Gulf-Africa Duty Free & Travel Retailing by Paramount Publishing Ltd.

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

TFWA WE 2012

Growth at Muscat p.

Tourvest’s web ambitions p.

Estée Lauder p. shines

Roland Abella helms Diageo p.

Letter from the Editor

Long-term vision t’s clear from examining the trajectory of the travel industry across the Middle East and North Africa over the first seven months of the year that the impressive gains seen in passenger numbers during the first part of 2012 are now slowing. Is it cause for concern? It really depends who you ask. While the International Air Transport Association (IATA) notes a slowing of premium and economy class bookings in the Middle East in July, there are plenty of airports in the MENA region that are continuing to post strong numbers, including Dubai, Abu Dhabi, Queen Alia and Muscat Airports just to name a few. Slowing growth in the MENA region should indeed raise eyebrows but likely isn’t as much of a cause for concern as the negative numbers being posted in other parts of the world. Certainly, from the conversations that Gulf-Africa Duty Free has had with operators, the sense seems to be that the region is still in great shape. As you’ll see in this issue, retailers as diverse as Muscat Duty Free (p. 18), Dubai Duty Free (p. 22), International Duty Free Shops (p. 24), ATÜ Duty Free (p. 26) and Qatar Duty Free (p. 30) are all posting positive year-on-year revenues. Further indication that the industry in general is expecting mid- to long-term growth in the MENA region comes in the form of large-scale airport expansion projects. Dubai International’s Concourse A, the New Doha International Airport and expansions at Muscat International Airport are just three projects touched on in this issue of Gulf-Africa Duty Free. Finally, there’s no doubt that suppliers are still heavily invested in the region. In our conversation with Estée Lauder on page 52, the company calls MENA “a key region” and notes that a new Jo Malone store at Dubai International has seen consistent growth since its opening in April. Furthermore, Managing Director of Diageo GTME Roland Abella tells us on page 90 that the MENA region continues to contribute to the company’s growth, citing Lebanon and North Africa as significant standouts. Of course, it’s certainly advisable to keep a close eye on key indicators for the region as the year progresses. Nonetheless, some of our fears should be allayed by the bigger picture in the MENA region, which is largely one of growth and opportunity.

Gulf-Africa Duty Free & Travel Retailing (ISSN 0954-0592) is published four times a year (Spring, Fall and Winter) by Global Marketing Company Ltd., 26 Pearl Street, Mississuaga, Ontario L5M 1X2 Canada. It is distributed to duty free operators and distributors in the following countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE, Yemen, Algeria, Azerbaijan, Benin, Cameroon, Cape Verde, Djibouti, Egypt, Ethiopia, Gabon, Ghana, Guinea, Iran, Ivory Coast, Jordan, Kenya, Lebanon, Madagascar, Malawi, Mali, Mauritius, Morocco, Mozambique, Niger, Nigeria, Namibia, Pakistan, Reunion, Senegal, Seychelles, South Africa, Sudan, Syria, Tanzania, Togo, Tunisia, Turkey, Turkmenistan, Uzbekistan and Zaire, as well as to duty free suppliers worldwide. Subscriptions: $200 for one year, $300 for two years and $400 for three years. Art and photographs will not be returned unless accompanied by return postage. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor. October 2012, Vol. 22, No.2. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2012 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 ASSOCIATE EDITOR Melissa Silva melissa@dutyfreemagazine.ca ART DIRECTOR Patrick Balanquit patrick@globalmarketingcom.ca CONTRIBUTORS Andrew Brooks

ADVERTISING SALES

Kind regards,

Hibah Noor Editor hibah@dutyfreemagazine.ca

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

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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OCTOBER 2012 • VOL 22, NO 2

Contents 14 18 22 24

IN BRIEF New direction for passenger way-finding at Dubai International ■ 2012 MEDFA conference program takes shape ■ Africa’s aviation potential increases with industry and government support ■ Tourism expected to increase Bahrain’s GDP by US$2.04 billion per year

Dynamic duo The combination of steadily increasing passenger numbers at Muscat Airport and equally impressive sales at Muscat Duty Free bode well for the State of Oman

DUBAI DUTY FREE

A year of milestones A record sales day in August and outstanding passenger numbers at DXB may be good omens for Dubai Duty Free’s ambitious 2012 sales goal of US$1.64 billion

IDFS

High season calls With a focus on customer service and numerous renovations ongoing and planned, IDFS is in good shape for its peak season in Morocco

26 30

QATAR DUTY FREE

FLEMINGO GROUP

MUSCAT DUTY FREE

ATÜ DUTY FREE

INDUSTRY NEWS

Bucking the trend ATÜ Duty Free distances itself from the European economic crisis given a strong customer base of highspending Turks, Russians and Middle Easterners

Driven in Doha QDF’s Senior Vice-President Keith Hunter ponders premium brands, the whisky boom, Chinese travelers and close quarters in the leadup to the New Doha International Airport

TOURVEST DUTY FREE

Growth rates in passenger numbers are on the decline, and despite regional variations, the decline looks set to continue

New frontiers Flemingo Group re-envisions itself and takes steps toward the objective of US$2 billion turnover by 2020

JMG-RESEARCH

ESTÉE LAUDER COMPANIES

TRAVELLER LIMITED

DESIGNER PARFUMS

AJMAL PERFUMES

BEAUTY BEAT: FRAGRANCES

The invisible retailer Tourvest Duty Free develops an online retailing and preorder strategy integrated into airlines’ websites with the aim of offering a seamless customer experience

The slowing surge

Understanding the traveler JMG-Research prepares to unveil the results of its annual PAX behavior study at TFWA WE and gives Gulf-Africa Duty Free a taste of what the industry can expect

Stronger in the middle For Estée Lauder, the Middle Eastern travel retail market is a big factor in the company’s stunning sales growth

Made for the market The development of Traveller’s Voile fragrances will benefit from close customer targeting

Strategic scents The broad range of premium fragrances Designer Parfums manages requires a steady hand and a sound strategy

The spice of success Armed with a new “hero” ingredient, Ajmal Perfumes looks to new technology and aggressive promotions

Fragrance firsts New top-line scents for men and women

ABU DHABI AIRPORTS COMPANY

Show stealer With strong passenger numbers for H1 2012 and plans to again host the 2013 Abu Dhabi Air Expo, Al Bateen Executive Airport is stepping into the spotlight

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Contents

110 64 66

BEAUTY BEAT: FRAGRANCE & COSMETICS

FESTINA

Brighter colors and better tones set the pace

Fossil’s acquisition of Skagen Designs bodes well for both parties

Driving growth

Gulf-Africa Duty Free speaks with Managing Director of Diageo GTME Roland Abella about the company’s performance in FY2012 and what’s to come over the next 12 months

Soaring spirits Leading brands see good numbers ahead, despite economic jitters

RÉMY COINTREAU

BODEGAS TORRES

Greater than the sum

Enticing with exclusivity Rémy Cointreau Global Travel Retail targets the Middle East and Turkey with two new exclusive limited editions from St-Rémy and Metaxa

Playing fair

Making the rounds

Torres announces Santa Digna Estelado, a new fair trade wine, looks forward to excellent reds from this year’s harvest and receives nods from top international critics

Enjoying success in Middle Eastern domestic venues, Festina seeks the same in travel retail

FIX WINES & SPIRITS

72 74

JEWELRY REPORT

VF CORPORATION

LIQUOR REPORT

SKAGEN DESIGNS/FOSSIL

TOSCOW

Top tones

DIAGEO GTME

Color conquers It’s “the jewelry itself” in the Middle East, and Toscow has what the market wants

Rock stars

106 108

JAPAN TOBACCO INTERNATIONAL

110

BAT INTERNATIONAL

VF Corporation hopes its leading brands can share market momentum

MARS INTERNATIONAL TRAVEL RETAIL

Mars in motion Promotional finesse and the impulse factor bring the confectionery icon new successes

TROIKA

The gift of success Four concepts, four key categories anchor Troika’s travel retail success

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

FIX Wines & Spirits emerges as the go-to marketing and distribution partner in the Middle East and Africa for some of the world’s biggest brands

PERNOD RICARD GULF

Armed with bright gems and bold accents, these jewelers plan to stand out in Cannes

Travel smarts

Specialized knowledge

114

From global to local A good part of Pernod Ricard’s success in the Middle East comes from remaining true to global concepts while adding an all-important local spin

On the up and up In addition to a strong first half in terms of sales, JTI rebrands Mild Seven and makes important strides in smoking lounges in Dubai and Frankfurt

Driven to innovate Gulf-Africa Duty Free speaks with Darren Eaton, Head of Trade at BAT International, about its business in the Middle East and Africa, as well as what travelers can expect in the months to come

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In Brief

Day one of last year’s MEDFA conference; with a varied lineup of speakers for 2012, it appears that the organization is on track for another solid event

2012 MEDFA conference program takes shape The Middle East Duty Free Association (MEDFA) and TFWA have announced that the program for the 2012 MEDFA conference, which will take place on November 26 and 27 in the Jumeirah Creekside Hotel in Dubai, is taking shape. The focus of this conference will be the Middle East’s pivotal role in the global economy and specifically in the aviation sector. After an opening address by MEDFA President John Sime, keynote speaker Dr. Ghanem Al Hajri, Director General, Sharjah Airport Authority, will provide his views on the state of the aviation industry in the Middle East, looking at key growth factors and how airports in the UAE are prepared for future economic fluctuations. Dr. Costas Verginis, Director, Consulting Real Estate & Hospitality, Deloitte & Touche

will then present a wider perspective of the Middle East within the global economy against the backdrop of recent political turmoil. He will also discuss the impact of travel to and through the region by people from fast growing economies such as China and India. In “About Africa: focus on business in North & South Africa,” retailers and operators will assess the growth drivers, recent performance and expectations for the future in their respective markets. The focus will then be turned on the consumer in “Shopper insights: downtown and duty free,” with analysis of the shopping behavior of different customers in the two channels by specialists in Middle Eastern markets. Engaging the customer at all stages of the travel experience is the subject of “360° Communication,” led by experts in com-

munications technology and social media. The keynote speaker on the second day will be Stephan Pichler, CEO of Jazeera Airways, on “Building the brand in the Middle East.” He will present his insight to the future of the airline sector in the region. There will be a session on “Excellence in the air,” where creating positive customer experiences at close quarters is said to be key to successful retailing. This will be followed by a lively session on “Brand news: innovation in duty free & travel retail,” with contributions from international companies in the beauty, liquor and tobacco sectors. Finally, in “East meets West: a focus on China, India and the Chinese and Indian travelers in the Middle East,” the two Asian giants, which route millions of passengers through the Middle East, will go under the spotlight.

Tourism expected to increase Bahrain’s GDP by US$2.04 billion per year According to the World Travel and Tourism Council, the direct contribution of travel and tourism to Bahrain’s GDP is set to increase by 3.7% per year to US$2.04 billion between now and 2022, the Saudi Gazette reports. The report indicates that travel and tourism investment is expected to reach US$865 million in 2022 compared to US$545 million in 2011. Such investment is said to play a key role in attracting the anticipated annual visitor figures to over eight million arrivals in 2022, compared to five million foreign tourist arrivals in 2011. The report also states business travel spending in Bahrain is also expected to rise to US$449 million in 2022. The Chairman of Ishraq Gulf Real Estate Holding and Managing Director of Dubai International Capital Maissan Jalal Al Maskati is quoted in the report as saying the decision to invest was influenced by a number of factors, including confidence in the market’s healthy occupancy levels and hotel rates, as well as consumer demand. The newspaper reports that the recent opening of the Holiday Inn Express in Bahrain is another contributing factor according to Kamal bin Ahmed, Minister of Transportation and Acting Chief Executive of the Bahrain Economic Development Board (EDB). 14

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

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The change impacted everything from flight information display screens to boarding cards and airport reservation systems

In Brief

New direction for passenger way-finding at Dubai International Navigating through the world’s fourth busiest airport for international passenger traffic just got easier thanks to the installation of a new alpha-numeric system for gate numbering and way-finding at Dubai International. Based on industry best practice and in response to extensive customer research and feedback, Dubai Airports, airlines, ground handling and control agencies operating at Dubai International recently applied a new alpha-numeric system across all airport signage and computer support systems during an intense and highly coordinated eight-hour window. The change impacted everything from flight information display screens to boarding cards and airport reservation systems and required that more than 1,500 signs be changed. “Essentially we have looked at this through the eyes of our customers to help them find their flights with ease and convenience,” said Paul Griffiths, CEO of Dubai Airports. “Research shows us that passengers find an alpha-numeric system a far easier way to navigate their way through the airport and locate their boarding gate.” While Dubai International’s three terminals retain their current num-

bering, all concourses and departure gates have been renamed. Concourse 1, which houses over 100 international airlines, becomes Concourse C, with gates numbered C1 to C50. Concourse 2 becomes Concourse B, with gates B1 to B32. Finally, Concourse 3, the world’s first purpose-built A380 facility set to open next year, becomes Concourse A, featuring gates A1 to A24. On the other side of the airfield, gates in Terminal 2 have been numbered F1 to F6. The remaining alpha numeric sequences are being reserved for future airport facilities that are part of Dubai Airports’ US$7.8 billion expansion program, including Concourse D, for which excavation work commenced in June.

Africa’s aviation potential increases with industry and government support The International Air Transport Association (IATA) has reinforced its commitment to African aviation and called on industry and government leaders in Central West Africa to work together to make aviation an even more

integral part of African economic development and integration. Safety, regional cooperation and global standards for infrastructure funding were highlighted as key issues which must be addressed.

“African aviation supports 6.7 million high quality jobs and business activity totaling some US$67.8 billion. Aviation could play an even bigger role in facilitating Africa’s growth,” Tony Tyler, Director General and CEO, IATA “African aviation supports 6.7 million high quality jobs and business activity totaling some US$67.8 billion. Aviation could play an even bigger role in facilitating Africa’s growth and development. To achieve this, however, we need a team effort of government and industry focused on improving safety, adopting a coordinated policy approach and implementing global standards,” said Tony Tyler, IATA’s Director General and CEO, in a keynote address to open IATA’s Aviation Days in Dakar, Senegal. “The most pressing problem for African aviation today is safety,” said Tyler. In 2011, the continent experienced an average of one accident for every 305,000 flights using Western-built jet aircrafts. This was an improvement over 2010, when the average was one accident for every 135,000 flights, but it was still nine times worse than the global average. “It should be as safe to travel by air in Africa as it is in any other part of the world,” said Tyler.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

In May 2012, IATA, with the International Civil Aviation Organization (ICAO) and a host of other organizations committed to an Africa Strategic Improvement Action Plan aimed at addressing safety deficiencies and strengthening regulatory oversight in the region by 2015. The plan was endorsed as part of the “Abuja Declaration” by the Ministerial meeting on Aviation Safety and Security of the African Union in July. The next step is ratification at the Assembly of the African Union in January 2013. Tyler also called for a coordinated regional approach to aviation: “Africa faces many common challenges. In addition to safety, these include inadequate infrastructure, ‘brain drain’ and skills building, finding sources for capital, fleet modernization, building competitiveness and much more,” he said. An example of regional cooperation is the multi-state Agency for Aerial Navigation Safety in Africa and Madagascar (ASECNA), which was established in 1959 and provides air navigation services across a vast section of the African continent. “We look forward to working with them to continually improve service levels and cost efficiency,” said Tyler. “Aviation connectivity is about people doing business, products moving to markets and new opportunities being discovered. With a few kilometers of runway even the most remote location can be connected to the global village. This has a huge and positive impact on development,” Tyler concluded.

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Muscat Duty Free During the summer, MDF customers who spent US$60 or more were given a scratch and win card for the change to win instant prizes and be entered into the grand prize draw for US$13,000 in gold and jewelry

Dynamic duo

RYAN WHITE

The combination of steadily increasing passenger numbers at Muscat Airport and equally impressive sales at Muscat Duty Free bode well for the State of Oman

ulf-Africa Duty Free recently had the opportunity to speak with Tom Byrne, General Manager at Muscat Duty Free (MDF), to discuss business of late. He told us that sales at the stores are in line with passenger increases for the first eight months of the year, with standout categories being P&C, Watches, Tobacco, Spirits and Food & Confectionery. Byrne went on to tell us that he expects similar sales increases over the rest of the year. Of course, business during the remainder of 2012 will no doubt be helped by MDF’s regular calendar of promotions and recent renovations that have introduced a new La Moda Exclusives sunglasses boutique. We started off by asking Byrne about the socio-political situation in Oman, and he told us that by and large it’s been business as usual for MDF: “There had been some small scale protests raising socio-economic issues and for the most part these have been addressed by the Omani Government, and successfully so,” he said.

A history of growth During the first eight months of the year total international traffic at Muscat Airport grew by 18% to reach 3.7 million travelers. The increase was driven mainly by fleet and route expansions on the part of Oman Air, while quarterly traffic figures showed a gradual decrease in the intensity of the growth, starting with 21.4% in Q1, to 18.8% in Q2 and finally to 13.9% in July and August. Arriving traffic grew at a faster pace of 20.7% during the eight-month period when compared to departures. It appears that the slowdown in growth this year is just a hiccup in an overall success story for Muscat International Airport and the 18

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

region at large. Indeed, in 2000 the airport handled a total of 2,721,393 passengers and 69,696 tons of cargo, with a total of 36,082 civil aircraft movements. Last year, 6,479,860 travelers passed through Muscat International, while 98,780 tons of cargo were handled and 68,696 civil aircraft movements took place. Other than a dip of 218,308 passengers in 2008, Muscat International Airport’s growth has generally continued unabated for the last 12 years. The new terminal at Muscat is slated to be completed by 2014 and will have the capacity to handle 12 million passengers annually. Further expansions planned in three subsequent phases will ultimately boost the airport’s annual capacity to 24, 36 and 48 million passengers when the demand is required.

Keeping sales up Perhaps the most telling indication of the operating environment in Oman is the fact that MDF’s sales for the first eight months of the year grew a respectable 16% over the same period last year. In terms of the 18% traffic increase, Byrne tells us that the gap between the two figures can be explained by the increase in transfer passengers moving through the airport during the period. “Transfer passengers so far this year account for approximately 37% of total departing passengers at Muscat International Airport,” he explains. “The first eight months of 2012 saw a 19% increase in transfer passengers over January to August last year.” Many of these transfer passengers are laborers and tend to spend very little in duty free, due in part to limited time at the airport when transferring. The good news, though, is that a number of core categories are benefitting from increased spend by other

Of all MDF’s categories, P&C enjoyed the highest year-on-year sales increase this year at 34%

Sales in the Spirits category are up 14.2% in the first eight months this year as compared to the same period last year

travelers. To the end of August, P&C saw an increase in sales of 34%, making it the number one category in terms of year-on-year growth. Coming in second was the Watches category with an increase over 2011 of 23%. Tobacco saw the third-highest increase in sales at 16.2%, while Spirits followed with sales up 14.2% from the first eight months of last year. Finally, a solid increase of 11% was also seen in the Food & Confectionery category. In terms of products that are catching travelers’ eyes, Byrne mentions Johnnie Walker Red, Johnnie Walker Black and Chivas Regal in Spirits, as well as Amouage, Chanel and Christian Dior in P&C. Finally, in the Food & Confectionery category, favorites such as Nido, Tang and Master Foods account for the lion’s share of sales. Notably, MDF has also managed to increase the all-important statistic of average transaction value: “Our average retail value per basket in departures grew by approximately 6.5%, while in arrivals it grew by 1.5%,” says Byrne. “The noteworthy growth in average retail value per basket is driven by the premium product offers, increases in our product range and recent refurbishments. Based

on current sales trends, we expect our sales to grow by approximately 16% year on year during the remainder of 2012.”

Turning shoppers into winners The list of promotions that MDF has run so far this year—including giving away a luxury car, US$50,000 in cash and a Harley Davidson motorcycle—reads like a shopper’s dream. However, in addition to the above promotional events, MDF also runs regular seasonal promotions that are no less exciting. At press time, the operator’s most recent promotion was a Scratch & Win campaign run in the summer during May and July. Customers who spent more than OMR25 (US$60) were given a scratch & win coupon at MDF’s redemption counter. There were literally thousands of instant prizes of varying dollar values available to be won. Furthermore, every shopper with a scratch & win card had the opportunity to enter a grand price draw for OMR5,000 (US$13,000) in gold and jewelry. “Muscat Duty will continue its promotional calendar in the www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

Muscat Duty Free

Sales in the Spirits category are up 14.2% in the first eight months this year as compared to the same period last year

months to come, so watch out for plenty more promotional and product action from one of the most active duty free shops in the region,” Byrne says.

A premium experience As mentioned, MDF’s sales increases have as much to do with store refurbishments as they do with promotions and product mix. The operator regularly updates category spaces as a means of giving shoppers the products they want in a suitably upscale environment. Most recently, a Moda Exclusives sunglasses boutique was added to MDF’s departures store. The space is characterized by artistic, elegant styling that lends a contemporary look and feel which coincides nicely with Moda Exclusives’ values. At the boutique, shoppers will find sunglasses from brands such as Prada, Gucci, Emporio Armani, Fascino, Chloe and Nina Ricci. “The new boutique at MDF has a trendy, upmarket feel with

customer-friendly displays, making shopping for sunglasses a premium experience,” notes Byrne. We asked about upcoming developments where renovations and stores are concerned, and Byrne told us that shoppers can expect to see a Lacoste shop-in-shop in the near future in MDF’s Departures location. “We are very excited about it,” Byrne says. “We are confident that with the continued success of Oman Air and their ever-growing network, premium brands like Lacoste will perform very well.” While at press time Byrne couldn’t comment on other upcoming changes to the stores, he did tell us that this type of activity is ongoing at MDF: “Watch this space. We have a lot of plans to further develop our retail offer at MDF. The industry, the brands and passenger preferences are always evolving. As such, MDF constantly monitors trends to ensure that the product offering and selling c spaces are up to date and appealing to travelers.”

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

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Dubai Duty Free

A year of milestones A record sales day in August and outstanding passenger numbers at DXB are BY

RYAN WHITE

good omens for Dubai Duty Free’s ambitious 2012 sales goal of US$1.64 billion

xecutive Vice Chairman of Dubai Duty Free (DDF) Colm McLoughlin was kind enough to sit down with Gulf-Africa Duty Free to discuss current sales, as well as the work going into making sure that travelers continue to spend in the lead-up to the year’s end.

A beautiful day

“In the Perfumes category the top two selling brands are Chanel and Dior, followed by Giorgio Armani,” McLoughlin explains. “In the Liquor category the top two selling brands are Johnnie Walker and Chivas Regal, because the category is dominated by sales of whisky, which contribute almost 50% [of sales in the Spirits category].” Whisky is followed by Cognac, which has seen excellent performance due to demand from emerging markets. The top selling brand in Cognac is Hennessy, says McLoughlin. In Gold category sales, 22 karat jewelry is in the first place position followed by gold bullion coins.

For the first half of the year, DDF’s sales were up 11% while penetration stood at 49%. These are certainly respectable statistics, and yet the operator’s staggering 2012 sales goal may make it difficult for many to truly get a sense of the day-to-day sales that DDF is generating. This past August 16 is a good example of just how much In addition to the highly popular and ongoing Finest Surprise and activity can happen at DDF’s stores in a single day: As the result of Millennium Millionaire promotions, McLoughlin tells us that a number of special Eid offers on a variety of products, sales at DDF’s DDF’s purchasing team is constantly working with suppliers to stores on that day alone soared to Dhs30 million (US$8.25 million). Other than the operator’s highly anticipated anniversary day, where there are any number of sales across categories, August 16 stands out as a record day for DDF. Colm McLoughlin, Executive Vice Chairman, Dubai Duty Free Further good news for the operator is that in addition to passenger increases at Dubai “ensure that there are any number of promotions taking place that International this year, average spend has also shown a double-digit will add to the customer’s retail enjoyment while providing a value increase. “The average spend per departing passenger year to date for money proposition.” As of press time DDF was running major promotions in conis US$48 and US$9 per arriving passenger, bringing the overall average spend up by 13.46% year to date,” McLoughlin told us near the junction with Jack Daniel’s—giving travelers a chance to win a Harley Davidson Motorcycle—and Peroni Beer—offering a trip to end of September. Italy. An upcoming promotion in cooperation with Fosters will give customers a scratch and win card on every purchase for the chance In terms of the categories that are attracting shoppers at DDF’s stores, to walk away with a new Samsung Galaxy SIII. it’s no surprise that Perfumes (+15% to August), Spirits (+15% to August) But whether it’s promotions, renovations or new stores, McLoughand Gold (+10% to August) make up the top three. Of course, one lin tells us that DDF’s activities always center on bettering passenof the keys to DDF’s success is making sure that the right brands are gers’ experiences when visiting Dubai International: “With an operlisted in store for the traveler profiles passing through the airport. We ation the size of DDF, there are constant projects in hand,” he asked McLoughlin about what brands are hot at the moment, and his explains, “and we are always looking for opportunities that will c answer indicates a clear trend toward premium products. improve our overall retail offer for the consumer.”

Making it an experience

“Sales year-to-date have reached US$1.14 billion and we are confident that we will reach our projected sales target of US$1.64 billion by year’s end.”

All about the brands

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

The new store at Rabat Sale Airport, opened January 21, will be the site of a new Wine and Cigar concept store scheduled to launch later this year

IDFS

High season calls

With a focus on customer service and numerous renovations ongoing and planned, IDFS is in good shape for its peak season in Morocco BY RYAN WHITE

n our last interview with Revic Tantoco, General Manager of IDFS, we discussed the large-scale reorganization of the company, which included streamlining through a concentration on business development, a redoubled focus on fostering a good relationship with the Government of Morocco, 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. We caught up with Tantoco just before this year’s TFWA WE in Cannes to speak about sales, passenger traffic at the airports where the company operates, upcoming renovations and new stores. It’s clear that a year after the reorganization of the business, IDFS is in a better position than ever going into high season in Morocco.

Gulf-Africa Duty Free: Can you give me the most recent passenger traffic statistics at the airports where you operate? How does this compare to previous months? Revic Tantoco, General Manager, IDFS: The month of August registered the highest passenger traffic so far this year. However, this is just a 0.42% increase from the total number of passengers registered during the month of July. In terms of monthly passenger traffic, there has been an average monthly increase of 25% since January, but the growth declined during the month of August, possibly due to the observance of Ramadan, which occurred from July 20 to August 19. 24

GADF: In terms of sales/average ticket/penetration, can you give me your latest statistics? How does this compare to the previous months this year? Are sales ahead of passenger numbers? RT: Sales for the month of August are 2% higher than the previous month’s sales. Notably, however, this figure is 21% more than last year’s sales during the same month. In previous years August contributed the highest sales over the course of the year but due to the effect of Ramadan this year, the month only ranked fourth among the first eight months of 2012. Average ticket for the month of August is 0.32% more than last month, but 1.16% less than the average year-to-date expenditure per customer. The average market penetration for August stood at 8.24%, which represents an improvement of 6% versus market penetration in July. Furthermore, this figure is 17.27% higher than what was registered in August of 2011. Finally, sales are ahead of the passenger numbers. During August we posted an increase of 21% over last year’s sales of the same period, as opposed to passenger number which posted a decline of 7% compared to the same month of last year. GADF: What are your forecasts for sales for the rest of the year? RT: We are expecting a higher sales turnover for the rest of the year as our peak season has just started. Provided the passenger numbers don’t suddenly start declining, we

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

expect to hit our sales targets for the next four months. GADF: Can you tell me your top three selling categories? RT: Our highest selling category is Tobacco. Some popular brands within the category include Marlboro, Winston and Philip Morris. Fragrances & Cosmetics comes in second, with brands such as Chanel, Christian Dior and Paco Rabanne. Finally, Wines & Spirits is third place in terms of sales and popular brands include Heineken, Johnnie Walker and ABSOLUT Vodka. GADF: In terms of purchasing habits, are you noticing any major shifts lately? Who are your main customers? RT: There are no major shifts to speak of. Our main customers are French tourists. GADF: Can you explain some recent or upcoming promotions? Which brands are involved and what are the mechanics of the promotions? RT: We recently concluded our first ever tieup with Ryanair, wherein we offered an exclusive 15% discount to all Ryanair passengers. This great discount was offered from May to July in three of our locations—Marrakech, Agadir and Fes. Indeed, this tie-up promotion was successful as it increased customer traffic and customer spend at these three locations. In terms of other activities, in order to have strong brand recall, we are currently focusing on our institutional promotion,

Pictured are IDFS operations in Marrakech; the operator is upgrading the store and also working with Japan Tobacco International on some category solutions for tobacco

IDFS has a number of renovation projects at Casablanca ongoing and due for completion by November of this year

called Express Savings. This is our standard promotional campaign and it offers a 15% discount with a minimum purchase on selected merchandise. Finally, for the upcoming holiday season, we will be running our Holiday Treats promotion. Pairings of merchandise from different

August passenger traffic at Moroccan Airports Airport Casablanca Marrakech Agadir Tanger Rabat Oujda Fes Essaouira Al Hoceima Total

August passenger traffic 322,000 132,000 57,000 44,000 18,000 31,000 33,000 1,900 5,400 642,900

categories will be bundled and the idea is that these bundles will serve as quick gift ideas for our on-the-go customers.

products, ensuring top notch customer service will also be a priority for IDFS here. These changes will take effect by January 2013.

