Asia Duty Free & Travel Retailing Magazine - TFAP May 2014 by Paramount Publishing Ltd.

MAY 2014 • TFWA AP • VOL 18, NO 2

TFWA AP 2014

For lovers of luxury p.

KLIA raises the bar p.

New frontiers for Nuance-Watson p.

L’Oréal’s regional focus p.

WE WELCOME THE NEW MACAU TO THE GROWING WORLD OF NUANCE-WATSON

The new face of THE ATRIUM department store brings you a further enrichment of shopping pleasure and refinement of customer experience in Perfumes and Cosmetics, Watches & Eyewear, Fashion and Technology. Visit us and explore our impressive selection of world-known brands and top-quality choices!

Shop 203 Lion Street, The Grand Canal Shoppes, The Venetian速 Macao-Resort Hotel

Letter from the Editor

Remodeling the regional travel retail landscape

n an industry where innovation is second nature and the short lifespan of concession tenures means that resting on commercial laurels is never an option, Asia’s travel retail landscape is undergoing a dynamic shift. It’s been a busy first quarter for the region with the successful holiday season setting the tone for the remainder of the year. Both homegrown and international players redefine their strategic focus in the quest to capture the imagination, attention and spend of an increasingly diverse consumer audience. Asia Duty Free’s Q1 road trip saw us meet with industry movers and shakers for firsthand analysis of the current state of play across the region’s key markets as robust predictions for future tourism growth present new opportunities as well as challenges. Differentiation, innovation and premiumization are just three of the buzzwords being bandied around with companies like Diageo adopting a multi-pronged strategy in order to drive sales, from cross-retailer collaboration to bold activations focused on channeling exclusivity. In Malaysia, where passenger growth across the country’s 39-airport network touched almost 80 million visitors in 2013 and the highly anticipated unveiling of klia2 is set to be a role model for the rollout of future airport retail facilities, Eraman has identified the customer service experience as the cornerstone for commercial success with targeted revenue set to breach the MYR1 billion mark (US$309 million). Increased emphasis on marketing activities following the recent Malaysia Airlines tragedy, and in line with the government’s comprehensive Visit Malaysia Year program, is of paramount importance if the country is to reach its goal of 28 million tourists by year-end. Global beauty giant L’Oréal Luxe Travel Retail ASPAC is also eager to capitalize on new market opportunities as sales outpace passenger traffic performance, with the emphasis on constant portfolio refinement from the introduction of new Asia-specific products to the debut of exciting global brands and bespoke gift sets. Regional relevance is a vehicle for sales optimization across the board with operators like Nuance-Watson actively targeting popular Korean and Japanese brands as well as supporting emerging regional brands as customers look for the next big thing. Gen Y is also an agenda leading issue with the Hong Kong- headquartered company investing in research to look at ways to commercialize trends, target audience opportunities and understand how we service the next generation of consumers. And it’s not only airport retail that is witnessing significant change as Sky Connection can attest. A changing consumer profile is taking the company in new directions at its two Hong Kong located rail terminuses where a healthy outlook for increased middle class traveler spend and category diversification is redrawing retail boundaries. We hope you enjoy this issue. Kind regards, Hibah Noor Editor-in-Chief www.dutyfreemagazine.ca

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

Asia Duty Free & Travel Retailing (ISSN 1360-9548) is published by Global Marketing Company Ltd. 26 Pearl Street, Mississauga Ontario L5M 1X2 Canada. It is distributed in the following countries, states, regions and territories on the Asian continent and in the Pacific Rim: Australia, Bangladesh, Bhutan, Brunei, Cambodia, China, Fiji, French Polynesia, Guam, Hawaii, Hong Kong, India, Indonesia, Japan, Macao, Malaysia, Maldives Islands, Myanmar, Nepal, New Caledonia, New Guinea, New Zealand, Philippines, Saipan, Samoa, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Tonga, Vanuatu and Vietnam. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor. April 2014, Vol 18, No.2. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. ©2014 Asia Duty Free & Travel Retailing.

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

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

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

MAY 2014 • VOL 18, NO 2

Contents 12 For lovers of luxury LS TRAVEL RETAIL ASPAC

the boundaries 34 Pushing of traditional airport retail DFS

LS travel retail ASPAC targets luxury-driven travelers at Shenzhen Bao’an International Airport’s new terminal with the opening of thirteen high-end fashion boutiques

raising the bar 20 KLIA for airport retail

With retail dominance at its original home turf at HKIA, duty free and travel retail giant DFS is intent on making the destination experience a hallmark of its global commitment to providing a unique customer journey

MALAYSIA AIRPORTS

38 On the right track for growth SKY CONNECTION

Plans are ramping up ahead of the imminent unveiling of klia2 but the airport’s main terminal is also set to get a makeover as it looks to maximize retail opportunities in the future

frontiers for 28 New Nuance-Watson NUANCE-WATSON

A tailor-made approach to maximizing its sea and land border locations has helped Sky Connection maintain market position, but a changing consumer profile is taking the company in new directions

focus for 42 Local Dimensi Exklusif DIMENSI EXKLUSIF

With a revitalized flagship destination in Macau, pipeline of international and regionally focused brands and new partnerships on the horizon, 2014 is showing great Eastern promise for the Hong Kong based operator

Staying small but profitable is the strategy for the Kuala Lumpur-headquartered company as it faces off against global operators eyeing Asia market expansion

promises style 46 Eraman with substance at new

MALAYSIA AIRPORTS (NIAGA) SDN BHD

klia2 emporium

A commitment to great customer service twinned with merchandising and marketing creativity is helping Malaysia Airports Niaga up the ante through its successful Eraman branded portfolio of 57 retail and dining outlets

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50 Global and local

FLEMINGO INTERNATIONAL

Flemingo appears to be conquering the world, one emerging market at a time

Malaysia talks 54 Tourism celebrations, sales and TOURISM MALAYSIA

high net worth sightseers A target of 28 million tourists is the goal for Visit Malaysia Year 2014 as its tourism chiefs look to hit MYR76 billion (US$23.3 billion) in tourist receipts

58 To serve and protect

ASIA PACIFIC TRAVEL RETAIL ASSOCIATION

Representing almost 100 members across a vast geographical territory, the Asia Pacific Travel Retail Association (APTRA) is developing its core services and capabilities to better serve the industry and protect its interests in 2014 and beyond

62 Innovative innovations

SPOTLIGHT ON TFAP EXHIBITORS

Companies gear up to display new products at Singapore

70 The sweet smell of success MÄURER & WIRTZ

Mäurer & Wirtz builds on 4711 brand to expand on a worldwide basis

72 Change of fortune FORTUNE CONCEPT

A strengthened portfolio will see Kenzo and Jean Paul Gaultier join the Fortune Concept brand family this summer as the company looks to capitalize on its International Luxury Group alliance

74 Carrying on

76 Beauty and the brand

L’ORÉAL LUXE TRAVEL RETAIL ASPAC

Travel retail trendsetting and local market alignment continue to underpin L’Oréal’s regional focus, and with sales outpacing passenger growth the beauty giant is capturing new market share in Asia

lifestyle products, 84 Luxurious meaningful experiences RITUALS

Rituals believes happiness can be found when you find the magic in everyday routines

86 Beautifying the world UNILEVER

Unilever International Division continues to push forward into the lucrative world of travel retail

PIQUADRO

Piquadro pushes forward internationally with its bestselling line of Coleos backpacks

75 An old favorite RUSS BERRIE

Iconic toy brand Russ Berrie gears up for a worldwide relaunch in 2014

88 A bright, shiny future LOLAANDGRACE

Swarovski brand lolaandgrace boldly expands into the world of travel retail

MONDELEZ INTERNATIONAL

92 Inclusive growth

106 A real Cuban cigar

94 Channeling exclusivity

108 An American in Asia

For Mondele-z International, growth benefits all stakeholders

DIAGEO

Robust predictions for future tourism growth in the region are fuelling Diageo’s pursuit of differentiation and premiumization in the race to engage travelers and convert interest into spend

HABANOS

The Habanos Festival brings thousands of cigar aficionados to Cuba each year

AMERICAN WHISKY

American whisky finds a receptive audience across the world

Cointreau maps out 110 Rémy organic growth in Asia RÉMY COINTREAU

98 Quiet elegance H. MOUNIER

H. Mounier’s success in Asia is encouraging for future expansion

100 The luxurious east

Building brand presence through engaging storytelling and lovingly crafted products is a winning strategy for the company’s global travel retail business, but building customer loyalty is an ongoing challenge

LUXURY SPIRITS REPORT

Asians know a thing or two about high-end products

114 Pipeline shift for STG

SCANDINAVIAN TOBACCO GROUP

Other Tobacco Products business is moving in a different direction for the Scandinavian Tobacco Group as pipe tobacco gets an on-trend makeover and little cigars mean big business

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

LS travel retail ASPAC

lovers of luxury For

RYAN WHITE

LS travel retail ASPAC’s new Bally store at Shenzhen International Airport’s new terminal

LS travel retail ASPAC targets luxury-driven travelers at Shenzhen Bao’an International Airport’s new terminal with the opening of thirteen high-end fashion boutiques

travel retail China, a division of the Lagardère Services group, marked the official launch of thirteen luxury fashion boutiques at a grand opening event, held mid-March in Shenzhen Bao’an International Airport’s new terminal. Ranging in size from 60 square meters to 150 square meters, the thirteen standalone boutiques comprise well known luxury brands such as Bally, Hugo Boss, Cerruti 1881, Coach, Dunhill, Emporio Armani, Ermenegildo Zegna, Furla, Montblanc, Salvatore Ferragamo, Shanghai Tang, Tommy Hilfiger and Versace. Asia Duty Free recently had the opportunity to speak with Eudes Fabre, General Manager of LS travel retail China, and Emmanuel de Place, COO of LS travel retail

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

ASPAC, about the new development and what this means for the operator’s business in China. “Last year traffic at the airport exceeded 30 million passengers and we foresee strong growth in the years to come,” Fabre explains, “thanks to the increasing capacity offered by the new terminal and its second runway.” Since 2010, LS travel retail ASPAC has expanded its Luxury Fashion portfolio to a total strength of 27 stores, beginning with its first multi-branded luxury fashion boutique, called The Fashion Gallery, which carries 17 different brands. This was followed by several standalone luxury fashion branded stores such as Coach, Hugo Boss, Longchamp and Salvatore Ferragamo in Singapore and at locations across China.

At Shenzhen, LS travel retail will be catering mainly to domestic and business travelers; pictured is the operator’s new Hugo Boss store

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20 Ho n 13 /1 nn 4 e

LS travel retail ASPAC

New challenges, new opportunities

LS travel retail ASPAC’s vision is to not only enhance the brands it has on offer but also to offer a new, innovative travel retail concept; pictured is the new Dunhill store at Shenzhen Airport

The new Furla store at Shenzhen International Airport

“We are very proud of our strong growth in luxury fashion across the region and particularly here in China with such modern and forward thinking airports as Shenzhen.” EMMANUEL DE PLACE, COO, LS TRAVEL RETAIL ASPAC

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

Although LS travel retail ASPAC has extensive experience in luxury fashion retailing, de Place tells us that in many ways the opening of the Shenzhen stores represents a new challenge: “Shenzhen is one of the largest airports we’ve operated in Asia, after HK, Singapore and Shanghai. It is quite a unique project by virtue of its architecture and the fact that it is in a domestic environment.” At the Shenzhen stores, LS travel retail will be catering mainly to domestic and business travelers given the close integration between Hong Kong and Shenzhen. As such, the operator has made a point of tailoring its luxury offer to appeal specifically to this group of passengers. Moreover, LS travel retail ASPAC feels that its tailored luxury fashion concept meshes well with the high-end design of the new terminal. In conjunction with its brand partners, the operator’s vision is to not only enhance the brands it has on offer but also to offer a new, innovative travel retail concept where consumers can experience world-class service. “These openings signify our wealth of expertise and knowledge in high-end luxury retailing, and also our ambition and ability for growth in China,” Fabre says. And de Place agrees, saying that these newest stores represent as significant an opportunity as LS travel retail ASPAC’s other award-winning operations: “In our luxury segment, the launch of these luxury fashion boutiques in Shenzhen airport has as much potential as The Fashion Gallery in Singapore,” he says. “With our strong credentials in luxury fashion, this segment of the business is clearly a very promising development track for LS travel retail in Asia and especially in China.”

CEDAR ESSENCE THE NEW FRAGRANCE

LS travel retail ASPAC

The new Emporio Armani store at Shenzhen Airport

The new terminal at Shenzhen is just part of a 21.8 billion yuan (US$3.5 billion) expansion plan; pictured is LS travel retail ASPAC’s appropriately high-end Montblanc store

Up to here

The openings at Shenzhen will no doubt contribute strongly to LS travel retail ASPAC’s performance this year, and the operator’s 2013 sales clearly indicate that the luxury retail sector is still booming in the region. Worldwide sales in 2013 totaled €2.8 billion (US$3.8 billion), up 5.4% on a reported basis and up 3.5% on a like-forlike basis. This increase was fueled largely by growth in the duty free (+14%) and food services (+13%) segments. On a like-for-like basis, the most substantial growth in business activity was seen in Asia (+29.5%), followed by Romania (+7.5%), the Czech Republic (+5.6%) and Poland (+4.9%). Given the strong performance of the Asia business arm in its overall 2013 numbers, LS travel retail is concentrating heavily on the region. In addition to the Shenzhen openings, LS travel retail has plans to expand its RELAY offering in India with partner Travel Food Services (TFS). The companies are set to create a powerful presence through nine RELAY concept stores before the end of 2014, with a range of key locations at New Delhi Indira Gandhi International Airport (IGIA) and Kempegowda International Airport, Bengaluru.

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

As part of this development, TFS will exclusively develop the RELAY franchise across the country’s major locations, with LS travel retail ASPAC’s support in operational management. The RELAY brand in India will retail books, press (magazines and newspapers), souvenirs, convenience and impulse products, with a varying merchandise mix depending on the location. Furthermore, the operator recently opened a Victoria’s Secret Beauty & Accessories store at Adelaide Airport. Opened

The new Shanghai Tang store at Shenzhen International Airport

at the end of March, the store will focus on an iconic, fashion-forward range of beauty products and accessories designed for the modern jet-setter. Beauty shoppers will find prestige fragrances like the FiFi Award-winning Victoria’s Secret Bombshell, just-launched collections like the new Glamour and perennial favorites like the much-loved VS Fantasies. Travel-ready items such as signature lip glosses and bodycare products will also be available to charm girls on the go.

“Our vision for Shenzhen Airport is to offer a strong portfolio of international luxury fashion brands and operate them to the highest standard in customer service.” EUDES FABRE, GENERAL MANAGER, LS TRAVEL RETAIL CHINA

LS travel retail ASPAC

A match made in heaven

It’s clear that LS travel retail ASPAC has tapped into the region’s penchant for luxury fashion brands, and its stores appear to be the perfect match for Shenzhen International Airport’s new terminal. Air passenger traffic in China rose 11% over the first 10 months of 2013 to 297 million, and the new 8.5 billion yuan ($1.39 billion) terminal is the southern Chinese city’s impressive attempt at tapping into the region’s demand for air traffic. The new terminal is just part of a 21.8 billion yuan (US$3.5 billion) expansion plan that includes a second runway—opened in July 2011—and a freight terminal, commercial complex and hotel. Designed by Italian firm Studio Fuksas, the new terminal is expected to boost the airport’s capacity to 45 million passengers a year by 2020 from the current 30 million passengers, meaning that LS travel retail ASPAC will certainly have no shortage of travelers passing by and through its stores. Shenzhen is currently the country’s sixth-busiest airport. Despite recent talk of a slight slowdown in growth in the Asia Pacific region, Shenzhen is still performing well. For Fabre’s part, he doesn’t see recent changes in Asian travelers’ purchasing patterns as cause for concern: “Overall, the slowdown on gifting does not directly affect our business here in China,” he explains. “Strong traffic is the key driver and despite the slowdown for gifting purchases, travelers are spending more for themselves. Purchases for travelers’ own use

LS travel retail ASPAC has tailored its offering at Shenzhen specifically for the airport’s traveler profile; pictured is the new Ferragamo store

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

has grown strongly to offset the slowdown of gifting.” Furthermore, says Fabre, the opportunity to work with Shenzhen on opening the stores in a new terminal has made for a very compelling offer in essentially every respect: “Our vision for Shenzhen Airport is to offer a strong portfolio of international luxury fashion brands and operate them to the highest standard in customer service,” he explains. “We value Shenzhen airport’s trust and confidence in our ability to deliver operational excellence and to create customer delight. “LS travel retail and Shenzhen airport share a common vision for the further development of the commercial offer,” he adds. “On the other hand, Shenzhen Airport has brought us great terminal alignment with extensive configuration of the stores and floorspace. Proper planning from both sides has created world-class airport standard here in Shenzhen.”

Shenzhen and LS travel retail ASPAC worked together to develop the stores from inception; pictured is the new Tommy Hilfiger store at the airport

Looking ahead

LS travel retail ASPAC won’t be resting on its laurels with these latest openings. The operator has recently launched a sunglasses concept called Eye Love Xi’an in Xi’an Airport, and will be opening a Longchamp boutique in Changi Airport’s Terminal 2 this April. Following this, LS travel retail will open a My Lifestyle Gallery multi-branded lifestyle concept boutique at KLIA2. Finally, a Ferragamo boutique is planned to open in August at Changi Airport’s Terminal 1. “We are very proud of our strong growth in luxury fashion across the region and particularly here in China with such modern and forward thinking airports as Shenzhen,” de Place tells us. “With more than 20 years’ presence in the Asia Pacific region we are now operating more than 260 stores in 9 countries. We offer tailored solution for each airport through our strong expertise in understanding the expectations of landlords and travelers.” 

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Malaysia Airports

KLIA raising the bar for airport retail

KLIA has unveiled a number of new high profile brands including a dedicated Rolex concept store, Michael Kors, Victoria’s Secret (pictured), Pedro, TWG Tea and Wear + When (for watches) offering a refreshingly different domestic passenger experience

Plans are ramping up ahead of the imminent unveiling of klia2 but the airport’s main terminal is also set to get a makeover as it looks to maximize retail opportunities in the future by

CLAIRE MALCOLM

he milestones just keep adding up for Malayisa Airports following significant growth in passenger traffic in 2013 with close to 80 million visitors across its 39-airport network, and 50 million through KLIA and KLIA-LCCT alone. “Last year we had around 20% growth domestically, and also witnessed the birth of Malindo Air, which tremendously increased traffic on those domestic routes; plus we saw 10% international sector growth,” says Puan Faizah Khairuddin, Senior General Manager, Commercial Services, Malaysia Airports.

Puan Faizah Khairuddin, Senior General Manager, Commercial Services, Malaysia Airports

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

The unexpected success of the domestic sector was something of a surprise, as she explains: “We were ready with the products and brands on the international side, but at domestic level we frankly weren’t ready with enough offerings to monetize passengers. Plus, the domestic contact pier was also undergoing renovation so to me it was an opportunity lost, although it was unforeseen.” Renovation plans have been speeded up with one part of the trio of phased components already unveiled and the introduction of a number of new high profile brands including a dedicated

Malaysia Airports Rolex concept store, Michael Kors, Victoria’s Secret, Pedro, TWG Tea and Wear + When (for watches) offering a refreshingly different domestic passenger experience. “If we’d discussed bringing this to the domestic market five years ago, people would’ve been hesitant. But we did it anyway and thanks to our good relationships with the operators retail performance against last year is already better, despite the ongoing renovation,” she says. Khairuddin is hopeful that the forecasted 2014 figure of 20 million tourists will translate into further commercial success for KLIA and the country’s four other international airports as it enters the second quarter of the year. “We’ve done a lot of research on the spend capacity of different nationalities, but what is important is knowing how to

leverage this knowledge so that we offer the right product at the right time,” she explains. “For example, if we look at Chinese passengers, we have identified the top five products they purchase when at the airport, so when we speak to the flight operations centre we can say that we would like this flight at this gate so we can match the destination to the products available at that location; we call this gate optimisation,” she clarifies. Operational constraints means that the commercial division doesn’t always get its way, but Khairuddin says that they are “getting there” and pushing the envelope to benefit the airport operation as a whole. Malaysia Airports is also targeting the growing number of Indonesian travelers through its airports. “They have a fastgrowing middle class market who really like

Malaysia Airports is hopeful that the forecasted 2014 figure of 20 million tourists will translate into further commercial success for KLIA and the country’s four other international airports as it enters the second quarter of the year

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

fashion products. Also, they don’t have the same restrictions like Singapore on duty free allowances, so there is an opportunity there for us to push our core products, especially in liquor and tobacco,” she says. KLIA’s hugely successful annual ‘Indulge Till You Fly’ campaign, which runs from July to February, has just wrapped its fourth series, and the challenge for the commercial team is how to top the 2013/4 program, which rewarded one lucky winner with a shopping voucher and business class trip to seven destinations. Exciting sales campaigns and themed activities aside, Khairuddin has spent much of her time over the last few years focusing on developing customer services initiatives to add value to the shopping experience and drive sales. “I thought there was a missing element and a definite disconnect between

Malaysia Airports

sales and service, yet service is a foundation for our success, just not a given,” she remarks. This spawned the concept behind the airport’s T.O.U.C.H progam, which rewards front-liners and concessionaires, and which entered its second year in February 2014 with the launch of the Public Nominations campaign. Says Khairuddin: “We took customer service above the line and engaged our front-liners and retailers as well as the general public by recognising and rewarding excellence in customer service. We had a lot of traction with the front-liners and concessionaires, and just six months after the 2012 launch we were nominated for a marketing excellence award.” “We want to combined sales and service on one platform and, even though we focus on the reward element at the moment, I hope that eventually this will be inculcated within our operations,” she adds. The next milestone for Malaysia Airports is the much-hyped unveiling of klia2, its dedicated budget carrier terminal, which is due to open on May 2, 2014. “We are busy working on the opening campaign for klia2 and this will be our main focus pre-summer. We also want to link it into the 2014 Malaysia Mega Sales Carnival, which starts in June, and this will be followed by the next edition of Indulge Till You Fly; and we hope to include klia2 in the bigger perspective,” she explains. According to Khairuddin, the commercial launch of klia2 has the customer service experience as its cornerstone, and this has permeated throughout the process, from planning to operational stage. “We’ve turned 180 degrees from being operations oriented to commercially oriented, and that has been a challenge, not only in words but in mind and spirit. “For klia2 this mind-set shift saw us review everything that we did, all the processes, in order to remain firm and business-like but also friendly and approachable. This can be rolled out everywhere across our network and we just need to migrate it to other airports.” Malaysia Airports is busy working on the opening campaign for klia2 and this will be the company’s main focus pre-summer

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

Malaysia Airports

Next on the agenda is an overhaul of the retail operation at the main international terminal. Says Khairuddin: “We have kick-started our KLIA retail optimiziation project as we cannot afford for it to be in the shadow of klia2, which as a high profile operation needs to stand on its own merits. “Intensive market research is already underway and it’s going to be a very exciting process as KLIA is a full service destination with premium positioning, so we need to look at how we make it a premium lifestyle destination. This will include an element of surprise through differentiation and the use of technological innovation.” Board approval for the master plan is set for Q2 2014 with the project scheduled to go out to tender in the final quarter of this year. “At the moment we are looking at customer engagement but will also need to undertake retailer engagement before we go to tender,” she notes. Existing retailers at KLIA have been given one-year contract extensions following expiration in 2013 and Khairuddin says that initial feedback on the airport’s plans is creating excitement from the shop floor upwards. “They want to be involved and so it’s important that they are engaged and consulted.” Interest in the klia2 project also prompted a surge in new retailer tender participation, as she explains: “When we originally issued the tender we got very little interest from the downtown retailers, and always had the same brands participate. “But we worked hard to change perceptions about klia2 and at submission stage we ended up with an equal ratio of existing and new-to-airport retailers. In the end 70% of the total space was awarded to existing retailers with 30% to new entrants as we wanted an injection of new blood and brands into the project to achieve the perfect balance.” “I believe that the KLIA retail optimization program will work even better, as we’ve learned from our klia2 experience.” 

