ASIA Duty Free

T F WA A P M AY 2 0 1 1 • V O L 1 5 , N O 1

TFWA AP 2011

Developments p. in India

42

The trendy traveler p.

72

Turning trends into spend p.

82

E-cigarettes: the new alternative p.

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Letter from the Editor

Asia Free & Travel Retailing (ISSN 1360-9548) is annually by

by Global Global Marketing Marketing Company Company published published annually Ltd., 26 Pearl Street, Mississauga, Ontario L5M 1X2 Ltd., 26 Pearl Street, Mississauga, Ontario L5M 1X2 Canada. It is distributed in the following countries, Canada. It is distributed in the following countries, states, regions and territories on the Asian continent states, regions territories onBangladesh, the Asian continent Pacificand Rim: Australia, Bhutan, and in the and in the Pacific Rim: Australia, Bangladesh, Brunei, Cambodia, China, Fiji, French Polynesia,Bhutan, Guam, Brunei, China, French Polynesia, Guam, Hong Kong, India,Fiji, Indonesia, Japan, Macao, Hawaii,Cambodia, Maldive Myanmar, Nepal, New Malaysia, Hawaii, Hong Kong, Islands, India, Indonesia, Japan, Macao, Caledonia, Maldive New Guinea, New Zealand,Nepal, Philippines, Islands, Myanmar, New Malaysia, Saipan, Samoa, Singapore, South Korea, Sri Lanka, Caledonia, New Guinea, New Zealand, Philippines, Taiwan, Thailand, Tonga, Vanuatu and Vietnam. Postage Saipan, Samoa, Singapore, South Korea, Sri Lanka, is paid at London, England.

Taiwan, Thailand, Tonga, Vanuatu and Vietnam.

The views expressed in this magazine do not necessarily The views in this magazine necessarily theexpressed views and opinions of do thenot publisher or reflect reflect the views and opinions of No. the publisher or editor. Spring/TFAP 2008, Vol. 12, 1. All rights Nothing reprinted or in reserved. editor.

TFAP May may 2011,beVol. 15, No.in 1.whole All rights writtenmay permission from the part without reserved.

Nothing be reprinted in publisher. whole or © in 2008without Asia Duty Freepermission & Travel Retailing. part written from the publisher. © 2011 Asia Free & Travel Retailing.

Duty Free & Travel Retailing AsiaDuty

Hope is faith ’d like to start off by expressing my deepest condolences to the people affected by the 8.9-magnitude earthquake that hit Japan recently. The quake, which was reported to be the most severe since Japan began recording earthquake data 140 years ago, shocked the world and has impacted the lives of tens of thousands of people.

To date, nearly 14,000 people were confirmed to have died in the earthquake and tsunami, and more than 13,000 people are missing.

In recent news, Australian Prime Minister Julia Gillard promised to secure a reliable supply of liquefied natural gas to Japan to help it meet shortages caused by the damaged nuclear plant in Fukushima. Other governments and organizations have also provided great support and continue to do so.

As I’m sure many of you will agree, Asia is a very resilient region, and its residents are known for their strong work ethic and extraordinary strength in times of crisis.

This has certainly helped them in the past few months.

In this issue we look at the progress in areas such as China, India and Australasia.

We also focus on market leaders such as Nuance Watson (HK), Changi and LS travel retail ASPAC, along with popular suppliers.

I look forward to seeing you in Singapore.

