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DUTYFREEMAGAZINE.CA MARCH/APRIL 2015 IAADFS VOL 25 · NO 1

Diageo Industry sales hit US$60 billion p. 14 JFK T4 Redo p. 22 Panama Report p. 32

LETTER FROM THE EDITOR

Looking ahead

and thinking big

W

hile many Latin American operators we’ve spoken to recently posted their year-on-year sales increases in 2014, growth seems to be slightly more subdued than in the boom years of the late 2000s, and growth across the region as a whole was flat last year.

Now is in many ways a time to take stock, identify weakness and capitalize on strengths, and a number of retailers are doing just that. From planned renovations at Mannah Duty Free’s stores to the continual upkeep necessary to keep Monalisa’s behemoth flagship store in tip-top shape, operators in the region are biding time until the next big growth spurt happens—and many are confident that it will.

Forecasts indicate that Latin America will become North America’s largest international market for air travel over the next 15 years (ACI), and you’ll also see in this issue that with the latest developments along the Brazilian border, Secretary-General of Cámara de Empresarios de Free Shops del Uruguay Carlos Loaiza Keel expects healthy competition in the area to heat up. Needless to say, more passengers through the airports and more choice for cross-border travelers is a good thing for travel retail.

Looking ahead to the next big industry event, in this edition Americas Duty Free examines a country that knows a thing or two about duty free: Panama. We talk to multiple names in the industry doing business there to find out why the country is the perfect choice for this year’s ASUTIL conference.

Of course, there’s plenty of action happening in other parts of the Americas, including a stunning new commercial space at JFK’s Terminal 4. From the stores themselves to the shopper-friendly ambience, you can find all the details in our interview with JFKIAT CEO and President Gert-Jan de Graaff.

Widening the scope, it’s always helpful to look outside the region to see the trends and tendencies shaping the worldwide travel retail industry, and in this issue we go in depth with Generation Research to discover that worldwide industry sales hit US$60 billion in 2013. You’ll learn who the top performers are and, more importantly, gain insight into how they turned trends into spend in 2013.

Finally, the vibrancy of the industry is to a large extent dependant on the brands themselves and the hot, new items they bring to the table each year. From the exploding popularity of malts and the suppliers shaking up the liqueur subcategory to Kate Upton’s new collection for Bobbi Brown and much, much more, Americas Duty Free covers all the bases across categories to give you a detailed roadmap of what to expect at this year’s IAADFS show.

This year marks Americas Duty Free’s 25th anniversary covering travel retail, and in that time the industry has seen its share of ups and downs. I’m particularly pleased to be producing this very special edition of the magazine as we are collectively on the upswing and moving toward continued growth for the industry.

I look forward to seeing you on the exhibition floor and hearing how your company is contributing to the exciting developments in travel retail in the Americas.

Kindest Regards,

Hibah Noor Editor-in-Chief hibah@dutyfreemagazine.ca 6

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

MARCH/APRIL 2015 · IAADFS VOL 25 · NO 1

The Americas Duty Free & Travel Retailing magazine (ISSN 0962-0699) is published five times a year March, April, June, October and November

by Global Marketing Company Ltd. 26 Pearl Street, Mississauga, Ontario L5M 1X2 Canada. It is distributed throughout Central America, South America, the United States, Canada, U.S. Virgin Islands, U.S. Pacific islands, and the islands in the Caribbean.

The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or the editor. March 2015, Vol 25. No. 1. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2015 Global Marketing Company Ltd.

AMERICAS DUTY FREE & TRAVEL RETAILING 26 Pearl Street Mississauga, Ontario L5M 1X2 Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemagazine.ca

PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@dutyfreemagazine.ca EDITOR Wendy Morley wendy@dutyfreemagazine.ca ASSOCIATE EDITOR Ryan White ryan@globalmarketingcom.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca

ADVERTISING SALES ADVERTISING & MARKETING EXECUTIVE Jacqueline Hammill jacqueline@dutyfreemagazine.ca CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

ENJOY THE ORIGINAL BISON GRASS VODKA RESPONSIBLY

LETTER FROM THE EDITOR

Mirando al futuro

y pensando a lo grande S

i bien muchos operadores latinoamericanos reportaron incrementos de ventas de año en año en el 2014, el crecimiento en general parece haber sido ligeramente más modesto que durante los años florecientes de finales de la década de los años 2,000. Este momento es, de muchas maneras, para analizar los acontecimientos, identificar debilidades y aprovechar los puntos fuertes, algo que ya están haciendo numerosos minoristas. Los operadores de la región están esperando la oportunidad favorable hasta que ocurra el próximo gran crecimiento tomando diferentes medidas, desde renovaciones planificadas en las tiendas de Mannah Duty Free, a la conservación continua necesaria para mantener en forma idónea la enorme tienda insignia de Monalisa. Y muchos están confiados de que el crecimiento se producirá.

Los pronósticos indican que Latinoamérica se transformará en el principal mercado internacional de viajes aéreos para Norteamérica en los próximos quince años (ACI), y en este número también verán que, con los acontecimientos más recientes ocurridos en la frontera brasileña, Carlos Loaiza Keel, Secretario General de la Cámara de Empresarios de Free Shops del Uruguay, espera que se incremente la competencia saludable en el área.

No es necesario decir que más pasajeros en los aeropuertos, y más opciones para viajeros que cruzan las fronteras es una buena noticia para el sector minorista de viajes.

En esta edición, anticipándose al próximo gran acontecimiento de la industria, Americas Duty Free examina un país muy conocedor del sector es duty free: Panamá. Hablamos con prestigiosas personalidades de la industria que hacen negocios allá, para saber la razón por la cual la nación istmeña es la opción perfecta para la conferencia ASUTIL de este año.

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

Por supuesto, en otras partes de las Américas hay mucha acción, como un sorprendente y nuevo espacio comercial en la Terminal 4 de JFK. Desde las tiendas en si al ambiente favorable a los compradores, podrá conocer todos los detalles en nuestra entrevista con Gert-Jan de Graaf, Director Ejecutivo y Presidente de JFKIAT. Ampliando el panorama, siempre es útil mirar más allá de la región para ver las tendencias que conforman la industria minorista de viajes mundial, y en este número investigamos a profundidad con Generation Research para descubrir que las ventas de la industria en todo el mundo totalizaron US$60 mil millones en el 2013. En este artículo, se enterará de los operadores de mayor rendimiento, y, más importante aun, de cómo éstos convirtieron las tendencias en ingresos en el 2013.

Finalmente, la vitalidad de la industria depende en gran medida de las marcas en sí, y de las mercancías nuevas y populares que estrenan cada año.

Desde la creciente popularidad de los whiskies de malta y los proveedores animando la subcategoría de licores; a la nueva colección de Kate Upton para Bobbi Brown y mucho, mucho más, Americas Duty Free le da amplia cobertura a todas las categorías, para ofrecerle un mapa detallado de lo que podrá esperar en la exposición de IAADFS 2015.

Este año se cumplen el 25 aniversario de la cobertura del sector minorista de viajes por Americas Duty Free, un período en el que la industria ha experimentado altas y bajas. Me complace particularmente producir esta edición especial de la revista, mientras vamos colectivamente en ascenso, y avanzando hacia el crecimiento continuo y sólido de la industria.

Espero encontrarme con ustedes en el salón de exposiciones, y enterarme de cómo sus compañías están contribuyendo a los sorprendentes progresos del sector minorista de viajes en las Américas.

Un cordial saludo, Hibah Noor Editora Jefe hibah@dutyfreemagazine.ca

Voted

the Best Rum in the WoRld

www.theeldoradorum.com Please enjoy el DoraDo resPonsibly

CONTENTS

What’s inside LEAD STORIES 18 Top Story READY FOR GROWTH

Santiago’s Comodoro Arturo Merino Benítez International Airport will more than triple its passengers in the next 30 years. Under a new consortium, this airport will be ready for them

22 Airport Report: JFK STEP BY STEP

JFKIAT, which manages JFK International Airport’s Terminal 4, has been taking its time fully developing its new airside commercial space

24 14

36 Panama Report WHERE THE AMERICAS MEET

Three big names in the industry—Motta Internacional, ASUTIL and Grupo Wisa—weigh in on what makes Panama a great place to do business

EL LUGAR DE ENCUENTRO DE LAS AMÉRICAS

Tres nombres prestigiosos de la industria— Motta Internacional, ASUTIL y Grupo Wisa— analizan los motivos por los que Panamá es un sitio ideal para hacer negocios

40 Latin Americas Report SOMETHING FOR EVERYONE

Four Latin American duty free operators walk Americas Duty Free through their varying strategies for ensuring success in an increasingly competitive industry

ALGO PARA TODOS

Cuatro operadores duty free de Latinoamérica revelan a Americas Duty Free sus cambiantes estrategias para garantizar el éxito en una industria cada vez más competitiva

58 Association Report: ASUTIL WHAT’S TO COME

FEATURES

LO QUE TRAERÁ EL FUTURO

Industry sales hit US$60 billion in 2013 Online experience with Dufry London Supply’s retail play Taking travel retailing to the next level Guest writer: Sarah Branquinho ARI North America is in the loop Taking the next step

ASUTIL’s José Luis Donagaray discusses the organization’s upcoming conference in Panama and what big changes in Brazil could mean for the industry

José Luis Donagaray, de ASUTIL, habla sobre la próxima conferencia de la organización en Panamá, y lo que podrían significar para la industria los grandes cambios en Brasil

14 68 70 78 84 86 92

An exciting show in store Viewing 2015 with positive anticipation Tackling global challenges head-on The sun is shining Essence Corp. tackles Caribbean challenges Extreme targeting

98 100 102 104 109 114

CONTENTS

LEAD STORIES 72 Retailer Report: Baja Duty Free BORDER STORE PIONEERS

Store openings and a pioneering new customer service program are in the works for US/Mexican border operator Baja Duty Free

76 Uruguay-Brazil border GOOD THINGS AHEAD

Americas Duty Free explores the duty free developments along the Brazil border with Cámara de Empresarios de Free Shops del Uruguay’s Carlos Loaiza Keel

104 Caribbean Corner: CTO THE SUN IS SHINING

One of the world’s favorite tourist destinations, the Caribbean is seeing some comforting trends, and the region is doing what it can to help that continue far into the future

136 126

110 Association News: FDFA Update/Review NEW LOGO, NEW PLAN

After four years in Niagara the FDFA Convention moved to Toronto, where a new logo was voted on and a new marketing initiative was launched

116 Beauty: L’Oréal Americas Travel Retail L’ORÉAL’S PIONEERING BEAUTY LAB

Javier Labarta, CEO of L’Oréal Americas Travel Retail, speaks passionately about the company’s plans to introduce a raft of retail innovations in the beauty category

120 Beauty: Essence Beauty OUTPERFORMING THE MARKET

Having achieved double-digit growth in 2014, Essence Corp President Jean-Jacques Bona reveals the fragrance distributor’s ambitious plans for the Caribbean

126 Beauty: Estée Lauder – Kate Upton A HOT NEW COLLECTION

American model and actress Kate Upton reveals details of her new Hot Collection for Bobbi Brown Cosmetics

132 Editor’s Picks THIS SEASON’S CHART TOPPERS

FEATURES Shiseido unveils the ultimate in beauty 122 A fixture on the travel retail beauty scene 124 Buckley Jewellery expands 134 Crislu quickens the pace 136 Lola&Grace shines on 138 Taking pearls to fresh heights 140 Traveling life is cool 142

Six of the best new innovations from key travel retail suppliers

Guest Writer: Catherine Bonelli 144 Watch this space 146 Watch News 148 Sunglass Report 150 Confectionery Report 154 Vodka News 166

152 Confectionery: Mars SMILES REFINED

Four years after opening, DFA’s M&M’s store in JFK’s Terminal 7 is given a whole new look and focus

CONTENTS

200

LEAD STORIES 159 Vodka Report A CLEAR FORCE

Vodka continues to be a driving force for sales in travel retail Americas, going strong in North America and picking up speed in the south

176 Spirits: Byejoe HAPPY CONTRADICTIONS

Byejoe is at once modern and ancient, eastern and western, but whatever its origins, this spirit is finding adoring fans around the globe

182 Spirits: EWTRA A CONSOLIDATED FUTURE

After years of working together in the Caribbean, Edrington and WEBB are taking on the travel retail channel in the Americas

190 Spirits: Rémy Cointreau ELEGANT AND REFINED

Sophisticated is the word for Rémy Cointreau’s upcoming year as premium new releases join its Rémy Martin Cellar Master range in the company’s impressive portfolio

198 Tobacco: JTI RESEARCH-DRIVEN PERFORMANCE

Japan Tobacco International realized substantial growth in 2014, with sales especially strong in North America

204 Tobacco: Davidoff CROSSING THE THRESHOLD

186

Ground was broken in early 2014 on the Davidoff Art Residency in Dominican Republic.

Less than one year later, the first five artists are ensconced within

208 A mixed bag A MIXED BAG

The travel retail shelves are packed with purse-friendly products for stylish globetrotters. Here, we feature six items that can be found in a woman’s bag this season

FEATURES

208

Vodka Spring Cocktails 174 Liqueurs Report 178 Whiskey Report 180 Heavy hitter 186 MONARQ takes to the skies 188 Liquor News 192

Habanos in Havana 200 Tobacco News 202 Double Happiness 206 CIDF seizes the Americas opportunity 207 Questionnaire: José Luis Donagaray 210

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ur

20 Ho n 13 /1 nn 4 e

  GLOBAL TR & DF OVERVIEW

Industry sales hit

US$60 billion

in 2013

Global travel retail and duty free sales reached US$60 billion in 2013, according to the latest figures from Generation Research, Sweden, the industry data experts by

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HIBAH NOOR

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

G

lobal travel retail and duty free sales hit US$60 billion in 2013, according to the latest figures provided by industry data specialists, Generation Research, Sweden.

By product category, fragrances and cosmetics led the way with 28.8% of total sales (US$17.3 billion), followed by wines and spirits with 16.4% (US$9.9 billion), fashion and accessories (14.6%/US$8.8 billion), tobacco goods (13.1%/US$7.9 billion), watches, jewelry and fine writing instruments (10.4%/US$6.2 billion), electronics, gifts and other goods (8.9%/US$5.3 billion), and confectionery and fine food (7.9%/US$4.7 billion).

Fashion and accessories topped the charts in terms of the percentage increase in sales over 2012, boosting its share by 10.1%. Fragrances and cosmetics also grew its share of sales, with a 9.3% upswing on the previous year. Notably, wines and spirits climbed by 8.5%, narrowly beating confectionery, up 8.4% on the year. Smaller increases were registered by tobacco goods, up 3% year-on-year, and electronics/other at 2.4%.

The world’s top 10 product categories in duty free and travel retail 2013 Sales in US$ millions

Market Share

Cigarettes

6,753

11.3%

Product category

Skincare

5,986

10.0%

Women’s Fragrances

5,401

9.0%

Confectionery

3,696

6.2%

Scotch Whisky

3,358

5.6%

Men’s Fragrances

3,097

5.2%

Accessories

2,907

4.8%

Leather Goods

2,845

4.7%

Jewelry

2,695

4.5%

Make-Up

2,458

4.1%

39, 195

65.3%

Total:

*Source: Generation Research, Sweden

By region, Asia and Oceania took the largest share of sales with 37.2%, narrowly beating Europe at 33.6%. The Americas contributed 18.6% of sales, followed by the Middle East at 9.3% and Africa (1.4%). Asia and Oceania increased as a proportion of worldwide sales by 12.1% year-on-year, while the Middle East grew its share by 11.1% versus 2012. Africa managed to up its share by 7.3% on-year, with smaller upticks registered by Europe (4.5%) and the Americas (2.8%).

By sales channel, airport shops took the lion’s share of sales, with 57.8% of turnover, followed by other shops (33.5%), airlines (5.0%) and ferries (3.7%). Other shops and airport shops boosted their share of sales compared to 2012, up 8.8% and 8.6% respectively. Airlines managed a smaller pick-up of 1% year-on-year, while ferries lost 8.4% versus 2012.

South Korea was the number one country in US dollar sales, with a market share of 10.5% and an 8.9% rise in value terms compared to 2012. China followed with 7% market share (+23.5%

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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  GLOBAL TR & DF OVERVIEW

in value), then US with 5.9% market share (+18.9%), UK with 5.5% (+1.3%), Hong Kong with 4.9% (+7.7%), Germany with 4.7% (+2.3%), United Arab Emirates with 4.1% (+16.1%), Turkey with 3.5% (+7.7%), Singapore with 3% (+9.6%) and Thailand rounding out the top ten countries with 2.8% market share (+38.7%).

France, the most visited country in the world, took 11th spot in the top 25 countries ranking, with 2.4% market share (+12.9% in value terms), followed by Japan, Russia and Taiwan, which each registered 1.8% market share. Brazil was ranked 15th with 1.7% market share, while the US Virgin Islands came in at 19th (1.5% market share, down 9.1% year-on-year). Further down the list, Macau sat in 24th place, with Australia one spot behind.

Product group breakdown 2013 (in US$ millions)

AMERICAS

Wines & Spirits 1,468.9

Total 11,162.5

Fragrance & Cosmetics 3,448.9

Tobacco Goods 775.6 Fashion & Accessories 2,006.6 Confectionery & Fine Food 744.7

Watches, Jewelry Electronics, & Fine Writing 1,452.6 Gifts & Other 1,205.3

*Source: Generation Research, Sweden

The world’s top 50 shops ranking was headed by Dubai Duty Free, with sales exceeding US$1 billion at Dubai International Airport. Seoul Incheon Airport took the number two position, followed by Singapore Changi, London Heathrow, Bangkok Suvarnabhumi and Hong Kong International Airports. Rounding out the top 10 shops were Shanghai Pudong, Beijing Capital, Paris Charles de Gaulle and Frankfurt Airports.

Scandinavian ferry line Tallink/Silja Line was the first nonairport outlet to appear in the top 50 shops ranking, coming in at number 11, while Korean Air was the top airline, in 48th position.

Americas outlets included in the top 50 were: Sao Paulo Guarulhos Airport at number 13, Honolulu Airport/off-airport at 22, Panama City Tocumen Airport (24), Rio de Janeiro Airport (27), Buenos Aires Ezeiza Airport (30) and New York JFK Airport (49).

Ever popular Dubai Duty Free is ranked number one for sales worldwide in the industry

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

TOP STORY

Ready for

Growth Santiago’s Comodoro Arturo Merino Benítez International Airport will more than triple its passengers in the next 30 years.

Under a new consortium, this airport will be ready for them by WENDY MORLEY

W Chile has a very strong economy that is attractive for business. The consortium takes seriously its role to support the country’s economic development

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

hile Brazil has gotten more press for its economic expansion in recent years, Chile has been quietly but steadily exploding. The country has South America’s strongest sovereign bond rating. It has a market-driven economy and a solid reputation for stable financial institutions. Exports are solid, and from 2003 to 2013, real growth averaged 5% per year. Unemployment is low in the country, which has a steady population. As business in Chile continues to grow, so does tourism, and both benefit the travel industry. Tourist arrivals increased 33% in five years, from 2008 to 2013, and Santiago is considered one of the most modern cities of the region. This is all good news for the country, but requires some infrastructure investment, and Chile is stepping up. The country has allocated US$18 billion to projects through 2021, and is creating environments where other companies can participate.

reached a full two years early, in 2008. By the time the earthquake hit in 2010, therefore, the airport was already at overcapacity. The operators at that time suggested an expansion of the current airport and in fact an expansion did occur. The nearly completed Phase 1 of the project, bringing the capacity to 15 million, began in 2013 and will soon be completed. But thinking farther into the future, the Ministry began investigating the best way to accommodate the growing traffic over the long term.

Attracting proposals

Santiago is one of the most modern, dynamic and safest cities in South America

Passenger overload In 2010, a massive earthquake struck off the coast of Chile, damaging thousands of buildings, including the passenger terminal at Santiago’s Comodoro Arturo Merino Benítez International Airport. Air traffic at the airport was not affected to any substantial degree and operations were resumed on March 3, but the need for repairs combined with the fact that passenger growth at the airport was far exceeding its capacity created a situation that convinced Chile’s Ministry of Public Works that the airport required a major overhaul.

The maximum capacity of the airport at that time, which had originally begun operations in 1961 and then expanded in 1994, was 9.5 million passengers. After achieving on average 10% growth year on year for 20 years, the 9.5-million-passenger figure was expected to have been met in 2010. In fact this figure was

After completing feasibility studies, in 2012 the Ministry put out a call requesting proposals for a whole new airport master plan, one that took into account not only current passengers and short-term traffic increases, but also considered predicted longterm increases. With over 16 million passengers in 2014, numbers already exceeded the expected 14 million at the airport, South America’s sixth busiest. And over the coming years passenger numbers are expected to more than triple, reaching 50 million by the year 2045.

On February 4, 2015, the Ministry of Public Works announced that the consortium Nuevo Pudahuel had won the concession with a winning bid that offers multiphase expansion. (The airport’s name was Aeropuerto Internacional de Pudahuel from 1967 to 1980). The consortium will take over operations as of October 1, 2015, with a 20-year contract. According to the agreement, Nuevo Pudahuel will expand and enhance the existing terminal and build a new, 175,000-square-meter terminal. By 2020, the airport’s capacity will increase to 30 million passengers per year with an expansion capability to 45 million. The consortium will finance, design and construct this terminal, run the administration an all operations of the airport. Following are the consortium’s primary objectives: • Renovation of existing facilities, including the redesign and expansion of the current terminal • Financing, design and construction of the new 175,000-square-meter terminal, which will be approximately 50% domestic and 50% international • Operation and commercial development of the airport during the concession period • Design and build all key infrastructure including existing and new terminals, parking lots and real estate developments.

Past and future vision The Nuevo Pudahuel consortium is made up of three companies: Aéroports de Paris, with a 45% ownership, VINCI Airports, with 40%, and Astaldi, with 15%. Together, the three companies operate over 60 airports around the world, with over 250 million passengers in Europe, Asia and Central America. Among these airports, they operate the two hubs of Paris, Charles de Gaulle and Orly, and Lisbon.

“This is why we have all the necessary tools to manage the AMB Airport, adapting to the new market demands and contributing to national development,” says Augustin de Romanet, Chairman and CEO of Aéroports de Paris. “Acquisition of this award is the result of great joint effort between Aéroports de Paris teams, especially the divisions of airport management (ADPM) and engineering (ADP), and our partners VINCI Airports and Astaldi.

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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TOP STORY

“The potential for growth by creating new routes will transform the connection between Latin America and Europe, America and Asia. This one project, in line with our overall strategy, lets us incorporate all our expertise as designers and operators of highly complex terminals,” he continues. “Santiago is one of the most dynamic development hubs in the region, with an average growth in passenger traffic around 10% per year for the last 20 years. We intend to dramatically improve the quality of the services offered to the passengers at this airport.”

Xavier Huillard, Chairman and CEO of VINCI, says, “Being awarded Santiago International Airport is a major win for our company, yes, but also gives us great pride as part of a joint tender. Together with Aéroports de Paris and Astaldi, we intend to work hard to incorporate improvements that will impact the passengers, the airline operators and the authorities. We have high expectations, and intend to provide lofty quality standards. This project will allow us to strengthen our airport strategy in South America; we have abilities to manage large-scale and complex projects, and we take seriously our job to support the country’s economic development. Along with our partners, we will manage passenger traffic without neglecting quality service to the highest international standards. Our goal is to create the best airport in South America.”

Stefano Cerri, Astaldi CEO, added, “The awarding of this project is the result of a successful management and mutual cooperation between Astaldi, Aéroports de Paris and VINCI, but at the same time it represents an important step towards the consolidation of the activities of Astaldi Group within the mar-

Tourist arrivals to Santiago’s airport have increased 33% in the past five years

ket, and also demonstrates our commitment to Chile. Astaldi is a leading industry performer in airport construction. Our experience includes projects in Russia, Turkey, Romania and Poland, completed on time and within budget. Together with our partners we will use all the capabilities and technical skills we have developed over time to turn this project into an icon of Chilean infrastructure. We have the knowledge to equip the Santiago airport with the highest technological, quality and security standards.”

All necessary construction work will be performed by infrastructure company Astaldi and VINCI Construction Grands Projets, in an equitable proportion of 50% each. Both companies boast an extensive track record in major construction projects.

All of their expertise and experience will be put to good use in a project of this size.

In envisioning, building, creating and then operating what the trio fully expect to be South America’s finest airport, the accepted proposal was based on four main pillars: 1. Operational excellence 2. Innovation and quality service 3. Financial solidity 4. Trust and cooperation with all stakeholders De Romanet confirms that non-aeronautical business will be a cornerstone of the consortium’s financial plans, and that retail, specifically, will be the focus. Not only is retail hugely important for the bottom line, the reality is passengers want it, and Santiago’s Comodoro Arturo Merino Benítez International Airport will be happy to oblige.

Non-aeronautical revenue is the cornerstone of the consortium’s financial plans, and retail is the focus

The existing terminal has already been enlarged to accept 15 million passengers per year. By 2020, the airport will have capacity for 30 million

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

AIRPORT NEWS: JKF

Step by step by

JFKIAT, which manages JFK International Airport’s Terminal 4, has taken great care when developing its new airside commercial space

When Delta became the anchor tenant of JFK Terminal 4, this sparked a major expansion and enhancement of the terminal, with a resultant increase in airside commercial space

S

oon after its formation in 1996 as a US affiliate of the Netherlands’ Schiphol Group, JFKIAT signed a long-term lease with the Port Authority of New York & New Jersey. Under the agreement, a new terminal was to be built to take the place of a former international arrivals building. The new terminal was completed in 2001, at a cost of US$1.4 billion. JFKIAT manages and operates Terminal 4 and is the only non-airline management company operating an air terminal in the U.S. The way Terminal 4 was built in 2001, most of the commercial space was landside, but the industry came to understand that it makes better financial sense to have more commercial space airside.

This became even more apparent after 9/11, when passengers began having to arrive for flights far earlier than they had before because of increased security measures. Having more commercial space airside not only makes the terminal better able to collect revenue, it also helps keep the passengers happy during their forced waiting time – the proverbial win-win.The terminal management, therefore, wanted to flip the airside-landside ratio. This kind of transformation, however, requires a considerable amount of capital.

Terminal 4 houses a large private art collection with several specially commissioned works including several pieces by BulgarianAmerican sculptor Dimitar Lukanov

PHOTO BY BJORG MAGNEA

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WENDY MORLEY

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015 PHOTO BY BJORG MAGNEA

AIRPORT NEWS: JKF

Delta’s new home Delta was looking for a new home in New York City, and began negotiations with JFKIAT. The agreement reached in 2010 allowed for a significant expansion of the terminal and, among other things, a redevelopment of the concessions program.

The redesign included a new concessions plan that brought the proportion of airside vs landside commercial space to where it should be.

Work on redeveloping the terminal began in 2011 and was mostly completed by 2013 when the new B extension opened and Delta’s first flights arrived and departed from the nine new gates.

At that time, only about 50% of the retail development was completed, and that’s exactly the way Edward Midgley, Vice President of Concessions Management at JFK Terminal 4, wanted it. “We didn’t want to develop all our spaces in 2012, 2013. We needed to see what would happen once Delta came in,” he says.

The arrival of Delta changed the dynamics completely.

Whereas before 2013 the terminal’s passengers were 85% international, that number dropped almost instantly to 60%, which is approximately where it remains. Passengers departing from the terminal jumped from four million per year to nine million per year. The terminal management wanted to observe, research and learn about the behavior of this new passenger mix before finalizing the commercial spaces. “Most airports know their customers, know their retail space,” says Gert-Jan de Graaff, JFKIAT President and CEO. “They know their demographics, their flows, their numbers. For us it was different because we all of a sudden had this huge influx of millions and millions of passengers we never had before. We needed to learn and understand how it would impact our commercial environment and how the terminal is used. That’s why we took this gradual approach.”

One thing they’ve learned in this time is how the domestic passenger is different. “Because they can’t buy certain products like liquor, domestic passengers don’t realize they are allowed to shop in the duty free store. The term ‘duty free’ scares them away,” says Midgley. “So DFS has been working on its merchandising. They’re changing their signs and messaging to reach the domestic traveler. Taking the emphasis away from liquor is helpful, but the domestic passenger is also interested in purchasing different products than the international passenger. We have done research on our demographics and will continue to do so, as our passenger mix is still changing. We have to show numbers, data. Our retailers are used to operating a certain way and sometimes need convincing with facts.”

JFKIAT management consciously left some spaces open while they decided the best use. This open area will be filled with seating

PHOTO BY BJORG MAGNEA

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

For its part, JFKIAT is doing what it can to create a commercial mix the domestic passenger wants. “We’re tailoring to the domestic market by bringing in brands that appeal to locals,” he adds. “MAC, Kiehls and Shake Shack, for example. Domestic passengers want to see this.”

De Graaff adds that there are other considerations. For example, in general the wait time is less for domestic passengers.

Therefore they do not have as much time at the terminal as international passengers do. Retailers need to get their attention and serve them more quickly.

The company is also making a point of playing up its location in such a famous city. “Even when people are here just for a stopover, they want to feel like they’re in New York,” says Midgley. “We have a great selection of New York foods and a lot more coming. We’re planning to build out a ‘street foods’ section with food carts. We’re also building a coffee concept that reflects the Flatiron district.” The city also lends itself to great souvenirs, which are offered throughout the airport. As a unique higher-end option, the Metropolitan Museum of Art has its own stand-alone store in the airport, offering one-of-a-kind mementos.

Don’t worry, be happy When asked about how JFKIAT helps inspire people to be in the right frame of mind to shop, de Graaff says as terminal operators their job is to provide travelers an atmosphere that says: don’t worry, be happy. The “don’t worry” part is the operational proWith a massive increase in domestic passengers, duty free needed to change its marketing strategy to encourage domestic passengers to shop in stores generally thought of as off limits

PHOTO BY BJORG MAGNEA

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AIRPORT NEWS: JKF

cesses, getting the passengers through ticketing and security as quickly as possible.“That should just work well,” he says.“People don’t want to have to queue up. They want good signage. They don’t want hassle. That is part of our responsibility. Then comes the ‘be happy’ part. That is retail, the arts, the entertainment.

These things literally make them happy, in the terminal and once they’re in the aircraft as well. Everyone understands that passengers are much happier when they have something to do, when they have entertainment, when they can shop, when they can be occupied while they wait. And this is an essential piece of our business, part of our revenue.”

Midgley concurs. “We want to create a more pleasant experience. We have art that was created specifically for this terminal. People take pictures next to the art and tweet them out every day. We have candy stores, all kinds of different restaurants, bars, we have an island bar in the middle of the retail lounge. We have a McDonalds, which people love. We have the Kiehl’s bus display, which is completely interactive. People smile and take pictures there.”

Another way JFKIAT is helping to keep passengers both happy and shopping is by constantly improving customer service.

“We brought a firm in to look at our brand and basically train our staff to raise the level of customer service to the point of more engagement. Selling, sure, but engaging. We want our concession partners’ staff to make memorable impressions of Terminal 4,” says Midgley.

“It’s all about engagement,” agrees de Graaff. “Engagement of both staff and customers. We want to entertain passengers and surprise them, taking it one step beyond just a retail offer.

The Kiehl’s bus is a good example. It’s different. Passengers take pictures with it. It’s fun.” He also talks about the importance of motivating staff. “Although they are not technically Terminal 4 Edward Midgley, VP Concession Management proudly showing off some of the art commissioned for JFK Terminal 4

Editor Wendy Morley interviews JFKIAT CEO and President Gert-Jan de Graaff in his office at Terminal 4

The Kiehl’s bus offers the engagement and surprise that JFKIAT would like to see more of throughout Terminal 4

employees, they represent Terminal 4.They need to know that they impact on the experience, that a smile from them helps create a good experience. We need to engage the staff, set the tone and make that the expectation, make it an everyday thing.”

To that end, a rewards program was recently set up for the retail employees. The retailers jumped on board, offering such things as free meals, gift cards and discount coupons in order to get the program started.

Transforming empty spaces When Delta began operations at Terminal 4 in 2013, about 50% of the retail space was filled. As JFKIAT management has been learning about what is needed and desired by passengers, that number has been increasing and is now in the neighborhood of 75 to 80%.

JFKIAT is working with concession partners to build out the remaining 20% to better meet the needs and desires of the ‘new’ passenger mix. “I like the build-out process,” says Midgley. There is always something new to strive for. We are always working and planning with our partners for successful builds. If the sales aren’t there, then we haven’t met customers’ needs and desires.”

“The main thing is to set achievable goals and make them happen,” says de Graaff. “We are still in the development process. It was a conscious choice of this company to develop the commercial space step by step and fully understand what’s happening before moving forward.”

What are they moving to? Midgley’s eventual goal is to see annual sales of US $300 million. “We’re not that far off,” he says.

“It’s achievable.” As for de Graaff, he would like to see nonaeronautical revenue rise from about one-fifth to one-third.“It’s different when you’re a terminal operator. When you’re involved with parking, transport and real estate you can strive for 50-50 or something like that. It is not possible for us. I would be very happy to see a third,” he says. “It’s a bit of a stretch but a good goal.”

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

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PANAMA REPORT

Where the Americas meet Three big names in the industry—Motta Internacional, ASUTIL and Grupo Wisa—weigh in on what makes Panama a great place to do business

P

anama is a country bursting with activity, and it’s no wonder given that it sits at the isthmus connecting North and South America and is home to the Panama Canal, a key conduit for international maritime trade. From an ongoing canal expansion project designed to welcome bigger ships in greater numbers to a new terminal at Tocumen Airport that will allow it to handle the expected increase in passengers over the coming years, the country has a distinctly international outlook when it comes to its infrastructure projects.

Americas Duty Free speaks with Motta

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Internacional, ASUTIL and Grupo Wisa about why they’ve chosen Panama to do business and how the country that connects two continents is the perfect compliment to duty free.

Since the beginning Motta Internacional is well acquainted with Panama, having opened the very first duty free store in the Americas, located at Tocumen Airport, way back in 1949. Currently Motta has 13 retail spaces in Tocumen Airport totaling 853 square meters.

Given the operator’s long history in the country, it’s no surprise that Ignacio Lasa, Vice President – Commercial at Attenza Duty Free/Motta Internacional, says the country is a great place to do business. “Panama has a very stable economy mainly because it is very diverse; there is not one specific area in which its economic health depends,” he explains.

“We have also had the Dollar running parallel as currency essentially since our independence. Panamanians understand

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

One of Motta Internacional’s new Attenza-branded duty free shops at Tocumen Airport’s North Terminal

the importance of international investing and the need for economic and juridical stability to be attractive.

“On top of this, the country itself is very dynamic and is small in size and population. It has always had an international outlook—something that Latin American countries are now beginning to see the importance of but that Panama has been working on for years,” he adds.

Lasa was born in Panama, and apart from schooling in the US and a four-anda-half year stint in Venezuela running Motta’s operations at Maiquetia International Airport, he has lived in the country all his life. “Panama has always been a very special country,” he says. “Panamanians are friendly, active people and the country has a cosmopolitan city with all the entertainment options of bigger cities, surrounded by beaches and mountains.

Panama is a safe, dynamic and beautiful country. I’m very much looking forward to welcoming ASUTIL delegates to Panama City for the upcoming conference.”

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PANAMA REPORT

A triumphant return We also spoke with Enrique Urioste, President of ASUTIL and CEO of Neutral Free Shop, about what prompted the organization to choose Panama as the venue for the 2015 ASUTIL Conference, to be held from June 3 to 6 at the Westin Playa Bonita. A very successful ASUTIL was held in Panama City in 2008.

“Panama came out as one of the most preferred destinations on last year’s survey, which was filled out by members and attendees to the 2014 conference.”

ENRIQUE URIOSTE, PRESIDENT, ASUTIL AND CEO, NEUTRAL FREE SHOP

“First of all, Panama came out as one of the most preferred destinations on last year’s survey, which was filled out by members and attendees to the 2014 conference,” Urioste explains. “Second, in terms of organizing the conference, Panama is a destination that is very easy to reach and has a great new hotel infrastructure at a very good cost. Finally, Panama is synonymous with duty free.

Don’t forget, after Ireland Panama had the world’s second duty free store, owned and operated by Motta.”

And as for the 2015 conference, Urioste tells us that there’s plenty to talk about from an economic standpoint: “In recent months we’ve been seeing a worldwide economic shift,” he says. “The Dollar is getting stronger and oil prices are dropping to historic lows. There is less demand for commodities, which is driving prices lower, and we’re seeing regional underperformance economy-wise. All of this is indirectly affecting the duty free business in the region. We’ll have occasion to discuss this and much more when we meet this summer in beautiful Panama City.”

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Flying free The Colon Free Trade Zone is the largest in the Americas and the second-largest in the world. The zone has been in operation since 1948, and represents a commercial showcase beyond compare. Imports and exports registered in the zone, directed toward a market of more than 525 million people, exceed US$5 billion per annum.

Supporting the zone is an impressive network of infrastructure that includes six airports, five ocean ports, container terminals, the Pan-American highway originating in Alaska, the trans-isthmus highway, a trans-isthmus railway and of course the Panama Canal.

Imports and exports registered in the Colon Free Trade Zone, directed toward a market of more than 525 million people, exceed US$5 billion per annum.

The hub of the Americas Grupo Wisa certainly knows a thing or two about Panama. The operator currently has 30 stores in Tocumen Airport, located in various commercial areas that total 2,000 square meters. World class in every sense, the shops offer the most recognized international brands across 11 duty free categories that include Beauty (fragrances, cosmetics and treatments), Luxury (watches, accessories and jewelry), Spirits, Confectionery, Travel Equipment, Electronics and Toys.

“Grupo Wisa started its commercial relationship with Panama Airport back in 1992,” says Reinaldo Rangel, Vice President – Commercial at Grupo Wisa. “Over the last 22 years the company has worked in closed partnership with the airport authorities to develop multiple commercial strategies that have contributed to the development of the duty free offering.

Today, Grupo Wisa is very proud to be one of the most important commercial partners for Tocumen Airport, and we are fully committed to continue developing the duty free business in this important regional hub.”

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

“It’s no secret that Panama is definitely one of the most attractive countries in which to do business in the region.”

REINALDO RANGEL, VICE PRESIDENT – COMMERCIAL, GRUPO WISA

PANAMA REPORT

Beauty is one of Grupo Wisa’s most popular categories

We asked Rangel why Panama is a good country to do business in, and he noted that the country has achieved strong GDP growth over the last eight years, and that key aviation projects such as the new terminal at Tocumen Airport, scheduled to open in 2017, are strong indicators that the country will continue to grow. The airport, known as “the hub of the Americas,” served a record 8.4 million passengers last year, and the expansion project is a good sign that more travelers are on the way. When complete, the

second terminal will double capacity and, Rangel says, serve to “support the country’s growth plan for the next decade.

“It’s no secret that Panama is definitely one of the most attractive countries in which to do business in the region,” he adds.

Rangel has lived in Panama for six years, and notes that even in that relatively short amount of time, the positive changes have been palpable. “The changes have been very noticeable in different sectors, including infrastructure, educa-

Bigger and better The Government of Panama is currently working on expanding the Panama Canal, which will result in more trade to and through the country. The project consists of building a new set of locks to double capacity. The work will also see the canal widened and deepened along with exiting channels in Gatun Lake and Culebra Cut. Currently vessels passing through the canal can carry up to 5,000 twenty-foot equivalent units (TEUs) of cargo; vessels carrying up to 13,000 TEUs of cargo will be able to use the canal upon completion of the expansion.

The initiative is the largest since the canal’s original construction and when completed will positively affect not only the country, but the entire maritime trade industry. The various works are in different stages of completion at the moment, with the Government of Panama estimating that the project as a whole was 84% complete as of December 2014.

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

The Panama Canal expansion project will double capacity and not only positively affect the country, but also the entire maritime trade industry

tion, efficiencies and services. Panama is a developing nation, but living here doesn’t mean you’ll be living in the Third World; Panama is full of comforts and luxuries.

“In fact, most people can significantly improve their quality of life by living in Panama. It’s a safe country with good infrastructure. Regarding the culture, in general Panamanians are very welcoming to foreigners. In the case of my family, Panama gave us a warm welcome and our hope is to continue enjoying the greatness of this beautiful country.”

Please enjoy our wines responsibly.

Please visit Constellation Brands at IAADFS Booth 1228 Award-Winning Kim Crawford Wines facebook.com/kimcrawfordwines

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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PANAMA REPORT

El lugar de encuentro de las Américas Tres nombres prestigiosos de la industria—Motta Internacional, ASUTIL y Grupo Wisa—analizan los motivos por los que Panamá es un sitio ideal para hacer negocios

P

anamá es un país bullente de actividad, lo cual no es sorpresa para nadie, dada su ubicación en el istmo que conecta a Norte y Suramérica, y sede del Canal de Panamá, vía principal del comercio marítimo internacional. La nación istmeña cuenta con una original perspectiva internacional en lo referente a sus proyectos de infraestructura, que abarcan desde un proyecto de expansión en progreso, con el propósito de dar paso a barcos de mayor calado en mayores cantidades; a una nueva terminal en el Aeropuerto de Tocumen, que propiciará acoger el esperado incremento de pasajeros en los próximos años.

Americas Duty Free habla con Motta Internacional, ASUTIL y Grupo Wisa sobre la razón por la cual han escogido a Panamá para operar, y cómo esa nación que conecta a dos continentes, es el complemento perfecto para la industria duty free.

Desde el comienzo Motta Internacional está muy familiarizado con Panamá, pues inauguró allí su primera tienda duty free en las Américas, ubicada en el Aeropuerto Tocumen, en 1949. En la actualidad Motta cuenta con 13 espacios minoristas en dicho aeropuerto, que totalizan 853 metros cuadrados.