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

Nuance-Watson The newly expanded Atrium was formally unveiled in December 2013 with expansion of the core perfumes and cosmetics category and revitalization of other key categories

New frontiers for

NUANCEWATSON

espite a challenging year following a reduction in the scale of the company’s HKIA operation, and the 4½ month-long refurbishment of The Atrium store in Macau, 2013 ended on a relative high for the Hong Kong based operator, which currently has more than 330 brands in its portfolio. “We basically had to transition our business overnight from one that is based on core licenses to a business based on specialty. Most of our stores recorded between high single digit to double-digit percentage growth, exceeding passenger growth in 2013, and in Macau we have seen a 38% increase in terms of transactions since opening in December,” says Alessandra Piovesana, Regional Managing Director Asia for Nuance-Watson. With both HKIA and Singapore Changi recording single digit passenger growth at 5.85% and 5% respectively, and The Venetian Macau hitting double-digit figures with hotel and retail visitors swarming to spend, revenue opportunities were tempered by a

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

shift in passenger mix and the highly anticipated Atrium renovation program. The newly expanded Atrium was formally unveiled in December 2013 with expansion of the core perfumes and cosmetics category and revitalization of other key categories including technology, watches, fashion and leather goods coming together to present 45 P&C brands, 21 eyewear brands, 19 watch brands, five fashion brands and 33 technology brands. “This growth in store penetration and average transaction value (ATV) were different by locations and by categories. At HKIA and Changi, while we noted in general there was growth in ATV in all our stores, penetration recorded marginal decline mainly due to the high mix of resident passenger growth in the two airports - who usually purchase in destinations instead of their home country airports,” notes Piovesana. Leading the single category sales rankings for Nuance-Watson was perfume and cosmetics followed by electronics and luxury brand boutiques, with confectionery a close fourth.

CLAIRE MALCOLM

“Perfumes and cosmetics are strong in both Singapore Changi and at The Atrium store in Macau, which benefits largely from the dominant PRC market. Apart from the international well-known brands, we have also seen increasing demand and sales in luxury skincare, trendy lifestyle beauty brands and also Japanese and Korean brands that are tailored to Asian women,” she says. At HKIA, the company expanded its Sound & Vision shops in 2013 with the addition of two innovative shop-in-shop ‘i-concept’ areas, introduced to trade on current consumer trends towards smart phone and tablet products; and which have seen the electronics category register solid performance, with demand from a wide range of nationalities. “We have also recently been awarded with a Bally boutique in T1 and T2 at Singapore Changi and a new Fossil concept store encompassing leather goods, watches and fashion jewelry, which will be the first-ofits-kind to debut in mid-2014, and which demonstrates our ability to introduce innovative ideas,” confirms Piovesana.

Nuance-Watson

In Macau, the long list of P&C brands includes Crème de la Mer, Helena Rubinstein, YSL, Philosophy, Bobbi Brown and Shu Uemura plus a number of regionally popular or unique names

The company also bolstered its Taste & Delights fine confectionery concept last year with the introduction of exclusive master chocolatier brands such as Fauchon and the quirky Italian label, Venchi. “These have proven to create a successful magnet to increase customer penetration and recruit new customers who are looking for something different and unique for gifting,” she says. Unsurprisingly, mainland Chinese remain the highest spenders, with travelers from Southeast Asian nationalities also demonstrating consistent growth. Nuance-Watson is also addressing the current downtrend from luxury to mediumhigh positioned purchases, compounded by weakened purchasing power of several important nationalities such as the Japanese and Australians, who have been stymied by current currency values, and the cascade effect of the Chinese government’s austerity measures. Piovesana explains: “This motivated us to look at and introduce options in the medium-high range, and we have since expanded our assortment by leveraging our broad range of brands which covers all segments.” Promotions and activations also continue to play a vital role in driving consumer interest and motivating spend through an ongoing calendar of product/brand and bi-monthly themed activities, often with a seasonal holiday focus, plus roster of tactical promotions with key strategic partners including airlines, banks and agencies. “We have set up outpost events outside of our stores to bring further excitement 30

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

and novelty choices in order to grab airport passengers’ attention and cater to their different needs,” she says. For Christmas 2013 and Chinese New Year 2014 these outpost events featured brands such Anthon Berg, Charbonnel & Walker, Leonidas, Tartuf Langhe and Neuhaus to Lifetron and Sony. New brands and products are flying out of the Nuance-Watson HQ and onto airport shelves already this year, with the SK-II Iconique Essential Set exclusively debuting at Changi and the company pioneering the launch of Astell & Kern’s latest AK240HD high-end audio player at HKIA, valued at HK$22,000 (US$2,800), plus premium camera maker Hasselblad’s Lunar Gold Special Edition, worth HK$66,800 (US$8,600). “Both launches are part of our strategy to provide a wealth of first-class offerings from sophisticated brands so as to capture the steadily increasing popularity of audio and camera enthusiasts who are both quality and brand- conscious. The latest Hasselblad Lunar Gold Special Edition raised immense interest when launched during Chinese New Year,” she says. In Macau, the long list of P&C brands includes Crème de la Mer, Helena Rubinstein, YSL, Philosophy, Bobbi Brown and Shu Uemura plus a number of regionally popular or unique names, as Piovesana explains: “In order to maximize sales opportunities across a strong Asian customer base, with lovers of Japanese and Korean beauty brands, we have also created a ‘Beauty & Wellbeing – Best of Asia’ concept to introduce Laneige and Sulwhasoo from Korea and Kose from Japan.”

“Complementing the portfolio, we were able to bring in ‘Thann’, the Thai aromatherapy wellbeing brand. While these brands are well established in China and other Asian markets in Asia, they are making their first full brand statement debut within The Atrium,” she adds. Piovesana and the team are now looking to the future and, as she says the company is in “full business development mode”, not only with the Las Vegas Sands Corporation, which is busy developing its next mega resort, The Parisian in the same location, but also other opportunities with other operators. “We expect to announce soon the first of what we hope is many new locations for the Nuance-Watson brand across China, both within airports and at other downtown sites. As any of the international retailers will tell you, Chinese travel retailing is a tough market to successfully crack so we are choosing our cities, brands and landlords carefully.” With an estimated average of 50,000 daily visitors to The Venetian, The Atrium location is a model for future development, but an evolving one, as Piovesana clarifies: “It’s translatable commercially up to a certain extent, but you constantly need to reinvent yourself and recreate the branding but with an authentic flavor to match the location,” she remarks. For The Venetian retail hub for example, a specially commissioned Murano glass vase from Venice was brought in to add to the feeling of destination authenticity. Malaysia is next on the launch calendar for Nuance-Watson with space at the all-

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Nuance-Watson new KLIA2, which is set to open on May 2, 2014. “We have reinvented the offer there and the concept as customers expect a zest of novelty in different locations, as well as added value,” she says. It will also open a Best of Store this April at HKIA, with the emphasis on reaching out to customers with more classic tastes. During Nuance-Watson’s 14-year core licenses tenure at HKIA, Piovesana took the lead in adding value to the duty free environment through experience based promotions and high profile events, and this underpins the company’s approach to duty free and travel retailing, as she explains: “We wanted to make it a pleasure to stroll, stay and enjoy the airport experience. One time we brought in a Ferrari F1 car, following which we launched the Ferrari clothing line, which did very well. This creates such a lot of customer interest and doesn’t take anything away from the retailer; it’s all about repeated rediscovery.” “Now we have to animate Macau, which is very spacious, and we need to create extraordinary things to add even more value to what is already an extraordinary location.” 

With an estimated average of 50,000 daily visitors to The Venetian, The Atrium location is a model for future development, but an evolving one

TARGETING GEN Y

“We expect to announce soon the first of what we hope is many new locations for the Nuance-Watson brand across China, both within airports and at other downtown sites.” ALESSANDRA PIOVESANA, REGIONAL MANAGING DIRECTOR ASIA FOR NUANCE-WATSON

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

Tackling the unique demands and purchasing patterns of the Gen Y traveler is a current focus for Nuance-Watson with the company looking at ways to commercialize trends and target audience opportunities. “This is a generation that already has a lot, that has seen a lot, and which basically has access to everything. For Gen Y we experiment with a lot of interactive tools. At The Sound & Vision at HKIA we even applied for the rights to air sports events for example, and we realized that this is one way to attract customers into the store,” says Piovesana. “We are now studying brands in terms of where Gen Y is heading: are they looking more at buying brands or an experience, or something that connects to their daily lives through smart technology applications? We have to figure out how they relate in a world of retail; we want to crack the code and understand how we service this future generation,” she adds. In Macau, the company has introduced a Gen Y-targeted tool within its eyewear category. “It’s ‘try me’ technology that we developed internally. The customer chooses a selection of branded eyewear and can see how it looks on them immediately. We found that it attracts ladies of any age and young guys, has good conversion, and so we are looking at developing this further as a customer and commercial tool,” she remarks. Brands that launch new eyewear can also book a space in the system and NuanceWatson will privilege it. Beauty brands like THANN from Thailand are also Gen Y oriented, as Piovesana explains: “The range has a lot of space pricewise and we are also looking to bring in other popular Korean brands such as the Face Shop, which is specifically targeting Gen Y with their skin and body care ranges.” One area that is proving more challenging when grabbing the attention of the Gen Y customer is food and confectionery. “Venchi, from Italy, is a good match. We brought it in both in our Taste & Delight concept and our Christmas outpost. They have very innovative and colorful packaging, and it’s a very young collection. It attracts customers in their late teens and above; the young people love it. Macarons are also very trendy at the moment and popular with a younger audience, and we are working in collaboration with Fauchon with plans to develop their business and also introduce a separate store in Macau.”

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DFS

Pushing the boundaries of traditional airport retail by

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

CLAIRE MALCOLM

ollowing the high profile takeover of HKIA’s three main concessions in late 2012, DFS’ North Asia division has been focusing on adding a new dimension to the customer experience supported by a record-breaking 6.1% growth in passenger movements at the airport in 2013. According to Benjamin Vuchot, Region President Asia North, DFS, the win was important on multiple levels. “Going back to HKIA where the company was founded in 1960 held special significance, the other thing was the scale of the undertaking with close to 80,000-square-feet of space and up to 39 individual stores, plus a renovation program to bring the level of quality and customer experience that DFS is famous for.” Support from the Airport Authority Hong Kong was also a vital constituent in DFS’ strategic plans, as Vuchot explains: “It was a big decision on their part to allocate the three wins to one operator and what we achieved in 2013 was to bring them a sense of presentation and luxury quality, which also saw us launch a new way to sign our products and promotions. “In addition we created some unique destination stops. We introduced two Lan Kwai Fong bars, which are a recreation of the city’s famous bar district, that bring the vibrancy of Hong Kong into the airport with cocktails and demonstrations.”

As well as adding a new dynamic element to the customer experience, the objective was to create an intentional link to the airport location. DFS developed a unique logo for Hong Kong International Airport, again focusing on marrying the destination with the duty free offering. “It’s an interpretation of what is iconic to Hong Kong – the traditional junk boat– and we took the sail and merged it together with an image of the beautiful Norman Foster-designed airport canopy and signed it Hong Kong and DFS,” says Vuchot. The ubiquitous duty free shopping bag has also become a brand ambassador in its own right, and DFS has rolled out similar brand/ destination identities in its other international locations. “You will always see an intentional elevation of the localization aspect juxtaposed against the category we are retailing, whether it’s luxury, beauty or spirits; and the DFS logo is there as a symbol of trust and confidence,” he adds. The importance of brand buy-in also precipitated the launch of the Loyal-T recognition program at HKIA, which is focused on the beauty concession. Says Vuchot: “The more you can engender happy feelings linked to a duty free purchase through the use of a loyalty or recognition program, the more opportunities there are for increased long-term spend and repeat business.” In tandem with the new loyalty program, DFS introduced its in-store Beauty Concierge and Beauty Lab service, adding value to the customer journey with a selection of complimentary quick fix beauty services and product advice.

“The level of engagement that we created really helped us bring up the spend. It was a challenging year with the store renovations, stabilizing the teams and bringing our corporate culture to life. We had a very strong conclusion to 2013 and ended it exactly where we wanted to be,” remarks Vuchot. “Traffic from mainland Chinese has been very strong, maintaining movement through the airport, and we have benefited from that as well,” he adds. The popularity of whitening lines for mainland Chinese travelers versus a westerner-led penchant for make-up purchases rather than skincare, has allowed DFS’ beauty retail to maintain a balanced portfolio, with all the “usual [brand] suspects” represented, according to Vuchot. “Through the Beauty Concierge we also have the opportunity to bring in new brands and have successfully trialled Korean skincare, which has a huge Chinese following, and interest from local Hong Kong and other Asian customers,” he notes. “In an airport which has a strong business focus, the male customer is a primary target, so we want to cater to them with male grooming lines as they do self purchase. And creating an environment that is welcoming with a high level of staff attention is also very important,” he adds. While mainland Chinese remain a big contributor to DFS’ revenues at HKIA, Vuchot and his team are focusing on the bigger nationality picture with both Hong Kong residents and Taiwanese travelers also key to ongoing commercial success.

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

DFS Spirits, wines and tobacco is a top category in the DFS portfolio, but Vuchot says that the revenue profile is balanced with beauty and fragrances and general merchandise (watches, confectionery, fashion souvenirs and gifts) mitigating overall exposure and allowing for increased creativity. “The fact that we have the three categories also helped us to roll out cross-category promotions and really create benefits that are customer focused across the different areas,” he elaborates. Creative promotions at HKIA include a high-end, quality packaged wine home delivery option for local customers. “Customers either order on departure and, when they get home, the wine is waiting for them, or can be ordered on arrival, which saves you having to carry it home with free delivery against a threshold value of around HK$1,200 (US$155). It’s all about how we evolve from being a very transactional business to one more catered towards customer satisfaction,” he explains. Vuchot reports a strong interest in single malts and, more recently, a trend for

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

Japanese whiskies. “We’ve also had very strong success with watches, it’s a category that is very important for Chinese customers. One of the big surprises in creating a localized impact was the success of local Hong Kong delicacies in biscuit and confectionery brands. “We wanted to find items that would be a discovery for customers, especially if they aren’t from Asia, or other Asian nationalities who come to Hong Kong where the food culture is so diverse; and our results in the food category have been very successful.” Entertainment and promotions are intertwined under the DFS marketing umbrella, as Vuchot explains: “The airport shopper is always attracted by a value proposition, either through the packaging and product selection or promotions. We focus on bringing retail entertainment to an airport, whether it’s a seasonal promotion such as Chinese New Year or even Halloween. We really want to create an experience memorable to Hong Kong.” Innovation in the form of mobile payment technology has enabled DFS to

streamline the customer experience during airport rush hour, with the development of mobile payment terminals proving hugely popular. Says Vuchot: “This is deployed during peak hours and is sensitive to passenger time pressure as well as maintaining operational efficiency. We are also launching the Octopus card as a payment option at the airport this April, in order to better service our local customers.” After a full year of operation, DFS is looking to further develop its all-important customer experience, as Vuchot explains: “The level of engagement that we were able to create through our various promotions and customer engagement initiatives has really paid off. “Given the level of repeat travelers at HKIA in particular, we are planning to intensify our loyalty programs. This is an area in which we believe we can be pioneers and push the boundaries of traditional airport retail to take the experience to the next level.” 

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Dimensi Exklusif

Local focus for

Dimensi Exklusif

Staying small but profitable is the strategy for the Kuala Lumpur-headquartered company as it faces off against global operators eyeing Asia market expansion by CLAIRE MALCOLM

Top-selling brands in perfumes and cosmetics in 2013 include core category contributors such as Estée Lauder, Chanel, Dior, Lancôme and SK-II

long term player in Malaysia’s duty free and travel retail community, 2014 marks 20 years of Dimensi Exklusif presence at Kuala Lumpur’s international airport. “The business environment is becoming increasingly challenging due to a combination of factors, namely the emergence of global players all fighting for a piece of the action at KLIA,” says Zainul Azman, Managing Director, Dimensi Exklusif, which has a perfumes and cosmetics, cigars, and two designer concessions for Salvatore Ferragamo and Ralph Lauren at KLIA. With the imminent launch of KLIA2 and a retail optimization program on the cards for KLIA, Azman says that a balance between local operators and global players is needed in order to ensure that homegrown companies aren’t sidelined. “We don’t want to see duplication and hopefully operators will be creative and open-minded with new product categories, but in reality everyone is fighting for the same core categories,” he notes.

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Dimensi Exklusif “Asian passengers will be the largest growth area in the next few years with China leading the pack and India slowly opening up its market. Indonesia is also coming out of a slumber and Jakarta is already listed in the top 10 airports globally in terms of traffic, with around 64 million passengers in 2013.” Dimensi registered 10% portfolio growth in 2013, with 15% year-on-year growth in January 2014. Says Azman: “Both average spend and volume have grown, especially among the Chinese. There is also the valueadd factor as they don’t only buy one item,

they take several at a time. There is definitely the herd mentality when they purchase. “However, we are now getting the Tier 3 traveler as Tiers 1 and 2 are all going to Europe. In the last year, the number of PRC travelers has dropped from 500,000 to 300,000 due to the Chinese government relaxing its visa rules on international travel.” Top-selling brands in perfumes and cosmetics in 2013 include core category contributors such as Estée Lauder, Chanel, Dior, Lancôme and SK-II. Azman also reports a closing of the gap between Cuban and non-Cuban cigars in tobacco.

Duty Free veteran Dimensi Exklusif, operates stores for perfumes and cosmetics, cigars, and two designer concessions for Salvatore Ferragamo and Ralph Lauren at KLIA

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

“Cubans still maintain a 60% lead but we are very happy with the emergence and strength in the market of Nicaraguan brands. Asian consumers still smoke Cubans but also want to try something different,” he says. “I would love to see more Chinese acquire a taste for cigars, in the same way that they have acquired a taste for good wine. If and when it does take off then you will find that brands from Cuba will have stock-holding issues with volume markets like China dominating demand,” he adds. Dimensi, in partnership with another operator, also retails watch brands at its TIME outlet, from the Swatch Group to Omega and Tag Heuer. “We are focused on mid-range priced at US$1-3,000, and with the dwell time of passengers only around 20 minutes, plus the availability of duty-lifted brands in the downtown KL stores, travelers want to ‘grab and go’ or pick up a model they know,” says Azman. Competition between city centre retail outlets, with a preponderance of duty lifted items freely available, and airport duty free operators is a challenge, but one that is not insurmountable, as Azman explains: “The mindset is different at the airport, to shop in duty free is all part of the travel experience and people don’t want go home emptyhanded. This does give us an advantage; even through the prices are more or less the same as downtown.” Chinese travelers are Dimensi’s number one market, but Indian, Australian and European travelers also feature. “Currency plays an important part and these nationalities are looking to take advantage of the weak ringgit, so it plays an important part in making KLIA an attractive destination,” he remarks. Promotional activity is another commercial mainstay. Says Azman: “We work very well with all our principles. We bring in cigar rollers from Cuba or the Dominican Republic on a quarterly basis, and in perfumes and cosmetics we work around travel packs, regular launches and added value deals. “Travel exclusives work very well, and with attractive packaging are a great self purchase or gifting option. And for Ralph Lauren we have ongoing promotions as well as periodic sales on Salvatore Ferragamo.” Dimensi Exklusif is also listing a number of new skincare brands in perfumes and cosmetics in 2014, including Jurlique, Kose from Japan and Korea’s Sulwhasoo. 

