AMERICAS DUTY FREE by Paramount Publishing Ltd.

NOVEMBER/DECEMBER 2010 • VOL 20, NO 4

CANADIAN ISSUE 2010

Mixed signals p.

DFX’s savvy incentives p.

Diverse FDFA p. exhibitors

New & Notable p.

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

Letter From The Editor

NOVEMBER/DECEMBER 2010

•

VOL 20, NO 4

The Americas Duty Free & Travel Retailing (ISSN 0962-0699) is published four times a year February/March, August/September, October, November/ December) 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. Subscriptions: $200 for one year. Art and photographs will not be returned unless accompanied by return postage. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor. November/December 2010, Vol. 20, No. 4. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2010 Global Marketing Company Ltd. The 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

Happy 25th anniversary to the FDFA

EDITOR Hibah Noor hibah@dutyfreemagazine.ca

ADVERTISING SALES ADVERTISING & MARKETING MANAGER Kim Carrera kim@dutyfreemagazine.ca CIRCULATION & SUBSCRIPTION MANAGER Deepa J deepa@globalmarketingcom.ca

he Frontier Duty Free Association has been connecting suppliers and operators in the Canadian duty free industry for 25 years, providing endless opportunities to all. To celebrate this milestone the organization has several fun events planned for this year’s convention in Niagara Falls. One of these events will be a welcome reception with an ‘80s theme, complete with a disc jockey playing retro music from that era, fire works, a full bar and lots of ‘80s memorabilia. The gala will feature memorable performances by Cirque de Soleil, as well as a Beatles tribute band. The FDFA Convention Committee has worked incredibly hard to make this year unforgettable, and I’m sure it will be a big success. I hope you enjoy this issue, which is dedicated to our fellow Canadians and their successes in the duty free market. Please join me in congratulating the FDFA team on 25 years of success, with many more to come. Kind regards,

Hibah Noor Editor hibah@dutyfreemagazine.ca

www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

EDITORIAL DEPARTMENT

CONCESSIONS, LIQUOR & TOBACCO EDITOR Ryan White ryan@dutyfreemagazine.ca ART DIRECTOR Patrick Balanquit patrick@globalmarketingcom.ca CONTRIBUTOR Andrew Brooks

NOVEMBER/DECEMBER 2010 • VOL 20, NO 4

16 Contents 6 8 10 14 16 20

Kiehl’s awarded “Shop of the Month” in Atlanta ■ Private equity firm acquires controlling interest in SNI ■ RIST appoints ETC as agent for Americas TR

ASSOCIATION NEWS

A consolidated message FDFA’s Laurie Karson discusses this year’s conference and trade show while touching on the importance of promoting a unified voice for Canadian duty free

OPERATOR NEWS: AER RIANTA

30 34

CANADIAN BORDER DUTY FREE

Mixed signals

INDUSTRY NEWS

Airport duty free leads the way

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

DFX Distribution pulls out all the stops when unveiling original promotions and incentives

FDFA EXHIBITORS

The journey ahead

2010 has been a good year for Canadian border duty free, but within the generally positive trend, individual stores seem to be seeing different trends

Savvy incentives

OPERATOR NEWS: ALDEASA VANCOUVER With Freda Cheung now at the helm as CEO, Aldeasa Vancouver lists new products, develops new store concepts and continues catering to passengers’ needs

COMPANY NEWS: DFX DISTRIBUTION

BEAUTY BEAT

“In a good position” With a new trans-border store in Halifax and stable sales growth over last year, Aer Rianta is exactly where it wants to be heading into the holiday season

Making waves with marine science The H2O Plus market differentiator is the skincare potential contained in the world’s oceans – and new scientific discoveries keep things moving

IN BRIEF

While Canadian land border duty free sales in September remained essentially flat over last year, sales in airport stores provided a low double-digit boost for the industry

COMPANY NEWS: H2O PLUS

40 42

The buzz around beauty Newest scents, skincare and cosmetics are ready to be scooped up in the Canadian travel retail market

Diverse FDFA exhibitors A whole slew of exhibitors ready themselves to welcome buyers from East to West during this year’s Frontier Duty Free show

LIQUOR REPORT: FAST-GROWING BRANDS

Booming business Americas Duty Free examines the explosive growth of three brands in Canadian travel retail, discovering that a concentration on quality is foremost in the minds of suppliers and consumers alike

COMPANY NEWS: DIAGEO

Back in Black With the release of Crown Royal Black and Johnnie Walker Double Black, Diageo continues to offer travelers in Canada innovative takes on premium favorites

NEW & NOTABLE Comfyzzz Travel Pillows ■ Adidas Timepieces ■ Classic Messenger Bag

In Brief Kiehl’s awarded “Shop of the Month” in Atlanta arbel’s traditional apothecary skincare brand Kiehl’s was named “Best Shop of the Month” for August at the Atlanta Airport. Nearly 90 million yearly passengers that travel through the airport have a large number of retailers to choose from when it comes to shopping. In August, the Kiehl’s boutique distinguished itself from the rest of the stores with its commendable performance. The award, which is granted monthly by the discerning Atlanta Airport Authority, is meant to recognize companies that provide

excellence in customer service, with an attractive and original look, and maintain the highest standards of cleanliness and friendliness. The Kiehl’s team was competing against other top brands such as Lacoste, L’Occitane, Salvatore Ferragamo, Swarovski and Ermenegildo Zegna. Parbel said the achievement itself is even more impressive when the relative newness of the store and the duty paid concept in the Kiehl’s airport environment is taken into account. Established not even a full year ago, the November opening was the first duty

paid Kiehl’s store in the United States. According to the company, this was Kiehl’s and HMSHost’s (the store operator at the airport) first joint venture into the duty paid domain and it has been a lucrative one. The store boasts impressive profitability per square foot. It is a case of one of the fastest growing firms within the beauty industry partnering with one of the cornerstones in travel retail. The fact that Kiehl’s products cater to such a wide audience and are becoming increasingly popular as gifts has also been a great boost to sales.

Private equity firm acquires controlling interest in SNI

lumni Capital Network (ACN), a private equity firm, has acquired a controlling interest in SNI Group, a fashion accessories wholesaler and innovator of the popular “Everything’s $10” retail concept. Founders Todd and Randy Cohen will continue to lead SNI, now known as Sourcing Network International, and hold a large equity stake. Located in Bensalem, Pennsylvania, SNI sources, produces and distributes items of high perceived value, such as handbags, watches, jewelry, ties, scarves and wallets, to more than 3,000 retail outlets in airports, casinos, cruise ships, museums, hotels and other tourist destinations. SNI also supplies a variety of more upscale products to its Luxury for Less stores and owns the Clöudz brand of travel pillows and accessories and museum artifacts line of silk ties, scarves and watches.

“The Cohen brothers have invigorated the fashion accessories industry by offering shoppers incredible quality at the US$10 price point,” said Jim Honohan, Chief Executive Officer of ACN, a New York City-based private equity fund created by former partners of the global management consulting firm Accenture. “We're thrilled to become partners with such dynamic entrepreneurs and are confident we can help them take their business to even greater heights.” Honohan has been named chairman of SNI’s new board. The Cohens started SNI, formerly known as Silk Neckwear International with their father, Stan, as a purveyor of silk ties and fashion accessories to hotel shops 22 years ago. “We wanted to expand our company and chose ACN as our financial partner because we were convinced it had the best resources and talent to help us accelerate our growth,” explained Todd Cohen, SNI Chief Execu-

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

tive Officer. He said the transaction significantly enhanced the financial position of the company, which has no third-party debt, a strong balance sheet, specific capital targeted for growth and access to future funds. SNI plans to use the influx of capital to broaden its sourcing networks, enter new markets globally, install new information technology, hire more employees and streamline operations. “These changes will allow us to make our customer partnerships better than ever,” said Randy Cohen, SNI Executive Vice President. He explained that new business processes and computer systems will make it easier to track product availability, customer orders and profitability. “We’ll also expand our Clöudz product line, offer an even wider variety of boutique products and introduce creative marketing campaigns to bring more shoppers into stores,” he added.

RIST appoints ETC as agent for Americas TR

C KIDRIST by RIST distributed by ETC in the Americas

Colorful, in-trend watch brand RIST has announced the appointment of ETC as its duty-free/travel retail agent for the Americas. The agreement covers all inflight, airport, border and cruise ship shops in North, Central, and South America, including the Caribbean. The agreement is effective immediately and includes the complete RIST range of watches along with the KIDRIST and PLASTICK brands. It will also include other RIST lifestyle lines as they are introduced over the next year. Elizabeth Taylor, President of ETC, commented: “I am very excited to represent the RIST brand. There is a strong demand for colorful timepieces and the RIST collections meet the full criteria. They are perfectly positioned for DF/TR in style, color, quality, and price. What also captured my attention is that they are very lightweight, making them wonderfully comfortable on the wrist. Travel Light – in Travel Retail. RIST is a perfect fit in the ETC group portfolio. “The PLASTICK brand of ion sports watches is also a lot of fun with holograms and tourmaline to enhance feelings of well being. I’ve already shown the brand to a couple of major groups in the U.S. and the reaction has been very positive.” RIST’s CEO Mick Armstrong comments: “We’re delighted to be working with ETC; Elizabeth has come highly recommended and is incredibly enthusiastic about the brand, which is very encouraging for us. We’re also now talking to other agents regarding distribution in other regions and hope to make further announcements very soon.”

Pronto I nnovations 601 G o rd o n Bake r Ro ad Toronto , ON Canad a M2H 3B8

To ll f ree: 1-866-214-4360 Telep hone: 416-492-6893 Fax: 416-497-4943 E mail: info @p r nto .com

www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

Association News

A consolidated

message

FDFA’s Laurie Karson discusses this year’s conference and trade show while touching on the importance of promoting a unified voice for Canadian duty free

aurie Karson, Executive Director of the Frontier Duty Free Association (FDFA), recently spoke to Americas Duty Free about the organization’s 25th anniversary conference and trade show. She also touched on recent Canadian duty free sales statistics and the FDFA’s national marketing and branding initiative aimed at communicating the benefits of shopping duty free to consumers. Karson went on to note that by all accounts, this year’s FDFA event should dazzle attendees. With delegate numbers up from 2009, a number of very special celebrations planned and consumer confidence gaining traction in the Canadian travel retail channel, there’s certainly more than one reason for operators and suppliers alike to be excited about attending the event in Niagara Falls, Ontario.

Americas Duty Free: Can you tell us how many people have confirmed attendance to this year’s FDFA conference and trade show? How does this compare to the previous event? Laurie Karson, Executive Director, Frontier Duty Free Association: So far a total of 85 companies have confirmed attendance to this year’s FDFA convention and trade show. The breakdown is as follows: 62 operator delegates and124 supplier delegates for a total of 186 attendees.