I

Kind regards,

Hibah Noor Editor hibah@dutyfreemagazine.ca

26 Pearl Street & Travel Retailing Asia Duty Free Ontario L5M 1X2 Canada Mississauga, PearlFax: Street Tel: 1 905 821263344; 1 905 821 2777 Ontario L5M 1X2 Canada Mississauga, www.dutyfreemagazine.ca Tel: 1 905 821 3344; Fax: 1 905 821 2777 PUBLISHER www.dutyfreemagazine.ca Aijaz Khan aijaz@globalmarketingcom.ca PUBLISHER Aijaz Khan EDITORIAL DEPARTMENT aijaz@globalmarketingcom.ca EDITOR Hibah Noor EDITORIAL DEPARTMENT hibah@dutyfreemagazine.ca EDITOR Liquor and Tobacco Hibah Noor Rick Lundstrom hibah@dutyfreemagazine.ca rick@dutyfreemagazine.ca ASIA ART ASSOCIATE EDITOR DIRECTOR P. Convery Patrick Balanquit padraic.asiadutyfree@gmail.com patrick@globalmarketingcom.ca CONCESSIONS,CONTRIBUTORS LIQUOR, & TOBACCO EDITOR Elizabeth Kerr Ryan White Lorna Strickland ryan@dutyfreemagazine.ca ART DIRECTOR ADVERTISING SALES Patrick Balanquit ADVERTISING & MARKETING MANAGER, patrick@globalmarketingcom.ca DUTY FREE TITLES, AMERICAS Beatrice Pitocco CONTRIBUTORS Tel: 1 416 908 1734 Andrew Brooks bpitocco@rogers.com James Ross DIRECTOR OF SALES, DUTY FREE TITLES,SALES EUROPE ADVERTISING Meena Bedi Tel: +33 5 53702538MANAGER ADVERTISING & MARKETING Mob:Kim +33Carrera 6 78343767 meenabedi@wanadoo.fr kim@dutyfreemagazine.ca CIRCULATION & SUBSCRIPTION MANAGER CIRCULATION & SUBSCRIPTION MANAGER Teresa Garrity Deepa J teresa@globalmarketingcom.ca deepa@globalmarketingcom.ca

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ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

18 14 16

TFWA AP MAY 2011 • VOL 15, NO 1

IN BRIEF

28

iHealth connects to Apple devices ■ Emirates adds Shanghai to A380 routes ■ Paul Topping joins Heinemann Asia Pacific ■ EU lifts restrictions on LAGs

ASSOCIATION NEWS: TFWA

“The way forward”

32

Asia Duty Free catches up with TFWA’s Alain Maingreaud to discuss the disaster in Japan, travel retail in general in Asia, this year’s conference and the dynamic region’s future

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REGIONAL REPORT: CHINA

Chasing the dragon China’s travel-retail trade enjoyed a strong year in 2010 – yet that good fortune was hardly shared as foreign retailers continued to find themselves largely excluded from the action

34

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REGIONAL REPORT: AUSTRALASIA

Think global, act local Australasian airports are increasingly aligning their retail operations with home-town destination branding. Ironically, they’re tapping a worldwide travel trend to do it

AIRPORT NEWS: MALAYSIA AIRPORTS

Malaysian persuasion Malaysia Airports has an enticing lineup of new developments this year that it's betting will tempt passengers and non- passengers alike into spending more in travel retail. Asia Duty Free asked Senior General Manager of Commercial Services Faizah Khairuddin to explain what's in store

AIRPORT NEWS: HONG KONG INTERNATIONAL AIRPORT

HKIA releases admire, a new leisure magazine HKIA’s admire covers 280 shops at the airport along with interesting travel tips

36 38

OPERATOR NEWS: NUANCE WATSON (HK)

People powered Nuance-Watson (HK) is betting on its staff as the best protection against the volatility of the travelretail business

OPERATOR NEWS: DELHI DUTY FREE SERVICES

The bold and the beautiful Delhi Duty Free Services has come a long way in less than a year at Delhi’s elegant new Terminal 3.

Asia Duty Free asked its CEO about how the company has blazed a trail in Indian duty free in such a short time

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ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

Table of Contents

48 40

AIRPORT NEWS: CHANGI AIRPORT GROUP

Lion City spirit Life is never dull at Singapore’s Changi Airport – not in 2010 and not for the foreseeable future

42 48 50 52

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AIRPORT DEVELOPMENTS: INDIA

One thing leads to another The opening of Delhi airport’s Terminal 3 last year set a new benchmark in India’s aviation development, but will Delhi’s example raise standards for booming airport construction in other Indian cities?

OPERATOR NEWS: LS TRAVEL RETAIL ASIA PACIFIC

Beyond expectations

72 62 64

BEAUTY BEAT: SKINCARE & COSMETICS

Beauty regime Creative cosmetics and revolutionary skincare: traveling consumers will have plenty of options to choose from this spring and summer

SUNGLASS REPORT

A shade different

LS travel retail goes above and beyond in its travel retail offerings and in turn sees robust growth in one of the world’s most dynamic regions

Sunglasses sales in Asia are growing as the appetite for luxury brands increases. Asia Duty Free reports on a market that is reaching new heights, but which also has its own particular demands

OPERATOR NEWS: ERAMAN

COMPANY NEWS: MAUI JIM

Eraman gears up for growth Eraman gains momentum with a series of new store openings

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The art of eyewear Maui Jim has come a very long way – and it’s enjoying market success at its own relaxed pace, on its own terms