GADF: Have you recently completed any renovations? Are any renovations planned for the near future? RT: We’ve actually got a number of renovation projects on the go or planned for the near future. In Casablanca, we’re adding a dedicated boutique space for the Watches, Sunglasses and Jewelry categories. The aim of the project, which should be completed by November of this year, is to better serve our customers by offering them a good selection of products across these three categories. We’re also working on a perfumery boutique at Casablanca, which should be completed around the same time. Notably, it will be located in a new selling space near a high-traffic area. In Marrakech we’re upgrading the store and also working with Japan Tobacco International on some category solutions for tobacco. Other categories that will benefit from the upgrade include Wines & Spirits, Gifts & Accessories, Confectionery and Fashion. Again, these renovations are designed with the customer in mind, allowing for better flow and quick checkout. Additionally, we’ll be increasing the selling space at our Lacoste boutique in Marrakech as well as upgrading to Lacoste’s new store concept. By November of this year, travelers passing through the airport should see these changes take effect. Finally, at our diplomatic duty free store, we’ll be upgrading all categories to ensure that the standard of the store is up to what our clientele expect. In addition to an improved ambience and better presentation of the

GADF: In terms of new store openings, are there any developments to speak of? RT: In 2013 at Fes Airport, we’ll be opening a new store which will sell Tobacco, Wines & Spirits, Fragrances, Gifts and Fashion & Accessories. We’re targeting the high percentage of European tourists passing through the airport with this opening. Additionally, we’ll be opening a Wine & Cigar Boutique in 2013 in Rabat Sale. It will measure 54 square meters and cater largely to the many business travelers there.

“ We are now focusing on our stores and growing our operation, not only by opening new locations but by focusing on customer service.” Revic Tantoco, General Manager, IDFS

GADF: The last time we spoke IDFS had gone through an internal reorganization with some improvements being made to the backend of the business. Is there anything new to report here? RT: Yes, IDFS has gone through a reorganization and we’re happy to report that a number of improvements have been made. Having implemented a number of changes, we’ve seen improvement in organizational efficiency, effectiveness and coordination. Thanks to these changes, IDFS is now a more performance-driven organization. We are now focusing on our stores and growing our operation, not only by opening new locations but by focusing on customer service as a means to continue growing sales and giving travelers a reason to stop in to our shops every time they pass through the airports where we’re located. c

ATÜ Duty Free

The Departures store at Atatürk Airport

Bucking the trend

RYAN WHITE

ATÜ Duty Free distances itself from the European economic crisis given a strong customer base of high-spending Turks, Russians and Middle Easterners

TÜ Duty Free has an impressive 59 stores across Istanbul, Ankara, Tbilisi, Batumi, Enfidha, Skopje and Ohrid, with selling space totaling just over 15,000 square meters. The operator is a subsidiary company of TAV Airports, which operates 12 airports in Turkey, Georgia, Tunisia, Macedonia, Latvia and Saudi Arabia. The company deals in core duty free categories such as Beauty & Fragrance, Tobacco, Food & Confectionery, Spirits and Fashion & Accessories, and also stocking offerings in the Toys & Games and Souvenir categories. ATÜ Duty Free caters largely to Turks, Russians and Middle Easterners at the airports where it operates. Across its duty free operations, ATÜ Duty Free saw a 22% increase in sales over 2011 in the first half of this year. Despite the European economic crisis, Ersan Arcan, General Manager at ATÜ Duty Free, tells us that business is booming in Turkey. “The aviation sector [in Turkey] is developing rapidly,” Arcan explains. “Turkish Airlines has made some big investments in the last few years. In parallel to this growth, TAV and ATU have increased their points of operation.” Significantly, ATÜ Duty Free makes a concerted effort to understand the travelers that pass through the airports where it operates. This knowledge then gets put to good use as changes take effect on the shop floor relating to everything from customer service and product mix to layout and promotions. In fact, Arcan tells us that raffles and other contests are one of the big reasons that ATÜ Duty Free’s sales have remained strong.

As with many operators, ATÜ Duty Free puts a big concentration on increasing penetration as a means of ensuring that sales continue to climb. Once a given promotion entices travelers to enter the store, friendly sales staff and a varied product offering tend to convert travelers to buyers.

The best of the best As can be expected when catering to a largely luxury-oriented passenger profile, ATÜ Duty Free’s bestselling products are familiar names in travel retail. In Beauty & Fragrance, Chanel, Dior and Lancôme products round out the top three brands in terms of sales. Marboro, Parliament and Davidoff products are favorites in Tobacco. In Spirits, usual suspects Johnnie Walker and Jack Daniel’s are tops, along with Yeni Raki, an anise-flavored aperitif very popular in Turkey. Continuing with the Food & Confectionery category, top sellers are Hazer Baba, Harem’s Delight and Nestlé products, while Hugo Boss, Hermes and Bvlgari rule the

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

roost in Fashion & Accessories. Finally, in Souvenirs, products from Seval, Selvi and Moda Gumus are popular, while Toys & Games shoppers tend to purchase Barbies, Legos and Intertoy products. As with promotional activity, a keen sense of what travelers in a particular region want and need informs ATÜ Duty Free’s assortment in each store. “We arrange our product assortment according to the local conditions and passenger profiles in each operation,” says Arcan.

Trending topics Travel retail has always had a luxury leaning, and this holds particularly true in the case of ATÜ Duty Free. However, the operator also makes sure to include a number of locally made products into the mix, thereby attracting both local and international travelers and extending the appeal of the stores. Related to the above is the rise of low cost carriers as a travel option and the consequent drop in ticket prices. Arcan tells us that this The Departures store at Atatürk Airport

ATÜ Duty Free

The Wines of Georgia section at ATÜ Duty Free’s operations in Tbilisi

Serving the world

effectively means that more passengers have dollars to spend when at the airport. Although luxury is a priority, ATÜ Duty Free’s product mix reflects its ambition of providing something for every type of traveler. Just as important as which products are being sold is where they’re placed in the store. ATÜ Duty Free regularly examines shopper behavior in store and adjusts the product layout according to its findings. “The shoppers’ habits when they’re in our stores tell us a lot about things we can change,” Arcan says.

Across the airports where it operates, ATÜ Duty Free serves passengers from 130 airlines, including Turkish Airlines, Emirates, Lufthansa, United and Singapore Airlines. Furthermore, Arcan tells us that the number of passengers at Atatürk Airport in Istanbul is expected to double in the next ten years. As such, ATÜ Duty Free’s Departures operation at Atatürk is being renovated to appeal to the wide range of travelers passing through the airport. Arcan tells us that in addition to increased sales, the renovations will go a long way toward solidifying ATÜ Duty Free’s reputation as a premium travel retailer in the minds of travelers. Also coming up at Atatürk Airport is a new tender that is expected to be announced soon. And with its secure foothold in airports across the region, “ATÜ Duty Free will be one of the strongest candidates to be the sole duty free operator,” Arcan tells us.

What’s the hook?

Trending topics

As mentioned, promotions play a big role in setting up potential sales by increasing penetration. At press time, ATÜ Duty Free was running a number of promotions in the popular Beauty & Fragrance category featuring Paco Rabanne’s 1 Million and Lady Million, Dior’s La Collection Privée, Bleu de Chanel, Dolce & Gabbanna Pour Femme and Guerlain’s La Petite Robe Noir. Lasting one month, the promotions feature the above range of products, but the mechanics are the same for each. Shoppers are invited to test the fragrances with trained staff on hand. Customers can earn points in store and are also given a GWP with either the purchase of a 100 mL perfume or the purchase of one smaller fragrance and another product of their choice. “Our general expectation is an increase in sales of around 40% for each promotion,” Arcan explains.

Of course, despite every effort on an operator’s part, sales depend significantly on how many travelers are passing through the airport. Fortunately for ATÜ Duty Free, in addition to its in-store efforts, passenger numbers across the airports where it operates more than back up Arcan’s assertion

that the European economic crisis isn’t really affecting the duty free or aviation industries in ATÜ Duty Free’s stomping grounds. From January to August 2012, Atatürk Airport serviced 29,257,806 travelers, a 21% increase over the 2011 January to August figure of 24,164,003. At Esenboga Airport, the first eight months of this year saw 6,137,550 passengers, an increase of 10% year on year over last year’s 5,597,599 statistic. Numbers were also up 10% in 2012 (6,293,368 passengers) at Izmir Airport over the first eight months of 2011 (5,729,669). In terms of passenger numbers, other standout airports where ATÜ Duty Free operates include Medinah (+42% from January to August), Tunisia (+54% from January to August), Georgia (+19% from January to August) and Macedonia (+12% from January to August). Given these impressive passenger statistics, ATÜ Duty Free could have conceivably just waited for the literally millions of new travelers at the above airports to stop by its stores and purchase. To its credit, though, the operator has continued to invest in promotions, improvements and research, thereby bucking the trend gripping most European countries. “We know how to overcome crisis and we can easily convert it to an opportunity,” Arcan told us. “The aim is always to increase our sales, despite the unstable economic c conditions.”

The Old Bazaar at Atatürk Airport is in keeping with ATÜ Duty Free’s commitment to providing a range of products for all travelers types

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Quatar Duty Free The P&C and Watches section of QDF’s operations at Doha

Driven BY

in Doha

HIBAH NOOR

QDF’s Senior Vice-President Keith Hunter ponders premium brands, the whisky boom, Chinese travelers and close quarters in the leadup to the New Doha International Airport

enior Vice-President of Qatar Duty Free (QDF) Keith Hunter sat down recently to speak with Gulf-Africa Duty Free about the operator’s business in Doha. Chief on his list of priorities is ensuring that sales continue to grow across the board into 2013 before the move to the New Doha International Airport (NDIA). Of course, related to that is a continued targeting of QDF’s main traveling customers. Furthermore, in terms of renovations and openings, QDF isn’t staying idle as they look toward populating their new home with fresh brands and extended offerings from existing supplier partners.

Gulf-Africa Duty Free: How are sales for the first seven months of the year? Keith Hunter, Senior Vice-President, QDF: Sales are very good. We’ve seen about a 24% increase on last year to the end of July. Sales are quite robust and ahead of PAX growth, which stands at +20% for the same period. We are at about US$84 in terms of average transaction value, which is about US$2.70 over last year. We’ve been as high as US$92 at certain times during the first seven months of the year. GADF: What are some top-performing categories this year? KH: P&C is the number one category, followed by Food & Confectionery and then Spirits. These are consistently the top three, with tobacco not too far behind.

“Sales are quite robust and ahead of PAX growth, which stands at +20% to the end of July.” Keith Hunter, Senior Vice-President, Qatar Duty Free GADF: Can you tell us what’s selling well within those categories? KH: The likes of Chinese cigarettes sell very well here. Within Food & Confectionery, the usual suspects dominate. It’s nice to see Cadbury go from strength to strength, and Nido and Tang are such huge volume drivers in the Food & Confectionery segment. We have quite a large Indian Subcontinent traveler that picks up those types of items and brings them home in vast quantities.

Targeting the Chinese traveler is high on QDF’s list of priorities

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

GADF: Whisky is no doubt another big subcategory for Indian travelers… KH: We’re in a whisky market, and 70% of our sales are in whisky. Probably another 70% of that would be the usual suspects in terms of brands—three brands or so dominate. Having said that, there are lots of great whisky brands and we’re giving a lot more prominence

XXX G FT U J OB D PN

Quatar Duty Free

A recent Escada promotion at QDF

to the category, but especially premium whiskies and other premium liquors such as Cognacs. GADF: Have you been noticing this shift toward premium products in other categories? KH: Indeed, there’s been a bit of a shift in spending habits where the premium brands are doing a lot better across categories. We’ve had over a 150% increase in premium sales for some of the lines. It’s the Chinese, Indian and some European travelers driving this growth. There is also that shift toward premium products reflected in the Watches & Jewelry category. We’re seeing the same shift in Fragrances, but the challenge we’re facing right now is that we don’t have the space to accommodate a lot of the brands’ premium offerings, although we’ve managed that with a few brands that are doing exceptionally well. Having said that, it’s important to note that it’s not all about premium. The low- or mid-range products are performing well and continue to grow at a very high rate. The increases are very much across the board. GADF: Is it fair to say, then, the bringing in more premium products will be the focus at NDIA? KH: At NDIA we’ll be bringing in our established brand partners’ premium lines and also new brands. It’s not all about premium, but a lot of space will be dedicated to premium lines. We’ll have the ability to showcase them better following the trend and the demand here. NDIA will help significantly with this issue, whereas now we couldn’t possibly display the products in the manner in which they’re intended to be shown. GADF: How important is the Chinese traveler to you at QDF? KH: I think everywhere you’re going to be seeing growth in Chinese travelers. For us, Qatar Airways continues to launch more destinations, with a notable listing being Chong Qing back in January. When you look at the premium spending habits at QDF, the Chinese constitute about 35% plus. Needless to say they’re a big target market. As such, our weighting of product toward them—our weighting of staff toward that market—has increased. We continue to do a lot of recruitment in China and this activity has been going on for a while. It’s a matter of keeping a relevant mix of Arabic- and English-speaking sales staff while also making sure we’re targeting Chinese travelers, which make up a very prominent group of consumers. 32

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

GADF: In terms of promotional activity, what have you been up to? KH: In January and February this year, we set aside a 70-square-meter Chinese New Year popup store dedicated to the Chinese traveler. We pulled together products across all categories—from tobacco and premium liquors to fragrances, watches and souvenirs—specifically targeted toward these travelers. It was one of the most successful activations in the area that we’ve had, to the extent that we’ve set up another smaller Chinesethemed area that we intend to keep on a permanent basis. It’s located near our transit escalators upstairs, just outside of our express store. GADF: What are some recent and upcoming renovations you can tell us about? KH: We’ve been doing consistent renovations for the last two years, such as upgrading the furniture within the P&C area along with our supplier partners. We’ve also moved the walls out in the P&C area by about two meters in order to open up a secondary entrance point at the transit end of the airport to assist with penetration. Additionally, we’ve opened up the walls by two meters in the Spirits section to improve circulation there. We’ve seen some loss of seating outside the store but it was really necessary to get improved circulation within the store, and it’s allowed us to push the cash counters forward. Needless to say, as we’re a 24-hour operation, this was a big job. We’ve also renovated the toy section and created a completely new souvenir section at the main departures shop. Furthermore, we’ve replaced most of the furniture in Food & Confectionery. Another change we made is to add more furniture to the Watches & Jewelry area. We previously had about 26 counters and various towers. We replaced them all with our own watch counters. We’re currently up to 42 watch display cases. We’ve created an express store upstairs and a standalone electronics store, also upstairs. In addition, we opened up our convenience store upstairs, taking the front wall down and going with the open approach. We also added more product there and gave a little bit more emphasis on books. The liquor, tobacco and confectionery assortment has been expanded there as well. Finally, we just created another express store in our new 12-gate area. We had 12 additional gates added to the airport earlier this year and the area is just screaming out for some retail presence since it’s on the other end of the airport. The store should be 60 or 70 square meters. We can’t afford to just sit and wait for NDIA. The passengers keep c coming and we have to keep up.

Tourvest Duty Free

The

invisible BY

RYAN WHITE

retailer

Tourvest Duty Free develops an online retailing and pre-order strategy integrated into airlines’ websites with the aim of offering a seamless customer experience ith the rise in popularity of sites like Twitter and Facebook and more and more consumers purchasing products online, it’s been clear for some time now that a new opportunity exists for airport and inflight retailers to reach a segment of the population that values the convenience that online shopping and pre-ordering offer. While many are still working out exactly the best way to go about reaching consumers online, Tourvest Duty Free (TDF) has put in place a robust e-commerce strategy that has already proven itself with Virgin Atlantic. The operator has seamlessly integrated a customized online retail concept within Virgin Atlantic’s existing website and passenger communications. Max Williams, TDF’s Vice President Sales & New Business, tells us that the next step is to incorporate the all-important element of its social media strategy. Over the last 8 months, TDF has engaged a number of well established e-retailers to bolster the home delivery offering on Virgin Atlantic’s e-commerce site, thereby giving travelers more options and an extra incentive to purchase any number of popular items by earning or using their loyalty miles. For TDF, the ultimate objective is to incorporate similar programs with its other airline partners while maintaining the high level of customization its clients appreciate.

An idea takes shape

Tourvest Duty Free has seamlessly integrated a customized online retail concept within Virgin Atlantic’s existing website and passenger communications

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

In 2010, TDF developed a new website to promote incremental online pre-order sales for Virgin Atlantic, whilst crew continued to drive pre-order sales in-flight. “That year was very much spent on making sure that the front end and back office system in support of online activity worked and that the structure behind it was in place,” Williams explains. “In the end we had a very smooth operation there in terms of our e-commerce aspirations.” TDF develops a customized marketing strategy with all of its major airline partners. The strategy essentially becomes a guidebook that outlines where TDF will drive business, what revenue expectations are and how common goals will be reached. In 2011, given the potential that the retailer saw, e-commerce became an integral part of the marketing strategies that TDF develops in cooperation with airlines.

Tourvest Duty Free

“Obviously, in Europe and the US, e-commerce is very well established—it’s a proven model and does very well,” he explains. “In the southern hemisphere it’s still very much in its infancy. It’s nowhere near where it is in the northern hemisphere. As such, a lot of our focus to date in terms of our web aspirations has been on airlines outside of Africa, although we are now developing the e-retail strategy for South African Airlines.”

Behind the scenes “As a concessionaire, we don’t own the passenger,” says Williams. “When we engage the customer we need to do it via the airline. As such, TDF remains absolutely invisible on the e-commerce section of Virgin Atlantic’s website, although we manage it 100%. It needs to be bespoke and tailored to the airline’s branding, so in that sense we’re very much behind the scenes.” Of course, making sure that the branding and the experience are both seamless when people click the online retailing link from Virgin Atlantic’s website created its own set of challenges. TDF had to coordinate with numerous business units within Virgin Atlantic that it doesn’t normally deal with on a regular basis in order to determine what opportunities existed for communicating with potential shoppers. “We had to determine how the airline was reaching out to its customers, how frequently it engaged them and what it was communicating,” Williams explains. “We then had to decide how we could piggyback on that activity in order to introduce and promote inflight retail sales, home delivery and pre-order.”

of transactions was also up by 44% and web revenue was up by 48%.” The average transaction value at the end of the first month stood at a very solid £55 (US$90). “These are pretty significant statistics,” Williams notes. Just as important as the sales results is the fact that TDF also increased its customer database by 25% over the first two months given e-commerce regulations which state that anyone who buys from a company online must register as a user. Much more than just additional names on a list, these are consumers that obviously have a genuine interest in purchasing online from TDF because they’ve done it in the past. “The quality of our database is high,” says Williams, “comprising of people who we know want to be engaged.”

Onward and upward Williams tells us that TDF doesn’t plan on engaging the consumer in an ad hoc fashion going forward. The idea is to regularly reach out with deals and offers with a monthly email campaign. Furthermore, TDF is honing its social media acumen with the recent hiring of a dedicated web and social media manager. Another prime objective for next year is developing live online chat given its increasing popularity as a customer service tool. Notably, now that TDF knows it can successfully drive traffic to the site, the operator is in talks with a number of e-retailers to add their products to the site for convenient home delivery. TDF will be able to up the number of SKUs on the site from about 400 to around 1,800—all products aimed at the traveling consumer—without having to worry about warehousing or shipping. The operator will still

“A lot of our focus to date in terms of our web aspirations has been on airlines outside of Africa, although we are now developing the e-retail strategy for South African Airlines.” Max Williams, Vice President Sales & New Business, Tourvest Duty Free

After researching how best to communicate the website, TDF set about the process of getting approval from the airline to have its retail message included in everything from email blasts aimed at frequent flyers to the credit card statements of Virgin Atlantic affiliate American Express. The aim, says Williams, was to drive site traffic, but more importantly maximize the conversion rate. An example of TDF’s strategy at work is a tie-up with Virgin Atlantic’s Flying Club. Through the club, the airline accesses about 2 million member travelers every month or so, and TDF is completely integrated within those communications. The strategy extends to Virgin Holidays and other units of the business. To get the program to the point that it’s at today—completely integrated into the Virgin Atlantic universe—took seven months given the complexity of the task.

Clear results The plan certainly seems solid, but is it working? Williams tells us that the answer is an unequivocal yes. “In the first month we actually increased traffic to the website by 44%,” he says. “The number 36

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

manage all the transactions, but once payment is complete the e-retailer will take the reins to handle the logistics of getting the product to the consumer’s doorstep. The benefit for the e-retailer, of course, is the ability to gain exposure with a very targeted demographic. Furthermore, the fact that consumers will be able to use their loyalty miles to purchase products or earn miles is truly a boon for everyone involved. As Williams puts it: “Why buy a tablet somewhere else when I know that if I purchase it with Virgin Atlantic I can earn loyalty miles? We’re effectively creating a greater, more dynamic, extensive range than we were able to do before, so in the end, everyone benefits.” These new developments are expected to go live in the first quarter of 2013. At that point TDF will look at implementing similar customized programs with other airlines, always working unseen in the background—at least from the user’s perspective—to further its clients’ objectives. “I’d like to say that consumers will be seeing much more of TDF online in the very near future,” concludes Williams, “but if all c goes as planned, they won’t see us at all.”

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Abu Dhabi Airports Company

With strong passenger numbers for H1 2012 and plans to again host the 2013 Abu Dhabi Air Expo, Al Bateen Executive Airport is stepping into the spotlight RYAN WHITE BY

hen speaking of Abu Dhabi Airports Company (ADAC), a lot of attention is necessarily centered on the work being done at Abu Dhabi International Airport and the upcoming Midfield Terminal Complex. Awareness of Al Bateen Executive Airport, however, is increasing, largely because of the Abu Dhabi Air Expo 2012, which took place there in March. ADAC also made a recent announcement that Al Bateen will again be hosting the expo in 2013. Furthermore, passenger numbers have been on the increase at the airport this year and this past summer saw renovations made to three hangers as a means of better serving passengers.

“Stronger than ever” According to Al Bateen’s latest passenger statistics, there was a strong +30% increase in visiting aircraft movements to the executive airport over the period between January and June, 2012 as compared with the same period in 2011. The airport registered a total of 1,100 visiting flights during the first six months of the year. Al Bateen continues to register a positive increase in traffic, witnessing a +10% increase in the overall commercial traffic in the first half of 2012 and handling over 5,000 based operators and visiting aircraft movements. “Al Bateen is again seeing a double digit growth of business jet movements, especially from visiting international aircraft that have not used the airport before,” Deputy General Manager of Al Bateen Executive Airport Yousif Al Hammadi said of the strong performance. “With the Formula One season nearing, there is no doubt that Al Bateen is positioning itself, stronger than ever, as the perfect tech stop location due to its ease of access, short turnarounds and top quality services. “In addition,” Al Hammadi continued, “traffic will continue to grow at Al Bateen as more business aircraft operators join the airport and base their aircraft at ADAC’s dedicated business aviation airport, and as Abu Dhabi continues to grow as a leading business, leisure and aviation hub in the region.” Al Bateen Executive Airport continues to develop and expand its services. Most recently it has recently revamped the uniforms for the 38

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

DhabiJet crew, the main FBO operator at the executive airport of the capital, to add “character and identity” to the brand.

Building it up Also during the first half of the year, Al Bateen announced the completion of refurbishment works for three hangars at its facilities in Abu Dhabi. The refurbishment works include structural, mechanical and floor works, as well as upgraded back-office and workshop facilities. The first phase of the refurbishment program at Al Bateen covered a total space of 7,500 square meters and represented an investment of US$5 million. The project, says ADAC, is a key part of Al Bateen’s strategy to expand and upgrade facilities to satisfy the demand for aircraft parking, based operator and maintenance services at the airport as more and more customers choose the convenience of flying in to and out of an airport that focuses on providing tailored service and solutions. “Al Bateen Executive Airport was inaugurated in 2008 as the first dedicated business aviation airport for the region with a mandate to develop and lead this dynamic industry,” said Al Hammadi at the time of the renovations. “The delivery… of three newly refurbished hangars is another key milestone in Al Bateen’s strategy to provide world class services and facilities for the business aviation community. “A number of projects are running in parallel and the refurbishment works have been planned and are being executed to deliver the needed infrastructure that is crucial for launching the free zone at Al Bateen this year,” he added.

Flying high As mentioned, following the overwhelming success of Abu Dhabi Air Expo 2012, ADAC has announced that it will be hosting the show for the second year in a row from March 5 to 7, 2013 at Al Bateen Airport. The expo was launched this year in Abu Dhabi, marking the first time it has ever been held in the Middle East. The event saw over

Al Bateen continues to register a positive increase in traffic, with a +10% increase in overall commercial traffic in the first half of 2012

Al Bateen Executive Airport focuses on providing tailored service and solutions to travelers

An aerial view of Al Bateen Executive Airport; high on ADAC’s list of priorities is promoting Abu Dhabi as a world-class destination

100 exhibitors and sponsors and displayed 70 aircraft from light jets to helicopters, attracting more than 10,000 international and local visitors. The show also hosted a series of conferences focusing on various general civil aviation topics, including training, licensing, safety and aircraft technology. “Abu Dhabi is witnessing significant growth in the commercial aviation industry across all sectors, including general aviation, which in turn supports the Emirate’s air transport strategy in building a strong and sustainable aviation environment,” noted Al Hammadi. “ADAC is proud to contribute to this growth through its leading initiatives in the areas of infrastructure development, quality of service and marketing. “Abu Dhabi Air Expo is the region’s first exhibition dedicated to general civil aviation and… this show will be held in Abu Dhabi once again in 2013, highlighting the capital’s position as an international hub for commercial aviation experts and professionals. This commitment is part of ADAC’s strategy [of] reinforcing Abu Dhabi’s credentials as the region's premier venue for the commercial aviation and aerospace industry,” Al Hammadi concluded. General commercial aviation refers to all flights other than military and scheduled airline and regular cargo flights, both private and commercial. Al Bateen Executive Airport is the region’s first and only dedicated private airport and it is a “one-stop shop” business jet facility for VIP passengers. In fact, DhabiJet was ranked in first place among FBOs in the Middle East and the fourth in Asia, Africa and Europe in the prestigious European Business Air News FBO Survey 2012.

Making it happen The total value of deals signed at this year’s Abu Dhabi Air Expo reached above AED 1 billion (US$272.2 million). Impressively, the show saw more than 10,700 visitors and 105 exhibitors from local, regional and international companies. Abu Dhabi Air Expo witnessed several big announcements, including ADAC’s own agreements with Falcon Aviation Services and R Offices. The show also inaugurated the AOPA UAE as the 70th local AOPA to join the International Association of Aircraft Owner

and Pilot Associations (IAOPA). Key developments at the event included Qatar Executive being appointed the newest Bombardier Authorized Service Facility in the Middle East; the announcement of Jet Aviation as “The Best Handler of the Year 2011” by Jepessen; Abu Dhabi Aviation signing an agreement with Mubadala to establish an aviation simulation center and also signing with Agusta Westland to launch an aircraft maintenance centre; Saudi Private Aviation (SPA) confirming that it is now officially the largest single customer of Dassault Falcon 7X aircraft after taking delivery of its fourth trijet; the TBM 850 aircraft—the world’s fastest turboprop—being showcased; The Ministry of Interior showcasing an air ambulance; and Saudi pilot Sami Al Refai revealing that he will be the first Arabian pilot to make a tour around the world starting from Al Bateen next month. The Air Expo also assisted in creating an opportunity to engage the general public and community in its activities, as the show welcomed more than 600 students from various colleges and institutions in Abu Dhabi invited by ADAC to view what the aviation industry has to offer to the younger generations. “This was the first private jet aviation expo in the Middle East and it was a huge success,” Senior Vice President Commercial at ADAC Dan Cappell told us following the show. “Delegates from around the world attended, with the top brands in private aviation exhibiting some fantastic new innovations.”

