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r Letter from ASUTIL

Welcome to the 2012 ASUTIL conference!

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’ve been attending the ASUTIL conference since I joined Dufry in 2006. Given Dufry’s presence in Brazil, Argentina, Ecuador, Bolivia and Uruguay we continue to attend the conference every year. Although each of these locations falls under the Dufry umbrella, each specific country has its own idiosyncrasies and needs, and to me this is one of the most valuable aspects of ASUTIL—the coming together of various countries in Latin America and the quality of the discussions that operators from each bring to the table. Perception and reality can sometimes be two very different things and the frank conversations that occur at ASUTIL’s yearly conferences help move us along as an industry.

Coming from a previous position in Europe, I was accustomed to a different reality. From day one, ASUTIL helped me understand the industry in the region. ASUTIL continues to do this year in and year out for many other individuals and companies that may be new to the region. It’s a wonderful thing to be able to learn from other people’s experiences and incorporate this knowledge into your business. Apart from the many reasons to attend ASUTIL, I think this benefit alone makes it well worth it.

The relaxed atmosphere of ASUTIL’s yearly events helps people ease into some really useful conversations. It’s a place where attendees can discuss, share, learn and perhaps most importantly formulate common goals to push our industry forward. The contribution that this type of forum makes to South American travel retail cannot be overstated.

Those of us in the region certainly feel the increasing importance of our market in global terms. People are looking more and more to South America and as a result will look more and more toward ASUTIL in the future. Knowing the excellent team that is in place and the organization’s plans for the coming years, I’m entirely confident that the trust we place in ASUTIL as an industry is well founded.

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that we’re growing year on year. For the future ASUTIL is looking at implementing a number of new services that will improve both communication throughout the year and our annual conference as well. We’re committed to continually upping the quality of our events and services.

This year ASUTIL makes a return to South America by holding the conference in beautiful Iguazú. The fact that so many attendees—from the US down to Argentina—have already confirmed attendance is a testament to the ground we’ve gained both as an industry and as an organization.

This year we maintain the same conference-networking format as previous years and include what I’m sure will be a few pleasant surprises as well. It is my sincere hope that you enjoy the relaxed atmosphere and at the same time have occasion to do ample networking during the conference, at the evening events and during the social outing. Let me take this opportunity to welcome you to Iguazú and the 2012 ASUTIL conference!

s our members know, ASUTIL is much more than just an event organizer. Our association works year-round to ensure that the South American duty free industry is well represented on the world stage.

One of the many topics that we’ve been focusing on at ASUTIL is continuing to improve duty free shopping in general in Latin America. We’re already worldclass but there’s always room for improvement.

Airports are looking for more non-aeronautical revenue and it’s clear from innumerable examples across the region that duty free can significantly contribute to an airport’s total revenue. As a result, the product offering has to be continually evolving and the stores have to be modern and inviting. ASUTIL provides an invaluable forum for discussions of this nature.

We’re also keeping a very close eye on alcohol and tobacco in duty free and we work in conjunction with a number of other travel retail associations worldwide to make sure that travel retail isn’t unfairly targeted. The illicit trade of alcohol and tobacco hurts our industry and it is up to us to effectively communicate our stance on this topic and let various organizations know that we are one of the most regulated industries in the world. We’ve gained some important ground lately but this topic is always something that we’re monitoring closely.

In terms of the conference, I’m pleased to say

Sincerely,

José Carlos Rosa President, ASUTIL

Sincerely,

José Luis Donagaray Secretary-General, ASUTIL

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

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Letter from the Editor

The Americas Duty Free & Travel Retailing (ISSN 0962-0699) is published four times a year March/April, June/July, October, November/ December) by Global Marketing Company Ltd., 26 Pearl Street, Mississauga, Ontario L5M 1X2 Canada.

It is distributed throughout Central America, South America, the United States, Canada, U.S. Virgin Islands, U.S. Pacific islands and the islands in the Caribbean.

Subscriptions: $200 for one year. Art and photographs

Burning bright he theme of this year’s ASUTIL conference is “A Waterfall of Opportunity.” Indeed, over the last year or more there have been a staggering number of success stories pouring in across the desks here at Americas Duty Free from operators, suppliers, distributors and service providers that have a stake in the region’s travel retail market.

From the impressive bids for São Paulo Guarulhos, São Paulo Viracopos and Brasilia airports to Grupo Wisa’s adventurous step into the world of South American border stores, it’s clear that airport and duty free operators alike see the potential in the region. Furthermore, on the back of increasing passenger numbers and duty free sales across many of the region’s airports, suppliers are giving their all to make sure that they capitalize on this very welcome “spend trend.” In fact, just flip through this issue of ADF and you’ll be hard pressed not to find a supplier in any category that isn’t targeting the region with travel retail exclusives, special promotions or trinity-style partnerships.

Despite all the good news coming out of South America, it’s human nature to doubt. Is the region burning so brightly that it’s in danger of burning out? The good news is that in the case of travel retail, concerns are nearly always accompanied with action.

Worries about infrastructure or the European economic crisis will surely pepper the largely positive discussions at this year’s ASUTIL conference; and in reality, this is how it should be. It feels good to pat ourselves on the

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back occasionally, but Secretary-General José Luis Donagaray or President José Carlos Rosa will be among the first to tell you that events like ASUTIL are first and foremost about exploring options, anticipating future pitfalls as best we can and formulating courses of action based on careful consideration. With any luck, at this year’s ASUTIL conference we’ll once again see some spirited conversations firmly grounded in a desire to see our industry continue its upward trajectory.

Like Keats pondering his own mortality, at this moment we are all obliged to exist in a “sweet unrest,” our very natural concern for the future of the industry—no matter how brightly this star burns at the moment—at odds with our sheer joy at the region having become all that we knew it could be. We can, however, take heart in the fact that as much as ASUTIL is a celebration of our current success, it is also a forum to ask the tough questions and thereby move forward into the future armed with a well informed plan of action.

I hope you enjoy this issue of Americas Duty Free. More than anything, its contents are an effort to begin the discussion that we’ll all have occasion to take part in at the 2012 ASUTIL conference in beautiful Iguazú. I look forward to seeing you there.

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

Kindest Regards, Ryan White Concessions, Liquor and Tobacco Editor ryan@dutyfreemagazine.ca

will not be returned unless accompanied by return postage. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor. June 2012, Vol. 22, No. 2.

Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2012 Global Marketing Company Ltd. The Americas Duty Free & Travel Retailing 26 Pearl Street Mississauga, Ontario L5M 1X2 Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemagazine.ca PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR Hibah Noor hibah@dutyfreemagazine.ca CONCESSIONS, LIQUOR & TOBACCO EDITOR Ryan White ryan@dutyfreemagazine.ca ART DIRECTOR Patrick Balanquit patrick@globalmarketingcom.ca CONTRIBUTORS Andrew Brooks ADVERTISING SALES ADVERTISING & MARKETING MANAGER Kim Carrera kim@dutyfreemagazine.ca CIRCULATION & SUBSCRIPTION MANAGER Deepa J deepa@globalmarketingcom.ca

The Party. Circa 1957.

PARTY TOGETHER RESPONSIBLY. THE PRODUCTS SHOWN IN THIS PHOTO ARE HISTORICAL AND ARE NOT FOR SALE. www.bacardi.com ©2012 BACARDI AND THE BAT DEVICE ARE REGISTERED TRADEMARKS OF BACARDI & COMPANY LIMITED. BACARDI U.S.A., INC., CORAL GABLES, FL. RUM - 40% ALC. BY VOL.

HISTORY’S SUPPOSED TO BE BORING. NOBODY TOLD US. This year, we celebrate Bacardi’s 150th anniversary.

When your story begins with the creation of the world’s smoothest rum, it’s not long before you’re rubbing elbows with rebels and royalty, introducing rum to cola, and partying through Prohibition. It’s not your average story, because we’re not your average rum. Let’s raise a glass to the next 150 and keep the party going.

Letter from the Editor

Brillo intenso

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l tema de la conferencia ASUTIL de este año es “Una catarata de oportunidades”. Y, en honor a la verdad, desde el año pasado, o incluso los anteriores, ha llegado a la redacción de Americas Duty Free una cantidad sorprendente de historias de éxito, protagonizadas por operadores, suministradores, distribuidores y proveedores de servicio con participación activa en el mercado minorista de viajes.

Desde los planes impresionantes para los aeropuertos de São Paulo Guarulhos, São Paulo Viracopos y Brasilia, a la audaz incorporación de Grupo Wisa al mundo de las tiendas de frontera suramericanas, está claro que tanto los operadores aeroportuarios como los de tiendas duty free aprecian el potencial existente en la región. Más aún, en vista de las cifras crecientes de pasajeros y de ventas duty free en gran parte de los aeropuertos de la región, los proveedores están esforzándose al máximo para garantizar el aprovechamiento de esta “tendencia de gastar” muy bienvenida.

Sólo bastará echarle una ojeada a este número de Americas Duty Free , y no le resultará fácil encontrar un operador de cualquier categoría que no esté introduciendo exclusividades

minoristas de viajes, promociones especiales o alianzas tripartitas.

A pesar de las buenas noticias que llegan de Suramérica, dudar es de humanos. ¿Goza la región de un brillo tan intenso que podría consumirla? La buena nueva es que, en el caso del sector minorista de viajes, las preocupaciones casi siempre van acompañadas por acciones.

Con toda seguridad, las preocupaciones acerca de la infraestructura o la crisis económica europea matizarán los intercambios en gran medida positivos de la conferencia ASUTIL de este año. Y, en realidad, así debería ser. Aunque a todos nos complace un elogio ocasional, el Secretario General José Luis Donagaray o el Presidente José Carlos Rosa estarán entre los primeros en decirle que los eventos como ASUTIL se proponen, ante todo, explorar opciones, anticiparse lo mejor posible a los obstáculos futuros, y formular maneras de actuar basadas en cuidadosas consideraciones.

Por fortuna, la conferencia ASUTIL de este año será nuevamente el epicentro de animadas conversaciones, enraizadas sólidamente en el deseo de que nuestra industria continúe su trayectoria ascendente.

Al igual que John Keats en sus reflexiones sobre su propia mortalidad, todos estamos obligados a existir actualmente en una “dulce inquietud”: nuestra preocupación muy natural por el futuro de la industria—independientemente del brillo que tenga esta estrella en este instante—en oposición a nuestra simple alegría de que la región está convirtiéndose en todo lo que sabíamos que podría lograr. Sin embargo, podemos entusiasmarnos con el hecho de que ASUTIL es tanto una celebración de nuestros éxitos actuales, como un foro para formular preguntas difíciles, y, por tanto, avanzar hacia el futuro, equipados con un plan de acción bien informado.

Espero que disfruten este número de Americas Duty Free. Esencialmente, su contenido es un intento por iniciar ese intercambio de opiniones del que formaremos parte durante la conferencia ASUTIL 2012 en la hermosa Iguazú.

Allí espero verlos a todos.

Muy cordialmente, Ryan White Editor de Concesiones, Licores y Tabaco ryan@dutyfreemagazine.ca

JUNE 2012

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VOL 22, NO 2

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Contents 14 20

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IN BRIEF St. Thomas Duty Free renovates Al Cohen, releases Mother’s Day shopping guide ■ Respectable increase in Canadian duty free sales for March 2012 ■ International travel and tourism spending in US shows continued growth ■ Mannah Duty Free to open new store in Rivera, Uruguay ■ Shopping China enjoys positive start to 2012, plans new store in Bolivia

TOP STORY: LONDON SUPPLY

New horizons With a solid grounding in London Supply’s long history of innovation and more than a few novel ideas of her own, Magdalena Ducos takes the reins as the new Commercial Manager

Nuevos horizontes Con un basamento sólido en la larga historia de innovación de London Supply y muchas ideas revolucionarias propias, Magdalena Ducos asume su cargo como la nueva Gerente Comercial

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LATIN AMERICA REPORT

Ahead of the game From the Caribbean down to South America, operators make some big plans as a means of ensuring the continued success of travel retail in Latin America

Ventaja competitiva Desde el Caribe a Suramérica, los operadores proyectan grandes planes para garantizar el éxito continuo del sector minorista de viajes en Latinoamérica

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THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

Contents

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DUFRY

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BRIGHT STAR

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Standout performance The Americas region, buoyed by the 2011 acquisition of operations in Argentina, Uruguay and Ecuador, contributes strongly to Dufry’s Q1 2012 results

Looking ahead After Q1 renovations, Bright Star now focuses on a 2012 calendar of all-star launches at its stores in Silvio Pettirossi Airport and onboard TAM Mercosur flights

AIRPORT NEWS

Breaking new ground While Latin America’s aviation infrastructure isn’t what it should be, these bright spots show how it can be done

INFRAERO

Keeping a steady pace Americas Duty Free speaks with Infraero for an update on the work completed in the lead up to the World Cup and what still remains to be done over the next two years

Avanzando a paso constante Americas Duty Free habla con Infraero para actualizarse acerca de las obras terminadas con vistas a la Copa Mundial, y lo que queda por hacer en los dos próximos años

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60 68 72

INDUSTRY NEWS

Air power Aviation can be a huge economic driver, but getting top performance takes more than just switching on the runway lights

BEAUTÉ PRESTIGE INTERNATIONAL

Strong statements Much of Beauté Prestige International’s success comes from larger-than-life brands

SHISEIDO TRAVEL RETAIL AMERICAS

Return of a beauty star Shiseido re-enters Latin America, building on its success in duty free

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CONFECTIONERY REPORT

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A LA GATE CARTE

A taste for temptation Confectioners differentiate themselves with new products, new market strategies

A world on wheels A La Gate Carte’s mobile retailing units enable travel retailers to get up close and personal with their customers

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LAPRAIRIE.COM Š 2012 LA PRAIRIE INC.

immerse your skin in the rrejuvenating ejuvenating power of the sea

introducing the advanced marine biology collection The sea is a source of life and mystery. Now, La Prairie has harnessed the power of its rich nutrients and sea-botanicals to reload skin with new energy.

The extraordinary results?

Skin feels fresh, energized and youthful.

Serious skincare as powerful as the sea itself.

Contents

86 86

BROWN-FORMAN

87 89

Special Report: Rum

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RUM COCKTAILS

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Brown-Forman partners with Celebrity Cruise Lines for a one of a kind educational activation that combines mixology and culinary delights

RUM REPORT

Riding the wave For five high-end rum companies, the increasing demand for luxury spirits in travel retail is a development for which they’ve literally been preparing for generations

In the mix Rum has always been favored by mixologists for its versatility; Americas Duty Free goes straight to the brands themselves to get advice on the best rum cocktail recipes

BOTRAN RUM

The age experts A one of a kind production process, a healthy dose of foresight and a little bit of luck have given Botran Rum a major leg up in the competitive high end rum game

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DIAGEO AMERICAS

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RÉMY COINTREAU

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A feast for the senses

Yin and yang

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CIGAR REPORT

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RAY TOBACCO

Rémy Cointreau has great things planned for its triple sec liqueur in the Americas

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

The competitive Americas tobacco market is a scene of rapid product innovation

Star in the east Born in a tough economy, Ray Tobacco knows how to survive—and thrive

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JTI

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HORIZON INTERNATIONAL DUTY FREE

Brand bonanza JTI makes the most of its market-making brands with new products, packaging and positioning

Flying high Just over a year after launching Horizon International Duty Free, José Chao finds himself in the enviable position of representing a stable of high-end brands suited perfectly for duty free

Diageo targets female white spirit fans in Mexico and gives brown spirit lovers something to talk about by adding two new expressions to the Johnnie Walker range

Triple threat

Constant change

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NEW & NOTABLE Mickey Finn Apple Infused Whiskey ■ Nestlé Swiss Carres ■ Aloha Mix

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In Brief St. Thomas Duty Free renovates Al Cohen, releases Mother’s Day shopping guide St. Thomas Duty Free owns and operates Al Cohen Discount Liquors, located in Havensight across from the West Indian Company cruise ship dock. The operator recently announced that it is in the process of redesign-

ing the space to resemble a hip urban loft space. New signage and product merchandised in the original packing cartons on colorfully painted shipping pallets contribute to the loft-like feel of the store. High ceilings,

exposed pipes and support beams provide an authentic backdrop to the industrial feel.

“Al Cohen’s shopping experience is unique to visitors on the island as it is the only space of its kind located in the vicinity of the cruise

Shopping China enjoys positive start to 2012, plans new store in Bolivia “We’re pleased with the development of our business so far this year,” says Felipe Cogorno, CEO of Shopping China.

“Across the stores we’re 30% above the same period last year.”

In fact, on Easter Shopping China had over 10,000 shoppers in its flagship store in Pedro Juan Caballero, Paraguay. Last year on the same day the number of shoppers reached only 8,000, which is a clear indication that business is booming for the operator.

While Shopping China continues running regular promotions across categories at its stores, the big news is that the company has confirmed that it has a plot of land in Bolivia and plans on constructing a new store there to accompany its existing location in the country. In addition to staying busy with these new plans, Cogorno notes that Uruguay is and will be an area of concentration for the company this year.

“Our store in Uruguay is our smallest in terms of size but we think it has the most potential for sales,” Cogorno explains.

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THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

“Despite being smaller than our existing store in Bolivia it’s selling more.”

While no details are yet available as to what the company has planned in Uruguay, in true Shopping China fashion it’s sure to be something spectacular. Americas Duty Free will keep readers up to date on new developments for the company in both Bolivia and Uruguay as details emerge.

“We’re pleased with the development of our business so far this year. Across the stores we’re 30% above the same period last year.”

Felipe Cogorno, CEO, Shopping China

In addition to its popular location in AH Riise Mall (pictured), St. Thomas is making some big changes to its Al Cohen Discount Liquors store

ship dock,” says Jan Baljet, Director of St. Thomas Duty Free.

In related news, St. Thomas Duty Free has published it first full color Mother’s Day shopping guide. The 20-page fragrance and skincare guide is printed on magazine quality paper and features full page ads from brands such as Bvlgari, Estee Lauder and Burberry.

Christopher Guzman, the Marketing and Merchandising Director at St. Thomas Duty Free, says: “We wanted to go in a more editorial direction with the guide. Each page entices the reader with a quote about motherhood from famous and unknown authors, in addition to Chinese and Spanish proverbs.”

The guide is available in all Duty Free St. Thomas store locations, is distributed to cruise ship passengers and as an insert in the Virgin Islands Daily News.

St. Thomas will also be installing a new Chanel Boutique in its Main Street store location, which will be one of its kind in the Caribbean. “It will offer a beautiful environment with a boutique-style look and experience to our discerning Chanel clients,” says Baljet. “We are also in the process of introducing other top brands such as Shiseido, bringing a new level of skincare with lines like Benefiance WrinkleResist 24 and Bio Performance, as well as the top cosmeceutical brand in the US market, Dr. Perricone.”

Respectable increase in Canadian duty free sales for March 2012 The Frontier Duty Free Association (FDFA) this week released information relating to airport and land border duty free sales for the month of March 2012. The main categories that dominated sales in land border duty free are as follows (in order of sales highest to lowest): ■ Alcohol (liquor, liqueur, wine, coolers) ■ Clothing (including hats, fur, leather) ■ Souvenirs ■ Tobacco, Cigars, Loose Tobacco ■ Office and Travel Supplies ■ Perfume, Cosmetics, Skincare ■ Glassware, Crystal, China, Figurines, ■ Beer (beer, malt-based coolers) Porcelain ■ Food ■ Other ■ Jewelry, Watches, Clocks ■ Crafts/Arts ■ Accessories (purses, wallets, ■ Electronics, Cameras, Binoculars, etc. sunglasses, etc.)

Land border duty free sales statistics Overall, the national land border duty free sales figure for March 2012 was CAD$9.2 million (US$9.3 million). This represents a 7.24% increase in sales compared to March 2011. January – March 2012 sales saw a 3% increase compared to the same period in 2011. Sales at land border duty free shops for January – March 2012 were CAD$23 million (US$23.4 million).

National Sales Statistics Airport Duty Free Stores (Canada) The national airport duty free sales figure for March 2012 is CAD$21 million (US$21.3 million). This is an increase in sales of 10% compared to March 2011. January – March 2012 sales saw an 11% increase compared to the same period in 2011. Sales at Canadian airport duty free shops for January – March 2012 equaled CAD$60 million (US$61 million).

Regional land border sales figures

Shopping China’s flagship store in Pedro Juan Caballero, Paraguay welcomed over 10,000 guests during Easter this year

During March 2012 the Prairie Region saw sales of CAD$728,000 (US$740,000). This is an increase in sales of 4% compared to the same month last year. For January – March 2012 the Prairie region saw sales equal CAD$2 million (US$2.03 million), representing an increase of 5% over the same period the year before.

The Pacific sales figure for March 2012 was CAD$1.7 million (US$1.73 million). This is a 7% increase in sales compared to March 2011. For January – March 2012 the Pacific region saw sales equal CAD$4.3 million (US$4.37 million) with an increase for January – March 2012 of 3% over the same period last year.

The Ontario sales figure for March 2012 was CAD$5.2 million (US$5.28 million).

This is an increase of 4.89% compared to March 2011. For January – March 2012 Ontario saw sales equal CAD$13.5 million (US$13.7 million), an increase of 4% from January – March 2011.

Finally, the sales figure for Atlantic/Quebec was CAD$1.5 million (US$1.52 million), which represents an increase of 11.5% compared to March 2011. For January – March 2012 the Atlantic/Quebec region saw sales equal CAD$4 million (US$4.06 million), representing an increase of 3% over the same period last year.

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

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In Brief

International travel and tourism spending in US shows continued growth The US Department of Commerce recently announced that international visitors spent an estimated US$13.3 billion on travel to, and tourism-related activities within, the United States during the month of February, nearly US$1.6 billion more (+14%) 14% than in February 2011. Year to date, US travel and tourism exports have grown more than 11% in 2012.

“Today's data is yet further evidence that the United States remains one of the top destinations for international visitors from around the world,” said Commerce Under Secretary for International Trade Francisco Sanchez upon the release of the information. “We have seen long-term growth in both arrivals and spending and hope to continue that trend with the focus provided by the Obama Administration on this growing sector. That is why we are making it even easier to visit America’s most amazing places and working hard to tell folks

Mannah Duty Free is nearly done converting its departures store into a walkthrough; the renovations should be complete by the end of May

about what an amazing place America is, whether you travel five or 5,000 miles to get here.”

Purchases of travel and tourism-related goods and services by international visitors traveling in the United States hit a recordbreaking US$10.1 billion during February, an increase of 13% when compared to last year. These goods and services include food, lodging, recreation, gifts, entertainment, local transportation in the United States and other items incidental to foreign travel.

Fares received by US carriers and US vessel operators from international visitors increased more than 16% to US$3.1 billion for the month, an increase of nearly US$435 million when compared to last year and a mere US$175 million shy of breaking the record set in August 2011.

While spending by international visitors has hit records, so have arrivals. In January

Mohamed Mannah, President of Mannah Duty Free, told Americas Duty Free in a recent interview that the company is planning on opening a new store in Rivera, Uruguay. The store will measure 300 square meters (3230 sq. ft.) and feature categories such as electronics, perfumes, accessories and more.

“Rivera is a little town that has grown immensely,” Mannah says. “It’s strategically located on the border with Brazil, and we’re hoping to welcome numerous Brazilian shoppers to the store.”

In related news, Mannah told us in early May that the company’s new walkthrough duty free is scheduled for completion before the end of the month. The operator is increasing the size of its airport departures store by 40 square meters (430 sq. ft.) in addition to converting it to a walkthrough concept. Apart from the obvious advantages of having 100% of travelers pass through the store, the spatial increase will bode well for key categories, says Mannah.

At the company’s border shop in Ciudad del Este, renovations will also happen this month to the electronics department. “We’re going to be modernizing the space,” says Mannah. “Electronics is a category that really requires an up to date space. The category is performing very well for us, with more and more people purchasing products every day.”

Finally, Mannah tells us that sales in the first trimester of the year were up 25% over the same period last year.

“Average ticket is at about US$88,” he explains. “We’re very happy with the performance to date and hope to continue this positive trend given the many improveMohamed Mannah, President, Mannah Duty Free ments we’re making across stores this year.”

Mannah Duty Free to open new store in Rivera, Uruguay

“We’re very happy with the performance to date and hope to continue this positive trend given the many improvements we’re making across stores this year.”

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2012, 4.5 million international visitors traveled to the United States, a 7% increase over January 2011. January 2012 registered the tenth straight month of increases in total US visits.

In January 2012, the top inbound markets continued to be Canada and Mexico.

Visits from Canada increased 9% while arrivals from Mexico grew 4%. Seven of the top inbound overseas regional markets posted increases in visits in January 2012, while Western Europe was flat and the Caribbean region decreased 4%.

The 2012 data to date builds on increases in international and domestic tourism spending in 2011, which showed an increase of 8%, supporting an additional 103,000 jobs for a total of 7.6 million. A big factor in the increase was a surge in international visitors: In 2011, 62 million international visitors came to the United States, an increase of 2.5 million from the year before. These international visitors spent an all time record of US$153 billion on US travel and tourismrelated goods and services.

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

For further information: www.imperial-tobacco.com

SMOKERS DIE YOUNGER. SOURCE: EU DIRECTIVE (2001/37/EC)

Top Story: London Supply

New horizons

BY

RYAN WHITE

With a solid grounding in London Supply’s long history of innovation and more than a few novel ideas of her own, Magdalena Ducos takes the reins as the new Commercial Manager ongstanding Commercial Director of London Supply Francisco Heredia recently passed the torch to Magdalena Ducos after being promoted to the position of Manager of New Project Development.

In an exclusive interview with Americas Duty Free, Ducos discusses her new role, projects on the table for the next 12 months, the trajectory of the company over the last 70 years and what attendees to this year’s ASUTIL conference can expect to see during the Gala Dinner.

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London Supply’s Iguazú duty free store

Americas Duty Free: Congratulations on your promotion, Magdalena. What was your previous area of responsibility at London Supply?

Magdalena Ducos, Commercial Manager, London Supply: I’ve been at London Supply for many years and have held a number of positions, but just before being promoted to Commercial Manager my title was Division Manager in charge of spirits, confectionery and tobacco.

In the end, it’s all duty free and the more parallels we can draw between categories the better it will be for the consumer. For example, fashion hardly existed in duty free ten years ago and part of our job as an operator is to make sure newer categories are aware of the wide variety of wonderful things they can do in duty free by bringing in concepts from other categories.

ADF: What are some of the challenges you’re expecting with this new role?

MD: I think one of the challenges of my new role will be to unify the categories in a sense.

Suppliers don’t view us as a partner that manages different categories; they view us simply as London Supply. I think it’s important to view our duty free business as a whole and take concepts that work from one category and figure out how we can make these ideas work in other categories.

ADF: I understand that a new parking structure is being built for the Iguazú store. Can you tell us about it?

MD: The new parking structure at the Iguazú store will hold more than 600 cars. The project is already in full swing but because of rain over the last few months it’s been held back a little bit. We expect that in two or three months the project should be finished. The parking lot will be very modern and automated, complete with a state of the art car location system, making it even easier for visitors to Iguazú to enjoy shopping at Duty Free Shop Puerto Iguazú.

Top Story: London Supply

ADF: This is only part of a larger project in Iguazú, correct?

MD: Once we have more space for parking, the second part of the project entails renovating the store and ensuring that we have more space for the categories. The store will double in size and we’ll be building a new themed restaurant in addition to the current eatery. In terms of retail offerings, we’ll be adding a department dedicated to sportswear and another for luggage. The perfumes and cosmetics section will also double in size. Furthermore, at the moment we have chocolates and spirits together in one department measuring about 400 square meters. With the renovations confectionery will have its own space of about 400 square meters and spirits will take up the entire space currently dedicated to the two categories.

Near the entrance we’ll have a Home and Design department, and in the center of the store we’re currently working on developing a recreational space for the public. This part of the project is still in the planning phase but we’re thinking of including games and an Iguazú Falls simulator so that our customers can have the experience of being at the Falls right in our store. The idea is to add a little fun to the store and give visitors a reason over and above the great shopping to visit our Iguazú store.

ADF: Big changes are also afoot in Ushuaia, aren’t they?

MD: We’re adding a new space behind the original store, thereby increasing the overall size of the store by about 50%. Today if you were to enter the store you’d first see the perfumes and cosmetics section, followed by confectionery on the middle level. On the third level you’ll find toys, fashion and electronics.

We’re adding pathways between departments and cleaning up lines of sight so that shoppers can see the entire store regardless of where they

happen to be. We’re also adding a café area where people can relax and grab a coffee.

We currently in the planning phase at Ushuaia but after approval things should get rolling fairly quickly. The project should be completely finished in about a year.

ADF: This industry prides itself on an offering that is distinct from high street, and even among the many innovators in duty free London Supply is held in very high regard. Can you tell us a bit about the company’s philosophy when it comes to the shopping experience?

MD: Part of our philosophy is that London Supply’s stores be places where people not only purchase, but stay for a while and enjoy a pleasant, unique experience. As we don’t have the advantage of being located in an airport where you’ve really got a captive audience, we’re very aware that we need to foster a culture of experiential shopping at our stores.

The Iguazú store is a great example of this philosophy. It’s really turned into another tourist attraction. Our departments are all themed around famous cities and it’s really a trip around the world in 3,000 square meters. Apart from purchasing, people spend a lot of time in our stores. It’s not like they buy their whisky or perfume and leave after ten minutes—they come for the experience.

It’s always an important consideration for us to keep things fresh for the consumer, not only in terms of products but in terms of the experience we offer.

ADF: How have sales been?

MD: As you can imagine, Brazilians make up a large portion of our customers, and thankfully this group is traveling and spending. The continued growth we experience never fails to surprise us. It’s clear that the work we’ve put into our stores is paying dividends.

Over the last few years sales have grown on the order of 50%. While this is a great

“Part of our philosophy is that London Supply’s stores be places where people not only purchase, but stay for a while and enjoy a pleasant, unique experience.”

Magdalena Ducos, Commercial Manager, London Supply

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accomplishment, we’re well aware that hard work is the only way we’ll continue to see such increases in the future and we’re committed to continuing to explore new ways of growing sales and capturing more shoppers.