SPOTLIGHT ON TFAP EXHIBITORS

It’s show time This year’s TFWA AP show welcomes a unique range of exhibitors to the trade floor. Here is what attendees can expect from some of the industry’s leading brands

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COMPANY NEWS: ESTÉE LAUDER

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BEAUTY BEAT: FRAGRANCES

Sophisticated skincare

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A host of alluring scents fill the air as suppliers roll out their best offerings yet for the warmer seasons

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

Eyes on the prize Bijoux Terner still going strong with new concepts and merchandising

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Time and again Estée Lauder successfully meets the demanding expectations of discerning Asian customers

Fragrance frenzy

COMPANY NEWS: BIJOUX TERNER

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FASHION REPORT

The trendy traveler The fashion and accessories category is shaking off its somewhat restrictive high-end image as more accessible brands come aboard

JEWELRY REPORT

All that glitters We poll some of jewelry’s leading lights for their views on the market – and for a glimpse at what’s new and exciting

Table of Contents

78 82 84 86 88 96 104

CONFECTIONERY REPORT

You can’t beat sweet Traffic growth, self-consumption and impulse buying all play their part in the resilience of the confectionery category

COMPANY NEWS: PERNOD RICARD

Turning trends into spend Asian travelers are known for having a keen eye for luxury offerings and brown spirits, and Pernod Ricard caters to both tastes with a wide range of new releases

COMPANY NEWS: DIAGEO

The power of partnership At TFWA AP, Diageo GTME Asia Pacific will continue to communicate the benefits of a trinity model that is already shining a spotlight on the spirits category in the region

COMPANY NEWS: BBR

A concentration on quality BB&R Spirits continues to make inroads in Asia Pacific travel retail by focusing on a range of quality spirits that includes The Glenrothes range and No. 3 London Dry Gin

COGNAC REPORT

Spirit of success Cognac is doing well in travel retail, buoyed by the strength of the high-end of the market, a more modern marketing approach and the surge in Asian demand

WINE REPORT

Points east New wines, new wineries, new promotions, new customers and even new bottles are making the market in Asia

COMPANY NEWS: VAPOR CORP.

Publicly traded pioneer leads electronic cigarette industry After years of sustained domestic growth, Vapor Corp.’s revolutionary e-cigarette brands Fifty-One and Krave are set to take the duty free industry by storm

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COMPANY NEWS: BRITISH AMERICAN TOBACCO

An eye for innovation Asia Duty Free discusses the importance of creativity to BAT’s Asia Pacific business with Head of Operational Marketing Justinus Nurman

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ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011 T

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In Brief

iHealth connects to Apple devices New Jersey-based Aero-Cos International, worldwide distributor to the duty free and travel retail channel, is ready to unveil iHealth, a blood pressure monitor for the iPhone, iPad and iTouch.

This practical device helps track blood pressure and shows how it reacts to exercise, medication, diet and weight, all controllable factors. For each measurement, the testing process in motion can be viewed. All data including Systolic, Diastolic, heart rate, time and WHO classification, flow into the history automatically, enabling the user to view archive files. iHealth helps manage records by using simple tools such as graphs and average calculations.

Results can be shared with family and friends simply by email; the user can also email results to doctors or other medical professionals

as part of personal healthcare. The monitor is suitable for all ages. iHealth’s App was selected as one of the top ten by “Mobile App Showdown, It is FREE.” The dock station for your iPhone, iPod touch and iPad doubles as a charging station too. The battery charge lasts for up to one month – about one hundred tests – so it doesn’t consume the battery life of your mobile device.

For more information contact: Nathan Barbanel Aero-Cos International inc.

90 Myrtle Street, Crandford, NJ 07016, USA Tel:+1 908 709-0800, Email: cpaero@aol.com Website: www.ihealth99.com

Emirates adds Shanghai to A380 routes Gulf carrier Emirates is set to make Shanghai the latest Asia-Pacific destination for its Airbus A380 fleet.

The airline's 489-seater A380s will be the first scheduled A380 service operated by any airline to Shanghai, flying the route three times a week.

"We are happy to welcome Shanghai's first A380 flight to ...

Shanghai Pudong Airport, having adapted the facilities and enforced

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ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

thorough safeguard measures for A380s to ensure the smooth operations of this revolutionary superjumbo," said Yu Wuyan, Vice President of Shanghai Airport Authority and Chairman of the Board of Shanghai International Airport.