Sky Connection

At Lok Ma Chau land border store in Hong Kong, Sky Connection has two 820-square-metre departure hall locations plus two 500-square-metre stores in arrivals

On the W right track for growth by

CLAIRE MALCOLM

A tailor-made approach to maximizing its sea and land border locations has helped Sky Connection maintain market position, but a changing consumer profile is taking the company in new directions 42

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

ith a 17-year industry pedigree, Sky Connection may have lost out to DFS in the 2012 HKIA reshuffle but has continued to streamline its land border and seaport business, maximizing operational efficiency and driving revenue. Two of the busiest land border points fall under its remit, with concession dominance at the high volume Lok Ma Chau and Lo Wu rail terminuses since 2007/8, and both the China Hong Kong City and Shun Tak Ferry Terminals. Lo Wu recorded 97 million passengers in 2013, a marginal dip on 2012, and Lok Ma Chau, which offers a much bigger and more relaxed shopping experience, logged 47 million passengers last year: a 12.9% gain on 2012. Add that to passenger volume at the two ferry terminals and total movements exceeded 170 million in 2013. “Lo Wu was built over 40 years ago and has reached saturation with around 250,000 passengers per day. The new Lok Ma Chau station was opened to compensate for Lo Wu overspill and we see the numbers growing steadily,” says Simon Au, Merchandising & Buying Director for Free Duty (Sky Connection). At Lok Ma Chau, Sky Connection has two 820-square-metre departure hall locations plus two 500-square-metre stores

in arrivals; at overcrowded Lo Wu, they occupy a 950-square-metre departures space and two smaller 200-square-metre sites in arrivals. “For 2013 we finished better than passenger growth in terms of sales, however, the outlook for 2014 is not as promising, largely due to China’s austerity measures coming into effect,” notes Au. This has been keenly felt in categories such as high-end spirits, as he explains: “Brands like Louis XIII were hit hard and also white spirits like baijiu, and brands such as Moutai and Wuliangye, reached record highs in good times but sales have now declined substantially. “I believe that the impact will be felt in the mid rather than short-term but, on the other side, we will also see an increase in the volume – and spend - of middle class business travelers. This is a more healthy outlook in the longer term, especially for international brands looking to attract the middle class consumer.” According to Au, top selling categories at Lo Wu and Lok Ma Chau are tobacco (cigarettes), spirits and wine. “All cigarette sales are counter based. It’s a similar concept to fast food chain ordering: easy to control and manage. We treat Chinese cigarettes as their own category and the imported cigarettes counter sells popular brands like Marlboro, Kent and 555’s, and

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Sky Connection then we have a big counter at the back for Chinese cigarettes.” Sky Connection also works with the Octopus cashless payment system, which adds to the fast track processing. “Less Hong Kong residents are going to China because of the strong renmibi, but more of them are now drinking whisky and smoking cigars whereas the mainland Chinese go for cognac and then wine,” says Au. Spirits sales are still largely cognac-based with Hennessy, Martell and Rémy Martin the brand leaders. “In terms of wine, which is a growth area, we are devoting more space to our wine concession. This part of the world is dominated by French Bordeaux followed by New World wines,” he adds. Following an extensive two-month renovation program at Lo Wu, the new-look retail debuted in November 2013. “The objective was to ensure efficiency and to increase the overall image. We also made some location adjustments for certain categories and sacrificed the space of others,” explains Au. “We see a lot of potential for wine and so we created a separate wine section, which has definitely boosted sales and started to pay dividends. There is also more room for spirits at the expense of packaged foods. Although the shop is small, relative to the number of passengers, we have dedicated areas for SPP/HPP promotions and we also moved cosmetics out to the entrance so that it steers women in a different direction while men head for the liquor section,” he clarifies. Promotional activity revolves around quarterly events, with a focus on education and awareness, as Au explains: “We don’t always pick leading brands and also give space to smaller suppliers. We conduct tastings, for example, complemented by big TV screen campaigns to build brand awareness. “We also do giveaways and other added value promotions but don’t run raffles or prize draw mechanics. Hong Kong and mainland Chinese consumers want instant prizes/cash benefits, and they aren’t comfortable with big ticket luxury-led prizes such as hotel stays etc.” Future plans include ongoing participation in regional airport tenders, but Au flags the high minimum requirements in terms of per head spend as a challenge. The future lies in rail it seems, with the company potential eyeing the new Hong Kong Express Rail Link, due to go live in 2015. Says Au: “We know through our own experience that you have to diversify to stay in the game.” 

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

At Lo Wu, Sky Connection occupies a 950-square-metre departures space and two smaller 200-square-metre sites in arrivals

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Malaysia Airports (Niaga) Sdn Bhd

Eraman promises style with substance at new klia2 emporium A commitment to great customer service twinned with merchandising and marketing creativity is helping Malaysia Airports Niaga up the ante through its successful Eraman branded portfolio of 57 retail and dining outlets CLAIRE MALCOLM

I by

n the two decades since its inception, Malaysia Airports (Niaga) Sdn Bhd (MAN), through its high profile Eraman brand, has grown its operation from a handful of high-end fashion boutiques at Sultan Abdul Aziz Shah International Airport in Subang to a portfolio comprising five international airports (KLIA, Penang, Langkawi, Kuching, Kota Kinabulu), one domestic airport (Labuan) and two low-cost carrier (LCCT-KLIA and Kota Kinabulu) terminals. According to Muhammad Fawzy Ahmad, General Manager, Malaysia Airports Niaga (MAN), Eraman’s positioning as the premier airport travel retailer for a wide range of competitively priced duty free and non duty free products stands the company in good stead ahead of further imminent expansion into the new klia2 and Gateway@ klia2 locations. “Operating 57 retail and food and beverage (F&B) outlets, Eraman continues to strive for excellence in providing the best in the travel retail industry for Malaysia Airports Group. With clear aims and visions, [we] are driven to ensure the expansion of

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

Eraman’s positioning as the premier airport travel retailer for a wide range of duty free and travel retail products stands the company in good stead ahead of further imminent expansion into the new klia2 and Gateway@klia2 locations

our retail outlets with increased focus on all core products categories and continued great service,” he says. At klia2, Eraman will operate a total of 22 outlets across 28 lots, covering 7,210.61 square metres of retail space. “The highlight will definitely be the operation of our largest retail space to date—a 3,002.69 square metre walk-through emporium, which will be the pièce de resistance,” notes Ahmad. “klia2 will provide an even better opportunity for us to take our constant pursuit of customer service excellence to the next level. The ambience, sense of space and the retail merchandising layout will all come together to ensure that customers get the best travel retail and dining experience. The challenge for us is to ‘up the ante’ in delivering better quality service by our Eraman frontliners,” he adds.

While MAN remain tight-lipped about the brands going into the new locations, Ahmad is keen to push home the point that despite klia2 being a low fare carrier operation, Eraman will deliver first-class customer service at every turn, as he explains: “Our philosophy is to ensure that our customers will have a pleasant shopping experience, akin to bringing the concept of downtown shopping into the airport, where they will still be spoilt for choice.” Buoyant sales in 2013 across all areas of operation were also marked by a shift in concession spend with liquor representing 44.2% of total business in 2013, down from 46.3% in 2012 while perfumes and cosmetics showed a 0.8% pick-up to 14.2% in 2013 with chocolate and confectionery, cigarettes and tobacco and fashion seeing a marginal increase at 16.8%, 18.8% and 2.8% respectively.

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Malaysia Airports (Niaga) Sdn Bhd Brand performance by category at KLIA in 2013 was led by Burberry, Swarovski, From Time to Time and Tommy Hilfiger, with MAN’s own Flying Nomad label also performing well. Flying Nomad topped fashion sales at both Kota Kinabulu and Kuching last year, with Guess (leather goods), Fossil Time Watches, Kipling and Swarovski rounding out the fashion top five at Kota Kinabulu and Bright Alliance Travel Luggage, Fossil Time Watches, Carlos Louis (leather goods and shoes) and Camly (leather goods) stealing sales at Kuching. It was a different story at Penang International Airport where G-Shock topped the list, followed by Ice-Watch, Aigner, Skagen and Baby G; with Armani Exchange and Michael Kors also prominent in the top ten. Core product bestsellers at KLIA included Martell Cordon Bleu, Dunhill Red 200’s, Martell XO Blue Arch, Benedictine Dome, Marlboro Gold KS Box 200’s, Chivas Regal 12-Year, Hennessy XO, Chivas Regal 18-Year and Johnnie Walker Black and Double Black. This was virtually mirrored across the majority of brands, albeit with Benedictine Dome dominating the category at LCCT-KLIA and Penang, while Dunhill Menthol 200’s took tenth spot at Kuching, Kota Kinabulu and Labuan.

Ahmad reports that the local market is a strong supporter across its entire portfolio, and a mainstay of the business. “Other strong contributors are consumers from China, India, and the Indochina region as a whole. The buying habits vary from country to country but generally liquors and perfumes and cosmetics, in no particular order, feature as the main contributors,” he notes. For 2014, Ahmad is confident that MAN will embrace new opportunities as well as “ride out” the challenges ahead. “With targeted revenue that will soon breach the MYR1 billion (US$306.2 million) mark, the company will leave no stone unturned in its quest to drive and achieve this target through its most important assets— the entire team of management and staff.” Marketing activity is also a major focus for this year as MAN prepares for the unveiling of klia2 and Gateway@klia2, as he explains: “Together with the visual merchandising unit, creative visions and ideas are being translated for better visual impact at retail level in order to get to ensure our stores stand out among a sea of others. “Riding high on the success of last year, we have also continued with the production of ‘Celebrations’- our own shopping and dining catalogue that features useful,

At klia2, Eraman will operate a total of 22 outlets across 28 lots, covering 7,210.61 square metres of retail space

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

strategic and spectacular promotional items for both loyal and new customers.” He adds that sales activity for the year will focus on enhancing service offerings by including application services for a number of carried core products, and also by creating new retail hybrid formats that incorporate or combine a boutique with a café in a retail environment. “We will concentrate on growing the business through creating opportunities within and beyond airports, and one of the strategies in line with this is the development of our own brands such as Apron Series, Bibik Heritage and Flying Nomad,” he says. A further highlight will be the implementation of MAN’s strategy to maximize potential marketing exposure via the use of the advertising space which lines the perimeter of its walk-through emporium. This will be twinned with an entirely new visual experience for airport shoppers at Eraman outlets, as Ahmad explains: “There will be a series of audio-visual screens running through Eraman’s emporiums, which will strategically display promotional videos and advertising graphics and which includes a canopy of ceiling-mounted LED lights designed to project different moods, lighting effects and air-flow.” 

Flemingo

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lemingo International, a Dubaibased company, began in 1997 when the founders saw potential in the traditional trade routes between East Africa and the Middle East. Since opening their first location in Tanzania, they have expanded throughout the world across many different formats including duty free stores in airports, seaports, borders and in downtown areas in addition to luxury retail, travel

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

essential stores, food and beverage outlets and coffee shops in airports. Currently, Flemingo operates approximately 137 locations in 31 countries across four continents. In late 2013, Flemingo entered the Indonesian market when it was awarded concessions to operate three stores at Juanda International Airport in Surabaya, followed by five outlets at Sepinggan International at Balikpappan. Flemingo was also awarded its first two convenience concessions in Malaysia. From the beginning, Flemingoâ&#x20AC;&#x2122;s major focus has been on emerging markets. This focus has brought them great success, and they are continuing with the strategy that has worked. Flemingo sets its sights on airports that are committed to growing their passenger base. The company chooses locations based on at least 9-10% passenger growth in addition to increased passenger spend. In Indonesia, for example, the average spend per PAX on convenience products was 27 cents in 2011, and by 2013 that had risen to 42-43 cents per PAX for similar categories. For this reason, along with rising passenger traffic and a calculated overhaul of the most of the airport infrastructure across the country, Indonesia is a strategic region for Flemingo. In Juanda, which operates in Surabaya, Indonesia, the company has opened three locations: a convenience store, Starter â&#x20AC;&#x201C; 140

square meters and two bookstores, Xpress, combined total 140 square meters, at arrivals and departures. The second busiest airport in Indonesia, Juanda serves over 17 million passengers each year. Terminal 2, where Flemingoâ&#x20AC;&#x2122;s stores are located, currently caters to five million passengers per year. That number is growing 10% per year and is expected to increase to six million. At Sepinggan International (now called Sultan Aji Muhamad Sulaiman Airport), in Balikpapan, Flemingo has been awarded five concessions: one convenience store called Starter, at 170 square meters; two bookstores, one in departures and one in arrivals, both called Xpress and with a combined total 230 square meters, and two food outlets with a combined total of 300 square meters. This airport currently serves eight million passengers per year and has been doing so in an overcrowded terminal. A new terminal was recently constructed, bringing the capacity to 10 million passengers per year. Demonstrating its commitment to increasing traffic, this year the airport is adding a shopping mall within its terminal. This mall will be accessible by travelers and locals, and is the first of its kind in Indonesia. Flemingo has a strong partner in Indonesia for its convenience and food and beverage operations, with Bogajaya Enterprises, a fast-growing packaged food manufacturer and convenience operator. Flemingo brings

Flemingo The Xpress bookstore in Balikpappan

to the partnership superior knowledge of global travel retail, and owns a 70% share. Bogajaya brings a strong understanding of local behavior and supply chains, and owns the remaining 30%. The joint venture plans to roll out approximately 20 to 30 convenience and food and beverage outlets across the country over the next 12 to 18 months, focusing on a combination of global retail brands, global cuisine and domestic favorites like nasi goring, with the goal of delivering a best-in-class airport shopping experience. Kartik Bhatt, Flemingo’s Head of Convenience, says: “South East Asia, especially Indonesia, is one of the fastest growing emerging markets and is integral to Flemingo’s future plans. We will be working closely with our Indonesian partners to deliver an exhilarating shopping experience across all our formats in the airports. We believe our partner’s local knowledge and understanding of the Indonesian consumer

Kartik Bhatt, Flemingo’s Head of Convenience

combined with our global experience will lay a strong foundation of a long-serving successful relationship for years to come.” The concession contracts are all for a period of five years.

Malaysia

Before securing its Indonesian concessions, Flemingo had achieved the same objective with two outlets at Senai Airport, Johor Baru, Malaysia, which has 1.8 million passengers pass through each year and a growth rate of 12%. The company will operate one convenience outlet and one outlet with coffee and convenience. The total space for both outlets is 140 square meters. Both outlets will go under the name “Xpress,” which has the tagline “your global local store” because it offers a wide product range of popular global and local brands. This mix is a priority for Flemingo, and the company plans to continue with this format in other emerging-market stores.

With a unique, scientifically created design based on the way a consumer naturally shops, the design of this store makes shopping there feel like a “joyride,” according to Bhatt. “The store layout is not typical,” he says. “Customers will be carrying luggage, they may be anxious about their flight and they may have little time. We offer wider aisles, well-known local products, and ease of movement – they can get in and out of the store anywhere.” Safuan Basir, Deputy CEO of Senai Airport, says: “Flemingo International, with its emerging-market focus and diverse experience, will bring in a new dimension to the airport. With this partnership we look forward to creating an exciting offering for the passengers traveling to different parts of the world.” Plans are currently underway for Flemingo to expand operations in this region, with immediate focus on Bali, Makassar and the Philippines. 

Shopping in Flemingo’s convenience locations is a “joyride”

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

ENJOY A GLASS FROM ONE OF OUR

“GREAT ESTATES” Please visit Constellation Brands at TFWA booth D35. please enjoy responsibly.

Tourism Malaysia

Tourism Malaysia talks celebrations, sales and high net worth sightseers

“ A target of 28 million tourists is the goal for Visit Malaysia Year 2014 as its tourism chiefs look to hit MYR76 billion (US$23.3 billion) in tourist receipts by

CLAIRE MALCOLM

n the frontline of Tourism Malaysia’s 2014 strategy is Ybhg Dato’ Azizan Noordin, its Deputy Director General (Planning). “In 2013, we received 25.7 million tourists and registered MYR65.4 billion (US$20 billion) in receipts, a year-on-year increase of 2.7% and 8.1% respectively.” The average per capita spend in 2013 was MYR2,544.90 (US$779) and this is expected to reach MYR2,714 (US$831) this year. As well as a full calendar of activities under the Visit Malaysia Year (VMY) banner, the country will also host a number of events and festivals this year including the F1 Petronas Malaysia Grand Prix, Colours of 1Malaysia parade, the Malaysia International Shoe Festival and annual Malaysia Mega Sale Carnival. A top-ranked attraction for families is the Legoland Theme Park and Lego Water Park, which opened in 2012, and which also features a Legoland Hotel. “Other new tourism developments this year that will positively impact Malaysia’s tourism industry include increased in seat capacity by Air France on its Paris-Kuala Lumpur route, and from June it will also increase frequency from three to four weekly 54

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

flights. Lufthansa also began a five-time weekly service between Frankfurt and Kuala Lumpur at the end of March, and on the hotel front we will welcome the new luxury St. Regis hotel in 2015,” says Noordin. The rollout of the VMY 2014 campaign kicked off in 2013, with the official launch held in mid-January. “Visit Malaysia Year 2014 focuses on encouraging tourists to stay longer and spend more. It is a game-changer and the springboard to boost Malaysia’s tourism industry and effectively position the country as the ideal holiday destination in the minds of both domestic and international tourists,” he notes. In February 2014, government news agency Bernama reported record-breaking occupancy figures for Kuala Lumpur’s hotels in the first two months of the year. Noordin attributes this early success to the VMY 2014 program, as he explains: “With over 200 exciting tourism events taking place throughout the country this year, we expect an influx of foreign tourists. “In January we also hosted the 33rd ASEAN Tourism Forum in Kuching, Sarawak, which was attended by tourism ministers, senior officials, industry players and 1,600 delegates. This was an excellent opportunity to showcase diverse tourism

The opening of klia2 and the growth of hybrid carriers such as Malindo Air are just two examples of strategic development focused on the country’s tourism product.

”

products, particularly those in Sarawak and Sabah, and raise awareness of the VMY 2014 celebrations.” The first quarter of the year saw Tourism Malaysia organize a number of other high profile events including the 12th Royal Langkawi International Regatta, which welcomed more than 350 participants from 16 countries, followed by the Chinese New Year celebration, which included a Malaysia Open House event in Taiping, Perak, and the 19th Pasir Gudang World Kite Festival with over 400 international participants. Over 125,000 spectators watched the Formula 1 Petronas Malaysia Grand Prix in March, which was held in tandem with the 1Malaysia GP Sale. Another area where Tourism Malaysia is keen to drive growth is in attracting the higher spend traveler and expanding its luxury tourism offering. Says Noordin: “In order to achieve our target of 36 million tourist arrivals and MYR168 billion (US$51.4 billion) in receipts by the year 2020 we are targeting high net-worth tourists as well as the mass market. We have therefore rolled out various innovative and creative events and activities, as well as luxury experiences, to diversify the country’s tourism attractions.

Tourism Malaysia

“Tourism industry players are supportive of this direction and recognize the need to attract high spending travelers by offering impeccable services and unique experiences that cater to this market.” The list of Malaysia’s luxury properties is also growing, with Noordin citing Kuala Lumpur’s new Grand Hyatt and The Majestic Hotel as examples, with desirable brands such as St Regis, The Regent, W Hotels, Four Seasons and the world’s first ever Harrods Hotel all under development and set to open their doors between 2015 and 2018. “The arrival of these hotels will help boost the country’s position as a front-ofmind luxury destination. In addition, we offer travelers high-end luxury shopping with retail destinations like The Starhill Gallery, Pavilion Kuala Lumpur and Suria KLCC,” he says. “The country also has a series of special events and attractions that cater to the needs and desires of top tier tourists who demand quality services. These include the muchanticipated annual F1 Petronas Malaysian Grand Prix and the 1Malaysia International Shoe Festival. We have also developed and promoted tourism products that embrace the concept of luxury such as spa vacations, golfing holidays, helicopter tours and

“

Malaysia as a wedding and honeymoon destination. We are also aggressively promoting the Malaysia My Second Home (MM2H) Program as we want to attract more affluent foreigners,” he adds. The opening of klia2 and the growth of hybrid carriers such as Malindo Air are just two examples of strategic development focused on the country’s tourism product, as Noordin explains: “Malaysia Airports Holdings Bhd (MAHB) and Mitsui Fudosan Co Ltd will build the first upscale Japanese factory outlet in Southeast Asia at KLIA called Mitsui Outlet Park KLIA, with construction set to begin imminently. “The establishment of premium outlets offering discounted luxury items aims to support the country’s goal of becoming a leading shopping destination in the region, and complement its existing retail offerings. The Johor Premium Outlet, for example, is home to 120 outlets, thus providing an enhanced shopping experience for the public and tourists alike.” Despite political and economic turmoil in other close-to-home countries, and the recent Malaysia Airlines tragedy, the

ABOUT VISIT MALAYSIA YEAR 2014 The country’s biggest tourism celebration, this is the fourth time that Malaysia has been chosen as the host nation for the regional event, following successful campaigns in 1990, 1994 and 2007. Held under the theme ‘Celebrating 1Malaysia, Truly Asia’, Visit Malaysia Year 2014 will highlight the country’s cultural wealth and heritage with a programme of more than 200 activities and events designed to cater to the interests of different types of travelers. The line-up includes colorful parades, carnivals, festivals, shows, events, conventions and celebrations. The calendar of events covers a wide range of activities from sports and culture to festive and arts, reflecting the diverse lifestyles and customs of Malaysia.

