruity and floral core, and a base that is woody and musky with notes of amber, musk and vanilla. The eau de parfum is sold in the 75ml size.

42

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Accord Violet’s sensual signature “The inspiration for this fragrance came from today's woman – a symbol of femininity, independence, resilience, intelligence, success and charm,” the Ajmal release notes say. “The fragrance is a testament to every woman and a beacon to every man who appreciates a ‘lady’ with all the meanings the word entails.”

Designed with an accent on sensuality, Accord Violet offers a bouquet with keynotes of peach and blackcurrant laid over a spicy-floral heart of clove, violet and jasmine. The fragrance is mellowed with a base of tuberose with vanilla and patchouli providing notes of warmth and longevity.

The fragrance is available in a 75ml form factor.

Ambre Pimenté – something for both buyers A unisex fragrance, Ambre Pimenté is designed for men “who are aware of their surroundings, enjoy providing an aura of warmth and love the company of their significant other.” The fragrance’s signature female wearers “bask in the sunshine of self awareness… are sophisticated, elegant personalities that reflect their attitude and taste through their selections.”

Ajmal emphasizes the extroverted character of the fragrance, which opens with a spicy woody ambery invitation. The fragrance is a blend of amber and spice, mixed with warm cedar, guaiac wood and musk.

Pimenté is sold in a 100ml size.

Mukhallat Tharwaan’s Arabic roots Ajmal describes Mukhallat Tharwaan as a concentrated perfume oil that “embodies prestige, power and luxury that reflect the rich cultural heritage of Arabia.” Made with a closely engaged blend of high-end ingredients, Mukhallat Tharwaan is designed to be worn by men and women.

The fragrance opens with bright floral notes of rose, while the heart is a blend of aromatic sandalwood and amber. Agarwood oil, exotic musk and spicy saffron complete the palette and contribute to the fragrance’s broad aura. A concentrate, Mukhallat Tharwaan comes in a 12ml dispenc sation.

Company News: Traveller Limited

A D V E RT O R I A L

A preferred partner

F

or Traveller Limited, the sky is not just the limit but the destination! The inflight services company within the renowned Chalhoub Group is by far the most preferred partner for brands and airlines alike.

Operating from their offices in the Chalhoub headquarters at Jebel Ali, Dubai, UAE, this wing of the prestigious Chalhoub Group has taken luxury to the skies!

Traveller Limited has provided customized services and supply of inflight programs to airline companies in the Middle East region for the past 23 years.

Traveller’s extensive brands include the best luxury lines in beauty products and accessories. Commitment to excellence and speed of execution, coupled with Middle East expertise and intimate knowledge of luxury, is what gives the company a cutting edge over competition and ensures sustainability.

By offering the benefit regional presence and expertise in the luxury domain, the company is able to maximize opportunities and minimize risks for the brands it represents and the customers with whom it operates. To summarize, in brief:

SUPPLIER ADVANTAGE i) Brands are provided with support in terms of implementing a marketing calendar in line with the global marketing strategy of the suppliers. ii) Products offered to airlines are chosen after identifying and analyzing passenger profiles and the necessities for inflight duty free services per sector. iii)They design and implement procedures for onboard sales. iv) Monitor and control financial processes, logistics and control of sales. v) Monitor performance of listed products. vi) Offer competitive prices with international duty free standards.

44

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Traveller Limited provides exemplary distribution services for brands and airlines active in the Middle East

AIRLINE ADVANTAGE i) Work closely with airlines to distinguish the optimum merchandising strategy, fine-tuned to the regional sector. ii) Measure performance of inflight promotions. iii)Extensive and in-depth training of cabin crew. Continuous training, promotion and enhancement of the airline staff for inflight sales. Weekly, fortnightly and monthly training sessions as per airline requirement are conducted for cabin crew, updating them on brand awareness, new products available, product knowledge, selling techniques and tips, as well as refresher courses. iv) Plan and execute promotions and incentive programs for passenger and crew. The company designs and implements procedures for enhancing onboard sales by way of promotions for passengers and crew.

ADDED VALUE: Logistics and Ware-

housing service ■ Source, purchase and warehouse an advantageous range of products.

■ Ensure inventory and stock levels to distribute to the airline from Jebel Ali, Dubai, UAE. ■ All above factors make Traveller Limited the only preferred partner for both suppliers and airlines. The company’s expertise and know-how ensure that they are well equipped and geared to handle the challenges of the fast expanding travel retail sector of the Midc dle East region.

Success in ITR comes in many colours.

As one of the leading confectionery players in ITR, you’ll find Mars’ brands at almost every travel location across the world. Focusing on the key purchase motivations our stunning product portfolio, containing the nr. 1 and nr. 2 brands M&M’s and Snickers, is backed by creative merchandising driving the purchase decision.

Our combination of insight, category vision and global strength enables us to optimize the effectiveness of our unmatched portfolio of global favourites. Finally, we continue to develop exciting new concepts.

For example, we now have all Wrigley products fully integrated into our ITR program, creating even more opportunities to drive your business.

Beauty Beat: Fragrances

A blooming business This season promises to surprise you with novel new scents that are sure to fly off the shelves Viva Rock by John Richmond

Company: Euroitalia Description: This juice opens on the sparkling and energizing blend of star fruit and Sicilian mandarin with an unexpected touch of cactus flower. The heart reveals floral notes of damascena rose, watery jasmine and delicate cherry blossom. The dry down seals a sophisticated rock’n’roll femininity enveloped by delicate musks, sensual ambergris and elegant orris Booth: Riviera Village RE2

Attimo pour Homme

Company: Ferragamo Parfums Description: Salvatore Ferragamo unveils its new masculine fragrance, a fresh and woody oriental fragrance that embodies the masculine facets of Salvatore Ferragamo’s distinctive elegance. The classy masculine flacon was created by renowned designer Sylvie de France Booth: Riviera Village RC13

Vera Wang Lovestruck

Company: Coty Prestige Description: The floral scent captures mouthwatering pink guava and mandarin, followed by a delicate mix of tuberose and lotus blossom. The dry down includes precious woods and sheer musk Booth: Marine Village Foyer 3

212 VIP Men

Royal Platinum by Parfums Charriol

Company: Cofinluxe Description: The new Eau de Parfum pour Homme is composed of exquisite raw materials, the most precious essences found in the Middle East Booth: Red Village K35

Kaloo Fluffy Dragée gift box

Company: The Millennium Essence Company Description: This gift box contains a soft toy twice the size of a regular Kaloo plush toy along with clinically tested, 100ml alcoholfree scented water, featuring subtle notes of almond and vanilla. The box is beautifully decorated with a satin ribbon Booth: Ambassadors U5, U7, U11

46

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Company: Puig Description: The new masculine fragrance completes the 212 VIP range and represents the style and attitude of VIP men in New York. The fragrance is a cocktail of vodka with frozen mint, lime caviar and vibrant spices inspired by the scent and attitude of the most exclusive parties Booth: Riviera Village RE19

Luciano Soprani Her

Company: Luciano Soprani srl Description: An elixir opening with fresh, spicy touches combined with green accents twisted to vibrant fruity facets.

In the heart, the fragrance reveals a white-flower bouquet of jasmine, sambac, white peony and ylang-ylang blended with soft rosy undertones. A mixture of woods with amber and vanilla are then combined with a musky dry-down

Davidoff Champion Energy

Company: Coty Prestige Description: Starting on an energetic aromatic cocktail of grapefruit and bergamot, this fragrance has a tonic and sensual edge with galbanum and fresh spices. The scent is completed by the masculine cedar wood, keeping a durable oak moss allure Booth: Marine Village Foyer 3

Attimo L’Eau Florale

Company: Ferragamo Parfums Description: Fashion designer Salvatore Ferragamo unveils its newest creation: Attimo L’Eau Florale, which is a celebration of femininity with a chic personal touch by the designer.

The outer packaging expresses the femininity and romance of the fragrance with the soft color palette Booth: Riviera Village RC13

Eau d’Ikar – eau de toilette pour homme

Company: Sisley Description: A high quality men’s fragrance structured around the Lentisk, a Mediterranean shrub. It is available in 50ml and 100ml bottles Booth: Harbour Village, Costa Magna

Sensuous Nude

Company: Estée Lauder Description: Characterized as a woody musk fragrance, Sensuous Nude’s powerful yet direct and minimal construction is sensual to the core, just like today’s woman, says the company Booth: Riviera Village RE18

Vince Camuto

Company: Parlux Fragrances Description: Vince Camuto is a floral chypre fragrance created by celebrated perfumer Steve Demercado. The delicate outline of the Camuto family crest surrounds the cap and appears on a ribboned medallion adorning the facade of the angled bottle Booth: Green Village M64

Solinotes Discovery Set Company: Parfums Corania Description: Solinotes is a range of six fresh and natural edts that can be mixed to create a personalized scent.

The set includes patchouli, mûre, amber, vanilla, musk and coco in 30ml bottles Booth: Blue Village G12 www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

47

Beauty Beat: Cosmetics & Skincare

Magnificent maquillage Cutting-edge cosmeceuticals and colorful new cosmetics that pack a powerful punch

Pure Colour Eyeshadow Palettes

Company: Estée Lauder Description: Each palette holds five powerfully complementing shades that are designed to work together whether you use just two shades or all five Booth: Riviera Village RE18

Black Rose Cream Mask

Company: Sisley Description: A new soothing skincare mask that instantly refreshes, smoothes and energizes the face thanks to its rich formula that includes vitamins and anti-aging active ingredients. It is available in 60ml Booth: Harbour Village, Costa Magna

Plantscription Anti-Aging Eye Treatment

Company: Origins, Estée Lauder Description: Formulated with Anogeissus Tree Bark as well as Kombucha (fermented Black Tea), this treatment helps visibly repair lines and wrinkles, crepey lids, under-eye cross hatching and saggy eye area skin while offering strong collagen-boosting benefits. Its potent combination of ingredients ultimately helps restore elasticity and turgor to the age-hollowed eye area for more youthful looking skin Booth: Riviera Village RE18

Re-Nutriv Replenishing Comfort Creme

Nourishing Body Cream Company: Institut Karite Paris Description: This body cream, rich in Shea Butter, nourishes and softens the skin. Its complex mix fights against slackening skin to firm and strengthen it. It gives the skin a smooth and radiant glow

Company: Estée Lauder Description: New Re-Nutriv Replenishing Comfort Creme instantly nourishes dry, delicate skin with a new advanced botanically-sourced Omega3 Phyto Complex comprised of a precious triad of pure and natural Omega-3 oils to help ensure skin cells remain hydrated, healthy and supple. Re-Nutriv’s signature Life Re-Newing Molecules help to repair, recharge and restore skin for an energized, radiant appearance Booth: Riviera Village RE18

Nordic Wind Nail Polish

Company: Micys Company, Pupa Milano Description: This technologically advanced nail polish uses resins for long-lasting brightness, a “jellified system” for easy application and intense color and nitrocellulose to help it dry fast.

Available in a mini 5ml format, the special applicator has rounded bristles, perfectly curved to pick up and release the right amount of color

The Concentrate

Company: La Mer, Estée Lauder Description: Now available in a new size of 30ml, The Concentrate enables the skin to repair and restore its appearance. It soothes irritation and redness caused by cosmetic procedures. It also moisturizes skin, helping alleviate the feelings of tight or taut skin often associated with scars and improving the appearance of scars and stretch marks Booth: Riviera Village RE18

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

         

Company News: ITF

Fashion meets fragrance Massimo Cappini, General Manager, ITF talks about the group’s

designer scents, rising stars and how to make fragrances relevant to the Middle East BY FAYE ROWE

B

eauty buyers in the Middle East and around the world will be looking forward to the hotlyanticipated new launches for Dsquared2 and Trussardi.

For Dsquared2 there’s Potion For Man, a new masculine fragrance with a premium line positioning and a unique concept, which takes inspiration from apothecaries of the past.

“It is a completely new mood compared to the wood family fragrances that has marked the entry of Dsquared2 in the perfumery market,” said General Manager Massimo Cappini. “But it is important to note that, despite their differences, the fragrances all contain olfactory elements and notes that are appreciated in the Middle East.”

All eyes now, however, are on Trussardi which is the latest brand to join the ITF portfolio and undoubtedly its rising star.

The worldwide distribution license agreement with the famous fashion house started in January 2011 and ITF is now ready to launch Trussardi 1911 Uomo and Donna. These

two new scents – one for men and one for women - are designed as a tribute to the classic lines first launched by Trussardi.

“They are a dual expression of brand excellence and Made in Italy fashion,” said Cappini. “They are a tribute to the past with an eye on the future - a perfect alchemy between present times and Italian origins that are synonymous with eternal elegance.”

The bottles feature a special type of glasswork and a bold linear cut along the bottom as well as genuine gold lettering. Trussardi Uomo is rich and strong while Trussardi Donna is seductive with woody undertones.

Looking at ITF’s other brands; there are also new launches in the Blumarine line, with Bellissima Acqua di Primavera and Jus de Fleurs Blugirl Blumarine. Meanwhile, distribution for Gianfranco Ferré is being consolidated.

“In the travel retail business, there is less and less time to make purchases,” said Cappini. “As products are slow to rotate on the shelves, there is a problem as the offer becomes too concentrated.”

“In the travel retail business, there is less and less time to make purchases.

As products are slow to rotate on the shelves, there is a problem as the offer becomes too concentrated.”

Massimo Cappini, General Manager, ITF

The biggest challenge for ITF however is visibility. “To overcome this issue, the strength lies in the brands that have international appeal and a strong identity,” said Cappini.

“It is important that the brands can give birth to innovative and unique products in terms of packaging, fragrance and visuals.”

His point is that products which are effectively self-explanatory can help to compensate for the lack of time there is to make a purchase.

“I believe in the importance of special limited editions and tailor-made promotional activities to support the master launches,” he added. “Last but not least, the expertise of BA’s and salespeople who are skilled and professional at all times is key.”