Continuing to invest In terms of what’s upcoming for ADAC at Abu Dhabi International Airport, Cappell tells Gulf-Africa Duty Free that more enhancements are in the works for this year. The company is currently starting work on the next stage of its capacity enhancements by adding a new arrivals building, a transfer security processing unit and a 20gate bus gate facility due for completion by the end of this year. Of course, given the success that ADAC has had to date with duty free at Abu Dhabi Airport, travelers can rest assured that retail will be an important feature of the new facility: “This will add another 4,000 square meters of commercial space, including business class c lounges,” Cappell explained. www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

Industry News

The

slowing

surge Growth rates in passenger numbers are on the decline, and despite regional variations, the decline looks set to continue BY ANDREW BROOKS

ir travel figures are usually a mixed bag, with considerable variation between different parts of the world, and a wide range of local events and circumstances playing a role in raising or lowering the numbers. As such, it may be dangerous

Terminal 3 at Dubai International; the first half saw a13.7% increase in passenger traffic over the same period in 2011

confidence and world trade is clearly having an effect on travel. With that said, the picture IATA draws is a mixed one, with considerable variation between regions. Air travel in the Middle East grew 11.2% in July, well down from the 18.9% it posted in June but still well ahead of the average. IATA also suggests that several percentage points of that fall may be due to the fact that this year, Ramadan began a month earlier than it did last year. Africa grew 5.2% in July, 0.5% behind Latin America and well down from the 12.0% posted in June. And IATA suggests worse may be to come: “Recent falls of business confidence in a number of major economies… suggest that

214.5 million international passengers, while the UK will account for 198.1 million. Airports Council International (ACI), which represents 580 member airport authorities around the world, echoes the gloomy assessment, with the announcement in September that global passenger growth rates fell to 2% year-over-year in July. ACI noted that the European and North American markets were hardest hit, and that emerging markets fared a bit better. Major airports in the Asia-Pacific region, the Middle East and Latin America and the Caribbean “posted robust year-over-year gains,” ACI said. The organization singled out the hubs in Beijing, Dubai and São Paulo for particularly

“We are on track to meet the annual projected traffic of 56.5 million passengers, which will bring us very close to Dubai International’s operational capacity of 60 million passengers per annum.” Paul Griffiths, CEO of Dubai Airports

to use passenger numbers to draw general conclusions about the state of health of the travel industry. Nonetheless, global industry organizations like the International Air Transport Association (IATA) have a good vantage point to spot trends, and their reports— caveats included—make interesting reading. Unfortunately for those who make their living in and around the business of travel, the news from IATA is not especially good. The organization says that according to figures for July, the expansion in air travel, measured in revenue passenger kilometers (RPKs), slowed to a rate of just 3.4% compared with July 2011. The figure in June was 6.3%. While noting that year-over-year comparisons have been somewhat distorted by events that affected air travel last year, such as the “Arab Spring,” the decline in business 40

growth in air travel and freight is likely to slow further in the next few months.” The travel retail industry may take some comfort from IATA’s finding that international air travel figures aren’t slumping as badly as are the numbers for domestic flights. And the weakest regions are AsiaPacific, which IATA says is being affected by changing trade flows and strong competition for airlines, and North America, where capacity cuts are having a slowing effect. “The Middle Eastern airlines are once more expanding rapidly,” IATA says, “gaining share in a number of long-haul markets, having slowed in the aftermath of the 2008-9 recession.” Nonetheless, the US and UK are firmly entrenched atop the traffic charts: by 2014, IATA predicts the US will welcome

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

IT’S NOT SCOTCH. IT’S NOT BOURBON. IT’S JACK.

Industry News

Work on the New Queen Alia International Airport continues; the current facilities enjoyed a 23.8% yearon-year increase in passenger numbers in August

strong growth—6.1%, 6.0% and 9.0% respectively. An index that might seem to be peripheral to travel retail, but that does indicate a level of business confidence, is the rate of growth in freight traffic. Here the otherwise buoyant Asian economies fared poorly, as did most markets, for an overall global decline of 2% in July. The exceptions were the Middle East and Africa, where two airports were singled out for good performance by ACI: Abu Dhabi International, which surged by 27.8%, and Johannesburg, which posted a 13% gain. Abu Dhabi’s strength isn’t all on the freight side. In July, the airport reported that it hosted just over 7 million passengers in the first half of 2012, a 22.8% increase over the first half of 2011, and well in line with its growth on the freight side. For June alone, 1,232,298 passengers arrived at the airport, a 25.3% increase over the previous June. Aircraft movements in the first six months of the year also climbed to 58,937, a 3.6% increase over the same period in 2011. The passenger traffic growth is largely a result of the success of Etihad Airways, the routes and frequencies of new airlines, and an ongoing increase in business and tourism in the capital. The airport was named “Best Airport in the Middle East” at the 2012 World Airport Awards, and recently signed off on the construction of its new Midfield Terminal Complex, part of plans to increase the airport’s annual capacity to over 30 million passengers. Dubai International also had a good first half, welcoming a record 27.9 million passengers between January and June, a 13.7% increase over the same period the year before. June saw 4,714,746 passengers handled, which was 16% better than June 2011. The top destinations served by the airport were India, Saudi Arabia, the UK, Pakistan and the US. “We are on track to meet the annual projected traffic of 56.5 million passengers, which will bring us very close to Dubai International’s operational capacity of 60 million passengers per annum,” said Paul Griffiths, CEO of Dubai Airports. “The addition of Concourse 3 during the first quarter of 2013 is well timed to boost our capacity 42

The control tower at Abu Dhabi International; the airport enjoyed a 22.8% year-on-year increase in passenger traffic in H1

to 75 million while upping the game on our already high levels of customer service.”

Alia’s aggressive August Queen Alia International Airport (QAIA) in Amman, Jordan, has some slightly more recent figures, reporting that August saw new growth records set in passenger volume and in aircraft movements. Some 603,000 passengers passed through in August, a 23.8% increase over August 2011, while aircraft movements rose 9.9% to 6,228. The passenger numbers for January through the end of August were up 19.1%. “2012 has been quite encouraging for QAIA, with new records being set both in actual numbers and in growth rates, reflecting promisingly on the future of the airport," said Kjeld Binger, CEO of Airport International Group, which operates QAIA. "However, the results are reflecting specific regional conditions, and we do not expect these extraordinary growth rates to be sustainable over the years to come, but with the opening of the new state-of-the-art terminal on the horizon we will further strengthen growth opportunities."

Premium traffic declines A good index of the amount of business travel —and also of passenger buying power—is offered by IATA’s analysis of premium air travel figures for July contained in its “Premium Traffic Monitor,” released in September. Here the pattern is similar to the pattern for air travel, except that there are actually negative numbers involved. Premium seat bookings actually declined by 0.5% in July compared to July 2011 after expanding 4.3% in June. Economy class bookings rose 3.0% over July 2011, down from a 6.2% increase in June. IATA predicts this trend will likely intensify. IATA again cites the earlier start of Ramadan this year as a likely contributor to the flattening growth rates in premium bookings, along with the general decline in business confidence and the slowdown in world trade. Weakness in European markets is also singled out as a leading factor, and

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

IATA offers the unsettling prospect that this weakness could spread to other parts of the world. An upward movement was in evidence earlier this year but the four months leading up to July were ones of steady decline, the organization says. “After signs of faster growth early in 2012, the expansion in premium travel has now clearly flattened out,” IATA says. “The premium market made no progress in July compared to June, with growth in passenger numbers staying flat over the month. Moreover, the number of premium passengers in July is only 1% higher than it was in January.” Premium travel in Europe and across the North Atlantic contracted 3.5% and 2.4% respectively in July compared with the same month last year. Premium travel between Europe and the Far East had been growing well earlier in the year but showed especially weak growth in July, increasing only 1% compared with the same month in 2011. The growth in premium bookings on transPacific flights had been in double digits in the first half of the year but then recorded an increase of only 2.9% in July. Markets removed from Europe did expand in July, although at a slower rate than in June in some cases, IATA says. Pacificrim nations that benefited from improvement in the US economy saw business travel rise, buoying premium travel growth rates, which have also been good across the Far East. “After showing months of strong growth, in both premium and economy travel, markets… within [the] Middle East and routes which connect to it showed the first signs of weakness in July,” IATA says. Premium travel in the Middle East shrank 6.4% year-over year, while economy class bookings fell 3.5%, and as a result markets connected to the Middle East were also pulled down. “Long haul flights from Africa, for example, using the Middle East as a connecting hub, saw premium passenger demand expand by 3.0% in July on a year ago, a significant drop on June when the market increased by 17.5% year-on-year.” c

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Flemingo Group

Flemingo’s operations at Gdańsk, Poland

New frontiers

Flemingo Group re-envisions itself and takes steps toward the objective of US$2 billion turnover by 2020 BY RYAN WHITE lemingo Group currently operates 120 travel retail outlets in regions as diverse as India, Africa, Eastern Europe and the Middle East. Flemingo counts among its businesses border, airport and seaport shops, but the company is also well versed in inflight duty free sales, diplomatic services, food and beverage and distribution. Impressively, Flemingo trades in no fewer than 26 countries and has approximately 9,000 square meters of retail space, with a good portion of these operations being serviced from its vast warehouse complex in Dubai. At this year's TFWA WE in Cannes, Flemingo will be unveiling what it calls its “Next Frontier Strategy.” Paul Topping, Independent Director at Flemingo Group, tells Gulf-Africa Duty Free that the company is looking to build on its “current substantial

The P&C section at Flemingo’s Sri Lanka operations

base and take a number of new initiatives to achieve its vision statement of reaching US$2 billion in turnover by 2020.” Of course, in order to achieve this objective Flemingo has taken a close look at essen-

The company’s operations at Entebee International Airport in Uganda

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

tially every aspect of its business, with service standard being one of the main priorities. The company has started what it calls the Flemingo Retail Academy in an effort to up the standards of its service. The program is aimed at both sales and management staff, and is designed to make training a more integral part of the company's culture and to build a team designed to achieve Flemingo’s expansion goals. While the initiative as a whole is set to take effect in early 2013, Flemingo is already well on the road to making it happen. The company has brought on a new Commercial Director in Simon Forde, assembled an inhouse legal team and hired on marketing specialists. Furthermore, two founding members of Flemingo are heading up business. A main focus for the group going forward is new

Flemingo Group

One of Flemingo’s strong suits has always been liquors; pictured is the company’s operations in Nairobi, Kenya

The Spirits section at Flemingo's departures store in Chennai, India

shop development, ensuring expansion objectives are met and ensuring that shops are opened quickly to the standards required. “We have put together manuals on where to source shop equipment in each market so that we have a formula in place for any new business opportunities,” Topping says. “Nonetheless, Flemingo has proven that it can move very quickly and allocate resources where they are needed.” Of course, being fast on its feet and getting stores up and running in record time has always been one of Flemingo's strong suits, especially in emerging markets. Topping chalks this up to a move away from the centralized business model and a concentration on having the right people in key positions in every region where the group operates. And speaking of emerging markets, it's clear that Flemingo is a pioneer, especially in India. The company is also a major shareholder in a duty free operation in Poland, which has effectively allowed it to make the move into Eastern Europe. This has opened up developments in the Ukraine and Romania as well. Of course, there's also the highly successful joint venture in Mumbai, India's second-largest airport, with DFS. Additionally, Flemingo bought into a business in Turkey that is predominantly inflight. The company's view, says Topping, is that there is a lot of potential in getting into other travel retailing, such as border shops, from this foothold in Turkey. “We have a mas46

sive distribution operation in Dubai and obviously Dubai must be the base for whatever may happen in the Middle East and Africa,” Toppings explains. “Having these regional centers and strengthening them will allow us to branch out into new regions such as Africa, where we already have 45 shops in 18 countries. However, there are so many more locations and countries to go for.” Indeed, Flemingo defies a lot of the traditional classifications used in the industry; the company seems to be at a point in its evolution where it possesses some important attributes of both big and small duty free operators that will likely pave the way for numerous future successes. Flemingo has proven its willingness to partner with likeminded companies in Mumbai, while at the same time having the skill set to go it alone in other operations like Sri Lanka. Furthermore, Flemingo still sees the potential in working with smaller airport operators who appreciate its wealth of experience, specialized knowledge and ability to offer a range of retail and catering options.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

“For smaller airports we really want to be able to give them the whole gamut of services, from retailing to catering, and this is a very big consideration for emerging markets and smaller airport owners,” explains Topping. Of course, Flemingo understands that looking closely at both strengths and weaknesses is needed to reach the next level. While traditionally very strong in spirits and confectionary, Topping says that more work needs to be done in areas such as perfumes and cosmetics, for example. “This is largely due to Flemingo's history of mainly having shops that measure less than 200 square meters and liquor being 60% of the sales mix. Today, however, if you look at the offer in many of our polish shops—some of them over 500 square meters—you will see a very competitive perfumery offer.” Flemingo will be unveiling its new strategy this week at TFWA WE during a one-hour press conference that will include a special guest and an open boat welcome to suppliers and friends of the company. “There is plenty of potential out there, particularly in emerging markets, which is one of Flemingo's key strengths and proven skills,” Toppings concluded. “We're looking forward to showing attendees at this year's exhibition Flemingo’s new look, its new team and our desire to c reach the next frontier.”

A car giveaway promotion tied in with the popular sport of cricket in Flemingo’s Departures location in Sri Lanka

They sell as good as they taste

Mars ITR is a leading player in the confectionary category. We combine insights, vision and global strength with powerful brands to create fantastic in store opportunities. Take M&M’s for instance, the great promotions, shop in shop concepts and fun merchandizing makes the brand to a very powerfull sales driver. Let’s face it, if consumers can’t resist M, how can you?

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JMG-Research

A perceived lack of time is a common reason why many travelers don’t enter duty free stores, says JMG-Research

Understanding the traveler

RYAN WHITE

JMG-Research prepares to unveil the results of its annual PAX behavior study at TFWA WE and gives Gulf-Africa Duty Free a taste of what the industry can expect

Untapped potential

During the ACI-Europe Airport Trading Conference in April, Goldberg noted that if airport authorities, operators and brands address the major reasons travelers have for not entering duty free shops, there is potential for a whopping US$4.5 billion in additional revenues. Obviously, even if only a portion of those travelers who don’t currently enter duty free stores are targeted by the industry and converted into purchasers, the profit potential is significant to say the least. “In the Beauty category, for example, the potential exists for up to US$8.2 billion in additional revenue, provided the industry can properly engage these ‘empty-handed passengers,’” says Goldberg. JMG-Research’s study has actually resulted in five different reports focusing on different geographical locations: Worldwide; Europe (including France, Germany, Italy, the Jérôme Goldberg, Managing Director, JMG-Research Nordic countries, the UK, Spain, the Netherlands and Russia); Asia Pacific (targeting “These days, with more and more people effects of promotions such as GWPs, limited Japan, China, South Korea, Australia, India and Hong Kong, with the last three countries traveling abroad all over the world, the travel editions and exclusives. “We monitored 20 different nationalities being new inclusions this year); the Ameriretail industry has to find a proper answer to a kaleidoscope of behavioral patterns,” Gold- in Europe, Asia Pacific and the Americas, cas (encompassing the United States, Brazil, berg told us. “In some cases, there are very sig- interviewing 5,631 international passengers Argentina and Mexico, with these last two nificant variations among nationalities and both on their behaviors at global airports and being new this year); and the Bric countries. the industry needs to be aware of this. It’s been their behavior during flights. We also specifproven time and again that understanding ically asked about their last travel experience,” Customized service travelers’ necessities is key to increasing sales.” Goldberg explains. “In total, we got 11,262 “JMG-Research also offers subscribers the And JMG-Research’s PAX study certainly answers from passengers on both departing option to ask for ad-hoc analysis,” explains goes a long way toward fostering a better and returning flights, and consequently related Goldberg. “This effectively allows them to focus on specific criteria from our database, understanding of traveler/shopper behaviors to both arrivals and departures duty free.” As compared to last year, JMG-Research from all respondents or a specific group, by tackling a robust set of topics that include:

MG-Research recently released its annual PAX behavior study. The aim of the research was to analyze what passengers do and don't do, both at the airport and during the flight. Gulf-Africa Duty Free sat down with Jérôme Goldberg, Managing Director of JMGResearch, to get a preview of the results he’ll be sharing with attendees at this year’s TFWA WE in Cannes.

factors that drive travelers into shops or conversely keep them away; duty free categories to which travelers are drawn and brands that they often purchase; which travelers plan their purchases and which generally buy on impulse; what travelers purchase and for whom, and conversely why they don’t buy; travelers’ perceptions of travel retail pricing versus high street pricing; affinity toward products/brands; travelers’ attitudes toward sales staff; and the

has fine-tuned its understanding of global travelers, with results that look specifically at the differences between arrivals and departures duty free, key categories and social media. Also of note is the fact that results have been broken down between men and women; frequent flyers and infrequent travelers; business and leisure passengers; and legacy carrier passengers and charter or LCC passengers.

“Our goal is to help airport authorities, operators and brandowners develop well considered solutions based on careful research.”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Aldeasa and World Duty Free together, global strength in depth EUROPE - AMERICAS - ASIA - MIDDLE EAST - AFRICA

JMG-Research

related to specific categories and subcategories, targeting key airports or centering on the departing or arriving passenger.” In addition to the passenger-specific information already mentioned, JMG-Research’s database of airport intelligence is fairly extensive, comprising information from passengers at some 90 airports across various regions of the world. The benefits for brands, says Goldberg, are numerous, from knowing what passengers expect of a specific product category to best understanding how to create impactful products and target specific groups of travelers. For operators, the reports can help improve footfall and conversion, shed light on new cross-selling opportunities and aid in the improvement of the consumer’s overall shopping experience.

The results are in While the big unveil for JMG-Research’s results will be taking place during the week of October 21-26 at TFWA WE in Cannes, Goldberg was kind enough to give us a taste what was discovered from this year’s undertaking. Gulf-Africa Duty Free learned that while many of the reasons that travelers decide not to enter duty free shops—from stress to time constraints—are no secret to the industry at large, variances among nationalities will no doubt give operators and brands plenty to think about. For example, targeting the well traveled Russian passenger is a clear priority among operators and suppliers. JMG-Research’s study shows that some 35% of Russian passengers answered that they always enter duty free shops when they travel, with 8% never entering. On the other hand, only 8% of American passengers always enter duty free shops when traveling, with a whopping 20% saying that they never enter. Clearly, the implication is that while storeowners and brands in certain airports should be concentrating on Russians within the shops, not enough is being done to capture Americans as they pass by on the way to their gate. Of course, the above is only one example of the results, but it’s easy to see how the industry can team with JMG-Research to dig much deeper. For example, a supplier may want to know what percentage of Brazilian passengers entered stores on their most recent trip. Are there any airports where this figure was considerably higher? What are the brands and operators doing in these airports to capture these travelers and what did the Brazilians purchase? What didn’t they purchase? What airline did they fly? Are our brands listed inflight on these carriers? 50

JMG-Research’s study also delves into inflight duty free and the differences in purchasing habits of travelers that fly on legacy carriers versus LCCs

Focus on P&C: Why non-buyers don’t purchase (n = 1,544) The prices were not interesting 67% The same products were everywhere 40% I couldn’t find what I was looking for 40% There were no affordable products 35% 22% My flight started boarding I couldn’t find my favorite product 19% I couldn’t find my favorite brand 15% The queue to pay was too long 15% Travel restrictions 15% The products were too bulky 13% There was no information on the price 9% The shops weren’t appealing 9%

Focus on Passenger study: Why non-visitors don’t enter duty free stores (n = 2,663) I was not interested in buying anything 53% I did not want to carry anymore items 40% I had no time before proceeding to my gate 39% I just wanted to stay calm 37% I did not want to miss my flight 35% I knew the prices were not interesting 28% Travel restrictions are too much trouble 20% I don’t usually find products in my price range 11% The shops were too far from my gate 11% I wasn’t allowed to buy duty free 9% I couldn’t find the shops 9% I usually can’t find my favorite brand 8%

Indeed, JMG-Research’s work offers myriad possibilities for the industry to focus very specifically on certain demographics or pan out to get a sense of the larger picture as it relates to a certain nationality, geographical area or category.

Looking ahead In November, JMG-Research will be looking specifically at Chinese passengers as a means of providing the industry with data on this increasingly important group. The qualitative portion of the study will focus on a total of 4,500 Chinese international travelers, with 1,500 from Shanghai; 1,500 from Beijing; and 1,500 from second-tier cities. The company will also conduct face-to-face interviews with travelers from the same locations for the qualitative portion of the study. “As a result of such global work, we will

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

be able to highlight what Chinese travelers from different parts of the country have in common when they travel, and conversely what specificities they exhibit— what they like or don’t like, what they expect from airport and inflight duty free, and so on,” Goldberg tells us. “The key benefit for the industry of course, is a better understanding of how to improve the way it engages with the Chinese, both in China and abroad. “In short, the industry now understands that a ‘one size fits all’ mentality no longer works,” Goldberg explains. “The aim of our research isn’t to prove or disprove this because it’s clearly a fact. Our goal is to help airport authorities, operators and brandowners develop well considered solutions based on careful research and, if need be, offer ad-hoc intelligence that lets them convert travelers c into consumers.”

Estée Lauder Companies Estée Lauder recently opened a new Jo Malone store in Concourse 2 of Dubai International Airport’s Terminal 3

Stronger in the middle

For Estée Lauder, the Middle Eastern travel retail market is a big factor in the company’s stunning sales growth BY HIBAH NOOR n August, the Estée Lauder Companies, which manages a broad portfolio that includes well known brands such as Clinique, Bobbi Brown, Aramis, Donna Karan, Tommy Hilfiger and of course Estée Lauder itself, reported a 10% increase in net sales for fiscal 2012, reaching US$9.71 billion, compared with US$8.81 billion the year previously. In announcing the results, the company said that “the travel retail business continued to generate strong double-digit net sales growth, resulting from successful product launches, higher global airline passenger traffic and a stronger conversion of travelers into purchasers.” President and CEO Fabrizio Freda notes that the performance in travel retail played a major role in driving the company’s success, and says that the company plans to focus on travel retail as one of the most promising areas for its prestige beauty portfolio. “All our brands are performing well in this key market where we continue to see sig-

nificant growth,” says Jean-Charles Seite, VP/General Manager, Travel Retailing EMA, when asked about performance in the Middle East. The region overall is in growth mode, he says. “Some countries are growing faster than others, but overall we are pleased with the performance of our brands in the region.” Estée Lauder caters to the Middle Eastern consumer specifically through its fragrance offering, Seite says, noting that the company launched a fragrance designed exclusively for the Middle Eastern consumer in 2011 called Wood Mystique. The new product has proven popular in the region, and was recently rolled out to all EMA markets in travel retail. Wood Mystique isn’t the only product in Estée Lauder’s armory with a Middle Eastern accent. “Jo Malone’s Intense Cologne collection was inspired by the Middle East and includes notes evocative of the Middle Eastern region,” Seite says. “The latest edition to the range—Velvet Rose and Oud—was launched this past summer. And Perfume

“The travel retail business continue[s] to generate strong doubledigit net sales growth, resulting from successful product launches, higher global airline passenger traffic and a stronger conversion of travelers into purchasers.” Fabrizio Freda, President and CEO, Estée Lauder Companies

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Calligraphy by Aramis was also launched in the region this summer; this fragrance was developed in the Middle East specifically for the Middle Eastern consumer.” Perfume Calligraphy applies the heritage of Arabic calligraphy to the fragrance category and can be worn by men or women. “Much like the art of perfumery, the art of calligraphy dates back thousands of years and is known as the most highly regarded and most fundamental element of Islamic art,” the company says. “This picturesque form of writing allows the creator to transform the task into a beautiful art form. These two ancient crafts have been intertwined for thousands of years. Now, both are enveloped into one creation to form a modern day masterpiece.” Perfume Calligraphy opens with nuances of cardamom and a blend of lemon and cinnamon. A heart of balms and precious

Velvet Rose & Oud from Jo Malone’s Intense Cologne collection, inspired by the Middle East region

Aramis’ Perfume Calligraphy is available in London Heathrow T3 and T5 and across the Middle East

petals develops the mysterious essence, with myrrh wrapped in golden saffron flowers and rich rose absolute. Aromas of patchouli and heated ambers feature over a bed of musk, leading to a lingering aura of oud. The scent is housed in a glass bottle and features a distinctive logo created by graphic artist and calligrapher Tarek Atrissi. The handcrafted image is modeled after the Arabic word for “calligraphy”—it’s actually two words. Each word is crafted in an opposing style; one is modern, more geometric and more typographic and the other is more traditional, organic and calligraphic. The contrast alludes to the unisex concept and reflects the way in which calligraphy is used to interpret traditions with a contemporary twist. Perfume Calligraphy by Aramis is available in a 100 mL Eau de Toilette, and is sold in London Heathrow T3 and T5 and across the Middle East.

Premium additions To add to its portfolio, this fall Estée Lauder is launching two new products in its premium luxury skincare range—Re Nutriv Intensive Age Renewal Crème and Intensive Age Renewal Eye Crème. The products will be available at most international airports by the end of the year, Seite says. Seite notes that Clinique recently launched Even Better Eyes Dark Circle Corrector, a new

addition to its successful Even Better franchise which includes the now iconic Even Better Clinical Dark Sport Corrector. La Mer has just launched its anticipated Moisturising Soft Crème. The new moisturizer is very light, renewing and energizing the skin’s appearance; Seite believes it will further build the brand’s strong presence in the moisturizer category. “All brands are positioned differently and are a priority in their own way,” Seite says when asked what Estée Lauder’s priority brands are in the region. “The Middle East is a key market for travel retailing with the variety of passengers traveling through, be that in transit or starting/ending their journeys in the region for business or pleasure, and it’s key to our strategy to have a wide offering of brands and products to satisfy each consumer.”

national Airport’s Terminal 3, which Seite reports is doing “incredibly well. We’re excited and encouraged by its performance and the interest in this quintessentially English brand in the region.” The new retail area is an important addition to Dubai Duty Free’s perfume and cosmetics category, which currently accounts for 21% percent (YTD) of the retail operation’s total turnover, which is expected to reach US$1.64 billion this year. The new retail area opened for business on April 23 and has seen a steady growth in average daily sales. Commenting on the addition of Jo Malone London, Colm McLoughlin, Executive Vice Chairman of Dubai Duty Free says, “We are very pleased with this new offer and we have received a good deal of positive feedback from our customers. The brand has a strong following worldwide, and so far 53% of our customers are existing customers of Jo Malone London. Encouragingly, though, 47% of those who purchased Jo Malone London since the opening are new to the brand, which is a very good indicator.” Seite attended the opening, along with a high-profile team of executives from the Estée Lauder Companies Inc. New York head office: President and CEO Fabrizio Freda, Group President Cedric Prouve and President of Travel Retailing Worldwide Olivier Bottrie. At the event Seite remarked, “We are delighted with the successful launch of this Jo Malone in Dubai Duty Free, where existing clients of the brand will be able to purchase their favorite products and experi-

“We know that there are big spenders in the Middle East, and we notice a really high footfall and conversion. Interestingly Middle Eastern consumers state shopping is a favorite activity at the airport.” Jean-Charles Seite, VP/General Manager, Travel Retailing EMA, Estée Lauder Companies

While Seite is hard pressed to single out particular recent trends in the Middle East, that doesn’t mean the region isn’t dynamic and changing. “We know that there are big spenders in the Middle East, and we notice a really high footfall and conversion. Interestingly Middle Eastern consumers state shopping is a favorite activity at the airport.” Estée Lauder recently opened a new Jo Malone store in Concourse 2 of Dubai Inter-

ence new ones, and where new consumers will be able to experience the world of Jo Malone London.” This past summer also saw the introduction of a new Tom Ford door offering the Full Color collection for the first time at Dubai International Airport. Tom Ford is a very strong brand in the Middle East and Seite expects that the additional offering of color c will prove very popular.