ADF: In line with exploring new options, I have to ask if we’ll see any new stores in the near future. It’s obvious that things are going well in the current locations.

MD: London Supply is always thinking of ways to grow the business and go a step further. Our President Teddy Taratuty is very forward-thinking and is always looking toward new horizons.

London Supply was founded as a ship chandler back in 1942. Today our business is comprised of managing airports and port terminals, air navigation, ship chandelling, duty free stores and wholesale distribution.

While I can’t comment specifically on this point, I can tell you that continued diversification is something that has always been an important part of London Supply.

ADF: Suppliers often tell us about experiences they have working with operators on promotions and London Supply is always at the top of the list. Have you put on any noteworthy promotions lately?

MD: We have an annual promotional calendar like many stores, with the important difference being that we always try to make our promotions unique from what you would find anywhere else. In December, for example, we ran a promotion in cooperation with The

Top Story: London Supply

A particularly busy day at London Supply’s Iguazú duty free store

Pathways between departments are being added at the Ushuaia store and lines of sight will be modified so that shoppers can see the entire store regardless of where they happen to be

Famous Grouse where consumers could get one bottle personalized with an engraving with the purchase of three bottles. We had a bagpiper in the store playing for the duration of the promotion, as well as tastings, and it was a great experience for shoppers.

When we do a promotion we really try to go all out for the supplier and involve the entire store.

During the month of December if you walked into the store you would have seen The Famous Grouse everywhere! We had three bars doing tastings throughout the location, footprints on the floor leading to promotional areas, signage throughout the store and two central walkways about 8 meters long showcasing the brand. This is a great example of how we try to work with a brand to get the most out of each and every promotion.

In February we did a promotion celebrating Carnival with Kit Kat. In the central area of the store we set up a large gondola and had Brazilian dancers and musicians come out and perform a show every 30 minutes. Shoppers were dancing and having a great time. Every month the promotion changes and this is a great example of how 26

visitors can always find something new that exceeds their expectations at London Supply.

ADF: You’ll be hosting the Gala Dinner at this year’s ASUTIL conference. Can you tell us what to expect from the evening?

MD: The real goal of the dinner is that invitees

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

feel like our consumers feel when they enter our store. While I can’t yet give you details, rest assured that in true London Supply fashion it will be a unique experience! We’re looking forward to giving suppliers, distributors, other operators and the media firsthand knowledge c of the London Supply experience!

www.habanos.com

Top Story: London Supply

The Iguazú store will double in size after the planned renovations, making more room for existing categories

Nuevos horizontes

Con un basamento sólido en la larga historia de innovación de London Supply y muchas ideas revolucionarias propias, Magdalena Ducos asume su cargo como la nueva Gerente Comercial

ecientemente, Francisco Heredia, el veterano Director Comercial de London Supply, le pasó la antorcha a Magdalena Ducos, luego de ser promovido al cargo de Gerente de Desarrollo de Nuevos Proyectos. En una entrevista exclusiva con Americas Duty Free, Ducos habla de su nuevo papel, de los proyectos a realizar en los próximos 12 meses, de la trayectoria de la compañía en los últimos 70 años, y de lo que verán los asistentes durante la Cena de Gala de la conferencia de ASUTIL de este año.

Americas Duty Free: Felicitaciones por su promoción, Magdalena. ¿Cuál fue su área previa de responsabilidad en London Supply?

Magdalena Ducos, Gerente Comercial, London Supply: He trabajado en London Supply durante muchos años y desempeñado diferentes cargos, pero antes de ser promovida a Gerente Comercial fui Gerente de División a cargo de espirituosos, confitería y tabaco.

ADF: ¿Cuáles son algunos de los desafíos que espera enfrentar en su nuevo cargo?

MD: Creo que uno de los desafíos de mi nuevo cargo será unificar las categorías en un sentido.

Nos proveedores no nos ven como un socio que administra diferentes categorías, sino simplemente como London Supply. Pienso que es importante ver nuestro negocio duty free en su conjunto, y tomar conceptos de una categoría que funcionen y determinar cómo pueden 28

funcionar esas ideas en otras categorías.

Al final todo es duty free y mientras más paralelos podamos establecer entre las categorías, más se beneficiará el consumidor.

Por ejemplo, hace diez años la categoría de modas casi no existía en el sector duty free, y parte de nuestro trabajo como operador es garantizar que las categorías más nuevas estén conscientes de la amplia variedad de cosas maravillosas que pueden hacer en el campo duty free adoptando conceptos de otras categorías.

ADF: Tenemos noticias de que se está construyendo una nueva estructura de estacionamientos para la tienda de Iguazú. ¿Qué puede decirnos al respecto?

MD: La nueva estructura de estacionamientos en la tienda de Iguazú tendrá capacidad para más de 600 vehículos. El proyecto ya está en plena marcha, pero las lluvias de los últimos meses lo han retrasado un poco. Esperamos que dentro de dos o tres meses esté terminado. La instalación será muy moderna y automatizada, con un sistema de localización de coches equipado con la tecnología más avanzada, lo cual les facilitará a los visitantes de Iguazú el disfrute de sus compras en Duty Free Shop Puerto Iguazú.

tienda y garantizar que contemos con más espacio para las categorías. El tamaño de la tienda se duplicará y construiremos un restaurante temático además del ya existente. En términos de ofertas minoristas, incorporaremos un departamento dedicado a ropa deportiva, y otro a equipajes. La sección de perfumes y cosméticos también se duplicará. Además, en este momento hemos unificado chocolates y espirituosos en un departamento con una extensión de unos 400 metros cuadrados.

Luego de la renovación, la confitería tendrá su propio espacio de unos 400 metros cuadrados, y los espirituosos ocuparán todo el espacio actual dedicado a las dos categorías.

Cerca de la entrada tendremos un departamento de Hogar y Diseño, y en el centro de la tienda ya estamos ideando un espacio recreativo para el público. Esta parte del proyecto está en su fase de planificación, pero pensamos en incorporar juegos y un simulador de las Cataratas del Iguazú para que nuestros clientes puedan tener la experiencia de admirar esta belleza natural en nuestra tienda. La idea es darle un poco de diversión a la tienda, y darle al público una razón adicional a las magníficas compras para que visiten nuestra tienda de Iguazú.

ADF: ¿Entonces es sólo parte de un proyecto de mayor envergadura en Iguazú, correcto?

MD: Una vez que contemos con más espacio de estacionamiento, la segunda parte del proyecto consistirá en la renovación de la

ADF: También hay grandes cambios en camino para Ushuaia, ¿no es cierto?

MD: Estamos incorporando un nuevo espacio detrás de la tienda original, incrementando así la extensión general del establecimiento en

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

The best of all worlds

Aldeasa and World Duty Free together, global strength in depth ASIA – EUROPE – MIDDLE EAST – NORTH AMERICA – SOUTH AMERICA

Top Story: London Supply

Another part of the renovations at the Iguazú duty free store consists of a new parking structure capable of accommodating 600 vehicles

cerca de un 50%. En la actualidad, si va a entrar a la tienda, lo primero que ve es la sección de perfumes y cosméticos, seguida por la de confitería en el nivel intermedio. En el tercer nivel están los juguetes, las modas y los artículos electrónicos. Estamos incorporando vías de comunicación entre los departamentos y eliminando obstrucciones visuales para que los compradores puedan ver toda la tienda, independientemente del sitio donde estén. También estamos añadiendo una cafetería donde los clientes pueden sentarse y disfrutar de un café.

Estamos actualmente en la fase de planificación en Ushuaia pero después de la aprobación, las cosas marcharán con bastante rapidez. El proyecto deberá terminar en un año aproximadamente.

ADF: ¿Cómo marchan las ventas?

MD: Como puede imaginar, los brasileños componen gran parte de nuestra clientela, y por suerte, este grupo viaja y gasta. El crecimiento continuo que experimentamos no deja de sorprendernos. Está claro que el esfuerzo que hemos desplegado en nuestras tiendas está dando sus dividendos.

En los últimos años las ventas se han incrementado en el orden del 50%. Aunque es un gran logro, estamos muy conscientes de que el esfuerzo es la única forma en la que seguiremos experimentando esos crecimientos en el futuro, y tenemos el compromiso de seguir explorando nuevas formas de incrementar las ventas y atraer más compradores.

ADF: Esta industria se enorgullece de tener una oferta distinta a la del mercado convencional, e incluso entre los numerosos innovadores del campo duty free, London Supply goza de muy buena reputación. ¿Puede hablarnos un poco acerca de la compañía en lo tocante a la experiencia de compras?

MD: Parte de nuestra filosofía es que las tiendas de London Supply sean sitios en los que el público no sólo compra, sino que permanece más tiempo para disfrutar de una experiencia agradable y única. Como no tenemos la ventaja de estar en un aeropuerto, donde se atrae a una audiencia cautiva, estamos muy conscientes de que es necesario fomentar una cultura de compras por experiencia en nuestras tiendas.

La tienda de Iguazú es un gran ejemplo de esta filosofía, pues se ha convertido en otra atracción turística. Nuestros departamentos están inspirados en ciudades famosas, lo cual implica un viaje alrededor del mundo en 3,000 metros cuadrados. Además de comprar, el público permanece mucho tiempo en nuestras tiendas, en vez de comprar su whisky o perfume y marcharse en diez minutos. Vienen a disfrutar de la experiencia. Para nosotros es una consideración importante actualizarse para atraer al consumidor, no sólo en términos de productos sino también en términos de la experiencia que ofrecemos.

ADF: En lo tocante a la exploración de nuevas opciones, quisiera preguntarle si habrá nuevas tiendas en un futuro cercano. Es obvio que las cosas marchan bien en los establecimientos existentes.

MD: London Supply piensa continuamente en formas de perfeccionar el negocio y progresar. Nuestro presidente, Teddy Taratuty, es muy innovador y está enfocándose siempre en nuevos horizontes.

London Supply fue fundado como proveedor naviero en 1942. En la actualidad nuestra operación consiste en la administración de aeropuertos y terminales portuarias, navegación aérea, suministro de buques, tiendas duty free y distribución mayorista. Aunque no puedo hacer comentarios específicos acerca de este tema, sí puedo decirle que la diversificación continua es algo que siempre ha sido parte importante de London Supply.

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ADF: Los proveedores nos hablan con frecuencia de las experiencias que tienen con los operadores con las promociones, y London Supply ocupa siempre el primer lugar. ¿Han creado algunas promociones notables recientemente?

MD: Tenemos un calendario anual de promociones como todas las tiendas, pero la diferencia importante es que siempre tratamos de

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

que las nuestras sean muy distintas a las que existen en el mercado. Por ejemplo, en diciembre, realizamos una promoción en cooperación con el whisky escocés The Famous Grouse que consistía en que los consumidores se llevaban una botella grabada con la compra de tres, e incluso tuvimos un gaitero en la tienda durante la promoción, así como degustaciones.

Fue una gran experiencia para los compradores.

Cuando creamos una promoción, tratamos de hacerla lo mejor posible para el proveedor, con la participación de toda la tienda. En el mes de diciembre, todo el que visitó la tienda ¡vio al popular The Famous Grouse por todas partes! Organizamos tres bares con degustaciones en diferentes partes de la tienda, colocamos huellas en el piso que conducían a las áreas de promoción, así como letreros por todo el establecimiento, y dos pasillos centrales de unos 8 metros de extensión mostrando la marca. Es un gran ejemplo de cómo tratamos de trabajar con una marca para aprovechar al máximo cada promoción.

En febrero hicimos una promoción celebrando el Carnaval con Kit Kat. En el área central de la tienda instalamos una góndola enorme, y contamos con la participación de bailarinas y músicos brasileños que hacían un espectáculo cada media hora. Los compradores bailaron y la pasaron de lo mejor. Todos los meses cambian las promociones, y esto es un ejemplo fehaciente de cómo los visitantes pueden encontrar siempre algo nuevo en London Supply que supera sus expectativas.

ADF: Ustedes serán los organizadores de la Cena de Gala en la conferencia de ASUTIL este año. ¿Puede decirnos que ocurrirá esa noche?

MD: La finalidad real de la cena es que los invitados se sientan como los consumidores que entran en nuestra tienda. Aunque no puedo darle más detalles, ¡le garantizo que será una experiencia única a la manera de London Supply! ¡Esperamos darles a los proveedores, distribuidores, operadores y a la prensa el disfrute de la experiencia London Supply en vivo y en c directo!

Latin America Report

Ahead of the game BY

RYAN WHITE

or the 2012 ASUTIL issue of Americas Duty Free, we speak to five operators with stakes in Latin American travel retail, four of which have new stores scheduled to open in the near future. It’s clear that the economic boom in the region, particularly in South America, is still in full swing.

Nonetheless, regional variations are apparent.

In South America, Grupo Wisa is poised to open a number of new border stores and believes that a combination of its travel retail acumen and exclusive products can raise profits to new heights at the existing stores. Also in Uruguay, Siñeriz is set to open a large shopping center. Project Leader Rafael Parodi indicates that business in Siñeriz’s current location is good, although he expresses concern that a rapidly inflating real could lead to problems down the road.

In Central America, Motta Internacional is preparing for the opening of two stores in Bogota’s new El Dorado Airport and indications from the current shops are that Brazilian travelers are opting for higher ticket items, which is certainly a good sign. Comparatively speaking, Guatemala’s Sociedad Protectora del Niño doesn’t have as large a Brazilian customer base with which to work, but nonetheless is hopeful that renovations at two stores and changes to the country’s government will bring about positive reforms and increased investment.

In the Caribbean, World Duty Free Group will open a new store at Jamaica’s Sangster Airport. Although far removed from South and Central America, the operator’s faith in the potential of the airport bodes well for all of Latin America; as the US economy continues to build momentum, duty free stores across North and South America should eventually begin to see the long-awaited return of US tourists to their stores.

Despite differences across Latin America, it’s clear that operators are aware of the opportunities available and, perhaps more importantly, the pitfalls that may present themselves.

Fortunately, many are investing heavily in their businesses to ensure that the positivity surrounding the region continues for a long time to come.

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THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

Latin America Report

An artist’s rendering of Grupo Wisa’s 1,340-square-meter store at the new El Dorado Airport in Bogota, scheduled to open August 4

Adding value In our IAADFS print issue, Americas Duty Free broke the story of Grupo Wisa’s venture into South American border stores. However, at that early stage some details—such as the companies with which Grupo Wisa was negotiating—weren’t available. Commercial Director Marcelo Montico has now confirmed that deals for a number of border stores in Uruguay have now been closed successfully.

“Grupo Wisa has come to an agreement with a company called Maua, which operates two duty free border stores in Rio Branco and Aceguá,” Montico explained. “In addition to this, we’ve reached agreements with two more companies that operate four existing duty free locations in Rivera. We’re planning on taking over operation of these stores in late June or early July. At the same time we’ll be working with Uruguay’s Ministry of Economy and Finance, the government body responsible for overseeing these types of negotiations, to change the ownership of the stores over to Grupo Wisa.”

Taken together the six existing stores in Rivera, Aceguá and Rio Branco are selling more than US$40 million a year. Of course, Montico notes that “potential” is the key theme for Grupo Wisa.

“We’re planning on increasing sales significantly given the many exclusive products and highend offerings that we bring to the table,” he says.

In addition to the above developments, Grupo Wisa has also purchased a location for a future duty free store inside a shopping center in Rivera that is currently being built by a company called Grupo Marquesano. The location will be one of two high-profile store areas in the shopping center, and reports are that Neutral will 34

“We’re very excited about the many new developments at Grupo Wisa. The new stores in South America add very significant value to the company.”

Marcelo Montico, Commercial Director, Grupo Wisa

operate the second. Each of the two stores there will measure 3,000 square meters, and all other locations in the shopping center will be duty paid.

“This store should be up and running by September of 2013,” Montico says.

Of course, despite these new developments in South America, Grupo Wisa is still very active in other areas of Latin America. Montico confirmed that a 1,340-square-meter La Rivierabranded store at the new El Dorado Airport in Bogota will be opened August 4. The operator has already finished the design process and is currently starting construction.

Another two stores will open in Cartagena

the first week of June. Grupo Wisa will have the distinction of operating the only duty free store in the airport. The company will also operate a duty paid store that caters mostly to nationals traveling between Cartagena and cities in Colombia. The duty free store will measure 410 square meters and the duty paid store 400 square meters.

“We’re very excited about the many new developments at Grupo Wisa,” Montico told us. “The new stores in South America add very significant value to the company, as well as a new and exciting aspect to the service we provide to our valued supplier partners.”

High-end, exclusive products will be a big part of Grupo Wisa’s offering at the new South American stores, just as it is in the operator’s other locations (pictured: a rendering of the new airport store in Bogota)

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

Luxury leanings Motta Internacional is also currently working on a store for the new El Dorado International Airport in Bogota. Motta will operate a 1,250-squaremeter departures store and a 600-square-meter arrivals store. OPAIN, who is in charge of building and operating the new airport, has stated that the new El Dorado will be the most modern and efficient airport in Latin America, estimating that in 2012 the airport will handle 6 million international passengers.

CEO of Motta Erasmo Orillac tells us that the company’s current stores in Bogota are catering mostly to Colombians traveling to and from the country, in addition to a good number of Brazilians. He doesn’t expect this to change in the new airport.

In terms of differences in shopper preferences between arrivals and departures, Orillac says that Motta has seen a significant upswing in sales of perfumes and spirits in arrivals. “You can expect these two categories to be a significant part of our offering in the new arrivals store,” he explains.

More generally, there’s been a growth in luxury items across categories, especially when it comes to Brazilian consumers. “High-end items will also be a concentration in the new stores,” Orillac says. “We’re also looking into some very special promotions and activations for the openings in order to drive footfall. However, the details of these activities will have to remain a secret for now!”

“We’ve seen a significant upswing in sales of perfumes and spirits in arrivals.

You can expect these two categories to be a significant part of our offering in the new arrivals store.”

Erasmo Orillac, CEO, Motta Internacional

Positive changes General Manager of Sociedad Protectora Del Niño (SPN) Alejandro Asturias told Americas Duty Free recently that the company is planning on renovating two stores in Guatemala’s La Aurora International Airport. Each location measures 400 square meters and sells products in such categories as spirits, tobacco, perfumes and confectionery. The renovations, says Asturias, amount to a general improvement of the stores’ aesthetics and some basic changes to displays.

Although La Aurora International Airport is the fourth busiest airport in Central America in terms of passenger traffic, surpassed only by Tocumen International Airport in Panamá, Juan Santamaría International Airport in Costa Rica, and Comalapa International Airport in El Salvador, Asturias says that economic troubles in some areas of the world combined with various internal factors in Guatemala are affecting business.

“Last year the average ticket at our stores was about US$35,” he explains. “With the renovations, we’re hoping that sales will improve this year. A new government has come into power and this gives us hope that more investment will be made in the country as a whole.”

North Americans make up about 29% of shoppers at SPN’s stores in La Aurora, second only to Guatemalan nationals (39%). As confidence in the US economy continues to grow, this may help 2012 sales statistics, says Asturias. Additionally, a healthy number of Central Americans (15%) and Europeans (10%) shop at SPN when passing through Guatemala.

Diageo’s Zacapa rum, produced in Guatemala, is one of SPN’s top sellers, says Asturias. In fact, he reports that the entire Diageo portfolio is performing extremely well. In terms of fragrances, Carolina Herrera and Chanel are the top selling brands. Rounding out the most popular products across the traditional duty free categories are Marlboro cigarettes in tobacco and Mars products in confectionery.

Of course, apart from the selection of top-end products at SPN’s stores, Asturias reminds readers that shopping at SPN benefits a good cause, with all profits from the sale of the duty free items sold there put toward a number of services aimed at helping children and families in need in Guatemala. “Each purchase made at our duty free stores is a direct contribution to our social programs, and by extension a way of improving the lives of less fortunate children in Guatemala.”

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

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Latin America Report

An artist’s rendering of the new Siñeriz Shopping center, which features a 10,000square-meter (107,639 sq. ft.) duty free store, movie theaters, a food court and more

A big step For the past 24 years, Siñeriz’s 1,800-squaremeter store has offered travelers to Uruguay’s border city of Rivera only the best in imported products. In a recent interview with Americas Duty Free, Siñeriz’s Project Leader Rafael Parodi explained that the company is currently on the verge of inaugurating a new commercial center called Siñeriz Shopping, which will include a 10,000-square-meter duty free store, movie theatres, a food court, a number of other services and parking for more than 700 cars.

“We’ve got a lot of promotions and special activities planned for the opening, which should take place near the end of June,” Parodi tells us.

“We’re very enthusiastic about this shopping centre. We’ve done a lot of research on shopper preferences and best practice in travel retail.

The finished product will be state of the art.”

When up and running, the center is expected to generate 400 jobs in the area. Siñeriz is currently working side by side with Rivera government officials to ensure the seamless integration of the new shopping center into the community.

We asked Parodi about business at the current store and he told us that sales have remained stable. “We deal with very high-end brands. I can’t point to any single category or brand specifically because, generally speaking, our entire range of offerings across categories is developing very well.”

Parodi echoes the sentiments of many in South American travel retail in telling us that Brazil “has a lot of potential.” Indeed, Brazilians make up the lion’s share of Siñeriz’s customers. However, he notes that managing the

The power of potential World Duty Free Group (WDFG) recently announced that it has secured the concession to open a duty free shop in Jamaica’s Sangster International Airport. The 110-square-meter store is located in the central departure lounge and will initially be dedicated exclusively to per-

airport is located in one of the most important tourist areas in Jamaica, Montego Bay, where fumery and cosmetics. last year it received over 3 million passengers.

Sangster International Airport, one of the “World Duty Free Group’s new outlet in largest and most modern airports in Jamaica, one of the Caribbean’s most importhe Caribbean, is also an important hub for tant tourist destinations, expands its presence many airlines operating in the region, with capac- in the region and is a significant step forward ity to receive 9 million passengers per year. The in the company’s growth strategy,” the operator said in a news release.

Pedro Castro, International Director of Operations, says: “This new concession continues our business expansion plan in markets with important growth potential, and where we can provide added value to passengers. We will work on this new project in collaboration with the airport authorities, who have placed their Pedro Castro, International Director of Operations, World Duty Free Group trust in the experience and know-how our company has acquired over many years.” c

“This new concession continues our business expansion plan in markets with important growth potential, and where we can provide added value to passengers.”

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country’s growth and the European economy are topics of concern.

“Despite being a Uruguayan company, it is Brazilian travelers that really determine our profit,” Parodi explains. “Brazilians are certainly keen shoppers and there’s a lot of opportunity in this regard. However, the excessive appreciation of the real and the volatility that may result could end up being problematic.

“For the moment, though, things are going very well,” he adds. “We are, however, dealing with the fallout of the European economic crisis here, and that’s affecting business to some extent. We’re confident that the new Siñeriz Shopping center, which is really a destination in itself as opposed to simply a store, will give travelers a reason to visit us over and above our great luxury offerings.”

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

Latin America Report

Ventaja competitiva

Desde el Caribe a Suramérica, los operadores proyectan grandes planes para garantizar el éxito continuo del sector minorista de viajes en Latinoamérica on vistas a la preparación del número dedicado a ASUTIL 2012 de Americas Duty Free, hablamos con cinco operadores que tienen intereses en el sector minorista de viajes en Latinoamérica, donde cuatro de ellos van a abrir nuevas tiendas en un futuro cercano. Está claro que el boom económico en la región, particularmente en Suramérica, está en pleno auge, aunque son evidentes las variaciones regionales.

En Suramérica, Grupo Wisa proyecta abrir nuevas tiendas de frontera, y estima que una combinación de su experiencia en el sector minorista de viajes y productos exclusivos puede elevar los ingresos a nuevas alturas en las tiendas ya existentes. También en Uruguay, Siñeriz va a inaugurar un enorme centro comercial.

C

Rafael Parodi, líder del proyecto, indica que los negocios en el establecimiento actual de Siñeriz marchan bien, aunque expresa preocupación de que una rápida inflación del real pudiera provocar problemas más adelante.

In Centroamérica, Motta Internacional se prepara para la apertura de dos tiendas en el nuevo Aeropuerto El Dorado de Bogotá.

Además, las indicaciones de las tiendas actuales revelan que los viajeros brasileños están optando por productos más caros, lo cual es sin dudas una buena señal. Y hablando comparativamente, aunque la tienda de la Sociedad Protectora del Niño en Guatemala no tiene tantos clientes brasileños, espera que las renovaciones en dos establecimientos y los cambios en el gobierno del país produzcan reformas positivas y una mayor inversión.

Another view of Grupo Wisa’s upcoming Bogota airport store; the company expects to employ similar design cues in the new South American border stores

Añadir valor En nuestro número impreso dedicado a la IAADFS, Americas Duty Free dio la primicia de la operación de Grupo Wisa en tiendas de frontera suramericanas. Sin embargo, en aquella etapa inicial algunos detalles—tales como las compañías con las que negociaba Grupo Wisa —no estuvieron disponibles. Marcelo Montico, Director Comercial de la firma, ha confirmado que los convenios de operación de varias tiendas de frontera en Uruguay se han suscrito con éxito.

“Grupo Wisa ha llegado a un acuerdo con una compañía llamada Maua, que opera dos tiendas duty free de frontera en Rio Branco y Aceguá”, explica Montico. “Además, hemos suscrito acuerdos con otras dos compañías que operan cuatro tiendas duty free ya existentes en Rivera. Tenemos en proyecto asumir la 38

operación de esas tiendas a finales de junio o principios de Julio. Al mismo tiempo, vamos a trabajar con el Ministerio de Economía y Finanzas de Uruguay, la entidad gubernamental a cargo de supervisar ese tipo de negociaciones, para transferir la propiedad de los establecimientos a Grupo Wisa”.

En su conjunto, las seis tiendas en Rivera, Aceguá y Rio Branco venden anualmente más de US$40 millones. Por supuesto, Montico destaca que el “potencial” es el tema clave para Grupo Wisa. “Tenemos en proyecto incrementar significativamente las ventas dados los numerosos productos exclusivos y ofertas de lujo que aportamos”, afirma.

Además de los convenios mencionados, Grupo Wisa también adquirió un local para una futura tienda duty free dentro de un centro

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

En el Caribe, World Duty Free Group inaugurará una nueva tienda en el Aeropuerto Sangster de Jamaica. Aunque el operador está distante de Centro y Suramérica, tiene fe en que el potencial del aeropuerto sea un buen augurio para toda Latinoamérica. En la medida que la economía estadounidense va cobrando impulse, las tiendas de Norte y Suramérica comenzarían finalmente a ver el esperado regreso de turistas de los Estados Unidos.

A pesar de las diferencias en Latinoamérica, está claro que los operadores están conscientes de las oportunidades disponibles, y, más importante aun, de los obstáculos que pudieran implicar. Por suerte, muchos están invirtiendo enormes sumas en sus negocios para garantizar que la influencia positive que existe en la región se mantenga por muchos años. comercial en Rivera que construye actualmente la compañía Grupo Marquesano. El local será una de dos zonas de tiendas de lujo en el centro comercial, y se ha revelado que Neutral operará la segunda. Cada una de las dos tiendas tendrá una extensión de 3,000 metros cuadrados, y las restantes en el centro comercial serán establecimientos con pago de aranceles. “Esta tienda estará funcionando para septiembre del 2013”, asegura Montico.

Por supuesto, además de estos nuevos proyectos en Suramérica, Grupo Wisa trabaja activamente en otras regiones de Latinoamérica.

Montico confirmó que se inaugurará una tienda de 1,340 metros cuadrados de marca La Riviera en el nuevo Aeropuerto El Dorado de Bogotá el próximo 4 de agosto. El operador ya ha terminado el proceso de diseño y ha comenzado la construcción.

Asimismo, se abrirán otras dos tiendas en Cartagena la primera semana de junio. Grupo Wisa tendrá la distinción de operar la única tienda duty free del aeropuerto. La compañía también operará una tienda con pago de aranceles dedicada fundamentalmente a viajeros nacionales entre Cartagena y las principales ciudades de Colombia. La tienda duty free tendrá una extensión de 410 metros cuadrados, y la de pago de aranceles 400 metros cuadrados.

“Estamos muy entusiasmados con los numerosos progresos de Grupo Wisa”, añade Montico. “Las nuevas tiendas en Suramérica le dan un valor muy significativo a la compañía, así como un aspecto nuevo y atractivo al servicio que les prestamos a nuestros valiosos proveedores”.

Latin America Report

Tendencias de lujo Motta Internacional también está trabajando actualmente en una tienda para el nuevo Aeropuerto Internacional El Dorado en Bogotá.

Motta operará una establecimiento de 1,250 metros cuadrados en el área de salidas, y otra tienda de 600 metros cuadrados en la de llegadas.

OPAIN, que está a cargo de la construcción y operación del nuevo aeropuerto, ha dicho que El Dorado será la instalación de su tipo más moderna y eficiente en Latinoamérica, y estima que en el 2012 el aeropuerto recibirá 6 millones de pasajeros internacionales.

Erasmo Orillac, Director Ejecutivo de Motta, afirma que las tiendas actuales de la compañía en Bogotá se dedican fundamentalmente a los colombianos que viajan hacia y desde el país, además de una buena cantidad de brasileños, una situación que, según él, no se espera que cambie en el nuevo aeropuerto.

Con respecto a las diferencias de preferencias entre los compradores que llegan o los que salen, Orillac afirma que Motta ha visto un aumento significativo en las ventas de perfumes y espirituosos en la sección de llegadas.

“Se puede esperar que estas dos categorías formen parte significativa de nuestra oferta en la nueva tienda de la sección de llegadas”, explica.

En sentido más general, se ha reportado un crecimiento en los productos de lujo en las diferentes categorías, especialmente en lo tocante a los consumidores brasileños. “Los productos de lujo también serán objeto de enfoque en las nuevas tiendas”, agrega Orillac. “También estamos analizando algunas promociones y activaciones muy especiales par alas inauguraciones, a fin de propiciar el tráfico. Sin embargo, ¡los detalles de tales actividades tienen que permanecer en el más absoluto secreto por ahora!”.