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AMERICAS DUTY FREE & TRAVEL RETAILING

Dada la larga historia del operador en el país, no es sorpresa que Ignacio Lasa, Vicepresidente del Departamento Comercial de Attenza Duty Free/Motta Internacional, afirma que el país es un lugar ideal para hacer negocios. “Panamá tiene una economía muy estable, debido principalmente a que es muy diverso, y su salud económica no depende de un área específica”, explica. “También el dólar ha funcionado paralelamente como moneda, esencialmente desde nuestra independencia. Los panameños entienden la importancia de la inversión nacional, y la necesidad de la estabilidad económica y jurídica para ser atractivos”.

Grupo Wisa’s operations at Tocumen Airport in Panama

“Además, el país en sí es muy dinámico, dado que su extensión y población son pequeñas. Siempre ha tenido una perspectiva internacional, algo cuya importancia están comenzando a ver los países latinoamericanos, pero en lo que Panamá ha estado trabajando durante años”, añade Lasa.

Lasa nació en Panamá, y aunque estudió en los Estados Unidos, y trabajó durante cuatro años en Venezuela, al frente de las operaciones en el Aeropuerto Internacional de Maiquetía, ha vivido toda su vida en el país. “Panamá siempre ha sido un país muy especial”, afirma. “Los panameños son gente amistosa y activa, y

Más grande y mejor En estos momentos, el gobierno de Panamá trabaja en la expansión del Canal de Panamá, lo cual dará como resultado más comercio hacia y en el país. El proyecto consiste en la construcción de un nuevo conjunto de esclusas a doble capacidad. El trabajo también ampliará y profundizará el Canal, conjuntamente con los canales de salida en el Lago Gatún y en el Corte Culebra. En la actualidad, los barcos que pasan por el Canal pueden transportar hasta 5,000 unidades equivalentes a veinte pies (TEUs) de carga. Las embarcaciones que transporten hasta 13,000 TEUs de carga podrán usar el canal al término de la expansión.

La iniciativa es la mayor desde la construcción original del canal, y cuando se concluya no solo afectará positivamente el país, sino a toda la industria de comercio marítimo. Las diferentes obras están en diversas etapas de conclusión en este momento. El Gobierno de Panamá estima que hasta diciembre del 2014 el proyecto estaba completo en un 84%.

el país tiene una ciudad cosmopolita con todas las opciones de entretenimiento de urbes más grandes, rodeada de playas y montañas. Panamá es un país seguro, dinámico y hermoso. Estoy muy entusiasmado por recibir a los delegados de ASUTIL en Ciudad de Panamá en la próxima conferencia”.

Un regreso triunfal También hablamos con Enrique Urioste, Presidente de ASUTIL y Director Ejecutivo de Neutral Free Shop, sobre lo que propició la decisión de la organización de elegir a Panamá como sede de la Conferencia ASUTIL 2015, que se llevará a cabo del 3 al 6 de junio en el Westin Playa Bonita. En el 2008, se realizó otra exitosa Conferencia ASUTIL en Ciudad de Panamá.

“Ante todo, Panamá fue seleccionada como uno de los destinos más preferidos en la encuesta del año pasado, en la que participaron miembros y asistentes a la conferencia del 2014”, explica Urioste. “En segundo lugar, en lo tocante a términos de organización de la conferencia, Panamá es un destino de muy fácil acceso, y cuenta con una magnífica y nueva infraestructura hotelera a muy buenos precios.

Finalmente, Panamá es sinónimo de duty free. No olviden que, después Irlanda, Panamá tiene la mayor tienda duty free del mundo, que es propiedad y está operada por Motta”.

En cuanto a la conferencia 2015, Urioste afirma que hay mucho de qué hablar desde un punto de vista económico: “En meses recientes hemos sido testigos de un cambio económico mundial”, revela.

“El dólar está cobrando más fuerza, y los precios del petróleo están bajando a niveles históricos. Además, hay menos demanda de activos, lo cual disminuye aun más los precios, y estamos viendo un menor rendimiento económico en el ámbito regional. Todo esto está afectando indirectamente el negocio duty free en la región. Tendremos ocasión de analizar esto y mucho más cuando nos reunamos

este verano en la hermosa Ciudad de Panamá”.

“El Hub de las Américas” Grupo Wisa es un conocedor auténtico en lo que a Panamá se refiere. En la actualidad, el operador cuenta con 30 tiendas en el Aeropuerto Tocumen, ubicadas en diversas áreas comerciales que totalizan los 2,000 metros cuadrados. Las tiendas, de clase mundial en todo sentido, ofrecen las marcas más reconocidas en 11 categorías duty free como Belleza (fragancias, cosméticos y tratamientos), Lujo (relojes, accesorios y joyas), Espirituosos, Confitería, Artículos para viajes, Electrodomésticos y Juguetes.

“Grupo Wisa inició su relación comercial con el Aeropuerto de Panamá en 1992”, afirma Reinaldo Rangel, Vicepresidente del Departamento Comercial de Grupo Wisa. “En los últimos 22 años, la compañía ha trabajado en estrechas alianzas con las autoridades aeroportuarias, en la creación de múltiples estrategias comerciales que han contribuido al desarrollo de la oferta duty free. En la actualidad, Grupo Wisa está extremadamente orgullosa de ser uno de los colaboradores comerciales más importantes del Aeropuerto Tocumen, y tenemos un compromiso total de seguir desarrollando el negocio duty free en este importante centro regional”.

Le preguntamos a Rangel por qué Panamá es un buen país para hacer negocios, y nos responde que el país ha alcanzado un sólido crecimiento del Producto Nacional Bruto (PNB) durante los últimos ocho años, y que varios proyectos importantes de aviación, como la nueva terminal en el Aeropuerto Tocumen, a inaugurarse en el 2017, son firmes indicadores de que el país seguirá en crecimiento. El aeropuerto, conocido como “El Hub de las Américas”, prestó servicios el año pasado a una cifra récord de 8.4 millones de pasajeros, y el proyecto de expansión es una buena señal de que se recibirán más viajeros. Cuando esté

Apoyo a la Zona Libre La Zona Libre de Colón es la mayor de las Américas, y la segunda más grande del mundo. Ha estado en operación desde 1948, y representa un ejemplo de progreso comercial insuperable. Las importaciones e importaciones realizadas en la zona, dedicada a un mercado de más de 525 millones de personas, superan los US$5 mil millones anuales.

El apoyo a la Zona es una red impresionante de infraestructura compuesta por seis aeropuertos, cinco puertos oceánicos, terminales de contenedores, la Carretera Panamericana que se origina en Alaska, la autopista transistmo, el ferrocarril trans-istmo, y, por supuesto, el Canal de Panamá.

lista, la segunda terminal duplicará la capacidad, y, como señala Rangel, servirá “de apoyo al plan de crecimiento del país para la próxima década”.

“No es un secreto que Panamá es definitivamente uno de los países más atractivos para hacer negocios en la región”, añade el alto funcionario.

Rangel ha residido en Panamá durante seis años, y destaca que incluso en ese breve espacio de tiempo, los cambios positivos son palpables. “Los cambios han sido muy notables en diferentes sectores como infraestructura, educación, eficiencias y servicios. Panamá es una nación en desarrollo, pero vivir aquí no quiere decir que se vive en el Tercer Mundo. Panamá cuenta con todas las comodidades y lujos”.

“De hecho, la mayoría de las personas puede mejorar significativamente su calidad de vida residiendo en Panamá.

Es un país seguro con una buena infraestructura. En lo tocante a cultura, los panameños son en general muy acogedores con los extranjeros. En el caso de mi familia, Panamá nos dio una cálida bienvenida, y esperamos seguir disfrutando de la grandeza de este hermoso país”.

Mannah Duty Free’s average ticket in its Silvio Pettirossi International Airport operations was US$94 over 2014

Something

for everyone Four Latin American duty free operators walk Americas Duty Free through their varying strategies for ensuring success in an increasingly competitive industry

T

he duty free scene in Latin America is as dynamic as ever.

Much like the wide variety of products that shoppers can find in the stores of Mannah Duty Free, Bernabel Trading, Top Brands or Monalisa, each retailer’s approach to giving customers what they want varies.

Fortunately for shoppers, though, the result is the same: exciting, memorable experiences in stores operated with the characteristic passion for which the region is known. Below, Americas Duty Free explores the latest duty free developments with four of the industry’s biggest names.

by

RYAN WHITE

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

Planning for the future Mannah Duty Free is coming off a solid 2014 that saw sales in line with the previous year, when the operator recorded a strong increase of 14.3% over 2012. For 2014, the average ticket hovered at a healthy US$94, and while it’s no surprise to see Spirits and Tobacco in the top two spots in terms of category sales, President of Mannah Duty Free Mohamed Mannah tells us that Travel Accessories have increased significantly in popularity to become the number three highest-selling category.

Within spirits, Mannah notes that whisk(e)y and vodka were popular with travelers, while cigarettes and cigars were not surprisingly the bestsellers in tobacco.

LATIN AMERICA REPORT

Within the growing Travel Accessories category, neck pillows took the top spot.

Of course, the holiday season is always a busy time for airports, and consequently for travel retailers. Mannah’s operations in Silvio Pettirossi International Airport received a boost over Christmas when sales jumped 5% over 2013 figures. And while sales and special offers are often a part of any retailer’s strategy during the holidays, Mannah Duty Free maintains a strong calendar of promotions throughout the year.

“We often organize our promotions around special days of the year,” Mannah tells us. “This year we’re planning some activity around Valentine’s Day, Mother’s Day, Father’s Day, the start of Spring and of course Christmas. Two-for-one deals and gifts with purchase have worked very well in the past, as is evidenced by our December 2014 sales figures, so these will form the basis of our upcoming 2015 promotional activity.”

Good news for Mannah Duty Free is that Silvio Pettirossi International Airport is looking to the future and finding ways to raise capacity to handle increased passenger traffic. In August of last year the airport completed renovations that included two new telescopic bridges and an expansion in the northern portion of the airport. The telescopic bridges are designed for faster turnarounds, potentially meaning more planes in the gates and more passengers moving through the airport. On the other hand, the expansion work effectively raises the airports capacity from 1 million passengers a year to 1.2 million. Another big advantage is that the airport can now handle 747s, giving carriers more options when flying to Paraguay.

The airport’s forward-looking move comes at a time when the attitude surrounding Paraguay in general is distinctly positive. The country’s Central Bank indicates that the Paraguayan economy grew 4% last year; furthermore, it expects this momentum to continue throughout 2015. “These good indicators have resulted in a number of positive effects across the board,” explains Mannah. “We’re seeing more construction in the country, livestock production is up, and banks are issuing more credit, which in turn positively affects the entire service industry.

We’re in a good place right now with the general consensus being that this will continue throughout this year.

Of course, Silvio Pettirossi International Airport isn’t the only one preparing for more passengers in the future; Mannah Duty Free is currently looking at a complete renovation of its stores, but for the time being can’t provide details.

Nonetheless, Mannah tells us that a strong foundation is being laid so that the operator can continue to offer the highest level of service if and when more air travelers arrive.

“In addition to the upcoming renovations, which are of course important, customer service is one of the most effective ways of making sure news shoppers feel welcome and old friends return again and again,” Mannah explains. “We work hard to make sure that we give the consumer the service they deserve. They make a choice to come to our store and it’s up to us to make sure that the next time they want to shop duty free, they’ll think of Mannah first.

“We’re entering an exciting time,” he adds, “for our stores, for the airport and for the country in general.”

In August of last year Silvio Pettirossi International Airport completed renovations that included two new telescopic bridges and an expansion in the northern portion of the airport.

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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LATIN AMERICA REPORT

Focusing on the customer Bernabel Trading has carved out a respectable travel retail business in Montevideo, Colonia del Sacramento and Buenos Aires onboard the Buquebus fleet of cruise ships. In Montevideo, Zeinal Hnos. S.A., the original name of the family-run company, currently operates nearly 500 square meters of seaport store space spread across three different locations offering general duty free items, clothing, accessories and perfumery.

Americas Duty Free recently sat down with Walter Zeinal, Director of Bernabel Trading, to discuss the latest developments with the operator. “Every new year brings new challenges,” he told us. “For us, the theme that seems to have repeated itself

over the last few years is that the market is in a constant state of change.”

Zeinal notes that while Bernabel Trading continues to look for new opportunities to ply its trade, the overarching objective remains to “awaken an impulse in consumers,” continuing the long tradition that duty free has as an industry which offers not only a shopping opportunity, but also an experience in and of itself.

“We foster this type of experience in a number of ways, not the least of which is developing innovative selling strategies that revolve around treating consumers to a level of service beyond compare,” Zeinal explains.

“Each one of our salespeople is trained to ensure that customer service is the cornerstone upon which our business is built.”

A priority for Bernabel Trading is to ensure that consumers have a high-end environment within which to shop

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

Largely because of this unerring focus on serving its clientele, Bernabel Trading saw sales exceed expectations in December 2014, with Zeinal calling the results “successful as compared to the same period in 2013.” Across the business as a whole, Bernabel Trading saw sales in December 2014 exceed the previous year by 5%.

“Part of this success has to do with the attention we pay to listing the products that are popular with consumers,” Zeinal adds. The three bestselling categories at the company’s stores are Chocolates, Cosmetics and Fragrances. Furthermore, the economic situation in Argentina has guided Bernabel Trading in terms of its offer to the public, and Zeinal attributes

a lot of the operator’s success last year in being attentive to trends within various the South American countries that are home to its customers.

For this year, Zeinal says that Bernabel Trading will concentrate on continuing to offer attractive promotions to shoppers. “The promotions that tend to do best are those that offer direct savings to the consumer,” he says. “That said, there will also be some very unique and interesting gifts with purchase throughout the year. Regardless of the specific promotion, the key is to ensure that shoppers are benefiting.”

Store renovations are also on the table for this year. Bernabel Trading employs a continually rotating renovation plan to ensure that its stores are always up to date. “I consider renovations to be part of customer service,” Zeinal concludes.

“We’re very focused on making sure that shoppers are comfortable and given an unforgettable experience, not only in terms of how they’re treated, but also in terms of the environment in which they shop.”

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LATIN AMERICA REPORT

Ferry Express, which takes tourists between Panama and Cartagena two times a week; Top Brands recently opened a store inside the ship

Keeping pace Top Brands recently opened a new store in Colombia’s El Dorado International Airport. President of the company Danny Yohoros tells Americas Duty Free that this latest development represents a big opportunity for the operator in terms of exposure to a large group of international travelers.

“El Dorado International Airport is the number three airport in Latin America in terms of passenger traffic,” he explains.

“As such, there is a large number of travelers passing by and through our store there. The airport services on the order of 19 million passengers per year.”

As a means of appealing to a wide swath of these travelers, Top Brands has stocked the location with a large selection of luxury items across categories such as Spirits, Fragrances, Watches and Sunglasses. For Yohoros’ part, he notes that Top Brands is well accustomed to catering to diverse groups of travelers.

“At the close of 2014, we had 40 stores located in eight Latin American countries, many of which are enjoying some of the highest economic growth in the region,” he explains. “This has really given us the confidence to continue expanding and developing the business with the same momentum that we’ve enjoyed to date.”

Importantly, maintaining such a

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growth rate, says Yohoros, will help the company increase margins, thereby helping sales numbers rise this year above 2014 levels. Of course, this isn’t to say that sales were poor last year by any stretch of the imagination; the operator saw a yearon-year sales increase of 18% last year as compared to 2013.

“Top Brands really reached and surpassed all its goals for 2014,” Yohoros says, “with regard to opening new locations, renovating existing stores and increasing sales. On this last point, we’ve seen particularly good performance in Fragrances and Spirits, the two most popular categories in 2014.”

And just as Top Brands has vast experience serving a variety of travelers across numerous countries in the region, the operator is also well versed in different store formats. Another of the recent openings mentioned was a cruise store aboard the Ferry Express cruise ship that travels between Panama and Cartagena two times a week. For tourists traveling between the countries, the store offers the opportunity to purchase tax free goods each time they board the ferry. The ship has the potential to service 350,000 tourists a year, mostly Colombians who, fortunately for Top Brands, happen to be extremely high spenders when it comes to duty free. The location is stocked with

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

the best brands in Spirits, Fragrances, Sunglasses and Beauty, as well as Skincare and other offerings suited to this demographic.

2015 won’t see the pace slow at all for Top Brands; among its many projects the operator will inaugurate a new store in Rio Branco, the duty free mecca located strategically on the Uruguayan border with Brazil.

“The city is a favorite destination not only for South Americans, but for tourists from all over the world,” concludes Yohoros. “As always, Top Brands will be present with all of the most popular categories and prestigious brands that duty free shoppers are looking for.”

A render of Top Brands’ El Dorado-branded store inside El Dorado International Airport

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LATIN AMERICA REPORT

A multi-talented retailer Paraguayan travel retailer Monalisa, whose iconic multi-level store is a staple of bustling Ciudad del Este, received more than one million tourists last year looking for the perfect gift or self-purchase. Charif Hammoud, Vice President of Monalisa, tells Americas Duty Free that the top categories last year were Fragrances, Gifts and Clothes.

“2015 will certainly be as excited a year as 2014,” Hammoud tells us.

“We have a lot of surprises in store for our clients where promotions are concerned.

We often get repeat business based on the fact that shoppers know they’ll find something new every time they visit, whether it’s new products or unique promotional activities.”

Indeed, after over 40 years of doing business in the same location, Monalisa has built up a significant amount of repeat business. The operator offers numerous products across categories that are difficult to find anywhere else in the region, which certainly helps with customer loyalty, but just as important is the relaxed, luxury shopping experience that the store provides. As such, Hammoud notes that Monalisa makes a point of scheduling regular renovations to make sure each section of the store is up to its clientele’s demanding tastes.

Paraguayan travel retailer Monalisa received more than one million tourists last year

“In reality we’re in a perpetual state of renovation!” he explains. “Given the size of the store, we need to make sure that each section is modern and inviting.”

And as if Monalisa weren’t busy enough with the flagship store, the operator continues to develop its Aphrodite brand of fragrance boutiques. Currently numbering seven and spread throughout

Monalisa’s iconic flagship store in Ciudad del Este, Paraguay caters to all consumer tastes

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

the most dynamic commercial centers in Paraguay, Monalisa will soon come to Asunción for the first time in the form of a store located in the luxurious Paseo La Galeria (Blue Tower). Furthermore, Monalisa is currently working on the project Hotel Bourbon-Monalisa in downtown Ciudad del Este, set to be operating within the next 15 months.

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LATIN AMERICA REPORT

Mannah Duty Free’s average ticket in its Silvio Pettirossi International Airport operations was US$94 over 2014

Algo para todos by

Cuatro operadores duty free de Latinoamérica revelan a Americas Duty Free sus cambiantes estrategias para garantizar el éxito en una industria cada vez más competitiva

E

l entorno duty free en Latinoamérica es más dinámico que nunca antes. Semejante en gran medida a la amplia gama de productos que los compradores pueden encontrar en las tiendas de Mannah Duty Free, Bernabel Trading, Top Brands o Monalisa, el método de cada comerciante minorista para darles a los clientes lo que desean varía. Sin embargo, y por fortuna para los compradores, el resultado es el mismo: experiencias atractivas y memorables en tiendas operadas con la pasión característica que distingue a la región. A continuación, Americas Duty Free explora los más recientes acontecimientos del sector duty free con cuatro de sus firmas principales.

Planificación para el futuro Mannah Duty Free emerge de un sólido año 2014 con ventas que se correspondieron con el año anterior, 48

cuando el operador reportó un gran incremento del 14.3% en comparación con el 2012. En el 2014, el promedio de ventas osciló a la saludable cifra de US$94, y si bien no es sorpresa que las categorías de Espirituosos y Tabaco estuvieran en los dos primeros lugares con referencia a las ventas, Mohamed Manna, Presidente de Mannah Duty Free, nos dice que la de Accesorios de Viaje ha ganado significativamente en popularidad, hasta convertirse en la tercera categoría con más ventas.

Dentro de los espirituosos, Mannah destaca que el whiskey y el vodka resultaron populares entre los viajeros, mientras que los cigarrillos y cigarros fueron, sin sorpresas, los más vendidos en la categoría de Tabaco. Por su parte, en la creciente categoría de Accesorios de Viaje, las almohadas para el cuello obtuvieron el primer lugar.

Por supuesto, la temporada festiva implica siempre gran actividad en los aeropuertos, y consecuentemente para los minoristas de viaje. Las operaciones de Mannah en el Aeropuerto Internacional Silvio Pettirossi experimentaron un impulso en la Navidad, cuando las ventas aumentaron un 5% en comparación con las cifras del 2013. Y si bien las ventas a precio reducido y ofertas especiales son

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

RYAN WHITE

con frecuencia parte de la estrategia de cualquier minorista durante la temporada festiva, Mannah Duty Free mantiene un sólido programa de promociones durante todo el año calendario.

“Organizamos a menudo nuestras promociones en correspondencia con los días especiales del año”, explica Mannah.

“Este año estamos planificando actividades en torno al Día de San Valentín, el Día de la Madre, el Día del Padre, el comienzo de la primavera, y, por supuesto, en Navidad.

Las oportunidades de dos por uno y los regalos con la compra han funcionado bien en el pasado, como evidencian nuestras cifras de ventas de diciembre del 2014, por lo que formarán la base de nuestra próxima actividad promocional del 2015”.

La buena noticia para Mannah Duty Free es que el Aeropuerto Internacional Silvio Pettirossi está mirando hacia el futuro, y buscando formas de elevar la capacidad para acoger a un creciente tráfico de pasajeros. En agosto del año pasado, el aeropuerto concluyó renovaciones consistentes en dos nuevos puentes telescópicos, y una expansión en la sección norte del aeropuerto. Los puentes telescópicos están concebidos para agilizar el movimiento de pasajeros, lo cual implica más aviones y más pasajeros

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LATIN AMERICA REPORT

más efectivas de garantizar que los nuevos compradores se sientan bien recibidos, y que los viejos amigos regresen una y otra vez”, asegura Mannah.

“Nos esforzamos en garantizar que los consumidores reciban el servicio que merecen. Ellos toman la decisión de venir a nuestra tienda, y de nosotros depende garantizar que la próxima vez que quieran hacer compras duty free, piensen en Mannah primero”.

“Estamos entrando en un momento atractivo para nuestras tiendas, para el aeropuerto, y para el país en general”, concluye.

In August of last year Silvio Pettirossi International Airport completed renovations that included two new telescopic bridges and an expansion in the northern portion of the airport.

circulando por el aeropuerto. Por otro lado, el trabajo de expansión eleva con efectividad la capacidad del aeropuerto de un millón de pasajeros a 1.2 millones.

Otra gran ventaja es que en la actualidad el aeropuerto puede recibir Boeings 747, lo cual les ofrece más opciones a los transportistas cuando vuelan a Paraguay.

La medida previsora del aeropuerto se produce en un momento en que la actitud con respecto a Paraguay en general es distintivamente positiva. El Banco Central del país indica que la economía paraguaya se incrementó el año pasado en un 4%. Además, se espera que ese impulso continúe en el 2015. “Estos buenos indicadores han dado por resultado numerosos efectos positivos en todos los aspectos”, añade Mannah. “Hay más construcciones en el país, la producción ganadera aumenta, los bancos están

otorgando más crédito, lo cual, a su vez, afecta positivamente a toda la industria de servicios.

En estos momentos estamos bien ubicados, pues el consenso es que seguiremos así durante el año”.

Por supuesto, el Aeropuerto Internacional Silvio Pettirossi no es el único que se prepara con vistas a recibir más pasajeros en el futuro. En la actualidad, Mannah Duty Free se propone una renovación total de sus tiendas, pero no puede ofrecer detalles en estos momentos. No obstante, Mannah dice que se está creando una sólida base para que el operador siga ofreciendo el más alto nivel de servicio tanto si hay como para cuando lleguen más pasajeros.

“Además de las próximas renovaciones, que, por supuesto, son importantes, el servicio al cliente es una de las maneras

A priority for Bernabel Trading is to ensure that consumers have a high-end environment within which to shop

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

Concentrándose en el cliente Bernabel Trading ha logrado un respetable negocio minorista de viajes en Montevideo, Colonia del Sacramento y Buenos Aires, a bordo de la flota de cruceros Buquebus. En Montevideo, Zeinal Hnos. S.A., nombre original de la compañía que administra la familia, opera actualmente cerca de 500 metros cuadrados de espacio de tiendas portuarias en tres sitios diferentes que ofrecen mercancías generales de duty free, ropa, accesorios y perfumería.

LATIN AMERICA REPORT

The high-selling Fragrances category at Bernabel Trading’s operations

Recientemente, Americas Duty Free conversó con Walter Zeinal, Director de Bernabel Trading, sobre los acontecimientos más recientes del operador. “Cada nuevo año trae nuevos desafíos,” nos dice. “Para nosotros, el tema que parece haberse repetido en los últimos años es que el mercado está en estado de cambio constante”.

Zeinal destaca que si bien Bernabel Trading sigue buscando nuevas oportunidades para incrementar sus operaciones, el objetivo fundamental sigue siendo “despertar un impulso en los consumidores”, siguiendo la larga tradición que tiene el sector duty free de ofrecer oportunidades de compra, y además una experiencia en y de sí misma.

“Fomentamos este tipo de experiencia de varias maneras, y una de las más importantes es la creación de estrategias

52

innovadoras de ventas que se concentran en complacer a los consumidores con un nivel de servicio incomparable”, explica Zeinal. “Cada uno de nuestros vendedores está entrenado para garantizar que el servicio al cliente sea la piedra angular sobre la que se construye nuestro negocio”.

Debido en gran medida a su enfoque infalible en prestar servicio a su clientela, las ventas de Bernabel Trading superaron las expectativas en diciembre del 2014, resultados que Zeinal considera como “exitosos en comparación con el mismo período del 2013”. Asimismo, el negocio en general de Bernabel Trading reportó ventas en diciembre del 2014 que superaron al año anterior en un 5%.

“Parte de este éxito tiene que ver con la atención que prestamos a contar con los productos que gozan de popularidad entre los consumidores”, añade Zeinal.

Las tres categorías de mayor venta es las

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

tiendas de la compañía son: Chocolates, Cosméticos y Fragancias. Además, la situación económica en Argentina ha guiado a Bernabel Trading en términos de su oferta al público, y Zeinal atribuye en gran medida el éxito del operador el año pasado a estar atentos a las tendencias en varios países sudamericanos de donde proceden sus clientes.

En cuanto a este año, Zeinal afirma que Bernabel Trading se concentrará en seguir ofreciéndoles promociones atractivas a los compradores. “Las promociones con mayores posibilidades son las que ofrecen ahorros directos al consumidor”, explica.

“Dicho esto, contaremos también con algunos regalos originales e interesantes con cada venta durante todo el año.

Independientemente de la promoción específica, la clave es garantizar el beneficio de los compradores”.

Asimismo, también hay renovaciones

LATIN AMERICA REPORT

de tiendas para este año. Bernabel Trading lleva a cabo un plan de renovaciones en continua rotación, para garantizar que sus tiendas estén siempre actualizadas.

“Considero que las renovaciones deben formar parte del servicio al cliente¨, concluye Zeinal. “Estamos muy concentrados en garantizar que los compradores estén cómodos y reciban una experiencia inolvidable, en términos de cómo se les trata, y además en relación con el ambiente donde compran”.

Manteniendo el ritmo Recientemente, Top Brands inauguró una nueva tienda en el Aeropuerto Internacional El Dorado de Colombia.

Danny Yohoros, presidente de la compañía, le revela a Americas Duty Free que este acontecimiento representa una gran oportunidad para el operador, con respecto al contacto con un grupo mayor de viajeros internacionales.

“El Aeropuerto Internacional El Dorado es el tercero de Latinoamérica en términos de tráfico de pasajeros”, explica.

“Como tal, tiene un gran tráfico de pasajeros que pasan también por nuestra tienda. El aeropuerto presta servicios a

unos 19 millones de pasajeros por año”.

Como medio de atraer a una mayor cantidad de estos viajeros, Top Brands ha abastecido la tienda con una gran selección de mercancías de lujo en categorías como Espirituosos, Fragancias, Relojes y Lentes de Sol. Yohoros destaca que Top Brands está bien acostumbrada a atender diversos grupos de viajeros.

“Al término del 2014, teníamos 40 tiendas en ocho naciones latinoamericanas, muchas de las cuales están disfrutando del mayor crecimiento económico en la región”, agrega. “Esto nos ha dado realmente la confianza para continuar ampliando y desarrollando el negocio con el mismo impulso que hemos tenido hasta la fecha”.

Según Yohoros, es muy importante que se mantenga ese índice de crecimiento, pues ayudará a la compañía a incrementar los márgenes, así como a que las cifras de ventas superen este año los del 2014. Por supuesto, esto no quiere decir bajo ningún concepto que las ventas del año pasado fueron insuficientes, pues el operador experimentó un incremento de año a año del 18% en el 2014, en comparación con el 2013.

“Top Brands logró y superó todos sus objetivos para el 2014 con referencia a la apertura de nuevas tiendas, la renovación de las existentes, y el incremento de las ventas”, asegura Yohoros. “En este último aspecto, hemos experimentado un rendimiento particularmente notable en Fragancias y Espirituosos, las categorías más populares del 2014”.

Y como Top Brands tiene una amplia experiencia de servicio a una amplia gama de viajeros en numerosos países de la región, también lo es en cuanto a diferentes formatos de tiendas. Otra de las recientes inauguraciones mencionadas fue una tienda a bordo del crucero Ferry Express que viaja entre Panamá y Cartagena dos veces por semana. Para los turistas que viajan entre ambos países, la tienda ofrece la oportunidad de comprar artículos libres de aranceles cada vez que usan el trasbordador, cuyo potencial de servicio es de 350,000 turistas al año, en su mayoría colombianos que, por suerte para Top Brands, tienen un algo nivel de gastos en lo tocante a mercancía duty free.

La tienda está abastecida con las mejores marcas en Espirituosos, Fragancias, Lentes de Sol y Belleza, así como Cuidado de la

Top Brands’ new store aboard the Ferry Express, which takes tourists between Panama and Cartagena two times a week

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

2014

LATIN AMERICA REPORT

After over 40 years of doing business in the same location, Monalisa has built up a significant amount of repeat business from consumers looking for the best across categories

Piel y otras ofertas convenientes a este sector demográfico.

En el 2015 no disminuirá el ritmo en lo más mínimo para Top Brands. Entre sus numerosos proyectos, el operador inaugurará una nueva tienda en Rio Branco, meca del duty free ubicada estratégicamente en la frontera de Uruguay con Brasil.

“La ciudad es un destino favorito, no solo para los sudamericanos, sino para turistas de todo el mundo. Como siempre, Top Brands estará presente con las categorías más populares y las marcas prestigiosas que buscan los compradores de tiendas duty free”, concluye Yohoros.

Minorista con múltiples talentos El minorista de viajes paraguayo Monalisa, cuya icónica tienda de múltiples pisos es un elemento importante de la floreciente Ciudad del Este, recibió el año pasado a más de un millón de turistas en busca

56

del regalo perfecto o compras personales.

Charif Hammoud, Vicepresidente de Monalisa, le asegura a Americas Duty Free que las principales categorías del año pasado fueron Fragancias, Regalos y Ropa.

“El 2015 será seguramente tan atractivo como el 2014”, dice Hammoud. “Tenemos muchas sorpresas reservadas para nuestros clientes en lo tocante a promociones. Los compradores regresan a menudo debido a que saben que encontrarán algo nuevo cada vez que nos visiten, ya sea productos recientes o actividades promocionales únicas”.

En realidad, al cabo de más de 40 años de operar en el mismo lugar, Monalisa ha logrado una cantidad significativa de compradores que regresan. El operador ofrece numerosos productos en categorías difíciles de encontrar en otro sitio de la región, lo cual contribuye a la lealtad de la clientela, pero también es de igual importancia la experiencia relajada y de lujo que ofrece la tienda. Como tal,

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

Hammoud destaca que Monalisa se ocupa de programar renovaciones regulares, para garantizar que cada sección de la tienda se corresponda con los gustos exigentes de la clientela.

“En realidad, ¡estamos en un estado de renovación perpetua!”, explica. “Dadas las dimensiones de la tienda, debemos garantizar que cada sección sea moderna y acogedora”.

Y como si Monalisa no tuviera trabajo suficiente con su tienda insignia, el operador sigue desarrollando su marca de boutiques de fragancias Aphrodite. En breve, Monalisa, que opera actualmente siete tiendas ubicadas en los centros comerciales más dinámicos de Paraguay, se introducirá en Asunción por primera vez, con una tienda localizada en el lujoso Paseo La Galería (Blue Tower). Además, Monalisa está trabajando actualmente en el proyecto del Hotel BourbonMonalisa en el centro de Ciudad del Este, que comenzará sus operaciones en los próximos 15 meses.

ASUTIL

What’s to come by

HIBAH NOOR

ASUTIL’s José Luis Donagaray discusses the organization’s upcoming conference in Panama and what big changes in Brazil could mean for the industry

L

atin America is one of the more dynamic areas of the world where duty free is concerned given large populations with emerging middle classes eager to spend their new-found disposable income. Americas Duty Free sat down with Secretary General of Asociacion Sudamericana de Tiendas Libres (ASUTIL) José Luis Donagaray to get the latest on the upcoming ASUTIL conference in Panama, as well as news on the fledgling border store industry in Brazil and how this will affect business on the Uruguayan side of the border.

José Luis Donagaray, Secretary General, ASUTIL

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

Americas Duty Free: Can you tell us a bit about the reaction to last year’s ASUTIL conference?

José Luis Donagaray: We received very positive feedback from attendees, and the fact that we had great speakers had a lot to do with this, I think. Participants particularly liked Dufry’s Julian Diaz’s speech and the study we developed with Peter Mohn, CEO of m1nd-set Global Marketing Intelligence & Solutions, which offered a wealth of information on border and ferry duty free in the region. Suppliers were happy to learn about this because they didn’t have this information before.

We also had a great presentation from ACI’s Rafael Echevarne about airports, and José Carlos Rosa from Dufry and Pedro Castro from World Duty Free Group about the Brazil operation; more than ever, attendees had a lot of useful information to take

ASUTIL

back to their businesses. The anniversary celebration was an emotional part of the event as we honored the founders of ASUTIL with gifts. Finally, those who stayed for the social activity were very happy. All in all, I think it went well.

ADF: Panama is an excellent choice for this year’s conference. What type of feedback have you been getting since you announced this news?

JLD: Registration opened in February and we received positive feedback about our choice of venue in Cannes in October.

Panama is a great country and this year the conference will be held in Panama City; it really has changed so much since the last time ASUTIL was there in 2008. I think those who join us there will really notice the positive changes happening. It’s a new city with new developments and we’re very pleased to be returning to Panama. I can confirm that the opening cocktail will be sponsored DFA and the gala dinner by Grupo Wisa given that they are the local duty free operator.

ADF: While it’s still early, can you tell us what you’re thinking for 2016? Will it be the Caribbean or Latin America?

JLD: We are hoping to go back to the Mercosur region, specifically Argentina. We are having conversations with venues in Buenos Aires. People want to go down to the Mercosur region so they can visit other places such as Santiago, Rio and Buenos Aires, largely because there are a lot of new stores and developments there. In 2017 we’re looking at doing the conference in either Brazil or Chile. Having said that, the Caribbean is a good venue as well.

ADF: What are your opinions on the performance of the industry last year?

JLD: 2014 was a flat year if you compare to 2013. We’ve been facing elections in Brazil we have the volatility of the Brazilian Real to contend with as well, which has been an issue. We also had elections in Uruguay, Argentina and Chile, so there was a lot happening over the course of the year.

We expect single-digit growth for 2015. Brazil is very important to the industry because of the tourism it generates within the country and in neighboring countries. Because of the value of the Real, people haven’t been traveling as much.

ADF: Can you tell us a bit more about the law that was passed to allow border shops in Brazil?

JLD: Brazil has passed a law to allow border duty free stores at certain cities within the country, including Bonfim, Brasileia, Guajara, Bela Vista, Uruguaiana, Foz do Iguacu, Chui, Acegua and nearly 18 others.

This is a very important development for a number of reasons, not the least of which is that border duty free now has a firm, recognized foundation upon which to grow in Brazil. Of course, competition is also good; it means good things ahead for consumers on either side of the border. The goverments of Uruguay, Paraguay and Argentina are coordinating with Brazil to harmonize the law, which is a great indication of the kind of support this initiative has.

From left: Dufry’s José Carlos Rosa (who has now moved onto a new role) and World Duty Free Group’s Pedro Castro at last year’s ASUTIL conference

ADF: In November of last year you put on the second border conference.

How was it?

JLD: The last one we had was held in Rivera, Uruguay on the border of Brazil. Instead of having it for half a day this time we planned for a full day. We had an increase of 30% in attendees, which is always a promising sign whenever you organize a new event.

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One of the more important developments in regard to the annual border meeting is that people in the government are now showing interest in the meeting, along with of course border shops. The key discussions were focused on the economic situation in Brazil, Argentina and Uruguay; the incoming law with regard to Brazilian border shops; the new duty free shops in Rivera and Rio Branco; more research from m1nd-set; and an update on the Siñeriz store. The event was closed by the Customs Director of Uruguay. In total, 110 people attended the meeting, which was held at the Hotel Casino Rivera in Rivera, Uruguay.

The nice thing about this event is that anyone who is interested is more than welcome to attend.

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

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ASUTIL

Lo que traerá el futuro by

José Luis Donagaray, de ASUTIL, habla sobre la próxima conferencia de la organización en Panamá, y lo que podrían significar para la industria los grandes cambios en Brasil

L

atinoamérica es una de las zonas más dinámicas del mundo en lo que respecta a la industria duty free, debido a enormes poblaciones con clases medias en surgimiento y listas para invertir sus ingresos disponibles recién hallados. Americas Duty Free conversó con José Luis Donagaray, Secretario General de la Asociación Sudamericana de Tiendas Libres (ASUTIL) para recibir la información más reciente sobre la próxima conferencia de ASUTIL en Panamá, así como noticias sobre la floreciente industria de tiendas de frontera en Brasil, y cómo esta situación afectará los negocios en la parte uruguaya de esa frontera.

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HIBAH NOOR

Americas Duty Free: ¿Puede hablarnos acerca de la reacción a la conferencia ASUTIL del año pasado?

José Luis Donagaray: Recibimos opiniones muy positivas de los asistentes, y el hecho de que contamos con magníficos oradores tuvo mucho que ver con ello, según creo. A los participantes les gustó particularmente el discurso de Julián Díaz de Dufry, y el estudio que realizamos con Peter Mohn, Director Ejecutivo de m1nd-set Global Marketing Intelligence & Solutions, que ofreció un caudal de información sobre el sector de trasbordadores y duty free de la región. A los suministradores les complació enterarse de esto, porque no disponían de esa información con anterioridad.

También tuvimos una gran presentación a cargo de Rafael Echevarne, de ACI, sobre los aeropuertos, y otra de José Carlos Rosa, de Dufry; y Pedro Castro de World Duty Free Group sobre la operación en Brasil. Más que nunca antes, los asistentes recibieron una abundante y valiosa información que incorporar

ASUTIL

The anniversary celebration was an emotional part of the event as ASU TIL honored the founders of ASUTIL with gifts

a sus negocios. La celebración por el aniversario fue una parte emotiva del evento, pues rendimos homenaje con varios regalos para los fundadores de ASUTIL. Finalmente, los que permanecieron para disfrutar de la actividad social se sintieron muy felices. En general, creo que nos fue bien.

ADF: Panamá es una opción excelente para la conferencia de este año. ¿Qué tipo de opiniones ha recibido desde que dio a conocer esta noticia?

JLD: El período de inscripción se inició en febrero, y recibimos opiniones positivas sobre nuestra selección de la sede en octubre, durante la exposición de Cannes. Panamá es una gran nación, y este año la conferencia se realizará en Ciudad de Panamá, la cual ha cambiado mucho desde la última vez que se realizó ASUTIL allí en el 2008. Pienso que todos los que estén con nosotros allá se darán cuenta de los cambios positivos que se llevan a cabo. Es una nueva ciudad con nuevos progresos, y nos complace volver a Panamá. Puedo confirmar que el coctel de inauguración será patrocinado por DFA y la cena de gala por Grupo Wisa, debido a que son el operador duty free local.

ADF: Aunque es temprano aun, ¿puede decirnos en qué sede está pensando para el 2016? ¿Será en el Caribe o en Latinoamérica?

JLD: Esperamos regresar a la región del Mercosur, específicamente Argentina. Estamos sosteniendo conversaciones con sitios en Buenos Aires. La gente quiere viajar a la región del Mercosur para poder visitar otros lugares como Santiago, Rio y Buenos Aires, sobre todo por la existencia de nuevas tiendas y construcciones. En el 2017 pensamos realizar la conferencia en Brasil o Chile. Dicho esto, el Caribe es también otra sede importante.

ADF: ¿Qué opina sobre el rendimiento de la industria el año pasado?

JLD: El 2014 fue un año sin grandes sucesos en comparación con el 2013. También hemos tenido que lidiar con las elecciones en Brasil y la volatilidad del Real brasileño, lo cual ha sido un problema. También hubo elecciones en Uruguay, Argentina y Chile, por lo que se produjeron muchos acontecimientos en el curso del año.

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Esperamos un crecimiento de un dígito en el 2015. Brasil tiene mucha importancia para la industria, por el turismo que genera dentro del país y en naciones vecinas. Debido al valor del Real, la gente no ha estado viajado tanto.

ADF: En noviembre del año pasado realizaron la segunda conferencia de frontera. ¿Cómo les fue?