Despite political events in the Middle East region, ITF’s business there is stable.

“Of course, we haven’t been dispensed from the critical political and financial development in this region, like everybody in the sector,” said Cappini. “To compensate this temporary weakness, we have focused our business in those areas where political stability and financial conditions are positive and give way to free circulation of people and of ideas.”

With the recent success of the Dsquared2 Supercollection launch - He Wood Silver Wind Wood and She Wood Golden Light Wood – the company is now enjoying better visibility and good feedback. Expectations are even higher for Dsquared2 Potion For Man and Trussardi 1911 Uomo and Donna, which will roll out in the last quarter of 2011 and into the beginning of 2012. Look out for a rich portfolio of launches over the next few years, involving all of ITF’s brands, with specific promotions and investments that enforce the strategy of each one. c

Potion For Man

by Dsquared2 Trussardi’s feminine fragrance called Donna contains woody undertones

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

The World Travel Retail, Duty Free & Luxury Goods Exhibition

Where buyers and brands do business Taking place in Dubai – the commercial heart of the UAE and the wider Middle East – Middle East Exclusive is the definitive travel retail and duty free event, for the most dynamic air transport region in the world.

Middle East Exclusive showcases duty free brands, luxury goods, and new products for travel retail buyers, duty free outlets, agents and decision makers, who are keen to source high quality goods for the region’s thriving travel retail sector.

The travel retail world comes to Dubai!

Take part in this special event – which includes business networking opportunities and a unique VIP buyers’ programme – and build your sales in this booming marketplace.

For Stand Booking and to know more about the Hosted Buyers programme, please contact the organiser, Channels Exhibitions, PO Box 55254, Dubai, United Arab Emirates.

Telephone +971 (0)4 282 4737, or email info@middleeastexclusive.com

27-29 February 2012 Dubai World Trade Centre middleeastexclusive.com Venue

Supported by

Company News: Procter & Gamble

With innovative products, engaging advertising campaigns and outstanding in-store execution, Procter & Gamble is focused on creating a holistic shopping environment that blends classic favorites with new innovations

BY FAYE ROWE The 3D promotional campaign for Lacoste L.12.12 helped bring excitement to the POS

Building future classics Consumers continue to look for innovation and the pleasure in buying ‘new’ products such as Gucci Guilty

S

triking a balance between new and classic brands is crucial for driving excitement at the POS. “Travel retail shoppers are highly interested in new product launches and seek them out when browsing the duty free shelves,” says Chris Erickson, Team Leader - Travel Retail Middle East & Africa, Procter & Gamble. “We continue to see strong sales in the classic lines like Boss Bottled and Dolce & Gabbana Light Blue while some consumers continue to look for innovation and the pleasure in buying ‘new’, as we have seen from our launches on Gucci Guilty, Boss Orange for Men and Dolce & Gabbana The One Gentleman. Additionally, they go for new lines within well-known brands such as Boss Bottled Night, Gucci Flora Eau Fraiche and The One Trilogy. We see these brands as the classics of the future and we are building on strong launch plans to build, sustain and grow further.”

Of course, shoppers still enjoy the assurance of buying a brand they know and love, and P&G is in an enviable position to offer many cult favorites, such as Dolce & Gabbana Light Blue. However, consumer shopping habits are changing and Erickson and his team are seeing a return to pre-crisis shopping trends within the beauty category.

“There are constant factors that remain important to shoppers: interest in the new, the importance of gifting and the need for brands to communicate clearly in a crowded

52

market place,” he said. “For this reason we continue to support our initiatives to make sure they stand out to shoppers, support our classic lines with new promotions and new instore features coupled with gifting ideas that attract consumers as they browse the shelves.

One of our challenges is to be able to delight shoppers with brand proposals which fit both the excitement of innovation whilst

launches helped to build the brands while creating a halo effect on the classic lines.”

In terms of help and support from retailers, growing spend per head and bringing the magic of fragrances to the shopper in new ways is vital for success.

“Driving conversion rates and basket spend by offering the brands - both classics and initiatives - that will offer consumers a transformational experience, along with an easier and engaging shopping experience developed in partnership with our retailers will be the key to delivering this,” said Erickson.

“The aim is to reduce confusion, retain excitement and energy of the category but this is a tricky balancing act so we are focusing on fewer launches that we’re confident will have staying power.”

Looking to the future, P&G is planning on using its consumer and shopper under-

“There are constant factors that remain important to shoppers: interest in the new, the importance of gifting and the need for brands to communicate clearly in a crowded market place.”

Chris Erickson, Team Leader - Travel Retail Middle East & Africa, Procter & Gamble

building a classic brand, and providing a holistic proposal to a shopper who is constantly exposed to new fragrance launches.”

The latest novelties, which include Lacoste L.12.12, show the company is rising to the challenge, with innovative products, engaging advertising campaigns and outstanding in-store execution. Among the most successful promotions, however, are Gucci Guilty, Boss Orange Man and Dolce & Gabbana The One Gentleman.

“The promotions took place in most doors, with a great in-store execution to drive consumers to buy,” said Erickson. “These new

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

standing to develop innovative programs that will help make its brands irresistible at point of purchase.

“The recent Gucci Guilty launch is an example where every detail was developed to make the shopping experience as enjoyable as possible and to build a future classic,” said Erickson. “We did that by exploiting the 360 degrees plans (with TV, print, digital, in-store and advocacy plans) developed for the female launch and further exploiting the success of the female line for the launch of the Gucci Guilty Pour Homme, building the whole Gucci Guilty house.” c

2012

inter nat iona l a ssoci at ion of a ir port du t y fr ee stor es

duty free show of the

americas March 11-14, 2012 | Orlando World Center Marriott | Orlando, Florida, USA

Business Complete The IAADFS Duty Free Show of the

Americas offers a unique location for suppliers and buyers in the industry to network and conduct business in one convenient, cost-effective site.

Make sure you take advantage of all that the Duty Free Show of the Americas has to offer.

More than 300 duty free store operating companies in more than 60 countries attend and agree it’s THE place to do business.

“Every year the IAADFS provides a good opportunity to conduct business.”

“This show is very important to me because I get to see all my suppliers under one roof and I get to see new products.”

“The best in every respect.”

“One of our most successful shows to date.”

“Most important week of the year.”

Visit www.iaadfs.org/dutyfreeshow for updated information on the show and to register online, or call +1-202-367-1184 for assistance.

The Duty Free Show of the Americas is hosted by the International Association of Airport Duty Free Stores, representing North, South, and Central America, Mexico, and the Caribbean for more than 40 years.

Company News: World renowned designer: Elie Saab

The

rise of

Elie Saab

Designer scents are contributing to the growth of the selective segment according to BPI’s Florian d’Hauteville and providing added value to the customer is key to continued success

W

ith the launch of Elie Saab Le Parfum, it is a particularly exciting time for Beauté Prestige International (BPI).

As the first fragrance from the Lebanese designer’s fashion house, the scent has a particular significance in the Middle East and the company is set to maximize the opportunity.

“We had very constructive discussions with operators in the region and we launched the brand on August 15 in all the main airports in the GCC, which shows a high support from the trade,” says Florian d’Hauteville, Regional Sales Manager, BPI. “In Dubai in particular, we have a strong presence with a 24-square-meter podium after the T3 check-in and promotions in all the shops for a full month, from August 22 until September 23.”

As well as increasing visibility, this style of promotion helps drive traffic into the duty free shops.

Promoters on the stand offer perfumed ribbons and flyers, which entitle customers to a free sample in the shops and a gift with purchase.

The fragrance launched in Saab’s hometown of Beirut slightly earlier than this, on July 1, and the design elements in store were equally as eye-catching.

“The scent had coverage on the first and the last entrance pillars of the shop, the podium areas, in the airport magazine and on flyers – we also have an exclusive Prestige Edition one litre EDP of Le Parfum on sale for four months, which costs US$1,520,” says d’Hauteville.

Other brands in the BPI stable – Narciso 54

Rodriguez, Issey Miyake and Jean Paul Gaultier – have also been performing exceptionally well across the region this year. For instance, Narciso has been supported with a month-long lounge event in Dubai that boosted sales by +40%.

D’Hauteville has been working for BPI in the Middle East and Africa for around a year. Coming from the European duty free business, he has been impressed by the passion and enthusiasm of people in the region.

“The operators dare to try new retailtainment concepts; they dare to fully support a new brand when they believe in it,” he says. “Moreover, the political unrests in some countries of the region do not discourage the different players of the industry but seem to re-enforce the willingness of everyone to develop their own business.”

His experience so far has taught him a lot about the role of designer scents in travel retail.

“Fragrances are commonly linked to fashion and many designers have their own brand-name fragrances, sometimes only dedicated to the aficionados and perceived as another accessory,” says d’Hauteville.

“There is also a real trend for emerging niche brands. However we believe that there is still space among the main names of the industry for new fragrance houses with a strong identity and with high quality products.”

With this in mind, we can expect to see Elie Saab Le Parfum rise to become one of the main perfume houses in the industry and also to contribute to the growth of the selective segment.

“Part of this first target is already achieved,” says d’Hauteville. “With the support of many operators we have been able

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

BY

FAYE ROWE

to faithfully translate the DNA of the fashion house and present the fragrance in a very qualitative way among the travel retail distribution.”

All BPI’s products share common values: to encapsulate the spirit of the designer and the vivacity and creativity of the fashion industry.

“With Issey Miyake, Jean Paul Gaultier, Narciso Rodriguez and Elie Saab, BPI dares to play on four very different expression fields, with the same ambition of high quality,” says d’Hauteville.

“No doubt that this diversity of creation and expression is helping to bring dynamism to the category as a whole.”

His advice for others? “In this region, operators are often different for each airport.

As a result, each is a specialist in its own environment, of the airport’s passenger profile and retail habits. Therefore it is a must to build the retail activities with the operators and retailers from the beginning. Then, retailers and suppliers should always share the same common objective: added value for c the final customer.”

Company News: EuroItalia

Oh Italy; the sights, the smells. Perhaps it is this Amore-fuelled Italian magic that sparks perfumer EuroItalia along on its quest for magnificent fragrances

T BY

LORNA STRICKLAND-COOK

wo main brands are the fighting talk in EuroItalia’s arsenal of fragrant weapons; The ever popular Moschino and Versace. With both brands, EuroItalia has been on a quest to reinvent the fragrance mould. On one hand, Moschino’s cheeky but ironically sweet attitude is a firm favorite with women, while Versace oozes all the glamour that Gianni and Donatella always intended.

But appearing from the wings is the fragrance collection from Brit designer John Richmond. The Italian connection? In 1995 John contacted Italian entrepreneur Saverio Moschillo with the possibility of expansion abroad. That year they solidified their firm friendship and began a professional partnership. Through Saverio Moschillo John was able to produce his collections at Falber Confezioni based in Forli, and use Moschillo’s global distribution network with showrooms across the world. The high quality of Falber’s production, the strength of the Moschillo showroom and staff, and above all the mutual respect and trust between the two partners are the key to the brand’s success.

EuroItalia spokesperson Giovanna Squicciarini tells Gulf-Africa Duty Free: “At Cannes we will be presenting a couple of new products, a new female fragrance: Versace Yellow Diamond and a female fragrance for John Richmond called Viva Rock.”

She says: “We have several best performing products. Among the Versace brand, speaking on a global basis, there's above all others Versace Bright Crystal, Versace Versense, Versace Pour Homme; and the latest Vanitas.”

“The John Richmond brand has been performing well especially with the masculine fragrance, John Richmond for Men, which gave the impulse for the creation of its female version.

“For the Moschino brand we are launching a new masculine fragrance: Moschino Forever. This new fragrance keeps to the same Moschino tradition of flaunting the highly recognizable logo in solid lettering and reinterpreting the classical with elegance and irony.”

Success forever EuroItalia’s success is driven by its ability to develop an enduring fragrance, not a fad or a flash in the pan. “A successful product for us is one that remains on the market for years, not just for a limited time with a particular edition,” says Squicciarini.

This couldn’t be backed up further than with the news that EuroItalia is changing the way it communicates its advertising image of Versace Bright Crystal. If a brand is being developed then investment in lasting awareness is considered key and tapping into the latest trends and philosophies behind fragrance-buying and purchasing power is important.

The power behind a brand is sometimes hard to completely pinpoint. With the three key global, recognizable brands in the EuroItalia portfolio, they have time on their side. Continuing the investment vein, the speed and success with which all three have achieved veritable glory is impressive: attire, shoes, accessories, jewelry, homewares, eyewear….the list of linked-in assets is lengthy for each brand.

These brands are unstoppable, and EuroItalia will be spurring on the fragrant growth c of each and every one of them. Watch out. The Italians are coming.

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Viva Rock by John Richmond Moschino Forever

Bag/Accessory Report

This year’s TFWA WE sees plenty of activity in the leather and handbag category

MCM moves up

M

B

HIBAH NOOR

MCM’s Spring/Summer 2012 collection is an ambitious exercise that aims to reposition the brand at a new premium level

ode Creation Munich (MCM Products AG) is a Korean manufacturer of luxury leather goods, handbags, apparel, footwear and accessories for travelers. MCM’s products have been available in the Middle Eastern market since the brand was launched into travel retail four years ago, says Susanne Laible, Global Travel Retail Manager, MCM Products AG. MCM’s goods are listed at Dubai T3, Doha in Qatar (Main Terminal and Qatar Airways Premium Terminal), Bahrain Airport Main Terminal and landside at the Main Terminal in Kuwait.

“We’re about to launch our Spring/Summer 2012 collection, which will be shown at TFWA World Exhibition in Cannes, and new projects are being discussed alongside the selling campaign,” Laible says. The Spring/Summer 2012 collection is an ambitious exercise that aims to reposition the MCM brand at a new premium level, with high quality materials and improved detailing. Inspired by color, the collection offers a wider choice of styles and designs than ever before, and caters to all customer profiles and age ranges.

