Asia TFWA WE October 2016 by Paramount Publishing Ltd.

TFWA WE 2016

DUTYFREEMAGAZINE.CA OCTOBER 2016 · TFWA WE · VOL 20 · NO 2

India makes waves in TR p. 8 Japan capitalizes on tourists p. 22 Incheon Airport looks at future p. 30

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LETTER FROM THE EDITOR

Exciting

future A

sia continues to be the land of extremes. While the travel retail industry in the region suffered a blow when the Chinese government put a moratorium on the conspicuous consumption of luxury goods, still the region as a whole, including China, is traveling more and more, creating ever-growing and everchanging opportunities. The duty free industry is not limited to airports and border stores. Korea is already a hotbed for downtown duty free shopping, and Japan is not to be outdone. A surge in foreign tourists in the country is supporting a surge in duty free growth in downtown Tokyo and now Ginza, with Shinjuku on the horizon. Meanwhile, duty free in India is just beginning to come into its own. While operating in a challenging environment due to limited space, regulations and space restrictions, the country is on the verge of becoming the second busiest for duty free in the region, according to m1nd-set CEO Peter Mohn. Interviews with DDFS’ Abhijit Das, Flemingo’s Paul Topping and Ahn Sang Joon, from Kempegowda International Airport Bengaluru, show the future is bright in India, for arrivals and departures both, with rapidly growing passenger numbers, a gifting culture and a customer base that is becoming increasingly wealthy. With success comes responsibility. While the duty free industry as a whole takes its role in global improvement very seriously, in this issue we focus on the efforts of Tiawan-based Ever Rich Duty Free and luxury travel retailer DFS and their support of the communities in which they operate. One cannot discuss travel retail in Asia without mentioning Incheon, in Seoul, and Changi, in Singapore. Kim Bum Ho, Deputy Director of Incheon International Airport Corporation’s Marketing Group, discusses the airport’s plans for success since its recent setback. Changi, meanwhile, continues on its course of offering new, different and spectacular, this time with a rare partnership: China International Duty Free has partnered with DFS to create the first premium Chinese tobacco boutique outside China. While it’s true that the industry has had a shake-up in Asia, this certainly doesn’t imply a precarious future. Never before have there been so many ways to reach potential customers, and never before has it been so possible to communicate with them and help them communicate with each other through social media. Whereas the older Asian customer was predictable and this was beneficial to a few companies, the Millennial is open to the global experience, offering an extraordinary number of possibilities to suppliers and retailers alike. As some suppliers have noted, the consumer is changing and figuring out the new customer takes some effort, but that is an enormous opportunity. The future of travel retail in Asia is exciting; we felt it when putting together this issue of Asia Duty Free, and we hope you feel it too. Kindest Regards,

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

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

OCTOBER 2016 · TFWA WE · VOL 20 · NO 2

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. October 2016, Vol 20, No.2. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. ©2016 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 SENIIOR EDITOR Wendy Morley wendy@dutyfreemagazine.ca ASSOCIATE EDITOR Jas Ryat jas@dutyfreemagazine.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca CONTRIBUTORS Rebecca Byrne Claire Malcolm

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

CONTENTS

What’s inside LEAD STORIES 8 Regional Report: India A RISING STAR IN TRAVEL RETAIL

India is making waves in duty free. With predictions that it will become the second biggest market for travel retail in Asia by 2020, the future is bright for travel retailer operators in the country

16 Malaysia Airports CHANGING FOR GROWTH

Malaysia Airports (Niaga) Sdn Bhd, also known as Eraman Malaysia, wholly owned by Malaysia Airports Holdings Berhad, continues to change with the travel retail market to ensure maximum profitability

18 Corporate Social Responsibility MAKING THE WORLD A BETTER PLACE

A successful corporate social responsibility program can play a major part in a company’s prosperity. Two leading duty free operators, Ever Rich and DFS, show how their commitment to helping communities in Asia is creating a positive impact on society

22 Japan downtown duty free BIG IN JAPAN

Japan is seeing a flurry of downtown duty stores launching to capitalize on the rapidly growing number of tourists visiting the country

28 China International Duty Free LUXURIOUS SMOKEFILLED ROOM

Chinese brand marketer China International Duty Free has unveiled a one-of-a-kind showcase for high-end Chinese tobacco products in partnership with the world’s leading luxury travel retailer

30 Incheon Airport INCHEON AIRPORT LOOKS TO THE FUTURE

In an exclusive interview, Asia Duty Free talks to Kim Bum Ho, Deputy Director of Incheon International Airport Corporation’s Marketing Group, about the airport’s plans for success since its setback in 2015

FEATURES m1nd-set believes India is key Rise and shine for Moroccanoil

34 36

Success is in the bag for Coccinelle Altimetre debuts at TFWA WE

40 44

48 LEAD STORIES 46 Furla BETTING ON EXCLUSIVES

The travel retail exclusive handbag is now a permanent fixture in Furla’s line-up, as Global Travel Retail Director Gerry Munday explains

48 Shiseido Travel Retail SPEAKING THE DIGITAL LANGUAGE

A digital animation at Singapore Changi Airport using motion-sensing technology has been the latest tech-savvy way for Shiseido to target Chinese travelers and the millennial generation

50 VP International BREAKING GROUND

Over the past year VP Brands International made the most of its strengths, having a spectacular year in all markets, including GTR

52 Brown Forman STRONG FOUNDATION

Despite a fragile GTR market, American whiskey continues to thrive – this helps keep Brown-Forman strong as the company journeys into single malts

54 Diageo NEW MAN AT THE HELM

Under Diageo’s new structure, Global Travel moves to London, where Dayalan Nayager has taken on the leadership role

FEATURES A tour of Edrington’s distilleries Liquor News

56 58

Davidoff’s many creations Loch Lomand’s resounding debut

60 62

â&#x20AC;&#x201A; REGIONAL REPORT: INDIA

A RISING STAR IN TRAVEL RETAIL India is making waves in duty free. With predictions that it will become the second biggest market for travel retail in Asia by 2020, the future is bright for travel retailer operators in the country by

REBECCA BYRNE

The retail stores at Bangalore Airport were completely refurbished last year

ravel retail in India is challenging for its operators due to a rapid increase in national and international passengers, space restrictions in airports and competition from nearby major hubs in the Middle East with substantial duty free facilities. However, the opportunity for growth is outstanding. Asia Duty Free talked to three market leaders about the opportunities and challenges ahead.

Continued reinvention at DDFS Delhi Duty Free Services (DDFS) offers the largest duty free retail space in India, with over 1,000 brands and 43,000 products. The company has grown its operations every year since its 8

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

inception in 2010 according to Abhijit Das, Head of Marketing. With a turnover of US$144 million in its last fiscal year, DDFS expects future growth of over 10% per annum. The company continues to reinvent itself in order to attract customers. It is currently undergoing renovations to create new walk-through shops at arrival and departures, as well as adding many brands. Along with the renovated stores, DDFS is implementing loyalty and customer engagement programs and innovative marketing campaigns, with the aim of being the most preferred duty free store at its airports. Arrivals accounts for 65% of DDFSâ&#x20AC;&#x2122; business as nationals and expats working in Delhi find it more convenient to shop

REGIONAL REPORT: INDIA

Ahn Sang Joon, Vice President – Commercial, Kempegowda International Airport Bengaluru

on the way home. Non-Indian international travelers still shop more in departures. Liquor accounts for 55% of sales, followed by perfumes and confectionary at 24%. Other key categories are fashion, confectionery, tobacco and Indian souvenirs. Das believes that the duty free market in India will continue to lead the growth curve, commenting: “This is primarily due to the strong economy, stable government, more Indians travelling abroad for holiday, high disposable income and a population more exposed to media.” The difficulties he sees ahead include a slowdown of purchases from the Chinese and Europeans, the weakening of many currencies, deteriorating global economic conditions, and deep

Delhi Duty Free offers the largest duty free retail space in India, with over 1,000 brands and 43,000 products

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

Perfumes and Cosmetics are popular with the domestic traveller

discounting by other duty free shops in the region. The impact of the proposed goods and service tax is also a consideration.

Flemingo: Both broad and deep Flemingo is the biggest player in duty free in the country, with 38 stores. Plans are afoot to increase space, upgrade, improve customer interface and increase product selection in the new stores by the end of the year. Talent in space planning has been transferred from Flemingo’s partner, Harding Retail, which runs shops on cruise ships, in order to ensure the new stores maximize revenue from every square foot. Paul Topping, Director and Board Member, remarks that

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REGIONAL REPORT: INDIA

in the second-tier airports in India, where Flemingo operates the majority of the duty free stores, the company has seen double-digit passenger growth. At Mumbai airport, where the company has a joint venture with DFS, there has been an encouraging growth in traffic since June this year. To attract customers, Flemingo continues to find innovative ways of bringing customers into its stores. A recent link with Bollywood, for example, bringing stars into shops, was a 65% of Delhi Duty Free’s business takes place in arrivals resounding success, particularly with the millennial audience. The Indian demographic at the airports is wide and Flemingo local and national government rules. For example, we are not has introduced measures to capture all incomes. For example, in able to sell local India liquor outbound to tourists wanting to Mumbai, some customers were intimidated by the large duty free take home local products such as Indian wine.” store so the company “red shop” with lower-priced products and On the positive side, Topping says President Modi has cut-price deals. At the other extreme, Flemingo has introduced encouraged travelers to come to India with the introduction of a system for contacting, monitoring and tracking VIPs to give the e-visa. He adds thatt the economic growth is more consistent them a tailored service. Likewise, they operate a duty free sales than other major economies such as China. However he has team in the only business class lounge in Mumbai airport. This a word of warning for newcomers to travel retail: “Increasing interest in Indian duty free by travel retailers continues to push enables the company to continue to push the boundaries on up rent paid by operators; many global duty free companies have premium product listings in whiskey, cognac and wines. entered the duty free market and struggled to make it profitable.” Flemingo’s arrival business continues to generate the largest He concludes that the potential is there. “Indians have been sales and growth. At some airports in India, arrivals purchases and continue to be big spenders in duty free. We are encouraging can hit 90% of the mix. In Mumbai, over four million passengers them, through initiatives such as pre-order and price guarantee, are workers going abroad, who have limited capacity to buy on to buy at home in India” departures and will save their allowances for arrivals. Flemingo has expanded categories in arrivals to include watches, health Bangalore preparing for colossal growth supplement and sunglasses to increase revenues. Bangalore International Airport Ltd is the fastest growing airport With 15 years’ experience in India, Flemingo has led the way in India and the third largest in India after Delhi and Mumbai. In for the industry to work with the government, but there is still 2015 the passenger growth was 23%. On the retail side, sales saw work to be done, as Topping says: “We still see issues with the