Another area where Tourism Malaysia is keen to drive growth is in attracting the higher spend traveler and expanding its luxury tourism offering

”

DATO’ AZIZAN NOORDIN, DEPUTY DIRECTION GENERAL (PLANNING), TOURISM MALAYSIA 56

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

country’s tourism leaders and government entities are singularly focused on augmenting tourist revenues and on-the-ground experiences. “We are constantly innovating our marketing strategies and keeping abreast of the latest tourism trends to remain ahead of the competition. Tourism Malaysia is working closely together with 12 other agencies under the Ministry of Tourism and Culture, other government agencies, various private sectors and local tourism industry players to ensure the success of VMY 2014,” remarks Noordin. “We have also partnered with foreign airlines and tour agencies to develop exclusive holiday packages that will enable customers to witness some of the mega tourism events. Tourism Malaysia is also using a new promotional approach with the launch of an integrated digital marketing programme that includes YouTube, web television channels, social media platforms as well as mobile applications.” An active schedule of participation in international exhibitions, at travel fairs and other business tourism events and through sales missions are also promotional requisites. Says Noordin: “This allows us to find new avenues of co-operation and growth. To me, this is an effective and concentrated effort to engage with our target markets, thus giving us the advantage in today’s competitive tourism industry.” 

Asia Pacific Travel Retail Association

To SERVE and PROTECT Representing almost 100 members across a vast geographical territory, the Asia Pacific Travel Retail Association (APTRA) is developing its core services and capabilities to better serve the industry and protect its interests in 2014 and beyond by CLAIRE MALCOLM

four-pronged remit in terms of support and development activities across its extensive industry reach is keeping the Asia Pacific Travel Retail Association (APTRA) busy in 2014 as the association pushes ahead with its packed agenda of advocacy, research, training and connectivity efforts. “We are moving forward on all those fronts with a full research program, the Responsible Retail Training initiative, intelligent databases and an issues matrix, but our first priority is always advocacy,” says Jaya Singh, APTRA President. Any government or regulatory authority policy that impacts duty free and travel retail is brought to the APTRA table, and this includes instances such as the restrictions on duty free tobacco allowances introduced in Australia, which threaten to spread across the Asia Pacific (ASPAC) region, as well as the proposed tobacco display ban in Singapore, which Singh believes may have knock-on effects elsewhere.

Jaya Singh, President, APTRA

Prospective new legislation out of India is also occupying APTRA attention, as Singh explains: “An apparently unrelated move to introduce new laws on labelling and sampling of imported consumables would have a serious impact on the travel retail confectionery and liquor categories; and special packaging would be required for Indian airport retail. “We are supporting local travel retail members in their efforts to restate that duty free is a separate retail channel and, under a 1993 Indian foreign trade act, duty free goods should be exempt from national rules and regulations.” The industry is witnessing a tightening of regulations and new measures across the

Visit us at Stand

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ASPAC region, with authorities in the Philippines last year removing the exemption from duties that duty free tobacco and alcohol products had previously enjoyed. Singh confirms that APTRA members from the relevant sectors are working with Duty Free Philippines to try to find a “satisfactory” solution. To ensure that APTRA and the industry remains on top of these worrying measures, the association recently introduced an ‘issues matrix’ to collate data from all sources in order to be forewarned - and in defence mode. “In 2014 we may develop this with independent research into challenges faced by the industry in the region by location and by product sector,” says Singh. While commercial growth may be impacted by the unique challenges of individual markets, the success of several APTRA initiatives is boosting business and reputations around the region. Says Singh: “The 2012 self-regulatory code of conduct for the responsible retailing of liquor in duty free was so well received by the industry that it has evolved into a training program: the Responsible Retail Training Programme (RRTP).” A web-based training initiative for retail staff that focuses on driving and maintaining the highest international standards, RRTP will be formally launched mid-2014 following a pilot test phase, with the goal of demonstrating to the outside world the integrity of the industry. “Our RRTP will take the principles of responsible retailing to the coal face for the benefit of consumers and the industry,” he notes. As well as advocacy and training, APTRA also commissions consumer behavioural research to provide its members with actionable data to facilitate business strategies,

and Singh and the team took the results of its 2013 Consumer Insight reports out to the region in November 2013 with a 10-day, seven-city road show to highlight findings and spread the word. “Another initiative of which we are proud

is the new member and industry database, which has more far-reaching capacity than our current list of industry members. It can be searched by function and location, by title and product category and will enable members to find exactly the right person

CMY

Visit us at Stand

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Asia Pacific Travel Retail Association among retailers, whether the business development contact for interested airports or the relevant category purchasing manager for each airport in which the retailer is present,” he explains. New for 2014 on the research front is a program developed in partnership with global market research firm, m1nd-set. The research will focus on several key areas including the fashion and accessories category, with particular emphasis on sunglasses; airport insights including the impact of security regulations on travel retail and on food and beverage consumption; consumer insights looking at the shopping behaviour of different nationalities both within and outside Asia, including a focus on Russian travelers in Asia; and inflight shopping trends. “The topics for the APTRA research program were decided upon following a member survey conducted late last year. We asked them to tell us which subjects would be of greatest value and we are doing our best to accommodate them,” remarks Singh. Trending on the association radar right now is fragrances and cosmetics; which he notes is currently the fastest-growing sector in ASPAC, adding: “Our Generation Index tells us that the category recorded the biggest growth at 16.4% in 2013, fuelled by a

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

surge in skincare sales of 21%. Fashion and accessories is also growing at a phenomenal pace, up by 14.8%, although the powerful Chinese market slowed a little last year. Finally, the wines and spirits category is also growing fast at 13.9%, although there was a distinct slowdown in China, particularly for premium and super-premium brands.” Overall, Singh reports a “rosy” 12.3% growth in duty free and travel retail sales across the region for 2013, according to data from Generation Research in Sweden, which put the total value of sales at US$22.4 billion. The sector may be in the pink in terms of average ticket increases, but the one-bag rule still in place on some Asian carriers remains an issue. Singh alludes to the policy shift in Europe where airlines are being instructed to abandon the practice, but highlights the ongoing challenge of different rules for different nations as regards the carriage of liquids, aerosols and gels inflight. “Our customers find the different rules applied around the world very confusing and discouraging, as do the staff. Who would risk an expensive purchase if there is a chance it will be confiscated en route?” he asks. “However, we have positive forecasts for passenger numbers across the region and the huge markets of India and China still

hold incredible potential. Catering to the projected growth in passenger numbers, there are new airports and fabulous new airport retail complexes opening up all over the place. It is up to us as an industry to grasp the opportunities presented to us,” he adds. Singh predicts this trend to continue, with healthy growth in 2013 repeated in 2014. “In terms of growth hotspots I would mention emerging markets such as Indonesia, Philippines, Vietnam, India and, of course, China. “China remains a huge area of potential because of the sheer size of market and their appetite for luxury goods. Both within Asia and on routes from China to destinations all over the world, the consistent increase in passenger traffic is creating extraordinary travel retail opportunities. However we are seeing a shift in Chinese consumer behaviour with regards to their travel patterns, where some segments are opting for individual travel as opposed to group travel.” Singh urges the industry to stay on top of these trends as, when applied to a market with the scale of the Chinese travelling consumer, they can have a marked impact on the effectiveness of marketing strategies. “We will need to adapt and evolve how we communicate along with the changing consumer trends.” 

The

l a b r e h s Swis queur Li

Visit us Stand J29

www.lateltin.com

Spotlight on TFAP exhibitors

Innovative innovations Companies gear up to display new products at Singapore Braun is upgrading its range of Satin Hair Dryers

Braun unveils new products for Singapore Procter & Gamble subsidiary Braun is gearing up to exhibit upgrades and improvements to its line of products. The company’s best-selling Silk-épil line of epilators will now feature a new electric facial cleansing brush, with the innovative product, which is six times more effective than manual cleansing, designed to open the pores and thoroughly yet gently remove makeup and impurities from the skin. Two different speed settings will allow the user to adjust the cleansing brush to their preference and skin sensitivity. Current owners of the products will be given the option to upgrade with a SkinSpa body exfoliation brush, an epilation head, or a shaver head. Braun’s line of cruZer razors is set to grow by two, with the company introducing the cruZer6 clean shave and cruZer5 clean shave. The former can be used in the shower and with shaving foam or gel, while the latter can be cleaned under running water. Finally, Braun is upgrading its range of Satin Hair Dryers, with the products now equipped with an improved professional nozzle for precise styling. Specifically, Satin Hair 7 and 5 dryers offer more motor power for long-lasting styling results, while the Satin Hair 5 boasts IONTEC technology for smooth and shiny hair.

Swiss chocolatier Chocolat Frey introduces a tasty new treat Chocolat Frey, founded in 1887 by brothers Max and Robert Frey, has added a new product to its assortment of celebrated chocolates, the Swiss Premium Crunchy Caramel bar. With a market share of almost 40%, Chocolat Frey produces the most popular brand of chocolate in its home country of Switzerland. The new bar, which is made from top-quality milk chocolate and caramel pieces, joins a roster of flavors that includes Milk, Raisins & Nuts, and White. Chocolat Frey’s various products are

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

made entirely in Switzerland, with the company using only the best ingredients available to produce its many offerings. With its popularity abroad steadily increasing, Chocolat Frey is well on its way to expanding its reach well beyond its Swiss-based borders.

Mars takes its brand even further with a series of new launches and activations As one of the most successful confectionery companies in the Asia region, Mars International Travel Retail (MITR) is gearing up to make a splash at this year’s TFWA Asia Pacific Exhibition & Conference. MITR, which will be holding court at booth N29, is planning a number of initiatives designed to bolster its success in the Asian market, with the company gearing up for a pair of high-profile store-in-store openings in Kuala Lumpur and Thailand KinMin. Additionally, MITR is in the midst of renovating its Changi Airport M&Ms store, with the shop’s new look designed to provide consumers with an element of theatre during their travels. The company is also gearing up for a series of category-exclusive launches in the coming months. “Getting travelers into the stores is our main objective, with confectionery being the most impulsedriven category. If we can attract footfall into the shop, then it is highly likely we can convert them into buyers,” says Marketing Director Lieke Duijmelings.

Chocolat Frey’s new Swiss Premium Crunchy Caramel bar

Mars’ gift-wrapped Celebrations Big Sweet is a travel retail exclusive

To that end, MITR will be debuting several new items at Asia Pacific – including the exclusive, limited-edition Watch M Collection. Available as a gift with the purchase of three Maxi M&Ms pouches, the Watch M Collection offers several timepieces designed to match the personalities of well-known M&Ms characters like Red, Yellow, Blue, Green, and Orange. “The collection aims to build the M&Ms brand as well as increasing in-store sales,” says Duijmelings. The company is also prepping the launch of two concepts that will allow retailers to customize the promotions to suit their individual needs. The Jewels Gift Bag offers a gift bag filled with two 400g Jewels Caskets, while the Celebrations Gift Bag contains two jars of the eponymous chocolate assortment – with both of these lines available exclusively in the Middle East. The two collections have been designed to stimulate chocolate giving during various seasonal celebrations (like Christmas and Ramadan), with the versatility of the lines allowing MITR to work with retailers to create a look geared towards the specific occasion. MITR additionally has a number of other new products and activities ready to go, including three items exclusive to the travel retail market – including the 310g, gift-wrapped Celebrations Big Sweet, the M&Ms Wheel Dispenser, and the Mars Maltesers Teasers. (The latter is available with three separate gift-tags in a heart, gift-box, or star shape.) The company will be revealing a pair of new gift-with-purchase products: a journal for travellers on the go called the M Book, and the self-explanatory Snickers Shopping Bag. “We are well on track for a very busy and successful year,” says Duijmelings. “These new product innovations and renovations, alongside our existing product offers, are complemented by a really exciting program of activations which we are looking forward to introducing to our clients in Singapore.”

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

Spotlight on TFAP exhibitors The Furla Alice Bag continues the company’s dedication to high-quality leatherwork with modern lines SKROSS will unveil its recentlyreleased World Adapter MUV USB and SOS Battery during TFAP

Designing a brighter future

Powering up In the years since its 2002 inception, SKROSS has established itself as a global market leader for world-travel adapters. The company, which is based out of Switzerland, boasts a line of multifunctional adapters and USB chargers for worldwide use in more than 150 countries, including Italy, Cameroon, Mexico, and the United States. SKROSS’ extensive line of products are geared towards every kind of travel, with items like the modular World Adapters, the specific Country Adapters, and the flexible World USB Charger capable of replacing a variety of chargers and power adapters – with these innovative items designed to both ensure easy-access to power and free up luggage space. “From the very beginning, safety was our top priority,” explains Christian Ernst, WorldConnect AG CEO. “Our entire development and production process aims at providing not only a compact and versatile product, but also a product which, above all, complies with all relevant international safety standards. This ensures user safety and proper functioning of all devices.” With this commitment to reliability behind it, SKROSS is looking to expand its global reach by setting up shop at Singapore’s TFWA show for the very first time. Sam Gerber, Head of Sales at SKROSS says, “our aim is to develop and strengthen the SKROSS brand awareness and present our latest products.” The company will consequently unveil its new point-ofsale concept alongside its range of innovative offerings, including the recently-released World Adapter MUV USB and SOS Battery. SKROSS will also be using the show to debut a series of brand-new products, with these yet-to-be-revealed items displaying for the first time on a global scale. The company’s presence at the 2014 TFWA Asia Pacific Exhibition & Conference is indicative of its desire to push its brand even further, with SKROSS gearing up to meet existing customers, get in touch with new distribution partners, and reinforce contacts in the travel retail business. “I’m convinced that the Asia Pacific Summit in May is one of the places to be within the Duty Free World,” says Gerber.

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

Furla is gearing up to push even further into the travel retail sector in 2014, with the company preparing for 40 new openings in the months ahead. With 2013’s sales improving 37% over the previous year, Furla is particularly focused on increasing its presence in the Asia-Pacific region—where 18 new concept stores and personalized corners are in the planning stages. Though its focus remains on China, Furla is planning to expand its reach in territories such as Thailand, Malaysia, Australia, and India. “We now have some 175 Furla stores and personalized corners open in major airports globally,” says Furla Global Travel Retail Director Gerry Munday. “This is an amazing increase on 2010 when we had just 33 doors open. These openings are across all regions and reflect the growing popularity and success of the brand in domestic markets.” Furla is set to unveil its Main Collection 2014/15 to regional buyers at this year’s TFWA Asia Pacific Exhibition & Conference, where the company will be displaying its wares at stand B2/J20. Designed to celebrate Italy and its culture, the Main Collection boasts leathermade products adorned in various shades of red – with the line’s vibrant appearance offset by neutral background colors like classic camel and shades of gray. Furla is also preparing for the debut of two new bags for the 2014/15 Fall and Winter season, with both products boasting the combination of craftsmanship and innovation that’s come to characterize the brand. The Furla Alice Bag continues the company’s dedication to high-quality leatherwork with modern lines and cool matches, while the Furla Twiggy Bag draws on Furla’s rich heritage by updating a classic piece with a functional and chic perspective. Finally, Furla will be displaying the latest additions to its popular line of Candy handbags—with the company offering new color options like Caramel and Acacia. Another innovation are the novelty metallic stud details that provide variety and texture, while a new Floral Print is the frontrunner in the line’s use of the hottest colors of the season. The proliferation of new outlets and new products ensures that Furla is going to be a prominent player in the months to come, with the company’s profile set to raise exponentially in the wake of Singapore. Munday says, “it’s going to be an incredibly busy year for Furla.”

Find out more @NestleITR

Iâ&#x20AC;&#x2122;m travel exclusive Perfect for sharing

new Kit Kat Mix Sharing Bag 748g

Spotlight on TFAP exhibitors

Nestlé continues the global roll-out of its new Nescafé Sharing Bags, which provides the brand’s most popular flavors in a package holding between 18 and 21 individual sachets – with the product available for Nescafé Original 3in1 (pictured), Nescafé Cappuccino, and Nescafé Variety

Dark Hazelnuts. Other brands will also be on display at the Singapore-based show, with Nestlé especially excited about its new Toppers for its line of Smarties candies—with the highlysuccessful Toppers range now boasting appearances by popular Disney Pixar characters. Finally, NITR will be launching a new 438g Carton for its Quality Street line of boxed chocolates. The innovative packaging boasts a new look with an improved gifting format and presentation, with the interior containing an assortment of 12 chocolates and toffees in different shapes. It’s all part of Nestlé’s efforts to increase and expand its reach in the travel-retail arena, because, says Rosier, “the fastest growing sector within our category is snacking and sharing.”

Travalo to launch luxury Milano HD at TFAP Brand-name success Nestlé International Travel Retail (NITR) is stepping up its commitment to the Asia Pacific region by investing heavily in this year’s TFWA Asia Pacific Conference & Exhibition. In addition to sponsoring the opening conference, Nestlé’s travel retail arm, will be occupying an enlarged stand at the Singapore-based show. The company’s increased focus on the region is paying off in a substantial way, with strong double digit confectionery sales value and volume growth registered for 2014’s first quarter over the previous year. NITR’s biggest asset in terms of growth is its Kit Kat brand of chocolate bars, as the product has increased its sales in the gifting and Snacking and Sharing sub categories. The company is looking to further accelerate this trend by kick-starting a number of shopper activations at key airports within the region. NITR is also using the show to continue the global roll-out of its new Nescafé Sharing Bags, which provides the brand’s most popular flavors in a package holding between 18 and 21 individual sachets – with the product available for Nescafé Original 3in1, Nescafé Cappuccino, and Nescafé Variety. Designed to strengthen Nestlé’s presence in the beverages category, the Nescafé Sharing Bags have been developed to meet the consumer’s changing coffee tastes. “Smoother blends and mixes now offer the discerning consumer a huge choice for individual palates,” says NITR Marketing Manager Frédérique Rosier. Pointing to a “real gap in the market for beverages,” Rosier says that Nestlé International Travel Retail is looking to capitalize on Nescafé’s 75 years of pioneering innovation to push the brand’s exposure farther than ever before. “The various options available within the Nescafé portfolio make it perfect for driving sales within travel retail.” Alongside the new Nescafé range, Nestlé will be showing off the latest additions to its confectionery portfolio in Singapore – including a pair of innovative Kit Kat products. The 748g Mix Sharing Bag contains 36 two finger bars in a quartet of flavors: Milk, Dark, Orange, and Cookies and Cream. Nestlé is also introducing a new packaging shape for the Kit Kat Mini 517g Sharing Bag, with this product and the Mix Sharing Bag both travel retail exclusives. Additionally, the company’s travel retail only line of Nestlé Swiss chocolates is adding two new products to its roster of 300g tablets: Nestlé Swiss Milk Almonds Nougatine and Nestlé Swiss

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

The Travalo Milano HD is a new custom made high definition spray head, which focuses on high performance. The spray head technology offers a luxurious fragrance mist, increased wraparound coverage and more efficient overall fragrance usage. Travalo Milano is finished in a durable leatherette, with finely crafted metal parts. Perfectly weighted and balanced, the Travalo Milano feels special the moment you touch it, and is designed to last. Building on its growing success in the Asia Pacific regions, Travalo has continued to refine its sales proposition in the Far East. It has been apparent that customers want higher value luxury Travalo products for gifting and the Milano HD fulfils these key customer demands as well as offering travel retail channels an entirely new model, price point and sales proposition. Like all Travalo atomizers, the Milano HD refills directly from a standard perfume bottle through the patented Genie-S pump-fill system ensuring that the fragrance is never contaminated by exposure to the air. Travalo contains no dangerous glass. Widely regarded as the leading experts in portable perfume, it’s focused on enhancing the consumer experience through this exciting new fragrance atomization technology. The Milano HD will initially launch as a travel retail exclusive in three colors (orange, hot pink and blue). To test out the new Travalo Milano HD and see the full range of Travalo products visit booth A11 at TFWA Asia Pacific.

THE NEW FLAVOURS OF GENEROSITY

YOU CAN NEVER BE TOO GENEROUS

Spotlight on TFAP exhibitors H2O Plus expands its reach into the Asian market Established in 1989, H2O Plus is expanding its best-selling skincare line with several innovative new products. Joining the ranks of the company’s Total Source collection is a new item, UV Defense Fluid SPF, which offers the user protection against 98% of UVA and UVB rays that damage the skin. The product stands alongside other potent products in the Total Source line, including the Optimum Cleanser, Optimum Toner, All Day Cream, Optimum Serum, and Night Cream. These oil-free products target the top five aging skincare concerns: reduce wrinkles, firm, brighten, nourish and protect for younger, luminous skin. For example, the Night Cream boasts clinicals of 92% increased hydration 67% improved skin elasticity, 72% improved firmness, and 71% improved brightness. H2O Plus will also be introducing an entirely new line called Marine Defense AntiAging Environmental Protection, which has been designed to block environmental irritants and prevent premature signs of aging. Among the products in this collection are the Green Tea Antioxidant Cleansing Milk, which neutralizes irritants and dissolves impurities, and the hydrating, oil-free moisturizer Green Tea Antioxidant Face Complex. The launch of these products is designed to bolster and heighten H2O Plus’ presence in the Asian duty free and travel retail markets. The company currently boasts 26 points-of-sale outlets at such locations as Singapore, Malaysia, Hong Kong, China, and the Maldives, with H2O Plus planning a brand-new location in Haitang Bay in June of this year. The company has also recently entered the China Duty Free Group’s Sanya location, where robust sales hold a great deal of early promise. Additionally, H2O Plus is anticipating a 25% improvement in duty free and travel retail sales over 2013, with the company’s various exclusive travel retail sets continuing to do big business among Asian customers. Sales in China remain head and shoulders above any other territory in the world, with the company’s front-running Oasis line holding steady as a top-seller among customers in that lucrative region.