RYAN WHITE

Last year’s convention attracted 184 delegates, so we’ve already surpassed last year’s numbers. It’s important to note that we still have quite a bit of time to increase the numbers further as registration is still open. ADF: How do you feel the duty free industry in Canada is performing compared to this time last year? LK: Based on the overall land border duty free sales, we are seeing sales increases in the Prairie region, the Quebec/Atlantic region and in other areas across the country. While the growth has not been tremendous overall, there is an increase compared to last year and we believe this is attributed to more passport usage amongst Canadians and Americans, as well as improved border infrastructure, which assists in traffic movement at the borders. I think there is a greater consumer confidence and desire for both Canadians and Americans to travel across the border compared to when the recession was at its height. Notably, airport duty free stores have seen incredible increases this year. ADF: The FDFA is working on a number of initiatives to increase communication of the value of purchasing duty free in Canada. Can you give us an update as to how the project is coming along? What have you accomplished and what remains to be done? LK: The FDFA has undertaken a national marketing and branding initiative that we are very excited about. The project is currently in the

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

implementation stage right now. We are currently completing the brand focus component and the national website is being completed. We hope to show the land border stores the initial website at our upcoming convention meeting in November. The purpose of this national marketing initiative is to promote Canadian duty free to the general public while identifying the benefits of shopping duty free, educate the consumer on allowances and direct consumers to our store locations with a consolidated message. ADF: This is the FDFA's 25th anniversary. What special events can visitors expect? LK: We have many wonderful events planned this year, such as our welcome reception, which this year has an 80s theme that includes fireworks, an 80s disc jockey, an 80s bar and a lot of other fun memorabilia. Our gala this year will feature Cirque de Soleil performances and a Beatles tribute band. The FDFA Convention Committee has really paid attention to the fine details this year to make this the most memorable convention of all time. We hope that those who are not current supplier members to the FDFA know that they still have an opportunity to join the convention via our trade floor and are welcome to contact the FDFA about the potenc tial of joining this year’s show.

simply perfect.

Hand-selected 100% Weber blue agave. The world’s finest ultra-premium tequila. patronspirits.com

Operator News: Aer Rianta

Aer Rianta’s main Canadian operation in Montreal is currently reaping the rewards of recently added routes to Athens, Copenhagen, Rome and Brussels

“In a good

position”

RYAN WHITE

With a new trans-border store in Halifax and stable sales growth over last year, Aer Rianta is exactly where it wants to be heading into the holiday season er Rianta enjoyed a good deal of success in 2009 due in a large part to moving four of its stores downstream from security areas. In cooperation with airport authorities in Edmonton, Winnipeg, Halifax, Ottawa and Montreal, the company managed to turn the challenge of the liquid, aerosol and gel (LAG) restrictions that have plagued many an operator into a bonafide success story. Most recently, the company’s trans-border location in Halifax, Nova Scotia, which was little more than a kiosk a year ago, was expanded into a walkthrough store measuring 40-square-meters. While not a large store by any means, the real draw for Aer Rianta was its prime location. “The store is quite small but superbly located,” says Philip Eckles, Regional Manager for North America and the Caribbean, Aer

The new Halifax trans-border location has been expanded to 40-square-meters, giving the company more space to showcase products and resulting in an 82% sales increase in Q3 2010

Rianta. “We could have had a bigger location in the main lounge area but agreed with the Airport Authority on a walkthrough location in the main thoroughfare immediately after US Customs and Border Protection.” The previous kiosk only sold a few core perfumery, liquor and tobacco items, but the new

“We had a good year in 2009. As a result, although our increases over last year are still good, we may not be showing the same big increases as operators in other regions.” Philip Eckles, Regional Manager for North America and the Caribbean, Aer Rianta

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

store now offers a complete range of products in these categories, along with some gifting items such as Swarovski and Guess products, as well as watches and pens. Largely as a result of the increased product selection, the location enjoyed an 82% increase in sales in Q3 2010 compared to the same period last year. “Of course, all of this wouldn’t have been possible in the previous kiosk, so as a result sales have increased,” explains Eckles. “In fact, the increase in sales has been tremendous at all of our downstream locations in Canada.” Aer Rianta’s sales for the past 12 months to September 2010 were up in Canada by 9.4% over the previous 12-month period. Indeed, this is compared to merely a marginal increase in departing passenger numbers. With PAX numbers essentially flat, Aer Rianta’s sales boost is largely due to an increase in average customer spend of 9.4% and similarly rising capture rates. This year, the company has also made great strides in ensuring that the right products are in the stores at the right time. Aer

SIGNUPNOW!

CONFERENCE ISSUE

Subscribe to The Americas Duty Free & Travel Retailing magazine and its bi-weekly eNewsletter to keep you informed of the latest news. Simply fill out and return this subscription card to the following address, or fax with your credit card details to +1 905-821-2777

One Year â&#x20AC;&#x201C; 4 issues and 24 eNewsletters

US$200

.00

Two Years â&#x20AC;&#x201C; 8 issues and 48 eNewsletters

US$300

.00

Please contact Deepa J at +1 905-821-3344 ext.#21 or email deepa@globalmarketingcom.ca Mail check made payable to Global Marketing Company Ltd.:

SUBSCRIPTION FORM

company name

The Americas Duty Free & Travel Retailing magazine 26 Pearl Street Mississauga, Ontario, Canada L5M 1X2 Tel: 1-905-821-3344 Fax: 1-905-821-2777 email: deepa@globalmarketingcom.ca

name

mailing address

city

province/state

country

postal code/zip

(

) area code

(

phone

) area code

year US $200.00 4 magazine Issues & 24 eNewsletters

year US $300.00 8 magazine Issues & 48 eNewsletters

fax

Enclosed is a check or money order made payable to Global Marketing Company Ltd.

Bill me

SIGN ME UP! I would like to receive a subscription to The Americas Duty Free & Travel Retailing magazine

expiry date

credit card number

signature Payment in U.S. funds must accompany this subscription card.

Operator News: Aer Rianta INTRODUCING THE

CHANTECLER COLLECTION INCLUDES OUR NEW WRISTLET WALLET

AVAILABLE AT MOST RETAILERS ACROSS CANADA

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Rianta has managed to reduce on-hand stock by 9.5%, which in turn has resulted in a 17.5% improvement in the company’s return on investment. While the above statistics aren’t the drastic double-digit increases that operators in other regions of the world have seen this year, it should be noted that in the region Aer Rianta is coming off a 2009 that was extremely successful in terms of sales growth over 2008. In October 2009, Aer Rianta’s capture rate was around 107% ahead of the previous twelve months. Indeed, all of the Canadian stores that were moved downstream from security saw increases—some of 35% and some as high as 90%. As an organization, Aer Rianta ended 2009 at 6.5% above 2008. “You have to bear in mind that other regions are having a tremendous 2010 compared to last year,” explains Eckles. “With us, however, we had a good year in 2009. As a result, although our increases over last year are still good, we may not be showing the same big increases as operators in other regions.” With regard to the rest of this year and 2011, Aer Rianta will build two new stores in the new James Armstrong Richardson International Airport terminal. The trans-border store will measure 103square-meters, while the international location will measure 30square-meters. Construction was originally scheduled to begin this year but has been postponed until the new year. “We have just completed the request for proposals process for our general contractor for the construction of the stores,” notes Eckles. “There are slight delays with the overall airport project, which will mean that we probably will not actually start construction on the new stores until early in the new year with an opening a few weeks thereafter.” While both the International Air Transport Association and Airports Council International note that the double-digit increases seen in passenger numbers in many regions of the world this year will likely shrink to more subdued increases into 2011, Eckles asserts that Aer Rianta has a lot to look forward to in the coming months. “The feedback we’re getting from the airport authorities is that 2011 will be a good year,” he says. “In Montreal, where our main Canadian operations are located, there have been new routes introduced to Athens, Copenhagen, Rome and Brussels, so this is certainly a positive sign. We’re also looking to boost spend with an upcoming promotion planned in cooperation with a Montreal-based charity for homeless youth called Dans la Rue.” As part of the initiative, passengers will be able to buy plush toys at a discounted price with a qualifying purchase. Of course, customers can buy the toys at regular price without meeting the minimum purchase requirement. All profits from the sales of the toys will be donated to Dans la Rue. Furthermore, Aéroports de Montréal is supporting the initiative by waiving all concession fees on the toys sold during the promotion. “The fact that we are able to help homeless kids during the holiday season and through the Canadian winter is good news,” concludes Eckles. “Additionally, we’ve got many other promotions planned for the holiday season, although it’s too early to give details. Furthermore, the charter season starts earlier this year and with increased capacity we will likely generate additional sales in our smaller regional stores. We feel we’re in a good position at the moment. All in all, we’re expecting stable growth that will remain ahead of passenger numbers in 2011.” [Ed: At press time, it was announced that Philip Eckles was named the Head of Aer Rianta - Middle East. Americas Duty Free wishes c Philip the best of luck in his new role with the company.]

Importing and Transportation Management Specialists PROVIDING COMPLETE AND INNOVATIVE SOLUTIONS

We have over 30 years experience in the Canadian duty free market and a commitment to excellence. BILSI staff are experts in Canada Customs regulations, transportation management and 3rd party logistics. Our mission is to provide our clients with the highest level of customer service covering their shipments to and within Canada and the USA.