JLD: La última [conferencia] fue en Rivera, Uruguay, en la frontera con Brasil. En vez de hacerla en medio día la planificamos para un día completo. Tuvimos un incremento del 30% en asistentes, lo que es siempre una señal promisoria cada vez que se organiza un evento nuevo.

Uno de los progresos más importantes en lo tocante a la reunión anual de frontera es que los funcionarios gubernamentales están mostrando interés en la reunión, conjuntamente, por supuesto, con las tiendas de frontera. Las conversaciones principales se enfocaron en la situación económica de Brasil, Argentina y Uruguay; la próxima ley referente a las tiendas brasileñas de frontera; las nuevas tiendas duty free en Rivera y Rio Branco; más investigaciones realizadas por m1nd-set; y una renovación en la tienda Siñeriz. La conferencia fue clausurada por el Director de Aduanas de Uruguay. En total, asistieron 110 personas a la reunión, que se llevó a cabo en el Hotel Casino Rivera de Rivera, Uruguay. Lo mejor del evento es que toda persona interesada es más que bienvenida a asistir.

ADF: ¿Puede hablarnos un poco sobre la ley que se aprobó para permitir tiendas de frontera en Brasil?

JLD: Brasil ha aprobado una ley que permite la creación de tiendas duty free de frontera en ciertas ciudades del país como Bonfim, Brasilia, Guajara, Bela Vista, Uruguaiana, Foz do Iguacu, Chui, Acegua y otras 18.

Es un acontecimiento muy importante por varias razones.

Una de las principales es que el negocio duty free de frontera actual tiene una base sólida y ambientalmente reconocida sobre la cual puede crecer en Brasil. Por supuesto, la competencia también es buena, pues implica cosas buenas en el futuro para los consumidores de ambos lados de la frontera. Los gobiernos de Uruguay, Paraguay y Argentina están coordinando con Brasil para armonizar la ley, lo cual es un excelente indicador del tipo de apoyo que tiene esta iniciativa.

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RETAILER REPORT: DUFRY BRAZIL

Online experience by

WENDY MORLEY

Dufry Brazil revamps its pre-order website, improving the user experience and potentially increasing pre-order sales

The first phase of Dufry Brazil’s digital pre-order platform included the website. Next, the company will redesign its iPhone application and launch an Android application

D

ufry, the world’s largest global travel retailer, has changed and revamped its pre-order website in Brazil. The new site will offer a more attractive and dynamic platform to its reported 600,000 visitors each month. The intent is to make it a more pleasurable experience to pre-order and check their purchases prior to international travel.

The new website is more modern, and the browsing capability is focused more on meeting the client’s needs. The redesign enables the company to make current promotions more accessible, and for the customers it offers a chance to easily find promotions that holds interest for them. The site is extremely user friendly, with a superior search function that is readily apparent, allowing the customer to find exactly what he or she is looking for by brand, by product, by category, by price, or by what is being currently promoted. The site also makes it easy to browse through all products for a true shopping experience. With each product choice, a pull-up menu shows at which airports the product is available.

Future iterations of the site will include exclusive pages for

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luxury brands. Products that are available exclusively in duty free, such as Johnnie Walker Explorer’s Club Collection, will have their own section, making pre-order easier. Next, the company will redesign its iPhone application and launch an Android application.

“We have observed the market and identified the need for such improvements, which range from a more functional interface to the introduction of features that enable a better user experience, such as the simplified pre-order process,” said Marcelo Ferreira, Dufry’s Global Webmarketing Manager. “We have observed the market and identified the need for such improvements, which range from a more functional interface to the introduction of features that enable a better user experience, such as the simplified pre-order process. Our website is the traveler’s major point of contact prior, during and after traveling. With enhanced mobile access, we expect to reach 100% of the audience, delivering the same experience as that of website users.”

Dufry Brazil expects the new site experience to increase the number of pre-orders the company receives, improve its clients’ experience through all steps of duty free purchasing.

B O O D L E S ® B R I T I S H G I N . 4 5 . 2 % A L C / V O L . ( 9 0 . 4 P RO O F ) . D I S T I L L E D F RO M G R A I N . © 2 0 1 4 . I M P O RT E D B Y P ROX I M O S P I R I T S , J E R S E Y C I T Y, N J . P L E A S E D R I N K R E S P O N S I B LY.

RETAILER NEWS: LONDON SUPPLY

The Fashion and Accessories category has been especially successful for the Iguazú store since the redesign. The new Pandora, Tommy Hilfiger and MAC stores helped bring about these positive results

London Supply and Absolut partner up to bring Carnaval to Iguazú each February, with DJs, dancers, color and movement. Last year shoppers had the chance to taste Absolut’s limited edition Karnival flavored vodka

Retail play

The Iguazú London Supply underwent a remodelling last year, resulting in nearly 20% more sales over 2013 by WENDY MORLEY

T

he last few years have not been optimal for the Argentine economy, and the past two years have been especially bad.

The peso has been on a generally steady and often rapid decline, once losing 12% of its value in one day. It was during this economic crisis that London Supply opened the remodelled Iguazú store.

This might seem like a disastrous time to make such a major move but that has not been the case. In fact, Magdalena (Maggie) Ducos, the Commercial Director of London Supply, says, “It was a success in terms of retailtainment. We had 18% more passengers pass through in 2014 over 2013.”

Iguazú Falls is the top tourist destination in Argentina, and the Puerto Iguazú London Supply is just 15 minutes away.

The lowered value of the Argentine peso and the worse economy in general meant Argentines were less likely to travel out of the country, so the store saw an increase in domestic customers. The low peso also meant great value for people from out of the country, who found their own currency went much farther. London Supply is already a huge shopping attraction for Brazilians, who make up 60% of the store’s clientele. The favourable exchange rate made shopping there an even more attractive prospect.

The store saw the greatest increase in sales in the Fashion and Accessories category this year, and it’s no wonder. As 70

part of the remodelling, London Supply added a sports store, a sunglasses store, a luggage store, exclusive stores for Tommy Hilfiger and MAC and a Pandora corner.

In keeping with the fashion theme, the store also created a Dog Fashion Shop, with fashionable pet accessories. The trend to purchase these accessories has been growing in the larger cities of Brazil and Argentina.

Another purchasing trend Ducos notes is that customers are really making the most of their visits. “In 2014, the most major change I noticed was that customers put more into their shopping basket and made sure to include luxury items.

As always, they looked for bestsellers and well-known brands, but they tended to add value to the basket with luxury sunglasses, watches and more exclusive whisky, and this increased the average ticket.”

Carnaval time is party time in London Supply stores, and an agreement with Absolut brought an even bigger party atmosphere last February as Pernod Ricard launched the new Karnival flavored vodka. The Absolut bar came complete with a DJ, dancers and artists painting. Appropriately for Carnaval there was lots of color and movement in this area while customers tasted the new Absolut.

Ducos and her team have a year full of exciting activations and activities planned for the coming year, “Our mission is to

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

create excellence through experience. We are always looking for different activations and promotions that give the customers quality items, good prices and moments to remember.”

It is this concept and planning that helps to give Ducos a positive outlook for 2015. “We expect similar variables in 2015 as in 2014, and we hope for a similar growth of about 20%. Our activation calendar is already booked for the year, starting with the next big Absolut show in February and continuing with new surprises throughout the year. We focus on creating an experience because that’s the best way to have happy customers: excellent products at the right price in a unique themed store, with retailtainment during the visit. We want our store to continue to be a must-do attraction of the Iguazú Falls circuit.

Ducos would like to thank all the suppliers for supporting the 11th London Supply Golf Tournament last year. “It’s a pleasure to work with suppliers who understand our language and want to walk with us as we work toward a better and more human society.” The event raised almost US$650,000, which will help remodel a seniors’ residence and build a daycare center for autistic children.

RETAILER NEWS: BAJA DUTY FREE

Border store pioneers

Baja Duty Free posted a 6% pick-up in sales in 2014 compared to the previous year

Store openings and a pioneering new customer service program are in the works for US/Mexican border operator Baja Duty Free by

HIBAH NOOR

B

aja Duty Free, the duty free operator on the US/Mexican border, is preparing for new store openings and launching a new customer service program this year.

The company, part of the Californiabased retail and distribution group F&S, is set to open two new stores this year. The first is scheduled to open in the second quarter of 2015. The pedestrian store is

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located adjacent to the pedestrian border crossing in Calexico, California, and has 810 square feet of retail space within a 2,610 square feet building. This is Baja Duty Free’s second store in Calexico; the first was opened in December 1999.

The second store will open towards the end of 2015 in Arizona’s second busiest border crossing and international border town, San Luis, and will be Baja’s first store in Arizona. The size of the retail floor is estimated to be 1,500 to 2,000 square feet.

San Luis has experienced a high flow of pedestrian crossings due to the proliferation of day workers crossing the border to work on farms and other businesses in Yuma County. The border crossing is cur-

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

rently going through a major renovation project which is expected to be finalized in the fall of 2015. The objective is to improve the circulation of traffic, enhance pedestrian safety and improve access to downtown businesses.

Baja Duty Free posted a 6% pick-up in sales in 2014 compared to the previous year. Spirits, beer, tobacco and fragrances were the categories that registered a major upswing year-on-year. In-store traffic also experienced an increase, measured by number of ticket transactions processed in the stores. The ticket transaction climbed by 17% versus last year.

The top three categories in terms of sales are: tobacco products, in which value brands are the top sellers; spirits, in

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RETAILER NEWS: BAJA DUTY FREE

which Scotch whisky, mainly Buchanan’s, sells best; and beer, where domestic brands, mainly Bud Light, are popular.

The majority of Baja’s customers are Mexican nationals, mainly people that commute on a daily basis because of work, school or business.

Customers continue to look for low prices and convenience when they shop, according to the operator. Every month Baja offers different promotions in which customers can save more. The company stays in constant communication with its customers through social media platforms such as Facebook and by sending monthly e-blasts with its special promotions and/ or launches.

Baja’s promotions are based on a yearly

calendar, and the operator works together with suppliers such as Diageo, AB InBev, Patron Spirits, Beam Suntory and Chase International. Promotions last four to eight weeks and are based on a volume purchase where customers can save when buying multiple products. The promotions are supported by in-store signage, media and social media vehicles.

This year, Baja Duty Free is launching a new service called Shop & GO. The pilot program launched in January 2015 in the Calexico store. Sales staff members will take orders as cars line up in the parking lot, so customers can order and pay while sitting in their own vehicles. Merchandise will be delivered right away so waiting time is reduced and customers can con-

tinue their way into Mexico. The retailer will also offer reserved parking spaces for Shop & GO customers. The objective is to offer an easy and fast shopping experience, the company says. Later in the year the service will be expanded into other Baja Duty Free locations.

Baja Duty Free makes up 36% of sales for its company owner, according to a company overview released by F&S in 2015, citing 2011 figures. The group’s total turnover surpasses US$100 million, the document states. Baja Duty Free currently operates stores in California, at Calexico, Otay, San Ysidro (Border Village store/Gateway shop/Trolley store) and Tecate; and in Texas, at Eagle Pass, El Paso and Laredo.

Baja Duty Free’s Gateway store in California

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URUGUAY-BRAZIL BORDER

Good things

ahead

by

RYAN WHITE

Americas Duty Free explores the duty free developments along the Brazil border with Cámara de Empresarios de Free Shops del Uruguay’s Carlos Loaiza Keel

F

ew travel retail news items in recent years have fuelled as much discussion as Brazil’s decision to allow duty free stores in a number of its border cities. Developments are ongoing and the details are complex, so Americas Duty Free recently sat down with Carlos Loaiza Keel, Secretary-General of Cámara de Empresarios de Free Shops del Uruguay, to discuss how his organization is working to ensure the fair development and growth of the border shop industry in South America.

Americas Duty Free: Can you tell us the latest developments regarding duty free on the Brazil-Uruguay border?

Carlos Loaiza Keel: In July of 2014, Brazil’s Ministry of Finance sanctioned Directive 307, which set out the basic rules for duty free on the Brazilian side of the border. The Directive left certain operational matters up to municipal law and in the hands of Brazil’s Secretariat of Federal Revenue, meaning that duty free on the Brazilian side of the border could be up and running by July of this year.

At the same time, the Government of Brazil noted that the inbound duty free allowance will be reduced to US$150, effective starting July 2015. There are already a number of neighboring border cities in Brazil that have passed legislation to allow duty free shops to be built and operated.

ADF: Can you tell us a bit about the work of the Cámara de Empresarios de Free Shops del Uruguay over 2014?

CLK: The Cámara’s overarching objective is to defend the interests of its members in the broadest sense possible. In pursuit of this goal, we’ve continued along the same path we’ve been on 76

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

since the organization’s inception. That is to say, we continue to produce high-quality documentation that clearly demonstrates just how important the border duty free industry is, not only to the Uruguayan economy, but also to that of the region in general; we also maintain ongoing contact with the authorities that regulate and control the development of the industry; finally, another important activity of the organization is communicating the industry’s challenges and victories to the media in an effective, accurate and timely manner.

A good indication of how our work is regarded within the industry is our recent recognition by the Uruguay Customs

Gateway to the region There are a number of reasons why Uruguay is an attractive place in which to do business. The favorable factors for travel retail include: • A hub for American exports into South America’s biggest market • A geographic center of the region’s most important economic corridor • A stable democracy, a reliable legal system and a burgeoning economy • One of the region’s most comprehensive free trade zone regimes • A decades-long national policy of facilitating exports into the region • Thriving local sector ready to help new-to-market/new-to-export companies Source: US Department of State

of priorities. The first is obviously the consensus between the Government of Uruguay and the Government of Brazil that ensures that duty free stores on both sides of the border compete on equal terms. We’ve made enormous progress on this point and continue working every day to ensure that the needs of both sides are met.

The next priority was ensuring that the second annual border duty free meeting, organized in coordination with ASUTIL, was as successful as the first. We’re very pleased with the synergy between both organizations where our common objectives are concerned and the growth that the event is enjoying. ASUTIL is a well-respected organization that has done great work for the duty free industry and we’re very proud that the event is enriching the experience of attendees. I’d like to take this opportunity to thank José Luis Donagaray, Secretary General of ASUTIL, for his vision to make the annual border duty free meeting a regular, and important, event on the industry’s calendar.

“The professionalism of the industry here is at an all-time high, and with more and more big-name travel retail operators and brands choosing to do business in the region, it’s crucial that we maintain the reputation of the industry here as transparent and by the books.”

CARLOS LOAIZA KEEL, SECRETARY-GENERAL, CÁMARA DE EMPRESARIOS DE FREE SHOPS DEL URUGUAY

Agency. The Agency invited us to be part of a special visit from members of the World Customs Organization to Uruguay. We disseminated a report that indicates duty free’s strategic importance and were very pleased to see that Uruguay’s Budget Act, which is prepared by the Government of Uruguay, included a special chapter dedicated to the sector that not only incorporated the Cámara’s data but also brought new depth and breadth to our insights. This is actually the first time in Uruguay’s history such an addition was made to the Budget Act, so needless to say we’re very grateful for the Government’s recognition of just how important duty free is to the country.

Going back to the work that we’ve been doing, I can tell you that in 2014 there are two issues that were high on our list

ADF: Can you tell us a bit about the last meeting? How do you feel it went?

CLK: We co-organized the event with ASUTIL and a team of collaborators. I’m truly impressed with the hard work of everyone involved and I want to thank them for their help in getting the event off the ground. The second annual meeting enjoyed extraordinary participation from all attendees. We’re confident that we can repeat the success of the last meeting at the end of this year, and perhaps in the future even expand the focus to other countries that count border stores as vital, both economically and socially. A case in point would be Paraguay.

ADF: What are the next steps for the Cámara de Empresarios de Free Shops del Uruguay?

CLK: It’s a theme that I think all of duty free can understand; that is, continuing to grow and adapt to new challenges. The professionalism of the industry here is at an all-time high, and with more and more big-name travel retail operators and brands choosing to do business in the region, it’s crucial that we maintain the reputation of the industry here as transparent and by the books—in compliance with the strictest national and international standards.

For a country like Uruguay, duty free—when done right, which it has been—can generate significant prosperity. We’re proud to be playing a part in this exciting story in Uruguay and will continue to work to ensure duty free’s responsible development in the region.

One of Cámara de Empresarios de Free Shops del Uruguay’s main priorities is to ensure that the border shop industry in the region develops in a way that is fair and profitable to all involved

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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RETAILER NEWS: WORLD DUTY FREE GROUP

World Duty Free Group officially opened its new walk-through store at Montego Bay’s Sangster International Airport

Taking travel retailing to the next level by

HIBAH NOOR

World Duty Free Group has revamped a number of its operations in the Americas, and in 2014 celebrated its milestone 20th anniversary in Peru

W

orld Duty Free Group (WDFG) has transformed the duty free retailing environment in a number of Latin American and Caribbean markets, as part of a wider company plan to align its stores with the cities in which they are located and to offer bestin-class customer service.

Here, Pedro Castro, International Operations Director of WDFG, spells out the major activities carried out in Jamaica, Mexico and Peru during 2014.

In Jamaica, WDFG officially opened its new walk-through store at Montego Bay’s Sangster International Airport on November 22, 2014, after the construction work was completed over several phases to ease the disruption to travelers. The store covers a total of 1,063 square meters, with the new walk-through retail area spanning 850 square meters and the corridors representing almost 200 square meters, enabling the travelers to pass through the store comfortably whether they want to buy or not, says Castro.

“This new retail space will be in addition to the stores that World Duty Free Group has already been managing at Sangster International Airport since April 2012,” explains Castro. “The opening of this new store was foreseen during the concession contract. The implementation

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of the contract was structured in three different phases and these works correspond to the last phase of it. The contract included a departures store at East Terminal with 510 square meters; an arrivals store with 150 square meters, and finally, a 1,063 square meter walk-through store, placed in the retail area. All of them were expected to be open in 2014.

“World Duty Free Group—as we have already implemented in other locations around the world—has developed a new commercial concept to bring its stores closer to the cities in which we are located. As a result of this, the new duty free shops at the airport are named Jamaica Duty Free.”

Following the completion of the works, WDFG’s retail space in Sangster International Airport has increased from 670 square meters to nearly 1,800 square meters.

Castro has high hopes for the new stores. “We have quite good expectations in the case of these new stores. We are expecting to overcome our forecasts for this operation. And actually it seems like we are already doing that. We got significant increases in our sales last year, if compared with the original budget. We hope to maintain these good results. And we also hope to keep on delivering significant value to our business and follow

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

up the good relations that we currently maintain with the airport. We are pretty sure that thanks to a great partnership with MBJ Airports Limited and due to our deep understanding of the travelers’ needs in this area, we are transforming the commercial area into a key feature of Sangster airport.”

The store design is bold and modern, to ensure the shops stand out. “The design of the new stores is a key part for our solid confidence in the Jamaican operations,” says Castro. “Before our new

Pedro Castro, International Operations Director of World Duty Free Group

RETAILER NEWS: WORLD DUTY FREE GROUP

The retailer recently opened a 930 square meter store in Mexico to replace the one that it used to operate on the ground floor

commercial strategy, the airport had small stand-alone stores rather than this huge new walk-through store which has been set up as the heart of the redesigned commercial area. Our 1,000 square meter walk-through store occupies the central area of the international departures entrance at Montego Bay Airport. The result of this transformation is a modern and bold design that makes this store stand out among the rest of stores. We can proudly say that there is no doubt that in Montego Bay we have taken our stores to the next level, delivering a best-in-class shopping experience to all the travelers of the airport.”

The customers are mainly American, Canadian, English and Jamaican. WDFG offers products from the major duty free

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categories: beauty, including fragrance, liquor and cigarettes. “In Jamaica our main category is liquor. The local liquor is undoubtedly our flagship product,” says Castro. “Moreover, the store will house exciting promotional areas, such as a tasting bar. Of course in this store, the customer will also find tobacco and some products from the food and confectionery category and miscellaneous.”

Meanwhile, in Mexico, WDFG opened a 930 square meter store in the first half of 2014, to replace the one that it used to operate on the ground floor. “It was a simultaneous process, where we closed the old one and at the same time opened the new,” said Castro, adding: “It is important to point out that the airport was doing some works in the terminal

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

building at that moment and we needed to coordinate ours with them.”

There are several reasons why WDFG decided to open this new store, as Castro explained. “First of all, our former duty free store was opened in the early 2000s and despite the works that we did to keep the store up to date, we thought that it was time for a complete update.

As happened in other places around the world, we decided that this was a perfect moment to start implementing in Cancún our new commercial strategy and bring to Cancún Airport our new image. The timing was perfect as the airport had by this time started some works in the terminal building. ASUR had offered us a bigger space in a different location within the terminal. The location, as it was different, demanded from us more creativity to attract passengers, but this was not really a problem as we are used to working in this environment.”

WDFG has stepped up its marketing activity to attract customers to the relocated store. “As always when you are investing money, you expect returns. The location of the store is different from the older one, so we are working on this with new marketing activities and promotions.

In any case, we are very pleased with the result of the store, by having a brand new, modern and more customer-focused store. For all these reasons our expectations are clear: we hope to improve our sales and obviously provide both customers and the airport itself with a better service.”

The new outlet is a walk-through store, as opposed to the old one, which was a regular store. “In terms of design you can see the difference, first in the new façade, and inside the store we brought the best of our modern design and use of technology. As you probably already know, our company is restless in its efforts to exceed customer expectations and to enhance their airport shopping experience. The new shop is definitely more attractive for the customer.”

The customers are principally from North America and Latin America.

“North American travelers are key for us, and in the case of Latin Americans, the main nationalities are Colombian, Argentinean and Brazilian.”

The new store carries products from the core categories: beauty and fragrances, liquor, tobacco, food and confectionery

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RETAILER NEWS: WORLD DUTY FREE GROUP

and some items from the gifts and souvenirs category.

Turning to Peru, WDFG was celebrating the 20th anniversary of its presence in the country, which Castro describes as “a huge milestone”, as it was where former Aldeasa started its international activities. WDFG started trading in Peru

in 1994 under the brand name Aldeasa, after signing a contract with the Peruvian Corporation of Commercial Airports and Aviation. The retail space that the company developed initially amounted to 478 square meters divided across two stores.

Now, 20 years later, World Duty Free Group has tripled the retail space under

WDFG celebrates 20th anniversary of its presence in Peru

its management and operates a commercial area of nearly 1,500 square meters.

Following Peru, the company entered other Latin America markets such as Chile, Colombia and Venezuela. Today, WDFG continues operating in Chile, Mexico and other Caribbean countries such as Curaçao.”In total, the company operates in 20 countries, which represents without doubt a success story in the field of travel retail,” enthuses Castro.

To celebrate its anniversary in Peru, WDFG carried out a series of commercial activities focused on generating the best experience for its customers. Additionally, the company offered a competition with the prize of a flight to Dubai. Also, it hosted an event in its stores chaired by the Spanish Ambassador in Peru, Juan Carlos Sanchez Alonso. The event was attended

by Juan José Salmon, General Manager of Lima Airport Partners, and Rafael Arias-Salgado, Chairman of World Duty Free Group.

Thanks to the celebratory offer, WDFG experienced significant growth in sales, not only in fragrances, where the campaign was communicated throughout the beauty area, but also in other categories, notes Castro. “The objective of this campaign was to increase the penetration and cross-selling between categories, originally not included in this offer,” he adds.

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OUR EXPERTS ARE ALSO

ORIGINAL

www.amarula.com Follow Amarula on

GUEST WRITER

An industry united

in friendship

Women in Travel Retail and many others in the industry have raised funds for Hand in Hand for Haiti

Sarah Branquinho, President of the European Travel Retail Confederation, considers how our competitive industry has changed—and how it comes together in a positive way by

SARAH BRANQUINHO, President, European Travel Retail Confederation (ETRC)

T

he Duty Free Show of the Americas in March for me always signals the start of a New Year.

Yes, by then we have been trading for two months but by March—and the meeting in Orlando—we can sense the ramping up of activity in anticipation of the busy peak months ahead.

I first attended the Duty Free Show of the Americas in the early 1980s when it was in the Sheraton Bal Harbour in Miami—I’m not sure the hotel even exists any more, and I have only missed one show since then (birth of my second child—bad timing, but lovely baby!).

So what has changed in the duty free industry since then? The transport infrastructure that we work within—airports, airlines, ferries, cruise ships, border stores—has evolved. Travel has become more affordable, so more and more people are taking advantage of this. Expectations of our customers have inevitably grown.

Premium brands and price are no longer enough of a draw. People are looking for an experience, entertainment, the latest, the exclusive and newest products, leading-edge stores and exceptional service. And that’s something that the travel retail industry constantly strives to deliver to its customers, who now have choices which even ten years ago, they could not have dreamt of.

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But what about the inside of our industry—the bit that our customers don’t see?

Increasing regulation has seen IAADFS, ETRC and TFWA joined over the last 30 years by ASUTIL, FDFA, MEADFA and APTRA as each region faces its own particular challenges. These bodies are now united by the Duty Free World Council (DFWC) which held its inaugural meeting at the Duty Free Show of the Americas last year. The regional associations are working ever more closely together as the world has become smaller and issues, once local, are replicated across the globe.

The formation of the DFWC recognizes that this global industry needs global muscle, just like other industries.

Over the years the travel retail sector has seen fantastic growth, driven by the huge increase in travel opportunities, but also by the drive and dynamism of companies and individuals within it. Our industry has a number of far-sighted retailers and suppliers, who recognise that their future is linked to the general health of the sector and therefore fund the trade associations accordingly. We also have a group of dedicated individuals, supported by companies like mine, who give freely of their time to defend the industry and promote a trading environment in which it can thrive.

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

Last but not least, this industry is incredibly generous to others who are less fortunate. Already this year London Supply has raised nearly US$650,000 for an elderly care home in Puerto Iguazu, DFNI has announced that it will raise funds for Duty Free Philippines’ DFP C.A.R.E.S project helping those affected by typhoon Haiyan, and the Dubai Duty Free Foundation has donated US$1.36 million to UAE Compassion providing winter aid for 1 million refugees in the Levant.

At IAADFS, Women in Travel Retail (WiTR) will hold a Tuesday morning breakfast hosted by Lois Pasternak, which will once again raise funds for Hand in Hand for Haiti—certainly not the hundreds of thousands of dollars in the previous examples, but by many women from all parts of the industry generously donating their own money for this brilliant cause, supported by exhibitors who will once again donate generous gifts for the raffle and silent auction.

It is moments like that where I feel truly blessed to be in a tough and competitive industry which comes together in friendship, to celebrate success and to do something positive for people across the globe, whose daily life is a continual struggle and who can only dream of traveling across the globe to be reunited with their friends and families.

RETAILER NEWS: ARI NORTH AMERICA

The Loop’s Canadiana department is popular with European travellers, who are welcomed by a very Canadian moose

In the loop by

WENDY MORLEY

A larger store and new branding helps lead the way to strong sales for ARI in Montréal 86

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

T

he oldest duty free retailer in the world, Aer Rianta International (ARI) invented the concept of duty free when it opened its first store in Shannon, Ireland in 1947. The company now operates in nine countries around the world, opening its most recent store in MontréalTrudeau airport in April, 2014. This new store contributed in no small part to an especially successful year for the global company, adding to sales that were strong at all locations.

The new Montréal store is trading under The Loop retail brand, which has been very successful in Ireland. If this location is any indication, the brand also works well outside its native country. The new space, which has expanded from 1,115 to 1,220 square meters, is designed as a partial walk-through. In line with the fact that Beauty is the store’s best-selling category, the P&C area has expanded to 360 square meters, a 35% increase in floor space. The company also increased the number of whiskies on offer, improving selection in its second-biggest category.

“Our core categories in Montréal are Beauty, Liquor, Tobacco, Confectionery and Souvenirs,” says Seamus Holmes, General Manager of Canadian Operations. “We also opened a standalone Oakley store and a separate outlet for Watches, Jewellery, Sunglasses and Fashion. Beauty is our largest category overall and most importantly our fastest growing category, but we have noted the trend towards growth in Lifestyle. Our standalone Oakley store is performing well. In addition, we recently introduced the Pandora brand. The initial launch has been very

RETAILER NEWS: ARI NORTH AMERICA

successful and this is a concept we wish to develop further. We are also in discussions with other brands in this category.”

As popular as certain international brands have become, research shows that travellers want to find local products, and ARI has taken steps to provide local brands to fill that need. “We are very excited about our new partnership with Rudsak, a Montréal leather brand that’s performing very well for us,” says Holmes.

“In Beauty we introduced Lise Watier, a Canadian prestige cosmetics brand known for its trendsetting color cosmetics and high-performance skincare as well as signature fragrances. This is also proving to be a very successful partnership.”

Another popular department is Canadiana; Holmes says these items are a favorite with European customers.

“We recently ran a very successful promotion called ‘Canada’s Pride’ to showcase the best of Canada to passengers travelling through Montréal Airport,” says Holmes. “The atmosphere air side was enlivened by traditional music and dances performed at key times. These were very well received by the airport and travelling passengers alike. Passengers were also able to sample some of the best of local Canadian products with tastings of maple syrup, Canadian confectionery, liquors and ice wines.”

The company has found its success is closely linked with activations, and a busy

year is planned ahead in the Montréal store. Activities are planned for holidays such as Valentine’s Day and St. Patrick’s Day, and also events such as Montréal’s Formula 1 Grand Prix and Comedy Festival. “These events are important not only to engage customers and offer them something unexpected at a duty free store,

but also to give small local producers the opportunity to showcase their products to a much wider audience,” says Holmes.

For the future, ARI is hoping to expand its footprint in North America.

Currently, the company is assessing some key duty free concession opportunities in the United States.

The company’s successful “Canada’s Pride” promotion featured traditional music and dancers

Beauty is the most important category, and P&C has been given 35% more floor space in the new store

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

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NON-AERONAUTICAL REVENUE

Non-aeronautical revenue (NAR) generation has gained more and more attention in recent years, largely due to the fact that airports operate within an increasingly challenging landscape

Taking the

next step Airports turn to non-aeronautical revenue as a means of ensuring that tomorrow’s capacity needs can be planned for today

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by

HIBAH NOOR

I

n the world of airports in general, and certainly within the duty free industry, non-aeronautical revenue (NAR) generation has gained more and more attention in recent years, largely due to the fact that airports operate within an increasingly challenging landscape, competing with each other for the business of the world’s air carriers.

International Air Transport Association Director General and CEO Tony Tyler often notes that “razor thin margins” are characteristic of the airline industry. Similarly, Director General of Airports Council International Angela Gittens explained in a mid-2014 speaking engagement that while the airport industry as a whole is profitable, some “67% of airports globally operate at a net loss.” It’s no wonder then, with the industry’s two most prominent stakeholders walking a fine line between being profitable and going the way of loss making, that airports are looking to other avenues to generate much-needed revenue for the capacity-building activities that are so vital to the continued growth of the worldwide air transport industry.

But how much of the conversation surrounding NAR in the Americas is rhetoric and how much is backed up by action and results? The good news—for airports, airlines, and duty free retailers and suppliers alike—is that airports in the region have generally succeeded in increasing their NAR. In the pages that follow, Americas Duty Free explores just how successful airports have been at broadening their traditional remit and, perhaps more importantly, the tools they’ve used to go about it.

Financial flexibility While full-year 2014 revenue information wasn’t available for most airports at press time, many forecasts for last year and partial results were decidedly positive with regard to NAR generation. Hartsfield-Jackson Atlanta International Airport (ATL), for example, forecasted that NAR would increase by US$11.6 million in its fiscal year 2014. This represents a 4.2% increase over the Hartsfield-Jackson Atlanta International Airport is the world’s busiest airport in terms of total passengers; revenues earned from nonaeronautical activities help ensure the airport’s financial flexibility

Non-aeronautical revenue is an important part of Hartsfield-Jackson Atlanta International Airport’s bottom line

previous fiscal year.

In its Fiscal Year 2014 Budget Book, ATL clearly delineated the advantages that NAR has over revenue related to aeronautical operations: “The significance… is that non-aeronautical revenues represent additional income to ATL that does not impose additional cost burdens to the airlines.” As such, it’s clear that NAR generation is a boon to airlines as well as airports.

Former General Manager of ATL Louis Miller (replaced by current General Manager Miguel Southwell in May 2014) went on in the same publication to note that one of ATL’s three main priorities with regard to budgetary matters in 2014 was “maximizing non-aeronautical revenues to ensure ATL’s financial flexibility so goals are achieved and customer service is supported.”

In the same forecast, ATL’s aeronautical revenue was expected to be down US$1.2 million dollars from fiscal year 2013 projected actuals. Citing rising costs for police, security and operations, and forecasting an increase in operating expenses of US$25.8 million, or 11.2% over fiscal year 2013, it’s undeniable that NAR is crucial to the airport’s bottom line.

Airports Council International North America (ACI-NA) echoes this sentiment: “Non-aeronautical revenue critically determines the financial viability of an airport, as these revenue sources tend to generate higher profit margins in comparison with aeronautical activities, which are mostly cost-recovery,” the organization notes on its website. “Aeronautical revenues are collected from such sources as landing charges, which are circumscribed by either regulated tariffs, contractual agreements between carriers and airports, or a combination thereof. Thus, airports are heavily reliant on the non-aeronautical side of the business as a driver of revenue growth.”

Kevin M. Burke, upon joining ACI-NA as President & CEO in January 2014, noted the importance of helping airports “gain greater flexibility so that they can finance and build capital projects needed to handle tomorrow’s travelers and cargo.” www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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NON-AERONAUTICAL REVENUE

Non-aeronautical revenue generation helps airports keep airline landing fees and rental rates down to retain service and even attract new airlines

A global marketplace The Port of Seattle, which operates Seattle-Tacoma International Airport (Sea-Tac), actually saw a 7.9% drop in aeronautical operating and maintenance costs over the first three quarters of 2014 versus the same period the year before (from US$ 122 million in 2013 to US$112 million in 2014). Despite the fact that full-year aeronautical revenue is expected to drop 1.3% year over year, from US$239 million in 2013 to a forecasted US$241 million in 2014, full-year 2014 NAR is forecast to increase by 9.6%, from US$161 million in 2013 to an expected US$177 million in 2014.

Looked at another way, the forecasted 2014 figures indicate that non-aeronautical revenue will increase as a proportion of overall operating revenues, from 39% in 2013 to an expected 43%, or an extra US$15.5 million in additional income separate from aeronautical returns.

Representing ACI-NA in a June 2014 statement to the Unites States’ Committee on Transportation and Infrastructure, Managing Director of Sea-Tac Airport Mark Reis alluded to the changing landscape of the airport industry and just how vital NAR is in helping airports keep pace: “The airport industry today is vastly different than what it was just a few years ago. As the aviation industry becomes more of a global marketplace and we see continued consolidation of the domestic airlines, airports have had to adapt business models to keep up with those changes.

With these global influences, passengers are comparing airports to their counterparts outside the United States. We have been challenged to meet customer service demands and make capacity enhancements all while trying to keep airline rates and charges as low as possible.

“In the wake of industry consolidation, smaller airports and their communities are struggling to retain air service or attract

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new service,” Reis continued. “In this environment, airports are acutely aware of the ever-increasing pressure to keep airline landing fees and rental rates down.”

In the wake of these pressures, Reis went on to note that airports are “increasingly using the net income derived from non-aeronautical revenue sources like dining and retail concessions, parking, property leases and other services.”

South of the border Airports in other parts of the Americas are also focusing on NAR. In its Q3 2014 financial results, Mexico’s Grupo Aeroportuario del Centro Norte (OMA)—operator of 13 international airports in 9 states in the Central and Northern regions of the country—noted that “increasing both aeronautical and nonaeronautical revenues” was key to its strategy last year.

OMA earned MXN 223 million (US$15.1 million) in NAR in Q3 of 2014 compared to MXN 207 million (US$14 million) during the same period in 2013, representing an increase of 8.1%. Moreover, it appears that this performance was sustained throughout the first three quarters of 2014. From January 2014 through the end of Q3, OMA brought in MXN 640 million (US$43.5 million) in NAR versus MXN 579 million (US$39.3 million) during the same period in 2013, representing a yearover-year increase of 10.9%.

OMA cites the principle reason for its increase in consolidated net income during the period as “the increase in aeronautical and non-aeronautical revenues.” Although the company didn’t give a full-year forecast for NAR alone, it did note that “the [full-year 2014] growth in the sum of aeronautical and non-aeronautical revenues is estimated to be between 10% and 12% (previously 9% to 11%).”

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NON-AERONAUTICAL REVENUE

How do they do it?

ACI-NA notes that a big part of raising NAR starts with the airport’s attitude toward the passenger. A desire to offer more options to travelers, both in terms of products and services at the airport, can be a good starting point for increasing NAR. “Airports have taken the approach that ‘the customer is king,’” the organization notes. “Providing a high level of customer service is essential.”

Fortunately for smaller or older airports, providing more choice for travelers doesn’t necessarily mean a complete overhaul of an existing concessions program. ACI-NA indicates that cart and kiosk programs can provide small businesses the opportunity to have a presence in concession programs at a relatively low cost to implement. This also allows airports to be fast on their feet when catering to ever-evolving market trends and demands.

ACI-NA also cites a growing trend in automated retail at airports: “Automated retail units are increasingly visible at airports that provide immediate access to essential items any time of day,” says the organization in its 2013 Concessions Benchmarking Survey. “They help airports generate revenue from spaces that otherwise are too small to accommodate traditional retail outlets.”

Another trend that is gaining a lot of attention and momentum is mobile technology. As with any new trend, there was a feeling out period, but many airports in the Americas are now on track to use mobile technology to help meet passenger needs and increase NAR: “Mobile apps better meet the needs and expecta-

After a feeling out period, many airports in the Americas are now on track to use mobile technology to help meet passenger needs and increase non-aeronautical revenue

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tions of air travelers,” says ACI-NA. “Like any other industry, airports are seeing mobile devices becoming the most important digital gateway. Passengers can now navigate through airports and order food on the go, to make those tight connections.”

But apps are just one of the many ways that mobile technology can be harnessed to better serve passengers. In fact, air transport communications, information technology and automated retail provider SITA says that the future is full of new ways that airports will be able to increase NAR, and one of the more interesting tools currently being trialled is beacon technology.

Beacon technology has been hailed as a game-changer in retail. It uses Bluetooth to trigger the display of information on phones and tablets that is relevant to the specific location and context of the user. “Connecting and communicating efficiently with passengers throughout their journey is a widely-held goal in the air transport industry and SITA Lab’s research has investigated the potential of using beacon technology in today’s airports,” says SITA. “The benefits being touted for the technology, such as low cost and wide range, have a strong appeal for anyone wanting to connect directly with customers.”

The first retail implementations of beacon technology have to date focused on contextual marketing, but the retail opportunities for beacons lie well beyond basic in-store location-based vouchering. SITA notes that PayPal plans to take beacon technology further in the future with a hands-free payment solution.

Of course, beacons can also be used for airport navigation,

With billions more passengers expected in the years to come, non-aeronautical revenue is helping airports develop infrastructure to meet tomorrow’s capacity needs

triggering mobile boarding passes and baggage reclaim, generally making the travel experience easier and more convenient, putting passengers in a more relaxed frame of mind for duty free purchases and also giving them more time to shop.

The bottom line With tight budgets and increasing operational costs, airports are getting savvy about how they work toward increasing NAR. While new stores and expansive retail areas may be the answer for some of the larger players in the industry, this approach

simply isn’t realistic for many. The good news is that there are many lower-cost options available, with more coming online in the months and years ahead.

As travelers have evolved, so have airports. More and more of the revenues used to develop the infrastructure that will serve the billions of new air passengers expected to travel in the decades ahead is coming from non-aeronautical activities. Perhaps paradoxically, the key to whether airports can continue being connectors of people and places tomorrow lies in how willing they are to be much more than that today.

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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ASSOCIATION Q&A: INTERNATIONAL AIRPORT ASSOCIATION DUTY FREE STORES

An exciting

Show in

Michael Payne, Executive Director, IAADFS

store

IAADFS Executive Director Michael Payne believes the future looks bright for further duty free developments across the Americas Americas Duty Free: Can you update us on registrants for 2015 Duty Free Show of the Americas?

Michael Payne, Executive Director, IAADFS: The registration numbers appear to be on track with last year’s, but as you know we experience a large number of on-site registrants so will not have final numbers until after Show opens. As of this mid-January point, we just passed the early registration deadline and those numbers look good, so I’m confident there will be a good turnout and on par with last year.

ADF: Can you give us a breakdown of booths by category?

MP: Currently we have approximately 23% in jewelry, accessories and luggage; 30% spirits; 20% fragrances; 11% confectionery; 7% tobacco; 7% gifts and writing instruments; and 2% services. Those numbers could change slightly but the ratios will stay about the same.

ADF: How does the mindset of members this year compare to last year?

MP: Probably a bit more cautious. Passenger loads are up so that remains very positive and US is strong, but the EU/ Euro situation and slowdown in Asia is affecting passenger spend, impacting some categories more than others.

ADF: In terms of sales and passenger traffic in the Americas, in your opinion how did duty free fare in 2014 as compared to 2013?

MP: Better overall, but recognizing some regions and some categories did not do as well. There definitely was some tightening toward the end of 2014.

98

ADF: Are there any airport or duty free-related projects in the Americas that you’re particularly excited about?

MP: I think we should be excited about developments throughout the Americas. Infrastructure development through both private and public sectors continues to enhance the opportunities for duty free shoppers.

Bigger, brighter, well-designed and better-located stores are evident throughout the Americas. Having said that, there is clearly still room for improvement but officials more and more recognize the value that duty free offerings and airports in general provide to local economies. That recognition bodes well for future development.

ADF: What are the major challenges facing duty free in the Americas today?

MP: Well, it is always hard to generalize!