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

Traveller Limited

Made for the market The development of Traveller’s Voile fragrances will benefit from close customer targeting BY HIBAH NOOR hen inflight services specialist Traveller Limited, part of the Chalhoub Group, decided to release its own branded luxury fragrances specifically for the Arab market, the move involved a thorough market analysis followed by a focused development process. But General Manager Rami Madi says that the fundamental factor behind the move was the Jebel Ali based company’s deep expertise in the region and understanding of customers there. “Basically travelers have seen a lot of new brands coming to the region with different products, especially for the Middle East region, and since we’re from the region we thought we’d be the best ones to do such products,” Madi says. Drawing on its constant exposure to the international market and the major international brands, Traveller joined forces with fragrance developer Ajmal Perfumes, one of the most renowned fragrance manufacturing companies in the region, to conceive two fragrances exclusively for Traveller’s airline clients. The development behind the new Edps—Voile Noir for women and Voile Blanc for men—was aimed at producing a fragrance based on traditional Arab oils with an Oriental flavoring. “We had to go on a ‘smelling journey,’ so to speak,” Madi says. The first short list of contenders numbered 20 fragrance samples, some for men, some for women, and some which could work for both. The list was progressively whittled down to the final two. The names were already in mind when Traveller embarked on the process, Madi says. And a similarly rigorous process led to the development of the bottle design. “Basically we wanted to present to the consumer a luxury brand, a luxury product,” Madi says. “So it was very important for us to come up with a bottle that was very modern, very novel, something contemporary at the same time and something that fits onboard.” He notes that the Oriental character that Traveller wanted for the fragrance was an important factor in coming up with the name. “We had to cross ideas—East meets West. The name is Western, it’s a French name that puts the Western signature on the product, but the connotation is very much Oriental. So that way it links to the region.”“Voile” is French for “veil” – a traditional garment, usually black, worn by women in the GCC to cover the hair, hence reflecting modesty, yet at the same time conjuring an image of mystery and allure. The male “veil” is white and is worn atop the head with the customary “egal” to add that singular touch of distinction to a man’s appearance, says Madi.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Traveller’s unique Voile Noir and Voile Blanc fragrances are available to it’s clientele in the Middle East

Voile Noir and Voile Blanc were launched in March and are sold in the 100 mL size at a retail price of US$85. Both fragrances made their debut onboard Saudi Arabian Airlines to outstanding sales results, surpassing Traveller’s own expectations. The next step was to introduce them onboard other airlines in the region, including Qatar Airways, Oman Air and Kuwait Airways, with Voile Blanc being launched onboard Etihad Airways in November of this year. “Given that Voile Noir and Voile Blanc were totally novel fragrances that were not available at the domestic level, and which hence did not enjoy the typical exposure other fragrances normally would – such as spraying campaigns – the only means to create a buzz and attract passenger attention was to launch a promotional campaign based on advertising visuals that would be printed in the in-flight magazines of the airlines carrying these fragrances,” explains Madi. “We launched rather provocative advertising visuals onboard the airlines.” The intriguing visuals feature a female dressed in black, whose face is partially covered with a square, gold-colored veil-like mask with metallic ornamentation, while the male face sports traditional Arabic dress, all in white. The project benefited from the focused scope of execution—“Voile was developed specifically for Traveller’s airline clients in interest of offering them as well as their passengers a different product that targets their need for a traditional Arabian fragrance with a little Western twist,” Madi says, “Our clients are very pleased with the sales results, which in turn reassures us that we actually did develop a star product and that the possibilities going forward are limitless.” And what about developing other fragrances? “We have a few things in mind at the moment and will be sharing details with the media in due course,” Madi says, adding that everyone will be pleasantly c surprised.

Designer Parfums Agent Provocateur recently launched Pétale Noir, a deep floral scent with premium oils layered with floral notes at the heart

Strategic scents BY

HIBAH NOOR

The broad range of premium fragrances Designer Parfums manages requires a steady hand and a sound strategy ou may not have heard of this company, but you most certainly will have heard about our brands,” says Dilesh Mehta, Managing Director of Designer Parfums, which creates and markets premium fragrances. The company is headquartered in Watford, UK, near London. Indeed, the notable acquisitions of Jean Patou and Ghost Fragrances from P&G Prestige have definitely positioned Designer Parfums as what Mehta calls an emerging force in the global fragrances market. Currently the portfolio also includes other notable names— Worth Paris, Aigner Parfums, Jean Louis Scherrer and Agent Provocateur—and the plan, according to Mehta, is to continue to develop and broaden the Designer Parfums range of brands with global appeal across the prestige fragrance market. “We want to be able to grow these brands organically through the expansion of worldwide distribution and the introduction of successful product launches,” Mehta says. “Our plan is to increase the number of brands in our portfolio through ownership or license

“Y

agreements, and we will identify those brands with an existing fragrance business or with a clear recognizable potential going forward.” The correct strategy, Mehta says, is to have a broad eclectic mix of well known brands across the full range of the global luxury fragrance market. The plan is to work specifically to develop about ten brands over the next two to three years. “There should be a spread between the niche, higherpriced premium brands and the more accessible ‘masstige’ [mass and prestige] brands to help smooth out the peaks in economic conditions and market trends,” Mehta says. He’s delighted to have Joy—the “costliest fragrance in the world”—to work with, alongside the most recent addition, Ghost. This enables Designer Parfums to offer something for everyone: the export distributors, the retailers and of course the customers. Ghost was acquired a few months ago, and Jean Patou a few months before that, both from P&G. Aigner was picked up two years ago from Puig. “We started with Agent Provocateur and Aigner,” Mehta says. “We’re

From left: Designer Parfum’s Dilesh Mehta, Managing Director and Lawrence Hili, Vice President (Export)

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

pretty new as a company, but the brands have great heritage.” Business is booming for Designer Parfums in Russia and Mehta says the Americas market is poised to do well, in Brazil in particular but also throughout South America. “We’ve acquired a lot of new brands this year and we’re looking at catching up in the second semester. The market is still a bit volatile—it’s not steady yet. The Far East is doing well, but in the Middle East it’s just holding steady.” Along the eastern seaboard of the US, from New York to Miami, Jean Patou is being well received. Aigner just reached number one status in the Middle East, having hit the top five in the first two months after its launch. The fragrance is well known there and across the Far East, Mehta says. “We’re looking for new listings in travel retail,” he says. “Soon we’ll be looking at Dubai and Qatar Duty Free and inflight listings like Etihad, Emirates and Saudi Airlines.” In Dubai Duty Free there will be GWP promotions as well as samplings, and Designer Parfums is supporting the fragrance with a lot of podium installations in Paris Gallery and Debenhams. “We’ve instigated the demand and that’s why we’re able to do travel retail and inflight. Consumers have seen our activity in the domestic market,” Mehta notes.

Ximena Navarrete Miss Universe 2010

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Designer Parfums

Aigner’s Middle East launch was backed up by the brand’s leather goods, which Mehta says are well crafted and were launched into the fashion and accessories category at the same time as the fragrance had its parallel launch. The brand’s watches have also proven to be popular, Mehta says. Overall 2012 has been a “phenomenal success” for Aigner in the Middle East, most notably in the UAE where sales have gone from strength to strength following the launch and where the brand has regained its top ten position.

The flag bearers Aigner’s success rests on a constant schedule of new product introductions, and one of the latest releases is the appropriately named Aigner No. 1 men’s fragrance. The fragrance offers a woody, dense, leathery scent softened by fresh accords. Cedar leaves, bergamot and pepper capture the high notes while strong middle notes of ginger, cinnamon and geranium add texture and depth. The whole infusion derives character and strength from vetiver, oud, sandalwood and musk. No. 1 is housed in a contemporary, smokey grey bottle that features the Aigner horseshoe. The fragrance is accompanied by the Aigner No. 1 Bath and Body Collection, which features a deodorant spray and bath and shower gel. The creative campaign was photographed by renowned German fashion photographer Markus Jan and features male model Craig Roberts. Agent Provocateur, which has been on the market for eight years, is also in motion, with a worldwide expansion program that includes plans to launch lingerie-led boutiques. A Saudi launch is also being contemplated. The brand has done well in Russia and the UK, Mehta says, and seven outlets have been opened up in the US—two in Las Vegas, one each in Miami and Los Angeles, and three in New York. “First comes the brand, then comes the perfume,” Mehta says. “They’re doing well in Asia—just opened in Korea, China and Japan, Taiwan, outlets in Singapore. Once the fashion leads, the perfume will follow.” Agent Provocateur has launched Pétale Noir, a pillar fragrance, a year in the making. Pétale Noir is a deep floral scent with premium oils layered with floral notes at the heart. Accents of precious wood are enhanced by musk crystals and sweet, spicy accords. The palette is extensive and varied: the top notes of mandarin, water lily, bergamot, violet leaves, hyacinth, flower stem accord 58

and magnolia unfold into strong tones of rose otto, rose absolute, ylang ylang, muguet, neroli caress heliotrope, orris, osmanthus and fine cassie blossom. The denouement proceeds along vectors of bold ginger, cedarwood, sandalwood and cistus-labdanum alongside musks, vetiver, leather, oakmoss and tobacco leaf, benzoin, patchouli and amber. The rose pink juice is echoed in the bottle design, which is hand etched with a rose flower. Pétale Noir is available as of October in selected department stores as a 30 mL Eau de Parfum £36 (US$58), 50 mL Eau de Parfum £49 (US$80), 100 mL Eau de Parfum £69 (US$112) and Luxury Body Elixir 225 mL £28 (US$45). The Luxury Body Elixir incorporates a blend of natural oils, babassu oil, Devil’s Eyelashes and tephrosia purpurea seeds—the latter purported to have aphrodisiac properties. Designer Parfums is also reintroducing the three pillar fragrances by Jean Patou, called 1,000, Joy and Sublime. “They’re the iconic fragrances for Jean Patou,” Mehta says. The expensive niche fragrances will be available by year’s end in all Middle East duty free and local markets. Jean Patou 1000—named for the 1000 trial variants formulated before the fragrance was finalized and released in 1972— is a blend of osmanthus and rose. The heart of the perfume is activated by a mix of tuberose and jasmine, which plays out into a powdered duo of orris and violets. The floral bouquet tops out in hot notes of Mysore

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Jean Patou’s Joy fragrance is a fusion of damascene rose from Bulgaria and rose de mai alongside jasmine from Grasse

Men’s fragrance Aigner No. 1 offers a woody, dense, leathery scent softened by fresh accords

sandalwood. The bottle design was inspired by the Joy flacon and is rendered in pure glass polished by hand, inlaid with the Jean Patou monogram and sealed in the brand’s signature golden thread. Jean Patou’s Joy fragrance is a fusion of damascene rose from Bulgaria and rose de mai alongside jasmine from Grasse. The combination is based on a doubling of the usual quantities, an unusual step that produced “the costliest fragrance in the world.” The market-savvy tagline actually helped the fragrance sell more successfully at a time when the Great Depression was in full swing. The floral fragrance features notes of honeysuckle, ylang ylang and tuberose, rooted in a sandalwood base. The Joy bottle was designed by architect and interior designer Louis Süe, who produced a flacon cut like a precious stone with a form that reflects the “golden ratio” derived from classical Greek aesthetics. The bottle has an etched top and is also decorated with the traditional Jean Patou golden thread. Finally, Jean Patou Sublime, launched in 1992, is a floral-based fragrance with middle notes of rose and jasmine combined with lily-ofthe-valley and orange blossom, enhanced by warm notes of vetiver, sandalwood and oak moss and a blend of citrus elements. Orange and mandarin facets combine with Comoro island ylang-ylang to add a c current of spice.

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Ajmal Perfumes Taaj Al Raas, a new exclusive travel retail fragrance will be unveiled at the TFWA World Exhibition

Armed with a new “hero” ingredient, Ajmal Perfumes looks to new technology and aggressive promotions MELISSA SILVA BY

jmal Perfumes of Dubai has launched a series of new fragrances for men and women. The 60-year-old perfumer has maintained a high profile over the years, and has made steady inroads into the travel retail market. In comparison to last year, business in the Middle East in both local and travel retail markets has improved for the brand in 2012. The outcome of the first half of the year was “overwhelming,” says Abdulla Ajmal, General Manager, Ajmal Perfumes—a demonstrated improvement after two years of tough market conditions—and the brand hopes to keep up with the pace until the end of the year. With business doing well, Abdulla Ajmal is pleased with the brand’s performance so far this year. With market conditions improving, he feels the second semester will bring positive results and expects significant growth through the remainder of 2012. “Travel retail has been showing positive results which have been extremely encouraging. With newer accounts like Air Arabia and British Airways, this area of business has been showing growth in 2012 and we look forward to a brighter second semester and the year 2013,” says Ajmal. “Our aim is to maintain continuous year-on-year sales growth at an average rate of 14%.”

are considered as leaders in this category,” Ajmal tells Gulf-Africa Duty Free. The brand’s consumer base consists of GCC nationals, Russians, Germans, English and Africans, with a normal purchase of two to three pieces per transaction. Speaking of transactions, Ajmal says that the company plans to make special use of new technologies such as the iPad at point of sale (POS). “Technology is the key to drive any marketing and sales activity,” he says. “We are working on plans to get into the same in a big way in the future. Once the structure is finalized media will be informed.” As for marketing, Ajmal explains that the brand follows the “norms”—POS displays, sampling, branding and advertising—

“ Travel retail has been showing positive results which have been extremely encouraging. With newer accounts like Air Arabia and British Airways, this area of business has been showing growth in 2012 and we look forward to a brighter second semester and the year 2013.” Abdulla Ajmal, General Manager, Ajmal Perfumes

Most of the brand’s business derives from the existing retail base in the GCC. Although Ajmal feels there is opportunity for substantial growth in almost all regions, it is Saudi Arabia—which works on a distribution model—and the United Arab Emirates which stand out as the most profitable in terms of success and growth. Retailer buyer trends are currently revolving around Oud, the new hero ingredient, which Ajmal says is gaining popularity outside the Arab world. “The international brands are following this new trend and are opting to use this exotic scent to create many blends for which we 60

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

and makes use of special displays in the event of a new product launch. Within some of the brand’s focus markets, specifically Dubai and Kuwait, several new promotional activities are presently in motion, in the form of stands, POS and gift with purchase promotions (GWP). Looking forward to the TFWA World Exhibition in Cannes, Ajmal plans to launch Taaj Al Raas, a new exclusive travel retail fragrance. Keeping in line with the current trends, Taaj Al Raas is an Oriental fragrance that offers woody, floral and spicy notes. Future development plans for the brand involve discussions with a few travel retail structures, but these are yet to be confirmed. c

Beauty Beat: Fragrances

Fragrance New top-line scents for men and women

firsts Vintage Bloom by Jessica Simpson Company: Parlux Fragrances Description: The new fragrance from Jessica Simpson is a soft floral harmony of garden flowers. Created by acclaimed Perfumer Stephanie Hakes at Ungerer and Company, Vintage Bloom captures the scent of a freshly cut bouquet of fragrant blossoms Booth: Green Village, M64

The Touch

Le Roy Soleil Extreme Company: Cofinluxe Description: The new men’s fragrance by Salvador Dali is a blend of extreme sensuality and seduction, says the company. The scent combines fresh citrus with the masculine accents of carnal wood and leather base Booth: Red Village, K35

Marc Eckō Green

Sensuelle Glamour by Parfums Arno Sorel Company: Parfums Corania Description: This new fragrance by Parfums Arno Sorel features floral, green and fruity notes. “A sparkling perfume for a spontaneous and glamorous woman,” says the company Booth: Blue Village, G12

Company: Parlux Fragrances Description: Marc Eckō’s fifth fragrance for men “explores the adventurous side of life”. The scent portrays the freshness of woods and water and is contained in the signature Marc Eckō fragrance bottle featuring sheer green glass nearly split in two and marked by the reflective rhino logo Booth: Green Village, M64

Vince Camuto Company: Parlux Fragrances Description: Vince Camuto is a woody fragrance created by award-winning master Perfumer Harry Fremont. Encased in a flacon covered in leather, the bottle sports the seal of the Camuto family crest Booth: Green Village, M64

Baldessarini Secret Mission Company: Mäurer & Wirtz Description: The scent is created in cooperation with renowned fragrance house IFF. Head note opens with a blend of bergamot and basil, combined with fresh cypress. In the heart, the fragrance reveals cardamom, aromatic geranium leaves and lavender. The base notes include cedarwood, musk and Oriental oud wood Booth: Green Village, K50

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Company: Travalo Description: This 5 mL refillable fragrance wand with rollerball technology has been receiving positive feedback from retailers worldwide. Like the earlier Classic Essential and Classic Excel models, the Touch features Travalo’s patented repeat pump system that keeps refilling simple and clean Booth: Yellow Village, D27

So Elixir Purple Company: Yves Rocher Description: Yves Rocher will unveil three scents during the TFWA World Exhibition including Comme Une Evidence, Moment du Bonheur and So Elixir Purple (pictured), which features an infusion of tuberose and vetiver essential oils in a floral-woody elixir Booth: Ambassadors Village, U2

True Reflection by Kim Kardashian Company: Five Star Fragrance Company Description: An oriental fragrance that opens with a burst of sparkling Italian bergamot, plum and peach. The floral heart offers a mix of night blooming gardenia, chocolate orchid and lotus flower, while the earthy finish of textured woods, patchouli and skin musk rounds out the scent

Armand Basi Happy In Red

Gold Diva by Roberto Verino

Company: Idesa Parfums Description: Created by Perfumer Sylvie Fischer-Desuzinge, Takasago, the fragrance starts with fruity top notes. The scent includes a mix of lemon and tangerine combined with spicy pink pepper notes. The middle floral notes are a combination of hyacinth, jasmin and orris. Warm bottom notes of amber, patchouli, vetiver and white musk round out the fragrance Booth: Golden Village, GO10

Company: Perfumes & Diseño Description: The floral, fruity fragrance was created by Véronique Nyberg and is encased in a delicate transparent mauve bottle. The outer packaging sports mauve and pink hues on the bright box evoking the fruits and flowers that make up the fragrance Booth: Blue Village, F3

Trussardi My Land

Zippo The Woman

Company: ITF Description: Main themes for the fragrance include a sense of travel and homecoming. The name is intended to evoke “the power and pride of being comfortable with yourself and appreciating the cosmopolitan spirit of your town,” specifically referencing the relationship between the Trussardi brand and the city of Milan Booth: Riviera Village, RD9

Company: Mavive Description: Following the success of masculine fragrances The Original and On The Road, Zippo presents its The Woman fragrance for the feminine side Booth: Red Village, M30

Success by Trump Company: Five Star Fragrance Company Description: Inspired by Donald Trump’s success in real estate, business, publishing and television, his fragrance is described as “an empowering scent.” Created in collaboration with Yann Vasnier from Givaudan and developer Jennifer Mullarkey, this fragrance was crafted with a unique blend of notes

Beauty Beat: Skincare & Cosmetics

Top tones

“M” Cream Company: 3LAB Inc. Description: The first cosmetic product that contains stem cells from the rare Uttweiler Spatlauber Swiss apple, so rare that only three trees remain in existence, according to the company. This luxury skin destressing cream works to increase resiliency and cellular turnover “while giving the skin a naturally radiant glow from the inside out” Booth: Green Village, L63

Hypnôse Star by Lancôme Company: L’Oréal Group Description: The ensemble combines a special brush with three patents pending and a “Black Diamond” effect fluid formula that helps to sculpt lashes precisely

Elixir 7.9 Youth Intensifier Company: Yves Rocher Description: For skincare, Yves Rocher will display several collections during the TFWA World Exhibition, such as Anti-Age Global collection; the Cure Solutions collection, which includes Elixir 7.9 Youth Intensifier (pictured); and the Ovale Lifting collection Booth:Ambassadors Village, U2

Ultra Shine Gel Company: Artdeco Description: The new Ultra Shine Gel provides a bright wet look. Acrylic resin makes the texture water-resistant and contributes to long-lasting wear, while acrylic polymer provides a more intense gloss. Applying the clear lacquer on the nails after lacquering will seal in color, while protecting against discoloration and fading Booth: Riviera Village, RF8

Ultra Quick Dry Nail Lacquer Company: Artdeco Description: A clear lacquer that dries freshly painted nails in 60 seconds. The formula maintains high gloss and helps preserve color intensity. The transparent top coat provides protection for the nails and can be applied repeatedly to refresh colored lacquer Booth: Riviera Village, RF8

White Flash Company: La Colline Description: La Colline bills White Flash as “the first light-creating cure, with three synergistic skincare formulas that take action to reveal, brighten and unify a fair, radiant complexion.” The selective action of LUX-Factor (Lightening Ultimate X-Factor) on pigmentation spots, combined with the anti-aging properties of the CMAge Complex brightens and evens the complexion Booth:Yellow Village, E39

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Glam'Abdo Company: Jacques Bogart Description: To restore a flat, firm, toned tummy, Méthode Jeanne Piaubert Laboratories has formulated Glam’Abdo, a specialized, high-power treatment inspired by mesotherapy that can “lift,” plump up, firm and repair skin Booth: Riviera Village, RC1

Creamy Matte Lip Color by Bobbi Brown Company: Estée Lauder Description: A matte lipstick formula that combines the look of a classic matte lip with high wearability. Creamy, moisturizing and highly pigmented the lipstick applies comfortably Booth: Riviera Village, RE18

CASABLANCA

MARRAKECH

AGADIR

AL HOCEIMA

FEZ

RABAT

OUJDA TANGER

ESSAOUIRA

OUARZAZATE

Skagen Designs/Fossil

Greater than the sum

In Asia, the brand has been selling for nine years, while the Middle East is handled out of the EMEA office. Travel retail currently accounts for about 10% of the total business, which is growing at about 20% a year. “We’d like to grow travel retail to at least 15% of our total business,” Jensen says, a target she believes can be reached in a couple of years. That growth BY HIBAH NOOR is expected to come from all regions, with the bulk of new customers coming from Asia. and values of our It will also come partly as the result of two companies and some unique tactics. “You’ll see Skagen do look forward to crethings other companies don’t,” Jensen says. “In ating something inflight magazines we don’t use all the space greater together." The 890 Series Kartsotis is described as includes two men’s for pictures of products—we write edito“a very visionary guy” by watches featuring a rial to educate the consumers.” steel case with matte Skagen has tried some other innovations Skagen’s Commercial Directop and flat glass tor Anita Jensen. “He sees enclosing a gradient to maximize sales in the often time- and dial that radiates out space-constrained world of travel retail. that Skagen has the potenfrom silver to tial to be a mega brand— charcoal or brown One challenge the brand faced was the (pictured) fact that in most retail settings—travel the lifestyle, the stories, the very unique point of view for the products. retail and otherwise—watches are displayed We are a perfect match within the Fossil port- in locked containers and interested cusfolio, with the Fossil Americas vintage and Ska- tomers need to find a salesperson to open gen Danish side. So ‘Yin and Yang’ in terms the cases if they want to have a good look of product offering for the consumer.” That at a watch they’re interested in. When it duality is echoed in Skagen’s strategy of comes to tangible, solid products like watches, matching Japanese precision and Swiss move- being able to let the customer feel the prodments quality with Danish minimalist stylings. uct is an important element in concluding Skagen’s attractiveness as an acquisition a sale successfully. If there’s no time to do it, was enhanced by the way the brand has been sales suffer. “On many ferry lines and in airports, growing of late, Jensen says. It’s now the eighth largest fashion brand in the watch where time for shopping is limited, it is segment globally, but was nearing the point important that the customer can quickly where a husband-and-wife partnership would look, feel and try on the watches without assishave found it increasingly difficult to main- tance,” Jensen says. On Scandlines ferries, tain the pace of expansion. The brand, which which ply the waters between Denmark and is also noted for manufacturing, marketing Germany, trips last 55 minand distributing jewelry, utes and sales staff simply The Faceted clocks and sunglasses in addi- don’t have time to help Glass collection features a sheer tion to watches, is present in every customer. Accordsteel look with nearly 70 markets around the ingly, Scandlines originally silver, gold and charcoal-toned world at the moment, but the decided watches weren’t steel links acquisition by Fossil gives it a worthwhile offering about twice the current distribution, Jensen on these crossings, says. “We’re now 400 colleagues in Hong Jensen says. Kong instead of 60. It’s a good move Skagen’s Ultra Slim for the brand.” The Jorsts will stay Ceramic collection on as brand consultants, training was unveiled to celebrate its popular new managers in the Skagen cul233 series from 2001 ture. In response, SkaThe acquisition also raised the number of people doing travel retail for Skagen gen developed a cusfrom one to four, so expansion is clearly on tomized “Shopper” the agenda. “Obviously we can grasp much 140cm X 30cm X 32cm more, we can develop more,” Jensen says. “We display unit with plexi glass shelves. Instead of being can take our heritage to the frontlines.”

Fossil’s acquisition of Skagen Designs bodes well for both parties ollowing its US$231.7 million acquisition of Nevada-based Skagen Designs, which was formally concluded in April, Fossil Inc. plans to capitalize on the success of the watch and jewelry brand by offering it the distribution and corporate resources it needs to continue its pattern of rapid growth. The transformation of small husband-and-wife operation, which was founded 23 years ago, into a global player in the travel retail market and others is expected to bring some rapid changes and large-scale success. “We’ve long admired Fossil and believe they will bring great passion and vision to our brand,” Charlotte Jorst, Co-founder of Skagen says of the acquisition. “The opportunities for Skagen under the Fossil umbrella are endless and we look forward to building this wonderful brand,” adds Henrik Jorst, the other Co-founder of Skagen. “It’s a great privilege to join together with our Skagen colleagues to share their Danish design story with the world,” says Fossil CEO Kosta Kartsotis. “Skagen is unique and has enormous potential as a lifestyle brand. We see many similarities in the history

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

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The Duty Free Show of the Americas is THE place to do business, with all primary show events taking place in one venue. Visit www.iaadfs.org/dutyfreeshow for more information and registration, 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 the duty free industry for more than 45 years.

Skagen Designs/Fossil

locked up, the watches are wired to the display and can therefore be safely shown in the open, where customers can pick them up and get a good look before deciding to buy. After seeing the unit, Scandlines reversed course and started to use it to sell watches onboard: sales are now at 30 watches a week, Jensen says.

Coastally conscious While based in Reno, Nevada, Skagen Designs is actually named after a small coastal town on the northern tip of Denmark where the Skagerrak strait turns into its continuation, the Kattegatt. Founders Henrik and Charlotte Jorst were so inspired by the warmth and welcoming spirit of this special place, they set out to create a small, design-driven lifestyle company that not only shared its name, but it’s very ethos. In a nod to the serene, seaside vibe of the Skagen village, they developed a distinct design DNA for the brand rooted in simplicity and natural elements. To ground the brand in an urban lifestyle, they also incorporated influences from their favorite metropolitan cities. This perfect mix of natural and modern design sensitivities makes the Skagen collections unique and has contributed to the brand’s global success for the past 23 years. The brand’s logo is a stylized representation of two bodies of water meeting. “The watches have some inspiration from the city,” Jensen says. But that urban accent is also closely tied to the sea environment. “When oceans meet, salt crystals are thrown in the air and when the sun comes down it creates a special light—at sunset and sunrise the city turns into this blue loomy shade. We call it ‘the blue hour.’ For us our signature dials are blue.” The company expanded rapidly from its original business selling corporate products to the general retail market, quickly entering some of the most powerful retail chains in the US. Geographically the brand remained US-oriented for its first ten years and only began to expand into Europe and Asia more recently—Jensen opened Skagen’s Asian distribution in Hong Kong five years ago. Among Skagen’s notable product families is the Faceted Glass collection. The watches have been designed with a ‘sheer’ steel look with silver, gold and charcoal-toned steel links. The cases are enhanced by a superhardened mineral faceted glass mounted over a mirrored border, which creates a prismatic ‘halo’ effect, set above matte or vertically brushed multifunction chronograph dials. A smaller model features faceted glass elements 68

From left: Skagen Design’s Anita Jensen, Commercial Director and Marianne Linder, Key Account Manager, Travel Retail, during the TFAP Singapore show earlier this year

Skagen developed a customized “Shopper” display unit with plexi glass shelves for Scandlines; the display will also be rolled out worldwide

over a mirrored border on a gold or rose case enclosing a vertically brushed dial. The dial has 12 crystal indicators made of Swarovski Elements crystals. A groove of gold or rose gold enhances the feeling of depth along the full length of the steel mesh band. In 2001 Skagen introduced its 233 Series watches, noted for its ultra-slim styling. Over the years since then the Danish-minimalist line has won a number of design awards including the Japanese Good Design Award for 2011. To celebrate that award, Skagen produced an ultra slim ceramic case in bright white or deep black housing matched layered matte dials with a bright red second hand and contrasting steel hour indicators. The accompanying genuine leather matte straps are also offered in white and black. The 890 Series of two men’s watches features a steel case with matte top and flat glass enclosing a gradient dial that radiates out

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

from silver to charcoal or brown, creating what Skagen calls a “sunburst” effect, supported by matching black or brown straps of genuine Italian leather. The watches have precision Japanese quartz movement and an inconspicuous date/day function to round out “a style that is both coastal and professional in its appeal.” Also newly released is Skagen’s 989 Series. The goal here was “to design a series of watches that pay homage to the simple forms of watchwork with a slight update to give a nod to contemporary fashion.” The models feature a minimalist matte dial in black and grey with a vertically brushed outer ring and simple hourly indicators which drop away to a concentric lower center dial with an unusual semi-dial day/date function. The vertically brushed case with shined and beveled edges and the super-hardened mineral crystal are driven into genc uine leather straps.