Raising children in a healthy, loving environment and proper parenting are just two programs that Sociedad Protectora del Niño offers families

Cambios positivos Alejandro Asturias, Gerente General de Sociedad Protectora Del Niño (SPN) le reveló recientemente a Americas Duty Free que la compañía tiene en proyecto renovar dos tiendas en el Aeropuerto Internacional La Aurora de Guatemala. Cada establecimiento tiene una extensión de 400 metros cuadrados y vende productos en categorías como espirituosos, tabaco, perfumes y confitería.

Las renovaciones, según Asturias, consisten en un perfeccionamiento general de la estética de las tiendas y algunos cambios básicos en los muestrarios de productos.

Aunque el Aeropuerto Internacional La Aurora es el cuarto de Centroamérica en términos de tráfico de pasajeros, superado solamente por el Aeropuerto Internacional Tocumen de Panamá, Aeropuerto Internacional Juan Santamaría de Costa Rica, y el Aeropuerto Internacional Comalapa de El Salvador, Asturias afirma que las dificultades económicas en algunas regiones del mundo, combinadas con 40

varios factores internos en Guatemala, están afectando los negocios.

“El año pasado, el promedio de compras en nuestras tiendas fue de unos US$35”, explica el funcionario. “Con las renovaciones, esperamos que las ventas mejoren este año. Hay un nuevo gobierno en el poder, y esto nos da esperanzas de que habrá más inversiones para el país en su conjunto”.

Los viajeros norteamericanos componen cerca del 29% de los compradores de las tiendas SPN de La Aurora, superados solamente por los guatemaltecos (39%). El continuo aumento de la confianza en la economía estadounidense podría ayudar a las estadísticas de ventas del 2012, explica Asturias. Además, una cifra saludable de centroamericanos (15%) y europeos (10%) compran en las tiendas SPN cuando pasan por Guatemala.

El ron Zacapa de Diageo, producido en Guatemala, es uno de los productos de mayor

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

venta en las tiendas SPN, afirma Asturias, quien informa además que todo el portafolio de Diageo está vendiéndose muy bien. En lo tocante a fragancias, Carolina Herrera y Chanel son las marcas de mayor venta, y completando los productos más populares en las categorías duty free tradicionales están los cigarrillos Marlboro en la categoría de tabaco, y los productos Mars en confitería.

Por supuesto, aparte de la selección de productos de lujo en las tiendas SPN, Asturias les recuerda a los lectores que comprar en las mismas beneficia a una buena causa, pues los ingresos de las ventas de productos duty free se destinan a numerosos servicios para niños y familias necesitadas en Guatemala. “Cada compra hecha en nuestras tiendas duty free es una contribución directa a nuestros programas sociales, y por extensión una manera de mejorar las vidas de los niños guatemaltecos menos afortunados”, concluye Asturias.

Latin America Report

Un gran paso adelante Durante los últimos 24 años, la tienda de 1,800 metros cuadrados de Siñeriz les ha ofrecido a quienes visitan la ciudad fronteriza de Rivera en Uruguay los mejores productos de importación.

En una reciente entrevista concedida a Americas Duty Free, Rafael Parodi, Líder de Proyecto de Siñeriz explicó que la compañía está actualmente a punto de inaugurar un nuevo centro comercial llamado Siñeriz Shopping, que consistirá en una tienda duty free de 10,000 metros cuadrados, cines, restaurantes, otros servicios y estacionamiento para más de 700 vehículos.

“Hemos planificado muchas promociones y actividades especiales para la inauguración, que debe llevarse a cabo casi a fines de junio”, explica Parodi. “Estamos muy entusiasmados con ese centro comercial. Realizamos muchas investigaciones de las preferencias de los compradores y las mejores prácticas minoristas

El poder del potencial World Duty Free Group (WDFG) anunció recientemente que ha obtenido la concesión para abrir una tienda duty free en el Aeropuerto Internacional Sangster de Jamaica. La tienda, de 110 metros cuadrados, está ubicada en el salón central de salidas, y, en principio, se dedicará exclusivamente a perfumería y cosméticos.

El Aeropuerto Internacional Sangster, una de las instalaciones de su tipo más grandes y modernas del Caribe, es además un centro importante para la operación de numerosas aerolíneas de la región, con capacidad para la recepción de 9 millones de pasajeros al año. El aeropuerto está ubicado en una de las zonas turísticas más importantes de Jamaica, Montego Bay, donde se recibieron el año pasado tres millones de pasajeros.

“El nuevo establecimiento de World Duty Free Group en Jamaica, uno de los destinos turísticos más importantes del Caribe, amplía su presencia en la región, y es un paso significativo hacia adelante en la estrategia de crecimiento de la compañía”, afirmó el operador en un comunicado de prensa.

“Esta nueva concesión es continuidad de nuestro plan de expansión comercial en mercados con importante potencial de crecimiento,

de viajes. El producto terminado tundra la más moderna tecnología”.

Cuando comience sus operaciones, se espera que el centro genere 400 empleos en la zona.

En estos momentos, Siñeriz está colaborando con funcionarios del gobierno de Rivera para garantizar la integración perfecta del nuevo centro comercial en la comunidad.

Le preguntamos a Parodi acerca de los negocios en la tienda actual y responde que las ventas se han mantenido estables. “Contamos con marcas de lujo. No puedo señalar una categoría o marca específica porque, en términos generales, la gama total de ofertas en las diferentes categorías marcha muy bien”.

Parodi se hace eco de los puntos de vista de muchos expertos del sector minorista de viajes suramericanos, coincidiendo en que Brasil “tiene mucho potencial”. Y en realidad, los

Last year Sangster Airport received over 3 million passengers; World Duty Free Group sees the concession as “an important step forward in the company’s growth strategy”

y donde podemos proporcionarles valor añadido a los pasajeros. Trabajaremos en este nuevo proyecto con las autoridades del aeropuerto, quienes han depositado su confianza

Sangster International Airport is one of the largest and most modern airports in the Caribbean and an important hub for many airlines operating in the region

42

brasileños componen en gran parte la clientela de Siñeriz. Sin embargo, destaca que el control del crecimiento del país, así como la economía europea, son motivos de preocupación.

“A pesar de ser una compañía uruguaya, los viajeros brasileños son los que determinan nuestras ganancias”, explica Parodi. “Los brasileños son compradores realmente poderosos, y hay muchas oportunidades en ese aspecto. No obstante, la valorización excesiva del real y la volatilidad que podría dar como resultado son problemáticos”.

“Pero por el momento, las cosas marchan muy bien”, añade. “Sin embargo, aquí se siente la crisis económica europea, y eso afecta en cierta medida los negocios. Confiamos en que el nuevo Centro Comercial Siñeriz, realmente un destino en sí mismo en vez de ser simplemente una tienda, les dará a los viajeros una razón para visitarnos, no sólo por nuestras grandes ofertas de lujo”.

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

en la experiencia y conocimientos que nuestra compañía ha adquirido en sus años de operación”, afirma Pedro Castro, Director c Internacional de Operaciones.

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Dufry

Standout performance

The Americas region, buoyed by the 2011 acquisition of operations in Argentina, Uruguay and Ecuador, contributes strongly to Dufry’s Q1 2012 results BY RYAN WHITE ufry had a strong start to 2012 and posted its best first quarter results ever with substantial turnover growth and improvement in profitability. In the first quarter of 2012, turnover grew by 30% on constant exchange rates (CER) and EBITDA before other operational results (CER) grew by 50%. EBITDA margin improved strongly by 1.8 percentage points and reached 13.5%. Net earnings to equity holders jumped by 50% in the quarter to CHF 25.1

D

growth contributing 7.4%. New concessions (net) resulted in a 2.3% increase in turnover for the quarter. “The like-for-like growth was well ahead of the increase in the numbers of international passengers and reflects the productivity improvements generated across the group,” says Dufry.

In terms of new retail space, Dufry opened 1,000 square meters of net retail space. Highlights are two new duty free shops in Mexico, with a total of 700 square meters (7534 sq. ft.) of retail space, and four

“Overall, we can say that in the first quarter of 2012 we have delivered once more on our plans and we expect to continue to do so also for the rest of 2012.”

Julian Diaz, CEO, Dufry Group

million. Below Americas Duty Free summarizes the points pertinent to Dufry’s operations in the Americas specifically, a region of the world that was particularly good to the operator during the first quarter of this year.

Strong organic growth combined with acquisitions In the first quarter of 2012, Dufry reached 9.7% organic growth with like-for-like

new Hudson news shops in Morocco. Additionally, Dufry has secured contracts to expand its business in the US in at JFK Airport. The Group says that 4,000 square meters (43,055 sq. ft.) were already opened in April and more is to come. Last but not least Dufry has been selected to provide retail and food services in the renovated Dallas Love Field Airport.

Acquisitions contributed 19.9% to turnover growth in the first quarter of 2012. Apart from the important contributions of the acquisitions completed in August 2011 in Latin America and Asia, Dufry notes that an acquisition in Russia also contributed. The latter

Dufry says the Hudson News business continues to be resilient, delivering solid results ahead of traffic figures quarter over quarter

transaction was signed in January 2012, when Dufry acquired 51% of a local travel retail operator at Sheremetyevo Airport to grow its business in the attractive Russian market.

Turnover on constant exchange rates (CER) increased by 29.6% in the first quarter 2012.

In absolute terms, turnover on constant FX rates reached CHF 740.8 million (US$801.3 million) for the first three months of 2012, and reported turnover for the same period stood at CHF 723.9 million (US$783 million). The translation effect from exchange rates reached -3.0%, driven by the depreciation of the Euro and the US dollar of 6% and 2% respectively.

Strong EBITDA In the first quarter of 2012, EBITDA before other operational results increased by 47.1% to CHF 98.1 million (US$106 million), backed by strong top-line growth as well as a substantial EBITDA margin improvement of 180

basis points reaching 13.5%, the highest EBITDA margin ever in a first quarter for Dufry. “Main drivers were operational improvements, synergies from the integration of the acquired businesses as well as a disciplined approach to cost,” said Dufry. The improvement in profitability is equally reflected in the bottom line: Net earnings to equity holders increased by 50.3% to CHF 25.1 million (US$27.1 million).

The Americas contributes heavily Turnover (CER) of Region Central America & Caribbean saw an increase of 12.3%. Translated to Swiss francs, turnover for the period was CHF 102.4 million (US$110.7 million) compared to CHF 93.0 million (US$100.5 million) in the first quarter of 2011. “The increase in the turnover was driven mainly by the recovery of Mexico, where various airlines continue

to fill in the gap created by the bankruptcy of Mexicana in the last quarter of 2010, as well as solid performances in Dominican Republic and other locations,” noted Dufry. The performance of some Caribbean islands, especially the ones in the English speaking Caribbean, was reported to be in line with performance during the same period last year.

Region South America achieved turnover growth (CER) of 61.9%, of which acquisitions contributed with 57 percentage points to this growth. In absolute terms, turnover increased to CHF 267.3 million (US$289 million) in the first quarter of 2012 from CHF 168.8 million (US$182.5 million) in the same period last year. For the new acquired businesses (Argentina, Ecuador and Uruguay) performance is healthy and on track according to Dufry’s business plan, the company says.

Turnover (CER) of Region North America grew by 11.5%. Measured in Swiss francs,

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

45

Dufry

One of Dufry’s airport stores in Brazil; these operations fall under the company’s South American arm along with Argentina, Bolivia, Ecuador and Uruguay

turnover amounted to CHF 176.8 million (US$191.3 million) for the first quarter in 2012 compared to CHF 161.9 million (US$175.2 million) in the first quarter of 2011.

“The Hudson News business continues to be resilient, delivering solid results ahead of traffic figures quarter over quarter. Equally, the duty free operations in the region saw dynamic growth in the period,” Dufry said.

CHF 19.9 million (US$21.6 million) registered in the first quarter of 2011.

Net debt was CHF 1,353.1 million (US$1,466.9 million), compared to CHF 1,361.4 million (1,475.2 million) at year-end 2011, a decrease of CHF 8.3 million (US$8.9 million).

The net debt in the period also includes the cash paid for the acquisition in Russia; excluding payments related to acquisitions, net debt decreased

by CHF 52.7 million (US$57.1 million) and pro forma net debt reached CHF 1,308.7 million (US$1,418.1 million), reflecting the substantial deleveraging in the slowest quarter of the year. The main covenant, Net Debt/adjusted EBITDA, stood at 3.34x compared to the threshold of 3.75x agreed with the lending banks.

Notable cash generation Dufry continued with its solid cash generation and converted its better profitability into higher cash flows. In the three-month period ended March 31, 2012, which historically has been the slowest quarter, net cash flow from operating activities reached CHF 58.2 million (US$63 million) versus CHF 34.7 million (US$37.6 million) one year earlier, an improvement of 67.7%. Capex for the period stood at CHF 27.4 million (US$29.6 million) compared to

A good start Julian Diaz, CEO of Dufry Group, commented: “I am pleased with the results presented in the first quarter, which represent a good start into

KEY FIGURES DUFRY GROUP IN CHF MILLION

Q1 2012

Q1 2011

VARIATION

Turnover on constant exchange rates

740.8

571.6

29.6%

EBITDA on constant exchange rates

100.2 13.5%

66.7 11.7%

50.2%

Core earnings per share (in CHF)

1.72

1.05

63.8%

Turnover

723.9

571.6

26.6%

Gross profit

422.1 58.3%

329.5 57.6%

28.1%

EBITDA (before other operational results)

98.1 13.5%

66.7 11.7%

47.1%

Net earnings to equity holders

25.1

16.7

50.3%

46

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

2012. The Group managed to grow the business in all fronts: like-for-like, new concessions and acquisitions all contributed to growth and all regions posted positive growth. Our profitability continues to improve at a high pace and we continue to achieve an excellent new level of EBITDA margin and cash generation.

“As already announced, our focus in 2012 is on profitability improvement and cash generation and the results of the first quarter 2012 show exactly that. Hence, we are fully on track with our plan so far. In addition, we continue to realize the synergies identified from the acquired businesses, which so far have been performing in line with our expectations,” Diaz continued.

“Expanding retail space continues to be an important element of our growth, be it through acquisitions or new concessions, and opportunities in emerging markets and tourist destinations remain our focus.

“In terms of business drivers, passenger numbers have so far held up well and we have no indication of a change of trend in general terms,” Diaz said. “According to industry experts, international passenger growth remains in the 4-5% range for 2012. Despite the friendly outlook, we remain alert. As already disclosed, we have prepared an action plan which could be implemented in case a global or regional slowdown takes place.

“Overall, we can say that in the first quarter of 2012 we have delivered once more on our plans and we expect to continue to do so also c for the rest of 2012,” Diaz concluded.

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Bright Star

Given rapid globalization, Bright Star makes a point of staying on top of worldwide trends to provide shoppers with the best products available

Looking ahead

After Q1 renovations, Bright Star now focuses on a 2012 calendar of all-star launches at its stores in Silvio Pettirossi Airport and onboard TAM Mercosur flights BY RYAN WHITE hen we last touched base with Bright Star Duty Free for the IAADFS issue, the company was in the process of renovating its stores. Additions included new checkout areas, new LCD displays, gondolas to communicate new launches and black highlighting throughout the locations to provide a more luxurious look and feel.

Cynthia Barreto Casartelli, Bright Star’s General Manager, tells Americas Duty Free now that renovations are completed, the company can concentrate on the business of giving customers more of the high-end products they’ve come to expect when passing through Paraguay’s Silvio Pettirossi International Airport.

“In terms of new launches, we’ve already done all the planning for the rest of the year,” she says. “All the major launches have been lined up and although we can’t comment on releases too far ahead of time, I can tell you that travelers who visit our stores will be pleasantly surprised.”

W

Keeping footfall up If the operator’s current launches are any indication, the rest of the year is indeed looking good. As of late April Ralph Lauren’s Big Pony Collection was receiving a warm welcome at Bright Star’s stores, and this month sees the launch of Issey Miyake Sport for Men. While Bright Star takes care to offer its customers the latest in products across categories, it’s no secret that promotions are another big draw for travelers. “This month we’re also giving away some incredible GWPs from Zeades to customers who purchase US$120 and over,” Barreto Casartelli explains.

We learned that activities surrounding wine launches are also a proven driver of footfall. In April, shoppers purchasing a bottle of Santa Julia Magna received a free 187 ml gift bottle, and this month shoppers buying two bottles of Escorihuela Gazcon or Ernesto 50

Catena wines will also receive a 187 ml bottle (6.58 fl. oz.) as a gift. On top of the promotions Bright Star has tastings in store on a weekly basis as a way of spicing up the shopping experience.

While new releases for the coming months will have to remain under wraps for the moment, Americas Duty Free did learn that Bright Star is currently in the process of negotiating with five fashion and accessories suppliers with the end goal of expanding the category in store. While details have yet to be worked out, Barreto Casartelli tells us that the most likely location for the expanded department will be the back wall. “In the next few months we should have much more information on this,” she says. “These brands are very prestigious and we’re very excited about this new concept.”

Sky high In addition to keeping travelers stocked with luxury items on the ground, Bright Star also handles in-flight duty free sales onboard TAM Mercosur. As a key area of the company’s overall business, Barreto Casartelli tells us that making sure that travelers have the chance to buy the latest products in the air as well as on the ground is extremely important.

This month sees the release of Bright Star’s Fall/Winter 2012 in-flight catalogue, which features Gucci Guilty Intense on the cover. As always, the magazine contains a great mix of new products and proven favorites from the most esteemed luxury brands.

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

The cover of Bright Star’s new in-flight duty free catalogue, available this month

Staying on point In closing our conversation, we touched on Barreto Casartelli’s recent appointment as Vice President of ASUTIL, as well as travel retail in general in South America. “It’s very important to stay on top of trends and watch what other regions of the world are doing in duty free,” she says. “Brazilian consumers, who purchase a lot in travel retail, are more mobile now than ever and we all must be aware that we’re competing on a world stage.”

Bright Star’s continued evolution and its concentration on the newest and best that suppliers have to offer certainly lends weight to Barreto Casartelli’s words. “After all, opportunities are only what we make of them,” she concludes, “and I think South America in general is doing a great job of c managing growth.”

Proven drivers of footfall for Bright Star include new product launches, high-profile promotions and activities such as tastings

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Airport News

Breaking new ground

While Latin America’s aviation infrastructure isn’t what it should be, these bright spots show how it can be done n the race to develop civil aviation infrastructure to keep pace with rising demand, Latin America has a mixed record. Part of that has to do with the fact that the region has seen exceptionally strong growth in aviation revenue and capacity recently—according to the International Air Transport Association (IATA), Latin America was one of the fastest growing regions in the world in February.

That growth has put unique demands on Latin America aviation infrastructure. In a talk delivered in March to the “Wings of Change VII” conference, IATA Director General and CEO Tony Tyler noted that “the freedom to succeed depends on having the right conditions in place… many of these conditions are beyond the control of the airlines—or at least require industry and government to work together with a common vision and purpose.”

Speaking at the same event, Executive Director of the Latin American and Caribbean Air Transport Assn. (ALTA) Alex de Gunten echoed Tyler’s points, calling for the modernization of Latin American aviation infrastructure, in particular airports. Noting that Latin American airlines ordered some US$50 billion worth of aircraft in the five years between 2006 and 2011, de Gunten said this torrid pace far outstripped the pace of public investment in airports and air navigation capabilities.

One airport that has been setting a solid example of infrastructure investment is El Dorado International Airport in Bogotá, Colombia. The airport is the largest in Colombia, accounting for half of the nation’s total air

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traffic, and is ranked as one of the top 50 busiest airports in the world, for both passenger and cargo traffic.

El Dorado is currently undergoing a massive airport-wide upgrade and renovation program, scheduled to be completed in 2014 under the terms of a US$1 billion concession contract granted to Operadora Aeroportuaria Internacional (OPAIN), a consortium that consists of Colombian construction and engineering firms and the Switzerland-based Flughafen Zürich AG. OPAIN’s mandate is to administer, build, modernize, operate and commercially develop the airport over a 20-year term that began in February 2007, when the contract was awarded.

In a progress report issued in February, OPAIN announced that 35% (US$400 billion) had been invested to date, and that 60% of the work—consisting of eight major milestones and some 43 individual projects—had been completed.

The reconstruction and upgrade work will more than triple the overall size of El Dorado, increasing it from 50,000 square meters to 163,000 square meters. The total area covered by the concession is 1,000 hectares while the area under active operation covers 2.5 million square meters. Some 1,000 local jobs have been created, with around 83% of the projects requirements for unskilled labor being drawn from the communities around the airport.

The amount of work being undertaken makes an impressive list. As part of the first milestone, service counters were replaced, the airport’s Operations Control Center was remod-

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

BY ANDREW BROOKS eled, and new flight and baggage information systems were installed. OPAIN says that “as a voluntary act” it provided airport retail spaces with unified display showcases and store fixtures, as well as increasing the height of the indoor ceilings.

Step by step Other milestones included a new firefighting station to serve the airport and neighboring communities—aviation safety was a theme hammered home by speakers at the Santiago conference referred to earlier—and a massive overhaul and redevelopment of the airport’s cargo facilities, which are the busiest in Latin America. Cargo capabilities have been probably the primary area of focus for the entire upgrade.

The immigration and security facilities have been redeveloped and improved, and new luggage carousels, lighting and air circulation systems have been installed. Passengers will now be able to view new information screens displaying real-time flight information, and the restrooms have been remodeled.

The new unified terminal will contain office, luggage sorting and registration systems, waiting areas and, on the first and third floors, retail and duty free shopping. International VIP lounges and public and private commercial areas will be housed on the fourth floor. Interestingly, the terminal will also receive a seismic retrofit to protect it against earthquake damage. The old terminal will be demolished when the new terminal is completed later this year.

The contract is a money-maker for the Colombian government. Under the terms of the deal with OPAIN, financing for the work

Growth in passengers has put unique demands on Latin American aviation

on the airport comes from OPAIN’s partners, long-term loans and gross revenue from airport operations—and 46.16% is paid to the Colombian Office of Civil Aviation (OCA). In its February update, OPAIN noted that about COL$445 billion (approx US$252 million) had been transferred to OCA. OPAIN derives gross revenue from regulated categories such as user fees and charges for rental of space. So far, OPAIN says, all profit

it has derived from commercial operations at El Dorado have been used to cover expenses and to support the ongoing work on the airport. In 2011 alone, OPAIN says, the consortium invested COL$322 billion (US$182 million) in El Dorado.

Despite the disruption caused by such a thorough overhaul, El Dorado has continued to enjoy growing passenger and cargo numbers over the last several years. Total passen-

ger throughput grew 8.55% from 2010 to 2011, rising from 18.7 million passengers in 2010 to 20.3 million last year. That growth in traffic contributed to a corresponding 10.1% rise in OPAIN’s revenue for the same period.

In 2011, OPAIN received COL$255 billion (US$144 million) in short-term loans, and as of last December the consortium’s total financial liabilities were COL$337 billion c (US$190 million).

Lima Jorge Chávez tops in South America for fourth straight year Lima Airport Partners, the private operator of Jorge Chávez International Airport in Lima, Peru, has announced that the airport has been named “Best Airport in South America” by Skytrax Research for the fourth year running. Skytrax is a London-based firm that specializes in research into the airline and air transport industry.

Jorge Chávez International, which is Peru’s main domestic and international gateway, topped José Joaquín de Olmedo International Sabine Trenk, COO of Jorge Chávez International Airport, accepts the “Best Airport in South America” award from Skytrax Chair Edward Plaisted

Airport in Guayaquil, Ecaudor and Comodoro Arturo Merino Benítez International Airport in Santiago, Chile, which came in second and third, respectively.

Jorge Chávez also carried off the “Airport Staff Service Excellence” award for 2012, which it also won last year.

The independent survey is conducted annually over the Internet with some 12 million passengers of 108 nationalities, as well as users of some 388 airport terminals around the world, providing their input on who’s good and who isn’t so good. Questions cover a range of 39 different criteria, including airport accessibility, passenger transit availability, the comfort of the terminal, baggage handling efficiency, security controls, the warmth and friendliness of the service delivered by airport staff members, design, cleanliness, immigration wait times and quality of service, terminal signage, facilitation of connecting flights, and the variety and quality of products and services on offer.

Ms Sabine Trenk, COO of Jorge Chávez International Airport, accepted the award at the Passenger Terminal EXPO, which was held in April in Vienna.

“We congratulate the management and staff of Jorge Chávez International Airport Lima on the fantastic achievement in securing both Best Airport in South America and the Best Airport Staff in South America at these 2012 World Airport Awards,” said Edward Plaisted, Chairman of Skytrax. “A perennial favorite with passengers, other airports in the region must be wondering what they have to do to unseat Lima from this top position.” www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

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Infraero

Keeping a steady pace Americas Duty Free speaks with Infraero for an update on the work completed in the lead up to the World Cup and what still remains to be done over the next two years BY RYAN WHITE he nature of big opportunities is that they also present their share of challenges. The staggeringly high bids for the operation of São Paulo Guarulhos, São Paulo Viracopos and Brasilia airports are a clear indication that a number of consortia are very confident in the region’s profit potential.

Nonetheless, organizations like IATA have expressed fears that airlines may have to deal with higher fees that would no doubt end up trickling down to the traveler.

Americas Duty Free was unable to contact the Secretaria de Aviação Civil before publication for comment on how concerns about the operation of Guarulhos, Viracopos and Brasilia will be met. However, in a recent conversation with Infraero, the airport authority told us that for its part, work on the 63 airports that it now operates is progressing at a rapid pace. Much ground has been gained in the last year, says Infraero, and the rest of 2012 and 2013 will see a number of other projects completed in the lead up to the World Cup in 2014.

Up to here “Infraero runs a work schedule for its investments on the network’s airports, the aim of which is to improve the airport infrastructure available to its users and further meet the growing demand of the civil aviation field in Brazil,” says Infraero. The airport authority has already seen a number of successes this year and last as a result of implementing the work schedule, commonly referred to as the “Accelerated Growth Program.”

Projects completed in 2011 include operational modules for Guarulhos, Viracopos, Goiânia, Cuiabá and Vitória Airports; the completion of the first phase of the apron and runway systems of São Gonçalo Airport; the last phase of the installation of new fingers at Recife Airport; and the enlargement and improvement of the apron and runway systems at Guarulhos Airport.

Moreover, this year has already seen two projects completed. Infraero has already implemented Guarulhos Airport’s fourth passenger terminal and successfully installed Porto Alegre Airport’s operational module.

Looking ahead Projects currently underway include breaking ground for Guarulhos’ third passenger terminal; the revitalization and recovery of the apron and runway systems at Galeão Airport; and finishing touches on the first passenger terminal, reforms to the second passenger terminal, and changes and improvements on the cargo terminal at Galeão Airport.

Other projects in the works this year include the second phase of implementing São Gonçalo Airport’s apron and runway system; the installation of Brasília Airport’s second operational module; reforms for the main section of Brasília Airport’s passenger terminal; the modernization and enlargement of Manaus and Confin Airports’ passenger terminals; an apron extension and runway revitalization at Curitiba Airport; and the enlargement of Curitiba Airport’s cargo terminal.

Additionally, Curitiba Airport’s passenger terminal will be extended and its road system improved. A parking lot will also be built this year. Foz do Iguaçu Airport’s passenger terminal will also see some changes and an extension, while Macapá Airport’s apron will be extended. Finally, Parnaíba Airport will be given a new apron and a new cargo handling terminal will be built at Porto Alegre Airport.

“The works underway show our efforts to modernize and improve the airports under our management,” Infraero says. Of course, it’s clear that there is a large amount of work yet to be done, but Infraero told us it is confident in its ability to complete the projects ahead of the World Cup.

The operational module at Goiânia Airport (pictured) was completed in 2011

At Brasília Airport (pictured is work being done one of the airport’s operational modules in December, 2011), investments on Infraero’s part total R$10.96 million (US$5.6 million)

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Infraero The timeline The passenger terminal reforms at Galeão Airport are expected to be completed in the fourth quarter of 2013, as are the runway and apron revitalization projects. The baggage carousel tender is currently in progress and the project is expected to be completed in April, 2014 The changes to Confins Airport should be finished by the fourth quarter of 2013, says Infraero, as will the first phase of Porto Alegre Airport’s passenger terminal and apron project. The runway expansion at Porto Alegre will be completed in March of 2014.

At Curitiba Airport, the expansion of the passenger terminal and extension of the road system will be completed in the fourth quarter of 2013, while the runway revitalization and apron expansion there will be completed in May and June of this year, respectively. At Recife Airport, the tender for the construction of a new air control tower is currently underway and the project is expected to be completed by December of 2013.

Salvador Airport’s passenger terminal project, apron expansion and new control tower—for which the tender is also currently underway— should all be finished by the fourth quarter of 2013, says Infraero. At Fortaleza Airport, the first phase of work to the passenger terminal and roadway reforms (tender currently underway) are also scheduled to be completed by the end of 2013. Likewise, the first passenger terminal expansions and the roadway improvements at Manaus Airport will be completed by the end of 2013.

Finally, at Cuiabá Airport the expansion of the passenger terminal, improvements to the road system and the parking lot construction should be completed by December 2013. The fourth quarter of next year is also the planned completion date for the second phase of work at São Gonçalo do Amarante Airport. Infraero also notes that the construction of a passenger terminal and road system will be completed by the winner of the São Gonçalo do Amarante concession.

A newly renovated area of Galeão Airport

Other airports that Infraero is investing in include Galeão Airport (R$813.2 million, or US$415.8 million); Confins Airport (R$508.6 million, or US$260 million); Porto Alegre Airport (R$579.2 million, or US$296.2 million); Curitiba Airport (R$84.4 million, or US$43.1 million); Recife Airport (R$18.4 million, or US$9.4 million); Salvador Airport (R$47.6 million, or US$24.3 million); Fortaleza Airport (R$349.8 million, or US$178.8 million); Manaus Airport (R$394.1 million, or US$201.5 million); Cuiabá Airport (R$91.3 million, or US$46.7 million); and São Gonçalo do Amarante Airport (R$174.4 million, or US$89.2 million).

“Infraero’s main challenge in the following years is to keep up with the growing internal demand for the air travel market,” the airport authority told us. “The company keeps a steady schedule of investments and c improvements to keep its airport infrastructure up to date.”