Emirates Chairman and Chief Executive Sheikh Ahmed bin Saeed Al-Maktoum said: "Thanks to the support that we have received from the Civil Aviation Administration of China and the Shanghai Airport Authority, Shanghai will become the latest destination to join our global Airbus A380 network.

"Emirates has enjoyed a long and successful partnership with China," said Saeed Al-Maktoum. "We began cargo operations between Dubai and Shanghai in 2002, and started passenger services in 2004. The A380 launch demonstrates our continuing commitment to this important country."

Shanghai will be the second mainland Chinese destination for Emirates' A380 flights, and the third in Greater China, following the launch of A380 flights to Beijing on August 1, 2010 and to Hong Kong two months later.

Emirates currently has 15 A380s in service, flying from Dubai to 10 countries around the world.

The airline's new A380 flights to China started on April 27.

Paul Topping joins Heinemann Asia Pacific Heinemann Asia Pacific Pte. Ltd., subsidiary of duty free retailer and distributor Gebr. Heinemann, has announced that Paul Topping will be added to the list of directors of the company.

Topping joined the company in the role of the Director (Special Projects). The other directors are Patricia Poon (Director Business Development), Carol Luu (CFO), Julia Baumann (CCO) and Max Heinemann (COO). Steffen Brandt is the CEO of Heinemann Asia Pte. Ltd. Topping has over sixteen years of experience in the travel and domestic retail trade in Asia.

Steffen Brandt, CEO of Heinemann Asia, said, “We are delighted to have Paul in the team. Given his experience, energy and knowledge of the region, he will assist us on developing our strategy and footprint in Asia.”

In response. Topping said: “Having admired Heinemann and their business approach for over twenty years and now seeing their appetite for Asia, I am very honored to be in the team.”

EU lifts restrictions on LAGs The European Union passed legislation lifting restrictions on travelers carrying duty free LAGs (liquids, aerosols and gels) purchased at non-EU airports and airlines. This legislation came into force on April 29, 2011.

The new rules apply to passengers arriving into the EU, Switzerland, Norway and Iceland and then transferring onto a flight to another destination.

Under the legislation, from April 29 all passengers traveling into Europe from non-EU airports and then transferring onwards will be allowed to travel without having their duty free LAGs confiscated, providing the goods are packed in an ICAO-approved sealed tamper-evident bag (STEB).

The European Travel Retail Council (ETRC) has consistently supported the lifting of the restrictions in principle, provided that the necessary procedures were in place to facilitate passengers who are transferring at EU airports without any delay or inconvenience.

However, ETRC has conducted extensive discussions with the European Commission, member states and European airports and it is clear that as things stand, many airports in Europe will not be able to lift the restrictions as scheduled.

A number of airports are awaiting delivery of equipment which will allow them to comply with the legislation at a future date. In addition, some member states have concerns about security and are reluctant to change the current rules immediately. Whilst some airports will be in compliance, the overall situation will be very unclear.

As an industry we cannot afford for our customers to have products confiscated that are bought in good faith. This causes high levels of customer dissatisfaction and frustration. ETRC strongly urges retailers to maintain the status quo for now and not sell LAGs to transferring passengers upon arrival in the EU. ETRC is closely monitoring the situation and will provide regular updates and further guidance as matters develop. Existing arrangements in place for passengers arriving on flights from the U.S., Canada, Croatia, Singapore and Kuala Lumpur and transferring onwards will continue.

FREY WILLE HEADQUARTERS: Gumpendorfer Straße 81 | Tel.: +43-1-599 25 - 450 www.frey-wille.com | vienna, austria

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Association News: TFWA

“The way forward” Asia Duty Free catches up with TFWA’s Alain Maingreaud to discuss the disaster in Japan, travel retail in general in Asia, this year’s conference and the dynamic region’s future BY RYAN WHITE Asia Duty Free: How have the events in Japan affected travel retail in Asia?

Alain Maingreaud, Managing Director, TFWA: Travel into and out of Japan has obviously been affected by the aftermath of the dreadful events there and it will take the country some considerable time to return to anything like normal levels. We understand from Japanese retailers that departures from Narita in the period since the earthquake have risen by around 20%, while inbound arrivals to Tokyo have fallen by some 60%.

Travel retail will definitely not be a priority at such a time. The impact on the wider region is likely to vary—in order to relieve the pressure on Japanese airports some flights are refueling and restocking in other Asian hubs—and we cannot at this stage tell what the longer term implications might be.