H2O’s Total Source range

Luxottica steps up its travel retail presence with an exclusive Oakley product Luxottica, the world’s largest eyewear company, is preparing to augment its line of Oakley sunglasses with a travel retail exclusive called the Oakley Chainlink Ruby Iridium. Inspired by the popular Crosslink Rx optical frame, the Oakley Chainlink Ruby Iridium is an active lifestyle sunglass that boasts a number of special features – including Unobtainium earsocks and nosepads that increase grip during perspiration and a lightweight O Matter frame for added comfort. The product will be available only at travel retail outlets for six months following its launch, and Luxottica is planning an immersive in-store campaign featuring professional CrossFit athlete Rich Froning. “To have an Oakley Chainlink model offered exclusively through our channel is a testament to the success of Luxottica’s travel retail business and shows how hard we strive to tailor our offering to the world’s travelers,” says Francis Gros, Group Travel Retail & Special Channels Director at Luxottica. 

The Oakley Chainlink Ruby Iridium is a travel retail exclusive

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

Enjoy the Chocolate Side of Life Visit us at Stand J 29

www.Lateltin.com

Mäurer & Wirtz

The sweet smell

of success

Margareta Klein, Senior Area Manager, Mäurer & Wirtz

Mäurer & Wirtz builds on 4711 brand to expand on a worldwide basis by HIBAH NOOR

stablished in 1845, German fragrance house Mäurer & Wirtz is seeking to broaden the appeal of its brands by placing a renewed emphasis on travel retail for 2014. Mäurer & Wirtz is specifically looking to expand the reach of its bestselling 4711 Cologne, with the company embarking on a campaign to introduce the iconic scent to an entirely new generation of consumers. With its long and rich heritage behind it, the Original 4711 Cologne is sold in 51 duty free locations around the world – including border shops, ferries, and the military. But, says Mäurer & Wirtz Senior Area Manager Margareta Klein, the centuries-old product has the capability to appeal to a much broader subset of purchasers. To that end, the company is planning a number of new initiatives geared specifically towards the travel retail market. “We feel there is far more potential for the brand within travel retail globally,” says Klein. Building on the introduction of 4711 Nouveau Cologne in 2011, Mäurer & Wirtz sees a great deal of potential in the relaunch of its 4711 Acqua Colonia bodycare line. The collection consists of five fragrances designed to provide a sensation of wellbeing, with Pink Pepper and Grapefruit

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

joining existing varieties Mandarine and Cardamom, Melissa & Verbena, Lemon & Ginger and Blood Orange & Basil. The 4711 Acqua Colonia line is also available in a miniature collection containing all five scents, with Mäurer & Wirtz already reaping the benefits of this travel retail exclusive. The company is also in the midst of launching a new fragrance for both men and women called 4711 Wunderwasser. Aimed at customers between 20 and 40 years of age, 4711 Wunderwasser is presented in a style that’s completely different from the 4711 Original Eau de Cologne—with the product’s blue-themed appearance designed to conjure up images of the ocean’s depths. The bottles for the two sexes are radically different in appearance—the women’s fragrance is soft and rounded, while the men’s is darker and taller—and both items are presented in a finished box containing either a 50ml or 90ml spray. These initiatives are all part of Mäurer & Wirtz’s ongoing efforts at expanding its travel retail presence beyond Germany and Europe, with the company’s various lines already available at duty free outlets throughout the region—including Frank-

furt, Hamburg, Vienna, Moscow, and Oslo. (This is in addition to the Mäurer & Wirtz’s availability aboard such top local airlines as Germanwings, SunExpress, and Onur Air.) “We are really convinced that Mäurer & Wirtz can be attractive to a wider audience,” says Klein. Klein notes that in addition to the 4711 line of products, Mäurer & Wirtz boasts a wide variety of brands geared towards demographics of all ages—including such globally-recognizable names as Baldessarini and Strellson. The company is focusing on building distribution in both South America and Asia, with a specific emphasis on the travel retail markets of those regions. As one of the top five perfume-producing companies in Germany, Mäurer & Wirtz is poised on the edge of international success. “Mäurer & Wirtz is totally committed to travel retail and we really intend to build our business this year,” says Klein. “We have the infrastructure and resources to support our presence in travel retail with shop-inshops, great display concepts, high profile promotions, incentives, exclusives, etc.”  The 4711 Acqua Colonia line is a travel retail exclusive available in a miniature collection

AFTER A GOOD MEAL

the natural herbal digestive

worldwide after a good meal since 1846 www.underberg.com

Made in Germany

Fortune Concept Brands set to enter under the Fortune Concept/ ILG banner include Gant, Cerruti 1881 (pictured) and Aigner (pictured), as well as Kenzo

CHANGE of

FORTUNE

A strengthened portfolio will see Kenzo and Jean Paul Gaultier join the Fortune Concept brand family this summer as the company looks to capitalize on its International Luxury Group alliance CLAIRE MALCOLM by

he addition of a number of high value brands to Fortune Concept’s expanding portfolio, following its membership alliance with the International Luxury Group (ILG) in 2013, is taking the Hong Kong headquartered company into new territories. “It was a big boost for us as it meant that we could get more brands on board, and we currently have more than 14 in our portfolio. The synergy between our two companies was a good opportunity to take advantage of one another’s brands,” says Rajiv Mehra, Regional Sales & Marketing Director, Fortune Concept. “In terms of duty free and travel retail exposure it really strengthened our position in the industry by creating a broader and deeper offer in terms of products, range and price points,” he adds. The booming Asia market, dominated by mainland Chinese travelers, is helping the brand portfolio gain valuable exposure in major gateway and domestic destinations, as Mehra explains: “[They] have the great-

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

est buying power and are vital to sustaining our future business growth but when you look at the world economy, India is upand-coming and then Indonesia, which is the world’s third largest country, has significant potential and is somewhere we are looking forward to exploring further.” The company currently has brand presence in Jakarta and Bali, and Mehra confirms that next on the agenda are the country’s domestic airports. Mehra is all too aware of the challenges of doing business in China and India and cites patience, as well as the requisite amount of time, resources and serious investment, as immoveable requirements for market access. Fortune Concept’s mid-market segment brands, with price points of

US$1,000 and under, are also perfectly placed to capitalize on consumer demand, and remain largely unaffected by China’s austerity measures. “Korea and Japan are also interesting. Japan is a very specific market with its own unique culture, but we do extremely well there with Police, Timberland and Swiss Military,” he says. Other brands set to enter under the Fortune Concept/ILG banner include Gant, Cerruti 1881 and Aigner, as well as Kenzo, with its fun, colorful and evolving brand image appealing to the Japanese customer. “It will do really well in Japan and we plan to launch it by June with a rollout across multiple destinations. Our greatest advantage in Japan is that we are present on ANA inflight as well as Japan Airlines,

Watches remain Fortune Concept’s core product category, headlining the company’s travel retail strategic development plans, followed by jewelry and sunglasses

where we will shortly be starting with Swiss Military and Aigner,” says Mehra. “Inflight has been a good business model for us; it’s great for brand exposure and we do extremely well with a number of our brands,” he adds. Another equally colorful brand coming on board this year is Jean Paul Gaultier, which is set for release in June/July 2014. Watches remain Fortune Concept’s core product category, headlining the company’s travel retail strategic development plans, followed by jewelry and sunglasses. “Fashion jewelry isn’t big business in the Far East as the Asian mentality means a preference for buying or investing in real gold. People tend to pick up our brands

mainly for gifting as it’s an affordable price point, although they would still prefer to buy a watch or pen,” notes Mehra. A solid promotional strategy has been key to successful performance, as he explains: “Even though it’s an impulse purchase, add-ons are always a benefit. We will give a keyring or a wallet for example, so for the buyer it becomes two gifts rather than one. They may be after a full set or want to give one item to someone else. This approach has really helped us grow the business.” “Today, discount is the bottom line when people travel and it’s airports like Seoul’s Incheon that has a great approach, and which offers the best discounts and endof-season sales,” he concludes. 

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

Piquadro

Carrying

Piquadro pushes forward internationally with its best-selling line of Coleos backpacks by

HIBAH NOOR

Consumers will also be able to select a purple/moss color scheme The functional Coleos backpacks are receiving bold new colors, including an orange/moss combination

talian leather goods company Piquadro Group is readying an addition to its Coleos line of expandable backpacks, with the product now available in either an orange/moss or purple/moss color scheme. Consumers were previously able to choose from such stylish colors as turtledove, black and saffron yellow. The Coleos remains one of the topselling products in Piquadro’s extensive line of leather products, with the backpack taking its inspiration from the Coleoptera order of insects – as reflected in its round shape, overlying pockets, front and side zippers, and bright colors. Piquadro prides itself on adapting the backpack to meet the needs of its evolving client base, with the laptop-friendly product boasting a series of external pockets and zippers, an expandable base with storage net, earphone loops on the shoulder straps, and a band for hooking to a trolley. The innovative interior of the bag contains two padded compartments, a key chain, and a folding rain cape, which ensures that the backpack is suitable for carrying a wide variety of items and accessories. Additionally, the interior has been specifically designed to allow the user easy and immediate access to the valuable items contained within. Though geared towards laptop users, the Coleos boasts compartments that can comfortably hold a number

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

of next-generation computer products – including the new iPad Air line of tablets. Although the Coleos remains the centerpiece of Piquadro’s line of products, the company boasts a catalogue bursting with items for different needs and occasions. Piquadro’s commitment to leather goods for busy people on the go is reflected in its emphasis on handbags and backpacks, with the company offering everything from computer shopping bags to shoulder pocketbooks to leather cell phone cases to women’s wallets. Piquadro, which was founded in 1987, has shown considerable growth during the 2013/2014 fiscal year, with the company experiencing a consolidated revenue increase of almost 12% during that period. This increase has allowed the company to look confidently towards the future despite current economic uncertainty, says Marco Palmieri, President and CEO of Piquadro. “The results for the year just ended represent an important confirmation for us because attest to the effectiveness of the choices and investments made as part of the development strategy of the brand. In particular, the double-digit growth—stable during the year and quite marked in foreign markets—gives us reason to trust in a positive trend, both on the international and domestic markets.” Piquadro currently boasts 57 directlyoperated stores and 44 franchises of branded boutiques around the world, with Palmieri

noting that the success of these shops has bolstered the company’s reputation as a firstclass purveyor of leather goods and products. “The positive trend of the directly-operated stores,” continues Palmieri, “demonstrate that the originality of the brand positioning and the strong distinctive features of the product can be successful elements on the domestic as well as on the international market, if they are supported by suitable communication campaigns and solid operations.” Piquadro’s success in the months ahead is dependent primarily on its success in Italy, as the country represents an important share of the company’s total sales. International growth is also becoming more and more pivotal to Piquadro’s continuing prosperity, with the company showing notable improvement in this area in recent months. Piquadro’s focus on global development has brought about an increase in international visibility and awareness of the company’s brand, with the opening of single-brand stores in Paris, Venice, Florence, Forte dei Marmi, Turin, and Beijing perpetuating this increase in name recognition. Additionally, Piquadro recently celebrated the arrival of its first London-based store with a splashy, attention-grabbing grand opening. The company is, as a result, anticipating results in the fourth quarter of 2013/2014’s financial year to register the same trend as the year’s third quarter. 

Russ Berrie

An old

favorite Iconic toy brand Russ Berrie gears up for a worldwide relaunch in 2014 HIBAH NOOR by

nown globally for its plush toys, Russ Berrie is planning a major comeback for 2014 after lying dormant for almost 10 years. The brand, which posted sales of over US$400 million at its peak, was acquired by Larsen & Bowman Holdings in 2013 and the company is prepping its return to market in the wake of a successful showing at 2014’s Duty Free Show of the Americas. “Larsen & Bowman is committed to maintaining the level of quality that Russ Berrie was always known for,” says Todd Tingley, Founder/President, TagAlong. To that end, the company will be focusing on introducing the brand to a whole new generation of consumers—which will primarily involve the use of social media, viral videos, and other contemporary means of communication. The worldwide rollout will contain a mix of new and familiar products, with the latter boasting such iconic items as the big-eyed Peepers line and the Yomiko group of realistic-looking animal plush toys. The company is also launching a brand new line of scented plush toys called Yummy Luvvies, with the product designed to emit a specific scent as the user rubs its surface. As part of the brand’s worldwide relaunch, Larsen & Bowman is especially focused on Russ Berrie’s presence within the lucrative travel retail market. “It was an important market for Russ Berrie when Russ was active and in its heyday, and our intentions are to get global distribution,” explains Tingley. Larsen & Bowman’s first step was the brand’s pivotal appearance at IAADFS in Orlando this past March, with Russ Berrie immediately striking a chord with attendees already familiar with the toy’s iconic name and logo.

Larsen & Bowman’s commitment to travel retail is indicative of the company’s desire to grow the Russ Berrie brand in the months and years ahead. “We hope to have a really nice footprint in as many of the duty free stores, travel retail stores around the globe as possible,” says Tingley. Noting that the recent IAADFS show was “the perfect place for us to get started,” he says that the company is exploring its options in terms of increasing Russ Berrie’s exposure in this lucrative market. “We’re working on getting distribution throughout the world and travel retail.” “People want to get Russ back into their stores. It was a strong, well-selling brand before, and they’ve missed it, and now it’s a good time to get it back in,” says Tingley. As such, Larsen & Bowman is focused on re-establishing Russ Berrie’s status as a premier toy in the world of duty free. Noting that the plush toys are perfect for people on the go, the Russ Berrie brand translates on a global basis so well. It’s good for children. It crosses all generations. Tingley knows that Russ Berrie has its work cut out for it in terms of re-establishing itself in an increasingly crowded plush marketplace, but the executive is confident that the brand’s superior quality will quickly set it apart from its competitors. “The plush is very realistic-looking and that’s where the detail comes in. That’s what Russ was so well known for.” The future is looking bright for Russ Berrie. “The nice thing is that almost everyone is familiar with Russ, so it’s not like you’re starting at ground zero. There was a story there already and this is just another chapter in that book of Russ Berrie,” says Tingley. 

Russ Berrie’s worldwide rollout will contain a mix of new and familiar products, with the latter boasting such iconic items as the big-eyed Peepers line and the Yomiko group of realistic-looking animal plush toys

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

L’Oréal Luxe Travel Retail ASPAC

BEAUTY and the Travel retail trendsetting and local market alignment continue to underpin L’Oréal’s regional focus, and with sales outpacing passenger growth the beauty giant is capturing new market share in Asia

In time for Chinese New Year, L’Oréal Group offered Clarisonic special edition in red featuring the horse

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

BRAND by

CLAIRE MALCOLM

sia Pacific is a key market for the global beauty retailer and, according to Eva Yu, Managing Director, L’Oréal Luxe Travel Retail ASPAC, a major player in the group’s push to win over one billion new customers. “We consider travel retail as the ‘sixth continent’ in which we seize every single opportunity to outperform the market by offering the best tailor-made products and services to global shoppers, and work closely with airports and retailers in order to satisfy our customers’ needs and recruit new ones,” she says. Following a successful holiday season, encompassing Christmas 2013 and Chinese New Year 2014, the first quarter of the year has already seen the rollout of exciting new brands and Asia exclusives. Holiday promotions included a gift-wrapping service and the launch of exclusive charity sets at Hong Kong International Airport in support of the End Child Sexual Abuse Foundation campaign. “We donated part of the proceeds from sales of our exclusive sets to the foundation, which raised a total of HK$160,000 (US$20,627),” says Yu. In terms of products, there were Clarisonic Chinese New Yearspecific edition in red featuring the horse. “Customers are very educated in the region and they expect attractive prices, exclusive offers and also entertainment, we ran a hugely successful Clarisonic Chinese New Year event in Sun Plaza DFS HK, which included live product demonstration sessions and a gifting approach,” she adds. Regionally, animation programs at point of sale included Biotherm with a special outer packaging and red envelopes, and oncounter animation with photo-taking opportunities. Ralph Lauren

L’Oréal Luxe Travel Retail ASPAC themed its Year of the Horse activity with a 360-degree approach to maximize on the cultural aspect impact, including specific visuals, a gift box, storytelling and the Chinese translation of product names and claim. “We used each feature of the Chinese horse horoscope in order to classify our different fragrances from Polo Red meaning heroic to Polo Blue and majestic.” A high profile schedule of launches include the recent unveiling of Lancôme’s 150-square-metre pop-up store at Beiing International Airport Terminal 3 with highlights such as the Genifique ‘Black Bottle’ exhibition, created in collaboration with global artists, along with a ‘Wonderland’ virtual gallery. Yu confirms that the company is planning to run a number of make-up shows at selected locations featuring a Lancôme regional make-up artist who will create tailor-made looks using travel retail exclusive palettes such as Absolu Voyage. Travel retail exclusives remain integral to L’Oréal’s broader marketing agenda, as Yu explains: “We target our products to provide our customers with a bespoke experience and gift sets are one item that global customers buy for gifting purposes. One big event this year will be the launch of the first travel retail exclusive Giorgio Armani Palette for full face.” Asia-specific products are another major driver for the region. “For Giorgio Armani, there is a new violet master primer launching, which offers better color control for Asian skin,” she notes, adding: “Lancôme has been a leader in the whitening category in Asia since 2004. Our Blanc Expert and UV Expert lines are formulated specially for Asian women. We also offer Renergie de Vie, which is a hydration line created to achieve the ideal ‘Qi Se’ and healthy skin radiance.” Other brands are also flying high. “YSL is well-known for its exclusive to travel retail make-up palettes, which look like a fashion accessory, and are the perfect gift,” she says. For its star Clarisonic brand, Yu reiterates the importance of having a travel retail exclusive, and this year saw the launch of the Aria exclusive which includes an international multi-plug; a first for the local market. Male travelers will enjoy special attention this year, as Yu explains: “For Biotherm we will be more visible where men are. Therefore, we will have more visibility and on-counter animations during the Rugby Seven’s tournament in Hong Kong. In addition, we plan to support and raise

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

awareness of men’s health issues by supporting Movember, where we will bring more activities into our point of sales that month.” Looking ahead, Yu sees positive growth across Asia for a number of reasons. “The main driver of this market is passenger traffic, particularly air traffic which has shown year-on-year growth over the last five years of 6.8%. Sales are growing faster than traffic, and this reflected a promising average basket growth. “According to Generation, P&C is the fastest growing category in travel retail in Asia with 16.4% growth as at October 2013 and the international traffic forecast for 2014 is more than 7%. The number one aspiration of the Chinese is travel, and Korea is becom-

“We consider travel retail as the ‘sixth continent’ in which we seize every single opportunity to outperform the market by offering the best tailor-made products and services to global shoppers, and work closely with airports and retailers in order to satisfy our customers’ needs and recruit new ones.” EVA YU, MANAGING DIRECTOR, L’ORÉAL LUXE TRAVEL RETAIL ASPAC

ing a popular destination with a pro-China visa policy attracting top spenders. “Preliminary results from a L’Oréal survey on the Chinese market shows that skincare products are the first items purchased with 76% penetration, fragrance in third place with 61% and make-up fifth at 37%; so there is already high existing demand for our skincare products.” According to Yu, L’Oréal is conducting intensive research aimed at understanding the source and needs of its customer base, and will roll out more surveys in 2014 with plans to share results with retailers in order to develop nationality-specific programs covering retail education, merchandising, promotions and digital.

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L’Oréal Luxe Travel Retail ASPAC

Q&A with L’Oréal Group’s brand divisions RYAN LEE, GENERAL MANGER, BIOTHERM AND YSL Q: What is coming up in 2014? A: “For women we are going to launch White Bright following the Life Plankton Essence in April. “In August/September we will launch the Blue Therapy SerumIn-Oil, which is quite popular in Asia and is one of the key franchises that we are going to concentrate on this year. Biotherm was previously well known for hydration and moisturizing, and we are extending into anti-ageing, hence reinforcing it with the Blue Therapy line, this launched in Q4 2013 and has been quite successful everywhere.” “For men we are going to renovate the whole product including the packaging and ingredients. Force Supreme is also a strong antiageing franchise for Biotherm and with an affordable price point and market position we are extending our brand image. It is doing particularly well in North Asia and Greater China. “For YSL, we launched Gloss Volupté in January, which is inbetween a lipstick and a gloss. It uses a scooped Q-tip for precise delivery and is doing well throughout Asia Pacific with some shades already out of stock. “We are also launching Kiss & Blush. We have many hybrid products that cross over between make-up and skincare so that you can use them for different things at the same time, which is very exciting. “We totally renovated the YSL skincare line in 2012 and this August will launch L’ or Rouge, which is the premium skincare line with a high price point. “In terms of fragrances we launched Manifesto last year, and it’s booming worldwide, and so we have extended the franchise line with Manifesto L’Eclat.”

Q: What is your promotions strategy for this year? A: “We work with a very simple strategy. We highlight our new products with HPP in the airport, so throughout the year we will rent space outside of a counter, which is important for us in enticing the customer in from outside.” Q: Are you bringing out any Asia specific products? A: “Whitening is very important and we are introducing a whitening set for Biotherm, with a price saving, targeting Asian customers.”