Flemingo has joined forces with DFS to create a highly innovate store in Mumbai

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

REGIONAL REPORT: INDIA

a 42% growth last year, and this impressive growth is continuing during 2016. Ahn Sang Joon, Vice President – Commercial, Kempegowda International Airport Bengaluru, has been charged with a mandate to shake up the travel retail and ensure its growth matches the rapid growth in passenger numbers. With 55 shops at the airport and 10 in duty free, the challenge is to ensure the offering meets the demands of the international traveler. Ahn comments: “India is a country of gifting culture as well as care for relatives and friends. India is a young country with 20% of the world’s working population. Also India has strong growth in wealth and middle-income population.” Sixty percent of the passengers travelling in the airport are Indian business travelers aged 25-34. To cater for this younger demographic the airport must embrace new technology to appeal to this group and provide targeted information through their total journey. The majority of travel retail, 70%, is purchased in the 500-square-meter arrival store. Within duty free, popular products are single malt, tobacco and confectionery/gift items. In

domestic retail, confectionery and perfumes and cosmetics are popular. Ahn comments: “Indians have aspiration for brands and authentic products. So we need to grow the product offer across all travel retail categories like packaged foods, dining, branded apparel and accessories, consumer electronics, personal care and affordable luxury brands.” Ahn’s aim is to make Bangalore Airport the best commercial airport in India, similar to world class airports like Changi, Dubai and Hong Kong within five years, with the commercial business growing tenfold by 2025. This success will depend on how well the airport is able to align with its partners in the execution of every detail. “As an airport in an emerging market, we are required to have closer relations with and more involvement in the day-to-day operations. Getting attention and timely cooperation from concessionaires is the main challenge and the most important part,” comments Ahn. The long-term challenge is to manage the congestion of the rapidly increasing passenger numbers. A second terminal has been planned for 2020-2021, which will have capacity for 35 million more passengers.

Flemingo is the biggest player in Indian duty free with 38 stores

Marketing initiatives, such as recent link with Bollywood, encourage passengers into the stores

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

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MALAYSIA AIRPORTS

Changing for Growth Last year Eraman officially opened its spectacular departures emporium in klia2 as the main concessionaire of the terminal

raman started out with high-end fashion boutiques at Sultan Abdul Aziz Shah International Airport in Subang in 1998. Since then the company has expanded its business in Malaysia to five international airport and two domestic airports including KLIA and klia2. Positioned as the largest duty free and airport travel retailer, Eraman offers a wide range of competitively priced duty-free, lifestyle and F&B products at major Malaysian airports, backed by excellent customer service. The company has continuously placed great emphasis on creating a memorable airport experience for travelers, fostering a sense of place. In this regard, Eraman continues to provide customers with a wide selection of local and international quality merchandise at competitive prices while actively pursuing customer service excellence which is complemented by a ‘one-stop shopping centre’ concept for the customer convenience. As such, Eraman believes in interspersing both retail and F&B together. The availability of a wide choice of both shopping and dining outlets complements the overall offering provided to travellers. Zulhikam Ahmad, General Manager, Malaysia Airports

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

Malaysia Airports (Niaga) Sdn Bhd, also known as Eraman Malaysia, wholly owned by Malaysia Airports Holdings Berhad, continues to change with the travel retail market to ensure maximum profitability by

REBECCA BYRNE Liquor and tabacco are among the key product categories which generate the highest revenue for Eraman

(Niaga) Sdn Bhd comments: “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, which means that even though customers might be in the airport, they can still be spoilt for choice and shop as if they are in the city with plenty of options of brands and product categories to choose from.” Looking to the future, the company will continue to maximise target revenue by several methods. These include leveraging strategic partnerships with a number of travel retail distributors, banking players and other business partners; adopting a more lifestyle approach in Malaysian airports retail presentation to enhance the airport consumer experience; providing an exclusive experience, ensuring sustainability of its own brands; and nurturing its business partnerships in travel retail industry. More initiatives such as thematic and tactical marketing programs have been implemented to improve footfall to the outlets. Zulhikam adds: “For each financial quarter, there will be a major marketing promotion campaign aimed at increasing per ticket spending and more importantly, to drive incremental rev-

The year-long Eraman Shopping Extravaganza Campaign includes the opportunity for a customer to win a car

One lucky passenger at Malaysia Airports is presented with his car, a prize in the year long Shopping Extravaganza Campaign

Zulhikam Ahmad, General Manager, Malaysia Airports (Niaga) Sdn Bhd

enue. There will also be more online promotions, more social media awareness and engagement programs, boosting the features of our Eraman Privilege Card (EPC) loyalty card to be more competitive and relevant. We are looking to drive more impactful relationships within the strategic marketing collaboration partnership with a leading local bank as well as the brand principal.” With this in mind, the company launched a year-long Eraman Shopping Extravaganza Campaign. This consists of three contests, namely Shop & Style, Shop & Win and Shop & Drive. The program offers a range of promotional activities, aimed at increasing brand awareness, rewarding loyal customers, tapping effectively into the number of travellers patronising the airports and elevating awareness of the location of Eraman outlets. All shoppers have to do is spend a minimum of RM250 in a single receipt or cumulative receipts and stand a chance to take home weekly prizes and a grand prize of a car in each campaign. Zulhikam adds; “We are pleased with the response received for the first phase of the Eraman Shopping Extravaganza: Shop & Style. This campaign was meant to increase the brand awareness

for Eraman and the location of its outlets, as well as tap into the pool of travelers patronizing the airports. We are proud to say that this campaign has succeeded. Malaysia Airports (Niaga) Sdn Bhd by itself has been on a positive growth compared to the very challenging 2015, achieving a 14% growth on a year to date basis”. Zulhikam talks about the demographic visiting the airports: “Our main target market are consumers from Malaysia, India, Indonesia, and the People’s Republic of China for both KLIA and klia2. Of course, in addition to this any person using the airport is our target as we cater for all retail and F&B categories which applies to businessman, families, tour groups as well as independent travellers.” Liquor, cigarettes, chocolates, perfumes and cosmetics by rank are among the key product categories which generate the highest revenue for Eraman With its cutting edge strategy and impressive outlets, Eraman is set to deliver on its promise to provide the best retail and F&B experience for travellers, as well as ensuring a positive revenue growth.

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

CORPORATE SOCIAL RESPONSIBILITY

Making the world

a better place by

REBECCA BYRNE

Ever Rich staff participate in community service including environmental protection

aiwan-based Ever Rich Duty Free is adamant that corporate social responsibility (CRS) should be an integral part of a company’s business model. In fact, Ever Rich considers itself a “social enterprise,” giving equal emphasis to maximizing its social impact as it does to maximizing its profits.

At Ever Rich, corporate responsibility is in the DNA The company believes that CRS is more than simply donating business profits; it is about committing manpower, resources, skills and time. Kevin Chiang, President, comments: “We call this idea ‘CSR plus’.

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

All our employees are encouraged to be actively involved in the charity and community work. As a company, we have the opportunity to help people and enterprises around us prosper in a stable society, for as they grow, they contribute back to the society and ensure the sustainability of our environment. This creates a positive impact on the environment, economy, and society.” Ever Rich employs approximately 8,000 people, and every one of them volunteers for community work. On average there are more than 150 charity events held by staff every year and projects are run to help minority groups all over Taiwan. These take time, commitment and dedication. Employees volunteer to visit social welfare organizations on a regular basis, care for the elderly or drive for three to four hours to remote villages in the mountains to teach children to read and learn. As many of the duty free shops are located in airports, Ever Rich brings underprivileged children to the airport to expand their vision, show them different cultures and help them prepare for future careers. Alongside national projects, Ever Rich’s outreach crosses borders to assist

international disaster relief. The Southeast Asian Tsunami in 2004, the typhoon in Myanmar, the earthquakes in Sichuan in 2008, Haiti in 2010 and Japan in 2011 – at all of these, Ever Rich contributed more than just donations; it has held charity auctions, gathered supplies and provided shelters for the victims. Chiang comments: “We also take a long-term perspective to support the rebuilding of disasteraffected areas, which was why after the Southeast Asian tsunami, we invested US$500,000 to help rebuild the Information and Communication Technology

Ever Rich Duty Free Chairman, Simon Chiang visits a nursing home

CORPORATE SOCIAL RESPONSIBILITY

Philippe Schaus, Chairman and Chief Executive Officer, DFS Group

Center at Syiah Kuala University in Aceh, Indonesia.” Chiang concludes: “Chinese philosopher Confucius said that ‘one shall take care of one’s own parents and children, and then offer the same care to aged people and children in general.’ We have incorporated the traditional Chinese values not only in the way we do business, but also in the way we perform our corporate social responsibilities.”

Ever Rich Duty Free Chairman, Simon Chiang teaches traditional Chinese culture to youngsters

Kevin Chiang, President, Ever Rich Duty Free

DFS: strengthening economies Luxury travel retailer, DFS, is also committed to making a positive social impact in the many locations in which it operates, in the belief that this helps to contribute to overall economic development. Employing over 9,000 people in the travel and tourism industry, the company feels that it is its duty to help strengthen the economies where it has a presence. Philippe Schaus, Chairman and Chief Executive Officer says: “Our focus now is on three themes: supporting young people through education, health programs and development opportunities; preserving and fostering local arts and crafts and providing assistance and training to women so that they can better support their families. Of course, we are also very active and responsive when a natural disaster befalls an area affecting our employees and their families.” DFS takes the view that wherever it has operations, it is there for the long term, and so it makes sense for the company to become a fully active and contributing member of the local community. While many of its locations are in fully developed countries, DFS also operates in emerging economies where there are many underserved groups. An example of this is Cambodia, where the company recently opened T Galleria by DFS Angkor in Siem Reap. 20

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

Schaus comments: “The Cambodian economy is still relatively new but it has enormous potential, and we want to do as much as we can to support the Cambodian people through educating children, providing jobs, training people with new skills to develop their careers, helping local artists to find commercial channels for their work, and so on. This is a win-win situation – by supporting and building the local economy, we encourage higher-quality tourists to visit Cambodia, who are potential customers for DFS.”

An example of how DFS has made a difference in Cambodia is through its work with Kuma Cambodia. This school and Education Center works to provide education for poor and marginalized children in Phnom Penh. DFS has helped to construct the school with a dining hall, kitchen, library, showers and toilet facilities. Students are provided with two meals a day, showers when they arrive at school and a well-rounded education, which includes sport, art and IT lessons.