Investing in the future When speaking with Infraero, Americas Duty Free took the opportunity to ask about the investment being put into the Accelerated Growth Program. “As for changes in the coming years, Infraero’s investment plans for the World Cup involve significant improvements for the airports directly involved with the events,” the airport authority said.

At Guarulhos Airport, Infraero has invested a total of R$651 million (US$333 million). At Brasília Airport, investments on Infraero’s part total R$10.96 million (US$5.6 million). The total investment at Viracopos Airport is R$7 million (US$3.6 million).

An aerial view of Confins Airport: In total Infraero has invested R$508.6 million (US$260 million) here

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At Cuiabá Airport (pictured), the expansion of the passenger terminal, improvements to the road system and parking lot construction should be completed by December 2013

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Avanzando a paso constante

Americas Duty Free habla con Infraero para actualizarse acerca de las obras terminadas con vistas a la Copa Mundial, y lo que queda por hacer en los dos próximos años a naturaleza de las grandes oportunidades consiste en que también traen consigo su cuota de desafíos. La envergadura asombrosamente alta de la operación de los aeropuertos de São Paulo Guarulhos, São Paulo, Viracopos y Brasilia es una clara indicación de que numerosos consorcios están confiados en el potencial de ganancias de la región. Sin embargo, organizaciones como la IATA han expresado temor de que las aerolíneas tendrían que pagar altas tarifas que, sin duda, se les transferirían al pasajero.

Americas Duty Free no pudo contactar con la Secretaría de Aviación Civil antes del cierre de esta edición, para que comentara acerca de cómo se manejarían las preocupaciones en torno a la operación de los aeropuertos de Guarulhos, Viracopos y Brasilia. Sin embargo, en una conversación reciente con Infraero, la autoridad afirmó que, por su parte, el trabajo en los 63 aeropuertos que opera progresa a pasos agigantados. Se ganó mucho terreno el año pasado, según Infraero, y durante el resto del 2012 y el 2013 se terminarán otros proyectos en el camino a la Copa Mundial de 2014.

Un plan de crecimiento acelerado “Infraero tiene un calendario de trabajo definido para sus inversiones en los aeropuertos de la red, cuyo propósito es mejorar la infraestructura aeroportuaria disponible a sus usuarios, y así satisfacer aun más la creciente demanda del campo de la aviación civil en Brasil” asegura Infraero.

La autoridad aeroportuaria ya ha tenido numerosos éxitos este año y el pasado, como resultado de la implementación del calendario de trabajo, al cual se le conoce comúnmente como “Plan de Crecimiento Acelerado”.

Entre los proyectos terminados en el 2011 están los módulos operativos de los aeropuertos de Guarulhos, Viracopos, Goiânia, Cuiabá y Vitória; la culminación de la primera fase de los sistemas de rampas y pistas del Aeropuerto de São Gonçalo; la última fase de la instalación de nuevos pasillos móviles de embarque y desembarco de pasajeros en el aeropuerto de Recife; y la ampliación y mejoramiento de los sistemas de rampas y pistas del aeropuerto de Guarulhos.

Además, en este año se han finalizado dos proyectos. Ya Infraero implementó la cuarta terminal de pasajeros del aeropuerto de Guarulhos, e instaló con éxito el módulo operativo del aeropuerto de Porto Alegre.

Mirando al futuro Entre los proyectos que se están acometiendo actualmente está el movimiento de tierra de la tercera terminal de Guarulhos; la revitalización y recuperación de los sistemas de rampas y pistas del aeropuerto de Galeão; y los toques finales a la primera terminal de pasajeros, las reformas a la segunda terminal de pasajeros, y los cambios y mejoras

de la terminal de carga del Aeropuerto de Galeão.

Otros proyectos en fase de realización este año son: la segunda fase de los sistemas de rampas y pistas del aeropuerto de São Gonçalo; la instalación del segundo módulo operativo del aeropuerto de Brasilia; las reformas en la sección principal de la terminal de pasajeros del aeropuerto de Brasilia; la modernización y ampliación de las terminales de pasajeros de los aeropuertos de Manaus y Confin; la extensión de las rampas y la revitalización de las pistas del aeropuerto de Curitiba; y la ampliación de la terminal de carga de este último.

Además, la terminal de pasajeros del aeropuerto de Curitiba será ampliada, y se mejorará su sistema vial. Asimismo, este año se construirá un estacionamiento. Por su parte, la terminal de pasajeros del aeropuerto Foz do Iguaçu también será objeto de algunos cambios y ampliación, mientras que las rampas del aeropuerto de Macapá también serán ampliadas. Finalmente, al Aeropuerto de Parnaíba se le instalará nuevas rampas y se construirá una nueva terminal de carga en el Aeropuerto de Porto Alegre.

“Las obras en fase de realización demuestran nuestros esfuerzos por modernizar y mejorar los aeropuertos que administramos”, destaca Infraero. Por supuesto, está claro que aún hay mucho trabajo por hacer, pero Infraero ha manifestado confianza en su capacidad para terminar los proyectos antes de la Copa Mundial.

El calendario Se espera que las reformas en la terminal de pasajeros del aeropuerto de Galeão se concluyan en el cuarto trimestre del 2013, así como los proyectos de revitalización de las pistas y rampas. La licitación del carrusel de equipaje está en marcha, y se espera que el proyecto esté terminado en abril del 2014.

Por su parte, los cambios en el aeropuerto de Confins serán concluidos en el cuarto trimestre del 2013, según Infraero, al igual que la primera fase del proyecto de terminal de pasajeros y rampas del aeropuerto de Porto Alegre. Además, la ampliación de las pistas del aeropuerto de Porto Alegre estará lista en marzo del 2014.

En el aeropuerto de Curitiba, la ampliación de la terminal de pasajeros y la ampliación del sistema vial se terminará en el cuarto trimestre del 2013, mientras que la revitalización de las pistas y la ampliación de las rampas estarán listas en mayo y junio de este año, respectivamente. En el aeropuerto de Recife, ya está en marcha la licitación de una nueva torre de control y se espera que el proyecto se concluya en diciembre del 2013.

El proyecto de la terminal de pasajeros, la ampliación de las rampas y la nueva torre de control del aeropuerto de Salvador—para el cual The runway revitalization project at Galeão Airport

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también está en marcha una licitación—deberán terminarse en el cuarto trimestre del 2013, explica Infraero. En el aeropuerto de Fortaleza, la terminación de la primera fase del trabajo de reformas en la terminal de pasajeros y sistema vial (la licitación está actualmente en marcha) también está programada para finales del 2013. De igual forma, las ampliaciones de la primera terminal de pasajeros y las mejoras del sistema vial del aeropuerto de Manaus se concluirán a finales del 2013.

Finalmente, la expansión de la terminal de pasajeros, las mejoras del sistema vial y la construcción del estacionamiento del aeropuerto de Cuiabá terminarán en diciembre del 2013. El cuarto trimestre del año próximo es también la fecha planificada de terminación de la segunda fase del trabajo en el aeropuerto de São Gonçalo do Amarante. Infraero añade que la construcción de la terminal de pasajeros y el sistema vial será concluida por el ganador de la concesión de São Gonçalo do Amarante.

Invertir en el futuro Durante su conversación con Infraero, Americas Duty Free aprovechó la oportunidad para indagar acerca de la inversión en el Programa de Crecimiento Acelerado. “En lo tocante a los cambios en los próximos años, los planes de inversión de Infraero para la Copa Mundial consisten en mejoras significativas en los aeropuertos con participación directa en los eventos”, manifestó la autoridad aeroportuaria.

En el aeropuerto de Guarulhos, Infraero ha invertido un total de R$651 millones (US$333 aeropuerto de). En el aeropuerto de Brasilia, la inversión por parte de Infraero asciende a R$10.96 millones (US$5.6 millones). Por su parte, la inversión total en el aeropuerto de Viracopos es de R$7 millones (US$3.6 millones).

Otros aeropuertos en los que está invirtiendo Infraero son: Galeão (R$813.2 millones, o US$415.8 millones); Confins (R$508.6 millones, o US$260 millones); Porto Alegre (R$579.2 millones, o US$296.2 millones); Curitiba (R$84.4 millones, o US$43.1 millones); Recife (R$18.4 millones, o US$9.4 millones); Salvador (R$47.6 millones, o US$24.3 millones); Fortaleza (R$349.8 millones, o US$178.8 millones); Manaus (R$394.1 millones, o US$201.5 millones); Cuiabá (R$91.3 (R$91.3 millones, millones, oo U US$46.7 millones); y São Gonçalo do Amarante (R$174.4 millones, o US$89.2 millones).

“El principal desafío que enfrentará Infraero en los próximos años es adaptarse a la creciente demanda interna del mercado de viajes por avión. La compañía mantiene un calendario seguro para mantener al día su infraestructura aeroportuaria”, conc cluyó la autoridad aeroportuaria.

The passenger terminal reforms at Galeão Airport (pictured) are expected to be completed in the fourth quarter of 2013 www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

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Industry News

LATAM contributes 27% of the world’s jet hull losses, meaning that in six years at the current rate of traffic growth carriers in the region will experience a major accident every eight weeks if things do not improve

“The investment must be recouped through efficiency improvements that enable traffic growth, not in higher charges to airlines.”

Tony Tyler, Director General and CEO of IATA, on Brazilian airport privatization

Air power BY

ANDREW BROOKS

Aviation can be a huge economic driver, but getting top performance takes more than just switching on the runway lights ir travel is a vital contributor to the economies of Latin American countries, as it is anywhere else in the world. And while the region was among the world’s fastest growing for the month of February in terms of revenue and capacity according to International Air Transport Association (IATA) figures, that industry body and others have voiced concerns over the pace and method of growth.

For IATA, Latin American aviation improvements hinge upon improving safety, investing in infrastructure and reducing taxes on the industry. “The freedom to succeed depends on having the right conditions in place,” said IATA Director General and CEO Tony Tyler in a speech delivered on March 28 at the Wings of Change VII Conference in Santiago, Chile. “Many of those conditions are beyond the control of the airlines—or at least require industry and government to work together with a common vision and purpose.”

While the aviation industry overall has improved safety performance—Tyler says 2011 was “a stellar year”—Latin American aviation underperformed on this key indicator. While LATAM traffic accounts for 6% of the global total, the region contributes 27% of the world’s jet hull losses. Tyler put the figures into stark relief, saying that “if this does not improve, then the current rate of traffic growth means that in six years, carriers here will experience a major accident every eight weeks.”

The need to ensure security impacts a number of operational areas, particularly airport wait times. “Does the security experience of long lines—which is a particular issue at several large hub airports in Latin America—plus unpacking, disrobing and often intrusive checks, need to be that way?” Tyler asked. He pointed to differentiated screening based on individual passenger information and the harmonization of intraregional passenger data exchange as possible ways to streamline security procedures and improve the flight experience.

Tyler was even more forceful when he commented on the aviation infrastructure picture in Latin America, citing bottlenecks created by neglect and underinvestment. He took the example of recent airport privatizations in Brazil, which were undertaken in the expectation that they would speed up the pace of investment in aviation infrastructure in advance of the FIFA World Cup and Olympic events. However, things didn’t go as smoothly as hoped, thanks to the high prices paid by investors for the concessions. “The investment must be recouped through efficiency improvements that enable traffic growth, not in higher charges to airlines,” Tyler said.

Tyler outlined the contribution that the aviation industry makes to the economic health of Latin America and the Caribbean, where it supports more than 4.6 million jobs and US$107 billion in GDP. Impressive figures, but Tyler insisted to his audience that the contribution could be much greater. American passengers, for example, make an average of 1.8 trips a year, while the average for Chile, which has the most well traveled passengers in Latin America, is only 0.7.

Earlier in the month, Tyler had made similar points in urging

competitiveness improvements in the North American aviation industry as well. In the US, he said, the tax and regulatory burden on the aviation industry in particular needs to be reduced and in Canada, the tax burden is especially severe, particularly when compared with the aviation sector in Australia, a market that offers a fairly close parallel with Canada.

Government regulation is unpopular with any industry, but the aviation sector has been particularly united in its attack on what it thinks of as “Big Brother.” In November 2011, the Latin American

The right way to win Grupo Aeroportuario del Sureste (ASUR) manages nine airports in southeastern Mexico, including Cancun Airport, which was ranked the best airport in Latin America in the Airports Council International (ACI) Airport Service Quality Awards in 2009. ASUR derives its revenues from passenger fees, as well as airport commercial operations, and has accordingly been buoyed by robust year-over-year traffic increases. In February it set its sights on operations outside Mexico with the announcement that it had decided to make a joint bid with Advent International for concessions to maintain, operate and expand three of Brazil’s largest airports—Brasilia, Guarulhos and Campinas.

ASUR’s was not among the winning bids, which, as it turns out, might have been a backhanded compliment: the handling of the bidding process came under fire almost immediately, from IATA and ALTA among others. One of the principal objections was that the concessions seemed to have been awarded simply to the highest bid.

InfrAmérica, for example, won the Brasilia concession with an offer of US$4.51 billion, more than six times higher than the minimum price cited in the tender. All in all, the three winning bids collectively amounted to five times the overall minimum value cited for the three airports.

The bid was the prime example cited by IATA’s Tony Tyler in his criticisms, noted earlier, of the privatization process in Brazil. Privatization is not a panacea, Tyler warned, and has to be implemented selectively and with care in order to net the desired results. And, quoted in an online report at the CAPA website, ALTA Executive Director Alex de Gunten warned an audience at the ALTA Airline Leaders Forum in Rio that the privatization model should always focus on best service at the lowest cost. “It’s very important for the government to focus on efficiencies, not revenue generation,” de Gunten said. He noted, however, that up to this point privatization initiatives in Latin America have focused on the revenue side.

When it comes to airports in North America, the key role they play as economic drivers was given extra emphasis in February when Airports Council International – North America (ACI-NA) released the results of its “Economic Impact of Commercial Airports

and Caribbean Air Transport Association (ALTA), a regional airline association, took the regional public sector to task when its President, Robert Kriete, addressed the 8th annual ALTA Airline Leaders Forum in Rio de Janeiro. Kriete touched on many of the same themes as IATA’s Tyler when he castigated governmental authorities in Latin America and the Caribbean for not matching the aviation industry’s rate of growth by investing in infrastructure, simplifying the region’s complicated regulatory landscape and promoting greater efficiency in awarding airport concessions.

in 2010” research study. The study found that US airports generated 10.5 million jobs and US$1.2 trillion in total economic impact, accounting for about 8% of gross domestic product and 7% of jobs.

Interestingly, the study found that the economic benefits were significantly greater than those recorded for 2001 in the previous ACI-NA economic impact study. The future only looks poised to get even better, with domestic passenger travel figures predicted to rise from 713 million emplanements a year to 1 billion in the next decade.

The Canadian Airports Council (CAC), a division of ACI-NA, is keenly—one could say painfully—aware of the economic impact airports have. In a statement leading up to a one-day forum devoted to the topic, the CAC noted that the cross-border shopping trend that sees millions of Canadians crossing into the US for lower prices on all kinds of goods and services is also well advanced in the air travel market, with five million Canadians every year choosing to cross the border to grab cheaper flights out of US airports.

“For years, we have talked about the need to address Canada’s cost competitiveness relative to the US and elsewhere,” said CAC Chairman Bill Restall. “But we are not just losing passengers because of this disadvantage—we are ceding to the US thousands of jobs, millions of dollars in wages and billions in economic activity.”

At the March forum—titled “One of Our Airports is Missing!” to drive home the fact that the five million lost flights approximate the activity at a major airport—the CAC released a study of the crossborder phenomenon, noting that fares from Canadian airports are pushed higher by a variety of drivers, including the Air Travellers Security Charge, Harmonized Sales Tax, the hidden cost of airport rent paid by airports to the federal government and the navigation and airport improvement fees paid to fund infrastructure.

“Our US airports and air carrier counterparts compete vigorously for this business, and we don’t knock Canadian air travelers for taking advantage of it,” said CAC Cross Border Shopping Working Group Chair and Vancouver Airport Authority Director of Aviation Marketing John Korenic. “But it would be great to bring this business back to Canada.

“I’d like to be able to say one day that we found our missing c airport.”

In North America, the Canadian Airports Council notes that five million Canadians every year choose to cross the border to grab cheaper flights out of US airports

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

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L’Oréal Group

“Rouge in Love” builds pace in travel retail L’Oréal Group’s new compact lipstick gets positive feedback following Americas launch

n March 2012, Lancôme Travel Retail Americas launched “Rouge in Love,” a new ‘prêt a porter’ lipstick, into the Americas travel retail market. The launch followed one month after the local market debut.

Designed for portability, Rouge in Love features a slim silhouette with a brushed metal cap and shiny base that fits easily into the palm. The case features a mirror inscribed with the words “Rouge in Love.” The back of the case is marked with red top stitching inspired by the intricate weave of couture stockings.

“This is the launch for Lancôme lips,” says Paul Connors, Lancôme Division Manager for Travel Retail Americas, L’Oréal Group. “The idea is to recruit a younger audience to our brand and offer a color game; a lipstick able to follow women through an entire day and night.”

Billed as a fashion accessory in and of itself, Rouge in Love is available in three categories and a total of 24 shades. “Jolis Matins” offers more neutral shades and tone-on-tone color for use earlier in the day. The shades, which feature the use of tone-on-tone pearl particles, include “Corail in Love,” “Beige Dentelle” and “Rose Pitimini”—the latter taking its name from the smallest rose in the world.

The “Boudoir Time” range features pop shades and matte shades such as “Rose Boudoir,” “Madame Tulipe” and “Violette Coquette,” developed around contrasting pearl particles.

“Tonight is My Night” is the party version with durable, intense, deep colors infused with golden pearl particles. Shades include “Midnight Rose,” “Rouge Valentine” and “Violine Lamée.”

The light texture melts when it is applied, leaving the essential color concentrate on the lips. The key to the formula is what L’Oréal calls a “color catching” polymer that forms a film on the surface of the lips that captures pigments and satiny agents. The lipstick also incorporates nourishing and repairing oils, and is scented with subtle notes of rose and violet.

L’Oréal has chosen actress Emma Watson to be the brand ambassadress for Rouge in Love. Watson, who came on-board with Lancôme International early last year to support the “Trésor Midnight Rose” fragrance, is being photographed by Mario Testino. She has chosen “Corail in Love,” “Rose Boudoir”

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BY

HIBAH NOOR

and “Rose Sulfureuse” as her personal shades.

To animate the stores, the Lancôme team has developed a tray that beauty advisors can carry

with them in the store to show the product to customers. The idea is not only to show the product to newcomers and brand adepts, but also to recruit new followers to Lancôme.

Feedback from the market has been very positive, Connors says. “Customers and retailers like the concept, and the hydration effect that lasts up to six hours. Rouge in Love lends itself to every interpretation. Whatever your wish, whatever your mood, beauty addicts will find a taic lor-made color just for them.”

British actress Emma Watson was named brand ambassadress for Rouge in Love

Rouge in Love

by Lancôme

Paul Connors, Lancôme Division Manager for Travel Retail Americas, L’Oréal Group

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THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

Beauty News

Clarins’ latest statement from the Angel Eau de Toilette

Clarins premieres new creams and fragrances Fragrance, skincare and cosmetics specialist Clarins Group is highlighting a range of new and recent products in the skincare and fragrance categories.

In the first quarter of this year Clarins launched Extra Firming Day wrinkle lifting cream, which is based on the discovery of the proteins that form connecting links between dermal fibers and cells. The cream is designed for all skin types, and Clarins says that it counteracts skin slackening, reduces wrinkles and firms the face.

Clarins has also introduced Extra-Firming Night rejuvenating cream, which reinforces the firming action of the Extra-Firming Day cream and reduces the deepening of lines.

The Day cream fragrance features rose and camelia, and the Night cream exhibits notes of lily of the valley, jasmine and iris. Each cream is also offered in a separate version designed for dry skin.

Clarins Group has also launched the latest statement with the Angel Eau de Toilette line. The new Angel features red berries, pralines, vanilla and patchouli in a fragrance composed by Amandine Marie (Robertet).

Clarins says that the fragrance deploys in three waves, starting with a “celestial” touch incorporating bergamot and red berries with a touch of pepper, continuing with praline and berry flavorings and concluding with a patchouli-vanilla accord tempered by cedar and nuanced with

white musk.

The bottle, emulating a comet, is round on the front and faceted on the back, with a star sculpted in silver on the top. The refillable Angel Eau de Toilette is available in 40 mL and 80 mL sizes.

In the Azzaro line, Clarins has announced the launch of the Azzaro pour Homme Night Time men’s fragrance. The composition was assembled

by Christophe Raynaud and Michel Girard (Givaudan). The three facets consist of an initial burst of bitter orange accented with rhubarb, followed by the fougère accord and spicy notes of black pepper and nutmeg, rounded off with the bottom notes of vetiver and cedar that provide the nocturnal theming.

International superstar Enrique Iglesias has been the face of the Azzaro Pour Homme fragrance since 2009, in a partnership that advances the brand’s refined and sensual spirit.

Azzaro pour Homme Night Time is available in 100 mL, 50 mL, 30 mL and 15 mL Eau de Toilette spray, 75 mL deodorant stick and 150 mL deodorant spray.

Ferragamo Parfums turns in positive 2011 results Italian selective fragrance company Ferragamo Parfums has rounded off a successful 2011 with growth of +25.7% over 2010, with its success bolstered by the official stock market listing of the Salvatore Ferragamo Group in June.

The company attributes the positive trend primarily to a successful clutch of launches, first among them being the latest male fragrances “F by Ferragamo pour Homme Free Time,” launched in the first semester, and “Attimo pour Homme,” launched in the second semester. The addition of the new feminine fragrance “Attimo L’Eau Florale” also contributed to the upbeat numbers.

In geographical terms Ferragamo Parfums’ key market remains Asia, especially China, Japan and Korea, followed by double-digit growth in Europe, mainly driven by Italy and Russia, and thirdly the US market.

The company’s distribution network underwent important enlargements in 2011, both in local and duty free markets, reaching over 15,000 doors worldwide. The Ferragamo Parfums business counts for 5.9% of total Salvatore Ferragamo Group revenue.

"We didn't expect such significant growth even though the forecasts had been positive,” says Luciano Bertinelli, Ferragamo Parfums CEO. "The Attimo line exceeded our expectations, but we are ready to go another important step forward in 2012 with the launch of ‘Signorina.’ Our new line and feminine fragrance presented with an important event in Moscow last October, but arrives on shelves this year—an amazing project that will contribute to increasing our market share even more.”

Ferragamo Parfums launched Signorina earlier this year

Beauty2Market takes on Americas travel retail for Victor Manuelle Beauty2Market has announced that it will be representing the Victor Manuelle fragrance line in travel retail and duty free for the Americas, as well as local markets in South America and Canada. Manufacturer Edge Perfumes will be responsible for the distribution of the product line in the US. As the iconic salsa singer is originally from Puerto Rico, Beauty2Market will be launching the fragrance line there in large department stores. The marketing strategy will be based on a “360-degree” approach that will engage Victor Manuelle’s large fan base at all levels in order to create awareness and build retail sales. The marketing campaign will utilize all possible media channels, placing advertising through print, TV, digital, mobile and social media networks.

Victor Manuelle’s career got its start when his talent was recognized and promoted by Puerto Rican bandleader Gilberto Santa Rosa. Manuelle started his career as a backup singer during his teen years.

From there, he quickly became the leading voice among his generation of salsa performers, and he has posted the most Number One singles in the Billboard Tropical Song Charts since he was in his 20s.

Manuelle won a “Premio Lo Nuestro” award for Best Salsa Artist in 2007 and co-hosted the 2006 Latin Grammys. He has released a total of 19 albums from 1993 to 2012.

Essence debuts a range of new fragrance releases “We are passionate about our brands, respectful of our clients and driven by excellence.” With this statement Essence Corp., luxury brand distributor in the Americas and Caribbean duty free markets, is gearing up for this season’s major launches.

Following the success of Burberry Body EDP, Essence will reinforce the portfolio with a new, lighter version of the iconic Burberry Body fragrance. The company identifies the new fragrance as a “light, clean combination of refined ingredients including crisp green apple and seductive tea.”

The character of the fragrance is reflected in the new advertising campaign, which features Montblanc Legend

Burberry Body EDT

Rosie Huntington as the first Burberry Body, and a multi-faceted glass bottle designed by Burberry Chief Creative Officer Christopher Bailey, this time in a white textured card packaging with silver accents to reflect the “clean and crisp” scent. Essence says that the launch of Body EDT during 2012 will support the position of the brand in key duty free markets.

In 2011 Montblanc launched its new Legend men’s fragrance. The product was given a muscular global push in the first few months after its release.

This year, Montblanc is maintaining the momentum with the launch of a new floral, fruity women’s fragrance, Montblanc Legend Pour Femme.

Following on the strong global performance of the Jimmy Choo EDP, this year the brand is launching Jimmy Choo EDT, which it describes as a modern, fruity floral that is “versatile, fresh and original… A spritz of Jimmy Choo EDT imbues women with an aura of glamour, and gives them an instant boost of confidence.”

Essence says that it plans to maintain its full market press for Live in Love, the new women’s fragrance from Oscar de la Renta.

The scent is a floral bouquet, with touches of warmth and richness on the dry down.

“Live in Love is an expression of Oscar de la Renta’s desire to make every woman feel like the most beautiful woman in the world.”

Kiehl’s unveils Aromatic Blends body collection New York skincare specialist Kiehl’s has premiered “Aromatic Blends,” a new scented body collection.

Billed as “a sensorial trip around the world,” the collection consists of four geographically themed variations featuring scents that evoke Provence, Morocco, Uganda and Japan.

“For Kiehl’s, Aromatic Blends represents the company’s authentic apothecary heritage of inspiring fragrance blends, utilizing sustainable sourcing methods, the finest natural ingredients, and the latest in science and technology for use in its formulations,” the company says.

Each scent was formulated with fewer ingredients than are used to make traditional fragrances, using higher proportions of each key ingredient.

Each Aromatic Blend comes in three forms: fragrance, body lotion and body cleanser. The fragrance is based on two key ingredients for a simple, clear construction, and is offered in a travel-friendly 30 mL size. The body lotion is based on Kiehl’s Crème de Corps body lotion, and delivers 24 hours of hydration and nourishment to the skin without the use of silicones. The foaming body cleanser is formulated without sulfates and offers 24 hours of softness.

The Provence-themed Fig Leaf & Sage scent represents “a combination of the scent of the air beneath the fig trees and the delicate aromas of the herbs in the

surrounding fields,” says David Suffit, Assistant VicePresident of Kiehl’s Fragrance Development. Vanilla & Cedarwood is a blend of Ugandan Vanilla and Virginia Cedarwood. Orange Flower & Lychee represents the experience of a Moroccan garden, and Nashi Blossom & Pink Grapefruit evokes a Japanese garden.

Kiehl’s says each product has been developed using sourcing policies that include on-site natural ingredient extraction using steamed water to capture essential oils directly after harvesting the ingredients, while they deliver their freshest and strongest aromas. Kiehl’s says it harvests from sustainable farms that provide ongoing local community support. In Uganda, this includes the installation of drinking water wells, education about cultivation and harvest techniques, fair-trade pricing and establishment of a banking system that provides micro-loans to families.

Kiehl’s also leverages “aromatic reproduction,” a technique that recreates an ingredient’s scents without destroying the plants. Kiehl’s was able to use natural extraction in the case of Pink Grapefruit, however Nashi Blossom was too delicate for a typical extraction, so the company utilized a process where odorous molecules are extracted at room temperKiehl’s presents a new scented body ature under precise pressure conditions. collection called Aromatic Blends www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

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Beauté Prestige International

Kokorico is a major new men’s line by Jean Paul Gaultier

Strong statements

Much of Beauté Prestige International’s success comes from larger-than-life brands

or premium perfume house Beauté Prestige International (BPI), the global travel retail market provides the perfect forum for the launch of its big-name fragrances, which are characterized by strong identities and powerful—even over-thetop—advertising and marketing campaigns.

BPI’s activities in 2011 and into this year offer good case studies of its market approach.

One of the main launches this semester for Beauté Prestige International has been the flamboyant Kokorico, a major new men’s line by Jean Paul Gaultier that had its debut in most local and travel retail markets in March. “Kokorico is a daring, bold project which is typical of Gaultier,” says Gérard Pichon-Varin, General Manager, Americas Travel Retail and Latin American Local Markets, BPI. “The idea was to appeal to a different man—it’s addressing a different customer looking for newness, looking for something more daring.” The new line is not cannibalizing off the existing Le Male brand, Pichon-Varin says.

The name “Kokorico” mimics the cry of the rooster, but the name also suggests a masculine cry of victory according to the brand’s marketing message: “With his new fragrance, Jean Paul Gaultier asks men to call out their virility, triumphant and heightened, loud and clear. All-powerful, energetic, free and wild, in unison they call out with a victory cry.

Kokorico is a virile scent without complexes.”

F

Issey Miyake pour Homme Sport

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THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

Created by Olivier Cresp and Annick Menardo of Firmenich, the fragrance features notes of fig leaf, patchouli, cedar, cocoa bean and vetiver. The bottle features the Kokorico name in red calligraphy, and bears the silhouette of a male torso in profile—a familiar Gaultier theme—when viewed from the side, which becomes the profile of a man’s face when viewed from the front. The iconic canister packaging has been reinterpreted as a glossy scarlet film canister. “Piled into towers… it can't be ignored: it's red like a cabaret curtain.”

Basque model Jon Kortajarena is the face and body of Kokorico. The flamenco dance he is shown performing in the brand videos was choreographed by Blanca Li. Kokorico EDT comes in 50 mL (1.69 fl. oz.) and 100 mL (3.38 fl. oz.) sizes, with the travel retail pricing at US$53 - $71. There is also an associated range of body care products including deodorant, shower gel and aftershave.

Another major release is Issey Miyake pour Homme Sport. Pichon-Varin says that BPI has high expectations as this is its biggest men’s line in the region. The travel retail launch took place in March with a rolling series of sports videos, all shot from a firstperson perspective and all tailored to “Air,” “Water” and “Earth” themes, with activities like rock climbing, kayaking and free falling.