F O R M O R E I N F O R M AT I O N C O N TAC T U S AT 9 0 5 . 6 0 6 . 2 2 2 2 | I N F O @ B I L S I .C O M W W W. B I L S I . C O M

Operator News: Aldeasa Vancouver

The

journey ahead

With Freda Cheung

now at the helm as CEO, Aldeasa Vancouver lists new products, develops new store concepts and continues catering to passengers’ needs RYAN WHITE BY

n July, Freda Cheung took over as CEO of Aldeasa Vancouver from Antoni Felany, who was promoted to President of Aldeasa’s US operations. Not long before that, Craig Duncan took the post of Vice President of Operations, bringing with him over 20 years of experience in the retail industry. The success of the company—both prior to and after the personnel changes—is a testament to Aldeasa’s concentration on mainstays such as customer service and product selection, as well as its commitment to the continued evolution of its Canadian duty free operations. Most recently, the company has opened a corner dedicated to Etro products in its Les Boutiques store at Vancouver Airport and plans on opening a wine specialty store in the airport’s international terminal before the year’s end. Finally, Cheung and company are also currently featuring an innovative promotion in cooperation with Chanel, as well as a very impressive display of Rémy Cointreau’s Rémy Martin Louis XIII Black Pearl, as a means of enticing passengers to purchase at Aldeasa Vancouver’s stores. Sure to capture the attention of travelers in Vancouver is the new Les Boutiques Etro corner. The 40-square-meter space is the only duty free Etro shop in Canada and the second Etro location in the country. Etro’s women’s and men’s prêt-à-porter collections made their debut in the 1990s and were immediately praised for their stylistic inventiveness and research, both in the materials and the workings. The 14

artful use of prints and colors—combined with extraordinary craftsmanship, attention to detail and modern cuts—has enabled the Etro label to enjoy ongoing growth. “Aldeasa firmly maintains its commitment to offer the most important brands in the world,” says Cheung of the new listing. “We focus on ensuring that our commercial spaces reflect the effort we make to offer our customers only the best and highest quality products. This new opening is a good example of that commitment.” The operator is also planning on opening a wine specialty store in the international terminal of the same airport later this year. The majority of the 120-square-meter store will be dedicated to local Canadian wines given the strong market demand for them. The remaining space will be dedicated to premium cognacs and Scotch whiskies. Aldeasa’s current “lounge” promotion, run in conjunction with Chanel’s launch of Chance

Eau Tendre, is another example of how the company is keeping things fresh for passengers. Cheung explains: “With the lounge promotion, passengers can relax on a comfortable lounge sofa and experience this incredible new fragrance, which has proven to be a great success since it was launched in April.” While the lounge promotion can certainly be described as unique, Rémy Cointreau’s Rémy Martin Louis XIII Black Pearl display gives an entirely new depth to the word. Only 358 bottles were produced worldwide, and the flask located at Aldeasa Vancouver’s store is one of the few still available on the market. This ultra premium, unbelievably rare spirit isn’t just on display, but also available for purchase. In fact, Aldeasa Vancouver has actually sold two bottles priced at a staggering CAD$34,000 (US$32,230) each. As for the future, Cheung is looking forward to increasing passenger numbers into 2011 and to receiving an influx of Chinese visitors: “For the rest of this year as well as next year, we are expecting passenger numbers to continue in a positive trend as they have so far this year,” she says. “Canada was recently granted Approved Destination Status by the Government of China, so we are also very focused on ensuring we cater for this new group of visitors. “As a leading travel retail operator, we are constantly striving to improve and develop our business and meet the needs of our airport partners and our customers,” Cheung concludes. “I look forward to leading our Vancouver team toward an amazing c journey ahead.”

“We focus on ensuring that our commercial spaces reflect the effort we make to offer our customers only the best and highest quality products.”

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Freda Cheung, CEO, Aldeasa Vancouver

Canadian Border Stores For Boutique Hors Taxes, 2010 is a turnaround year

Mixed signals 2010 has been a good year for Canadian border duty free, but within the generally positive trend, individual stores seem to be seeing different trends

Hitting the highway

Boutique Hors Taxes takes things slow and steady

e’re seeing more Canadians than Americans every year, thanks to the weak US dollar,” says Eric Lapointe, Manager of Boutique Hors Taxes de la Beauce. The trend helps to drive continuing strong sales of tobacco prodhe move was definitely worthwhile,” says John Mar- ucts, wines and spirits, and perfumes. At the moment tobacco accounts shall, President of St. Stephen Tax/Duty Free Store for 26.4% of sales, wines and spirits 39.26% (42% if you include beer) in St. Stephen, New Brunswick. Marshall is referring and perfumes 22.8%. to the store’s relocation last February to a border locaBoutique Hors Taxes doesn’t depend heavily on promotions. The store tion on a new four-lane bypass highway at a new crossing a few runs some loss leaders during the summer season, but they’re mainly miles south of St. Stephen. Previously, the store was located in the small promotions on single units in perfumes and alcohol, designed to town itself, in an old building with poor parking facilities. What’s draw customers in, and not large-scale, multi-SKU affairs. June to Sepmore, the traffic was seriously congested, making it difficult for tember is the main selling season, seeing 75% of the annual business. shoppers to visit the store. With the decline in American customers, souvenirs and gifts are down, Now, traffic isn’t a worry and there’s more than enough park- and Lapointe says tobacco could be better, but in general 2010 has been a ing space, Marshall says. On top of that, retail space is now 279- good year so far – sales have increased year-over-year for the first time since square-meters, double what it was in the old store. And despite 2002. When we spoke with Lapointe, the store had seen almost 17,000 cussome hiccups, signs are that business is on the increase. tomers for the year, which puts it in good shape to beat the 17,200 figure “The first summer we weren’t happy with some of the highway for 2009, even if the remaining weeks constitute a slow period. signage,” Marshall says, “but even so traffic is up 40% over ’09.” The As for upgrades, Lapointe explains that the store takes a proactive customer mix is mostly Canadians, but there has been an increase approach to improving its 157-square-meters of space. “Instead of havin American customers. One reason, Marshall thinks, is the fact that ing some big upgrade now and then,” he says, “we do a little something the CAT Ferry, which used to run between Yarmouth, Nova Scotia every year. This year we expanded perfumes, last year we had new shelves and Bar Harbor and Portland in Maine, was cancelled a year ago. for wines and spirits, the year before that new shelves for confectionery. “They had duty-free on the ferry,” Marshall says. “The travel- We’d rather spend a few thousand dollars on improvements every year than ers were almost 100% American, and we’re the next border cross- wait – and then have to spend a much larger amount after several years.” ing they can get to, so they come here now.” Alcohol and tobacco are the bestselling categories. Confectionery is growing, Marshall says, clothing and souvenirs are strong, and fragrances are only “so-so.” This year Marshall has been working on streamlining the clothing category, pushing out the older lines that are holdovers from the old location, bringing in new ones, ltan Duty Free Shops in Coutts, Alberta, is having a positive 2010, and expanding the category overall. with sales at this point up by 10% over 2009, says Manager JanThere’s not usually a lot of traffic around the Christmas season, ice Beagle. The American mix in the store’s customer base has with the store’s main selling season being from June to November. fallen, Beagle says, thanks to stricter customs requirements The tail end of that season, from September to November, has been getting stronger in recent years. Over the next year Marshall says he that require travelers from the US to Canada to bring a passport or valid will “definitely” expand the number of staff to support business growth, equivalent. The new rules are part of the Western Hemisphere Travel Iniand he’s optimistic about the years ahead. “We’ll definitely expand tiative introduced in 2004 by the US government. The restrictions were in the works for a long time, but that doesn’t seem to have persuaded very in future,” he says. “There’s a lot of room here to expand.”

“T

“W

Americans down, Canadians up at Altan

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Peace Arch moves up-market as the customer gets younger

many Montanans to do what’s necessary to get across the border. “Our Canadian souvenir products are down,” Beagle says. “Many Montana residents just are not crossing the border, leaving an 80% to 20% Canadian mix. And with a strong Canadian dollar, Canadian crossborder shopping is on the rise – also snowbirds are increasing yearly and we forecast another significant increase this year.” One major growth category is accessories (purses, jewelry, etc.). However a strong commercial customer base means that tobacco is still the star, accounting for 60% of sales, followed by liquor at 25% and perfume at 10%. Coutts is the primary Alberta-US border crossing, and has received some attention lately in terms of improvements to traffic flow, which have helped Altan. “Last November we got to open our trucker exit lane, which has relieved a lot of parking and traffic issues,” Beagle says. And the store has carried out its own ‘infrastructure’ work: all-new flooring was recently installed in the retail area, with upgrades in the liquor and tobacco sections. Plans for a major perfume renovation are in the works too. “We’ve made adjustments for our ever changing industry,” Beagle says, “and we anticipate another good year.”

Olympics aren’t quite over for Peace Arch

e’re doing extremely well,” says Peter Raju, President of Peace Arch Duty Free, on the border in Richmond, B.C. The store is capitalizing on a continued shift in clientele, as younger customers in the 20-40 age range supplant the older generation. This shift has plenty of implications, especially since it’s occurring as Raju continues his upscale repositioning of the store – he told us his goal is to turn Peace Arch Duty Free into something closely akin to an airport duty-free store. “For one thing, we’re seeing lower sales in scotch and single malts,” he says. “The trend now is towards summery ‘party’ drinks like vodka and rum, where sales are way up.” As reported previously, the large Asian population in Vancouver has an influence on what sells: Raju notes that they boost the performance of the leather goods category. Fragrances and cosmetics, meanwhile, are merely “stable,” Raju says. Overall, sales are up 10% over 2009. In alcohol, the bestsellers right now are Grey Goose, Crown Royal and Bacardi. In perfumes it’s Versace, Dolce & Gabbana and Gucci. In skin care, the Asian clientele has helped to drive Shiseido skincare sales up by an impressive 60% this year. Last year, Raju spent around Cdn$2 million to renovate the store’s 2,415-square-meter of retail space in anticipation of the Winter Olympics, and to support the addition of luxury goods to the retail mix. The Olympics increased traffic, but oddly, they recently did so again, months after the games ended: a new ten-lane border crossing that was intended to accommodate the Olympics was finally ready only in September. That opening has helped drive a 300,000-vehicle increase in traffic in 2010.

“W

Canadian Border Stores

At Woodstock, more Americans equals higher average spend

Going out with a bang e’re seeing more American customers,” says John Slipp, President of Woodstock Duty Free, located in the Atlantic Travel Centre in Woodstock, New Brunswick, where Highway 95 crosses the US border to Houlton, Maine. This is the first increase in American traffic since the fateful year 2001, he says. Slipp hesitates when asked why this is happening. He notes, as does John Marshall of St. Stephen Tax/Duty Free, that the suspension of CAT ferry service between Maine and Nova Scotia has driven cross-border traffic to other crossings, and says that some of the increase is doubtless due to that, but that nonetheless a lot of the new arrivals are people who never took the ferry. He notices there are fewer campers and motor homes coming in from the US, and more couple in cars staying at bed and breakfasts. “It’s a higher-end, semi-retired clientele,” Slipp says. The end result of this shift in clientele is that the average spend is rising, Slipp says. Sales this year are up 6% over 2009, which is higher

“W

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

than expectations. “We expected sales to be flat,” Slipp reports, “but now I’m expecting to end the year with between 5% and 10% revenue growth for the year.” Bags, wallets and purses are the strongest sellers. When we spoke with him, Woodstock Duty Free was about to launch its Annual Holiday Escape Promotion, which is aimed at female customers crossing the border to go to shopping destinations in Maine and New Hampshire. “In addition to many in-store specials, our customers can also enter to win a local Canadian gift basket and shopping spree sponsored by local merchants in our local community,” Slipp says. The campaign is marketed primarily through direct mail. November is the store’s primary holiday season and is quickly becoming the best month of the year, Slipp says. When we spoke he was readying for holiday traffic, decorating the 306-square-meter store, adding staff and increasing inventory. “We’re getting ready earlier than in past years,” he says. “We have big expectations for holiday-season sales.