Timepieces from Skagen’s Fall 2012 collection

Exhibiting at TFWE in Cannes from 22nd to 26th October 2012. Riviera Village RG16 www.mavala.com

Inspired by cycling, this chronograph for men from the Chrono Bike collection is available in a stainless steel case and is water resistant up to 10 ATM

Festina

Making the rounds

Enjoying success in Middle Eastern domestic venues, Festina seeks the same in travel retail BY

MELISSA SILVA

atch company Festina currently has its hands full in the Middle East, selling in locales such as Bahrain Duty Free and Beirut Duty Free. Ethiopia has also proven to be a great market for the brand in terms of sales, and Iraq sales are on the rise. Given the growth of the brand in domestic markets, Festina wants to replicate that growth in travel retail, and is on the hunt for a business partner who can help establish the brand and leverage the competitive advantage it currently enjoys. As a direct result of the current growth, Festina’s domestic sales are currently up, along with sales in travel retail. The brand’s listings with Saudi Airlines have contributed a lot to this increase, and have helped boost sales figures. “Airlines are the vehicle we use to increase brand awareness at both national and international levels,” says Worldwide Director of Travel Retail Jason Newman. “So we will continue to push to get more listings. Selling ‘in the air’ also gives the possibility of presenting a successful product which is representative of the brand in a proactive and commercial way via a professional and qualitative backdrop, usually in the form of an inflight catalogue.” In addition to airlines, Festina is looking to develop sales in airports, duty free zones and other areas. Festina has recently introduced some new models exclusive to travel retail, and is evaluating their performance. In collaboration with cruiselines the brand has pursued some GWP promotions, which have boosted sales. “With one cruise ship operator we offered a Festina towel as a GWP and the results were very positive,” says Newman. “While in general we do not want to be a GWP-defined brand, we can discriminate according to clientele, destination, etc., and thus push sales in a particular direction.” Festina plans to continue with new product development on a constant basis, offering products that are suitable for duty free and offer

good value for price. Over the past year Festina has increased market share in ladies’ watches, with the brand developing a successful ceramic line that has been introduced into travel retail. Sales of this line have been very good, largely thanks to listings with Air France, Iberia and Lufthansa. “Some brands come and go in a flash and others have existed for centuries,” says Newman. “The watch category is a dichotomy of fashion and tradition. Part of the watch category is evolving constantly; the other part takes pride in being faithful to its origins. Festina was founded in Switzerland in 1902 but as a forerunner in the mid-price range we are constantly introducing new products.” Consumer buying trends are changing, something many companies in the category have noted. According to Newman, watches used to generally be an “event” purchase, meaning that buying a watch was an educated selection of a product people knew something about. Buyers had a notion of what they wanted and how much they were willing to pay. Today, that mentality has changed. “I would say the reasons people buy a watch have evolved. The motivation for buying a watch now ranges from functionality to pure frivolity, but still with a strong ingredient of the watch being a status symbol,” Newman says. Newman feels the materials used today contribute to this evolution and have rendered watches more of a fashion accessory than ever before. “They are less functional and more ornamental; it is more about color and material combinations. At the lower price point colorful combinations of plastic have been the recent trend, whereas ceramic is the biggest innovation at the middle-to-higher-end product group,” Newman tells Gulf-Africa Duty Free. To maintain this demand for fashionable timepieces, Festina works closely with local partners in the domestic and duty free

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Part of the Ceramic Collection, this ladies’ watch features a ceramic band and stainless steel dial with a mineral glass face

Jason Newman, Worldwide Director of Travel Retail for Festina

markets to develop product lines that follow certain trends on either a short run or oneshot basis. This strategy complements the listing of models from the brand’s more established collections. “This said, consumer tastes are also becoming homogeneous in many categories,” says Newman. “So for example, tailoring to local market needs is more the exception than the rule.” As for retailer buying trends, Newman has noticed a lack of risk taking, which he feels is largely due to retailer purchasing budgets being controlled by accounting departments. Because of this, each brand is allocated only a certain amount of money per year. “While this is necessary for financial purposes, from a commercial point of view it is suicide,” Newman explains. “If a brand sells well, by October the client can be out of budget leaving a totally flat end-of-year period, and if sales aren’t going well, you have generally no feedback until after year-end, by which time it’s too late to solve any style, c display or other issues.”

Made by hand to touch your heart

Frédérique Constant and Nicole Faria share one passion: Supporting the International Children’s Heart Foundation. We will donate the cost of a life-saving heart scan for each Frédérique Constant Double Heart Beat watch sold. Contact. + 41 22 860 0440 www.frederique-constant.com

Toscow Selections from Toscow’s Glitzy Ritzy collection including a cocktail ring, necklace and earrings, all featuring crystals in lavender, champagne, lemon and rose, to crimson, sky blue and apple green

It’s “the jewelry itself” in the Middle East, and Toscow has what the market wants

ustralian jewelry company Toscow has enjoyed doubledigit growth during the first half of 2012 compared with the same period last year. With the strong demand for colorful crystal jewelry in the Middle East, Toscow is in an enviable position in the region. Recognizing a shift in buying trends, with customers buying jewelry for the jewelry itself as opposed to buying for the brand, Toscow has remained focused on design and craftsmanship, not to mention color and crystals. “Nowadays a lot of people wear jewelry to be seen,” says General Manager Francis Ng, Toscow. “People are buying jewelry that is very eye-catching, as they’re not afraid to express themselves.” This may explain why Toscow’s bestsellers in the Middle East are its multi-colored crystal jewelry collections, specifically its vibrant Rio collection, which was aptly named after the Rio Carnival. Of all the pieces in the range, the bangle has proven to be particularly popular, thanks to its spring hinge which makes it easy to put on and take off. Also among Toscow’s bestsellers is the Paradise Garden collection, which offers an array of floral designs. “People are becoming more fashion conscious and it is unlikely that they would wear the same jewelry from day-to-day,” says Ng. “Jewelry is part of the ‘makeup,’ therefore ease of wearing is important.” In order to ensure its designs meet this current demand, Toscow’s design team attends jewelry shows in various countries, from Italy, Japan and Thailand to Hong Kong where the company gains valuable insight on what will be popular in the coming year. Just as important as attending the shows is paying attention to what people are

MELISSA SILVA

wearing on the street, recognizing what is prominent in fashion publications, and deriving inspiration from traveling, as seen with the Rio collection. Taking risks with design is equally important. Toscow’s recently-launched Artesian brand—which is the brand’s biggest achievement this year—focuses on lifestyle jewelry such as titanium necklaces and bracelet sets with germanium, which is very different from the Toscow brand. Artesian is currently listed on Saudi Arabian Airlines, Qatar and Thai Airways. Ng cites Australia as Toscow’s star region thanks to the brand’s expansion at its major airports Sydney and Melbourne. With its core business coming from Asia and the Middle East, the company hasn’t been affected by the recent economic turmoil in Europe. As evidenced by sales, the Middle East remains very strong in terms of growth, as colorful jewelry has always been popular in the region. Aiding the brand’s popularity is its use of airport signage and advertisements in inflight magazines, with signage ranging from a lightbox three meters in height to an A5-size poster. During this year’s TFWA World Exhibition in Cannes, Toscow will once again place bold color at the forefront, with its plans to exhibit its renowned multicolor crystal jewelry collection. Also set for display are additions to the existing popular collections such as Glitter Glamour, new designs from Dolce Vita as well as a brand new second line of its popular Glitzy Ritzy collection.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Featuring large bright-colored crystals locked together in a scattered brickwork format, the “second generation” of Glitzy Ritzy comprises two popular cocktail rings, two sets of earrings and a bracelet, with prices starting at US$89. The decision to extend the original line came from retailer feedback, as the original collection did very well when launched three c years ago.

Aurora

Inspired by nature’s most dazzling fireworks display. A striking combination of the earth’s atmosphere colliding and bringing light and love into a dark night sky. Don’t just paint the earth, paint the sky.

www.picalela.com

Jewelry Report

From the Floral Symphony collection’s “First Love” design, the Miss Bordered Bangle features a crème background with tones of soft pink and green

Rock

stars

Armed with bright gems and bold accents, these jewelers plan to stand out in Cannes BY MELISSA SILVA his year’s TFWA World Exhibition in Cannes is clearly going to be a colorful affair, with brands set to show their most vibrant collections to date. Paying close attention to consumer demand and market trends, these gem masters have put together collections that they believe will generate buzz in the industry. Frey Wille has high hopes for its colorful new collection titled “Floral Symphony” at the exhibition. A “tender tribute to nature and its magnificent splendor,” the collection boasts three new designs: Impressionist Flowers, Bouquet of Dreams and First Love. Inspired by the Impressionist movement, Impressionist Flowers features pieces painted with strong colors without visible outlines, making for a “sea of flowers” effect. Designs include three yellow gold-plated bangles and a ring with artistically designed enamel. Bouquet of Dreams features soft pastels and gold lining inspired by the Baroque period. Designs include bangles, earrings and a pendant, all featuring 24-karat gold powder. Featuring “bubbly” colors, First Love was created to exude a sense of youth and innocence. Plated with yellow gold, the pieces—including bangles and a pendant—display a crème background with tones of soft pink and green. The demand for uniquely designed pieces is a trend Wessam Elmona, Frey Wille’s Director of Duty Free and Worldwide General Manager Middle East and Africa has noticed, especially in the Middle East region. Elmona finds consumers in this region are highly selective, very brand oriented and interested in statement pieces that show not only the style of the brand, but also its value. Unique designs are one of Frey Wille’s strengths, as the company regards itself as first and foremost a creator of decorative art jewelry, not fashion jewelry, which differentiates the brand from others in the category. This emphasis on unique, art-inspired designs

has received a positive response, and the brand is doing well this year in comparison to last, reaching 20% higher in some duty free shops for an overall growth rate in the double digits. Frey Wille’s appeal in the Middle East—the region that will offer the greatest growth in 2013—accounts for its recent activity in existing duty free shops like Beirut Duty Free, and has likely landed it the opportunity to work on the new Dubai Duty Free Concourse 3, along with other new projects with existing partners Kuwait Duty Free and Amman Duty Free. “Frey Wille is decorative art jewelry,” says Elmona. “We have a wide range of art pieces. We don’t create fashion jewelry so we don’t really follow trends or fashion. Surely we have to take fashion into consideration, but we don’t follow it. We follow the authenticity of the art we are presenting.” The brand’s bestsellers are not regional, but worldwide, explains Elmona, referring to the Gustav Klimt and Hundertwasser collections. Also depicting a range of color and drawing inspiration from a specific period or era are the two latest collections from Reminiscence, Fancy and Silver, both of which will be launched during TFWA World Exhibition. The Fancy collection features eight themes: Allegria, Calamity Jane, Manhattan, World Family, Rock & Love, Les P’tits Fétiches, Dream Purple, Hypnose and Legends d’Automne. As with Frey Wille, the themes— like the collections as a whole—feature mother of pearl accents and pastel colors among other details like snakeskin, which establish a romantic and feminine feel.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

The Luna Piena pendant from Frey Wille’s Floral Symphony collection, featuring the “Bouquet of Dreams” design, including soft pastels and gold lining

The Fancy collection is positioned to do well in the Middle East, as a spokesperson for Reminiscence says that the region responds well to the brand’s extravagant, baroque style and unique materials. Evidence for this appeal lies in the brand’s regional sales, as its regional sales drivers include Europe, all French-speaking countries and the Middle East, where sales are driven by local and foreign tourists visiting duty free zones, particularly in Dubai. “Our portfolio is in constant evolution to continue proposing what the market demands: exceptional, incredible pieces of fancy jewelry, and knowhow in our silver collection, maintaining the spirit of the French Riviera in every piece we create,” says the spokesperson. Femininity and color are also on the agenda for Pandora, but with an added “luxe” factor. Pandora’s Autumn/Winter 2012 collection, which is set to launch in Cannes, features pearls, gemstones and polished surfaces. The focus of the new collection will be on the charm bracelet along with new key pieces. The brand’s new pavé charms series stands out in terms of color, Sterling silver ring with a black onyx heart from Pandora’s Autumn/Winter 2012 collection

One of Pandora’s new murano glass charms in red, made with sterling silver

Swarovski’s iconic piece, the “Nirvana” ring, made with Jet Hematite crystal has been revisited with a new faceted crystal cut and transformed into a gold-plated bracelet

while its new hand-faceted Murano glass charms offer more shine for the wearer. A number of new rings featuring enamel embellishments and polished black onyx heart will also be offered at affordable prices, as the brand has recognized an increased interest in its stackable rings. “Within the remaining categories—earrings, necklaces and watches—the collection is sharp and focused on a selected number of pieces within our best price points, shapes and colors,” says Julian Mullins, Travel Retail

ern influences, the collection features necklaces, earrings, bracelets and rings with a recurring triangle shape along with bright colors such as ruby, emerald and deep sapphire. Also featured is a selection of metals including gold, silver and antique polished steel to create a vintage look. With consumers in the Middle East looking for pieces that will match their tastes in style, Kingdom of Jewels appears to have a strong chance at performing well in the region.

Ancoli Earrings and the Clematis Bracelet from the “Dream Purple theme,” part of Reminiscence’s new Fancy collection

Director. Mullins adds that Pandora’s “broad appeal” is what has allowed the brand to perform so well in the region. “Consumers globally are looking for innovative products at the highest standards, whether the price point is US$30 or US$1,000,” he says. Pandora’s global strength is a testimony to its broad appeal which matches the diverse population of the Middle East.” For Swarovski, heritage and modernity set the tone for what the brand plans to bring to Cannes this year, as it is set to showcase its new Autumn/Winter 2012 collection Kingdom of Jewels. The collection responds to the solid demand in the Middle East for more bold and trendy designs. Additionally, Swarovski has recognized an increase in demand for rings— a demand reflected in this year’s offerings. Exhibiting medieval, ancestral and east-

“Middle Eastern women have a great sense for fashion and they know their own style and what they want,” says Swarovski’s Rasmus Olsson, Director Consumer Goods Business, Middle East. “They have a great fashion knowhow and know what brands stand for.” The necklaces featured in the collection include Seductive, featuring pear-shaped crystals, Serena, a baroque-inspired piece offering a traditional necklace chain with ruthenium accents, triangular crystals and pavé half rings in ruby and grey tones, and

The “Singapour” scarf necklace from Swarovski’s Fall/Winter 2012 collection, “Kingdom of Jewels”

Supreme, a flagship product for the brand featuring Crystal Mesh reminiscent of chain mail and a large blue crystal. Also part of the collection is the Singapour scarf necklace, which features Chinese influences and two decorative tassels with beading. Singapour can be worn in several different ways, even as a belt. Among the rings are Sketch, a cocktail ring with black agate and mini crystals, Sienna, a medieval-inspired piece featuring one large, square-cut clear crystal adorned with mini crystals, and Nirvana, which is regarded as one of Swarovski’s iconic pieces and has been revisited with a new faceted crystal cut and transformed into a gold-plated bracelet. The bracelet is part of the extended Nirvana Iconic collection, which includes bracelets, earrings and pendants. Also on hand is the Shogun ring with baguette-cut crystals in Crystal and Montana colors. The featured bracelets range from the Story bangle, which features a bold, exclusive octagonal cabochon in ruby red, scattered on each side with miniature crystals, the Studio bracelets showcasing crystals woven with black cord to create a studded wristband look, the Sword bracelet featuring braided black cord and a combination of charms with pavé mini crystals, and the Style bangle made entirely from steel and adorned with pavé crystals, creating a three-dimensional, graphic feel, a result of its rectangular crystal stone. Also part of the collection are the Sissy earrings which feature gold and silver flowers and multicolored mini crystals. Reporting double-digit growth this year, Swarovski feels the remainder of the year to be promising. “We see growth potential in all major markets, driven of course by Asia,” says Olsson. “And the Middle East is also generating c great results.”

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

In the last couple of years, Kipling has enjoyed huge success in travel retail

VF Corporation

Travel smarts VF Corporation hopes its leading brands can share market momentum

randed lifestyle apparel specialist VF Corporation is hoping to place its Eastpak urban lifestyle bag and luggage brand on travel retail shelves as successfully as it has done the same for the Kipling line over the last few years. Kipling, which started in 1987 as a high-end backpack line, now offers a broad range of lifestyle carryalls. “It’s been two years since we’ve been working on the best business model for Kipling that we’ve found,” says Ralph Bou Nader, VF Corp.’s Head of Travel Retail Worldwide. “We covered all airports worldwide. VF Corporation has enjoyed much success with its Kipling brand and now wants to do the same with Eastpak.” “The reason we want to enter with Eastpak is because Kipling is 95% for women,” Bou Nader says. “In terms of consumers, the travel retail business is more men. The women’s side is growing—it’s up to 40% now—but it’s still dominated by men.”

HIBAH NOOR

In Europe, Eastpak is stronger than Kipling, but Bou Nader says VF Corp. can use this presence to build Kipling’s European share. “It’s a win-win situation for both brands.” The Eastpak brand was launched some 50 years ago, originally to supply bags to the US military. Bou Nader plans to focus Eastpak’s debut with VF Corp. on the Core Series collection of travel bags. When he spoke with Gulf-Africa Duty Free, Bou Nader said he was in talks with World Duty Free, Heinemann and “all the big retailers.” He feels the market momentum generated for Kipling will naturally carry through with Eastpak, which already has a good and growing presence in Europe, France, the UK, Spain, Germany and across Asia—Eastpak opened a Hong Kong office to address the domestic market three years ago. Eastpak’s Fall/Winter 2012 collection features an urban-oriented lineup of bags and luggage with the brand’s distinctive multifunction approach and built-in adaptive features. The collection’s Core Series presents

what’s happening on the market. We share this target with the operator. We can react faster.” For this fall, Kipling is offering a “catwalk inspired Varsity look” range of luggage items, rendered in lightweight material. Products include the Wonderer SB small, unstructured, wheeled duffle with multiple straps for extra support, made of Kipling’s classic crinkled nylon. Also new is the Yupin Spin 55 four-wheeler trolley, which Kipling says is one of the lightest on the market. The unit features four light EVA wheels and soft-grip handles styled in warm grey. Also new is the Oristo bag, which comes with a trolley sleeve enabling it to be attached to trolley handles. “The best way to grow the accessory category is to have a great concept that doesn’t exist yet,” Bou Nader says. “I don’t see any concept from the retailers’ point of view that has innovative thinking, and this is something I would challenge the retailer to think about.” c

“The reason we want to enter with Eastpak is because Kipling is 95% for women. In terms of consumers, the travel retail business is more men. The women’s side is growing—it’s up to 40% now—but it’s still dominated by men.” Ralph Bou Nader, Head of Travel Retail Worldwide, VF Corporation VF Corp. plans to continue developing its Kipling success in tandem with the new focus on Eastpak. In fact Kipling recently opened in a dual launch with Eastpak in the Rolling Luggage branded bag store in Heathrow, while Eastpak also launched in all the Rolling Luggage locations in Europe. Both brands are also scheduled to open together in Manchester. Bou Nader believes that Eastpak is the best complementary brand for Kipling. “With those two brands I can tackle 95% of the market. My products are as good as any highend products—at 60% lower price points. It makes sense to have Eastpak in the business.” 76

a new range of packs and luggage items. The multifunctional concept is carried through with a range of “understated but edgy” prints. New styles joining the Core Series include the carry-on Stuwy with padded laptop sleeve and multipurpose pockets; the Berkins, featuring a back stash pocket; and the Bold S cabin-size trolley with quick-access compartments and compression straps. Kipling continues to develop its range too, Bou Nader says. “We’re going for four collections instead of two. It’s different from other companies, but the high-end brands are already doing this. This way there will be less stock for operators and more visibility on

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

VF Corporation believes that Eastpak is the best complementary brand for Kipling

Mars International Travel Retail

Mars

in Motion

Promotional finesse and the impulse factor bring the confectionery icon new successes HIBAH NOOR BY

or Mars International Travel Retail (ITR) the forthcoming appearance at this year’s TFWA WE in Cannes is a matter of seeing old friends and making new ones, says Lieke Duijmelings, Mars ITR Marketing Director. “Mars ITR has a clear ambition to grow together with our customers,” she says. “We would like to talk with our customers about how to grow the business faster, what tools we need to achieve this and which products fit the challenge.” Of course there will be new products to highlight as well. Duijmelings says that there will be new tins, sharing bowls, new dispensers and new rockstars on display. “Under the Celebrations brand we have a great new gift pack, which will be hard to resist,” she says. “Also our Galaxy range will be further improved and will be consisting of ITR exclusives.” These introductions, plus the appeal of the Mars “hero” brand M&M’s, which cuts across age groups, build on Mars ITR’s solid track record of introducing novelties. “The consumer leads what we do,” Duijmelings says. “Every consumer is unique, and so is every location. This is why we offer a variety of special packs and add a local touch to our products in airports, border shops, inflight and on ferries and cruise ships.” The promotional schedule has been a heavy one for Mars ITR. Over the past year the brand has staged a free speakers promotion in addition to a steady diet of year-round promotions. One example was the big theater “Plug M In and Win” promotion, which Duijmelings says achieved a great final result thanks in large part to a good team effort involving the airport and the customers in addition to Mars ITR. This year also sees a large-scale promotion with giant beach balls, which Duijmelings says have a lot of in-store theater possibilities. Also, year-round promotions will be developed around GWPs, and there’s a major Snickers promotion in the works. Mars ITR has experienced double-digit growth so far this year, Duijmelings says. “Our market share continues to grow as we develop and explore mutually beneficial ways of working with our retail partners,” she says. These include introducing new strategies such as offering customers in-store experiences and theater, with an emphasis on continuing to offer compelling promotions to consumers. The steady diet of promotions and other initiatives has helped to generate a “strong and positive” performance in the Middle East, Duijmelings says. “During the summer we ran a fantastic M&M’s speaker

case promotion—“Turn M Up”—with Qatar Duty Free at Doha, and results from this were very encouraging with the sellout tripled versus last periods in this promo area.” Of course the dynamic Asia region is also turning in excellent results. Growth rates for Asia—as for the Middle East—are on track to top out above 15%, which puts them ahead of the Americas, which is pacing at 13.6%. Europe is in the 10% range right now. Asia’s success has been attributed to numerous factors throughout the travel retail field, but Duijmelings singles out the fact that the Asia-Pacific region generates an average of 17 million new international arrivals every year. “For Mars ITR the opportunities are exciting,” Duijmelings says. “We recently opened an M&M’s standalone store at Singapore’s Changi, one of the leading airports of the world, where we entertain passengers, create additional sales opportunities and see direct engagement with the world’s number one chocolate brand, M&M’s. The colorful fun of M&M’s is converting those non-shoppers into shoppers.” The impulse nature of the chocolate category makes the conversion to sales that much easier, Duijmelings says. Asia remains a prime focal point for new developments, with Mars ITR riding what Duijmelings calls “the wave of optimism and willingness to try new ways of working amongst retailers.” She believes that because Asian travelers have a less well established relationship with the confectionery category, the impact of encouraging impulse buying behavior is that much greater. With the continuing growth in passenger traffic and the dynamism of new and emerging markets, Duijmelings says that Mars ITR’s strategy is to maximize impulse confectionery purchasing, through strong merchandising and category management that leverage the well established market presence of the brands in the portfolio. “Our portfolio contains eight out of the top 20 biggest brands in the world,” Duijmelings says. “As the leading confectionery player in duty free and travel retail we take the whole confectionery category one step further. We make consumers smile by bringing fun into their lives, c anytime and anywhere.”

“Our portfolio contains eight out of the top 20 biggest brands in the world.” Lieke Duijmelings, Marketing Director, Mars ITR

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Mars ITR will highlight new tins, sharing bowls, new dispensers and new rockstars during the TFWA WE in Cannes

MAKE YOUR HOMECOMING A SWEET MOMENT N

EW Visit us Blue at Cannes Villag e B7

YOU CAN NEVER BE TOO GENEROUS

Confectionery News

Iconique holds six of God iva’s most iconic chocolates

g Markers travel pack containin New Chupa Chups Smurfs book ops and one Smurf coloring lollip n seve ers, mark t eigh

Smurfs swell Perfetti Van Melle’sCannes lineup Perfetti Van Melle (PVM) will be exhibiting a new range of travel exclusive products at the forthcoming TFWA World Exhibition, including a new Chupa Chups license for the well known Smurfs cartoon characters (Mediterranean Village, N11). New to the Chupa Chups selection is the Chupa Chups Smurfs Markers, a travel pack containing eight markers, seven lollipops and one Smurf coloring book which will be hitting duty free shops in April 2013. Also new in the Chupa Chups range is the Chupa Chups Pouch Bag Exotic Tropic, consisting of 25 lollipops in Banana & Strawberry and Coconut & Pineapple flavors. The lollipops are covered with little spots that give them a unique character and flavor. New as well are the Chupa Chups Backpacks for kids, a red monkey backpack and a blue crocodile backpack with yellow straps. The Mentos brand also sees some new arrivals with the Mentos Jumborolls Tutti Frutti. Each Jumboroll contains six single

rolls of Bubblegum flavored candy. Also new from PVM is the Mix of Minis Bag, a combination bag of Perfetti's best-selling sweets: Mentos Mini rolls (Strawberry/Orange/Lemon and Cola flavors), Chupa Chups Mini Lollipops (Strawberry/Orange/Cherry and Cola flavors) and Fruittella pixels. Each Mix of Minis bag contains 36 pieces in total. PVM will also be showcasing a new product by Russian brand Meller called Meller White Jumboroll, a combination of chewy caramel with a soft white chocolate filling on the inside. Each Jumboroll contains six single rolls. “This has been a successful year for PVM with business growing globally with significant increases in the Asia Pacific and Americas regions with new distributors, as well as growth with our existing distributors,” says Mark Laros, PVM’s Travel Retail Director. “We are excited to display our new products this year at TFWA World Exhibition.”

