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DUTYFREEMAGAZINE.CA APRIL 2016 · IAADFS· VOL 26 · NO 1

Dufry’s Rene Riedi discusses changes in LATAM p. 18 Neutral Duty Free update on Melancia Mall p. 32 What to expect at ASUTIL 2016 p. 52

LETTER FROM THE EDITOR

Seeing

the light I

n South America, a region normally strong in travel retail, has had a difficult year. Ever optimistic, ASUTIL Secretary General José Luis Donagaray tells Americas Duty Free that he believes the economy will start to improve again in late 2016/early 2017. Meanwhile, operators and brands are working together in a partnership that should bring them through the other side strong and ready for the economic recovery. Nowhere is that more the case than in Rivera, Uruguay. While a number of external forces meant late last year was not the best time for opening the new, ultra-modern Malencia Mall, Enrique Urioste, CEO of Neutral Duty Free, one of the mall’s two anchor tenants, is sanguine. He reminds us that the investment was made for the long term and implies that time will bring success. Our interview with Rene Riedi, Chief Operating Officer at Dufry Americas, answers many questions burning in industry minds since the Swiss power-player acquired Nuance and World Duty Free Group. Riedi explains how changes are taking place, and how the two newly acquired brands will fit into Dufry’s overall plan. For suppliers, Rene offers insight on getting listed with the travel retail giant. As Brazil continues to be the engine that drives the South American economy, Gustavo Fagundes, COO of Dufry Brazil, says the company’s multi-pronged approach is keeping sales relatively stable in local currency, despite the country’s downturn. Investment in airports for the FIFA World Cup in 2014 and in advance of this year’s Olympics will result in long-term passenger traffic growth, he believes. The potential for big change is in the air as Brazil’s government has given permission for duty free stores to open in some key border cities, but this new development is expected to take some time to come to fruition – perhaps into 2017. The region has seen its ups and downs before, but, especially as the current woes are not region specific, industry players are convinced the upswing will come soon, and they’ll be ready for it. Kindest Regards,

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

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

APRIL 2016 · IAADFS · VOL 26 · NO 1

The Americas Duty Free & Travel Retailing magazine (ISSN 0962-0699) is published five times a year March, April, June, October and November by Global Marketing Company Ltd. 26 Pearl Street, Mississauga, Ontario L5M 1X2 Canada. It is distributed throughout Central America, South America, the United States, Canada, U.S. Virgin Islands, U.S. Pacific islands, and the islands in the Caribbean. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or the editor. April 2016, Vol 26. No. 1. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2016 Global Marketing Company Ltd.

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

PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@dutyfreemagazine.ca EDITOR Wendy Morley wendy@dutyfreemagazine.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca CONTRIBUTORS Mary Jane Pittilla Peter Diekmeyer Ryan White

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

Wonderful fragrances Collecta able cosmetics Exquisite jewellery One way to have it all

www.duba aidutyfree.com

LETTER FROM THE EDITOR

Viendo

la luz P

ara Suramérica, una región normalmente sólida en el sector minorista de viajes, el año pasado fue difícil. Con su optimismo habitual, José Luis Donagaray, Secretario General de ASUTIL, le patentiza a Americas Duty Free su seguridad de que la economía volverá a mejorar nuevamente a finales del 2016/principios del 2017. Entretanto, los operadores y marcas están colaborando en una alianza que debería conducirlos al término de la crisis más fuertes y preparados para la recuperación económica. El ejemplo más genuino de la situación es Rivera, Uruguay. Si bien un cúmulo de factores externos provocaron que el año pasado no fuera el mejor momento para la apertura del nuevo y ultramoderno Melancía Mall; Enrique Urioste, Director Ejecutivo de Neutral Duty Free, uno de los dos arrendatarios ancla del centro comercial, se muestra optimista y nos recuerda que la inversión se hizo a largo plazo, lo cual implica que el paso del tiempo traerá consigo el éxito. Nuestra entrevista con René Riedi, Director de Operaciones de Dufry Americas, responde muchas preguntas que surgieron en las mentes del sector, desde que la prominente firma suiza adquirió Nuance y World Duty Free Group. Riedi explica cómo se están llevando a cabo los cambios, y la forma en que las

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

marcas recién adquiridas se incorporarán al plan general de Dufry. Además, aporta valiosos consejos para los proveedores sobre cómo pueden llamar la atención del gigante del sector minorista de viajes. Como Brasil sigue siendo el motor que impulsa la economía suramericana, Gustavo Fagundes, Director de Operaciones de Dufry Brazil, afirma que el método de múltiples etapas es mantener las ventas relativamente estables en moneda local, a pesar de la crisis económica del país. Según afirma, la inversión en los aeropuertos para la Copa Mundial de la FIFA en el 2014, y con vistas a las Olimpiadas de este año, darán como resultado un crecimiento a largo plazo del tráfico de pasajeros. El potencial para grandes cambios está a la vista, pues el gobierno de Brasil ha otorgado el permiso para que se abran tiendas duty free en algunas ciudades fronterizas importantes, pero se espera que este nuevo acontecimiento demore en materializarse, tal vez para el 2017. La región ha pasado anteriormente por este tipo de altibajos, pero, y debido en especial a que los problemas actuales no son específicamente regionales, los protagonistas de las operaciones del sector están convencidos de que pronto llegarán los buenos tiempos, y estarán preparados para eso. Un cordial saludo,

Hibah Noor Editora Jefe

hibah@dutyfreemagazine.ca

CONTENTS

What’s inside LEAD STORIES 18 Top Story: Dufry’s Rene Riedi GRADUAL CHANGE

Dufry seemed to come out swinging with its acquisitions of Nuance and WDFG, but as Rene Riedi explains, the company is not rushing the execution at shop level

24 Retailer News: Dufry Brazil TAKING CHARGE

Dufry Brazil has so many different initiatives happening across the country, any economic woes in the region end up as barely a blip on the company’s radar

18 24

32 Retailer News: Neutral Duty Free LONG-TERM RELATIONSHIP

Enrique Urioste, Neutral Duty Free’s CEO, is one of the biggest backers of this ultra-modern Northern Uruguay mall, which opened last year during tough economic times

UNA RELACIÓN A LARGO PLAZO

Enrique Urioste, Director Ejecutivo de Neutral Duty Free, es uno de los principales promotores de este centro comercial ultramoderno en el norte de Uruguay, inaugurado el año pasado en tiempos económicos difíciles

38 Industry News: Cámara de Empresarios de Free Shops del Uruguay EQUAL STANDING Cámara de Empresarios de Free Shops del Uruguay trade association is working to ensure a level playing field between duty free stores straddling the Brazil-Uruguay border

IGUALDAD DE CONDICIONES

La Cámara de Empresarios de Free Shops del Uruguay está tratando de garantizar igualdad de condiciones entre las tiendas esparcidas por la frontera entre Brasil y Uruguay

52 Association News: ASUTIL TRYING TIMES

ASUTIL Secretary General José Luis Donagaray discusses the ASUTIL conference and what to expect in the region over the coming year

TIEMPOS DIFÍCILES

José Luis Donagaray, Secretario General de ASUTIL, habla sobre la conferencia de la organización, y lo que se puede esperar este año en la región

44 FEATURES Bermuda Duty Free cruise into profit m1nd-set says join the tech revolution Siñeriz offers dining location Baja Duty Free uses creativity to combat

44 48 62 64

Chinese shopper’s spending habits Monalisa’s shopping experience Guest writer: Angela Gittens, ACI World

66 70 72

CONTENTS

LEAD STORIES 86 Association News: IAADFS FACING HEADWINDS

The travel retail industry is going through a slowdown throughout most of the Americas, but Michael Payne reminds us of some positive signs

96 Beauty: Essence Corp. ESSENCE CORP KNOWS THE ESSENTIAL ROLE OF SERVICE

Top revenue gains and giving back go handin-hand for Miami-based Essence Corp

100 Sunglasses: ASPEX Eyewear FAMED BMW BRAND LAUNCHES EYEWEAR LINE IN THE AMERICAS Aspex Eyewear and BMW’s social media prowess combine to bring big business

102 Beauty: Altimetre REVVING UP FOR GROWTH

Duty free distributor Altimetre, run by duty free veteran Arnaud de Volontat, is in full gear for the IAADFS show, as the company prepares to unveil a growing portfolio of prestige brands

104 Editor’s Picks BURSTING WITH CREATIVITY

This spring’s summary of the best travel trinkets run the gamut of refreshing fragrances, covetable bags, and innovative gifts

106 Beauty: Actium CRUISING THROUGH THE AMERICAS

Building on the momentum it has achieved across the Americas, particularly onboard cruise lines, Miami-based luxury distributor Actium plans to expand its brand portfolio

112

112 Fashion: Bijoux Nouveau BACK AND BETTER THAN EVER: BIJOUX NOUVEAU

With new ownership, management and products, Bijoux Nouveau reintroduces the Bijoux Terner brand at IAADFS

116 Sunglasses: Essilor, Costa COSTA MAKES A SPLASH IN TRAVEL RETAIL

Things are looking sunny for innovative optical company

116 FEATURES Guest writer: Michiel Munneke, M2mobi FDFA: New government, opportunities Expansion at L.F. Wade Airport A banner year for the Caribbean

82 88 90 92

Revlon is set for success 98 Spotlight on IAADFS exhibitors 08 Guest writer: Giles Marks, Maui Jim 118 Luxe vision with Kering 120s

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CONTENTS

LEAD STORIES 128 Liqueur Report KEEPING UP WITH THE TIMES

Liqueur producers are becoming highly creative in their approaches to travel retail marketing and releases. The world of fashion – and even the selfie craze – has re-energized this

134 Whisky Report A CATEGORY IN COMMAND

134

Suppliers are generally buoyant about the Scotch whisky category in the Americas, despite some currency and economic concerns. New product development and enticing activations continue to enthral travelers

136 Spirits: Brown-Forman ON THE WORLD STAGE

Marshall Farrer, MD Global Travel Retail, Brown-Forman tells us that with a legendary lineup of American whiskies, the supplier is ready to conquer the Americas and beyond

152

138 Spirits: Patrón Spirits International ANSWERING THE CALL

Strong demand for Patrón’s products in Americas duty free results in a number of new offerings that are sure to excite traveling consumers

142 Cognac Report STRENGTH IN DEPTH

Cognac houses have performed well in the buoyant US market, and are positioning themselves for a brighter future in other promising locations in the region, particularly Brazil

146 Spirits: Ron Abuelo FINISHING FIRST

Well-known premium rum Ron Abuelo is moving in a new and exciting direction in 2016 with its Finish Collection

152 Spirits: Gosling’s Rum A NATIONAL TREASURE

136 154

As the official rum of the America’s Cup yacht race in 2017, Bermuda-based Gosling’s has been repackaged with a new look – and sales are growing fast

154 Tobacco: Davidoff A NATURAL PAIRING

Davidoff has been discovering its natural partners around the globe, starting with art and now moving on to gourmet dining

158 Tobacco: CIDF GLOBAL FLAVORS

CIDF believes its high-tech, high-end vaper sticks will finally allow travel retail to get its share of this lucrative market

FEATURES Stoli’s robust region Flying start for Bacchus Future of Irish whiskey Diageo’s joyful journey Quickly established

126 130 132 140 144

Growth for Monarq 141 Tito’s achieves shelf space 147 J. Cortès reaps huge dividends 160 A Mixed Bag 164 Questionnaire: Rene Riedi 166

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TOP STORY: DUFRY’S RENE RIEDI

Gradual change by

WENDY MORLEY

t’s safe to say that Dufry’s acquisition of Nuance in 2014 rocked the travel retail world, causing a giant shift in the power spectrum. Whatever balance had remained at that point was negated when the company then acquired World Duty Free Group (WDFG) in 2015. This series of events has caused rumors to fly and left many in the industry wondering how this will affect them. Who will do the purchasing? Is it all taking place in Switzerland, as rumored? If so, what happens to regional brands? Will Nuance and World Duty Free Group cease to exist? A recent interview with Rene Riedi, Chief Operating Officer at Dufry Americas, should help to clear up the rumors and answer the questions.

Three phases As Riedi explains, there are three phases to the operational changes. First was the planning phase; next, as is happening now, the taking-control phase at local level, and finally, the execution phase. “The priority has been to take control of Santiago and Lima,” says Riedi. This phase has already begun, with a redesign of both spaces. The redesign of the store in Lima is well on its way, and Santiago’s will be starting soon. Creating synergies between the two companies is an important aspect of the execution phase, but for the time being it will be business as usual for purchasing. “We are just taking control and leaving things as they are,” says Riedi. “If we abruptly changed logistics the stores would go out of stock, because we are not ready here in Miami. Imagine, you need to fill up warehouses. We have seven new stores that need to be supplied from here, so the stock is not sufficient. We also need to analyze what they carry that we don’t have. And then later on do all the necessary adjustments to be sure we can supply and align product assortments. We assume this will take all of 2016 and also moving into 2017. We need to take the necessary time in order to

Dufry seemed to come out swinging with its acquisitions of Nuance and WDFG, but as Rene Riedi explains, the company is not rushing the execution at shop level

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

make sure the job is done correctly and make sure the stores have products at all times.” Riedi brings up another important point in the merging of two companies: product descriptions. “The product description by WDF is not the same as the description by Dufry. For example, this water here,” he holds up a bottle, “has a different description in WDF than it does in our system, so how will our system identify it? We need to harmonize descriptions of I don’t know how many SKU’s – thousands and thousands. Making sure the descriptions match is imperative, before we can even start.” So for now the WDF stores continue to be supplied from Spain, though in future they will be supplied from Miami. “But before that happens, there is much work to be done,” says Riedi.

It’s all in a name While there will be no great rush to switch supply from Spain to Miami, neither is there a great rush – indeed barely a thought – to get rid of the WDF and Nuance names. “No,” says Riedi, emphatically. “Going forward we will be a house of brands, meaning most stores will keep the brand they currently have. So WDF will keep the WDF logo on fascia of store, but we may add a tagline saying ‘Member of Dufry Group’ or something like that. We don’t want customers irritated by a changing brand name.”

Reorganization of regions The purchase of Nuance and WDFG has precipitated a change in the business’ operating model and overall organization. Says Riedi, “It becomes too big. The way we add volume to our group’s sales is not equally distributed over different regions; one region will become huge and others will not grow to the same extent. So we have to look at the overall organization to make sure the divisions are structured in such a way that each is a digestible size.” Riedi was formerly in charge of LATAM and Caribbean but

TOP STORY: DUFRY’S RENE RIEDI

not Brazil and Bolivia. Under the new structure, he is Divisional CEO of LATAM, including these two countries. A common concern from brands in light of Dufry’s growth is that it will be too difficult for smaller brands to enter Dufry’s radar. Here, Riedi puts some rumors to rest. Yes, there are two global category directors at Group level. But each region has a procurement manager, and each store is able to make decisions on local brands it carries. The procurement channel operates independently of the operations channel, so each region has a procurement manager reporting to the respective group function. But the procurement manager of each region listens to the stores on an individual basis. That’s important, says Riedi, to keep a sense of place. “I know it’s not easy to get products in,” he says. “But the first thing you have to decide is if your product is regional or global. Global suppliers have a global distribution network. They must be able to get their products to our stores whether in Cambodia or Africa or North America. If it’s not global, then it has to be regional/local. At that point it gets difficult and time consuming because you have to go store to store, operation to operation. A supplier has to have a concept, a plan. What does he want? Where does he want to be listed? How will he ensure his success? If successful in the first location, then it can be easier to move on to the next.”

Dufry’s stores continue to have a degree of autonomy when ordering products, especially when it comes to filling the shelves of the local sections, as shown above in the rendering of the new Peru store, and below in the Puerto Rico store

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

The bottom line is, if you want Dufry to list your product you need to have a convincing argument. “We had great success with the Kerastase salon concept, which started in one Brazil store and grew from there,” says Riedi. “But if you come with the 30th tequila then what are you offering to the organization that the other 29 aren’t?”

Store Redesign in Lima, Peru Lima is currently undergoing a complete redesign. The Departures store is being transformed from a traditional duty free store of 1,107 square meters (net commercial space) to a walk-through store of 1,818 square meters. This store is expected to open in Q3 of this year. The Arrivals store, already being operated as a walk-through, will be refurbished and will grow from 230 square meters to 493 square meters. The Arrivals store is expected to open in April. Last-minute: This 120-square-meter store has already been refurbished and reopened in February. The Departures store will carry mainly core categories, with local heritage products, electronics, apparel, fashion and accessories, and a MAC boutique will be within the store. The store will be widely personalized, with themed design of categories, especially the local Peruvian section.

TOP STORY: DUFRY’S RENE RIEDI

Cambio gradual

e puede afirmar, sin temor a equivocarnos, que la adquisición de Nuance por parte de Dufry en el 2014 conmovió el mundo minorista de viajes, provocando un cambio gigantesco en la esfera de poder. Sin embargo, la compañía negó cualquier balance remanente en ese punto cuando adquirió World Duty Free Group (WDFG) en el 2015. Esta serie de acontecimientos ha generado numerosos rumores, y muchos en la industria se preguntan cómo les afectará. ¿Quién realizará la compra? ¿La transacción se está llevando a cabo en Suiza, como se comenta? En caso de ser así, ¿qué les ocurrirá a las marcas regionales? ¿Dejarán de existir Nuance y World Duty Free Group? Una entrevista reciente con René Riedi, Director de Operaciones de Dufry Americas, podría contribuir a la aclaración de los rumores y responde diversas preguntas.

Tres fases Como explica Riedi, los cambios operacionales tienen tres fases. La primera fue de planificación; la segunda (que está ocurriendo actualmente), es la toma de control a nivel local; y, finalmente, la de ejecución. “La prioridad ha sido tomar el control de Santiago y Lima”, afirma Riedi. Esta fase ya está en marcha, con el rediseño de ambos espacios. El rediseño de la tienda en Lima está muy avanzado, mientras que en la de Santiago comenzará próximamente. La creación de sinergias entre las dos compañías es un aspecto importante de la fase de ejecución, pero, por el momento, las compras seguirán operando normalmente como hasta ahora. “Solo estamos tomando el control y dejando las cosas como están”, explica Riedi. “Si cambiamos abruptamente la logística, las tiendas se quedarían sin inventario, porque no estamos listos aquí en Miami. Imagínense que es necesario llenar los almacenes. Tenemos siete tiendas nuevas a las que debemos abastecer desde aquí, por lo que el inventario no es suficiente.

Aparentemente, Dufry mostró cartas de triunfo con las adquisiciones de Nuance y WDFG. Sin embargo, según explica René Riedi, la compañía no está apresurando la ejecución a nivel de tiendas

También necesitamos analizar aquellas mercancías que venden y que no tenemos. Y, posteriormente, hacer los ajustes necesarios para garantizar lo que podemos suministrar, y organizar surtidos de productos. Asumimos que esta tarea se llevará todo el 2016 e incluso varios meses del 2017. Tenemos que tomarnos el tiempo necesario para garantizar que el trabajo se haga correctamente, y asegurar que las tiendas tengan productos todo el tiempo”. Riedi cita otro punto importante en la fusión de las dos compañías: las descripciones de productos. “La descripción de productos de WDF no es la misma que la de Dufry. Por ejemplo, esta marca de agua [toma una botella y la muestra] tiene en WDF una descripción diferente a la de nuestro sistema. ¿Cómo podrá identificarla entonces nuestro sistema? Es preciso armonizar descripciones de no sé cuántos SKU (números específicos de cada unidad), miles y miles. Garantizar que las descripciones se correspondan entre sí es imperativo, antes de que ni siquiera podamos comenzar”. Por el momento, las tiendas WDF seguirán siendo abastecidas desde España, aunque en el futuro esto podría hacerse desde Miami. “Pero antes de que eso ocurra, hay mucho trabajo por hacer”, añade Riedi.

La importancia de un nombre Si bien no hay grandes prisas por cambiar el abastecimiento de España a Miami, tampoco hay apuro– en realidad, apenas se ha pensado–para eliminar los nombres WDF ni Nuance. “No”, responde Riedi, enfáticamente. “En el futuro seremos una firma de marcas, o sea, que la mayoría de las tiendas mantendrán la marca que tienen actualmente. Por tanto, WDF conservará el logotipo WDF en la tienda, pero podríamos añadirle el eslogan Member of Dufry Group o algo parecido. No queremos irritar a los clientes con un cambio de nombre de marca”.

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

TOP STORY: DUFRY’S RENE RIEDI

Reorganización de regiones La compra de Nuance y WDFG ha precipitado un cambio en el modelo de operaciones del negocio y la organización en general. “Todo cobra enormes proporciones. La forma en que incorporamos volumen a las ventas de nuestro grupo no está distribuida equitativamente en las diferentes regiones”, explica Riedi. “Una región crecerá enormemente, mientras que otras no lo harán en la misma medida. Por tanto, tenemos que ver la organización general, para garantizar que las divisiones se estructuren de manera que cada una tenga un tamaño digerible”. Anteriormente, Riedi estaba al frente de Latinoamérica y el Caribe, pero no de Brasil ni Bolivia. Bajo la nueva estructura, es Director Ejecutivo de División de Latinoamérica, incluyendo estos países. Una preocupación común de las marcas a la luz del crecimiento de Dufry, es que las marcas más pequeñas tendrían grandes dificultades para llamar la atención de esa compañía. Pero Riedi desmiente los rumores. Es cierto que existen dos directores globales de categoría a nivel del grupo, pero cada región cuenta con su gerente de adquisiciones, y cada tienda puede tomar decisiones sobre las marcas locales que incorpora a sus inventarios. El canal de adquisiciones opera de forma independiente a la función respectiva del grupo. Sin embargo, el gerente de adquisiciones de cada región atiende a las tiendas individualmente. Según Riedi, esto es importante para mantener un sentido de lugar. “Sé que no es fácil incorporar productos”, dice. “Pero lo primero que debemos decidir es si el producto es regional o global. Los proveedores globales tienen una red global de distribución, y deben suministrarles sus productos a nuestras tiendas, ya sea en Cambodia, Africa o Norteamérica. Pero si

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

no son globales, hay que hacerlo a nivel regional/local. En este punto el proceso se dificulta y consume tiempo, porque hay que visitar tienda por tienda, operación por operación. El proveedor tiene un concepto, un plan. ¿Qué quiere? ¿Dónde quiere ser incluido? ¿Cómo garantizará su éxito? Si logra éxito en el primer establecimiento, entonces puede ser fácil pasar a otro”. La conclusión es que, para que Dufry incorpore un producto, el suministrador debe tener un argumento convincente. “Hemos tenido gran éxito con el concepto de salón Kerastase, que comenzó en una tienda de Brasil y creció a partir de ahí”, prosigue Riedi. “Pero si un proveedor viene con el 30mo tequila, ¿qué esta ofreciéndole a la organización que no tienen los otros 29?”.

Rediseño de tiendas en Lima, Perú Salidas: La tienda está transformándose de establecimiento tradicional duty free de 1,107 metros cuadrados (de espacio comercial neto) a una tienda de tránsito libre de 1,818 metros cuadrados. Su inauguración está programada para el tercer trimestre de este año. Llegadas: La tienda, que ya es operada como de tránsito libre, será remodelada y su espacio se incrementará de 230 a 493 metros cuadrados. Su inauguración está programada para abril. Último minuto: Esta tienda de 120 metros cuadrados ha sido remodelada y comenzó sus operaciones en febrero. La tienda de Salidas venderá principalmente categorías básicas, con productos locales, electrodomésticos, prendas de vestir, modas y accesorios, y tendrá una boutique MAC dentro. El establecimiento será ampliamente personalizado, con diseño temático de categorías, especialmente la sección peruana local.

DUFRY BRAZIL

Taking charge Dufry Brazil has so many different initiatives happening across the country, any economic woes in the region end up as barely a blip on the company’s radar. by

he word one continuously hears coming up in reference to business in South America right now is “challenging,” and nowhere is that more the case than in Brazil. The country has spent a great deal of money in recent years preparing its airports for the FIFA World Cup in 2014 and the Olympics in 2016, and Dufry in turn has opened up an extraordinary number of stores. Brazil pre-2014 and the Brazil post-2014, however, are worlds apart. How is Dufry faring in this milieu? To answer that question we spoke to Gustavo Fagundes, COO of Dufry Brazil. Q: In advance of the World Cup and also since then in advance of the Olympics, so much preparation, money, and effort

WENDY MORLEY

have been put into the rebuilding of airports and other infrastructure, and also in the opening of new Dufry stores. Since 2014, however, the economy has tumbled. Has this affected your business vis-a-vis forecasted? A: Both events, the World Cup and the Olympics, were great achievements for Brazil. Unfortunately, those events came up during a time of global economic instability, noticeably in Brazil. One of the most important aspects related to such events is the country’s legacy. In other words, what will travelers remember from these events in Brazil? We believe that from the tourism industry’s point of view, the good experience will help to set the country as a solid tourist destination and therefore boost Hudson stores were an entirely new type of retail concept in Brazil. Stores such as this one at Santos Dumont Airport – Rio de Janeiro are doing very well, and Dufry is planning to open more

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

Dufry Shopping, the company’s duty paid stores that carry a similar mix to duty free but geared toward the domestic traveler, are doing extremely well

passenger traffic in the Brazilian airports, for example, in future. In addition to that, we saw major achievements in terms of infrastructure, especially in the airports, that are now much more commercially oriented and attractive to passengers. As reported, our operations in Brazil have been impacted by the economic slowdown, but it’s important to note that sales registered in local currency have been relatively stable. We have put in place several action plans in order to help keeping and improving profitability, such as the Efficiency Plan, which includes a savings program. We have also increased our focus on some internal processes with regards to our shops, to further maximize performance and shop attractiveness, the Store Level Excellence Program. Q: The decreased value of the Real will have greatly affected pricing, I imagine. Has it been difficult to stay competitive? A: We sell in USD in our duty free shops, so whenever there is a maxi-valuation of the US Dollar against the Brazilian Real, it impacts the purchase power of Brazilians, our main nationality. In general, the savings when comparing duty-free shops vs. local market are in the range of 20% to 40%, depending on the product category. What is happening now – but this is a temporary effect – is that savings are located at the lower level of this range.

Dufry has opened 10 Olympic Shops already, such as this one at Terminal 3 Gru Airport, departure; the company will be opening 12 more such stores

The high street retailers are still working with an “old” inventory, priced when the BRL/USD devaluation was at a lower level. But again, this is a temporary effect, and we are starting to notice that savings are returning to their original levels. In order to remain competitive, we are increasing our already-strong partnership with our suppliers and landlords to develop specific strategies to stimulate and increase sales. In addition, we are now even more active with our marketing mailing, promoting special offers and deals for our clients. As an example, we have just launched a campaign called “Lowest Price Guaranteed,” where we guarantee the lowest price to customers in comparison to any other international duty free shop (including on board) that he/she passed through during an international trip, and also any Brazilian local market shop. More than ever, we have been focusing on our loyalty program created in 2014, called “Dufry Red.” The program offers exclusive advantages for its participants such as discounts and exclusive gifts in addition to the best customer service in travel retail. At the same time Dufry Red helps to drive even more sales, because we design special offers more suitable to the individual’s purchasing profile. Discounts increase up to 10% whenever the customer’s ticket goes above US$300

in departures and US$400 in arrivals. We now have around 50,000 Dufry Red members. Q: Have you found the decreased value of the Real to be beneficial in any way? Has Brazil – and Dufry – seen an increase in foreign tourists brought about at least in part by an attractive exchange rate? A: Brazil has increased its visibility as a tourism destination over the past few years, especially after the World Cup. This, in addition to the weak currency in Brazil, has brought about for the first time in many years a contribution from foreigners to our business. This is especially the case in Rio de Janeiro, which is one the most important tourist destination in Brazil. Having said that, foreigners’ sales are growing not only in terms of number of customers but also as a contribution to our sales in USD. It is worth mentioning that our duty-paid business (Dufry Shopping and Hudson) has shown consistent and healthy growth, capturing the passenger that has decided to stay in the Brazil. We have a presence in almost all domestic and international airports and we have a broad offer in terms of shop concepts (duty free, Dufry Shopping, Hudson) and products, helping Dufry overcome any adverse environment.

Q: Last time we spoke you were just opening up your new mega stores and some Hudson News stands. How have they been received? How has business been at these new locations? A: The development of the duty paid “Dufry Shopping” as well as Hudson has been one of our main goals in the past year. We successfully opened 12 Hudson shops across the main Brazilian airports in 2015, such as RioGaleão in Rio de Janeiro, GRU Airport in São Paulo, and in Brasília airport, among others. The Hudson concept was well accepted in the Brazilian travel retail market, which didn’t have a similar concept before Hudson. The Hudson roll-out in Brazil is considered a benchmark for other operations, and we expect to continue expanding going forward. Regarding Dufry Shopping, our first mega store under this concept is in Brasília. It has been performing very well, not only because of the passenger flow but also due to the concept that we developed there, a general travel retail shop for domestic passengers, offering a product range similar to a duty-free shop. Another megastore was recently opened in Curitiba and we plan to replicate the concept even further in 2016, in other relevant airports such as RioGaleão and Viracopos (which are under construction), among other cities. This business is

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DUFRY BRAZIL

Rendering of Dufry’s coming duty free general travel retail shop at RioGaleão Airport

growing strongly not only in terms of new concessions/expansions, but also in like for like. Bear in mind that 90% of Brazilian passengers fly domestic. Q: Do you have any new developments in the works? New locations? A: 2015 was a year full of challenges, but also opportunities. Several international brands announced the end of operations in the country due to the economic environment, and some of these brands were operating at airports. Dufry was therefore able to negotiate and retain some spaces and even shops. Dufry is constantly monitoring and analyzing the viability of each project. If the opportunity and return appear positive, we can apply for it. A major project to be ready soon is in RioGaleão airport, in Rio de Janeiro. This will be a very important milestone for Dufry, as we are more than doubling current retail space of 4,000 square meters, and offering a best-of-class feel and look to the shops. It will be a whole new shop experience in RioGaleão compared to the current setup. Just to give a flavor, there will a special space in the departure area to be called “Destination Shops,” where travelers will find the most prestigious

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

Brazilian shops before they leave the country. Also, the main departure and arrival stores were designed to give a “sense of place” of the Rio de Janeiro city for our customers that are traveling to and from this destination. Last but not least, Dufry will also continue to develop its active role with business partners, bringing new concepts to the airports where we operate as well as adding more space. Q: What do you have coming up that’s specific to the Olympics? A: Dufry already established the tradition to be present as the official store of major sports events in Brazil, such as FIFA Confederations Cup Brazil 2013, FIFA World Cup Brazil 2014™ and Stock Car (Brazil’s largest category of car racing) among others. Now, we are proud to be part of another great event as the official operator of the 2016 Olympic Games in Rio de Janeiro. We are already operating 10 shops across GRU Airport, RioGaleão, Santos Dumont airports, among others, and expect to open approximately another 12 shops across airports, subways and bus stations. In addition to that, we will have a

“shop-in-shop” concept for these Olympic Games stores within our duty free and duty paid stores, to take advantage of our existing area, enhance visibility and at the same time increase sales. It’s worth noting that these shops have all been performing very well. Q: Now on top of economic issues you have the Zika virus. Have you heard anything about how this is expected to affect travel to the country? A: So far, we have been monitoring the situation, but we haven´t recorded any disturbances in our operations linked to the Zika virus issue. In addition, the World Health Organization has not issued any travel restrictions to affected regions, except for pregnant women. And finally, we have had experiences with similar diseases in the past in other parts of the world (e.g. Ebola); the impact has been very marginal and limited to only a short period of time. Q: Is there anything else you’d like to discuss that I might have missed? A: Dufry has recently disclosed its new organizational structure. The new business configuration will cover all LATAM

DUFRY BRAZIL

This departures duty free store coming to Rio Galeão Terminal 2 features local Confectionary & Spirits brands

countries including Brazil and Bolivia under a single “Division.” Among other benefits, this will give us the opportunity to share and implement local expertise and strategies in a faster way across the division. This will for sure enhance customer experience, and at the end also leverage the business. Furthermore, the new organization of Division 4, Latin America, will allow us to install intradivisional synergies at different levels. In terms of operations, we would like to reinforce our initiative to grow the business. We have been working internally with some tools linked to digital service, as we understand this is the future. Our pre-order service now represents Dufry has driven business by such methods as creating M.A.C stores and shop-in-shops, offering the Brazilian woman her favorite brands

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

approximately 5% of our sales, and we have been investing to upgrade and even expand to other operations. The intention is to improve the customer experience, creating customized offers, content and entertainment. The mobile experience is gaining attention for core countries, and with digital customers we can also capture the travel date, offer Automated Virtual Assistant services and develop actions for key categories the individual intends to buy. I’d also like to mention Dufry Red again. Through Red, we offer special benefits to our costumer. Dufry Red clients, for example, were invited to stay at the exclusive Bodega Terrazas de Los Andes

in Mendonza. This initiative showed great results and proved to be very positive for the brand’s image, since the first participant group purchased large amounts of Terrazas wines in Duty Free upon their return. Last but not least, through our Dufry Shopping shops (Duty Paid), we have been able to drive more sales by adding the “shop-in-shop” concept for several brands in our operations including a M.A.C. store. As you may know this is one of bestselling products for the Brazilian women. So far we have launched at Santos Dumont, Congonhas and Brasilia airports, and our goal is to expand to other operations.

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DUFRY’S NEW REGIONS

Dufry’s New Regions North Amercia

Latin Amercia

Southern Europe & Africa

Asia, Middle East & Austraila

UK, Central & Eastern Europe

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Neutral Duty Free’s 4,000-squaremeter store in Melancia Mall

Long-term relationship

arge projects, such as the US$70 million Melancia Mall that opened late last year near Rivera in Northern Uruguay, take years to organize, plan and build. So developers of the region’s largest retail project had no way of predicting that by the time it opened, Brazil, where most of its customers come from, would be in the midst of a major downturn. “None of the public or private sector forecasters anticipated the scale of Brazil’s economic downturn,” says Enrique Urioste, CEO of Neutral Duty Free, which along with Grupo Wisa’s La Riviera, comprises the mall’s two major anchor tenants. “So we had to adjust tactics quickly. That being said, we did not create the Melancia store for short-term gains. Successful retailers need a long-term outlook to navigate these kinds of fluctuations.”