It pays to promote anadian traffic is up at Blue Water Bridge Duty Free, says Peter Brain, Special Projects Manager. Blue Water is located at the Point Edward border crossing in Sarnia, Ontario. The traffic increase is a result of the strong exchange rate versus the US dollar, a phenomenon which also explains a decline in US traffic. “Sales to overnight Canadian travelers are strong,” Brain says, “but an issue at our port is that many Canadian travelers are day trippers who don’t qualify for liquor and tobacco purchase exemptions.” Other factors restricting traffic have been construction on the highway that leads to the crossing, and lengthy processing times at US. Customs during peak periods. Finally, Ontario’s imposition of the 13% Harmonized Sales Tax (HST) definitely puts the Canadian side at a disadvantage, especially with the sales tax across the border in Michigan at only 6%. All these factors account for the fact that sales are off slightly in the flagship liquor and fragrance categories, as well as some others. “But we continue to pursue an aggressive

monthly sales promotion program to positively affect store capture rates,” Brain says. “We’re also doing extensive advertising along the highway near the store, using some very large format programmable message boards put in place this year by Blue Water Bridge Canada.” Blue Water runs what Brain calls one of the most extensive ongoing monthly promotional programs in land border duty free. “We invest heavily each month in completely changing our promotions, including sign and graphical elements in the store, in the parking lot and along the highway.” One payoff is that many liquor suppliers now use the store to test new marketing and promotion ideas for the duty free market. Brain says the plan is to continue to refine the store’s marketing, paying special attention to Canadian day trippers, which are the biggest growth segment. He is also hoping that the national branding and marketing program being formulated by the Frontier Duty Free Association will help business when it’s rolled out later this fall.“We’re also making evolutionary changes to our product mix, including adding new package sizes and price points, in an attempt

Blue Water’s in a tight spot but works hard on promotion

to better appeal to the day-trip shoppers.” Because the store is distant from large US metropolitan centers, the holiday season isn’t a major fixture. Instead, Blue Water’s business is year round, tied to weekends, travel to events such as NASCAR races in Michigan, and the banner special holiday weekends. c

Travel Retail Specialists

Maan Sales Associates 1495 Chasehurst Drive Mississauga, ON L5J 3A8 o/f 905 855 9873 cell 416 988 8257 Contact: Michael Gray - President

www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

Industry News

Airport duty free leads the way While Canadian land border duty free sales in September remained essentially flat over last year, sales in airport stores provided a low double-digit boost for the industry BY RYAN WHITE he Frontier Duty Free Association (FDFA) recently released its analysis of land border and airport duty free sales during the month of September. The organization notes that the main categories that dominated sales at land border duty free stores across Canada were (in order of sales in September from highest to lowest) Alcohol (liquor, liqueur, wine and coolers); Tobacco, Cigars and Loose Tobacco; Perfume, Cosmetics and Skincare; Beer (beer and malt-based coolers); Food; Jewelry, Watches and Clocks; Clothing (including hats, fur and leather); Accessories (purses, wallets, sunglasses, etc.); Souvenirs; Glassware, Crystal, China, Figurines and Porcelain; Office and Travel Supplies; Other; Crafts and Arts; and Electronics, Cameras, Binoculars, etc.

Canadian land border duty free sales Overall, CAD$13.5 million (US$13.2 million) worth of goods was sold at land border duty free stores in Canada throughout September 2010. This represents a 0.18% decrease in sales compared to September 2009. January–September 2010 sales saw a 0.27% increase compared to the same period last year. Finally, the FDFA reports that sales at land border duty free shops for January–September 2010 totaled CAD$105.7 million (US$103.2 million).

Canadian airport duty free sales The national airport duty free sales figure for September 2010 is reported by the FDFA as being CAD$19 million (US$18.5 million). This is an increase in sales of 12% compared to September 2009. January–September 2010 sales saw an increase of 12% compared to the

same period last year, with total sales for January–September 2010 at CAD$151 million (US$147.4 million).

Land border sales by region During September 2010, sales in the Prairie region totaled approximately CAD$940,204 (US$917, 466). This figure represents an increase in sales of 7.44% from September 2009. For the period of January–September 2010, the Prairie region saw sales totaling CAD$7.4 million (US$7.2 million), with an overall year-on-year increase over January–September 2009 of 10.49%. The Pacific region saw sales in September 2010 total CAD$2.1 million (US$2.04 million). This figure represents a 1.86% increase in sales compared to September 2009. For the period of January–September 2010, sales increased in the region by 2% compared to the same period last year. Total sales for January–September 2010 equaled CAD$17.4 million (US$16.9 million). Land border sales in Ontario during September 2010 totaled CAD$7.5 million (US$7.3 million). This represents a decrease in sales of 1.69% compared to September 2009. January–September 2010 sales decreased by 1.7% compared to the same period in 2009. Sales for January–September 2010 totaled CAD$58.1 million (US$56.6 million). Finally, in the Atlantic/Quebec region, sales for September 2010 totaled CAD$2.9 million (US$2.8 million), representing a sales increase of 0.06% compared to September 2009. For January–September 2010, sales increased by 1.16% compared to the same period last year. Total sales for January–September 2010 equaled CAD$22.7 c million (US$22.1 million).

National Gross Sales -Airport Department (product lines) Rayon (gamme de produits)

Imported (IDNP) Importees

January-September 10 Imported [IDP) Domestic Importees Nationales

Accessories (purses, wallets, sunglasses,etc.) Alcohol (liquor, liqueur, wine, coolers) Beer (beer, malt-based coolers) Clothing (including hats, fur, leather) Crafts/arts Electronics, cameras, binoculars, etc. Food Glassware, crystal, china, figurines, porcelain Jewellery, watches, clocks Office and travel supplies Perfume, Cosmetics, Skincare Souvenirs (no clothing) Tobacco, cigars, loose tobacco Other TOTAL/TOTAUX

$2,246,830.03 $16,104,646.22 $23.97 $2,405,940.46 $0.00 $163,029.12 $3,993,831.49 $61,564.81 $4,205,889.94 $3,113,087.46 $45,634,329.78 $13,899.22 $18,909,759.84 $0.14 $96,852,832.48

$2,526,429.25 $0.00 $0.00 $2,435,954.28 $23,538.48 $292,035.61 380,377.11 $191,272.39 $4,255,748.36 $1,459,797.53 $153,882.55 $2,566,376.25 $9,777.25 $0.00 $14,295,189.06

Source: FDFA

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Total

Sales Mix %

$121,039.67 $4,894,298.95 3.24% $18,101,733.47 $34,206,379.69 22.63% $180,427.44 $180,451.41 0.12% $180,370.52 $5,022,265.26 3.32% $76,950.45 $100,488.93 0.07% $1,105.74 $456,170.47 0.30% $7,992,362.39 $12,366,570.99 8.18% $54,304.67 $307,141.87 0.20% $249,230.86 $8,710,869.16 5.76% $18,019.63 $4,590,904.62 3.04% $671,847.03 $46,460,059.36 30.74% $1,270,399.20 $3,850,674.67 2.55% $11,081,899.65 $30,001,436.74 19.85% $32.99 $33.13 0.00% $39,999,723.71 $151,147,745.25 100.00%

Imported +/- %

Variance Domestic +/- %

TOTAL +/- %

21.98% 217.47% 23.87% 11.01% 13.38% 12.25% -25.00% -16.34% -16.34% 67.78% 5.16% 64.27% 211.70% 13.98% 33.87% -6.94% 22059.12% -6.72% 23.33% 9.69% 14.16% -9.41% -8.91% -9.32% 24.82% 117.80% 26.37% -2.77% -62.95% -3.38% 9.88% 13.02% 9.92% 42.67% 41.09% 42.15% 7.79% 3.04% 5.99% -17.65% 0.00% 19388.24% 13.25% 10.45% 12.50%

Company News: H2O Plus

Making waves with marine science

The H2O Plus market differentiator is the skincare potential contained in the world’s oceans – and new scientific discoveries keep things moving stablished in 1989 by Cindy Melk, H2O Plus is based on the idea that the sea has huge power to heal, protect and renew skin. The company’s product strategy is centered on water-based, oil-free skincare products for the face and body, and buyers have proven to be very responsive. Elizabeth Maul, Director of Global Marketing, H20 Plus, notes that the company has benefited from the “pull” model, with much of its expansion occurring when travelers contact the company to set up distributorship agreements to bring the products to new markets. The store locator on the H2O Plus website lists 21 countries in addition to the US, Asia, Europe and the Americas, and the company boasts 1,500 distribution points around the world, in boutique environments as well as prestige retailers. Duty free and travel retail play a huge role, and the company continues to look to that end of the market to fuel future growth. “Duty free is really key for us,” says Maul. “We’re a global brand and that global consumer who travels is obviously very important to us – and since the duty free market is all across the globe, it’s important for us to have a presence there.” On the Canada/US border, the company has set up shop in Ontario, Quebec, B.C. and Manitoba, and is now pushing for an airport presence as well. “We’ve been in the Canadian

Oasis Collection

market for a very long time,” Maul says. “The Toronto [local market] store was actually our first international store when the company started. It’s nice to have the border presence as well, so the consumer can purchase whether they’re going into or out of the country.” H2O’s duty free agent, GMP Services, works with Beler Holdings, a Canadian border store distributor of luxury products. This year, Maul says, the company’s North American operations launched with 16 points of distribution. Twelve are located on the Canadian border through Beler, two on the Mexican border are with Fairn & Swanson, and farther south are two more stores through St. Honore, at Amador in Panama and Roatan in Honduras. “Through our partnership with GMP, we plan to continue to grow our distribution on the Canadian and Mexican borders as well as open up new distribution in the Caribbean, Central America, and South America in the next year,” Maul says. “We hope to round off this year with Bermuda, some of the British and US Virgin Islands.”

The science of success There are several pillars to the success of the H2O Plus portfolio. Products are based on exclusive sea-derived ingredients, including marine botanical blends that focus on hydration, anti-aging and oil control. These ingredients are combined with advanced skincare technologies, including time-release liposomes, polyvitamin profusion, peptide fusion and micro-current technology.