JAPAN DOWNTOWN DUTY FREE

Big

in Japan by

The Shilla Duty Free has several downtown stores in Korea in cities such as Jeju and Seoul

REBECCA BYRNE

Japan is seeing a flurry of downtown duty stores launching to capitalize on the rapidly growing number of tourists visiting the country

T The first downtown store for Shilla Duty Free will be a popular area of Tokyo

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

ourism in Japan is growing at an explosive rate. At one time the National Tourism Association was predicting 20 million visitors by 2020. Now that target has been doubled after a record 19.7 million foreign tourists visited Japan in 2015. Chinese nationals constitute the largest number of tourists entering Japan. During 2016, over 500,000 Chinese visitors traveled to Japan per month. Of the Y3.48 trillion spent by overseas tourists in 2015, 40.8% of this is credited to Chinese visitors. The surge in the number of foreign tourists and the phenomenon known as “bakugai” – explosive shopping sprees – by Chinese tourists, is a positive sign for travel retailers in Japan, and many companies are investing in downtown stores to profit from this trend. Tokyo got its first downtown store in January 2016 when Japan Duty Free Ginza opened at the Mitsukoshi Ginza department store. The 3,300-square-meter store was developed as a joint venture between Isetan Mitsukoshi Holdings, Japan Airport Terminal Co and NAA Retailing. The new store is located on the 8th floor of the department store and offers a “pre-order style” concept to local and foreign customers who will be departing from Japan. Divided into six merchandise zones, including a liquor, beauty and luxury zone, customers can find top brands such Boucheron, Valentino and Saint Laurent. Two months later, Korea’s Lotte Duty Free launched the largest downtown duty free store in Ginza. The company chose

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JAPAN DOWNTOWN DUTY FREE

Ginza due to its reputation for luxury, not just in Japan, but internationally. The company predicts that sales of the new store will reach 150 billion Won in the first year. With further shop openings, it expects to grow Japanese sales to 1 trillion Won within 10 years. Hikarawa Koji, Manger at Lotte Duty Free Ginza says: “With Ginza as our base, going forward we are planning to develop our stores in main cities nationwide in Japan. Our mission is to introduce the ‘downtown duty free store’ shopping concept, which is not widely known in Japan.” Covering 4,400 square meters, the downtown store occupies the entire eighth and ninth floors of the iconic Tokyu Plaza Ginza. The eighth floor is a luxurious space showcasing highvalue products including Gucci, MCM and Coach, brands popular with Asian shoppers. The ninth floor features Japanese and international cosmetic brands alongside other tax-free products. As the only Korean duty free operator in Japan, the company promotes Korean products to locals and tourists with specialized corners in the store. Popular with the Japanese are cosmetic brands such as IOPE and SUM37, and ginseng brand Cheong Kwan Jang. With an eye on the Chinese demographic, Lotte Duty Free has been creating a database on tourists from China to Korea for more than 30 years, as well as deploying employees to gather information from local travel agents in China, Thailand and Japan. This in-depth research has given the Lotte Duty Free an insight into the changing trends of the Chinese customer and has enabled it to tailor its offering in Japan.

The company is also attracting customers through its marketing reach. Taking marketing know-how developed in Korea, it is adjusting its successful programs, such as “Enter-Tour-ment” that fuses shopping with tourism and entertainment to satisfy the local market. Lotte Duty Free’s downtown store will soon have competition from Korea. The Shilla Duty Free is entering the market in 2017 in a joint venture with Takashimaya and All Nippon Airways Trading Company. This initiative is an important milestone in The Shilla Duty Free’s global expansion. According to a company spokesperson, “every country and every project is crucial for global expansion of The Shilla Duty Free. The Shilla Duty Free is in the very early stages of its global expansion so success of each project is important.” The company believes that success in Japan will enable The Shilla Duty Free to become a global market leader in travel retail. The proposed duty free store will be located on 11th floor in Takashimaya Times Square in Shinjuku, a major commercial and administrative center, housing the busiest railway station in the world. Floor space of 2,800 square meters will include luxury international Japanese and Korean brands. The building also holds the Takashimaya department store, Tokyu Hands and a number of restaurants, which will attract tourists. The Shilla Duty Free chose Shinjuku because it had the biggest market share in tax-free sales in department stores in 2015. In fact the company believes that “it would be difficult to find a better place for a duty free store to be.”

Selling well is the luxury watch category, which offers leading brands including Omega, Panera and Blancpain

Popular luxury brands are found on the eighth and ninth floors at the Tokyu Plaza department store

Lotte Duty Free’s downtown store opening in Ginza on March 2016

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

Lotte Duty Free predicts that sales of the new store will reach 150 billion Won in the first year

CHINA INTERNATIONAL DUTY FREE

Luxurious smoke-filled room Chinese brand marketer China International Duty Free has unveiled a one-of-akind showcase for high-end Chinese tobacco products in partnership with the world’s leading luxury travel retailer by

REBECCA BYRNE

hina International Duty Free (CIDF), in partnership with DFS Group, has unveiled its first shop-in-shop concept as part of the world-leading luxury travel retailer’s new Wines and Spirits Duplex at Terminal 2 of Singapore Changi International Airport. Housed on the second floor of the two-level store, the Jasmine House is described by CIDF as the first premium Chinese tobacco boutique outside China, offering customers an opportunity to explore the rich history of premium Chinese tobacco by traveling back in time to a luxurious, classical Chinese home of the 1940s. The store showcases only the most premium and exclusive selection of CIDF’s ever-growing portfolio of Chinese tobacco products. The concept behind Jasmine House was to create the look and feel of a modern Chinese gentleman’s study, filled with items collected from his travels around China. Inspired by China’s rich design heritage, traditional elements such as the intricate brass fretwork and carefully curated antiques are presented alongside more contemporary accents, such as the colorful tiled flooring and beautifully illustrated wallpaper featuring birds and plants. Carefully lit shelving highlights a number of specially selected antiques dotted around the shop, with an impressive collection of traditional Chinese smoking pipes and artefacts for customers to learn about bygone smoking customs, once prevalent in China. 28

Inspired by China’s rich design heritage, traditional elements such as the intricate brass fretwork and carefully curated antiques are presented alongside more contemporary accents in the shop-in-shop

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

“Jasmine House aspires to feel warm and inviting to customers with some familiar elements but also sparkling to the eye, with different details to discover across the entire space,” says CIDF, which specializes in marketing Chinese consumer brands in duty free. Products on sale include Diaoyutai, Baisha Harmonization and the newly launched F132, a ginseng-infused tobacco product based on Chairman Mao’s smoking preferences. Described by CIDF as “truly unique in the travel retail space”, the Jasmine House showcases Chinese tobacco in a sophisticated but accessible light. Fred Combe, CEO and Founder of CIDF, said: “CIDF is delighted to launch the Jasmine House, the first-ever luxury Chinese tobacco boutique in the world, in the beautiful, new DFS Wines and Spirits Duplex in Singapore Changi Airport. As the leading multi-category marketer of Chinese consumer brands in duty free, CIDF prides itself on showcasing the finest of Chinese brands with the best consumer engagement experience. The Jasmine House represents a masterpiece in classic Chinese luxury.” Speaking about the attention to detail that has gone into the space, Jayan Lad, Design Director at travel retail design specialist FILTR, said: “CIDF’s portfolio of Chinese brands offered a unique opportunity to reinterpret the presentation of tobacco products and accessories to smokers of legal age in travel retail, in partnership with DFS and Changi Airport. We established key design pillars of

authenticity, sophistication and attention to detail to beautifully curate an inspiring and immersive environment.” Commenting on the ambitious showcase, Brooke Supernaw, Senior Vice President Spirits, Wine, Tobacco, Food and Gifts, DFS Group, concluded: “DFS’s Terminal 2 Wines and Spirits Duplex is inspired by the heritage of craftsmanship in the wine, spirits and tobacco worlds and we’re thrilled to partner with CIDF to bring that strong Chinese tradition to life for our customers through the Jasmine House. From the exceptionally curated collection to the eye-catching details, we’re confident the Jasmine House will delight travelers looking to explore the rich heritage of premium Chinese tobacco.” Customers at the DFS Wines and Spirits Duplex at Terminal 2 can explore the rich history of premium Chinese tobacco by traveling back in time to a luxurious, classical Chinese home of the 1940s

INCHEON AIRPORT

looks to the future In an exclusive interview, Asia Duty Free talks to Kim Bum Ho, Deputy Director of Incheon International Airport Corporation’s Marketing Group, about the airport’s plans for success since its setback in 2015 by

REBECCA BYRNE

Asia Duty Free: How are sales following the impact of Mers in 2015? Kim Bum Ho: I am pleased to report that half yearly sales in 2016 have increased around 5% compared to the same period in 2015. This is due to several factors: the completion of our refurbishment, which has provided a much more conducive shopping environment, an increase in passengers of around 14% to 27 million

Kim Bum Ho, Deputy Director of Incheon International Airport Corporation’s Marketing Group

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

in the last six months, and a beneficial exchange rate (dollar to won). We can say that sales have recovered from the negative impact of the MERS crisis last year and, if there are no further challenges, turnover for 2016 is on track to US$2bn. ADF: What has the impact of online sale been on airport sales? KBH: As online duty-free sales increase, it threatens airport sales volume and market share in Korean duty free industry more and more. Online companies are able to run aggressive promotions compared to airport duty free and this has had a negative impact on our sales. It is important to counter this challenge and I believe in the future we will see airport duty free operators needing a special license to sell online. ADF: What was the reason behind the increase in concessions last year? KBH: In September 2015, we increased concessions from seven to 12 and the number of operators from three to seven. We included four new SME concessions to encourage the success of local business and to offer a wider variety of national and global brands to passengers. Furthermore, by introducing Korean traditional and unique products we have created a

Duty free sales have recovered from the negative impact of MERS in 2015

sense of place for our customers. I am delighted to report that sales are stable for the SMEs. To accommodate the new concessions we reconfigured the existing retail space and added an extra 680 square meters predominantly comprising the popular Cosmetic & Perfume and Liquor & Tobacco categories. This increase has led to improved sales with new brands such as Gentle Monster, Tom Ford, Moncler, Saint Laurent and Victoria’s Secret performing well. As C&P remains the bestselling category in Incheon Airport, the newly launched K-Cosmetics brands have proved extremely popular. ADF: How will you attract the increasing number of Low Cost Carrier (LLC) customers? KBH: LCC passenger traffic is dramatically increasing in Korea, up by 50% this year. With this growing volume, this collection of LCC passengers is an important target market. Most of LCC airlines use Incheon Airport’s concourse, so we have created a single duty-free concession, run by Lotte, that sells every category and can be flexible in adapting to this younger customer. We have also expanded the C&P stores in the concourse to cater to the increasing demand for this category.