Travelers selected their theme and then experienced the action themselves while viewing text that described the sensations

Beauté Prestige International

From left: BPI’s Gérard Pichon-Varin, General Manager, and Antonio Andrade, Marketing Director for Americas Travel Retail and Latin American Local Markets

of the athlete who shot the footage. There was also strong website tie-in, with new content being added over time.

The women’s segment will become the focus of activity in the second semester, picking up from last year’s launch of Elie Saab EDP. “What I found fascinating in working for Elie Saab was the idea of interpreting light,” says Francis Kurkdjian, who created the EDP. “I didn’t have any specific images in mind, just sensations: the whiteness of the sun at its zenith, radiant femininity, a modern interpretation of voluptuousness.”

This year the Elie Saab EDT launch will follow, maintaining the market momentum of the brand and leveraging the global reputation of the self-taught Beirut-born designer. The EDP launch set the tone, featuring podiums in a large number of airports.

At Miami International Airport, BPI featured several large advertising panels placed outside the stores that worked very well, Pichon-Varin says, and there was good synergy with the domestic markets, where the same launch was happening in parallel.

There was also a significant training component that took place before the launch, at a convention in Montreal in July. BPI brought several of its beauty consultants to the event, where Pichon-Varin says they received celebrity treatment. “That was the whole approach. Elie Saab is known to be the designer of the red carpet and we wanted to involve the beauty advisors in this world of luxury and teach them how to apply it to the fragrance. They fell in love with the product right away and the results were outstanding, much above our expectations.”

The steady pace of rolling Elie Saab launches reflects the view, expressed by the brand Vice President, that “we’re not launching a line, but we’re constructing a brand, so 70

we shouldn’t take too long to enrich the portfolio.” Pichon-Varin agrees, saying that the momentum needs to be maintained in order to establish the product’s broader identity.

Building market share Last year BPI experienced an 18-20% growth rate in sellouts, a good year considering that North and South America are combined— with South America performing ahead of North America, where economic problems persist even if the 2008-2009 crisis has largely been overcome.

Travel retail in South America is a mixed bag. BPI has underperformed in some countries, Pichon-Varin says. The flip side of that is that others did exceptionally well, such as Argentina, Mexico, Chile and Peru, which For BPI, the women’s segment will become the focus of activity in the second semester, picking up from last year’s launch of Elie Saab EDP

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

posted increases on the order of 30-50%.

Mexico is especially important given the number and importance of the borders it has, and Brazil, Argentina and Uruguay are also critical pieces of the puzzle. “Our biggest market share in South America is in Argentina and Uruguay, where the stores are operated by the duty free giant Dufry,” Pichon-Varin says.

Brazil has the greatest potential for BPI, in both the local market and travel retail. “In travel retail there is room to grow for us because we are under our market share,” Pichon-Varin says.

What’s needed are the right marketing programs and the chance to fully express the brand identity—“to be ourselves”—an opportunity that isn’t always available.

“In Argentina we’ve arrived at the market share that we have by investing a lot in the last three to four years, and we doubled our market share in three years,” PichonVarin says. “In Brazil, we’re not even at half of the market share we have in Argentina.

But we are optimistic.” Part of the success in Argentina is due to the scale and pace of activity. BPI does a lot of creative animations in Argentina and is staging big podiums “constantly,” Pichon-Varin says.

At the beginning of last year, BPI staged a special event in conjunction with IOSC to promote the Narciso Rodriguez brand, inviting the best customers of IOSC to a special cocktail event at a hotel in Buenos Aires. The best customers were selected from the information IOSC used to support its loyalty program by tracking repeat buyers.

“During the presentation Beauté Prestige International’s international trainer presented the brand,” says Pichon-Varin. “There was no selling going on; we were purely giving info and treating customers. It lasted a few hours and 40-50 people attended. These people will pass on the message for our brands by word c of mouth.”

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Shiseido Travel Retail Americas

From Left: Shiseido’s Isabela Casado, Marketing Coordinator, Jo-Ann Santiago, Marketing Manager and José A. Páez, Area Sales Manager - Latin America

Return of a beauty star

Shiseido re-enters Latin America, building on its success in duty free BY

HIBAH NOOR

atin America has been a good market for Shiseido, says José A. Páez, Area Sales Manager - Latin America, Shiseido Travel Retail Americas. The perennially strong Brazil market, where face skincare and suncare products are the standouts, along with Colombia and Central America, reinforced by good growth in Argentina, made 2011 a healthy year business-wise. That positive outlook is set to improve considerably with Shiseido’s recent re-entry into local markets throughout Latin America after a hiatus lasting nearly a decade, Páez adds.

“Shiseido is focused on becoming a global player representing Asia with its origins in Japan,” Páez explains. “We pulled out from the countries in Latin America, except Brazil and Mexico, as part of the company's strategy to restructure the region. Now we are becoming stronger and we intend to stay.”

The company has always enjoyed a good market position in the region, and Páez notes that when the company recently reopened operations in Colombia, many Beauty Advisors who had worked with the brand ten years earlier were on hand, and “happy to have the brand back.” The same

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Shiseido’s suncare compact foundation is its star player

kind of brand equity has endured elsewhere, for example in Argentina, he says.

In the dominant Brazil market, suncare and skincare sales account for the majority of the brand's duty free business. Shiseido recently climbed to fourth place in the Brazil cosmetics market, behind MAC, Victoria's Secret and Lancôme. And as Brazilians are traveling more these days, they’re carrying their own market profile to their destination countries, boosting sales there as well— Páez points to Miami, New York, Orlando, the Caribbean and Europe as places where this fallout is having a positive impact.

On the product front, Shiseido’s suncare compact foundation is its star player. The product has a 34 SPF rating, comes in seven

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

Shiseido launches Eudermine limited edition to celebrate its 140th anniversary

shades and sells for US$25 in duty free. The company has added the Urban Environment collection to its suncare range, designed for daily use as opposed to solely outdoor use. Feedback is good, Páez says.

Available in SPF 42 and Oil-Free (SPF 42) versions, the Urban Environment products provide high-grade protection against UVA and UVB rays, but also offer a range of features that provide added protection. Rose Apple Leaf Extract helps to prevent DNA damage caused

by UV rays, while Scutellaria Baicalensis Extract helps to protect fibroblasts. Thiotaurine and Rose Leaf Apple Extract also protect against oxidation caused by environmental factors.

“Shiseido is recommending suncare as the fourth step of your skincare routine,” Páez says.

“It’s cleansing, softening, moisturizing and then suncare, right before you apply makeup.”

Shiseido is also launching a limited edition of Eudermine, the oldest product in its skincare portfolio, in a replica of the original bottle. The limited edition will run only for this year. Eudermine (the name derives from a combination of the Greek eu for “good” and derma for “skin”) was originally introduced in 1897 and represented a strong break with traditional Japanese cosmetics, which Páez says tended to be strong-smelling, medicinal-looking concoctions sold in dark bottles.

“Eudermine offered customers a ruby–red skin-softening lotion so effective it’s still sold today—albeit in an advanced formulation—and still beloved by women of all ages,” Páez says. The bottle also represented a break with tradition, evolving the older Japanese ‘apothecary’ look into a much more stylish design with eight cut facets at the shoulders, a flower-emblazoned label and a red bow around the bottle’s neck.

2012 is Shiseido’s 140th year in business.

To celebrate that anniversary, which fell on April 14, Shiseido ran a worldwide event across all its doors, with trained staff giving customers a symbolic hand massage based on a special Shiseido technique lasting six to 10 minutes.

A Japanese welcome ritual, the massage was available wherever the company had exclusive c Beauty Advisors on hand, Páez says.

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Confectionery Report

A taste for temptation BY

ANDREW BROOKS

Confectioners differentiate themselves with new products, new market strategies ark chocolate confectioner República del Cacao is an American native, and the only chocolate brand that harvests and produces the product in Ecuador, the nation that is home to Cacao Arriba, which is considered to be the best cacao in the world.

The company is a relative newcomer, having been established in 2007 with a mandate to save Cacao Arriba, and has only begun to make inroads into local and travel retail markets in the last couple of years.

Carmen Castro, Marketing Manager for República del Cacao, says that these are good times for the dark chocolate business. The category had a narrow, niche footprint in its early days, but in recent years it has been making impressive gains as it enters more and more markets around the world. One sign of the category’s maturity is the fact that it is now making headway in ‘less developed’ markets.

Castro says the travel retail market overall is growing at about 31% annually, based on solid demand for new and innovative products as well as established offerings. The company

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currently has four stores in Ecuador—two at José Joaquín de Olmedo International Airport in Guayaquil, a chocolate boutique in Plaza Foch in Quito’s tourist center and another at Quito’s Mariscal Sucre International Airport (no word on any planned presence at Quito’s new Mitad del Mundo International Airport, which is being built because Mariscal Sucre is surrounded by the city and can’t be expanded).

The company also opened a new store last year at the Charles Darwin Station in the Galapagos Islands, and is looking at other possible locations in Latin America, where it can take advantage of the newness and market attractiveness of dark chocolate in the travel retail channel.

Confectioner Perfetti van Melle enjoyed strong sales growth in 2011, and year-to-date data so far for 2012 is also good, says Eric Vermetten, Perfetti Van Melle’s Area Manager for Europe and the Americas. 2011 results were already nearly 50% above those for 2010, generating impressive compound numbers, and PVM is looking to build market share wherever it can.

The impressive pace of growth will be supported by the hiring of a new distributor for

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

The Mentos three-layer gum features a textured gel middle layer and green tea extracts

the Caribbean market, part of a multi-year ongoing effort to strengthen and expand PVM’s distribution infrastructure in the hemisphere. PVM now has a well developed fourdistributor network up and running in the Americas market, and complements that with its own activities in direct delivery.

identified with a very particular locale.

República del Cacao prides itself on being the only brand that harvests cacao and produces chocolate in Ecuador. Dark chocolate derives a large part of its popularity among chocolate consumers from the cocoa bean’s antioxidant properties as well as the upscale nature of the product itself, which has seen a very rapid development into new taste profiles, more exotic flavorings and more up-market product options. At this stage, the dark chocolate product category is itself a primary driver of the entire premium chocolate market.

Recent product introductions for República del Cacao include a dark milk chocolate bar in a plain version and a version that includes plantain chips. Aside from the new entrants, stars in the Americas travel retail channel include the Galapagos chocolate bar with coffee nibs, two organic chocolate bars and gift presentations.

In travel retail, the product’s positioning is reinforced by airport point of sale displays that use natural materials, such as jute and bamboo, to convey a flavor of the chocolate’s own home environment. In this way República del Cacao hopes to differentiate itself from the major global brands, who have huge marketing budgets to support their own entry into this high-potential market space.

Local flavors Butlers Chocolates’ unique series of Chocolate Cafés is set to expand to new locations

In addition to border and airport locations, the confectioner plans to begin making more of a push into the cruise line market and other travel retail channels through 2012 and beyond. And while new sales locations are always being targeted, the company’s presence in its existing locations is also receiving plenty of attention.

“We will continue to invest in increasing visibility in the stores,” says Vermetten. As a part of that strategy, Vermetten says that plans are now underway for some point-of-sale projects that will emphasize the Mentos Chewing Gum product line.

República del Cacao is marketing itself as a destination business in travel retail, appealing to a broader range of purchasing motivators than in local markets. The brand’s exotic provenance and the relative newness of the dark chocolate product category will help establish an upscale, niche identity, as will the “origin souvenir” potential of a product clearly

A newcomer in a different sense— marking its 80th birthday this year— Butlers Chocolates is now seriously contemplating its debut in Latin America, having demonstrated its market potential with recent forays in Asia and elsewhere. “We’ve exhibited successfully at Cannes for a number of years now, and more recently at Singapore,” says Sales Director Karl Marnane. “We opened an office in Singapore last year to cover the Asian market and up to China, and more recently we opened an office in Dubai to cover the Middle East, but also the likes of India and Russia.

“The next obvious step was to put some focus on South America and we feel we now have the right product range and the people in place to do this. Attending ASUTIL for the first time gives us an opportunity to understand the market better, but also to meet the retailers for the first time and introduce the Butlers brand to them.”

Recently introduced products for Butlers include a special limited edition The Chupa Chups souvenir tin from Perfetti Van Melle

range to commemorate the company’s 80year milestone, as well as a pair of new gifting ensembles, new chocolate bars and a premium collection. The company has developed a dedicated travel retail range that includes premium boxed chocolate assortments, an expanding range of 100 g (3.5 oz.) chocolate bars, luxury filled chocolate truffles, alcohol free selections and promotional lines.

In addition to Mentos Chewing Gum, the full Mentos line and Chupa Chups remain the main performers for Perfetti Van Melle in the travel retail channel. This year the company is extending a number of its lines. Chupa Chups will be available in a new range of gift items that include a pair of binoculars, a balloon-powered racecar and a souvenir tin with travel-related images that also has potential as a memento.

Chewing gum is also a product category that PVM believes has a great deal of potential in travel retail, which it plans to tap into by expanding its range of sugar-free Mentos gum.

New additions include a new two-pack of Mentos three-layer gum that features a textured gel middle layer and green tea extracts, available in mint and a three-fruit combination, and c also new travel packs.

Guest Writer

Understanding airport prices irport retail prices have been a big topic of discussion worldwide for many years.

On the Travel Retail forum group at LinkedIn I polled our members about this.

When asked “Do you think that selling products at a much higher price than the manufacturer’s suggested price could mislead travelers about airport prices, resulting in a lack of trust against airport stores?” a stunning 84% replied positively. This is a complex question as the average passenger does not understand many different aspects of travel retail—for example the difference between duty paid and duty free inside the secured area (many people believe “inside” means “duty free”) or pre-security stores, why duty paid stores are sometimes cheaper than duty free (with strong pricing competition and lower margins maintained by some retailers), etc.

A

What’s important is the traveler’s perception Whether products are or are not actually more expensive in airport stores than they are in local markets is a different topic. What is important is the perception of the traveler. If a traveler believes prices are higher even for just a few items, then the credibility of the entire store is undermined. Many travelers visit the same airport store(s) often or visit different stores run by the same operator. This ‘disappointed’ passenger will most likely become less loyal to

a particular store. Also, he will most likely tell his network of friends and family that airport prices are not competitive as he might fancy himself a savvy traveler. However, a consumer could still find airport prices non-competitive between two airport stores—within the same airport or between countries—but still very competitive versus local market prices in the passenger’s country of origin.

When looking at airport prices, it is also key to look at MSRP without promotions.

Indeed, promotions can be very aggressive in the local market, often reaching 50% off for discontinued items.

Also, some brands launch products so quickly that by the time they reach some remote airport locations (sometimes many months after the global launch), the same products might actually have started to be sold to discounters elsewhere. We should note that local market MSRP varies a lot depending on the country. However, prices are more consistent at the duty free level.

How involved is the consumer in his purchase?

Finally, when looking at prices, an important factor is how involved the consumer is in his purchase. Is the traveler aware of the price of the product he intends to buy? The higher the involvement in the purchase decision, the higher the product knowledge and price awareness—and thus the retail comparison.

Prior to working in travel retail, I used to

Traveler perception/savings SAME CONTINENT COUNTRY A (Example Brazil)

COUNTRY B (Example USA)

OTHER CONTINENT COUNTRY C (Example UK)

High Duties & Low duty & High Duties & Sales tax Country Sales Tax Country Sales tax Country DUTY FREE MSRP (USD) LOCAL MARKET MSRP with VAT (Sales Tax) in USD

$85

$195 Traveler A

$85

$107 Traveler B

$128

21%

15%

Total saving other duty free versus local market where Traveler (A, B or C) lives

34% to 56%

0% to 21%

15% to 43%

These numbers vary per product depending on price structure, brand positioning & duties on each respective country

Average saving Total Savings Traveler A

Always very high

Total Savings Traveler B

Low

Total Savings Traveler C

Mid

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THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

Conclusion A consumer aware of fair prices will be a better consumer. Confusion creates doubt and alienates the consumer, which obviously isn’t in the interest of the travel retail channel. In stores, it’s important to clarify pricing differentials by showing the local market prices of goods prevailing in passengers’ countries of origin alongside the prices being charged in the local market where the store is located. For example, at Ezeiza Airport in Buenos Aires, showing the Argentinean local market prices is of course a good idea—but as most of the travelers coming through are Brazilian, it’s even better to post the Brazilian local market prices as well.

Short-term profit-taking by some operators (charging prices higher than suggested duty free) could jeopardize the long-term revenue stream for travel retail overall. c

$150

56%

General traveler perception/mindset Duty free products are a bargain—I should buy.

Duty free products are not worth it—often overpriced.

Duty free products are more or less interesting. Maybe I will buy.

DAVID FERREIRA

define price strategy for a supermarket chain.

Our strategy was to have the lowest price in the market. This is about perception—the key was to have very aggressive prices on the items people know very well, usually best selling or highly advertised items. These are the key items that will convey the price positioning perception of a store. Once that’s done, whether other products are more or less price competitive will not affect the overall perception.

The challenge for the retailer is to push additional purchases for other products where they can make up lost revenue. For example, a woman will most likely be highly involved in buying her cosmetic staples (mascara, lipstick, foundation) and will most likely know very well how much these products cost. If these items are among the best sellers and are at a low price, the retailer will most likely gain the trust and loyalty of that traveler.

Traveler C

Total saving local duty free versus local market where Traveler (A, B or C) lives

BY

David Ferreira, Travel Retail Manager & National Accounts, Cross

A La Gate Carte

A world on wheels

A La Gate Carte’s mobile retailing units enable travel retailers to get up close and personal with their customers BY

HIBAH NOOR

La Gate Carte is a retail merchandising display specialist that fabricates sales units and displays for use in store environments.

The company, which began life as a subsidiary of display fixture company Watson Productions, put together its first prototype mobile retail merchandising unit about four years ago, says CEO Robert Watson.

When he spoke with Americas Duty Free at the IAADFS show in Orlando, Watson noted that the company previously focused on designing and producing exhibit and display fixtures—and has in fact fabricated the show booth for Philip Morris this year and for several years in the past.

A La Gate Carte’s parent company Watson Productions has worked with highvalue brands like Ferrero and Diageo, and the word of mouth uptake was rapid. “The stores and the operators got a chance to see the level of service, timely delivery, the cleanliness, the quality, and they’d refer us to other manufacturers who were looking to do a personalized area,” Watson says.

“A La Gate Carte was born through some customers saying ‘we need a better mouse trap, we need better visibility,’” Watson says.

The space restrictions prevailing in the airport environment presented the main challenge, as the mandated low unit height made it almost impossible to build good visibility.

“If passersby from the terminal or concourse can’t see you, they’re not going to see you even if I gold plate your display,” Watson says.

“Your brand alone isn’t going to draw people into the store when the stores are experiencing diminishing traffic. And in the trade show environment, how do you attract people to the exhibit, what do you do to create a special environment to attract people?”

Watson’s response: “I said to some of the brands and stores, you’re going to have to get in front of the traffic, period.” And so work began on the company’s portable merchandising unit.

“We introduced it first through renderings and drawings and design,” Watson

A

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recalls. “We did some market tests—how do you think this concept would play out, would you embrace it, would the airport authorities allow it?” Even before the prototype was built, the feedback Watson received told him that the solution the company had in mind was relevant for the industry. So the company went ahead with prototypes, patents and trademarks—and came up with a suitable name and a logo with a European twist.

The prototype was first shown at IAADFS last year. “We got a huge response,” Watson says. “People loved it. They felt that it was a solution, because in our marketing we tell them the truth about what’s being talked about online on every blog and in the travel retail groups—some of the problems with store penetration, some new metrics about consumers and where they’re going and why they’re not spending.”

A lot of the disconnect between airport retailers and their erstwhile customers is a problem of convenience. More accurately, it has to do with the inconvenience of airport security checks, and whether the store is located post- or pre-security. Once passengers finally do make it through the checks and into the post-security zone, they’re usually feeling harassed and distracted.

“They kind of want to put the blinders on and get to the gate,” Watson says. “You’re not going to back track another 400 feet to see the stores.” What better way to reach this distracted passenger, Watson says, than to display a favorite beverage on a mobile cart and tempt them into that impulse buy? “If the individual was going to buy a carton of Marlboro cigarettes for his brother-in-law to save money, he might end up picking up a bottle of Johnnie Walker too, if you display the right products and show them off with the cart’s battery powered lighting.”

Many of the units that A La Gate Carte has positioned at airports carry travel themes utilizing elements such as airliner tails, luggage compartments, overhead bins and suitcases. In fact, from a patenting standpoint A La Gate Carte actually owns the likenesses of these and other elements, Watson says.

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

The unit is compact enough that even a small sales associate can operate it with the touch of a couple of fingers, Watson says. The display measures about five feet wide by two feet deep by five feet tall. The lighting and POS system are powered by the same kind of battery used in forklift trucks, and because the power demand is considerably lighter than that of a forklift, the battery life is exceptionally long. The system can be run for a few hours at a time before requiring a recharge. This means users can easily map out the day’s activities and have to allow for only a single recharge halfway through. Standard safety features include a horn, and an emergency stop button. Amber Beacons and motion beepers are also available for locations requiring such safety components.

A La Gate Carte offers online support in terms of training but also to support maintenance in the field. The company has produced a hard-copy training manual that has to be signed and initialed by a receiving customer every time a unit is shipped out—this ensures that the retail operator is familiar with the unit and has been trained to operate it properly.

The standard solution is now implemented in over a dozen airports around the world, with another dozen currently in the airport approval process.

A La Gate Carte exhibited at TFWA WE in Cannes for the first time last year, and the company’s growing profile is reflected in the fact that it was a finalist in the “Speciality Concept of the Year” category at the 2011 Frontier Awards. “It was great for us,” Watson says. “It was an honor to have been considered for that award.”

Customers keep coming—Sydney Airport, Rome International, London Supply, Bijoux Terner—and the company has pitched to many more, including Diageo, Brown Forman and a number of tobacco companies. Three recent sales were directly to airc port authorities, Watson says.

A La Gate Carte’s Paul McCormick and Robert Watson

Getting ready to assort the kiosk with (from left): Mark Lewis-Jones, Innova Distributors, the sales team in gray polos, Sergio Casaretto, Managing Director of Crepier and Juan Manuel Palacios, Corporate Sales Manager of Crepier

Go Travel’s kiosk in Lima’s Jorge Chavez International Airport with teaser advertising just before the opening

Supplier News Go Travel opens kiosk at Jorge Chavez International Global travel accessories brand Go Travel has announced the opening of its kiosk in Lima’s Jorge Chavez International Airport.

The 6 metre kiosk is situated in the airport’s international departures concourse between gates 25 and 26.

A joint venture between Lima Airport Partners, Class Complements S.A.C. and Innova Distributors Inc., the authorized distributor of Go Travel products in Latin America, the venture is the first of its kind in the Americas for the travel accessories brand and follows the successful execution of a similar project at Hong Kong International Airport by Go Travel and their local partner there.

The kiosk will house approximately 100 dif-

ferent travel products and showcase Go Travel’s retail concept, which mixes highimpact packaging with a designer POS display that carries a wide selection of value-priced travel products. Travelers can access the full spectrum of travel accessories in a single display. Go Travel says that its products tend to move fast and are often impulse purchases, requiring a relatively small footprint to generate a high rate of return per square metre.

Go Travel has an extensive global airport retail program, selling in diverse channels such as London Heathrow’s Terminal 3, where it works with retailers such as Boot’s Pharmacy, Dixon’s and Rolling Luggage. The 400product range means the company can tai-

lor its offering to retailer requirements depending on the specific target consumer.

Go Travel accessories are currently carried in Latin America by duty free operators including Attenza, La Riviera, DFA and Mannah.

“We hope that the combination of this hallmark launch at Jorge Chavez International Airport, along with the current presence in leading duty free retailers, will cement Go Travel’s credibility as the ‘go-to’ choice for other duty free and border store operators in the region,” says Mark Lewis-Jones of Innova Distributors.

For more information, email Mark LewisJones at mlj@innovadistributors.com or visit www.go-travelproducts.com.

DuePunti scores points in travel retail After launching its DuePunti series of rings into the Americas travel retail market at IAADFS in March, Kronos America is reporting “extremely positive” feedback from the travel retail channel as well as domestic markets, says Stephanie Grignet, Marketing and Sales Coordinator, Kronos America.

“Buyers and retailers love the unique, modern, unconventional, fun, colorful concept of a silicone diamond ring,” Grignet says. “DuePunti is a revolutionary piece of jewelry that reflects the captivating and innovative aspects of fashion made in Italy.”

Celebrities who have been seen wearing DuePunti include supermodel Alessandra Ambrosio, actresses Jennifer Lopez, Emma Roberts and Vanessa Hudgens, and performers Christina Aguilera and Nicki Minaj, among others.

“It’s a great add-on to classic jewelry that will represent incremental and fast-turning business,” Grignet says. “Final customers are indeed very attracted by colorful products priced below US$500. We therefore expect DuePunti to fast become a must-have, afford-

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able mix-and-match accessory.”

DuePunti (the name is Italian for “two points”) rings are manufactured in Italy to an internationally patented Italian design. They feature certified conflict-free, high-clarity H-SI1 diamonds mounted in a sterling silver setting. The addition of stackable colored silicone bands enables wearers to mix and match to create a personal look. The rings are also water- and heat-resistant, and so can be worn in a range of activities.

“DuePunti was designed to reach a diverse feminine clientele as a unique and colorful lifestyle accessory meant for all ages and multiple purposes,” Grignet says. “The rings offer each customer the opportunity to create their own sporty, contemporary or classic color associations.”

The rings fit different store categories and cater to a broad customer range. In the US domestic market they are available at highend jewelry stores, fashion stores, accessory boutiques and selected gift stores.

Kronos America will be showing

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

DuePunti rings individually to key retailers at the upcoming ASUTIL conference. “We’re planning to increase sales and secure placement of the brand in a significant number of retailers to maximize the exposure,” Grignet says. “Based on our experience with other brands, we’ll offer PR and advertising support to retailers.” Kronos will also support the selling effort with GWP programs for consumers and through tie-in promotions with other brands.

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WORLD TRAVEL RETAIL

www.hersheystravelretail.com ©2012 The Hershey Company

The welcoming BT Fashions team at IAADFS in Orlando 2012

Supplier News

Where the market takes us For BT Fashions, known as Bijoux Terner until its recent rebranding at IAADFS earlier this year, offering multiple price points is a key avenue to market success. The multiplicity of brands—seven in all, including the AdiXion retail concept introduced last year—was a big reason for the name change, as BT represents more brands than Bijoux Terner alone.

“We’ve now learned how to operate with multiple price points,” says CEO Gabriel Bottazzi. A case in point is the continuing evolution of BT’s AdiXion retail concept. “Last time we thought of three price point levels,” Bottazzi says. “Now we’ve expanded to US$10 for Bijoux Terner, US$20 for Voux and Deja Voux, US$30 for Xest Jolie, US$40 for Madiera and US$50 for the AdiXion line of bags.”

Luxury and high-end value are rebounding in travel retail, Bottazzi says, though value continues to be a very important consideration.

Accordingly, BT’s higher-end line will be very heavily slanted toward handbags, the fastest growing category under the AdiXion umbrella.

“The way we’re putting things together is we do different styles to the color, not 10 different colors for everything,” says Lina Henao, Chief Creative Officer, Bijoux Terner. “We’ll have key colors like oranges, tans and a few blacks, and we’ll focus on details, hardware and real leather trims. We’re looking for the finest faux leathers, suede and so on.” Bags are trending smaller, Henao says. Most are very structured, with a lot of shoulder bags being introduced, along with satchels, hobos and quilting.

As far as price points go, a good value proposition in a handbag can be conveyed at US$40-$50, compared with around US$30 for a watch. Bottazzi says that handbag price points have a lot more potential to create the perception of shocking value, one of the key

concepts behind AdiXion in addition to the emphasis on simplicity.

“I think with the price points we’ve selected we have a lot of space to do amazing things.

We want to develop these price points— we’ll go wherever the markets take us,” says Bottazzi.

And BT is definitely exploring every possible avenue to grow the business. In South America BT is mostly in border stores right now, operating with partners like London Supply, Shopping China, Grupo Vierci, Multiler, and Grupo Wisa. However, several AdiXion stores are planned in South America and in the cruise market, with some seven of the stores slated to appear in the next three to six months. Duty free operators already host BT’s brands, which have also rolled out in the cruise market.

Biaggi folding luggage collection makes its debut A new folding luggage collection named Biaggi has been launched by the trio of Ron Hersh, Stephen Chen and Nancy Hung. The Biaggi pieces all feature four wheels and “hinge lock technology,” which enables each piece to fold flat. The lightweight folding styles are offered in a variety of high performance materials and styles.

“Biaggi’s modern looking collections are functional, practical and address the needs of space-starved travelers,” says Ron Hersh, President and CEO of Biaggi. “The new Biaggi foldaway luggage collection is one that I feel will be a game changer in the travel industry. We have trans-

82

formed the way people store and use luggage forever.”

Biaggi is designed for travelers in small quarters on cruise ships or in boutique hotel and dorm rooms. The four-wheel spinner technology allows for 360-degree movement, and the bags come with interior and exterior pockets for organization, a telescoping, fully adjustable aircraft-grade aluminum handle system that accommodates users of all heights and a special storage bag to keep the luggage clean and protected. Retail prices range from US$79 for a nylon wheeled tote to US$339 for a 30-inch ballistic nylon packing case.

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

Sunglass News Chasing

the

shades

After being hard hit by the economic crisis of 2008/2009, the luxury accessories category is on the rebound, which is good news for Stephane Giraud, Agent – Duty Free Americas, for eyewear/accessories brand Safilo Group/Travel Traders. “In the last two years the category has been booming,” says Giraud, who created Travel Traders in 1999. “We had important growth in 2010, and 2011 was even better.”

Giraud says that retailers planning to open new stores are saying that eyewear is a “must” category for them. The result: Safilo Group/Travel Traders finds that most of its customers are doubling and even tripling the brand’s space—DFA and UETA throughout Latin America and Neutral Duty Free in Uruguay being notable examples.

“All the big retailers are investing in Uruguay,” Giraud says. “And Brazil is on fire. We are getting a lot of new business there. We used to be in Rio and Sao Paulo now we’re opening 18 new locations in airports with Dufry Do Brazil. Before, they were concentrating on the business between Rio and Sao Paulo, and now they’re expanding all over.”