Enrique Urioste, Neutral Duty Free’s CEO, is one of the biggest backers of this ultra-modern Northern Uruguay mall, which opened last year during tough economic times by PETER DIEKMEYER Melancia Mall: cross-border and duty free shoppers Neutral Duty Free’s 4,000-square-meter store in Melancia Mall is one key element in the mall’s long-term strategy, together with La Riviera. In addition to the two major anchor tenants, Grupo Marchesano, the developer, was able to attract a slew of innovative retailers including Paratodos Free Shop, Varlix Servicios Financieros, Movistar and many others. In the end, Grupo Marchesano invested US$42 million in the 60-store complex, and retailers invested another US$28 million, priming the mall for long-term success. Melancia Mall’s coveted location in the Uruguayan town of Rivera, just across from the Brazilian border, has attracted Brazilian tourists and cross-border bargain hunters since its inception as a duty free location. Some Brazilians conduct day trips to Rivera to do their regular grocery shopping. Others go to take advantage of the mall’s luxury products, alcohol, tobacco, clothing, cosmetics and other offerings. Uruguayan shoppers are not eligible to take advantage of these duty free deals, so Brazilians make up the vast majority of customers, as demonstrated by the mall’s Facebook page, with an impressive 26,000 Brazilian followers as of press time.

Neutral Duty Free: updated merchandizing

Enrique Urioste, CEO of Neutral Duty Free

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

Urioste sees the vision of the mall just as he has been a visionary since the start of his career. In 2011, the former InterBaires and Duty Free Americas executive made his biggest move yet. With backing from JH Partners, a San Francisco-based private equity firm, Urioste led a buyout of Neutral, which at the time consisted of eight stores on the southern side of the Brazil/Uruguay border as well as airport duty free stores in Argentina. His mandate was

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to build the firm’s legacy business, both through organic growth and acquisitions. Under Urioste’s guidance, Neutral invested more than US$15 million into its retail network during the first two years after he led the buyout of the company. This included increasing the number of available SKUs in the chain’s stores and almost tripling its retail space offering. “When we bought Neutral it was a solid business, with a good brand name and an almost 25-year history,” says Urioste. “They had developed a proven success strategy. But the company did not have the capital available to fully develop the brand and the flexibility to leverage the most modern retailing knowhow.” Many innovations at Neutral Duty Free attracted a considerable Key to developing that potential has been number of new clients to the chain in its first few weeks Urioste’s strategy of building licensing arrangements. These agreements have enabled the company to feature shop-in-shop offerings of The Gap, operations. The company is also studying opportunities to open BMW, Nike and Tommy Hilfiger and other brands in its Melanup duty free shops on the Brazil side of the border. The new cia Mall outlet. “We want to offer affordable luxury,” says Urioste. Uruguayan border immigration office for Rivera and a domestic “We are looking for partners whose products offer good brand and international bus terminal, which are opening near Malenawareness, exclusiveness, competitive pricing and which can cia Mall, should prove to be another positive development, as it provide good margins.” means that all travelers crossing the border from Brazil will have Urioste also has infused the chain with updated merchandizto stop there. Rivera is the main crossing point for land border ing, training, presentation and marketing techniques. These traffic between Brazil and Argentina. included improving the chain’s loyalty system and developing A projected firming of the Argentinian economy is also its ecommerce offerings. “Duty free shopping is about buying a expected, over time, to increase the number of travelers who pass dream,” says Urioste. “Clients feel special when they travel and through the crossing each year, on their way to Brazil’ s beaches. are more open to treating themselves.” “The changes that the new government in Argentina is making Many of Urioste’s innovations are now evident in the Malenare huge,” says Urioste. “We are already seeing positive signs. cia Mall outlet, which attracted a considerable number of new The number of Argentinians traveling to Uruguay last summer clients to the chain in its first few weeks, as measured by the increased by nearly 30%.” small percentage who were using Neutral loyalty cards. AccordUrioste’s biggest strength may well be his temperament, which ing to Urioste, the average ticket price at the store, of more than enables him to focus on long-term corporate success. “I am US$100, was also significantly higher than at other Neutral stores lucky, because our investors, JH Partners, share our vision.” says located downtown. Urioste. “They hold onto their investments much longer than traditional private equity firms. This enables time to work for, rather than against, them. They once held onto an investment for Solid momentum moving forward 19 years, before they divested it. That is rarity in a today’s fastHow these developments will play out in the future is unclear. moving world.” However, there are numerous positive signs. Last year Urisote led a restructuring at Neutral that significantly streamlined

Key to developing that potential has been the strategy of building licensing arrangements. These agreements have enabled the company to feature shop-in-shop offerings of The Gap, BMW, Nike and Tommy Hilfiger

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Brands shown at our booth : Eyewear

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Una relación a largo plazo

os proyectos de gran envergadura como Melancía Mall, valorado en $70 millones, e inaugurado a finales del año pasado en el norte de Uruguay, toman años de organización, planificación y construcción. Debido a esta situación, los urbanistas del principal proyecto minorista de la región no tuvieron forma de predecir que, a la hora de su apertura, Brasil, la fuente principal de procedencia de sus clientes, estaría pasando por una enorme crisis. “Ninguno de los pronosticadores del sector público o privado pudo prever la escala de la crisis económica de Brasil”, afirma Enrique Urioste, Director Ejecutivo de Neutral Duty Free, la cual, conjuntamente con La Riviera de Grupo Wisa, son los dos arrendatarios ancla del centro comercial. “Por tanto, tuvimos que ajustar las tácticas rápidamente. Dicho esto, no creamos la tienda Melancía para obtener ganancias a corto plazo. Los minoristas exitosos necesitan tener una perspectiva a largo plazo para transitar por este tipo de fluctuaciones”.

Melancía Mall: compradores de frontera y duty free La tienda de Neutral Duty Free en Melancía Mall, con una extensión de 4,000 metros cuadrados, es un elemento clave en la estrategia a largo plazo del centro comercial, en unión de La Riviera. Además de los dos arrendatarios ancla principales, la firma urbanizadora Grupo Marchesano pudo atraer a un grupo de minoristas innovadores como Paratodos Free Shop, Varlix Servicios Financieros y Movistar, entre otros. En total, Grupo Marchesano invirtió US$42 millones en el complejo de sesenta tiendas, mientras que los minoristas aportaron otros US$28 millones, equipando al centro comercial para el éxito a largo plazo. La codiciada ubicación de Melancía Mall en la ciudad uruguaya de Rivera, al otro lado de la frontera con Brasil, ha atraído a turistas y buscadores de oportunidades brasileños, desde su creación como establecimiento duty free. Algunos 36

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

brasileños realizan viajes de un día a Rivera para hacer sus compras regulares de víveres. Otros, por su parte, aprovechan los productos de lujo, alcohol, tabaco, ropa, cosméticos y otras ofertas del centro comercial. Como los compradores uruguayos no son elegibles para sacar ventaja de estas oportunidades duty free, los brasileños conforman la amplia mayoría de la clientela como demuestra la página del centro comercial en Facebook, que tenía una cifra impresionante de 26,000 seguidores brasileños al cierre de esta edición.

Neutral Duty Free: comercialización actualizada Urioste considera la misión del centro comercial con la capacidad visionaria que le ha caracterizado desde el comienzo de su carrera. En el 2011, el ex alto funcionario de InterBaires y Duty Free Americas llevó a cabo la acción ejecutiva más notable de toda su trayectoria. Con el apoyo de JH Partners, firma de capital privado radicada en San Francisco, Urioste encabezó la adquisición de Neutral, integrada en ese momento por ocho tiendas en la sección sur de la frontera Brasil/Uruguay, así como tiendas duty free de aeropuertos en Argentina. Su mandato fue crear el legado comercial de la firma, mediante crecimiento orgánico y adquisiciones. Bajo la dirección de Urioste, Neutral invirtió más de $15 millones en su red minorista durante los dos primeros años después de haber liderado la compra de la compañía. Esta medida incluyó incrementar la cantidad de unidades de mantenimiento de existencias (SKU) disponibles en las tiendas de la cadena, y triplicar su oferta de espacio comercial. “Neutral, cuando la compramos, era un negocio sólido con un buen nombre de marca y una historia de casi 25 años”, recuerda Urioste. “Ellos [la dirección de Neutral] crearon una estrategia de éxito demostrado. Pero la compañía no tenía capital disponible para desarrollar totalmente la marca, ni la flexibilidad para potenciar una experiencia más moderna de comercio minorista”.

La estrategia de crear acuerdos de licencia puesta en marcha por Urioste ha sido clave para desarrollar ese potencial. Esos convenios han facilitado que la compañía active ofertas de “tiendas dentro de la tienda” de The Gap, BMW, Nike y Tommy Hilfiger, así como de otras marcas en su instalación de Melancía Mall. “Queremos ofrecer lujo asequible”, explica Urioste. “Estamos buscando socios cuyos productos ofrezcan buen conocimiento de marca, exclusividad, precios competitivos, y que proporcionen buenos márgenes de ganancias”. Urioste también ha equipado a la cadena con comercialización actualizada, entrenamiento, y técnicas de presentación y mercadotecnia como el perfeccionamiento del sistema de lealtad y el desarrollo de sus ofertas por comercio electrónico (ecommerce). “Las transacciones duty free son fundamentalmente la compra de un sueño”, asegura Urioste. “Los clientes se sienten especiales cuando viajan, y son más propensos a consentirse a sí mismos”. Gran parte de las innovaciones de Urioste se han hecho evidentes en la tienda de Melancía Mall, que atrajo en sus primeras semanas a una cantidad considerable de nuevos clientes a la cadena, en comparación con el pequeño porcentaje que estaba usando las tarjetas de lealtad de Neutral. Según Urioste, el precio promedio de mercancías de la tienda, superior a $100, también fue significativamente más alto que otras tiendas Neutral ubicadas en el centro de la ciudad.

Un sólido impulso en el avance Aun no está clara la forma en que seguirán desenvolviéndose los acontecimientos. Sin embargo, se aprecian numerosas señales

positivas. El año pasado, Urioste encabezó una restructuración en Neutral que perfeccionó significativamente las operaciones. La compañía también está analizando oportunidades de apertura de tiendas duty free en el lado brasileño de la frontera. La nueva oficina de inmigración fronteriza uruguaya en Rivera, así como una terminal nacional e internacional de autobuses que se está inaugurando cerca de Melancía Mall, deberían ser otro acontecimiento positivo, pues equivale a que los viajeros que crucen la frontera provenientes de Brasil, tendrán que pasar por esta ciudad. Rivera es el principal punto de cruce para el tráfico fronterizo terrestre entre Brasil y Argentina. También se espera que una solidificación proyectada de la economía argentina, con el paso del tiempo, incremente la cantidad de viajeros que cruzan cada año la frontera, camino a las playas de Brasil. “Los cambios que está llevando a cabo el gobierno en Argentina son enormes”, comenta Urioste. “Ya estamos viendo señales positivas. El verano pasado, la cifra de argentinos que viajaron a Uruguay se incrementó en casi un 30%”. Probablemente la mayor fortaleza de Urioste es su temperamento, que le permite enfocarse en el éxito empresarial a largo plazo. “Me considero afortunado, pues nuestros inversionistas, JH Partners, comparten nuestra visión”, afirma Urioste. “Ellos [JH Partners] retienen sus inversiones por más tiempo que las firmas tradicionales de capital privado. Esto propicia que el tiempo trabaje a su favor, y no en su contra. Por ejemplo, mantuvieron una inversión por 19 años, antes de venderla. Una rareza en el mundo agitado de estos tiempos”.

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INDUSTRY NEWS: CÁMARA DE EMPRESARIOS DE FREE SHOPS DEL URUGUAY

Equal standing

Carlos Loaiza Keel, General Secretary of the Cámara de Empresarios de Free Shops del Uruguay

Cámara de Empresarios de Free Shops del Uruguay trade association is working to ensure a level playing field between duty free stores straddling the Brazil-Uruguay border by

PETER DIEKMEYER

“M

ay you live in interesting times,” says the famous curse. In northern Uruguay right now, times are very interesting indeed, and retailers in the region are working hard to ensure they emerge from the other side relatively unscathed. Northern Uruguay has long been a popular area for duty free shopping. From its larger stores like Neutral, Siñeriz and La Rivera to smaller downtown stores, Rivera is a well-known shopping destination. But a combination of factors recently has made this region a challenging one for business. Because Uruguayans cannot purchase duty free in Rivera, the city relies almost exclusively on trade from Brazil, but economic and currency woes in that giant of a country have resulted in decreased cross-border shopping trips, and Rivera’s retailers are feeling the pinch.

Sales decrease in the region “Business among our members is down by nearly 40%,” says Carlos Loaiza Keel, General Secretary of the Cámara de Empresarios de Free Shops del Uruguay (CEFSDU), a trade association for the region. “Many of their investments were in multi-year projects that were thought up during a time when Brazil’s economy was slated to grow by leaps and bounds. The slow start is causing challenges to the region’s economy, because the industry and related business employ so many people.” While a recent report published by the World Travel and Tourism Council states that the number of foreign visitors

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

to Uruguay is projected to grow by a 4.2% per year during the coming decade to 3.6 million arrivals by 2025, Brazilians had been expected to supply a major proportion of that growth. The sluggish Brazilian economy means growth will certainly not reach those projected figures this year as cross-border traffic has slowed. To make matters worse, currency devaluation

means the people who do come are spending less per ticket. “It’s hard to say when this will end,” says Loaiza Keel. “The timing is unfortunate.” Several trends, including slowing natural resources exports to China and other emerging economies, the Petrobras scandal [a corruption scandal that has resulted in arrests of top brass in the country], cur-

Northern Uruguay has long been a popular area for duty free shopping

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INDUSTRY NEWS: CÁMARA DE EMPRESARIOS DE FREE SHOPS DEL URUGUAY

cause for concern is the recent reduction by the Brazilian government on the inbound duty free allowance, to US$150. So far, Loaiza Keel and the CEFSDU have had some success in advancing the industry’s interests. One recent win: the organization helped obtain government relief for laid-off industry workers in the region, notably an extension in unemployment insurance premiums. That concession, as well as the implementation of a partial work/study program, will enable merchants to keep their pool of skilled workers for when the industry does start to bounce back.

Brazilian economics growth projected to turn positive in 2017

After many years of growth, Brazil’s output is expected to shrink by more than 3% in 2016

rency devaluations and challenges within the Dilma Rousseff administration are all putting a real bite in Brazil’s US$2.34 trillion gross domestic product (GDP 2014). According to a survey of central bank and related economists, after years of growth the country’s output is expected to shrink by more than 3% in 2016. As the massive Malencia Mall was opening, meanwhile, the region saw extreme flooding that curtailed safe travel. To add insult to injury, the time is coming soon for Brazil’s duty free laws to change. Until now, border stores have all been on the opposite side of the border to Brazil. Expected later 2016 or possibly into 2017, shops will begin opening on the Brazil side. The new rules, passed in July 2014, contain guidelines related to the establishment and operation of duty free shops on the Brazilian side of the border, which were initially slated to begin implementation by July of 2015. However, despite the fact that several Brazilian cities have passed the necessary legislation to allow such shops, that has yet to occur. Although the public sector decisionmaking process in Brazil is notoriously

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

sluggish, uncertainly stemming from a tense political situation is also partly at fault. The scale of the competition they will provide remains unclear at this time, says Loaiza Keel.

CEFSDU takes action Led by Loaiza Keel, a well-connected lawyer who does business in several countries, the CEFSDU isn’t waiting around for developments. The association’s first goal is to ensure that duty free and travel retail shops on both sides of the border compete on a level playing field. “This will not be easy,” says Loaiza Keel, due to the minimal clout that a small country such as Uruguay has in the five-country Mercosur trade alliance, which is dominated by two larger players, Argentina and Brazil. Two immediate causes for concern relate to the fact that under current provisions, Uruguayans are not allowed to take advantage of domestic duty free shops. Loaiza Keel wants to ensure that Brazilian stores operate under the same constraints. If Brazilians were allowed to buy at their own duty free shops, Uruguayan stores would lose their customer base. Another

The other good news is that despite the current challenges, there are several bright spots on the horizon. In February a consensus among Brazilian economists projected that the country’s economy would stop shrinking by the end of 2016, and return to growth the following year. Furthermore, while Brazilian tourism will likely continue to feel the pain, the number of international visitors to Brazil, at least a portion of which will likely visit Uruguay as well, is likely to spike later this year, due to the 2016 Olympics, which will be held in Rio de Janeiro, although recent international sporting events have shown disappointing in this regard. Another positive thought is that Brazil isn’t the only game in town. As Uruguay’s tourism minister Liliam Kechichian noted late last year, the number of Argentinian visitors to Uruguay, many of whom pass though the country on the way to Brazil, shot up by 150,000 during the first eight months of 2015. A new government in Argentina, which is making great strides in improving the country’s economy at the same time as making it easier for Argentineans to travel outside of the country, suggest that the cross-border flows of Argentinian tourists through Uruguay into Brazil is likely to continue to increase. Carlos Loaiza Keel and members of the Cámara de Empresarios de Free Shops del Uruguay will be hoping that they stop at Uruguayan retail outlets while they pass through.

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INDUSTRY NEWS: CÁMARA DE EMPRESARIOS DE FREE SHOPS DEL URUGUAY

The Brazilian real devaluation means that travelers will be spending less per ticket when shopping

Igualdad de condiciones

“O

jalá te ocurran cosas interesantes”, sentencia una de las tres famosas maldiciones chinas. Actualmente, en el norte de Uruguay, están ocurriendo acontecimientos realmente interesantes, y los minoristas de la región están esforzándose para garantizar que salgan relativamente ilesos de tal desafío. El norte de Uruguay ha sido por largo tiempo una zona popular para las compras duty free. Desde los establecimientos más grandes como Neutral, Siñeriz y La Rivera, hasta las pequeñas tiendas del centro, Rivera es bien conocida como destino de compras. Pero, recientemente, una combinación de factores ha convertido a la región en un reto para los negocios. Como los uruguayos no pueden hacer compras duty free in Rivera, la ciudad depende casi exclusivamente del comercio con Brasil, pero los problemas económicos y de cambio monetario en el gigantesco

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

La Cámara de Empresarios de Free Shops del Uruguay está tratando de garantizar igualdad de condiciones entre las tiendas esparcidas por la frontera entre Brasil y Uruguay

país sduramericano han dado como resultado una disminución de los viajes de compras al otro lado de la frontera. Y los minoristas de Rivera están sufriendo las consecuencias.

Disminución de las ventas en la región “Los negocios de nuestros miembros han disminuido en casi un 40%”, afirma Carlos Loaiza Keel, Secretario General de la Cámara de Empresarios de Free Shops del Uruguay (CEFSDU), asociación comercial para la región. “Gran parte de las inversiones se dedicaron a proyectos de varios años concebidos en una época donde la economía de Brasil estaba destinada a crecer vertiginosamente. El lento comienzo esta provocando desafíos para la economía de la región, porque las industrias y los negocios relacionados emplean a muchas personas”. Si bien un informe reciente publicado por el Consejo Mundial de Viajes y Turismo, revela que se proyecta el

incremento de la cifra de visitantes extranjeros a Uruguay en un 4.2% por año durante la próxima década, hasta alcanzar 3.6 millones de llegadas en el 2025; se esperaba que los brasileños aportaran una importante proporción de ese crecimiento. Con toda seguridad, la lentitud actual de la economía brasileña no llegará a alcanzar este año esas cifras proyectadas, pues el tráfico fronterizo ha disminuido. Y para colmo de males, la devaluación de la moneda equivale a que quienes cruzan la frontera están gastando menos en las mercancías. “Es difícil decir cuándo terminará todo esto”, añade Loaiza Keel. “El momento es infortunado”. Varias tendencias, como el decrecimiento de las exportaciones de recursos naturales a China y otras economías emergentes, el escándalo de la firma Petrobras [con acusaciones de corrupción que han llevado al arresto de prominentes funcionarios del país], las devaluaciones de la moneda y los problemas en el gobierno de Dilma

Rousseff, están mermando el producto nacional bruto de US$2.34 billones de Brasil (PNB)(2014). Según una encuesta del Banco Central y economistas relacionados, después de años de crecimiento, se espera que la producción del país disminuya más del 3% en el 2016. Entretanto, cuando se inauguraba el Melancía Mall, la región fue azotada por intensas inundaciones que impidieron viajar con seguridad. Pero los males no terminan ahí. Muy pronto cambiarán las leyes que controlan la operación duty free en Brasil. Hasta ahora, las tiendas de frontera han estado al lado opuesto de la frontera con Brasil. Pero se espera que a finales de este año, o posiblemente en el 2017, se comiencen a abrir tiendas en la parte brasileña de la frontera. Las nuevas leyes, aprobadas en julio del 2014, contienen directivas relacionadas con el establecimiento y operación de tiendas duty free en la parte brasileña de la frontera, cuya implementación estaba programada inicialmente para comenzar en julio del 2015. Sin embargo, a pesar de que varias ciudades brasileñas han aprobado la legislación necesaria para permitir esos establecimientos, la puesta en marcha del proyecto no ha ocurrido aun. Si bien es conocido que el proceso de toma de decisiones del sector público es notoriamente lento en

Brasil, la incertidumbre que emana de la tensa situación política actual también ha contribuido en parte a la demora. La escala de la competencia que implicarán esas tiendas no está bien clara en estos momentos, según Loayza Keel.

La CEFSDU pasa a la acción La CEFSDU, liderada por Loaiza Keel, abogado con excelentes conexiones que hace negocios en varios países, no se ha sentado a esperar pacientemente por los acontecimientos. El primer objetivo de la asociación es garantizar que las tiendas duty free y minoristas de viajes a ambos lados de la frontera, compitan en igualdad de condiciones. “Esto no será fácil”, asegura Loaiza Keel, debido al poder mínimo que tiene un pequeño país como Uruguay en la alianza comercial de cinco países que integran el Mercosur, dominado por dos grandes participantes, Argentina y Brasil. Dos causas inmediatas de preocupación están relacionadas con el hecho de que, bajo las regulaciones actuales, los uruguayos no pueden aprovechar los beneficios de las tiendas duty free nacionales. Loaiza Keel quiere garantizar que las tiendas brasileñas operen bajo esas mismas limitaciones. Si se les permite a los brasileños comprar en sus propias tiendas duty free, los establecimientos uruguayos perderían

Northern Uruguay has always been a popular area for duty free shopping, but a combination of factors recently has made this region a challenging one for business

su clientela. Otra causa de alarma es la reciente reducción que puso en práctica el gobierno brasileño con respecto a la importación de mercancías duty free por sus ciudadanos, limitándola a US$150. Hasta el momento, Loaiza Keel y la CEFSDU han logrado algunos éxitos en el progreso de los intereses de la industria. Una victoria reciente: la organización contribuyó a obtener un alivio gubernamental para los trabajadores desempleados del sector, notablemente una extensión de las primas de seguro de desempleo. Tal concesión, así como la implementación de un programa parcial de trabajo/estudio, propiciará que los comerciantes mantengan una reserva de trabajadores calificados para cuando la industria vuelva a recuperarse.

El crecimiento económico proyectado de Brasil se materializaría en el 2017 La otra buena noticia es que, a pesar de los desafíos actuales, hay varios destellos de luz en el horizonte. En febrero pasado, un consenso entre los economistas brasileños proyectó que la economía del país dejaría de contraerse a finales del 2016, y emprendería su ascenso al año siguiente. Además, si bien el turismo brasileño seguiría siendo afectado, la cifra de visitantes extranjeros a Brasil (al menos una porción de los cuales viajaría también a Uruguay), podría aumentar este año debido a los Juegos Olímpicos 2016 que se llevarán a cabo en Rio de Janeiro, aunque los recientes acontecimientos internacionales en los deportes han sido desalentadores al respecto. Otro factor positivo es que Brasil no es la única atracción de la región. Como destacó el año pasado Liliam Kechichian, ministra de turismo de Uruguay, la cantidad de visitantes argentinos a Uruguay (muchos de los cuales pasan por este país en camino a Brasil), totalizó 150,000 en los ocho primeros meses del 2015. Las medidas favorables que está tomando el nuevo gobierno de Argentina para mejorar la economía nacional incluye facilitar que los argentinos viajen al extranjero. Esto indica que el flujo de turistas argentinos que cruzan la frontera por Uruguay para llegar a Brasil podría seguir incrementándose. Carlos Loaiza Keel y los miembros de la Cámara de Empresarios de Free Shops del Uruguay, esperan que estos turistas visiten las tiendas minoristas uruguayas a su paso por la frontera.

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

RETAILER NEWS: BERMUDA DUTY FREE

Cruising into profit by

Charles Gosling, Managing Director of Bermuda Duty Free Ltd, speaks about the effect the America’s Cup 2017 yacht race is already having on his thriving business

ermuda Duty Free Ltd is gearing up for the business boost that’s expected to occur when the North Atlantic island hosts the America’s Cup yacht race in 2017 – and the operator is already feeling the positive impact of this major global event. Bermuda Duty Free Ltd operates two airside departures stores at L.F. Wade International Airport: one, measuring around 232 square meters, is located in the US flight zone of the airport, while the other, covering 149 square meters, is situated in the international departures area, which caters to Canadian and UK flights. In 2012, Bermuda Duty Free was permitted to open an arrivals shop. Located between the immigration arrivals hall and the baggage reclaim area, the 49-squaremeter store offers a wide selection of duty free wines, spirits and tobacco products. Each arriving passenger is entitled to

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

MARY JANE PITTILLA

Bermuda Duty Free Ltd seeks to ensure that the customers are getting good savings every day on liquor and tobacco compared to US main street pricing, so promotions are not a prominent feature

RETAILER NEWS: BERMUDA DUTY FREE

import duty free one litre of wine, one litre of spirits, 200 cigarettes, 50 cigars or 0.5 kilograms of tobacco. Charles Gosling, Managing Director of Bermuda Duty Free Ltd, said the store was performing “fairly well,” but was keen to see higher sales among passengers arriving on British Airways flights from London Gatwick Airport. “Our prices are better than Gatwick’s,” he stated. Speaking to Americas Duty Free, Gosling said that up until September 2015 there had been a decline in flights from Canada and that had had a slightly negative impact on sales. But in October, Bermuda hosted the first preliminary competition before the main America’s Cup World Series finals in 2017, and this had resulted in a positive effect on sales. Therefore, overall, the airport’s traffic figures are a little over last year’s. In general, Canadians have pulled back on visiting Bermuda mainly because of the weak Canadian/US dollar exchange rate. “This is having a big effect on passenger numbers, as the rate is currently around 75 cents to the US dollar,” said Gosling.

America’s Cup boost In the run-up to the America’s Cup, Bermuda Duty Free is stocking apparel from Sail Racing, an authorized clothing merchant. “We sold out of our initial order soon after we began stocking it in mid-August 2015,” enthused Gosling. “We had a short timeframe to get it into the shops. We thought we had purchased enough merchandise to last until Spring 2016 but we’ve had to re-order.” Charles Gosling’s family-owned rum company, Gosling Brothers Ltd, dominates liquor sales at Bermuda Duty Free. The island’s bars, restaurants and hotels all promote the famous Dark ‘n Stormy highball cocktail made with Gosling’s Black Seal (dark) rum and ginger beer served over ice and garnished with a slice of lime, and this translates into flourishing duty free sales of the brand. The duty free stores perform well with both the 80 proof and 140 proof variants, and the rum is available in 75cl and one-litre multi-packs in 750cl and 4-litre versions. Rival rum brand Bacardi – whose striking, Bauhausstyle corporate headquarters is located in the city of Hamilton – is also prominently

Gosling’s rum dominates liquor sales at Bermuda Duty Free. The island’s bars, restaurants and hotels all promote the famous Dark ‘n Stormy highball cocktail made with Gosling’s Black Seal dark rum and ginger beer, and this translates into flourishing duty free sales of the brand

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

displayed in the duty free stores. The best-selling tobacco products are Philip Morris and Marlboro Gold cigarettes. The international departures store carries Cuban cigar brands, while the US shop offers Dominican cigars from Davidoff. Gosling noted that the retailer was not able to offer much of a discount on Davidoff cigars, which meant that these products were the same price as the major US cigar discounters. Across all product categories, American brands dominate in both the arrivals and departures stores, noted Gosling. Promotions are not featured at Bermuda Duty Free in a big way because Gosling tries to ensure that the customers are getting good savings every day on liquor and tobacco compared to US main street pricing. However, a current promotion that has been very successful in the US store is for Hennessy Pure White Cognac, which is not available in the US domestic market. Bermuda Duty Free offers a volume discount on six-bottle packs. Pure White Cognac retails at US$44 per bottle.

GalaxyÂŽ is a registered trademark. ÂŠMars 2016.

INDUSTRY NEWS: M1ND-SET

Join the TECH REVOLUTION Research firm m1nd-set discovers that North American travelers aren’t using their favorite tech devices in the duty free shopping arena, and a new report reveals their shopping habits by

N m1nd-set’s Owner and CEO Peter Mohn

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

HIBAH NOOR

orth American travelers are big users of technology such as smartphones when they travel – but they don’t use it to check out the duty free shopping when they’re passing through the airport. According to the latest data shown exclusively to Americas Duty Free by travel retail research specialist m1nd-set, of the 88% of North Americans who use smartphones when traveling, the vast majority used it at the airport before boarding – but only 7% used it to research duty free shopping. Swiss-based m1nd-set’s latest report is based on interviews with over 4,000 travelers across the globe. The research showed that on average, North American travelers take with them between two and three different devices when going on a business or leisure trip. And they are significantly more likely than travelers globally to carry a smartphone, laptop, tablet or e-reader. m1nd-set’s Owner and CEO Peter Mohn says the report shows that there

is a clear behavioral challenge. “The industry has to encourage more travelers to consult the internet for duty free and travel retail shopping information. Currently only three out of ten shoppers will consult the duty free retailer websites, while twice as many check brands websites and five out of 10 check the domestic retailers’ websites.”

Tech-connected travelers On business trips, some 91% of North American travelers carry a smartphone, while 88% take a laptop and 51% have a tablet. For leisure trips, 87% carry a smartphone, 56% a tablet, and 54% a laptop. Of the 88% of North Americans who use smartphones when traveling, the vast majority (86%) used it at the airport before boarding – but only 7% used it to research duty free shopping. And only 7% used their phone during a flight, but this jumped to 42% who used their phone at their destination. Of the 71% who use their laptop when traveling, 36% used it

INDUSTRY NEWS: M1ND-SET

at the airport before boarding, but in this case, no one used it to research duty free shopping, yet 21% used it during their flight and almost half (48%) referred to it at their destination. Likewise, of the 56% who use tablets when traveling, more than a quarter (26%) said they used it at the airport before boarding, but again, not for researching duty free shopping. Only 2% did so. Yet 39% of people looked at their tablet during the flight, and 18% used it when they arrived at their destination. m1nd-set’s research also showed how North Americans use the internet at the airport. Almost all (98%) checked or sent emails, messages and used social media. Some 66% researched flight information, 41% wanted to find out about their destination, while 33% listened to music and watched movies. The percentages were much smaller when it came to duty free. Only 7% used the internet to compare prices in the airport shops, while 5% searched for information about the brands/products in the airport shops. m1nd-set noted that internet usage for reasons related to airport shops was significantly lower than globally.

Convenience shopping is a major factor m1nd-set’s findings also reveal the general duty free shopping habits of North American travelers. Asked about the benefits of duty free shopping, 71% said it made good use of time while waiting for their flight at the airport, 60% stated that it was perfect for making a last-minute purchase, and convenience was cited by

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

57%. Other benefits were the availability of products suitable for gifting (36%), appealing prices (27%), leading brands at one location (25%), pleasant shopping environment (25%), no counterfeit items (23%), high quality (23%), authenticity and local touch (18%), duty free exclusive products (18%), wide choice (12%), good service and advice from sales staff (11%), and special and unique experience. North American travelers also gave their reasons for not visiting duty free regularly. Almost half of respondents (46%) said they preferred doing other things, such as going to the airline lounge, reading or working, while some 42% said they preferred to buy products in local or more authentic shops. A somewhat high percentage – 41% – said the prices in the duty free shop were not appealing, while 40% said they did not want to carry their purchases onboard the flight. About one third (29%) said the products were not unique or special enough, with a similar percentage (28%) stating that the duty free shops were too expensive or exclusive, and around one quarter (26%) said they normally didn’t have time to shop. Other reasons for not visiting the duty shops regularly were: no visible promotions that motivated them to enter the store (13%); they were afraid the products would not be accepted at Customs (9%); they had no money left in their travel budget (5%); and the sales staff were not helpful or knowledgeable enough (3%). Travelers were then asked what motivated them to buy in duty free shops. The majority (70%) cited convenience, with 38% saying the shops offered items suit-

able for gifts. About one third (33%) said the packaging format was often suitable for carrying during their trip, with 32% saying the products offered value for money. Other motivations were: the duty free shops offered products suitable as souvenirs (31%), when traveling they were in the mood to indulge themselves (30%), there were appealing special promotions (30%), it was cheaper than in their local shops (28%), the brand had a good reputation and/or is of high quality (25%), they could find their favorite brands or products (24%), the shops offered brands/ products that they could not find at home (23%), they felt like buying something different from what they usually bought (22%), the duty free shops offered airport special editions/duty free exclusives (19%), they tried/tasted a product in a shop and liked it (16%), and finally, 13% knew that people close to them liked the brand/product. With so many travelers connected to their favourite tech while on the move, m1nd-set believes that mobile is the place to be in the future. “With 25% of North Americans now booking their travel via the mobile phone, there are significant opportunities to reach travelers on the move in real time. Beacon technology will increasingly enable retailers in airports and other travel retail environments to reach consumers with adapted offers and enticing information. Travel retail lends itself to these new opportunities – the industry just needs to be ready to take the step,” concludes Mohn.