Godiva adds the Coeur Iconique to its bestselling Gold Collection Just in time for TFWA WE in Cannes, Godiva has announced the addition of the Coeur Iconique to its Gold Collection. Billed by Godiva as perfect for gifting or treating oneself, the Coeur Iconique’s box is a blend of Art Nouveau and straight-from-the-runway fashion, bringing to life both Belgium’s design and chocolate heritage. The heart-shaped box, which features a delicate cut-out lace design, is created by using innovative laser-cutting techniques. Inside are six of 80

Godiva’s most iconic chocolates, the delicious heart-shaped Coeurs. These charming chocolates are filled with Godiva’s renowned signature creamy smooth praline and coated in white or milk chocolate, or covered in dark chocolate with a delicious ganache filling made with 70% dark chocolate from Papua New Guinea. Visitors to this year’s TFWA WE can learn more about the Coeur Iconique or the rest of Godiva’s range of chocolates at Yellow Village, F33.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Coeur Iconique holds six of Godiva’s most iconic chocolates

www.godiva.be

Confectionery News

Ferrero launches

gift mium ed pre s-them u b ir a e Surpris Kinder

travel-friendly Kinder gifts For 2013 Ferrero is launching a new Kinder gifting range exclusively for travelers which will be unveiled at the TFWA World Exhibition in October (Green Village, J35). Featuring cartoon characters and an Airbus-themed premium gift pack, Ferrero says the new range will boost sales in the new season at travel retail outlets worldwide. The Kinder products, rich in milk and designed especially for kids, have been combined with Looney Tunes games to create familyoriented gifts specifically for travelers. The Kinder Choco Box this year not only contains four Kinder Chocolate bars and four Kinder Country bars; it also becomes a personalized money box decorated with Looney Tunes cartoon characters. It serves as a lunch box or snack pack on the go, or a money box to keep at home. The Kinder Chocolate 32-bar pack is the best-selling item in the Kinder travel range, and is being relaunched this year with a Looney Tunes soccer game on the pack that kids can cut out and build. The Kinder Surprise 4-pack, Ferrero’s best-selling egg-shaped chocolate, has also been teamed up with Looney Tunes characters in bright packaging with one of the eight Looney Tunes Show characters inside each pack. Besides the Looney Tunes range, the Kinder gifting range this year also includes a Kinder Surprise offer linked specifically to the airport channel and new to the market for 2013. The Airbus Kinder Surprise 5-pack contains a complete collection of five model Airbus A330-300 planes in Airbus, Asiana, Lufthansa, Turkish Airlines and Kinder colors. The premium showcase packaging is transparent, revealing the Kinder Surprise chocolates inside. Once they have been enjoyed, the gift pack folds out to make a display case into which the model aircraft can be placed, making the pack a good gift for Kinder fans, aircraft enthusiasts and collectors alike. Key facts about the aircraft and the manufacturer are also presented on the pack. Priced at RSP €7.90 (US$10.27) the Airbus Kinder Surprise Collection with five chocolate Surprises and five mini-aircraft inside serves as a gift or souvenir for consumers of all ages, Ferrero says. Ferrero Travel Market will exhibit its brand portfolio including Kinder, Tic Tac, Ferrero Rocher, Ferrero Collection, Raffaello and Nutella at TFWA WE stand J35 in Green Village in October.

pack

The Kinder Choco Box becomes a personalized money box decorated with Looney Tunes cartoon characters

Confectionery reinvented Andreas Fehr, Managing Director of Kraft Foods World Travel Retail (KFWTR), promises that the company’s presence at this year’s TFWA World Exhibition in Cannes will open “a new chapter in the history of travel retail confectionery.” Fehr will share three major stories with industry partners, all of which he says will have a major impact on the confectionery category and beyond. The first piece of news concerns the splitting of Kraft Foods into two separate companies. As of October 2, a newly formed - International, will be listed on the New York company, Mondelez Stock Exchange. This will be the new home of the world travel retail team, which will - World become Mondelez Travel Retail from Q2 2013.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

KFWTR’s second big story relates to the launch of its new “Delighting Travelers” program, which Fehr defines as “a compelling vision that aims to grow the total confectionery category.” The third highlight comes courtesy of the leading brand Toblerone. “A new flavor innovation and a cutting edge promotional concept will be presented to our industry partners, guaranteeing a boost to sales next year,” Fehr says. “We are thrilled to be bringing such exciting news to Cannes, and we cannot wait to work with our industry partners to bring our dreams to life.” Toblerone offers new flavor called Crunchy Almonds

PREMIUM P R E M I U M AUSTRALIAN AUST RALIAN MACADAMIA MACADAM IA NUTS N UTS

NEW FLAVOURS 2012 -13

Travel Blue’s “le Pocket,” a multi-usage pouch designed to hold mobile phones, digital cameras and other personal items

Bright ideas BY

MELISSA SILVA

Electronics News Market adaptation Travel accessory specialist Go Travel has little innovation to our offering. Recently, unithe Middle East on its radar, as the com- versal adaptors with USB capabilities have pany has seen a significant increase in seen a substantial spike in sales.” Feedback from the marketplace suggests sales in the region this year. In the coming months Go Travel plans to focus more on that Go Travel’s key adaptors and USB the region, bolstering its current opera- products are experiencing the greatest tions with commercial support and revis- uptake in the Middle East. Products launched in 2012, such as the USB shaver ing infrastructure. Following successful new product and the Worldwide USB Charger, have launches in the US and Latin America, the also been key sellers. Lomas says the unrelenting market penMiddle East and Asia are the next targets for the company. With a new team mem- etration of Smartphones has also generated ber on board, Go Travel feels this target is significant demand for Smartphone accessories. achievable. During this year’s TFWA WE (Green Vil“Enric Subiros joined the company in July to strengthen the international sales team,” lage, Stand K60), Go Travel will be introducing Go Travel’s Director David Lomas tells Gulf- its new Worldwide USB Charger, which Africa Duty Free. “The Middle East will be allows users to charge or power two USB his primary focus for the year ahead, where devices at once in over 150 countries. “Small and compact, the Worldwide he will use his extensive key account experience and industry knowledge to really USB Charger has a 1.3A output, making it a powerful partner for a variety of elecpush the brand forward in this region.” Although Go Travel is not a specialist electronic equipment including iPads, iPhones tronics provider, the electronics category still and other Smartphone and tablet devices,” forms a key component of the company’s explains Lomas. A convenient sliding-pin product mix. “Our role in the electronics mar- mechanism allows the user to quickly switch ket is to observe what’s trending in elec- between countries. Also set for launch at TFWA WE is Go tronics and develop accessories that support those trends while traveling,” says Travel’s latest USB shaver. Go Travel says that its 20-strong inLomas. “Equally, we monitor passenger behavior and create innovations, such as house design team, which monitors marthe USB Shaver, that provide convenience ket trends and anticipates future demand, along with positive customer feedback and on any trip.” annual key product cateWith adaptors and USB compatible gory refreshes, leave it products serving as the company’s bestoptimistic about sellers in the Middle East, Go Travel future market is well positioned to continue this success. trend, as adaptors have been strong performers for over 30 years. “Globally, it’s adaptors that are really Go Travel’s pocket-sized travel shaver is rechargeable the bestsellers in this category,” says through any USB port Lomas. “Go Travel has an extensive collection of adaptors and always look at ways to improve them or add a 84

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Bright, strong colors are boosting impulse sales for Travel Blue’s range of travel accessories. This year at TFWA World Exhibition (Red Village, stand M24) the company will be highlighting its range of electronic pouches in fluorescent colors that Jonathon Smith, Director of Travel Retail calls “a real sales pull.” Included in the offer is a new item called “le Pocket,” a multi-usage pouch for mobile phones, digital cameras and other personal items. Made of high-quality, water-resistant Neoprene, the pocket comes with a belt loop. Featured colors include citrus yellow, fuchsia pink or mint blue. A family owned business, Travel Blue is experiencing growth in all areas. In order to maintain service levels as it grows the company has recently opened a regional office in Shanghai, managed by Andy King. In the past two years the company has also opened offices in Mumbai and Miami, while maintaining a presence in the Middle East, Russia and Europe. “This is instead of having a third-party distributor,” explains Smith. “We wanted to control what we do, where we are going and how we look after our customers.” Every item sold by Travel Blue is covered by its free lost and found service, with each product carrying a unique ID code that can be registered online. “If a customer loses a product and someone finds it, they can use that number on our database,” Smith says. “We contact the person who lost their property and put them in touch with the person who found it.” The free lost and found service was launched two years ago and finders who contact Travel Blue will receive a thankyou gift. The company is also pursuing other ways of giving something back to customers through corporate social responsibility initiatives targeting environmental and social causes. Commitments include the reduced use of plastic in products and packaging; the use of limited packaging where possible; the recycling of materials; and close management of hazardous substances. Travel Blue’s packaging is currently made from 80% recycled fibers and is printed with environmentally friendly ink. “This is an exciting time for Travel Blue and we’re really looking forward to sharing our success with existing and new clients in Cannes this year,” says Smith.

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Electronics News

The Capi store at Frankfurt Airport, Transit Hall B

Setting the tone Capi Trading (part of B&S International), business partner in electronic consumer lifestyle products for the travel retail and duty free market, carries a diverse brand portfolio, offering top notch brands such as Sony, Apple, Canon, Hugo Boss, Dr. Dre and its own brand, MiTone. MiTone is a unique travel brand for consumers who are looking for high quality in a competitive price range. Headphones, mobile tablets and related accessories are the fastest growing categories for Capi, and as the demand for electronics at airports continues to grow, the number of customers Capi receives also grows. Sales from Capi’s own brand MiTone, which is sold exclusively in travel retail and duty free, increased substantially in 2011. The product range consists of MP3/4 players, portable speakers, computer accessories, headphones, earphones, solar chargers, portable gaming consoles and other products. “MiTone products are well designed, high-impulse and high-value-for-money products with fashionable colors,” Jaco Vlemingh, General Manager for Capi Trad-

ing tells Gulf-Africa Duty Free. Capi recently introduced “Travel Stories” on its MiTone packaging. On each product, space has been allocated to show part of someone’s travel experience. Customers are invited to submit a travel story with a chance of winning a Bluetooth Speaker if their story is chosen to be printed on the packaging. On August 28 Capi was selected as the exclusive supplier of Hugo Boss accessories for mobiles and tablets. Hugo Boss has entered the electronics accessories market with a collection of covers, cases and sleeves for Smartphones and tablets. The cases are available in a variety of colors, materials, prints and patterns. The collection consists of three themes: “Metropolis,” which is inspired by major cities around the world and features metallic details combined with leather; “Construction,” which displays geometrical patterns and bright colors reminiscent of modern architecture; and “Composition,” which features soft leather and classic details. Capi Trading has recently reached an agreement with accessory specialist Strax to supply Hugo Boss cases.

A woman’s touch With epilators, hair stylers and household appliances leading the way as bestsellers in the Middle East, Braun plans to introduce many more products at this year’s TFWA World Exhibition. “We’re also introducing more and more black household products that look good in modern and stylish kitchens,” says Klaus Mellin, Sales Agent Travel Retail and Special Markets. Mellin notes that Braun products purchased in Middle Eastern duty free shops are mainly used by women, which is evident from the success of the brand’s epilators and hair stylers. Household appliances— another big seller for 86

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

“We have chosen Capi as our exclusive partner because Capi’s distinctive store concept is a great platform to showcase our products to an international audience,” says Frank Hackmann, European Director Alps, Benelux, Germany and Poland for Strax. “Smartphones and tablet computers have become status symbols. Protection for these products must be both functional and fashionable. We created a luxury line of protective cases and bags that match the well known style and image of Hugo Boss. Normally we sell these products through our own channels so when it came to airport retail, where we reach an important segment of our target audience, we wanted a partner with a comparable appearance. We have found this in Capi.” Capi will debut at the TFWA World Exhibition in Cannes with a 35 square-meter stand. During these five days Capi Trading will present its retail background, retail marketing program and brand portfolio to the industry. In addition, Capi is up for an award from Frontier Magazine for Best Supplier of the Year. The awards ceremony will be held at the exhibition.

Braun—are also very specific to the Middle East, and are sold in several duty free shops in the region. Although sales in the Middle East are slightly below last year’s numbers due to weaker sales in Egypt and lack of activity in Syria, Mellin says that Braun has experienced strong increases at Beirut Airport and Dubai Airport. The Satin Hair 7 Color straightener from Braun is specifically designed to protect the beauty of colored hair

Braun’s Silk-épil 7 Dual Epilator offers the best of epilation and wet shaving in one step

The world’s international exhibition for travel retail, duty free and luxury goods

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Now jointly presented by MEDFA (Middle East Duty Free Association) in partnership with Channels Exhibitions For online registration visit MiddleEastExclusive.com or contact us at Channels Exhibitions on +971 (0)4 282 4737, or email channels@channelexhibitions.com

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Troika

The

Troika focuses on providing selfservice displays to its clientele

gift of success

Four concepts, four key categories anchor Troika’s travel retail success

012 has been a great year for us,” says Carolina Marini, Troika’s Senior Sales Manager, Travel Retail Worldwide. The German men’s giftware brand has strengthened sales with existing clients while continuing to open new accounts in travel retail. By the end of August the company had already invoiced for the same amount that it had for all of 2011, so it’s no wonder Marini is happy about how 2012 is going. “We expect to have a growth of 30% or more by the end of the year,” she says. The Americas has been a great market this year, Marini says, and the Asia-Pacific region has also been doing well, with even bigger results anticipated for 2013. Europe is harder to assess due to economic issues. “We see more conservative growth there in terms of opening new doors, as many operators are understandably more on the cautious side at the moment,” Marini says. “Nevertheless the shops where we’re already selling have continued to improve results, and we expect to be rolled out to more POS soon with the operators we’re currently working with.” For Troika, key rings are by far the bestsellers globally. But, depending on region and operator, Marini says the leather goods collection is also a great performer. Highlights for the TFWA World Exhibition trade fair in Cannes this year will come from across Troika’s four core categories: key rings, card cases, desk accessories and writing instruments. Marini and her team will also showcase new displays that have been designed specifically to retailer needs and customer shopping behavior in Troika’s key categories. “We’ve focused a lot on self-service displays,” Marini says. “In terms of products, we’ve focused on the tablet/touch screen trend and developed accessories in Troika’s style to complement the technology trend in a fun, innovative way.” Marini says she’s finding retailers are interested in developing the gifting category these days. “There’s still room for work, but more retailers see that the gifts and accessories

“

category can be a differentiating factor between stores,” she explains. “Basically, most operators around the world will have most of the same big brand names in their core categories—perfumes, confectionery, beverages, tobacco, etc.—however it’s gift items and accessories that have the chance to make each shop different from the competitor's.” The development of that understanding has enabled Troika to advocate more successfully for fully developed gift sections. This is where Marini feels Troika can exercise its core competencies, leveraging a range of categories that can be sold independently but that also sell well together. One example of such synergy that Marini picks out of the Troika portfolio is the pairing of a key ring and a matching card case. “Troika also has the capacity to create exclusive collections for specific POS, countries, cities, etc. This allows operators to let their imaginations run wild and create specific collections and campaigns to highlight any given event, location and so on. We’ve created an Italy collection that will be sent to Dufry shops in Italy, for example.” When developing products, Troika applies four key concepts to maximize consumer appeal. One is to provide an original gift option. Quality is another central goal, as is

HIBAH NOOR

go in synch with the high-end product ambiance within duty free in terms of quality, design, the emotions that the gift will generate.” Troika also adapts to the time constraints of travel retail by striving to ensure that its products, displays—and prices— are ideal for fast impulse purchases. Marini says that Troika places great value on good design, an approach borne out by the fact that the company has received more than 60 International Design Awards. Internally the company also enables employees to have input through its "Innovation Module,” where they can register suggestions not only about products but about how to improve corporate processes. “We believe talent can come from anyone and all ideas are worth a look,” Marini says. “This mindset, where teamwork, research, professionalism are freely shared, is what results in great products on the shelves.” Quality is key, but showing it off to advantage is vital too. Troika focuses on displays mainly as a way to promote the brand at POS, and the company has recently invested in backlights for locations where it has its own branded space. It has also placed some ads in some customer magazines. “We’ve also done many promos this year at certain points of sale and placed signs at the shops to proc mote these,” Marini says.

“In terms of products, we’ve focused on the tablet/touch screen trend and developed accessories in Troika’s style to complement the technology trend in a fun, innovative way.” Carolina Marini, Senior Sales Manager, Travel Retail Worldwide, Troika eye-catching packaging. Range of choice is the fourth key. “Basically we understand that when consumers shop for a gift they know that what they give is a reflection on themselves,” Marini says. “Therefore we strive to provide them a wide product selection that can

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Troika’s four core categories include key rings, card cases, desk accessories and writing instruments

THE

November 26-27, 2012

MEDFA CONFERENCE

JUMEIRAH CREEKSIDE HOTEL, DUBAI

Diageo GTME

The Smirnoff Gold display at Dubai Duty Free—the variant was launched late last year

Driving growth

RYAN WHITE

Gulf-Africa Duty Free speaks with Managing Director of Diageo GTME Roland Abella about the company’s performance in FY2012 and what’s to come over the next 12 months Gulf-Africa Duty Free: Can you comment on Diageo’s results for the six months ended June 30, 2012? Roland Abella, Managing Director, Diageo GTME: I’m delighted to say that Diageo GTME had a strong year, a result which underlines the buoyancy of the channel and the strength of our brand and innovation agenda within it. Both these factors give us confidence in our plans for the coming years. The performance we delivered during FY2012 reflects some really groundbreaking work by our people. They, like me, are really energized by our growth potential and I am personally very excited to be leading what is an extremely important market for Diageo. Our positive performance in FY2012 was driven largely by our super deluxe brands and it is in this category that our innovation has led the way. We had successful launches of Johnnie Walker Platinum Label, Johnnie Walker XR21, Johnnie Walker Gold Label Reserve and Johnnie Walker Blue Label – The Casks Edition. They have helped grow our Johnnie Walker footprint and will continue to build our range of highly competitive super deluxe Scotch whisky offerings. We know that our shoppers in travel retail are

looking for exclusive products in the duty free store and we will increasingly produce exclusive propositions to capture their attention. Global travel Asia remains a major contributor to our global travel business, driven by the consumer dynamic, gifting opportunities and the growing level of international travel. The excellent growth in that market is largely down to our reserve brands. In the Americas performance was driven by, among other things, inflight and cruise channels and the continued strong performance of Johnnie Walker Double Black. MENA continues to contribute to our growth, with markets such as Lebanon performing particularly strongly. Furthermore, our business in North Africa is growing and we believe there is certainly potential. Europe, as you might expect, remained uneven and economically challenging in some markets, but we were pleased to maintain our business performance there. GADF: Given the number of Asians traveling throughout the world can you tell me the importance that your Chinese white spirits will play in the future? RA: Shui Jing Fang, our premium baijiu brand, continues to be a major success, and it is second only to Johnnie Walker in the Asia market. It has huge appeal for the Chinese traveler and last year we made the most of its popularity through new merchandising and our special Chinese Mid Autumn Festival pack.

“Our relationships with our customers are of vital importance to us and I am passionate about improving our collaborations to deliver real commercial value to them and ourselves.” Roland Abella, Managing Director, Diageo GTME

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

John Walker & Sons Odyssey, Diageo’s latest innovation in the ultra deluxe segment

sponsorship during the Abu Dhabi Grand Prix. Through our strong customer partnerships we have developed a number of stand-out campaigns around this which are really delivering scale in building brand equity and driving growth both in travel retail and in our domestic markets.

Shui Jing Fang will remain an important part of our offering in the fast-growing luxury spirit segment in the key markets of China, Hong Kong, Taiwan and Singapore. But, because the Chinese traveler is truly international, we are seeing Shui Jing Fang gaining a foothold in other regions. It has been a notable success story in travel retail in locations as diverse as Paris, London and San Francisco. GADF: Related to the above, Diageo has a great stable of very highend brands. What other brands are important for you in terms of the burgeoning middle class in emerging markets? RA: In addition to our super deluxe offerings, brands such as Johnnie Walker Black and Johnnie Walker Red continue to be important to us in duty free, as do others such as Baileys and Smirnoff. GADF: In the Americas, MENA or Asia what large-scale promotions do you have planned for the coming months? RA: It’s a matter of watch this space, because we will be putting together some really exciting things for John Walker & Sons Odyssey, our latest innovation in ultra deluxe, and continuing to support our deluxe brands such as Johnnie Walker Platinum, Johnnie Walker Gold Label Reserve and our ultra-premium vodka Cîroc. GADF: In terms of innovation, what will we see in the months to come? RA: We have a particularly strong innovation pipeline, but for reasons of commercial confidentiality I can’t be specific about our future plans. You will have seen our recent launch in global travel Asia of John Walker & Sons Odyssey, a spectacular and unique triple-malt blend that joins our unmatched portfolio of luxury spirits. Our innovation is focused on the super deluxe and ultra deluxe sectors and will be accompanied by luxurious and engaging experiences in travel retail, through partnerships and investments in our customer relationships. We have some exciting new launches planned this year but, as I’m sure you can appreciate, I can only give the details when they are formally unveiled. GADF: What major sponsorships are coming up in the next few months in the Americas, MENA and Asia? RA: The Johnnie Walker sponsorship of Team McLaren Mercedes remains the key opportunity for us. It is a truly outstanding sponsorship that is working extremely well for the brand and we will certainly activate the

GADF: Can you tell me what Diageo has planned for the rest of the year in terms of targeting the female traveler in duty free? RA: The female opportunity is huge. The largest growing economic force in the world isn’t China or India—it is women. Research suggests they are under-represented when it comes to global alcohol purchases. We will continue to market NUVO specifically at the female market, with activations custom-designed for this audience. In recent months Smirnoff Gold Collection has proved to be a key player in driving a higher footfall of female shoppers in duty free stores and we will develop further limited edition flavors for Baileys which have proved a huge hit with women. As well as focusing innovation at the female shopper, we are seeking to ensure that our activations can really engage with them. Bali Airport, for instance, was one of the first in the world to really target female shoppers with a fantastic three-month concourse activation in a prominent location and with high-traffic visibility. This involved a fun and highly engaging experience centered on a pop-up cocktail bar. Making it a great environment for women to enjoy, they introduced a range of Diageo spirits (Johnnie Walker Gold Label Reserve, Baileys, Cîroc, Smirnoff and Tanqueray) through bespoke cocktails and gave shoppers the chance to create their own cocktails. Given the growth potential of the market, Cîroc Peach; the we have also taken other bold steps with, for ultra premium vodka brand is just one of instance, Johnnie Walker. In a ground-breakthe many spirits in ing moment for both Johnnie Walker and Diageo’s portfolio that is enjoyed by Lebanon, the acclaimed Lebanese film maker the all-important Nadine Labaki was announced as the brand’s female traveler first female giant at the end of 2011. Nadine’s involvement in “Walk with Giants” marked the first time that Johnnie Walker had ventured off the traditional path of male ambassadors and opened the door to women in Lebanon, inspiring them to push continuously forward. The campaign was a stunning success that resulted in a 49% increase in female participation in Lebanon. GADF: Finally, how do you feel your previous experience will help you in this new position? Can you tell us a bit about your objectives for the rest of the year? RA: I am no stranger to GTME, having been Regional Director for the Middle East and North Africa and more recently running the Indian market, which gave me a great deal of experience, particularly with consumers new to our brands. In GTME one of the things we can achieve through our innovative offerings is to provide global visibility for our brands and drive consumer recruitment for them. GTME is a channel full of amazing opportunities with emerging markets and new consumers. Our aim is to grow our business and our customers’ businesses, not just this year but in succeeding years, and I believe we are well positioned to achieve our goals. We have a very strong pipeline of innovations which will continue to underpin our growth strategy. Our relationships with our customers are of vital importance to us and I am passionate about improving our collaborations to deliver real commercial value to them and c ourselves. www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

Liquor Report

Soaring spirits BY

Leading brands see good numbers ahead, despite economic jitters

he travel retail market for wines and spirits continues to grow around the world, says Matthew Hodges, Marketing & Business Development Director for Rémy Cointreau Global Travel Retail. Hodges notes that global sales in 2011 were up nearly 18% over 2010 according to Generation Research thanks to good growth in passenger numbers, the efforts of brands to offer innovative and attractive products for both gifting and self-indulgence, and a full slate of marketing and promotional events that keep the labels center stage. “Rémy Cointreau brands have been busy with high visibility activations and limited editions which add luster to our portfolio and boost sales exponentially,” says Hodges. Among the successful events in the Middle East over the past year have been the St-Rémy VSOP 90 Proof launch in August as a limited edition exclusive to Dubai, and Russian Standard Vodka’s “Vodka as it should be” high-profile promotion at Beirut. Also high on the list was the Rémy Martin VSOP Cannes limited edition offer in Dubai and Beirut, and Cointreau’s “Midnight in Dubai,” a special bottle design created exclusively for Dubai Duty Free which was launched on December 20 to mark the retailer’s 28th anniversary. Cognac has always performed well in the region, as has St-Rémy, Hodges says. Thanks to economic growth and the arrival of a wider variety of nationalities, Hodges says Rémy Cointreau is very pleased with the performance of all of the brands in its portfolio, namely Rémy Martin, Cointreau, St Rémy, Mount Gay Rum, and the brands that Rémy Cointreau distributes, including Russian Standard and Champagne Piper-Heidsieck, and—on a smaller scale—Metaxa and Passoa. “The global travel retail business worldwide is of great importance to us and we will be focusing more on this over the coming years,” says Mike Harrison, Sales Development Director of Berry Bros & Rudd Spirits Ltd.

ANDREW BROOKS

(BBR). The brand recognizes the GulfMideast and Africa regions as growth areas, so while they currently account for a fairly small slice of business, BBR is definitely on the lookout for any opportunities that arise. For Edrington’s portfolio of brands, sales in 2012 are performing well ahead of 2011, which was itself a strong year,” says Steven Sleigh, Area Director for Edrington. He characterizes demand for The Macallan as “exceptional”—and it continues to strengthen not only across the region but globally. There has also been strong interest in the super-premium releases from the Macallan such as the Lalique decanter and Masters of Photography Annie Leibovitz edition. The Famous Grouse is building on its credentials as the number one brand in Scotland, and has enjoyed success with the introduction of The Naked Grouse, which Sleigh points out was awarded gold as best premium blend in the Scotch Whisky Masters 2012. “It’s creating great interest from retailers,” Sleigh says. The Highland Park brand is still in the early stages of development, but has widespread distribution and Edrington is expanding the availability of the premium products in the range, Sleigh explains. The market push has been helped by leading expert and journalist Paul Pacult’s description of Highland Park as the producer of the best spirit in the world. Growing connoisseurship and consumer understanding of the malt category should also reinforce Highland Park’s prestige and market awareness. Cutty Sark is also gaining new listings in the region. “The focus is on Cutty Sark Original, but there are interesting opportunities also for some of the more limited edition products,” Sleigh explains.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Robur Reserve is a travel retail exclusive available from specialty retailers at hubs serving The Glenrothes core markets as well as major international airports The Naked Grouse copped gold as best premium blend in the Scotch Whisky Masters 2012

Rémy Martin VSOP’s Cannes 2012 Limited Edition proved a huge success when it was released earlier this year; the brand has something new planned for Cannes, says Rémy Cointreau

Cointreau Mabille, a limited edition designed by French haute couture fashion designer Alexis Mabille

Northern newcomer

Ungava’s bottle design and coloring give it good shelf impact

Continuing its global rollout, Canadian premium gin brand Ungava will be shown on the Camus stand (Blue Village, stand F11). Ungava made a successful regional launch at TFWA Asia Pacific earlier this year. “Ungava Canadian premium gin is perfect for travel retail,” says Richard Bush, Marketing Manager. “Its uniqueness and high quality distinguish it from other competitors, and we’re extremely confident that continuing Ungava’s global launch will help the brand gain more listings and extend its distribution. We’ve been delighted at the response to Ungava this year and have already gained listings for the brand in key Asian markets.” Ungava gin is distilled using 100% natural ingredients. The gin is infused with Nordic juniper, wild rose hips, cloudberry, crowberry, Arctic blend and Labrador tea, which Ungava says impart a distinctive color and “fresh, floral and spicy flavor.” The bottle has a contemporary design, with a sleek shape and clean lines. Bush says the thick, pristine glass gives the brand strong on-shelf stand-out value.

Improving the potential Africa has great potential, says Keith Bonnington, Area Director Africa for Edrington. “There’s been a marked change in the airport experience in Africa over the past five years and we’re beginning to see the positive impact of investment in construction and refurbishment filter into the duty free environment.” Bonnington notes a rise in the numbers of Africans traveling, most prevalent in the South African and Nigerian populations. The number of travelers entering South Africa from the wider African continent grew by 7% with Nigerian numbers in excess of 30%. “This means that we can no longer assume that travel into Africa is restricted to foreignbased business people and tourism,” he says. “Africans are well and truly on the move.” For BBR, business in general in 2012 has been quite buoyant, Harrison says, with a good diversity of markets helping to counteract the downward pull of regions where economic problems are being felt. “Whilst Europe in particular appears to be suffering, outside of Spain, we are seeing growth in the UK, France, Benelux, and we also see Russia as a fast developing market for us,” Harrison says. “Within the travel retail arena we are seeing growth in Europe despite passenger numbers being slightly down.” Within BBR’s portfolio, No.3 London Dry gin is performing to plan worldwide,

and front runner Glenrothes is also growing at a good pace in domestic and travel retail markets. This year will see the launch of a very limited super-premium expression of Glenrothes. Scotch whisky continues to be the dominant category in the duty free liquor market, says Steven Sleigh. “The clear trend is one of premiumization, with the emphasis on value growth, particularly on malt whisky,” he says, noting that continued investment in airport infrastructure and the ongoing upgrades of the retail environment are good indicators of overall industry confidence that passenger numbers will continue to rise.

Quality wins out The Middle East and Gulf region continues to develop its role as a hub, says Matthew Hodges, and the arrival of such a high volume of Russian passengers has had a significant impact on the growth of some categories, especially Cognac and vodka. “More widely, it does seem that Africa as a whole is now ripe for further development of its airport infrastructure and travel retail. This will certainly take time but encouraging signs are there already.” Hodges believes that customers have been drawn back to the old fashioned concept of product quality. “If overall the number of gifts that people buy is reducing, they are less likely to take a risk,” he says. He sees the

market now as “somewhat polarized” both geographically and in terms of spending; he sees a clear slowdown across Europe, while at the same time European customers do still seem to be spending in some locations. “Likewise,” he adds, “we’ve recently seen how high spenders drive a high proportion of airport retailing, such as the Asian travelers moving through the Gulf states.” In the Middle East, competitions have long been the mainstay of the promotional armory, Hodges says. Rémy Cointreau Global Travel Retail has been especially pleased with the performance of concourse activations in Dubai, which Hodges says is due in part to the layout of the terminals and the quality of the retail space—as well as the executions themselves. Rémy Cointreau Global Travel Retail recently strengthened its presence in the region, and now has a team based in Dubai that reflects the importance of the business there today and its potential for the future. Edrington also assigns a high priority to the Gulf-Mideast market, and has been significantly increasing the amount it spends to expand business and raise brand profile there, Sleigh says. He points to the recent appointments of Derek Brown as Edrington’s Area Director for the region and Patsy Christie as Brand Ambassador as signs of the importance the company attaches to its c efforts to develop its brands there.