It’s a big region with a number of variances throughout, but certainly the global economic picture can impact the region.

Will people travel as much and if they do will they spend as much? Currency fluctuation hurts some, benefits others, so operators and suppliers will be watching those trends carefully. Government regulations impacting product categories remains a threat and natural and/or man-made catastrophes can always create serious problems.

ADF: Who are the 2015 sponsors?

MP: [At time of writing] Bacardi, Cross, Davidoff, Hershey, Botran, Godiva, American Caribbean Gateway/Macanudo,

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

Essence, Travel Retail Distribution Group and Brown-Foreman are all sponsoring various activities at this point. Some details remain to be worked out but we are so grateful for their support. Each of those companies brings a tremendous value add to our Show.

ADF: Do you have any other new developments to share?

MP: Generally the Show format is similar to last year, but we are adding a fun run/ walk for charity on Sunday morning and will have an exciting gala evening planned for everyone. We have a good representation of some of our new members this year exhibiting on the floor. We have tried to respond to survey results and work to improve food offerings and opportunities for events to occur on the floor as appropriate. From a Board perspective, the primary focus remains on the advocacy front. One quiet but very meaningful initiative that will benefit both suppliers and operators involves improvements to the paperwork requirements for bonded warehouses. IAADFS has worked closely with Customs to reduce the paperwork required, allowing goods to move to market faster and enabling suppliers to access key documents more quickly and in an electronic format.

ASSOCIATION Q&A: TAX FREE WORLD ASSOCIATION

Erik Juul-Mortensen, President, TFWA

Viewing 2015 with positive anticipation TFWA President Erik Juul-Mortensen sees some serious challenges ahead for the industry but also great opportunities for growth Americas Duty Free: Can you give me your opinion of the duty free business overall in 2014?

Erik Juul-Mortensen, President, TFWA: The overall development of the global duty free and travel retail business in 2014 was positively supported by a continued growth in international passenger numbers. Some areas fared better than others, and the political environment and financial situation each played an important role in this.

to amaze with its glittering displays and interactive store theatre which are a delight to behold and an effective driver of sales too. I would like to see a more exciting offer in toys and gifts, a category which is under-represented in many airports.

Basically, wherever suppliers, retailers and landlords combine forces to set an attractive and alluring retail scene, there is potential for significant growth in duty free and travel retail sales because we have a captive audience and travelers like to shop.

ADF: How much growth do you predict for 2015?

EJM: I believe we have great opportunities to grow the industry more in 2015 than the development we saw in 2014. There are serious challenges facing us as an industry, including increased pressure from regulatory factions, continued political unrest in many parts of the world, together with a very difficult currency situation. At the same time we see a continued growth in the international passenger numbers, including newer categories of travelers, and combined with a number of new and exciting retail developments coming into force in 2015, I believe we can look at the coming year with some positive anticipation.

ADF: The China conference was a hit in 2013. Will you be filling 2016 with a different regional conference?

EJM: At the moment there are no concrete plans for a regional conference in 2016, but we keep the options open and should we see a clear need or desire we shall react accordingly. However, at the moment, although we believe strongly in industry-staged events, our members feel that the industry conference and exhibition calendar is busy enough with new activities being added at regular intervals. We want to ensure that our events are essential and meet a demand in the market.

ADF: What are some of the growing categories?

EJM: Statistically-speaking, each of the product categories ought to grow in line with growth in passenger numbers, but I believe there is potential to grow faster than the increase in traffic if we can get better at driving footfall and increase average basket value.

A star performer in the last couple of years has been fashion and accessories, and this is likely to continue as more retail facilities are developed which can accommodate this extremely popular but space-intensive category. The selection in confectionery and fine food is ever increasing, with local specialities and travel retail exclusive lines tempting the consumer, and where there is increased diversity matched to the passenger profile there is generally growth in sales. The wine and spirits category never ceases 100

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

ADF: What are the major economic challenges for the duty free market this year?

EJM: I believe the currency fluctuations are, and will continue to be, a major challenge for the industry in 2015. I also believe that the discussion on the so-called ‘industry model’ will have to be revisited – or will continue to be discussed in 2015 – as a win-win situation and is an absolute must for all partners in the industry.

ADF: How is TFWA addressing these challenges?

EJM: TFWA plays a major role in bringing together all players in the global industry and providing the opportunities for the industry to meet and discuss issues for the future. TFWA also plays an important role in supporting the industry with research and also through our work with, and support of, the regional trade associations as well as with the Duty Free World Council.

ASSOCIATION Q&A: DUTY FREE WORLD COUNCIL

Tackling

global

challenges

head-on

Duty Free World Council President Frank O’Connell sets out the council’s achievements and activities in its first year

Frank O’Connell, President of Duty Free World Council

Americas Duty Free: Which topics has DFWC been tackling since its inception last year?

Frank O’Connell, President of Duty Free World Council: The council has focused its efforts on industry information, education and establishing a library and resource center.

The council has commissioned a database which will develop a profile of the industry – its size, turnover, value, employment content and number of companies involved. Once completed, I would expect industry information to be widely accessible with the facility to interrogate

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the database by country, by product category, by retail channel and so on but only on an aggregated basis. Given the commercial sensitivity of the data, it will not be possible to access any individual company information.

The council also commissioned a series of economic impact studies to be conducted on a regional basis to quantify the added value the industry brings to each region or country, the level and quality of employment it creates and the wider economic benefits generated. The first such study, which is European based, is under way.

These studies, when coupled with the database and profile, will be invaluable to the regional and national associations in their dealings with government and regulatory bodies and will facilitate increasing awareness and knowledge of the industry among mainstream media and help ensure our industry is perceived for what it is – a generator of essential revenue for the aviation and travel industries.

An important objective is encouraging the highest possible standards of management development and training, backed by academic accreditation from a range of universities and other educational institutions. The council is exploring the establishment of an academy to promote educational standards and training and has established a working group drawn from across the industry to begin scoping this exciting project. The group will be chaired by Christine Martin of Travel Retail Training, and I expect their initial findings will be presented to the council during its meeting in Orlando.

An industry library and resource center has been established at the DFWC office in Paris, where research materials, reports and data can be accessed by students, researchers and academics and become a single point of reference globally for solid and reliable industry data on its contribution to airport, aviation and maritime economics.

The DFWC would welcome contributions to the library of relevant research reports and papers, books and material in hard copy or online.

ADF: What is the structure of membership?

FC: All the world’s regional duty free and travel retail associations are mem-

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

bers of the Duty Free World Council.

Council membership includes APTRA (Asia Pacific Travel Retail Association), MEADFA (Middle East and Africa Duty Free Association), ETRC (European Travel Retail Confederation), ASUTIL (Associacion Sudamericana de Tiendas Libres), FDFA (Frontier Duty Free Association), TFWA (Tax Free World Association) and IAADFS (International Association of Airport Duty Free Stores).

There are two formal board meetings of the council each year, one in Orlando and another in Cannes, but members communicate regularly through their associations and at the many industry conferences and shows around the world.

The DFWC office is also in regular contact with members.

ADF: Who are the board members?

FC: Presidents of all the regional associations are members of the DFWC board: Jaya Singh of APTRA, Sean Staunton of MEADFA, Sarah Branquinho of ETRC, Enrique Urioste of ASUTIL, Laurie Karson of FDFA, Erik Juul-Mortensen of TFWA and Pancho Motta of IAADFS, who is also on the DFWC Executive along with Erik as Treasurer and myself as President.

ADF: Are you facing any challenges?

FC: There is widespread support throughout the industry for the DFWC and a clear recognition that the industry needs a level of coordination globally and needs the comprehensive industry data expected from the studies under way, if we are to meet the various legislative and regulatory challenges in many parts of the world.

ADF: How is the association funded?

FC: The DFWC is funded through membership fees paid by the member associations on the council.

ADF: Do you have any other developments you can share with us?

FC: Other activities include the development of a website, which would also become the online access point for interrogating the library materials. The council has also finalised an agreed definition of duty free and travel retail for use by the industry in promotional materials and with the media, which is available from the DFWC office or from council members.

What’s your favourite

Break?

Have a break, have a KitKat.®

CARIBBEAN CORNER: CTO

The sun is

shining by

WENDY MORLEY

After many years in the making, St. Vincent and Grenadines’ Argyle Airport will open its doors later this year

One of the world’s favorite tourist destinations, the Caribbean is seeing some comforting trends, and the region is doing all it can to help that continue far into the future

A

s a destination that relies heavily on tourism for its overall economy, the Caribbean region suffered a big financial blow after the economic meltdown of 2008-2009 drastically diminished the number of tourists crossing its multitude of borders. Since then, however, most countries in the region have reported increases in tourism every quarter, and monthly international travel stats show this trend continuing. For the fifth straight year in a row, travel to the region has increased, according to the Hon. Richard Sealy, Chairman of the Caribbean Tourism Organization, in his

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state of the industry report. Tourism in the summer period was especially high, with growth rates almost double what they had been in 2013. Caribbean arrivals grew by 5.4% in 2014, outpacing world travel growth by 0.7%.

As countries in the region compete with each other and with the rest of the world for tourists and their dollars, however, an increased need for infrastructure has sometimes been apparent. Says the Hon. Sealy, “If we are to withstand the strong competition from both emerging destinations and our own source markets, we must make the right investments in our infrastructure. We must make travel to and through the Caribbean as hasslefree as possible.” A number of developments in the region are taking place to encourage potential travelers to choose this part of the Atlantic.

Argyle soon opening The new Argyle Airport at St. Vincent and the Grenadines, with a capacity nearly

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

four times that of the previous airport, will open later this year. The country had identified tourism as the industry to focus on when it lost its banana trade to Europe, but this resolution was hindered by the length of the runway in the country’s largest airport, which was too small to accept larger jets. This meant visitors had to fly to a nearby country first and then transfer over. The extra journey and extra expense, it was felt, prevented the country from achieving its tourism goals.

In 2005 the government and local organizations made the commitment to build a larger airport with a runway capable of accepting larger jets. The groundbreaking took place in 2008, and Argyle International Airport will accept its first airplanes later this year.

While the old airport has a small duty free shop that offers mainly liquor, in the new airport, non-aeronautical revenue will be paramount. The commercial area has increased from a small store to a 650-square-meter area, and half of that

CARIBBEAN CORNER: CTO

Elite visitors to Curaçao now have their own terminal, accepting private and corporate jets

space is allocated to duty free.

Airport improvements in Curaçao About 500 kilometers to the west and a little further south, very close to the shores of Venezuela, lies the island of Curaçao. This country is not building a new airport, but it is making improvements to the airport already there.

As a carryover from the utilitarian spaces used in the early days of aeronautics, commercial airports were once considered little more than holding cells for passengers. The travel retail industry has helped to knock this reality on its head as airports began to witness the income that commercial space offers. As time has passed that non-aeronautical income has become ever more important, with many airport managers half-joking

that their goal is to have 100 percent of their respective airport’s income from non-aeronautical sources. Throughout the past 20 to 30 years of travel retail history, retailers and eventually airports have come to understand many things that make a traveler more or less likely to shop, thereby supporting this non-aeronautical income. Two of the major factors in a traveler’s willingness to spend money at an airport are the speed at which they get through ticketing and screening and their level of physical comfort.

Curaçao Airport Partners, the international consortium that runs the state-ofthe-art Curaçao International Airport, is committed to develop the airport. As part of that development, it has invested US$10 million in renovations meant to improve the two factors of speed and comfort. The airport has added air conditioning to the

The government has stated that duty free shopping will be an important part of Tortola Pier Park, the British Virgin Island’s expanded cruise port

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

check-in hall and screening area, helping to make the traveler more comfortable throughout the sometimes tedious procedure and hopefully more likely to enjoy the lively shopping and dining options.

The airport has also created a new Curaçao Airport app, to help passengers find what they are looking for. The more elite passengers flying to and from Curaçao by corporate or private jet will find a new terminal called Jet Centre Curaçao, where their travel experience, whether arriving at or departing from the island, will be enhanced.

Curaçao Airport Partners has the stated goal of making Curaçao International into one of the best airports in the Caribbean. The airport will soon be expanding its capacity from 1.6 to 2.5 million passengers per year. The consortium also plans to make the airport a major cargo hub, taking advantage of its location in the southern Caribbean.

Cruising into port Some Caribbean countries are focused on airport improvement, but in this region tourists don’t just come from the sky; they also come across the waves.

With over 37% of the 20,335,000 cruise passengers per year, the Caribbean takes by far the largest slice of that industry’s pie. In the British Virgin Islands (BVI) a massive pier-expansion project speaks

BELGIAN CRAFTSMANSHIP

No two Duc d’O truffles are the same.

The reason for this is very simple. The light chocolate mousse is sent on a journey through a large bed of chocolate flakes. Dancing over them, the truffles wrap themselves in the wildness of Belgian chocolate. Only then are they ready to find their way into civilisation. That’s why all Duc d’O truffles are indecently delectable. But each that little bit unique.

CARIBBEAN CORNER: CTO

to the country’s investment in the cruise industry. With a cost of US$57 million, the BVI Cruise Pier Expansion Project is lengthening, widening and strengthening its existing cruise pier to accommodate larger classes of ships. The project is also creating a five-acre landside development featuring retail, commercial, entertainment and green spaces, to be named “Tortola Pier Park.” While details are not yet available, the government has confirmed its plan to The BVI Ports Authority has signed agreements with both Disney and Norwegian Cruise Lines that guarantee an annual minimum of 425,000 passengers.

That number is the lowest possible, and the company actually anticipates a minimum of 650,000 passenger arrivals for the 2015-2016 cruise season.

Belize soaring as destination The Central American country of Belize has seen an especially good year for tourism in 2014, aided in part by a number of new nonstop flights arriving from the US, from Atlanta, Chicago and Houston.

By October 2014 one million people had visited Belize, including both cruise and overnight guests. This news was most welcome, as that number had not been projected to occur until December.

Overnight numbers increased 9.2% over 2013, crossing the coveted 300,000 barrier to end up at 321,220. The largest increase was in April, where overnight visitors increased 23% over 2013. This was partly because Easter fell in April in 2014, though March numbers were up as well, albeit a more modest 8.1%.

Airport passengers were up 7.0% overall, again with April having the largest gain, but cruise passengers were up a whopping 42.9% by year’s end, and that was despite 13 ship cancellations. The summer months of June and July saw more than double the cruise visitors as the same months in 2013, up 120% and 106% respectively. September was not far behind with a 90% increase, but the entire year was very good.

Belize’s largest market is North America, with US leading the way, followed

by Canada and Mexico. The country’s next-biggest market is Europe, with most visitors coming from the UK.

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Aiming to stay ahead of the competition US domestic market discounting and hot competition for consumers are among the challenges facing Tairo International, one of the leading distributors of fragrances and cosmetics within Caribbean travel retail.

President Robert Bassan, who co-owns the company with his wife Tania, cites discounting in the US domestic market, where most of the travel consumers in the region are from, as a challenge, but he does not currently see any new rules/regulations in the Caribbean that are impacting his business.

Speaking about changes he would like to see in the region, he notes a move among manufacturers in the region to be more competitive for consumers.

Bassan, who has been doing business in the Caribbean for 19 years, observes that the end consumer has become more price sensitive. He sees consumer trends remaining stable in the Caribbean in the next two to three years.

Meanwhile, Bassan says he is satisfied with the number of tourists visiting the islands, as it continues to increase.

Florida-based Tairo continues to support retailers with a number of beauty advisor trainings on location throughout the year, and also hosts marketing events that bring together its top buyers and beauty advisors for several days of business and networking activities.

Tairo International President Robert Bassan and his wife Tania

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

CARIBBEAN CORNER: ESSENCE CORP.

Caribbean heat Essence Corp. squares up to Caribbean challenges

P

ositive growth continues to lift the spirits of luxury duty free distributor Essence Corp.

Based in Miami, the familyowned company handles some of the most prestigious fragrance names in the industry: Burberry, EuroItalia, Interparfums Paris and USA, Clarins Group, Elizabeth Arden Group, Bulgari, Hermés, Beauté Prestige InterGuillaume Bona, Executive Sales Director Caribbean, national, Shiseido, PUIG Group, Essence Corp.

Victoria’s Secret, Laboratoires Filorga and Art & Fragrance.

Despite the good performance, Executive Sales Director Caribbean Guillaume Bona is honest in his appraisal of the challenges faced by suppliers/distributors in the Caribbean. Firstly, he points out that the company’s global partners are demanding ever higher margins, allied with the high cost of HPPs (highprofile promotions) and beauty advisors.

Meanwhile, a lack of space in-store is impacting advertising and promotions, he says. In addition, distributors are exerting less control over stock/assortment and promotions/space. Bona notes that the state of the cruise ship business and promotions in that sector are affecting all Caribbean retailers.

Secondly, Bona believes that the big retail groups’ open-to-buy plans mean that small brands suffer. New launches and limitededition products are difficult to place and are not profitable, he says. Thirdly, space is a challenge, as stores are not expanding.

Fourthly, he cites the grey market as an issue.

Meanwhile, new rules and regulations in the Caribbean are impacting business, such as Jamaica’s tax increases, which Bona says fluctuate from one year to the other. Curacao has imposed new taxes, while the Bahamas has set a new VAT rate. In Aruba,

by

HIBAH NOOR

new rules have been introduced for transit passengers, which he believes will impact perfume duty free sales.

Continuing the list of regulatory concerns, Bona noted that passengers traveling from Aruba to Venezuela in transit through Curacao have had their liquids confiscated. There has also been a reduction in the number of flights to Aruba/Curacao, while Aruba’s internal debt, combined with a sudden pharmaceutical crisis, has seen local spending going down.

Bona would like to see several changes in the Caribbean, notably additional high-end and modern shopping malls, which he believes are needed to attract international brands. He would like to see more airline connections in between islands, along with the reintroduction of real duty free savings to compete against US domestic pricing.

Turning to changing consumer trends in the Caribbean over the next two to three years, Bona thinks the rejuvenated US economy will positively impact the Caribbean, as will the opening up of Cuba.

“Internet sales are booming,” adds Bona. In addition, he says retailers are forced to run “blow-out sales” and are looking for items at a price.

Regarding new emerging trends, Bona notes that shops are becoming showrooms for customers to price shop, and internet sales are a big competitor.

Bona believes retailers can do four things to help his business.

“Retailers should be able to direct the beauty advisers to push profitable brands; retailers should make their perfumeries a shopping experience instead of showrooms; and they should personalize [their in-store space].”

Bona is satisfied with the number of tourists visiting the Caribbean. According to the Caribbean Tourism Organization, the number of 2014 cruise ship passengers slightly increased versus 2013, which is “good news”, he says. Stopover arrivals are also up on 2013.

“However, the Caribbean has experienced an impoverishment of its cruise ship visitors—volume is replacing quality,” he notes. www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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FDFA

Outgoing FDFA President Abe Taqtaq with the Honourable Maxime Bernier and FDFA Executive Director Laurie Karson

New logo, new plan by

WENDY MORLEY

After four years in Niagara the FDFA Convention moved to Toronto, where a new logo was voted on and a new marketing initiative was launched

D

elegates enjoyed the change of scene as the 2014 Frontier Duty Free Association (FDFA) Convention and Trade Show made an appearance in downtown Toronto. “Feedback has been outstanding,” says Laurie Karson, Executive Director of the FDFA. “The attendees appreciated the location; there are so many options in an urban center.” She says the hotel also worked well. “The Hyatt allowed us to essentially ‘take over’ the property and not be lost amongst multiple conventions. This created an intimate gathering and made it easy for buyers to move between suites, the trade floor and other meetings.”

The convention began with a full-day operators’ meeting, kicked off by a financial review by Jim Pearce and a welcome by outgoing president Abe Taqtaq. Executive Director Laurie Karson stated that the focus of the FDFA’s efforts over the coming year would be threefold: 1) the Canada Border Services Agency 2) government relations and 3) marketing. After a talk from Anne Kline and a coffee break sponsored by Godiva, board members discussed government relations.

In the past few years a number of government decisions have been made that negatively impact the travel retail industry. After consultations, the FDFA decided that their best hope to improve the industry’s position lay in convincing the government to allow a GST rebate for non-Canadians shopping at Canadian

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

Making Friends Since 1834 FINEST SCOTCH WHISKY Lauder’s Scotch Whisky first appeared in 1834. The original blend was developed by the Glasgow merchant Archibald Lauder soon after the distilling of whisky was made legal in 1815 and Lauder’s has changed little since it was first produced over 175 years ago in Glasgow, Scotland.

www.macduffint.co.uk

FDFA

The design of the duty free eco bag and splash screens with the new tagline: Do better at the border

land border stores, known as the Road Travel Rebate Program (Road TRIP). While tobacco taxes may arguably have had greater impact on sales than the elimination of the former tax rebate, the board and its government consultant felt that there was no hope the government would roll back any tobacco decisions. Karson, Taqtaq and other board members have met with MPs, ministers and senior policy analyst Mr. Blainey, and feel the Road TRIP proposal has a strong chance of passing. “We are thrilled with the support we have received, and we hope the federal government will accept our proposal in the coming budget,” says Karson.

Peter Brain, current FDFA President, adds: “It will be a big project, so the board is working on the development of an operational and financial plan for rapid implementation if necessary.”

After a lunch, sponsored by Diageo, the afternoon’s events began with a talk by Karl Littler, VP of the Retail Council of Canada (RCC). Littler discussed the RCC’s negotiation of credit card fees. Visa and Mastercard are both reducing their fees to 1.5%.

This is a reduction of .11% for Visa and .24% for Mastercard. The RCC also announced a training program that will soon be available for duty free stores to help employees become successful in retail. This program will be offered to members of the FDFA for a 25% reduced rate. “Staff training is so critical to success. We hope this will be a great benefit for operators and suppliers. Our goal is to have this program ready for review at our June Business Summit,” says Brain.

After another coffee break by Godiva came a presentation by Derek Joynt, Senior Vice President of The Mars Agency, a marketing firm contracted by FDFA. Joynt suggested a rebranding that would essentially brand all Canadian border shops under the same umbrella. Members voted on three potential new logos and two potential new taglines. The winning logo and tagline appear in the images on this page. “We are excited to share our new look and feel,” Karson says. “Our industry will have a more compelling image, one that will be much more consumer friendly and appealing.” More can be seen at www.fdfa.ca.

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

The agency also gave information on a cross-store promotional campaign that would take place in summer 2015. Because one of the biggest reasons Canadians don’t shop in duty free border stores is lack of knowledge about allowances, the campaign will reward those who know answers to certain questions. They will get a greater discount for each correct answer. To increase social media activity, one customer per hour will have the possibility to double their percentage reduction by scanning their coupon instore.

After this presentation and a question period, the FDFA held a board meeting and voted on a new board, which consists of: President: Peter Brain Vice-President: Philippe Bachand Secretary: Simon Resch Treasurer: Jim Pearce Director: Justin Guay Director: Paul Dickinson Director: Len DaSilva

Feathers and pearls The Great Gatsby was the theme of the opening cocktail party, and delegates responded by donning the appropriate accessories: feather boas, jewelled headbands and long strings of pearls for the ladies, and black hats for the gentlemen. A silent auction raised funds for Missing Children Society of Canada. The roaring ‘20s evening was sponsored by a number of spirits providers in addition to First China Tobacco Company and Duty Free Americas.

Down to business The trade show floor opened on Monday, and until Wednesday the 260 delegates held meetings in booths, in suites throughout the hotel and at local restaurants and cafés. Wednesday night a storm ushered in the Imperial Gala Dinner and Gold Standards Awards, where elegantly dressed guests enjoyed wine and dinner and listened to speeches by Karson and the Honourable Maxime Bernier, Minister of Small Business and Tourism The coming year will be a busy one for the FDFA and its members. Brain says, “The association’s key goal is to broaden

the participation of board members and operators in program and service development in 2015. To that end many board members will actively take on projects or program development issues identified. We are reaching out to entice new volunteers to take part in program planning and implementation priorities. Hopefully we can get more and better things done by tapping into the enthusiasm and talents of many FDFA members this year.”

The third annual Business & Professional Development Summit will be held in early June in Chicago, IL. Because the timing of the event has changed, there will not be a golf tournament this year. “We have tasked our Business and Professional Development Committee with getting on top of planning for this year’s Summit early, so we can improve the relevance and benefit of topics covered in 2015,” says Brain.

The 2015 Convention and Trade Show is being held in the beautiful city of Vancouver, B.C. at the Westin Bayshore from November 15th to 18th, 2015. “This will be our 30th Anniversary, so we are very excited to share this important milestone with the duty free delegation,” says Karson.

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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INDUSTRY NEWS: FLYINSTYLE

Extreme

Targeting by

WENDY MORLEY

FlyInStyle’s technology has made it easy to target customers when they’re right where you want them

T

he path to success in any company is not straight, and a technology company is no different. When CEO and Founder Amanda Anthony started her travel app in 2012, her goal was to help improve travelers’ airport experience. That hasn’t changed. But after the initial development came a complete rethinking. “We originally built a social media app that was meant to help travelers connect,” she says. “It didn’t take long to figure out social media is difficult to monetize.” She soon realized it makes more sense to reach people through what they’re already doing instead of trying to introduce something new, and that is where the FlyInStyle app was born.

In early 2013 FlyInStyle created its first prototype, which Anthony brought to IAADFS that year. This was not a technical prototype; her goal was to get input from the market. Anthony built an almost market-ready prototype and brought it to TFWA WE in Cannes later that year, but she was not especially happy with the technology provider and ready to break the relationship.

Before she had the chance, the tech company disappeared with all the code.

Making it better As devastating as this was, Anthony figured it gave her the opportunity to make the app better. “So the lemonade we made from the lemon was to make a big design improvement,” she says.

“We took input from companies that we work with, like Pernod Ricard and L’Oreal. They gave us really great feedback about improving our design and user experience. We ended up launching a better product.”

Last year FlyInStyle began working with with beacon-technology company Bluvision (formerly called StickNFind) and SITA, bringing the app to a whole new and very useful level. As the app user enters the airport he or she will be given interesting information, deals, promos, events and travel tips for that airport and/or region in real time, using beacons to target messaging.

The app also allows users to check out airports further along in their journey, to plan for shopping, dining or entertainment while on layover, for example. The app offers a mix of curated and sponsored content. Anthony has a team of writers including a pilot, a business traveler, a foodie and a young fashionista. Clients also provide content; for example, Absolut posted a video about making cocktails.

Client control Once they have been approved, clients have complete control.

“You can see we have hundreds of airports,” says Anthony. “If you’re launching a new brand at 100 airports globally, you can 114

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

FlyInStyle’s Founder and CEO Amanda Anthony has taken her app from a social network to a tool that’s useful for companies and travelers

build a campaign for those 100 airports in 10 minutes. On the other hand, if you were doing something in one city or at one airport then you can do it in just that one. You can also customize for certain times of specific days to capitalize on the travelers. So let’s say an airport has one flight coming in from Beijing and then two hours later the flight is from Brazil; you can customize the advertising for each flight. It’s self-service and dynamic, meaning you can change things quickly.”

The app has created a formidable solution for marketing teams in travel retail, but Anthony says they face one limiting factor: their human resources. “Often only one or two people will manage the entire Americas region for example, domestic and travel retail and often multiple brands. As a new initiative this will not be high on the list of their priorities. So we found we needed to drive more service – technology service and marketing service.

Technology services creates the apps, marketing creates digital content.” Anthony will be at IAADFS, and she will be happy to show you how FlyInStyle can help you market your brand.

Clients can upload interesting content or information about special promotions at a specific location or hundreds of locations in minutes

When words end, my

begins.

The world’s first personalised chocolate by Frey.

Visit us at IAADFS Orlando booth no. 733

BEAUTY: L’ORÉAL AMERICAS TRAVEL RETAIL, PARBEL

L’Oréal’s

pioneering

Javier Labarta, CEO of L’Oréal Americas Travel Retail, Parbel

beauty by

HIBAH NOOR

lab

Javier Labarta, CEO of L’Oréal Americas Travel Retail, speaks passionately about the company’s plans to introduce a raft of retail innovations in the beauty category

L

’Oréal Travel Retail is set to introduce a raft of innovations in the beauty category along with the launch of two new product categories for the channel. In an exciting initiative, which he likens to a business start-up, Javier Labarta, CEO of L’Oréal Americas Travel Retail, Parbel, has recruited a new team to oversee the launch of the dermocosmetics and professional hair care categories into travel retail. This will include the development of a “new retail model”, he says, which will include bringing the hair salon experience to the sector.

As part of the ambitious new plans, the company’s Vichy, La Roche-Posay and Kérastase brands are being introduced to some of the most prestigious travel retail locations at the beginning of 2015 in the Americas. The focus is on bringing newness to the channel—in response to retailer and traveler feedback—while at the same time recruiting new customers.

Here, Labarta also talks about the positive 2015 outlook, from the growth in forecast passenger numbers to the consolidation among travel retailers.

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Americas Duty Free: What type of growth are you expecting for the overall travel retail business in the Americas for 2015?

Javier Labarta, CEO of L’Oréal Americas Travel Retail, Parbel: Market speaking, 2015 comes with positive traffic expectations, in line with what we have seen in the second semester of 2014, growing at rates between 5% and 6%. Together with that, we should have a positive influence on the number of visas issued for Chinese travelers, that should keep fueling our growth in North America. Also, the concentration of global retailers is something that will definitely bring opportunities for us, with the acquisition of Nuance by Dufry strategic in that sense.

On an internal level, it is also important to consider the potential of growth coming from three different brand tiers/ groups. First, with Lancôme, Giorgio Armani and YSL growing, keeping their strong position, we have a solid luxury backbone; second, the development of all our brands that are “younger” in our distribution, like Kiehl’s or Clarisonic is a solid bet for us; and third, new brands to come, like Urban Decay, Kérastase, Vichy and La RochePosay, that will be born not only as brands but also categories to keep building our future. Definitely, we have a solid and diverse offer, suitable to address the needs of every type of traveler, and consequently solid reasons to feel confident about 2015. Counting also on solid support from the L’Oréal group in this strategic channel leads us to confidence in continuing to beat the market growth again this year.

distribution by our main partners has been encouraging. Indeed, these brands come at a moment where travel retail is looking for new categories, together with refined standards of service.

Definitely it is the right moment.

ADF: How do the brands fit into your existing portfolio?

JL: They fit perfectly in order to recruit new consumers, and will complement our existing brand portfolio, enforcing L’Oréal’s mission, that is to offer a right product for every type of consumer.

We are one of the few beauty groups, if not the only one, that can offer such a wide portfolio of brands to serve a more and more diverse universe of customers in travel retail. From luxury, to hair care, to accessible beauty, to dermatologic skincare, L’Oréal can offer all of them.

ADF: How did sales in 2014 compare to the previous year?

JL: 2014 has been a very dynamic year for us, with a very positive growth trend, especially in North America. Overall, the influence of the Chinese passengers in the North is driving the growth of many of our brands, together with our historical strength in South America. Also, the roll-out and development of brands like Kiehl’s is definitely helping us to overperform the market growth and strengthen L’Oréal Luxe’s position and leadership in the travel retail arena.

ADF: Why is now the best time to launch Vichy, La Roche-Posay and Kérastase into travel retail?

JL: We believe it is a very appropriate moment, and the reception of the initiative of these new brands on the The roll-out of new brands will be accompanied by the development of travel retail exclusive products

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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BEAUTY: L’ORÉAL AMERICAS TRAVEL RETAIL, PARBEL

Kérastase will be available in dedicated hair studios reproducing a hair salon experience in a unique and bold retail approach

many possibilities on the trade marketing side and product plan that we will be implementing step by step, together with a tailor-made retail concept highlighting the expertise of the three brands through personalized diagnosis, expert advice and unique service.

ADF: What type of retailer feedback have you received so far?

JL: We received very positive feedback on these launches, as these brands will help to diversify the overall beauty offer and recruit new customers. As I mentioned before, creating new categories with innovative retail concepts is an initiative that our partners received with encouraging feedback, going hand in hand with the travel retailers’ vision of the future.

ADF: Will you create a new department in your Miami office to handle this business? Who is heading this business?

JL: We built a full new team for the development of the project, with the objective of mixing internal people with experience in L’Oréal and in travel retail, together with people coming from outside the group. This project represents a bet for the future, and we are bringing good people for it, but keeping a spirit of a start-up in a big group. It is quite unique and exciting.

ADF: What type of feedback/results are you expecting in your first year of business in travel retail?

JL: Talking about results is something that is secondary in this case, and I will explain myself. Of course results are important but in this specific case what we are creating is a new retail model, with new categories to develop, thinking about them as a way to understand travel retail in the future. Think about it as a lab, in which we will develop a concept for the coming years.

ADF: Where will these brands be available? All your doors or selective doors?

JL: The brands will be available in our selective doors in our most strategic airports. Vichy and La Roche-Posay will be retailed in Derma Center flagships, creating a unique experience through shop-in-shops dedicated to dermocosmetics.

Kérastase will be available in dedicated hair studios reproducing a hair salon experience in a unique and bold retail approach.

ADF: Do you have any major promotions/activations planned around these launches?

JL: The main focus first will be to implement the retail model, and to create the synergies with the domestic markets, as a first touching point. Then, the trade marketing approach will be co-ordinated in line with the domestic push, in order to convey the same message to the consumer, in all channels. There are

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ADF: Which collections from the three brands will you be highlighting during IAADFS? JL: We will of course highlight iconic lines as we can rely on a strong catalogue, very carefully selected for the travel retail product offer. I would mention: Kérastase Nutritive, Résistance, Elixir Ultime; Vichy Liftactiv, Aqualia and Eau Thermale; and La Roche-Posay Anthelios, Effaclar and Toleriane.

Also, our travel retail approach will be accompanied by the development of travel retail exclusive products, addressing the specific needs of travelers with specific formats and sizes created just for them.

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February - Atlanta Jewelry Show; March - Basel World; March - IAADFS Orlando; April - Chicago SMART Show; May/June - JCK Las Vegas; August - Atlanta Jewelry Show; October - JIS Miami Show

BEAUTY: ESSENCE CORP.

Outperforming the market Versace Eros Pour Femme is a seductive fragrance named after the Greek god of love

Having achieved doubledigit growth in 2014, Essence Corp President Jean-Jacques Bona reveals the fragrance distributor’s ambitious plans for the Caribbean by

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ean-Jacques Bona, President of Essence Corp, is proud of his company’s achievements over the past year, which saw the leading Miami-based fragrance distributor outperform the market with a double-digit upswing in sales.

“2014 was overall a good year for Essence Corp, with like-for-like growth of 10% when the market trend was flat at best,” he tells Americas Duty Free.

Highlights during the year included starting the distribution of Victoria’s Secret in the Caribbean and in some travel retail markets as well as the Puig brands in the Caribbean. “New staff were hired and we are proud of our extended family,” he says.

Bona’s main goal in 2015 is to strengthen the family-owned company’s pillar brands—Burberry, Versace, Montblanc and Jimmy Choo—in the travel retail markets as well as its Caribbean brands: Hermès, Bulgari, Issey Miyake, Clarins and Thierry Mugler.

New product development continues apace, stresses Bona. “As a dynamic company we are always looking for new opportunities and have developments in the pipeline. We will share them as soon as they are finalized.”

Bona notes the successful launch in the French Antilles of Clarins novelties Super Restorative Day and Night creams, introduced together for the first time. The company worked with leading French Antilles retailer, Parfumerie d’Outre-Mer, to stage the promotions on the islands of Guadeloupe and Martinique.

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At the 2015 IAADFS Show, the company is showcasing the major new launches Burberry Brit Rhythm Floral for Women and Burberry Brit Rhythm Intense for Men, Versace Eros Pour Femme and Montblanc Emblem Intense for men.

Inspired by the energy and intimacy of live music, Burberry Brit Rhythm Floral for Women is dubbed free-spirited and feminine and infused with sensual fruits, lilac and lotus blossom, while the deep, smoky Burberry Brit Rhythm Intense for Men features artemisia, juniper and guaiac wood with notes of leather and pepper oil. Model Suki Waterhouse takes center stage in the ad imagery alongside British musician George Barnett.

The new, gold-coloured Versace Eros Pour Femme, described as a seductive fragrance named after the Greek god of love, has Versace’s gold Medusa signature on the bottle and is presented in a deluxe coffret that opens up like a jewelry box drawer. The edp combines Sicilian lemon and jasmine, enhanced by smooth woods.

The ad campaign stars top model Lara Stone with artisitc direction from Donatella Versace.

Meanwhile, Montblanc Emblem Intense for men takes its inspiration from the German luxury goods house’s strong, masculine Meisterstück Solitaire Royal Legrand fountain pen. The edt bottle has a metallic silver finish and appears in the ad campaign with model David Genat, who is the face of the woody, oriental and spicy fragrance.

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

HIBAH NOOR

Leading retailer Parfumerie d’Outre-Mer staged successful Clarins promotions in Guadeloupe and Martinique

2015 30 Annual Convention 30e Convention annuelle th

“Canada’s Exclusive Duty Free Convention”

November 15 – 18 | 15 – 18 Novembre Westin Bayshore, Vancouver, BC, Canada

www.fdfa.ca

BEAUTY: SHISEIDO

Shiseido

unveils the ultimate The Ultimune bottle has an ultra-modern shape that draws on past elements of Shiseido design

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n a bold and ambitious move to strengthen its leadership position in the beauty industry, Shiseido has launched a ground-breaking new product aimed at women—and men— of all ages and ethnicities.

Ultimune Power Infusing Concentrate is described as the world’s first skin immunity awakening concentrate, a preventative product capable of boosting the skin’s immunity. Shiseido says it is unlocking a new era in cosmetics, based on 20 years of award-winning research.

Just like one’s immune system is important to general health, Shiseido has identified a connection between skin’s beauty and the condition of its immune system. The skin even has its own immune system, to protect against environmental threats, stress and ageing— factors that not only weaken the skin, but also damage its appearance. With its rich, dense texture and green, floral, mood-lifting fragrance, Ultimune is said to protect, regenerate and strengthen the skin.

The objective of this breakthrough discovery is to reinforce Shiseido’s leadership in beauty with an iconic launch and innovative technology based on research into immunity by Nobel Prize-winning scientists, the company says.

Ultimune was globally introduced in September 2014 and the product was launched in the Americas duty free doors in the fourth quarter of 2014. Today, Ultimune is present in over 90% of the Shiseido travel retail doors.

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in beauty

Shiseido aims to reinforce its category leadership with Ultimune, a first-of-its-kind skincare launch based on Nobel Prize-winning research by HIBAH NOOR

“Ultimune is a global launch and the product targets all women of all ages, ethnicities and different skincare types, therefore it will be available in all our duty free doors across the Americas, targeting passengers from different nationalities,” explains Jo-Ann Santiago, Marketing Manager, Shiseido. “This product is the perfect complement for the existing Shiseido user and an excellent brand introduction to new prospective customers.”

Ultimune will be the beauty brand’s main marketing focus during the first half of 2015, and the company will continue to invest in airport media and on-counter animations consisting of traffic stoppers to guide consumers to its counters where they will receive information, education and product sampling.

“Initial feedback has been extremely positive and sales are greatly exceeding our original plan. And customers’ positive feedback has been overwhelming,” says Santiago.

“We are thrilled and excited every time we have a customer returning to our counter asking for a refill of her vitamin for the skin.”

Santiago notes that the product’s target customers would include men as well as women. “We are targeting a clientele who is attracted to newness, interested in the science and technology behind the product, and of course is looking to enhance her or his natural beauty.

It is a product not only for women, but we

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

invite men to experience it as part of his skincare routine.”

Shiseido is also taking a fresh marketing approach for the product, which features an arched and curved bottle in the brand’s signature red color. The bottle has an ultra-modern shape that draws on past elements of Shiseido design and recalls the brand’s first beauty product, Eudermine skin-enhancing lotion, created in 1897.

The ad campaign, which is designed to bring out the red color as a sign of energy, sends out the message that Ultimune gives skin the power to repair damage and enhance its own beauty, underscored with Shiseido’s new tagline: “Because the beauty is already in you”.

The ad campaign is designed to bring out the red bottle color as a sign of energy

BEAUTY: CRABTREE & EVELYN

A fixture on the

travel retail beauty scene Crabtree & Evelyn is gearing up for its third IAADFS show, where the beauty firm is keen to engage with partners who share its vision by HIBAH NOOR

Crabtree & Evelyn celebrates the 20th anniversary of the La Source collection

Diego Aleman, Director of Sales at Crabtree & Evelyn’s Latin America and Travel Retail Americas division

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rabtree & Evelyn’s Americas travel retail team is brimming with enthusiasm for the upcoming IAADFS exhibition, following a highly successful second-time showing in Orlando last year. Since last March, the beauty products company has won key airport and border store customers in the region.

“Last year’s Orlando IAADFS was a turning point for our brand,” says JuanCarlos Delgado, Managing Director, Latin America and Travel Retail Americas.

“We showcased the brand, our product range and presented our new duty free retail experience, specifically, our new travel retail fixture program. In return, key duty free retailers took notice and today we are well on our way to having a duty free presence among the major players of our category in the Americas, at airports and borders.”

Since the show, the company has gained a number of new retail customers, including Duty Free Americas, which has become a key partner. In addition to Duty Free Americas’ border stores, it also has a presence in New York JFK, Atlanta, Punta Cana and Miami airports.

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Based on the brand’s success so far, Delgado is full of expectation for this year’s fair. “IAADFS 2015 offers us the opportunity to meet with potential new customers and show them the success we achieved in 2014 through our actual results and our new 2014 retail installations. Our intent is to tailor our presence in their environments. Crabtree & Evelyn’s commitment to travel retail is long term and we plan to engage with partners who match our vision.”