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

HIBAH NOOR

The company boasts a patented moisture transportation and delivery system based on a sea mineral complex that attracts, transports and distributes moisture within the skin, in the volumes required to firm and diminish fine lines and restore a youthful appearance. Worldwide, H2O’s number one bestselling line is the Oasis collection, the company’s signature oil-free hydration system. Infused with nourishing marine botanicals, the product floods the skin with water-rich nourishment to maintain a youthful appearance. It works by plumping out fine lines and maintains its effect by means of time-released hydration. “No matter where we go in the world it’s our number one selling line,” Maul says, adding that the product is sold every two minutes somewhere in the world – an impressive benchmark. The top selling product is the Face Oasis Hydrating Treatment. This original, 100% oilfree, water-based hydrator deploys time-released liposome technology to optimize moisture delivery, retention and absorption. The hydrating marine blend includes sea fennel, sea lettuce and wakame, and reinforces collagen and elastin while energizing, strengthening and hydrating. It’s fortified with phospholipids to bind water to the skin, plumping and restoring skin’s natural moisture balance. Maul notes that with an Oasis Ultimate Hydration Collection set, customers receive a full-size Face Oasis Hydrating Treatment, full-size Oasis24 Hydrating booster and in addition will receive an Oasis face cleanser, face mist, and eye gel in smaller sizes. “If you’re an H2O loyalist, you have those sizes to take with you when you travel,” Maul says. “But if you’re new to the

brand and you like Face Oasis because you’ve heard about it, this gives you the opportunity to try new products as well. We do this on the local markets also.” To celebrate the company’s 20th anniversary last year, H2O released Face Oasis Ultra Hydrator for dry skin. This is a completely oil-free gel-cream with five times the hydrating power of Face Oasis, protecting against daily dehydration and environmental offenders. Bio-marine extracts provide instant hydration, while fucus serratus – a North

exclusive hydrating marine blend. Plankton extract delivers fortifying nutrients, making skin more resilient. “These are our daily multitaskers,” Maul says. “They’ll go with any skincare that we have.” The Sea Results line features advanced formulas based on transformative marine nutrients and skincare science that help prevent and rewind visible signs of aging. Marine collagen nourishes the skin’s support structure to promote a firmer appearance, smoothing fine lines and restoring natural radiance.

“Through our partnership with GMP Services, we plan to continue to grow our distribution on the Canadian and Mexican borders as well as open up new distribution in the Caribbean, Central America, and South America in the next year.” Elizabeth Maul, Director of Global Marketing, H20 Plus Atlantic seaweed – also contributes hydrating properties and stems moisture loss. Like the Face Oasis Hydrating Treatment, the Ultra Hydrator contains a hydrating marine blend of sea fennel, sea lettuce and wakame. Polyvitamin (vitamins A, C, E) profusion delivered via nutri-spheres helps to protect against cell-damaging free radicals and reduces visible signs of aging. Provitamin B5’s deeply hydrating humectants help by attracting moisture from the air. There are two other skincare lines that H2O distributes in duty free. The Aqualibrium collection comprises daily essentials to keep skin blemish-free healthy-looking. Aqualibrium is fortified with marine botanicals, vitamins and minerals, with an

The company’s market differentiator is marine science “or ‘marine skincare’ if you will,” Maul says. “It’s about ingredients from the sea and we couple that with science and technology and that’s really our point of difference.” She refers to a marine science exhibit that recently toured the globe, and recalls how impressed she was by the fact that marine scientists say more is known about the face of Mars than about what’s in the world’s oceans.

“There’s all sorts of new discoveries on new sea plants and underwater elements that really have amazing benefits for your skin,” she says. “For us it’s really wonderful because it’s an endless arena to play in from a new product development standpoint.” For promotions, H2O relies on sampling and gift-with-purchase (GWP). “For the consumer who may know us or be a regular, we offer on occasion gift set options,” Maul adds. “These would package multiple products together in a specific gift set.” As this went to press, the Cdn$30 qualifier GWP on offer in duty free stores featured five products: Sea Results 3-in-1 Foaming Cleanser (50ml), Line Resolution Cream SPF 30 (8ml), Unscented Hand & Nail Cream (30ml) and Hand & Cuticle Scrub (30ml) – all new. The fifth entrant was the bestselling Dual-Action Eye Makeup Remover (30ml). The company has just launched a completely revamped H2Oplus.com website. “This is really exciting for us,” Maul says. “We’ve really looked at how we’re communicating and talking about the products, so every single product description has been updated and we’ve changed all of the imagery. There are more interactive and user-friendly tools, and there are skincare consultations and diagnostics.” Wrapping up the company’s success, Maul notes that H2O’s transformative approach remains based on “an innovative sea-science approach to skincare. Each formulation is designed not only to produce results but to maximize the skincare experience on every sensory level. “Our goal is to always remain at the forefront of new ingredients and technology c while remaining true to our concept.” Aqualibrium Collection

Sea Results Collection

www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

Company News: DFX Distribution

Eva by Eva Longoria

Savvy incentives

HIBAH NOOR

DFX Distribution pulls out all the stops when unveiling original promotions and incentives

n an interview with Americas Duty Free, fellow Canadian Alexandria DeBellis, VP of Marketing & Sales at DFX Distribution, commented on this season’s line-up of new launches, promotions and incentives

Americas Duty Free: What will you be exhibiting during the upcoming FDFA show? Alexandria DeBellis, VP of Marketing & Sales, DFX Distribution: We have some exciting fragrances for this semester. The launch for us that has been quite successful is Giorgio Armani Acqua di Gioia. We’re also anticipating doing really well this quarter with Lady Million by Paco Rabanne and we’re launching the new Guess Seductive. Everything about it is great - the juice is a floriental

woody fragrance and the packaging, price and the advertising are all fabulous. This will be the first Guess fragrance we’ll be launching in conjunction with GMP Services. We’re also launching Eva by Eva Longoria. Everybody loves the juice and the packaging and it is a unique fragrance. It’s the first fragrance that people who are allergic to fragrances can wear. As well, there’s a great GWP to go along with a purchase of the scent – a lady’s grey tote.

We’re also doing the new Prada Infusion Iris EDT, which is launching in duty free at the same time as in the domestic market. This is something lighter; it’s going to be an incredible wearable fragrance available in 50ml and 100ml. In August, Ricci Ricci by Nina Ricci was a good success for us. Yves Saint Laurent will also be showing at the show – Belle D’Opium – as well as Givenchy Play for Her and the new Victorinox Swiss unlimited EDT for men.

“We recently implemented mini makeovers. We never used to do those before; we just started in the summer time. We’re doing the makeovers with Dior and Lancôme products – those are our two biggest cosmetic companies.” Alexandria DeBellis, VP of Marketing & Sales, DFX Distribution Ed Hardy Hearts and Daggers GWPs

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

ADF: Did you have any special promotions in the summer season? AD: We launched the fashion fragrance Hearts and Daggers by Ed Hardy in July. That did really well for us. We’re also doing a great GWP – we have a tote for the ladies and a great gym bag for the men. In November we’re coming out with a five-piece gift set at the same price as the regular spray.

surprises we’ve had. When I booked this brand with GMP I said we’ll take five units, and right now we’ve opened up 11 doors and I would really like to have more. We’re looking at taking the two-by-two displays and making them into two-by-four so this is going to be something we’re really going to be pushing in 2011. I think a lot of people are going back to basics. It’s not just a hypoallergenic line; it is a line that offers ingredients derived from the sea.

DFX Distribution arranges mini makeovers at Ambassador Duty Free store in Windsor

The set will include a 100ml EDP spray, a 7.5ml spray, 90ml shower gel, 90ml body lotion and an original Ed Hardy luggage tag. For men it’s a 100ml EDT spray, 7.5ml spray, a 90ml shower gel, and an original Hearts and Daggers key chain. ADF: Is there a particular brand that DFX is giving a big push to? AD: We recently started distributing the H2O Plus brand that we picked up from GMP Services. It’s doing so well – we have a two-by-two gondola in the stores that showcases its treatment products on one side, and the other side highlights bath and body products. Working with this brand has been one of the most pleasant

ADF: What are you doing to capture the market? AD: We always try to tie our launches to GWPs and incentives for the staff. This way the beauty advisors (BAs) will get something and the customer is also going to receive some extra value for his or her purchase. In conjunction with Kenzo fragrances we’re doing a special Louis Vuitton sales staff incentive program. The stores have to achieve their sales and generate an increase. The store that has the highest increase will receive three prizes, first prize Louis Vuitton Sarah Wallet (Cdn$560), second price Cdn$150 Visa card and third Cdn$125 Visa Card. The store that comes in second will receive Louis Vuitton Emilie Wallet (Cdn$400), second prize Cdn$125 and then Cdn$100 Visa card. For the third and forth store they will receive Visa Gift cards in various amounts. We’re constantly doing incentives for the girls. The incentives take place in top stores such as Windsor Tunnel, Peace Bridge, Niagara Duty Free, Peninsula Duty Free, BHT Philipsburg, IGL, BHT de L’est, Ambassador Duty Free, Abbotsford, Blue Water Bridge Duty Free, Pac Can, and West Coast Duty Free. Earlier on in the year we did a Lancôme contest; the BAs that reached their targets received a Lancôme make-up coffret. The third place winner received a skincare coffret with Cdn$100, the second place winner received a skincare coffret and choice of large spray and Cdn$150 and the first

place winner won the same prize as the second place winner with an additional Cdn$50. The grand prize winner won a trip for two to Las Vegas, a trip valued at Cdn$2,500, with Cdn$500 for spending money. This contest was held in Rock Island and it accumulated an increase of 38%. To get these kinds of results when business is in the slump is fabulous. For some of the smaller stores where we don’t do the incentives. Instead we organize a breakfast luncheon with the staff. We try to accommodate all the stores and get them to participate differently. ADF: You mentioned earlier on that retailers are allocating more space to new launches. Why is this? AD: I think they realize that people come into the store to buy liquor and tobacco, judging by the way things have been recently. But now we have good opportunities with great GWPs and great incentives, so retailers are now saying that we should have some excitement, similar to what you would find in a department store. They’ve opened up the areas and we have great launches, HPPs like stockers, floor mats, full set banners, just like any department store. Most of the stores are taking advantage of that on a rotation basis. They’re doing it every month or every two months. ADF: What are you doing to engage your customers? AD: We recently implemented mini makeovers. We never used to do those before; we just started in the summer time. We’re doing the makeovers with Dior and Lancôme products – those are our two biggest cosmetic companies. The BAs wear the brush sets around the stores so they can do a quick touch up and show the customer how to extend that eye or make the evening eye. The feedback from the BAs has been great; they say that it’s a lot easier for c them to sell additional products.