OF SWITZERLAND

SWITZ ERLAND

ASUTIL Q&A

The speakers at ASUTIL Conference 2015’s first day

Trying times

outh America has proven to be a powerhouse in global travel retail, with much of its population so supportive of the industry that they sometimes travel specifically to shop in its stores. Be that as it may, the past year has been a difficult one in the industry and this year is expected to bring much of the same. José Luis Donagaray says operators and brands are working together in a partnership that should bring them through the other side strong and ready for the economic recovery. Q: Can you tell me about the reaction to last year’s conference? A: In general people’s response was that it was a very good conference. The networking and conference speakers were all well received. There are always little issues that crop up with hotel rooms, breakfast etc., but for the most part people were very happy. Q: How was the reaction to having the conference all take place within one resort outside of town? A: This was not the first time we’ve held the conference in an environment like this. We had a similar situation in Punta

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

ASUTIL Secretary General José Luis Donagaray discusses the ASUTIL conference and what to expect in the region over the coming year by

WENDY MORLEY

Cana and also previously in a resort nearby in Panama. It’s only about 15 minutes into town if people want to go. I didn’t hear any comments about it at all, so it must have been received well. Q: Any speakers last year that you thought were especially significant? A: Peter Mohn’s presentation is always very popular because he gives real information and insight into customer behavior. And then Carlos Melconian gave great insight into the economic conditions

Erik Juul-Mortensen, President of TFWA, and Michael Payne, Executive Director of IAADFS, enjoying themselves at the opening cocktail in Panama, 2015

throughout the region. People also got a lot out of the discussion about the future of the industry. All in all, almost everyone was very satisfied, I would say. Q: One of the hallmarks of the ASUTIL conference is the chance to network in the afternoon. The way ASUTIL sets up the room makes it possible for brands to see buyers they might never get the chance to see otherwise. Do you hear about specific instances where this happens?

ASUTIL Q&A

Q: The laws at Brazil’s border have changed. Can you please tell us a little about what is happening and how it will affect the industry? A: Brazil has passed the law to allow duty free stores in certain key cities, but politics in Brazil do not move quickly. We are hoping to see a progression by 2017.

ASUTIL as an organization and as a conference rely heavily on these two individuals, Inés Sisto Patrón and José Luis Donagaray

A: This is a great asset of the ASUTIL conference. You can see all the buyers for the entire continent in three days. This is very time- and cost effective. Otherwise it would take two weeks and great expense to fly around the continent. You get two mornings of extremely useful information and data, and then you get the opportunity to see all the buyers. We are not trying to compete with IAADFS or TFWA; we offer something completely different. We offer specific information about the region: shopping, customer behavior and the LATAM economy. Q: The last couple of years have been tough, economically, in South America –especially Venezuela (which many people seem to have written off entirely), Brazil and Argentina. With this year’s commodity prices plummeting, then commodity-based economies like Chile’s are following behind. What do you foresee for the region in 2016 and into 2017? A: I would say it’s been the past year more than the past two years. One thing different about this downturn in the LATAM economy is that it is a crisis of the world and not caused by the politics of the region. The increased US dollar, currency battles in many countries including Russia, the slowdown in the Chinese economy, the drop in commodity prices … The only market in the world that’s really doing well is the US domestic

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

market – not duty free. Worldwide there have been big adjustments. I think things will start to improve again in late 2016/ early 2017. Q: What do you think retailers and brands will have to focus on in order to at the very least get through this trying time and possibly thrive? A: You can analyze two ways: number of tickets and dollar value per ticket. The dollar value per ticket is the same, but fewer people are shopping. I think brands and operators are doing a great job with social media and promotions – the partnership is good.

Melancia Mall opened at an unfortunate time, but in the long run will be a great investment.

Q: How has the reaction been to Malencia mall? How has this affected other duty free businesses in the area? A: Unfortunately it was the worst timing for Malencia to open, with Brazil’s economic troubles and also the floods that occurred around that area. But this is not a short-term business. Over the next three years it will prove a great investment, not over one year. The big stores –DFA, Neutral, Siñeriz and La Riviera – they are all doing ok. The smaller stores have been affected much more. Q: How are preparations coming for the ASUTIL conference this year? A: Preparations are very good. The hotel has been chosen and the rate fixed at under US$200 per person including breakfast and wifi. In March at IAADFS we will make more announcements and give you the agenda, but for now I can tell you we will have the president of Argentina’s biggest bank there to discuss the economy. Q: Where will the ASUTIL conference be held in 2017? A: That will be announced in August.

ASUTIL Q&A

Tiempos difíciles

uramérica ha demostrado ser una potencia en el sector minorista de viajes, con una mayoría poblacional tan solidaria con la industria, que viaja a menudo específicamente para comprar en sus tiendas. A pesar de esto, el año pasado fue difícil, y se espera que éste no sea muy diferente. José Luis Donagaray, Secretario General de ASUTIL, afirma que los operadores y las marcas están enfrascados en una alianza que los fortalecerá y preparará para afrontar la realidad económica. Americas Duty Free: ¿Puede hablarnos sobre la reacción a la conferencia de este año? Sr. Donagaray: En general, la respuesta de los participantes fue que se logró una conferencia muy buena. El contacto profesional y los conferencistas tuvieron una excelente acogida. Siempre hay pequeños contratiempos con las habitaciones, el desayuno, etc., pero en su mayoría todos se sintieron muy felices. P: ¿Cómo fue la reacción con respecto a la ubicación de conferencia en un resort fuera de la ciudad?

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

José Luis Donagaray, Secretario General de ASUTIL, habla sobre la conferencia de la organización, y lo que se puede esperar este año en la región

R: No es primera vez que la conferencia se lleva a cabo en un entorno así. Tuvimos una situación similar en Punta Cana, y previamente en resort cercano en Panamá. Este año, estuvimos a solo 15 aproximadamente de la ciudad, si alguien deseaba visitarla. Como no escuché comentario alguno al respecto, debe haber sido bien recibido. P: ¿Algún conferencista que considera especialmente significativo? R: La presentación de Peter Mohn es siempre muy popular, porque ofrece información y conocimientos reales sobre la conducta del cliente. También está Carlos Melconian, quien dio importante información sobre las condiciones económicas de la región. Además, los participantes recibieron numerosos detalles relevantes en el intercambio de opiniones sobre el futuro del sector. En general, diría que casi todos estuvieron muy satisfechos. P: Uno de los momentos cumbres de la Conferencia ASUTIL es la posibilidad de hacer contactos profesionales en horas de la tarde. La manera en que ASUTIL planifica la estructura del salón, posi-

bilita que las marcas vean compradores con los que no tendrían contacto de otra forma. ¿Conoce instancias específicas donde esto ocurre? R: Es un gran atractivo de la Conferencia ASUTIL. En tres días se pueden ver compradores de todo el continente. Un evento oportuno y rentable que evita las dos semanas de viaje y los grandes gastos que implica volar por todo el continente. Los participantes disponen de dos mañanas de informaciones y datos extremadamente útiles, y luego tienen la oportunidad de ver a todos los compradores. No estamos tratando de competir con IAADFS ni TFWA, pues ofrecemos algo completamente diferente. Les brindamos a los participantes información específica sobre la región: compras, conducta del cliente y economía de Latinoamérica. P: Los últimos dos años han sido difícil en el aspecto económico en Suramérica, especialmente en Venezuela (que ha sido eliminada aparentemente por muchas personas), Brasil y Argentina: la caída de los precios de los productos este año, y otras economías dependientes de las

ASUTIL Q&A

mercancías como Chile se están quedando a la zaga. ¿Qué pronostica para la región en el 2016 y el 2017? R: Diría que el año pasado fue más difícil que los dos últimos. Un factor que diferencia a esta desaceleración de la economía latinoamericana es que se trata de una crisis mundial, que no ha sido provocada por la política de la región. El incremento del valor del dólar estadounidense, los problemas de cambio monetario en muchos países como Rusia, la desaceleración de la economía china, la caída de los precios de las mercancías… El único mercado del mundo que marcha bien es el nacional estadounidense, no el duty free. En el mundo se han llevado a cabo grandes ajustes. Creo que la situación comenzará a mejorar nuevamente a fines del 2016/principios del 2017.

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

P: ¿En qué considera que deberán enfocarse los minoristas y marcas, al menos para sobrevivir estos tiempos difíciles y prosperar posiblemente? R: Se puede analizar de dos maneras: cantidad de mercancías y valor en dólares por mercancía. El valor en dólares por mercancías es el mismo, pero se está comprando menos. Creo que las marcas y los operadores están realizando una gran labor con los medios sociales y las promociones. La alianza es óptima. P: Las leyes de frontera en Brasil han cambiado. ¿Podría hablarnos sobre lo que está ocurriendo allí, y cómo afectará al sector? R: Brasil ha aprobado una ley que permite tiendas duty free en ciertas ciudades importantes, pero la política de ese país marcha a paso lento. Esperamos ver progresos para el 2017.

P: ¿Cuál fue la reacción al centro comercial Melancía? ¿Cómo ha afectado a otros negocios duty free de la zona? R: Lamentablemente Melancía se inauguró en el peor momento, debido a los problemas económicos de Brasil, y además por las inundaciones que afectaron a esa zona. Pero no se trata de un negocio a corto plazo. En los próximos tres años demostrará que es una gran inversión, pero no al cabo de un año. Las grandes tiendas–DFA, Neutral, Siñeriz y La Riviera – están marchando bien, pero las más pequeñas han sido mucho más afectadas. P: ¿Cómo van los preparativos para la Conferencia ASUTIL de este año? R: Las preparaciones van muy bien. Ya se escogió el hotel, y la tarifa es inferior a US$200 por persona, e incluye desayuno y Wifi. En marzo, durante la IAADFS, haremos más anuncios, y les daremos la agenda. Por ahora solo puedo decirles que contaremos con la presencia del principal banco de Argentina, quien va a hacer un análisis sobre la economía. P: ¿Dónde se efectuará la Conferencia ASUTIL del 2017? R: Esa información la daremos a conocer en agosto.

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AIRPORT NEWS

MIA mobile app version 2.0 uses geo-location technology to make travel easier Passengers at Miami International Airport can now travel easier and smarter with MIA Airport Official 2.0, the airport’s upgraded mobile app that is also a personalized travel assistant. Thanks to more than 500 Bluetooth data beacons installed throughout MIA, users can now scan their boarding pass and immediately receive turn-by-turn, blue-dot navigation with estimated walk times, real-time flight updates and shopping and dining suggestions nearby based on their customizable personal profile. MIA is one of only a handful of airports in the world to incorporate beacon technology with its mobile app to provide this cutting-edge, personalized travel experience. In February, MIA turned Fat Tuesday into “App Tuesday” with a press conference and Mardi Grasstyle celebration to launch the new version. MIA Airport Official 2.0’s location-aware technology provides options based on geography, so a user in Miami will get a different experience than someone opening it in London, Bogotá or New York. Passengers can also search the mobile app’s extensive database in English and Spanish for directions to whatever their travel needs are—all with a single keyword. Whether its bagels or bathrooms, T-shirts or TSA checkpoints, MIA Airport Official 2.0 will find it and get you there. “MIA Airport Official 2.0 is the latest example of how we are leveraging new technology to make travel through our airport easier than ever,” said Miami-Dade Aviation Director Emilio T. González. “Thanks to the installation of data beacons, our mobile app can now guide you from your driveway to the runway with personalized, user-friendly instructions.” Future enhancements will include notifications for special offers from the user’s preferred shops and restaurants at MIA, the ability to reserve parking and estimated security checkpoint wait times. Passengers at Miami International Airport can now travel easier and smarter with MIA Airport Official 2.0

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

ASUR releases December 2015 passenger traffic statistics; Cancun stands out Mexico’s Aeropuertos del Sureste (ASUR) has released passenger traffic statistics for December 2015. The traditionally busy month proved to be stellar as a whole for the group, with all but two airports under its purview posting gains in international passenger traffic. A standout for international passenger traffic, Cancun recorded +9.3% over the same month in 2014, representing an increase of 104,573. Other airports that performed strongly where international traffic is concerned—albeit with much lower passenger numbers than Cancun—include Minatitlan (+23.7%); Tapachula (+18.7%); Oaxaca (+13.9%); and Huatulco (+6.8%). With regard to total passenger traffic, all of ASUR’s airports posted gains in December 2015 ranging from +1.0% in Veracruz to +31.3% in Tapachula. The highest increase in terms of passenger numbers was again seen in Cancun, with 135,811 more total passengers in December 2015 than in December 2014.

Tocumen welcomed a record 1,305,276 passengers in January 2016, representing an additional 85,615 passengers over and above the same month in 2015

Cancun proved once again to be a tourist draw, with the airport welcoming 104,573 more international air travelers in December 2016 than it did in the same month in 2015

Panama’s Tocumen International Airport enjoys record-setting January Tocumen International Airport has announced that it closed the month of January 2016 with a record of 1,305,276 passengers, representing an additional 85,615 passengers over and above the same month in 2015. Transit passengers for the month totaled 887,512, and increase of 54,663 over January 2015. Highlighting the airport’s vital role in the country’s economy, for the month Tocumen welcomed 215,170 passengers with Panama as their final destination. Joseph Fidanque III, General Manager of Tocumen International, noted that the increases are a clear indication that tourism and business travel to Panama is increasing. Fidanque cited new routes, increasing frequencies, vacation promotions and the “instability” of some traditional vacation markets as contributing factors explaining the increases. An indication of continued future growth, in the coming months Tocumen expects to welcome new routes from Lufthansa, Venezuelan airlines Avior Airlines, Emirates and Turkish Airlines.

RETAILER REPORT: SIÑERIZ

For Siñeriz, it’s important to offer customers a good selection of highquality dining choices

Dining out T

As part of Siñeriz’ massive expansion and reorganization, the company is determined to become the go-to dining location in the region by WENDY MORLEY

hey say challenge brings opportunity, and that certainly seems to be the perspective of Uruguayan retailer Siñeriz, located at the Brazil border. The past year has been especially difficult in the region, with a sinking Brazilian Real on one side and a bleeding Argentine economy on the other. Added to economic and currency woes was severe flooding at the end of 2015. While some businesses during such economic times choose to lay low and wait for the storm to pass, Siñeriz chose to face the wind. As Siñeriz director Gandhi Abdullah stated, “We think that this bad moment the border is passing through is the best opportunity to clean the house, reorganize and be stronger into the near future.” To accomplish this, last year the company embarked on a massive expansion, increasing its mega store from 16,000 to 22,000 square meters. Work began on the Siñeriz Shopping expansion in June 2015, and will be completed in two phases. Stage one, completed now, added 2,000 square meters to the retail operation’s restaurants, while the stage two Siñeriz Free Shop extension will begin later this year.

Two targets to hit Abdullah stated last year: “With this expansion we have two targets: first, expansion of the duty free area to remain the duty free leader and stay one step ahead of consumer necessities, and second, to become the reference for restaurants and food court in the region.” The second part of that goal is well on its way to becoming reality, as Siñeriz recently announced the completion of the

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

construction of its 2,000-square-meter restaurant area. The area holds six restaurants, including an artisanal ice cream shop, a Burger King – the only fast food location on the border, a traditional Uruguayan pizza restaurant, a café that offers coffee and Uruguayan chocolate, and the anchor restaurant, La Perdiz, which is the number one restaurant in Montevideo. This restaurant offers the traditional Uruguayan barbecue but also seafood, something unusual to see in this border region. Three more restaurant spaces are also available and these will be announced once the contracts are signed. Siñeriz has made it a priority not only to offer a variety of restaurants within this location, giving shoppers a good selection, but also to bring high-quality options to the region. “We are not looking for ‘more of the same;’ we are looking for high-quality restaurants that offer more selection. We will not fill the space with different variations of the same restaurants; instead, one restaurant is a complement for the other,” says Abdullah. The

construction of both La Perdiz and the ice cream shop are now complete and, at time of press, almost ready to open.

Shopping expansion to come next Amid this uncertain economic climate, the retailer has also decided to enlarge its Siñeriz Shopping complex, which comprises a duty free shop, supermarket, cinema, restaurants and other services. This mega-store currently boasts 10,000 square meters of duty free. With the expansion, the duty free area will increase to 14,000 square meters, plus 8,000 square meters of food court, supermarket, services and backstage, bringing the total square meters to 22,000 – a massive area. This follows the complete rebuilding in 2014 of its smaller Siñeriz Free Shop in Rivera city center, which expanded from 1,800 square meters to 2,500 square meters and instantly quadrupled the sales. The categories that have most increased in sales are liquor/confectionery and perfumes.

Siñeriz’ mega store is a true destination for shopping in the region

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OPERATOR NEWS: BAJA DUTY FREE

Trials at the Border Between stiffened security and currency woes, 2015 has not been the best year for duty free at the US-Mexico border. Baja Duty Free is using creativity and promotions to combat these difficulties by

WENDY MORLEY

s with many countries throughout the Americas, Mexican currency was devalued against the USD in 2015, and as with other businesses on the border – not just duty free stores – Baja Duty Free has been hurt. “In 2015 we experienced a decreased in sales compared to 2014,” says Elisa Castro, VP of Retail. “We have been facing multiple external challenges. The devaluation of the Mexican peso has hurt not only the Duty Free operators but also local businesses. Mexican customs officials have been implementing more controls over the allowances crossing into Mexico. Competition from both sides of the border has been aggressive, especially in the beer category.” She also mentions increasing competition from other sources. “These days you can purchase spirits and beer in almost any store, from convenience stores to box stores and drug stores, besides the traditional outlets.”

Pressure from all sides In addition to increased pressures caused by currency devaluation and competition, traffic is down 10% compared to 2014. “You

While Baja Duty Free’s top category is still Spirits, beer sales have dropped, in great part because of unclear restrictions. The retailer now offers smaller package sizes to help counter this

still have the commuters who cross the border on a daily basis for work, college or to drop off kids at school,” says Castro, “but the in-store traffic has decreased compared to last year, for many of the same reasons we’ve already discussed. Even the pedestrian crossers have been exposed to more intense check-ups. For example, more borders are using X-Ray machines, where all belongings need to be scanned before entering Mexico.”

Spirits still on top Despite the fierce competition from other types of stores, spirits remains top category for the retailer, with tobacco second. Scotch whisky is the top sub-category, followed by liqueurs and then Bourbon as top three sub-categories. Beer, however, has decreased greatly over the past two years. “The reason for the decrease in beer sales has been stricter controls over duty free allowances,” says Rojas. “But the law is not clear on what the beer allowance is, so each border crossing has a different interpretation. To help overcome this challenge we have made changes to the presentations we offer to customers. For

Promotions are key for the retailer, and the calendar this year is full. Marketing Manager Irene Rojas says tastings are especially popular because they not only increase sales but also make the shopping experience more enjoyable

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

example, we have moved from selling 24-packs to selling 6- and 12-packs in domestic and imported beer brands.”

Promotions are key Promotions are the key to success no matter what the economic climate, and never is that more the case than when things are down. Baja Duty Free has a full promotional calendar this year. “We work closely with suppliers in order to bring new programs and initiatives to increase the traffic,” says Irene Rojas, Marketing Manager. “The tasting programs are very popular. This is not only a great way of introducing new products, but also helps customers to have a better experience when purchasing duty free. For example, last month we ran a great program with Bailey’s. We teamed up with Diageo and presented customers with a fun and easy way of drinking the creamy liqueur. The promotion was called Bailey’s Frozen. We had visuals all over the stores, we raffled blenders, handed out recipe cards, did Facebook posts, added website banners, and we also included the promo in our radio spots.”

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INDUSTRY NEWS: I2I GROUP CHINA

Hey, big spender! i2i Group China’s CEO Alexander Glos discusses the Chinese shopper’s spending habits and how i2i is targeting an attractive subset: the repeat traveler by

HIBAH NOOR

2i Group is a consultancy that specializes in analyzing Chinese market trends, and Americas Duty Free recently sat down with Alexander Glos, CEO of i2i Group China, to discuss the latest developments with regard to this important duty free shopper demographic. He told us that the big Chinese shopping trend in the second half of 2015 was the significant increase in shopping by the Chinese in Europe. “It was good before, but in the second half of 2015 it was explosive,” Glos said. “Global Blue reported their refund processing grew 72% year-over-year. This is largely due to the exchange rate shift; today, the Euro is cheap compared to the US Dollar for the Chinese. As a result, they are flooding Europe.” Glos said that globally, the inbound Chinese traveler market is growing rapidly— for example to the US, from 2.2 million last year to a projected 5 million by 2020. What’s more, repeat travelers, which currently count for 1.4 million Chinese, spend an average of nearly US$10,000 on luxury shopping. While he notes that these travelers are particularly attractive targets for duty free, he concedes that they’re a hard group to reach given that they’re independent travelers as opposed to part of a homogeneous group. “Many brands are now focused on how best to align the flow of goods with the flow of qualified and capable Chinese buyers,” Glos added. “Fully 80% of Chinese luxury purchases originate outside of China because Chinese consumers prefer the retail experience of buying abroad. Furthermore, they enjoy sharing their experiences with their friends and colleagues through social media.”

“Fully 80% of Chinese luxury purchases originate outside of China because Chinese consumers prefer the retail experience of buying abroad. Furthermore, they enjoy sharing their experiences with their friends and colleagues through social media.” ALEXANDER GLOS, CEO OF I2I GROUP CHINA

•

Facts and figures Glos cited a number of sources which indicate that despite widespread economic turbulence in many markets throughout the world, Chinese tourism and shopping continues strongly. China Luxury Advisors notes that the Chinese slowdown isn’t changing the amount of travel, but rather the nature of it. This includes fewer long-haul trips among the middle class and a lower average spend, but one that is still strong compared to other nationalities. Backing up Glos’ claim that Chinese travelers prefer shopping outside the country, China Luxury Advisors says that figures indicate that Chinese consumers currently spend US$229 billion per year outside China. This amount is projected to double by 2020. Glos cited a number of other sources which suggest that the boom in Chinese shopping isn’t going away anytime soon:

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

•

According to marketing organization BrandUSA, Chinese visitors to the US spent a staggering US$24 billion in the country in 2014. China is the second-largest inbound travel market for the US, according to China Daily USA. More than 2 million Chinese visited the US in 2014, and this number is expected to increase. Ctrip, China’s top online travel booking service, says that the number of Chinese tourists who booked trips during China’s national holiday increased by 150% in 2015 over the previous year. Furthermore, shopping remains a major focus, with 36% of Chinese tourists surveyed by Ctrip selecting shopping as the purpose for their trip. Given the Unites States’ decision to offer 10-year visas to Chinese nationals from November 2014, more Chinese travelers are planning on visiting the US on their own as opposed to travelling as part of a tour group, says Ctrip. Los Angeles, New York, Honolulu, Las Vegas, San Francisco, Washington D.C., Boston, Orlando and Chicago are the top US destinations for independent Chinese travelers.

INDUSTRY NEWS: I2I GROUP CHINA

•

Appraisal firm Miller Samuel suggests that precisely because of the economic upheaval within China, more money may finds its way into the US, particularly in residential and commercial real estate.

Reaching the right people i2i has developed a new publication called Galerié, which is distributed to Chinese travelers when they apply for their travel visa in China. Importantly, the magazine reaches the attractive repeat traveler target group since these travelers apply through CITIC Bank for their visas. The magazine is distributed across all CITIC Bank locations across China. And there are other advantages to this approach, explained Glos: “What is particularly attractive about this way of distributing the magazine is that each of these travelers is unique because one does not typically apply for a visa several times a year. Rather than a typical magazine hitting the same readers multiple times a year, in this case we get all new readers with each issue.” It’s easy to see why advertising in the magazine would be an attractive way for brands and retailers to reach these travelers, but i2i has taken the quest to connect advertisers and shoppers one step further with its Wechat platform. “Wechat is sort of a

customer relationship management platform for our advertisers,” Glos said. “We have over 350,000 members in our Wechat platform, allowing us to connect the advertiser to the reader on an ongoing basis.” Given the above, Glos told us he sees Galerié as much more than simply a magazine. “It’s a print and digital publication, but also an integrated marketing solution that enables luxury and premium brands to build a customer base that consists of their target shopper. The magazine reaches an impressive 640,000 repeat Chinese travelers every year.” Another advantage to this approach is that Galerié’s readers are virtually guaranteed to travel given that they receive the magazine upon applying for a visa. “No one in China is getting a visa for fun,” quipped Glos. “They are getting a visa because they are traveling.” Most Galerié readers are going to the US, and Glos told us that nearly 80% will travel within 90 days. “The bottom line is that Galerié offers retailers, brands and service providers an ongoing marketing and communications package that keeps them in contact with a very attractive group of travelers not only as they are making their travel plans, but also during pre-departure, while they are in the US and for months afterwards,” Glos concluded.

i2i Group China has developed a new publication called Galerié, which is distributed to Chinese travelers when they apply for their travel visa in China

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

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RETAILER NEWS: MONALISA In addition to interior renovations, work has also taken place on the exterior of the building, with a large sign promoting Monalisa and a fresh coat of paint on the wall to the side of the large, iconic replica of Leonardo Da Vinci’s most well-known work of art

Four decades strong by

RYAN WHITE

Monalisa’s continuing focus on providing the best shopping experience for clients results in continuing success despite challenging conditions in Brazil

mericas Duty Free had the opportunity recently to speak with Charif Hammoud, Vice President of Paraguayan travel retailer Monalisa, whose iconic multi-level store is a staple of bustling Ciudad del Este. It’s no secret that the Brazilian economy is struggling of late, but Hammoud tells us that a combination of attractive promotions and continuing renovations at the store has kept business brisk. Brazilians continue to be Monalisa’s best customers, with Paraguayans and Argentinians coming in second and third respectively. “The top three remained consistent throughout 2014 and 2015,” Hammoud says. One statistic that has changed slightly, though, is the top three categories. In 2014, Fragrances, Fashion and Cosmetics, in that order, made up the top categories. In 2015, Fashion took the top spot, with Fragrances and Cosmetics in second and third respectively.

moud. “We saw good sales of the products that were discounted last year.” Monalisa is currently working with suppliers to develop more promotional activities in 2016. “The importance of promotions at the moment cannot be overstated,” Hammoud explains. “For now our strategy is in earning less to sell more.”

Tip top shape When discussing Monalisa’s success as a retailer over the last 40 years, Hammoud often cites the relaxed, luxury shopping experience that the store offers visitors as key to the retailer’s longevity. To keep the store as modern as possible and to cater to evolving tastes, Monalisa makes a point of scheduling regular renovations. “We’re in a state of constant renovation,” Hammoud notes.

Offers they can’t refuse For many retailers with a majority of Brazilian clients, promotions have lately become an important tool for increasing spend. During 2015, Monalisa concentrated on the Fashion, Confectionery (chocolates specifically) and Fragrances categories where promotional activities were concerned. In Fashion, the operator offered discounts of up to 70% on selected brands. In Confectionery, selected chocolate brands were discounted up to 50%. Finally, offers of up to 40% off were seen in Fragrances. “These promotions were very well received by our clientele,” notes Ham-

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

Dudalina, a newly added brand at Monalisa’s flagship store in Ciudad del Este

Monalisa recently added a bistro near the space dedicated to chocolates

Last year, Monalisa changed out the furniture for its clothing section, at the same time adding new brands such as Desigual, Dudalina and Emporio Armani. The operator added a Sushi restaurant, along with a bistro near the space dedicated to chocolates, and renovations have also taken place on the exterior of the building, with a large sign promoting Monalisa and a fresh coat of paint on the wall to the side of the large, iconic replica of Leonardo Da Vinci’s most well-known work of art. And if the above weren’t enough, Hammoud tells us that Monalisa is currently in the process of constructing a new store in Asuncion, Paraguay that will deal in Fragrances, Cosmetics, Fashion, Watches and Jewelry, and House and Home items. The store will measure a whopping 3,590 square meters. We finished our conversation with Hammoud by asking about his priorities for 2016: “We will continue to incorporate new brands this year, including renowned names like Ralph Lauren Sport, Paul & Shark and Tag Heuer sunglasses,” he said. “Furthermore, as a pioneer in border retailing in Paraguay, Monalisa will continue to work closely with the local and national governments to promote the further growth of the region. This takes the form projects such as the Puente del Amistad [the Friendship Bridge], the construction of Hotel Bourbon and the general revitalization of Ciudad del Este.”

GUEST WRITER: ACI WORLD

State of the

airport industry Angela Gittens, Director General, ACI World, gives readers the latest traffic and economic data on the airport industry ahead of her speaking engagement at IAADFS 2016 by

ANGELA GITTENS, Director General, ACI World

ir travel has remained resilient in the face of the economic woes that have lingered in many markets. Rising per-capita income in key markets and lower fares faced by passengers have helped foster an environment of sustained growth in air travel. Airports Council International’s (ACI) latest preliminary traffic statistics indicate a 6.1% growth in total traffic in 2015, with international traffic growing at a strong 6.2% on a worldwide level. Except for Africa (-0.1%), all regions posted strong positive growth rates in passenger volumes, ranging from 5% (Europe) to 11.3% (Middle East).

Mexico and Colombia drive growth in Latin America In the Latin America-Caribbean region, total passenger growth for the twelve months amounted to 5.5%. This is the result of strong growth in both international (+7.4%) and domestic (+5.2%) passenger traffic despite the recession in Brazil and the economic problems in other countries in the region. The passenger traffic growth in Latin America-Caribbean is largely driven by Mexico (+13.1% in domestic, +12.1% in international and 12.6% in total passenger traffic), followed by Colombia (+10.2% in both domestic and international) and Argentina (+11.5% in domestic, +2.6% in international and +8.3% in total passenger traffic). Brazil came to the finish line with 0.5% growth in total passenger traffic, with international traffic growing stronger than domestic (+2.8% versus +0.6%). The key airports contributing to the growth in the region are Mexico City (MEX, +4.2 million), Bogota (BOG, +2.5 million), Cancun (CUN, +2.2 million) and Lima (LIM, +1.5 million). A number of airports in Brazil lost traffic, including the major gateway Sao Paulo (GRU, -0.5 million), Recife (REC, -0.5 million) and Rio de Janeiro (SDU, -0.3 million). SUMMARY WORLDWIDE TRAFFIC RESULTS, December 2015 (% CHANGE)

December 2015 over December 2014

Year to date 2015

12-month rolling year

PaxFlash International passenger

6.2

Domestic passenger

5.7

6.1

Total passenger

5.9

6.1

FreightFlash International freight

1.7

2.5

Domestic freight

2.2

1.8

Total freight

1.9

2.3

Source: ACI World

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

Angela Gittens, Director General, ACI World will speak on 4 April 2016 at an education session organized by IAADFS during the Duty Free Show of the Americas

Strong growth for mature North American market Passenger traffic in North America grew by 4.9% in the sole month of December 2015, slightly below the year-end figure of 5.6%. Over the course of the year, international passenger traffic saw an increase of 6.1%, while domestic traffic grew by 5.5%, testament to the resilient US recovery and the appreciating US dollar vis-à-vis the basket of other major currencies. Canada, dependent on oil exports and transborder traffic, however, achieved only 3.7% growth in total passenger traffic. Atlanta (ATL) reached the milestone of 100 million passengers with its additional 5.3 million passengers in 2015. Impressive growth was also observed at Chicago-O’Hare (ORD, +6.9 million), Dallas-Love Field (DAL, +5.1 million), Seattle (SEA, +4.8 million) and Los Angeles (LAX, + 4 million). In terms of international traffic, four airports in the region added over one million international passengers during 2015: Toronto (YYZ, + 1.8 million), New York (JFK, +1.8 million), Los Angeles (LAX, +1.6 million) and Miami (MIA, +1.1 million).

Airport economics Based on the 2014 financial year, airport revenues experienced strong growth compared to the previous year. Although there were regional variations in financial performance, the recovery in the Euro area and the United States, combined with the continued buoyancy of aviation in emerging markets, translated into gains in airport revenues. Industry revenues as a whole grew by 8.2% from 2013, reaching over US$142 billion in 2014. Many airports across the globe have moved towards a business model that charges the traveling end user for their services through passenger-based revenue schemes. On the aeronautical side of the business, over 55% of every dollar was generated from passengerrelated charges as compared to other sources of aeronautical of income such as aircraft-related revenues.

â&#x20AC;&#x201A; GUEST WRITER: ACI WORLD Es#mated industry revenues and costs (millions US$)

Africa Asia-PaciďŹ c Europe La>n America-Caribbean Middle East North America World

Total revenue

2014/2013 % change

Aeronau#cal revenue

2014/2013 % change

3,000 41,800 50,800 8,100 10,900 27,900 142,500

17.0% 8.3% 7.0% 25.9% 13.0% 4.8% 8.2%

2,100 20,600 30,100 4,800 5,200 14,500 77,300

18.8% 10.2% 7.8% 17.1% 11.8% 6.8% 9.1%

Non-aeronau#cal revenue and non-opera#ng revenue 900 21,200 20,700 3,300 5,700 13,400 65,200

2014/2013 % change 12.8% 6.3% 5.8% 38.7% 14.2% 2.4% 7.2%

Total cost (opera#ng + capital costs) 2,000 27,200 41,300 6,500 9,100 25,100 111,200

2014/2013 % change 2.2% 9.4% 4.3% 29.4% 12.3% 5.3% 7.3%

Source: 2015 ACI Airport Economics Report Distribu(on of non-aeronau(cal revenues (% of total non-aeronau(cal revenue, 2014)

Africa Asia-Pacific Europe Latin America-Caribbean Middle East North America World

Retail concessions

Food and beverage

Car parking*

Rental car concessions

Adver(sing

Fuel and oil

31.3% 44.0% 32.1% 34.2% 54.7% 9.2% 28.3%

1.7% 4.1% 4.9% 9.8% 4.4% 6.8% 5.6%

15.5% 9.8% 19.0% 11.2% 8.1% 38.8% 22.3%

5.0% 1.5% 2.4% 3.1% 2.0% 18.0% 7.0%

6.7% 4.8% 2.5% 5.9% 2.9% 0.8% 2.8%

2.3% 2.1% 0.9% 5.4% 6.8% 3.0% 2.3%

Avia(on catering U(lity recharges service 0.4% 0.7% 0.2% 0.5% 1.1% 0.0% 0.3%

Other

16.7% 21.9% 18.3% 7.1% 9.8% 6.7% 14.5%

16.9% 5.8% 15.1% 21.2% 7.4% 16.6% 14.0%

Source: 2015 ACI Airport Economics Report

*Car parking revenue includes revenue from airport-operated parking lots and car parking concessions revenue.