Improving brand awareness is a priority for the firm, and travel retail is playing a key part in this objective. The recent improved presence in travel retail in the Americas is in line with its corporate priority of improving brand awareness and distribution in the US and internationally, he notes.

IAADFS 2015 also provides the company with the chance to engage with local market partners. “This is especially interesting for our brand growth in Central and South America,” explains Delgado.

In Latin America, the brand has had a successful business in Mexico for over ten years. “Our growth in Mexico in 2014 was remarkable. As we look to 2015, we plan

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

to grow in other Latin American markets and use Mexico as an operational best practice example to achieve success.”

Gift packs are a major part of the brand’s travel retail assortment. “We are known for our beautiful packaging and strive to ensure that all of our products are gift-worthy. From fine fragrances, to body care gifts to travel sets, Crabtree & Evelyn has a wide range of gift offerings that all convey a message of quality and luxury,” says Delgado.

Among the best-selling gift items are duos of body lotion and body wash, Hand Therapy trios, five-packs and 12-packs, and men’s shaving kits.

The company offers bath and body products and gifts in a wide range of distinctive fragrances, all inspired by nature blended with science—a factor that has secured loyal customers over its 40 years in business. “A great example of the staying power and relevance of our products is our La Source collection. This year, we’re celebrating the 20th anniversary of this collection, which has remained a top-seller since its introduction,” enthuses Delgado.

BEAUTY: Q&A WITH KATE UPTON

Bobbi Brown’s new celebrity face Kate Upton wears the Hot Collection

KATE UPTON FACT FILE Place of birth: Florida Occupation: Model and actress Favorite city to visit in the Americas: Florida, where I grew up Is there anything on your bucket list right now? Go on a safari

A Hot new

collection American model and actress Kate Upton reveals details of her new Hot Collection for Bobbi Brown Cosmetics by

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HIBAH NOOR

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merican model and actress Kate Upton has partnered with Bobbi Brown Cosmetics as the brand’s second celebrity face following their first‐ever celebrity spokesperson, actress Katie Holmes.

The new collaboration has resulted in the Hot Collection of color cosmetics, inspired by Kate Upton’s hometown in Florida, which will be on-counter in Americas duty free and travel retail in March 2015. Described as fun, effortless and vibrant, each shade and product in the collection was carefully selected

by Bobbi Brown to reflect Kate’s playful, beach-ready lifestyle in Miami. The collection pairs subtle nudes with pops of color, while nude eyes and bright lips add to the look, which aims to convey Kate’s easy confidence.

Here, Kate Upton speaks to Americas Duty Free for our IAADFS issue about her new partnership and her desire to communicate the message of inner beauty and confidence to other women.

How much awareness did you have about beauty products growing up?

I was probably 13 when I started wearing makeup. I actually had to wear makeup because I used to show horses. My mom taught me how to apply it, and I would coordinate my makeup with whatever outfit I was wearing—a red lip to show English, or a brown smoky eye to show Western. But my sisters and I would always raid my mom’s makeup bag together. Now my mom says: “You owe me from years of stealing my makeup.” So with this new partnership with the brand, things have worked out in her favor, too.

Kate Upton swears by Bobbi Brown’s Hydrating Gel Cream moisturizer after an airplane journey

Which product do you swear by?

Hydrating Gel Cream. I’m constantly traveling and this moisturizer is the first thing I apply as soon as I get off the airplane. It’s lightweight without feeling greasy, plus it smells amazing.

How do you relate to the Bobbi Brown brand?

The brand celebrates a woman’s natural beauty and individuality – that’s a message that stands out. It’s a philosophy that speaks directly to me and that I’m proud to represent.

How did your collaboration with Bobbi Brown come about?

Bobbi asked to meet with me, and she is someone I have always looked up to. I’ve always admired the way Bobbi lives her life—from her exceptional career and healthy lifestyle to her incredible products—so I was excited to meet with her, and once we sat down, it was as if we knew each other already. There was an instant connection and everything evolved naturally from there.

What does your job as a celebrity face of Bobbi Brown entail?

Bobbi Brown is all about inner beauty and confidence, and how makeup is meant to be fun—not to create your confidence, just to improve it. That is a message that I can relate to and want to help relay to other women.

How do you feel about being one of the first celebrity faces for Bobbi Brown?

The opportunity to be the face of Bobbi Brown was incredibly exciting to me. My mother and sister and I all use the products and I grew up using them.

Bobbi is an American success story—she created a global brand from an idea that women can be beautiful being exactly who they are, and I love that.

How would you describe Bobbi Brown’s Hot Collection?

The Hot Nudes Eye Palette from the Hot Collection was actually created for me. We were on set and I told her I really like the Creamy Concealer Kit because it has powder and concealer in the same kit. Bobbi knows I’m all about convenience. So that’s what she did for me, she put all the nude shadow shades I love in the same palette.

What is your favorite Bobbi Brown item?

Smokey Eye Mascara. I love the formula, I love the brush. You don’t have to put a thousand coats on. It immediately gives you the look of a smoky eye without actually having to create one with eye shadows and liners.

Bobbi has some long-wear products coming out this year. Do you ever use long-wear formulas?

I should because I’m not a touchup person. It would be great when I’m on the beach in Florida, where it’s so humid. Although I usually just do sunblock and moisturizer.

If you had to pack a weekend bag for the summer, what would be in it?

Sunblock, face mist, lip balm, moisturizer, a lip color, mascara, and sunglasses. I love a shade. Last year I was all about Ray-Bans and now I’m a bit about oversized. But I feel like I’m going to transition back to Ray-Bans.

Smokey Eye Mascara gives you the look of a smoky eye quickly and easily

The Hot Nudes Eye Palette from the Hot Collection

The Creamy Concealer Kit has powder and concealer in the same kit www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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BEAUTY BEAT: FRAGRANCES

Killer queens

and couture

Leading fragrance houses unveil their latest creations, spanning celebrity, classic and modern lines Boucheron Quatre Woman Company: Essence Corp A tribute to Boucheron’s iconic Quatre ring, the sculpted glass bottle has touches of rose gold and white enamel. The sparkling top notes contain bitter orange essence, Brazil Green Mandarin Essence Orpur, redcurrant sparks and wild strawberry, followed by middle notes of sambac jasmine absolute, rose absolute and Pétalia. The base notes comprise golden woods, cedarwood orpur, cashmeran and sensual musk.

Boucheron Quatre Man Company: Essence Corp Created by perfumer Christophe Raynaud, the top notes feature energizing lime, bergamot and violet leaves, leading to aromatic middle notes of lavender, geranium and artemisia. The base notes are woody patchouli and driftwood, along with sensuous cistus labdanum. The sculptural glass bottle features a cap inspired by Boucheron’s signature Quatre white gold ring.

Daisy Marc Jacobs Sorbet Edition Company: Coty Prestige A blend of sheer florals with a hint of fruit, Daisy Marc Jacobs Sorbet Edition is lush and playfully fresh, according to Coty. The fragrance opens with a juicy blend of pear and passion fruit, as crisp jasmine brightens the floral muguet. Woody notes leave a warm dry down on the skin.

Ferrari Vetiver Essence Company: Perfume Holding Vetiver Essence, Ferrari’s new perfume for men, is the latest fragrance in the Ferrari Essence Collection. The warm, spicy, woody fragrance embodies timeless masculine elegance, and comes in a bottle inspired by the legendary Grigio Silverstone of the Ferrari GT car color library.

Original Blend by Original Penguin Company: Falic Fashion Group This fresh, clean, marine scent aligns with the Original Penguin man’s laidback yet socially active, fashion-forward lifestyle. Opening with a burst of Italian bergamot, kaffir lime and crisp apple, the scent infuses into a blend of crushed lavender, shaved nutmeg and brushed suede finely wrapped with a dry down of sandalwood, musk and warm amber.

Fleur Fatale by Kim Kardashian Company: Beauty Contact Developed by Givaudan, this fragrance takes a different turn from Kim Kardashian’s past fragrances and opens with the fresh crispness of blackcurrant, bergamot and violet. The heart unfolds with a floral bouquet of iris, tea rose and peony, while amber, sandalwood and white musk provide a warm and intoxicating finish. Fleur Fatale is the seventh line in the reality TV star’s successful fragrance portfolio.

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Katy Perry Spring Reign Limited Edition Company: Coty This fragrance, dubbed Eau de Spring Royalty, centers on Killer Queen Katy Perry’s garden as the rain falls in spring. Targeted at women aged 16 to 34, the singer’s latest limited-edition fragrance is a fresh fruity floral.

Ferrari Cedar Essence Company: Perfume Holding Cedar Essence, Ferrari’s new, fresh and vibrant perfume for men, is the latest fragrance in the Ferrari Essence Collection. The line evokes luxury, power and sophisticated elegance, and comes in a bottle inspired by the mythic Blu Tour de France Ferrari GT car color.

Harajuku Lovers Pop Electric collection

Company: Beauty Contact Citron by Perry Ellis Singer, songwriter and fashion entrepreneur Gwen Stefani is Company: Falic Fashion Group introducing a new limited-edition collection of Harajuku Lovers Perry Ellis epitomizes all-Ameri- fragrances named the Pop Electric collection. Building on its past can opportunity, optimism success, the scents are packaged in vibrantly colored bottles that and wit. Citron is described look like they have been dipped in molten chrome. The doll-shaped as an aromatic, citrus, woody bottles are whimsical pieces of pop art inspired by Stefani’s love of cocktail with a burst of freshmodern street art and contemporary sculpture. ness and a splash of seduction. This addictive scent aims to stimulate the senses, turn heads and evoke a trail of sophistication and confidence.

Icon by Dunhill Company: InterParfums USA In the sophisticated setting of its Mayfair flagship, UK luxury menswear house Dunhill showcases its interpretation of classic masculine values and innovation with the launch of the new fragrance, Icon. The signature masculine scent takes inspiration from the world of British motoring design and was created with a new generation of global consumers in mind. Icon has a refined style that reflects the Dunhill ethos of a self-assured, sophisticated urban gentleman.

Azzaro Pour Elle Company: Clarins The Azzaro Pour Elle edp has a floral woody amber signature, blending elegance with sensuality. Delicate and light, the bottle evokes the sophisticated world of Azzaro Couture. Its faceted sculptural silhouette offers a shimmering play of light reminiscent of the mirrored Paris store. The lamé trim, which appears on Azzaro designs, is slipped around the neck of the bottle and its pack. The lines are designed to be pure and contemporary, reflecting the new Azzaro Pour Homme bottle.

Elie Saab Le Parfum, Resort Collection 2015 Limited Edition Company: Beauté Prestige International For the new Spring/Summer 2015 collection, Elie Saab brings an aquatic world to life with different shades of blue evoking the Amalfi coast. The perfumer Francis Kurkdjian has modelled the composition on the sea’s golden reflections and beaches bathed in sunshine. Floral, solar and fruity, this new line is bursting with sensuality, indulgence and elegance, BPI said.

Les Délices de Nina Company: Puig This new fragrance was created by Marie Salamagne and Olivier Cresp, the Master Perfumer behind Nina. Les Délices de Nina features an exclusive strawberry candy accord. The head notes mix the tangy freshness of lemon and tangerine, enhanced by a hint of raspberry. The heart reveals the innovative strawberry candy accord, with notes of Mara strawberry and white caramel, combined with the delicate fragrance of gardenia. The base notes have a touch of praline and white musk.

Reveal Company: Coty Prestige Reveal Men Calvin Klein is said to capture the tension between instant attraction and playful seduction. The top note is crystalized ginger, sparking an exhilarating burst of freshness. Mid notes of a seductive raw salt signature and exotic agave nectar reveal bold sensuality, exposing masculinity. The base has deep, intense traces of vetiver and golden amber. The combination of crystalized ginger, raw salt signature and addictive vetiver offers a new signature play between freshness and seduction. www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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BEAUTY BEAT: SKINCARE & COSMETICS

Flawless introductions Selected beauty launches from the travel retail channel’s major players Revitalift Filler Renew Company: L’Oréal Paris This product, endorsed by the company’s new spokesperson Naomi Watts, is described as the first revolumizing anti-wrinkle filler solution at home that targets volume and wrinkles simultaneously. The day cream has a high hyaluronic acid concentration and Fibroxyl, known for its firming properties, while the serum contains 140mg of pure hyaluronic acid, 10 times more concentrated than the average of L’Oréal Paris products. They are said to fill wrinkles, restore volumes and recharge skin for a plumper, fuller effect.

Clearly Corrective Dark Circle Perfector with SPF 30 Company: Kiehl’s Kiehl’s chemists have created a new, three-action solution to address dark circles. The lightweight eye cream is said to instantly brighten and perfect, reduce discoloration, and protect against future darkening. The product has lasting buildable coverage and a high SPF.

Grandiôse Company: Lancôme Lancôme’s patent-pending mascara stem incorporates a “swan-neck” wand with a cutting-edge design. Short and twisted, it is shaped to adapt to the eye’s curves with a flick of the wrist. The brush is precisely positioned along the eye contour to access all the lashes from corner to corner and root to tip. With its short elastomer brush, Grandiôse allows for optimal formula adherence and glide. Small in diameter, it is designed to extend and lift even the shortest lashes.

False Lash Wings Intenza

Color Riche La Palette Nude

Company: L’Oréal Paris Butterfly Intenza by False Lash mascara comes in deep matte black for the latest butterfly lash effect and intense, fanned-out volume. The product has a double wing butterfly brush: one side spreads out lashes, while the second side charges maximum volume. The product is said to stretch lashes outwards like a butterfly wing and has a glossy finish.

Company: L’Oréal Paris This palette of 10 nude shades was chosen by L’Oréal’s make-up designers. Pigments and mixed pearlescents offer intense and nude color.

The make-up designer applicator helps the wearer apply and blend the colors evenly with no creasing. The result is 1,001 eye looks. The palette comes in two shades and has a travel exclusive box.

Everlasting Foundation+ Company: Clarins This new-generation foundation offers coverage, comfort, radiance, a matte finish and long-lasting hold under any circumstances, according to Clarins. It was designed for women who want a flawless complexion, with no touch-ups needed. Enriched with organic quinoa and anti-pollution plant active ingredients, the foundation is said to offer 18 hours of flawless coverage, skin comfort and protection.

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EDITOR’S CHOICE

This season’s chart toppers Six of the best new innovations from key travel retail suppliers

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1. Design Go pillow: Combining innovation and ergonomics, the new Bean Snoozer pillow from travel accessory firm Go Travel features a flat-back design to promote a more comfortable sleeping position 2. L’Occitane Divine Renewal Program skincare: Targeted at overworked skin, the French beauty company has developed a program that works in harmony with the skin’s natural rhythms to enhance its ability to regenerate

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3. TAG Heuer Carrera Calibre 9 automatic watch: This sparkling 28mm timepiece incorporates 12 Top Wesseltons (0.10 carat) on a mother-of-pearl dial and 56 Top Wesseltons (0.55 carat) on the polished steel bezel. It comes on an H-shaped steel bracelet 4. Braun Face: This clever two-in-one device combines superior facial cleansing with precise facial hair removal. The cleansing brush removes makeup and impurities thoroughly yet gently, freeing the pores to enable facial creams to work their best

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5. Carrera New Champion sunglasses: Described by eyewear maker Safilo as distinctive but easy-to-wear, this sporty model delivers a lightweight feel, climatic adaptation, a shapememory effect and strength 6. Rituals Ayurveda collection: This natural bodycare collection blends the delicate fragrance of Indian rose and nourishing sweet almond oil in a range of products inspired by India’s ancient Ayurveda holistic philosophy

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7. Mexico from Tic Tac T100 Destination Collection: With more than a dozen designs now available and new ones being released all the time, this collection is proving very popular with souvenir hunters and Tic Tac fans

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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JEWELRY & ACCESSORIES: BUCKLEY JEWELLERY

Buckley Jewellery Ltd. expands its sparkle in the Americas

Buckley London’s jewelry brands is expanding its presence in the Americas region, spearheaded

by Katherine Patch Sleipnes, President of Miamibased International Brand Builders by HIBAH NOOR

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uckley Jewellery Ltd continues its rapid growth within the travel retail channel with brand new collections from its award-winning Buckley London costume jewelry brand, as well as a refreshed offering from premium sterling silver brand BOUTON. Buckley Jewellery’s Sales and Marketing Director, Neil Thompson, says: “We are excited to be entering many new ventures in 2015 within travel retail, in particular our launch onboard cruise ships where we hope to really make an impact. We will also be focusing on inflight, airport and downtown duty free doors within the Americas.”

Buckley aims to double its growth globally within the next two years, notes Thompson, thanks to a continued focus on creating innovative new product. He explains: “We are expanding into important local markets such as Italy, Spain, France and other domestic markets that

also drive awareness and sales. On the brand side, we will be previewing our new BOUTON 925 Silver range that is being condensed to offer top selling items at reduced retails.”

At the IAADFS show in Orlando, Buckley London will consolidate its brands into one portfolio, which Thompson says will reduce complexity and be “a big win for 2015”.

Among the new collections to be unveiled at IAADFS will be a range of Teddy Bear pendants, as part of the Adrian Buckley Signature collection.

The crystal-encrusted pieces have been designed to bring an element of fun and playfulness to jewelry. Available in two sizes, the larger bear is designed to be worn as both a brooch and a pendant and the smaller bear as a pendant.

Speaking about the company’s performance in the Americas, Thompson says: “During 2014 we saw significant growth within the Americas, and we hope to

The new range of Teddy Bear pendants forms part of the Adrian Buckley Signature collection

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The Teddy Bear pendant is designed to bring an element of fun and playfulness to jewelry

continue this success in 2015 by consistently offering excellent quality products at competitive prices. A key strength of our designs is that they appeal to a broad range of customers, which means that our performance is strong across all channels in which we operate. We are continuing to innovate with improved new fixtures and marketing tools that are best in class.”

In terms of consumer preferences in the region, Sleipnes observes: “We offer jewelry at a price point that many of today’s consumers are looking for, stylish yet affordable. Duty free is evolving to expand its offering to include such brands as Buckley London and Bouton, to allow their customers a broader selection than before. Recent research supports that duty free shoppers buy mostly based on price and exclusive finds [items not found in their local markets] and we believe this is a benefit for Buckley jewelry brands.”

“A key trend we have seen in the inflight channel has been for giftable items, so we always ensure that we have products within the range which make ideal gifts for a loved one, and we believe innovation is key to the company’s success,” adds Thompson. All products are designed in-house in the UK by the company’s talented design team, and it always strive to create a product offering with wide appeal which takes inspiration from all cultures around the world.

“We are conscious of the importance in continually developing our range, offering new and exciting launches each season and staying ahead of the trends,” concludes Thompson.

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JEWELRY & ACCESSORIES: CRISLU

Crislu delivers design and precious metal sets with flawless cubic zirconia at retail prices under US$200

Crislu quickens

the pace by

HIBAH NOOR

With fresh private equity investment under its belt, US jewelry design company Crislu is forging ahead with expansion

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ales are booming in the Latin American and Caribbean markets at US jewelry design company Crislu, which has recently partnered with a private equity group to accelerate expansion.

Bryan Scott Crisfield, President and CEO of Crislu, reveals: “The brand has partnered with a private equity group, and our strategy is to drive sales to the next level. Crislu just came out of its best fourth quarter in corporate history.

“We believe Crislu has the best design, packaging, price and quality in the fine fashion jewelry channel and will maximize marketing and sales support/investment to grow the brand in 2015.”

Continued investment and focus on brand excellence will be to the fore, says Crisfield. “Design is the new gold. Crislu delivers design and precious metal set with flawless cubic zirconia in the same light as Neiman’s, Bergdorf ’s and Barney’s but at retail prices under US$200.”

At the IAADFS Show, the company will showcase a new self-serve lit display.

This unit entices travelers to come closer and then magically transforms fine jewelry into affordable luxury any traveler can afford, with average retail prices between US$58 and US$128. In addition, a complete inflight offering of Crislu’s best-selling design collection pieces are sold worldwide at retail prices beginning at US$48.

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Crislu, which began trading in 1961, has partnered with Marshall Retail Group to open both standalone and shop-in-shops at the following airports in 2015: Las Vegas McCarran (D gates), Vancouver, Denver, Philadelphia, Minneapolis, Dallas Fort Worth and New York LaGuardia.

To capitalize on new retail opportunities in the Americas, the company recently brought Andrew Hoitsema onboard to manage the Latin America and Caribbean business. In further new hirings, Zeyry Gutierrez is managing the US market and Christelle Kaprielian is overseeing Canada.

“The Latin America and Caribbean market is exploding for the brand and has doubled in one year,” states Crisfield.

So how does Crislu cater to current customer preferences? Crisfield responds: “Established in 1961, the Crislu brand does the analytics to identify best-selling styles, by category and by style, to maximize the stock and sales strategy at each point of sale. We then flow in nationally advertised vignettes of designer collection product to add additional excitement to the presentation. The design, the quality, the packaging and the price equal sell through,” he says.

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

Crislu’s new self-serve lit display will be showcased at IAADFS

JEWELRY & ACCESSORIES: LOLAANDGRACE

lolaandgrace

shines on Swarovski-owned young fashion jewelry brand lolaandgrace aims to source key partners in the US and bolster existing markets this year by

HIBAH NOOR

The all-new Cocktail collection is designed for layering and can be mixed and matched with other pieces

lolaandgrace is unveiling the new Rondelle collection at IAADFS

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ourcing key partners in the Americas and bolstering existing markets in Europe and Asia Pacific are on the list of priorities this year for lolaandgrace, the Swarovski Group-owned young fashion jewelry brand.

“Our main focus for the company right now is sourcing partners, particularly in the Americas, but also strengthening the existing markets in Europe and Asia Pacific,” says Head of Wholesale Aurelie Girard, talking about the company’s plans.

“Our goal is to broaden our collection appealing to a wider range of customers.

We are very proud of the kiosk and corner recently opened in Auckland Airport (New Zealand) and Vienna Airport (Austria) and will be looking for similar opportunities to grow in the Americas,” she enthuses.

Although the brand is expanding globally, its strategy is selective and the regions it is focusing on are chosen in detail. “We would rather shine bright in key and exclusive locations, rather than testing out multiple markets as it’s vital to have a real impact on future customers,” she says.

The brand has big plans for this year’s IAADFS. “We will be launching our new display and doubling the size of our previous exhibition space at the IAADFS

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Orlando fair this year to help increase brand awareness,” explains Girard. “Key features include our ‘touch and feel’ unit, inspired by the beauty and cosmetics industry, which allows customers to have a more direct experience with our products.”

Product-wise, lolaandgrace will be showing its new Rondelle collection as well as the all-new Cocktail collection. The Cocktail collection injects the trend look of the brand’s customer with seasonal colours that sparkle with Swarovski crystals, the company said.

Rings, pendant necklaces and drop earrings come in nine different colorways that are designed to capture the spirit of the season, from blooming spring flowers to summer beach parties and music festivals. With three different crystal cuts —oval, teardrop and long cushion—there is a style and shade for every outfit. The pieces are designed for layering and can

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

be mixed and matched with other items from the lolaandgrace Spring/Summer 15 collection. The jewelry can be combined for a rainbow effect or worn singularly for a color kick.

Turning to consumer trends, Girard says: “We believe that travel retail consumers are busy with traveling, but also ensure that they plan enough time to shop in the airport. Airports in the Americas are becoming true shopping malls, where one can find many big international brands. For this reason we value these outlets to reach key travel retail consumers and increase brand awareness.”

Thanks to being part of the Swarovski Group, lolaandgrace benefits from the knowledge and professionalism of a wellestablished company in the travel retail industry, which helps keep the brand one step ahead, Girard says, adding: “What we offer in addition is freshness and dynamism to appeal to the new younger consumer.”

In the future, the company plans to continue introducing “fashion-forward jewelry to #makethemoment and boost any outfit, mood and occasion”, says Girard. Additionally, fresh ideas will be introduced for impactful merchandising and displays.

your body. your soul...

Discover us at

IAADFS booth 1923

Amsterdam

Paris

London

New York

Sao Paolo

RITUALS.com

Sakura. For centuries, the Japanese have celebrated the annual flowering of the Cherry Blossom. These Cherry Blossoms, or Sakura, mark an awakening of nature and symbolise that beauty is momentary and life must be enjoyed. Inspired by this tradition, our Sakura collection makes each day feel like a new beginning.

JEWELRY & ACCESSORIES: NISHI PEARLS

Taking pearls

to fresh

heights Duty free newcomer Nishi Pearls is already flying high, thanks to a debut listing on board Air Canada by

HIBAH NOOR

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ishi Pearls is set to participate in the IAADFS Show on a high note, following its successful first-ever duty free listing. The brand, which offers genuine cultured pearl jewelry, entered the channel with a presence in Air Canada’s inflight catalogue for the 2014 Fall/ Winter program.

“Nishi Pearls is thrilled to enter the travel retail market and have two of our best-selling genuine cultured pearl sets featured amongst a selection of high quality duty free products,” enthuses Vanessa Lombardi, Brand Manager of Nishi Pearls. “Our fashionforward silver thread necklace and matching pearl stud earrings can be purchased on international flights. Alongside the inflight catalog, we have also co-branded with one of the industry’s leading professionals, Swarovski, out of which we offer a genuine cultured freshwater pearl pendant and earring set made with Swarovski Zirconia, which is exclusive to Asia flights for onboard purchases.”

Following the success of its pearl jewelry in the Air Canada travel retail program, the Canadian flag carrier will continue to feature its two sets for the 2015 Spring/Summer program. “Shopping is a key element to the travel experience for many passengers and we are happy to provide exciting personal purchases or gifts for loved ones,” says Lombardi.

She acknowledges that marketing to international travelers requires a specific business strategy and the flexibility to tailor products to the needs of those customers. Nishi Pearls is aiming to meet its needs by customizing its collections to respect specific price points and trends.

“The duty free and travel retail market is a unique retail environment in which Nishi Pearls has found its place by developing and implementing a series of select items to appeal to an array

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Nishi Pearls offers genuine cultured pearl jewelry to suit all customer tastes, from classic to fashion-forward

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of people enforced with the proper marketing support. There is a distinct range of selected products sold in duty free and travel retail programs compared to the domestic market, therefore Nishi Pearls’ emphasis on high quality goods and a wide range of unique designs are a perfect fit for this enticing market.”

Recognizing the shop window effect of the travel retail channel, Lombardi adds: “The duty free and travel retail market allows Nishi Pearls to showcase collections on an international basis amongst a slew of premium quality products and brands.

We are eager to develop new relationships in the duty free and retail market and adopt new strategies throughout this invigorating process.”

Lombardi is also keen to note the importance of the company’s attendance at key international trade shows, including IAADFS. “Our annual attendance at prominent jewelry trade shows enables us to secure our presence in both the duty free market and international/domestic markets.” These trade shows include the Jewellers Circular Keystone Las Vegas, JIS Miami, IAADFS, Hong Kong Jewellery & Gem Fair, Vicenza Oro and the Toronto FDFA Annual Convention & Trade Show.

Collections to be featured in Orlando include Hidden Halo, Trellis, Bridal, Opulenti, Aline for Nishi Pearls, Stackable bracelets, collections featuring 10-14 carat gold and Tahitian pearls, and an upcoming Nishi Pearls Blossom collection.

Lombardi also points to the launch of the company’s online store in November 2014, a significant milestone. “There has been a drastic transition in consumer preferences, namely concerning shopping in-store versus shopping online. Nishi Pearls began with a foray in the B2B division and now we’ve extended our business to B2C. We carefully evaluated our products and knew we were ready for the online market.”

FASHION: DESIGUAL

Fashion house Desigual offers travel retail exclucives

Traveling life is cool

“

2014 has been a great year for Desigual in travel retail.”

So says the buoyant Spanish fashion house, which now counts more than 170 points of sales in airports, on cruise ships and inflight since its travel retail debut in 2013. The company closed the year with a double-digit percentage sales upswing on 2013 and with strong projections for 2015 in the channel.

Initially, Desigual focused on opening corners in multi-brand shops, but as the brand gained traction, the strategy is more set on establishing mono-brand boutiques. The brand is also becoming much stronger onboard cruise lines. New store openings have included Sao Paulo, Pittsburgh, Dallas and Detroit, and a new pop-up concept will begin trading in Paris Charles de Gaulle Airport in partnership with French operator Aelia.

Major highlights over the past year have included the brand’s rapid expansion in the US with four mono-brand boutique openings. “This has been a testament to our excellent partners— Dufry Group (Dallas and New York), Airest (Pittsburgh) and World Duty Free Group (Miami),” the company notes. It has also entered new territories, including India and Australia.

Another highlight of 2014 was the launch of the brand’s first travel retail exclusive bag collection. This includes three styles with different patterns, representing a reinterpretation of the company’s distinctive geometric shapes, featuring a brown base color combined with ecru and orange symbolizing sandy beaches and sunsets. It is reinforced by a message dedicated to travelers: “Travelling Life is Cool”.

Desigual has rapidly expanded in the US with a few branded stores

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Spanish fashion house Desigual is continuing its rapid international expansion, with the US and Latin America poised for further growth this year by

HIBAH NOOR

The brand’s best-selling products vary depending on the geographic location. In general terms, the most popular items are dresses, T-shirts, coats, bags, pashminas and small leather goods.

Regarding consumer trends in travel retail, Desigual has observed that new shoppers are often motivated to impulse buy affordable garments from aspirational luxury brands. “For Desigual, the customer is at the heart of the strategy. By knowing what they want and what they enjoy, the brand is able to draw inspiration for each collection. Innovation, the needs of the mainstream consumer and value for money are pillars of the brand’s strategy to exceed consumer expectations,” it says.

The fashion category in the channel is evolving, and Desigual believes that because the fashion category is complex in terms of sku management, with a single collection made up of thousands of items from different families, models, colors and sizes, operators must have the right IT systems to allow for visibility on sell out and therefore properly manage reorders during the seasons.

“Even though Desigual as a brand is innovative, the innovation in this area will be driven jointly with retailers. The travel retail industry is still focused on core categories and fashion is gaining traction and mindshare slowly within the industry.”

Looking ahead to 2015/16, Desigual’s travel retail business is still being driven by Europe, the Middle East and Asia, so in absolute terms these regions will have the greater growth, but in relative terms the US and Latin America will be the areas with the highest incremental growth on the previous year, the company predicts.

GUEST WRITER

Forging strong

relationships by

CATHERINE BONELLI, Worldwide Travel Retail Director, Paul & Shark

Catherine Bonelli, Worldwide Travel Retail Director of Paul & Shark, considers the huge potential of the Italian fashion brand in travel retail

Catherine Bonelli, Worldwide Travel Retail Director, Paul & Shark

I

have been involved with the fashion industry for 15 years and travel retail for six of them. It’s an addictive business to be in—unlike any other retail environment, not just in terms of the way we do business but in the strength of relationships and friendships that we forge across all sectors.

But it is not a walk in the park either.

Fashion is a very buoyant category within travel retail, attracting more and more attention from airports and retailers—but the competition for retail space is becoming ever tougher. We compete within our own category, against other categories and, indeed, other services such as food and beverage.

For Paul & Shark, however, it is a challenge worth taking and I was delighted to join this family-run company last year to direct the development of its travel retail business. We see huge opportunities for the brand, fueled by the ever growing number of passengers looking for alternatives to the traditional duty free categories, plus the increasing traffic from countries such as China, Russia, South America and Middle East: passenger profiles who have money and are keen to spend it on authentic products.

Paul & Shark now has around 30 points of sale in travel retail, across three continents, and we are steadily building distribution with a new emphasis on the cruise-ship business. We are very confident of the brand’s potential within the channel and are investing in its development, recruiting a dedicated team to ensure total customer service.

To be successful in travel retail requires more than simply transferring a brand from the high street into the airport retail environment, although maintaining the brand’s heritage and DNA in what can

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be a much smaller space is imperative.

The most important point we stress for Paul & Shark is the Italian know-how and expert tailoring that are brought together in every piece of clothing. Since the beginning, innovation has been extremely important. From the outset we set out to produce clothing items that are able to withstand all weather conditions.

To do this we have invested in creating new, high-performance materials, many of which have been patented by Paul & Shark. The ultimate frontier for Paul & Shark research, for example, was the development of three threads twisted together to achieve one single thread.

The result is a compact yarn that refuses to bobble. Equally innovative is our

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

packaging—from the first sailing sweater introduced in 1978 in a metal can, we have endeavoured to make the packaging integral to the offer.

On an ongoing basis, one of the unique elements about Paul & Shark is the company’s ability to take any item within a collection and customize it to meet a specific retailer’s requirement; for example, the length of a shirt, a particular color, or special embroidery. We can even do customization on site at a retail outlet using instant embroidery technology.

This was a service that we highlighted on our stand at TFWA World Exhibition last year, which was very much appreciated.

You cannot just say you are different— you have to show that you are!

The Tastes of Happiness.

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WATCHES: OBAKU

WATCH this space by

Obaku is going places with its distinctive brand of Danish designed timepieces

O

baku is a relatively new name on the travel retail watch scene, but the Danish designed brand has already made great strides in the channel.

In the run-up to the IAADFS Show, where Obaku is being showcased for the first time, Scott Marsh, Obaku Director US & Caribbean, explains the brand’s current distribution: “We’ve had great success this year in building the US and Caribbean markets. Since September we’ve opened 50 new accounts, including Bloomingdale’s.

We are looking forward to opening at least three times as many in 2015.

“Currently, most of our travel retail exposure is with independent jewelry stores located at the ports of call in the Caribbean islands and inflight with airlines such as KLM, El-Al, South African Airways and Condor. We are working with European-based airport retailer Gebr Heinemann through our travel retail sales agent partner Skylink. Here at the US office, we are working on opening travel retail channels with airline, airport and border stores throughout the North and South American continents with our travel retail sales agent partners International Brand Builders (IBBI).”

Key to the brand’s travel retail expansion is the Orlando show, where Obaku will be represented by IBBI. “We have a great travel retail sales group partner in IBBI with a lot of experience in the travel retail market and we look forward to working hand-in-hand with them as we expand into this new business channel.

IBBI will have a paramount role in our brand’s expansion in travel retail,” says Marsh.

He continues: “When I think about the expectations of the average travel retail consumer who is buying timepieces, they are looking at three key components in the

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product they are buying: design, quality, and price point. We at Obaku provide a high quality, exceptional designed timepiece at an affordable price point. We stand behind our product and that is why we offer a Limited Lifetime warranty. We feel that our brand is attractive to retail members of the IAADFS and once they see our beautiful products, retail fixtures and presentation at the show, we feel the retail customer will agree. This, as well as being very customer service friendly and listening to our retail partners’ ideas and suggestions, will be our key to success at the Orlando show and in the future.”

Obaku Denmark offers minimalistic Danish designed watches that are sophisticated, elegant, ultra-slim, lightweight and affordable for the average consumer.

Inspired by clean Danish design and the harmony of Oriental philosophy, Obaku’s designers Christian Mikkelsen and Lau Liengärd Ruge have created a distinctive collection to reflect the best of both traditions, seeking to combine character and personality with a subtle balance of nature and fashion.

Obaku watches are made from high quality materials with great design, feel, and affordability, says Marsh. The retail price range of the watches runs from US$99 to US$275, with the average price around US$149. “All of these components make it very attractive for the duty free and travel retail channel,” he points out.

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

“Obaku has a great multicultural history, a strong brand identity, and a beautiful, unique look with an affordable price.”

Marsh sees Obaku being an entry price point watch brand in high-end department stores, independent jewelry stores and boutiques across the globe. “Our ultimate goal is to become a well-known and internationally recognized brand,” he says.

“We look to further continue advertising in well-known publications, catalogs and online media.”

The brand is already well on the way to achieving its aim, as on the domestic market, Obaku is distributed in 70 countries and partners with some major retail chains such as H.Samuel (UK), Bloomingdale’s (US), City Chain (Asia), Titan (India), Angus & Coote (Australia) and Rivoli Group (UAE).

At IAADFS, Obaku will be represented

by International Brand Builders, headed

by Katherine Patch Sleipnes

CONSTRUCTION

Planning aid and tool box in one! The multitasking ballpoint pen CONSTRUCTION can really do a lot thanks to ruler (cm and inch), cm scales, spirit level, Phillips/slotted screwdriver and stylus.

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Rollerball pen

registered Design

TROIKA - The design gift brand for a more enjoyable business and travel life.

WATCH NEWS

An exciting year beckons for Tyko

The new Breo Axis on-trend fashion watch

It’s time for innovation The fast-growing Invicta watch brand prides itself on being a leader in innovation with over 4,000 sporty styles available—and many can be seen at the IAADFS Show.

Founded in 1837 in Chiasso, Switzerland, the brand (which means “invincible” in Latin) was relaunched by its President and CEO Eyal Lalo in the early 1990s and has since grown its distribution worldwide.

In 2000 Lalo focused his company on designing a perfectly fitting, oversized timepiece, which resulted in the introduction of the professional diving watch, Ocean Ghost. Invicta watches now encompass over 30 diverse collections, with over 4,000 styles, which change each year. Offering the customer fashionable and innovative watches at an affordable price point, Invicta also specializes in case complications.

“Invicta has experienced explosive growth in the last 10 years and has been one of the fastest-growing brands in the industry,” says the company. “In many of its areas of distribution it is often the best-selling watch brand.”

The Florida-based company has 16 Invicta boutiques in the US and plans to expand worldwide. New Invicta boutiques are opening in New York at the New World Trade Center and in Times Square.

The brand has many collectors—more than 48% of Invicta customers have an average of 10 watches each.

At IAADFS in Orlando, Invicta will showcase a wide variety from all the collections, such as the Pro Diver, Subaqua, Russian Diver and the new Hydromax model.

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Tyko Travel Retail, the UK-based supplier of watches and jewelry to airlines and ground shop operators, is debuting several new brands at the IAADFS show this year, following the initial success of its collections in the Americas.

After identifying “huge potential” to develop its business in the region, the company announced a partnership with travel retail agent Worldclassbrands in late 2013. Since then, Worldclassbrands has secured several listings on board strategic airlines and a number of key ground store locations for Tyko’s brands.

Best-selling products in the Americas have been its Hippie Chic, Breo and One Tribe watches. “The sales from these brands regularly achieve number one or two status within the category for our airline partners,” says Martin Lovatt, Travel Retail Sales Director.

For ground shop operators, the focus has been on the self-select Breo freestanding display unit designed for impulse purchases, which has made a “very positive” addition to its partners’ sales, according to Martin Lovatt.

At IAADFS, Tyko has a number of new brand launches making their Americas debut this year, including the modern classic men’s Kartel timepiece and the Daisy Chain jewelry collection.

Products joining the Breo range will be the Orb 10, a collection of high-specification sports watches, and Axis, described as colorful, on-trend fashion watches. Hippie Chic also sees three new styles added to its award-winning range.

“Since the official unveiling of the Tyko brands during IAADFS in 2014, the response has been phenomenal,” enthuses Martin Lovatt.

“Since last year’s show we have secured over 10 airline listings and sited over 11 Breo freestanding display units in the Americas, which include key strategic locations such as airports and border stores.

We currently have a further 15 freestanding display units in production for clients who have confirmed new locations for 2015.”

In addition to the Breo freestanding display fixture, the counter spinner unit has been popular with clients whose stores have less space.

Invicta offers variety and value

WWW.BUCKLEYLONDON.COM

WWW.BOUTON.CO.UK

SUNGLASS REPORT

Spotlight shines

Italian eyewear group Luxottica ended 2014 with a strong set of financial results

on sunglass suppliers

A round-up of the latest new developments from travel retail’s key sunglass brands by

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s the sunglass category continues to grow across the Americas duty free region, four of the main players are kicking off 2015 on a high note.

Luxottica ended 2014 with a strong set of financial results as the Italian eyewear group simultaneously announced the appointment of co-CEOs. Adil Mehboob-Khan has been named as CEO for Markets, while Massimo Vian will be responsible for Product & Operations.

Announcing the company’s results, Vian set out the company’s aim to double net sales in the next 10 years.

For the full year 2014, Luxottica said its net sales were up by 6.7% to over €7.6 billion (US$8.6 billion). It described this figure as “a particularly satisfactory result in a globally more uncertain economic environment.”

The wholesale and retail divisions both contributed to the company’s strong results.

“Once again, the proprietary and licensed brands portfolio has proven a key success factor,” it said. “Ray-Ban, in particular, continued to record double-digit growth. These results were also driven by the performance of Luxottica’s major retail chains, especially Sunglass Hut’s sustained growth worldwide.”

In North America, sales rose by 5.3% in 2014 and accelerated 12.2% in the fourth quarter. “This performance can be attributed to the continuing appreciation of American consumers in Luxottica’s eyewear collections and confirms the strength of the business in both traditional and newer channels for this category, such as department stores and e-commerce,” the company said.

Brazil, over the year, climbed by 19.9%, despite a challenging macro-economic environment. And Sunglass Hut grew its comparable store sales in Latin America by 18.9% during the year.

Meanwhile, fellow Italian eyewear supplier Marcolin is set to launch its first Ermenegildo Zegna sunglasses collection in the Americas duty free market from spring 2015. The company said the Zegna brand perfectly complemented its portfolio, enlarging its offer

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HIBAH NOOR

for a male consumer who is seeking a modern and refined look, following the latest fashion trends but always with a classic touch of elegance.

In the Americas, as well as in the rest of the world, Zegna is identified as a signature of tailor-made tradition, timeless elegance, high quality and attention to detail, according to Marcolin. “Our first outstanding collection perfectly expresses all these features,” it added.

Marcolin is introducing the brand in the most exclusive and selected premium duty free stores, where high visibility will be given to the new collection in a bid to enhance its characteristics.

During a launch event for the Zegna sunglass brand in Milan in December 2014, video projections illuminated the venue, engaging the guests in an innovative sensory experience created by playing with lights and shadows, images and references to a sophisticated world in line with the brands’ common values.