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INCHEON AIRPORT

ADF: How do you use technology to benefit the airport? KBH: We use technology to create a convenient shopping environment. Rather than fliers and advertisements that unilaterally deliver information, we employ 3D shopping information using OLED, U-Signage, U-Board, DID, and other platforms in order to interact with passengers. We also provide hands-on experiences in shopping spaces that use technology, such as the Experience Zone and performances by our robot, Kuka, in sunglasses shops. ADF: What will the new terminal T2, which is on the horizon, add to your duty free offering? KBH: T2’s total retail space will be approximately 35,000 square meters and will include a duty free space of 9,600 square meters. As for the number of concessions and detailed plan, we are in final stage of drafting. With Korean Air moving to the new terminal, the demographic will include a high number of Koreans, and the IIAC and operators will need to take this into account.

ADF: There has been much in the media regarding the latest license changes in Korea – what is your view on this? KBH: In my personal opinion, it could be positive to open the duty-free market to various operators with new and additional licenses. On the other hand, it could be negative due to increasing uncertainty of market and excessive competition among operators. I strongly believe that within the next couple of years these uncertainties will be settled and the market will stabilize.

ADF: Finally, Incheon Airport is frequently named best duty free airport by business travelers – what is the secret behind your success? KBH: We are proud that passengers traveling around the world can have a unique and memorable shopping experience at Incheon Airport. Sincere services, distinct experiences, a wide choice of brands and unique Korean items are key to our success. Cooperating closely with seven operators, we consistently strive to improve our shopping environment, keeping our customer at the forefront of everything we do.

“We are proud that passengers traveling around the world can have a unique and memorable shopping experience at Incheon Airport”

ADF: Who buys duty free at Incheon? KBH: Our major customers are Korean, Chinese and Japanese. The purchasing power of the Chinese and Japanese is dominant. However, although Chinese passengers are increasing, we have seen that this year their purchasing power is slightly decreasing due to the depreciation in Yuan, Chinese policy to boost domestic economy and the rise of younger and smaller groups of visitors. Kuka, the airport robot, amazes customers buying sunglasses

This category is popular with increasing numbers of Low Cost Carrier travelers

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

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M1ND-SET RESEARCH

Indian summer

looms

Travel retail research specialist m1nd-set believes that India will be the second most important market in Asia in the near future. Here, the company reveals consumer insights on Indian travelers in duty free

ndia is on course to become the second biggest market in Asia in the near future. That’s the view of travel retail researcher m1nd-set. According to m1nd-set’s macroeconomic research, the travel behavior of this nationality will be driven by a forecast GDP growth rate above the world average. Furthermore, the Indian middle income group is on course to grow to 174 million households by 2030. m1nd-set’s latest survey of Indian nationals’ travel behavior polled international travelers who had visited a duty free shop in the Asia Pacific region in the last three months. Some 800 people responded to the online survey. The average age of the Indian duty free visitors surveyed was 41, with 81% males and 42% millennials. Some 43% of respondents had income well above the average, with 50% in either senior or middle management. Around half (51%) were on a business trip. More than 60% (64%) said they visited duty free shops on every trip, with 22% citing every second trip and 9% every third trip. Indian visitors to duty free shops on average shopped 3.6 product categories: confectionery was listed by 72% of respondents, alcohol 62%, perfumes 57%, electronics 41%, cosmetics 28%, souvenirs 25%, fashion 24%, accessories and jewelry 18%, tobacco products 15%, and stationery 11%. The average conversion rate (buyers out of visitors) was 51%, with alcohol at 72%, confectionery 70%, tobacco products 69%, perfumes 57%, fashion 50%, souvenirs 46%, cosmetics 45%, stationery 42%, electronics 38%, and accessories and jewelry 24%.

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

Indian duty free visitors purchased on average 2.3 categories, with confectionery the most popular category at 58%, alcohol 51%, perfumes 37%, electronics 18%, fashion 14%, cosmetics 14%, souvenirs 13%, tobacco products 12%, accessories and jewelry 5%, and stationery 5%. Of the share of wallet, some 24% was spent on alcohol, 20% on electronics, 17% on perfumes, 13% on fashion, 10% on confectionery, 7% on accessories and jewelry, 6% on cosmetics, 2% on tobacco products, and 1% on souvenirs.

Convenience is key In terms of the motivations for buying in duty free, around half of respondents cited convenience, followed by the price being lower than local stores (32%), it was their favorite product (27%), prices were lower than other duty free shops (25%), an appealing promotion (24%), someone asked me to purchase (23%), the display caught my attention (21%), and the product purchased could not be found at home (20%). In total, across all product categories, 56% of purchases were planned. The most planned purchases were: alcohol, with 82% of Indian duty free visitors planning this purchase, followed by 67% planning souvenirs, 64% tobacco products, 62% cosmetics, 61% electronics, 47% confectionery, 39% perfumes, and 32% fashion. Half of Indian duty free buyers made price comparisons, with nearly one third

(27%) comparing prices with their local shops and 18% making a comparison against other duty free shops. Only 6% compared prices online. The findings are interesting when broken down by category. More than 60% (64%) compared prices in both the tobacco and electronics categories. A similar percentage (61%) compared prices for alcohol purchases, with 58% comparing cosmetics prices, and 55% comparing perfume prices. The percentages were 46% for souvenirs, 40% for fashion and 36% for confectionery. Some 43% of Indian visitors to duty free shops interacted with sales staff, with more than 50% interacting with personnel in both the alcohol and electronics departments. Half of visitors interacted with staff in perfumes, with 44% in tobacco products, 43% in cosmetics, 42% in fashion, 38% in confectionery, 37% in accessories and jewelry, and 31% in souvenirs. Nearly one third had no interaction at all with salespeople. Almost one third (31%) of Indian duty free buyers were strongly influenced by the sales staff, though 43% said that staff had no influence over their final decision to purchase. Nearly 60% of Indians who bought fashion said they were strongly influenced, followed by purchasers of cosmetics (46%). More than half (51%) of Indian duty free buyers were influenced by promotions, with 25% saying they bought more because of a promotion. Promotions were

effective across the board, but particularly in the categories of fashion, perfumes and cosmetics, alcohol and confectionery. Indians who did not purchase anything in the duty free shops cited a number of factors. The most popular reason for not buying was that they were just browsing, followed by not wanting to carry their purchases, not being attracted by anything, and lack of attractive prices/ promotions. The non-buyers said they would possibly have been motivated to buy if offered more duty free exclusives, or better promotions and sales. Generally, Indian duty free visitors felt that they were being offered excellent or good value for money, with only 7% citing poor or very poor value. Around one quarter of respondents (23%) consulted duty free websites to see what brands or products were available in the duty free shops before their trip, with only 6% pre-ordering duty free products online, and 12% checking on a duty free smartphone app what products/brands were available before their trip. Finally, turning to Customs regulations, 37% of Indian duty free visitors were unsatisfied with their level of information about Customs regulations and 55% sometimes refrained from buying in duty free because of uncertainty over these regulations. This reveals an opportunity to improve communication, m1nd-setâ&#x20AC;&#x2122;s research concluded.

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

MOROCCANOIL

Rise and

Moroccanoil is growing in markets outside of the Asia Pacific region, and debuted in its first duty free point of sale in Canada at Toronto Pearson International Airport on August 30, 2016 with Dufry

shine

Beauty brand Moroccanoil is coming to the TFWA Cannes show for the second time with high hopes, having just launched successfully in Asia Pacific travel retail

This travel retail exclusive gift set incorporates the beauty brand’s signature Moroccanoil Treatment hero product

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

oroccanoil is scaling up its presence in travel retail, just over two years since Vice President of Retail & Travel Retail Sales John Gates debuted the beauty brand at the IAADFS Duty Free Show of the Americas in 2014. The brand’s biggest markets overall are the US, Northern Europe – specifically Scandinavia within the Nordic and Danish regions – as well as Latin America and Brazil. “We are seeing the most growth in sales by volume in Europe,” Gates exclusively tells Asia Duty Free. “We have the most points of sale in this region – it was our very first point of distribution and has continued to build traction. New growth is coming from Asia, primarily in Hong Kong and South Korea, as these are new points of sale for us. We do not have as much visibility in mainland China – something we are looking to change moving forward.” The brand continues to grow its consumer base through the travel retail channel. Most recently, it is seeing significant growth through its launch in Asia Pacific and is looking to new markets in the travel retail space.

MOROCCANOIL

During the TFWA World Exhibition, Moroccanoil is exhibiting its new Moroccanoil Moisture & Shine Shampoo and Conditioner featured in its signature Fragrance Originale, Fleur d’Oranger and Fleur de Rose scents

“Moroccanoil is experiencing great success with our newly launched location at Hong Kong International Airport with the DFS Galleria Hong Kong downtown location, which has led to conversations with DFS about opening other DFS Galleria locations in Asia,” says Gates. The demand for the brand in the Asia Pacific markets has grown due to the recent increase in exposure and locations, which has prompted the brand to include its hero product Moroccanoil Treatment onboard in several inflight amenity kits and programs, starting Fall 2016. Moroccanoil will also be creating an exclusive travel retail item in celebration of Singapore Airlines’ 75th anniversary. The brand is growing in markets outside of the Asia Pacific region, and debuted in its first duty free point of sale in Canada at Toronto Pearson International Airport on August 30, 2016 with Dufry. The African market is “most certainly” a key target, according to Gates. Moroccanoil is currently sold in salons in South Africa, so it has already started to gain brand awareness in the market. “We’ve most recently received interest from the emerging markets in South and Central Africa at the show in Cannes last year and we look to forward to furthering those conversations,” enthuses Gates. In tune with current fashion trends, Moroccanoil’s current hair care, body care and sun care lines are not gender-specific. “We offer a wide selection of products that can be used by everyone,” confirms Gates. So has diversification beyond hair care, for which the brand is best known, been 38

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

successful? “Absolutely, the response from our markets has been overwhelmingly positive,” says Gates. “Moroccanoil Body was developed to satisfy our consumers’ desire for luxurious treatments that not only transform the hair, but the body as well. Like the hair care products, the consumer is embracing the easy-to-use formulas in both our Moroccanoil Body and Moroccanoil Sun collections.” During the TFWA World Exhibition, Moroccanoil is exhibiting its new Moroccanoil Moisture & Shine Shampoo and Conditioner featured in its signature

Fragrance Originale, Fleur d’Oranger and Fleur de Rose scents, as well as its Moroccanoil Body Shower Milk in all three scents and travel retail exclusive gift sets. Additionally, the brand will be exhibiting the Moroccanoil Sun Collection with the Moroccanoil Sun Oil SPF 15 and AfterSun Milk for the European markets. This will be the company’s first booth at the Cannes show (stand number: Blue Village F12). Gates and his team will also be meeting with current partners and press onboard a yacht in the Harbour Village.