DFA, UETA, Grupo Wisa and Shopping China are among the major retailers investing in this area, Giraud says. In the process, they’re doubling the accessory category, with sunglasses in particular a very hot item. DFA is particularly strong in Uruguay, and Grupo Wisa as a standout in Panama and Mexico, Giraud says.

After a long time being focused on luxury sunglasses brands,

Luxottica

strengthens travel retail team Marketing a portfolio of brands including Ray Ban, Oakley, Tiffany, Chanel, Bulgari and more recognizably deluxe brands than you can shake a sunglasses case at, Luxottica has been strengthening its marketing team over the past few months. Its strength has been from appointing personnel from outside the sunglasses category to gain “best practice” from other categories.

Francesco d'Amelia has joined as Marketing Manager Travel Retail, responsible for

84

Safilo Group/Travel Traders has added “diffusion” brands to its lineup.

These are fashion brands with younger styling and more use of color, at more affordable price points, and they help to expand the customer base, Giraud says. Among the diffusion brands are names like Carrera, Armani Exchange, Tommy Hilfiger and Marc

by Marc Jacobs. Among the luxury brands, Gucci and Dior remain strong sellers.

In the Americas, black, brown and Havana colors sell the best.

Some 20-40% of customers are now seeking colors out, Giraud says. “If you buy a US$300 product, most likely you will play safe and go for black and brown. If you can buy a product at US$120, why not go crazy on colors? And you can buy two or three models.” Gucci and Dior appear in the US$260-$300 bracket while diffusion brands range between US$65-$150.

In terms of product trends, Giraud says that polarized lenses are increasingly popular, especially among male brands. The sunglasses category is an easier sell in Latin America, where the products are very popular and savings over the local market prices can run to a very persuasive 60-70%. But Giraud says it’s a harder sell in North America, where outlet malls are proving to be tough competitors for business.

the company’s global marketing activity in the channel.

D’Amelia brings solid experience in various marketing and sales roles with companies such as Vodafone, FinecoBank, Sisal and, most recently, in travel retail working for British American Tobacco as Account Manager Southern Europe Travel Retail. He will be based in London reporting to Francis Gros, Luxottica Group Travel Retail Director, and replaces Charlotte Hamel, who moves within the Luxottica Group to the position of Global Brand Manager for the Coach license.

Commenting on the appointment, Francis Gros says, “I’m pleased to welcome Francesco on board, and look forward to his contribution as we build on the great suc-

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

Carrera (above) and Marc Jacobs are considered “diffusion” brands. These are fashion brands with younger styling and more use of color, at more affordable price points

cess we’ve seen in Luxottica Travel Retail over the last few years.”

“Our dedicated travel retail team, now nearing 20 people strong, has vast experience from within Luxottica Group and other leading travel retail brand-owners in perfume and cosmetics, liquor, tobacco and confectionery. Enriching Luxottica’s leadership in sunglasses with best practices from other categories, we are in an excellent position to continue to drive forward the sunglasses category in travel retail.”

Luxottica Travel Retail now has a strong marketing team in place to drive further growth and innovation in the channel through three regional marketing specialists and a Training Manager reporting to d’Amelia.

Marcolin’s Marco Lares and Miss Florida, Karina Brez, picking Roberto Cavalli shades which Brez will wear during her appearances

Pure DNA Italian luxury sunglasses brand Marcolin is launching the Tod’s and Diesel sunglass collections into the travel retail market in the Americas. So far the company has done good work in penetrating the Latin American and Caribbean markets, says Marco Lares, Travel Retail/Duty Free Sales Manager for the Americas. Now the job is to accelerate expansion into North America.

“It’s going to be Tod’s, together with Tom Ford, Cavalli and Swarovski in North America,” Lares says. “Specifically with Tod’s, it creates a whole new world of opportunities because of its brand recognition in certain segments. It’s recognized as a high luxury brand for shoes and bags.

It gives us a good opportunity to open with new customers. This is our new approach—to make sure we already know what brands we can bring to the travel retail segment.”

Marcolin is opening new distribution channels everywhere, but especially in North America, pushing strong brands like Tom Ford and focusing on the Roberto Cavalli fragrance launch for cross category promotions. “If we can pull all our resources together then the brands will be stronger than ever,” Lares says.

Marcolin is sponsoring Miss Florida, Karina Brez, who will wear Roberto Cavalli sunglasses The appointment of Averis Papastefani as Training Manager Travel Retail is a new step for the company as it only recently created the role. Papastefani joins Luxottica Travel Retail in this new role within the division tasked with developing and implementing travel retail–specific training programs with key travel retail operators. “Staff training is a key element of Luxottica’s Category Management approach,” Gros says.

Papastefani has spent over 13 years in various positions within the Luxottica Group in Italy and Dublin. She has worked across production, brand management, marketing and sales roles giving her huge experience in all aspects of the company and the sunglasses category.

Gros adds, “Papastefani’s appointment is

during her appearances as she takes part in the 2012 Miss USA competition in Las Vegas. The arrangement was initiated some five years ago with the Miss Florida Pageant association, and Lares says it has provided great exposure for the Roberto Cavalli sunglass collection.

Overall the launch of Diesel and Tod’s together has been very successful.

Both brands are well recognized, new styles were introduced in January—just in time for the travel retail launch—and retailers were making it known that they felt it was about time for a sunglasses collection that pairs well with watches and colognes.

“We have an opportunity to sell cross-category,” Lares says.

Diesel’s new Spring/Summer Shades collection occupies center stage at the moment.

“The new collection is the result of a new collaboration between Diesel and Marcolin,” Lares says. “Marcolin’s know-how and expertise in sunglasses fused with the creativity of Diesel. The collection truly speaks the language of the label.

It’s bold, it’s rock, it’s iconic, it’s defining the vintage of the future. It’s pure DNA, it’s Diesel.”

a significant development for Luxottica Travel Retail. Her role has been created to help work with our travel retail partners to achieve our objective of making travel retail the specialist channel for sunglasses. Frontline staff are the key protagonists in any service proposition, which is even more important with such a personally-specific luxury product as sunglasses. Our new tailored training programmes will help differentiate travel retail and continue to drive growth for the category.”

Bettina Danet, Marketing Coordinator Europe, Near East & Africa joined the company in 2010 and has been instrumental in the rapid development of the sunglasses category in Europe over the last two years.

Prior to Luxottica, she gained experience with Guerlain, Thierry Mugler and Chanel. Now based in London, Danet is responsible for planning and execution of Luxottica’s marketing and promotional initiatives within Europe, Near East & Africa regions.

Anna Ng, Marketing Coordinator Asia Pacific joined Luxottica Travel Retail in 2010, bringing with her over 5 years experience

Luxottica carries prestigious names such as Dolce & Gabbana and Vogue

in travel retail with Estee Lauder where, amongst other roles, she was regional Marketing Manager for the Jo Malone, Bobbi Brown and La Mer brands. Based in Singapore, she is responsible for planning and execution of Luxottica’s marketing and promotional initiatives within Asia Pacific and Gulf region.

Martha Galvis, Marketing Coordinator Americas joined Luxottica Travel Retail in September 2011, having spent much of her career in travel retail where, amongst other roles, she handled marketing in travel retail and domestic markets in Latin America for Coty Prestige. Based in Miami, she is responsible for planning and execution of Luxottica’s marketing and promotional initiatives across the Americas.

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

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Brown-Forman

Not all tequilas are created equal—for Brown-Forman educating consumers on the superior quality of the Herradura range is a top priority

A feast for

the senses

Brown-Forman partners with Celebrity Cruise Lines for a one of a kind educational activation that combines mixology and culinary delights BY RYAN WHITE arlier this year, Celebrity Cruise Lines approached Brown-Forman to be part of their “Excite the Senses” series of activations.

Never a company to pass on the opportunity to engage with consumers, Brown-Forman sent Tim Laird, Chief Entertaining Officer, onboard one of Celebrity’s Caribbean vessels on March 24 to give passengers a taste of two iconic ranges—the Jack Daniel’s Family of Whiskies and the Herradura line of ultra premium tequilas.

“Tim travels all over the US doing events for Brown-Forman and has appeared on the Today Show, the Tonight Show and numerous other television programs promoting Brown-Forman’s brands,” says Pierre Plessis, Territory Manager – US, Mexico and Caribbean Duty Free, Brown-Forman.

“We brought Tim in for this event because we wanted to start this partnership with Celebrity Cruise Lines off with a bang, and it certainly worked!”

Brown-Forman set up a Jack Daniel’s barbeque and two tastings led by Laird—one for Herradura Tequila and one for the Jack Daniel’s Family of Whiskies. Making sure that both whiskey and tequila fans as well as the unconverted were engaged during the event was a key objective for Laird and Brown-Forman.

“The theme of versatility came up throughout the day,” explains Plessis. “The barbeque

E

gave the 85 or so guests a chance to see the many ways that Jack Daniel’s can be used for cooking. Tim also created specialty Jack Daniel’s cocktails for the passengers to try, with the favorite that day being Lynchburg Lemonade. Many people think that whiskey can only be enjoyed straight or on the rocks, and this just isn’t the case.”

For Brown-Forman, education is also important when it comes to tequila—first because some people may have had a bad experience with tequilas of lesser quality and second because of the differences between Herradura and many other tequila brands out there. “In the case of Herradura it comes down to the ingredients, the production process and the heritage of the brand,” Plessis tells us.

The Taberna, or Old Factory at Casa Herradura, built by Felix and Carmen Lopez Rosales in 1870, was in full operation until 1963. It still stands today as a reminder of the determination and dedication the family possesses for making only the finest 100% agave tequila. Today, Herradura is the result of 140 years of dedication to the craft of tequila making and the steps in the production process remain the same as they did when the first bottle was produced. Of course, the production facility as it is now is modern in every way, but the legacy of hand-crafted tequila remains.

To highlight the qualities of the brand,

Herradura cocktails, including the Caribbean Cruiser, the Black Raspberry Margarita and the Pineapple Margarita, were served to guests.

“This is a great way to re-introduce people to tequila and help them understand that all tequilas are not created equally,” Plessis explains.

Finally, anyone who has been to a BrownForman organized event can attest to the fact that fun is as much an ingredient as good spirits, and the day ended with games and prizes such as branded t-shirts, hats and bags. Plessis tells us that while nothing has yet been officially organized, the success of the event may very well result in similar cruise activations happening in the future.

“I’d like to take this opportunity to thank Celebrity Cruise Lines for all of their help,” Plessis says. “The staff was a pleasure to work with. Thanks also to Tim Laird, who is a really knowledgeable and fun guy with a talent for engaging people. Given the significant contribution that cruise lines make toward Brown-Forman’s business we’re currently exploring ways that we can educate even more passengers about BrownForman’s portfolio of award-winning spirits.” c

The Brown-Forman activation onboard Carnival Cruise Lines was hosted

by Tim Laird (standing, far left), the supplier’s Chief Entertaining Officer

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THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

Guests to the Carnival Cruise Lines activation were taught that Jack Daniel’s can be enjoyed neat, on the rocks, in cocktails or as a cooking ingredient

Riding the wave p.

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In the mix p.

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The age experts p.

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Rum news p.

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Rum Report

Riding the

For Brugal 1888, a blend of rums that have been aged from 6 to 8 years in American white oak casks are then aged a second time in ex-sherry casks

BY

RYAN WHITE

wave

For five high-end rum companies, the increasing demand for luxury spirits in travel retail is a development for which they’ve literally been preparing for generations

“Today’s refined rum consumer demands the very best and our job is simple—we must deliver.”

Gustavo Ortega, Maestro Ronero, Brugal

he Americas is a hotbed of activity for the rum category.

Brandowners are constantly looking to up the ante in terms of offerings as travelers’ tastes become more and more refined. As a result, rum in travel retail has taken on an element reminiscent of the whisky category, with high end aged options a clear favorite among consumers.

Americas Duty Free recently spoke to five rum brands with stakes in the travel retail market in the Americas. We learned that above all, authenticity, uniqueness and quality are what travelers look for when selecting a rum in duty free.

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Keeping it real The Edrington Group introduced the Brugal Reservas range to Americas travel retail at the 2011 IAADFS show in Orlando. Given a strong response on the part of the industry to the brand, Edrington showcased the new Brugal 1888 expression at this year’s IAADFS exhibition at a special event at the Gaylord Palms Hotel that attracted some 70 guests.

“The Edrington Group knows that the Brugal family has been crafting authentic quality rums since 1888 and always relying on members of the Brugal family for the art of Master blending,” says Juan Campos, The Edrington Group’s Brand Development Manager – US and Canada. “It is the name of the family that goes on every bottle of Brugal rum and there is no better guarantee to ensure high quality in our products than that fact.”

Ron Abuelo’s number one customers are Panamanians, but the brand is also gaining traction in South America with a strong presence in Chile, Ecuador and Bolivia. Vice President of Sales at Varela Imports Ricardo March tells us that Abuelo’s Centuria, the company’s most recent release, was originally dedicated exclusively to duty free but then released domestically in the US and Europe due to high demand.

“Centuria was released last year to celebrate the company's 100 year anniversary,” he explains. “It's a solera-style with a blend of rums up to 30 years old. This expression perfectly exemplifies one of the main reasons why consumers choose Abuelo—because of its long history of making fine rums.”

Authenticity is something that Mount Gay Rum certainly possesses.

Laurent Cosson, Business Development Director for the brand, tells Americas Duty Free that Mount Gay is actually the oldest rum brand in the world, with roots all the way back to 1703.

“Mount Gay is a hand-crafted rum, true to its roots and origins, very authentic in its style,” he says. “These qualities are embodied in our Master Blender Allen Smith.”

The second limited edition Mount Gay Eclipse expression, dedicated to the world of sailing, was recently showcased at IAADFS this year. Early on in its evolution, Mount Gay Rum became an integral part of the sailing community. Sailors would bring back a cask of Mount Gay from the New World as proof of their passage across the Atlantic to Europe.

“Every rum produced by Bacardi is backed by 150 years of expertise and craftsmanship,” says Leigh Irvine, Regional Director – Americas at Bacardi Global Travel Retail. “Bacardi revolutionized the spirits industry when it created the first premium, clear rum in 1862 and it has continued to lead the category in innovation and quality ever since.”

In fact, this year Bacardi has a host of airport activations planned— the most recent of which took place at San Juan and Miami Airports— to celebrate the noteworthy 150-year milestone. In addition, the recent release of Bacardi OakHeart—a new, expertly blended, smooth and smoky rum—is only intensifying the buzz around the brand’s anniversary.

In addition to OakHeart and to specifically honor 150 years of Bacardi rum-making expertise, Bacardi has released Ron Bacardi de Maestros de Ron, Vintage, MMXII. A blend of the finest rums laid to rest in oak barrels over the last 20 years and finished in 60-year old Cognac barrels, the vintage blend is presented in a hand-blown 500ml (16.9 fl. oz.) crystal decanter housed in a leather case.

The first known documentation of rum production at Appleton Estate in Jamaica dates back to 1749. However the origins of the Estate date back as far as 1655 when the British captured Jamaica from the Spaniards. Today, J Wray & Nephew own Appleton Estate and produce a range of rums based on the philosophy of choice and accessibility.

“Connoisseurs who have a deep understanding of what sets apart www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

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Rum Report

Rich and oaky on the nose with aromas of smoke and dried fruit, OakHeart possesses robust flavor with a hint of maple and honey, followed by vanilla and caramel

“Bacardi revolutionized the spirits industry when it created the first premium, clear rum in 1862 and it has continued to lead the category in innovation and quality ever since.”

Leigh Irvine, Regional Director – Americas, Bacardi Global Travel Retail

certain fine, aged rums represent a growing segment of the base, and for this reason Appleton Estate 21 Year Old fits the bill perfectly,” Peter Hottmann, J. Wray & Nephew’s Regional Sales and Marketing Manager for NAFTA, told us. “However, the very essence of our brand is about being accessible to every person who responsibly enjoys fine rum.”

Different is good The way in which a rum is produced can have a big impact on the final product.

Thankfully for connoisseurs, each of the above companies has its own special way of doing things, resulting in a wide variety of rums that can be enjoyed in varying ways and at different occasions.

“All of our rums are proCenturia, Ron Abuelo’s duced using 100% Dominican sugar cane,” says most recent release, was originally exclusive Brugal Maestro Ronero Gustavo Ortega. “Our to duty free but then rums are very light with a very low level of conreleased domestically in the US and Europe geners. The result of the distillation process is due to high demand very clean, very pure.”

Brugal’s rums are aged in ex-bourbon casks make from white American oak, which plays a big part in the woody, dry profile of the finished product. In the case of the most recent expression, 1888, a blend of rums that have been aged from 6 to 8 years in the manner described above 92

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are then aged a second time in ex-sherry casks—the same used when aging The Macallan.

“The result is a very unique rum,” Ortega explains. “This is why we call Brugal 1888 ‘the rum every whisky lover should try.’”

Abuelo rum actually owns its own sugar cane fields, which is relatively rare among rum producers. This allows the company to control every aspect of production, from the sugar cane seed all the way to the bottle.

“Anyone can buy molasses and distill it,” Ricardo March says. “But Abuelo has the experience and the expertise to craft its rums from start to finish.”

In the case of Centuria, the result of the sugar cane used, the solera aging process and the careful blending of rums up to 30 years old is a rum of very high quality. In fact, March calls Centuria “the highest expression of Ron Abuelo’s passion for making only the best aged rums.”

All of Mount Gay Rum’s expressions are distilled in Barbados. The company uses coral-filtered spring water in its production process before aging in Kentucky oak barrels for a delicate flavor profile. “The combination of the distillation process and the aging gives all of our blends a genuine refinement and a very elegant taste,” says Laurent Cosson.

Available in Americas travel retail now and soon to be released in Europe, Mount Gay Black is a deeper and more intense expression of the Mount Gay style, with rich notes of dried apricot and ripe banana, as well as exotic spices like cinnamon and pepper with a touch of vanilla. The same production processes are used, but the combination of a higher ABV and greater proportion of pot still rums in the blend are what gives Mount Gay Black its unique taste.

For OakHeart, Bacardi’s latest release, the process begins with rums mellowed in charred American white oak barrels and blended together to create the perfect base. Selected flavors and spices, including cinnamon, nutmeg, honey and vanilla, are then added to the blend. The result is a bold, spiced rum straight from the heart of charred oak barrels with an amber hue, a hint of smokiness and unique

“Anyone can buy molasses and distill it, but Abuelo has the experience and the expertise to craft its rums from start to finish.”

Ricardo March, Vice President of Sales, Varela Imports

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Rum Report

“Appleton Estate is one of the few rums in the world to claim a ‘terroir’ and the only rum in the world that has a terroir that is as unique as the Nassau Valley.”

Peter Hottmann, Regional Sales and Marketing Manager for NAFTA, J. Wray & Nephew

its Competition, Wine Enthusiast and many more. “From the beginning Brugal has been focused on creating a rum that is unique among rums,” Gustavo Ortega says. “I’m very pleased that the knowledge that has Appleton Estate Reserve Jamaica Rum is a recent addition to travel retail and is handed down from generation to generation of Maestro Ronero been growing at double digits in all markets has resulted in a range of products that is held in such high regard.” velvet-like smoothness. Rich and oaky on the nose with aromas of smoke In addition to receiving recognition from some of the world’s best and dried fruit, OakHeart possesses robust flavor with a hint of maple and known spirits competitions, it’s clear that Ron Abuelo is an attractive honey, followed by vanilla and caramel. brand for today’s modern consumer. In fact, Forbes and Playboy have “We launched Bacardi OakHeart in North America and the Caribbean both sung its praises, and the Wall Street Journal told readers that if they in October last year and the reception it has received from our customers tried Abuelo they’d be “blown away by its smoothness.” and consumers has been extraordinary,” Leigh Irvine explains. “Sam“There are not many companies in the world that do what we do,” pling has been key to this success as we believe that once consumers Ricardo March says simply. “Ron Abuelo has also received accolades have an opportunity to taste OakHeart the quality and taste of the liq- from the San Francisco World Spirits Competition and the Beverage Tastuid speaks for itself.” ing Institute, which is a clear indication of the brand’s quality.”

“All Appleton Estate Jamaica Rum is produced on a single estate in a Renowned spirits expert Paul Pacult also had occasion to try Mount small circumscribed geographical area,” says Peter Hottmann. “Appleton Gay 1703 Old Cask Selection and called it “the best rum in the world,” Estate is one of the few rums in the world to claim a ‘terroir’ and the only giving it five stars. In fact, in the last two years Mount Gay 1703 Old Cask rum in the world that has a terroir that is as unique as the Nassau Valley.” Selection also won the Chairman’s Trophy in the 2010 Ultimate Spirits The most important factors in creating Appleton Estate Jamaica Challenge. In the same competition Mount Gay Extra Old received an Rum, says Hottmann, are fermentation, which involves the use of a pro- ultimate recommendation and was described as extraordinary. “This recogprietary strain of yeast; distillation, which is done in small batches in 100% nition is something of which we’re very proud,” Laurent Cosson says. copper pot stills as opposed to copper-lined stills; aging, which happens “Bacardi is not only the world's favorite rum, but it is also the world's in 40-gallon oak barrels and gives the rum its color, flavor profile and most awarded rum,” explains Leigh Irvine. “Over its 150-year history, Bacmellowness; and blending, with layer after layer being carefully added to ardi has received nearly 500 awards for taste and quality and it continues each blend in order to achieve the desired complexity and richness. to receive awards for its innovations.”

Bacardi OakHeart was only launched last October Available in Held in high esteem but has already won several awards, including Best New Americas travel The last hallmark of a great rum—that is, recognition from Liquor Product of the Year from DFNI. In the 2012 San retail now and soon to be spirits experts and success in the industry—is really the culFrancisco World Spirits Competition, Gold Medals released in Europe, mination of all the hard work that goes into producing it. were won by Bacardi 8 Year Old, Bacardi Añejo and BacMount Gay Black is a deeper and Brugal, for example, is one of the largest international ardi Reserva Limitada 14 Year Old. more intense expression of the golden rum brands in the world and is in the top 20 of Appleton Estate’s high end 21 year old expression last Mount Gay style Impact's Top 100 growth premium spirit brands worldwide. year walked away with Best in Category, Double Gold The brand has received accolades from the Puerto Rico International Medal and Spirit of the Year honors at the 2011 World Rum Awards, F. Paul Pacult’s Spirit Journal, the San Francisco World SpirSpirits Awards. The 12 year old, Reserve and V/X expressions have also won numerous prizes from the World Spirits Awards, Monde Selection, the Ultimate Spirits Challenge and more.

While the five companies discussed herein have all managed to carve out their own respectable niches in the industry, they all no doubt agree with Gustavo Ortega’s philosophy, which is as fitting a thought as any to sum up the art of rum making.

“It is about consistency balanced with adventurousness and age-old knowledge tempered with the desire to continue innovating.

Laurent Cosson, Today’s refined rum consumer demands the Business Development very best and our job is simple—we must Director, Mount Gay Rum c deliver.”

“The combination of the distillation process and the aging gives all of Mount Gay’s blends a genuine refinement and a very elegant taste.”

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Rum cocktails

In the mix

Rum has always been favored by mixologists for its versatility; Americas Duty Free goes straight to the brands themselves to get advice on the best rum cocktail recipes BY

RYAN WHITE

n the last issue of Americas Duty Free, we brought you a collection of vodka cocktails—some innovative, some classic—from the industry’s biggest brands. For this issue, we set our sights on rum, a spirit very popular in many Latin American countries.

With the economic downturn still fresh in the minds of many suppliers and consumers, making sure that travelers are provided with easy and delicious cocktail solutions for entertaining at home is still very important. Furthermore, each brand employs differing production methods and aging processes, making each rum different. As a result, it’s important to find the right mix to bring out the subtle essences of a particular brand. With this in mind, Americas Duty Free speaks with a number of new and well established rum brands to discover the best way to enjoy the fruits c of their labor in cocktail form.

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Havana Mojito Havana Club has kept alive the art of aging and blending premium rums, with the end goal of ensuring the heritage and excellence of the Cuban rum-making tradition. Along with travel retail staples like 3YO and 7YO, Havana Club has also had great success in travel retail with Selección de Maestros. Recognized as a high-quality, ultra-premium rum, Selección de Maestros has been awarded a Gold medal by the San Francisco World Spirits Competition, the Beverage Testing Institute’s International Review of Spirits and the International Wine and Spirit Competition.

Recipe ■ 1 part Havana Club 3YO ■ 2 parts sparkling water ■ Fresh lime juice from half a lime ■ 2 sprigs of mint ■ 2 teaspoons of sugar Method: Place mint leaves in bottom of glass. Add crushed ice, Havana Club 3YO, sugar and lime, then muddle. Add soda water and garnish with mint leaves.

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The Lord Panama Ron Abuelo is produced in Panama under some very unique circumstances. One of the few rum companies in the world to own its own sugar cane fields, Ron Abuelo controls the entire production process from sugar cane seed to bottling. Appropriately named given the brand’s country of origin, “The Lord Panama” is easy to make and a refreshing cocktail that is perfect for hot summer days.

Recipe ■ 1.5 oz. Ron Abuelo Añejo ■ 4 oz. Sweetened lemon iced tea Method: Mix Ron Abuelo and sweetened lemon iced tea over ice in a highball glass. Garnish with a lime wedge.

Mount Gay Eclipse & Apple Juice Mount Gay Rum has a unique heritage as the oldest rum brand in the world, dating from 1703. The brand’s rums are all distilled in Barbados, where coral-filtered spring water is used in the production process to give all the blends a genuine refinement and a very elegant taste. While simple in its composition, the “Mount Gay Eclipse & Apple Juice” is one of those drinks that looks so good when someone orders it you just have to try it for yourself.

Recipe ■ 1 part Mount Gay Eclipse ■ 2 parts apple juice Method: Mix Mount Gay Eclipse in a cocktail shaker with ice and strain into a rocks glass filled with ice.

Gar nish with two lime slices.

The Macua

Dark ‘n Stormy Gosling’s Black Seal 80 Proof Rum is the company’s bestselling expression in travel retail. The cocktail “Dark ‘n Stormy”—made with Black Seal 80 Proof—is actually trademarked and has the distinction of being the national drink of Bermuda. For those with a more adventurous spirit, Gosling’s produces a 140 Proof Rum, the highest alcohol content spirit that a passenger can legally carry on an aircraft in the US.

Recipe ■ 2 oz. Gosling’s Black Seal 80 Proof Rum ■ Top with Gosling’s Stormy Ginger Beer Method: Mix the ingredients over ice in a highball glass and garnish with a lime wedge.

The Macua is a superior tasting cocktail made exclusively with Flor de Caña Rum and is recognized as the national drink of Nicaragua. With over 100 awards and recognitions from various institutes and organizations, Flor de Caña is one of the most awarded rums in the world.

Recipe ■ 1 1/2 oz. Flor de Caña Rum ■ 1 oz. guava juice ■ 1 oz. orange juice ■ 1/2 oz. lemon juice ■ 1/3 oz. simple syrup Method: Mix all ingredients in a cocktail shaker with crushed ice. Garnish with an orange slice and a green maraschino cherry. Serve in a 10 oz. Collins glass.

Ye Olde Fashioned

Captain & Cola No discussion of rum cocktails would be complete without including Captain Morgan. There are two main reasons why Captain Morgan Spiced Rum and cola is a drink enjoyed around the globe: Captain Morgan is one of the world’s most popular rums and the drink is just plain good. Cola is the perfect accompaniment to Captain Morgan Spiced Rum because the mix accentuates the vanilla notes naturally produced during the rum’s maturation process.

Recipe ■ 1 part Captain Morgan Spiced Rum ■ 2 parts cola Method: Fill a highball glass 3/4 full with ice. Add Captain Morgan Spiced Rum and top off with cola. Garnish with a lime wedge (optional).

Patrón, owner of Pyrat Rum, is perhaps best known for the exceptional quality of its tequila brand. However, the company puts just as much attention and care into the production of Pyrat Rum, with many of the rums used to blend Pyrat having been aged for 15 years or more. Simple yet delicious, “Ye Olde Fashioned” is the perfect way to enjoy Pyrat while still experiencing the rum’s true essence.

Recipe ■ 2 oz. Pyrat XO Reserve ■ 2 dashes orange bitters ■ 2 dashes bitters ■ 1 sugar cube Method: Muddle the sugar cube with bitters in a glass. Add Pyrat Rum and ice. Stir and strain over new ice in a glass. Garnish with an orange peel.

Shave and a Hair Cut Norman “Sailor Jerry” Collins was the father of old-school tattooing—a true American icon whose work is still revered today. Sailor Jerry Spiced Rum was created to keep his legacy alive, and in keeping with the edgy attitude of the brand, the “Shave and a Hair Cut” cocktail is one of the more daring rum cocktails you’re likely to try.

Recipe ■ 1 part Sailor Jerry Spiced Rum ■ 2 parts cola ■ 3 parts stout Method: Combine the rum and cola in a highball glass and top off with stout. www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

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Botran Rum

The age

experts

A one of a kind production process, a healthy dose of foresight and a little bit of luck have given Botran Rum a major leg up in the competitive high end rum game BY RYAN WHITE n the 1940s the Government of Guatemala decided to tax rum production and passed a law requiring rum companies to increase their production. As opposed to bottling more rum and attempting to immediately recoup their investment, the Botran family set a large portion of its liquid aside to age. Thanks in large part to the company’s foresight, Botran now has one of the largest reserves of aged rums in the world. This fact, combined with Botran Rum’s unique production, puts the company at the forefront of the high end aged rum segment “Aged dark rums are our forte,” says Frank Quinones, Commercial Director for CB Products Inc., part of Botran Rum brand owner Industrias Licoreras de Guatemala. The company is the marketing and services agent for Botran Rum brandowner Industrias Licoreras de Guatemala. “Botran Rum is a major focus for us in the Americas. The range consists of 18, 14, 12, 8 and 5 YO variants. For duty free we concentrate on the high end of our portfolio, namely the 18 and 14 YO.” It’s no surprise that the premium variants are given preference in travel retail.

However, Harald Jensen of the Botran family tells us that Botran 18

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and 14 YO—in fact the entire Botran range— offer rum connoisseurs some very distinct points of difference from other rums out there, regardless of how old they may be.