Ed Hardy offers a five-piece gift set to travelers

Beauty Beat

The

Bang by Marc Jacobs

buzz around beauty

Company: Coty Prestige Description: The new men’s fragrance starts with an explosion of its signature threesome of black, pink and white peppercorns. The heart and the base of the fragrance are wrapped with primal masculine woods. Hypnotic elemi resinoid and aromatic benzoin join with vetiver, white moss and patchouli. For the first time ever, Marc Jacobs the designer appears in his own advertising campaign

Newest scents, skincare and cosmetics are ready to be scooped up in the Canadian travel retail market BY

Belle D’Opium Company: Yves Saint Laurent, Parbel Description: The “next-generation” version of the brand’s iconic Opium fragrance is an oriental scent developed by perfumers Honorine Blanc and Alberto Morillas. The notes include Casablanca lily, sandalwood, gardenia, white pepper, jasmine and narguile accord

HIBAH NOOR

Le Male Terrible by Jean Paul Gaultier Company: Beauty Prestige International Description: Made to bring out the bad boy in every man, the EDT extreme starts off with a freshness of bittersweet grapefruit with pink pepper and a hint of lavender. The end notes comprise vetiver, vanilla and ambery musk

Cadillac Black Limited Edition Company: Beauty Contact Description: This 100ml edt was inspired by the iconic Cadillac brand name, which has always symbolized elegance, class and style

Calvin Klein Beauty Extra-Firming Foundation SPF 15 Company: Clarins Description: A formula of rich in powerful plant extracts that offers women effective firming and smoothing actions

Midnight Recovery Concentrate Company: Kiehl’s Description: A powerful concentration specifically formulated to biologically replicate skin’s natural lipids for optimal skin repair during the night

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Company: Coty Prestige Description: A new interpretation of a lily - a neo lily – is the heart and soul of the fragrance. Ambrette seeds enhance the spicy warmth, jasmine elevates the floral signature and a trail of cedarwood brings beauty to the drydown

Re-Nutriv Ultimate Eye Duo Company: Estee Lauder Description: Now available in a travel exclusive duo, this ultra-luxurious, allpowerful eye creme is a singular achievement in visible age correction

Beauty Beat Pure Color Peony Blossom Lip Pots

Black Velvet Collection Company: Bobbi Brown Description: Perfect for the fall season. Charcoal eye shadows, lips products in plum, red, maple and cherry are just some of the fabulous shades in this collection

Guess Seductive Company: Coty Beauty Description: A glamorous floriental woody fragrance for the seductive woman who is iconic, memorable and legendary

Company: Estee Lauder Description: This beautiful new lip set features three lip pots in the floral peony design including Wild Lilac, Pink Innocence and Brazen Berry. This new limited edition lip trio set complete with applicator makes the perfect gift

Source Defense Serum Company: Bvlgari Description: This cell-energy booster is designed to neutralize the effects of aging at its source by preserving mitochondria, the sole source of cell energy. Combined with a powerful anti-oxidant, this high-performance anti-aging weapon preserves skinâ&#x20AC;&#x2122;s youthfulness capital

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

2011 Duty Free Show of the Americas Business Complete. Join us at the Orlando World Center Marriott from March 20 – 23 to get business done in a very cost-effective environment, with everything under one roof. The IAADFS Duty Free Show of the Americas draws as many as 1,000 buyers representing more than 330 distinct duty free store-operating companies and more than 200 exhibitors with the latest, most sought-after products.

Here’s what attendees es fro from om ou our ur 2010 show had to say: ers in ju just 3 d days! s!” “ I saw 95% of all my customers vention! ion!” “ This is an outstanding working convention! ing show shows hows “ I think it was one of the most exciting in quite some years!” new business. bus usiness.” “ My company secured lotss of ne as exc excellent. xcellent nt.” “ The level of buyers was Make sure YOU take advantage of all that our show has to offer. Visit www.iaadfs.org for updated information on the show and to register online, or call +1-202-367-1184 for assistance.

Duty Free Show of the Americas March 20 – 23, 2011 | Orlando World Center Marriott | Orlando, Florida, USA

IAADFS – for over 40 years, representing North, South, and Central America, Mexico, and the Caribbean

FDFA Exhibitors

Diverse FDFA exhibitors A whole slew of exhibitors ready themselves to welcome buyers from East to West during this year’s Frontier Duty Free show

HIBAH NOOR

Maan showcases new sizzling brands

Mann Sales Associates recently added the Riana jewelry collection to its diverse portfolio

anada-based distributor Mann Sales Associates unveils Ice-Watch, Go Snacks products and Riana jewelry collection to the Canadian duty free during this year’s Frontier Duty Free show. Canadian entrepreneur Michael Gray

embarked on his distribution business six years ago. “My main premise for starting the company was to be in travel retail and I started with some smaller brands which I don’t have anymore as things have evolved,” explained Gray. The Ice-Watch brand which Mann picked up recently as a sales agent for duty free in Canada is a lifestyle brand for the consumer who is looking for a timepiece for work, sports, holiday or party. Each watch is distinguished by striking design and attractive packaging. “Ice-Watch just shipped their products to 49 Bay stores across Canada,” explained Gray. “I’ve opened up about three or four duty free stores already. My main intention in getting the line in the summer time was to launch it at the FDFA convention.” Ice-Watch products will have a significant presence at the Mann Sales Associates booth. “The brand isn’t new but maybe to the people in North America. It was launched in Asia years ago – it took off in Europe, now 48 countries sell the brand,” said Gray. The two major lines that the agent will be showing include best sellers such as the Sili and Classic lines. The company has also added a new line of natural snacks called Go Snacks in 15 different

Swarovski shines in Canadian duty free ustrian crystal specialist Swarovski is experiencing double digit growth in sales across Canadian airport and border store locations. Swarovski Canada’s Sales Manager - Special Channels, Parker Baile commented: “We have been gaining market share due to the fact that we are one of a few brands that offers affordable luxury.” In the second half of 2010 the company launched new fashion jewelry in the core range along with the annual ornaments that are strongest sellers for the fourth quarter per SKU. Baile explained that a major part of the company’s success this season was the imple-

Swarovski recently introduced pens to the Canadian duty free market that have proven to boost incremental sales

mentation of its assortment tiering. “This new assortment plan was created to make sure that we do not under assort or over assort any one location. This program helps buyers bring in the minimum number of SKUs while maximizing the turns within our brand,” he said. “All assortments are tiered via customer demographic combined with the actual space allocated per location. This new program selection has proven to work extremely well in duty free giving us double digit comp growth over last year per overall,” noted Baile. This year saw the introduction of Swarovski pens across Canada. “Our new pens have proven

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

ranges. The brand carries inexpensive pick-up items such as peanuts in different varieties. “More importantly Go Snacks have a natural line from Tropical Valley Foods called Mixed Organics – that’s one of the strongest lines they carry and I’ll be showing that at the show,” said Gray. The snacks are available in 10 varieties, such as coconut, apricot, cherry, almonds and more, covered in dark chocolate and retailing at US$6.99 to $7.99. The distributer is also showcasing the Riana jewelry collection, which is available worldwide. The line offers a broad range of jewelry for men and women. “For this brand I’m a sales agent in duty free only. The line is very well made and available in Canadian local market as well,” said Gray. Mann will continue to offer Skagen watches for duty free along with self-developed Canadian souvenirs called CanadaTin. “I have six different SKUs and inside each of these tins there’s maple syrup toffee. I have been selling them for about four years now to retailers such as Nuance, Aldeasa, Aer Rianta and all the different border stores and gift shops,” he said. “That’s a significant part of my company.”

to be our largest incremental sales growth per sku in travel retail for 2010 to date, within the self service program. The accounts that planned ahead and took advantage of these items that retail for CAD$26 in duty free found these SKUs were the most successful part of the self service program,” explained Baile. Swarovski’s fashion jewelry items have been the key driver of the business; average pricing is well above CAD$100. The company observes that younger buyers recognize the brand as fashion forward name which has helped Swarovski to capitalize with its fashionable styles in crystal as well as color.

Mann continues to sell its Canadian souvenirs called CanadaTin

New Roots Mystic collection for Fall BM Inc./Meade Ray Intl., a leading manufacturer and supplier of small leather goods and accessories, presents Roots’ most recent fall collection of wallets called Mystic. With its intricate and overlapping folds, this new collection mixes fashion with elegance. Each piece offers a multitude of card slots and pockets, resulting in a collection that will satisfy both the conservative and trend conscious, says the company. Each piece is complemented by the rich color hue of its material. The collection is available in select stores across Canada for a limited time. The retail

price ranges from CAD$35 to $45. Founded in Montreal, CBM Inc./Meade Ray Intl. specializes in handbags, men's and women's wallets, briefcases as well as travel and business accessories. The company has worked with renowned brand names such as Rodier, Alfred Sung, Guy Laroche, Rochelier, Buffalo David Bitton, Club Rochelier Active and many more. “Some of our top retailers [in the domestic market] include The Bay, Sears, Roots, Bentley, Winners, Laura, Globo and duty free stores across North America,” said Louisa Brito, Sales Manager, CBM Inc./Meade Ray Intl. “Our partnership in travel New Roots Mystic collection retail has continued to evolve by the mere fact that we listen to the travelers needs. Recently there has been more demand for smaller more convenient accessories, such as wristlets, and we have done our best to design and bring to the market exactly that.”

www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

FDFA Exhibitors Michel Germain presents its new sensual fragrances

Citizen watches: Environmentally sound ynonymous with reliability and social responsibility, Japanese watch company Citizen is the largest manufacturer of watches worldwide. In an interview with Americas Duty Free Doug Irwin, Vice President Sales of Citizen in Canada, said: “We make one in four watches made in the world. What the company is primarily known for and marketing these days is its Citizen Eco-Drive watches, which uses a permanently rechargeable lithium-ion cell recharged by any light source, which range from CAD$175 to $1,000…. We also have some of the duty free operators buying our entry level price point battery operated quartz watches that start from CAD$110 to $195.” Irwin notes that, “When consumers have the option to buy something that they like and is also good for the environment, a Citizen Eco-Drive watch seems like a clear choice because when you have a watch that’s powered by light it means that you’re not sending batteries to landfill and potentially polluting the environment. That is a key benefit of an Eco-Drive watch.” On the Canadian duty free side, the company started developing this business four years ago. During the Frontier Duty Free tradeshow Citizen will be showcasing its Spring 2011 collection along with its high-end line called The Signature Collection which retails for CAD$1,050 to $1,925. The Spring 2011 collection features a host of watches, including diamond watches for men and women. Many of the timepieces sport black ion plating. Citizen will also unveil some easy reader watches and new men’s technology pieces. Focusing on the use of technology, Citizen will be showing its World Perpetual A-T watch, featuring sapphire glass crystal. This is the company’s newest EcoDrive radio controlled analog world timer. It redefines atomic timekeeping with radio-controlled accuracy perfection in North America, the United Kingdom, Europe, Japan and China, where radio signals are received both automatically and on-demand. This technological expertise is a key advantage of the Citizen brand. “As a Japanese watch company and a manufacturer, one of the things that we excel at and invest a lot of money in is the movement of the watch,” points out Irwin. “What that means is we can take that movement, which is proprietary to us and which makes us unique and special, and then we can execute it in many different ways with different dials colors, bracelets etc.” The company’s best sellers include the Citizen Eco-Drive Skyhawk A-T, a flight chronograph with atomic time keeping with radiocontrolled accuracy perfection and EcoDrive technology. The collection does particularly well. The second best seller is the Calibre 8700 collection, a retrograde perpetual calendar alarm masterpiece that is a tribute to the skill of watch-making. c

S Michel Germain unveils new Séxual scents enowned Canadian perfumer Michel Germain has come out with new fra– Sugar Daddy and Séxual – Sugar. grances for men and women called Séxual – The men’s chypre oriental Séxual Sugar Daddy comprises a splash of grapefruit zest mixed with cinnamon bark, a mouth watering blend of richly caramelized pralines blended with a leather note and the bold masculinity of sweet tobacco accord. The carton is crystallized in slate black. The sugar crystallization is a 16-step process that layers crystals with black, glass-like lacquer to create the most sophisticated carton worldwide, said the company. – Sugar which tempts and teases with For women Michel Germain created Séxual a fresh burst of juicy wildberries and crystallized sugar. Sensual passion flower reveals a powdery soft centre that’s sprinkled with the light freshness of orange water flower. A blend of fresh roasted almonds and caramelized vanilla. Like its men’s counterpart, the carton is crystallized in pink. The company said the sensual fragrances are infused with aphrodisiacs, which allows the fragrances do the flirting for you.