The Moroccanoil Sun Collection, including Moroccanoil Sun Oil SPF 15 and After-Sun Milk, will be showcased at the Cannes fair for the European markets

COCCINELLE

Mindful of the popularity of miniature bags, Coccinelle develops a huge collection of mini bags every season, matching the main collection

Coccinelle’s Arlettis collection, featuring a signature inverted C buckle, is a best-selling bag in travel retail

Success is

IN THE BAG Emanuele Mazziotta, Head of Travel Retail, Coccinelle

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

It’s full steam ahead in travel retail for Italian affordable luxury brand Coccinelle, as many points of sale begin trading across Asia

occinelle, the Italian accessible luxury bag brand, is on a roll in travel retail, with some 30 store openings in the first eight months of the year, despite the geopolitical and economic turmoil that’s buffeting the whole industry. Founded in 1978 by the Mazzieri family in Parma, Italy, Coccinelle produces contemporary bags for fashionable women. Product development takes place in the company’s headquarters in Parma. Everything from the style, the choice of materials, as well as the whole creative process takes place locally, while the production is global. Coccinelle is an accessible luxury brand offering high quality products with a very good price/value ratio, which are distinctive features of the brand, explains Emanuele Mazziotta, Head of Travel Retail. Reflecting on the year to date, he says that 2016 has been a difficult year, marked by terrorist attacks and the macro-economic and geopolitical situation in different regions around the world, which have affected the overall travel retail business. As a consequence, he believes customers are now more pricesensitive and conscious about spending money, and are looking for durable products of good quality at a reasonable price.

Coccinelle’s boutique at King Power International’s new downtown duty free complex in Phuket features bright steel for the wall display module and fumé mirrors designed to give the interior a timeless elegance

The Italian accessible luxury brand has begun trading at Oporto International Airport in Portugal, one of 30 retail openings this year

Despite the downbeat environment, 2016 has been a busy and prosperous year for Coccinelle, with 30 openings around the globe in the first eight months, including boutiques, shop-inshops and corners in Eastern Europe, Russia, Portugal, China, South Korea, the Philippines, Myanmar and on cruise ships, among others. “The Asia Pacific region is, of course, an important area for the expansion of the brand in travel retail,” he says. In a major development in the region, the company has opened a 60 square meter boutique at King Power International’s new downtown duty free complex in Phuket, Thailand. The boutique opened in early 2016 and features the brand’s sophisticated and elegant store concept, where every detail is designed to showcase the products on display. Bright steel for the wall display module and fumé mirrors are designed to give the interior a timeless elegance and make the best use of the available space. The bags and accessories are showcased in open displays. Over in the Philippines, Coccinelle has opened a personalized 15 square meter corner at Manila Ninoy Aquino International Airport Terminal 3 and at Mactan Cebu International Airport. Additional openings in the South Korean duty free market have taken place in Seoul at Shilla I’Park Duty Free Shop, SM Duty Free shop and Dongwha Duty Free Shop.

A contemporary and feminine collection for Fall Coccinelle recently entered the Myanmar travel retail market, a new market for the brand with the aim of offering a shopping experience to local and international travelers from a 100 square meter boutique at Yangon International Airport. The boutique showcases the Fall/Winter 2016-17 collection, featuring precise aesthetics and looks that playfully create infinite combinations and amplify the creativity of shapes, materials and colors. In this contemporary and feminine collection, Coccinelle seeks to capture the different personality nuances in every woman: urban, rock, sensual, androgynous, versatile, cool, happy. The Arlettis bag, inspired by the theater actress Arletty, is available as a shoulder bag, backpack and clutch, sealed by a graphic inverted C gold buckle. Additionally, there is a compact bag with snap closure that re-elaborates the Sixties shape of a vanity case. The Perine tote bag has a functional silhouette, highlighted thanks to an unexpected, unseen mix of materials. Shapes run from small to large. There are roomy, user-friendly boho tote bags, soft shopping bags and bowling bags with saddlery seams and patchwork. Then there are mini-sized versions

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

COCCINELLE

The Arlettis it-bag and the top model Mariacarla Boscono star in the Coccinelle Fall/Winter 2016-17 campaign, focused on a smart, cool style and a natural, spontaneous penchant for elegance

and downtown duty free mall openings in the second half of 2016. Travel retail is our window to the world where we can capture millions of travelers,” he enthuses. Consumers are particularly attracted by Coccinelle’s promise of a beautiful yet functional product and by the brand’s harmonious balance between fine style and great quality leather at an affordable price. Best-selling bags include the Arlettis collection, with its signature graphic gold inverted C buckle. Mini bags are always in demand, observes Mazziotta. To this end, Coccinelle develops a huge collection of mini bags every season, matching the bag collection. Small leather goods, such as wallets, document cases, cosmetic cases, passport holders, etc, are also good items to have in the assortment of all stores, he says. During the TFWA World Exhibition in Cannes, Coccinelle will present the Spring/Summer 2017 collection, which Mazziotta describes as a fine contemporary collection using Italian know-how and clean design for a visionary, positive, fashionable woman. And, of course, the Arlettis collection will take center stage during the exhibition as part of the Spring/Summer 2017 season.

of trunks, backpacks, buckets and handbags for use day and night. Meanwhile, the functional mid-sized bags, backpacks and purses are characterized by essential lines and organized spaces. Materials include suede, cavallino and calf, all with a soft feel. The surfaces incorporate mosaics of prints and finishes: the B14 bag experiments with geometries in saffiano and varnish, python and lizard prints, pixel and bark effects. The color palette is inspired by the earth, in sand, brown, khaki and leather, contrasted by pink, fuchsia, China blue and light blue, touches of red and grey, silver and bronze. The Arlettis it-bag and the top model Mariacarla Boscono are the stars of the Coccinelle Fall/Winter 2016-17 campaign, focused on a smart, cool style and a natural, spontaneous penchant for elegance. The entire campaign offers a sensitive take on the Coccinelle #feelgood philosophy, with the right dose of glamour, making for an effortlessly natural style. The Fall/Winter 2016-17 collection is now available in travel retail stores worldwide.

Personalized spaces with an elegant store concept Coccinelle does not offer a travel retail exclusive collection as such, but does offer different colors that are appreciated in specific regions, because the assortment is crucial in travel retail, notes Mazziotta. “Our offer needs to be suitable for different occasions and for different tastes as well,” he continues. “Of course, we adjust the assortment from door to door, but the articles which are important from the point of view of communication and the very commercial products are always on display worldwide.” Regarding the brand’s travel retail strategy, the company aims to open more personalized spaces, featuring the sophisticated and elegant store concept, where customers can experience the essence of the brand and its products. “We want to open Coccinelle locations in key destinations worldwide and in the Asia Pacific region where the highest traffic airports are located. In the pipeline we already have key airports

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

In the Philippines, Coccinelle has opened a personalized 15 square meter corner at Manila Ninoy Aquino International Airport Terminal 3

ALTIMETRE LLC

Starting a

beauty revolution

Arnaud de Volontat, the owner of Altimetre LLC, is exhibiting at the 2016 TFWA World Exhibition for the first time to introduce an innovative, patented product that he believes will bring a new, hi-tech experience to the perfume and cosmetics category by

MARY JANE PITTILLA

rnaud de Volontat will be on a mission at the TFWA World Exhibition in Cannes – this is the first time his Miami-based company Altimetre LLC will participate at the fair. “We will showcase our star product, Spongellé® body wash infused body buffers, a very new and unique product bringing a totally new experience to our industry and the P&C category,” he enthuses. “So far our product has received a great acceptance since we launched it last year at the Orlando IAADFS show and then at the Singapore TFWA show. Both events have brought a lot of interest from the duty free operators. We are thrilled to be able to participate at the Cannes show as we believe it will really and definitively help us to position our product as a must-have product for the duty free operators.” de Volontat, a former executive at Longchamp and Estée Lauder Companies, describes Spongellé® body wash infused body buffers as “very innovative with a patented technology, offering a unique experience with an all-in-one beauty system” and at the same time eco-friendly for today’s clean living trend. The product is infused with natural oils, nurturing extracts and fragrances in a body buffer that can deliver this system for up to 30 showers. For instance, the Ginger Bergamot body buffer contains fresh yuzu, which has energizing and toning properties, anti-inflammatory edelweiss and vetiver, and anti-oxidant sea kelp, together with cooling peppermint.

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

Spongellé® was developed to replace the everyday body wash to transform the bathing ritual into a “Beyond Cleansing®” experience. The product aims to re-invent and revolutionize the bath experience and its rituals. Speaking of beauty trends, he says: “I think trends in all categories are very linked to newness, new technology and new experience. Consumers are the ones that define and mark the trend, so you need to make sure you’re part of it. I think with Spongellé® we are right there.” The products are also ideal for travelers, as he explains: “For Fall 2016, we will be launching a travel set called the ManiPedi Set with more than seven uses each, the perfect beauty product to travel with and to take care of your hands and your feet during your trip.” The Spongellé® brand targets all consumers from aged four and older, women, kids and men. Last year the first body buffer for men was launched, which is

Spongellé® is described as a very innovative with a patented technology, offering a unique experience with an all-in-one beauty system, and at the same time eco-friendly for today’s clean living trend

described as a perfect accessory for traveling one to two weeks. Marketing initiatives for the brand have included harnessing social media influencers and celebrities. The product was named an Oprah Winfrey “Favorite” in 2015. Spongellé® was awarded in 2015 the title of Best Product by the Today Show, MSNBC, Redbook and InStyle Magazine, and chosen by Reader’s Digest as a Best Choice for Holiday Giving. Since the brand is new to the market, de Volontat says all travel retail channels are very interesting. “The downtown stores and cruise ship channel have shown very good results,” he says. “For this year we are focusing on opening key retailers in travel retail in all distribution channels and all regions that are considered as the benchmark for the industry. After that has been achieved, it will help us without any doubt to expand our distribution everywhere.”