The airport revenue model has become increasingly diversified and sophisticated. Airport operators have moved beyond being mere infrastructure providers for aeronautical activities to varied and far-reaching enterprises. Commercial or nonaeronautical sources of income such as retail concessions and car parking contribute to the diversification in an airportâ&#x20AC;&#x2122;s income portfolio and provide an additional cushion during adverse economic times. The combined revenues from commercial and non-operating activities accounted for 45% of the all revenue streams and grew by 7.2% in 2014. While European airports hold the highest proportion of these revenues relative to other regions, much of the revenue growth is originating from airports located in the emerging markets of Asia-Pacific, the Middle East and Latin America-Caribbean, where the highest growth in commercial revenues in being posted. Nevertheless, certain realities persist that are related to the economics of airports and economies of scale. The challenge remains that most airports in the world are small, with high traffic volumes concentrated in only a handful of airports. Therefore, the airport industry faces a conundrum; although the airport industry as a whole appears to be profitable on the aggregate level, with returns on invested capital in the realm of 6.3%, the majority of airports are actually in the red on their financial statements. Thus, developing the necessary strategy to enhance traffic growth is fundamental in generating a positive economic

3.5% 5.3% 4.6% 1.7% 3.0% 0.0% 3.1%

Property and real estate revenue or rent

return. It is important for all stakeholders in the air transport value chain to work together to reap the benefits and the multiplier effect of increased trade and tourism.

The challenges ahead By 2031, worldwide passenger traffic is expected to top 12 billion, with much of the growth coming from emerging markets. Airports have already started thinking about how to accommodate this large increase in passengers, which is expected to become more diverse and demanding. For its part, ACI is working with stakeholders around the world to develop workable solutions to increase efficiency, from check-in and security through to air traffic management. Furthermore, publications such as the 2015 ACI Airport Economics Report and our forthcoming 2015 ACI World Airport Traffic Report are indispensable resources for airports as they work toward ensuring their businesses are economically sustainable over the long term. Airports and travel retail share physical space and customers, so it is only natural that we share many of the same challenges. I look forward to discussing the above in more detail in Orlando at IAADFS 2016, in addition to providing further statistics that I hope will light the way forward for your business as we travel together into a future of unprecedented growth for worldwide air travel.

Year-over-year % change in non-aeronau?cal revenues (2014/2013) +15.2%

+10.6% +9.2% +8.2% +7.2% +6.5%

Food and beverage

Retail concessions

Adver?sing

Fuel and oil

Car parking

Rental car concessions

+5.8%

+5.2%

+4.8%

(Property and real U?lity recharges Avia?on catering estate revenue or service rent

Source: 2015 ACI Airport Economics Report

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

RETAILER REPORT: ARI NORTH AMERICA

A sense of place is an important tool for driving sales in an airport; ARI holds a number of promotions to remind people about the character of Montréal

Greater Growth by

Despite a slowdown in the Canadian economy in 2015, airport traffic grew at 4%. ARI’s sales growth more than doubled that figure ARI North America General Manager Seamus Holmes helped drive sales in Canada to more than double the passenger rate

WENDY MORLEY

RI North America saw a very good year in 2015, with business up 8.5% overall versus 2014. Sales growth for the company in the region was considerably higher than overall passenger growth, which was up 4% year-on-year. These sales growth increases were driven by Perfume & Cosmetics (P&C) and the Spirits category, according to ARI North America General Manager Seamus Holmes. “The best performing categories were fashions and jewelry,” he says. “Liquor, P&C and sunglasses also recorded increases. The main contributors to the growth in overall dollar terms were the P&C, driven by the extension of our makeup range. Our liquor category also performed very well.” Canada has experienced fairly rapid devaluation of its currency against the US dollar since about July of 2014. How has this affected ARI’s business? “The weakening Canadian dollar had a slight negative impact on the purchasing power of Canadian customers, but on the flipside we have benefitted from an increased spend from US passengers due to the strong US dollar,” says Holmes, echoing a trend seen across the country, at border stores in particular.

Expanding on what works ARI operates in four Canadian International airports: Halifax, Montréal, Ottawa and Winnipeg, with Montréal’s store The Loop the company’s flagship store in the region. The company opened The Loop in 2014, and this new store brand has been received extremely well. For the opening, ARI very much focused on its strengths at that airport, increasing floor space overall with particular emphasis on P&C, expanding that area by 350 square meters. The company also expanded its whisky category, opened a stand-alone Oakley store and opened a separate outlet for jewelry, watches, sunglasses and fashion. This has proven to be a recipe for success, according to Holmes, and the company is expanding along these lines once again. “The Loop has performed very well, recording a sales increase of just over 8%. It is very much our flagship Canadian

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Jewelry, watches, accessories and fashion have helped toward ARI’s growing bottom line

Connecting traditions with beauty store,” he says. “We are planning an extension of 330 square meters to our existing store in the International Terminal in Montreal. This will allow us to introduce new luxury brands and expand the footprint of existing brands. These will include Victoria’s Secret, Desigual, Longchamp, Tumi, Lacoste and Pandora.” This past year, again playing to its strengths, the company also opened its first MAC Cosmetics counter in the heart of the International Store in Montréal Airport.

A sense of place Of course, success in airports relies not only on international brands but also a feel for the local atmosphere. ARI has taken steps to fill that need by offering high quality local brands, but also by celebrating the city of Montréal itself. “The Loop Loves Montréal was a marketing initiative developed by ARI North America to celebrate some of Montréal’s great summer events and festivals, such as the Canadian Grand Prix, the Montreal Jazz Festival and the Just For Laughs comedy festival,” says Holmes. “Over the course of the two-month event a number of different local vendors, such as Jackman’s Maple Syrup, and also international vendors, such as Chanel, held special promotions in our stores. We also ran the very successful Joy of Giving seasonal campaign again this year. These events are important, to engage the customers and offer them something unexpected.”

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GUEST WRITER: M2MOBI

Travel retail enters the digital age Combining digital and traditional in-person shopping has potential to revolutionize the passenger’s travel retail experience by

MICHIEL MUNNEKE, Director & Co-Founder, M2mobi

ven though passenger numbers have been increasing, the average revenue per passenger is decreasing. Now that passengers have the ability to compare products online, the idea that duty-free products are cheaper is long gone. Still, we don’t see an urge to digitally innovate within travel retail. If we look at high street, we’ve seen many brands struggling because they didn’t adapt to the new digital reality. Consumers who order online expect more variety, better prices, and faster service. The brands that are surviving on high street, are the ones that have embraced the digital revolution and are continuously improving their omnichannel strategy. That is, these brands are combining the strength of a digital and a physical shopping presence. So why aren’t we seeing this trend in airports around the world? Is it because digital just doesn’t work in travel retail? Or is it because airport retailers just don’t know how to apply digital yet? Because passengers have to be at the airport on time, they are more or less forced to use the shopping mall that is built around it. That’s one reason why travel retail hasn’t been hit as hard by digital as high street has. However, pas-

senger expectations have changed. These days, they expect a personal approach and online shopping mixed with the offline experience. They are scanning products to see if they can buy them cheaper online and have them shipped to their homes. This behavior is only slowly starting to affect airport retail sales and the revenue per passenger. And, most airports are still resting on their comfortable nonaviation revenue streams, all the while not realizing they need to take urgent action in order to keep their customers satisfied.

Integrating physical and digital shopping At M2mobi we work to bring a variety of brands into airports including Schiphol, DFW, Paris CDG, and DXB. We want to use our passenger knowledge to help brands like G-star and Heineken reach their customers in a meaningful way. In airport retail, we always start with the passenger but when looking at digital shopping possibilities within travel retail, we need to start with the customer. They are already highly accustomed to online shopping and direct services via mobile ordering. Their established online habits have given a whole new range of possibilities to the retailers who have the right ingredients in place.

Four points in time define the travel retail experience, and each has opportunities for increased shopping time, both online and in-person shopping

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

The beautiful thing about mobile and wearable connected devices is that they create the opportunity to combine digital shopping with the physical shopping experience. And being primarily physical, this is where it gets exciting for travel retailers. Recognizing the customer in a shop gives retailers the chance to become personal in terms of knowing what this person likes, what he has bought before and whether he deserves special treatment. Bluetooth beacons can be a powerful tool to enable a personalized approach in airport retail shops. Since GPS does not work well inside buildings, it becomes hard to know where passengers are within an airport. But, by strategically placing Bluetooth beacons, an app can recognize the beacon’s proximity and thus determine that this person is in your shop. If done well, you can set up your digital systems in such a way that customers can connect to their profile and receive personalized suggestions. On the other hand, the physical shopping experience is also rife with personalized opportunities. You can help the staff along

From taxi service to food and fun, passengers need and want a variety of services while en route and online

Eight factors contribute to a passenger’s personalized shopping experience

in this direction by giving them background information about the customers who are in your shop. Saying something as simple as “Hello, Mr. Munneke. How did your wife like the perfume you bought for her last month?” can go a long way in building a memorable, personalized shopping experience. The problem is that most travel retailers don’t have their systems set up right for this personal attention. Most of them are still stuck in retail’s middle ages and

lack things like a product information management (PIM) system with all their SKU’s nicely documented; an ecommerce platform in which their customers can actually buy things; or even a customer relationship management (CRM) system, loyalty program, or targeted advertisement system.

Opportunities At M2mobi, we think the opportunities are vast within a passenger’s journey of

the airport, especially if key flight information, wayfinding and leisure elements like shopping and food are integrated into a single flow. Every mobile travel service that has been introduced has seen a quick uptake by passengers. Eighty percent of passengers carry a smartphone now. When mobile check-in is available, it is used by more than half of the passengers, and 9 out of 10 passengers want flight status on their mobile. This indicates that there is a strong demand for a passenger journey during which mobile is the primary touchpoint. We believe that this mobilefirst approach is the way to go for airports, retailers and airlines the coming years. Setting up this mobile-first strategy will lay the foundation for many innovations.

Business Model The prime business model leads back to the main passenger problem: stress. When passengers have to run to their gates only to experience the frustration of having to sit and wait for their flights, stress results.

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GUEST WRITER: M2MOBI

Location determines special product offerings in Dubai and Tokyo, while pre-flight wait time and the time of day can influence meal promotions

M2mobi is convinced that finding ways to reduce passengers’ stress levels will create trust, and therefore confidence, that there is enough time to relax in the lounges, go shopping, and do things that improve the total travel experience. Decreases in passengers’ stress levels will result in revenue increases. Apart from the relaxed passenger who has more time to spend in the lounges, there is also a more direct business model, mCommerce. The duty-free zone is a perfect place to shop, but what if you could already figure out which shops to go to and which items are on sale before you got there? Also, why should you drag all those bags with you during your trip if you don’t really need them?

Digital Services and mCommerce Not only should passengers enjoy the majority of their time in an airport, but this enjoyment can be extended if they can access the airport services digitally. There are a lot of possibilities pre- and post-travel to create an integrated online and offline travel experience. The aim here should

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

be to create a kind of “Uber for airports” where all the available services of an airport will come to you with a single tap. This means you can have a coffee delivered at the gate, or a rental car waiting for you right outside the main exit . Passengers can browse the collection on their way to the airport and use the showroom to select and get a better feel for the products. Ultimately, passengers want to have single-click services experience.

Personalized Offers & Recommendations At Schiphol Airport, 21% of the passengers have indicated they did not shop because they did not get a relevant offer. If the airport knows their flight, their gate, their shopping history and their preferences, why can’t it be more personal in its offerings? Personalization and context are key to creating an experience that is relevant to the user. With such a wide range of services and products to offer, we need to be able to get this right. There is no use in offering a parking spot to someone who travels by train or to send offers to

passengers who are in a hurry to board their plane. There are a lot of factors and existing data that we can use to predict whether a certain passenger might be interested in a certain offering. In the above image, eight factors that can affect the level of personalization a passenger experiences are shown, ranging from the passenger’s location to his final destination. Obviously, time is an important factor in these offerings. For example, the time of day defines whether to offer someone breakfast or lunch.

Conclusion There is a long way to go for airport retailers to catch up with high street. The situation is different, so a different approach should be taken. Travel retailers have taken the first baby steps, but now it is time for a serious change. Simple solutions like hiring a digital manager won’t do the job. Rather, it is time for a company-wide sea change in which every retail employee understands and embraces the new digital opportunities. If they get this right, there is a lot to gain for the airport, the passenger and the retailer.

IAADFS: MICHAEL PAYNE

Facing headwinds

Michael Payne, Executive Director of IAADFS, says registration is down just slightly this year; a positive sign during a slowdown

The travel retail industry is going through a slowdown throughout most of the Americas, but Michael Payne reminds us of some positive signs by

WENDY MORLEY

s the IAADFS Duty Free Show of the Americas nears, Michael Payne, Executive Director of IAADFS, is realistically optimistic. The booth space is sold out and registration for events such as the fun run, education sessions and gala dinner are higher than last year at the same time. Registration for the show itself is down slightly in comparison, but Payne says numbers are still good, especially considering the economy in LATAM at present. “It would be great if we could know final figures ahead of time,” he says, “but there are always lineups to register on Monday morning so we don’t know until then.” Regardless of the final figures, he says, the people there will be there to take care of business.

Pre-registration strong for events Already close to 300 people have preregistered for the morning education sessions, which feature ACI’s Angela Gittens, to discuss the state of the airport industry and a brief overview from Peter Mohn, of m1nd-set. Tuesday, Mohn will discuss in more detail the results of research that IAADFS commissioned.

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

The event looks positive and numbers are solid, but Payne says the event will feel the economic headwind. “Some companies will send fewer people,” he says. “At this point buyer numbers are down slightly from last year. Considering that so many regions of the world are experiencing difficulties, this is not surprising. Europe, Canada, China, LATAM are all feeling issues with cost evaluation at the moment. Additionally, we don’t know how recent consolidations will impact number of people sent.”

Certain areas doing well Payne feels this year the industry in the Americas will feel the headwinds he spoke of earlier. “There’s a slowdown, yes. Things are changing – technology, consolidation, expansion of retail operations. But it’s also important to define what we mean by the industry. Sure there’s a slowdown, but in certain sections. Airports are growing. Passenger numbers are up; load is up. This is the first time spend is not in line with that,” Payne says. The industry may need to change and evolve as spending patterns evolve. While 2016 is not set to be a banner year for global travel retail, certain areas

are shining in the darkness, according to Payne. “The Caribbean is doing especially well,” he says. “Also parts of Mexico – Cancun, for example. The US is strong. And don’t forget that the economy is not going to stay down,” he adds. “An Americas rebound is on the way. It won’t happen this year, but Brazil is a strong engine that will start moving in the right direction. Argentina is already gaining strength.”

Establishing strong foundations Payne suggests the region will be in full recovery by 2017/2018. “It’s a huge region with tons of potential,” he says. “Money is being invested in improved infrastructure, laying the groundwork for the future.” As an organization, IAADFS has been working mainly with issues concerning liquids and gels in airports, and dealing with occasional specific issues encountered at airports. For the future, Payne sees growing concern regarding confectionery. “Our industry can be a convenient target,” he says, as there is a move toward regulation of food items deemed detrimental to health.

FDFA UPDATE & REVIEW There wasn’t a dry eye in the house when Zina Arista (Niagara Duty Free) won Outstanding Land Border Duty Free Employee

New government, new opportunities by

WENDY MORLEY

The Frontier Duty Free Association’s Executive Director Laurie Karson discusses 2015’s Convention and Trade Show and what’s coming for the Association and its members in the coming year Laurie Karson, Executive Director FDFA, sees great sales in the year ahead in Canadian border duty free shops, due in part to the currency disparity

verlooking Vancouver’s beautiful Stanley Park, the Westin Bayshore was the location for the 30th Anniversary FDFA Convention and Trade Show in 2015. The day was filled with keynote speakers from Canada Border Services, The Mars Agency and the Retail Council of Canada. Key topics included changes being faced by the industry in Canada, what to expect with Canada’s recent change of government, and the Mars Agency’s recommendations for future marketing endeavors. Of course, there was plenty of time for business networking on the trade floor, in suites and at social events. Next year’s convention and trade show will move back to Toronto before heading to Montréal in 2017. Q: What were the final numbers for the FDFA Convention? A: We had approximately 215 delegates at the Vancouver Convention. We typically have fewer delegates at a west coast show since over 60% of our core membership are in the east, but it was an excellent attendance record for a western convention.

PHOTO BY VALERIE KEELER, VALBERG IMAGING

Q: What was the reaction of delegates to the location, both the hotel and the city? A: The reaction was very positive, as the FDFA had not hosted a western location in many years. Given the six land border stores located in B.C., it was great to be back. Additionally, given the 30th anniversary milestone for the association, it was a very special show for our membership. The FDFA, however is now focusing our attention to our 31st Annual Convention being held this year back in Toronto at the Hyatt Regency Hotel from November 13th to November 16th, 2016. Q: At the conference you read a letter you had received from the new minister. Have you had more dealings with her? If so, how has that relationship progressed? A: Yes, we were very honored that the new Minister of Small Business & Tourism, Minister Bardish Chaggar, sent a letter to the FDFA congratulating our industry on our 30th Anniversary and referring to our industry as one that is “iconic.” Since then, I have presented Michael Resch, our Duty Free owner of DFS Ventures in Manitoba, with Canada’s Tourism Hall of Fame Award in early December at the Tourism Congress in front of 350 of Canada’s top tourism decision makers including Minister Chaggar. I also

Lunch was presented by Diageo GTME and included a whisky tasting of some of the company’s new single malts

recently met with the Minister and the Associate Deputy Minister both to discuss Road TRIP and to educate her team on the importance of the Canadian Duty Free Industry. Q: What is the news regarding the Road TRIP program? A: Work has been very steady for the Road TRIP program, which is an initiative to rebate our US tourists the 5% federal tax for goods they purchase in Canada, only at land border duty free shops via a three-year pilot program. We know that in the last VRP program, which was canceled in 2007, over 60% of customers spent their rebate back in our stores. Our focus this year with Road TRIP has been to garner support letters for the Finance Minister, Minister Morneau, through mayors of border communities, local chambers, tourism boards and of course our border MPs. Thus far, we have an additional 40 letters of support from across the country. It is uncertain whether Road TRIP will be approved in the next federal budget as there are so many other competing national issues A few of the most fun people at 2015’s FDFA Convention & Trade Show

that are requesting government funding, but we will continue to push forward in hopes that a positive outcome will occur. Q: What are the next steps re: FDFA’s work with the government? A: With a new Liberal government, the FDFA has been very focused on developing new relationships and on educating our federal decision makers on who we are as an industry. This is critical for industries such as ours, to ensure that we do not get unduly impacted by decisions that could adversely affect us in the future. Through our work, we are able to convey the importance of duty free stores to our border communities, the importance of our supplier network, our positive relationship with the airport duty free network and how we plan on building and growing the industry for the future. Q: Is the FDFA continuing to work with the Mars Agency for marketing? If so, what is the agency working on? A: We are continuing our work with the Mars Agency and are in the process of identifying our strategy moving forward.

Q: The employee training program through the Retail Council of Canada (RCC) – is this fully rolled out now? How has the response been? A: Yes, this has been a very well received program among our members In the pilot phase we have had over 35 employees and managers from across the country enroll in the program, which includes online study modules for Duty Free 101 alongside the online testing. The formal roll-out was mid-March, and we are looking forward to seeing the take-up from our stores once it is officially live. At the end of the day, properly trained employees ultimately increase store sales, increase customer service satisfaction and create better employee retention rates, so investing in a national training program benefits everyone. Q: Are you having another Business Development and Golf Summit this year? If so, when and where? A: We recently had a one-day FDFA Business & Professional Development Summit next week – Las Vegas on March 2nd and 3rd. We focused on key issues for operator discussion and creating action plans on the challenges and opportunities we face, whether that be government relations, improving supplier relationships or future collaborative opportunities. Q: How do you see the year progressing for Canadian shops, both airport and border? A: With the current dollar, we should be seeing more US visitation in our stores, especially during the upcoming high season. I am positive and hopeful that this expectation of more US visitation will mean greater sales for our stores. AMERICAS DUTY FREE & TRAVEL RETAILING

AIRPORT NEWS: BERMUDA L.F. WADE INTERNATIONAL AIRPORT

Stunningly located with the Atlantic Ocean on three sides, Bermuda L.F. Wade International Airport’s new building promises to be a state-of-the-art terminal with world class facilities

E Sailing towards expansion by

MARY JANE PITTILLA

L.F. Wade International Airport in Bermuda has inked a deal to redevelop its passenger terminal building by 2020 with enhanced duty free, retail and F&B activities 90

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

xciting times are ahead for the island of Bermuda, as the airport authority gears up for a new project to redevelop the passenger terminal building. A duty free tender is also coming up. Bermuda L.F. Wade International Airport (BDA) recently entered into a development agreement with Torontobased Canadian Commercial Corporation (CCC) for the redevelopment of the airport. The deal, signed last summer, calls for CCC to construct a new terminal building and to operate the airport and the concession agreement. At time of writing (February 2016), the two companies were finalizing the agreement and securing funding for the project. Construction will begin in February 2017, but the new terminal won’t be ready in time for the America’s Cup yachting competition later that year, which Bermuda is hosting for the first time. The building is expected to be completed in 2020. The new building promises to be a state-of-the-art terminal with world class facilities. The commercial areas will undergo extensive changes. Like other

airport authorities, BDA recognizes the importance of non-aeronautical revenues and wants to see enhanced duty free and F&B activities in the airport’s new home. “Enhanced duty free, retail and F&B activities will be part of our plans, and we’re finalizing the designs now. Commercial and retail are critical to the success of the project moving forward,” Bermuda L.F. Wade International Airport General Manager Aaron Adderley tells Americas Duty Free. The current ratio of aeronautical to non-aeronautical revenues at the airport is 70% vs 30%, but Adderley explains that it won’t be possible to turn that ratio around completely. “We have lots of short haul flights and the dwell-time is not big. People tend to choose the beach or their hotel rather than the airport, so realistically, we’re somewhat limited in our ability to exponentially grow our nonaeronautical revenue, but we’re excited to try and push the envelope.” In addition, notes Adderley, the island does not permit hire cars, so there is no revenue to be gained from this popular form of non-aeronautical revenue-raising. The airport authority is also looking

The new airport’s commercial areas will undergo extensive changes. Like other airport authorities, Bermuda recognizes the importance of non-aeronautical revenues and wants to see enhanced duty free and F&B activities

to capitalize on the natural assets of its location in the new airport design. The current terminal building is surrounded by the ocean on three sides, and this natural beauty will be maximized in both the interior and exterior of the new building. The idea is that passengers will be incentivized to arrive at the airport early and go sunbathing before their flight. BDA is also considering what outdoor commercial activities it can provide for passengers. “Our whole focus is on stimulating commercial activity,” enthuses Adderley. In terms of duty free and retail activities, BDA will likely be looking for one or two key retail partners who can run – and grow – these areas. The company is launching a duty free tender to find an innovative partner who can bring world-class retailing to the airport, although the timing of such a tender was not yet known at time of writing. “The duty free tender will be a key component of our commercial analysis,” emphasizes Adderley. L.F. Wade International serves around 1 million passengers per year, and Adderley is optimistic this number can grow.

“Traffic numbers in 2015 have suggested we’re in year one of what we hope to be a multi-year uptick in visitor numbers. The uptick was driven in part by the America’s Cup World Series races held in October 2015 – a preliminary event leading up to the major race in 2017. Two races were held on the island which were extremely successful and it gives us an initial indication of what to expect in terms of future traveler numbers for the main event.” Due to its location in the North Atlantic, Bermuda is a destination influenced by North America, and 75-80% of its visitor traffic is from the US, with the rest coming from Canada, the UK and Europe. That’s likely to remain the case going forward. “In the lead-up to the America’s Cup we anticipate more Americans, as the Oracle Racing Team are the current defending US champions, and Bermuda was chosen to stage the event partly because our time zone makes sense for most viewers around the world,” explains Adderley. Bermuda’s location also favors affluent, yacht-loving East Coast US visitors, who find it very easy to travel to the island. Adderley hopes the America’s Cup

event will also boost visitor numbers from the UK and Europe. To this end, the airport authority is always looking at options to increase airlift out of Europe. Currently, the only European airline that serves Bermuda is British Airways from London Gatwick. L.F. Wade International has much to look forward to, as the Bermuda Business Development Agency and the Bermuda Tourism Authority are also working to attract more traffic to the island. A number of new hotel developments are being constructed in time for the America’s Cup, which is expected to boost leisure tourism. In addition, the government is finalizing gaming legislation which will bring casinos to the island for the first time. The number of business travelers is also expected to increase as the US economy expands and as more businesses set up on the island to take advantage of its favorable tax structure. “There are some exciting things on the table,” Adderley says.

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

CARIBBEAN CORNER: CTO

The cruise industry saw very slight growth in 2015 and the same is expected for 2016

A banner

year by

WENDY MORLEY

he Caribbean region has seen its best year ever in 2015, not only surpassing its own growth records but also outperforming every major tourism region in the world. Tourism in the region as a whole grew by an estimated 7% to 28.7 million visits, much higher than the projected 4 to 5% growth. This was well above the global rate of growth, which according to the World Tourism Organization was 4.4%. This was the second year in a row that the region has done better than the rest of the world, and the sixth consecutive year of growth for the Caribbean. Visitors spent over a billion dollars more in 2015 than they did in 2014, contributing approximately US$30 billion to Caribbean economies – 4.2% higher than the US$28.8 billion spent during the previous year.

Strong US dollar and more Many Caribbean destinations and resorts focused marketing efforts on attracting residents of the US, where a strong dollar and increased air capacity have encouraged outbound travel. Consequently, travel from the US grew an impressive 6.3% to 14.3 million visits, accounting for approximately 50% of all arrivals. The majority of Americans to the region visited the Dominican Republic, Jamaica, Puerto Rico and The Bahamas. The highest growth rates in arrivals from the US market were recorded in Barbados (+27.6%), Curaçao (+15.3%) and Trinidad & Tobago (+14.9%). But the US was not the only coun-

Since dropping hard in 2009, tourism in the Caribbean has grown every year, with growth in2015 surpassing all

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

try that proved beneficial to the region. Despite currency woes the Canadian market continued to be resilient, with a 4.5% increase in 2015, although its share of total arrivals dropped marginally from 12.1 to11.8%, with 3.4 million Canadians coming to the Caribbean. The top performing destinations were Curaçao (+45.5%), Suriname (+58.0%) and Barbados (+17.8%). Of some concern to the CTO is the fact that as a group Canadians tended this year to visit fewer islands, focusing on just a few. The European market made significant gains in 2015, recording its best performance in seven years. For the first time since 2008, total arrivals from Europe reached the five million mark, a rise of 4.2% compared to 2014. The UK was a dominant performer from this region, growing by a healthy 10.4% to 1.1 million visitors. Travelers from Germany increased 11.5% whereas France was flat. The top performers for Europeans were Turks & Caicos Islands (+34.7%), Cuba (+23.1%) and Montserrat (+12.1%).

Looking inward and southward In 2015, traffic from the Caribbean market accounted for 6% of total arrivals, with 1.7 million visits among the various states, an increase of 11.4% over the previous year despite ongoing concerns of the high cost of intra-Caribbean travel. All of the regional groupings registered strong growth from this market, ranging from six percent to 9.3%, the best numbers since the CTO has begun to keep records.

Another surprising region of success for Caribbean travel was South America, with strong double-digit growth despite the political and economic challenges faced by many countries in the region. That source market generating 2.1 million visitors to the Caribbean in 2015, an 18.3% increase over 2014, representing 7.2% of overall regional traffic. South American arrivals have displaced Caribbean arrivals as the 4th largest source market. The destinations receiving the highest increases in South American tourists were Dominican Republic (+25.1%) and Aruba (+28.8%). Perhaps surprisingly, given their respective economic troubes, the main markets within South America were Venezuela, Brazil and Argentina, in that order.

Increased capacity Part of the reason for the region’s success in 2015 was increased capacity from airlines and from hotels. The International Air Transport Association (IATA) reported a global rise of 5.9%, including an increase of 9.3% in Latin America, both new routes and additional flights on existing routes. Available rooms increased by 1.6% and occupancy by 1.0%, but daily rates increased by 4.6%. Total room revenue jumped by 7.7%.

Cruise steady Although the cruise industry did experience slight growth, this was very slight and near flat. Demand for Caribbean cruises was relatively high in the first four months of the year, averaging

Key Stats Source: CTO Member Countries and CTO estimates.

GLOBAL TOURISM PERFORMANCE

4.8% growth. June and November were also strong, with 3.5% and 3.8% growth respectively. However, sharp declines in the summer months countered this growth. The result was an estimated 24.4 million cruise visits in 2015, an increase of 1.3% over 2014. “Needless to say, we are very pleased with the Caribbean’s performance of stayover arrivals in 2015,” says CTO Secretary General Hugh Riley. “In each quarter the region recorded at least 6% growth over the corresponding quarter for 2014, and each month in 2015 was better than the same month the previous year. “Still, the Caribbean cannot be complacent,” he adds. “We must continue to grow our traditional markets, strengthen emerging ones and penetrate new sources as we target the 30 million arrivals mark we set some years ago. Our efforts to improve our product quality, enhance our marketing, grow our rate base, increase our profitability, and constantly offer excellent value for money, must continue.”

Looking ahead While the outlook for 2016 is positive, the CTO is still concerned with the volatility of the economy of some of its main markets, China’s economic slowdown and the continuation of recessions in Brazil and other South American countries. Says Ryan Skeete, CTO Director of Research & IT: “Lower oil prices, a strong US dollar, improved economic growth in major source markets and extra airline seat capacity to the region are all expected to positively impact tourism performance in the Caribbean, while uncertainty about the impact of the mosquito-borne disease Zika persists, the implications of the economic slowdown of China, the world’s largest economy, and the continuation of recessions in Brazil and Venezuela will temper our optimism. Consequently, we predict that stay-over arrivals to the Caribbean will increase between 4.5% and 5.5%, while cruise arrivals will increase between 1% and 2%.”

Here is a snapshot of how the Caribbean performed in 2015 and what we can expect for 2016. Source CTO Member Countries and CTO estimates.

Caribbean tourism growth up 7%

CARIBBEAN TOURIST STOP-OVER ARRIVALS

with 28.7 million stopover arrivals, surpassing world tourism growth of 4% in 2015.

Double digit growth recorded in

CARIBBEAN MAJOR MARKET GROWTH

U.S. up 6.3% at 14.3 million

Haiti Barbados* Aruba* Cuba 15% 11% 15% 17.4% Note: * Jan.- Nov. only

U.K. up 10.4% at 1.1 million

Canada up 4.5% at 3.4 million

Caribbean up 11.4% at 1.7 million

Europe up 4.2% at 5.2 million (including U.K. numbers)

South America up 18.3% At 2.1 million

CARIBBEAN ACCOMMODATION PERFORMANCE

Room Occupancy Percentage

Revenue per Available Room

Average Room Rate

68.8%

$157.74

$229.44

1.0%

4.6%

6.0%

Source: 2014 STR Global

CARIBBEAN CRUISE ACTIVITY PERFORMANCE

Total Estimated at 24.4 1.3% million in 2015 Destinations with double digit increased cruise passenger visits

Destinations with most cruise passenger visits Bahamas 19% of total Cozumel 14% of total

CARIBBEAN TOURISM 2016 OUTLOOK

Overall, tourist arrivals are projected to increase between 4.5% and 5.5% in 2016.

St. Maarten and the U.S. Virgin Islands both represented 8% each of the total.

Source: CTO Member Countries and CTO estimates.

All figures are provisional and subject to revision.

Visit OneCaribbean.org for more information and follow us on Twitter, Periscope & Instagram @ctotourism.

BEAUTY: THE BODY SHOP

The world as a

The Oils of Life range will launch at the end of Q1

source of beauty

The Body Shop is revamping its entire range for a modern and authentic take on beauty, strengthening both its brand and its focus on skincare

parks are set to fly as The Body Shop natural beauty brand reignites its business in the travel retail channel this year. 2016 will certainly be a year to remember for the brand that’s owned by French beauty leader L’Oréal as it introduces a fresh, strong identity. The Body Shop’s entire catalog is being revamped to incorporate much more premium, modern and authentic packaging. The changes are very significant, especially within the skincare range, the company says, as skincare becomes a key focus from now on. “In terms of assortment, body care remains our core business, but more and more The Body Shop will increase its presence in skincare, by bringing innovative and high quality launches,” says Emilie Poisson, General Manager L’Oréal Travel Retail Americas Consumer Division. The launches in Q1 2016 have included the new Oils of Life range, along with Drops of Youth and a revitalized Vitamin E line. For Q2, The Body Shop is bringing a selection of sets exclusive to travel retail, filled with consumer’s favorites and with great value for money. L’Oréal, which welcomed The Body Shop into its world-leading portfolio in 2006, believes that the new packing will help to add authenticity and “premiumness” to its products. It will also facilitate the shopping process by communicating the ingredients more precisely and keeping the consistency among the different

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

lines. Crucially, it aims to differentiate The Body Shop from the competition. It is important to mention that although revamped, the brand remains accessible. The Body Shop is already a powerful player, achieving €1.3 billion (US$1.47 billion) in annual sales. Globally, the brand has 25 million customers and more than 3,000 shops in 68 countries. The brand has been a pioneer in ethical and fair trade since its founding in 1976 and boasts The Body Shop Foundation. Now in its 40th year, The Body Shop unveiled a pioneering new global corporate social responsibility strategy in February that will underpin all aspects of company operation. The new Commitment aims to reaffirm The Body Shop’s position as a leader in ethical business. The Commitment, which will support The Body Shop in its aim to be the world’s most ethical and sustainable global business, is an extensive program of global activity and measurable targets that touches all areas of the business, to be delivered by 2020. The Commitment, entitled Enrich Not Exploit, embraces the bold ethical principles from which The Body Shop was built. Announcing the ambitious plan, The Body Shop Chairman and CEO Jeremy Schwartz said: “For us, being truly sustainable means shaping our business to work in line with the planet’s natural systems so they can replenish and restore themselves. With our Commitment we’re

challenging ourselves to go further than we’ve ever gone before to make a real, sustainable and positive difference. We have set ourselves a significant goal to be the world’s most ethical and truly sustainable global business.” The Commitment will enable The Body Shop to protect and nurture the environment and society across every part of its business: ingredients, products, packaging, stores, employees, suppliers and campaigns. Underpinning this plan are the six dimensions that are the pillars of the brand. First, using the finest natural ingredients, hand-picked and processed in a superior way; second, sourcing from the four corners of the globe, inspired by the diversity of the world; third, generosity, and making a positive difference; fourth, evoking the feel-good factor, with indulgent textures, and uplifting aromas; fifth, authenticity, with plain talking and no fake promises; and lastly, English irreverence – a brand that doesn’t take itself too seriously. Even in a serious business.