Many celebrities joined the event, such as the Italian actor Adriano Giannini and the actress Carolina Crescentini.

Marcolin’s Ermenegildo Zegna sunglasses will hit the Americas duty free shelves from spring 2015

Known as one of the lightest sunglasses worldwide, Maui Jim adds Keanae and Red Sands to its PureAir collection

For Hawaii-based company Maui Jim, whose sunglasses feature patented PolarizedPlus2 lens technology, January 2015 began with a flourish. The company was voted Reader’s Choice Sunglass Company of the Year and Women’s Sport Sunglass Brand of the Year by opticians, optometrists and opthalmologists.

Vision Monday and 20/20 Magazine announced their selections in the sixth annual EyeVote Readers’ Choice Awards, a survey aimed at identifying readers’ favorite products and companies of the year.

Optical retailers and eye care practitioner readers of the two Jobson Medical Information publications were asked to identify their favorite products in 10 categories, including sunglasses.

Selected companies were chosen based on both brand and company choices supplied by readers.

Invented more than 30 years ago, all Maui Jim sunglasses cut 100% of harmful UV rays and 99.9% of glare. Maui Jim is the only company to use three rare earth elements, and other treatments, to white-balance its lenses, resulting in true color vibrancy. An added benefit of PolarizedPlus2 technology is that it increases definition and depth perception.

All Maui Jim sunglasses have also been awarded the Seal of Recommendation from The Skin Cancer Foundation as an effective UV filter for the eyes and surrounding skin.

Maui Jim’s PolarizedPlus2 lenses can be found in more than 112 different sunglass styles for men and women. The lenses come in four colors to enhance vision in varying light conditions.

Marchon, a key US-based supplier, is gearing up for the IAADFS Show with a reconfigured booth in a new area of the trade floor, designed to be a more open concept that improves the visibility of the brands displayed. Some of the company’s latest additions include Nike’s sporty eyewear for kids and Dragon’s floatable sunglasses.

Commenting on their potential, Erwan Le Guennec, International Travel Retail Director of Marchon Eyewear Inc, says: “We believe there is great sales potential in the sports eyewear segment, not only in the performance category, but also in the sport-inspired/lifestyle and kids’

categories. With Nike and Dragon, we have the right brands and products to address this market.”

He continues: “For Nike, we have a wide consumer target as the brand is very popular across all age segments. The recent addition of the Nike Young Athlete line of sunglasses has been a huge success and we continue to expand this collection with new styles. As for technology, Nike sunglasses offer three leading vision innovations for the consumer: advanced high precision sport optics, progressive frame design and engineered lens tints.

Dragon has seamlessly blended fashion with function to create the H2O Collection—its first ever line of floating sunglasses.

Perfect for men and women who enjoy an active lifestyle in and around the water, the Dragon H2O Floatable Collection features a specially formulated injected frame designed to stay afloat in the water.”

From trays to backwall units, Marchon has developed a complete range of mono-brand displays to support retailers depending on their space constraints. It has also developed multi-brand fixtures to enable the introduction of more brands in the shops.

Some of Marchon’s latest additions include Nike’s sporty eyewear and Dragon’s floatable sunglasses

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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CONFECTIONERY NEWS: MARS

The Yellow and Red M&M characters in their New York City outfits are the focal point of the store. Customers often take photographs with the characters and post on social media

Four years after opening, DFA’s M&Ms store in JFK’s Terminal 7 is given a whole new look and focus by

WENDY MORLEY

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n 2011 a new concept shopping experience was born at New York’s JFK airport when Duty Free Americas (DFA) opened the first M&Ms store in the world, now one of nine. After nearly four years, on February 5, 2015 a new store opened – a completely refurbished 30-square-meter store at the same location. “The only thing that remains from the old store is the floor,” says Liliana Fuentes, Mars International Travel Retail (MITR) Director for the Americas.

Leon Falic, President of Duty Free Americas, was on hand to cut the ribbon at the official opening of the bright, colorful new space, joined by Craig Sergeant, General Manager MITR, and Alan Eley, Vice President of JFK Terminal 7 (British Airways). Guests at the event mingled while staff served mini cupcakes (decorated with M&Ms, of course) and glasses of champagne.

The new store was designed with MITR’s new “smiles” marketing strategy in mind. This new strategy, launched at TFWA WE in Cannes last year, is aimed at making travelers smile. “A smiling traveler is a spending traveler,” Craig Sargeant says. “Not just in our stores and not only on confectionery, but across the board in all travel retail. By helping passengers to smile, we absolutely believe that we help the entire industry.”

It is understood in the travel retail industry that a disgruntled passenger does not go shopping. Long lineups and red tape collecting boarding passes and getting through security do more than simply take away shopping time; they put the passenger in a mood less conducive to shopping. Airports, therefore, have been putting great effort into making these processes easier and more painless. (MITR) is bringing that concept one step further, helping to create a passenger that is in the best possible mood to spend money.

If the anecdotal evidence from the official opening is any indication, smiles will be easy to come by at the new store. The

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vibrant music and colors along with the unmistakable familiar faces of the M&M characters act like a beacon to draw travelers in and make them happy. It seems every passenger walking by the store looks in, smiles, and then often enters. Fuentes says, “We want to create moments. We want travelers to come in and smile.” Sargeant agrees, stating that the store has all the elements to provide such an experience.

As Fuentes notes, everything in the store is new, from the fixtures to the bright yellow paint. An exciting series of screens play videos of the famous M&M characters, conveying their personalities. Below the screens each character’ has its own section,

The completely redone store includes a section for each M&Ms character, complete with its own merchandise and a screen showing videos that reflect the character’s personality

(L to R) Liliana Fuentes, MITR Director for the Americas; Craig Sargeant, MITR General Manager; Denise Erickson, DFA Regional Manager and Leon Falic, DFA President

DFA staff members were on hand to help celebrate the official store opening, taking pictures of passengers and guests with the Yellow M&Ms character and handing out samples

DFA President Leon Falic cut the ribbon, officially opening the new M&Ms store at JFK. He was joined by Craig Sergeant, General Manager MITR, and Alan Eley, Vice President of JFK Terminal 7 (British Airways)

with themed T-shirts, mugs, plush toys and more. An interactive moment is offered with the “What’s Your Color?” permanent display. Customers place their hands on the M&Ms-style hands and then a screen comes up with the M&Ms color that matches their current mood, creating a unique brand experience.

International but local Each store has themes related to its specific location, and this New York store makes the most of its famous home. New York City is a theme throughout. The characters’ screens are reminiscent of Times Square. A central gondola features large versions of the two best-known M&Ms characters, Yellow wearing a baseball cap and Red featured as the Statue of Liberty. The two rest on a stylized and M&M-branded American flag. Another gondola close by contains other New York-specific M&M items such as a New York City candy dispenser.

“Like our Paris CDG shop, this new store is designed to offer fantastic theatre and fun. We have worked to create an innovative and interactive experience,” says Sargent. ‘We are extremely happy with the result and certainly the response in the first few days of opening from travellers has been most encouraging.”

He mentions that customers often take photos of themselves with the M&Ms characters and then post those photos on social media. “That’s great for brand recognition,” he says, “but our goal is to translate that into a sale.”

Quick turnaround The new store was built in a whirlwind of activity over just two weeks. Without closing for even one day, the new space opened on January 26th following two days of training the DFA staff.

At the grand opening, staff members were smiling as much as the customers, with additional helpers handing out samples. The Yellow M&Ms character was there and many travelers stopped by to take a picture. The helpers then loaded these images on Facebook and those photographed tagged themselves, again using social media to improve brand awareness.

“DFA has been a wonderful partner to work within the concept and creation of this store,” says Sargeant. “They are very open to our aim of engaging more strongly with existing customers, while enticing new shoppers to enter the store. DFA was the first innovative retailer to partner with Mars back in 2011, and now after three successful years we have a totally refurbished store, based upon the latest shopper insights to continue the successful journey so far.”

Fuentes and Sargeant agree that this new store is a great leap forward. “When we opened in 2011 we did not have the complete concept clear,” says Fuentes. “Now we have learned.” And that learning is reflected in this new store.

As the official opening drew to a close, guests were given samples of various Mars items and a gift bag from DFA. Everyone was smiling. www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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CONFECTIONERY REPORT

Sweetness personified If you have a sweet tooth, you’re in luck— expect to see lots of enticing new offers from confectioners this year by

HIBAH NOOR

J

ust when you think there’s little more that confectioners can do to tempt a traveler’s taste buds, they turn around and prove you wrong with a tempting array of new sweets. This year is no different.

Leading confectioners are pulling out all the stops as they roll out a tantalizing display of new and upgraded products to show at the Duty Free Show of the Americas.

For chocolate giant The Hershey Company, the focus in 2015 is on gifting and snacking, and this means two new USthemed American Destination Tins. The 10-oz tins include a Stars & Stripes version with Hershey’s Kisses Chocolates, and a Sunrise in America option with REESE’S Peanut Butter Cup miniatures. Shipments for both begin this May. Another tempting new treat is the company’s HERSHEY’S Cookies ‘n’ Crème Stand Up Pouches. The 200g snack size pouches build on the success of the full-size pouches—Hershey’s number one travel retail exclusive item.

Godiva’s Coeur Iconique Limited Edition is a trendy box with neon pop color combinations designed to appeal to Millennials

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Hershey’s New US-themed American Destination Tins

Overall, Hershey’s business continues to do well in the global duty free and travel retail channel, with double-digit growth registered throughout in YTD Q3 2014. Regarding the Americas market specifically, the company says it remains strong with the delivery of new programs and innovations.

“In 2014 we implemented several innovative programs with key customers to generate confection category growth,” says Steve Bentz, General manager, World Travel Retail at The Hershey Company.

“In 2015 we look to continue to deliver insight-based innovation to drive category sales and exciting retail programs to generate shopper engagement.”

Brazil remains a strategic market in the region, and Hershey has “aggressive plans” to continue its growth there.

Brands that do particularly well in the Brazilian market include BROOKSIDE, REESE’S Peanut Butter Cups and HERSHEY’S KISSES Chocolates.

“REESES’s Peanut Butter Cup is one of our brands that is gaining traction as consumers seek out interesting combinations of ingredient,” says Bentz. “Consumers also find our HERSHEY’S KISSES Chocolates to be indulgent little treats and are especially interested in our Cookies and Crème flavor.”

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

US focus US-themed confectionery extends across a number of additional brands, most notably at Hawaiian Host, a company as famous for its locale-thematic packaging as it is for its delicious chocolate covered macadamia nuts.

This year, Hawaiian Host introduces new packaging for its American Vacation Box of 14 chocolate covered Macadamias featuring the Statue of Liberty and Mount Rushmore.

“We’ve upgraded the box to make it more appealing on-shelf with brighter, more dominant visuals,” says Daniel Verduzco, Assistant Sales Manager for the company. “Destination merchandise remains a popular purchase.”

Hawaiian Host also revamped its Jewel box and added an inspiring name change to the product—it now goes by the moniker Classic Collection. The premium assortment of classic flavors includes the usual macadamia mix: milk chocolate macadamias, honey coated whole macadamias, white chocolate whole macadamias and dark chocolate whole macadamias.

Golden days At Ferrero, golden days continue as the company introduces its Ferrero Golden Gallery to the Americas. The elegant windowed box, filled with individually wrapped Ferrero chocolates, was previewed in Europe in October to an

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CONFECTIONERY REPORT

Hawaiian Host has revamped its Jewel box and given it a new name, Classic Collection

enthusiastic response. And what’s not to like? The offering includes an assortment of Ferrero chocolates in six tempting flavors: Cappuccino, Manderly, Tenderly Nougat, Tenderly White, the classic Ferrero Rocher, and Ferrero Rondnoir, its darker, more intense version.

The Ferrero Golden Gallery will have special activations in a number of key locations in Europe and Asia in the coming months, and the company hopes to soon add retail outlets in the Americas to this list.

Also big for the company this year is the refined Raffaello 200g Coffret, complete with 20 coconut-flavored pralines, as well as the children’s confectionery brand Kinder, which has a particularly strong presence in South America. The focus this year will be on the Kinder Miniatures 200g collection. The sharing packs come in three flavors and are presented in premium card pouches with strong branding.

For all the Nutella lovers out there— and there are many—Ferrero is rolling out a travel-exclusive Nutella Big Jar, filled with 21 mini-jars of the classic hazelnut spread. The company’s new marketing platform for the Nutella brand—Nutella World—further strengthens the brand’s presence and acts as a brand ambassador.

Also on the Ferrero radar for IAADFS is the Tic Tac T100 Destination Collection, a travel retail exclusive, with Mexico as the latest destination of choice to be featured—an illustration of an ancient Mexican temple appears on the product’s sleeve.

The Collection is proving to be a big hit with travelers worldwide, and more than a dozen designs have now been introduced, including ones featuring Brazil, Canada, the US, Panama and the 156

Caribbean. The packs, which contain 100 mouth-freshener mints, appeal to souvenir hunters and Tic Tac fans alike.

A trio of offers When it comes to innovation, it’s hard to beat Godiva, and this year the worldrenowned confectioner offers up three new collections.

To start, there is the Coeur Iconique Limited Edition, a trendy box with neon pop color combinations designed to appeal to Millennials. It comes with six Godiva hearts and is available in milk, dark and white chocolate variations.

Also in the spotlight are Godiva’s Sables, buttery Belgian biscuits in a range of international flavors: spicy ginger from Asia, buttery pecan from Central

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

America, dark chocolate from the African continent and almond speculoos from Belgium. As to be expected, each piece is dipped into smooth rich Belgian chocolate. There are three different monopacks available, including an exclusive Travel Retail Quattro Pack.

And if that’s not enough to entice the travelers out there, then there’s Mousse Meringue—hard chocolate shells each containing a refreshing filling with meringue. These delectable little bites come in six flavors: chocolate, praline, lemon, mandarin, strawberry and coffee.

Available for purchase are boxes with nine or 16 pieces.

Godiva will supplement all its new products with a series of high-profile in-store events as well as personalized merchandizing and fixtures. “Our fully dedicated travel retail team for the Americas will continue to work closely with our customers to grow the business, not just for Godiva but for the confectionery category as a whole,” says Diane Buchanan, Retail Region Manager Americas and Caribbean. “In particular, we will continue to focus on developing our Latin America and cruise line business in 2015, both of which still offer a great deal of opportunity.”

All told, this year’s Duty Free Show of the Americas promises to be a sweet success, at least if the exhibiting confectioners have their way.

Ferrero Golden Gallery is new to the Americas market

Special Report: Vodka

THE VODKA THAT TASTES LIKE VODKA.

DRINK WITH CARE. STOLICHNAYA® PREMIUM VODKA 40 % Alc./Vol. 100 % Russian Grain Neutral Spirits. © 2015 Spirits International B.V. All rights reserved.

STOLICHNAYA, STOLI and S Logos and their associated visual properties, are trademarks or registered trademarks of Spirits International B.V.

Feature Vodka Report p.159 Vodka News p.166 Vodka Spring Cocktails p.174

A clear

force

VODKA REPORT

Finlandia is the 10th largest spirit in the travel retail industry, thanks in part to BrownForman’s promotions and activations

Vodka continues to be a driving force for sales in travel retail Americas, going strong in North America and picking up speed in the south by

WENDY MORLEY

S

pirits industry press has not been especially kind to vodka in the past year. Word has been buzzing around about a slowdown in sales of regular-flavored vodka and about “flavor fatigue” as increasingly exotic vodka flavors have hit the market. But this slowdown is not apparent in the Americas, where the vodka subcategory is still growing, and for some companies well into the double digits. Flavors continue to perform well in travel retail, but the real story is in the more premium selections, and that is very good news for this industry.

More than ordinary The latest IWSR report ranks Brown-Forman’s Finlandia as the 10th largest spirit in this industry. Promotions and premiumization are both important aspects of the brand’s success. Tim Young, Marketing Director for Brown-Forman Travel Retail/India/Africa/Middle East, says the overwhelming purchasing trend in travel retail for both the company’s North American whiskeys and Finlandia is toward premium products.

“Finlandia, of course, benefits from this premiumization trend more than standard-priced vodkas.”

“We are very excited about a promotion theme Finlandia Vodka is currently running called ‘Life Less Ordinary,’” Young continues. “This brings our brand positioning to life and gives consumers a truly memorable experience.” To continue Finlandia’s development in the Americas and around the world, the company has kept a focus on promotional activity. Creating and executing sampling opportunities of Finlandia Vodka flavors has been an important part of these promotions. Brown-Forman also has a number of permanent Finlandia displays at various travel retail locations around the world. The company is always interested in exploring and developing new promotions and activations, and will continue to do so in the coming year.

With a continuous increase in international travelers keeping the travel retail industry strong, Brown-Forman sees Finlandia vodka as an important player. “There is a terrific amount of interest among today’s consumers to try new things and that includes cocktails,” says Young. “Some of this no doubt comes from popular culture—movies and television that feature cocktails. The interest in mixology is such that Brown-Forman Travel Retail created a portfolio promotion named ‘The Essential Collection,’ comprising all the spirits necessary for the premium at-home bar. Because of its mixability, Finlandia Vodka is a key component of this collection.” This interest in new cocktails and mixology makes Young very optimistic about sales in 2015. www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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VODKA REPORT

Bacardi’s Grey Goose VX brings this already super-premium vodka to a new innovative level

Night moves

Flying further beyond According to Bacardi’s Strategic Intention for Category Growth, vodka is the largest driver of spirits, with Grey Goose delivering two-thirds of the growth of super premium vodka—the largestgrowing category. Grey Goose VX caused a big splash when it was introduced at TFWA AP last year, and it has been making waves ever since. The addition of Cognac created from Grand Champagne cru in this expression adds smoothness and complexity to an already distinctive vodka. The “VX” in the name stands for “vodka exceptionelle” and is reminiscent of the cognac designations. Bacardi recommends that Grey Goose VX be served in a snifter, and that is how it was served in two major activations last fall at LAX in Los Angeles and LAS in Las Vegas.

In this promotion, brand ambassadors explained the unique story behind the expression as they served the sipping vodka in a unique fashion, wearing white gloves as they extracted the liquid from the elegant decanter, to emphasize its exclusivity.

Geoff Biggs, Regional Director Americas, Global Travel Retail, says, “This is a key region for Grey Goose as leader of the superpremium vodka category in both US domestic and travel retail markets.

This is a strategic channel to share our brand stories and introduce consumers to exciting innovations such as Grey Goose VX.”

From A to ZU In the coming year, Roust will place greater focus will be on its newest addition, ZU. “ZU is being well received by American and Canadian customers,” says Andrew Notcutt, Global Marketing Director Travel Retail. “As the bison grass-flavored vodka, it delivers unique credentials to grow the category. This is reflected in an impressive conversion to sales from sampling activations as consumers discover its aromatic taste.”

Activations for ZU will take place on the Canada-US border throughout the summer months as well as across the US, featuring life-sized Bison models in-store.

Distributed through Remy-Cointreau, ZU will be the company’s vodka focus at Orlando IAADFS. Meanwhile, Roust’s more traditional vodka Russian Standard has seen a consistent growth pattern throughout the Americas in 2014, especially in the US, Canada and Brazil. In keeping with the trend toward premiumization, the company’s biggest performance was with Russian Standard Platinum, the most premium expression. Russian Standard Gold, made with extracts of Siberian ginseng and a standout on shelves with its relief bottle design, performs well with new listings, and Original also demonstrated solid growth. The special limited edition St. Petersburg packaging has been well received by trade and consumers alike, as is the limited edition Enchanted Forest packaging of ZU.

ZU is being well received by American and Canadian customers, and will be Roust’s focus at IAADFS

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Stoli has found a big improvement in business in the Americas in 2014 over 2013 after the first full year of working with Chase International distribution.

North America is the leading travel retail market for the brand, and in this region the company is expecting strong growth in the coming year, 10% growth for Stoli Premium and a whopping 25% growth for elit by Stolichnaya. While this market may be the strongest, Global Duty Free & Travel Retail Director Jean-Philippe Aucher says sales are also strong and steadily growing in Latin America, especially Brazil and Mexico. “We now have the structure and resources we need to drive the business in travel retail in the Americas, and we continue to have ambitious forecasts for growth this year.” Stoli is forecasting 25% growth in Brazil, Argentina and Uruguay, fueled by high profile promotions and tastings.

The cruise industry is also very strong for the company. Stoli is a leading brand on cruise lines in the US and Caribbean and growing fast in Europe. “This is another area where we see sustained growth in coming years,” says Aucher.

Helping to grow its business has been Stoli’s Night Editions. The first edition, the original glow-in-the-dark bottle, was so incredibly successful that the launch of Stoli Night Edition 2 resulted in increased volumes and sales targets. “We’ve seen excellent results in Stoli’s Night Editions have been incredibly successful, North America and demonstrating that travelers do through duty free in respond to innovative initiatives Brazil. This year we will also offer Night Edition through duty free in Argentina and Uruguay. It goes to prove that although the vodka market is very competitive, travelers do respond

and trade marketing activities. For the second year, Nemiroff International has teamed up with Harley Davidson and Playboy as a partner in the Miss Harley Davidson show in Ukraine, helping to choose 12 models for the Nemiroff-Harley Davidson-Playboy calendar. Nemiroff Vodka is planning further partnership with international brands.

On display at IAADFS will be the final installment of the exclusive elit pristine water series: the Andean edition

Absolut activations

to new initiatives that are innovative and different. The new Night Edition rolled out globally this January and so it is a little early for results, but we are extremely confident that this version will be every bit as successful as the first one, if not more so,” says Aucher.

This new Night Edition, which is cold activated to show images of the night, will be on display at IAADFS, as will the final installment of the exclusive elit pristine water series: the Andean edition.

Aucher is confident that these launches in addition to fact that Stoli now has the structure and resources necessary to drive the business in the Americas travel retail will mean another very successful year.

more than offset this loss.

The company announced in 2014 that it would be restyling its products, and this is one of its many steps toward leadership in the spirits market. Nemiroff Vodka has a lofty goal of 25% increase in sales volume in 2015 over 2014, and it intends to bring this about with strong consumer

An inspired decision, Pernod Ricard’s release of Absolut Warhol last year was successful not only in terms of sales but also in terms of bringing activations to another level. The bottle and the concept behind it opened the door to creative, imaginative activations and tastings, and these were held in many airports globally, including the Americas.

Some of these in-airport experiences paid tribute to Andy Warhol’s silkscreen design process and created truly unique pop art by turning travelers into art objects using their own selfies.

The technology installed at each of these activations—located at key airports around the world—identified the individual’s facial expressions and movements and allowed them to create their own Warhol-style image. Even the activations without this technology were fun and eye catching. These activations ran until January, 2015, and were a great way to show the dramatic bottle to collectors and the average traveler alike.

In the coming year, Pernod Ricard will

Nemiroff has found recently that its premium sales have dropped somewhat, but the sales of its standard-priced vodkas have increased greatly, with total sales volume up 18%

Provocative promotion A challenging year economically did not result in a negative year for Nemiroff Vodka, in fact quite the opposite. This was an especially successful year for the Ukrainian vodka brand. Duty free and travel retail sales volumes were up 18% in 2014 over 2013, supported by strong partnerships and activations. Unlike other brands, however, Nemiroff Vodka has seen its premium sales drop 6%, though the 28% increase in its standard brands

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VODKA REPORT

upgrade its classic flavors, using exclusively natural ingredients, citing “flavor fatigue” for its decision. “The new flavors and general renewal of the brand has brought more dynamism to an already dynamic brand,” says Nadège Perrot, Poliakov Brand Manager. “We are especially proud of Poliakov Lemon, which won a Gold medal at the Spirits Business Vodka Masters 2014.”

Even the smaller Absolut Warhol activations were eye catching and creative

launch a limited edition Absolut Honey, to be available exclusively in travel retail beginning in April 2015. Also in April, the company will launch an Absolut Elyx pop-up store in Jet Blue’s terminal 5 in JFK International Airport and an instore boutique in International Shoppes Duty Free store located in American Airlines Terminal 8, again at JFK.

Flavor file SKYY’s the limit Business was very good for Gruppo Campari in 2014 with the company’s core brands, including SKYY. In global travel retail, the US market was one of the vodka’s top three, where the brand achieved strong single-digit growth. Andy Holmes, Gruppo Campari Global Travel Retail Director, says, “The US market has its challenges in terms of sheer numbers of competitors, however we’re continuing to make steady progress there, choosing which areas we know that together with our partners we can win—which is good news.”

Gruppo Campari held a variety of SKYY promotions throughout the year, including some that offer those who purchase SKYY an opportunity to win exclusive branded gifts, including a quality set of Monster headphones. This successful mechanic will continue in 2015 and new gifts will be offered.

With talk of vodka flavors losing steam, Campari’s SKYY infusion range has helped the growth of the SKYY brand, particularly in the Middle East, where these now represent about 20-25% of the total brand volume sold. The US remains an important brand driver for SKYY’s infusions; the company’s offer of one or two new flavor expressions every year is well received by both the travel retailers and their consumers. The company’s top flavors are Citrus, Raspberry and Passion Fruit, though Holmes says all of the SKYY flavors show healthy growth.

At IAADFS, Gruppo Campari will showcase all its GTR brands, but with special attention to the top performers in the Americas, including SKYY, with the goal to repeat 2014’s growth over the coming year. “Importantly, our geographical reach and weight increased again last year,” says Holmes. “Our share of core brands to total increased to where we wanted it to be and we’re working hard with all the key global duty free accounts to ensure this growth continues.”

Refining to grow Poliakov Vodka, one of the world’s topselling vodka brands at 1.3 million cases per year and sold in 50 countries around the world, has been renewed with a packaging redesign and a revamped flavour range, which was unveiled at TFWA WE in Cannes 2014. Instead of creating an ever-multiplying range, Poliakov chose to SKYY Citrus is one of the vodka brand’s top flavors

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VODKA REPORT

Instead of releasing new flavors, Poliakov vodka has chosen to upgrade its classic flavors as it revamped its packaging

The company has achieved the challenge it set for itself to increase the number of countries carrying the range, and new demands are growing around the world. Poliakov has been on a considerable growth trend since its launch, and is still today one of the world’s fastest growing vodka brands.

While the vodka’s main strongholds are in Europe, Oceania and the Middle East, it is available in the Americas and is looking for greater expansion in the region.

Perrot has big expectations for sales in 2015: “Poliakov has many strengths: a large and varied range to answer all demands, a unique and inspiring strategy focusing on extreme cold and infinite space, and a growing presence on the digital network.” The Poliakov flavor range includes Mandarin, Lemon, Green Apple, Cranberry, Peach, Caramel and Strawberry.

Cautiously optimistic When Waldemar Behn acquired Danzka Vodka in 2013, the brand already offered a range of flavors. While Danzka does not have the massive range of flavors that other companies have, its flavors have been important to the brand’s success, and so Danzka just recently launched its newest flavor in 10 years, Danzka Apple.

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Torben Vedel Andersen, Global Sales Director of Waldemar Behn, says the company did not launch this new flavor for any other reason than that there was a demand. “We recognized a need for this flavor,” says Andersen, adding that this is perfect for an Appletini with its fresh flavors of Delicious and Granny Smith apples.

Danzka Apple has been on shelves only since the beginning of the year and so it’s too early to determine sales, but in general Danzka is doing well in travel retail. “There were some hiccups in Eastern Europe with the uncertainties there, but we have an expanded customer base in 2014 with continued global expansion,” says Andersen. For 2015, he has “controlled optimism. We see success but also unrest in certain parts of the world, so we are careful not to be overly optimistic.”

The company recently announced a major hire in Ricardo “Tito” Gonzalez as regional director Latin America and Caribbean, which will undoubtedly impact the brand’s future in travel retail in the Americas.

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

Danzka Apple, the company’s newest flavor in 10 years, will be showcased at IAADFS

VODKA NEWS

Kosher at Passover Moses Vodka is the first ultra premium vodka that’s certified Kosher throughout the entire year, including at Pesasch (Passover). But this is only one of the ways in which this extraordinarily smooth vodka distinguishes itself.

In recent years, Kosher products have been surging in popularity with Jews and non-Jews alike. Some in the food and beverage industry believe Kosher is the next big food trend as consumers become ever more concerned about unknown ingredients.

Moses vodka is an optimal example of that. It is made from only the purest and freshest well water in Europe. The vodka is organic, and is also vegan. Vodka is traditionally made using animal fat. Although this is often not the case anymore, animal products are still sometimes used in packaging or production, but not Moses.

What really makes this vodka different is that it is distilled from sugar cane. This makes it Kosher all year long because the spirit is not distilled from a grain or a food considered “kitniot” such as corn, millet or rice, which most Jews consider not Kosher at Passover. Using sugar cane also helps preserve the fresh well water’s natural, pure taste.

Moses has won multiple awards for its original superpremium vodka, and now it is winning awards for its first flavor, created using all natural ingredients by adding an infusion of dates. This delicious Moses Date vodka is not only unlike any other being offered, it is uniquely appropriate for consuming with traditional Passover foods.

Kosher food is not so difficult to obtain, but Kosher alcohol can be. Moses Vodka offers two choices perfect for any occasion during the year

Tofka vodka is infused with liquid caramel toffee

World of Patria is set to shake up Orlando with Tofka World of Patria International (WOPI) has returned to the IAADFS Show (booth 1516) to introduce Tofka Toffee Vodka, which the company describes as a “new theatrical drinking experience.”

This premium and luxurious drink, produced by Babco, UK, will be offered to travel retail exclusively by WOPI. While this drink is not new, having been a favourite in the French resort of Courchevel as an après-ski drink since 1850, before now it has not been brought like world.

Tofka Vodka is infused with liquid caramel toffee that appears to be swirling liquid gold when shaken, highlighting the premium nature of the liquid.

The versatile nature of Tofka allows it to be served over ice, as a shot, mixed into coffee or served over ice cream. “Tofka is not just another flavored vodka,” says WOPI Managing Director Rob Nichols, “but a drink experience in its own right. Travelers are always looking for something new and different and this most definitely is it, capturing the consumer’s eye and seducing the taste buds.”

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VODKA NEWS

Edrington’s Ryan Hill took on the Antarctic to aid snow leopard charity Ryan Hill, Edrington’s Managing Director of Asia Travel Retail, last year competed in The Last Desert Challenge in Antarctica – the fourth and final 250km run in the 4 Deserts Challenge.

Hill participated in the run, which will took place from November 1st to 11th, 2014, in order to raise awareness and funds for The Snow Leopard Trust, a charitable organization that aims to safeguard the future of one of the planet’s most endangered species, the snow leopard.

Hill’s inspiration for his choice of charity was the recent acquisition of Snow Leopard Vodka by The Edrington Group. Snow Leopard Vodka donates 15% of its profits to conservation projects in countries including Mongolia, China, India and Kyrgyzstan. To date, US$100,000 has been raised for snow leopard conservation, with the long-term goal of selling over 150,000 cases of Snow Leopard vodka annually, generating US$1 million for The Snow Leopard Trust.

Hill’s fundraising target was £25,000. He asked for support from the travel retail industry. They responded, donating £20,000 so far.

“The Snow Leopard Trust really makes a huge difference not only to the plight of the snow leopard but also to improve the livelihood of the communities that live alongside it, where people are often surviving on less than US$2 a day,” he says.“The community-based conservation projects help local businesses, protect farmers’ livelihoods and provide education as an integrated solution to discourage poaching of the snow leopard. I really think this is an incredibly worthwhile cause. I would ask as many people as possible to dig deeply and make a donation through my fundraising campaign.”

For details, visit www.run4snowleopard.com.

Royal Dragon Vodka seeks to roar in travel retail Dragon Spirits Ltd is aiming to expand its duty free presence with Royal Dragon Vodka, one of the fastest-growing vodka brands worldwide. This vodka is listed at DFS in Hong Kong International Airport and will soon be Dubai. It has sold over 3,700 bottles (oneliter and 1.5-liter sizes) this year alone.

Royal Dragon Vodka features distinctive bottle and packaging designs aimed at the gift market. The gift boxes have a powerful LED light built into the base of the box that illuminates the handcrafted dragon and 23 carat gold leaves within the bottle. The brand’s awards include: Most Innovative Spirits Brand 2012-2013, awarded by the spirits industry in Asia; and the Cathay Pacific China Business Award 2013.

The vodka is currently distributed in 18 countries, and growing.

“We have enjoyed rapid growth in market share and brand recognition since our launch in March 2012,” says Founder & CEO Mr. Michel Morren. “Based on our overwhelming success thus far in the duty free industry, we believe now is the time to expand into the Americas.”

The vodka brand offers four lines, all five-times copper pot distilled from fine organic winter harvest rye: Elite: This premium vodka comes in a 700ml/750ml black matte bottle incorporating the Royal Dragon Vodka golden dragon print.

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Edringtonowned Snow Leopard Vodka donates 15% of its profits to conservation projects that aim to safeguard the endangered snow leopard

The luxurious hand-blown bottles, intricate gold design and opulent but tasteful embellishments speak to Royal Dragon Vodka’s exclusivity

Elite Flavors: Royal Dragon is introducing a Flavored Line that will encompass a wide variety of new and exotic flavour choices, incorporating the highest of standards when selecting exotic fruits, berries and beans.

Imperial: The hand-blown bottle features a sculpted dragon and contains vodka infused with 23 carat gold leaves from Switzerland.

The product is available in 700ml/750ml classic, one-liter, 1.5-liter magnum, three-liter Jeroboam and six-liter Methuselah bottles.

Emperor 888 Limited Edition: This 750ml hand-blown bottle features a dragon in a golden cage. It has an 18 carat solid gold cap with 35 certified brilliant-cut diamonds, and contains 23 carat gold leaves. The product is presented in a luxury box.

iceberg.ca

Please Chill Responsibly

VODKA NEWS

Award-winning U’Luvka eyes Americas for expansion Polish vodka brand U’Luvka has been doing very well in travel retail throughout Europe and the Middle East, and it has now broken into the Americas at the Canada-US land border. According to Nick Kirkpatrick, Co-founder & Operations Director of the brand, this region will be a focus for the company.

U’Luvka aims to reconjure the spirit of vodka created by a famous alchemist at the court of King Sigismund III of Poland in the late 16th century. Its “legless” glasses, which are included in gift sets, are faithful copies of the original vodka drinking glasses from the Polish Royal Court of 1606. The strikingly different bottle catches the eye of virtually every passerby.

The brand’s sculptural glass bottle was inspired by ancient alchemical distillation vessels. It represents a physical representation of the balance between male and female, with the rounded base representing female and the elegant neck representing male. The vodka is made from fine Polish rye, wheat and barley and distilled three times, seeking to ensure strength, purity and smoothness while retaining character, body and depth of flavour.

“Like a great cocktail that balances acid, sugar and alcohol, U’Luvka’s recipe of wheat, barley and rye has a wonderfully assertive flavor that belies the common notion that vodka has no taste,” says Kirkpatrick. Indeed, U’Luvka Vodka has won over 60 international awards, seven times for Best Super Premium Vodka in the World and seven times for best packaging in the last two years.

U’luvka’s striking bottle lends itself to interesting events like this one the company had with Etihad Airways

Tito Gonzalez joins Danzka Vodka to head Latin America business Experienced executive Tito Gonzalez will focus on growing Danzka Vodka in Latin America and Caribbean

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Ricardo “Tito” Gonzalez has been appointed Regional Director Latin America and Caribbean of German spirits company Waldemar Behn GmbH. His appointment, effective March 1, further demonstrates the commitment of the family-owned spirits company to the Americas region. In his new position, Gonzalez will be focusing on growing Danzka Vodka.

Gonzalez has an extensive background in the region, having worked as an Area Manager at the Cruzan Rum Distillery, Area Manager Latin America for the V&S Sprits Company (Absolut) and Regional Director Latin America for Imperial Brands, overseeing the duty paid, duty free and travel retail business. His most recent position was as Category Director for Grupo Wisa in Panama.

Gonzalez will be working with the company’s regional distributors in Latin America and has said that the Mercosur market would be a first priority.

Waldemar Behn will be exhibiting at the IAADFS Show (booth 223), where it will introduce its new Danzka Vodka Apple to the Americas market, following a successful launch at the TFWA World Exhibition. Danka Vodka Apple is the brand’s first flavor expansion in ten years. The 40%/80 proof apple vodka features the taste of crisp green apples, and has already been awarded a gold medal in “TheFiftyBest Best Vodka awards” last September.

“We are very excited about the development of our business in the Americas in 2015, both with the addition of Tito to our team and the launch of Danzka Vodka Apple,” said Global Sales Director Torben Vedel Andersen.

VODKA SPRING COCKTAILS

Spring

Fever

It’s spring, and just as the heavy layers of clothing are getting lighter, so too are the tastes of the cocktails. Vodka is the perfect choice for a spring cocktail, so here are a few recipes from some of the duty free industry’s favorite vodka brands.

K Degree 1 part Poliakov Vodka 1 part freshly squeezed lemon juice 1 tsp mint syrup, or to taste Crushed ice METHOD Place crushed ice in a glass.

Add vodka and lemon juice, then drizzle mint syrup on top.

Can combine by stirring together if desired.

French Strawberry Mo-Tito 1-2 fresh strawberries 1 mint leaf 1 basil leaf 1 ½ oz Tito’s Handmade Vodka ¾ oz simple syrup ¾ oz fresh lime juice ½ oz St. Germain Liqueur Club soda METHOD Muddle fresh strawberries, and mint and basil leaves in the bottom of a mixing glass.

Add Tito’s Handmade Vodka, simple syrup, lime juice and St. Germain. Shake to combine, and pour into a Collins glass over fresh ice. Top with club soda and enjoy!

The Evergreen

Classic Finlandia Martini 2 oz Finlandia Vodka 1 dash Dry Vermouth Lemon Twist METHOD Place Finlandia Vodka and vermouth over ice in a cocktail shaker. Stir and strain into a chilled martini glass. Add a lemon twist for garnish.

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Makes 4 cocktails 8 oz Iceberg Vodka or Cucumber IceFusion 1 English cucumber ½ cup loosely packed fresh mint 2 tsp granulated sugar 2 Tbsp fresh lime juice 2 oz orange-flavored liqueur Soda water METHOD Cut four spears of the cucumber for garnish. Peel the remainder and quarter lengthwise. Scrape out seeds with a spoon and discard. Coarsely chop cucumber, then purée it in a food processor until smooth. Strain.

Muddle fresh mint for 10 seconds, then add along with sugar and lime juice to a cocktail shaker. Add ice to four glasses, and then shake mixture and strain into glasses.

Fill with soda. Garnish with cucumber spears.

™

/cuervo

COMPANY NEWS: BYEJOE

Happy

contradictions byejoe is at once modern and ancient, eastern and western, but whatever its origins, this spirit is finding adoring fans around the globe by

WENDY MORLEY

As the first baijiu infusion in the world, byejoe dragon fire incorporates the exotic flavors of dragon fruit, lychee and Szechuan chilies, making this drink an inspired choice

Unlike China’s traditional baijiu, byejoe’s modern taste and design appeal to those in the coveted 25-35-year age range

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T

he most commonly consumed alcoholic beverage in the world is one most people have never heard of.

According to International Wine & Spirit Research (IWSR) figures, over 11 billion liters of baiju were consumed in 2012, making up more than one-third of all alcohol consumption worldwide. This spirit, however, is rarely encountered outside of China.

While China is considered a brown spirits market, baijiu, a white spirit, greatly outsells all foreign types of alcohol combined in that country. As tequila is the drink of Mexico, vodka the drink of Russia and whisky the drink of Scotland, baijiu is the drink of China, but on a much larger scale. This spirit is present from the dinner table to celebrations, and is an important part of closing a Chinese business deal. As China has risen as an international trade partner, it’s been surmised that one day baijiu would enter the western world’s drink menus, but until now that has not occurred. Enter byejoe, the brand that turned the classic Chinese drink into a western phenomenon.

Baijiu is most commonly distilled from any combination of sorghum, wheat, rice or corn but can also be produced from other grains, creating baijius that taste quite different from one another. The three main taste categories of this spirit are strong, saucy and light. As might be expected, the light category is more appealing to the western palate, and that is the category byejoe fits in. byejoe is distilled from 100% red sorghum and aged for five years in China. It is then brought to the US in small batches, where it is further filtered and refined using patented American technology. “The result is an ultra premium spirit,” says Alberto Fariñez, byejoe Duty Free & International Markets Manager. “It is possibly the cleanest, purest baijiu on the planet.” Byejoe is certified gluten free and Kosher, and is becoming a real hit with mixologists.

The reaction from Chinese and westerners alike is one of surprise, says Fariñez. “The Chinese are surprised by the smoothness and modernity whereas westerners are surprised and excited by the unfamiliar and exotic flavor.” When comparing demographics between the Chinese consumer of baijiu and the western consumer of byejoe, however, great differences emerge. Close to 100% of baijiu is consumed

by Chinese and only 0.1% by non-Chinese. byejoe is split evenly between Chinese and westerners. Greater than 70% of Chinese baijiu consumers are men, whereas women consume 55% of byejoe. Baijiu is a drink for older generations, with the majority of drinkers over 35 years, whereas byejoe is enjoyed mainly by those in the 25- to 35-year range. Also, byejoe is the first baijiu to introduce flavor infusions with its sweet and spicy dragon fire, made with dragon fruit, lychee and Szechuan hot chilies.

Winner of 30 medals including Triple Gold in addition to “2014 China Distillery of the Year” in the NY International Spirits Competition, as well as “Hottest New Brand of 2014,” byejoe stands out for its smooth purity and its award-winning design. It is the number-one-selling baijiu in America and is making inroads in Canada, Latin America, Hong Kong and other Asian gateways. The spirit, at once modern and ancient, has placements with DFS at LAX and SFO. “We believe byejoe is the best priced, most modern baijiu,” says Fariñez.