For travel retail, MCM is focusing on practical and functional lines and fun styles aimed at a younger buyer. The range of small leather goods continues to be important, with new introductions aimed at the gifting market. The range features strong colors

Bally reviews 160 years

BY

throughout, with in-trend orange, lime-green and mustard yellow dominant.

In Middle Eastern duty free, MCM’s best-selling bag is the MCM Boston bag in almost all ranges. Laible says the bag’s practical shape is the key to its sales success.

The “Boston Project” has been a success for two seasons now. 2012 sees the introduction of the Shopper Project, with two styles of bag – E-W and N-S. These logoed visetos bags come in white/black, cognac/orange and beige/beige. Laible says that the white/black has been particularly well received but that the cognac and beige versions are ideal for cross-merchandising with MCM’s Vintage Visetos and Heritage lines.

“MCM offers fabulous quality and style, combined with ultrapracticality and functionality and all at a reasonable price,” Laible says. “We have to be aware of the need for wide price points, however, you will now see in our collections a greater range of materials used in order to create a broader price spectrum.”

ally is another brand that has recognized the importance of the Middle Eastern market, listing at Abu Dhabi Airport and Kuwait City Airport. There are expansion plans in the works, says the company. Bally continues that the growing significance of the Middle East as a market, coupled with the sophistication of customers there, means Bally has to be on its game in selecting the right products to offer.

Although Bally is renowned for shoes, Bally’s leather goods business is also thriving in travel retail. “Our Trainspotting collection for men and the newly launched Urban collection for women both feature beautiful bags and accessories that do very well,” according to the company.

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Bally’s new releases include the 160th anniversary Edelweiss Collection

THE MIDDLE EAST DUTY FREE CONFERENCE

CREATING A FUTURE 21–22 NOVEMBER 2011

Al Murooj Rotana Dubai

Bag/Accessory Report

Bally says the collections feature interesting details such as the integrated use of Bally’s famous red and white trainspotting stripe, which also provides a connection to the company’s 160 year Swiss heritage. The collections are reinterpreted season by season, with the emphasis on a contemporary, casual feel, strong functionality and seasonal colors.

New releases include the 160th anniversary Edelweiss Collection that includes a complete range of bags and shoes, including ballet flats, ankle boots, sling backs and pumps. In this case, the brogue detailing normally carried through Bally’s Scribe shoes for men has been applied to bags for women. The collection’s “charmingly proper” ‘Ellie’ shoulder bag is highly detailed with brogeuing in patent leather that imparts a more refined feminine mood while connecting to Bally’s

heritage. Available in a range of autumnal hues, finishing touches include a Swiss Rose metal closure and commemorative tassel on each bag.

Bally’s 160th Anniversary Collection for men is an ensemble of shoes, bags and accessories that also reflect a contemporary reinterpretation of Bally’s legacy. The shoes are complemented by the ‘Ablayr’ grained leather tote bag that features practical design notes like gadget pockets.

When asked about what constitutes the special appeal of Bally products, the company says that “Bally is well known for excellence in the crafting of shoes and leather goods. With inspiration often drawn from our extensive archive, Bally products appeal to any man or woman seeking the highest quality materials, outstanding craftsmanship and contemporary luxury design.”

Furla’s photographic eye

G

erry Munday, who formerly occupied Laible’s role at MCM, has taken up duties as Head of Travel Retail at Italian leather goods company Furla. Munday’s appointment comes as the company focuses on maintaining and increasing its success in the travel retail market, with an emphasis on growing existing business and expanding into new markets.

Founded in 1927 in Bologna, Italy, Furla is a major player in the worldwide leather goods market. The company is present in 63 countries with 319 single-brand high-street shops, a distribution network with over a thousand official points of sale and a large travel retail network.

As it made the announcement, Furla also drew attention to its Spring/Summer 2012 collection, which takes its design cues from travels through the Mediterranean. Specifically, the primary inspiration is the photo book on the Tuscan Hotel II by late American photographers Slim Aarons and John Swope, together with German photographer Jurgen Teller. The book provides design inspiration in terms of the intense colors of the Mediterranean. The collection also draws on shapes from nature.

“The collection is aimed at the dynamic woman who loves to travel and requires comfortable, roomy, practical and multifunctional bags,” the company says. “With this woman in mind, Furla has developed lines with an equestrian and bohemian flavor, reworking them in a contemporary style. The collection mixes bags with shoulder straps, unusual forms and constructions, to create unique pieces for the woman’s wardrobe.”

Blue is the collection’s signature color, offset with the black and white of sand and pebbles, against hues that appear as if faded by the sun. High-tech, waterproof neoprene is one unusual material, used in the bright and colorful Candy collection. This collection is well suited to travel retail, with entry price points of €160 (US$231).

Other styles mix buffalo hide with a reptile-skin look, vintage-

effect leather and coarse salt and pepper canvas.

The Furla Uomo collection is also designed for travelers, and is founded on two concepts – one based on business and one on leisure. The business line is light and structured for functionality, while using brushed calfskin, crocodile effect leather and a new texture of refined micro grain. Computer cases, briefcases with expandable pockets and compact trolley cases are joined by ultra-flat, simple shopping bags – all designed with functionality to the Aigner’s new fore. The color palette is classic black, travel collection blue and ivory, with accents of dove grey and bottle green. Price points are €135340 (US$195-490).

Aigner’s travel collection

A

From the bright and colorful Candy collection

igner has a new travel collection out, aimed at globetrotters, businesswomen and anyone with a yen for travel. Cowhide handles and a unique charm print help reinforce the feeling of luxury, while the use of soft nylon reduces weight, an important factor for travelers. The interiors incorporate a zipped pocket and two open ones for mobile devices, lipstick and other knickknacks. The collection, which is available in c small, medium and large sizes, will be featured at this year’s TFWA WE in Cannes.

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Confectionery Report

A natural fit Fruit and spice ingredients continue to garner attention in the confectionery market

Guylian at Istanbul Airport

BY

ANDREW BROOKS

Core strength key for Guylian

G

uylian caters to the upper end of the mid market, as Steven Candries, the company’s Export and Travel Retail Director puts it. While it’s one of the smaller players compared to the bigger confectionery names, the company boasts some well known and recognized products. Besides the company’s trademark seashell and seahorse-shaped chocolates, Guylian’s niche portfolio has brands that enjoy broad global recognition and is able to compete with the bigger players. As for the Middle East market, sales from January to June this year were up a remarkable 72% versus the same period in 2010.

“All manufacturers have their core products,” says Candries. “To create more interest they will create a couple of new flavors that they pursue for a couple of years, and then they discontinue them.” Guylian, as a relatively small player compared to some of the giants in the confectionery market, simply doesn’t have the resources to “launch and drop” like this, so the corporate strategy is a matter of pursuing increased sales for the core products.

“Fruit fillings and spices are indeed trendy today,” Candries says. “They don’t sell at the same levels as the core products, but it makes some noise in the category, and it keeps the communication going without becoming boring.” These are the main motivating factors, as fruit and spice fillings tend 62

not to increase customer or consumer demand, he adds.

For a year now, Guylian has offered a strawberry filling for its seahorse chocolates.

The strawberry flavor is one of the most popular in the confectionery market, and it has proven to be an especially big hit in Asia, as well as the Gulf-Africa market. A special display that can mount 48 boxes is available, which Candries notes is ideally suited for promotional purposes.

For Cannes, Guylian does have some news

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

planned. One will be a “letterbox” presentation, geared for an end-of-year launch. The letterbox concept allows buyers to inscribe a message4 on the box of chocolates, affix a stamp, and send the box to the recipient or simply purchase as a gift box. The system is patent-protected, and the cost to the consumer will be £4.99 (US$7.18). “It’s a small box, easy and quick to deliver – and personal,” Candries says. He promises attendees a variety of new products and packaging news in addition to the letterbox plans.

A Guylian display at Singapore Changi T1

Delightfully Delicious One-of-a-Kind KISSES

®

Come discover HERSHEY®’S new innovations at Booth K40 in the Green Village!

www.hersheys.com ©2011 The Hershey Company

Confectionery Report

Neuhaus: luxury rediscovered

“W

e use top quality ingredients" says Philip Geeraert, Director of International Sales for Neuhaus. "That has its impact on shelf life, but the market is definitely moving toward less, but higher quality.”

Neuhaus is the inventor of the Belgian chocolate, filled chocolate or praline, and sticks to its origins and its tradition of handmade chocolate making. The Neuhaus standard range includes products with nuts and dried fruit, in addition to the top selling "Orangettes" – candied orange peel coated with a thin layer of dark chocolate.

Geeraert says that there are major opportunities in the Gulf-Africa given that the area is growing fast. The area is relatively less developed in the luxury chocolate segment, he says, and so far the more mass-market products have dominated the market with a high number of laborers returning home and buying gifts on the way. “We see that the interest for luxury items is clearly increasing,” Geeraert says.

The Dubai destination box from Neuhaus

Duc d’O focuses on flavor

S

trawberry will be a major part of Duc d’O’s presence at Cannes this year. Leading the Belgian chocolatier’s lineup of new products will be the “Intense Collection,” which features a white chocolate truffle with a strawberry mousse containing pieces of fruit. The collection (Duc d’O refers to it as a “sub-brand”) emphasizes strong, intense flavors. Along with a new milk chocolate truffle with French biscuit, the new truffle will be released in a 100g box with graphics by food photographer Stephane Verheye. A shelf-ready display of eight boxes will also be issued.

“From 2011, the ‘Intense Collection’ range will on the one hand consist of what we call ‘delicacy truffles,’ but it will also give our chocolatiers the opportunity to test new, innovative ideas on the market, on a relatively 64

limited scale,” says Duc d’O Brand Manager Gijsbrecht Ostyn.

The Pâtes de Fruits line – the only Duc d’O product that contains no chocolate – will receive a new, brighter packaging design, with the original ballotin being replaced with a bottom-lid box. A new sharing product in the La Boule range will include pistachio filling along with coffee and praline. Other new releases include “Wintertales Limited Edition,” a series of five new holidaythemed designs for boxes and tins of truffles, pralines and mini pralines.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Duc d’O’s Intense Collection

”DRINKS ARE ON ME” us at Visit annes – 7 AC TFW Village B e u Bl

YOU CAN N EVER BE TOO GENE ROUS

Find us on

and anthonberg.com

Confectionery Report

Anthon Berg: fruit in the mix

O

ver the last few years, Anthon Berg has launched a number of products featuring fruit and spice ingredients, and consumer demand is increasing, says Travel Retail Director Peter Dige. “Combining chocolate, fruit and fine liqueurs has for many years been a very strong threshold for the Anthon Berg brand,” he says, “and we take pride in mastering the delightful combination to the absolutely highest quality and full consumer indulgence.” Dige points to the well known Affection range as a good example of Anthon Berg’s attention to the category – attention that has been further reinforced with the new Sweet Moments Giftpack range that will be highlighted at Cannes.

Sweet Moments reached airport shops in spring of this year, and has recently been extended with the addition of two gift packs. Coming next year are two gift pack cylinders aimed directly at the market for gifting in travel retail. The Sweet Moments Nougat Pralines cylinders come in passion fruit, orange/chilli and sea salt flavors. The Sweet Moments Caramel pralines come in pure caramel, sea salt and chilli/orange flavors.

As far as new trends are concerned, Anthon Berg has found patterns tend to be global, not regional. However, relevant regionspecific challenges include the sale of alcohol filled chocolates. These include some Anthon Berg bestsellers, but they represent a challenge because alcohol is not allowed in the confectionery areas in places such as Dubai airport. “In Dubai some of our products are therefore placed in the liqueurs section,” Dige says. “This however does not affect the fact that the Anthon Berg has become a much loved brand in the Gulf-Africa region.”

Anthon Berg has been doing well globally, but Dige says the Gulf-Africa market has been a real standout. The company has paid a lot of attention to the region, and has been rewarded with 50 percent growth rates. Gifting is an important focus, as always, but Dige says that new packaging and single-wrap chocolate pieces play an important role in the growing market for sharing. Priceoff promotions work best, Dige says, supported by strong POS in the promotion spaces.

Anthon Berg chocolate liqueurs: a regional challenge

Anthon Berg’s Sweet Moments Caramel Gift Pack

A new year for Godiva

F

or TFWA WE this year, Godiva will be taking its cue from the fact that 2012 is the Chinese year of the Dragon, releasing a new limited edition gift box containing 15 chocolates made from 12 recipes. Five of the chocolates will be dragon-shaped in single-origin dark, milk and white chocolate and the entire collection comes in three flavors, each marking the country of origin of the chocolate used – dark chocolate from Ecuador, milk chocolate from Venezuela and white chocolate from the Dominican Republic. The box will be available in travel retail as of December.

66

Godiva will also be displaying its 2011 Christmas Collection, which is well suited for travel purchase. The collection covers a range of gifting options, and includes an assortment of seasonal chocolates including Sujets de Noel and Truffe Champagne.

Other seasonal offers will include the Christmas Gift Box, Christmas Gift Box – Truffles and Christmas Tablet Gift Pack. c

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

The White Chocolate Vanilla Bean from Godiva

Company News: Mars ITR

Self-serve option at work at London Heathrow

Challenge and response

“2

M&M's display at Las Palmas de Gran Canaria BY

ANDREW BROOKS

Different challenges and varied markets elicit innovation at Mars ITR 010 was a good year for us, but we can always do better,” says Jack Tabbers, General Manager of Mars ITR. “In the past year our concentration on upgrading category execution in key locations delivered a sales uplift of 38%.” Key captures for Mars ITR were enhanced visibility and the unification of customer focus from both Mars ITR and the retailers it works with.