BEAUTY: KROMA

Naturally niche The KROMA® Makeup beauty brand is bringing its natural, customized makeup line to the duty free arena – along with a charitable approach

ee Cristou, Founder of the KROMA® Makeup beauty brand is new to the duty free sector. But this dynamic, Greek-born entrepreneur (KROMA means color in Greek) knows her Floridabased professional makeup line is totally suited to travel retail. “For 16 years we’ve serviced traveling women and executives via our Professional Makeup Studio, online or onlocation listening to real needs day in, day out,” she tells Americas Duty Free. “Being an exclusive, niche manufacturing brand we have the ability to respond and cater to those needs. Most of our products in our collection are either refillable or in sleek, refillable, compact magnetic cases. As the need for natural formulas continues to grow, KROMA® has already met that call and is willing to continue meeting future demands.” Cristou’s objectives for the IAADFS show – her second travel retail exhibition – are clear. “Other than introducing KROMA® and expanding on a global level, I wish to share my 20-year retail expertise on a wider mainstream level to buyers/distributors who aren’t hesitant bringing in an open-minded, passionate, adaptable niche brand.” Cristou’s plan is to grow in duty free without compromising the brand’s personalization, education and customer client/account attentiveness it is known for. “I plan to bring our impressive resume

of extensive education and sales training from beauty advisors, all the way down to the end-user carrying our products.” Importantly for the natural cosmetics brand, KROMA® has corporate social responsibility right at its heart. The Preeclampsia Foundation announced in March that KROMA® will be launching a new “Promise Me” botanical collection to benefit the Foundation’s mission and raise awareness of preeclampsia, a potentially life-threatening disorder of pregnancy that affects approximately 5-8% of all pregnancies in the US. “At KROMA® we have always focused on helping moms make healthy choices for their skin and bodies that are ‘natural and limitless’, even before ‘natural’ reached today’s prime,” says Cristou, whose brand is celebrating 16 years in business. “The Promise Me” botanical collection is an opportunity for us to extend that promise toward supporting healthy moms and babies who have been affected by preeclampsia.” In a collaborative approach, Cristou invited the public to vote for their favorite lipstick choice for the Spring/Summer Promise Me color from three options: Promise Me ROSES, Promise Me ENCHANTED, or Promise Me CHOCOLAT. KROMA® is a US sponsor for the Promise Walk for Preeclampsia, which will host 40 events across the country in May and June 2016, coinciding with

Natural KROMA® products are either refillable or available in sleek, refillable, compact magnetic cases

Lee Cristou, Founder of the KROMA® Makeup

National Preeclampsia Awareness Month. In a further significant development, KROMA® recently celebrated the 15th anniversary of its new studio, which opened its doors in March 2000, offering even more personalized consulting services and newly added product formulas. Now, the brand is looking forward to its first travel retail customer who shares Cristou’s passion for high-grade, customized products. To find out more, visit KROMA® at IAADFS, booth 2009. Ideal for duty free, KROMA® offers a practical travel bag

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

BEAUTY: ESSENCE CORP.

Essence Corp

knows the essential role of service

rom luxury goods to doing good in the neediest parts of the world, Essence Corp has nailed a quintessential principle of business: succeed enormously, give back, repeat. Patricia Bona, Vice President of Essence Corp, says, “We are privileged to work in the luxury goods industry, and have strong ties with the countries where we sell our goods. We cannot pretend that we do not see the other side of that world of glamour: hunger, poor housing, lack of education, even natural disasters. It is our privilege and our duty to help.” Already in 2016 the company has participated in two events to help its Miami headquarters’ local community, and plans to keep up the pace after April’s IAADFS. On January 14, 2016, Essence Corp employees had the opportunity to serve the homeless community by joining forces with the Miami Rescue Mission. Since 1922, the Miami Rescue Mission has helped transform the lives of men, women and children with meals, safe shelter and educational programs. Employees participated in different activities encompassing some of the center’s core missions, such as preparing and serving meals, cleaning and sorting clothes at their local thrift shop, and creating cards for the members’ upcoming graduation. Earlier that same month during its January 11-14, 2016 annual internal seminar, Essence Corp employees gathered in Miami for the annual internal seminar, to celebrate a successful closing of 2015 and plans for an even better 2016. During the seminar, Essence Corp welcomed special guest, Marc Buoniconti. Buoniconti is President of The Miami Project to Cure Paralysis, a highly-acclaimed research

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

Essence employees had a chance to serve the homeless community by joining forces with the Miami Rescue Mission

Top revenue gains and giving back go handin-hand for Miamibased Essence Corp

Columbus, Ohio, this August benefitting center recognized for its remarkable the Cancer Research at Ohio State Univeraccomplishments in the spinal cord sity, Essence Corp employees will be on injury field. Essence Corp and the Buoniconti Fund the move for community causes. And, since the company matches both kickstarted their social and business employee donations, the events manage ventures around the same time back in to combine friendly competition and the late 1980s. Says Bona, “We are very altruism. “Events like these are a joint close to the Buoniconti Fund. In the last effort between management, marketing, 30 years it has made astounding progress and really everyone in the company,” says on curing spinal cord injuries and their Bona. “Helping others is a good feeling. scientific team is dedicated to the fund’s It boosts the morale of the team. We even mission of mobility: to get everyone out become competitive as to who can raise of their wheelchairs once and for all.” the most funds!” Indeed, mobilizing employees to give Clearly, its core belief in service keeps back to the community is woven into Essence Corp up and running year after the very fabric of the company, from top executive management to the newest team successful year. members. “We believe that whether we donate money, or better, our time, giving back benefits us all— the recipients and the donors. Giving back to the community is rooted in the philosophy of Essence Corp and as officers, it is our responsibility to instill it in everyone on the team and pass it to the younger generations.” The Bonas welcomed special guest Looking ahead to the Marc Buoniconti, President of The Miami Project to Cure Paralysis at the Essence’s many community events annual internal seminar earlier this year planned this year, we see that instilling the Essence Corp’s Patricia Bona and importance of service daughter Laetitia Bona-Piedra at the company’s “Pink Breakfast” is at the forefront of the held last year in honor of the Susan company’s 2016 agenda. Komen Breast Cancer foundation From the Miami Cure for Paralysis corporate run in April after IAADFS to the LL Brands team cycling Pelotonia event in

2016 31st Annual Convention 31e Convention annuelle “Canada’s Exclusive Duty Free Convention”

November 13–16

Hyatt Regency

ToronTo Ontario - Canada

www.fdfa.ca

BEAUTY: REVLON

All set for success by

HIBAH NOOR

With a new ad campaign and innovative products hitting the travel retail shelves, Revlon is buzzing – including on social media sites

One of Revlon’s main launches at IAADFS will be Love Series Essentials, consisting of must-have makeup essentials in a compact pouch. The product contains longwear eye liner, Revlon ColorStay Eye Liner, Revlon Balm Stain, and the new, lash-transforming Revlon Ultimate All-In-One Mascara

One of the firm’s most advanced brushes ever released, this Makeup Brush Essentials travel exclusive brush set contains a foundation brush, blush brush, double-ended smoky eye brush and retractable lip brush for all makeup applications

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

avid Carvalho, Senior Vice-President and General Manager of Revlon, is helping to keep the US beauty brand at the forefront of the fast-moving travel retail world across the Americas. 2015 saw a very positive year for Revlon in the region with fresh distribution gains through the introduction of its new Mini gondola. The Mini gondola was launched during the 2015 TFWA World Exhibition and in just three months, Revlon has already achieved listings on nine ships with Carnival Cruise Line, and 17 points of distribution with Duty Free Americas. Carvalho is keen to emphasize the Mini gondola’s practicality, saying: “The Mini gondola is very compact at just 11.8in by 11.8in, and can hold the full assortment of our Travel Exclusive Collection sets. It’s a very efficient unit that can really increase the productivity of the retail space and that’s why it has been such a success with our partners.” 2015 also saw the launch of its new Love Is On edt at all Revlon counters throughout the Americas, and major Valentine’s Day activations at St Honore Airport in Panama, London Supply at Iguazu Falls, Duty Free Americas in Miami, New York JFK, and Punta Cana. Revlon’s strategy for growth is to provide high quality, innovative products at an accessible price. “There is a big demand for high quality products in all segments and over the past year, we have expanded our portfolio in travel retail from cosmetics into fragrances and professional hair care,” explains Carvalho. “We have launched our new Love Is On

edt at all Revlon counters worldwide and our professional hair care ranges – Uniq 1 and Orofluido – at several key travel retail doors. In 2016, we will continue to build on and expand the distribution of these new categories within the Americas.”

A strong gifting proposition Travel exclusive sets are always an important focus, as customers look to Revlon for affordable gifts. For the first half of 2016, Revlon is launching a new makeup brush essentials kit, four nail sets and a beauty essentials kit. These six new sets are being launched at the 2016 IAADFS show and extend its travel exclusive range beyond the lips category, in which Revlon has been very successful. During IAADFS, Revlon’s main launches will include Love Series Essentials, consisting of makeup essentials in a compact pouch. The product contains the best-selling longwear eye liner, Revlon ColorStay Eye Liner, moisturizing Revlon Balm Stain, and the new, lash-transforming Revlon Ultimate All-In-One Mascara. Measuring just 6.5in by 2.5in by 2in, it is ideal for inflight sales. In addition, Makeup Brush Essentials is described as one of the firm’s most advanced brushes. This travel exclusive brush set contains a foundation brush, blush brush, double-ended smoky eye brush and retractable lip brush for all makeup applications. Carvalho is upbeat about the opportunities in the Americas. “Revlon is very strong in the Americas, and we continue to build on this strength. Last year, we launched our new Love Is On positioning

globally and on February 1 this year, Revlon unveiled our Choose Love campaign, the next phase of our Love Is On brand mission. Choose Love invites women around the world to believe in love, to let go of doubts and take a chance to make love happen. We are inviting women to show how they Choose Love by uploading photos of themselves blowing kisses and tagging someone special to ‘pass it on’ using the new #CHOOSELOVE hashtag.” Social media engagement with consumers is a big focus for Revlon as it seeks to tap into the role that cosmetics and fragrances play in the attraction between a man and a woman. During IAADFS, visitors to the Revlon booth can have their picture taken in a photo booth, and receive a free printed photo. Visitors can also share their photo online under the hashtag #CHOOSELOVE to receive a free Revlon gift. Travel retail exclusives continue to be very important for travelers as two thirds of shoppers shop for gifts in travel retail, according to Revlon. “Revlon is very wellpositioned for these shoppers; we are a globally recognizable brand with a strong brand heritage as a beauty expert offering high quality products at an accessible price, so we have a very strong proposition for gifting,” Carvalho enthuses. “We have done a lot of work in enhancing the offer of our travel exclusive sets – from the packaging revamp for all sets to the launch of our Love Series regimen sets. At the IAADFS, we are launching six new sets and you can expect to see more attractive travel exclusive sets from Revlon this year.”

Revlon ColorStay Gel Envy Nail Sets provide brilliant color, gel-shine and long-lasting wear. They extend the brand’s travel exclusive range beyond the lips category, in which Revlon has been very successful

www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

SUNGLASSES: ASPEX EYEWEAR

Famed BMW brand launches eyewear line

in the Americas Aspex Eyewear and BMW’s social media prowess combine to bring big business Marco Lares, new Director of Sales Worldwide -Travel Retail/Duty Free for BMW Eyewear will be presenting best-selling BMW frames at IAADFS

n any given day social media outlets are abuzz over BMW. Of course, the iconic brand continues to drive luxury automobile sales with its legendary focus on smooth lines and stringent quality checks, but now these selfsame qualities are bringing fresh visibility to its latest venture, a new line of eyewear. BMW Eyewear is getting high praise in travel retail markets around the globe thanks to a strong online presence and its collaboration with global eyewear distributor, Aspex Eyewear. Serving over 50,000 accounts in 80 countries, Aspex Eyewear is responsible for numerous fashion and technology breakthroughs including the magnetic clip technology, memory metal eyewear, and TurboFlex. Situated with offices in Montreal, Miami and Paris, Aspex Eyewear continues to push technological limits to create new, accessible designs. Its collaboration with BMW Eyewear is no exception, as both companies strive to deliver sophistication and performance to the optical consumer. Since September 2015, Marco Lares, new Director of Sales Worldwide -Travel Retail/Duty Free for BMW Eyewear, has worked hard to ensure the BMW Sunglass/Eyewear collection is well known across the Americas travel retail business, with a particular focus on spreading the word through social media. Says Lares, “I’ve created a Facebook page dedicated mainly to new and existing BMW Eyewear customers in travel retail in which we show BMW as the amazing brand it is,

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with a perceived brand value of US$24.62 billion by Forbes magazine.” With such impressive sales numbers and customer outreach, it is clear BMW Eyewear understands the importance of eyewear to travel retail markets. “Eyewear in travel retail is big business with premium sunglasses produced by fashion labels, and now BMW sunglasses, representing a large percentage,” says Lares. Functionality, style, and a keen understanding of the needs of the traveling professional have contributed to BMW’s success. Its eyewear collection includes 21 sunwear models assembled from high-quality materials including titanium, stainless steel, acetate, TR90 and NXT. Several features including polarized and mirrored sun lenses, Turboflex, and even BMW’s signature blue-and-white logo have combined to provide customers with both aesthetics and durability. The tech-savvy, traveling professionals who are snatching up these products know the sunglasses look good and that they will last. Says Lares, “Our target consumers are traveling men and women who are familiar with the brand, looking for something new and unique, and tired of seeing the same old sunglasses available everywhere. We bring amazing value into

the luxury market.” BMW Eyewear is holding its own against fierce competition from more established luxury eyewear brands such as Tag Heuer, Montblanc, Prada, Tom Ford, Bvlgario, and Giorgio Armani. Retailing at between US$250$260, BMW Eyewear is affordable even as it remains an iconic brand in the luxury market. Much of this success goes back to BMW Eyewear’s masterful finesse of social media. “BMW is a modern and avant-garde brand, and is one of the most active on social networks,” says Lares. “On Facebook alone BMW has attracted almost 20 million fans and it probably averages around 50,000 likes — and it’s not uncommon for posts to exceed 100,000.” Hoping to capitalize on this social momentum, Lares has his eye on this April’s IAADFS in Orlando. Says Lares, “This is a great show to meet new and existing clients. Orlando is a unique experience, and it brings all of us together as a ‘big family,’ all making sure everyone succeeds in their own field. With BMW Sunglasses, my goal is to become a ‘must’ brand in the travel retail segment.”

BEAUTY: ALTIMETRE

Revving up for growth Duty free distributor Altimetre, run by duty free veteran Arnaud de Volontat, is in full gear for the IAADFS show, as the company prepares to unveil a growing portfolio of innovative, prestige brands

Mercedes Benz MAN targets men aged from 20 to 40 with a contemporary and ultra-sophisticated scent

rnaud de Volontat, President of travel retail distributor and agent Altimetre, is gearing up for the 2016 IAADFS show in Orlando with a powerful portfolio of innovative brands. Miami-based de Volontat is a duty free veteran, having worked at Longchamp and Estée Lauder, and started his own company in 2013. His philosophy is to bring to the traveler new, innovative and high quality products offering the best shopping experience. Now, he is enthralling consumers with the prestigious range of Mercedes-Benz fragrances, as Altimetre is the agent for Mercedes-Benz Fragrances for travel retail Americas. In March 2016, Mercedes Benz MAN was launched: this new fragrance targets men aged from 20 to 40 with a contemporary and ultra-sophisticated scent, packaged in a hi-tech bottle, with a distinctive silhouette in a soft-touch matte black and the emblematic star on the center. “MAN received a great response from the industry in Cannes [TFWA World Exhibition]

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and we are very confident it will have the same result with the final consumer,” says de Volontat. At IAADFS, Altimetre will be introducing two brands: Spongelle, a technology product reinventing the bath experience; and Aight Watches, a range of colorful timepieces with a fluid and urban-inspired design.

Mercedes-Benz hits the road Mercedes-Benz fragrances have achieved “very positive” results in the Caribbean and Latin America since the range was introduced in several key places at the beginning of 2015, competing in sales very closely with men’s fragrances that are already well established in the industry, says de Volontat. “With the concentration of the duty free landscape in hands of very few operators, it is getting more and more difficult for new brands to get listed but, where it has been possible, local operators are very happy with the sell out due to the quality of the product – scents and packaging – and the price positioning,” notes de Volo-

ntat. “As well, we cannot forget the name that has a great recognition worldwide (in top 10 in branding), always delivering excellence in any product that has the name of Mercedes-Benz.” Mercedes-Benz Club is the best seller, followed by Men Intense. In addition, the women’s fragrances, Eau and Rose, have been performing beyond expectations, representing up to 25% of its business. In December 2015, Altimetre launched two new versions of the original Club: Club Fresh, with a lighter and fresher scent, and Club Extreme, featuring a more powerful and sophisticated scent. The packaging follows the latest color trends: matte metalized blue and matte metalized dark grey bottles. Today, Mercedes-Benz is present in Central America with Grupo Wisa, in the Caribbean with the Penha Group and other local customers. In South America, a few accounts have opened with local duty free operators at the borders in Uruguay, Paraguay and Argentina. More duty free operators will be opened in 2016 in the Americas region, says de Volontat.

EDITOR’S CHOICE

Bursting with creativity

This spring’s summary of the best travel trinkets run the gamut of refreshing fragrances, covetable bags, and innovative gifts

4 3

4. Germany’s VW Beetle car is celebrating its comeback as a keyring by Troika. The Light Beetle 1964 keyring shines with tiny LED lights to lighten every keyhole 1. Braun’s PrecisionTrimmer PT 5090 is a high-precision styling device with an edgy and masculine design that can be used in the shower. Its slim head ensures even trimming and precise edging of beard lines and three trimming combs allows for different length settings 2. With strong vintage inspiration, this round, glamorous Jackson model is a sophisticated expression of the Chloé fashion spirit. Made by Marchon Eyewear, the frame features unique metal temples that resemble a tennis racket 3. Lambretta Watches’ new, fashionable Cielo Zebra collection is inspired by the colors of the savannah with hot and trendy zebra patterns in three creative colors

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5. The Chupa Chups Mini Sour pouch bag by Perfetti Van Melle is the ideal pack for snacking and sharing. It contains 40 mixed sour fruit mini lollipops 6. The limited-edition Godiva Gold Anniversary Collection 18-piece box features eight of Godiva’s most iconic chocolates – one from almost every decade. The collection is completed by the brand new Egérie Noir piece 7. The Mr. Burberry fragrance is inspired by the iconic, black Burberry trench coat. The woody scent is encased in a masculine bottle. The weighted cap references horn-look buttons, while a hand-tied knot in English-woven gabardine sits around the neck

10 16 13 9 15

12. Perry Ellis RED, supplied by Falic Fashion Group, is a powerful and masculine new fragrance for spring from the allAmerican apparel brand. An initial burst of juniper berries with a kick of citrus, the scent evolves into red apple, Sichuan pepper, red leather, and amber

8. Montblanc Legend Spirit reveals a more casual aspect of Montblanc Legend. The two master perfumers, Nathalie Lorson and Olivier Cresp found a perfect composition to create a fresh and intense fragrance

13. Inspired by modern gentlemen dressed in classic white, Vince Camuto Eterno by Parlux Fragrances is a woody aromatic fragrance that features citrus and mint blended with rich bourbon, sleek woods and vibrant spices

9. Featuring cool freshness and warm spices, Polo Blue by Ralph Lauren is a fragrance inspired by the blue sky, the open waters, and an invigorating blast of fresh air

14. Canadian Flower, produced by Canada’s Pillitteri Estates Winery and distributed by ALFA Brands, represents an evolution in the packaging of reserve icewine. The designer is Jesse Shou, a young Canadian artist from British Columbia

10. Tumi’s Larkin Collection, named after the historic street in San Francisco, is offered in a ballistic fabric and pebbled leather for female travelers. The range of refined and structured silhouettes includes briefcases, totes, and the new, must-have Laurel backpack 11. The new Slim Power Bank from accessories expert Go Travel is as compact as a credit card yet powerful enough to fully charge a smartphone in just 1.5 hours. Thanks to its ultra-slimline design, it conveniently slips into any wallet or shirt pocket

15. This Danish designed women’s watch from Obaku Denmark, with its peach mother-of-pearl dial and white Italian leather strap, is a perfect example of Obaku’s sophisticated look and Zen philosophy 16. Perfume Holding’s innovative fragrance iPhone case protects the phone while holding your fragrance. The case has been tested to ensure that the juice will not come into contact with any part of the phone. It comes pre-filled with 25ml of fragrance and an additional 25ml refill www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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BEAUTY: ACTIUM

Cruising through the Americas

Hanan Fraysse, Director of the Lifestyle & Beauty Division, Actium

Building on the momentum it has achieved across the Americas, particularly onboard cruise lines, Miami-based luxury distributor Actium plans to expand its brand portfolio

anan Fraysse, Director of the Lifestyle & Beauty Division of Actium, is glad to be back. With 25 years’ experience in international business development within the luxury and beauty industry. Fraysse founded the division in 2005. She recently re-joined Actium in January 2016 after leaving to pursue her career in in-store analytics and big data with RetailNext, one of the leading companies in this arena. After spending four years in Switzerland as Regional Sales Director for the EMEA region and Travel Retail World Wide between 2011 and 2015, she returned to work at Actium in Miami. Fraysse is clear about the road ahead for the company, which acts as a distributor and agent for the entire Americas, including the Caribbean. “My goal at Actium is to grow our existing businesses with Parbel (L’Oréal Luxury Division), Puig Group and Hermès, and strengthen our partnership with these leading groups, in addition to developing our portfolio of brands while sustaining our analytical strategy of attention to detail that differentiates us in this competitive environment.” The company’s focus in 2016-17 is the cruise industry, which Fraysse describes as a unique channel with a lot of hidden potential. “After working with the cruise lines for 10 years, we have accumulated unprecedented expertise that has helped us grow the businesses of our brands to new levels,” emphasizes Fraysse. “We will continue to invest in this division, and our most recent investment and most important is in our team. We recently hired a new Brand Executive who possesses 10 years’ experience with some of the world’s most luxurious brands, including Chanel Beauty, Dior Watches, Cartier, Swarovski and Luxottica.” Actium’s success stories onboard include the staging of HPPs for Paco Rabanne and Carolina Herrera on Starboard Cruise Services that were mixed with strong training. The company 106

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

launched simultaneously two new Puig fragrances onboard: Olympea, the new feminine fragrance by Paco Rabanne, and CH Men Privé, the new masculine fragrance by Carolina Herrera. Successful animations celebrated those two big launches. These included HPP and windows onboard Norwegian Cruise Line’s Norwegian Epic in December 2015 that drove sales by 187%, says Fraysse. Specially-trained beauty advisors helped customers discover the new fragrances. Additionally, an advertising campaign on Royal Princess featured personalized gondolas. For Hermès, the new Cologne Eau de Rhubarbe Ecarlate (scarlet rhubarb), Christine Nagel’s first fragrance for Hermès, will be launched in the summer onboard Starboard and Princess Cruises. This rhubarb fragrance is said to unveil a different and unexpected vision of the Cologne, with a surprising freshness. The crisp and tangy freshness of rhubarb is softened with white musk. Fraysse wants to capitalize on this momentum, explaining that the company will be diversifying its services to new categories such as watches, jewelry, accessories and fashion. “The diversification allows us to maintain in each product category a limited number of brands… We are not in the business of collecting brands, we are in the business of making

a difference and acting as an extension to our brands.” She added that the firm would also be focusing on recruiting brands that need Actium’s expertise in the US and Latin American travel retail sector, in addition to the Caribbean and cruise ships. Great teamwork is crucial to Fraysse: “Our team is our biggest asset and an important focus for Actium.” She goes on to quote Allan Ray, who famously said: “Great Teams Find A Way to Win”. The company therefore focuses a lot on training, particularly on the cruise ships, where she says training is “challenging”, thereby providing the correct level of support to its retail partners. Fraysse cites as an example Puig training conducted in partnership with Arturo Senior on Royal Caribbean’s Oasis of the Seas with Starboard. Actium will be exhibiting in booth 413 at the 2016 IAADFS show in Orlando, where this ambitious firm is sure to make many more waves.

Hermès’ new Cologne Eau de Rhubarbe Ecarlate (scarlet rhubarb) will be launched in the summer onboard Starboard and Princess Cruises

Actium hosted-Puig training conducted in partnership with Arturo Senior on Royal Caribbean’s Oasis of the Seas with Starboard

IAADFS EXHIBITOR SPOTLIGHT

Buckley London rocks at IAADFS show UK jewelry designer Buckley London is set to showcase its Spring/Summer 2016 collections and an expanded range of innovative retail display solutions at IAADFS (Booth 613). As part of a brand refresh, the 11 new collections in the design portfolio are sleeker and more trend-led to target a younger audience, alongside the core customer. Visitors will see London-inspired pieces, studded profiles and statement neckwear. Sophisticated and classic style staples will also be unveiled featuring intricate pavé-set barrels and natural materials. The modern-meets-classic designs include the London Rocks collection, which mixes smooth surfaces polished to a high lustre with tonal Preciosa crystals. Available in a choice of rose gold, gold or rhodium plating, items can be mixed, matched and stacked to suit the wearer’s personal style. The nature-inspired Chelsea collection is expected to be a stand-out choice for the US market due to regional focus groups highlighting the need for more statement styles. Luminescent mother-of-pearl charms are coupled with gold-plated, hammered, textured discs and sparkling pavé-set discs for a chic style. With the continuing trend for stackable wristwear, Buckley London will also display an expanded range of colorful fast-fashion items with a multi-buy option. Profiles feature accents

The London Rocks collection combines smooth surfaces polished to a high lustre with tonal Preciosa crystals

of semi-precious stones, intricate beaded multi-rows and clean, polished surfaces. Additionally, innovative branded display units such as an interactive counter-top ring display, three-tier bracelet bar and floor-standing two-sided unit will be displayed, offering spacesaving solutions for retailers.

Cabeau brings hi-tech cool to Orlando Travel products specialist Cabeau is exhibiting its most technologically advanced and comfortable travel pillow in Orlando (Booth 835). The Evolution Cool pillow features ground-breaking ventilation technology and dual-density memory foam technology, delivering the coolest travel comfort experience, the company said. Following the success of the award-winning Evolution pillow, Cabeau surveyed thousands of travel pillow owners at airports worldwide to help understand the needs of travelers. The Evolution Cool pillow offers support and comfort for travelers and is available in four on-trend colours, retailing at US$59.99. The patent-pending pillow features proprietary dual-density memory foam, 360-degree head and neck support, and a cool-to-the-touch wicking fabric cover that is machine washable and breathable. Magnetic auto-snap toggles hold the pillow in place and adjust to provide custom-fit head support. Its upscale travel case compacts the pillow to save valuable space. David Sternight, Founder and CEO of Cabeau, said: “The past few years has seen Cabeau grow from its base in the travel retail market to achieving tremendous growth in sales in 2015. The Americas is a very important region for us and we are thrilled to be showcasing our new Evolution Cool pillow to 108

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key industry figures at such an important exhibition.” The launch will be supported by a consumer marketing campaign, including a partnership with Paige Spiranac, one of golf ’s most popular female professionals. The pillow also has a consumer money-back guarantee. The hi-tech Evolution Cool pillow offers support and comfort for travelers and is available in four on-trend colors

IAADFS EXHIBITOR SPOTLIGHT

Security is in the spotlight for Travel Blue Travel Blue is displaying a host of Radio Frequency ID (RFID) products at IAADFS to help travelers protect their personal information (Booth 901). The recent introduction of contactless payments has coincided with an influx of personal identification fraud, according to the electronics specialist. “Security is of the utmost important to everyone, not just travelers, but with traveling continuing to be voted one of the most stressful experiences for many individuals, it is essential that theft of personal information is not an addition to this already stressful environment,” said Travel Blue’s Travel Retail Director Jonathan Smith. New products include the stylish RFID Money Belt, which protects the personal information contained on your passport. The water-resistant belt is backed with a soft nonwoven material, which is gentle on the skin. It fits up to a 122cm (48in) waist. The RFID Neck Wallet protects personal information contained on your passport and credit cards. The high quality neck wallet

contains one large RFID-protected pocket plus two additional large pockets for cash and other documents. The RFID Passport Protector protects passport and credit card information. Made of leather, this attractive passport protector stops thieves using scanners to read personal details in busy places. The RFID 2 x Pocket Set comprises a set of two zipper pockets made from RFID blocking materials that help to protect personal information. The passport pocket measures 15.5cm x 11.5cm, while the credit cards pocket is 11.5cm x 7.5cm.

The stylish, water-resistant RFID Money Belt protects the personal information contained on your passport

IBBI steals the show with accessory brand trio International Brand Builders Incorporated (IBBI) is previewing the Spring/Summer 16 collections from three brands in its portfolio at the IAADFS show: Obaku Denmark, Buckley London and Cerruti 1881 (Booth 828). Obaku Denmark is launching its new, sleek Danish design watches, with a focus on spring colors. New features include interchangeable straps and pastel colors with mother-of-pearl dials. Obaku’s display furniture will also be showcased, incorporating LED lighting and storage. Cerruti 1881’s Spring 16 collection includes small leather goods for men and women at affordable prices, such as this men’s belt

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Buckley London is previewing its Spring/Summer 16 collections as well as new fixtures that offer retailers even more options, including back walls, ring and counter merchandisers and bracelet bars (Booth 613). These aim to create a shop-in-shop environment and also flexibility for smaller shops not able to carry Buckley London’s award-winning tower. IBBI is also presenting the Spring 16 collection from Cerruti 1881. This includes small leather goods for men and women, at affordable prices.

FASHION: BIJOUX NOUVEAU

Back and better than ever: new name, new ownership, new management for Bijoux Nouveau Bijoux Nouveau designs its own unique styles that are manufactured in the company’s factories and distinguish BNI from its competitors

With new ownership, management and products, Bijoux Nouveau reintroduces the Bijoux Terner brand at Orlando’s 2016 IAADFS by

HIBAH NOOR

ashion accessory company Bijoux Nouveau has reintroduced the Bijoux Terner brand. Under new ownership the new management team that brings a bold new business model and new product lines to its 2016 agenda. Poised to show at Orlando’s 2016 IAADFS, the travel retail world celebrates the company’s reemergence into the spotlight. In June 2013 Bijoux Nouveau, Inc. (BNI), headquartered in Miami, Florida, acquired the assets of Bijoux Terner, LLC, and its portfolio of fashion brands ranging from the flagship Bijoux Terner brand to AdiXion, Cool Travel, and Byou. Robyn Mohr, current President of Bijoux Nouveau who took the lead just six months later in December 2013, says, “We recognized the strength of the Bijoux Terner brand’s positioning and its single price point business model, making it a premier affordable fashion accessory brand in travel retail.” One of Mohr’s first orders of business as the company’s new president was to bring in Director of Sales Lisa Burgoyne

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in May 2014, who has over 26 years of wholesale brand management experience. Combined with Mohr’s 27 years of fashion wholesale and retail experience, the leadership duo brings unprecedented experience and vitality to the company. Together, Mohr and Burgoyne got to work building a new team and business model. The new management team of product development specialists focuses on specific classifications within the company and has worked to design and develop products that are unique to Bijoux Nouveau. The team quickly worked to evaluate all the things that made the Bijoux Terner brand such a success and to devise ways to do them even better. The new business model since the acquisition has been all about quality and relationships. Says Mohr, “Since the acquisition, the focus has been on improving the quality and styling of the

product in order to offer a compelling value to our customers. Additionally, we are focused on forging strong positive relationships with our wholesale partners. Ensuring the success of our partners is essential to our success.” Living up to the “nouveau” in its new company name, the management team has found ways to build upon successes while also identifying plenty of room for new growth in the form of new products, new wholesale partnerships and customers, and even a new distribution facility. “In terms of new products,” says Mohr, “Bijoux Nouveau designs its own unique styles that are manufactured in our factories and distinguish BNI from its competitors.” The Bijoux Terner line includes bags, textiles, watches, jewelry, hats, sunglasses, and more while new

FASHION: BIJOUX NOUVEAU

items such as the cardishawl, kimono, and trendy hobo bags have become best sellers. The Cool Travel line was expanded to include novelty kids’ travel pillows, among other travel items. And, with AdiXion handbags successfully reintroduced at two stores in Miami International Airport, Bijou Nouveau will soon be offering these products to wholesale customers worldwide at US$38 to $68 retail. In fact, wholesale is another area that puts the “nouveau” in “Bijoux Nouveau.” The company has renewed its dedication to strengthening relationships with wholesale customers. Says Mohr, “Our partners preview new collections seasonally, providing valuable feedback and ensuring that the line meets the needs of our customers. The new sales team has focused on building partnerships with customers.” Account coordinators visit stores to provide on-site training and merchandising updates. They also provide detailed business analysis to assist in maximizing sales. As these partnerships have been either renewed or forged and fostered, increased collaboration and planning have driven customer fill rates consistently above the 95% mark. With such strong sales figures, Bijoux Nouveau in turn needed a strong distribution center. They now utilize a 3PL facility

for distribution in Miami, Florida. The facility uses state-of-the art technology and is a free trade zone. With close proximity to the port of Miami, Bijoux Nouveau can export worldwide. Naturally, one of its first stops en route around the globe this year is the upcoming 2016 IAADFS trade show in Orlando. Reflecting on the company’s goals for IAADFS, Mohr says, “most importantly, Bijoux Nouveau will be reintroducing the Bijoux Terner brand to the industry and sharing improvements as well as our vision for the future.” The company will dive right into its promising future by showcasing the Spring/Summer 2016 Collection which began shipping in March 2016, as well as previewing the Fall 2016 Collection with its partners. Some of the new items Bijoux Nouveau will be previewing include an exciting new collection of jewelry and a new assortment of apparel with kimonos, ponchos, and wraps. The company is also introducing a new line of bag accessories that allows retail customers to play “dressup” and customize their favorite bags. Surveying the travel retail and duty free landscape from its new vantage point, the company has identified many exciting initiatives. Says Mohr, “Within the last year, we have leveraged the success of our

The Cool Travel line was expanded to include novelty kids’ travel pillows, among other travel items

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brands and strength in product development to launch a private label program. Four new Bijoux Terner locations were opened in 2015 with additional airport, port, and local market locations planned for 2016 in the Caribbean and US.” With a sales department that focuses on duty-free and travel retail, account coordinators and customer service representatives have reached out to travel retail partners from Florida to worldwide locations. Currently, Bijoux Nouveau operates 10 company-owned stores, with six stores and two kiosks at the Miami International Airport, one kiosk at the Orlando Airport, and a freestanding store at the Palmetto Outlet in Miami. Outside of its home base of Florida, there are over 300 Bijoux Terner locations worldwide operated by licensing partners including airports, casinos, border locations, local market malls, and cruise ships. Looking ahead, Bijoux Nouveau even has fresh, new insights into its future. “Our vision is to be the leading wholesale supplier and distributor of fashion accessories in the travel retail industry,” says Mohr. “BNI is expanding and evolving the business model that has made the Bijoux Terner brand a worldwide success in order to capture new opportunities and better meet our partners’ needs.”