“A perfect product for the travel retail consumer.”

LIQUEUR REPORT

Sweet success A staple of home bars everywhere, liqueurs are heating up in duty free with strong sales growth, new releases and novel strategies to capture the travel retail shopper

T

Wild Turkey American Honey is a blend of pure honey and Wild Turkey bourbon that delivers an unmistakable kick with sweetness that ends in a long, rich finish.

he liqueurs subcategory has one major strength in comparison to other duty free spirits subcategories—it’s relative consistency. While consumer demand for other types of liquor waxes and wanes depending on the trends of the day, at-home entertainers will always require liqueurs to make any number of staple cocktails.

Below Americas Duty Free speaks with four companies, some with relatively new additions to the market and others with tried and true favorites, to get the latest news on what’s happening in liqueurs in 2015.

Wild and sweet

Gruppo Campari’s entire global travel retail portfolio enjoyed success in 2014, including the Wild Turkey American Honey variant. In fact, according to Andrew Holmes, Global Travel Retail Director at Campari, the release grew in double digits in Americas travel retail, albeit from a comparatively low, but not insignificant, base.

Wild Turkey American Honey is a blend of pure honey and Wild Turkey bourbon that delivers an unmistakable kick with sweetness that ends in a long, rich finish. Although it was available at the distillery and limited locations for years, the product wasn’t released to the public at large until 2006.

American Honey has won numerous accolades since its launch, including the Hot Brand Award for 2012 and 2013 by Impact; the Hot Prospect Brand Award for 2009, 2010 and 2011, also by Impact; a Best in Class Distinction at the World Whiskey Awards in 2010; and an Icons of Whiskey Award in 2009.

In addition to the US, Australia is a key domestic market for Wild Turkey American Honey. Holmes tells us that Campari will continue driving the brand in both countries over 2015, and that American Honey will be present at the company’s stand at this year’s IAADFS show in Orlando.

“Importantly for us, Wild Turkey American Honey isn’t cannibalizing sales of Wild Turkey bourbon,” Holmes explains.

“In fact, Wild Turkey American Honey is a great entry point into the brand for many consumers.”

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by

RYAN WHITE

Building brands, building relationships For Licor 43, the key to success has been getting liquid to lips.

Antony Kime, Director Global Duty Free at Diego Zamora Group, tells us that 2014 was a good year for the brand in travel retail on the back of a focus on building in-store presence through tastings at permanent or mobile bars throughout the Americas. Kime credits the company’s long-term partnerships with trusted retailers in the US, Mexico and Brazil—and outside of the region in Spain and Germany—for making the activations work. “We’re going to be continuing this focused investment in 2015 as we expand into more markets,” Kime says.

And adding a little more shelf standout is a new bottle that will be rolled out in April across duty free. “We’ve received a lot of retailer and distributor feedback on the new bottle and we expect it to be on the shelf in duty free without delay once it’s released,” Kime notes.

The new-look Licor 43, which was debuted in Cannes at the TFWA WE last October, features a taller and more sophisticated bottle that enhances visual impact and strongly conveys the brand’s Spanish heritage.

Kime says that in terms of the future, “opportunity” is the key buzzword. “Despite the growth story, the brand is still only available in about 50% of markets in the Americas, so there’s plenty to look forward to in terms of growth in the Americas,” he says.

And along with the new Licor 43 bottle, Diego Zamora has expanded the work it does with Edrington Webb Travel Retail Americas. To date the distributor has handled Diego Zamora’s Caribbean and US/ Mexico duty free accounts.

The scope now grows to include all South American airports as well.

“We value all of our relationships with distributors and retailers, and always aim to make them long term,” The new-look Licor 43, which was debuted Kime concludes. “We always in Cannes at the TFWA WE last October, give 100% when it comes to features a taller and more sophisticated bottle that enhances visual impact our partnerships.”

Patrón Citrónge Lime is an ultrapremium liqueur crafted from the highest quality Persian limes Patrón XO Cafe Incendio combines the spicy, distinctive flavor of Mexican arbol chile with the essence of Criollo chocolate, brought together with the taste of Patrón Silver tequila

Double trouble Patrón Spirits recently launched two new liqueurs to the delight of duty free shoppers everywhere. The first is a brand extension in the highly successful Patrón Citrónge liqueur line. New Patrón Citrónge Lime is an ultra-premium liqueur crafted from the highest quality Persian limes cultivated from the Mexican states of Veracruz, Michoacán and Colima.

“We originally developed Patrón Citrónge Orange liqueur to complement margaritas, and of course it’s still the ideal ingredient to prepare an authentic, high-quality margarita cocktail. But the versatility of this spirit is endless, and over the years bartenders and chefs have asked us to explore a lime flavor extension to widen the variety of cocktails and food recipes that are possible with this unique spirit. And that need has become even more compelling with the recent volatility of lime prices and availability,” says Ed Brown, President and CEO of Patrón Spirits International. “We’re very proud to add this innovative new lime liqueur to our growing portfolio of ultra premium spirits.”

Patrón has also launched Patrón XO Cafe Incendio, an innovative fiery-hot chile chocolate liqueur. Patrón XO Cafe Incendio combines the spicy, distinctive flavor of Mexican arbol chile with the rich, decadent essence of Criollo chocolate, brought together with the crisp, smooth taste of Patrón Silver tequila.

“Patrón XO Cafe Incendio is an incredibly versatile spirit.

Not only does it create interesting and inventive cocktails, just like the rest of the Patrón XO Cafe line it’s the perfect choice for celebratory occasions that call for an ultra-premium shot,” says Brown. “No other brand in the crowded shot market compares to the taste and quality of Patrón XO Cafe, and no other liqueur comes close to the powerfully spicy hot flavor of Patrón XO Cafe Incendio.”

Volume and visibility Ludovica Reina, Illva Saronno Travel Retail Manager EMEA, North America and Caribbean, tells us that popular liqueur Disaronno enjoyed a great 2014 in Caribbean markets, and in North American travel retail.

“Thanks to initiatives such as the Versace Limited Edition we saw sales grow by more than 40% in many markets,” she explains.

“With Starboard, which operates the retail duty free sales onboard cruise lines including RCCL, CCL, Costa and NCL, the Disaronno Versace Limited Edition outperformed the category by 50%.”

2015 is shaping up to be a busy year for the brand as well.

Disaronno Riserva, which was introduced last year at TFWA WE in Cannes, is expected to hit shelves in the coming months, and the company is currently in talks with a number of key travel retail players to list it. Additionally, Disaronno’s new Icon bottle will be revealed in autumn of this year. It will still be designed by a world renowned Italian fashion designer and, for the third year in a row, the project will support the Fashion for Development charity.

The company expects global growth of 10% for the duty free channel this year. “Our channel target is not only focused on volume though; during the last two years we have fine-tuned a strategy increasingly focused on visibility activities and have developed ad hoc projects such as Icon and Riserva, which communicate our sharp and innovative identity in this channel,” Reina says. “At the same time we are accelerating new listings and activities, especially in emerging airports and areas which are strategic to our current consumers and our newly targeted consumers such as the Chinese and Brazilians.

“In the Americas, we intend to maintain our double-digit growth rate in this area,” she adds. “The Americas remains a very strategically important region for Disaronno.”

Disaronno performed particularly well last year in Caribbean markets and North American travel retail

Disaronno Riserva, which was introduced last year at TFWA WE in Cannes, is expected to hit shelves in the coming months

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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WHISKY REPORT

Into the

GREAT WIDE

OPEN

From single malts and blends to bourbons, the whisk(e)y category is full of choice—and potential for future growth by

RYAN WHITE

A

mericas Duty Free speaks with five big names in the world of whisk(e)y and finds that while concentrations vary, all can agree on the strong potential the category has for continued growth.

Developing relationships, growing brands ACTIUM, agent and distributor of whisky brands Whyte & Mackay, John Barr, Jura and The Dalmore in the Americas, notes that the brands performed well in the region last year, with overall growth of 10%. More specifically, blended whiskies John Barr and Whyte & Mackay were up 3%, while Jura and The Dalmore were up 13% given the growing popularity of the malts subcategory.

Besides gaining traction with existing clients, Jura and The Dalmore made progress with a number of new listings in 2014, including at DFA Latin America and Caribbean; Dufry in Argentina and Uruguay; International Shoppes; London Supply; Carisam; and Imas Costa Rica. The visibility that duty free provides often helps brands in the domestic market. Daniel Brás, Director, Beverage Divistion at ACTIUM. notes that this has been the case with their beverage offerings, mainly in Uruguay and Mexico with The Dalmore and Jura “We are confident that 2015 will be a great year for ACTIUM and for the Whyte & Mackay brands in the region, especially our malt brands The Dalmore and Jura. We will have the Sales of Jura and The Dalmore opportunity to consolidate our were up 13% for ACTIUM in 2014 180

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

Bacardi has invested heavily in research into consumer behavior in order to understand the potential of the whisky subcategory

business with key players with whom we have been establishing solid relationships, to develop promising businesses with new distributors in key markets such as Mexico and Brazil, and to substantially grow the recently obtained duty free listings across the region,” says Brás.

Strong ambition Geoff Biggs, Regional Director Global Travel Retail Americas at Bacardi Global Travel Retail, characterizes the company as a “sleeping giant” in whisky. “We have strong ambition, supported by significant aged inventory, growth capacity and market leading shopper research investment,” he explains.

“In the Americas Travel Retail channel we continue to see growing demand from US consumers seeking aged discovery malts,” Biggs continues. “Those key retailers who have shared our vision and supported Aberfeldy, Glen Deveron and Craigellachie are seeing sales that now match some of the more established mainstream single malt brands. There’s clear evidence that age still matters and that it is a key category driver. The Bacardi single malts range provides an excellent win-win opportunity: category sales growth opportunity for retailers while opening up genuine excitement for malts connoisseurs and collectors with a choice of previously undiscovered—and now highly rated— quality single malts.”

Of course, high-end whiskies are particularly popular in travel retail, and Bacardi has proven that it can compete with the best of the best. Late last year, an expression from ultra-premium Scotch brand Aberfeldy sold out in less than three hours at the the prestigious Masters of Spirits event, organized by retailer DFS in Singapore. Aberfeldy Gold of Pitilie 28 year old sold for US$4,000 a bottle, and all eight bottlings were snapped up by collectors in a matter of hours. The liquid was drawn from a single vintage cask and what was on showcase at the event represents the only liquid from that specific cask that will ever be released.

Of malts and brands such as Aberfeldy, Biggs notes that over the last two years Bacardi has heavily invested in shopper and

Morrison Bowmore will be a focus for Beam Suntory in the Americas

consumer research to understand the subcategory’s growth potential. “We know that many shoppers are moving into the second stage of luxury, wanting lesser-known brands with strong quality cues for their whisky choices. Discovery malts are growing twice as fast as mainstream. We estimate that this year half of the scotch growth will come from malts, and particularly discovery malts.”

Peated malts a growth opportunity Beam Suntory Americas Travel Retail Director José Aponte tells Americas Duty Free that Scotch is a “major focus and a huge opportunity for Beam Suntory going forward.” He notes that following the merger of the two spirits giants, the company now has one of the broadest world whisky portfolios. As a result, he says, “there has been a marked change in terms of focus for our whisky business.”

Owning both Laphroaig and Bowmore, Beam Suntory is now by far the number one supplier of Islay malts, and given the importance of peated malts this is a very significant development. “Malts are performing better than Scotch overall, but peated malts are the fastest growing of the malts, contributing about half of total growth,” Aponte says.

For the Americas specifically, Aponte notes that the recently added Morrison Bowmore brand will be a focus. He expects the brand, along with Auchentoshan and Laphroaig, to be the growth engines in the malts subcategory for Beam Suntory.

In the foreseeable future, Beam Suntory expects malts—and specifically peated malts—to continue growing. “Given the strength of our portfolio we aim to establish ourselves as the world whisky supplier of choice and establish a strong foothold on the malt and peated malt category,” Aponte concludes.

The art of blending MacDuff International’s latest releases, Lauder’s Ruby Cask Finish and Lauder’s Sherry Edition, received positive feedback late last year when they were premiered at TFWA WE in Cannes.

“The response to these, the first two expressions in our ‘Art of Blending’ range, was very good,” says John Scott, Sales Director at MacDuff.

Lauder’s Sherry Edition draws its amber hue and sweet palate from its time maturing in seasoned Oloroso Sherry casks. The malt and grain whiskies that make up the blend are initially aged in charred bourbon casks. These individual whiskies are combined to form the blend and then returned for a second time to mature further in Oloroso sherry casks.

Lauder’s Ruby Cask Finish is presented in the traditional Lauder’s “4-pinch” bottle with a high-quality gift carton featuring the image of a port wine cellar. The whisky has a slightly reddish hue which it has taken from its time maturing in seasoned Ruby Port casks carefully selected by the master blender. The malt and grain whiskies that make up the blend are initially aged in charred bourbon casks. These individual whiskies are combined to form the blend and then returned for a second time to mature further in Ruby Port casks.

Lauder’s Sherry Edition and Lauder’s Ruby Cask Finish, the first two expressions in the Art of Blending range

In terms of what 2015 holds for MacDuff International, Scott notes that the company will be focusing on regionally targeted promotions for the products. “We’re also currently developing a third Lauder’s expression, called Madeira, which will be a big focus,” he adds.

Premiumization in bourbons While malts have captured the attention of shoppers in duty free, bourbon is still on a huge upward swing, as Andrew Holmes, Global Travel Retail Director at Gruppo Campari, tells us. Sales of Campari-owned Wild Turkey grew by over 20% in 2014 in Americas duty free (including cruise), while value grew more than double the volume.

“We saw real growth in two areas, the first being the premium references of Wild Turkey—such as Rare Breed, 13 year old and Kentucky Spirit—and the American Honey franchise, which saw strong double-digit growth, albeit from a lower, yet not insignificant, base,” Holmes explains. “I’m really pleased with the performance we’ve achieved in 2014.”

As mentioned, premiumization is a trend that Holmes sees as important to the brand’s growth in duty free. “Shoppers are looking more and more for unique, rare and aged expressions, especially on brown spirits,” he says. “Given the strong gifting motivation we see that this effect is more noticeable in global travel retail, and seeing value growing faster than volume is not news anymore. In parallel and very much related, we can see consumers are craving the genuine and rich stories behind the liquid.”

Indeed, Campari has built a portfolio of brands that positions it to satisfy those consumer desires, and Wild Turkey is no exception. Very recently the brand launched Wild Turkey Diamond Anniversary, celebrating Master Distiller Jimmy Russell’s six decades on the brand.

“It is great to see that the consumer is not indifferent to such a story; the amount of buzz it has created is phenomenal,” Holmes says.

Wild Turkey Bourbon remains on a huge upward swing, with especially strong markets in the US and Australia

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SPIRITS: EWTRA

Edrington and WEBB brands are all prestigious – joined together, they make a formidable range

A Consolidated

Future by

WENDY MORLEY

After years of working together in the Caribbean, Edrington and WEBB are taking on the travel retail channel in the Americas

I

n August of 2014, World Equity Brand Builders (WEBB) and Edrington announced that they would soon form a joint venture, and on January 16, 2015 that partnership was born. WEBB had already been Edrington’s distributor in the Caribbean for over four years, and the two companies had been sharing a large, bright new office space in Miami’s fashionable Brickell neighborhood for over a year. The new entity, Edrington WEBB Travel Retail Americas (EWTRA), will market and distribute Edrington’s brands as well as WEBB’s current portfolio of brands in travel retail including airports, border stores and cruise lines “from Canada to Tierra del Fuego,” says Juan Gentile, Area Director Latin America and Duty Free Americas at Edrington. This 50-50 partnership will replace Edrington’s former agreement with Rémy Cointreau Travel Retail Americas, which ended January 15, 2015.

Impressive portfolio

John Soden, VP Strategy & Development at Edrington and Ken Pfeiffer, CFO, Edrington WEBB Travel Retail Americas join Andy Consuegra and Juan Gentile

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Edrington’s portfolio includes some of the world’s best-known Scotch whiskies including The Macallan, Highland Park, The Famous Grouse and Cutty Sark, along with Brugal rum and Snow Leopard vodka. WEBB represents a number of impressive international brands including Tito’s Handmade Vodka, Disaronno, Armand de Brignac, Licor 43, The Glenrothes and Tia Maria, plus wines including Cupcake Vineyards, Ramon Bilbao, Luc Belaire and Mionetto.

LIMITED EDITION

SPIRITS: EWTRA

In recent years, The Edrington Group has been taking control of its distribution networks across the globe, establishing new sales, marketing and distribution companies in Southeast Asia, with the creation of Edrington Singapore Pte Ltd; in the MENA region in a joint venture with FIX Wines and Spirits to create Edrington FIX; and in the domestic US market, creating Edrington USA, all in 2013.

These business decisions have all been made in an effort to give the company greater control over hands-on, customer-focused distribution at the store level, and the creation of EWTRA is no exception.

Over the past few years of working together, both companies have developed a very strong relationship, built on shared values, experience and the achievement of outstanding sales results and marketing activations across the region. “Andy Consuegra, President of WEBB, has a very good track record in the Caribbean,” says Gentile, “he brings a lot of expertise to the table. He’s great at putting together solid, professional marketing and is excellent at creating and building brands.”

The staff of WEBB and EWTRA celebrate the joint venture in the large bright offices in Miami

Nothing negative Gentile is also quick to praise Rémy Cointreau, which he says has done a very good job for Edrington.

He explains that this business decision did not come about because of any issues with the company’s former distributor. “Rémy did a great job,” he says.

“We just wanted to be closer to the operators. Additionally, we wanted to form cohesive and consistent marketing that is not limited by geography.” Because Edrington’s brands had been represented by different distributors in different regions, Gentile found it a challenge to keep consistent in brand marketing across all retailers, and even with the same retailer in different locations.

Operators will see no interruption in delivery during the transition from Rémy Cointreau to EWTRA, Gentile wants to make clear. “Customers will not notice a change in that respect,” he says. “But they will see that we have become more involved.

We will offer more support, and we will have the resources to provide more time and focus.”

Consuegra points out that a distinctive feature of WEBB has been its close relationship with operators over the years, and EWTRA will continue in that vein. The company has hired four people, and Consuegra intends that these new hires frequent actual stores throughout the Americas. “It’s important to visit head office,” says Consuegra, “but it’s also important to be in the stores. This move allows us to do that.” This spring EWTRA will get the chance to demonstrate that support with some exciting new releases including a new Brugal Papá Andrés and a new range of Macallan decanters.

The importance of travel retail Gentile says this joint venture underlines the importance of travel retail for Edrington. “The point of travel retail is to support and accelerate the domestic market,” Gentile says. He adds that his goal is to double total sales in the region over the next five

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Andy Consuegra and Juan Gentile have worked together for over four years in the Caribbean; now their partnership straddles the western hemisphere

years. “Travel retail will have to be strong to help facilitate that growth,” he says. Currently, travel retail makes up about 10% of Edrington’s sales globally.

For his part, Consuegra has demonstrated the ability to build strategic partnerships, working with increasingly sophisticated brands through the years. He has definitively reached the stage where partnering on this scale with a global company like Edrington will help fulfill his vision of growing his distribution company through Latin America. “To be relevant you must have scale,” he says. “You need scale to have people calling in stores in Toronto, Vancouver, Santiago and São Paulo.” With this new joint venture, EWTRA definitely has scale.

According to Consuegra, EWTRA will expend much of its focus and energy at the store level, in partnership with the travel retail operators, to deliver outstanding brand presence and execution to the traveling consumer. The company has big goals to bring world-class activation and staff training along with its great brands. “We offer commitment, experience, brands, great stories and trainer differentiation,” says Gentile. “I have great expectations for our long-term partnership.

LIMITED EDITION

BEAM SUNTORY

Heavy hitter

Beam Suntory’s bourbon portfolio meets the needs of a wide variety of consumer profiles while at the same time providing ample room for continued growth by

RYAN WHITE

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mericas Duty Free recently had the opportunity to sit down with José Aponte, Americas Travel Retail Director for Beam Suntory, to discuss both the company’s business last year and plans to continue growing in 2015. To frame the discussion, Aponte noted that bourbon sales in the Americas travel retail market have generally grown for the last decade or more, and in the last few years that growth has accelerated.

“Bourbon sales in Americas duty free continued to grow very well last year,” Aponte explains. “Bourbon is the fastest growing category and showed a very strong performance. From 2003 to 2010 category sales grew from 3 to 5% each year, but the last couple of years we have seen 7 to 8% growth in the US, according to IWSR data.”

Of course, it’s important to keep pace with overall category growth, and Beam 186

Suntory has seen its bourbon brands grow at the same rate. Even more encouraging is that at times the company’s brands are outpacing the category.

with flavored bourbons before moving on to more premium products like Basil Hayden or Knob Creek.

What’s trending?

Beam Suntory is well placed to take advantage of the above trends with a broad portfolio of bourbons that have many price points. “We have a bourbon for everyone,” Aponte says. “We’re attracting adults across the board, and once they buy into the range they stay in the family and move up from the core Jim Beam portfolio to Knob Creek and Maker’s Mark, for example.”

And for the high-end bourbon seekers, Beam Suntory continues to invest heavily in the premium and super-premium aspects of its business, producing exciting new products to try.

In fact, Aponte expects the balance of the Beam Suntory bourbon portfolio to shift toward premium and superpremium in the future.

For the moment, though, the focus remains squarely on giving consumers what they want. “We are the biggest supplier of bourbons and as leaders are setting the pace and driving the category,” Aponte says. “Our aim is to solidify this leadership position and see how far we can grow this category together with our customers.”

In terms of trends for the bourbon category in travel retail, Aponte says authenticity is gaining in importance as consumers become more knowledgeable about about the brands they love and the world of bourbon in general. “Shoppers are looking for more authentic American products and seeking out genuine bourbon,” he says.

Consumers are also looking for more high-end expressions of their favorite brands. “Demand for higher styles and different types of products is really driving creativity within the category,” Aponte says. One need only look to the trend toward aged, oaked and handcrafted bourbons to understand what consumers want and that they’re willing to pay a premium to get it.

Another major trend that Aponte notes is women becoming more interested in bourbon. Up to this point the core Jim Beam brands have been male dominated, but flavored bourbons are now a 50-50 split down the middle between male and female consumers. Aponte chalks this up to the fact that females generally start

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Meeting demand

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COMPANY REPORT: MONARQ

MONARQ takes

to the skies by

WENDY MORLEY

After its biggest year ever, MONARQ will have plenty of new brands to showcase at this year’s IAADFS

As with the company’s newer brands, MONARQ’s established brands such as Bols sold very well in 2014

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ONARQ Group is headquartered the Netherlands but does business throughout the Americas, including the Caribbean. Focused on brand building in addition to distribution, MONARQ’s formula appears to be working as the company’s portfolio continues to expand with global brands. In line with its expansion, the company is adding three new representatives in Latin America and one in the Caribbean and US duty free.

Recently Robert de Monchy, Managing Director of the company, spoke with Americas Duty Free about developments in the past and upcoming year.

Q: How was business in 2014 as compared to 2013?

A: This past year was very good. 2014 was the best year since the start of MONARQ in 2006.

Q: Could you please tell us about any new brands you have?

A: It’s been an exciting time, and we’ve added quite a number of prestigious brands to our portfolio. First, we take great pride in representing part of the Bacardi portfolio, with well-established premium brands such as DOM Benedictine, Tequila Cazadores, Baron Otard Cognac and Oxley London Dry Gin. We are also introducing a number of independent whisky brands, including the Arran single malts and blended whiskies from MacDuff International, with Lauder’s and Grand MacNish as their flagship brands. Next to the Scotch whisky category, we have Irish whiskey from Teeling. That company will soon open the first new working distillery in Dublin in over 125 years!

Another important new brand in our portfolio is Licor 43 from Spain. This is the world’s fastest-growing liqueur brand. In the wine sector we are excited to introduce the multiple awardwinning Charles Smith Wines; the company was just awarded “Winemaker of the Year” by Wine Enthusiast magazine.

Q: How are your existing brands performing?

Have you run any promotions?

A: Our more established brands such as Heineken, Crystal Head Vodka and Bols continue to do well, but also the newer ones like Ole Smoky Moonshine, Seagram’s Escapes and Magic Hat craft beer have performed very well. We’ve seen great acceptance

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of the innovative Mediterranean aperitif FRUTTA winespirit.

We’ve run a number of promotions in duty free in the Americas.

For instance, we had a number of very successful Heineken and Limoncello di Capri promotions with London Supply in their Iguazu store.

Q: Do any of your brands have new packaging or travel retail exclusives?

A: Wild Africa Cream has a completely new look that is more elegant and sophisticated. Cazadores Tequila has changed their premium tequila range to reflect the brand’s heritage and authenticity. Żubrówka (ZU) has a special travel retail-exclusive limited edition sleeve, built on the brand’s enchanted-forest concept.

Q: What is your forecast for business in 2015? Why? A: Although the global economic crisis is largely behind us, I believe 2015 could be a more challenging year because of political and social unrest in parts of the world and the economic challenges that Brazil is facing recently. I believe Argentina will bounce back after elections.

Q: Do you have any promotions or activations planned in airports in the months to come?

A: Yes, we have a special display promotion in the arrivals store at Grantley Adams International in Barbados for Ole Smoky Moonshine. We are also working closely with PLS in St. Maarten for upcoming special exhibitions at Princess Juliana Airport.

A new addition to MONARQ’s portfolio, Teeling’s Irish Whiskey will soon be opening the first new distillery in Dublin in 125 years

COMPANY NEWS: RÉMY COINTREAU

Cointreau Blood Orange offers a tangy, fruity choice expected to be popular with the female traveler

Elegant

Rémy Cointreau will progressively replace the current entry-level Mount Gay Eclipse with this premium Mount Gay Black Barrel

and refined Sophisticated is the word for Rémy Cointreau’s upcoming year as premium new releases join its Rémy Martin Cellar Master range in the company’s impressive portfolio by

WENDY MORLEY

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he coming year is looking both busy and exciting for Rémy Cointeau Travel Retail Americas. In 2014 the company made a big change by replacing Rémy Martin VSOP and XO with its new Rémy Martin Cellar Master range in travel retail (now moving into travel retail in Europe and Asia). The range launched with Cellar 16 and Cellar 28, introduced at last year’s IAADFS. Throughout the year existing stock in the Americas was slowly replaced by the new selections.

For the most part, according to Francois Van Aal, Regional Director, Rémy Cointreau Travel Retail Americas, the results have been very positive. “Of course, such a transition does not come without understandable challenges, but the first year’s overall success is a sign of a bright future for this exclusive travel retail range,” he says.

In the coming year, Rémy Cointreau will present new sizes of the Cellar Master range, including a 5cL, 20cL and 50cL size for Cellar 16, and 5cL and 35cL sizes for Cellar 28. “These new smaller sizes will give us the opportunity to recruit new Cognac drinkers by offering them the chance to try the product without feeling committed to buying a larger bottle. Also, these smallersized bottles serve as a nice small gift to take home to friends and family,” Van Aal says.

Tangy and fruity The company is launching a number of new products for 2015.

Cointreau is adding a traditional southern European fruit to its namesake liqueur with the travel retail exclusive Cointreau Blood Orange. This bold and assertive new expression is presented in a slightly different version of Cointeau’s iconic square bottle.

The Cointreau Blood Orange bottle is a deep orange-red color with an elegant rose-gold finish, a nod to the copper stills where the liquid is distilled. More tangy and fruity than the original 190

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Cointreau, Cointreau Blood Orange is made of the distillation of sweet and bitter orange peels and blood orange peels. The result is a sophisticated and zesty, crystal clear liquid.

Limited and exclusive Two more important additions to the Rémy Cointreau portfolio this year will be travel retail-exclusive Bruichladdich Bere Barley, Port Charlotte and The Octomere, plus Mount Gay Black Barrel rum.

Bruichladdich’s Bere Barley is a limited edition un-peated malt. It will be launched along with other members of the line including Port Charlotte, which is a fine, elegant, heavily peated malt, and The Octomore, which is reportedly the most heavily peated whisky on the planet.

Mount Gay Black Barrel rum will also be a focus for Rémy Cointreau in 2015. “This year we will progressively replace the current entry-level Mount Gay Eclipse with this premium Mount Gay Black Barrel expression,” says Van Aal, putting into practice the premiumization that works so well in this industry.

“It takes its name from the charred interiors of the barrels in which it is matured. It is designed to appeal to those who appreciate the signature smoothness of Mount Gay, with an added intensity of flavor.”

Van Aal has difficulty deciding which new product excites him most. “The Cellar Master’s range is still growing, and I like the smaller-size offering. The Bruichladdich collection includes such diverse expressions. Cointreau Blood Orange offers something that might appeal more to the female traveler, and then there’s Mount Gay Black Barrel. Also, we represent Russian Standard vodka, and I love the St. Petersburg limited edition bottle, inspired by the city referred to as the ‘Venice of the North.’” In all, he foresees a stellar year.

LIQUOR NEWS

80th anniversary for John Walker & Sons In time for Chinese New Year, Diageo released an elegant limited edition design of the award-winning John Walker & Sons King George V as a travel retail exclusive. Created to mark the 80th anniversary of the awarding of the Royal Warrant to John Walker & Sons, this design celebrates the arts and crafts movement popular in the 1930s. The Royal Warrant is regarded as a mark of quality and excellence and is an honor John Walker & Sons still holds today.

The limited edition packaging has a luxurious feel with its burgundy finish. It features an intricate motif and gold chandelier print with rich, warm colors that reflect the super-premium whisky contained inside. The bottle is elegant and sweeping, with a heavy bottom and gold details. The shape and motif reflect the design excellence of the day.

The liquid inside is a distinctive blend using whiskies exclusively from distilleries in existence at the time of King George V, when John Walker & Sons was first given the honor of supplying whisky to the Royal Household. The prestigious whiskies used in this blend include the rare Port Ellen Single Malt from the Isle of Islay.

The John Walker & Sons King George V Limited Edition is available in travel retail outlets for a limited time of six months and retails for US$494.

Diageo celebrates the 80th anniversary of being awarded the Royal Warrant with the release of this limited edition design of John Walker & Sons King George V

Gin from Spain Rives Special Gin has been produced in Spain since 1880, but is only now coming available in travel retail

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Fraternity Spirits has seen big success in recent years with a number of brands including 99,000 Horas and Los Arango tequilas, El Ron Prohibido rum and Boker Vodka have all helped Fraternity Spirits to show above-average market growth in 2014.

Now the company has added gin to its already successful portfolio. Fraternity has partnered with Spanish company Rives in the Americas. Rives Special Gin has been produced in Spain since 1880. Fraternity offers both Rives Special Gin and Rives Pink Gin, both high-quality premium spirits.

Rives Special Gin has a unique flavor that features lavender and thyme. It is the only 100% Andalusian gin, handcrafted in copper stills. This all-natural gin uses 11 natural botanicals, harvested to achieve perfect balance and flavor. The gin offers high end, clean aromas. It has soft complexity that highlights tones of juniper, mouth balance and rich nuances. The aftertaste is fresh, with a predominance of toasted almonds. Rives Special Gin has been awarded gold and silver medals at some of the most prestigious competitions in the world. The other addition to Fraternity’s portfolio, Rives Pink Gin, is a classic triple-distilled gin infused with Huelva strawberries. This creates a fresh, sweet gin with less bitterness.

At the Fraternity booth at IAADFS in Orlando, Raffaele Berardi CEO of Fraternity Spirits, will be providing a variety of cocktails using a combination of Rives gin, Tequila Corralejo and its new flavored syrups. “Through mixology and new concepts such as the TEQ Tropics, Fraternity and Rives are able to build brands from both companies. With its premium look and taste, our new Rives gin is the perfect addition to our travel retail portfolio. We want travellers to be able to make cocktails at home which are easy to produce and a joy to drink; and the synergy between our brands makes this very possible,” says Berardi.

LIQUOR NEWS

New world creation Miami-based ACTIUM has just added to its portfolio RumChata, a big success story to come out of the US in recent years. Introduced to the US market in 2009, RumChata is now the world’s numberone crossover rum cream. Less filling and more mixable than other brands, it is already the top-selling cream liqueur in 12 states. Its ingredients are sourced from around the world, and the end result is an easy drink made of fresh dairy cream, premium Caribbean rum and a mellow blend of cinnamon, vanilla, sugar and other flavors.

The drink horchata was created by the ancient Egyptians for the Pharoahs. Made with chufa, a plant common in southern Europe, Africa and the Indian subcontinent, this drink was so revered that the Moors brought it to Spain, where it is still a popular beverage. Because chufa is not grown on this side of the world, here horchata is made with rice milk, milk or cream, but otherwise the beverage is the same. With RumChata there is just a little extra, however. As Steve de Luca, Director of International Business Development for the brand, says: “The only thing more delicious than horchata is horchata with rum in it.”

While the company’s focus has been the US and the majority of sales are from there, consumer demand has brought about the move to export and to enter travel retail. “We are proud to represent

RumChata, in Latin America, the Caribbean, and US Duty Free.

We are confident that ACTIUM has the capabilities to replicate the US success story across the region, and are embracing this new challenge with enthusiasm,” says Daniel Brás, Beverage Division Director of ACTIUM. Since beginning in the US in 2009, Rumchata has become so well loved that consumer demand is bringing it to travel retail

Edrington launches 2nd release of Papá Andrés Spanish designer Javier Mariscal has managed to express the color, warmth and joy of living found in the Dominican Republic

Papá Andrés was created for the Brugal family to enjoy. For over 100 years this private reserve was carefully guarded in Brugal’s warehouses in Puerto Plata. and had never been tasted by the public until a limited number of bottles were released in 2012. It was quickly given such awards as “World’s Best Super-Premium Rum” in The Spirits Business Rum Masters 2013 competition. Papá Andrés will be released this spring for the second time, available to order from April 2015.

Jassil Villanueva Quintanais, a fifth-generation member of the Brugal family, grew up around the Brugal warehouses. She trained to become a Master Blender, and is the first woman in her family to achieve that status. In her Papá Andrés 2015 Alegría Edition, Quintanais has created an exceptionally smooth, complex and subtly sweeter expression of this aged rum.

The rum is well harmonized with the crystal decanter and presentation box illustrated by world-renowned Spanish designer Javier Mariscal, who has managed to express the color, warmth and alegría de vivir, or joy of living, encountered in the Dominican Republic. Mariscal has also illustrated the collectors’ book included in the presentation box, which recounts the story of Papá Andrés and the history of Brugal.

Just 1,000 of the Brugal Papá Andrés 2015 Alegría Edition decanters will be produced, and available for US$1,500 each. All profits will go to the Brugal Foundation, which was established in 1988 to support development and reduce poverty in the Dominican Republic.

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LIQUOR NEWS

Bacchus picks up steam Bacchus, a distribution company based in Miami, was started just in time to squeak in under the wire, getting a booth in the IAADFS Duty Free show of 2014. One year later and the booth is doubling its space, beautifully displaying the exciting new brands the company has picked up in the past year in addition to those it has already been representing.

In addition to Beluga Vodka and Hine Cognac, Bacchus has added an impressive collection of new offerings over the past year, including Fraternity Spirits’ Tequila Corralejo, the fastestgrowing tequila brand in the US, and Ron Prohibido, a premium, artisinal 12 year solera rum; International Beverage Holdings’ Balblair and Speyburn single malts and Hankey Bannister blended Scotch whisky; McCormick Distilling’s International Premium range including Tequila Rose Strawberry Cream Liqueur, Eco-Friendly 360 Vodka, Platte Valley Moonshine and the original key lime pie liqueur, Keke Beach; the Vanderpump Family’s LVP Sangria, the world’s first premium bottled sangria with a recipe used for years in the family’s restaurants and bars and featured on TV; and finally AGWA de Bolivia, the fun party drink made from coca leaves and distilled in Amsterdam.

Tom Browne, Bacchus Managing Director, says: “Having inventory in a bonded Miami warehouse means our customers can place smaller orders and receive them quickly, thereby saving time and money as well as lowering their inventory costs. This convenience along with tourism on the upswing in the Caribbean via both plane and cruise ship makes us confident and optimistic about our growth opportunities for 2015.”

The Vanderpump Family’s LVP Sangria is the world’s first premium bottled sangria. Made with a recipe used for years in the family’s restaurants and bars, LVP is also featured on TV

The French spirit

Last year Armagnac Janneau modernized its packaging, changing the label and box to a sleek, contemporary look

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Armagnac is the oldest spirit in France, having recently celebrated its 700-year history. The house of Janneau has been producing Armagnac since 1851. The most highly awarded Armagnac, Janneau has taken home 83 medals in the past 12 years, and has performed very well in travel retail, currently available in over 250 locations, Janneau is the number-one exported Armagnac.

This spirit may be considered almost the perfect travel retail choice in an industry that thrives on premiumization and on products that are not encountered every day. Despite the fact that it is France’s first brandy, Armagnac is not as well known as Cognac, but that is caused mainly by geography and circumstance, not quality. Armagnac tends to offer more complexity than Cognac, and for this reason might be especially well suited to the whisky drinker—again, appropriate for travel retail.

During TFWA WE in Cannes, 2014, it was announced that Spirit France had purchased the well-known and well-respected Armagnac Janneau, a move that makes perfect sense and appears all but guaranteed to succeed. Spirit France has also enjoyed great success in travel retail, and as it’s done so it has helped to bring premium brands of the lesser-known spirits of France, such as Calvados and Armagnac, to the world. The two best-selling brands of Calvados in travel retail, Boulard and Père Magloire, are carried by Spirit France, which distributes its premium spirits in 80 countries worldwide and has a specializing team dedicated to duty free and travel retail.

LIQUOR NEWS

Baltic tradition Known and beloved in Estonia, Vana Tallinn is one of that country’s most cherished products.

It’s served in an almost endless variety of combinations, consumed cold or hot, over ice, in cocktails or on its own, and is even served with tea. Vana Tallin is at once velvety, sweet, bitter and strong, with the natural flavors of vanilla bean, orange, lemon, bitter orange and cinnamon and other spices, mixed with Jamaican rum.

Vana Tallin, which means “Old Tallin,” has a bottle inspired by the towers of the old part of the city, which is Estonia’s capital. Its label, which depicts Old Tallin, was based on 17th century woodcuts that showed the same towers. Despite its rich Estonian history, the company is looking to bring the famous liqueur across the borders of the world, and is focusing on travel retail to help that happen. That fact was widely announced with a substantial booth at TFWA WE in Cannes 2014.

In recent years Vana Tallin has introduced new flavors such as Winter Spice, in addition to Vana Tallin Cream, Chocolate Cream and Coffee Cream. The liqueurs and cream liqueurs are commonly used to flavor marzipan, truffles, candy and ice cream.

Vana Tallin is one of Estonia’s most beloved products.

Common in Eastern Europe and Russia, it is now becoming available around the world

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LIQUOR NEWS

Cruising the Caribbean In a move sure to increase its sales in the cruise industry, Bottega has partnered with the American arm of Norway-based Interbrands, a leading supplier to Scandinavian domestic and travel retail. Interbrands USA is “committed to being the preferred supplier to the cruise industry,” according to Bottega’s press release. Deborah Golden brings Bottega, the cruise industry and Interbrands together with her strong history in the three areas. She first became very well known in the cruise industry, then, running her own consulting business, helped Bottega establish its brands. Currently, Golden works as VP, Sales and Marketing for Interbrands.

“Major advances in distribution and sales were achieved over the past five years with Golden and Company. Bottega’s awardwinning sparkling wines, grappas and premium liqueurs have attracted special attention,” said Alessandra Piccin, Bottega SpA Export Manager Travel Retail.

“Bottega SpA is pleased with this new partnership and welcomes Interbrands USA to its global family of agents and distributors,” said Sandro Bottega, President, Bottega SpA. Bottega is famous for its award-winning grappas, including Alexander Grappa, the number-one-selling grappa in travel retail, its Bottega Limoncino and a full line of Italian wines and sparkling wines, which feature the company’s signature gold bottle.

With its new distributor, Bottega’s iconic gold bottle should soon be seen more often on the high seas

A singular expression

Each bottle of this uncommon release has been individually created by a master craftsman at Atlantis Crystal in Alcobaca, Portugal

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Berry Bros. & Rudd Spirits has recently released the third expression from its series of single cask bottlings of The Glenrothes from the late 1960s and early 1970s. The distillery has very little stock from that time, and the Extraordinary Cask Collection is selected from only the finest samplings of this already-rare discovery. It is exceedingly uncommon to find whisky worthy of this collection, but with an increasingly high demand for such bottlings, The Glenrothes Brands Heritage Director Ronnie Cox has undertaken the demanding task of assessing casks until he finds one worthy of being included.

Only three times has a cask been found that meets the strict criteria. Of the third Extraordinary Cask Collection single-cask bottling, Cox says, “This cask follows in line with our initial Extraordinary releases: a Single Cask from 1970 and a Single Cask from 1969, both of which have all sold out. The latest bottling, a venerable cask from 1968, in keeping with The Glenrothes’ philosophy to bottle at peak maturity, is now ready to be unveiled.”

The decanter continues on with this one-of-a-kind offering. The instantly recognizable Glenrothes bottle is created with hand-blown lead crystal. The essential shape remains, but it is now multifaceted, with a heavy crystal base. Each decanter has been individually created by a master craftsman at Atlantis Crystal in Alcobaca, Portugal. A polished brass plaque is applied, showing the year of distillation, and an engraved brass collar encircles the neck. The head of the stopper is made from the wood of the cask in which the whisky matured, #13507.