The overall global rebound in passenger traffic, while not uniform or constant, compounds the challenge Tabbers and his team face: namely, how to conquer new market share by outpacing that increase. To set the kind of pace required, retailers need to understand the kind of leverage they can gain by doing their homework when it comes to positioning confectionery correctly.

“No other category is as impulsive as confectionery,” says Tabbers. “At Mars we’re always looking and working towards new and innovative ways of partnering with our retail customers to bring to life that high impulse factor in confectionery.”

Snacking and sharing are high motivators in travel retail, and the fun-size packs of Snickers, Mars, Bounty and Twix are turning in good figures in all markets, Tabbers says. Celebrations and Galaxy/Dove

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are also strong entries in the gifting category.

It helps to have the M&M’s and Snickers brands – the two top confectionery brands in the world according to Euromonitor research on retail sales. With recognition levels surpassingly high, Mars ITR can get the most out of the intense interaction customers already enjoy with these brands, while adding an extra twist tailored for the travel retail market.

For next year Mars is developing extensions to the M&M’s character range, which will be revealed at TFWA WE in September.

“The other big opportunity for us in 2012 is around Wrigley gum brands, Orbit and Wrigley Extra,” Tabbers says. “Again, more will be revealed in Cannes.”

Tabbers says that Mars ITR is actively exploring multibrand shop-in-shop opportunities with key partners to play to the dynamics of the channel. “We’d love to see more of the category approach format we’ve delivered with the Eraman Store in Kuala Lumpur, where the famous Petronas Towers are brought to life – M&M’s style.” Again, Tabbers promises more shop-in-shop revelations for visitors to the company’s stand in Cannes.

A standout current promotion is “M brella,” which is running in 70 locations.

Customers receive a free branded umbrella

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

with the purchase of any two M&M’s pouches. “The take-up from retailers has been amazing, and in Copenhagen we’ve already had to order new stock as consumer response has beaten expectations.”

Asia arguably offers the most excitement in terms of new developments, Tabbers says, thanks in large part to an optimistic attitude among retailers, along with drive and desire to get things done. But more broadly, the attraction of world leading brands is very strong in most emerging markets, where shoppers who are new to travel retail respond well to the reassurance of brands that are familiar to them and offer an aspirational pull. “Some of them may be trying our brands for the first time and that represents a hugely exciting opportunity for us.”

In 2011 there have been challenges for Mars ITR in some regions, especially around inflation, and currency and commodity prices that are beyond the ability of any business to influence, but Tabbers believes that the industry has faced and overcome bigger challenges before and his attitude is definitely positive.

“We have many reasons to be optimistic,” he says, “particularly if airports, retailers and suppliers join forces to share data and try new retail approaches to win the customer.” c

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EST. 1757

Jewelry Report

The

past reborn

European heritage provides the touchstone for these important new jewelry collections

BY

HIBAH NOOR

Clogau’s golden gate

C

logau Gold occupies a unique niche in the gold mar- on show for cruise ships and other channels.

“When we create designs in gold for our domestic market, I ket, acting as a supplier of Welsh gold to make wedding rings for the British royal family. The company’s gold always look through to see what would work in silver (with gold ornareserve, derived from its mine at Bontddu in North Wales, mentation),” Butler says. “By changing to silver I can bring the price coupled with its unique status as supplier to royalty, has down, which enables us to sell our best designs to airlines.” Many enabled it to develop its business model for jewelry manufacture, says silver/gold travel retail exclusives will be on show at Cannes. ButDavid Butler, Clogau’s Head of International Sales. “The rarity of the ler’s favorite promotion right now is a GWP based on Lady Diana’s gold and its limited supply mean that we add just a touch of Welsh engagement ring. “The item is a silver plated key-ring and I’m using it as a GWP not only on many airlines but also airgold to our jewelry, but it is our main USP.” port shops and on cruise ships,” Butler says. “It’s The company doesn’t sell into Middle East duty so popular it could be a product in its own right.” free yet, Butler says, but if they did, he feels the top Overall, Clogau’s international business is up two lines would be the fairy locket in silver and rose 360% this year over 2010, and new customers keep gold, which is Clogau’s global bestseller, and its large getting on board. The latest was Star Cruises in Asia. butterfly locket, also in silver and rose gold. The fairy Clogau has also started new listings with American locket is listed on six of the largest airlines in the Airlines and All Nippon. Interestingly, the company world, and for several months in 2011 it has been has just signed a contract with Historic Royal the top seller for British Airways. The butterfly Palaces in the UK, which provides access to the locket is also on several major airlines, where its dualpalaces and the archives they contain. Butler is look feature – it can be worn open or closed – expecting this access will yield some top-end design gives it good sales appeal. inspiration for future lines.

The royal wedding in April of this year gave Clogau the perfect excuse to come out with some royal-themed pieces. Three new Royal collections were introduced. Kensington is based on the ornate design of the gates outside Kensington Palace.

Including a yellow and rose gold key pendant hand David Butler, Clogau’s Head of International Sales set with three diamonds, the line also offers a bangle, rings and earrings. Lillibet – titled after the Queen’s nickname when she was a girl – is a white gold and sapphire pendant. Royal Roses Silver plated keyring in the style of features three pieces set with a carat of diamonds.

Lady Diana’s For TFWA WE Butler will be showcasing royal-themed lines in famous sapphire engagement ring gold and silver for airlines, while the new Royal collections will be

The Bonding Collection

Folli Follie uses two of its most meaningful designs – Heart4Heart’s crystal clover and the Flower Ball’s signature flower - in the Bonding Collection. The bracelets are split by colorful, bohemian-chic braided leather and a bangleesque silver side, all clasped by one of the featured jewels.

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Frey Wille: one big market

F

or Viennese jeweler Frey Wille, pendants and bangles are top sellers in Middle Eastern duty free. Customers start with one and move on to collect the other items, says Wessam Elmona, Director Duty Free, Worldwide General Manager Middle East & Africa. A major trend right now is seeing customers move for unique and colorful items, along with a return to yellow gold. “White gold is still trendy, but yellow gold is attracting more customers,” Elmona says.

Frey Wille’s new collection GK5 continues the brand’s pursuit of the ideals set by renowned Austrian Symbolist painter Gustav Klimt.

Inspired by Klimt’s painting “Hope II,” the collection is titled ‘Hope’

From Frey Wille’s Hope collection

and features the bold geometric shapes and rich colors of the masterpiece, expressed across a range of 21 pieces, including bangles, earrings, rings and pendants.

Frey Wille launched its first listings with Tehran Duty Free in May, and is working on developing existing locales rather than focusing on other new locations for now. Any expansion will be very selective.

“We strongly believe in the synergy between duty free and local market retail,” Elmona says. “All our designs which are Wessam Elmona, Director Duty Free, Worldwide General Manager available in duty free are also Middle East & Africa, Frey Wille available in our boutiques. Our fans start their purchase in the duty free or local market first. Then, they want to continue their collection. We have to provide them the opportunity and freedom where to buy the matching items.”

Accordingly, Frey Wille doesn’t mount travel retail exclusives.

Reminiscence: eye of the tiger

B

outique jewelry maker Reminiscence got its start in 1970 with the meeting of jewelry designer Zoé Coste and Nino Amaddeo. The same year saw the opening of its first boutique. Five years later came the first Reminiscence collections of silver and gold jewelry.

“Our brand was born in the 70s in the south of France, and our creations have always been inspired by travels and the imaginary world,” the company says. “You can see it in our perfumes or our fancy jewelry.” Overall the company’s jewelry aligns itself on three main themes: Romantic, Ethnic and Baroque. Of particular note in the Middle Eastern market is the “Lilly La Tigresse” collection, which is designed for “feline and sensual women” using tiger’s eye quartz, crystal and a golden tiger head - an exclusive Reminiscence creation.

The company believes that one strong trend in the market right now is a move to using a mixture of mateLilly La Tigresse collection has rials and beads from cloth – seen in its “Collection particular appeal Gypsetteuse” – and the use of a necklace as a scarf, to the Middle Eastern market as reflected in its woven metal and diamond-cut Swarovski “Rock and Folk” line.

The company has plans to develop overseas sales, especially in travel retail: it is now at work on a travel kit project which will enable it to develop the duty free business further. “Our goal is to expand the network of countries where Reminiscence is distributed, to have a brand that is always more international-oriented. We have started developing a base to open new markets, with the objective to reach the penetration rate our brand already benefits from in consolidated markets.”c

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Travel Accessory Report

Gadgets galore

Traveling today seems unthinkable without a bag stuffed with electronic devices. Gulf-Africa Duty Free reviews this market and the supporting role of travel accessories BY JAMES ROSS

A

cell phone needs a charger, which in turn needs an adaptor plug that fits the electrical sockets of the hotel you are staying in when you go on a holiday or on a business trip. Logic dictates that the more a passenger has in the way of electronic items the more they will need in terms of accessories for them – and that’s good news for suppliers of ancillary products.

In a world where, even leaving home – never mind leaving the country – without a communications or entertainment device seems no longer viable, such perceptions are playing into the hands of gadget makers and suppliers in all regions.

In the Middle East, duty free electronic items are a big business. At Dubai Duty Free for example, which accounts for the lion’s share of the market in the region, sales of electronic goods rose by +22% for the first half of the year to reach Dhs196 million (US$54 million). This was better than the retailer’s overall growth rate of 16.6% which produced total half year sales of US$698 million.

It won’t be surprising then to discover that suppliers in the market are very happy with the travel retail business right now. At Switzerland’s World Connect, which supplies products under the SKROSS and Swiss Travel Products brands, Chief Commercial Officer Sam Gerber says: “Travel retail has performed extremely well with a growth in units sold of more than 20%. In the Middle East, travel retail is dominated by a small number of very important players which operate in a strongly segmented market. We believe that growth in this part of the world will be directly linked to the development of major hubs in the region.”

Those hubs – airports such as Dubai International, Doha and Abu Dhabi International – are already growing fast, not just 72

in their infrastructure but also their passenger numbers as their respective national airlines; Emirates, Qatar Airways and Etihad, attempt to build global transfer businesses that link east and west.

While the Middle East is generally prospering, it is not doing so everywhere. The Arab Spring has dampened travel and prospects in much of the wider region from Egypt and across North Africa to countries such as Syria and Bahrain. But larger players are taking a more global perspective.

At one of the bigger electronics wholesalers in travel retail, Netherlands-based Dufri International which supplies airport shops, airlines and military bases in more than 60 countries, CEO Andrea TaekemaJager says: “Big regional variations are always a challenge but since we can’t change external factors like exchange rates or political internal conflicts you have to be creative to increase the business. We World USB Charger 3D UK plug by World Connect

have developed our One-StopShopping concept – a package of services, from shop design, the development of POS material and promotion plans, to staff training and stock management – which is a solution to bind existing customers and to get new ones.”

He adds that, overall, he is pleased with 2011 so far which has seen the company start supplying new airport stores in Moldavia and Pakistan plus newly opened electronics stores at Hamburg Airport in Germany and Toulouse airport in France.

For other players Snappy - the high Sony SLTA35K like Germany’s Pasco, specoffered

by Dufri which is primarily

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

focused on electronics, growth is being driven by both headphones and cameras. Pasco General Manager Robert Suter says: “We expect to launch quite a number of new products in the near future (including Bang & Olufsen’s EarSet 3i at TFWA in Cannes) and these are key to building sales, especially in electronics where passengers are always on the lookout for new goodies.”

The fact that economic growth is progressing at variable rates in different regions – with Europe looking shaky and Asia and the Middle East still strong – is not currently a big concern. At Go Travel, the new brand name for Design Go which makes adaptor plugs as well as products like travel pillows and mini scales, Sales Director David Lomas says: “Regional variations don’t worry us particularly. We have a very wide distribution both geographically and in terms of channels so if one area is not doing well, another makes up the difference.” Suter concurs: “As we have quite a global footprint, we are less affected by regional shifts. In other words, we are simply selling more now in Asia than a few years ago but, in some cases, less in other parts of the world.”

Selling more gadgets is chiefly dependent on the volume of travelers coming through airports, and these are rising fastest in places like the Middle East and Latin America. But having the right products in the airport is just as important given how clued up passen-

Dufri’s hot property - Ice Diamond's Styler in blue

gers are today; not simply about prices in the places they are traveling to and from, but about the latest versions of gadgets and their functionality.

Dufri points to the digital camera segment as one that has been on an upward trajectory. “All major brands have a good line up starting from entry level models to the highend in various colors. The idea that you can film high definition movies with a compact camera is very appealing to the customer,” says Taekema-Jager.

Pasco will show the WorldSIM card at Cannes which is claimed to save travelers up to 95% on mobile roaming charges on unlocked phones while abroad. It costs €30

Several suppliers cite Philips as a proven successful partner in the shaving, headphones and docking categories over the years. In Dufri’s case, the company believes it has played its part by making its collections relevant to traveling consumers. “Shavers offer gifting opportunities and are considered as a nice treat for business passengers after, for example, successful meetings,” claims Taekema-Jager. “Regarding headphones, they indicate a new lifestyle trend where a growing number of people are willing to express themselves more. Where else can this fit be better than at airports where different people are traveling, listening to their favorite music and seeking the right headphones. The headphone portfolio is therefore developing and very successful.” Dufri

also points to travel docks with universal travel adapters as being an extremely good fit with travelers who love to play music when traveling.

New brands for Dufri this year are Leica, the high-end camera and binoculars brand and Ice Diamond, a luxury range of professional hair styling tools. Among the launches that the company has high hopes for are a number from the Sony stable: the NEX-C3KB digital camera, the SLTA35K digital SLR, the HDR-TD10ES 3D camcorder and the NWZ-A864B touch screen MP3/4 player plus two Eisa award-winning products: Sony’s DSC-HX9 digital camera) and the HDR-PJ10 camcorder.

Comfort and convenience are also important. Go Travel’s Lomas says: “Passengers are opting for comfort and choosing products such as new neck pillows (Bean Pillows), our new range of travel scales, in addition to our new world adaptors. These are some of the best-performing items.