Biotherm Homme Aquapower travel exclusive set

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

L’Oréal is renovating the YSL skincare line and will launch L’or Rouge this August

Q: What are the brand bestsellers? A: “YSL is well known for its unique innovation, Touche Eclat. We also introduced the Vernis à Levres glossy lip stain which is doing well everywhere, especially in North Asia where sales are doubling every two months. Certain shades were permanently out of stock last year.” Q: Are you noticing any particular trends? A: “Sets with a price saving have been trending for the last five years and we are seeing more sets than singles. Best of best product sets are bringing people into the local market and increasing loyalty for different products.” STEEVE HAGEGE, GENERAL MANAGER, GIORGIO ARMANI AND SHU UEMURA Q: What is coming up in 2014? A: “For Shu Uemura, the focus is back on make-up artistry with fantastic innovation. For eyes we are launching Calligraph: ink, a refillable liquid liner in a pen to create a formed line. Eyeliner is the trend in China where the category is booming and growing faster than mascara, whereas in Thailand it has always been very strong culturally; and young consumers are interested in trying things in a more playful way. “The Lightbulb UV Compact with its unique two-sided sponge – one for application and one for polishing – gives a flawless long-lasting complexion. We are also collaborating with Mika Ninagawa, a photographer and graphic artist, who has designed some beautiful products following a ‘Wonderland’ theme, which will launch in May/June. “Giorgio Armani Beauty has historically always been very successful in Hong Kong and we have lately accelerated the rollout of new counters in Korea and Southeast Asia. The brand stronghold is foundation with the likes of iconic products like Maestro, a revolutionary ultra-thin liquid foundation delivered with a dropper. “Our ambition this year is to build Crèma Nera, our premium skincare range, as an iconic franchise. We launched a new serum

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TOSCOW cordially invites you to celebrate our 30th Anniversary

Booth B18 TFWA Singapore

L’Oréal Luxe Travel Retail ASPAC Q: Who is buying Kiehl’s products? A: “Kiehl’s as a brand is quite unisex, so a lot of male customers buy across our product range even though there is a specific male franchise. “We are not a promotion driven brand. Our philosophy is about exciting staging and merchandising and ‘try before you buy’, so we do a lot of sampling programs. “Moisturising is the number one concern for most of our clients and Kiehl’s has a luxury image but its price point is very accessible, and its unique brand personality appeals to younger customers while offering value for money.”

Shu Uemura is focusing back on make-up artistry

Giorgio Armani’s Crèma Nera premium skincare range will continue to build the range with the May launch of Crèma Nera Extrema Supreme Cream Light Texture, for hot and humid weather

in January, the Crèma Nera Extrema Supreme Reviving Serum and will continue to build the range with the May launch of Crèma Nera Extrema Supreme Cream Light Texture, for hot and humid weather. This will be followed in September with the debut of Crèma Nera Extrema Supreme Recovery Balm, a richer version for damaged skin or night-time application. Q: What is your promotions strategy for this year? A: “We have dual distribution at our on-counter events for all new launches. It’s very important for us to demonstrate products in downtown stores and offer consultations. At the airport it’s the focus is more on merchandising and providing specific information on product benefits. “Armani Sí did very well when it launched last September and we want to sustain that. This September, the new eau de parfum comes in and with some consumers, like the Indonesians, preferring stronger fragrances, the idea is to refocus and have the team reintroduce Sí on its first anniversary. “The Armani brand talks to the Chinese consumer, and our focus for fragrances last year was to bring their interest to this segment, with a focus on gifting as well as self purchase. We are working hard with the China marketing team to adapt the concept for Sí so they can understand the story through merchandising.” ADELE ZHANG, GENERAL MANAGER, KIEHL’S Q: What is coming up in 2014? A: “We have two major launches this year; the Ultra Facial Cream Intense which is our number one SKU worldwide, which launched in February. In the second semester we will launch the Calendula cleanser, this is selling very well, especially in China. Calendula answers the skin problems of young customers and with our franchise extension this is helping the brand recruit more young consumers.” 82

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

Q: What are your bestsellers? A: “We try to align with the local market and see travel retail as an extension of the local market. We have travel retail sets available all the time, and they go very fast, especially the limited edition seasonal holiday sets. The Ultra Facial Cream is a bestseller followed by the Creamy Eye Treatment with Avocado, Avocado Eye, Calendula Herbal Extract Toner and Cucumber Herbal Alcohol-Free Toner.” Q: Are you noticing any particular trends? A: “We see the Chinese traveler booming and we are starting to pay more attention to them and their behavior.” Q: Any exciting developments for the brand this year? A: “We will enlarge our men’s space this year with a dedicated area and will also try to develop some value sets for travelers with two to three small size deluxe samples for grab and go. We are also hoping to maximize gifting in seasonal offerings; it’s not a big percentage of business right now but we see potential in the market. We are thinking to introduce a gifting area and more POS counter excitement.”  Kiehl’s is catered to both men and women

Kiehl’s best seller is it’s Ultra Facial Cream

Look out for… “…Lancôme at TFAP, where we will be showcasing Genifique, our hero product; Absolue, our premium brand ‘within the brand’; and La Vie est Belle Eau de Toilette new make-up bar look. The focus for TFWA will include a showcase for the upgraded Prodigy Powercell from Helena Rubinstein, which newly launched in Asia in March.”

Rituals

Rituals has established itself solidly and without question with over 300 shops, over 700 shop-in-shops, five spas, 21 online shops, 34 airport shops and 14 airline partners

Luxurious lifestyle products, meaningful experiences Rituals believes happiness can be found when you find the magic in everyday routines by HIBAH NOOR

reated in 2000, Rituals is the first brand to combine home and body care. A luxury lifestyle and wellness brand, its passion is to turn the customer’s everyday routines into meaningful experiences, with products based on ancient eastern beauty traditions. Since that time, Rituals has established itself solidly and without question with over 300 shops, over 700 shop-in-shops, five spas, 21 online shops, 34 airport shops and 14 airline partners. It is also present in over 800 hotels. Just as Rituals crosses borders between wellness, beauty and lifestyle, it also crosses the borders between travel and domestic retail, between wholesale and retail, and between business-to-consumer and business-to-business sales. The company has won numerous awards throughout Europe, the US and the world, for retail and for innovation.

Soaring in travel retail

In 2012, Rituals entered travel retail. As with other areas of the company, its vision and business model for travel retail was unlike that of other companies, because it plans to be with the traveler on every step of his or her journey. At the airport, the traveler can browse through either a Rituals store or a shop-in-shop or a corner to purchase duty free products. During the flight, Rituals wants to be in the bathrooms. The company wants its amenity line to be offered to those 84

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

in business and first classes. Rituals sees its own tea, in innovative single-wrapped packaging, being served, and its hot towels being offered to passengers. And of course the same passenger will be able to purchase Rituals’ products onboard. At the hotel, Rituals products will be in that same traveler’s hotel room. The company’s concept and execution are indeed innovative, and that has done nothing to stem either its growth or its presence in travel retail, where it has gone from strength to strength and grown rapidly. In 2012, Rituals’ first year in travel retail the company was present in two airport stores and on two airlines. In 2014 that number will increase to five airport stores and 34 travel retail shop-in-shops. This year the company’s products will also be available on over 30 cruise ships worldwide.

Upcoming expansion

Until this point Rituals has been present mainly in travel retail throughout Europe, with duty free presence in the UK, the Netherlands, Germany, Sweden, Belgium, Norway, Denmark, Austria, Hungary and Portugal in addition to South Africa. In 2014 the brand will be focusing on increasing its presence in new and existing markets, and Rituals’ goal is to be present worldwide by the 2020. With its expansion rate so far, that feat seems both feasible and likely. Some of Ritual’s major partners include the biggest names in travel retail such as Heine-

Rituals has been present mainly in travel retail throughout Europe, with duty free presence in the UK, the Netherlands, Germany, Sweden, Belgium, Norway, Denmark, Austria, Hungary and Portugal in addition to South Africa

mann, Nuance Group, Belgium Sky shops and Inflight. Rituals product line includes a vast array of items created not only for their results, but for the experience of using them. Rituals products are inspired by authentic eastern rituals such as the Samurai shaving ritual, the Hammam steam bath ritual and the gemstones make-up ritual. The products are designed for customers who not only have high standards with their products, but who also care about others and the environment. The company uses natural, renewable and organic ingredients, and sources safe alternatives whenever necessary. 

BELGIAN CRAFTSMANSHIP

No two Duc d’O truffles are the same. The reason for this is very simple. The light chocolate mousse is sent on a journey through a large bed of chocolate flakes. Dancing over them, the truffles wrap themselves in the wildness of Belgian chocolate. Only then are they ready to find their way into civilisation. That’s why all Duc d’O truffles are indecently delectable. But each that little bit unique.

Unilever International Division

Beautifying

the world

The Radiating Tropical Elixir is available only in the travel retail exclusive Casual Lush Radiance collection

Unilever International Division continues to push forward into the lucrative world of travel retail by HIBAH NOOR

s the world’s third largest consumer-goods company, after Procter & Gamble and Nestlé, Unilever has managed to establish quite a foothold in the world of travel retail in just a few short years. The company’s Singapore-based Unilever International Division was instituted back in 2012, and the relatively new department has grown in leaps and bounds in the years since. Unilever International Division is especially focused on expanding its reach in the lucrative hair care market, because it’s an area that’s “a growing priority for travel retail,” explains Rosalyn Frayna, Business Manager Travel Retail. It’s for that exact reason that Unilever International Division has placed such a heavy emphasis on Toni & Guy’s presence in the travel retail arena. Founded in London, England in 1963, Toni & Guy has grown over the years to become one of the premier hair care companies on the planet—with the brand’s many hair and beauty salons across the world augmented by a line of popular products. Unilever has long-experienced a great deal

of success in this lucrative market, as the company remains a global leader in volume for total hair care. “We’re looking at a €41 billion (US$53.6 billion) market in 2015,” says Frayna. It’s not surprising, then, that Unilever International Division has specifically targeted the travel retail market within this sector, with the company taking advantage of Toni & Guy’s growing popularity to launch a series of travel retail exclusives. Leading the charge in the company’s Spring and Summer 2014 line are a pair of fashion-focused styling products, Casual Radiating Tropical Elixir and Hair Meet Wardrobe Glamour 3D Volumiser. The two products were used by Global Hair Ambassador Mark Hampton at 2014’s Fashion Week, and ultimately produced some of the season’s most talked-about new looks. The Casual Radiating Tropical Elixir boasts a blend of such high-performing oils as Marula, Coconut, Sunflower, and Almond Oil, and leaves hair with a natural shine and even protects the hair from sun-based damage with its UV filters. A high-performing formula, Hair Meet Wardrobe Glamour 3D

The Casual Lush Radiance collection is one of Unilever International Division’s travel retail exclusives

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

Toni & Guy remains a forerunner in haircare thanks to products like the Hair Meet Wardrobe Glamour 3D Volumiser

Volumiser gives both a volume boost and a touch of shine through its specialized pump. And although Hair Meet Wardrobe Glamour 3D Volumiser is available globally, the Casual Radiating Tropical Elixir is available only as part of a travel retail exclusive package entitled Casual Lush Radiance. The package includes the Casual Radiating Tropical Elixir and also Shampoo and Conditioner for Damaged Hair and a bottle of Toni & Guy’s Heat Protection Mist, with the four products packaged in a practical, aesthetically-pleasing white bag. Such initiatives are part of Unilever International Division’s plans to become the top global premium styling brand by 2015. The push into travel retail has so far netted impressive results, and Frayna is optimistic that the trend will continue in the months and years to come. “There are many positive responses received from different retailers across regions, and we are working on expanding and opening new doors, one airport at a time.” 

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lolaandgrace

A bright, shiny future

Swarovski brand lolaandgrace boldly expands into the world of travel retail HIBAH NOOR by

or a brand that’s barely two years old, lolaandgrace has already made impressive strides in the world of travel retail. The business, which is an offshoot of Swarovski AG, recently showcased its Spring/Summer 2014 collection at this year’s IAADFS Duty Free Show of the Americas, and plans are afoot for the upcoming TFWA Asia Pacific Exhibition & Conference. lolaandgrace has experienced a great deal of success at several European duty free market shows, says Aurélie Girard, lolaandgrace’s Head of Wholesale, with the brand’s innovative attitude and affordable prices ensuring that there is tremendous potential in the travel retail arena. The brand’s commitment to the Asia Pacific market has been in the works since its inception, says Girard. The up-andcoming brand has recently established relationships with such key clients as Japan Airlines and Qantas, and Girard notes that there is a concerted effort to accelerate the brand’s presence in the region. To that end, lolaandgrace is expecting big things from its appearance at the Asia Pacific Exhibition & Conference, where the brand will be premiering its Fall/Winter 2014 collection in a travel retail context for the very first time. “We are very focused on travel retail,” explains Girard. “It is a significant part of our growth plan and is essential to implementing our development strategy.” lolaandgrace soft launched into the burgeoning market in October of 2013 with a showing at the TFWA World Exhibition in Cannes, with the brand walking away from the tradeshow with four airline listings and 20 ground-

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

based locations. lolaandgrace successfully locked down agreements with several highly-respected names in the industry, including World Duty Free, Heinemann, Nuance Group, and LS Travel Retail. The brand’s dedication to the travel retail market has paved the way for a number of exclusive products. “We think it is important to incentivize travelers,” explains Girard. lolaandgrace has, as a result, launched 38 products and sets that can only be purchased in the travel retail market, with the brandoffering up a selection of items that have been tailor-made for the market. It’s all part of lolaandgrace’s strategy to differentiate itself from its parent company, Swarovski, without sacrificing the high quality and value for money that customers have come to expect from the centuries-old brand. One such product is the Slim Modular Crystal necklace, which is a slimmer, sleeker version of the brand’s best-selling Modular necklace. Like the various other

From lolaandgrace comes a series of exciting new products that are both on-trend and affordable

ESSENTIAL COMMUNICATIONS

knowledge CLIENT understanding MEDIA

Essential Communications is an independent Public Relations agency specialising in the travel retail and duty free industry. Established for over ten years, our goal is to raise the profile of the companies we represent in the international and regional media. At Essential Communications, the client always come first and we will bend over backwards to put together a proposal that meets your needs...and your budget. Flexibility is the name of our game, so if you’re looking for a simple, straightforward press release program or an all singing, all dancing media campaign, we’ll give you a nononsense solution to your needs. And..we do it with a smile.

“I have worked with Essential Communications since it was first established in 1996. The company has always been the mainstay of a proven successful marketing strategy for the various companies I have been involved with. In working with Morgan & Oates for the last four years, EC has helped us to develop and establish a solid brand image within the Travel Retail sectors. Excellent editorial coverage, assistance with activities at exhibitions, and full assistance with Web site developments has ensured that Morgan & Oates is well respected in the Travel Retail arena. I would not hesitate to recommend their services.” Jeannie Archer, Managing Director, JA Associates Ltd

“Scorpio Distributors appointed Essential Communications in 2006 as part of an upgraded marketing strategy. They provide us with a friendly, efficient, pro-active service and, certainly for Scorpio, represent excellent value for money.” Stuart McGuire, Group Managing Director, Scorpio Distributors Ltd ‘Essential Communications has proved to be a vital part of the success and growth of Counter intelligence Retail in the channel. Always quick to respond to our needs, the reach the company has provided us has ensured we’ve always had the right amount of exposure and the most appropriate coverage at the right time’.

“I don’t know why everyone doesn’t use Row at Essential Communications. Fast, efficient, and makes sure that everything is done in the right way, is in front of the right people and in time for publication. Row has become a vital tool in our communication strategy and we are delighted to be working with her.” Ian Taylor, Global Marketing Manager, William Grant & Sons

Garry Stasiulevicuis, Managing Director, Counter Intelligence Retail

Rowena Holland Essential Communications 110 Falconwood Road Croydon Surrey, CR0 9BD, UK

Tel: 44 (0) 208 405 8109 Fax: 44 (0) 208 405 0330 Mob: 44 (0) 771 021 9784 Email: row@essentialcommunications.org www.essentialcommunications.org

lolaandgrace goods in this line, the necklace has been geared towards travelers on the go who want to choose “that perfect look for themselves or that gift for somebody special at their destination.” Continues Girard, “we will be able to satisfy the need for affordable, quality fashion jewelry.” Another hot new item from lolaandgrace is its Crystal Cut pendant necklace and stud earring set, which boasts dropshaped crystals designed to create a refined look that’s both elegantly brave and sexy. In that same realm are the brand’s Stud stretch bracelet set and Chain necklace with crystal pavé, with these two products reflecting lolaandgrace’s commitment to reflecting the latest catwalk styles. “Our products are known for being on-trend. It’s what we are about,” explains Girard. One hot trend that lolaandgrace is especially excited about is rose gold, which is, explains Girard, a “fashionable alternative to classic gold that compliments just about any skin tone.” An alloy of gold and copper, rose gold is being used extensively in the brand’s new and existing designs and works well with many types of plating and material. Leather will also be used extensively in lolaandgrace’s travel retail output, as the brand’s innovative use of crystal and metal together with leather has already set it apart from its like-minded competitors. As a way of further enticing potential customers, lolaandgrace has developed special packaging that will accompany all of its travel retail exclusive products. Consumers in the travel retail market are bombarded with

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

items on a consistent basis, and the brand is hoping to combat that by showcasing its products with targeted displays and communication tools. The brand’s commitment towards “further promoting” the travel retail channel will increase its exposure and reach in the months and years ahead, says Girard. With the brand already experiencing notable growth in Europe, lolaandgrace is approaching Asia’s travel retail market with a similarly ambitious determination and zeal. “We have set clear, region-specific goals for the Asia Pacific market,” explains Girard. Pointing to the region’s “dynamic” nature, she says that conversations are underway with a number of partners in the area and that the brand is looking to “cement many of these relationships” at this year’s TFWA AP show. With Swarovski’s reputation as one of the foremost purveyors of luxury products on the planet, lolaandgrace already boasts a great deal of name recognition among customers in the Asia Pacific area. “Consumers know that they can expect a certain level of excellence that is synonymous with Swarovski crystals,” says Girard. The brand’s close relationships with their existing retail collaborators will prove instrumental in its impending growth, says Girard, and lolaandgrace is looking forward to establishing “many more” healthy partnerships with retailers across the region. The brand’s presence outside of travel retail continues to surge as well, with the brand boasting a network of stores in the United Kingdom and Italy that continues to expand. Additionally, lolaandgrace has begun distributing its products in Spain, the United Arab Emirates, and Kuwait, while new markets like Germany, France, and Switzerland will be explored in 2014. The brand’s dedication to expansion has paved the way for serious growth in the travel retail sector, says Girard, and lolaandgrace is ontrack to “achieve global market penetration within Europe, the Middle East, Africa, Asia Pacific, and the Americas.” With the brand having just entered the travel retail game, lolaandgrace has already shown an incredible degree of potential within a market notoriously crowded with competitors. Girard says that sales are in line with current targets and states that the brand’s year-end goals will be definitively met. “We are confident that the contemporary fashion-forward spirit of our brand will be a great hit, as our early success in the European duty free market shows.” 

The Tastes of Happiness.

Iconic brands. Delicious choices. And new Travel Retail Exclusives such as REESE’S Pieces and REESE’S White Peanut Butter Cups Miniatures. You bring all this and more to your customers with Hershey’s extraordinary portfolio of chocolate and confections. New Location! Visit us at Stand G31 at the TFWA Asia Pacific Show.

HERSHEY’S

www.hersheystravelretail.com

HERS HEY’S KISSES

REESE’S

ICE BREAKERS

J OL LY RA N C H E R

B R OOKS I DE

Mondele-z World Travel Retail

INCLUSIVE GROWTH

For Mondele-z International, growth benefits all stakeholders

ondelēz International is possibly the largest food company in the world, with approximately 100,000 employees worldwide. Formerly known as Kraft Foods until 2012, the company manages many of the best-known food and snack brands, including cookies such as Oreo and Chips Ahoy, crackers such as Triscuit and Club Social, chocolate such as Cadbury and Toblerone, gum such as Trident and Chiclets, and many more famous brands. Last year, Mondelēz World Travel Retail (MWTR) announced the launch of its category vision, entitled “Delighting Travelers.” The aim of this campaign is clear and concise: to grow the sales of the confectionery category by US$3 billion over the next three years. Currently, confectionary represents 10% of the entire travel retail market. In this category, Mondelēz has seen a year of double-digit growth, outpacing growth in passenger numbers and the growth in the travel retail industry overall. According to Jaya Singh, Regional Director, Middle East & Asia Pacific, Mondelēz WTR, there has been an ongoing shift in the perception of the importance of the confectionery category. “Confectionery was once grouped in with other categories

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

HIBAH NOOR

Mondele-z will continue to grow not only the category but also the industry, for the benefit of all

or given second-tier designation, but it’s now considered a core category by all the major retailers and airport authorities,” he says. “It’s clear that confectionery has been identified as a key growth driver [for any recent tenders] within their overall offering.” Singh says his team in Asia Pacific is strong and that they have proven so by their great success over the past year, not only extending the company’s leadership in confectionery, but also growing the category itself. This highlights an important feature of Mondelēz’s “Delighting Travelers” vision: inclusive growth. The company understood from the beginning that category growth could not be at another category’s expense. Success would require all necessary stakeholders to be communicating and working together toward achieving the potential, and no other stakeholder would contribute energy and training to a strategy that benefitted only one company. With the idea of inclusive growth, Mondelēz has received great support from stakeholders in this region and in others.

Execution of the vision

The company’s “Delighting Travelers” vision was built over many years with a great deal of energy spent looking at where the category was heading. Once its vision was

launched, Mondelēz spent the first year meeting with stakeholders, consulting with them, hearing their points of view and bringing them on board because, as Singh says, “executional excellence is the sum total of all parts in an organization being aligned.” He offers an example of sitting at a round table with the retailer and airport authority to discuss the potential for confectionery, build a plan and then drive changes to various aspects of confectionery offer on the shop floor. Some of these changes so may seem small, such as signposting and improving navigation with call-outs, but have helped drive high double-digit growth. Having brainstormed with stakeholders and brought them onboard, Mondelēz remains focused on implementing its vision over the next 12 months, moving into the execution stage and delivering tangible benefits and growth to retailers.