Get creative with Bump ump Creative Partners specialize in unique promotional, seasonal and packaged products that go beyond standard paperweights, pens and t-shirts. The company designs and sources items that are fashionable, trend focused and unique to specific brands. The company travels the world to determine what colors, textures, patterns and fabrics will be popular for seasons to come. Bump’s portfolio includes a variety of products created to sell in major retailers that require the following: wine and spirits packaging, cosmetics packaging, promotional gifts and value-adds and fashion accessories. The innovative ideas developed by the Bump team create a competitive advantage for its customer and help brands truly stand out in the marketplace. “At Bump Creative we live by the philosophy Bump it up a notch,” said the company.

Citizen Eco-Drive watches are fueled by light

Liquor Report: Fast-growing brands

Perfectly

positioned in Canada

In addition to now being listed in almost every land border and airport duty free store in Canada, Patrón recently launched XO Café in select locations throughout Canada

hile the worst of the economic downturn appears to be over, sustained double digit sales growth in duty free is still a lofty goal for many suppliers. There are, however, a select number of brands that have managed to capture the attention of the traveling public in a way that resists explanation. Americas Duty Free recently spoke with Patrón Spirits International, Appleton Estate Jamaica Rum and Pernod Ricard about their fastest-growing brands in the Canadian duty free channel. We discovered that while these successes may seem like magic to many companies still struggling to recoup last year’s losses, outperforming the competition still comes down to a few basic principles: high-end positioning, ensuring quality offerings and constantly promoting one’s virtues.

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

ust two short years ago, Patrón Spirits International had virtually no product in Canadian duty free stores. Today, the company’s spirits—spearheaded by iconic brand Patrón Silver—are in nearly every land border and airport duty free shop across the country. This feat is made all the more remarkable considering the company didn’t even have a presence in any duty free markets six years ago. Indeed, Patrón’s success in Canada mirrors its success worldwide. The increasing popularity of Pyrat Rum, along with Patrón tequilas and Ultimat ultra premium vodka, helped Patrón Spirits grow by 30% last year in the competitive travel retail channel and achieve an impressive 81% growth rate in duty free so far this year. In addition to being sold onboard Air Canada, the company recently secured listings at Hamilton Airport and at Peace Garden Duty Free in Manitoba. In Canada specifically, Patrón’s duty free sales are up 8% year to date. The company also launched Patrón XO Café in Canada this year, a blend of ultra premium tequila and the natural essence of the finest coffee. To date the brand is performing well, with listings in land border stores in British Colombia, Ontario and Quebec, as well as a listing at Vancouver Airport. To support the duty free channel, the company has recently launched two new consumer-focused programs for global duty free operators. The fully integrated initiatives “The Perfect Mix” and “The Perfect Gift” are both designed to reinforce Patrón’s “Simply Perfect” luxury brand positioning and help increase awareness, trial and purchase of Patrón tequilas. “Canadian spirits drinkers appreciate and understand high-quality, sophisticated spirits, and we’re excited to be able to offer them, and visitors to the country, the opportunity to purchase and enjoy our premier spirits when they travel,” says Burt Stewart, Vice President Regional Sales, Patrón. “We’re very pleased with our travel retail partnerships throughout Canada and look forward to expanding further in the future.”

GO ANYWHERE IN THE WORLD AND YOU’LL FIND PEOPLE WHO SPEAK APPLETON.

The Exceptional Spirit

Liquor Report: Fast-growing brands

Absolut-ly stunning ny discussion of fast-growing brands in Canada would be incomplete without mentioning Pernod Ricard’s Absolut Vodka. The brand experienced over 9% growth in FY2010 in Canadian duty free and is currently experiencing double-digit growth in sales within the same channel. “Absolut’s growth can be attributed to several factors,” says Enrique Girones, Marketing Vice President of Pernod Ricard Americas Travel Retail. “First is the brand’s unique and exclusive strategy, which encompasses innovation and creativity. Absolut on a regular basis has released exclusive duty free products throughout the years, allowing for passengers to find something different and unique when they travel. In addition, Absolut’s global marketing campaigns have added to the overall success of the brand.” Girones cites products such as Absolut Tropics and the soon to be released Absolut Watkins as examples of unique offerings that can only be found in duty free stores. However, exclusive flavors and packaging are just part of an overall strategy that also takes promotional activity into consideration. The successful execution of campaigns such as Absolut Drinks within AerRianta’s transborder and international duty free stores in support of Formula One Racing went a long way toward appealing to international travelers and has also led to the brand’s successful growth in sales. The most recent installment in Absolut’s yearly limited edition campaign is Absolut Glimmer. The stunning bottle was designed to celebrate the year’s end, communicate the purity of Absolut and act as a tribute to the importance of the here and now. Absolut Glimmer’s pressed glass bottle mimics the classic look of cut crystal with the shape consumers have come to associate with Absolut Vodka. Because of the facetted design, the bottle reflects light in a beautiful and appealing way, reminiscent of glittering sunlight, the bling of diamonds, the sparkle of ice cubes, glimmering waves and the lights of a discotheque. Girones notes that although Absolut continues to grow in Canada and is actually the number one premium vodka in country, Pernod Ricard will maintain the brand as a priority in the future: “Canada… will remain a key focus market for the brand,” he says. “Duty free in general will always be a key focus area for Absolut Vodka, and [Pernod Ricard] will continue its strategy of introducing unique products exclusive to the duty free markets.” c

Dan Rosenfeld (left) and Peter Hottmann (right) attribute much of Appleton Estate Reserve’s success in North America to the spirit’s value for money positioning

The rum that needs

nothing

t’s no surprise that Appleton Estate Reserve is one of the fastest growing spirits in the North American duty free channel. The rum’s price point, the 260-year history of Appleton Estate and the premium character of Reserve have proven to be a combination with which few other spirits— especially rums—can compete. “Appleton Estate Reserve is a premium rum that sells for only a few dollars more than Appleton Estate VX,” says Dan Rosenfeld, Regional Manager USA at Appleton Estate. “As a result, the response has been phenomenal. The economic downturn hasn’t really affected sales of Appleton Estate Reserve simply because the price point is so reasonable.” Indeed, the company just closed the books on its 2010 fiscal year and Reserve performed unbelievably well in US duty free, selling over 300% more than in 2009. In Canada, duty free sales of Reserve in FY2010 were up 14% over FY2009, and Peter Hottmann, Appleton Estate’s Regional Sales and Marketing Manager, NAFTA Region, notes that the entire range shows very stable increases. “Our numbers indicate a continuous growth curve that never really slowed down during the recession year,” Hottmann says. “Furthermore, to keep momentum, we’re investing a lot in advertising domestically with our ‘Rum That Needs Nothing’ campaign, and there is certainly some spillover into duty free as North American travelers are exposed to this campaign at many different points throughout the US.” The name of Appleton Estate’s latest advertising campaign refers to the fact that Reserve’s blend is of such a high quality that no mix is needed. Nonetheless, the spirit can also be used as the base in any number of great cocktails. Of course, this versatility exponentially increases Appleton Estate Reserve’s potential both in the duty free and domestic markets. “As a result of our value for money proposition, we’ve retained our loyal customer base and brought on new customers as well,” concludes Rosenfeld. “There are plenty of rums on the market these days, but the vast majority don’t have the credentials that Appleton Estate does. Customers, and especially rum enthusiasts, know the difference between an authentic super premium rum and something that’s merely been packaged to appear as such, which is why they’re consistently choosing Appleton Estate Reserve as their rum of choice.”

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Absolut’s concentration on limited editions such as Glimmer (above) and Watkins (right) has struck a chord with Canadian travelers, making it the number one premium vodka in the country

Van Gogh Vodka is happy to announce our strategic partnership for the Duty Free sector in Canada with

Mondia Alliance

Committed to “outside the box.” VAN GOGH IMPORTS | ORLANDO, FLORIDA | 32809 | www.vangoghvodka.com 35% & 40% alc/vol | Please enjoy responsibly

Liquor News

Brown-Forman has concentrated heavily this year on promoting the Jack Daniel’s Family of Brands in Canadian duty free

rown-Forman Duty Free/Travel Retail has concentrated on offering Canadian duty free consumers a combination of newly packaged classics and engaging promotions this year. The company most recently released the new Southern Comfort bottle in Canadian travel retail and has plans to increase the focus on its tequila brands in the coming year. Of course, among those brands are the very popular el Jimador and the newly packaged Herradura Tequila. Montgomery Wilson, Brown-Forman’s Director for Americas Duty Free, asserts that the new Herradura packaging, which will be available in Canada in 2011, is “very bold and colorful yet still retains the quality and heritage that helped make Herradura Mexico’s favorite super premium tequila.” With regard to Canadian duty free promotions, Brown-Forman has been very active, running its Jack Daniel’s Family of Fine Whiskey promotion in Aldeasa Vancouver during the Olympics and in July and August. The promotion also ran with Aer Rianta in Montreal during September and with Nuance in Toronto in September and October. Passengers across Canada were also recently treated to a giftwith-purchase promotion. With a qualifying purchase, travelers were gifted a Jack Daniel’s hip flask and a Jack Daniel’s Rodeo Belt Buckle. During one month in the summer, Jack Daniel’s wallets were also given away as part of this promotion. In Calgary the company was busy running a Jack Daniel’s bench promotion with a Jack Daniel’s Family of Brands display. In other Jack news, Brown-Forman installed new Jack Daniel’s displays in Windsor Duty Free and at Importations Guay Ltee near Quebec City. Finally, two new ready-to-drink (RTD) flavors, Jack & Cola and Jack Lemonade, were recently released throughout Canada in travel retail and have been performing well.