“I think what sets us apart is the company itself,” Jensen says. “Botran controls the whole rum making process from start to finish. The Botran family owns thousands of acres of sugar fields where the cane for our rums is produced.”

While most rums are a by-product of sugar production, sugar is a by-product of the production of Botran. The company uses only the first press of two special types of sugar cane—one imported from Puerto Rico and another developed in Guatemala— and then sells it so that the remaining juices can be extracted from the cane to make sugar. Put simply, says Jensen, starting with better raw materials is another reason why Botran is unlike other rums out there.

“Another thing that sets us apart from almost everybody else is that we age at high altitude—at about a mile and a half high,” Jensen explains. “Due to a more consistent temperature, the entire aging process becomes more stable.”

A fortunate result of the high-altitude aging process is that the angels’ share is significantly less, meaning that Botran can age for a longer period of time than many other rums. “Aging as long as we do for some of our high end rums wouldn’t be very cost-

Botran Solera 1893, an Extra Añejo rum produced according to Botran’s stringent standards

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effective in the Caribbean, for example, because of heat and humidity,” Quinones adds. “Our master blender compares Botran’s aging process to simmering food to release more flavor as opposed to cooking at a high temperature.”

The result of this attention to every detail, from the sugar cane and cask selection to the blending and bottling, results in rum that is truly unique. Botran Solera 1893, one of the company’s higher end offerings, is rich brown in color with a nose of caramelized crème brulée, new glove leather and sandalwood. The taste is described as lush and mouth filling, the rich sweetness of honey and maple syrup balancing with notes of toasted wood and baking spices.

It’s easy to see why Botran and travel retail are a match made in heaven, and Quinones tells us that the brand is making significant headway in Central America and has also been listed at Miami and JFK, as well as in Mexico. One of RCP Corp’s objectives for this year is to secure more listings in North America, broadening Botran’s reach in the US and getting into US/Canada border stores.

“Our main goal at the moment is to get things right first and foremost across the Americas,” Quinones explains. “2011 was our first full year back in duty free with new bottles and a clear focus on the premium level, and we’ve made some great strides. We’re well established in some important areas of the Americas, but there’s certainly more opportunity for Botran in the region, specifically in North American duty free.” c Botran Reserva, the brand’s Añejo expression; the Botran family has one of the largest stocks of aged rums in the world

Harald Jensen of the Botran family (right) and Frank Quinones, Commercial Director for CB Products Inc., part of Botran Rum brand owner Industrias Licoreras de Guatemala, at IAADFS 2012

Rum News Produced in Antigua, English Harbour is matured for longer than is normally required, resulting in an exceptionally smooth rum

English Harbour

Given the success of Atlantico Private Cask (far right), the brand has introduced two new expressions— Reserva and Platino

Atlantico introduces Reserva and Platino expressions With the success of Atlantico Private Cask rum, owners and rum connoisseurs Aleco Azqueta, Brandon Lieb and Enrique Iglesias, along with regional distributor MONARQ Group, are expanding the line to include two new premium rums: the Solera-style Atlantico Reserva and the smooth, clean Atlantico Platino.

While most rums are produced using either molasses or cane juice, Atlantico rums are produced using both, providing the highest quality product. The unaged, handcrafted Platino is an incredibly smooth and flavorful light, white rum that can easily be enjoyed on the rocks, or in a cocktail.

Also produced using a unique blend of molasses and cane juice, Atlantico Reserva is aged between 6-15 years. Cane juice and

molasses are aged in separate barrels for three years, then blended together and aged for another two years. During this point, it enters into a “Solera” style aging system for up to 10 years which results in a truly unique and complex rum. Ocean air and tropical island breezes further enhance the flavors and aromas developed during the aging process. Once reaching the peak of perfection, the liquid is removed from the barrels and bottled by hand.

“We’re very pleased to be representing a super quality rum brand like Atlantico in Latin America and the Caribbean markets plus US duty free,” says Robert de Monchy, Managing Director of MONARQ Group. “These latest expressions are sure to create even more of a buzz around the brand in travel retail.”

Flor de Caña launches line of rum-infused coffees and marmalades Flor de Caña rum and regional duty free distributor World Equity Brand Builders (WEBB) have announced the launch of a new line of rum-infused coffees and marmalades. While the offerings will be sold exclusively in Flor De Caña boutique stores, for a limited time consumers will be able to try the line as a GWP in selected travel retail outlets. With the purchase of a bottle of Flor De Caña Centenario 18YO, travelers will receive samples of the rum-infused coffee and marmalade.

Rodrigo Bazan, Global Travel Retail Manager at Flor De Caña, tells us that the rum is doing well in duty free, with the 7YO, 12YO and 18YO being the standout expressions. And it’s

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rum enters duty free on high note

Robert Syner, President of Specialty Brands, tells Americas Duty Free that just two months after English Harbour rum’s introduction to duty free, the brand has already been picked up by a number of operators in the Americas. Given the fact that the rum is already well known in the Caribbean, Syner expects the momentum to continue through to next year.

“The reaction on the part of operators in just the last two months has been fabulous,” Syner explains. “This rum is highly sought after by connoisseurs, especially the Xtra Old given its limited production.”

While Syner says that a small number of Xtra Old cases may make their way into duty free later in the year, the concentration in travel retail will be on the 5YO and 10YO expressions of the brand. Indeed, English Harbour is considered by many experts to be one of the finest blends of dark and light rum distilled in the Caribbean today.

Produced in Antigua, English Harbour is matured for longer than is normally required, resulting in an exceptionally smooth rum.

“We’re looking forward to showing English Harbour to more operators and continuing the great start we’ve enjoyed in duty free,” Syner concludes.

With the purchase of a bottle of Flor De Caña Centenario 18YO, travelers will receive samples of the new rum-infused coffee and marmalade as a GWP

no wonder—the brand is one of the most awarded rums in the world, with over 100 accolades under its belt from top spirits magazines and institutes all over the world.

“Flor De Caña has established a unique duty free presence with a shop-in-shop retail concept that mirrors the Flor de Caña Boutique stores in Nicaragua, Honduras, Mexico and Panama,” Bazan says. “In addition to the shop-in-shop concepts in selected locations, as the number one rum brand in the Americas, Flor de Caña is enjoyed by consumers from Mexico all the way to Chile.”

After receiving numerous accolades for its US domestic presence, Don Q is entering duty free with its Gran Añejo expression

At San Juan’s Luis Muñoz Marín Airport, giant 3D 10-foot-tall Bacardi bats took up residence on the airport concourse earlier this year

A year of celebration for Bacardi Bacardi Global Travel Retail is commemorating the 150th anniversary of Bacardi, the world's favorite and most awarded rum, with a year-long programme of special events.

The celebrations began in style with airport spectaculars and the launch of a US$2,000 limited-edition decanter of rare Bacardi rum.

In San Juan and Miami, travelers enjoyed airport spectaculars created by Bacardi Global Travel Retail. At San Juan’s Luis Muñoz Marín International Airport in Puerto Rico, giant 3D 10-foot-tall Bacardi bats took up residence on the airport concourse earlier this year. The iconic Bacardi bats were decorated with photography and advertisements celebrating the brand’s rich heritage.

In Miami International Airport, the North Terminal rotunda was filled with the spirit of Bacardi as imagery of 150 years of legendary Bacardi parties was on display. Travelers to San Juan and Miami were served a refreshing authentic Bacardi Mojito, one of the many classic cocktails inspired by Bacardí Rum, to toast the 150th anniversary and enjoy while they take in the exhibitions.

“In 2012 we will be celebrating 150 years of legendary parties with a year-long series of exciting Bacardi programmes that will engage consumers and drive footfall throughout global travel retail,” says Vinay Golikeri, Bacardi Global Travel Retail Marketing Director. “It’s the perfect way to celebrate the 150th birthday of a remarkable company and a revolutionary rum.”

Sailor Jerry gains momentum in duty free with JFK activation

Paige Parness, Regional Marketing Manager at William Grant & Sons, tells Americas Duty Free that Sailor Jerry Spiced Rum, although new in travel retail, has gained significant momentum in the channel following a high profile activation in March at JFK’s Terminal 5. For one week, the concourse grandstand in the Jet Blue Terminal 5 at JFK was transformed into a world of Sailor Jerry that attracted attention, motivated curiosity and entertained traveling consumers.

The activity represents the largest Sailor Jerry activation to date in global travel retail. It is an authentic brand experience of Norman “Sailor Jerry” Collins, pushing consumers to lighten up and not to take themselves too seriously. Travelers were invited to try a number of unique Sailor Jerry cocktails while exploring an iPad app.

“Sailor Jerry has a strong brand heritage with a brand attitudinal positioning that connects to our target consumers’ lifestyles,” says Parness. “The quality of the liquid is also why consumers choose Sailor Jerry. It is 92 proof while remaining extremely smooth. Very versatile, it can be served neat, over ice or in any number of simple or complex cocktails. For the last decade, Sailor Jerry has built 92 proof yet a loyal cult following that passionately supports the extremely smooth and versatile, man, the brand and the rum.”

Sailor Jerry can be served neat, While details aren’t yet available, Parness tells over ice or in any Americas Duty Free that travelers can expect to see number of simple or complex more novel Sailor Jerry activations throughout the cocktails Americas in the coming months.

Don Q receives spirits industry accolades, enters duty free with Gran Añejo Don Q rum has announced that in the March/April edition of Beverage Dynamics, the brand achieved its first ever “Fast Track” Award. This is an honor given to only a select few brands that are more than 5 years old and have achieved double digit growth over 200,000 cases domestically in the US. The award was presented at a ceremony at the Win and Spirits Wholesalers of America convention on April 4 in Las Vegas.

The above is certainly an indication of the brand’s increasing popularity in the US domestic market. However, Patrick Nilson, President of Haleybrooke International (Don Q’s duty free distributor for North America and select markets in Latin America) says that Don Q also has its sights set on travel retail and is entering the market with premium variant Don Q Gran Añejo.

“Don Q Gran Añejo is the highest example of the exacting production process used to create every expression in the Don Q range,” Nilson tells us. “Gran Añejo is a masterful blend of rums aged from 6 to 12 years in American white oak barrels and Solera aged rums aged up to 20 years old. The brand is premium in every way, from the exquisite bottle to the rare liquid contained within.”

Don Q Gran Añejo has won numerous awards over the last year, including a FiveStar Diamond Award from The American Academy of Hospitality Sciences, as well as accolades from The Beverage Testing Institute, Wine Enthusiast, The Los Angeles Wine & Spirits Competition, the SIP Awards and the World Beverage Competition.

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Diageo Americas

Yin and yang D

Diageo targets female white spirit fans in Mexico and gives brown spirit lovers something to talk about by adding two new expressions to the Johnnie Walker range BY RYAN WHITE iageo is perhaps best known in travel retail circles for its unwavering commitment to the trinity concept and the unprecedented worldwide success of Johnnie Walker Blended Scotch

Whisky. Just ahead of this year’s ASUTIL conference Diageo announced three new developments that put a fresh spin on the trinity concept, target female shoppers and take the legacy c of Johnnie Walker to new heights.

Targeting female travelers

“The opportunity for targeting female shoppers with innovation such as Nuvo is hugely exciting for us because of the growing appeal of white spirits worldwide as drinking tastes evolve,” Louise Higgins, Diageo’s Regional Marketing Director GT Americas, told us recently. Diageo recently teamed with Grupo Wisa in Mexico City and WDFG (formerly Aldeasa) in Cancun to run an activation that included cross-category merchandising and sampling in the perfume & cosmetic zones of the operators’ stores.

Nuvo sparkling liqueur is a unique blend of premium French vodka, French sparkling wine and natural fruit flavorings, perfectly blended and gently carbonated to create a uniquely light and refreshing taste. With a powerful established reputation since its launch in the US domestic market and celebrity endorsement, particularly with leading hip-hop artistes, Nuvo has created a strong following from the key target audience of urban females aged from legal drinking age to 35.

“There are clear signs that female consumers are increasingly curious about expe102

riencing a broader range of spirits, particularly in white spirits and also in whisky,” Higgins notes. “The taste, versatility and style of Diageo’s white spirits portfolio makes it highly appealing to female shoppers.”

Indeed, the intriguing mixture of elements in the pink liquid is also reflected in the beautiful clear glass design of the Nuvo bottle.

Unmistakably modern with feminine lines

and a strong square shape, the bottle evokes the design of classic perfume bottles, delivering a stylish presentation that looks just as good in P&C as in the liquor department.

Diageo says that it believes it is essential that the spirits category demonstrates its ability to respond to the needs of the female consumer. Indeed, the

Nuvo sparkling liqueur is a unique blend of premium French vodka, French sparkling wine and natural fruit flavorings

Smirnoff Gold is another recent Americas release that Diageo feels will appeal to female travelers

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

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Diageo Americas

supplier sees significant opportunities within this domain. A recent piece of research demonstrates that Nuvo has huge appeal to this audience, says Diageo, not only because of its great taste and style but also through its credibility as a product clearly designed to complement the lifestyle of modern women.

Nuvo’s taste

hints of a cosmopolitan cocktail with the added sparkle and elegance of sparkling wine.

The simplest elegant serve is over ice in a fluted glass but it also mixes superbly with Ciroc Vodka and a splash of lime juice to create the “Nuvo Sparkling Cosmopolitan.”

Additional innovations recently launched in the Americas also specifically target females.

Baileys with a hint of Biscotti, already popular with female shoppers in other regions, is set to build on the Baileys brand appeal across the region. Smirnoff Gold, a unique cinnamon spiced premium variant, is beautifully packaged and, with real edible gold leaf

uniquely suspended in the liquid, delivers strong on-shelf standout and gift appeal, with the call to action of “Gold In Every Drop.”

With regard to future activities related to Nuvo, Higgins tells us that the brand will certainly be a priority for Diageo in the Americas: “The quality and appeal of the Nuvo brand and the exciting extent of its early success ensures that it will be given as strong a platform as possible across the region so that this remarkable launch momentum can be fully exploited. We are exploring options with other retailers where space and trading parameters allow.”

Rarity redefined A new limited edition release of the world’s leading blended Scotch whisky will be released exclusively in global travel retail: Johnnie Walker Blue Label – The Casks Edition. Crafted from some of Diageo’s rarest casks, each noted for their intensity and depth of flavor, this special edition, bottled at 55.8% ABV, has intensified wood flavors and “is a tribute to the perfect harmony of the oak casks used in the blending of Johnnie Walker Blue Label,” says Diageo.

Johnnie Walker Master Blender Jim Beveridge says: “This limited edition is a chance to enjoy the remarkable experience of Johnnie Walker Blue Label in a new way. Only one in ten thousand of Johnnie Walker our casks have sufficient character Blue Label – The Casks Edition is for Johnnie Walker Blue Label and described as having in creating this special edition we rich woody notes, deep smoke, traces really wanted to showcase the of spice and a long, lingering oak finish incredible flavors that come from

Precious metal Diageo’s second new addition to the Johnnie Walker range is Johnnie Walker Platinum Label. Inspired by the Walker family’s historic tradition of creating exclusive “private blends” for favored customers, directors of the company and select private gatherings, Johnnie Walker Platinum Label has been crafted by Jim Beveridge “for today’s increasingly sophisticated global consumers—the ‘new whisky set’—to enjoy at their own intimate gatherings,” says Diageo. It is a delicate, smoky blend that embodies the characteristic full flavors of the Johnnie Walker range of blended Scotch whiskies.

Jim Beveridge explains: “Like the rare and precious metal after which it is named, Johnnie Walker Platinum Label is rich and refined, delivering the distinctive depth and complexity that is synonymous with Johnnie Walker. In fact, I believe that if John Walker were to create a whisky today, Johnnie Walker Platinum Label would be the result. It is a bold, intense and smooth blend, crafted from some of our most treasured whiskies, for the evolving tastes of today’s global whisky consumer.”

“Johnnie Walker Platinum Label is the richest, most precious crafted 18 year old blended Scotch whisky John Walker & Sons has ever created—its price point reflects this,” says Steve 104

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

the casks themselves. The flavors drawn from these carefully selected casks have intensified to produce a robust and powerfully flavored blended Scotch whisky that has rich woody notes, deep smoke, traces of spice and a long, lingering oak finish.”

Produced in limited quantities and blended in small batches, the bold blend is a contemporary expression of the powerful 19th century character pioneered by the Walker family, created for true connoisseurs who are seeking new depths of flavor.

Steve White, Marketing Director, Diageo GTME, said: “Johnnie Walker Blue Label – The Casks Edition is a Scotch whisky with a remarkably powerful flavor, the result of almost two centuries of unbroken blending expertise. This limited edition release is a rare opportunity to enjoy a bold amplification of the powerful cask flavors contained in Johnnie Walker Blue Label—it is rarity redefined.”

White. “We believe that consumers will quickly develop a real affinity for Johnnie Walker Platinum Label and that it will offer real value for our trade partners.

“It is a thoroughly modern interpretation of the ‘private blends’ that our company has produced from the very beginning and is a contemporary blended Scotch whisky that is perfect for exclusive occasions,” he added.

Johnnie Walker Platinum Label is available now in 75cl size in limited Asian Duty Free locations with a global Duty Free launch of the 1L (25 fl. oz.) variant from June 2012. Priced at an RRP of USD $100 for 1 liter (33 fl. oz.) in duty free, Johnnie Walker Platinum Label is a premium whisky that will sit c towards the top end of the Johnnie Walker range.

Johnnie Walker Platinum Label has been crafted for today’s increasingly sophisticated global consumers—the ‘new whisky set’—to enjoy at their own intimate gatherings

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Rémy Cointreau

Triple threat

Rémy Cointreau has great things planned for its triple sec liqueur in the Americas BY

ANDREW BROOKS

he triple sec liqueur Cointreau has an eventful future in Latin America, if the brand’s success to date is any indication, and maker Rémy Cointreau plans to leverage the upcoming ASUTIL trade show to build further momentum for its iconic brand, says Francois van Aal, Regional Director Americas Duty Free, Rémy Cointreau.

“London Supply is hosting the gala dinner at the ASUTIL Conference on the Thursday evening in their Iguazu flagship store,” van Aal says. “Cointreau will be the exclusive liquor sponsor with a featured cocktail for all guests during this event. For Rémy Cointreau, as for the other suppliers that attend, ASUTIL is the perfect place to meet all our key customers in one place over the course of just three days. It’s also a good barometer of the economic and business activity in the LATAM region.”

Cointreau is a key liquor in Latin American domestic and duty free markets, particularly in the powerhouse of Brazil, says van Aal. Rémy Cointreau is planning to generate added growth in 2012 for Cointreau across the region, with some strong investment planned based on “a holistic approach” between the duty free and domestic channels in Brazil.

“We’re mainly targeting the Brazilian who is returning home and going through the Dufry Brazil arrival stores in Sao Paulo and Rio airports,” van Aal says. “We chose Cointreau also because it is an amazing brand, famous for its history as well as its quality.” The liqueur was first distilled more than 160 years ago by the Cointreau

T

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Cointreau market positioning is in keeping with its premium, marketleader status

family in Angers in France’s Loire Valley. Cointreau is made from all-natural ingredients, based on a mix of bitter and sweet orange peels combined according to a secret recipe. It first arrived in America in 1920 and has since become a pillar of American cocktail culture, providing the base for the Margarita, the Sidecar, the Caipicointreau and the Cointreaupolitain to take a few examples.

Van Aal says that Cointreau’s presence tends to be homogenous by region, with the brand being relatively prominent in the Caribbean and Puerto Rico in particular. Rémy Cointreau’s overall brand portfolio is well distributed in the Americas duty free channel, with the scale of the business obviously dependent on the importance of each category in each region. To take an example, Rémy

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

Cointreau’s design and labeling enjoy market mindshare equalled by few other brands

Martin is strong in the US and Canadian markets thanks to high demand for Cognac, while its sales are less significant—though they are growing—in the rest of the Americas.

“The scarcity of the eaux de vie relates to Rémy Martin Fine Champagne Cognac, obviously,” van Aal says. “We’re listed and visible in every key location across the LATAM region with this brand, the Cognac category still being relatively small compared to North America.

The impact of the scarcity of the eaux de vie has not affected the Latin American region the way that it did for North America.”

Mount Gay Rum is well established in Canada and the US. It has also become strongly positioned across the Caribbean, which is the brand’s original market, expanding beyond Barbados where the product is produced.

“We’re looking to improve the presence of Mount Gay in other regions, but also the Scotch that we distribute like The Famous Grouse and Cutty Sark,” van Aal says. “The Macallan is already very well distributed.”

Two other key brands that Rémy Cointreau has plans to add more support to this year are Brugal Rum and Russian Standard Vodka, which will be developed through targeted investments in visibility and promotions. c

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Norsemen sailed in magnificent handmade oak longships to colonise the Islands in the eighth century; the most fearless of all was Leif Eriksson, the first European to reach America over 1,000 years ago.

In recognition of his achievements, this delightful expression of Highland Park single malt is wholly matured in American Oak casks; it has a wonderful balance of honey sweetness, citrus fruit and spicy smoke.

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Liquor News

Despite launching as a WDFG exclusive in Birmingham, Patron notes that XO Cafe Dark Cocoa will be rolled out worldwide in the coming months

Patrón releases XO Cafe Dark Cocoa, partners with WDFG on Ice Bar promotion Patrón Spirits, World Duty Free Group and Birmingham Airport joined forces to install an Ice Bar on April 5 at the airport’s landside departures area, where passengers were able to sample Patrón’s ultra-premium tequilas and liqueurs, along with its Pyrat rum. Patrón also used this opportunity to introduce a new chocolate and coffee liqueur called Patrón XO Cafe Dark Cocoa, which it says will be a European exclusive for World Duty Free Group and Birmingham Airport, making this the only European location in domestic or duty free where the new spirit can be purchased. Patrón

XO Cafe Dark Cocoa will be rolled out worldwide at a later date, Patrón spokesperson Greg Cohen told Americas Duty Free.

“In addition to promoting our products, more importantly this initiative is designed to showcase the duty free and airport shopping experience,” says Mike Hill, Vice President for Europe, Africa and the Middle East at Patrón Spirits International. “Our goal is to drive penetration and growth by giving travelers who might not consider shopping in the airport’s duty free store a compelling reason to shop.”

Prowood Wine & Spirits launches high-end brandy Kilikia in the Americas Prowood Wine & Spirits (PWS) is an exclusive importer and distributor based in the US. The company was established in 2003, and is continuing to expand its portfolio by importing excellent spirits throughout the US. PWS feels that high-end brandy Kilikia will be extremely sought after in the Americas. “Given the super premium positioning of Kilikia we feel it’s a great fit for Americas,” says Henrik Sargsyan of Prowood.

Made in Armenia, Kilikia is intensely aromatic brandy that is harmonized and well balanced. In addition to brandy, over the past few years PWS has become one of the largest importers and distributors of Russian vodka in the US. PWS is also a brand development company that is always looking to innovate as a means of staying on top of ever-changing consumer preferences. The company also has a new high-end Cognac called Arman that Sargsyan asserts has already gotten attention in the channel.

“Kilikia is truly a unique offering in the brandy category and we are confident that it will make waves in duty free, particularly in the Americas,” Sargsyan says.

Prowood Wine & Spirits’ new luxury brandy Kilikia

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THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

Grant’s runs high profile promotion with Dufry in Sao Paulo and Rio William Grant and Sons is pushing to “premiumize” its brand in Latin America, says Paige Parness, Regional Marketing Manager. Parness points to a month-long promotion Grant’s ran in May through Dufry, in airport stores in Sao Paulo and Rio de Janeiro, as an illustration. The promotion centered on Grant’s 12 year old premium aged Scotch whisky.

“We’re shifting our focus from Grant’s Family Reserve to Grant’s 12 year old to help premiumize the brand in Latin America,” Parness says. The events consisted of branded tasting bars supported by brand ambassadors who offered travelers samples to taste and provided information about the product. At Rio de Janeiro/Galeão–Antonio Carlos Jobim International Airport the promotion ran in the airport’s Terminals 1 and 2.

The bars varied slightly in dimensions, but all carried the “Uniquely smooth and complex” tagline associated with the 12YO brand, and accompanying text highlighted the whisky’s telltale spice and vanilla notes.

The premiumization initiative received a boost last November when Grant’s was named 2011 “Distiller of the Year” and “International Spirits producer of the Year” at the prestigious International Wine and Spirit Competition (WSC) Awards, which were held in London, England.

Grant’s 12 year old also captured a Silver medal at the event.

Grant’s is uniquely positioned to exploit a premium positioning, boasting other recognized brands such as Glenfiddich, Tullamore, The Balvenie, Reyka Vodka, Leyenda del Milagro Reposado Tequila and Hendrick’s Gin. The 12 year old promotion follows on the heels of other recent activities by Grant’s to promote its varied portfolio in the Americas. Events included the Sailor Jerry Spiced Rum promotion, which ran at New York’s JFK International Airport in March and was timed to coincide with the college Spring Break festivities in the US. The promotion integrated various media presentations as well as social media networks.

William Grant & Sons is putting a push on premiumization in Latin America and focusing on the 12 year old expression in this most recent Dufry activation

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Liquor News

White Gold sees continued successes in worldwide duty free White Gold Company broke into duty free and travel retail just two years ago and has already seen some impressive successes.

The company’s White Gold vodka has been listed in Gebr Heinemann and Aer Rianta International stores worldwide, as well as with Dufry shops in Russia.

The company says that its products are now getting noticed on the worldwide stage. According to a recent IWSR report, vodka brand Gzhelka, produced and distributed by White Gold, is a new entrant on the list of the top 20 fastest growing vodka brands worldwide.

White Gold says that given the growth of the vodka subcategory, especially in duty free, it sees great potential for its brands as they continue to penetrate the channel. Currently working on its own to supply clients and organize activities, the company is interested in meeting with experienced distributors to discuss increasing the reach of its brands in export markets.

The company’s latest offering is a new vodka brand called Russian Gold. According to IWSR, the Russian Gold brand grew seven times over in duty free channel in just one year and is seen by leading industry players as a product to watch in the vodka subcategory.

According to IWSR, the Russian Gold brand grew seven times over in duty free channel in just one year; the brand is White Gold’s latest entrant into duty free

110

Louis Royer Cognac secures new listings in Americas Philippe Pichetto, Export Manager – Americas at Louis Royer Cognac, tells Americas Duty Free that the brand has secured a number of new listings in the Americas. Travelers passing through airports in Los Angeles, San Francisco and Hawaii will now be able to find Louis Royer in duty free. Another half dozen or so listings, mostly in North America, are expected to be finalized in the coming months.

“We think that we can do the same in South America in 2012 as there is a great interest for the brand,” Pichetto explains. “We are already in a growing number of border shops in Uruguay and we are currently getting new listings in Central America. Additionally, our cruise line and diplomatic business continues to grow.”

Louis Royer is doing nicely in travel retail with all of its standard ranges, including VS, VSOP and XO. Pichetto tells us that VSOP is the biggest seller, but notes that Louis Royer Force 53, a new expression that comes in a compact 500ml bottle in a very contemporary metal mesh canister, will be an area of focus for the company this year in duty free given its uniqueness among Cognacs.

VSOP, Louis Royer’s bestseller in duty free

Tequilera Corralejo sees success with 99,000 Hours, Vodka Boker in Singapore Continuing its passion for traditional production methods, Tequilera Corralejo introduced a special commemorative edition premium tequila at this year’s TFWA Asia Pacific & GATE ONE2ONE exhibition: 99,000 Hours.

99,000 Hours is aged in single Kentucky oak barrels (no bigger than 200 liters) for 18 months and double distilled using copper and column stills. This premium tequila is presented in a rounded carafestyle bottle and is designed for drinking neat, on the rocks or in cocktails.

Also new at the show was Vodka Boker, a unique Mexican corn vodka presented in a highly attractive and unusual deep blue bottle that has a twisted effect. Initially launched to travel retail markets in India, Central America, Mexico and Canada, Vodka Boker is described as versatile and smooth, but with the added bonus of a direct link with centuries of history and culture.

The main market strength of

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

Tequilera Corralejo is centered in the Americas, but the brand is steadily expanding beyond and now reports significant duty free business in India, the Maldives and Sri Lanka, plus in Spain through Aldeasa and via Russian border stores.

The Middle East and Asia Pacific are next on the hit list and the company is keen to make new contacts at this year’s Singapore show.

99,000 Hours is aged in single Kentucky oak barrels (no bigger than 200 liters) for 18 months and double distilled using copper and column stills

NOW ALSO ON SALE IN THE E.U. CONTACT: IAN SMART, Director Business Development TEL: +44 (0) 8700 339 866 EMAIL: sales@protege-international.com FOR INFORMATION ON THESE PRODUCTS PLEASE VISIT: www.protege-international.com After Dark is a registered trade mark. © Protégé International Limited 2012.

Liquor News

Diego Zamora’s Licor 43 flagship continues to grow in the Americas Diego Zamora Group’s original brand, its Licor 43 citrus and fruit liqueur, continues to enjoy strong success in the Americas duty free market. The main stronghold is Brazil, where 5,000 cases were sold last year, but the US and Argentina are also profitable markets for the brand, showing good growth. Prospects are positive with the product still being relatively young in many Americas markets.

Mexicans and Brazilians between 18 and 35 years of age make up the bulk of the customer base, with a slight female bias.

The product’s reputation has been enhanced by a number of recent awards, including being named the “2011 Top Drink in Germany” by FIZZZ Magazine, a silver medal in the 2011 San Francisco Spirits Competition, and a gold medal in the 19th Cocktail Challenge, held in April of this year in London England.

The sweet spot for Licor 43 is the premium channel, where close and constant engagement with customers remains the proven builder of market share. Diego Zamora is currently operating its tasting bar experience in airports

such as Sao Paulo and Rio de Janeiro, with brand ambassadors offering tastings, recipes and cocktail ideas, and offering product advice and information as well as historical background to win over new fans and reinforce Licor 43’s standing with connoisseurs. The model has been successful and plans are in the works to bring it to other airports.