Expecting strong inclusive growth in Asia Pacific

Singh says the opportunity is huge in Asia Pacific. He feels that with the strong team in the region in addition to the vision and platform developed both over time and in particular over the past year, Mondelēz will continue to grow not only the category but also the industry, for the benefit of all. “It’s always about inclusive growth and enlarging the pie for all. This serves to strengthen partnerships between all stakeholders in our business model.  Jaya Singh, Regional Director, Middle East & Asia Pacific, Mondelez WTR

Diageo

Channeling exclusivity Robust predictions for future tourism growth in the region are fuelling Diageo’s pursuit of differentiation and premiumization in the race to engage travelers and convert interest into spend by

CLAIRE MALCOLM

Diageo’s Shui Jing Fang Lunar New Year pack captured the spirit of eight horses, representing strength and vitality as well as evoking good fortune and luck

he successes of the busy holiday season may be a distant memory as Diageo focuses on second quarter activity across Asia Pacific, but for Katherine Abram, Asia Regional Marketing Manager, Diageo Global Travel & Middle East, the company’s strategy of “bold activations” placed key brands front of mind as consumers flocked to the region’s airports. “Our illustrated Shui Jing Fang Lunar New Year pack captured the spirit of eight horses, representing strength and vitality as well as evoking good fortune and luck. The pack featured a pair of 500-milliliter Shui Jing Fang Wellbay bottles packaged neatly in an illustrated Chinese paper-cut style, a modern take on traditional art form popular during Chinese New Year,” she says. 94

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

The focus in Scotch whisky was led by the limited edition Johnnie Walker Gold Label Reserve, as she explains: “As our celebration blend, it was the perfect choice for the occasion. The metalized gold bottle was a bold gift choice for those looking to bring sophistication and confidence to their own celebrations. “Finally, we stopped holiday travelers in their tracks in Shanghai, Korea and Thailand with our Johnnie Walker Blue Label and Alfred Dunhill pop up stores, which offered the exclusive gift pack for the holiday season.” The popularity of baijiu, which is the biggest spirits category in China and the world according to International Wine & Spirit 2012 research, has kept the Shui Jing Fang brand on the leader board amongst

Chinese travelers and Abram reports that it was a particularly popular gift choice during the Lunar New Year period. In March, Diageo announced the launch of a pioneering new vodka variant—Smirnoff White—a super-premium vodka available exclusively to travelers from July 2014. “It’s an innovation that demonstrates our relentless focus on differentiation and premiumization and will be supported by bold executions at scale across key travel retail locations globally—including Asia, of course,” she notes. Diageo also recently announced the rebirth of Mortlach, which will be welcomed to the Asia duty free portfolio. Says Abram: “In recent times, only a very limited number of bottles of Mortlach Single Malt Scotch

THE CRAFT OF BOURBON

L E A R N A B O U T O U R F I V E S O U R C E S O F F L AV O R

Diageo Whisky have been available globally and sold rapidly to connoisseurs in the know, so we’re very excited to be able to bring the luxurious single malt offering to our Asian global travel customers.” Rather than targeting non-shoppers in the region, the company is focusing on specifically targeting the non-liquor shopper, as Abram explains: “This involves branching out our presence from the liquor section into other retail areas in duty free. For Baileys Chocolat Luxe, for example, where the female shopper is our target, we’ve created promotional spaces within the confectionery area, as that’s a section we know they browse. “Cross-retailer collaboration and incentivization is also another method we use to target the non-liquor shopper. Ultimately, targeting the non-shopper needs to be a joint effort between retailers, suppliers of all categories and airports.” Research is another vital resource contributing to Diageo’s longer-term strategic

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

vision. “We constantly anaylse data from a number of sources such as the World Tourism Organization (UNTWO) and across the Diageo domestic business to inform our strategy and executions,” she says. “We’re very excited by the robust outlook for international tourism, with UNWTO reports projecting that the number of tourists will reach 1.8 billion by 2030, with Asia Pacific and Africa fuelling that growth,” she adds. Abram also highlights the mooted statistic that tourists now account for 40% of total global luxury spending, commenting that travel retail is an important channel for Diageo’s Reserve brands, with the share of the travel retail business held by Reserve set to accelerate. A five-pronged strategic focus is underpinning the company’s growth prospects, covering differentiation, premiumization, luxury, new shoppers (especially female and those in emerging markets) and growing the base business through excellence in retail execution.

“Differentiation and premiumization are particularly important for consumers from emerging economies—we know they love to trade up when they shop in duty free,” she remarks. And the excitement of the global travel retail arena is driving Abram’s own future enthusiasm. “I believe that [it] is set to grow significantly because of the forecasted expansion in travel, the emergence of new middle classes and the desire of consumers for products that they cannot find in their domestic markets. “The channel is playing a big part in the growth of the luxury spirit market, with wealthier travelers seeking out desirable luxury items which are exclusive. Our innovation is focused on meeting the needs of these consumers by providing variants and new products exclusive to travel retail, and by engaging them in the amazing heritage and stories behind our deluxe brands.”  Holiday travelers were treated to Johnnie Walker Blue Label and Alfred Dunhill pop up stores, which offered the exclusive gift pack for the holiday season in Shanghai, Korea and Thailand

H. Mounier

Quiet elegance H. Mounier’s success in Asia is encouraging for future expansion

The Malaysian and Philippine teams have achieved high sales and visibility

H. Mounier CEO Christoph Juarez

The new Prince Polignac Grand Champagne offers a quiet elegance contrary to the extravaganza of overpromising products

H. Mounier has seen great success with its Chinese New Year horse edition

aunched in 1858 as its logo suggests, H. Mounier has a long histor y of trading cognac throughout the world, making it especially appropriate that it now sees such success in duty free. Despite an adverse environment recently, sales of H. Mounier’s products in the Asia Pacific region were good during 2013. The company saw double-digit growth, which CEO Christophe Juarez says is “quite encouraging for [the company’s] future expansion in the region.” H. Mounier has invested considerably in advertising and promotion in areas such as mainland China, Vietnam and Malaysia, including a TV commercial for Polignac, the company’s flagship cognac house in the region. While the focus for this A&P was domestic, it positively affected the company’s position in duty free as well. Juarez says working closely with duty free operators and building long-term relationships is imperative to ensure good visibility, and H. Mounier has been doing business in Asia for a long time. Their Hong Kong subsidiary, established in the 1990s, is a good platform from which to deal with the major players in the area. Over the past year the company has opened new doors with Shenzhen Duty Free, Sky Connection and Lotte. Meanwhile, their Malaysian and Philippine sales teams have had impressive results, with high-visibility store displays. One trend Juarez sees in the duty free marketplace is that the more prestigious players are displaying exceptional products in sophisticated manner. At this top

WENDY MORLEY

end, though affordable given the quality, H. Mounier has a limited assortment of high-end products in crystal decanters, Prince’s Reserve and Prince’s Heritage. Their new Polignac Extra Grande Champagne, while not quite as glamorous, offers an unforgettable experience for the cognac expert. In the tradition of quiet elegance so well represented by H. Mounier, Juarez says: “This is the category to watch in 2014 as a backup to the extravaganza of overpromising products.” At the other end of the spectrum, hardsell promotions are, Juarez feels, threatening the prestige of duty free, especially in emerging markets, where these low-cost promotions are more aggressively marketed. H. Mounier has seen great success with its “New Year” limited editions. This will continue as the company produces “Chinese New Year” editions of their Polignac VSOP, which will appear as a “Luxury Christmas Edition” in other markets. The company’s Polignac Réserve special master VSOP has been so successful across Asian markets that they will be conducting other marketing initiatives throughout the year. This spring, H. Mounier is launching a special smaller size of its highly acclaimed Prince Hubert de Polignac XO. Normally available in a 700mL (70cL) bottle, this elegant cognac with its bouquet of vanilla, cinnamon, candied orange and tobacco, interlaced with exotic, spicy and woody notes will be available in a 350mL (35cL) bottle, packed in a luxurious “lucky drawer” box. This limited product will be available in travel retail and select specialty stores. 

This spring, H. Mounier is launching a special smaller version of its highly acclaimed Prince Hubert de Polignac XO, packed in a luxurious “lucky drawer” box

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

Luxury Spirits Report

The

luxurious east Asians know a thing or two about highend products by

WENDY MORLEY

hen those in travel retail are looking at which spirits to promote in Asia, they need to look up. Way up. The Asian consumer is well educated about luxurious high-end products, and understands the difference between quality and hype. Here are five products and product lines that are well placed to do well in the prestigious section of duty free stores in the region.

The Glenfiddich Cask Collection ready for lift off

William Grant & Sons recently launched an exciting new travel-retail exclusive collection of Glenfiddich whiskies in The Glenfiddich Cask Collection. Each of the three whiskies in the collection offers a distinct flavor profile, appealing to the varied preferences of single malt drinkers. Glenfiddich Select Cask is a soft tasting whisky with layers of sweetness, spice and hints of citrus. Glenfiddich Reserve Cask is mellow and rich, sweet and spicy with a complex, evolving flavor. Glenfiddich Vintage Cask is inspired by the very first Glenfiddich spirit in 1887. It has a smoky, peaty taste with leafy, floral undertones. The Glenfiddich Cask Collection was launched in travel retail in the Americas, and will soon be launched in Asia Pacific and the world. Scott Hamilton, Director of Travel Retail Asia Pacific for William Grant & Sons, says: “We are very pleased about the year-to-date performance of the all brands, especially the Cask Collection range. The next few months ahead will be an exciting time for WGS as we launch Cask Collection to all major airports and partners in Asia Pacific and the world. What the range

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The Glenfiddich Cask Collection offers a choice for each whisky drinker’s discerning palate

now has to offer is to allow customers and consumers the best offering in single malt with pricing and age structure. And with our brand team and master blenders’ great assistance and knowledge you will see a series of travel retail exclusives also launch during 2014, making this a very busy year at WGS.”

Moving to the east side

Vodka has not traditionally been one of the hottest items in the Asian markets, where brown spirits have always been the bigger sellers. But the vodka category is growing at the year-over-year rate of 21% and SVEDKA, a cutting-edge high-quality vodka, has highprofile market activation in South Korean travel retail. SVEDKA Original, Citron and Clementine were launched in January of 2014 in four Lotte locations in Incheon Airport, with a plan to get to eight stores in Incheon by 2015. SVEDKA has been well received, and Constellation Brands, the brand’s owner, is seeing sales increase on a weekly basis. As this is a new brand to travel retail in Asia, they had a soft launch, with strong in-store activation.

Because sales have been so strong, however, in-store promotions are planned for July and August with, says Amanda Dolotowicz, Business Development Manager, “a very attractive offering. SVEDKA packaging is very slick and cool, and we are in line with the travel retail one-liter offering for every product.” While SVEDKA Original is the volume driver, “with the growing cocktail era we are really looking to build on our SVEDKA flavor category,” says Dolotowicz, who confirms that they will be rolling out SVEDKA in India and Vietnam in the coming months. SVEDKA Original is the volume driver, but the growing cocktail era should build volume in the flavor category

The Gran Patrón range services the Asian market with premium barrel-aged tequila and luxury presentation

Smooth, aged and burnished

Tequila has not traditionally been a strong product line in Asia, but with an incredible 30% increase in duty free sales in the area during 2013 versus 2012, ultra-premium Gran Patrón aged tequilas may be changing that. The Asian travel retail customer appreciates and enjoys all high-end, sophisticated spirits, and Gran Patrón tequilas have been continuously increasing in popularity among people with this appreciation. The release of the Gran Patrón line has created a “tier” of Patrón tequilas at the very high end that appeals to people who appreciate this level of sophistication and taste. Gran Patrón Burdeos, aged in Bordeaux wine casks, tastes almost like a cognac but with the distinct agave flavor still present. Likewise, Gran Patrón Piedra appeals to people who enjoy a nice Scotch. Asian consumers have historically preferred brown spirits such as fine cognacs, scotch and other whisky not because of their color but because of the flavor profile that comes from being aged in barrels. The Gran Patrón line, especially Gran Patrón Burdeos and Gran Patrón Piedra, appeal to those consumers who enjoy a barrel-aged spirit. It also appeals to younger consumers who don’t want to drink what their fathers and grandfa-

thers drank yet are looking for a sophisticated, high-value, luxury spirit. These tequilas perfectly fill that desire.

The quintessential blend

Asian travelers are very well educated in cognac, and that makes Asia a perfect market for Grand Marnier’s very limited edition Quintessence, a delicious blend of Grand Marnier and the finest Grand Champagne cognac selected from the family reserve. Using their “double parfum” method of extracting the flavor from orange peels, they enrich this fine cognac with the essence of orange to produce an incredible liqueur. Quintessence has a special place in Asia travel retail, at the intersection of cognacs and liqueurs. Grand Marnier has found the elegant black box and sleek bottle of Quintessence perform very well in the duty free market in Hong Kong, which so far has been its only location in Asia. Currently, talks are underway to extend it into Singapore and China. Anne-Claire Delamarre, Regional Director for Grand Marnier, says: “Asian travelers expect to find an extensive selection of this type of product in travel retail, and with its elegant environment, travel retail is a perfect setting for our finest range.”

The sleek bottle hints at the luxury inside

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Luxury Spirits Report

Diageo’s most expensive whisky release

Asia Duty Free recently had the opportunity to speak with Steve White, Global Marketing Director of Diageo Global Travel and Middle East, about the company’s release of Brora, at £6,995 the highest-priced whisky the company has ever produced. Asia Duty Free: This whisky is over 40 years old, and the distillery itself was mothballed in 1983. How long has this release been in the offing? Steve White: While the distillery finally closed down in 1983, some of the wonderful whiskies distilled there continue to be matured in our Scottish warehouses. Because of the rarity of the liquid, we recently decided to release a limited quantity of Brora 40 Year Old for single malt aficionados and collectors.

ADF: Just how exclusive is this whisky? Is it physically in the stores, and if so, how is it being displayed? Where will it be sold? SW: This is a very limited offering. There are just 160 bottles. Brora 40 Year Old is a fine, pale gold single malt, taken at the natural cask strength of 59.1% from a single cask distilled in 1972. It is the first 40-yearold Brora whisky ever to be bottled, and the oldest and rarest Brora expression ever released. We have chosen to launch this whisky, Diageo’s most expensive single malt, through our exclusive partnership with the World Duty Free Group UK. It was available for pre-order online until April 21st, when it was available for pickup. Any product not sold at that point was made available in select duty free stores.

The beautiful crystal decanter bears the emblem of the Scottish wildcat

ADF: What will whisky connoisseurs taste when they encounter this liquid? SW: Brora 40 Year Old is drawn from the highly peated 1972 reserve. On the nose it is soft and smoky with notes of gently rising honey, fruit, musk and menthol. The palate is exposed to notes of concentrated woodsmoke and ash closely followed by soothing honey and a hint of liquorice, giving way to hazelnut notes. Cereals form an undercurrent of tangy clarity against smoke, salt and toffee flavor. To finish there are immediate hints of eucalyptus and spice, followed by a long, smooth and savoury smoke. Brora 40 Year Old is best enjoyed neat or with a few drops of water.

The exquisite wooden case was skillfully crafted by the Queen’s cabinetmakers at N.E.J Stevenson Ltd

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ADF: How does this exclusive product fit in with Diageo’s suite of whiskies? SW: The trend in travel retail is that consumers are becoming increasingly focused on premiumization. Our strategy is to raise the bar and better fulfil consumers’ experiences. We are confident that Brora 40 Year Old will exceed the expectations of travel retail consumers. As Diageo’s most expensive single malt, it is a prime example of our dedicated efforts to offer luxurious and highly valued products to travel retail consumers. 

This refined whisky liqueur marries 15-yearold Speyside malt whiskies

the company has secured listings and has had relevant promotional activity such as samplings. The company’s focus over the coming year will be on reproducing these activations in other Asian airports. William Birkin, Regional Manager for Global Travel Retail, India, Middle East, Africa & Asia at Drambuie, says the company expects to make steady progress and single-digit growth for Drambuie 15 across the region, aided in part by the exclusive gift pack. “We’re confident that the premium look and feel of the set will guarantee on-shelf stand out, and drive brand awareness within travel retail with our existing customers, while also attracting new and younger consumers to the brand.”

For those who want to understand cognac

Iconic whisky liqueur paired with refined older sibling

This June, Drambuie will unveil an exclusive gift pack for global travel retail. This pack will contain a 50cL bottle each of Drambuie Original and Drambuie 15, a refined older sibling to Drambuie that marries rare 15-year-old Speyside malt whiskies, presented with two engraved glasses. Together, these components will be presented in a striking box designed to showcase the brand’s latest creative campaign, A Taste of the Extraordinary, combining deep golden liquid tones with a monochromatic night sky. The set also includes a recipe for the iconic cocktail made famous by the Rat Pack in the 1950s, the Rusty Nail. Drambuie 15 has performed well in Asia in locations such as Seoul, where

The Chinese slowdown combined with excessive cognac stocks in the entire region made 2013 a challenging year for cognac houses established and not as well established. Alix Le Boulengé, Asian Customer Relations and Public Relations for Bache-Gabrielsen, says the coming year will be one of transition. “Performances will probably still be lower in 2014 than we used to see before the implementation of the new laws in China, but at the same time the sales will probably be built in a safer way.” She confirms that there is still large enthusiasm for cognac in the area, but suggests that consumers are buying more strategically. Bache-Gabrielsen is fortunate that they have very loyal customers who are not as concerned with a big name but have more interest in learning about cognac specificities. These consumers have helped the recently launched Bache-Gabrielsen XO to perform well, and they will also help ensure the success of the Dupuy TENTATION line of vintage cognacs just launching.

After aging for more than 45 years in the same oak barrel and under the close supervision of three successive Cellar Masters, the 1966 TENTATION Vintage Cognac has the mellow taste and aromatic power of a very aged cognac. This cognac was blended before distillation, as was commonly done in those days. Over 40 years have passed since the 1973 Vintage Fins Bois Cognac was placed into very old oak barrels. Because the barrels were old to begin with, the color is very pale and the wood notes are especially light. This cognac is powerful and sharp on the nose, and beautifully light on the palate, with spicy notes of saffron and pepper combined with hints of jammy orange zest. Refined and balanced, the 1988 TENTATION Vintage Fins Bois Cognac has aged in oak barrels for over 25 years. This round and generous cognac presents notes of flowers, fruits and wood, with hints of rose petal, mangoes and oranges. Later this year will bring the launch of the Dupuy AUGUSTE Cognac, a very high-end, 60-year-old Grande Champagne cognac housed in a made-to-measure crystal decanter.  Cognac from one year sometimes has the character and balance that begs to become a vintage

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Liquor News Spun gold Diageo’s innovative new liqueur, Smirnoff Gold Apple, combines Smirnoff No. 21 premium vodka with the flavor of apple, and then adds edible 23 carat gold. In making this product, Smirnoff uses a natural gum that adapts when shaken or stirred, thickening just enough that the flakes of gold remain suspended throughout the liquid, ensuring gold in every smooth and luscious drop. Steve White, Global Marketing Director of Diageo Global Travel and Middle East, said: “White spirits is a key growth area in travel retail, where we can deliver more value for Diageo and for our retail partners. Flavor differentiation is increasingly important to us in unlocking new growth opportunities.

Glittering gold flakes remain suspended in Smirnoff Gold Apple

“With discerning consumers in the channel seeking out exciting new flavor experiences, we are launching Smirnoff Gold Apple as a travel retail exclusive for six months before it is introduced to domestic markets. It offers a great proposition for travelers—an exclusive offering from the world’s number-one premium vodka. We are confident that shoppers will love the flavor and the magic of the gold flakes and will see it as a fitting celebratory drink or an ideal gift for friends.” Smirnoff Gold Apple, exclusive to travel retail until September 2014, is the second release from the Smirnoff Gold Collection. Smirnoff Gold Cinnamon was successfully launched in 2012. One can’t help but wonder how the two of them might taste combined.

Golden shores Mix Amarula Gold with ginger ale or sparkling apple juice

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25 years ago Amarula was launched, and took the world by storm shortly after. The cream liqueur is the 36th most purchased spirit in travel retail, and in certain parts of the world is the bestselling cream liqueur. The company has been successful throughout the past 25 years on the strength of one product, but 2014 marks the introduction of a new Amarula: Amarula Gold. It is expected to be a leader in the markets where Amarula already holds large market share, specifically South Africa and South America. But with recent double-digit increases, Asia Pacific is considered a strong growth market. The company has tasting promotions planned for New Zealand in June 2014. It will also be available in Australia, and brandowner Distell is hoping the variant will soon move into Singapore and Hong Kong. Like its counterpart, Amarula Gold is made from the hand-harvested marula fruit indigenous to subSaharan Africa, double-distilled and aged in oak for 24 months, but this product is not hailed as a relaxing, after-dinner wind-down. This is Amarula’s party drink, and it’s being promoted as the drink you have

when you’re out on the town. Marius Fouche, Distell Group’s Managing Director of Global Duty Free, says Amarula Gold is positioned as sophisticated and cosmopolitan, reflecting the thriving urban nightlife of Africa. The sensation is surprisingly spicy and smooth, with a strong flavor of marula fruit. “The strategic intent of Amarula Gold has been to address the needs of the non-cream consumer to be able to experience this unique marula spirit,” says Fouche. “We have seen that our Amarula Cream volumes have not been affected by the launch of Amarula Gold, so early indications are that we have addressed consumer needs. Looking forward from these early indications we expect positive overall sales growth on Amarula.”