The Spongellé® body wash infused body buffer in Ginger Bergamot contains fresh yuzu, which has energizing and toning properties, anti-inflammatory edelweiss and vetiver, and anti-oxidant sea kelp, together with cooling peppermint

FURLA

Over the past 12 months, Furla has opened a 20 square meter semi-personalized location in Siem Reap Galleria, Cambodia, with DFS

Betting on exclusives The travel retail exclusive handbag is now a permanent fixture in Furla’s line-up, as Global Travel Retail Director Gerry Munday explains by

MARY JANE PITTILLA

“T

ravel retail exclusives are a very important part of our business,” asserts Furla’s Global Travel Retail Director Gerry Munday, as she muses on the Italian accessories brand’s stellar success in duty free. “This is the fourth season that Furla has offered a travel retail exclusive to retailers,” she continues. “For Spring/ Summer 17 we are introducing the travel retail exclusive Erica bag, a small, sophisticated and extremely functional handbag in three colorways, each with an external pouch in a contrasting color.” Munday is seeing demand for such products grow, as she explains. “The success of the previous exclusives supports the growing demand by retailers and consumer for exclusives in the fashion sector. Offering an exclusive creates a point of difference compared to domestic stores and online, essential in today’s competitive environment.” The travel retail channel as a whole has shown a significant increase in sales – up 36% in 2015 – thanks to Furla’s presence in 48 countries with a total of 195 airport doors, versus 174 in 2014. “We couldn’t have asked for a better year. We are delighted with the results and expect that this year and beyond to echo the same sentiment.” Asia is a “vitally important” region for the brand, says Munday. Japan accounted for 23% of the company’s consolidated turnover in 2015 and the rest of Asia Pacific 19%. “Overall, Furla saw 30% growth globally, but geographically Asia Pacific enjoyed a massive 53% growth and Japan 24%, which shows the continuing 46

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

dynamism of the region – even though we know there are challenges,” she says. Asia is different from other regions because downtown duty free outlets play a very important role. For example, in Korea, Furla has 13 corners in downtown duty free shops in Busan, Jeju and Seoul, as well as distribution at Seoul Incheon, where it has four separate corners, and Gimhae International Airport, Busan. Munday notes that in Korea the brand has more travel retail/duty free outlets than domestic, because the key customer focus is the Chinese shopper. In Greater China, the brand’s domestic market footprint is strong, in turn helping the brand to grow its travel retail presence. Today, Furla boasts five shops and five corners in China, including one in Macau. It’s a similar story in Taiwan. Furla has a powerful presence in travel retail with seven corners at Taipei Taoyuan and Songshan airports, Taichung Airport and downtown – again targeting primarily Chinese shoppers. The store count in Asia continues to climb. Over the past 12 months, Furla has opened a 20 square meter semi-personalized location in Siem Reap Galleria with DFS; a 15 square meter personalized

During the TFWA World Exhibition in Cannes, Furla is launching the travel retail exclusive Erica bag. This small, sophisticated and functional handbag comes in three colorways, each with an external pouch in a contrasting color

Furla has celebrated the opening of a 15 square meter personalized corner in Taipei Taoyuan Airport Terminal 2 with Taiwanese operator Tasa Meng

corner in Taoyuan Airport with Tasa Meng; a 3 square meter generic corner in Singapore Changi Airport with Lagardère Travel Retail; two 22 square meter personalized corners in the North and South terminals of Okinawa Airport with DFS; a 12 square meter personalized corner at Hong Kong International Airport with DFS; a 6 square meter personalized corner in Siem Reap International Airport with Dufry; and a 12 square meter personalized corner in Taipei Songshan Airport with Ever Rich. The next few months will see many new Furla stores opening in the Asia Pacific region, including Cambodia, Kaohsiung, Phuket, and Yangon. Munday is optimistic about Furla’s travel retail future, despite the challenges, particularly from online retailing. “We maintain that as long as there are consumers traveling, with price differentials around the world, and added value in most airports, then our travel retail business will continue to grow and prosper.”

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SHISEIDO TRAVEL RETAIL

Shiseido Travel Retail’s digital animation at Singapore Changi Airport marks the global travel retail debut of its new Rouge Rouge lipstick collection

Speaking the digital language

A digital animation at Singapore Changi Airport using motionsensing technology has been the latest tech-savvy way for Shiseido to target Chinese travelers and the millennial generation

n July 2016, Shiseido Travel Retail launched a digital animation at Singapore Changi Airport to mark the global travel retail debut of its new Rouge Rouge lipstick collection. The animation features a digital wall complete with motion-sensing technology. LED screens display Rouge Rouge products which create different patterns in sync with the movements of passing travelers. The promotion, which was supported by exposure on Facebook, Instagram and Weibo platforms, was squarely aimed at both the Chinese traveler and the millennial generation. Shiseido Travel Retail Vice President Marketing Elisabeth Jouguelet explains the thinking behind the animation. “The main objective of such animations is to drive brand awareness and sales by reaching out to our key target consumer group – Chinese travelers – so a lot of the research that we do is geared towards developing a better understanding of them.” According to the 2015 Pax Gloss Global Shopper Survey, 96% of Chinese travelers have a connected device while traveling and 81% book their trips online.

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

This underlines the importance of digital as part of the marketing strategy, says Jouguelet. Shiseido’s research into Chinese travelers’ characteristics has helped the company to establish an omni-channel framework of multiple digital touchpoints where they can be engaged along their journey. For example, Chinese travelers frequently visit Ctrip to plan their trips, so Shiseido Rouge Rouge has targeted advertising there. With WeChat being used by almost 90% of Chinese travelers, it was chosen as a key social media engagement platform in the ‘Red’ campaign. “We have also been able to better understand traveling consumers through ongoing dialogues with our retailer partners, supported by our recently introduced key account management system,” she adds. Singapore Changi is the first airport to feature the ‘Red’ animation. The animation is slated for a global roll-out through the end of the year. The company is in discussions with retailers at key locations on Chinese travel routes, such as London and Los Angeles. Jouguelet confirms that the animation

is attracting a lot of attention from millennials. “Millennials are digital natives, and the ‘Red’ campaign, with its use of digital technology and consumer-centricity, was specially designed to appeal to them. “Millennials steer clear of traditional advertising, and value fun, visual and social interactions, so the motionsensing digital wall worked well as a traffic-stopper.” Shiseido’s salespeople also played a key role in the campaign. “Millennials prefer discovering the brand on their own, but also expect knowledgeable staff; the campaign offers a good balance of both. The Find Your Rouge Rouge iPad application is a self-service tool to help shoppers find their perfect shade, with Shiseido beauty consultants on hand to provide a lip makeover using the recommended color options.” After the lip makeover, shoppers are invited to take a photo at a designated photo wall and to share it on social media with the hashtags #shiseidored and #rougerouge2016. This seeks to tap into the power of peer-to-peer influence when it comes to marketing to millennials.

Working with the Digital Center of Excellence Speaking the digital language is crucial for engaging millennials, Jouguelet believes, and Shiseido’s commitment to this is underlined by the establishment of a global Digital Center of Excellence in New York to ensure a “timely, genuine” dialogue with this increasingly important group worldwide. While it is too early to quantify the success of the animation through sales, it has certainly driven footfall and conversion. The animation was located at a heavily trafficked spot, just after immigration at Changi’s Terminal 3 Departures concourse. The motion-sensing wall captured attention and encouraged high levels of consumer interaction. The Japanese brand has recruited new consumers, confirms Jouguelet. The motion-sensing wall was effective in attracting attention and driving interaction from consumers, but it was Shiseido’s beauty consultants who were instrumental in closing the sale and recruiting new users. “At Shiseido, we believe that our beauty consultants are key messengers

of brand value, and they are essential in introducing new users to the brand and inspiring loyalty. They play a key role in our transition to become a more consumer-oriented marketing company under the Vision 2020 plan.” Through surveys, the company has found that customers who were satisfied with service from a beauty consultant are 2.5 times more likely to revisit a store. The average transaction value per customer for cosmetics specialty stores with beauty consultants on hand is 1.3 times higher than stores without beauty consultants. In light of this, the brand places a lot of emphasis on training. Shiseido Group has 22,000 beauty consultants around the world, with almost 1,000 in travel retail, excluding Japan. As representatives of the brand, they are expected to embody the spirit of omotenashi, the Japanese word for hospitality, and all new beauty consultants are given a copy of the Shiseido Beauty Consultant Omotenashi Credo, a set of behavioral guidelines and code of conduct created in 2011. The company plans to strengthen store activities by investing more in

recruitment and training. Digital will continue to be a priority for Shiseido going forward, confirms Jouguelet. “We are working with the Digital Center of Excellence to establish the digital architecture necessary to support technologies that our brands will integrate into their campaigns. We are also exploring the use of augmented reality technology – such as Shiseido’s Magic Mirror tool – to reinvent the travel retail shopping experience in-store.” Magic Mirror allows users to virtually try on make-up looks, provide beauty advice and product recommendations, and is currently only available in Japan and selected international locations.

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

VP INERNATIONAL

FLIRT Vodka has worked in GTR in part because of appealing offers such as this 5x100ml package. The company promises plenty more exciting items over the coming year

Breaking

ground by

WENDY MORLEY

ormerly known as Vinprom Peshtera, VP Brands International has had a successful year despite a challenging environment. The company has had a good year in international markets, with expansion in domestic and global travel retail. “We have significantly expanded our presence this past year, especially in the regions of Africa, Middle East and Asia,” they say at the Export Department of VP Brands International. Those three regions will be the company’s priority over the next couple of years. “We believe that the strongest potential for business development is there, bearing in mind the current market complications the industry faces in the western world and in South America,” the VPBI Export department explains. “We have managed to develop several key hub markets such as Kenya, Nigeria, Egypt, UAE and Malaysia, and it is at these locations where all our efforts, main investments and expertise will be directed over the coming years. Our strategy is to utilize these markets as primary centers for our products and expand exponentially in the surrounding territories. All of them can be considered emerging markets with a growing population of legal drinkers who are brand adventurous and open to new propositions.” While the decline in luxury goods has hurt some companies in GTR, VP Brands International has found quite the opposite

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

Over the past year VP Brands International made the most of its strengths, having a spectacular year in all markets, including GTR

effect because of the company’s insistence on offering good value for their high quality products. “We as a company believe that there is a great potential for products with exceptional quality at a very attractive price level. In this sense the decline in luxury goods has given us the opportunity to attract a wider consumer base that is not only interested in discovering new and exciting brands, but has also transformed their traditional purchasing decisions.” After such an impressive time of growth and expansion, VP Brands International expects 2017 will be very exciting for the company and for its consumers. “We are working on exciting and innovative exclusive GTR propositions. We will be launching a GTR-exclusive SKU which will be very distinct from anything we have seen before. In addition, we are planning a variety of value-added promotions that will be a first for the industry.” As in the past few years, VP Brands International’s main focus will once again be the vodka category on its flagship brand FLIRT. But that is only the beginning. VPBI will be launching several new brands in the whisky and wine categories. “We will give the global consumer contemporary, competitive and attractive alternatives to the mundane offered by other brands in these categories,” announces the VPBI Export department. Whereas traditionally a customer was loyal to a global brand in vodka and

VPBI has done incredibly well in Africa and the Middle East, thanks in part to displays such as these

whisky, VP Brands International is seeing this change, and feels its contemporary choices are the perfect choice for this new legal drinking age consumer. “A young LDA consumer is willing to experiment not only with new brands but also in subcategories. For example, this group is more interested in trying flavored vodka and whisky. We also noticed resurgence in flavored spirits such as aniseed.” The company understands that variety is not the only reason for purchasing a new product, and offering superior value at a good price is an important one. “There are great differences in consumer purchasing patterns in GTR, but one theme seems to be constant: consumers want to know they have got a real deal.”