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

Rémy Cointreau

Metaxa 5 Stars Rising Sun 2012 is exclusive to Nuance Group boutiques at Antalya Airport to February 2013

Enticing with

exclusivity

Rémy Cointreau Global Travel Retail targets the Middle East and Turkey with two new exclusive limited editions from St-Rémy and Metaxa BY RYAN WHITE

ulf-Africa Duty Free has learned from Matthew Hodges, Marketing and Business Development Director for Rémy Cointreau Global Travel Retail, that at this year’s TFWA WE the company will be exhibiting the 2013 limited edition Rémy Martin VSOP Cannes; St-Rémy à la Crême, which has to date been seen only in Canada; the Metaxa 5 Stars Rising Sun Limited Edition, a new design for Russian Standard Gold and the new Piper Heidsieck range. Hodges tells us that worldwide business has been generally been brisk over the first half, but it’s particularly apparent that the Middle East and Turkey are areas that have seen a significant bit of activity from the supplier of late. Indeed, underlining Rémy Cointreau’s commitment to partnership with operators, the supplier has released new variants of two popular brands, each exclusively listed with a big name retailer.

A powerful new addition Rémy Cointreau recently announced that it has launched St-Rémy VSOP 90 Proof as a limited edition exclusive to Dubai International Airport for the rest of this year. St-Rémy is the world’s finest French Brandy and the winner of numerous awards. A masterful blend of wines from some of the best vineyards in France, it is distilled and aged in cellars deep in the Chateaux de La Loire Valley under the watchful eye of Martine Pain, the first lady Cellar Master in brandy and Cellar Master of St-Rémy for the last 20 years. St-Rémy VSOP High Proof is a powerful new addition to this successful collection, which includes VSOP and XO expressions, and is expected to blaze a trail for St-Remy in global travel retail. Amber in color, highlighted by golden hues, it is appealing to the eye and distinctive on the palate. Decades spent aging in small oak barrels have lent it pronounced wood aromas with hints of leather and tobacco. The light flavors of vanilla and dried fruits, which bring a certain sweetness, balance its powerful alcoholic strength and create a fine, well-balanced product with exceptional length in the mouth. Presented in an elegant golden sleeve, its VSOP 90 Proof credentials emblazoned on the label, the limited edition is showcased in a sleek branded display unit to provide maximum visibility. St-Rémy VSOP High Proof will remain exclusive to Dubai Duty Free for the remainder of 2012, after which it will be launched elsewhere. 94

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

St-Rémy VSOP High Proof is a new variant of the highly coveted French Brandy, exclusive for the rest of the year to Dubai Duty Free

“For too long St-Rémy has been in the shadows in travel retail and we are delighted to have the opportunity to launch it into the spotlight with this wonderful golden edition,” Hodges explained. “St-Rémy VSOP High Proof has got what it takes to revolutionize the brandy section: good looks, fabulous taste and a powerful punch.”

Land of the rising sun Things are no less exciting in Turkey, where the House of Metaxa has designed a special limited edition specifically for the Nuance Group boutiques at Antalya. Metaxa 5 Stars Rising Sun 2012 Collector's Edition is emblazoned with a bright yellow sun marked with the “Salamina Warrior,” the emblem of the House. The distinctive blue belt bearing the five stars declares the style of the spirit. Furthermore, the amber color of the liquid can be admired through a transparent vertical Metaxa mark that adorns the back of the bottle. The design of Metaxa 5 Stars Rising Sun 2012 is a new interpretation on the vivid Rising Sun 2011 sleeve, which drew admiring glances last summer and sold out in record time. Placed next to each other, the Metaxa 5 Stars Rising Sun 2012 and the Metaxa 7 Stars create a striking yellow-orange block, attracting more visitors into the stores. In recognition of a growing partnership with the House of Metaxa and with Rémy Cointreau, Nuance Antalya reserved a six-month period of exclusivity for this limited edition, and they are currently making it available in nine boutiques across Antalya airport. In the locations with the highest traffic, Metaxa 5 Stars Rising Sun 2012 is displayed on light box gondolas with a video animation created with award-winning director Tassos Boulmetis. Metaxa is known for its smoothness as well as its link with the sun, and the film concludes with the message “Limited Edition, Unlimited c Smoothness.”

Bodegas Torres

Playing fair

Torres announces Santa Digna Estelado, a new fair trade wine, looks forward to excellent reds from this year’s harvest and receives nods from top international critics BY RYAN WHITE

ulf-Africa Duty Free recently spoke with Bodegas Torres about new developments and found that the company is currently working on a number of new projects. Area Manager Andrea Serrat Draper tells us that one of the more noteworthy developments is Santa Digna Estelado Chilean sparkling wine. Estelado is made with 100% País grapes, which were in fact the first grape variety brought to Chile 500 years ago. “The varietal is cultivated in dry zones with humility, hard work and dedication, generally by small winegrowers Santa Digna Estelado is a who have passed their land from father to 100% Chilean son over several generations,” Serrat Draper sparkling wine that certified explains. fair trade In 1850 the first French vines were introduced to Chile, leaving País grapes all but forgotten. Over the years, the price of this particular varietal skyrocketed and by 2007 many País grape growers had been forced to abandon their lands. It was that year in particular that Miguel Torres Chile, together with the University of Talca, began a project aimed at studying País grapes. Working together with producers from Cauquenes, Chile, Torres was able to produce a 100% Chilean sparkling wine with País grapes obtained from 100-year-old grapevines. Estelado is certified as fair trade, meaning that the farmers are paid a fair price for their grapes. Furthermore, a portion of sales is put toward social projects in the community of Cauquenes.

Excellent reds to come In related news, Torres Bodegas Torres has reported that 2012 has seen higher temperatures than normal, especially throughout August, with heat waves from Africa that have made it very difficult for the Torres vineyards in Catalonia to ripen properly. This has put pressure on some zones of Chardonnay in the Penedès region, says Torres, as well as on a few red varieties on the Juneda estate in Lleida (Desterrats), which has suffered from a harsh drought. Fortunately, from 28 August the temperatures went down, it rained on most of the estates and, from then on, the vines have been able to ripen much more normally. “This year the red wines are expected to be excellent provided the good weather continues, particularly with cool nights throughout September,” Torres says. “In any case, the yields will be lower than normal and the loss in volume is expected to be around 15% overall. 96

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Grape prices have also risen, especially for white varieties. In general, 2012 can be classified as a good quality but low yield harvest.”

International accolades For the second year running, Bodegas Torres came in second during 2012 in the ranking of the World's Most Admired Wine Brand, regularly produced by the British magazine Drinks International. Torres also takes the spot of the highest ranking Spanish and European winery in the list. At a world level, Bodegas Torres is the second most highly rated wine brand according to the ranking. Wine critic Martin This distinction is in addition to Moran recently the outstanding recognition said in his Sunday Times column that obtained previously by the Group, Mas La Plana “is such as the Lifetime Achieve- the best Cabernet I've tried in ages” ment Award 2011 from the British magazine Drinks Business in recognition of its contribution towards ecological practices in the world of winemaking. Torres was also rated as the most widely recognized European wine brand and the 11th wine brand in the world in The Power 100, produced in 2011 by the British company Intangible Business on the wine and spirits market. This recognition coincides with the mentions made by leading international media in the sector regarding Mas La Plana, the Torres family's iconic wine from the single vineyard of the same name, produced with the Cabernet Sauvignon variety and considered to be one of the most highly appreciated Spanish wines in the world. In fact, Martin Moran recently said in his Sunday Times column that Mas La Plana “is the best Cabernet I've tried in ages,” while Jane MacQuitty from The Times referred to Mas La Plana as a glorious wine, “the best value Primum Familiae Vini star by far.” Additionally, Jamie Goode has published a critique on his WineAnorak website where he gives it c a score of 94/100.

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FIX Wines & Spirits

In order to capture the essence of The Macallan, FIX approached Jordan Design to help with the refurbishment of The Macallan Lounge

Specialized

knowledge FIX Wines & Spirits emerges as the go-to marketing and distribution partner in the Middle East and Africa for some of the world’s biggest brands BY

The Macallan Brand Ambassador Patsy Christie discusses the brand with visitors at the opening of The Macallan Lounge at Ben Gurion Airport

RYAN WHITE

IX Wines & Spirits was established in 2005 in Cyprus with the goal of marketing and distributing world-class wines and spirits. Today the company services 100 customers in 40 active markets in the Middle East and Africa. FIX’s brand partners certainly mesh with the original aim of representing high-end brands; the company works regularly with the likes of The Edrington Group, Beam Inc., Symington Family Estates and Berry Bros. & Rudd, and the brands it distributes include favorites such as Courvoisier, Teacher’s, The Famous Grouse, The Macallan, Jim Beam, Sauza, Laphroaig, Cockburn’s, Maker’s Mark, Cutty Sark, Highland Park, The Glenrothes and Larios. This year has seen numerous new developments for FIX, including an increased concentration on the Gulf, the opening of a Dubai office, the appointment of a brand ambassador for The Macallan, a complete refurbishment of The Macallan Lounge in Israel’s Ben Gurion Airport and a great reaction to a very rare expression of The Macallan at Beirut Duty Free.

A committed partner Céline Cabannes, Marketing Manager at FIX, tells Gulf-Africa Duty Free that the company has been ramping up its presence in the Middle East and Africa this year. FIX began acting as a distribution platform for Cutty Sark this past summer in Dubai, Abu Dhabi, the northern Emirates, Bahrain, Qatar, 98

FIX is a distribution partner for Cutty Sark in Dubai, Abu Dhabi, the northern Emirates, Bahrain, Qatar, Oman, Iraq, Syria, Lebanon, Jordan, Israel, Egypt, Morocco and Tunisia

Oman, Iraq, Syria, Lebanon, Jordan, Israel, Egypt, Morocco and Tunisia. “We act as a distribution platform for suppliers in the region, leveraging our knowledge to ensure that the brands are distributed by quality local distributors,” says Cabannes. “Our regional expertise allows us to help suppliers accomplish goals that would otherwise be difficult to reach due to logistics and resource challenges.” Indeed, with a stable of over 700 SKUs, it’s clear that brandowners see FIX Wines & Spirits as a key partner when it comes to

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

cracking the very lucrative Middle Eastern and African markets. In addition to continuing to ply its trade in the region, Cabannes tells us that the company is now using social media sites such as LinkedIn to communicate new developments. “People have heard through the brands about the great things we’ve been doing in the region but many may not associate these developments with the name FIX Wines & Spirits,” Cabannes explained. “We’re now starting to communicate this more and more. We have a very specialized knowledge of the Middle East and Africa and I think this is really what brandowners appreciate.”

FIX Wines & Spirits

branch in Dubai. The new office is part of FIX’s strategy to strengthen its relationship with one of its key partners, Dubai Duty Free.

Rarity sells in Beirut

The ice ball machine at The Macallan Lounge in Israel’s Ben Gurion Airport makes the perfect ice for a dram of the legendary whisky

The lap of luxury In addition to distributing the brands mentioned above, FIX is also very involved in making sure that these spirits are as highly visible as possible to travelers passing through the region. While on a business trip to Israel, FIX Area Manager Florence Chevallier envisioned a VIP lounge in Ben Gurion Airport dedicated to The Macallan. With the official opening of The Macallan VIP Lounge earlier this year, her vision became a reality. “Offering an exclusive shopping experience to high-end customers traveling to Russia, the United States or the European capitals has always been a priority for [operator] James Richardson,” said Chevallier. “The existing VIP lounge was quite simply an Aladdin’s cave, providing a broad selection of fine wines and spirits, with a comfy couch to enjoy a dram and a cigar. “Despite its unique charm, the lounge had a cluttered look and feel that did not reflect luxury or exclusivity,” Chevallier continued. “The Macallan is the essence of luxury and this is why we created a lounge designed around its inspirational qualities. James Richardson now has a more secluded and aesthetically pleasing environment where the discerning traveler can unwind and enjoy a perfect serve of his/her favorite single malt. I feel we have raised the level of experience for VIP guests.” The project was challenging due to the awkward shape of the room and the need to create distinct zones with a range of functionality, notes FIX. In order to capture the very essence of The Macallan the company approached Jordan Design, a company renowned for their professionalism and wealth of experience in the travel retail sector. Great care was taken with feature lighting—LEDs are concealed in wooden shelves to give warm ambient highlights and, where appropriate, they are carefully focused on the display merchandise. The bar, constructed from white Corian with gold leaf detailing, 100

contains subtle lighting that contrasts with the rest of the room and becomes a focal point—a unique showcase for the ice ball machine used to cast the perfect ice cube for a glass of The Macallan. Indeed, The Macallan VIP lounge was designed as a sanctuary where the traveler can acquire or simply taste some of the limited editions of The Macallan. Current expressions featured in the lounge are The Macallan 1824 collection; The Macallan Inspiration 1851; The Macallan Masters of Photography – Annie Leibovitz edition; and The Macallan Fine & Rare vintage (1969, 1976 and 1989).

Initiating a dialogue FIX also strengthened its team with the recruitment of Patsy Christie as The Macallan Brand Ambassador for the Middle East and North Africa region. “We have a high level of ambition for The Macallan in the region,” says Igor Boyadjian, FIX Managing Director. “It’s vital to build unique relationships with key customers and consumers; you need to initiate a dialogue to convey the brand credentials and the story of The Macallan. The Rolls Royce of single malts and one of the most iconic spirit brands deserves a higher level of attention and commitment, along with a more sophisticated and personal approach. “For this very reason, we needed an extra resource fully dedicated to The Macallan,” continues Boyadjian. “Patsy’s passion, experience, enthusiasm and dedication made her the ideal candidate.” FIX’s new ambassador is indeed a soughtafter professional, with 16 years of experience in the hospitality industry in bartending and mixology training. In addition to the appointment, FIX this year announced the opening of its new The Macallan Masters of Photography – Annie Leibovitz edition is available at The Macallan Lounge at Ben Gurion Airport

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

FIX recently announced that three decanters of The Macallan 60 years old in Lalique have been sold by Beirut Duty Free at a retail price of US$20,000 each. This unique expression of The Macallan has been restricted to 400 rare, individually numbered decanters that are highly valued and coveted by whisky collectors. Beirut Duty Free was one of the fortunate shops in the region to be offered such a prestigious decanter because of its Lebanese clientele of connoisseurs and aficionados. These individuals travel extensively out of the country, for business or pleasure, seeking uncompromising quality and excellence. A standalone glorifier was designed and created by FIX to exhibit the decanter. “Once installed at Beirut Duty Free [it] resulted in more or less an immediate sale,” FIX told us. “This is no surprise due to the quality of the expression.” Bassam Mohanna, FIX MENA Area Manager, expects Beirut Duty Free to become home to further exceptional expressions created by The Macallan given the fact that the malt category is going from strength to strength in this outlet. “Thanks to Beirut Duty Free General Manager Ciaran O’Neil’s decision to increase space allocated to malts, the category has boomed in terms of sales and accessibility. O’Neil was the first to rightfully judge the category’s potential and have the courage to dedicate a large sales area for single malts. He significantly helped the entire category grow in both the duty free c and domestic channels.”

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Liquor News

Ernie Els Proprietor’s Syrah 2010 is an exclusive listing aboard Asiana Airlines

Diverse Flavours has announced that Asiana Airlines has listed the Ernie Els Proprietor’s Syrah 2010 as part of its inflight duty free sales program. Recognizing Ernie’s passion for golf and wine, Asiana has timed this launch Ernie Els celebrating his win at the Open Championship at Royal Lytham & St. Anne’s

Gérard Bertrand has significantly strengthened his company’s position and brand recognition of late and this latest win will certainly help increase the company’s visibility

Gérard Bertrand

perfectly given Ernie’s famous win at the Open Championship at Royal Lytham & St. Anne’s. “This is tremendous timing, as it will give all golfers the chance to celebrate this historic win with one of Ernie Els’ great wines, which has been made exclusive to Asiana Airlines given its limited quantities,” says Managing Director of Diverse Flavours Anthony Budd. “We have also made the Proprietor’s Syrah available in a special gift tin. Ernie Els Wines is a truly premium brand and I am extremely confident that this wine will develop strongly in Asia duty free. It brings together the passion and dedication of an iconic sports personality of our day and a truly magnificent range of premium wines that bear his name.”

wins red winemaker of the year accolades Gérard Bertrand has won the Red Winemaker of the Year accolade at the International Wine Challenge 2012 awards dinner, held earlier this month at the London Hilton Park Lane. With 10,000 wines from around the world tasted by the jury of experts, the International Wine Challenge is one of the most prestigious wine competitions in the world. The win comes in addition to 46 awards and 3 trophies earned by Gérard Bertrand for its wines. 2012 has been a year of great progress and achievement in travel retail for Gérard Bertrand with new listings, range extensions and opening of new travel retail outlets,” says the company. Gérard Bertrand has significantly strengthened its position and brand recognition as a player both in the still premium wine market and the sparkling wine business. “Our strong identity and differentiation, our recent election as European Winery of the Year (Wine Enthusiast Wine Star Awards), as well as our status of flagship producer of the South of France have played a role in this achievement,” said the company.

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Jameson releases limited edition Great Urban Escapes bottle exclusively in duty free Jameson, the world’s number one Irish whiskey, has launched a new innovative limited edition bottle that captures urban iconography from some of the world’s most exciting cities while also highlighting some of the best bars to visit while in these cities. The Jameson Great Urban Escapes bottle is available exclusively through travel retail channels for a limited period starting this month. The new bottle is aimed at urban explorers who choose adventurous city breaks over beach holidays. The contemporary bottle is adorned with logos and emblems from the top districts of seven cities across the world, including Dublin, the home of Jameson;

The new Jameson Great Urban Escapes bottle is aimed at urban explorers who choose adventurous city breaks over beach holidays

London; New York; and Stockholm. It also highlights 11 top bars in these cities that locals would recommend you visit and where Jameson is a whiskey of choice. To support the launch, a city guide app has been created that will provide travelers with an insider’s guide on what to see and do in four of the chosen cities. To access the app consumers will be directed to a QR code that will feature on supporting POS material. For those without access to smart technology, a traditional printed city guide will also be available alongside the bottle, which will further extend the reach of the campaign.

Liquor News

Underberg benefits from varied portfolio Baileys Orange Truffle, a blend of Baileys Original Irish Cream infused with a decadent hint of orange truffle, is a travel retail limited edition for the holiday season

Baileys launches limited

edition Orange Truffle Flavour Baileys Original Irish Cream recently launched the latest addition to its successful “Flavours” range: Baileys Orange Truffle. The limited edition flavor, a deliciously indulgent blend of Baileys Original Irish Cream infused with a decadent hint of orange truffle, will be available in travel retail from this month, just in time for the all important festive gifting period. Baileys is a key brand at Christmas time for shoppers and the arrival of the brand’s much anticipated annual Christmas campaign heralds the beginning of the festive season for Baileys lovers around the world. Pamela Dinh, Brand Manager, Vodka, Gins & Liqueurs, Diageo Global Travel and Middle East, explains: “Baileys Orange Truffle Flavour has been created with the festive period in mind, tapping into this consumer mindset but also answering the consumer need for innovation and exciting new offerings to our core range. The flavor cues of rich orange chocolate blended with Baileys evoke thoughts of sumptuous and

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luxurious Christmas occasions and present our consumer with something new to serve friends or give as a gift.” “The new flavor presents a fantastic commercial opportunity for travel retail in the coming months,” she continues. “Promotional collateral has been designed with the discerning female shopper in mind, and also works to engage the potentially lucrative female ‘non-shopper’ group.” Premium POS, theatrical displays and sampling initiatives hero the liquid and dial up the product’s luxurious flavor cues. This will create excitement, says Diageo, driving footfall into store and encouraging instant purchase and in turn retail sales. The limited edition status of the product combined with targeted distribution in key domestic markets is intended to further elevate this innovative product’s “buy now” credentials. Baileys Orange Truffle Flavour will be available from October 2012 to January 2013.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

“Two things that contribute to the Underberg’s distinctive character are its unique soothing effect and the unmistakable portion-sized bottle wrapped in straw-colored paper, giving drinkers just the right amount for well-being,” says Scholz. “In fact, Underberg has become a symbol of well-being throughout the world.” Marketing literature provided by the company emphasizes that the drink is a fit in any situation, whether it be a beer garden, a pub or as an after-dinner digestif. The drink is largely sugar free and gluten free, and contains natural anti-oxidants. And it is sold in bottles that contain the exact amount of Underberg the company believes is needed to promote digestion and well-being. Underberg is also active in the spirits arena with the renowned XUXU brand, which has more than made its mark in Russia, Turkey and of course in Germany. XUXU is a unique drink that contains at least 55% strawberries, and is “the only one with real strawberry seeds,” says the company’s literature. It is sweetened with fruit juices rather than sugar and Scholz describes it as a “Vodka Strawberry Cocktail with only 15% ABV,” unlike some of the more heavy vodka-laden drinks sold in North America. “Russians really like the taste of strawberry,” says Scholz, “and the freshness date is as long as 12 months.” Some of the other company brands are Asbach, the most famous German Brandy; Grasovka, the premium bison grass vodka from Poland; Amarula, a cream liqueur from Africa that recently brought home a gold medal from the International Wine & Spirits Challenge; and Schlumberger, the most famous sparkling wine from Austria. The latter is produced using some very traditional methods. Visitor’s to this year’s TFWA WE in Cannes are encouraged to visit Underberg’s stand to learn more about the company’s wide range of products for the duty free and travel retail markets. Underberg’s popular digestif is largely sugar free and gluten free, and contains natural anti-oxidants

DISCOVER PATRIA INSIGNIS Our exceptional collection of award-winning spirits

We search the world to bring travellers extraordinary products to discover. Each innovative brand has its own unique personality and all embrace values of quality and exclusivity, differentiated by small batch and limited release production.

Visit us at Stand G13, Blue Village at TFWA World Exhibition worldofpatria.com

+44 (0)1892 890202

Itâ&#x20AC;&#x2122;s all in the mix

Pernod Ricard Gulf ABSOLUT Unique is another new variant that will see strong support from Pernod Ricard’s Gulf region

From global to local

A good part of Pernod Ricard’s success in the Middle East comes from remaining true to global concepts while adding an all-important local spin BY RYAN WHITE rom the new ABSOLUT Unique and Chivas Brothers’ Blend offerings to partnerships with Etihad and DFS centered on the Abu Dhabi Formula One Grand Prix, as well as the continuation of The Age Matters campaign, Pernod Ricard certainly has a lot on its plate in the Middle East. Nonetheless, you won’t hear Managing Director of Pernod Ricard Gulf David Freeborn complaining— business is good, key operator partners are performing well and passengers are leaning toward more premium expressions of the supplier’s brands.

Gulf-Africa Duty Free: How has business has been over the last few months? David Freeborn, Managing Director, Pernod Ricard Gulf: Things have been very positive across the region with a continuing trend towards the higher end of the portfolio. Whilst the retail environment has become increasingly competitive we do have strong brands in key categories, which has helped ensure we have been able to keep our business moving forward. GADF: In what areas of the region has business been strongest? DF: Dubai remains strong. The flydubai impact, especially over holiday periods, has definitely supported growth. In addition, the political issues in North Africa & Levant appear to have driven higher traffic into the Gulf and Dubai has been a key destination. However both Abu Dhabi and Qatar have benefited from passenger traffic growth. Whilst three key airlines are still investing heavily on aviation infrastructure you really have to admire their marketing. The passenger growth really reflects the promotional effectiveness of their various campaigns. GADF: Other than the usual suspects, where are some airports/areas that may not be on everyone’s radar where you’re seeing good performance or good potential? DF: Sharjah continues to benefit from the Air Arabia phenomenon. It’s very nice to see Adel Ali recognized recently at a CEO conference for his contribution to aviation in the region—a well-deserved award. Surprisingly, Bahrain has been quite robust even during difficult times. Oman remains my dark horse for future growth. It is a beautiful country and if they can improve their marketing I see great tourism opportunities. 106

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

GADF: When will ABSOLUT Unique hit shelves in the Middle East? Do you have anything special planned? DF: ABSOLUT Unique will be available in the following stores from September: Dubai Duty Free, Bahrain Duty Free, Oman Duty Free and Qatar Duty Free, and in DFS Abu Dhabi from October 2012. This will be supported by in-store installations and we are planning tastings for Abu Dhabi. Obviously, the Middle East is a challenging environment for promoting alcohol brands, but we have some great ideas, especially with Unique, on how to improve visibility and activation whilst respecting local customs. GADF: The new Chivas Brothers Blend has got to be something that will pique travelers’ interests in the Middle East… DF: The Chivas Brothers Blend is a key global initiative for this year, and we will be supporting this locally, especially bearing in mind the strength of the super premium Scotch whisky category in the wider region. We have every confidence that the Chivas Brother Blend will be a huge success. The Chivas brand has fantastic equity and based on recent consumer insight we feel that the new product, which offers an ultra smooth taste, will appeal not only to our existing Chivas drinker but also attract new consumers to the brand. The regional launch will be supported by great visibility and consumer communication in the airport environment, additional promotional space and consumer engagement platforms. GADF: We’ve spoken before about taking worldwide promotions and tweaking them for regional specificity. Can you give me any examples of recent activations where you’ve done this? Are there any upcoming promotions planned that will have a regional spin? DF: In July 2012 we launched the second phase of the innovative and extensive consumer campaign, The Age Matters, in Dubai International Airport to advocate the importance and value of the age statements to travelers. The Age Matters campaign uses motion and 3D innovation to capture consumers’ attention and we are able to empower consumers with knowledge about age statements so that they fully understand the value of what they are buying. For this second phase of the campaign, we have secured light boxes, digital faces and two standalone mechanized displays within Terminal 3 and a complete transit corridor takeover connecting Terminals 1 and 3 with 3D elements in wall wrappings and light boxes. Through the activation, consumers will be encouraged to look for age statements on Scotch whisky via point-of-sale materials, advertising and public relations. Along with the tagline “Great Things Take Time” and iconic images including the Great Pyramid and Terracotta Army, the Guaranteed Age Whisky logo will be visible in all artwork, which is also included on all Chivas Brothers brands that carry an age statement.

â&#x20AC;&#x153;The environment can be very competitive now, almost to the point of cluttered. Therefore we need promotional activation that is designed to cut through this and have the shopper stopped in their tracks.â&#x20AC;? David Freeborn, Managing Director, Pernod Ricard Gulf GADF: Have you done any consumer stud- the airline through the airport retail environment and then into the ies lately? Have there been any major shifts in actual domestic market itself. Whilst it may be an obvious associawho is buying? Who tends to be your biggest tion there are a lot of people at many different touch points all very customers in duty free? much on the same wavelength, which just shows how well these c DF: We have a wave of consumer insight currently associations can be done if the desire is there. being conducted so we would probFrom humble beginnings the Chivas Regal Brand has grown ably answer that better the next time to be a worldwide favorite in the competitive whisky category around. However, we are confident that we will pick up new information from the new wave of consumers coming to the region from Asia, as well as confirming the importance of gifting within the category. GADF: Some pockets of the region are still experiencing troubles. Is this affecting business? DF: As I alluded to earlier, the Gulf market has probably benefited from the regional issues as opposed to having had business hindered. As for North Africa and Levant their view may be different. As for Bahrain we have been quite surprised at just how robust the market has remained even during what have been challenging times. GADF: Are there any other product launches that we should know about? DF: Pernod Ricard is currently ranked in the top twenty of the most innovative companies in the world in a Forbes Magazine survey, so I am confident you will see new product innovation in the coming months. However, the challenge locally is to innovate around in-store activation. The environment can be very competitive now, almost to the point of cluttered. Therefore we need promotional activation and excellence that is designed to cut through this and have the shopper stopped in their tracks. So whilst new product development is critical, I also would see local innovation at point of purchase equally as challenging and potentially rewarding when it comes to consumer engagement. GADF: Is there any major cooperation with airport authorities or operators upcoming? DF: We have again just signed off with Etihad around the Etihad Abu Dhabi Formula One Grand Prix and G.H. Mumm association. I do believe this is the perfect partnership, linking G.H. Mumm as the onboard Champagne, also available in the Etihad First and Business Class lounges. DFS have been great supporters of the initiative in Abu Dhabi Duty Free as well, so we get a great link running from

Japan Tobacco International Winston’s shipment volume increased 8.4% driven by strong momentum in Russia, Italy, the Ukraine and other CIS+ markets; pictured is the new Winston smoking lounge at DXB

On the up and up

In addition to a strong first half in terms of sales, JTI rebrands Mild Seven and makes important strides in smoking lounges in Dubai and Frankfurt BY RYAN WHITE apan Tobacco International has announced a complete redesign and name change for global flagship brand (GFB) Mild Seven. The brand will now be called Mevius and have a globally unified design. With active investment to strengthen brand equity and a greater presence around the world, Mevius is aiming to become the number one global premium brand. Mild Seven, known for its smooth cigarettes with a clean finish, has been the best selling brand in Japan since 1978, a year after it was launched. JTI plans to roll out the new name and design across Japan, introducing the globally unified design in November 2012 while retaining the Mild Seven name, followed by the launch of the Mevius brand name in February 2013. “The JT Group targets sustainable profit growth in the mid to long term, based on the ‘4S’ management principle of satisfying and fulfilling our responsibilities towards consumers, shareholders, employees and wider society,” said Mitsuomi Koizumi, President and Chief Executive Officer of JTI. “By prioritizing investment in this business for quality top line growth and stronger business sustainability, we are targeting our tobacco business to grow EBITDA by mid to high single digits per year over the medium to long term.”