This year has been very positive and we have shown double-digit growth worldwide.”

As for the future, expectations for the Middle East and other regional markets are universally high thanks to passenger demand.

World Connect’s Gerber says: “Travel accessories and electronics will be a major growth area in travel retail simply because electronic gadgets are becoming more popular and more people are traveling every year. We have some new power accessories hitting the markets which will add substantially to our sales. Our activities will be focused on working closely with distribution companies serving the channel to optimize our presence.

Furthermore, we are developing new OEM clients that are active in travel retail too.”

Go Travel is positive as it begins expanding further into non-European markets. But purely from a product development standpoint it is also happy. Lomas says: “We have invested heavily in new product development which has kept our range fresh for over 30 years. As a result, we have a very strong new product pipeline which will continue into 2012.” Taekema-Jager adds: “The outlook is positive as we see that the electronics category is fast-changing, innovative and exciting – and a must in order to please the consumer today who is looking for a well chosen assortment from A-list brands.”

Travel and electronic accessories have become a required part of the product mix, which was not always the case. Suter says: “Electronics in travel retail has gone from practically zero about a decade ago to a very significant category. Operators realize that – even though there are still challenges in terms of margins – the sales and profit potential are too large to ignore. There is clearly potential for further growth in electronics.” As for travel accessories, these can often get overlooked. But as Lomas says: “Products like ours add interest to the store and are good profit earners, requiring minimum retail space to achieve maximum return.” That is a sentence that should sit well c with buyers everywhere.

Go Travel's micro scale

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

73

Company News: AM International

Scuba Series diving masks have an integrated waterproof digital/video camera

A fresh start

The Sharper Image collaborates with AM International to explore new markets

T

he Sharper Image (TSI) is moving beyond its familiar borders with the help of AM International, a new company unveiled in May by Klaus Mellin and Wolf Ayen of Tax Free Trade.

AM International will work with CTI International Group, Miami, to represent TSI in global travel retail outside the Americas.

Ayen and Mellin will also continue their involvement with Tax Free Trade, which has operated as an independent sales agent for Braun for the past 20 years.

As a long-time industry veteran, Mellin felt that Tax Free Trade was in a vulnerable position due to its reliance on one major customer and it was time for new challenges, a view shared by the younger members of his staff.

This prompted the decision to investigate new business opportunities in travel retail.

“It’s good to stand on one very strong leg, but it’s better to stand on two and that’s why we started to create the second leg,” says Mellin.

Over the last three years TSI has taken a very promising position in travel retail throughout the Americas. The company currently has around 120 travel retail distribution points with key retail partners such as Dufry, Starboard and Princess Cruises, Stella Partners and London Supply.

The cooperation with AM International aims to take the brand to the next level in terms of global expansion.

“Dufry Brazil is certainly the role model customer for TSI in the entire travel retail world. This is an example showing that this brand in travel retail can be very powerful and we’re trying to re-apply the things that work well with Dufry with other retailers,” explains Wolf Ayen.

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TSI offers over 600 different products in various accessory categories, such as electronics, headphones, gadgets, toys, gifts, luggage and household products, through 27 different licensees. CTI International Group is one of the licensees and holds the global travel retail distribution for TSI. The strategy for travel retail is to offer a wide variety of accessory products under one umbrella brand – TSI – leveraging the innovation pipeline of all 27 product licensees and other branded products which may be placed within TSI shop-in-shop concepts. Those complementing other branded products will be partly provided through either CTI International Group and AM International or by the choice of the retailers themselves.

AM International’s first duty free tradeshow was at the TFAP show held earlier this year in Singapore. The company received tremendous feedback and were able to go through 40 meetings in just three days. “We had a lot of traffic, it was overwhelming,” says Ayen.

TSI’s portfolio is very flexible and can be changed according to the need or strategy of the retailer. The aim is to encourage impulse buying through a lifestyle isle at the point of sale where consumers like to stop and find new products when they travel.

A current hot product offered by TSI is the Powermat, which focuses on wireless energy. It’s widely known for its two-part wireless charging solution that pairs devicespecific receivers with Powermat charging mats to deliver smart, efficient, real time, and convenient wireless power to multiple electronics devices.

Powermat lets consumers charge their favorite

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

BY

HIBAH NOOR

smartphones and devices with the one-time addition of a receiver that enables wireless power delivery when the device comes into contact with any Powermat.

Another hot category for the company is its selection of unusual gadgets. “These are technical products that you don’t really think about but once you see them you want them,” explains Ayen.

A perfect example are the Scuba Series diving masks, that have an integrated waterproof digital/video camera, eliminating the need to hand-carry an underwater camera. These devices are ideal for snorkelling or diving buddies. The top model has a 720p high definition video mode, 12MP photographs and a maximum depth of 130 feet/40 meters.

It runs on 4 AAA batteries (included) and hosts micro SD/SDHC memory cards of up to 32GB (not included) to complement the internal memory.

“At the end of the day, it’s all about impulse buying. In a saturated society we have everything we need. You see things you like and then you buy them. People can always find something new with Sharper Image.

That’s what makes Sharper Image well known in the US and why it’s being recognized as an innovation platform,” concludes Ayen.

For more information, visit AM International at TFWA WE, Mediteranean Village c P14.

A current hot product offered

by TSI is the Powermat, which focuses on wireless energy

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Company News: Diageo

Staying committed

Diageo partners with Dubai Duty Free for iconic summer promotion while continuing its commitment to corporate social responsibility in Lebanon BY RYAN WHITE

D

iageo recently partnered with Dubai Duty Free and Dubai International airport to create a campaign called “Summer Spirits 2011.” The initiative featured high profile concourse activations and two pop-up stores operating outside the main duty free store to maximize the opportunity during the busy summer traffic period and the large numbers of transit passengers hubbing through the airport. In-store branding adjacent to the products on shelf carried the call to action, “Why Not Take Your Spirits Away Too?” Running throughout June and July, the campaign showcased popular brands including Smirnoff, Gordons, Captain Morgan, J&B, Baileys and Pimms.

The high profile concourse activation in Terminal 1 was an eye-catching iconic summer set featuring a tropical Tiki bar and other beach props such as vintage-style suitcases, deckchairs and surfboards. The second smaller activation in Terminal 3 followed the same theme.

Passengers could pick up promotional recipe cards and also buy any two bottles of the products and receive a 10% dis-

count off the retail price. The promotion offered the opportunity to take consumers on a journey designed to educate them on the products and brands available and also to enhance their retail experience at the airport.

“Dubai Duty Free is a great partner for us on this initiative—we share similar ambitions to create excitement for passengers with campaigns that resonate with their purchase motivations,” says Diageo GTME Managing Director Jane Ewing. “DDF have enabled us to position large-scale branding at key vantage points around the departures lounge— outside the main store, next to the escalator and on the walkways. The visibility is therefore extremely high and shoppers are responding well. This activation demonstrates our intention to reach people at multiple touch points throughout their journey and to build on consumers’ emotional connections with the ‘first drink of the holiday.’”

This year marked the Summer Spirits promotional drive’s third year in existence, with sustained success in increasing conversion among consumers purchasing their favorite brands to enjoy both on holiday and at

Diageo’s CSR strategy Of course, the tree planting initiative is just one of a multitude of Diageo projects aimed at giving back. The company’s CSR plan rests on five key pillars: creating a positive role for alcohol in society, building sustainable local communities, minimizing environmental footprint, releasing the potential of employees and creating an exemplary compliance environment.

In terms of other projects aimed at saving the environment, Diageo has committed itself to addressing the global water challenge in the communities in which it operates through efficiencies in its operations, community investment and collective action. Diageo has made significant progress towards its target of eliminating all waste sent to landfill by 2015.

Since 2007, the company has reduced waste to landfill by over 70%. The company notes that packaging also represents a key area of focus for reducing its environmental impact.

Finally, Diageo is also making strides in reducing carbon dioxide emissions at production sites by 50% from its 2007 baseline by 2015. In 2010, 42% of the electricity the company used came from low-carbon sources. Diageo is already well on its way to meeting this year’s target: to increase the percentage of electricity from low-carbon sources to 50%.

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Greenhouse gas emissions (kt CO2e) 840 Indirect

830

Direct 773 743

2007*

2008*

2009*

2010

Running throughout June and July, the Summer Spirit Campaign showcases popular brands including Smirnoff, Gordons, Captain Morgan, J&B, Baileys and Pimms

home on their return.

Diageo consumer research highlights the strong emphasis of shoppers not only enjoying responsible consumption while away and optimizing their quality leisure time with friends and family but also stocking

up on the great deals available and so extending that holiday feeling upon returning home. Diageo has repeatedly demonstrated its ability to drive seasonally focused campaigns across the liquor category, particularly in addressing opportunities in gifting.

Diageo has set a goal of planting 1 million trees in Lebanon; the nursery has already been built and the first 1,000 trees planted

An initiative of a different kind Firmly committed to sustainable practices and improving the communities in which it operates, Diageo puts just as much energy into its corporate responsibility initiatives as it does into promoting its brands in duty free.

The company has recently embarked on a tree planting project in Lebanon with the end goal of planting an impressive 1 million trees.

“We want to enrich communities and give something back,” former Diageo Corporate Communications Director Tim Rycroft told Gulf-Africa Duty Free early last month. “Three years ago at our annual conference in Athens we decided on this amazing target. We were all very excited about it, but to be honest none of us really knew how we would go about doing it.”

It was decided last year that the 1 million

trees would be planted in Lebanon. Diageo’s team in the country were already working with the Association for Forest Development and Conservation (AFDC) on smaller-scale projects and it was apparent that Lebanon would benefit greatly from the initiative. “It’s a country that has suffered massive deforestation, particularly in the last 30 years,” said Rycroft, “and we knew that it would make a real difference for the community.”

In addition to a corporate donation from Diageo to get the ball rolling, the company challenged its staff to raise money as well.

Over the first half of 2011, fundraising events were held in Miami, Dubai, Beirut, Sydney, Singapore and London. A group from Diageo’s offices in Singapore also cycled to Kuala Lumpur, about 500 km, to aid in the effort.

In the London office, one employee cycled the Olympic cycling road race route, which is about 250 km, in one day. Others in London did the three peaks challenge, climbing the tallest mountains in England, Scotland and Wales in 24 hours. “The things that people did to get behind this cause were truly amazing,” Rycroft noted.

The nursery has already been built and 1,000 saplings planted. The trees will grow at the nursery for about 18 months before being planted throughout Lebanon in places where’ they’re needed. “It’s been an incredible journey for Diageo,” Rycroft said. “It took a while to figure out how we would go about it, but once we did there was fantastic momentum behind it. We’ll continue our commitment to planting trees each year and this will be an ongoing initiative c for Diageo.”

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Whisky Report

The

spirit of success

Promotions, messaging and experience keep these whisky leaders on top in a rising market ANDREW BROOKS

“T

BY

he Middle East continues to be an important market for Dewar's Scotch Whisky,” says Vinay Golikeri, Marketing Director for the Bacardi Global Travel Retail Division. The growth in the Middle East reflects a similar experience in Asia. Bacardi Global Travel Retail has employed strategic brand promotions to strengthen relationships with existing Dewar’s customers and create new ones, in the process helping to foster brand loyalty, Golikeri says.

In June, Bacardi Global Travel Retail announced a partnership between Dewar’s and the internationally renowned National Geographic Society. The new promotion, called “Dewar’s World of Discovery,” gives entrants in a prize draw the chance to win six travel experiences created by National Geographic Expeditions: Costa Rica; a New York photography trip; an insider’s tour of Italy; the Amazon; New Zealand; and the home of Dewar’s, the Highlands of Scotland. Depending on the market, entry may require the purchase of Dewar’s 12 Years Old. Part of Bacardi Global Travel Retail’s strategy to grow Dewar’s in the Middle East saw the launch last year of a training program with Dubai Duty Free, Middle East Airlines and Beirut Duty Free. Conducted once or twice

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The “Dewar’s World of Discovery” promotion

The Dewar’s brand has seen great success in the Middle East, largely as a result of creative promotional activity from brandowner Bacardi

a year with these organizations, the sessions are hosted by the Dewar’s Global Ambassador and consist of a tutorial on Scotch whisky production as well as a Dewar’s comparison tasting.

“Training provides Dewar’s with a unique opportunity to create brand advocates in each of its core markets,” Golikeri says. “As the Scotch market continues to grow in the Middle East, we want to ensure that our key partners are equipped with the tools and information they need to help drive sales in their outlets.”

“Of our brands there is one standout product across the Gulf and Africa as a wider region: Hankey Bannister Blended Scotch whisky,” says James Bateman, Global Travel Retail Manager for International Beverage Holdings (Interbev). Bateman’s focus right now is on improving the product’s distribution and visual displays. He says that premium expressions will be introduced, and the process is already underway with the launch this year of a new Hankey Bannister expression, 12 Years Old Regency.

This product constitutes an entry into the premium blended Scotch category and retails for about US$25 for 100cl. Bateman says that Interbev will aim to launch the Hankey Bannister 21 YO and 25 YO super-deluxe blends at Cannes this year. New twin packs (2 X 100cl) specifically for travel retail will also be premiered.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

The majority of duty free consumers of Hankey Bannister in the Gulf are residents originally from the Indian subcontinent, Bateman says. In terms of the travel retail trade, the main buyers in the Gulf are Dubai Duty Free, Dufry at Sharjah and Aer Rianta International’s regional network.

Africa is a complex picture, but Bateman says Gebr Heinemann, Dufry and Flemingo are important network partners.“Egyptian airports are very important, and will be again once the tourists return in confidence. Big Five Duty Free in South Africa and Mauritius Duty Free are very important retailers of our products, and the expansion of Flemingo Duty Free has made it a real retail force on the continent.”