SUNGLASSES: ESSILOR, COSTA

Makeing a splash in travel retail Things are looking sunny for innovative optical company Costa, a performance eyewear brand that is only now targeting the travel retail channel

Costa’s Copra and Anaa models are new for 2016

or an optical lens company that is only just emerging into the spotlight for the first time at IAADFS this year, Costa is already outshining the competition and expanding into new travel retail markets. Known not only for its top-quality sunglass lenses but also for its environmental preservation initiatives and down-toearth authenticity, Costa brings a unique perspective to the world of eyewear in travel retail. Built by and for outdoor enthusiasts over 30 years ago, Costa has long been recognized as a force in anti-glare lenses that can endure an athlete’s wear and tear, yet only recently has Costa shined a light into travel retail. Jenny Gordillo, Export Manager for Costa, says that “we have been opportunistic by attending our first IAADFS exhibition this year. Our goal is to explore and identify opportunities along with key players. Attending IAADFS in 2016 will expose us to the travel channel of distribution. This will be a great opportunity for Costa to learn more about the market.” The company aims to learn more about travel retail at IAADFS, but it already has experience of the market. Last year it opened new accounts in Chile and Colombia, and soon after, in partnership 116

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with its new sales force Travel Traders, also opened accounts in the Caribbean and Puerto Rico. While Costa has been emerging in Latin American markets, the company is no stranger to success. Costa’s parent company, Essilor, ranked as one of the top innovative companies by Forbes magazine for the third year in a row since 2013. Boasting new tri-fusion frame technology and bio resin frames, as well as its classic 580 lens technology that blocks yellow light at its highest peak, Costa’s product line-up is certainly innovative. Costa’s 580 lenses work because they outperform competitors under harsh environment conditions and light settings. Good sunglasses are essential as part of outdoor gear for eye protection. The lenses filter yellow light which enhances reds, blues and greens. This produces better contrast and definition while reducing glare and eye fatigue. These features become a necessity for the angler wrestling a fresh catch or battling intense heat. In fact, the bio-based resin produces increased durability, overall sunglasses weight reduction, and the ability for the frame to hold its shape in extreme heat and cold. The same qualities that have attracted the outdoor consumer are now in hot

demand among travel retail clients. “As a business traveler, I visit many airports worldwide each year,” says Gordillo. “I have seen how sunglasses are selling more on functionality and technology. We are seeing more fashion sunglasses offering polarized designs. Frames are also evolving in technology: lighter, ergonomic and more flexible/resistant to daily wear.” If the hardy outdoorsman can sport these lenses, then the average travel retail consumer can expect no less than an enduring, top-quality pair of sunglasses from Costa. “I think consumers nowadays are well educated and prefer to make an informed decision before purchasing a premium product. They want to know the benefits, especially when it comes to performance products like sunglasses.” Looking ahead, Costa will leverage its history of technology and performance in the optical and sporting channels of distribution into travel retail. Its strategy for growth will soon encompass other markets within the travel channel like inflight shopping and cruise lines. And of course, the company has its eye on IAADFS 2016, where it plans to showcase exciting new products to continue reeling in the travel retail revenue in 2016 and beyond.

W W W. W O R L D C L A SS B R A N D S . C O M B O OT H 73 0

GUEST WRITER: MAUI JIM

David versus

Goliath

Giles Marks, Director Duty Free Sales, Maui Jim

Maui Jim, the fastest-growing global polarized sunglass brand, highlights the challenges of doing business in the hotly competitive world of travel retail by

GILES MARKS, Director Duty Free Sales, Maui Jim

ost of us are familiar with the story/phrase, David versus Goliath. Since our entry into travel retail in 2006, Maui Jim has been, and continues to be, “David”. As a mono-brand company, the challenges and hurdles to become established as the global leader in premium polarized sunglasses are significant. A single branded sunglass company from Maui, competing for space and recognition against the multi-branded optical giants – no easy task. Mono brands, from all categories, are faced with limited resources to brand themselves in one of the most competitive retail environments: airports, cruise ships, border shops, and inflight. Are we granted the same rights and concessions as the “Giant”? For the most part, simply put – we are not. That in itself is bad business, and poor, short-sighted decision making. Uniqueness is a quality all shoppers crave. Maui Jim is truly unique. We are the fastest-growing global polarized brand pitted against other brands focused on clothing, fragrances, jewelry and yes, even their own retail shops competing against the very customer they apparently support. Brand loyalty is critical to succeed – for all brands. Mono brands must fight smarter and stronger than multi-branded products. We must establish a niche, and support that niche with distinctive culture, professional people, exceptional service, and above all, success for our partners – the retailer. Maui Jim enters the next decade in travel retail

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As Maui Jim enters the next decade in travel retail, the success we have earned over the last 10 years has been built around sound fundamentals. Create brand visibility, provide exceptional service to our retailers, train and motivate sales associates, and bring uniqueness and energy to the sunglass category. Most importantly, fully understand and appreciate that the consumer who purchases our products is the number one resource we have. They have the power to drive our brand to a higher level of success and recognition. We intend to continue with this winning formula over the next 10 years and beyond. As the story goes, “Giants are not what they think they are. The same qualities that appear to give them strength are often the sources of great weakness.”

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Visit us in the Monarq Group Booth #1037 at the IAADFS show in Orlando.

SUNGLASSES: KERING EYEWEAR

Luxe vision

To exploit the Olympic Games, Puma has launched the Usain Bolt Capsule Collection, centered on staying ahead of the game and looking “beyond, forever, faster”

As hot brand Gucci prepares to return to its portfolio, Kering Eyewear has propelled itself into the travel retail arena on a mission to become the first luxury company in the eyewear category by

HIBAH NOOR

ering Eyewear, part of French luxury goods group Kering, is new to travel retail and has a clear vision for the eyewear industry. Since venturing into the channel with its eyewear collections – including hot fashion and sports lifestyle brands Saint Laurent and Puma – the company has been selecting its partners in the channel and is now building its roll-out plan, carefully selecting each location. In addition to Saint Laurent and Puma, the firm boasts nine other on-trend brands, with brand-of-the-moment Gucci being added to its portfolio in 2017 for the Spring/Summer 17 collection. With these stellar brands under its belt, what does the future look like? “Kering Eyewear’s main mission is to create an impact in the travel retail industry, transforming the way the luxury eyewear is perceived by final consumers,” says Omar Hagi, Head of Global Travel Retail and International Optical Retailers, Kering Eyewear. A big focus will be given to sports lifestyle brand Puma, ahead of the Olympic Games in Rio de Janeiro, Copa America and European League championship, leveraging the synergy with the brand. Overall, Kering Eyewear has a sixprong strategy for growth: strong brand portfolio and dedicated products; relevant distribution ; partnership with top clients in all regions; key projects; a focus on staff and final consumers in order to increase sell-out; and a well-structured team. Speaking about the strategy for Americas travel retail, Kering Eyewear’s

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goal is to help all 11 brands in their organic growth. He mentions two that are achieving “very important growth” in the market: Puma, through the launch of the Usain Bolt Capsule Collection, in order to exploit Olympic Games; and Saint Laurent, which personifies the laid-back LA attitude with its Surf Sound collection inspired by contemporary Californian music culture and rock aesthetic. The company is working on several strategic initiatives in the region. For the high-end brands, such as Bottega Veneta and Saint Laurent, it is focusing on visibility in selected locations. Several initiatives will be unveiled during the following months. For the Sport & Lifestyle division, where Puma is its pillar, a broad distribution is targeted in high-traffic locations such as Rio de Janeiro, São Paulo, Manaus, Macapá and Buenos Aires. He adds that the company offers dedicated Asian and Korean fitting for consumers traveling in the North West [US] region. To spur growth, Kering Eyewear aims to integrate one of the fastest-growing categories within accessories, helping the sunglass brands to exploit their full

potential. The eyewear collections are now designed and developed in-house, in collaboration with the creative teams, and with the same attention to craftsmanship and detail as in other product categories. “The result is that we are now presenting to the market collections that are totally aligned with the brand’s DNA and that leverage on the masterbrand icons, such as for Puma, where we have translated some strong concepts such as Suede and Ignite into the eyewear collection,” enthuses Hagi. He also cites McQ, the Alexander McQueen diffusion line, whose Spring/ Summer 16 collection takes classic shapes and distorts iconic silhouettes with metalwork, unexpected textures and bold prints that capture the rebellious spirit of the brand. Crucially, Kering Eyewear also aims to maintain selective distribution by choosing its partners carefully and offering qualitative visibility for its brands. “We are not another eyewear company, but we aim to become the first luxury company in the eyewear category,” Hagi concludes.

Saint Laurent’s California sunglass style forms part of the Saint Laurent Surf Collection, evoking a laid-back LA music vibe and rock aesthetic

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CONFECTIONERY NEWS

Sweet talk Three of travel retail’s powerhouse performers unveil their latest confectionery innovations – illustrating that the category still has much more room to grow

Mars plays on Skittles success Mars International Travel Retail (MITR) is presenting new products for both its Skittles sugar brand and Extra gum portfolio at the 2016 IAADFS fair (booth 520). The company sees enormous headroom for growth in these segments. “In domestic markets, gum and sugar confections can represent over 40% of total confectionery sales and yet in travel retail they deliver less than 10% of total sales, so the potential is enormous,” said MITR Category Director Matt Boulter. MITR aims to continue to be a leader and provide solutions to unlock the potential of this ever-growing category. New for 2016, MITR is extending its successful Skittles brand with the launch of a travel retail exclusive stand-up pouch. Launching in July, the 18 x 26g Skittles Fruits fun size bags incorporate a convenient handle for carrying on the go. This marks the first product launch in the traditional sharing/home-sweet-home sector by MITR in sugar confections, which is expected to open up new travelers (and buyers) to the category. The company’s best-selling Extra gum will now include a travel retail exclusive pack. With its enhanced size, the new pack retains the look and feel of its distinctive domestic packaging, but the exclusive eight-pack comes in a premium and easily portable box. The 8 x 10 packs are available from June 2016 in three flavors. Following its official re-launch at the TFWA World Exhibition, Galaxy chocolate is being introduced to the Americas with high ambitions for travel retail. Aiming to cement the chocolate bar’s position as a top 10 confectionery brand, four new Galaxy products have been created, with two of MITR’s category vision concepts in mind: Showing Thought and Home Sweet Home. They include Galaxy pouches; Galaxy Multi-Pack, containing six tablets; and Jewels, a mixture of flavored bonbons of Galaxy chocolate.

Ferrero Rocher T48 Destination Pack proves a hit in US Ferrero Travel Market is enjoying the success of the first travelexclusive Ferrero Rocher T48 Destination packs which have been debuted in the USA. Special activations were organized by Ferrero and travel retailer DFA in the airports of Atlanta, New York, Miami and Washington during December.

Ferrero’s first travel-exclusive Ferrero Rocher T48 Destination packs

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Hitting the shelves in July 2016, the Skittles Fruits fun size bag marks the first product launch in the traditional sharing/home-sweet-home sector by Mars International Travel Retail in sugar confections

The results prove the immense appeal of this souvenir pack of the brand’s iconic chocolate pralines, which is decorated with designs of the country’s most famous landmarks, and confirm data from a pre-launch survey where consumers gave the offer very high scores in gift-ability, modernity and appeal. The promotion in the US and the presentation of a French version with Aelia in Paris Charles de Gaulle airport in September are precursors to the global roll-out of Ferrero Rocher T48 Destination packs in key airport locations in Europe, Middle East, Asia and the Americas. Patrick Baubry, General Manager, Ferrero Travel Market added, “Our pre-launch research, conducted in partnership with CIR, clearly indicated the appeal of souvenir gifts in the confectionery category. Guided by this research, we have created a product which is modern and has strong gifting appeal. We have then taken a step further by making the powerful Ferrero Rocher brand available in an exclusive offer, which consumers have never seen before, with unique designs for specific destinations. “The Ferrero Rocher T48 Destination box is a complete innovation for the Ferrero Rocher brand and, after the first activations in the USA and France, we are delighted to see that this very special and exclusive gift has been well received by consumers. We look forward to rolling out similar destination-specific packs, as well as a generic ‘World Traveller’ pack, to other countries later this year.” Ferrero Travel Market will exhibit its portfolio, including the new Ferrero Rocher T48 Destination collection, at the IAADFS Duty Free Show of the Americas on booth 1123.

t h e

e x c e p t i o n a l

t e a

e x p e r i e n c e

teaforte.com

VISIT US: IAADFS - DUTY FREE SHOW OF THE AMERICAS - STAND NO. 831

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CONFECTIONERY NEWS

Hershey finds low conversion rates among North American Hershey World Travel Retail will share key shopper research findings on the North American confectionery buyer, alongside its category vision and strategy, at the IAADFS show (booth 1315). The research was carried out in partnership with Counter Intelligence Retail. Covering numerous topics ranging from purchasing motivations, average spend and gifting/self-purchase behavior, the key stand-out finding was that conversion rates – at 30% – are considerably lower than either South Americans (46%) or Other World buyers (43%). While 25% of North American shoppers visit the confectionery section (compared to 27% of South Americans and 28% of Other World), just 7% go on to purchase – compared to 12% of South Americans/Other World. However, of those that do buy, average spend is slightly above the rest of the world at US$26 (compared to US$25).

“These are insights that we can turn into activation to increase confection category sales,” said Hershey Company Regional Director Europe and Strategy for World Travel Retail Amy Wilson. “It’s clear from the research that good quality (at 43%) is a key purchase driver for North American shoppers, yet the percentage who buy is significantly lower than in other parts of the world.“ Wilson continued: “There’s clearly an opportunity that we are missing here, both in terms of attracting more shoppers to the confectionery sales area and then converting them into buyers. In Orlando we will be discussing with retailers our strategies on how we can partner to improve these figures through shopper engagement and retail activations, supported by the right product offer in terms of brand and gift or self-purchase/snacking mix.”

THE NORTH AMERICAN CONFECTIONERY BUYER

FINDINGS FROM THE 2014 GLOBAL SHOPPER STUDY

WHO

MALE:

58%

UNDER 35 :

51%

LEISURE:

73%

2+ TRIPS PER YEAR:

WHEN

81%

WHAT

25%

62%

85%

VISIT CONFECTIONERY vs. 27% of South Americans vs. 28% of Other World

BUY FOR A GIFT vs. 64% of South Americans 60% of Other World

BUY CHOCOLATE vs. 86% of South Americans 88% of Other World

WHY

HOW MUCH

BUY CONFECTIONERY vs. 12% of South Americans vs. 12% of Other World

43%

$26

GOOD QUALITY A KEY PURCHASE DRIVER

30%

AVERAGE SPEND ON CONFECTIONERY

vs. 34% for South Americans 41% for Other World

CONVERSION

vs. $25 for South Americans $25 for Other World

vs. 46% of South Americans vs. 43% of Other World

THE NORTH AMERICAN CONFECTIONERY BUYER FINDINGS FROM THE 2014 GLOBAL SHOPPER STUDY

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CHEN RAN 陈燃 Actress & Model Beijing, China

It fits everything and more.

I always keep this in my makeup bag.

These scents remind me of my last trip.

My shortcut to beauty sleep.

Something new I found along the way. -L ove!

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COMPANY REPORT: STOLI

Robust region The Americas has always been a strong region for Stoli®, and that is a trend the company is happy to see continuing by

WENDY MORLEY

he fact that travel retail is an important channel for Stolichnaya is no secret. The company that brought both premium and flavored vodka to the world has substantial presence each year both at the IAADFS Duty Free Show of the Americas in Orlando and the TFWA World Exhibition in Cannes, and has had some highly successful limited edition releases in the channel: two Stoli® Night Editions and also elit® by Stolichnaya’s Pristine Water series. The company has achieved 130% growth in US duty free with elit by Stolichnaya, and will be focusing on this super premium vodka and on its core range at IAADFS this year.

Perceived value As with other companies, a trend seen by Jean-Philippe Aucher, Global Duty Free & Travel Retail Director for Stoli Group, is that customers are looking for value. “Duty free customers in the Americas are looking for perceived value and savings,” he says. “This has impacted the industry. We are well positioned in this regard, by offering value-added options and channel exclusives.” The strong US dollar has brought its own challenges in this regard, but Aucher says activations, consistent pricing and enhanced brand awareness have helped to drive growth. Two markets Stoli has seen considerable success in and will be focusing on in the coming year are cruise lines and border stores. “In 2015 Stoli experienced strong growth in the cruise line channel, and see this channel as a high-growth area for 2016. “Stoli Group, through a major cruise line, will be offering passengers the ultimate luxury experience of vodka and caviar through a tailored on-board educational program. Complete with multiple caviars paired perfectly with our range of vodkas, passengers will learn about the history of this traditional pairing. This

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program will feature Stoli Premium, Stoli Citros, Stoli Gold and elit by Stolichnaya, allowing passengers to fully explore our line of products,” says Aucher. “We are also happy to be partnering with another major cruise line on a custom-made Bloody Mary program focusing on fresh, ‘farm to table’ ingredients that allows passengers to fully customize their Stoli Bloody Mary experience while interacting with the bartender making it table-side. Passengers will have a selection of Stoli Premium, Stoli Citros and Stoli Hot.”

Net positive on the border The company has seen great success with border stores, although the strong US dollar has been a bit of a double-edged sword in this regard, says Aucher, with business decreasing on one side while increasing on the other. Canadian border stores have been strong, however, with the combination of already being a strong market and the lower dollar bringing extra savings. Aucher says border stores offer a unique opportunity to deal with a specific type of customer: the international commuter, who looks for special savings and unique products. Aucher foresees continued growth both on the Canadian and Mexican borders, and says Stoli will continue to focus on the types of promotions that speak to this customer, such as gifts with purchase and multi-bottle promotions. As successful as cruise lines and border crossings are for the brand, airports remain an important part of its strategy, says Aucher. “With our continued focus on airports, Stoli will be promoting Stoli Premium through a series of North American activations with Dufry this spring. Highlighting our signature THE Lemonade cocktail, consumers will have a chance to sample and purchase Stoli Premium across the US, Canada and the Caribbean.”

At last year’s TFWA WE in Cannes, Stoli® introduced its new bottle, which stayed true to its iconic image but is now made thinner, to help make pouring easier for bartenders, and contains a cap that makes refilling more difficult, helping to ensure the customer gets the real Stoli

LIQUEUR REPORT

Keeping up

with the times by

Liqueur producers are becoming highly creative in their approaches to travel retail marketing and releases. The world of fashion – and even the selfie craze – has re-energized this category

he liqueur category is getting interesting as suppliers large and small are refreshing the sector with countless innovations amid a challenging economic environment in the Americas region. In this roundup, we take the temperature of the now-hot liqueur category.

MARY JANE PITTILLA

year’s focus will center on sampling the Disaronno Sour cocktail, which has proved increasingly popular.

Selfies with elephants Last year was challenging for Distell’s liqueur business in the Americas, particularly in Canada and Brazil, where Amarula is one of the most popular brands in arrivals stores. The company is responding by offering specials on multiple purchases, and also a one-liter package, with 33% more than the standard-size bottle at a favorable price, according to Andrea Baumgartner, the newly appointed Head of Marketing Global Travel Retail at Distell Ltd. Business is growing well in Argentina, where new consumers are being reached through taste trials and activations. Amarula is also strong in cruise ships, where consumers are seeking something exotic. Baumgartner notes that the liqueur’s unique, African origin and story engages consumers and responds well to sampling and entertaining activations. “In many regions we’ve been making an impact by setting a large handmade beaded elephant in-store, and have been overwhelmed by the response of travelers who cannot wait to get a selfie with our elephant.” Baumgartner continues: “At the same time we offer gift-withpurchase items that underline our African roots. This is something we’re looking to do more of in the Americas in the future.” In a significant regional development, Distell recently opened an office in Miami and appointed Sylvia Sulkes as General Manager Americas Travel Retail to allow the firm to expand distribution.

Disaronno’s Roberto Cavalli designer collaboration is available in six 50ml mini bottles in coordinated looks for the season. These three-packs of minis, offered in two versions, are an ideal impulse purchase gift item or self-treat

Illva Saronno: Fashion craze Martin Howey, Global Travel Retail Director at Disaronno International B.V., is delighted at the way Illva Saronno’s liqueur business has performed in the Americas. “Sales in 2015 have been extremely good in North America, through our agent EWTRA,” he says. “Depletions have grown for Disaronno by over 40% versus last year, a remarkable performance. We are expecting solid growth for the year ahead as the core North American travelers will continue to travel. But naturally there is uncertainty when you look at the dynamics of South America and its possible impact.” Howey believes female shoppers will become increasingly important. The limited edition Disaronno series featuring the latest Roberto Cavalli animal-print edition, introduced at the 2015 TFWA World Exhibition, has proved very successful. The company will continue with this bold approach for the fourth year, the newest edition launching in October 2016. The company staged a “fantastic” Disaronno Cavalli event with International Shoppes at New York JKF Terminal 1 during November and December 2015. Travelers could taste the famous Italian liqueur, and Illva Saronno decorated an impressive wall space with its vibrant and colorful animal print. The coming 128

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At Frankfurt Airport in October 2015, an Amarula promotion made an impact thanks to a handmade, beaded elephant that sat in-store. Travelers couldn’t wait to take a selfie with the elephant

At the 2016 IAADFS show, the company is launching Licor 43 Orochata – the first innovation for the brand in 70 years. Orochata cream liqueur will be launched immediately in Latin America but not in US until early 2017

Innovations and activations This past year was exciting but challenging in the Americas, with currencies playing a big part in business performance, says Antony Kime, Director Global Duty Free, Diego Zamora. “Edrington Webb Travel Retail Americas (EWTRA) did a great job with the North America business, which includes Mexico. It was up by 10% versus 2014,” he says. “And despite the economic challenges in Latin America, we saw flat growth. Under the circumstances, this was a great result.” Mexico is delivering the strongest growth in the Americas for Licor 43 outside the US, for two main reasons. “Firstly, the phenomenal growth in the Mexican domestic business is helping our border shop business. Secondly, the activations in airports such as Mexico City have been executed exceptionally well. Consumers are showing their appreciation with 80% growth, which we never thought possible.” The activation in Mexico delivered great results. “We did a tasting of our signature drink in Mexico – the L43 Carajillo – at the Rotunda in Terminal 1.” The company is set to run a similar promotion with Dufry Mexico again in August at the Rotunda in Mexico City. The 2016 IAADFS show in Orlando will be the first viewing of Licor 43 Orochata – the first innovation for the brand in 70 years. Its taste and packaging is inspired by the traditional Horchata recipes of Valencia and seeks to bring passion to the cream liqueur category. Crafted from vegetal ingredients and infused with Licor 43, it has a soft and spicy taste. The initial rollout plan for 2016 will be to launch throughout the Americas excluding the US and Puerto Rico, where it will be added in 2017.

Marie Brizard shakes things up

Liqueur, dating back to 1763. This depth is boosting liqueur sales in the US, asserts Baker. He says consumers are seeking handcrafted products. “We find new flavored spirits in the stores every day, which makes the market very competitive. We see the next trend as moving towards flavours with organic or health properties.” Marie Brizard will be revamping and relaunching its liqueurs this year to ensure it remains in tune with market demands. Subject to Alcohol and Tobacco Tax and Trade Bureau approval in the US, a new product, Shotka, will be launched. “Bold and daring,” Shotka is a premium hemp liqueur without narcotic effects and with an unexpected taste. Introduced in Spain during Summer 2015 in a strategic partnership with nightlife specialist Matinée Group, Shotka is the focus of a targeted activation program that will run until the end of 2016.“Travel retail buyers are always on the lookout for something fresh and different, and while some retailers may find the idea of Shotka too daring and challenging as a brand concept, some of the more progressive buyers will embrace its potential,” says Baker.

Upselling with a glance to the past Grand Marnier showed resilience in the Americas region in 2015 despite complications from currency and consolidations. “We observed a slower trend due to the impact of devaluation, on the American-Canadian border, in Mexico and in Brazil,” says Grand Marnier’s Travel Retail and International Director Anne-Claire Delamarre. Despite these difficulties, upgrading is a clear trend. “Our growth opportunity resides in the ability to upgrade our core consumer toward our more sophisticated cuvée range,” she says. “The elegant travel retail environment is the perfect setting for promoting our finest range.” Grand Marnier is one of the few liqueurs to bring such high value to retailers, Delamarre believes. The company recently released its Cuvée Louis Alexandre exclusively to the travel retail channel in the Americas. This special cuvée was developed as a tribute to the creator of Grand Marnier, Louis-Alexandre Marnier Lapostolle, who preferred to add Cognac to his glass of Grand Marnier. Results have been better than expected, with Louis Alexandre representing 10% of the company’s total business, where listed. This launch was supported by tastings in Dufry and WDFG’s main stores in the Americas. This year the company is introducing a Louis Alexandre pack created specially for travelers, inspired from the Art Deco style in tribute to the roaring 20s.

Kevin Baker, Global Travel Retail Director, Marie Brizard Wine & Spirits, says cocktails have created renewed interest in the liqueur category. The company offers a wide portfolio of liqueurs, including the indulgent Chocolat Royal, and is proud of its iconic Marie Brizard Anisette Fine Subject to US Alcohol and Tobacco Tax and Trade Bureau approval, a new product, Shotka, will be positioned as a hemp liqueur, allowing Marie Brizard to create a unique niche in the market, away from the hugely competitive vodka category

World Duty Free Group held a successful tasting for the new Grand Marnier Cuvée Louis Alexandre liqueur at Los Cabos Airport in January 2016

COMPANY REPORT: BACCHUS

Flying start

Beluga vodka has been very active in the region; the company sponsored the Americas Cup kickoff luncheon in Bermuda

Bacchus started quietly on the travel retail scene, but in a short time has gone from new kid on the block to someone well respected on the proverbial playground by

WENDY MORLEY

acchus, headquartered in Fort Lauderdale, near Miami, has seen an explosive first two years. The company, which came into existence just in time for IAADFS Duty Free Show of the Americas in 2014, started life with some substantial premium brands, and the portfolio has grown in a very positive manner since then. Along with the growing portfolio, Bacchus’ success in the Caribbean and Latin America has also grown. “We added new brands in 2015 which complemented our portfolio and boosted turnover. At this year’s IAADFS, we will be featuring these new brands including offerings in the growing gin category,” says Tom Browne, Bacchus’ founder and owner. While the Americas region has had a tough year for the industry in 2015, the same cannot be said for the Caribbean, Bacchus’ busiest region. “Tourism increased some 7% in the region last

Bacchus has added a gin to its portfolio; Caorunn is a small batch gin made from foraged botanicals in the Scottish Highlands

year and that trend should continue this season,” Browne notes, before adding something that seems to be a real trend across the board: customers want to feel they are getting a bargain. “Consumers are looking for more and better deals when they travel, which keeps pressure on pricing and volume.”

Big year for Beluga Beluga Vodka has been a real star in the Bacchus portfolio, shining not just in the strong Caribbean market but also in LATAM. “We are launching Beluga Vodkas in Peru this month with sales and trade presentations as well as special packaging for the upcoming Easter season and Father’s Day in June; we will also be doing more bar staff training and tastings in key On and Off trade outlets and brand features in trade catalogs.” Beluga Noble Vodkas sponsored the cocktail during the 2017 Americas Cup kickoff luncheon in Bermuda last October, welcoming international dignitaries, business people and the Americas Cup Leadership Team. “As this Americas Cup trial was a two-week-long event in Bermuda, we worked closely with our distributor to maximize brand exposure in key Horeca and retail outlets. This resulted in a 22% sales increase during the Americas Cup trials in October.”

Beluga Vodkas have travel retail packaging uniquely designed to feature each expression: Transatlantic Racing in the shape of a yacht, Allure with the saddle leather and gold buckles, honoring Beluga’s sponsorship of polo around the world and the Gold Line, with the hammer and brush to remove the wax seal for the traditional Russian service.

New and notable Tequila Rose Strawberry Cream Liqueur has been performing very well in many markets, according to Browne. “We have been pushing tastings and have found that Tequila Rose’s natural cream and fresh strawberry flavor with a touch of tequila is not only very appealing to female travelers but also locals. We will be introducing the new glass bottles and labels in Orlando.” Bacchus is now entering the gin category with the second-leading super premium brand in the UK. Caorunn is a small batch gin made from foraged botanicals in the Scottish Highlands. “It is a modern London Dry Gin with uniquely aromatic taste,” says Browne. “Also from Scotland, we will be introducing the Glenfarclas 105 and Aged Single Malts from Speyside, appearing in their classically elegant tins in Orlando this year.”

IRISH WHISKEY

Old is new Despite a history that stretches back hundreds of years, Irish whiskey is as exciting as ever in travel retail, with new launches and new players getting involved by

Bushmills Sherry Cask Reserve is exclusively matured in first-fill Oloroso sherry butts to deliver additional spiced honey, dark chocolate and rich dried fruit flavors

espite a long history that started back in the 12th century, Irish whiskey makers are still finding ways to keep the spirit fresh, especially in travel retail. The latest news for IAADFS 2016 includes new variants from Bushmills and Jameson, and an exciting new purchase for Brown-Forman—the Slane Irish Whiskey Distillery.

Full steam ahead Bushmills Irish Whiskey recently announced its first new range of limited edition Irish whiskeys available exclu132

AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2016

RYAN WHITE

sively to shoppers in select travel retail outlets – The Steamship Collection. The first release in the collection, Sherry Cask Reserve, combines the centuriesold fine Irish whiskey making craft with intercontinental flavors to mark the 125th anniversary of the maiden voyage of SS Bushmills. The limited edition collection is inspired by the extraordinary voyages of the SS Bushmills steamship to new corners of the world and introduces a range of special cask matured Bushmills Irish Whiskeys. In 1890 the ship, commissioned by then owners The Boyd Brothers, set course for America, travelling as far as Philadelphia and Yokohama, before eventually returning refilled with casks of rum, fortified wine and bourbon – the gateway to new flavor possibilities. David Phelan, Director of brandowner Jose Cuervo Global Travel Retail, said: “The launch marks an exciting phase for Bushmills and demonstrates Jose Cuervo’s commitment to unlocking the potential of this legendary whiskey in the high profile travel retail channel. The Steamship Collection is available now in Belfast, Dublin and London Heathrow, and while it can’t be purchased elsewhere, we hope distribution will extend across the world, just like the voyages of SS Bushmills to the USA, Asia and beyond.” Sherry Cask Reserve is exclusively matured in first-fill Oloroso sherry butts to deliver additional spiced honey, dark chocolate and rich dried fruit flavors. The bottle is presented in a distinctive maritime-designed packaging featuring a replica illustration of the famous Bushmills steamship. Speaking about Bushmills’ tradition for innovation Colum Egan, Master Distiller at The Old Bushmills Distillery, said: “For centuries distillers have experimented with different barrels so naturally I was inspired by the adventures of the ship and the opportunities it opened to experiment with various casks

from around the world. So, together with Master Blender Helen Mulholland, we created a whiskey with a rich, complex flavor and a smooth finish – a characteristic synonymous with our range of triple distilled whiskeys.” A limited number of bottles of Sherry Cask Reserve are available now exclusively to travellers in Belfast City, Dublin and Heathrow T5 priced at €80 (£65 or US$89) for 1 litre. It is the first release in the collection, which will soon comprise three permanent expressions plus regular special releases.