Lounging about Of course, other big news for JTI the Middle East this year was the opening of five large smoking lounges at Dubai International Airport totaling 600 square meters. The total space of the lounges is the largest in the world in a single airport. The global travel hub now joins a select group of international airports like Munich, Zurich, Moscow, Kuala Lumpur and Geneva which provides passengers with a refined and relaxing environment to pause before boarding while enhancing the airport environment for non-smokers. The smoking lounge concept was created in 2003 as JTI was looking for a solution to accommodate smokers and non-smokers in airports—a top priority for the company. Since then, this innovative concept has been 108

JTI’s Santiago Llairo tells us that JTI has become the go-to partner for airport smoking lounges given the company’s expertise at incorporating bespoke, well ventilated spaces into existing airport infrastructure

implemented in 21 airports around the world that have a combined traffic of more than 300 million passengers per year. The smoking lounges proved to be a win-win solution for all parties: smokers are enjoying a break in a pleasant environment especially designed for them, non-smokers benefit from a smoke-free environment and the airport is providing travelers with a high quality service.” We took the time to speak with Santiago Llairo, JTI’s Corporate Affairs and Communications Director – Worldwide Duty Free, about what goes in to a project like that recently completed in Dubai. “In terms of how challenging a particular project is, the size of the lounge isn’t the most relevant thing,” Llairo told us. “For example, Dubai International is a very centralized airport, meaning that five lounges were enough to meet the needs of the passengers across all three terminals. In airports like Zurich, which is very dispersed, more lounges may be necessary.” Llairo also tells us that the turnaround time for completing a lounge also necessarily varies depending on circumstances. If JTI is involved with an airport authority when a new terminal is still in the planning phases, implementation tends to be a very fluid process. However, most of the time JTI is dealing with airports that are already built and incorporating its lounges into the existing infrastructure, which often makes for a more complex job. Indeed, one of the reasons why JTI has become the go-to source for smoking lounges the world over for is precisely because of its expertise in pulling the more complex projects off in dazzling fashion. Most recently, the first new Camel-brand smoking lounge, measuring 65 square meters, was inaugurated in Terminal B-East at Frankfurt Airport. It will soon be followed by nine more smoking facilities with a total area of almost 1,000 square meters. The new fully ventilated lounges are the result of a close working relationship between JTI and the airport. Responsibility for the service-sponsoring concept was assigned to Media Popular brand Mild Seven is getting a makeover Frankfurt, a subsidiary of Fraport AG specialthis year in the form of Mevius; the brand will have c izing in such projects. what JTI calls a “globally unified design”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Visit us on stand J24 (Red Village) from October 21-24 at TFWA WE

BAT International BAT International’s Burgundy Lounge

Driven

innovate

Gulf-Africa Duty Free speaks with Darren Eaton, Head of Trade at BAT International, about its business in the Middle East and Africa, as well as what travelers can expect in the months to come RYAN WHITE BY

Gulf-Africa Duty Free: How has the first half of 2012 been for you? Which brands are performing well? Darren Eaton, Head of Trade, BAT International: British American Tobacco is having an excellent year in 2012, especially when it comes to our Global Drive Brands, which show excellent growth. During the first half of 2012, the brands that performed the best are Dunhill, Kent, Lucky Strike, Pall Mall and Vogue. The growth is underpinned by a wide roll-out of innovations which represent a significant share of our portfolio, and marketing campaigns based on our consumer insights. GADF: In terms of the MENA region, what airport locations are you especially happy with in terms of sales, exposure, promotional activities or partnerships? DE: In terms of sales, locations such as Dubai are typical of our excellent performance across the Middle East. Elsewhere, Cairo and Johannesburg really stand out, but I am glad to say that we are performing well in most of the key airports across the region. In terms of partnerships, we enjoy excellent support and collaboration with all the key retail partners, and this is a key part of our success. GADF: What about airports that are “up and coming” in the region? Where do you feel that passenger numbers or sales show some real potential? DE: We expect Africa and Middle East to continue to grow in the mid and long terms, and the key locations will only get stronger. Specifically, we see great potential for the new business in Saudi Arabia once it is up and running. In addition, Africa shows huge potential, and airports such as Nairobi are surely to become larger and more important 110

as air travel in the region becomes more and more established. GADF: Are there any new developments in airports with regard to airport lounges? DE: Over the last few years, we have established premium smoking lounges in major airports in the Africa and Middle East region. With Nigeria being a key domestic market, we have opened a smoking lounge in Lagos. We are delighted with the execution and it was very well received by all visitors. GADF: What is the main objective for BAT International at Cannes 2012? Will there be any new products/variants released? DE: Our objective in Cannes 2012 is to

tourist destinations. We support domestic growth for countries such as Egypt and Morocco, but also are very focused on the key tourist airports where the passenger profile is more European. We had good growth this year in the area. GADF: What are consumer trends that you’re noticing at the moment? DE: Our recent shopper insights clearly identify different shopper segments. While “fast and functional” shopping remains big, the strategic importance for us is shoppers’ browsing and searching for exclusive offers [and] souvenirs that they can bring back home either as a gift or for self-consumption. We have solid plans to satisfy these

“We see great potential for the new business in Saudi Arabia once it is up and running. In addition, Africa shows huge potential.” Darren Eaton, Head of Trade, BAT International demonstrate our leadership of the tobacco category, delivering against our vision. We will achieve this by demonstrating that BAT International understands the adult tobacco consumer, the channel and our customer needs better than anyone else within the category; BAT International successfully delivered in the past and we plan to continue this into the future. GADF: I know North Africa is also an area of concentration for BAT. Can you tell us how things are progressing there? DE: North Africa is a key location for BAT International from two points of view: it has some key domestic markets and also

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

trends in 2013 and beyond. GADF: What’s happening in your region in terms of BAT’s in-store displays, furniture and consumer education? DE: In travel retail, the category has historically been focused on stock holding and price communication. Our solutions are tailored to cater to all types of adult tobacco shoppers by providing engaging and premium executions which meet the basic needs of stocking, but through the use of added functions such as touch screens, display interaction, and so on. They can bring more of an “experience” to shopping. BAT International feels that this is very important for the category, and therec fore for our retail partners.

Tobacco News Ray Tobacco

continues growing in travel retail

Hong Kong-based Ray Tobacco has made some significant inroads in travel retail in recent months. As a result of exhibiting at this year’s IAADFS and TFWA AP exhibitions in Orlando and Singapore, respectively, new listings have come online and promising contacts have been made that bode well for the supplier’s future in the industry. A triple threat, offering two brands of cigarettes (Walton, called a “Royal Blend,” and Ray, an American Blend), as well as Walton-branded whisky and beer, Ray Tobacco has seen particular success in Egypt recently, with listings in some 50 points of sale—both airports and border stores— over the last few months. Other new travel retail

listings include Australia, Cyprus and Turkey. “We’re also working on Dubai, Israel and Beirut,” says Chris Pfister, Export Director for Ray Tobacco, “but nothing has been confirmed yet. At the moment our duty free business is about 50% airports and 50% border stores. We do very well at border stores in the Middle East and I think many of these locations often get overlooked by suppliers.” “The first quarter was a little slow but things picked up in the second quarter,” Pfister tells us. “We’re looking forward to continued sales growth in the second half of the year as we continue to expand our reach in duty free.”

Villiger introduces

Ray Tobacco offers two brands of cigarettes—Walton, pictured here, and Ray, an American Blend—as well as Walton-branded whisky and beer

Habanos releases Romeo

new mini cigarillo range

y Julieta Petit Churchills

“Villiger cigar manufacturing has introduced a new mini cigarillo line aimed at trendy and adventurous smokers. The company says that the Red Mini cigarillo “features a seductive, aromatic hint of vanilla, accenting the sophisticated combination of flavors of Virginia, Burley and Black Cavendish tobaccos.” The Black Mini is a mildly aromatic cigarillo that is satisfying and contains a harmonious blend of fine tobaccos. While both of the above cigarillos have rather light flavors, Villiger says that the Saphir Mini has “a little more spirit.” An elegant oriental blend, Saphir is a medium-strength, spicy smoke. Villiger calls it “a jewel of a cigarillo for adventurers.” To see Villiger’s entire range, including the new mini cigarillo line, attendees to this year’s TFWA WE can visit booth N7 in Mediterranean Village.

Romeo y Julieta was created as a Habanos brand in 1875. Its roots lie in the literary tragedy of the same name by British playwright William Shakespeare. The brand rose to international fame during the early years of the twentieth century, after Don “Pepín” Rodríguez was one of the first to recognize the importance of a cigar’s band as a factor of success. During this time no less than 20,000 distinct bands were used in production. Winston Churchill was one of the most devoted smokers of the Romeo y Julieta brand. Ever since his visit to Havana in 1946, his name has not only widely been used on Habanos bands, but also came to represent the bestknown vitola within the brand: Romeo y Julieta Churchills. Its balanced and aromatic blend, with filler and binder leaves selected from plantations in the Vuelta Abajo (D.O.P.) zone in Cuba, has made Romeo y Julieta the classic medium bodied Habano. Today, Romeo y Julieta enjoys considerable prestige worldwide and offers one of the broadest size ranges among Habanos brands, all made totally by hand with long filler. “The new Romeo y Julieta Petit Churchills vitola was designed to complement the current Romeo y Julieta range by adding a format that has been highly appreciated in recent years by Habanos enthusiasts,” says Habanos, S.A. Indeed, the balanced and aromatic flavor of this vitola can be enjoyed in just 20 minutes. Its wide ring gauge and moderate length give the cigar excellent combustibility and provide a complete series of flavor nuances in a short period of time thanks to the brand’s blend. The new Petit Churchills vitola will be available in the classic Romeo y Julieta labeled Box containing 25 units. They will also be available in aluminum tubes sold in cases containing 3 units in the months to come.

Villiger’s new mini cigarillo line include Red, Black and Saphir varieties

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

Diageo GTME

Liquor Report: Standout Spirits

! BY

Just in time for TFWA AP in Singapore, Diageo releases two new expression in the iconic Johnnie Walker range of blended Scotch whiskies BY RYAN WHITE

A new limited edition release of the world’s leading blended Scotch whisky will be released exclusively in global travel retail: Johnnie Walker Blue Label – The Casks Edition. Crafted from some of Diageo’s rarest casks, each noted for their intensity and depth of flavor, this special edition, bottled at 55.8% ABV, has intensified wood flavors and “is a tribute to the perfect harmony of the oak casks used in the blending of Johnnie Walker Blue Label,” says Diageo. Johnnie Walker Master Blender Jim Beveridge says: “This limited edition is a chance to enjoy the remarkable experience of Johnnie Walker Blue Label in a new way. Only one in ten thousand of our casks have sufficient character for Johnnie Walker Blue Label and in creating this special edition we really wanted to showcase the incredible flavors that come from the casks themselves. The flavors drawn from these carefully selected casks have intensified to produce a robust and powerfully fla-

Diageo’s second new addition to the Johnnie Walker range is Johnnie Walker Platinum Label. Inspired by the Walker family’s historic tradition of creating exclusive “private blends” for favored customers, directors of the company and select private gatherings, Johnnie Walker Platinum Label has been crafted by Jim Beveridge “for today’s increasingly sophisticated global consumers—the ‘new whisky set’—to enjoy at their own intimate gatherings,” says Diageo. It is a delicate, smoky blend that embodies the characteristic full flavors of the Johnnie Walker range of blended Scotch whiskies. Jim Beveridge explains: “Like the rare and precious metal after which it is named, Johnnie Walker Platinum Label is rich and refined, delivering the distinctive depth and complexity that is synonymous with Johnnie Walker. In fact, I believe that if John Walker were to create a whisky today, Johnnie Walker Platinum Label would be the result. It is a bold, intense and smooth blend, crafted from some of our most treasured whiskies, for the evolving tastes of 92

iddle Eastern travelers are known for their love of whisky, and International Beverage Holdings (Interbev) is breathing new life into some promising brands with package redesigns and special editions that were introduced at this year’s TFWA WE in Cannes in September. The standout Old Pulteney single malt whisky and Hankey Bannister blended Scotch whisky have been boldly redesigned. In addition, a special two-pack of Hankey Bannister Original and 12 Year Old was recently introduced and has been performing well in the Middle East. Old Pulteney, which is one of the fastest growing malts in the industry, has revealed a vibrant new design with a bolder logo to drive a premium message and improve retail

vored blended Scotch whisky that has rich woody notes, deep smoke, traces of spice and a long, lingering oak finish.” Produced in limited quantities and blended in small batches, the bold blend is a contemporary expression of the powerful 19th century character pioneered by the Walker family, created for true connoisseurs who are seeking new depths of flavor. Steve White, Marketing Director, Diageo GTME, said: “Johnnie Walker Blue Label – The Casks Edition is a Scotch whisky with a remarkably powerful flavor, the result of almost two centuries of unbroken blending expertise. This limited edition release is a rare opportunity to enjoy a bold amplification of the powerful cask flavors contained in Johnnie Walker Blue Label—it is rarity redefined.”

today’s global whisky consumer.” “Johnnie Walker Platinum Label is the richest, most precious crafted 18 year old blended Scotch whisky John Walker & Sons has ever created—its price point reflects this,” says Steve White. “We believe that consumers will quickly develop a real affinity for Johnnie Walker Platinum Label and that it will offer real value for our trade partners. “It is a thoroughly modern interpretation of the ‘private blends’ that our company has produced from the very beginning and is a contemporary blended Scotch whisky that is perfect for exclusive occasions,” he added. Johnnie Walker Platinum Label is available now in 75cl size in limited Asian Duty Free locations with a global Duty Free launch of the 1L variant from June 2012. Priced at an RRP of USD $100 for 1 liter in duty free, Johnnie Walker Platinum Label is a premium whisky that will sit towards the top end of the Johnnie Walker range.

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RYAN WHITE

onsumer preferences aren’t static, and thankfully for globetrotters the travel retail industry is especially good at staying ahead of trends and treating duty free shoppers to new and exciting experiences. Gulf-Africa Duty Free recently spoke with International Beverage Holdings, Bacardi Global Travel Retail and Brown-Forman about how they’re going about pleasing discerning spirits lovers in the Middle East. Among the latest developments from these suppliers are new liveries for two iconic whisky brands, the introduction of a new spiced rum with a big heart and a collaboration between two American legends.

iageo recently announced that two new expressions of its iconic blended Scotch whisky Johnnie Walker will be available in travel retail. The first—a global travel retail exclusive—gives one of the brand’s legendary expressions a new woody, smoky twist, while the second—inspired by the Walker family tradition of creating exclusive “private” blends—offers consumers a strong, sweet and elegant spirit crafted in traditional Speyside style.

display while at the same time retaining Old Pulteney’s distinctive bottle shape and “Maritime Malt” positioning. “Old Pulteney is distilled in Wick, Scotland,” says James Bateman, Global Travel Retail Manager at Interbev. “In fact, there are no other Scotch whisky distilleries there, so we’ve communicated Old Pulteney’s unique origins on the bottle. We’ve also taken the boat and put it to the back so that it can be seen through the front of the bottle. These changes, combined with the redesign of the words ‘Old Pulteney,’ have resulted in much more shelf standout.” Hankey Bannister blended Scotch whisky has unveiled a striking, super-premium presentation pack of its 21 year old “Partner’s Reserve” that features an elegant black box, proprietary bottle and gold embossed label. The new limited edition Hankey Bannister 25 year old “Partnership Blend” was also previewed in Cannes. It comes beautifully encased in a Lochinver decanter and luxurious bordeaux-red presentation box. This new expression has been specially selected by Master Blender Stuart Harvey using the very finest non-peated single malts, resulting in a distinctively delicate and smooth flavor. Interbev is banking on increased traction in Asia duty free with the above super-premium Hankey Bannister offerings. Bateman told Gulf-Africa Duty Free that in the Middle East,

Hankey Bannister Original and 12 Year Old expressions are very popular, particularly with Indian travelers. “For the Gulf we’ve introduced a gift pack featuring two one-liter bottles—Hankey Bannister Original and 12 Year Old,” Bateman explains. “It offers a savings to shoppers and has already been launched in airports in Dubai and Sharjah to great effect. “Duty free is a great channel for us to generate awareness of these brands,” Bateman continues. “Hankey Bannister is a very regional brand that is popular in India. As such, it’s also popular with Indians living and working in Dubai, which helps us develop in the Middle East.” Old Pulteney has revealed a vibrant new design with a bolder logo to drive a premium message and improve retail display

Pernod Ricard Asia Duty Free

Asian travelers are known for having a keen eye for luxury offerings and brown spirits, and Pernod Ricard caters to both tastes with a wide range of new releases BY RYAN WHITE sia Duty Free recently sat down with John O’Sullivan, Marketing Director at Pernod Ricard Asia Duty Free, to discuss the numerous new launches in the region that coincide with the TFWA AP exhibition in Singapore. We also took the opportunity to ask him about business in general in the region and get an update on last year’s big news during the exhibition, the Martell Experience Boutique.

Adding excitement to duty free Absolut Watkins, a limited edition exclusive to travel retail, was launched to the Asian market at Changi Airport in February 2011 and was then rolled out in Hong Kong, Thailand, Malaysia and Korea throughout March. Absolut Watkins offers the distinct qualities of freshly ground coffee with notes of

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almond, caramel and warm chili. The detailed image on the limited edition bottle is created by celebrated Swedish fashion illustrator and artist Liselotte Watkins, famous for her designs for fashion brands such as Miu Miu, Anna Sui and Barney’s, as well as for magazines such as Vogue and The New Yorker. In addition, Pernod Ricard Travel Retail launched its limited edition Chivas Regal 18 Year Old by Christian Lacroix in key Asian airports in March to showcase the new masterpiece and bring to life the brand values of luxury, craftsmanship and excellence. Only 3,000 bottles of this striking limited edition design were produced, of which a select number will be sold in Asia duty free. The activity kicked off at Hong Kong International Airport and Singapore Changi Airport where elaborate displays were positioned in high traffic locations to generate impact. The product was rolled out in April to Incheon International Airport and Kuala Lumpur International Airport. Also early this year, Royal Salute 62 Gun Salute was rolled out in Asia at Hong Kong International Airport, Taiwan Taoyuan Airport, Singapore Changi Airport and Korea Incheon Airport. The product was positioned on premium display units in the first class and business lounges of Korean Air. “Innovation is a key driver for Pernod Ricard and we have had some very successful recent launches,” says O’Sullivan. “As many have come to expect, Absolut has led the way with Glimmer and the travel retail exclusive Absolut Watkins. “The Chivas 18 Year Old by Christian Lacroix, the latest release in the Chivas 18 designer series, was a huge success,” he continues. “The product is very limited and will only be in store for a short time before it is sold out. Probably the most high profile launch we had this year was for Royal Salute 62 Gun Salute, which was supported with luxurious

help us to tell the brand story and increase interest.” New launches are an important vehicle for creating excitement in the duty free channel and Pernod Ricard has released a number of new products in the past 12 months. Absolut has always been an active brand and its latest release was Absolut Mode, the fashion-themed bottling. Chivas is another brand that is regularly innovating and this is particularly evident with the Chivas 18 series of designer bottle releases. The latest was based on the work of British fashion designer Vivienne Westwood. Previous releases have been developed with fashion designers Christian Lacroix and Alexander McQueen. Other recent launches from Pernod Ricard include the Master Distiller’s Reserve expression of The Glenlivet, exclusive to travel retail, which was particularly visible recently in Taiwan and Hong Kong. And cognac brand Martell has recently benefited from the Centenary Edition of Martell Cordon Bleu with special packaging and, more recently, Chanteloup Perspective in the Extra category, named after the home of Martell. Significantly, the travel retail team collaborated with the domestic side to launch Glenburgie Edition, a 17-year-old limited edition Ballantine’s celebrating one of four signature Ballantine’s distilleries. The launch was initially focused on Korea, and response was “outstanding,” O’Sullivan says, with a high proportion of the travel retail allocation flying off the shelves in the first days. O’Sullivan also notes the recent launch of a single Martell eau de vie in the two dedicated Martell Experience boutique airport shops in Hong Kong and Kuala Lumpur. Titled “Millésimes,” the very exclusive launch came out in December.

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2012

Whisky Report

The “Dewar’s World of Discovery” promotion

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

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.

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

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

W E N

South Africa is a standout market for Jameson Irish Whiskey

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

Editorial Highlights: • Feature Report on Asian retailers and top selling whiskies • Trend Report: An in-depth overview of the year ahead in the whisky category • Whisky News: What’s new and noteworthy • Tasting Notes: All the seasons must haves from some of the top whisky brands • Company Profiles: Highlighting the industry’s heavy hitters

S PECIAL R EPOR T: WH ISKY

ernod Ricard Asia Duty Free (PRADF) is a leader in the Asian travel retail and duty free market. While it covers the full range of channels in the duty free market, airports are definitely the main focus of activity, says John O’Sullivan, Marketing Director, Pernod Ricard Asia Duty Free. As air travel is especially strong in Asia these days—and growing— 2011 was a good year, O’Sullivan says, with the business rebounding quite well from the lows of the 2008-2009 economic crisis. According to the research that O’Sullivan and his team have access to, the Asia travel retail market is actually growing at a rate that puts it ahead of global trends in terms of passenger numbers, but also by volume and in terms of the value of the travel retail business overall. Asia presents quite a complex and varied mix when it comes to the combination of nationality profiles and preferences. It’s even more complicated when you factor in the amount of intraregional travel done by passengers of different nationalities. Koreans favor aged whisky, which puts Pernod Ricard in the sweet spot, with premium brands like Ballantine’s, Chivas Regal and Royal Salute. The big emerging market in Asia is of course China, and with Chinese passengers traveling more and more throughout the region, the Chinese buyer’s preference for premium brands represents a real opportunity for Asian travel retail. Here, O’Sullivan says, whisky and cognac are among the keys to success. In addition to the whiskies mentioned earlier, the Martell cognac marque in particular is a leading brand for the Chinese consumer. Shopping is an important part of the travel experience for Chinese travelers, O’Sullivan says. “They’re brand-conscious—a luxury consumer category is developing. Our presence is strong and our brands are well recognized, so we’re in a good position. It’s a matter of making sure that when Chinese passengers travel elsewhere in Asia, we engage them at strategic airports like Hong Kong, Macau, Singapore and so on.” Promotions play a double role. Of course they bring in added sales, but they also play an important part in boosting brand profile. “We work both levels with special packaging, limited editions, new launches, exclusive products,” O’Sullivan says. “All of these

Whisky Report

“T

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

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The growing luxury market in Asia means there’s more growth ahead for Pernod Ricard in the region BY ANDREW BROOKS

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

Premium prospects

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At this time last year, the Martell Experience Boutique concept at HKIA and Kuala Lumpur—designed to showcase Martell’s unique combination of traditional, cultural and modern attributes—was making headlines for its high-end, educational offering. O’Sullivan tells Asia Duty Free that over the last year Pernod Ricard’s expectations have been exceeded, both in terms of sales and making quality connections with travelers. “Selling was never a primary objective for the Martell Experience Boutique as this is the role of main duty free shops in the airports,” he explains. “Having said that, we have had some good sales, mainly to Chinese and Malaysian travelers. More importantly from a sales perspective our overall performance in Hong Kong and Kuala Lumpur International Airports has been very positive since the boutiques opened. The growth has been driven by our Prestige range, which consists of Martell Cordon Bleu, Martell XO, Martell Creation and L’Or de Jean Martell.” Given the popularity of both brown spirits and luxury offerings in Asia, Pernod Ricard is certainly in a good position going into the second half of the year with brands such as Chivas Regal, Royal Salute, Ballantine’s, The Glenlivet, Jameson and Martell. O’Sullivan asserts that outside this subcategory, vodka continues to show growth on a smaller scale, and Pernod couldn’t be happier with the innovations coming from the team at The Absolut Company. “All of these brands appeal to Asian customers because they are leading brands, if not the leading brands, in the categories,” O’Sullivan concludes. “They are also all premium brands, most of which fall into the super premium and above categories, which is important to the Asian customer.”

displays in key airports.”

Luxury leanings

SPIRIT

The Whisky Supplement is designed as the most comprehensive whisky source for the travel retail industry in Asia Pacific. With indepth reports on the biggest brands and up-and-comers alike, as well as unparalleled coverage on innovation and trends, there is no doubt that the Whisky Supplement will provide both buyers and suppliers with an inside perspective on the iconic spirit.

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2012

SUCCESSFUL New for 2013, presents an exclusive Whisky Supplement that will have bonus distribution at the 2013 TFWA WE exhibition in Cannes. Whisky is the spirit to watch in duty free given its wide popularity with high-spending travelers like the Chinese and the emerging Indian middle class.

The new presentation of Hankey Bannister 21 year old “Partner’s Reserve” features an elegant black box, proprietary bottle and gold embossed label

Company News: Pernod Ricard

THE

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

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 detail on those plans at Cannes.”

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

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

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New & Notable TOBACCO Tonino Lamborghini Company: KT&G Description: KT&G has launched Tonino Lamborghini, a new tobacco brand co-developed with Italy’s namesake luxury brand. The world’s first Tonino Lamborghini tobacco uses premium leaves from ‘SmokingLeaf,’ which represents only 2% of global tobacco output, and South European Orient leaves featuring a soft throat and enriched taste, and other highend materials including embossed ‘lip release filter.’ The new Tonino Lamborghini comes up with two types, L6 and L8, with tar at 6.0mg and 8.0mg respectively Booth: Marine Village, S14

ACCESSORIES The Dri- Cat Company:Advanced Wireless Technologies Description: The Dri-Cat is a 100% waterproof iPhone 4/4S case with a carabiner clip. Unlike other waterproof cases, it is easy to use and allows the device to be fully functional; the user places the device in the waterproof shell and clamps shut. The silicone shield allows users to take photos, shoot videos, make calls or listen to music all while the phone is secured in the protective case. Waterproof up to 18 feet (6 meters) Booth: Yellow Village, F57

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18 karat Gold collection Portofino Company: Leo Wittwer GmbH & Co KG Description: Completely manufactured in Germany, Leo Wittwer’s latest collection features jewels made out of 18 karat rose or white gold, covered with gold enamel in various colors Booth: Red Village, J 7

CONFECTIONERY

LIQUOR

Macadamia Truffles

Copia de Boka

Company:Hawaiian Host Description: The truffle center is made with macadamia butter, ground to a creamy consistency and then mixed with dark chocolate. The product is then enrobed with Hawaiian Host’s signature milk chocolate. Each box of Macadamia Truffles includes 12 pieces and has a net weight of 5.5OZ (156g)

Company:Tequilera Corralejo Fraternity Spirits World Description: Mexican corn vodka presented in deep blue bottle which has a twisted effect. Made of corn that was discovered in Mexico by the Spanish conquistadors Booth: Blue Village, E1

Desigual Travel Wallet Company:Desigual Description: A functional but fun design, Desigual's unique wallet is designed to carry passports, tickets, travel cards, insurance, bills and coins Booth: Mediterranean Village, N5

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2012

JEWELRY

Tequilera Corralejo Añejo 99,000 Hour Aged Company:Tequilera Corralejo Fraternity Spirits World Description: This 100% Blue Agave tequila, double distilled in column and copper stills, is aged for 18 months in American oak barrels no bigger than 200 liters. 99,000 hours is the total time required to finish the product, from growing the agaves to bottling Booth: Blue Village, E1

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