The new travel retail display for Hankey Bannister In addition to Hankey Bannister, which has been available in the Gulf and parts of Africa for many years, in the last few years single malt Scotch has been developing a presence with retailers that want to build the category, for example Qatar Duty Free and Muscat Duty Free. “The development potential for our portfolio in Sub-Saharan Africa is also of great interest,” Bateman adds.

2011 so far has been very good, Bateman says.

At press time, Interbev received some very welcome news that certainly won’t hurt its global presence. The company carried off no fewer than 16 awards at the 2011

Whisky Report

International Wine & Spirits Competition.

Hankey Bannister was well represented with four awards, including a Gold for Hankey Bannister 40 YO. The brands represented by the Edrington Group are well liked in the Middle East and North Africa, says Keith Bonnington, Area Director, Africa and Middle East. However, the leading brand is Johnnie Walker, although Bonnington says the evidence points to future growth in the deluxe range—Black Label and above.

“Many of the major Scotch brands— including Johnnie Walker and Chivas, which together hold around 60% Scotch volume share—suffered significant volume losses in 2009 and into 2010,” he says. Other categories, such as vodka and cognac, also suffered. “The Edrington Group portfolio on the other hand performed very well with The Famous Grouse and The Macallan dining at the top table in their respective categories.”

The market has been buoyed by a more stable economic outlook after a tough 2010, Bonnington believes. Generally, travelers are returning, and one indication Bonnington takes some comfort in is the recent announcement that Dubai Duty Free has exceeded last year’s growth by 16%.

Standard Scotch remains the volume leader, driven by its traditional blue-collar customer base, largely from the Indian subcontinent. A decline in this category over the past year could be a result of the sudden and dramatic shutdown of construction in the region following the global slump, Bonnington believes. The other backbone demographic shopping at the super-premium level is likely to be Asian or Russian and favors destinations such as Dubai and Abu Dhabi for business and leisure travel.

“Our portfolio has shown stunning growth in recent years,” Bonnington says. The Famous Grouse family, which now includes Black Grouse and Snow Grouse, is number three in terms of total blended Scotch volumes, with a 6.5% market share. The Macallan, meanwhile, commands fully 15% of the malt Scotch category. Bonnington 80

South Africa is a standout market for Jameson Irish Whiskey

notes the brand’s huge franchise in Asia, Russia and the US. “In the next few years I believe consumers will see some very exciting developments across our malt whisky range,” Bonnington says. In particular, The Macallan will see the introduction of new super-premium concepts.

At Cannes, Edrington Group will focus heavily on its super premium offerings, with the presentation of the latest Macallan in Lalique decanter and attention on reinforcing the travel retail exclusive 1824 range, Bonnington says. “We also have some interesting developments in The Famous Grouse,” he says. “And Cutty Sark is waiting in the wings.” Bonnington considers the latter a “sleeping giant,” destined to become a key player once again.

“The key message from us is that 2010 was a ‘signature’ year for Jameson,” says Donagh McHenry, Regional Director Asia Pacific, Travel Retail and Africa/ME. “We’re up 16% in the calendar year, and we broke the 3 million case threshold. That’s overall, but there’s the same momentum in duty free— we’re up 14% there.”

Within the Gulf-Africa catchment area, there are some markets that stand out for Jameson. South Africa is one such, McHenry says, with a high recognition level for the brand: sales into the domestic market totaled over 180,000 cases in 2010. On the duty free side, McHenry commends the ranging and distribution work done on Jameson, from Classic to Reserve, by Big Five Duty Free in Johannesburg and Cape Town. Jameson Signature Reserve, exclusive to travel retail, is also selling well in Big Five outlets.

The consumer streams in South Africa are threefold: South Africans, international travelers and those traveling within

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Africa. While South Africa is Jameson’s standard bearer in Africa’s southern cone, McHenry sees signs that Angola and Mozambique are approaching critical mass in the region too.

In the Middle East the strongest market is Israel with domestic strength reflected in healthy duty free presence and sales. Lebanon is now benefiting from initial marketing and promotions.

Other emerging markets recently showing potential for Jameson in the region are Egypt and Morocco. No one will be too surprised to hear that Dubai is the key Gulf market, posting a muscular 24% growth in 2010—a trend driven by international travelers who play a significant role in Jameson's current global momentum.

On Jameson promotional activity, “we’ll do new global promotions every 18 to 24 months or so, as a rule,” McHenry says, highlighting the recent “Experience Our World” promotion, which has run globally from 2010 through mid 2011. On special editions for the Travel Retail channel, McHenry points to the Jameson St. Patrick’s Day limited edition bottle that was introduced in Europe this spring as a notable success.

For Cannes, Jameson will be focusing on its successes in 2010 and its ongoing promotions, including some new promotional concepts and special editions that will hit in 2012. “We’re still working out the details,” McHenry says, “but we’ll have a bit more c detail on those plans at Cannes.”

The core offerings in The Famous Grouse range (left) and The Macallan 1824

Please Drink Jameson Responsibly

TRIPLE DISTILLED, TWICE AS SMOOTH, ONE GREAT TASTE.

www.jamesonwhiskey.com

Brand history

The importance of tradition Communicating the history of a spirit brand to consumers is especially important in duty free, where travelers look for both exquisite liquids and established names BY RYAN WHITE

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pirit suppliers utilize a number of strategies to entice customers to choose their brands, and discussing the history associated with a given liquid is inarguably one of the most important marketing tools any brandowner can employ. Gulf-Africa Duty Free looks at some popular duty free liquors and discovers that world travelers are often less concerned with tradition in and of itself and more attracted to the qualities of craftsmanship and dedication that a brand’s history implies.

Rémy Martin Fine Champagne Cognac “Our most prestigious global brand is Rémy Martin Fine Champagne Cognac, whose lineage stretches back 300 years to a vigneron in south-western France who distilled eaux-de-vie of such quality that his Cognac found favor with European royalty,” says Laurent Cosson, Marketing Manager at Rémy Cointreau Global Travel Retail.

Of course, many travelers looking for a premium Cognac may be tempted to purchase Rémy Martin based solely on the assumption that if it’s good enough for French royalty, it’s more than likely a spirit of exceptional quality. However, tradition is only one piece of a larger puzzle and sales of Rémy Martin—especially in Asia where travelers certainly know their Cognac—are outstanding. The brand holds about a quarter of the Cognac market share in travel retail, says Cosson, and it is the number two Cognac worldwide. No matter how prestigious a brand’s hisRémy Martin holds about a quarter of the Cognac market share in travel retail and is the number two Cognac worldwide

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

tory may be, this doesn’t happen unless the liquid itself is also a force to be reckoned with.

History and tradition are pivotal to the Rémy Martin marketing platform and also to that of the other brands in the Rémy Cointreau portfolio. The Rémy Martin Heart of Cognac displays and activations, which focus on the heritage and quality of the Cognac, were created to inform and educate consumers, helping them to understand the brand’s unique marketing propositions, which include the importance of the quality and selection process for the raw materials, the ageing process and the expertise of Rémy Martin’s Cellar Master.

“For many consumers Rémy Martin Fine Champagne Cognac has an unrivalled reputation for superlative quality and a unique aromatic intensity, and it is held in high esteem by connoisseurs,” concludes Cosson. “The brand is associated with tradition, luxury and prestige so it has become a popular gift purchase in GTR as well as a favorite purchase for self-consumption.”

Bottega Gold

For three generations, the Bottega family has used only the best quality natural ingredients to produce an array of exemplary grappas, excellent liqueurs and high-quality wines. Bottega Gold, with its unmistakable gold gilding, exemplifies luxury and at the same time is indicative of Distilleria Bottega’s commitment to producing nothing less than the perfect bottle of Prosecco.

“We were the first to offer a bottle of wine that was completely gold,” says Sandro Bottega, President of Distilleria Bottega. “Besides its aesthetic impact, the gilding works to protect the wine from the light, maintaining the Prosecco unchanged for over 12 months.”

The company’s history stretches back to the 1920s, when Domenico Bottega was a wine trader and passionate oenologist. For Distilleria Bottega today, the wine itself and the tradition inherent in its production intermingle to the point where it is difficult to separate the two. For this reason, tastings play a large role in the company’s marketing as a genuine product of Italy. Bottega notes that a recent initiative at Beirut Airport resulted in sales that were well above expectations.

“Our eye catching packaging and high quality together with the made in Italy warranty of genuineness make our products refined and highly sought after by customers,” says Bottega.

Brugal

During the second half of the nineteenth century, Andres Brugal Montaner, born in Sitges, Spain, immigrated to Cuba and later moved to the Dominican Republic where he established residence in Puerto Plata. With experience in the development of rum he had acquired in Cuba, he founded Brugal & Company, effectively starting the rum industry in the Dominican Republic.

The history of Brugal is certainly a storied one. According to the company, it actually created the dark rum segment in 1920 when it first started to age the spirit in white oak barrels. Brugal & Company also contributed significantly to the aged rum segment with the launch of Brugal Añejo in 1952.

As with many spirits, the way Brugal is produced today is inextricably linked with the tradition of rum making that started well over a century ago. Master Roneros, or Master Rum Blenders, are normally required to be experts in every facet of rum preparation. Brugal adds one more requirement in that its Maestros Roneros must be part of the family.

“History and tradition are important with any premium product, and the Brugal family has been produced since 1888,” explains André de Almeida, Edrington Group’s Area Director - Americas Duty Free. “It is now being produced by the fifth generation of Maestro Roneros, our Master Blenders.

Furthermore, it has a distinctive, lighter style with drier woody notes that come through whether drunk neat or mixed. Finally, Brugal is produced under a very tightly controlled distillation process to guarantee a clean spirit with low levels of congeners. All of this combines to make Brugal a very unique proposition in the rum category in travel retail.”

The history of Brugal is certainly a storied one; according to the company, it actually created the dark rum segment in 1920 when it first started to age the spirit in white oak barrels

Distilleria Bottega’s history stretches back to the 1920s, when Domenico Bottega was a wine trader and passionate oenologist

Chivas Regal James and John Chivas were primarily concerned with supplying fine food and drink from around the world to Europe’s elite when they first opened their gourmet food establishment in 1801. James began to lay down casks of fine Scotch whisky in the shop’s cellar without realizing that he was creating a spirit that is, over 200 years later, revered the world over.

In the 19th century, the brothers were awarded the first of many royal warrants to supply goods to Queen Victoria. Around the same time, they perfected the art of blending and orders began to pour in. The whisky’s popularity soared even higher as phylloxera destroyed French vineyards in the 1880s and many wine drinkers turned to the Chivas brothers in search of a suitably refined drink. Today, Chivas Regal runs a number of promotions in duty free that communicate the importance of traditional values (Live with Chivalry) and production methods (The Age Matters).

In 1801 James and John Chivas open a fine food “The Age Matters is really about emporium, but James explaining to consumers around the began laying down casks of fine Scotch world what the age statement on a botwhisky, thus creating tle of whisky means and communicatone of today’s most respected spirits ing to them that a 12-year-old whisky is worth the price they’re paying,” explained Christian Porta, Chairman and CEO of Chivas Brothers. “This also helps facilitate a consumer’s trade up to a 17-, 18- or 21-year-old whisky, for example. It’s also a way to recruit people into Scotch whisky, because the message about quality, authenticity, heritage and provenance—all the great aspects of Scotch whisky—is something that is attractive to many people. This campaign helps c us communicate these qualities.” www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

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Company News: Brown-Forman

A bit of everything Brown-Forman continues to see success in the MENA region with both tried and true favorites and exciting new releases BY RYAN WHITE

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ulf-Africa Duty Free recently sat down with Tony McIver, BrownForman’s Area Director Middle East and North Africa, to discuss new developments in the region. In addition to the upcoming launch of Finlandia Platinum, Brown-Forman is concentrating on tried and true brands such as the Jack Daniel’s family of whiskies. With operators such as Dubai Duty Free planning expansions in the near future, McIver is optimistic that the company’s footprint will only increase as time goes on despite political and social unrest in some pockets of the region.

Brown-Forman currently enjoys a very strong relationship with Dubai Duty Free and is running a raffle promotion in September that will see one lucky shopper walk away with a Harley Davidson motorcycle.

“This will be the biggest promotion that we have ever conducted in Dubai Duty Free,” McIver says.

The supplier is also looking forward to the opening of Terminal 3 of Al Maktoum Airport in Dubai World Central. Of course, this project will give Dubai Duty Free a lot more selling space and McIver says that Brown-Forman will have an increased presence in the new terminal.

“We hope to be able to expand our entire portfolio with additional space being given,” he says. “New listings would include Finlandia Platinum and additional Finlandia Flavours such as Lime, Mango and Blackcurrant, Finlandia 101, Chambord liqueur and vodka, Southern Comfort Reserve and Herradura Seleccion Supreme.”

Despite the above, Brown-Forman’s current focus is on the bestselling Jack Daniel’s family. The company has been growing the brand, introducing Gentleman Jack to a whole new group of consumers in the Middle Eastern duty free market by offering a 375

Highlighting purity The new Finlandia Classic bottle hit duty free shelves in selected areas of the Middle East just last month. McIver says that plans are in the works to launch the new super premium offering Finlandia Platinum, premiering at this year’s TFWA WE, in the near future.

The new bottle for Finlandia Classic maintains its strong connection to Finnish design. The bottle was developed through the collective effort of people close to the Finlandia brand, including Harri Koskinen, a world-renowned Finnish designer, and Ken Hirst, an award-winning package designer based in New York.

Along with the new look, the brand has revived an iconic piece of its history: the facing reindeer on the logo. The bottle also features a redesigned label to ensure better visibility on shelves.

Platinum (pictured left) is Finlandia’s long-awaited entry into the luxury category. Made with Finland’s purest glacial spring water and finest six-row barley, Platinum is hand-crafted under the supervision of Finlandia Master Taster Marku Raittinen, passed over a bed of Finnish birch chips and then finished through slow arctic chilling to ensure ultimate smoothness.