Taking it apart Late last year, Jameson unveiled plans for its first-ever global travel retail exclusive range of super-premium whiskeys. Creating an exciting journey of discovery, the Jameson Deconstructed Series is an exceptional new range that deconstructs key notes from the world-renowned

In the Deconstructed Series, the Jameson Original components have been deconstructed and reconstructed, allowing individual taste characteristics to be amplified in their own distinctive blend

Jameson Original and uses them as the base for three new whiskeys: Bold, Lively and Round. Anna Malmhake, CEO of Irish Distillers, says: “We are incredibly excited to have created our first ever Jameson range that will be exclusive to global travel retail. We wanted to give consumers around the world the opportunity to journey into the beautiful and multifaceted world of our whiskey, wherever they might be. The Deconstructed Series has everything that our consumers know and love about Jameson. The series invites our consumers to experience Jameson in a new way, exploring our defining characteristics.” In the Deconstructed Series, the Jameson Original components have been deconstructed and reconstructed, allowing individual taste characteristics to be amplified in their own distinctive blend. The series includes three brand new, unique whiskey styles: Bold, influenced by pot still whiskey, is an intense and robust whiskey, with a strong hit of spices; Lively, influenced by grain whiskey, offers an elegant and floral taste combined with a citrus lightness; and Round, influenced by the wood contribution, is a balance of rich and plump charred tones. Brian Nation, Jameson Master Distiller, comments: “It’s fascinating to be able to deconstruct Jameson Original and create three entirely new whiskeys. Each of the new expressions in the series has its own individual characteristics that are amplified in a unique way. By doing this, we get

to unveil three innovative taste experiences.” The new Jameson Deconstructed Series will be available from 2016 exclusive to Global Travel Retail at a recommended retail price of €36 (US$40).

An exciting first step In mid-2015, Brown-Forman purchased the Slane Irish Whiskey Distillery. Late last year, the company held the official groundbreaking ceremony for the distillery. In addition to marking BrownForman’s first step into the world of Irish whiskey, Slane Distillery is also the first distillery built by the company outside of the United States. The US Ambassador to Ireland, Kevin O’Malley, joined representatives from Brown-Forman and Slane Castle for the distillery’s official construction kick-off. Slane Distillery, which will also include a visitor experience, is planned to open late this year. The new distillery will create nearly 25 new full-time jobs while the construction process will support approximately 80 jobs. The distillery is being built in the grounds of Slane Castle, which is located in the middle of a 1,500acre estate in the heart of Ireland’s Boyne Valley, 30 miles north of Dublin. Slane Castle is the home of Henry Conyngham, the eighth Marquess Conyngham, and his son, Alex Conyngham, the Earl of Mount Charles, whose family has been part of the Slane community for generations. “Brown-Forman brands are founded on heritage, quality and authenticity, and there is nowhere as real as this beautiful

and historic part of Ireland,” said Lawson Whiting, Brown-Forman Executive Vice President and Chief Brands & Strategy Officer. “We will leverage our wood and whiskey making prowess to create worldclass whiskey at Slane Distillery.” Ambassador O’Malley signed the first cask that will be filled with whiskey from the distillery. He was joined by Whiting as well as Brooke Brown Barzun, fifth generation family shareholder of BrownForman, and Henry and Alex Conyngham of Slane. The distillery and visitor center, which is in the historic stables complex adjacent to Slane Castle, will involve the 18th century buildings being restored and converted to house both the production operations and the consumer experience. The first Slane Irish whiskeys will be launched to market in early 2017, initially using high quality whiskey purchased from other Irish distilleries and finished to Slane’s exacting recipes and specifications while the first whiskey from the distillery is laid down to mature. Upon completion it will have a potential output of more than 600,000 cases. “This is a great coming together of two historic families – the Browns of Kentucky and the Conynghams of Slane. We are very proud to join forces to bring exciting new Irish whiskeys to the world. The commencement of work on the distillery is just a first step in developing a new Irish whiskey brand and welcoming guests to the new distillery,” said Henry Conyngham.

US Ambassador to Ireland Kevin O’Malley, along with members of the Conyngham family and executives from Brown-Forman signed the first cask that will be filled with whiskey from the Slane Distillery

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SCOTCH WHISKY REPORT

A category in

COMMAND by

MARY JANE PITTILLA

Following its success in Asia, the Royal Brackla Highland single malt Scotch whisky will launch in the Americas on April 1, 2016 and this will complete the range of age statements in the whisky portfolio offered at airports, on cruise ships and at Canadian border stores. “Over the past year, border stores including Blue Water and Peace Bridge have benefited from the strength of the US dollar versus Canadian dollar,” notes Biggs, who says the company has also been successful with Starboard Cruise Services on several luxury ships with a shared approach to category management. Promotions are key, as the company has seen in Asia Pacific and Europe with its retail concept, the John Dewar & Sons Fine Whisky Emporium. This concept is now being introduced across the Americas, including the airports of Sao Paulo, Mexico City, New York JFK, Chicago and Toronto.

Wm Grant stays the course

After a successful rollout in Asia, Royal Brackla is launching in the Americas

he Americas is a key region for many Scotch whisky suppliers. Despite being buffeted by currency headwinds and economic unease in some countries, bright spots are appearing. Bacardi Global Travel Retail has been successful with Starboard Cruise Services on several luxury ships, with a shared approach to category management. Wm Grant & Sons is also intending to grow in the sector. Marketing activity is strong, especially at airports. Edrington staged two successful promotions with The Macallan last year, in Mexico City and Los Angeles.

stage of luxury, as they are influenced by age statements. This consumer group is also motivated by the discovery of niche brands, especially those offering heritage and provenance. “We see this as a trend that will continue to grow as more millennials travel internationally,” says Geoff Biggs, Regional Director Americas, Bacardi Global Travel Retail.

The single malt Scotch category remains “hot,” says WGS Regional Director Stephen Corrigan. The Americas is a key region for Wm Grant & Sons (WGS)’s global travel retail strategy, he says. Here, the emphasis is on the single malt category. In addition to airports, WGS also seeks to grow in the cruise line industry. The strong US dollar and other regional currency woes are major issues, says Corrigan. In Brazil, the biggest concern is how the strengthening US dollar has affected local duty paid goods versus duty free. He has noted a trend emerging in global travel retail away from driving

Bacardi brings its age statement whiskies to Americas Scotch whisky continues to be a strong category for Bacardi Global Travel Retail in the Americas, driven by the wide range of age-statement options in its single malts and in the Dewar’s blended Scotch range, led by Dewar’s 15. The company says this is especially pertinent for engaging with consumers at the second

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The 2016 IAADFS Duty Free Show of the Americas will see Wm Grant & Sons exhibiting the new Grant’s Elementary range, which consists of the C Carbon 6 blended Scotch whisky and the O Oxygen 8 travel-exclusive blended grain Scotch whisky

Grand Macnish 6 Cask Edition is the first blended malt Scotch whisky to include six carefully selected single malts, one from each of Scotland’s whisky-producing regions, providing a taste of “Scotland in a bottle”

value (POS/PWP promotions) versus volume (price support) – though this is not a policy that WGS is pursuing. This could be being driven by the current challenging global economic conditions, Corrigan adds, especially in emerging markets such as Latin America. “Over the years our move to introduce a number of travel retail exclusive brands has worked in our favour, helping us to counter this current negative trend,” says Corrigan. Despite the challenges, new product development remains unabated. The 2016 IAADFS show will see WGS focusing on the Grant’s Elementary and House of Hazelwood blended Scotch whiskies.

The Macallan grows in double digits Despite trading difficulties experienced in the Americas during 2015 led by Brazil and local currency devaluations in major markets, The Macallan’s business in the region has grown at a double-digit rate, outperforming the category, according to Juan Gentile, Vice President, Regional Director Latin America & Travel Retail,

The new Macallan Rare Cask Black made its successful debut in Mexico City with a monthlong activation at the Rotunda in Terminal 1. The whisky has a distinctive smoky flavor

Edrington Americas. During 2015, The Macallan became the number one brand by value in single malt in the US and the number two brand by value in travel retail Americas, growing especially well in North America, including the US, Mexico and the Caribbean – Puerto Rico and the Dominican Republic in particular. Regarding the outlook for 2016, Gentile is sanguine. “In South America we expect tough trading conditions driven by lower oil prices, high inflation rates and local currency devaluations against the US dollar affecting consumer confidence. However, in North America we expect to have a similar year with steady growth and a growing consumer confidence. Central America and the Caribbean will outperform Latin America as a result of proximity and improved trading with the US.” Edrington recently launched The Macallan Rare Black, exclusive to travel retail. Gentile describes the product as a Macallan with a surprising yet subtle, distinctive smoky flavor. The company staged two successful promotional initiatives with The Macallan last year. In December 2015, Rare Cask Black made its debut in Mexico City with a month-long activation at the Rotunda in Terminal 1. The brand also featured The Macallan Masters of Photography edition by Mario Testino at Los Angeles Tom Bradley International Terminal in September 2015.

MacDuff’s Grand Macnish 6 Cask blends all of Scotland into one 2015 was a year to celebrate for MacDuff International. Grand Macnish sold 30,000 cases last year and two new releases were launched: Grand Macnish 6 Cask Edition and Black Edition. At WSWA 2015 Grand Macnish Black Edition won Double Gold–Best in Show at its official US launch. It has since won three medals in its first year of launch in the US. “We have now won nearly 20 major medals/awards in the past few years with our range, so Grand Macnish continues to be very well received with the public and the press,” says MacDuff International’s Export Sales Manager Alan Burns. “We expect to see an increase in

our sales as our importer MS Walker has expanded our distribution into the key states of Texas, California, Illinois and Florida. MS Walker currently has its own wholesale operations in Massachusetts, Rhode Island and recently established a new operation in New York, which we expect to see further growth. Overall a very exciting time for the Grand Macnish range in the US.” Grand Macnish 6 Cask Edition is the first blended malt Scotch whisky to include six carefully selected single malts, one from each of Scotland’s whisky-producing regions. “By masterfully blending the finest single malts from the prestigious regions of Highland, Speyside, Islay, Campbeltown, Lowland and islands, this innovative hybrid blend truly provides a taste of ‘Scotland in a bottle,’” enthuses Burns. The distinctive whisky retains the taste, aromas and complexity of its component parts, resulting in a well-balanced spirit, with a complex but smooth character.

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COMPANY NEWS: BROWN-FORMAN

On the world stage by

Woodford Reserve and Woodford Reserve Double Oaked are still gaining distribution and Brown-Forman believes the variants have tremendous potential to be leaders in the super premium bourbon category

RYAN WHITE

Marshall Farrer, MD Global Travel Retail, Brown-Forman tells us that with a legendary lineup of American whiskies, the supplier is ready to conquer the Americas and beyond Americas Duty Free: How were sales in the Americas in 2015 versus 2014? Marshall Farrer, Managing Director Global Travel Retail, BrownForman: As you know, the most recent year has proven quite challenging in general for the travel retail industry in the Americas, primarily driven by the effects of an extremely strong sustained US Dollar. Latin American economies have been adversely affected with depreciated currencies, thus stripping the consumer purchasing power. The Euro’s depreciation against the dollar hasn’t significantly affected passenger levels, but spend in the Americas appears down as they seek similar value in European domestic economies.

“During any challenging business environment, the right portfolio is key, so we are very pleased with the rising popularity of American Whiskies and the fact that we have the right portfolio to lead the category.” MARSHALL FARRER, MANAGING DIRECTOR GLOBAL TRAVEL RETAIL, BROWN-FORMAN

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ADF: A few economies have been ravaged—Brazil, Venezuela, Argentina, for example. Has this had a big negative effect on your business? Has the improving economy in the US helped balance this out? MF: Brazil is the primary South American economy for us and it has been challenging in travel retail. While we believe Jack Daniel’s has outperformed the market—in some cases significantly due to the demand for American Whiskey—the environment remains challenging. The Jack Daniel’s trade market is very vibrant and healthy in Brazil and we believe has much growth to carve out in the years ahead, so 2015 is merely a bump in a long road. Argentina is actually showing some

growth, while Venezuela is not a market we are investing in currently. We also know that Jack Daniel’s and Woodford Reserve have the authenticity and craftsmanship credentials that are required to weather this current storm, so we remain confident in our outlook. ADF: What do you think the trend will be in the coming year/years? Why? MF: We believe the Americas will follow the general trends we predict for the rest of the world. Authenticity and premiumization are driving more interest in imported spirits and attracting more spend from consumers. American Whiskey will continue to be amongst the best performing categories and we are especially excited about the potential for Jack Daniel’s at numerous price points, as well as Woodford Reserve Bourbon. ADF: Do you have any new products? New packaging? MF: We are not releasing any new products or packaging at this moment but have some on the horizon. The past year has seen us make some meaningful investments behind Jack Daniel’s by introducing Sinatra Century, Jack Daniel’s Fire, Jack Daniel’s 100 Proof (a travel retail exclusive) and expanding our successful Jack Daniel’s Twin Packs. Woodford Reserve and Woodford Reserve Double Oaked are still gaining distribution and have tremendous potential for us as the leaders in the super premium bourbon category. ADF: Have you had any recent big promotions/activations in the Americas? Is anything coming up? MF: We recently launched Jack Daniel’s Sinatra Century, an ultra-premium whiskey created by Master Distiller Jeff Arnett as a tribute to Frank’s 100th birthday. We had high-profile promotions globally in all the key international airports. We also collaborated with our partner, Delta Airlines and Delta Sky Clubs, to give consumers a 360 branded experience for the launch of this very premium brand. This coming year we will celebrate the 150th Anniversary of the Jack Daniel’s Distillery with multi-dimensional promotions across the globe including in all the key US airports.

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Please Chill Responsibly

PATRÓN SPIRITS INTERNATIONAL

Answering the call by

To meet the continued strong demand for its products in travel retail, Patrón has decided that now is the time to transition all of its core tequilas and liqueurs into 1L bottles exclusively in duty free; pictured is Patrón Silver

RYAN WHITE

Strong demand for Patrón’s products in Americas duty free results in a number of new offerings that are sure to excite traveling consumers

ith the US economy improving and air travel to and from the country posting respectable gains last year versus 2014, duty free brands in the Americas are reaping the rewards. Stephane Gonzalez, Duty Free Director for the Americas at Patrón Spirits International, tells us that the company posted nearly double-digit duty free sales growth for the Americas region as a whole in 2015. And what’s more, despite challenging economic conditions in a number of Latin American countries, Patrón performed well in the major market of Brazil last year. “The improving US economy has certainly helped us in the region, especially among US travelers to the Caribbean, and people purchasing at US airports,” Gonzalez explains. To meet the continued strong demand for its products in travel retail, Patrón has decided that now is the time to transi-

Patrón Extra Añejo 5 Años is a limited production duty free exclusive aged tequila

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tion all of its core tequilas and liqueurs into 1L bottles exclusively in duty free. The change applies to all three Patrón tequilas (Patrón Silver, Patrón Reposado and Patrón Añejo), and all three Patrón XO Cafe liqueurs (Patrón XO Cafe, Patrón XO Cafe Dark Cocoa and Patrón XO Cafe Incendio.) The Patrón Citrónge line of liqueurs will continue to be available in 1-liter size bottles. The company is also currently rolling out a limited production duty free exclusive aged tequila called Patrón Extra Añejo 5 Años. This remarkable product starts with the finest 100% Weber Blue Agave from the harvest, which is then baked in brick ovens for about three days. The agave is then crushed, fermented and distilled using the time-honored “tahona” process, together with the more modern roller mill method. But it was in the aging room at the Hacienda Patrón distillery in Mexico where this very special spirit began to truly distinguish itself. The tequila was placed in hybrid new American/limousin oak medium toasted barrels and used whiskey barrels, for a remarkable five years. The result is a tequila notably light in color for its aging, yet exhibiting intense aroma and complex flavors that can only come from a process so exacting and a product so rare. Fewer than 500 cases of this exceptional limited-production spirit were produced, and will only be available in global travel retail, on shelf starting in early 2016. In addition to these developments, Gonzalez says that Roca Patrón, a recently released line of three tequilas, is doing well

in duty free. “The range has proven to be complementary to our core line of tequilas, not taking consumers from it,” he notes. Crafted from only the highest-quality 100% Weber Blue Agave, each tequila in the new Roca Patrón family – Roca Patrón Silver, Roca Patrón Reposado and Roca Patrón Añejo – is traditionally handcrafted at a specific proof, higher than the core line of Patrón tequilas, to create the perfect balance of flavors. Roca Patrón is the product of a painstakingly meticulous – and today rarely practiced – process that starts with a tahona, a giant two – ton stone wheel hand-carved from volcanic rock (roca), that slowly crushes the cooked agave to break the bonds of fiber and release the rich agave juice. From here, both the juice and the agave fiber are placed together into wooden fermentation vats for about 72 hours, and then distilled in small-capacity, handmade copper pot stills. Because of its intensive nature, it is believed that only a handful of the more than 150 working tequila distilleries in Mexico still utilize the tahona process. Needless to say, the future is looking bright for Patrón – and fans of tequila – in Americas duty free. “Global air travel will only continue to increase, especially if fuel costs remain low, and airlines continue to offer generous airfare deals,” concluded Gonzalez. “We also foresee the market continuing to grow for tequila, especially high-end brands, and new and innovative products.”

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COMPANY REPORT: DIAGEO Diageo has noticed two trends that are satisfied by the recent Singleton Glendullan Range launch: the trend toward single malts and the trend toward a younger travel demographic, looking for quality at a lower price point

Joyful journey Diageo’s recipe for success: now with added joy

orth America has been an important market practically since international markets began, but only recently has a growing population with disposable income in Latin America made this region especially attractive to business. “The Americas is a vital region for our travel retail business,” says Matthieu Comard, Regional Director, GT Americas, Diageo “It benefits from both developed markets in North America and a strong emerging class in Central and South America. We have worked in partnership with our customers to offer shoppers an enticing product mix and ongoing innovation, meeting travelers’ expectations for unique experiences on their journey.”

Learning through listening After a few years of extraordinary growth in the southern hemisphere, the inevitable slowdown came last year. But Comard says overall category growth remains strong. “In the Americas, the business environment in 2015 was certainly more challenging than 2014, but by listening to Air4Cast 2015

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our customers and consumers, applying insights gleaned from those conversations and through tactical business decisions we have managed the headwinds. For example, we know that passenger demographics are changing. Today’s audience is younger and travel more, impacting sales at higher price segments. Therefore we need to continue to offer accessible quality products at lower price points, such as The Singleton of Glendullan™ range, which we launched earlier this year.” Comard says the company is pleased with how the region is performing as a whole. “Although our research shows that global passenger figures will double from 1 to 2 billion by 20301, we are currently witnessing reduced spend per passenger. However, the United States has continued to show strong signs of recovery over the last 12 months, with an annualised GDP growth rate of 3.7% at the midway point of 20152.”

Constant innovation Promotions, activations and innovations are all paramount in this category, and

Diageo is keeping busy in all three areas. “Engaging activations are a key focus for the channel,” says Comard. “A highlight for the Americas in 2015 was the launch of CÎROC® Pineapple last summer. To support the seasonal launch we rolled out striking and engaging activations, in close partnership with our customers such as World Duty Free Group.” The company will focus on Johnnie Walker House™ at IAADFS, and will also shine a spotlight on its range of single malts: “We have grown ahead of the category in Malts,” says Comard, “and this presents a huge opportunity for us in the channel.” More innovations are on their way. “We realize innovation is one of the key elements that brings excitement and growth to the category; we have a few interesting releases in the pipeline for the region. Including news on a brand new travel retail exclusive from a popular liqueur brand!” Diageo’s coming year will be filled with joy. “Our focus is to bring joy back to the journey by creating impeccable retail experiences and ease of shop for consumers, making the purchasing decision a simple and joyful one,” says Comard. “We are the market leaders in category management and committed to working hand in hand with our customers, using consumer insights and innovation to drive increased growth by offering a strong, well-balanced portfolio.”

A highlight for Diageo this past year in the Americas was the launch of CÎROC® Pineapple

COMPANY REPORT: MONARQ

Eternal growth

MONARQ’s Founder and CEO Robert de Monchy sees trends including increased sales in craft spirits and national specialties

Any business is expected to have a growth pattern that ebbs and flows, but MONARQ’s seems to go continually up by

WENDY MORLEY

o paraphrase Benjamin Franklin, each year the travel retail industry seems able to count on two things: taxes and MONARQ’s sales growth. Last year was no exception. “2015 has been another year of double-digit top line growth, mostly coming from the Caribbean region plus USA Duty Free,” says founder and CEO Robert De Monchy. “This year also has started well for the Caribbean and Central American region, while parts of South America are under pressure due to the Brazilian crisis.” Despite much of South America being in that crisis, MONARQ has seen modest growth in the region in 2015. “The most heavily impacted countries are Brazil and its neighboring markets, especially Uruguay, Paraguay and Bolivia,” says De Monchy. “Argentina travel retail did very well in 2015 but is expected to suffer this year because of the Brazilian currency crisis. On the other hand, Chile, Peru and Central America continue to do well. Colombia and Mexico are facing some challenges due to the devaluation of their currency but should rebound relatively quickly since the remaining socio-economic indicators look positive.” While the company is very well established in the Caribbean and therefore might not expect such strong growth to continue, MONARQ still managed to increase close to 30% in 2015 in the region.

Promotions and packaging This type of success comes only with effort, and De Monchy’s team is putting forth plenty of that. “We have three new Heineken travel retail/duty free-exclusive promotions lined up for 2016,” he says. “We will be launching a travel retail exclusive pack for Jefferson’s extremely small batch bourbon called Jefferson’s Declaration. We will also be offering a new travel retail-exclusive 4 x 5cl pack for Crystal Head Vodka.” Additionally, at IAADFS the company will introduce the 1-liter bottles for Opihr Oriental Spiced Gin and Bloom London Dry Gin.

Still growing This year at IAADFS, MONARQ will present a number of new premium and super premium brands that have been

added to their portfolio, most notably Tamdhu Speyside Single Malt Whisky, Tomatin Highland Single Malt Whisky, Del Maguey Mezcal, Thomas Dakin London Dry Gin, St Germain liqueur, Cognac D’Ussé, Rhum J.M and the iconic Chartreuse brand.

Spirits trends According to De Monchy, Vodka and Scotch whisky have maintained their leading position, but market share of other spirits is improving. ”We see Gin, Genever, Bourbon, Tequila, Moonshine, Irish Whiskey and Single Malt Scotch whisky growing,” he says. “Mezcal is still relatively small but also gaining in interest. I believe Rum will be the next category to – finally – take off in GTR. The wine category is also gaining in interest and shelf space.” De Monchy sees the increasing popularity of craft spirits and national spirits such as Mezcal, Pisco and Cachaça as a burgeoning trend as well.

Like MONARQ’s sales, the company’s portfolio continues to grow. New brands will be presented at IAADFS

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COGNAC REPORT

Strength in

DEPTH

Cognac houses have performed well in the buoyant US market, and are positioning themselves for a brighter future in other promising locations in the region, particularly Brazil by

MARY JANE PITTILLA

here’s a huge amount of innovation occurring in the Cognac travel retail category. The main players are all releasing new products or packaging, building on the success of previous launches. Rémy Martin is adding two products that are already bestsellers in the US and China to its travel retail range. Meanwhile, GAUTIER will unveil its new brand and packaging design at the 2016 IAADFS show, and Bache-Gabrielsen plans to introduce four new products.

Already launched in the UK, the new range’s tagline is “The Toast of Paris since 1889.” The platform celebrates the Golden Age of Paris with a stylistic design inspired by its most recognizable icon, the Eiffel Tower. In anticipation of the new Courvoisier packaging launch this year, a number of activations will take place across global travel retail in its key channels, with particular emphasis on airports and border stores. Additionally, the brand is expanding its promotional footprint from coast-to-coast and building a deeper relationship with its consumer globally.

Rémy Martin launches new “retailtainment” concept According to Sebastien Devallet, Director Travel Retail Americas at Rémy Cointreau, in 2015, Rémy Martin Cognac sales decrease on the west coast of the US. The company saw lower average spend from its most important customer, the Chinese traveler,

Courvoisier buoyed by sales uptick Courvoisier has seen a sales boost for its upscale products in the Americas, thanks to Asian travelers. “Like most Cognacs in Americas travel retail, Courvoisier has seen an uplift [in sales] that can be largely attributed to an increase in passengers traveling from Asia to North America, specifically in sales of VSOP and XO,” said Antonio Suárez, Head of Americas – Global Travel Retail, at Courvoisier brand owner Beam Suntory. Suárez notes that the US consumer, particularly the millennial, is experimenting in new categories, including Cognac. “We have seen Cognac category growth in the US domestic markets. This is something we expect to be reflected in travel retail over the coming years.” In terms of trends, US consumers are gravitating towards VSOP Cognac now more than ever, he said. The company is introducing contemporary new packaging for the three key brand expressions: Courvoisier VS, VSOP and XO. Contemporary new packaging will be introduced for the Courvoisier range in 2016, with a stylistic design inspired by Paris’s most recognizable icon, the Eiffel Tower

Rémy Martin has seen significant growth in Canada, with Asian customers and a strong exchange rate, as well as in Brazil, where the status of Cognac is increasing

due to the financial crisis affecting the country and devaluation of the yuan. Mexico also suffered from the strong devaluation of the Mexican peso. However, the brand has seen significant growth in Canada with its Asian customers due to the exchange rate, as well as growth in Brazil, where the status of Cognac is increasing. The launch of the travel retail exclusive Cellar Master range in Asia and Europe in the first quarter of 2015 helped the brand grow its awareness in the Americas. Despite some dips as noted, the US market performed well in 2015, Devallet noted. In travel retail, Rémy Martin’s customers are traveling from abroad. The Chinese are Rémy’s top customers. Americans are also a growing category as well as people in Brazil, where the brand sees increasing demand even though it remains small. The firm has been affected by the strong dollar towards the euro. In terms of promotions, Rémy Martin ran an event in January and February 2016 to celebrate the Chinese New Year. A new

“retailtainment” concept will be released this year, supported by the new media campaign, “One Life/ Live Them.” Two new products will be launched in the travel retail portfolio in 2016: 1738 and Rémy Club. Both are bestsellers in the US and China that continue to show double-digit growth year after year. Ongoing plans launching limited editions in partnership with artists, in a bid to attract new customers.

VSOP Natur & Eleganse is described as unique in the market as this Cognac gives a drier taste compared to classic Cognac and can attract Scotch drinkers, says Hervé Bache-Gabrielsen

GAUTIER outperforms the market The Cognac market in 2015 was mainly driven by the US, with strong growth of 13.5%, according to BNIC, the French Cognac bureau. Encouragingly, GAUTIER outperformed the market with a 21% sales jump, mainly thanks to a good performance in the US (up 19%) and in Canada (21%). “Providing there are no unexpected shocks to the US economy, we are very optimistic about the future of Cognac in the market. The demand for premium spirits is continuing to rise, and Cognac currently is seen as a trend-setting, fashionable drink,” said Kevin Baker, Global Travel Retail Director of Marie Brizard Wine & Spirits. Central to its travel retail development, GAUTIER Cognac will unveil its new brand and packaging design at the 2016 IAADFS show. GAUTIER’s Cognac range, which has won 15 major awards during 2015, will be on display. The company’s main focus this year will be on GAUTIER’s relaunch, which will include completely new marketing materials to support the new visual identity and packaging. “We plan to grow distribution and raise GAUTIER’s brand awareness. We are looking to invest in high-end on-trade outlets and travel retail,” said Baker.

GAUTIER XO Gold & Blue is a subtle, round and harmonious Cognac with fruity and floral aromas, and hints of toast and cinnamon. It was honored as the World’s Best Cognac at 2015 World Cognac Awards

Bache-Gabrielsen eyes opportunity in craft spirits trend Sales of Cognac to the US have been growing nicely in 2015, with a 17% increase in volume, according to Hervé BacheGabrielsen, who runs the Cognac house. “The trend for craft/ authentic spirits is a great opportunity for mid-sized Cognac houses to establish themselves in the US Cognac market, and we are doing every effort to grab this opportunity,” he said. In terms of upcoming trends, Bache-Gabrielsen cites limited-edition releases, and innovation driven by no age statements and the aging process. Turning to the change in the demographics of Cognac purchasers, he continued: “Cognac is historically an Afro-American drink, but I believe some well-marketed Cognac concepts with a dash of craft and authenticity can be very successful in the hipster community. Not forgetting the Asia-American community, who can purchase and drink a lot of XO during family events.” Bache-Gabrielsen has a hectic 2016 in store as the company plans to launch four new products with new packaging: Cognac with a special ageing process, Cognac XO in a decanter, Cognac Extra in a decanter, and Cognac sold as it used to be during the Prohibition in Norway. In terms of promotions, Bache-Gabrielsen plans to have two French brand ambassadors based in the US who will be in charge of promotions, such as in-store tastings and master classes. Looking ahead, BacheGabrielsen intends to gain long-term contracts with distributors in key states, and ignite brand awareness. www.dutyfreemagazine.ca AMERICAS DUTY FREE & TRAVEL RETAILING

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COMPANY REPORT: EWTRA

Quickly

established by

WENDY MORLEY

EWTRA, a joint venture between Edrington and World Equity Brand Builders, launched in January, 2015, has rapidly proven itself a force to be reckoned with in the Americas

EWTRA has an impressive portfolio that includes some of the best brands in single malts, liqueurs and craft spirits. A recent strong addition is the iconic brand Southern Comfort

drington WEBB Travel Retail Americas (EWTRA) has already proven a solid success in its inaugural year. At the time of the company’s launch, EWTRA CEO Andy Consuegra explained that an unwavering commitment to building strong relationships in individual markets would prove central to the company’s strategy. According to Consuegra, “Excellence at in-store activations to thorough brand training as well as truly listening to the needs of the customer” have driven the year’s success. And as far as Consuegra is concerned, it’s only going to accelerate. “We have absolutely achieved our expectations – maybe even exceeded them. We’ve focused on the importance of personal relationships with every customer, from the floor sales person right up the channel to the CEO.” The extra attention doesn’t end there. EWTRA held a record 400 training sessions last year, and also held special trips where they brought some of their customers to Scotland, to both Macallan and Highland Park.

Superior staff To achieve these kinds of goals a company needs feet on the ground. Consuegra credits his entire staff with the first year’s success. “The highlight of the first year has been our team. We have the best team ever,” he says. “The combination of people who are new to the industry to travel retail veterans, everyone from different backgrounds, speaking different languages, bringing something new to the table, but all passionate. Everyone came together so quickly.” Activations have also been extremely important. Dufry Mexico Airport Rotunda has been the location for two of EWTRA’s major activations: Licor 43, already a very strong brand in the region, and Macallan Rare Cask Black, Macallan’s exciting and unusual travel retail exclusive that was launched in Cannes. Partnering with customer International Shoppes, Disaronno was also an active brand for EWTRA this year, with beautiful wrapped walls in New York City’s JFK airport highlighting the special limited edition created by designer

Mexico City’s Rotunda was the location of two very successful activations last year, for Macallan Rare Cask Black, shown, and Licor 43. EWTRA will be making use of this space again in the coming months

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Roberto Cavalli. During this event over 4,000 travelers had the chance to sample the famous Italian liqueur. The west coast also had its share of excitement. Travelers received a trolley bag gift with a Macallan brand purchase at San Francisco International, and the company also held a Highland Park promotion at both LAX and SFO.

Success and new launches The combination of approaches by EWTRA resulted in extremely positive outcomes for the brands in the company’s portfolio. Tito’s Handmade Vodka sales doubled in the brand’s second year in the duty free channel, Licor 43 sales increased by 25% and Disaronno broke double digits. In a recent development, EWTRA partnered with the Sazerac Company to exclusively distribute and market the iconic American brand Southern Comfort as well as Tuaca. Independent, familyowned company Sazerac acquired the two brands earlier this year from BrownForman. Consuegra praised Sazerac for their confidence in entrusting the prized Southern Comfort brand to his team for duty free and cruise lines. Consuegra states that EWTRA’s goal for the year is to improve the presence of all the brands in the portfolio and provide training to support them. “We plan to be the go-to company for single malt whisky, liqueurs and craft brands,” he says, adding that the company is well on its way in this regard, with Edrington’s single malt brands, Disaronno, Tia Maria, Villa Massa, Licor 43, Molly’s Irish Cream and Southern Comfort liqueurs, and craft brands Tito’s Handmade and Highland Park.

COMPANY REPORT: RON ABUELO

Finishing

first Well-known premium rum Ron Abuelo is moving in a new and exciting direction in 2016 with its Finish Collection by

WENDY MORLEY

Strong and growing market

The brand still offers its “Dirty Mojito” kit with a muddler and mojito recipe

anamania rum Ron Abuelo’s parent company Varela Hermanos S.A. has a strong history of over 100 years. In 1908, a Spanish immigrant named Don José Varela Blanca created the first sugar mill in the Republic of Panama. Come 1936, he began distilling the sugarcane and making spirits. Since then, the family-owned company has been a leader in spirit making in the country, today producing about a million cases per year. Their rum is well known in Panama and a popular item for travelers to carry home with them.

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The premium aged rum market has been strengthening lately and is widely accepted as being the next big explosion in the global spirits market. Ricardo March, Vice President of Varela Imports, agrees. “Yes,” he concurs. “Premium rum as a category keeps growing with producers, with brands and with line extensions.” The company’s sales are growing 35% annually in the Americas, and March says Europe is seeing especially strong growth. He believes this is partly because it is growing from a smaller base, but also because Europeans are traveling more and more to the region and discovering the pleasures of premium dark rum. A continued problem for small brands like Ron Abuelo, however, is getting shelf space. “This is one of the biggest challenges, to be able to get the attention and the space in the stores,” says March. “It is one rum against many multinational companies, all fighting for the same space.”