The outer case is made of fine, hand-stitched leather. Each bottle comes with its own oak plinth for display purposes, and included is a book co-written by seven leading whisky writers, each contributing a chapter about The Glenrothes, its history and the whisky.

Prices will start at 11,275 SGD (US$9,250) per bottle, and move upwards.

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Sexy, Fun, Delicious, Miami

LIQUOR NEWS

As the American gateway to Latin America and nestled along the beautiful beaches of the Atlantic Ocean, Miami really is unlike any other city. And its namesake Miami Club Rum® is unlike any other rum. Sexy, Fun, Delicious and Miami are the four pillars this rum rests upon. Matt Malone, Founder and CEO of Destilería Canéca, LLC, producer of Miami Club Rum, has been doing an excellent job of keeping these pillars strong and sturdy.

Created in Miami’s very first legal distillery and utilizing South Florida sugarcane and other superior local ingredients, the rum then ages in a room filled with salsa music. The music infuses the liquid with the spirit Malone wants, allowing the rum to integrate more vigorously with the oak. After the aged rum is turned platinum by coconut filtration, it is bottled in an award-winning Art Deco-inspired bottle designed by Malone himself.

Now Miami Club Rum has strengthened those four pillars even more by forming a partnership with Cuban-American actor William Levy, in addition to entrepreneur Herman Echevarria. Levy, a perfect choice to match with the rum’s image, is now the face of the brand. The marketing campaign that features the handsome actor, shot last year, began rolling out in late February. “William brings so much to our team,” says Malone. “He is a savvy businessman and creative thinker. He is also a rum enthusiast with a discerning pallet. We are thrilled to have him as an involved partner.”

“Miami is the capital of the Americas,” notes Levy. “I am very excited about not only partnering with these guys but also to put my personal touch into the branding strategy. This is my city, my rum!”

William Levy is an active partner in addition to being the new face of Miami Club Rum

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COMPANY REPORT: JTI

Camel and Winston performed well in Brazil in 2014 because of the large numbers of Europeans in the region for the FIFA World Cup

Research-driven

performance Japan Tobacco International realized substantial growth in 2014, with sales especially strong in North America by

WENDY MORLEY

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apan Tobacco International’s (JTI’s) worldwide duty free (WWDF) business in the Americas enjoyed another year of strong growth in 2014. An overall volume increase of 7.6% was largely supported by the company’s performance in North America, where sales grew by over 30% versus 2013, and this growth was not a matter of happenstance. The company put a lot of research behind those numbers.

“Growth in North America can largely be attributed to several new product launches in the US, in addition to new listings, ” explains Alex Leu, WWDF Americas General Manager. “We have been conducting a considerable amount of research into the nationalities and habits of passengers traveling through airports in the region, and based on our findings we have started working with operators to match our brands with traveler trends.” The 30% growth figure underlines JTI’s success.

The US west coast sees a lot of travelers from Asian countries, especially China and Japan, so in 2014 JTI launched Sheng Xiao, a dedicated WWDF brand targeting Chinese travelers, as well as Mevius Premium Menthol and Seven

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Stars Medium, aimed at Japanese tourists.

Similarly the company expanded sales of its Canadian brand, Export A, in the US. “Canadians are the second biggest nationality traveling in the region,” explains Leu. “We ensure that our portfolio contains brands that appeal to Canadians, British and Asian adult smokers. This gives us a unique advantage in the region and as a result our business is expanding.”

By contrast, the unstable political and economic situation in Argentina has had a negative effect on the company’s volumes in the Southern Cone. Argentines are still traveling, but the economic environment means they are spending less, and that has an impact on JTI sales. This volume loss was offset by reliable growth in other markets in Latin America such as Brazil, however. Sales in that country benefited from a boost thanks to the 2014 World Cup: “Camel and Winston performed well as a result of the high numbers of Europeans traveling through Brazil for the football tournament,” says Leu. Successful category solutions in Buenos Aires and Cancun have helped keep numbers up in Latin America. The company has also run successful promotions targeting, among

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Sheng Xiao is one of the brands launched in the US to target the Asian traveler

others, British adult smokers traveling to the Caribbean and the US. Leu foresees that the ongoing political and economic uncertainty in Latin America will make 2015 another challenging year: “The strong US dollar will also have an impact on visitors from Asia and Europe. But our considerable insight into travelers and their behaviors means we have a very focused approach and that we are well placed to help our partners grow our businesses together.”

Alexandre Leu, World Wide Duty Free Manager, Americas for JTI

TOBACCO: HABANOS

Each year visitors descend on Havana for the festival and the trade show, which combined bring more than 3,000 people to the city

Visitors can trace a cigar every step of the way, from touring the tobacco fields to making their own hand-rolled cigars to lighting them up

Habanos in

HAVANA

Each year at the end of February the world descends on Cuba to celebrate the island’s essential export by

WENDY MORLEY

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or over 300 years the hand-rolled cigar has held importance on many levels for the Caribbean island of Cuba as art, craft, tradition and a major source of income. That importance is only increasing with time, as the annual cigar festival easily demonstrates. The 17th annual Habanos Cigar Festival took place in Havana, Cuba from February 23rd to 27th 2015, bringing together thousands of cigar aficionados, those in the cigar/tobacco industry and media for one week of celebration, festivities and education.

In 2014 over 2,200 visitors attended the Habanos Trade Fair, which had 60 exhibitors from seven countries. The festival itself welcomed more than 1,300 participants from nearly 60 countries, in addition to 250 journalists and camera operators plus 142 other media representatives.

Leading up to the 2015 Habanos Festival there was excitement around the pairing event with Habanos and Chianti wines, bringing Tuscany to Cuba and pairing the rich and complex Cuban cigar with luscious Tuscan wines. Four Tuscan wine growers took part in this event. The Chiani Superiore D.O.C.G. “Cerretello” (2011) and Chianti Rufina D.O.C.G. Riserva “Lastricato” (2010) wines from the Pieve De’ Pitti and Castello del Trebbio vineyards, respectively, were served with the Montecristo Open Eagle, a milder Habano. The Chianti Colli Fiorentini D.O.C.G. “Il Castelvecchio” (2011), from the vineyard of the same name, and Chianti D.O.C.G. Riserva “Vigna 54” (2012), from the Azienda Agricola Pugliano, will then be tasted together with Le Hoyo San Juan. This mild vitola played the leading role in the Habanos s.a. 2014 launches.

Each year the Habanos Festival features the finest entertainment, including performances of national and international artists such as renowned composer, performer 200

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

The week is always filled with entertainment. This year multi-Latin Grammy winner Descemer Bueno performed his greatest hits at the Welcome Evening

and producer Descemer Bueno. His performance during the Welcome Evening included his hit song “Bailando,” which recently won three Latin Grammy awards for Best Song of the Year, Best Urban Performance and Best Urban Song.

Gastronomy always plays a central role in the Festival, and this year was no exception. Belgian chef Anne Marie Lauwers supervised the menu for both the dinner celebrating the 25th Anniversary of La Casa del Habano and the Gala Evening, mixing Asian, European, and Cuban flavours to surprise her guests.

Not surprisingly, samplings of Habanos are an integral part of the festivities. This year’s tastings included classic medium flavour of Romeo y Julieta, the new Gran Reserva Wide Churchills Cosecha 2009 and Pirámices Añejados, the new 80 Aniversario, and Churchills Añejados vitolas from the iconic Montecristo brand. Special editions were on hand to commemorate the 25th Anniversary of La Casa del Habano in addition to other outstanding Habanos that are part of its extensive range of prestigious brands.

Food, wine, entertainment and cigars sounds like a combination that could not be improved upon, but the festival offers even more, bringing the visitor along every step of the cigar’s journey to existence, from touring the tobacco fields to taking a master class on rolling “Totalmente a Mano,” which means “totally handmade,” to smoking a cigar for one of the favorite festivities, the contest to create the longest ash. As the week draws to a close, guests take part in a celebrity-filled gala evening complete with entertainment and capped with the exciting yearly humidor auction, proceeds going to Cuba’s public health system.

TOBACCO NEWS

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COMPANY REPORT: DAVIDOFF

The newly built residency facilities at Altos de Chavón School of Design are housing the Davidoff Art Residency’s first five artists from January 18 to April 5, 2015

Crossing the threshold by

WENDY MORLEY

Ground was broken in early 2014 on the Davidoff Art Residency in Dominican Republic. Less than one year later, the first five artists are ensconced within

O

n January 18, 2015 a new era began as the first resident artists stepped into the Davidoff International Art Residency’s brand new building on the campus of the Altos de Chavón School of Design in La Romana, Dominican Republic.

The five artists were chosen from a pool of highly talented applicants from around the globe. Their names were announced amid great excitement during Davidoff ’s Caribbean cocktail party at Art Basel Miami in December. All five happen to be female although Hans-Kristian Hoejsgaard, CEO of Oettinger Davidoff AG, joked that this was not a prerequisite. Two of the five, Cathleen Mooses and Soledad Salamé, were present at Art Basel Miami, where Davidoff is a huge presence as a major sponsor. Mooses and Salamé were welcomed at events hosted

by Davidoff such as the cocktail party and the Davidoff Art Initiative brunch, which took place in the Davidoff Lounge at the Miami Botanical Gardens.

Normally, artists must make a living by picking up jobs, full time or part time, that allow them to pay their bills but hinder their art making. From January 18th until April 5th, Davidoff is allowing these artists to focus on their work in a completely supportive environment. In addition, being in such close quarters with other artists creates conditions rich for learning and for inspiration.

The Davidoff Art Initiative committee chooses artists based on how it collectively perceives the experience might benefit them and on their merit rather than on their preferred medium or place of residence, but Hoejsgaard expresses optimism that those chosen will represent a diversity of nationalities, art forms and styles, and that is certainly the case with this first group of five. The artists taking part in Davidoff ’s first residency in Dominican Republic are: Alia Farid (b. 1985, Kuwait) Nuria Montiel (b. 1982, Mexico) Cathleen Mooses (b. 1982, USA) Mathilde Rosier (b. 1973, France) Soledad Salamé (b. 1954, Chile) 204

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

Cathleen Mooses and Soledad Salamé, two of the five artists chosen for the first Davidoff Art Residency, were present at the brunch that took place at the Davidoff Cigar Lounge, Miami Beach Botanical Garden, Art Basel Miami

Hoejsgaard has stated many times that this is no temporary lark for Oettinger Davidoff AG. The company is fully committed to a long-term investment in individual artists with its residency program, but it’s also fully committed to investing in the Caribbean. Of over 3,500 employees worldwide, close to 2,000 are in the Caribbean, mostly in the Dominican Republic.

The residency will welcome five international artists to the Caribbean each year, and the company will also be sending five artists each year from the Caribbean to art residencies around the world, currently to Berlin, New York, Beijing and soon in two other locations.

The company also supports Caribbean art by supplying grants to various art organizations. Its inaugural grant was made to provide a floor for the sculpture studio at the Altos de Chavón School of Art and Design. It also provided a grant to a photography magazine to create a website. A limited number of grants are provided each year to meet the needs of organizations, including museums, non-profit art spaces, art schools, art publications and websites, commercial galleries, and other non-for-profit or commercial ventures dedicated to providing opportunities and exposure for artists of the Dominican Republic and the Caribbean.

Davidoff has certainly seemed to find its niche in the global art world. It has become a highly visible and very important source of support and every year the company boldly dives deeper into this milieu. Very early in his tenure, Hoejsgaard saw the relationship between art and cigars and thought a partnership between the two worlds might work. He couldn’t have been more right.

PLEASE COME VISIT PROXIMO SPIRITS CHASE INTERNATIONAL BOOTH #1111, Please Drink Responsibly.

DRINK RESPONSIBLY. THE KRAKEN® BLACK SPICED RUM. ©2014 KRAKEN RUM CO.,JERSEY CITY, NJ 47% ALC/VOL. (94 PROOF)

COMPANY REPORT: FIRST CHINA TOBACCO

Double

Double Happiness, distributed in North America by First China Tobacco Company Ltd., is celebrating its 110th birthday this year

Happiness by

First China Tobacco Company, based in Vancouver, is bringing a true Chinese cigarette to the North American duty free market

C

WENDY MORLEY

world because of strict tobacco laws and regulations, but we are working within that framework.”

Since the brand’s Canadian launch, Chen has focused on duty paid markets in that country, but over the coming year focus will shift to duty free, border stores and airports in the US. “We have been selling to duty free shops in Canada, and Double Happiness is also available at US side in Vancouver International Airport,” says Chen. “A number of airport duty free shops in the US now carry the brand, including San Francisco, Los Angeles, Hawaii and New York. We are also working with Duty Free Americas shops at Blaine, Washington.”

Considering the increase of Chinese travelers to North America combined with the culture of gift giving, it is not surprising that duty free will be an important market for the company. Chen says they will be creating some special products and special packaging for duty free shops, including the creation of a tin pack for the US.

hina has about 320 million smokers, and China National Tobacco sells 40.6% of global cigarette sales.

To put that in perspective, that figure is considerably more than the top three non-Chinese tobacco companies combined. Cigarettes are a very popular gift with Chinese; in fact they are the most common gift during the Lunar New Year. Tobacco plays a significant role in social behavior in a country where cigarettes are intended to be shared, and quite often the shared cigarette is the brand Double Happiness. In the Americas, few people have heard of Double Happiness cigarettes, but in China that is decidedly not the case.

Double Happiness is produced by Nanyang Brothers Tobacco Company Limited. The company, which was nationalized in 1951, celebrates its 110th anniversary this year. Produced in Hong Kong, the brand is extremely well known in China and other parts of Asia, where sales are strong. Double Happiness was first launched in Canada in August, 2013 in advance of its launch in the US. “We are the first company to import Chinese brand cigarettes into Canada,” says Ben Chen, Director of First China Tobacco, the authorized dealer for Double Happiness in travel retail and the domestic market in North America. “The market is a little In China, tobacco products are the most common choice slower here compared to the rest of the as a New Year’s gift, often a more premium selection

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TOBACCO: CIDF

CIDF seizes the

Americas

opportunity Leading distributor China International Duty Free is bringing the largest tobacco company in China to the IAADFS Show by

HIBAH NOOR

F

ollowing a very successful joint effort at the TFWA Asia Pacific fair in Singapore last year, leading Chinese distributor China International Duty Free (CIDF) is once again partnering with one of its major suppliers, CNTC Yunnan Tobacco International, to exhibit at the IAADFS Show for the first time.

The North American region is considered a top priority for CIDF and the company considers the Orlando show to be a fantastic opportunity to communicate with both new and existing customers.

Ian Clarke, Chief Operating Officer of CIDF, says: “CIDF hopes to further educate the North American region on Chinese tobacco trends and the immense opportunities the growing number of Chinese outbound travelers presents to global travel retail. Orlando serves as the perfect platform for us to do so and proves our commitment to our retail partners across the territory.”

Al Tounbak, a separate distribution company which is also working with CIDF and CNTC Yunnan Tobacco International, will also be sharing the stand. Al Tounbak’s major commercial focus in North America is the Mexican duty free market.

Participating as an exhibitor in North America will be a first for the newly-formed CNTC Yunnan Tobacco International, which is the result of a mid-2014 merger between two previous regional tobacco heavyweights in Yunnan Province, China. The company is part of China National Tobacco Corp (CNTC), the Chinese state-owned manufacturer of tobacco products.

Zhou Feng Zhu, Vice General Manager of Team Success at Yunnan Tobacco International, said he was extremely excited about this opportunity: “IAADFS 2015 will serve as the perfect stage for the international debut of the new and consolidated Yunnan Tobacco. Over the previous five years and with the

Distributor CIDF focuses on North American markets for distribution

help of our partners CIDF and Al Tounbak, we have undergone worldwide launches of our most important brands in over 50 international duty free markets. After the success of our exhibition at Singapore TFWA 2014, we will continue to grow our presence in the Americas this March.”

Yunnan Tobacco is the largest tobacco company in China and features a brand portfolio of over 50 different products, including the now internationally well-known Hongtashan, Yunyan, Yuxi and super-premium Diaoyutai. The Yuxi Manor brand was the first organic Chinese cigarette to be launched in travel retail, where it was listed by DFS Group at its Singapore Changi Airport shops in August 2014, following the brand’s trial launch at Hong Kong International Airport.

In addition to presenting the ultra-premium Yunnan Tobacco product portfolio, off-stand CIDF is happy to discuss its wider selection of tobacco and liquor products from its other major Chinese suppliers. These include Yanghe’s popular TianZhiLan and M3 baijiu spirits.

As a specialist marketer of Chinese products, CIDF works in partnership with both its suppliers and its network of duty free operators—which include DFS, Dubai Duty Free, Dufry and Duty Free Americas—to boost the visibility and appeal of its products. CIDF designs and sources packaging materials for its products during specific periods in the Chinese calendar to maximize potential sales. It also designs international and destination-specific sleeves for certain brands which appeal to its target market of outbound Chinese tourists.

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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PRODUCT LAUNCHES

A Mixed Bag The travel retail shelves are packed with purse-friendly products for stylish globetrotters. Here, we feature six items that can be found in a woman’s bag this season

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1. Desigual purse: This spring/summer 2015 bag features on-trend colorful graphic florals, inspired by the recent runway looks 2. Lancôme Shine Lover lipstick: This moisturizing, vibrant, healthy-glow lipstick seeks to revive the complexion by enhancing the lip’s natural color by one tone 3. Vogue Eyewear sunglasses: These glamorous Vogue sunglasses (model #VO 2918S) will wow the crowds with their violet frames and kaleidoscopic motif inside the temples 4. Travalo Milano fragrance atomizer: This upscale atomizer incorporates high-definition spray head technology, delivering a luxurious fragrance mist and an increased emotional experience

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AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

5. Troika Bag Light: This attractively designed pocket torch in the shape of a modern pendant light shines a bright LED beam into every corner of your bag. To turn it on, just pull on its shade 6. Cross Botanica pen: With its fashionably floral design, this new lacquered and engraved pen is this season’s must-have for every style-savvy traveler 7. Mentos Gum Nano Bottles: This cute gift pack contains five mini bottles of sugar-free gum with five Pure Fresh flavors – including the wonderfully named Bubble Fresh

IAADFS – Duty Free Show of the Americas March 22-25, 2015 – Orlando, Florida

Patrick Nilson +1 845 981 7240 p.nilson@haleybrooke.com Roger Thompson + 1 203 322 9691 r.thompson@haleybrooke.com

Visit us at booth # 207 IAADFS

QUESTIONNAIRE

ALL ABOUT

On vacation in Villa La Angostura, Argentina in 2012

José Luis Donagaray, Secretary General, ASUTIL Where were you born and raised?

In Montevideo, Uruguay on April 15, 1960. I spent almost all my time here.

If you attended post-secondary school, what did you study?

Business Administration at university, an MBA in Argentina, and Executive Education in Strategic Marketing at Harvard Business School.

Are you married?

Do you have children?

Yes, I married in 1987 and have two children: Ines, born in 1989, and Martin, born in 1991.

What is your favorite movie?

I like many movies, but some of my favorites include El Padrino/ Atrapado sin Salida/all of James Bond.

What is the last book you read?

Las Montañas siguen alli by Pedro Algorta, a survivor of the Andes tragedy in 1972.

José and his family on a catamaran in Punta Cana in 2013

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What would you choose as your last meal?

A traditional Uruguayan asado (barbecue).

Which living person do you most admire?

Pope Francisco and the Andes survivors.

Your favourite drink?

I don’t drink alcohol, but I like orange juice, apple juice and Coke Zero.

Which historical figure do you most admire?

I admire many people in politics, sports and business. I like Steve Jobs, Ayrton Senna, Leonardo da Vinci and Gandhi.

Do you have a passion in your life (or more than one)? What?

Sports in general, tennis and rugby, but I prefer car racing and motorbike racing.

Do you have a pet (or more than one)?

If so, what animal and name?

Pepe is his name and it’s a dachshund.

Do you prefer country or city?

Country.

What is your favourite place to vacation?

Any beach, especially in the Caribbean.

Where and when were you happiest in your life?

I had many times and in many places, but when you are a kid is when you most have fun.

What in the world would you most like to change?

War and terrorism.

What about yourself would you most like to change?

Get rid of my anxiety!

What’s the first thing you do in a new place?

Walk around in my hotel and outside.

What is the most important piece of advice anyone ever gave you?

“Life is like a wheel, sometimes you are up and sometimes you are down” and “If you want to be happy as you say, don’t analyze”.

If you could choose any place in the world to live, where would it be?

I’d like to live three months in the country, three months in Paris and six months at the beach.

What is something about you that most people would find surprising?

My capacity to work, understand and analyze different issues.

AMERICAS DUTY FREE & TRAVEL RETAILING IAADFS MARCH/APRIL 2015

PLEASE SAVOUR RESPONSIBLY

FOLLOw US ON thEMAcALL AN ANd thE _ MAcALL AN

IAADFS EXHIBITORS GUIDE

*PHOTO COURTESY OF IAADFS

DUTYFREEMAGAZINE.CA MARCH/APRIL 2015

IAADFS

The home

stretch

Just ahead of the 2015 show, IAADFS Executive Director Michael Payne discusses the industry and what the organization has in store for those in attendance by RYAN WHITE

W

ith preparations for the 2015 IAADFS Duty Free Show of the Americas well under way in early January, it’s a wonder that Executive Director Michael Payne had time to sit down for an interview, but Americas Duty Free caught up with him to get the latest developments on this year’s event and the industry at large in the Americas.

We began by asking about registrations, and Payne tells us that “the numbers appear to be on track with last year’s, but as you know we experience a large number of on-site registrants so we will not have final numbers until after the show opens.”

When we spoke to Payne, IAADFS had just passed the early registration deadline and he noted that numbers were looking good. “I’m confident there will be a good turnout—on par with last year,” he said.

On the tradeshow floor In terms of the exhibitors that attendees can find on this year’s exhibition floor, as of mid-January IAADFS had confirmed the following numbers: 23% jewelry, accessories and luggage; 30% spirits; 20% fragrances; 11% confectionery; 7% tobacco; 7% gifts and writing instruments; and 2% services. “These numbers could change slightly as we get closer to the show,” Payne explained, “but the ratios should stay about the same.”

Of course, just as important as what categories will be present is the mindset of members this year. Payne noted that things are looking up in the US in terms of passenger traffic, but outside factors may affect the industry in the country. “Things are probably a bit more cautious,” he said. “Passenger loads are up, so that remains very positive. Likewise, the US is strong, but the EU/Euro situation and slowdown in Asia is affecting passenger spend, impacting some categories more than others.”

And in terms of the Americas’ performance in 2014, it’s a similar mixed bag, with Payne telling us that sales were better overall last year as compared to 2013. Despite this, he said, some categories didn’t fare as well last year. “There was definitely some tightening toward the end of 2014,” he noted.

A lot to look forward to Despite mixed indicators for the region, Payne told us that there are a lot of exciting airport and duty free projects in the region to look forward to. “Infrastructure development through both private and public sectors continues to enhance the opportunities for duty free shoppers,” he said. “Bigger, brighter, well-designed and better-located stores are evident throughout the Americas.

Having said that, there is clearly still room for improvement but officials are increasingly recognizing the value that duty free offerings and airports in general provide to local economies.

That recognition bodes well for future development.”

And in terms of looking forward to the IAADFS show itself, there are equally exciting things planned. While the show format will be similar to last year, the organization has added a run/walk for charity on Sunday morning, and at the time of the interview, plenty of sponsors had already signed on, including Bacardi, Cross, Davidoff, Hershey, Botran, Godiva, American Caribbean Gateway/Macanudo, Essence, Travel Retail Distribution Group and Brown-Foreman. Finally, Payne promises fun social events, including an exciting gala evening, in addition to the customarily on-schedule daily business meetings for which the event is known.

This year’s IAADFS show takes place March 22–25 at the Orlando World Center Marriott.

“Passenger loads are up, so that remains very positive.

Likewise, the US is strong, but the EU/Euro situation and slowdown in Asia is affecting passenger spend, impacting some categories more than others.”

MICHAEL PAYNE, EXECUTIVE DIRECTOR, IAADFS

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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IAADFS EXHIBITORS

On the tradeshow floor Rituals to showcase new fixtures at IAADFS Rituals Home and Body Cosmetics, one of the fastest-growing beauty brands of its kind in Europe, will be exhibiting at the IAADFS exhibition in Orlando in March (booth 1923).

Rituals Cosmetics, which combines home and body cosmetics, offers luxury body and facial creams, mineral make-up, scented candles, pure tea and Soulwear. “We exhibited at the IAADFS exhibition last year for the first time and we found it an extremely effective way to introduce ourselves to the travel retail industry in North America,” says Neil Ebbutt, Director Wholesale and Travel for Rituals Cosmetics. “As we start to expand our presence and profile in North American travel retail, then events like IAADFS become even more important for us.” Rituals will showcase its latest in-store merchandising furniture by building its exhibition stand from these units.

“It’s a great opportunity not just to present our products but also the extremely high quality, bespoke display furniture that goes with them,” says Ebbutt.

Rituals has been working on expanding its presence in the Americas. In December 2013 it made its debut in the US domestic market, opening two stores in the Upper West Side and SoHo neighborhoods of New York City and achieving nationwide distribution in Barneys department store.

And at the end of 2014 Rituals won the prestigious WWD Beauty Inc award for Best Specialty Retailer of the Year in the US. 2015 will see the firm open a further five stores in the US domestic market and listings with Americas-based global airlines and hotel operators.

At least five stores are also scheduled to begin trading in the domestic market in Brazil.

Rituals Cosmetics is expanding its presence in the Americas

Travel Blue brings one-stop travel accessory shop to Orlando

Travel Blue’s TECH range of over 150 electrical/electronic/digital items including adaptors, power banks, speakers, cables, earphones, Bluetooth headphones, USB car and wall chargers and laptop bags

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AMERICAS DUTY FREE & TRAVEL RETAILING MARCH/APRIL 2015

Travel accessories specialist Travel Blue is to exhibit its one-stop travel accessory shop at the IAADFS show (booth 901) following another successful year in the region.

With an expanded regional team to meet the growing demand for its products in both North and South America, Travel Blue offers a one-stop travel accessory shop for retailers, as well as the regional support required to ensure the best service, the company said.

The company provides attractive and space-saving merchandising units that range from shop-in-shop, corner and wall bay systems to simple standalone gondolas. The offer includes Travel Blue’s TECH range of over 150 electrical/electronic/digital items including adaptors, power banks, speakers, cables, earphones, Bluetooth headphones, USB car and wall chargers and laptop bags. Travel Blue is now promoting the TECH line to airlines globally for inflight sales.

“Airlines can choose products which best suit their passenger profile, region and demographic.

They are ideal for impulse sales and boosting that allimportant need for additional revenue,” says Jonathan Smith, Director of Travel Retail.

Also on show in Orlando will be Travel Blue’s recently added colors range of micro-pearl neck pillows in red, light blue, deep blue and purple, first introduced at the TFWA World Exhibition last year.

IAADFS EXHIBITORS

Clogau jewelry is made from rare Welsh gold

Clogau to bring Welsh heritage to Americas Welsh gold jewelry brand Clogau is poised to bring its travel retail offering to the Americas, following two successful years of expansion into the Middle East and Asian markets, including two stand-alone stores in China.

The company will be attending its first IAADFS show in March, where it will introduce the brand’s new self-select units in addition to its travel retail assortment plus the 9ct and 18ct collections. To celebrate its 25th anniversary, Clogau recently launched its Heritage campaign, set at Highclere Castle, the location of the popular Downton Abbey TV program.

The brand believes its prestigious connections to the British royal family, unique heritage and rare Welsh gold will appeal to consumers in the Americas. Garry Stoner, Clogau’s Travel Retail Account Manager, said: “Partners can expect to see a long-term commitment to the Americas region from Clogau. We want to build strong partnerships with our customers that will be a real win-win.”

Nestlé optimistic for category growth in Americas

Nestlé Swiss presents its new elegant and premium look

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Nestlé International Travel Retail remains bullish on delivering category growth in the Americas, despite a challenging 2014 in the region for the confectionery category, according to Global Head of Sales, Alan Brennan.

“Nestlé will be working with its retail partners to optimize sales and deliver category growth focusing on converting more travelers to shoppers and shoppers to buyers, leveraging insight-driven new product development and category action via its Perfect Store platform,” he said.

The primary brand focus in South and North America this year will be the launch of the new Nestlé Swiss range, which offers an exclusive gift for the traveler, while in-store activations will focus on the Kit Kat brand in South America.

At the IAADFS Show, visitors will see the full range of products for 2015—the majority exclusive to travel retail—including Nestlé Swiss presented in its new elegant and premium look. Offering a new 230g gift box of premium assorted dark chocolates with different signature tastes, along with 300g Bars and Sharing Bags, all formats can be shared and gifted.

Important for South America will be the new Kit Kat offer, which supports the ongoing high-level global campaign to promote the brand. The offer is spearheaded by the launch of four Kit Kat Break Time Sharing Bags. Each 517g easy-carry bag is designed in a humorous way to represent a bag symbolising a different type of travel break: beach, city, chic or globe-trotting. Each bag contains 31 Kit Kat Minis and is exclusive to travel retail.

Also new is a 162g Kit Kat Mini Chunky Snack Bag containing mini bite sizes that aim to increase sales at the till point. Additionally for South America are new Smarties Disney Gift Boxes, each containing eight Smarties mini boxes for portion control plus a toy. The boy’s version includes a Disney/Pixar Glow in the Dark Flash McQueen Coin Bank, while the girl’s features a Disney Frozen jewelry box.

Visitors in Orlando will also be able to view new-look Nestlé Mix Sharing Bags designed to give a distinctive identity to the range and better communicate both the Mix concept and Nestlé’s extensive confectionery portfolio, along with the Nescafé range of Cappuccino, Latte, Mocha and Vanilla coffee mixes in a travel exclusive format.

“Last year was difficult in the region, largely driven by economic factors centered on currency movement versus the US dollar, specifically in Brazil in the early part of the year.

This, coupled with the weakness in key economies in South America, only reduced traveler confidence and appetite to spend,” noted Brennan.

“However, whilst these negative factors are still relevant for 2015, the situation has improved in terms of reaching a level of stabilization but still remaining volatile. Therefore, both retailers and suppliers will need to be flexible in their retail proposition and adapt where necessary if the situation changes. We are certainly going to meet these challenges and look forward to meeting with our customers in Orlando to discuss how best to maximize potential.”

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IAADFS

EX HIBITOR S

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EXHIBITOR NAME A to Z Duty Free, LLC A. Fuente & Co., Inc. Actium LLC Aero-Cos International Ltd. Air-Val International, S.A. Alexander James & Co. ALFA Brands Inc. Altimetre LLC American Caribbean Gateway dba Otis McAllister American Fragrances LLC Angus Dundee Distillers PLC Artco Group ATRA Industries Inc. Bacardi Bacchus Bardinet SAS Barrington House Premium Jamaican Cigars, Ltd. Barton & Guestier Patriarche USA Beam Suntory Beaute Prestige International Beauty Contact Inc. Beluga Vodka International Limited Bodegas Williams & Humbert Bolle (formerly Bushnell) Bond No. 9 Braun Brown-Forman Beverages Worldwide Buckley Jewellery Buco Handbags Caballeros Inc. Cabeau, Inc. Campari International SRL Camus Wines & Spirits Capella Industries AB CB Products Inc. AMERICAS DUTY FREE & TRAVEL RETAILING MARCH/APRIL 2015

PRIMARY PRODUCT CATEGORY Liquor Tobacco Liquor Jewelry/Accessories/Luggage Fragrances/Cosmetics Liquor Confections/Gourmet Foods Fragrances/Cosmetics Tobacco Fragrances/Cosmetics Liquor Services Jewelry/Accessories/Luggage Liquor Liquor Liquor Tobacco Liquor Liquor Fragrances/Cosmetics Fragrances/Cosmetics Liquor Liquor Jewelry/Accessories/Luggage Fragrances/Cosmetics Gifts/Writing Instruments Liquor Jewelry/Accessories/Luggage Jewelry/Accessories/Luggage Liquor Jewelry/Accessories/Luggage Liquor Liquor Jewelry/Accessories/Luggage Liquor

LOCATION 1142 1007 413 1004 229 813 526 1521 1305 2410 806 826 1304 Crystal J1A 1433 807 1110 1300 323 Atlanta 2203 1237 934 2405 2607 1114 1409 831 2307 206 835 613 522 1908 1401

2015 IAADFS EXHIBITORS EXHIBITOR NAME CBM Inc. / Meade Ray International Chase International, Inc. Cheyenne International Chocolat Frey AG Chrislie Formulations Clarins SA Clogau Constellation Brands Crabtree & Evelyn Crislu Corporation Cross CZ by Kenneth Jay Lane Daniel Wellington Danzka Vodka Copenhagen ApS De Kuyper Royal Distillers Dejuno Corporation Design Go Inc. Designer Parfums Desigual Destilerias Campeny, SA Diageo Distell Latin America Distillerie Des Moisans Drew Estate E.T. Perfumes, Inc. Elite SRL Essence Corp Estee Lauder Travel Retail Services Inc. Euroitalia SRL Evaflor SA Falic Fashion Group Ferrero Travel Market Fervor Montreal (SAG Trading LLC) Flor de Cana Rum Fraternity Spirits World Furla Gerard Bertrand Giowine Inc. Global Brand Equity Solutions Global Design Solutions Godiva Chocolatier Greensmartliving, Inc. Grupo Penaflor Guylian NV Haleybrooke International Haleybrooke International Haleybrooke International Hardy Cognacs Heineken International Honora I & JC Corp I Marmol & Associates Inc. Imperial Tobacco International Ltd. Imprint Brasil INCC Group International Beverage International Liquor and Tobacco Trading Invicta Watches Ithier de Montmarin SARL Jakeman's Maple Products JC Newman Cigar Company JetLag Joanel Inc. JTG Trading BV JTI Duty Free USA, Inc. Kaloo, Clayeux & Kokeshi by Millennium Fragrances Karma Tequila Kipling KROMA Makeup Kronos America LLC L&L SAS La Foret Cosmetique LLC La Martiniquaise La Siesta Inc. La Toscana LAS Gear LAS Gear LAS Gear Leanez International Corp. BV Les Vins de Pierre Montagnac L'Occitane Loch Lomond Group lolaandgrace

PRIMARY PRODUCT CATEGORY Jewelry/Accessories/Luggage Liquor Tobacco Confections/Gourmet Foods Fragrances/Cosmetics Fragrances/Cosmetics Jewelry/Accessories/Luggage Liquor Fragrances/Cosmetics Jewelry/Accessories/Luggage Gifts/Writing Instruments Jewelry/Accessories/Luggage Jewelry/Accessories/Luggage Liquor Liquor Jewelry/Accessories/Luggage Jewelry/Accessories/Luggage Fragrances/Cosmetics Jewelry/Accessories/Luggage Liquor Liquor Liquor Liquor Tobacco Fragrances/Cosmetics Jewelry/Accessories/Luggage Fragrances/Cosmetics Fragrances/Cosmetics Fragrances/Cosmetics Fragrances/Cosmetics Fragrances/Cosmetics Confections/Gourmet Foods Jewelry/Accessories/Luggage Liquor Liquor Jewelry/Accessories/Luggage Liquor Liquor Liquor Services Confections/Gourmet Foods Tobacco Liquor Confections/Gourmet Foods Liquor Liquor Liquor Liquor Liquor Jewelry/Accessories/Luggage Jewelry/Accessories/Luggage Fragrances/Cosmetics Tobacco Services Fragrances/Cosmetics Liquor Liquor Jewelry/Accessories/Luggage Fragrances/Cosmetics Confections/Gourmet Foods Tobacco Jewelry/Accessories/Luggage Jewelry/Accessories/Luggage Fragrances/Cosmetics Tobacco Fragrances/Cosmetics Liquor Jewelry/Accessories/Luggage Fragrances/Cosmetics Jewelry/Accessories/Luggage Liquor Fragrances/Cosmetics Liquor Gifts/Writing Instruments Liquor Gifts/Writing Instruments Gifts/Writing Instruments Gifts/Writing Instruments Liquor Liquor Fragrances/Cosmetics Liquor Jewelry/Accessories/Luggage

LOCATION 1910 1111 936 733 1522 1717 739 1228 2613 508 623 429 1702 223 112 1334 601 2404 Atrium A 727 Alcove B 1105 1402 900 2501 2019 1903 Crystal KL 2101 2605 2217 1123 409 1223 828 2223 436 1101 1439 2504 823 536 1339 1129 207 208 309 800 1015 431 122 123 713 1106 1716 609 532 107 1709 802 1005 2609 433 1520 1421 228 2617 2209 2408 2409 1336 1518 809 2619 1229 1301 1400 2207 1338 438 Chicago 907 2309

EXHIBITOR NAME L'Oreal - Parbel L'Oreal - Parbel Lorience Paris Luxottica Group Majorica Marchon Eyewear Marcolin USA Inc. Marie Brizard Mars International Travel Retail Maui Jim Inc. Micys Company Spa Monarq Group Mondelez World Travel Retail LLC Moroccanoil Inc. Naftali Inc. Nestle International Travel Retail Neuhaus NV/SA Nishi Pearls Obaku LLC Oettinger Davidoff AG Ohserase Manufacturing Omron Healthcare Inc. OneSimCard Opticaset Inc. / Toxic Eyewear Orlane SA Pace Tobacco Industries (BD) Ltd. Palm Beach Beaute LLC Parfums Jacques Bogart Parlux Ltd. Patron Spirits International AG PBG, S.A. (Premium Brands Group, SA) Perfetti Van Melle Global Travel Retail Perfumes Y Diseno Comercial S.L. Phenix Business Corp Philip Morris Duty Free, Inc. Philip Morris Duty Free, Inc. Premier Global Trading, Inc. Premier Portfolio International Ltd Prestige Wine Imports (Nosio) Prowood Wine & Spirits Inc. Puig Panama Ravoire & Fils Reba Americas LLC Remy Cointreau Travel Retail Americas Revlon RIGO Trading SA Ritter Sport Rituals Cosmetics Rodeo Sport SA Safe Skies TSA Luggage Locks Safilo Sayan Inc. Shiseido Travel Retail Americas SNI Solar Time Ltd. Specialty Brands Spirits & Wines Inc. Stansfeld Scott Inc. Storck Travel Retail Ltd. TDL International Inc. Tea Forte The Hershey Company Travalo Travel Blue Ltd. Travel Clozs Travel Retail Distribution Group Travelpro International Inc. Underberg Group Urbani Truffles USA Varela Hermanos SA Viva Sales & Services LLC Wefort Inc. Wente Vineyards William Grant & Sons Wonderful Pistachios

PRIMARY PRODUCT CATEGORY Fragrances/Cosmetics Fragrances/Cosmetics Fragrances/Cosmetics Jewelry/Accessories/Luggage Jewelry/Accessories/Luggage Jewelry/Accessories/Luggage Jewelry/Accessories/Luggage Liquor Confections/Gourmet Foods Jewelry/Accessories/Luggage Fragrances/Cosmetics Liquor Confections/Gourmet Foods Fragrances/Cosmetics Jewelry/Accessories/Luggage Confections/Gourmet Foods Confections/Gourmet Foods Jewelry/Accessories/Luggage Jewelry/Accessories/Luggage Tobacco Tobacco Gifts/Writing Instruments Gifts/Writing Instruments Jewelry/Accessories/Luggage Fragrances/Cosmetics Tobacco Fragrances/Cosmetics Fragrances/Cosmetics Fragrances/Cosmetics Liquor Liquor Confections/Gourmet Foods Fragrances/Cosmetics Liquor Tobacco Tobacco Fragrances/Cosmetics Gifts/Writing Instruments Liquor Liquor Fragrances/Cosmetics Liquor Fragrances/Cosmetics Liquor Fragrances/Cosmetics Confections/Gourmet Foods Confections/Gourmet Foods Fragrances/Cosmetics Gifts/Writing Instruments Jewelry/Accessories/Luggage Jewelry/Accessories/Luggage Jewelry/Accessories/Luggage Fragrances/Cosmetics Jewelry/Accessories/Luggage Jewelry/Accessories/Luggage Liquor Liquor Confections/Gourmet Foods Confections/Gourmet Foods Confections/Gourmet Foods Confections/Gourmet Foods Fragrances/Cosmetics Jewelry/Accessories/Luggage Jewelry/Accessories/Luggage Gifts/Writing Instruments Jewelry/Accessories/Luggage Liquor Confections/Gourmet Foods Liquor Jewelry/Accessories/Luggage Gifts/Writing Instruments Liquor Liquor Confections/Gourmet Foods

World Equity Brand Builders Llc

Liquor

World Of Patria International Ltd. Worldclassbrands Yon Smart Blanket Yunnan Tobacco International Zippo Manufacturing Company Zylangia

Liquor Jewelry/Accessories/Luggage Gifts/Writing Instruments Tobacco Gifts/Writing Instruments Fragrances/Cosmetics

LOCATION Canary 4 Crystal N 1811 2117 423 2317 1803 701 523 1703 1917 1037 315 2517 1201 Denver 1704 435 838 322 2603 1235 110 337 2111 1514 2600 2017 2109 531 939 1329 1817 700a 301 Alcove A 1708 703 437 1104 Crystal PQ 938 2401 113 723 1234 1031 1923 Atrium B 1340 2417 1809 Boston 432 425 707 201 801 1207 931 1315 1515 901 1241 1323 1512 832 1400a 1001 2523 1700 333 100 1335

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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IAADFS TRADE SHOW FLOOR PLAN 2015

IAADFS

TRADE SHOW

FLOOR PLAN

2 0 1 5 10

AMERICAS DUTY FREE & TRAVEL RETAILING MARCH/APRIL 2015

IAADFS Duty Free Show of the Americas March 22-25, 2015 Orlando World Center Marriott, Orlando, Florida

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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