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BROWN FORMAN

Strong

foundation Despite a fragile GTR market, American whiskey continues to thrive – this helps keep Brown-Forman strong as the company journeys into single malts by

WENDY MORLEY

rown-Forman is in the enviable position of having the best-known brand of American whiskey in the world at a time when this subcategory is one of the few bright lights in global travel retail. “American whiskies continue in high demand around the world both in domestic and in travel retail markets,” says Eric Helms, Marketing Director, Brown-Forman Global Travel Retail. “We have focused our efforts on Jack Daniel’s Old No. 7 as well as Jack Daniel’s Tennessee Honey and Woodford Reserve.”

Challenges in the south Helms says the Middle East and Australia are traditionally robust regions for the company: “The Middle East has been very strong for Jack Daniels and we see this continuing. There does seem to be an upswing in discounting for blended Scotch whisky and others, but Jack Daniel’s is thus far not affected. Australia is a strong region for the Brown-Forman Travel Retail portfolio. Jack Daniel’s continues to remain vigorous and Woodford

Reserve is gaining in appeal. Of course we have benefited considerably from the currency devaluation by Australia not too long ago.” While these regions continue to be strong the company sees Asia as an area of great opportunity, especially with the company’s journey into single malts with its acquisition of The BenRiach Distillery Company and its three Scotch whisky brands. “We feel our brands have a promising future and considerable opportunity in Asia,” he says. “Admittedly, spirits growth has been a challenge as a result of policy changes initiated by China. But Asia has a long affection for Scotch whiskies and we feel that the addition of BenRiach to the Brown-Forman Travel Retail portfolio will prove to be an asset for us.”

Outperforming the market While American whiskey has continued to do incredibly well around the world, the same cannot be said for other spirits such as tequila, although Brown-Forman’s ultra-premium tequila brand Herradura is

Brown-Forman’s focus over the past year has been Jack Daniel’s 150th anniversary, in addition to Jack Daniel’s Tennessee Honey and Woodford Reserve

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

The Jack Daniel’s family of products remains strongest for the region, but Woodford Reserve is gaining in appeal

holding its own. “As with most spirits that are not American whiskey, tequila has been dealing with some real challenges lately,” says Helms. “Last year the entire category was down double digits, and it remains sluggish so far in 2016. Herradura is somewhat of a bright spot among tequilas, however; even at a premium price it is outperforming the category. Just like Jack Daniel’s and Woodford Reserve, Herradura is authentic, offers premium value and is just a great tasting tequila.” While the US and Mexico remain the primary markets for tequila, Herradura is showing growth in several markets in Europe and Australia as well as Latin America. Brown-Forman is no stranger to activations and promotions, especially with its Jack Daniel’s family. “We are in the midst of a year-long celebration of the Jack Daniel Distillery 150th Anniversary Celebration. We have a variety of promotions and activations in conjunction with this event in markets around the world,” says Helms. The company has many announcements in the coming months and will surely have a great many more events on the horizon.

DIAGEO

New man

at the helm Diageo has created a new structure, separating MENA from Global Travel. Under the new structure, Global Travel moves to London, where Dayalan Nayager has taken on the leadership role by

WENDY MORLEY

iageo’s new Global Travel Managing Director Dayalan Nayager takes the helm at both a challenging time in travel retail and a time of transition for Diageo’s Travel Retail department as it relocates to London, England. “We want to ensure that we have the right structure and resources in place and that we’re focused on the biggest growth opportunities and bringing the business even closer to the customer,” he says. “It’s an exciting time for the Global Travel business and I’m delighted to be taking the helm.”

Areas of attention After many years of strong growth, travel retail has been facing challenges of late. Nayager sees geopolitical and currency issues in addition to changing passenger demographics as the key areas needing attention: “In Asia, for example, China continues to be a key driver of PAX growth, but there is a significant shift in where passengers are flying from: in 2011, 66% of Chinese PAX departed from Shanghai, Beijing or Guangzhou; by 2015 this had dropped to 26% with the balance flying from less affluent ‘second tier’ cities*, which clearly impacts purchase intent, and we have had to adapt to this.” (*Air4casts 2015)

Diageo’s new Travel Retail Managing Director Dayalan Nayager is excited with the company’s plans for travel retail over the coming year

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

Nayager is working on the assumption that global volatility is unlikely to change. “This is becoming ‘the new norm,’ and we need to work harder than ever to deal with unpredictable movements across categories and geographies going forward, as well as working closely with our retail partners to build this positive value proposition,” he says. “We also recognize traveling can be a stressful experience and customers today have more distractions than ever, so gaining their attention is key to success. Therefore we aim to create a more engaging shopping experience that will encourage more travelers to visit the alcohol section of duty free. We want to make this visit as inspiring, educational and easy as possible and showcase products ideal for gifting across various price points and occasions.”

Plenty of opportunity Despite such challenges, Nayager sees travel retail as offering enormous opportunity. “The reality is that of 100 people who go into an airport today, currently only 12 will buy alcohol [Diageo Global Shopper Study 2015]. We see this as a huge opportunity for growth in the coming years, but also as a challenge to continue evolving our offerings to compete with other suppliers,” he says.

“We know that consumers are looking for something different in travel retail – exclusive products that can’t be bought at home. Therefore we have created a range of differentiated liquids exclusive to travel retail, across all spirits categories. Recent TR exclusive launches have included Johnnie Walker Island Green, The Singleton Of Glendullan Range, Talisker Neist Point, and Baileys XC.” For the year ahead, Nayager is excited about Malts: “The category is on fire, showing double-digit growth and huge potential for the future. Diageo holds over 40% of the entire Malts industry stock in some 28 Scottish Malt distilleries and this extensive range we have means that there is a whisky to suit all preferences. The launches of Mortlach, Talisker and The Singleton in travel retail have been well received, but we’re not stopping there. Diageo’s ambition in Malts is to lead the category by 2018, and as such, we will continue to invest significantly behind our four core brands: The Singleton, Talisker, Oban and Mortlach.” Please see the interview in its entirety at www.dutyfreemagazine.ca/asia/industry-news/people-news/diageos-new-manat-the-helm

EDRINGTON

The Macallan guide Kat allows the extraordinary experience to continue in the tasting room in Easter Elchies House

Past &

Present The Macallan: Old and New The Macallan is nestled in the rolling hills of Speyside; this is reflected in the design of the new distillery and welcome center currently being built, with its rolling, undulating roof. Non-traditional to be certain, but the whisky is steeped in tradition. My tour begins in the original Easter Elchies House, built in 1751 and the first of six “pillars” of Macallan whisky. Of the estate’s 270 acres, 90 still grow barley for special The Macallan releases. The water source remains the original wells on the property. From Easter Elchies House we move through every step of The Macallan creation from barley to bottling. Edrington makes a huge investment in its wood, creating all casks and planting two trees for every one it fells. With a career beginning in a cooperage, Master of Wood Stuart MacPherson brings vast knowledge of the characteristics of wood and the flavors imparted. The Macallan’s Master Distiller, too, worked his way through ever-more-responsible positions, starting as a shift worker in warehousing. One can’t help but think his lifelong experience every step of the way offers something special to the whisky. Macallan never uses caramel and never will. Following my distillery tour and a lesson on wood and casks, I’m offered a some extraordinary experiences: tasting The Macallan through a secret hole in the floor that opens to a cask; watching men filling casks with freshly distilled whisky;

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

Speyside and Orkney offer two distinct distillery experiences and two distinct whiskies, each with Edrington’s trademark quality by WENDY MORLEY

tasting the whisky streaming into a trough to be married, and even tasting from the marrying barrel. Finally, I see the truck driving the fine liquid to bottling before heading back to Easter Elchies House for a fine tasting, including the luscious travel retail exclusive Rare Cask Black.

Highland Park, from the land of Vikings Orkney Island, north of the Scottish mainland, is rich in Viking heritage. Vikings were skilled farmers and craftsmen, and Highland Park celebrates this heritage in its range. Like the domestically released Valhalla collection, the travel retail Warrior Series is a nod to the Vikings of old. Due to its location, history and nature, Highland Park retains a truly original character, and has won “Best Spirit in the World” three times. One of the very few distilleries to malt its own barley, its

Highland Park is one of only a few distilleries to malt its own barley, hand turning it on the malting floor and then peating it on the smoke floor

employees hand turn it on the malting floor and then smoke it with local peat. Orkney peat does not contain tree roots, as trees do not grow naturally on these islands; rather, it contains heather and sphagnum moss. According to Patricia, my extremely knowledgeable guide, this creates a uniquely smooth flavor, as tree roots provide an acrid taste. Edrington builds all its casks new, and then sends them for sherry fill. All casks at Highland Park have been used for Oloroso sherry, providing richness, color and dried fruit character to the resulting whisky. Patricia led me through luscious, long, chewy tastings of Highland Park 12, 15,18, 21 and 30YO. Interestingly, she had me drink them out of order, according to which tastes she felt would be one after the other. My favorite was the 21. No, maybe the 18. Actually, they were all wonderful.

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LIQUOR NEWS

Martell Cordon Bleu Extra makes exclusive appearance Martell Cordon Bleu Extra, a new expression of Martell Cordon Bleu, was launched exclusively at DFS in Singapore Changi Airport for the month of September, 2016. The immersive pop-up store located at Terminal 1, open for six weeks, offers a special augmented tasting. There, travelers discover the tasting notes of Martell Cordon Bleu Extra using five senses. A special French delicacy created by the House of Martell’s cellar master is served during the augmented tasting. Visitors are invited to a photo booth, where they can take a journey through the hilly roads of the Borderies Vineyards. Upon purchasing a bottle of a Martell Cordon Bleu Extra, consumers will be given a personalized gift. Last year, the House of Martell famously celebrated its 300th anniversary, with a host of events around the globe and a celebrity-studded party at the Palace of Versailles in France. Martell Cordon Bleu was created in 1912 by Edouard Martell as a “prestigious ambassador to French elegance and Art de Vivre.” Martell Cordon Bleu Extra is a tribute to this icon. After its exclusive period in Changi, Martell Cordon Bleu Extra is rolling out to global travel retail, where it will retain its exclusivity for one year. Martell Cordon Bleu Extra will be available exclusively in global travel retail for its first year

Bowmore GTR-exclusive 10YO inspired by Devil’s Cask series released in Europe and Asia Beam Suntory has launched a new Bowmore whisky, exclusive to travel retail from September to December 2016. This 10-Year-Old is aged in Oloroso sherry casks and red wine barriques. The whiskies are then married. The result is a velvety liquid with flavors of treacle and smooth leather, set off by hints of spice and fruity sweetness. The sherry casks impart notes of figs and raisins whereas the red wine adds a spicy flavor of dark chocolate fudge imbued with dark fruit. Bowmore 10-Year-Old is inspired by the Devil’s Cask series, which in turn was inspired by the “Devil on Islay” legend, wherein the Devil himself was chased through the village of Bowmore and through the gates of the distillery, the first on the Island now famous for its whisky. Those chasing him searched every inch but were unable to find him; he was thought to have escaped by hiding inside a cask of Bowmore that was headed for the mainland. Bowmore is one of the few distilleries that still produces its own floor-malted barley, hand turned. The peaty undertones of the Laggan river add to the ancient Islay traditions expressed through this whisky, and the distillery’s proximity to the sea adds another unique dimension to the whisky’s character. This new travel retail exclusive, available just in time for the gifting season, comes in a striking gift box.