Licor 43 closed 2011 with sales of over 500,000 cases worldwide, or 4.2 million liters, a 25% increase over 2010. With that kind of demand curve, it’s no surprise that Diego Zamora is ramping up capacity with construction of a new Licor 43 factory in Cartagena, which will be finished this summer. The new plant will increase current capacity by 50% and will also be the company’s new HQ. Also, to highlight the history and achievement of the liqueur, the company is constructing an “Experience 43” Mediterranean venue where the experience and history of the brand can be enjoyed by visitors.

Clase Azul Tequila targets travel retail in the Americas Casa Tradicion began producing the ultra premium line of Clase Azul tequilas in 1997. In 2004, the company expanded distribution into the United States and sales have grown each year since. Today, the US market is the main focus for Casa Tradicion as the company continues to drive a sales and marketing program for Clase Azul and its unique pomegranate liqueur made with tequila, La Pinta.

Clase Azul tequila includes three different products including a Plata (silver), Reposado and an extra anejo called Ultra. All of the products are made with organic agave that has matured for at least nine years before being cooked in traditional brick ovens and fermented with a proprietary yeast developed

by Master Distiller Arturo Lomeli.

“At the moment in the only duty free market we work in is Mexico,” Lomeli says.

“80% of our sales in the US come from California, Arizona, Colorado and Nevada.

We recently launched in New York and are planning a move into Texas and Washington by the end of 2012.” Duty free does figure in Lomeli’s long-term plans, and the channel is a natural fit for his very high-end products, but he believes in building up awareness in local markets first.

For Clase Azul, the packaging and bottle are just as important in positioning the

112

product as the quality of the tequila itself, Lomeli says. “One thing I realized when we started out was that we had to create a quality product and create packaging that tells the customer they are experiencing something special. Our taste, quality and packaging are all unique. We’re not a ‘me too’ company.”

Lomeli works with Aldeasa, Dufry and Grupo Wisa to manage the duty free channel in Mexico.

While he finds customers willing to pay for quality, he has found that it helps to have promotional t astings to show prospective customers what they’re getting. “The people in the airport locations can give personalized selling points to consumers,” he says. “They go through the production, the character of the bottle, the quality of tequila, and they talk about the company. It all helps support the US$39-$89 price point which is double certain other tequilas sold.

“Once they taste the quality of what we make the sale is that much easier.”

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

As for many suppliers, Diego Zamora notes that Brazil is a big market for Licor 43

“We’re now covered in each of the major categories with leading brands”

MONARQ highlights portfolio growth, Americas footprint Beverage distribution and marketing specialists MONARQ Group have been on a roll over the last few years, inking agreements to distribute market leaders in one category after another. Their portfolio is virtually a who’s who of market leaders in rum, vodka, tequila, liqueurs, vermouth, cachaça, wine, beer and more.

The company recently made another premium addition to its lineup by concluding an agreement with Morrison Bowmore to distribute the Bowmore and Auchentoshan single malt whiskies throughout the Americas, except for Mexico and Brazil.

“This is one of the few sizeable remaining independently operating malt whisky producers,” says Owner Robert de Monchy. “It was a gap we wanted to fill for quite a while. We’re now covered in each of the major categories with leading brands, except for cognac, standard

SIGNUPNOW!

scotch and gin.” The remaining gaps won’t last long: when he spoke with Americas Duty Free, de Monchy was working on an agreement with a major gin maker.

When he speaks about filling gaps, de Monchy means anything but a mere stopgap. The new agreements follow hard on the heels of a pact with Miamibased Alebrands Spirits Co. to manage, distribute and market its ultra premium Atlantico Rum in Latin America and the Caribbean, as well as in US duty free. As the fastest growing ultra premium rum in the US, Atlantico is a perfect partner to MONARQ’s entrants in other categories.

2011 was an outstanding year for MONARQ, de Monchy says, and 2012 is continuing the trend. Momentum will probably increase with the hiring of new staff members to concentrate on specific areas in the Americas.

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Cigar Report

Constant change The competitive Americas tobacco market is a scene of rapid product innovation BY ANDREW BROOKS ven though Ray Tobacco is a relative newcomer to the tobacco market, with the bulk of the HongKong-based company’s business remaining on the domestic market side, it has been expanding steadily into new duty free markets. Founded only in 2008, Ray Tobacco is nothing if not methodical in its market approach, and duty free inroads are being made one step at a time. For the time being at least, the company is focusing fairly close to its Hong Kong base. So far the early travel

E

You can’t smoke it, but this Walton-labeled whisky has given Ray Tobacco a leg up in duty free

retail presence is being developed in the form of airport shops and border stores, with inflight listings still to come.

As young as it is, Ray Tobacco has a solid portfolio of duty free brands that have proven themselves in the company’s first forays into the channel. The Ray American Blend and Walton Royal Blend cigarette brands lead the way, but new products are also under development, says Chris Pfister, Ray’s Export Director.

The duty free expansion will undoubtedly be helped by the introduction of a whisky product under the Walton name, increasing Ray’s category reach. A blend produced at one of the largest distilleries in Scotland, the whisky bears a resemblance—visually and in terms of taste—to the iconic Johnnie Walker. Ray hopes that setting the product at an attractive price point will get the new whisky some critical early-market uptake from customers. There’s a new beer product in the portfolio too, also under the Walton name, which Pfister says is a good prospect for duty free in Latin America, where beer is a popular category.

International recognition of Ray Tobacco has been growing rapidly in the last several months, thanks in large part to a

strong showing at the IAADFS tradeshow in March, where Alfa Brands played host to Ray Tobacco at its booth.

“The response was tremendous,” Pfister says, with independent duty free operators from across the Americas showing strong interest in Ray Tobacco’s products. As a result of the good showing, Ray Tobacco was able to enter negotiations with potential clients from Honduras, Ecuador, Jamaica, Panama, Mexico, Paraguay and duty free companies in Miami, Ft. Lauderdale and the Caribbean.

In addition to Ray’s tobacco products, the new whisky also attracted serious attention.

New product introductions are a way of life at Habanos S.A. The iconic Cuban cigar brand is a constant hive of activity when it comes to The Macanudo “Celebramos” ashtray is part of General Cigar’s Father’s Day promotion with DFA and Dufry

The Villiger pack of 25 individually wrapped Premium Mini Sumatra Cigarillos

Villiger’s new Premium Mini Cigarillos come in Vanilla and Sumatra Classic flavors in addition to Espresso

new brand launches. New and recent entries include Partagas Serie E No. 2, distinguished by its 54 ring gauge—the largest ring gauge yet presented for the Partagas brand, which traces its history back to 1845. Other innovations include the addition of a flap to separate the cigars in the box and the addition of a lithographed paper label to make the series more easily identifiable in-store. The Serie E No. 2 is available in units of 5 and 25.

Habanos has also recently released the new H. Upmann Half Corona, a short 90mm cigar with a ring gauge of 44. The Half Corona is made with leaves from the Vuelta Abajo region in Pinar del Rio in Cuba and packaged in a box adorned with the medals representing the awards the H. Upmann brand garnered at 11 international fairs over the course of the 19th century.

At the TFWA travel retail trade show in Cannes last September, Habanos presented the new Serie E No. 2, the Serie D No. 5, a range of H. Upmann entries including the Half Corona, and the Cohiba 1966 and Short Hoyo Pirámides 2011 limited edition vitolas from Hoyo de Monterrey, in addition to the Allones Extra 2011 limited edition vitola from Ramón Allones. The new Montecristo No. 2 Gran Reserva 2005 was also highlighted. This limited edition of 5,000 numbered 15-cigar boxes is the first Gran Reserva in the Montecristo line, which Habanos says is probably the best recognized of all its brands. The travel retail channel is an important one for Habanos, representing around 30% of its total business—a proportion that shows every sign of growing.

For Switzerland-based cigar maker Villiger, the duty free market has also been turning in especially strong results, in this case despite the added economic challenge of a very strong Swiss franc. “We’re certainly on course to sell more despite the social and political pressure on cigar manufacturers,” says Area Export Manager Lydia Garcia. “In 2012 we will look to continue this growth further and we see a promising future.”

The Villiger Premium line has been growing ever since its launch 50 years ago, based

on the quality of the Cuban tobacco that Villiger uses in the products. Overall the line is number one in travel retail and duty free, Garcia says.

Villiger’s latest launch is the Premium Mini Cigarillos, a new line in three flavors— Vanilla, Espresso and Sumatra Classic.

Vanilla, with its vanilla insert enveloped in high-grade Ecuadorian natural tobaccoleaf wrapper, has what Garcia describes as a light caramel sweetness and a waft of rum, and “develops a pleasant mild aroma for the connoisseur.” The Sumatra features a combination of mild Brazil and Java tobacco varieties together with aromatic tobaccos from Cuba. “The Espresso flavor is seductive for its 'kick' of noble Virginia and Burley tobacco varieties, together with a waft of roasted coffee and caramel tones,” Garcia says.

Building the brands Ray Tobacco isn’t devoting a lot of attention to promotions as a vehicle of growth in duty free, preferring to focus on volume for now. The growth model it has adopted is an organic one, with Ray moving to make capacity increases, hire new staff or ramp up distribution as required by current market success.

And it has an idiosyncratic approach to duty free operators.

“We tend not to deal with the big operators,” Pfister says. “We work more with the local ones, the border shops and so on. They do a good job. They have smaller shops, and hence they take more care of their clients. If we work closely with them it works out well for us.”

General Cigar, meanwhile, is on a fast track to growth in the Americas. The company, a subsidiary of Scandinavian Tobacco Group, hired American Caribbean Gateway (ACG) in November to serve as its exclusive travel retail agent throughout the US, Latin America and the Caribbean.

“ACG gives us the best opportunity to reach our aggressive growth targets and expand the reach of our brands,” says Gene Richter, General Cigar’s Vice President of Sales.

In travel retail, the company focuses on three brands: Macanudo, CAO and Don Tomas, made respectively in the Dominican Republic, Nicaragua and Honduras. For the US travel retail market, General Cigar adds the Dominican-made Cohiba, La Gloria Cubana and Partagas, and the Honduranmade Hoyo de Monterrey and Punch to the brand portfolio.

Richter cites nimbleness and responsiveness as among General Cigar’s primary market strengths. By way of example, General

Cigar is developing four-, five- and six-packs so that its core global brands can be represented in the desirable US$14.95, US$19.95 and US$24.95 price points. The company is also evolving its product offerings to focus on sizes and packaging suited to travel retail consumers. In addition, General Cigar is serving as a trusted advisor, working hand in hand with retailers to maximize their cigar programs and develop customized promotions tailored to retailers’ needs.

On the promotional front, General Cigar has created an intriguing Father’s Day gift item for DFA and Dufry. Featuring a new size of Macanudo for travel retail, the special offering includes a branded wooden ashtray with a pull-out drawer for storing cigar accessories, priced at US$49.95.

Interestingly, this packaging concept came out of a national sales meeting in the Dominican Republic. At that time, the cigar manufacturer gifted attendees with a similar item, which struck Richter and his colleagues as something a promotion could be built around. Accordingly, in June at DFA’s northern border stores, all sales associates will be entered into a sales competition and will be given Macanudobranded polo shirts to further incentivize consumer purc chase.

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

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Ray Tobacco

STAR EAST IN THE

Born in a tough economy, Ray Tobacco knows how to survive—and thrive BY

ANDREW BROOKS

ay Tobacco is based in Hong Kong and only started in 2008, making it a genuine newcomer.

The bulk of Ray’s business is still domestic, says Chris Pfister, the recently appointed Export Director. Duty free strong points right now are in Malaysia, Laos, Thailand, Cambodia, Indonesia and Vietnam, but expansion plans are afoot.

The fact that the company started up in 2008 gives Pfister an interesting perspective on the 2008-2009 recession that spiked the plans of so many other companies in travel retail. Starting out during a recession is never part of any businessperson’s plans, but as Pfister points out, it had some advantages in Ray’s case.

R

Walton is Ray’s other main cigarette brand, which Ray has taken into whisky and beer products

“It was unfortunate timing, definitely,” Pfister says. “We started out right when the market was at its lowest point. But we were young and new and we didn’t feel the reces116

The Ray American Blend cigarette brand continues to be Ray Tobacco’s flag carrier

sion as much as older players in the market.

While they were losing business, we were getting our first listings. So we were growing when others were struggling.”

Now that the recession is more or less behind us, the growth prospects for Ray are inviting to say the least. The Asian portfolio is concentrated in airport and border shops, with inflight not yet on the scope.

Growth across all markets is good, Pfister says.

The company is young enough that growth potential is still strong in the markets where Ray is already present.

The company is continuing to make inroads in the Middle East, where it took its first steps outside of Asia and where it has already turned in positive results. In Egypt, Ray is present in airport and border stores, as well as in the high street, with its full range of products. Ray has also listed with border shops in Lebanon, Iran, Iraq, Turkey and most recently Libya. More Middle Eastern markets are in the offing.

Ray Tobacco’s main products in duty free— and generally—are the Walton Royal Blend and Ray American Blend cigarette brands. New products are under development, Pfister says.

Interestingly, two years ago Ray also ventured into the whisky market

under the Walton imprint, with a new blend produced at one of Scotland’s largest distilleries.

“It looks a bit like Johnnie Walker,” Pfister says. “The taste is also similar. The differentiator for us is the combination of high

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

quality with a very attractive price point.” With a new brand, and especially a new brand in a new category, Pfister says, you have to convince the customer first, and the low selling price is the way to go.

“People who try it are surprised by the quality of the product,” Pfister says. “We’re working with low margins so we can sell at a good price and build sales. So far the strategy is working very well for us.”

Echoing the experiences of so many others, Pfister finds that Asian customers are very interested in high-end items, but he notes that Ray’s price-active approach also reflects the reality that even here there are customers who can’t afford top-line purchases, and many operators in Asia are very much on the lookout for better pricing.

“There are always customers who can’t afford the big-ticket items and go for the cheaper ones,” Pfister says. “It’s a good opportunity—not everywhere of course, but in certain markets.”

Ray followed up on the success of its blended whisky last year when it introduced a new beer product, also under the Walton label. So far it’s been launched in Asia, the Middle East and Africa. The latter is a very beer-friendly market, and prospects are also good for South America, another region known to favor a good brew.

Ray is an active participant in the trade show circuit, and Pfister was pleased with the quality of new contacts he made at the latest IAADFS event. The trade show agenda for Ray always involves showcasing the full portfolio, instead of selecting a few “stars” from the lineup.

For the future, Ray remains focused on growing organically in Asia and its “newer” markets. Ray tends to work with smaller, locally oriented operators, where close cooperation and the intimate understanding of local markets pay big dividends. “They do a good job,” Pfister says.

“If we work closely with them it works out

well for us.”

JTI

The new Mild Seven pack, launched in May at TFAP Singapore

Brand bonanza JTI makes the most of its market-making brands with new products, packaging and positioning BY ANDREW BROOKS

n Latin America, Argentina, Mexico and the Dominican Republic are among the most important markets for Switzerland-based JTI, a member of the Japan Tobacco Group of Companies. JTI’s brand portfolio includes some of the most recognized names in tobacco products around the world, including Winston, Camel and Sobranie.

In the well known Camel line, JTI continues a progressive rollout of the Camel Black and White extension to the portfolio that was initially launched into the market in October of last year. In the Americas, the second quarter of this year will see Black and White launched in Mexico, Argentina and the Dominican Republic, a three-country nexus that represents a critical portion of the Latin American market for JTI, says Santiago Llairo, JTI’s Corporate Affairs Manager.

I

“We want to follow consumer trends to ensure we stay up-to-date” Santiago Llairo, JTI’s Corporate Affairs Manager

“These are important markets for us as we start to support the global strategy for the Camel brand,” Llairo says. “We’ll be starting very, very soon. This is a permanent addition to Camel, not a limited edition launch.” The packaging is an important part, with a modernlooking, minimalist profile. The product itself offers a stronger (black) and milder (white) smoking experience.

The second quarter of 2012 is proving to be a very busy time for JTI. Another significant launch scheduled for this slot is the debut of Winston Xsense SuperSlim cigarettes, an extension of the Xsense franchise that was launched to market acclaim two years ago. The new SuperSlims feature a king size form factor and a charcoal filter.

The product is designed to appeal to new customer segments, says Llairo.

“We want to look for customers who want a soft smoke, not at the same strength or duration as a standard cigarette.” The super slim category is skewed more toward female customers in Latin America—a bias not necessarily noted in other regions—but also overlaps a hefty swathe of 118

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

male customers too. The launch is coming first in the signature trio; Mexico, Argentina and the Dominican Republic.

Also in the second quarter, JTI is launching Sobranie SuperSlims into the massive US market. One of the more notable features of this release is the use of “less smoke smell” technology to minimize odor and smoke. Sobranie is available in the premium Black Russian and Cocktail lines right now, and the new SuperSlims line extension will be available in black, white and pink versions, each color denoting strength level.

Still in the second quarter, Camel will be given a new “Curve” packaging profile, which rings a change on the familiar square-sided Camel packaging with more rounded contours. This launch too will take place across the familiar troika of countries. “This is a packaging launch,” says Llairo. “We want to follow consumer trends to ensure we stay up-to-date.”

Moving slightly further off, to the fourth quarter of the year, JTI will launch a limited edition inflection of Winston. This will be a design alteration, and at press time the designs were still being formulated, so Llairo couldn’t say much about them. He did point out that Winston is the Number 2 brand worldwide, and that last year it was tops in the market for low-tar cigarettes.

JTI also became involved in an interesting, market-forward collaboration with Ploom at the end of 2011, when the two companies signed an agreement that will see JTI take Ploom’s next generation smoking alternative to market around the world, with the exception of the US. “Ploom is a completely new concept, for people who like tobacco and want a different, non-smoke way to smoke it,” Llairo says. “With Ploom the tobacco is heated, not burned, and the user inhales the vapor. It’s an ‘electric’ cigarette—a very innovative concept.” As a nonsmoke product, Ploom could be used in environments that are currently restricted, such as on airliners.

“It’s very difficult to say how big this will be,” Llairo says. “It’s a completely different segment so it’s difficult to assess consumer reaction, but we believe it will be an important segment of the non-cigarette tobacco c market, and we need to have a presence in it.”

UNBELIEVABLY TRENDY LICOR 43

with pineapple juice

LICOR 43. THE SPANISH SMOOTH TEMPTATION www.licor43.com

Tobacco News Imperial Tobacco calls “Davidoff’s Greatest Idea” the most important launch from the brand for many years

The first Romeo y Julieta Reserva closes the XIV Habanos Festival The XIV Habanos Festival ended after bringing together innumerable international personalities and lovers of Habanos. The Gala Evening, dedicated to the Romeo y Julieta brand, closed the event.

During the Gala Evening, two new Habanos were launched and sampled by attendees: the Romeo y Julieta Churchills Reserva 2008— the first reserve of the brand—and Romeo y Julieta Petit Churchills, a new vitola that will delight connoisseurs with its characteristic aromatic and balanced flavor, suitable for any occasion.

Romeo y Julieta Churchills Reserva 2008 demands the most stringent selection criteria in creating the reserve, Habanos says.

From the long, careful process of aging the best tobacco from Vuelta Abajo* (D.O.P.) for at least 3 years to the tasting committee comprised of more than 50 experts who have supervised the selected blend to guarantee a unique flavor that is harmonious, balanced and aromatic.

The Reserva of Romeo y Julieta is a unique product with an extremely limited production run of only 5,000 numbered cases, each containing 20 units.

The new Romeo y Julieta Petit Churchills vitola completes the current Romeo y Julieta offering by adding a format that has been highly favored in recent years by Habanos enthusiasts. The cigar can be

Imperial Tobacco

to reveal “Davidoff’s Greatest Idea” in Singapore Every great invention, every memorable song, every tearjerking film, every stunning piece of artwork—starts with a great idea. At press time, Imperial Tobacco was about to reveal its latest and greatest idea for premium brand Davidoff at the TFAP exhibition in Singapore.

The aim, says Imperial Tobacco, is to target a wider audience for Davidoff using an inspirational and artistic approach.

The company notes that all details will be revealed in Singapore where Imperial Tobacco will be presenting the new concept and celebrating with a special launch party.

“This is the most important launch from Davidoff for many years and we are incredibly excited about it as we believe it will open up the brand to a completely new audience of smokers,” says Jennifer Thanscheidt. “The initial launch announcement will take place in Singapore and we will further push this inspirational concept with another major presentation at TFWA World Exhibition in October.”

Imperial Tobacco calls “Davidoff’s Greatest Idea” the most important launch from the brand for many years

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THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

smoked in twenty minutes.

Ahead of the dinner and the new Habanos tastings, the traditional Auction of Humidors took place. This year it raised US$963,506. The six humidors auctioned feature artisan-crafted designs of the most prestigious Habanos brands (Cohiba, Montecristo, Romeo y Julieta, Partagás, Hoyo de Monterrey and H. Upmann).

Over the past 12 years the auction has raised almost US$10 million, all of which has been donated to the Cuban Public Health System.

Other events during the festival included the XI Habanosommelier International Contest, the 2011 Habano Awards and the international contest “Habanos in images.”

J. Cortes announces new releases J.Cortès Cigars has announced the launch of two new products: Neos Mini Menthol Filter and J. Cortès Wood Tip cigarillos.

Neos Mini Menthol Filter cigarillos, packed in a bespoke tin, are made from a perfectly balanced tobacco blend and carry a premium Ecuadorian light shade wrapper. The fresh menthol flavor turns these filter cigarillos into a very accessible and pleasant smoke, says J. Cortes.

J. Cortès has also created a new concept involving wooden tip cigarillos, available in three different tastes: natural, vanilla and ginger. These rich and tasteful cigarillos come with a quality Java Besuki wrapper and are packaged in an innovative and exclusive box that holds eight smokes and features an easy-to-use magnetic closure system.

J. Cortès Wood Tip cigarillos

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Vice Vodka Icewine came onboard with Horizon early in the company’s evolution and is now making significant inroads in the travel retail industry

Horizon International Duty Free

Flying

Allison’s Missoni sunglasses; the flagship line retails at around US$300 a pair and the entry level “M” line sells for around US$180 a pair

high

Just over a year after launching Horizon International Duty Free, José Chao finds himself in the enviable position of representing a stable of high-end brands suited perfectly for duty free

BY RYAN WHITE imply put, it’s been a wild ride,” says José Chao, President of Horizon International Duty Free. The company was conceived just over a year ago to be a one-stop shop for brands looking to leverage Chao’s significant experience in travel retail.

“S

sumer groups as they travel, from home to destination. We then position our brands accordingly to have the most appeal.”

Latest and greatest With such a stable of brands, Chao tells Americas Duty Free that there is no shortage of new developments. Allison’s Missoni sunglasses—both

“There’s nothing else like it available.”

The term “unique proposition” applies equally well to U’Luvka Luxury Polish Vodka. With a gift set recently introduced that includes a bottle of U’Luvka and two crystal shot glasses, the brand has secured a number of listings in worldwide duty free of late.

In confections, Tortuga Rum cakes, made from a generations old family secret recipe, are baked in the Caribbean with the finest ingredients and a special oak-barrel aged Tortuga gold rum. Each cake is hand glazed and vacuum sealed to lock in freshness. They are available in three sizes—33 oz., 16 oz. and 4 oz. cakes—and nine tropical flavors. The cakes were recently listed in duty free shops on both sides of the Canada/US border.

“Things are going well and we’re very pleased with the industry’s response to all of our brands,” Chao says. “Travel retail is all about high-

“We are proud to be a company that suppliers can feel comfortable with, knowing there is an experienced team looking out for their brands’ growth.”

José Chao, President, Horizon International Duty Free

Chao doesn’t pull any punches in telling Americas Duty Free that venturing off on his own was a scary proposition at first. Fortunately, however, he wasn’t alone for long. With hot brands like Vice Vodka Icewine and U’Luvka Polish Luxury Vodka coming on board early in the company’s evolution, momentum quickly built in the Americas.

In addition to the above supplier partners, Horizon International Duty Free’s clients now include Tortuga Rum Cakes, Equss watches and accessories, Allison USA sunglasses, Cilea eyelash growth stimulator, B+D eye wear, Von Eicken tobacco products, VnC ready to drink cocktails. In North America specifically Horizon also represents Parlux, which offers fragrances from Rihanna, Vince Camuto, and Paris Hilton and others.

As is evident from its client list, Horizon works across categories, with premium positioning being an important consideration.

“Horizon focuses on premium and luxury brands, a sector that continues to outperform standard brands across all categories,” Chao tells us. “At Horizon, we continually research, as well as track data, to ensure we are tracking key con122

the flagship line retailing at around US$300 a pair and the entry level “M” line selling for around US$180 a pair—as well as Allison’s other anchors, Moschino and GianFranco Ferré, are poised to make waves in duty free.

“The brands on their own compete with Gucci, Dior, Chanel and Tom Ford, and the sunglasses are of the highest quality,” explains Chao. “The lenses are made by Zeiss Lenses, a German manufacturer that creates camera lenses for Leica. The layered acetate bodies— with wire underpinnings for longer wear and shape retention—are by Mazzucchelli. They have a gorgeous, almost lacquered finish.”

Offering a wide spectrum of eye wear brands, Horizon also represents the colorful Danish-designed B+D line, which offers well made readers at US$20 to $30. Travelers can also find B+D sunglasses in duty free from US$40 to $60.

In the world of spirits, Vice Vodka Icewine has made good inroads in Asia and recently exhibited for the first time at TFWA AP in Singapore in its own booth. “Vice Vodka Icewine is a unique proposition in duty free,” Chao says.

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2012

end products. We’re happy that our original concept is working out well and we are proud of the listings we’ve achieved. We set out to work with brands that have an eye toward luxury and craftsmanship, as well as understand the need to invest in the marketplace, and a year later have a very respectable portfolio that speaks for itself in terms of quality.

“We are proud to be a company that suppliers can feel comfortable with, knowing there is an experienced team looking out for c their brands’ growth.”

U’Luvka’s mini gift box for travelers

LIQUOR & TOBACCO Balmoral Dominican Selection Collection 12 Fireball Whiskey

Company: Royal Agio Cigars Description: This collection offers a luxury assortment box containing Small Panatela, Panatela and Corona cigars. Each cigar is blended carefully with selected tobaccos from the Caribbean

Company: Stansfeld Scott Description: A cinnamon flavored whiskey liqueur that is 33% ABV (66 proof), offering “a sweet taste of heaven mixed with fiery cinnamon flavors”

Avondale wines, from Paarl, South Africa

Bottega Diamond

Company: Diverse Flavours Description: Avondale’s collection of seven hand- crafted wines, with the ethos, ‘Terra Est Vita’ meaning ‘Soil is Life’ encapsulates Avondale Estate as a dynamic living system where nothing compromises the growing of healthy, balanced grapes and the making of naturally delicious wines

Company: Distilleria Bottega Description: Bottega Diamond is a sparkling wine produced with a selection of Pinot Noir grapes from Oltrepò Pavese. This well-structured wine is characterized with dry, velvety and fruity notes, enriched by a slight aroma of bread crust and a pleasant aftertaste of fresh fruit and spices

New & Notable CONFECTIONERY

Wave Whipped Cream Vodka Company: Stansfeld Scott Description: Wave Vodka features a bold look and an array of flavors, including whipped cream, pink lemonade, cherry, blue raspberry and grape

Mickey Finn Apple Infused Whiskey

Nestlé Swiss Carres Company: Nestlé International Travel Retail Description: Nestlé Swiss Carres contains chunky ingredients such as pineapple and pepper, almonds and orange, cashew nuts and cranberries. Each ingredient is topped with a solid piece of Swiss chocolate. Two variants are available—milk and dark—both available in 160g (5.6 oz.) premium boxes

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Company: Haleybrooke International Description: A light golden whiskey liquor with a subtle touch of Irish whiskey, infused with green and red apples for “an alluring aroma, crisp taste, fiery after-burn and rounded rewarding experience”

Chupa Chups Binoculars Company: Perfetti Van Melle Global Travel Retail Description: This pair of working binoculars includes a Chupa Chups lollipop—an ideal gift to keep children amused while traveling and on holiday

Series 7

José Mourinho World Football Coach of the Year

Does in the first pass what others do in two.

Braun Series 7 with the world’s only intelligent Sonic Technology.

Braun GmbH, Dept. IAM-DF, Frankfurter Straße 145, D-61476 Kronberg, Germany, Tel.: +49 6173 30 2221, E-mail: mellin.k@pg.com, www.braun.com/global

New & notable CONFECTIONERY ACCESSORIES

Temptations mixed 537g pouch

Desigual Travel Wallet

Company: Guylian Description: Convenient sharing bag with 50 pieces of artisanal, creamy filled and individually wrapped Belgian Chocolates in the unique Guylian Seahorse shape. Mixed flavors include original praline, milk truffle and dark praline

Company: Desigual Description: A functional design for an unforgettable travel experience. Desigual's spirit, color and fun come alive in this unique wallet that is designed to carry passports, tickets, travel cards, insurance, bills and coins

Lip Smackers Company: Scorpio Distributors Description: Popular lip balms in multipacks for the travel retail market. Each balm has its own scent and flavor—including Coca Cola, Sprite, Fanta and other well known names

Muppets and Star Wars Assortment from PEZ Candy Inc. Company: ALFA Brands Inc, Duty Free Exclusive Agent Description: Star Wars reverts back to classic packaging while unveiling two new character dispensers: Darth Maul and Yoda.

The New Muppets Assortment will include Miss Piggy, Kermit the Frog and Animal

Aloha Mix Company: Hawaiian Host Description: Aloha Mix includes an assortment of individually wrapped macadamia favorites including Hawaiian Host Signature Chocolate Macadamias, handselected macadamias covered in Hawaiian Host’s secret milk chocolate recipe, and MacNut Crunch, a combination of diced macadamias, rice and milk chocolate

Zippo Windproof Lighter Company: Zippo Manufacturing Company Description: Each Zippo windproof lighter is authenticated with distinctive bottom stamp revealing date of manufacture and authenticity.

Zippo offers many lighter finishes including a variety of engraving and imprinting options

Sportina Company: Bric’s Description: Sportina is the original bag designed by Bric’s for convenience, functionality and style. Adjusted with pressure studs, Sportina can be used as a hand, shoulder, or cross-body bag and the inside pocket functions as a utility case or a mini-shoulder bag

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Success in ITR comes in many colours.

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

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

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