Habanos

A real Cuban cigar Visitors can make their own hand-rolled cigars

The Habanos Festival brings thousands of cigar aficionados to Cuba each year

WENDY MORLEY

The week is filled with entertainment

Thousands of visitors come to the festival each year

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abanos. Throughout the world that word means one thing: quality, hand-rolled cigars. It has meant that for over 300 years. In Cuba, it also means the festival that celebrates the one of the country’s largest export items, and possibly its most famous. For the past 16 years Cuba has hosted the Habanos Festival, the largest setting for cigar enthusiasts in the world. In 2014, the fiveday festival, which took place from February 24th through 28th, paid tribute to four of the association’s most prestigious brands: Hoyo de Monterrey, Partagás, Trinidad and H. Upmann. Each year, the festival grows in size and stature. Last year the festival welcomed 1,200 delegates from nearly 80 countries; 273 journalists and camera operators from 30 countries, across five continents. The Trade Fair, which is there for the business side of Habanos, had 72 exhibitors from eight countries and more than 2,000 visitors from the business world, including those dealing in tobacco and luxury products. The Habanos Festival brings the visitor to every point on the cigar’s journey, from tobacco fields to smoking the finished product. They can visit tobacco plantations and the iconic Habanos factories. Visitors can take a master class on cigar rolling technique Totalmente a Mano, which means “totally handmade.” Then they can watch the pros roll them in a fraction of the time. Every year visitors discover the history, culture and secrets behind centuries of Cuban tobacco tradition.

The first night of the festival offers a welcoming event. This year the event was dedicated to Hoyo de Monterrey and Partagás cigars. Entertainment included a synchronized swimming show and a spectacular performance by Juan Formell, winner of two Latin Grammys in 1999 and 2013, and his legendary Cuban band Los Van-Van. Because it’s Cuban, the Habanos Festival always mixes knowledge with a lot of fun. The week is filled with entertaining events such as pairing exclusive international beers with cigars, lectures on such topics as Habanos in Cinema, a lesson on Habanos Vintage, with an aged Habano tasting and a contest to see who can get the longest ash. Midweek, guests at the Havana Museum of Fine Arts had the exclusive pleasure of being the first to sample the new Trinidad Vigía vitola (ring gauge 54 x 110 mm long), with a heavy ring gauge and short length, making it possible to enjoy the exclusive Trinidad flavor in an innovative format. As the week draws to a close each year, guests take part in a celebrity-filled gala evening packed with entertainment—this year’s headliner was Tom Jones—and a yearly humidor auction, with proceeds going to Cuba’s public health system. This year, the evening celebrated H. Upmann. Guests had the exclusive opportunity to sample the first Reserva made by the company in its 170-year history. For information on the Habanos Festival, go to www.festivaldelhabano.com. 

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American Whisky

Maker’s Mark will soon increase production by 50%

Woodford Reserve is one of the premium expressions BrownForman promotes in the region

AN AMERICAN

IN ASIA American whisky finds a receptive audience across the world WENDY MORLEY by

fastest-growing spirits in duty free and travel retail worldwide, at 9% growth each. According to the Distilled Spirits Council of the United States (DISCUS), bourbon and Tennessee whisky exports snowballed over the past decade, from US$350 million in 2002 to just over US$1 billion last year. Japan is the export’s sixth-highest market, with 57% growth. By dollar, it is the second-strongest growth market, behind only Germany. While consumption of American whisky is still low throughout the region compared to Scotch, it has seen phenomenal growth since the year 2000. Numbers from the US International Trade Commission show American liquor exports to China have increased 1020% in that time, Singapore 945%, Hong Kong 400%, Korea 406%, Vietnam 8900% and India 975%. These numbers include all liquor exports from the US, but 71% of that number is made up of American whisky. These figures do not mean the sales to the area are enormous, because they started Exports of American whisky reached over US$1 billion in 2013 (chart out quite low, but they do demoncourtesy Distilled Spirits Council of the United States (DISCUS) strate an incredible upward trend. Since 2005, DISCUS has been promoting American whisky and other spirits in these countries and others around the world, and lobbying governments to change laws that make it more difficult for American liquor producers to do business. In 2012 a 20% tariff that had been in place in Korea on imported whisky was lifted, taking effect immediately for American whisky and gradually for Scotch Sales of American spirits are growing and Irish whisky. Sales of Ameriexponentially in emerging markets sia is a well-known Scotch whisky market. But, as the recent purchase of iconic American company Beam by Japanese whisky giant Suntory hints at, the popularity of American whisky (mainly bourbon and Tennessee whisky) has been exploding throughout Asia and especially Australia in recent years. According to the International Wine & Spirit Record (IWSR), Australians consume more American whisky per capita than even Americans do, and New Zealand comes in third. Again according to the IWSR, American and Canadian whiskies are the

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can whisky went up 73% in Korea in the two years after the tariff lifting was announced, from a little over US$8 million per year to just under US$16 million per year. Similar results were seen in Australia after the lifting of their tariff in 2005 and in China after the reduction of their tariff that same year. Sales of US spirits doubled in Australia, reaching well above US$160 million in 2012. In China sales increased 319%, from approximately US$3 million per year to US$11.24 million per year. The numbers in China, it must be said, are not enormous. But the trend is, and so is the population. With effective marketing and good distribution, the market could easily blow open. While undoubtedly the lifting of the tariffs has played an enormous role in the increase in sales, the popularity in the area is thought to also be in part from a burgeoning young middle class that wants to drink sophisticated spirits but does not want to drink what their fathers and grandfathers drank. American whisky has a rugged, independent image that appeals to this younger generation.

Supply and demand

Mark Lawton, Beam Global’s Travel Retail & Licensing Manager for Australia & Pacific Islands, says they are seeing double-digit growth in the region for American whisky, especially in the bourbon category. “In already mature North American whisky markets like Australia and New Zealand we are achieving growth with the introduction of premium expressions such as Jim Beam Signature Craft, which is driving the value for all travel retail customers.” Beam’s well-known bourbon Maker’s Mark has seen such an upswing internationally that the company is making a US$67 million investment in its Kentucky

Jack Daniel’s 27 Gold promotion in Sydney

distillery by installing a third still. This will increase production by 50%. Rob Samuels, Maker’s Mark Chief Operating Officer, said: “Maker’s Mark bourbon takes time to age to perfection, and that’s left us running a bit short of supply in recent years due to the ever-increasing demand.” According to Beam executives in 2013, the three markets with particularly demanding growth have been Japan, Australia and Germany.

Woodford Reserve and the Jack Daniel’s family

Finbar Boyle, Brown-Forman Travel Retail Director for Asia/Pacific, says: “American whisky is growing across Asia Pacific as consumers are looking for more premium expressions from iconic brands such as Jack Daniel’s. Consumers appreciate the versatility of American whisky, from enjoying Woodford Reserve Kentucky Straight Bourbon or Jack Daniel’s products in cocktails or over ice. As the understanding and appreciation for the flavor profile and craftsmanship of American whisky grows we will continue to see increased demand for premium and innovative expressions from the leading brands.” Brown-Forman is currently promoting Woodford Reserve for travel retail in the region, while their Jack Daniel’s brand is the best-selling American whisky in the world and especially strong in Australia. According to Boyle, Woodford Reserve is reaching new markets in the region, where Gentleman Jack Tennessee Whisky is also continuing to grow. The company also recently launched Jack Daniel’s 27 Gold. This super-premium expression, initially released exclusively to travel retail, was created for the more discerning whisky drinker and is selling very well in select airports across all of Asia and the South Pacific, attracting new consumers to American whisky.

Sampling at Sydney airport

Wild Turkey Spiced helps rum drinkers graduate to bourbon

Wild Turkey Spiced: pioneering innovation

Gruppo Campari travel retail recently launched another first-to-market product with Wild Turkey Spiced in Australia, New Zealand and the US. The launch is another pioneering innovation by Wild Turkey, marrying the popular “Flavored Bourbons” and the “Spiced” subcategories. With this product, Wild Turkey provides an exciting new product for the adventurous travel retail shopper. Wild Turkey Associate Master Distiller and Bourbon Hall of Famer Eddie Russell created this unique product that mixes like spiced rum but retains its bold bourbon character. It can be easily enjoyed on its own, but really shines when mixed with cola. “I wanted to develop a liquid that brought to life the best of our robust bourbon, while borrowing cues that have made island spirits so appealing,” said Russell. “As the category continues to grow, many people, especially rum drinkers, are becoming curious about bourbon and its sophisticated, more pronounced taste profile.” Supported by a unique campaign that conveys what life is like on the “Island of Kentucky,” this product maintains Wild Turkey’s signature bold flavor while highlighting notes of vanilla, caramel and cloves. Like all Wild Turkey Bourbons, Spiced is born from a natural aging process using American oak barrels with the deepest number 4 char—or “alligator” char—that is used to age every Wild Turkey Bourbon variant. With a robust Australian market, a rapidly increasing Asian market and the Japanese purchase of an iconic American brand, American whisky is on a rocket in Asia, and ready to launch.  www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Rémy Cointreau

maps out organic growth in Asia Building brand presence through engaging storytelling and lovingly crafted products is a winning strategy for the company’s global travel retail business, but building customer loyalty is an ongoing challenge CLAIRE MALCOLM

F by

ollowing a successful 2013/14 holiday season, Rémy Cointreau is rolling out a number of exciting new brands and activations in Asia from its global travel retail business base in Singapore. “The Chinese New Year is always an important time of year for us and we had a new product launch with the Rémy Martin Coupe Shanghai, which despite the slowdown in spending by Chinese consumers has done pretty well,” says Matthew Hodges, Global Marketing Director, Rémy Cointreau Global Travel Retail. A reinterpretation of the blend of Rémy Martin that first went to Shanghai in 1903, the product was launched exclusively with DFS in Singapore last December, before being rolled out around the world in time for Chinese New Year this January. Hodges is upbeat about the mid-term impact of China’s austerity policy. “I don’t think it is as bad as the industry has talked itself into. It’s not necessarily a fundamental change and there are already some bright points on the horizon. The effect was a step change and, although we have seen it ripple outwards, I think most of the effects have perhaps fed through. “We have quite a few things coming up for Q2 2014 starting with our current ‘Fly Me To’ multi-brand promotion in Singapore and Hong Kong featuring Rémy Martin, Mount Gay, Russian Standard and Piper Heidsieck,” he notes, adding: “It’s something we’ve done before, but a new iteration. It works well because it’s a collection of premium brands and is much more about the cocktails. It’s also a little bit tongue in cheek and a nod to the golden age and glamour of travel.” Hodges is also excited about the launch of Bruichladdich Scotch whisky, follow110

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ing its acquisition by the company 18 months ago. “We launched the exclusive travel retail range in nine places, with four out of the five products exclusive to travel retail, and it’s going fantastically well. We will be launching it in this region in the next few months. “The idea behind the brand is to disrupt the category. We want to be different so there are no age statements on the products and everything is distilled and matured on the island of Islay. Where possible, we even use barley from local farmers; it’s about combining the ideas of terroir with the distillation of whisky,” he adds. Hodges has high hopes for the organic single malt Octomore 6.2, which is the world’s most heavily peated whisky but its “lighter floral notes and an almost zesty lemony taste”, he says makes it very accessible to first-time malt consumers. Its success in Europe has been something of a phenomenon, as he explains: “People are going into airports on budget tickets just to gain access to the store to buy the product, and then leaving without actually flying. “Part of its appeal is that although it comes from a distillery that is largely as it was when it first opened in the 1880s, it is extremely active on social media; and it’s

The Botanist, a premium gin which has 31 botanicals and which comes from the same distillery as Bruichladdich, is be unveiled shortly

the only brand I know that does tastings on Twitter.” Consumers fall into two clear categories: those who are interested in its niche distillery with its interesting history and distinctive positioning, and then the connoisseurs who are passionate about the category. Hodges also believes that the packaging has an important role to play along with the history. “The whole story of bringing a redundant distillery back to life, plus having a slightly anarchic view of the category; this is bringing other people in.”

Imperial Collection Super Premium Russian Vodka is available at Selective Venues & Retailers DISTILLED AND BOTTLED IN RUSSIA BY LADOGA GROUP

WWW.LADOGASPB.COM

Rémy Cointreau Getting connoisseurs through the door clearly isn’t an issue for Rémy Cointreau, but converting non-shoppers is proving to be more challenging. “Being interesting at the front of the shop is the easiest way to get people in, but from the research I’ve seen—and it’s a beguilingly simple answer—often the reason for not shopping is that their ‘need for liquor is currently fulfilled’,” he says. “However, there is more to it as they may already have a cupboard full of their normal purchases and it may be a case of ‘I’m not looking to expand my repertoire to other things’. This is where we need to hook them in and is why we focus on cocktails and expanding the drinks repertoire rather than the kinds of promotions that just steal share from one brand to another,” he adds. Catering to the unique requirements of the Asian consumer also necessitates a different approach, as he explains: “They like things that are exclusive rather than necessarily new; anything that conveys the privileged access that someone might have because they travel or travel frequently, or visit more far-flung airports. “Education in the art of cocktail preparation doesn’t work so well here either, because most people consume in the on-trade where drinks are made for them.” Rémy Cointreau regularly conducts its own studies and Hodges reports a consumer shift from more status-driven products to those that are a little less extrovert, and which have more history. “This is great for Rémy Martin as all our products have lots of history, but it’s important to find a way to make that story accessible in just two minutes.” he comments. There is also the industry bête noire topic of customer loyalty. “In this business there are a billion passengers every year which, if duty free was a country, would make it the size of India. The catch is that our population changes every single day so the chances of building a relationship are frustratingly low.

Rémy Martin Coupe Shanghai was launched in time for Chinese New Year

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“The loyalty opportunities are limited by definition when you have leisure travelers who travel once or twice a year, but there is a high frequency group that tends to use the airport more like an executive convenience store.” Rémy Cointreau does work with its partners to push the loyalty agenda, but it’s a time-consuming endeavour, as he explains: “It’s not something we’ve done enough of and we want to bring something else to it as well, particularly in destinations like Singapore or Hong Kong. “If someone is visiting, for example, they are likely to go out for drinks or dinner and there’s no reason why we can’t help them with their choice of venue when they arrive, and if they’ve had a great time, then again help them buy something at the airport on their way home.” And that could be gin, which Hodges says is coming back on trend. “It’s been a world of vodka over the last few years but now there’s a lot of craft gin around. We’re in the process of launching The Botanist, a premium gin which has 31 botanicals and which comes from the same distillery as Bruichladdich. “Mad Men and other shows have revitalized the interest in martinis; they’ve become cool yet again. It’s also such an interesting product, with so much flavor and versatlity.”  Rémy has high hopes for the organic single malt Octomore 6.2, which is the world’s most heavily peated whisky

Scandinavian Tobacco Group

Pipeline

shift FOR STG

his year is shaping up to be an “exciting” 12 months, according to Patrick Zhang, International Business Manager for the Scandinavian Tobacco Group (STG), as the company turns its attention to pipe tobacco and handmade cigars as a primary focus for 2014. “Last year, the figures were okay overall and cigarillos were our main business, but there was tough competition and the introduction of products not seen before in Asia, so while sales were stable we did compensate through our other categories,” he explains. Group strength in the Other Tobacco Products (OTP) segment is key to the company’s penetration objectives and STG is augmenting its Asia duty free presence this year with a number of new products and lines. In the Asia domestic market, the successful introduction of W.Ø. Larsen pipe tobacco has filtered across to the duty free arena, as Zhang explains: “We saw strong volume in Japan, Malaysia, China, Hong Kong and Macau. So we are trying to build on this by introducing limited editions through selected retailers such as Hong Kong Duty Free, and we also just got listed in a couple of Chinese airlines in the inflight category. “We use these channels as an entry point, and launch with extremely limited quantity to bring up the brand image first and then introduce regular items under the brand, which will also be listed Asia-wide.” In 2013 the company also relaunched the Borkum Riff brand. “This is the best-selling

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The Other Tobacco Products business is moving in a different direction for the Scandinavian Tobacco Group as pipe tobacco gets an on-trend makeover and little cigars mean big business by

CLAIRE MALCOLM

For Asia, STG is focusing on a couple of international brands including Macanudo, but is also trying to bring more competitive brands and products to the market

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Scandinavian Tobacco Group

mass-market pipe tobacco in domestic and duty free, and with the introduction of a new transparent outer in 2013 to support the colorful new packaging we saw a spike in consumption and purchase.” Although cigarillos are no longer in pole position, Café Crème remains the focus for the category and, following a brand image overhaul, Zhang says that the company is optimistically looking at a late second half/Q4 launch to capitalize on Christmas traffic and the next Chinese New Year. “We are updating Café Crème as we want to maintain it as the leading market brand across Asia duty free and, at the same time, we are also launching little cigars which are a hybrid product between premium cigarettes and cigarillos.” The Captain Black brand, which includes little cigars, is also being relaunched in the region following the end of a fouryear hiatus. “We see up-trade from premium cigarettes so it’s a good thing to have as the retail price between premium cigarettes and mass-market cigarillos often has a significant gap. It’s also easier for consumers to buy into, plus the packaging is more cigarette style,” he says. The consumer demographic is also evolving. Says Zhang: “You see two completely different types of consumer: one is mature, over 50 years old and has smoked a pipe for a long time; and then you get the younger generation. “In Asia especially we are seeing 20- to 30-year-olds picking up a pipe, often very trendy ones, so there is a resurgence of interest and a definite growth spurt with year-on-year growth, especially in Southeast Asia, driven by flavored tobacco.” China is also home to a growing number of pipe shops, which is giving additional impetus to the case for expansion of the pipe tobacco category. “Different markets are driven by flavor preferences. In Thailand they like cherry and Malaysians love vanilla, so for territorial differences we use those preferences to allocate different shelf space,” he notes.

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“We are also focusing on premium products with items like collectible tins for example. We see a mix of purchase for personal use and gifting for limited editions. There isn’t a big trend in terms of gifting culture, but we think it will pick up slowly,” he adds. Handmade cigars is the other focus for STG in its export markets, as Zhang explains: “For Asia we are focusing on a couple of international brands including Macanudo, but we are also trying to bring more competitive brands and products out here.” “People are quite willing to try different things in the duty free environment when it comes to handmade cigars. Promoters are a key influencer for the consumer when considering a purchase, and we provide regular training to all our partners to support this.” This cosmetic sales technique is adding value to the customer experience which Zhang says is especially important for premium product sales, in direct contrast to the “grab and go cigarette” purchase mentality. Expansion into new territories is also on the cards for STG. Says Zhang: “We are trying to step into Japan. We already sell well in the domestic markets, but Japanese duty free right now is still only open to Davidoff and Cohiba, plus we don’t have dedicated wall units for OTP, with the majority of space focused on JTI and BAT products, as it’s a very cigarette-driven market. “It’s interesting to us as Japanese consumers travel outside quite often and we are well covered in the destinations they travel to, so our products are well displayed and we see Japanese consumers purchasing.” STG’s presence in major land border stores is equally valuable, with the volume of passenger traffic, and a tendency for travelers to max out their allowance, driving up average spend.

In the Asia domestic market, the successful introduction of W.Ø. Larsen pipe tobacco has filtered across to the duty free arena

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Tobacco News

The Neos Cigar Company began producing fine cigars in Belgium in 1903. Recently, Neos flavored Minis have been extremely popular, especially in the Asian market. And this May, more than 110 years of cigar manufacturing are resulting in an evolution, as brandowner J Cortes launches their Neos Selection 50 cigars. These fine Java-wrapped cigars are slightly thicker than a traditional mini cigarillo, giving a medium-bodied flavor sensation while retaining that frontier feel of a traditional cigarillo. The Selection 50 cigars from Neos come in a superb, sleek black metal tin, filled with 50 cigars. Short and friendly, this small cigar is perfect for the individual who wants the taste of a cigar but with a smaller profile.

Neos Minis are perfect for the cigarillo aficionado

Neos’ flavors do exceptionally well in Asian travel retail

“Great cigars don’t need to shout.” The Davidoff name is synonymous with subtlety, sophistication and a discerning palate. Davidoff Classics were made for individuals who know that a great cigar will only reveal its depths of flavor to those who will truly appreciate them. They are, and always have been, created with passion and dedication. Davidoff recently began selling three of their timeless classics together under the banner “great cigars don’t need to shout.” These Davidoff Classics are the choice for the true cigar connoisseur who demands a unique mix of subtlety and sophistication. Included in this collection are Davidoff No. 2, Davidoff 2000 and Davidoff Special R. Davidoff No. 2, launched in 1968, is woody and earthy. With a complex but harmonious blend, floral aromas and a refined, smooth aftertaste, this cigar was the cigar of choice for Zino Davidoff himself, and was one of the first to wear Davidoff’s white band.

Davidoff 2000, the company’s first Corona and the best-selling cigar around the world, defined a generation. It contains notes of coffee and pepper, with a creamy aftertaste. Davidoff Special R contains three unconventional tobacco leaves within its wide ring gauge, giving rise to pronounced spicy flavors and a creamy aftertaste. Its tobacco is from the Dominican Republic, its wrapper from Ecuador. The relaunch of the Davidoff Timeless Classics under the banner “great cigars don’t need to shout” will be sustained by the global Davidoff brand campaign “Viva Subtlety – Viva Sophistication.” Davidoff’s extraordinary Timeless Classics are now available together in select locations in travel retail and select tobacconists worldwide.

Three timeless classics from Davidoff, available together

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The evolution of the cigarillo

ASIA DUTY FREE & TRAVEL RETAILING MAY 2014

Mars ITR is a leading player in the confectionery category. We combine insights, vision and global strength with powerful brands to create fantastic in-store opportunities. Contact your local account manager and see what we can accomplish together!

Visit Mars International Travel Retail at booth 523

They sell as good as they taste