GTR-exclusive Bowmore 10YO, carrying the undertones of spicy dark fruit and chocolate, is available just in time for the gifting season

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

LIQUOR NEWS

Napa Valley’s Robert Mondavi Winery 50th Anniversary Year 50 years ago, the California wine industry wasn’t remotely what it is today. In 1966 Robert Mondavi built the first major post-prohibition winery in the Napa Valley and in doing so, created the foundation upon which sits the extraordinary California wine industry today. Robert Mondavi the man believed strongly in the concept of terroir, and that a wine should express the region of its naissance. The winery that bears his name continues to pursue this concept, representing Napa Valley with wines that are also varietally authentic. In celebration of the winemaker and his legacy, a commemorative 50th Anniversary label will adorn the new release of some of the most enduring bottlings from Robert Mondavi Winery: the 2015 Fume Blanc, Napa Valley, the 2014 Cabernet Sauvignon, Napa Valley and the winery’s hallmark 2013 Cabernet Sauvignon Reserve, To Kalon Vineyard. The To Kalon Vineyard, a 440-acre parcel of exceptional provenance, lies at the heart and soul of Robert Mondavi winery, and contributes to the its To Kalon vineyard-designated and Reserve wine programs. So meticulous is the production of this iconic Cabernet Sauvignon that to ensure only the highest quality fruit is used, the To Kalon grapes are sorted three times. The wine is aged in 100% new French oak barrels for 21 months, and each year reflects the “First Growth” quality of the To Kalon Vineyard. Constellation Brands will be featuring Robert Mondavi Wines at Booth No. D26, TFWA Cannes. Robert Mondavi’s meticulously created To Kalon Vinyard Reserve is the perfect wine to honor the winery’s 50th anniversary

Disaronno launches new limited edition Icon bottle with fashion house ETRO Since its first Icon edition in 2013, Disaronno has kept the world on edge each fall waiting for its next surprising ensemble. This year, Disaronno’s unique look was designed by renowned fashion house ETRO. The annual Icon project benefits Disaronno’s ongoing charity partner Fashion 4 Development, sponsored by the United Nations. As was the case in previous year’s designs by Italian fashion brands, Moschino, Versace and Roberto Cavalli, a portion of the proceeds from sales of the DISARONNO wears ETRO collection will be donated to the development of this unique project to develop the textile trade and fight poverty in Africa. The DISARONNO wears ETRO design draws inspiration from the brand’s Autumn/Winter 2016 season and features striking paisley done in vibrant blue, orange and gold hues. The exclusive limited edition 50cl bottle is available from the beginning of October in major travel retailers globally, supported by activations and promotions, including tasting bars. Again this year, the designer edition will also be available in six different coordinated mini bottles, which will be offered in packs of three. “There is always a huge amount of hype surrounding each year’s new launch, and it’s something our partners, retailers, and consumers get very excited about,” says International Sales Director Domenico Toni. “The Disaronno ICON bottles are perfectly suited for travel retail, with their strong shelf appeal, collectability factor and unique design all being key sales drivers. The previous three Icon editions have all achieved better-thanexpected results in travel retail and we anticipate another successful year for DISARONNO wears ETRO.” The new limited edition icon bottle will be showcased at this year’s TFWA World Exhibition on the Illva Saronno stand (Green Village, M52).

Disaronno by ETRO is the fourth in Milan’s famous liqueur brand’s Icon project, which supports Fashion 4 Development

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

DAVIDOFF

At Davidoff’s Ladies Masterclasses, women find a comfortable meeting place where they can learn about cigars, from seed to enjoyment

New releases Looking at the enormous number of announcements and releases by Davidoff this year, it’s no surprise that this cigar company continues to hold its lofty place in the world of cigars by WENDY MORLEY

his has been a year of a seemingly endless series of announcements by Oettinger Davidoff. In addition to a number of new cigars, the company has released a newly designed line of accessories, a beautiful new Limited Art Edition humidor and launched its Art in Lounges program. In truth, one would need an entire magazine devoted to Davidoff in order to give space to everything the company has been up to in just the past few months. Here’s a small sample.

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

New line of accessories

Women’s Masterclasses

Davidoff has revamped its accessories line through a cigar-inspired design developed in collaboration with Swiss architecture and design agency Atelier Oï. Based in La Neuveville - Switzerland, Atelier Oï has been striving to create a new transdisciplinary design genre and skills to play with materials, shapes and functions. The rollout of this new design across the accessory range is true to Davidoff ’s values of craftsmanship and timelessness, with a contemporary touch of elegance.

Davidoff ’s Ladies Masterclasses were founded to create a place where women can meet without being disturbed, while discovering new things about the cigar world, from the choice of cigar to the lighting and cutting, right through to the enjoyment. These Masterclasses have been held in major cities, including Amsterdam, Brussels, London, Madrid, Vienna and Zurich as well as in Dominican Republic, the home of Davidoff cigars. The most recent addition was Barce-

The perfect marriage of art and cigars is presented for the second year in a row, with The Davidoff Limited Art Edition

Escurio and Nicaragua lines. Participants enjoyed a pairing session with selected champagnes, white and red wines, rums, specially prepared cocktails, chocolate and coffee.

Part of the revenues generated by the Davidoff Limited Art Edition 2016 will be dedicated to sustaining the Davidoff Art Initiative and supporting artists from the Caribbean.

Limited Art Edition 2016: Olivia McGilchrist

lona, where more than 40 women met in the beautiful gardens of Can Travi, set in an authentic 17th-century Catalonian farmhouse. The program included a short introduction to the entire process, from the seeding, harvesting and blending of the tobacco to the handcrafting of the cigars in the Dominican Republic. The participants were able to sample different blends and formats available in Davidoff ’s wide range of cigars, from the mild Davidoff No. 2 and ‘2000’ to the more complex and intense Winston Churchill,

For the second year in a row, Davidoff has chosen an artist and a work to be featured on its Limited Art Edition. The Davidoff Limited Art Edition 2016 is limited to 7,000 unique boxes, each featuring an exclusive still extracted from McGilchrist’s video “from many sides.” Olivia McGilchrist is a JamaicanFrench visual artist whose works explore themes of translocation and issues of Caribbean cultural identity. Each box will carry 10 exquisitely flavorful and well-balanced perfecto cigars, an exceptional format, which only 10 experienced Davidoff torcedores (cigar rollers) are able to craft. A highly limited run of Collector’s Editions were released during Art Basel in June, consisting of one of 16 numbered editions of the commissioned video, a cigar box featuring a unique still image from the video, and a signed certificate by the artist, Visitors also had the opportunity to immerse themselves in a 3D virtual reality video piece by McGilchrist.

Davidoff’s new line of accessories was developed in collaboration with Swiss architecture and design agency Atelier Oï

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

LOCH LOMAND GROUP

Broadcast news

After establishing itself domestically in 90 countries, this year the Loch Lomand Group is making big moves into travel retail by

WENDY MORLEY

ndependent distiller Loch Lomand Group has made a big announcement just in time for TFWA WE in Cannes. The group will reveal its global travel retail range for its two main whisky brands, Loch Lomand and Glen Scotia, at the event. The company has been expanding globally, and now that its brands are available in 90 countries, the Group feels it is time to make travel retail a focus. CEO Colin Matthews says travel retail is important to the company going forward, and for this reason André de Almeida, well known in the global travel retail industry, has been brought on as Managing Director in the channel. Since 2014 the company has invested heavily, creating new bespoke ranges in both of its distilleries, resulting in seven expressions for GTR, some of them exclusive to the channel. Distinctive new bottles and premium packaging emphasize the tradition and quality of these brands, and are sure to appeal to the traveler.

Loch Lomand, with four unique stills The Loch Lomond Distillery, located near the southern tip of Loch Lomand, has four different types of stills, and this has invited the creation of four expressions for the GTR range. Each of these whiskies has completely different characteristics, though from the same distillery. The range includes The Loch Lomond Single Grain, distilled exclusively with malted barley; Loch Lomond Signature, a premium blend that undergoes the distillery’s “100 cask” solera process; Loch Lomond 12-year-old single malt, which contains spirit from two types of stills, and Loch Lomond Inchmurrin Madeira single malt, which comes exclusively from the company’s pot stills with rectifying head, for an exceptionally smooth single malt. “Combined with over 100 years of experience and craft from our coopers at the in-house cooperage, the Loch Lomond GTR range is unmatched in its diverse offering, consistency and excellence,” says de Almeida.

The GTR range includes four expressions that showcase the innovation, versatility and craft of this unique distillery. The bold look in the packaging communicates the crafted nature of the brand and the differences in the stills, in-house cooperage and production

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

One of only three distilleries operating in Campbeltown, Glen Scotia whisky offers significantly different characteristics typical of the Victorian style and perfect for travel retail

Glen Scotia, the Victorian distillery The Glen Scotia Distillery is located in Campbeltown, on the Kintyre Peninsula in southwest Scotland. This is in the “Victorian” or “Campbeltown” whisky region – though a small area, its whisky has distinctive characteristics and is therefore considered its own region. Glen Scotia is one of only three distilleries currently operating there. The Loch Lomand Group has invested significantly to increase production and warehousing for this distillery, in addition to creating a new shop and tasting room. “There are two brand new variants exclusive to the GTR channel: the Glen Scotia Campbeltown 1832, celebrating the founding date of the distillery, and the Glen Scotia 16-year-old,” says de Almeida. “In addition, we also have the Glen Scotia Victoriana, a combination of our finest whiskies chosen for their rare character and exceptional maturity, finished in heavy charred oak casks from our cooperage and Pedro Ximenez sherry casks, resulting in a complex yet remarkably smooth single malt, bottled at natural color. All the expressions are bottled non-chill filtered.”