A new finish for rum This year, Ron Abuelo is taking a bold new step in order to stand out in this competitive market by creating something never before seen in a rum: The Finish Collection, which is already being sold in duty free in Panama and is being introduced to the rest of the region at IAADFS. For many years Scotch and other

Ron Abuelo is moving in a new direction with the launch of a new collection finished in Cognac, Sherry and Port barrels

whiskies have played with different barrels as a finishing technique, maturing their product first in whisky barrels and then “finishing” the aging process in barrels previously used for sherry, for example. The idea is not completely new to rum production, but Ron Abuelo has taken it to an entirely new level by creating a trio of 15-year old Panamanian rums that are each finished in Cognac, Sherry or Port barrels. “We deliberately chose the names to reflect not just the character of the finishing wood, but also the places that inspired their creation: Napoleon for Cognac and France, Oloroso for Sherry and Spain and Tawny for Port and Portugal,” says March. “It is a proud moment for us and for Panama that we can offer the world such exquisite and nuanced products, and through them convey in our rums a bit of France, Spain and Portugal, countries with a rich history and tradition of creating fine spirits.” While the Finish Collection is a big focus for Ron Abuelo in duty free for the year, the company is not neglecting its other items. “We continue to promote our Dirty Mojito pack that consists of a muddler and our recipe to make the perfect Dirty Mojito, so everybody can get dirty at home on their own,” says March.

COMPANY REPORT: TITO’S

Out of Austin

Bert Butler “Tito” Beveridge II makes no secret of his love of dogs, and his company supports them – and other animals – through multiple means

Tito’s Handmade Vodka has beaten the odds, taking on the bigger companies and achieving shelf space by

WENDY MORLEY

nyone in the spirits industry is well aware of the Tito’s phenomenon that has taken place over the past few years. Suddenly this vodka, an upstart from Austin Texas, is everywhere. Making waves in the spirits industry is incredibly difficult as a smaller company, but Tito’s is making some whoppers. As the company’s domestic business has flourished, so its travel retail business is also beginning to do so as well. How has a small local company succeeded where so many others have have tried and fallen? John McDonnell, Managing Director International at Fifth Generation Inc, maker of Tito’s Handmade Vodka, explains that the brand appeals to a discerning younger age group. “Millennials do not want mass-produced brands. They like the bespoke. They like brands with an authentic story to tell, and we certainly have that.” He adds that the brand is also certified gluten free, which is both rare and important to a great many people in recent years. Appealing to certain people does not necessarily result in increased sales, but in Tito’s case, it has. While the company does not disclose case figures, McDonnell will speak about recent growth. “From an admittedly small base, the brand has grown 50% in 2014 and 40% in 2015, according to Shanken,” he says. The vodka has won numerous prestigious awards including a Double Gold in San Francisco, but McDonnell says word of mouth has been the real driving force. “The brand was built in the off-premise channel. We have had very limited print and out-of-home advertising, and instead we’ve grown by word of mouth and

social media. The last three years Tito’s has gained significant traction in the onpremise channel.”

Speeding ahead in global travel retail “In global travel retail we have doubled our business in 2015 versus 2014, due to many new listings,” says McDonnell. Tito’s gained its first GTR listing in January of 2014 with DFA and International Shoppes. This year the company has secured many new placements through the Dufry network. McDonnell has found Canada’s land border shops to be especially supportive, and the company has just finished its launch of Tito’s in San Juan airport, where there is a large display and samplings. Additionally, you are ever more likely to drink Tito’s in the air. “The brand is currently the exclusive vodka on United Airlines, American Airlines, Jet Blue and Virgin America’s,” says McDonnell. Tito’s recently offered its first GTRexclusive, a Tito’s Handmade Vodka burlap bag. But that’s far from being the first unique Tito’s product. The company offers branded hats, t-shirts, American Mule mugs, water bottles, socks, a yoga mat and even a dog bowl and dog toys, among other items. The dog items may seem out of place but they make complete sense, as they support the company’s “Vodka for Dog People” fund-raising initiative, which Americas Duty Free has reported on in the past: “Tito’s is very supportive of pet welfare programs,” says McDonnell.

“But also much more. We have a corporate culture of giving back in many areas. For example, we just left San Juan, PR, where we participated in a few different community service projects including cleaning up a beach, painting and helping at a pet shelter.” As for the year ahead in travel retail, “We need to continue to expand our facings,” McDonnell says. “Currently demand is outpacing our supply in many airports. Also, we need to expand our footprint across Europe and Asian airports.” To this end, the company has recently secured Amsterdam, Istanbul and Frankfurt airports with Heinemann.

Tito’s recently offered its first GTR-exclusive packaging with this burlap vodka bag

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LIQUOR NEWS

Rémy Cointreau unveils movie-inspired Rémy Martin XO limited edition

The new Rémy Martin XO Cannes 2016 limited edition is now available in key airports to celebrate the Cognac house’s long-established partnership with the Cannes Film Festival

Rémy Cointreau Global Travel Retail is showcasing the Rémy Martin XO Cannes 2016 limited edition in key airports to celebrate the 69th Cannes Film Festival. For the 13th consecutive year, Rémy Martin is an exclusive partner of the star-studded event, which will be staged in May. To celebrate the bond Rémy Martin has forged with the motion picture industry, XO has borrowed the symbolic film reel to adorn the Cognac house’s iconic carafe. The film roll has been delicately gilded for the occasion. “This special edition is a reflection of the values dear to Rémy Martin and the Cannes Film Festival, namely elegance, know-how and the French art of living,” the company said. The star-shaped carafe is presented in an exclusive case, mounted at the top of the famous steps. The carafe accentuates both the refined appearance and the intense mahogany colour, a mark of excellence of Cognac Fine Champagne. Described as opulent and refined, the limited edition Cognac has a recommended price of US$189. It offers a rich aromatic palette: touches of white blossom such as jasmine and iris, hints of candied fruits like plums, figs and oranges, and woody notes of cinnamon and freshly grated hazelnuts. Its flamboyant mahogany color is striking at first glance, while its velvety texture is revealed on the palate.

Fraternity growth spurred by new Tequila Corralejo gift box

Tequila Corralejo’s colorful new gift box has been specially designed to celebrate the 20th anniversary of the successful tequila brand

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Fraternity Spirits comes to the IAADFS fair (booth 707) with a portfolio of premium tequila products. The highlight of its range is its Tequila Corralejo, which now comes in an eye-catching gift box. Launched at TFWA World Exhibition in October 2015, the gift box has been specially designed to celebrate the 20th anniversary of the successful tequila brand. The colorful gift box features illustrations of the beautiful Hacienda Corralejo and its origins, and is supported by a promotional campaign. “We have received some very positive feedback regarding our anniversary gift box and since the last quarter of 2015 it has been listed in selected retailers, giving it an element of exclusivity. 2016 will see us focus on the expansion of its distribution into worldwide stores,” said Raffaele Berardi, CEO of Fraternity Spirits. Tequila Corralejo’s brands 99,000 Horas and Los Arango also continue to see strong growth in the Americas. “The Americas is a very important region for us, as tequila is one of its most popular spirits,” said Berardi. “We are seeing steady growth in the travel retail sector and we are determined to maintain this momentum by continuing to develop new and unique product offerings.” Fraternity will also be showcasing its Los Arango Cream and Coffee Tequila and its RIVES Pink Gin, which was launched at the Americas show in 2015. Visitors to the booth will have the opportunity to try a variety of cocktails, using combinations of Tequila Corralejo, Los Arango and RIVES gin.

LIQUOR NEWS

Danzka trips lightly into Orlando with new travel packs

This Disaronno by Roberto Cavalli limited edition bottle with its graphic animal print design has proved to be a successful launch

Illva Saronno fashions strong growth in North America

Waldemar Behn is presenting two new travel retail packs for Danzka Vodka at the IAADFS show in April, consisting of a twin-pack and a 4 x 1-liter pack. The company is featuring its award-winning brands Danzka Vodka and Dooley’s The Original Toffee Cream liqueur in Orlando (booth 223). The new Danzka Vodka Apple flavor continues its strong reception wherever it is released, with particular success in South America, Europe and Asia. The brand, known for its aluminium bottle, is continuing its global rollout throughout the year, adding new listings in key international outlets such as Sydney, Delhi, Mumbai and Muscat airports. The new twin-pack features two 1-liter bottles, which can be customized by retailers upon request. Also new is a lightweight and practical 4 x 1-liter pack that is expected to work especially well in border shops. Said Global Sales Director Torben Vedel Andersen: “Our twin pack is very flexible when it comes to outer decoration and our 4-liter briefcase-style pack is light and handy.” Meanwhile, Dooley’s liqueur has strengthened its position during the past year in Europe, Asia, and South America. The latest flavor addition is Dooley’s White Chocolate with Wild Berries. The delicate blend of finest Dutch cream, white chocolate and premium vodka is gaining fans around the world, according to company reports.

Following a successful year of sales in North America, Illva Saronno will be showcasing its Italian liqueurs Disaronno and Tia Maria at the IAADFS show through its regional distribution agent World Equity Brand Builders (WEBB). The booth will display the Disaronno by Roberto Cavalli limited edition bottle with its graphic animal print design created by the Italian fashion designer, which has already proved to be a successful launch. “Depletions have grown for Disaronno by over 40% versus 2014, so it was a remarkable performance,” said Illva Saronno International Sales Director Domenico Toni. “The limited edition series with the latest Cavalli edition has proved to be very successful.” Toni said the company was expecting “solid growth” for the year ahead as the core North American travelers would continue to travel and female drinkers becoming more important. However, the dynamics of South America created some uncertainty, he added. Illva Saronno will continue to invest in high-profile activations, such as the wall-space takeover and tasting in partnership with International Shoppes at New York JFK Terminal 1 in November and December. “This created huge interest in the Disaronno Sour cocktail, which we will continue to focus on in 2016 with sampling programmes at key domestic and travel retail outlets,” said Toni. Outside North America, Toni also reported promising results for the duty free Caribbean islands with Disaronno growing in high single-digit figures, while Tia Maria had shown very strong growth in Jamaica duty free. Visitors to WEBB in Orlando (booth 923) are invited to see the Illva Saronno range and try a Disaronno Sour cocktail. Danzka Vodka’s new twin-pack features two 1-liter bottles, which can be customized by retailers upon request

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LIQUOR NEWS

Carnival’s Kljajic wins Bacardi Legacy Bartender of the Year title Miroslav Kljajic of Carnival Cruise Line has been crowned winner of the 2016 Bacardi Legacy Cruise Competition Bartender of the Year and now goes forward to compete in the global finals of the Bacardi Legacy Global Cocktail Competition in San Francisco in April. In a closely fought battle with two other finalists, Kljajic impressed the judges with his bespoke and innovative Elixir Fizz cocktail creation, featuring Bacardi Carta Blanca rum, tawny port wine, homemade vanilla and thyme syrup, Martini prosecco, cherry bitter spray and fresh sprigs of thyme. Zachary Sulkes, Regional Manager Bacardi Travel Retail Americas, said: “Miro’s winning cocktail perfectly captures the spirit of Bacardi. His confidence and professional presentation really impressed the judges and he is clearly a fantastic example of how bartending standards in the cruise industry are fast becoming ever more professional with talent like Miro, whose total commitment to his craft, knowledge and skills are an absolute pleasure to witness in action. We were also very impressed with the marketing campaign he created to promote his cocktail in the months leading up to the final.” Kljajic, who hopes to open his own bar one day, said: “I am thrilled to have the opportunity to attend the Bacardi Legacy Global Final in April and it’s a tremendous honor to be included as part of this important professional showcase.”

The other finalists were Bailon Pasamba, of Holland America Line, and Andres Poljakov, of Tallink Group. Kljajic received US$4,000 cash prize and an all-expenses-paid trip to the Bacardi Legacy Global Cocktail Competition in San Francisco in April, where he will compete against 35 other professional bartenders for the ultimate title.

Miroslav Kljajic of Carnival Cruise Line receives a US$4,000 cash prize and a trip to the Bacardi Legacy Global Cocktail Competition in San Francisco in April

Oak by Absolut darkens travel retail doors After a limited launch in selected US cities, Absolut is introducing Oak by Absolut to travel retail locations around the world. Oak by Absolut is created through a multi-step process of combining original Absolut Vodka with barrel-rested and oak-macerated Absolut Vodka. Each step adds a new dimension of character to the product, bringing balance between the smoothness of vodka and the character of brown spirits. With Oak by Absolut, the brand has added the element of oak into the crafting process. The complex character comes from using Swedish, American and French oak in a method involving virgin barrels, oak macerations that have been toasted to a precise degree, as well as carefully selected Bourbon barrels. Through a multi-step process, the vodka is transformed, adding a fresh depth of character and richness, a smooth and subtly smoky flavor, and with notes of vanilla, caramel and toasted oak. Per Hermansson, Director of Sensory Design at Absolut, said: “I was inspired to create Oak by Absolut by the emerging trend of unique barrel-aged cocktails that brings a new versatility and flavor to even the simplest of cocktails. I wanted to see what could happen if we brought this new flavor dimension directly to the base spirit. The end result is better than we could have ever imagined.” Oak by Absolut brings a distinctive twist to classic drinks, including Oak Mule (ginger beer and a squeeze of lime), Oak Sour (lemon juice and simple syrup) and Oak Apple Pie Shot (apple juice, lemon juice and cinnamon syrup). Oak by Absolut launched in Gulf travel retail earlier this year. Europe and Americas travel retail will follow in April and Asia travel retail in August. Oak by Absolut was inspired by the emerging trend of unique barrelaged cocktails and brings a distinctive twist to classic drinks

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LIQUOR NEWS

William Grant reveals engaging plans for Orlando show Visitors to the William Grant & Sons (WGS) booth at IAADFS can view the latest product launches for 2016, as well as experience how WGS encourages travelers to sample its range. The booth will feature examples of activations for Tullamore Dew, Monkey Shoulder and Grant’s Elementary whiskies. “Key to activations – in an increasingly competitive market – is that they are relevant to the brand and rather than standalone, link to highly giftable travel retail exclusive products, that together create a compelling offer,” said WGS Regional Director Stephen

Corrigan. Supporting the introduction of 50cl versions of Tullamore Dew Cider Cask and Tullamore Dew Phoenix in gift cartons, the booth highlights three activations. First, The Pip Show is a light-hearted version of the traditional peep show concept, where consumers are invited to peek through the spy hole, where they will see the Cider Cask brand story told through a black and white film reel.The TD Phoenix activation is designed to share the spirit of optimism shown by the people of Tullamore Dew when the town was destroyed by fire in 1785. The activation encourages consumers to print out individual ribbon messages, which can be hung on a Spirit of Optimism peg wall. For Monkey Shoulder whisky, visitors are invited to discover Destination Monkey – an activation that features Monkey Drinks Trolley, which can be positioned anywhere within the retail space. WGS will also be highlighting its new House of Hazelwood collection, inspired by family doyenne Janet Sheed Roberts, which celebrates the Art Deco era. House of Hazelwood comprises three expressions: 18yo, inspired by Paris in the 1920s; a 21yo, drawing on references from Mumbai; and a 25yo, with Shanghai a central theme

Zacapa luxuriates in the spirit of Guatemala with bold new rum Ron Zacapa has announced that the latest edition to its family of rums, Zacapa Edición Negra is now available in travel retail stores worldwide. Inspired by traditional Mayan rituals, this slow-aged artisanal rum evokes Guatemalan heritage and culture. The luxury rum is produced in volcanoshadowed lowlands, and aged in the House Above the Clouds – 2,300 meters above sea level. The blend is aged in double-charred American oak casks, which creates a dark rum with a smoky intensity, while revealing woody and spicy notes in the liquid, creating a chocolate taste. Peter Fairbrother, Marketing Director of Diageo Global Travel and Middle East, said: “Delivering a bolder, new flavor inspired by the powerful, natural landscape of Guatemala, Zacapa Edición Negra is the perfect choice for the rum connoisseur, as well as those travelers looking for something very special.” Zacapa Edición Negra comes in a slender and elegant bottle, complete with the distinctive Zacapa Petate band – this time in sleek black. To complement the bottle, it is encased in a lavish ebony canister. This new bottle is designed for gifting. Deep mahogany, with an intense amber glow, the scent is caramelized fruits, plums and raisins, balanced with smooth smoky notes. The smoky tasting notes combine with chocolate and dried fruit to create a dense and well-balanced rum with a smooth and persistent finish. Zacapa Edición Negra retails at €70 for a 70cl bottle.

Inspired by traditional Mayan rituals, this slow-aged artisanal Zacapa Edición Negra rum evokes Guatemalan heritage and culture

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SPIRITS: GOSLING’S RUM

A national

treasure As the official rum of the America’s Cup yacht race in 2017, Bermuda-based Gosling’s has been repackaged with a new look – and sales are growing fast by

MARY JANE PITTILLA

The Dark ‘N Stormy cocktail is made from Gosling’s Ginger Beer and Gosling’s Black Seal Bermuda Black Rum and is promoted across the island in hotels, bars and restaurants. It is almost considered Bermuda’s national drink

osling’s may be a small Bermudian rum brand, but it is making waves in duty free as the official rum of the 35th America’s Cup yacht race in 2017. The Gosling’s liquor portfolio comprises Gosling’s Black Seal Bermuda Black Rum, the new Gosling’s Gold Seal Bermuda Gold Rum and Gosling’s Family Reserve sipping rum, together with a ready-to-drink Gosling’s Dark ‘N Stormy, based on the signature ginger beer and rum cocktail that’s almost considered Bermuda’s national drink. Malcolm Gosling, President of Gosling’s Export Ltd (GXB), has been busy repackaging the product in the run-up to the America’s Cup event, to communicate

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the high quality, aged product inside the bottle. The bottle itself has been upgraded with a better quality of glass, the label has a cleaner and more consistent look, and the logo has been made more visible. The America’s Cup logo and statement of the official partnership with the global event are now included on the enhanced cap. The brand is in good company – other sponsors include Louis Vuitton, Moët & Chandon Champagne, Bremont Watches and BMW. “We have a huge plan for the America’s Cup,” Gosling told Americas Duty Free. “There are many World Series events held internationally before the 2017 finals, the equivalent of play-offs in football. In 2015, we participated in three events, for

example in Portsmouth, England, and Bermuda in October. And in 2016, there are many events, starting with Doha in February, followed by New York in May, Chicago in June and July in Portsmouth.” During these World Series events, the brand is featured in the Event Village, in the VIP-style Club AC lounge that includes dedicated bars, and in other satellite locations. In addition, Gosling’s operates a branded roof bar on top of the huge containers that travel to each venue (Bermuda Tourism Authority is a 15% partner in the roof bar), and is available on the spectator boats. “It’s all about visibility,” enthused Gosling. “Our brand is already available to buy in the different event locations, but

Gosling’s Black Seal Bermuda Black Rum has been repackaged in the run-up to the America’s Cup event, to communicate the high quality, aged product inside the bottle. The America’s Cup logo and statement of the official partnership with the global event are included on the cap

we see our partnership with the America’s Cup as expanding our awareness and trust. Tens of thousands of people are exposed to the product at each event – New York and Chicago will be massive. We’re fortunate to be part of it. It’s part of our responsibility to bring something extra, a different feel and level of quality.” The numbers are strong for a small local supplier; Gosling’s turns over 2.4 million 75cl bottles per year, or 200,000 cases globally. The brand is growing, but

The recently launched Gosling’s Gold Seal Bermuda Gold Rum features an upscale packaging design incorporating an embossed label and other expensive treatments

due to the small size of its manufacturing operation, it can only grow at a certain speed, according to Gosling. Gosling’s Black Seal retails at around US$22.99. “We’re not a value brand; we’re a premium brand. Out of the three rum segments – value, premium and superpremium – only the premium (US$18-35) and super-premium (US$35 and above) segments are growing.” Meanwhile, Gosling’s Family Reserve retails at around US$75 and sells 4,500

six-bottle cases annually. “That’s all we have,” said Gosling. The duty free channel is “very important” to Gosling’s, and the company is focused on North America, where the brand awareness is high. The brand is handled by duty free agent Chase International and sold around 180,000 cases in 2015 across all travel retail sectors: airports, border stores and the cruise business. The brand has been particularly successful in the latter category, where the brand does extensive sampling with representatives onboard the ships and staff training. It is also available to purchase in the cruise shops. “We’ve watched the cruise business grow with their drinks lists. They’ve really embraced the Dark ‘N Stormy concept.” When the cruise lines dock in Bermuda, Gosling’s runs several sunset rum cruises, for which passengers buy tickets. Talking generally about the duty free business, he continued: “We have big relationships with all the duty free operators and we’re happy with the way it’s going. It takes time, and it depends on your activities in the domestic market; you need a domestic market following to be successful in duty free.” In product development news, after months of testing, Gosling’s has just launched Gosling’s Gold Seal Bermuda Gold Rum, a premium amber rum retailing at approximately US$25.99, slightly above Black Seal. The product was introduced in the US domestic market from February 1, 2016 in three southern states, with the rest following in March/April. It hit the duty free shelves immediately after launch. The upscale packaging design features an embossed label and other expensive treatments. “We have high expectations for Gold Seal. It’s a very unique amber rum that’s had rave reviews. Our trials show it appeals to single malt Scotch drinkers, and we think it will be very attractive to younger, discerning drinkers. We will support airport duty free operators with a sampling program.” Summing up the buoyant mood, Gosling reflected on the year ahead. “Our whole portfolio has been upgraded and rebranded for the America’s Cup – it’s so exciting.”

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COMPANY REPORT: DAVIDOFF

A natural pairing by

WENDY MORLEY

Davidoff has been discovering its natural partners around the globe, starting with art and now moving on to gourmet dining

The Davidoff White Gourmet Night at Minitas Beach in Casa de Campo was spiced up with Caribbean beats

Davidoff’s new Chefs Edition was launched at the Tour Gastronomique in Dominican Republic

hen Hans Kristian Hoejsgaard became CEO of Oettinger Davidoff in 2011, the company was destined to go in bold and exciting directions. The first step was to forge a new sponsorship agreement. The company had been a major tennis sponsor and was in the perfect position to create a new sponsorship that made sense to the brand. This resulted in a partnership with Art Basel and soon thereafter, the decison to create the Davidoff Art Initiative.

New alliance Hoejsgaard and Oettinger Davidoff have now recognized another opportunity to marry the brand with the people who love it in a unique event launched this year: its first-ever international Tour Gastronomique, a “vibrant, imaginative celebration of culinary delights accompanied by a very special gourmet cigar.” February, 2016 was an especially exciting month for the company in the Dominican Republic, as it brought the now-annual Art Weekend, the Pro Cigar festival and the launch of the Tour Gastronomique. In honor of the Tour, Davidoff created a special Chefs Edition cigar, for which the company’s master blenders partnered with some of the world’s top chefs to create a masterpiece.

The event On Friday, February 19th, guests were invited to tour the open art studios at Altos de Chavón before being treated to a flying buffet dinner of signature dishes, cocktails, wine, and freshly rolled Davidoff cigars. The backbone of its Art Initiative is to bring Caribbean artists to the world and artists from around the world to the Caribbean. Therefore it was important for Hoejsgaard that the event represent a 154

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Guests were treated to many courses of gourmet food over the weekend, created by Swiss chef Peter Knogl and Dominican chef Anthony Masas

collaboration between Europe, where the rest of the Tour will take place, and the Dominican Republic. Anthony Masas, Executive Chef of Casa de Campo, where guests stayed, cooked the feast with Peter Knogl, the renowned three-Michelin-star and 19 GaultMillau Swiss Chef from the Cheval Blanc of Grand Hotel Les Trois Rois in Basel/Switzerland. On February 20th, the Davidoff White Gourmet Night at Minitas Beach in Casa de Campo treated the 80 guests to a five-course banquet with exclusive wines, spiced up by local Caribbean beats, fine rums and freshly rolled cigars. The night was highlighted by the global launch of the Chefs Edition cigar. At the event, Hoejsgaard expressed his delight to see people connect and “fill unforgettable moments in life with the joy and pleasure of class and beauty, thanks to our premium cigar Davidoff.”

Chef Knogl was just as pleased. “When I first met with my colleagues and the Davidoff team to discuss the blend of Davidoff ’s first Chefs Edition, it was important to me that every connoisseur would have fun with the product. As a chef, my key aim is to deliver new delights and to make people happy, and that’s why I love my job and the Davidoff Chefs Edition project.” The other chefs who helped create the Chefs Edition were Renato Wüst of Bad Ragaz Grand Resort in Switzerland, TV Chef Ali Güngörmüs, of Le Canard HH Pageou, Münich in Germany, TV Chef Léa Linster of Restaurant Léa Linster in Luxembourg, Michel Trama of Relais & Chateau, Puymirol in France and Maria Marte of Club Allard, Madrid in Spain, all highly decorated. The Davidoff Tour Gastronmique will next visit Switzerland, Germany, Spain and Luxembourg.

Tomatin.com

Please enjoy responsibly.

VISIT US AT IAADFS 2016 AT THE MONARQ STAND #1037

COMPANY REPORT: J CORTES

J. Cortès was recently listed by WDFG. Here, the brand announces its presence in Curaçao

Eyes on the Prize

While some companies have stepped back from GTR recently, J. Cortès has gone in the opposite direction and is reaping huge dividends by

WENDY MORLEY

. Cortès travel retail saw a fantastic year in 2015. “We increased our locations by almost 25%, generating a growth of 30% in travel retail, though I’m still working hard to get listed with some of the big operators such as Dufry and Heinemann.” says Thomas Gryson, Export Manager & Travel Retail Coordinator for the company. “They keep a nice selection in their most important airports, but one manufacturer is missing in their beautiful range!” J. Cortès is internationally recognized as a top player in the cigar business, exporting to over 80 countries and with daily production of over two million.

“The Americas represents only 2% of our total duty free business.” Chile and Mexico were especially strong, but Gryson says he is also happy with results in Jamaica. “We had a sales ambassador in Sangster airport,” he says. “The results were good, and we will repeat later in the year.” The company prolonged the action at Sangster airport with a gift-with-purchase (GWP). J. Cortès also offered a travel retail exclusive GWP with DFS at JFK airport; travelers receive a set of headphones with the purchase of 50 cigarillos.

Huge growth in Americas

This year, J. Cortès created a bespoke display specifically for the travel retail market, underlining its commitment. “The product display, which we call the J.Cortès Multi-Brand Floor display, increases our brand visibility. It allows the cigars and cigarillos to stand out from other tobacco products. Today the interest is mainly border shops, but we are also working on projects with Aelia and WDFG to have the gondola at the airports.” This year, J. Cortès is again focusing on the Neos Selection 50 cigars and the Neos Flavor Collection, available everywhere now in flight packs. In Cannes, the company will present a new travel retail

Those two duty free giants might still be holding out, but listings with DFS and WDFG in the Americas have moved J. Cortès closer to its retailer goals, especially considering Dufry’s purchase of WDFG last year. The company has seen an extremely successful year in the Americas in 2015, with duty free sales in the region up 20% over 2014. “Thanks to several new listings with WDFG and DFS we grew substantially in the region. The brand Neos is now listed at JFK with DFS and with WDFG at, among other locations, Chile, Jamaica, Mexico,” but he says there’s still plenty of room for growth.

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New display for an important market

exclusive with premium line J.Cortès. But first, the shows in the Americas. “This year I’ll be present at the IAADFS show and also in Chile for the ASUTIL convention,” says Gryson. “We still have a lot of work to do in the region. Our goal is to get listed in several border shops in LATAM, and I’m also talking with DFA and other players. “Many cigars and cigarillo smokers are very happy to find their Neos and J.Cortès cigarillos in the airports all over the world. They have the resources to buy our cigars and cigarillos not only for their own use, but also as gifts.”

Jamaica’s Sangster airport had especially good sales with a month-long brand ambassador and GWP to carry the momentum

COMPANY REPORT: CIDF

Global flavors

CIDF believes it is the company to break through the huge e-cigarette market in travel retail

CIDF believes its high-tech, high-end vaper sticks will finally allow travel retail to get its share of this lucrative market by

WENDY MORLEY

hina International Duty Free (CIDF) is living up to the “international” part of its name in 2016. The company, which distributes and markets Chinese tobacco and liquor products, is continuing to build its global business by launching its own line of travel retail-exclusive Novi vapor sticks in a number of high-profile US airport locations this March. Novi will exhibit its signature range of vaper products at IAADFS this year for the first time. After just a few years on the market, the non-combustible tobacco segment is booming, with US$4 billion sales in the US alone, and CIDF is well poised to be a global frontrunner. Sophie McGirr, Key Account Manager, Southeast Asia, CIDF, says: “Studies expect the use of non-combustibles to take over traditional combustible cigarettes in many markets within the next 10 years and we are sure this is a trend that GTR cannot afford to ignore.”

Travel retail-based flavors The company’s “Metropolitan Series” of vapor sticks contains NYC-crafted e-liquid, and was developed specifically for the travel retail market. “The Novi Metropolitan Series is perfectly suited to the GTR market,” says McGirr.“It comes in five flavors, each one a tribute to one of the world’s greatest cities. Paris Afternoon, for example, is paired with tasting notes of lemon, cream and honey and distinctive graphics to evoke the enjoyment of a citrus crème brûlée in a busy Parisian café.” The other flavors boast of taste experiences reminiscent of Tokyo, New York, London and Shanghai.

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This series contains pharmaceuticalgrade nicotine, but the company will release a non-nicotine series later in 2016 to cater to vapers who are interested in just the flavors and for launching in markets that don’t yet allow nicotinecontaining products.

A new market “We understand that the vaper category in travel retail is still in its infancy,” says McGirr. “Temporary regulatory constraints in some markets aside, we believe that the failure of high street e-cigarette brands in GTR to date is due to a lack of resonance with the consumer’s purchasing motivations and with what makes the channel special – that it is a retail opportunity for an out-of-the-ordinary brand experience. Novi is perfectly aligned to this channel, with a travel-inspired story and sensory experience for the consumer.” She adds that as a high-tech item, vaper sticks naturally take up very little space in the retail environment. The company has high-end custom-built point-of-sale solutions available for all spaces. The product is available in a specialedition five-stick pack to sample the entire line. This retails for US$50. It is also available in larger sticks retailing at US$11 each, allowing the consumer to pick a favorite. The Metropolitan Series also comes in e-liquid bottles, for consumers who prefer to use their own vaping device. Novi will be at IAADFS booth 1203, and the company’s representatives are looking forward to discussing more about the vaper category in travel retail.

The Metropolitan Series is available as a five-pack, to sample all the globalbased flavors, or as singles

Novi’s “Metropolitan Series” was created specifically for the travel retail market, with five cities represented

All Bourbons are not created equal

Please visit us at the MONARQ Group Booth #1037 At the IAADFS Show in Orlando

A MIXED BAG

A bag of tricks Check out these new-season must-have products to enhance your travels, from a selection of the most creative travel retail suppliers

4 8

1 7

2 6

1. Joyful and playful, Furla’s Furla Feeling Fall-Winter 16 collection takes inspiration from the world of rock music, highlighting metal color blocks, fur, Galassia fabric and quilted leather, and flower-inspired camo print 2. Beautify your hands with Rituals’ Hand Care Travel Exclusives, containing Ginkgo’s Secret hand balm, Miracle Balm hand balm, a nail file, and Hands Free hand hygiene, made without water or soap 3. Created by a team of gifted Canadian designers, Di Valdi’s exclusive collection of trendy, avant-garde and glamorous sunglasses will make you feel unforgettable 4. Take command with PEZ Candy’s Star Wars dispensers, featuring the movie favorites Darth Vader, Yoda, R2-D2, Chewbacca, Stormtrooper, and Kylo Ren. Distributed by ALFA Brands Inc

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5. Cross debuts a Peerless Special Edition Collection of fine writing instruments to honor iconic cities. The first edition celebrates the cosmopolitan locales of New York, London and Tokyo 6. Maestro Glow by Giorgio Armani enhances the complexion with a fresh, natural radiance thanks to a surprisingly light texture. Instead of water, this SPF 30 elixir contains a high concentration of nourishing oils, without an oily effect on the skin 7. Giorgio Armani introduces Lip Maestro, the next generation of lip color for instantly plumped and radiant lips. The classic formulas offer a flawless matte finish that is never dry, and a glow that amplifies color. The luxurious, velvet texture glides onto lips for four-dimensional volume 8. KROMA’s Pressed Powders are oil-free mineral pressed foundations with silky coverage. It improves skin while covering skin imperfections and provides all-day wear with a balanced matte finish

IAADFS – Duty Free Show of the Americas April 3-6, 2016 – Orlando, Florida

Patrick Nilson +1 845 981 7240 p.nilson@haleybrooke.com Roger Thompson + 1 203 322 9691 r.thompson@haleybrooke.com

Visit us at booth # 207 IAADFS

QUESTIONNAIRE

ALL ABOUT René Riedi,

Divisional Chief Executive Officer, Latin America, Dufry Where were you born and raised? In Switzerland in a tiny little village in the Eastern part of the Alps. If you attended post-secondary school, what did you study? Specialization in Marketing

Are you married? Do you have children? Yes, I am married and no, we do not have kids – no tengo tiempo y dinero for kidz! What is your favorite movie? I like thrillers, with a flair for films from France and Scandinavia. If I were to mention one in particular then maybe this one: The Girl with the Dragon Tattoo. What is the last book you read? I like Frederik Forsyth, and his last book I read was The Odessa File, although it was published a while ago. What would you choose as your last meal? A juicy steak at Peter Luger Steak House in Brooklyn. Your favourite drink? Currently, Pisco Sour.

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Do you have a passion in your life (or more than one)? What? My job.

Do you have a pet (or more than one)? If so, what animal and name? I have a cat and his name is George.

Do you prefer country or city? City; the countryside is too calm for me. Maybe this is going to change as I grow older. What is your favourite place to vacation? In my opinion the best place I ever visited is Patagonia and I hope I will have the time to visit it at least once again. What’s the first thing you do in a new place? Create a social network. It helps enormously to build a positive experience, especially at the beginning when you reach a new place. If you could choose any place in the world to live, where would it be? This is the million-dollar question …

Which living person do you most admire? People who are pioneers and with a vision to create real value, such as Steve Jobs.

Which historical figure do you most admire? Henry Dunant, who founded the Red Cross. The Red Cross is still one of the most recognized and respected organizations in the world. Where and when were you happiest in your life? When I met my wife.

What in the world would you most like to change? The extremist mindset of terrorists who destroy what generations built. What about yourself would you most like to change? Nothing, necessarily. I am happy with the life I live and how it turned out. What is the most important piece of advice anyone ever gave you? To invest in education.

What is something about you that most people would find surprising? [Mr Riedi apparently would like to still keep this a surprise.]