Platinum’s bottle was inspired by the natural beauty of Finland.

The striking bottle depicts the essence of an icy Nordic landscape. Koskinen and Hirst collaborated once again to create the iconic new bottle for the super premium variant.

Platinum, Finlandia’s new super premium vodka, will be launched at this year’s TFWA WE and is expected to be available in the MENA region in the near future

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Jack Daniel’s Old No. 7 is a bestseller for Brown-Forman in the Middle East and North Africa; the company will soon be launching the new bottle design in the region

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

ml bottle of Gentleman Jack free with the purchase of two liters of Jack Daniel’s. “This promotion has proved to be a huge success everywhere we have run it,” McIver asserts.

While Jack Daniel’s Old No. 7 has grown tremendously in the region for Brown-Forman, the increasing popularity of Gentleman Jack is proof that there is great potential for JD variants and other brands in the region.

The company will soon list the Jack Daniel’s 1954 Gold Medal bottles and Woodford Reserve Special Finishes in MMI’s Le Clos outlet in Dubai Airport.

The only area of the MENA region that has slowed slightly for Brown-Forman of late is Egypt, but McIver expects business to pick up as tourism returns over time. Standout locations over the first half of 2011 included Dubai and Tel Aviv, where McIver asserts “exponential growth” was achieved.

With a stable of tried and true winners in addition to some exiting new entrants, Brown-Forman seems positioned to continue growing in the Middle East. “We’ve had a very positive first half of the year,” McIver concludes. “With a lot upcoming, including new products, listings and promotions, we’re looking forward to a great second half.” c

Liquor News

Davidoff XO cognac is a high-end blend composed only of old cognacs coming from the finest areas of the Cognac region

CL World Brands to launch Davidoff XO and Hine Triomphe at TFWA WE At this year’s TFWA WE, CL World Brands will present the new addition to the Davidoff cognac range, Davidoff XO. The spirit will be revealed for the first time at the company’s stand in Marine Village S7.

Davidoff XO cognac is a high-end blend composed only of old cognacs coming from the finest areas of the Cognac region. The result is a modern and elegant cognac characterized by hints of liquorices, prunes and honey presented in very audacious and contemporary packaging.

Also new at the CL World Brands stand will be a new ultra premium packaging for a

New Cutty Sark profile to be revealed at TFWA WE

The Edrington Group will use TFWA WE as the platform to unveil the first stage of a complete relaunch of Cutty Sark Blended Scotch Whisky. Following its acquisition of Cutty Sark in April 2010, The Edrington Group will be investing over £100 million (US$164 million) over five years.

The investment will include a new deluxe range that includes aged blends of Cutty Sark, a full packaging update and an expanded distribution plan that will see the brand enter new markets such as global travel retail, South Africa, Russia, Turkey and Brazil, as well as returning to several other markets including the UK. One of the primary objectives of the investment was to create a more contemporary signature yellow label with a revised clipper icon on a new shaped glass bottle to appeal in duty free and travel retail markets worldwide. The new design, exclusive to global travel retail, will be unveiled on the Maxxium Travel Retail stand at M53 in Green Village.

The Edrington Group plans to invest over £100 million (US$164 million) over five years to revamp the popular Cutty Sark brand

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most exceptional cognac, Hine Triomphe. The prestigious blend was first created in 1888 by Thomas Edouard Hine to celebrate triumphing over the phylloxera crisis that threatened to wipe out French vineyards back in 1872.

The crowning glory of a heritage passed down through several generations, Hine Triomphe is an exceptional blend of over fifty selected rare Grande Champagne cognacs aged for 50 years or more. With exquisite finesse and extraordinary complexity on the nose, Hine Triomphe is round and mellow on the palate and has a superbly long finish.

Nemiroff outperforms in travel retail Nemiroff recently announced that compared to 2009, the brand has grown 1.2% and total sales volume of spirits from Nemiroff reached 9.21 million cases, according to the World Millionaires Club rating, which is prepared on a yearly basis by Euromonitor International.

“A traditional and honorary position in the rating of the most popular international brands confirms that the business model of the Nemiroff Company is correct and effective,” says Alexander Glus, President of the Supervisory Board of the Nemiroff Company. “From 2006 to 2009, we worked on developing a platform for further growth.

As a result, a corporate management system was created in line with international practice where operational and strategic management are separated. A 100% transparent financial structure was developed, the distribution system in all markets was put in order, a single commercial policy was developed and the portfolio of marketing tools was balanced.”

In 2010 Nemiroff became the leader in the Ukrainian vodka market. According to the MEMBR-UMG Retail Audit in Ukraine LLC (MEMBR), the share of the international brand from December 2010 to January 2011 was 18.2% in monetary terms (UAH) and 17.5% in kind. In the last Brands from the Nemiroff portfolio have not only year, the company increased sales to US$473.6 performed well in million, which exceeds the 2009 result by European markets, but also internationally US$56.8 million (+13.6%).

Nemiroff has also reported strong results in the Armenian market. M-Info studied consumer behavior in Armenia using the “unprompted awareness” method, where respondents were not offered a list of brands or manufacturers and were free to make their own choices.

“It should be mentioned that the Armenian alcohol market is rather capacious,” said Nemiroff’s Marketing Director. “Our success was achieved not only due to excellent taste characteristics, but also due to the sustained quality of our products.”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Liquor News

Showtime for champagne Piper-Heidsieck and Rémy Cointreau Global Travel Retail

Rémy Cointreau GTR welcomes a glamorous new performance by Champagne Piper-Heidsieck Cuvée Brut at this year’s TFWA WE at Foyer 1A of the Marine Village.

The color of the red carpet, the glamour of the footlights and the seduction of the renowned French Cancan combines in this limited edition bottle dressed by worldfamous couturier Jean Paul Gaultier.

The Champagne Piper-Heidsieck Cuvée Brut “French Cancan par Jean Paul Gaultier” wears a black latex dress and fishnet stocking with a red mask at the neck suggestive of mystery and passion. An exceptional showcase for its vibrant fruity bubbles, Rémy Cointreau GTR notes that “the eyeliner black complements lipstick red perfectly, defining and enhancing like the sheath dress of a seductive diva.”

The company also notes that Champagne Piper-Heidsieck Cuvée Brut French Cancan par Jean Paul Gaultier will soon be found in high class bars, restaurants and selected travel retail outlets including Paris CDG, Brussels, Singapore, Ho Chi Minh, Kuala Lumpur and Bangkok.

At this year’s TFWA WE, Rémy Cointreau GTR will present the new Champagne Piper-Heidsieck Cuvée Brut French Cancan par Jean Paul Gaultier

The Naked Grouse to be revealed at TFWA WE The Naked Grouse, the latest addition to The Famous Grouse family, will be revealed for the first time in global travel retail at TFWA WE at the Maxxium stand (M53 in Green Village). Already an award-winner in domestic markets, this premium blended whisky contains two of the world’s most renowned malts—Highland Park and The Macallan— slow-matured in sundried Spanish sweet sherry casks to give the blend unrivalled smoothness.

The Naked Grouse has already won a Gold Best in Category Medal in the International Spirits Challenge, a coveted Masters Award in the premium blends category of the Scotch Whisky Masters and the prize for Bottling of the Year under £35 in the Scottish Field Whisky Challenge 2011.

Steven Sleigh, Area Director Global Travel Retail, The Edrington Group: “We are delighted to add this extraordinary new blend from The Famous Grouse family to our travel retail portfolio. Travel retail is a hotbed of innovation and The Naked Grouse represents a significant departure from the usual style of blended whiskies, but one which boasts a proud heritage.”

The Naked Grouse contains two of the world’s most renowned malts—Highland Park and The Macallan— slow-matured in sundried Spanish sweet sherry casks

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

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Company News: Arnold André

Staying competitive

Handelsgold Sweet Chocolate Cigarillos are the latest flavored product in the range; other bestsellers from Handelsgold include Peach, Cherry, Vanilla and Classic varieties

Arnold André maintains its identity as a family-run business while teaming with the Tobacco House of Sweden and releasing new products ahead of this year’s TFWA WE BY RYAN WHITE

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hen the Tobacco House of Sweden (THS) was founded earlier this year, four of the biggest international players in tobacco were effectively merged. THS is made up of German cigar company Arnold André, Mac Baren Tobacco Company of Denmark, Heintz van Landewyck of Luxemburg and AG Snus of Denmark.

THS is now the only vendor in Sweden that can offer tobacco retail the complete portfolio of tobacco products: Swedish Style Snus, cigarettes, cigars, cigarillos, pipe tobacco, rolling tobacco and chewing tobacco. This concentrated supply bundling is a great advantage for the retail market because it can access very profitable internationally well-known brands of the highest quality and profit from the expansive THS knowledge base.

Arnold André has been located in Buende since 1851. However, the company was founded 34 years earlier in Osnabrueck. In 1905, Buende finally became the headquarters of the family business. Today Arnold André is managed in the seventh generation

by Axel-Georg André and is considered one of the most important companies in the worldwide cigar industry.

Gulf-Africa Duty Free recently spoke with Konstanze Marth, Export Manager at Arnold André, about the venture. She also told us that Arnold André will be at this year’s TFWA WE with some new and existing products that are sure to please cigar lovers.

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“The trend these days seems to be that the bigger companies keep getting bigger and there are only a few family-run businesses left,” she says when asked about THS. “This initiative is really about a number of family-owned businesses getting together to share expertise and support each other.

“This is really our way of continuing to improve and remain competitive with the bigger companies,” she adds.

In addition to the Tobacco House of Sweden, one thing that’s certainly helping Arnold André remain competitive is its stable of bestselling products. The company recently released Handelsgold Sweet Chocolate Cigarillos. While chocolate is certainly a popular flavor, Arnold André also offers other Handelsgold taste variations such as Peach, Cherry, Vanilla and Classic.

Arnold André reports that international sales have tripled since the introduction of Handelsgold Sweets. The attractive price, trendy aromas and attention grabbing presentation at the POS have reportedly resulted in price-sensitive smokers spontaneously picking Handelsgold Sweets. The Sweets are in especially high demand in the Netherlands, Sweden, Greece and Eastern Europe, says Arnold André, and Austrian and Swiss smokers have also acquired a taste for them.

The new Sweet Chocolate flavor has a sweetened mouthpiece, a pleasurable chocolate aroma and a dark wrapper. The product is available in a 5-pack for a very com-

Clubmaster Mini cigarillos continue to be one of Arnold André’s most successful ranges; a chocolate flavored variant was recently introduced

petitive price. Depending on available space, there are several forms of merchandising presentation available: a large Handelsgold Tower, a Handelsgold dispenser, a counter display or a shelf unit.

“The dispenser has been a particularly effective way of selling Handelsgold Sweets,” Marth explains. “It brings to mind a dispenser in some discount or bulk stores. Combined with the very competitive price, this means that a lot of people reach in a grab a cigar or two when at the counter.”

In addition to Handelsgold, Marth asserts that Clubmaster Minis are still performing very well. The Clubmaster Mini line includes Superior Vanilla, Mini Vanilla Filter, Mini Sumatra and the recently released Clubmaster Chocolate variety.

“A lot of competitors have incorporated chocolate in some way or another, but it’s very hard to get a good flavor,” Marth explains.

“With the new chocolate-flavored Clubmaster Minis, we worked really hard to get a pleasing chocolate taste and aroma. The product has already proven itself domestically in Germany and it’s now available worldwide.

“Our Vasco de Gama range also continues to gain popularity domestically and in duty free, so all in all it’s been a very positive first half of 2011,” she concludes. “We’re looking forward to meeting with our partners in Cannes and showing them the new c products we have on offer.”

Company News: STG

Upping the ante STG continues to strengthen its position through the merger with Swedish Match cigars and new brands within the Café Crème range BY RYAN WHITE

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candinavian Tobacco Group’s (STG) merger with Swedish Match late last year effectively created the world’s second-largest cigar company in one fell swoop. Although the company hasn’t released any new products this year, sales are still strong given the popularity of existing offerings.

The company is riding high on the strength of its Café Crème range. Variants such as French Vanilla and Italian Machiato were released in 2010, along with Café Crème Finos Regular, Blue and Arome. This year, STG will focus its efforts on giving traveling consumers more incentives to purchase its brands in duty free.

Dick Noordzij, International Business Manager at STG, says that another priority for the company is an ongoing concentration on making sure business remains strong in the Middle East: “Although we are still finetuning our Middle East duty free business due to the merger between Scandinavian Tobacco Group and Swedish Match, we are happy to announce a double-digit increase in the area during the first half of 2011 compared to the same period last year.”

As mentioned, the Café Crème line, specifically Café Crème Blue and Regular, is STG’s bestseller in global duty free. Currently the company is focusing on Middle Eastern duty free, and Noordzij says that the response to all line extensions from operators in the region has been very positive. The lion’s share of sales are made in Dubai Airport, but he reports strong performance across the region.

Supply and demand Besides the fact that STG produces some very high-quality cigarillos, the company has benefitted from listening to consumers.

Central to the popularity of Café Crème’s

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popularity in the Middle East, and indeed all over the world, is that the range perfectly satisfies many consumers’ needs for a smaller cigarillo that still carries a big taste and can be smoked over a shorter time frame than traditional cigars.

“Given the popularity of the cigarillos format,” Noordzij says, “plans are in the works to release a range called Café Crème Filters & Flavors in the future. We’re planning on starting with three different variants. The Middle East smoking environment is moving towards a quick filter and flavor smoke.