Brown-Forman stays busy in Canada with

creative promotions and new

packaging Caliber Fine Wines & Spirits introduces

several new products to Canadian duty free Among a multitude of products, Caliber will be offering a range of grappas from Giori at this year’s FDFA trade show and convention

aliber Fine Wines & Spirits has been supplying premium wines, liquors and liqueurs to Ontario land border duty free operators for a decade now, and at this year’s FDFA convention, the company builds on an already strong tradition by introducing a number of new products. Buyers can get glimpse of selections from the Giori Grappa range, variants from the Tequila Don Ramón line, a new amaretto from Toschi and a wide selection of wines. The Giori grappa range includes Classic (white grappa), an aged variant called Ori di Grappa and a grappa made from the famed prosecco grape. Caliber will also be offering a range of flavored grappas from Giori, such as green apple, pear, wild berry, peach, strawberry and blueberry. Blanco and reposado tequilas from Don Ramón will also be on display at the convention. The tequilas are made in Jalisco, Mexico from 100% agave and are

presented in exquisite bottles perfect for gifting. Toschi, which currently supplies Caliber with Fragoli, a strawberry-flavored liqueur, has extended its product range with the introduction of Toschi Amaretto. The Amaretto comes in a very unique, frosted bottle and is also suitable for gifting purposes. With regard to wines, Caliber is now offering selected vintages from Candoni, as well as a Merlot and Pinot Grigio from Friuli. Finally, from Venedo comes a Pinot Noir, a sparkling Prosecco and a Chianti. Caliber is also featuring two organics from the same company, a Pinot Grigio and a Merlot. “All of these products are new to Canadian duty free and we’re extremely pleased to be showcasing them,” says Sandy Garofalo, President of Caliber. “Our products have sold very well in Ontario to date and we’re confident that these newest offerings will be very popular. This year’s FDFA convention represents an opportunity for us to not only meet with our valued partners in Ontario, but also discuss the possibility of expanding our reach to other parts of Canada with some of the products that we offer.”

Peter Mielzynski Agencies brings exclusive and trusted brands to the FDFA eter Mielzynski Agencies (PMA) has a number of impressive offerings lined up for this year’s FDFA convention in Niagara Falls, including some never before seen products in Canadian duty free and a very special spirit from William Grant & Sons that is exclusive to the travel retail channel. Americas Duty Free recently spoke with Jeff Orson, Regional Manager/Travel Retail North America at PMA, to get the details on what buyers can expect to see from the company. “We’ll be officially launching Glenfiddich 14YO Rich Oak 1-liter bottles in Canadian duty free at approximately 5% less than the retail price of Glenfiddich 15YO,” Orson notes. “Skyy Infusions all natural Citrus, Grape, Cherry, Pineapple, Ginger, Raspberry and Passion Fruit vodkas are also available in the 1-liter format at a slight premium to the standard Skyy Vodka.” While the above listings are certainly noteworthy, one of the more exciting introductions is that of Grant’s Distillery Edition, which will also be hitting the Canadian duty free market this year. It is a duty

free exclusive and essentially a repackaging and renaming of Grant’s Superior Strength. “Speaking of William Grant & Sons, Tullamore Dew Irish Whisky was also recently purchased by the company, and is now featuring prominently in the PMA portfolio,” explains Orson. “We will be looking for listings for the 1-liter size in Canadian duty free during the FDFA show.” Orson tells Americas Duty Free that well known brand Wild Turkey will be listed once

again by Ontario and British Colombia operators after an absence of a few years in Canadian duty free. Finally, PMA will also be showcasing Norton wines from Argentina at this year’s convention. “PMA has for years represented some of the finest brands the dinks industry has to offer and we are very proud to be bringing these new brands and line extensions to life in Canadian duty free this November,” concludes Orson. “The FDFA has been a great organization to be involved with over the past 25 years, not only for bringing the various operator-owned stores together, but also for its unified voice both in Ottawa and around the world with regard to the Canadian duty free industry.”

Glenfiddich 14YO Rich Oak and Grant’s Distillery Edition are just two of the many spirits that Peter Mielzynski Agencies will be showcasing at this year’s FDFA convention

The Exclamation labeling will now replace the Pillitteri label and logo for all reserve classified wines

Pillitteri Estates Winery announces new look Exclamation Cellar Series

illitteri Estates Winery, whose wines are handled in duty free by ALFA Brands, is gallantly making a memorable statement with the new look of its Exclamation Cellar Series reserve wines. The winery calls Exclamation “a showcase of commitment to superior quality with a focus on uniqueness and individuality.” The new design includes a unique label and bottle selection particular to each varietal. Exclamation will replace the Pillitteri label and logo for all reserve classified wines. The Exclamation label will also be expanded to include wines from particularly excellent vintages worthy of the label. Currently there are five projected wines for release as Exclamation: 2006 Barrel Fermented Chardonnay, 2007 Reserve Merlot, 2006 Reserve Cabernet Sauvignon, 2007 Reserve Cabernet Sauvignon and 2007 Reserve Cabernet Franc. Pillitteri notes that there is also an Exclamation Icewine program in development for future vintages of particularly unique Icewines.

www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

Company News: Diageo

Diageo recently released Crown Royal Black, a 90 proof variant of the number one selling spirit in Canadian duty free

RYAN WHITE

Back in Black BY

With the release of Crown Royal Black and Johnnie Walker Double Black, Diageo continues to offer travelers in Canada innovative takes on premium favorites mericas Duty Free recently spoke with Scott Bradley, Customer & Trade Marketing Manager with Diageo Global Travel Retail for the Americas, as a means of learning how the spirits powerhouse has managed to consistently rack up solid sales at both land border and airport duty free stores in Canada. The company has enjoyed a number of successes this year and is currently focusing on offering travelers a wide range of promotions that highlight a particularly strong selection of premium spirits. Furthermore, with the recent release of Crown Royal Black and the upcoming launch of Johnnie Walker Double Black, Diageo plans to continue developing premium spirits that are too good for consumers to pass up. Two thirds of the travel retail business in Canada comes from sales in land border duty free shops, while the other third comes from sales in airport duty free stores. In Canadian duty free from January to June 2010, the industry saw the land border business dip slightly due to less border traffic while the economy still showed signs of the global downturn. In airport duty free, Diageo has had a very strong year. From January to June sales were up double digits over last year and Bradley asserts that during the summer, numbers were driven by strong promotions, robust PAX numbers and the new Security Tamper Evident Bags, which allow travelers with connecting flights to purchase spirits. “We lost a lot of American shoppers as the Canadian dollar gained strength over the last several months,” says Bradley. “Typically, American shoppers tend to spend about twice as much as Canadian shoppers.” Diageo’s research shows that American shoppers’ motivation to purchase at Canadian duty free stores is unique versus Canadian shoppers because Americans are looking for

more rare, unique products such as Crown Royal Limited Edition, Ciroc Vodka, Zacapa Rum or a rare malt like Singleton of Glendullan or Talisker 57 North. Bradley notes that in the summer Diageo saw an upswing in growth during each month despite the border traffic not experiencing any noticeable increases. “Most of our growth revolved around our premium and super premium brands,” he explains. “With the savings that consumers are offered in duty free, we’re finding they tend to buy what they want as opposed to opting for what they can afford when purchasing at a local liquor store. As a result, the key to breakthrough sales in the duty free liquor category is the quality, scale and flawless execution of sales promotions. With this, Diageo remains committed to the premiumization trend of persuading consumers to buy better, drink better." Across both land border and airport duty free, Diageo’s top brands in Canada are Crown Royal, Johnnie Walker, Baileys, Smirnoff, Tanqueray and Captain Morgan. However, the supplier is also seeing huge growth in super premium brands such as Ciroc Vodka and Zacapa Rum. Neither is available at local liquor stores in Canada, and both are exceeding sales expectations in duty free. “Given the strength of our portfolio, we are the only spirits company that is able to offer standard, deluxe and premium-level mix and match programs to customers, which allows for an unrivaled choice when it comes to stocking their home bars,” Bradley continues. “We’ve learned that even if in-store traffic doesn’t increase, educating customers about the benefits of purchasing premium spirits can really boost revenue and profits.” Indeed, Diageo is expecting a significant uptake in sales given the recent release of Crown Royal Black, a higher proof full-bodied varient of the number one selling spirit in Canadian duty free. “Sales in the United

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

States have been phenomenal since its launch in May and we’re looking forward to duplicating this success in Canadian duty free,” says Bradley. In addition, Diageo is continuing its travel retail exclusive release of Johnnie Walker Double Black, a smokier variant of the inimitable Johnnie Walker Black Label. Diageo will be launching Double Black in February across Canada in travel retail and is excited about the sales opportunity this product innovation provides. Concluding, Bradley noted that he is excited for travel retailers in Canada: “Given our consumer insights on promotions and huge unique brand launches, we’re confident that shoppers from both sides of the border will have even more reasons to Keep Walking with c Diageo in the year to come.”

Diageo will be launching Double Black in February with the LCBO, but for a short time before that it will be exclusive to duty free in Canada

New & Notable BY KIM CARRERA

TRAVEL ACCESSORIES Fashion Color TSA Locks Company: Pronto Innovations Description: Keep bags locked and secure by using these TSA approved luggage locks. Available in three fashion colors: green, fuchsia and yellow; each item contains two keys per lock

Comfyzzz Travel Pillows Company: Pronto Innovations Description: Each pillow contains thousands of tiny foam polystyrene micro beads. They have a removable and washable cover; available in black, blue, platinum, burgundy and mocha

CONFECTIONARY Gold Tablet Milk Hazelnut 150g Company: Lindt & Sprüngli Description: Delicious Lindt Milk Chocolate and delectable Lindt White Chocolate with aromatic whole roasted hazelnuts is suitable for selfconsumption and ideal for gift-giving

LUGGAGE & ASSESSORIES Adidas Timepieces Company: Fossil Inc. Description: The new Adidas NYC collection stylishly integrates the playfulness of a plastic digital with the street heritage of Adidas Originals

Maple Products Company: Jakeman’s Maple Products Description: Acclaimed as “Canada’s best tasting maple syrup,” by The National Post, Jakeman’s Maple Products are pure and natural. Jakeman’s is considered one of the few maple syrup bottlers and confectioners that actually produce maple syrup from scratch. Now available in a convenient one liter size

Kati Ko Designs Company: Olympia Gold Description: The Kati Ko Designs feature a unique line of high-end artisan fashion jewelry for the modern women. Each piece is 24k plated and .924 plated sure to satisfy the desires of the most hard to please shoppers

Classic Messenger Bag Company: Tusk Description: Available in durable Italian nylon with textured calfskin trim, the Classic Messenger Bag is a great choice for work or travel

THE AMERICAS DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Baileys Original Irish Cream Mint, Caramel and Coffee flavored liqueur chocolates Company: Lir Chocolates Description: Following the phenomenal success of its Baileys Original Irish Cream Liqueur Chocolate Collection, Lir has introduced a new selection of Mint, Caramel and Coffee flavored chocolates -each filled with the unique and creamy Baileys Liqueurs

Smoking Kills