Of course, there will always be the need The Café Crème line is STG’s bestseller in the Middle East for handmade cigars presented in unique packs specially designed for duty free. reaches an estimated annual turnover of We have all of these options in our portfolio approximately €800 million (US$1.16 biland therefore satisfy these particular needs. lion) and sales volumes of more than 2.5 bil“Next to CAO we are now able to offer lion cigars, 2,175 tons of pipe tobacco, 3,170 the leading handmade cigar in USA domes- tons of fine-cut/roll your own tobacco and tic, Macanudo, to the global duty free mar- 450 million little cigars. ket. Apart from this top brand, we will also With the acquisition of Lane STG’s brand introduce two small machine-made cigar- portfolio will be extended to include Capillos under the Macanudo flagship brand tain Black pipe tobacco and little cigars, as name: Macanudo Club Cigarillos and well as Winchester little cigars. The Lane Macanudo Club Mini. These exquisite cig- fine-cut tobacco brands Bugler and Kite arillos are packed in 5x20 flightpacks devel- extend STG’s significant fine-cut/roll your oped for duty free.” own tobacco market position in ScandiWhen asked which demographics pur- navia to include the position as the leading chase STG’s products in the Middle East, fine-cut/roll your own tobacco manufacNoordzij says that UK travelers are good turer in the US, securing the company a customers. The company is also benefitting significant platform to expand its business. from a burgeoning middle class in India “We’re currently looking into how and that is traveling—and purchasing—more where to relaunch Captain Black little filtered than ever. Pakistanis round out the top three cigars, mini cigars and pipe tobacco in duty in terms of purchases. free,” Noordzij explains. “BAT formerly handled the brand and will continue to do so in select domestic areas. Hopefully soon we’ll Continued investment STG recently acquired Lane Ltd. for US$205 have some news on the reintroduction of c million. With this latest development, STG these new brands in duty free.”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Company News: Oettinger Davidoff

More than a cigar

For Davidoff and its customers, the ultra-premium cigar is a statement that defines success BY ANDREW BROOKS

I

n 2010, the Middle East market was a challenging one for cigar maker Davidoff as a result of the implementation of new tobacco allowances in Turkey in 2009. Despite setbacks, Davidoff closed off 2010 with positive results thanks to growth in other markets, says Area Sales Manager Susanne Lüthi.

“We clearly felt a rebound around the second quarter of 2010,” she notes. “The current political situation in some Middle Eastern countries is worrying us, but we stay confident and are convinced that 2011 will be a good year overall.”

2010 saw a lot of improvements that are now materializing in the first half of this year, says Lüthi. In the Middle East market, the company is now working closely with the Bin Mahmoud company, which holds the cigar concession at Abu Dhabi Duty Free, and Davidoff products are available at shops in both arrivals and departures.

Davidoff recently announced the opening of the first Davidoff Cigar Lounge in Jeddah, Saudi Arabia, located at the Marina next to the new Park Hyatt Hotel. “This will undoubtedly reinforce our brand and product positioning among Saudi customers and visitors,” Lüthi says. “It will certainly have an impact on our duty free sales, since Saudi customers are largely traveling across GCC [Gulf Cooperation Council] and Middle East countries.” Plans are afoot to establish new partnerships with the objective of setting up other cigar lounges across the Middle East.

Davidoff also started off the year with some new distributor relationships: Cigalah Group for the Saudi Arabian domestic market, IDFT&A for duty free in Egypt and Jashanmal and Sons for both domestic and duty free in Bahrain.

In terms of products, the Puro d’Oro cigar line, launched at the end of 2010, continues to generate strong demand among passengers. Puro d’Oro is the end result of many years of development by Hendrik Kelner, a renowned tobacco expert who also serves as Davidoff’s Manager in the Dominican Republic. In the Middle East and Gulf markets, Puro d’Oro has been launched via Dubai Duty Free, ATU Duty Free, Syria Duty Free and others. More channels will come online as the year progresses.

In June, the Puro d’Oro groundswell got a boost with the launch of Puro d’Oro Momentos. With the trademark Davidoff gold band, the handrolled Momentos feature a Dominican binder and filler tobaccos that produce a spicy, full-bodied smoke with hints of coffee. As the name suggests, they are tai94

lored for customers who are pressed for time but still want a recognizably Davidoff smoking experience.

The Momentos launch followed on the heels of the introduction of the Lancaster, part of the Winston Churchill line inaugurated with four different longfiller cigars in 2008 and completed in 2009 with the Winston Churchill Spitfire. The Winston Churchill Lancaster cigar is a larger version of the Spitfire. In a Belicoso format, the cigars come in a striking red tin, and offer a strong, balanced combination of specially fermented and aged Lancaster is the larger version of the Spitfire tobaccos that serve up a linin Davidoff’s Winston Churchill line gering hint of fresh-roasted coffee beans.

The new Puro d’Oro Momentos For accessories, Davidoff has an active launch schedule. The regular assortment as well as the Davidoff Collection—which features products on limited offer and/or for a limited time period—rank among the top-selling smoking accessories. “The Davidoff Collection is doing great since its launch last year in the Mideast,” says Lüthi, “and we’re looking to broaden our sales points in 2011.” Recent launches have included exclusive products such as alligator cigar cases, China lacquer and rose gold lighters.

This year marks the 100th anniversary of the very first Davidoff boutique, which opened in Geneva in 1911. To commemorate the anniversary, an invitation-only soirée was held in June in Geneva at the Domaine de Choully. The “Davidoff 100 Years Geneva” cigar in Toro format was created especially for the event. At press time, this limited edition cigar was about to be rolled out to Davidoff flagship stores.

At Cannes this year, in addition to showcasing the new anniversary cigar, Davidoff will keep the momentum up on the Puro d’Oro line at stand RH8 in Rivc iera Village.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Tobacco News

De Santis is already sold in Red and White varieties; just as the other cigarettes in the range, Black De Santis will be available in regular and slim formats

Monus Tobacco Company announces the release of Black De Santis line extension

Monus Tobacco Company recently announced the launch of Black De Santis as an extension of its popular De Santis range of cigarettes. Monus says that the new premium offering is “intended for people with high esthetic criteria and good taste. A well-balanced mixture of the finest tobacco combined with top-quality design provides exquisite smoking pleasure.”

De Santis is already sold in Red and White varieties. Just as the other cigarettes in the range, Black De Santis (tar: 9 mg; nicotine: 0.9 mg; carbon monoxide: 10 mg) will be available in regular and slim formats. All versions are sold in a unique octagonal packaging that aesthetically brings together the themes of modernity and tradition.

"In addition to the launch of the new extension in the De Santis range, we’re currently in the developmental stage for a new brand in the super premium segment," explains Živojin Zorkic, General Manager at Monus.

"We pride ourselves on innovation and for this reason continually seek to offer our customers more choices.”

Monus is currently listed with Dufry Serbia and Hellenic Duty Free Shops in Greece. In Africa, Monus is listed in airport stores in Uganda, Tanzania, Kenya and Ethiopia, and the company is currently in negations with operators in Iraq, Iran, Syria, the UAE and Jordan. Most recently, Monus entered the Asia Pacific market with Monus Aroma Slim cigarettes, which are available in strawberry, grape and apple flavors. The company’s products are listed with Duty Free Shops in the Philippines, Indonesia, Vietnam, Laos and Macau.

Bommidala launches superslims and roll your own brand Innovation has been second nature for the BBM Bommidala Group, India’s leading seed-to-smoke integrated cigarette producer and exporter with an annual capacity of more than six billion sticks. Right from its inception 90 years ago, founder and Chairperson Bommidala Bhanu Murthy decided that the world was his market. He began exporting to Japan and Hong Kong as early as the 1950s.

The company’s most well known brands are Bright, Deal, Lucky Mild, Miles, Pride, Ruby, Smart and Deal Super Slim. The company has a worldwide footprint and strong partner networks, exporting to more than 84 countries and serving clients in Europe, the Americas and Asia. Among its longtime customers are Phillip Morris and Imperial Tobacco. The company’s most recent product pushes in the Gulf-Africa duty free market are superslims and a roll your own brand called ROLON, which the company says is receiving encouraging support from European travelers.

“There is also a premium brand of BBM called PRIDE, which is a good American blend smoke with Recessed dual Filter,” says Naveen Natarajan, President, Business Development (MEA & Central Asia).

“From time to time we keep changing the promotions on cigarettes sold in the duty free market,” he says.

“Sometimes it’s with attractive gifts like a watch or a pearl necklace attached to the outside of the box, or sometimes the promotion is more aggressive by offering ‘buy one, get one free,’ depending on the season.”

At TFWA WE, Bommidala’s chairperson Raja Bommidala is expected to be present to meet with officials from the other large producers whose products are sold by BBM in the duty free shops of the Asian subcontinent.

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING SEPTEMBER/OCTOBER 2011

Publicly traded pioneer leads electronic cigarette industry Since 2008, electronic cigarettes have become increasingly popular as an alternative to smoking traditional tobacco cigarettes given the fact that e-cigarettes can be used virtually anywhere. At the forefront of this burgeoning movement is pioneering e-cigarette company Vapor Corp. [OTCBB: VPCO], which offers a range of e-cigarette brands—from the rechargeable Fifty-One brand to the disposable Krave brand—to satisfy the varied needs of virtually any smoker.

“Vapor Corp.’s e-cigarette brands are distinct from many other e-cigarettes available today, both in terms of the quality and the cutting-edge technology employed,” says Adam Frija, Director of Business Development at Vapor Corp. “Our electronic cigarettes do not emit any second-hand smoke. Instead, our products emit an odorless vapor. Our electronic cigarettes look like, taste like and feel like a cigarette, but they aren't cigarettes."

The filter of the Fifty-One contains flavoring, nicotine and an atomizer that essentially vaporizes the nicotine. When you inhale, a microcomputer activates the atomizer and the battery (contained in the white part of the e-cigarette).

The end of the Fifty-One even glows when you puff it.

Over the last 3 years, Vapor Corp. has crossed into virtually every distribution channel available in the US, such as convenience stores, tobacco shops and supermarket chains. The company also sells direct-to-consumer on its website and has carved out a very respectable niche selling in mall kiosks throughout the US. The worldwide duty free channel is attractive to a company like Vapor Corp. for two main reasons, says Frija: “First of all, airports are very high-traffic areas for retail, which is what any company looks for. Furthermore, e-cigarettes are a perfect fit for the duty-free customer, for the busy traveler on the go. Vapor Corp. has increased its business exponentially year over year since its inception and I have no doubt that both the traveling public and the duty free industry will see immense value in our brands.”

The Fifty-One starter kit will retail in duty free for about US$100; a refill cartridge costs US$3 and each can last as long as two pack of traditional cigarettes

New & Notable The Balvenie Tun 1401

LIQUOR & TOBACCO

Company: William Grant & Sons Description: A wonderful expression which includes rare liquid from a number of casks specially selected by the industry’s longest-serving Malt Master, David Stewart and married in Tun 1401 at The Balvenie distillery Booth: Golden Village GO 2

Amarone Prêt a Porter

Company: Distilleria Bottega Description: Distilleria Bottega has joined forces with renowned American designer Denise Focil to create a stylish yet luxurious wine. The bottle features a white leather label and is nestled in a white leather case embellished with black lettering – a collectible piece reminiscent of a vintage suitcase Booth: Yellow Village A16

Amarula

Company: Underberg Description: Amarula is based on the spirit distilled from the fruit of the marula tree. Amarula is double distilled and aged for two years in small oak barrels before blending with fresh cream. The liqueur is fresh, smooth and has a creamy consistency, with tones of vanilla, caramel and nut Booth: Red Village K9

Handelsgold Sweet Chocolate Cigarillos

Company: Arnold Andre Description: The new “Sweet Chocolate” flavor has arrived with a sweetened mouthpiece, a pleasurable chocolate aroma and a dark wrapper. The affordable cigarillos are available in a five pack

CONFECTIONERY Butlers Seasonal Collections

Company: Butlers Chocolates Description: This year, Butlers will launch deluxe gifting packs, featuring impressive new selections of delicious alcohol free chocolate assortments, aimed at celebrating special occasions Booth: Green Village L73

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

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New & Notable CONFECTIONERY

Oreo Cookie

Company: Kraft Foods World Travel Retail LLC Description: Oreo makes a sweet entry into the travel retail market with a range of six exciting novelties. The unique product range, covers everything from snacking to gifting Booth: Riviera Village RG 5

Chinese “Year of the Dragon” Limited Edition Tins

Company: Nestlé International Travel Retail Description: These two exclusive tins are designed not just for Chinese New Year but as a whole year gift sales opportunity. The high qualitaty tins – in red, silver and gold for SWISS and red and gold for KIT KAT – are embossed with Dragon graphics and have a premium look and feel Booth: Gold Village G03

HANDBAGS The Civilian Fall 2011 Collection

Company: Tumi Description: The new collection is destined for world markets, combining casual sophistication and urban sensibility.

Its clean, modern styling is brought to life with ultra-functional pockets and versatile compartments to organize one’s essential accessories. All bags are made from lightweight, durable and water-repellant nylon fabric with contrasting pops of color and leather trim details Booth: Riviera Village RG 14

JEWELRY AND WATCHES Jacques Lemans Porto for Men

Spring/Summer 2012 Sportina

Company: Bric’s Spa Description: The Sportina collection is available in many bold and vibrant colors and centres around the goal of providing customers with functionality Booth: Riviera Village Stand RA7

Company: Harston Group Description: These sporty dynamic chronographs have a striking dial design and feature a solid stainless steel case, special hardened mineral crystex and a high grade caoutchouc-grain leather or rubber strap with Jacques Lemans lettering Booth: Yellow Village B 23

Necklace Bolero

Company: Antica Murrina Veneziana Description: Antica Murrina presents the Bolero line characterized by retro style. The collection features twisting glass rings decorated with spirals of micro aventurine. The beads are incorporated with a classic silver leaf and 24 karat gold leaf Booth: Blue Village D12

Ripples Collection (Bracelet)

Company: Clogau Gold Description: Stylish contemporary boldness fuses with an elegant design in the new Ripples Collection.

Inspired by the movement of a ripple of water, rose quartz circular forms are handcrafted, imitating the glistening of water Booth: Yellow Village D35

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