ADF: Have there been any new developments with regard to the TFAP & GATE ONE2ONE conference, such as speakers, activities and workshops?

AM: The TFWA Asia Pacific & GATE ONE2ONE Conference and Workshops will be a very stimulating affair. There’s a great line-up of speakers, with Christian Blanck-

aert, President of Petit Bateau , Rohit Talwar, CEO Fast Future, Sunil Tuli, President of APTRA, Ron Kaufman, Author & Founder of Up! Your Service and our own President Erik Juul-Mortensen.

The workshop on duty free and travel retail in Japan will go ahead as planned, which is a credit to the speakers who are prepared to travel from Japan at this difficult time, and we have three further workshops on India, China and Partnerships in Practice, all led by expert panels. The TFWA Industry Associations lunch will cover the challenges facing our industry at present and how we all ought to be reacting.

ADF: Can you give us an update on confirmed exhibitors and sponsors, and how this compares to last year?

AM: To date we have 213 confirmed exhibitors, which is up 24% over last year, with a record 58 new or returning exhibitors across the categories, so there will be much to interest all our visitors. We have laid on the popular ONE2ONE meetings service again, which helps airport executives to meet up with suppliers and concessionaires.

We are also putting together a varied

“Asia will be the new force in travel retail in the next decade in spite of natural disasters and numerous challenges.”

Alain Maingreaud, Managing Director, TFWA

TFAP registration was up 24% over last year, with a record 58 new or returning exhibitors across the categories and a total of 213 exhibitors

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ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

social and leisure program to maximize the networking possibilities. The Welcoming Cocktail will be at Raffles, the Pool Party returns and takes place at the Mandarin Oriental with sponsors MLP wines by Paul Sapin and the Singapore Swing moves to the Tanjong Beach Club on Sentosa Island with a circus theme. The Golf Tournament is organized in partnership with Inter Parfums and the after-hours TFWA Asia Pacific Bar is sponsored by several wines & spirits exhibitors.

As for the conference and workshops, the Diamond sponsor is Qatar Duty Free, the Platinum sponsors are Changi Airport Singapore and Ajmal and other sponsors are Ferrero, Lightfoot Asia and Perfetti van Melle.

ADF: What excites you the most about travel retail in Asia?

AM: It is the range and diversity of duty free and travel retail which I find most stimulating. You would think that over a decade in the business would mean you have seen most tricks but every year and at every show I am amazed by the range of products and the fabulous stands, and I am excited by the new developments taking place all around.

To think it used to be liquor, cigarettes and the odd bottle of scent—and not so long ago!

We now have glamorous double level stands such as Bulgari, which are the way forward for the big brands in Singapore. We have 58 new and returning exhibitors and many more companies on the floor than last year.

You could not wish for more positive proof that Asia will be the new force in travel retail in the next decade in spite of natural disasc ters and numerous challenges.

Regional Report: China China Duty Free store in Hainan island

Chasing the dragon China’s travel-retail trade enjoyed a strong year in 2010 – yet that good fortune was hardly shared as foreign retailers continued to find themselves largely excluded from the action

P. CONVERY he year 2010 was the year of the tiger, according to the Chinese zodiac. That was an apt symbol as Chinese travel retail roared out of the global downturn and onto a path of robust growth.

China Duty Free Group (CDFG) – far and away the biggest retailer in the Chinese travelretail market, with more than 190 outlets nationwide – consolidated its position as the country’s pre-eminent operator with a number of highprofile store openings and a surge in sales revenues during World Expo 2010 in Shanghai.

In July, CDFG opened a sprawling new

BY

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ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

China Duty Free operates stores in Hainan which attracted nearly 26 million tourists last year, 97% of whom were domestic visitors

Regional Report: China

Dufry operates stores at Shanghai Hongqiao Airport and at Beijing Capital International Airport

retail complex in the new international terminal at Hangzhou’s Xiaoshan International Airport. The retailer developed and manages the entire 2,000-square-meter retail space in close partnership with the airport operator under a five-year contract.

CDFG put the finishing touches to China’s biggest duty-free store at the end of September, when it opened a 3,600-squaremeter expansion of its Sanya Galleria outlet on the southern island of Hainan. The store now covers an area of more than 7,000square-meters.

Hainan will be CDFG’s main focus this year and beyond, says a Senior Executive at the company who spoke to Asia Duty Free on condition of anonymity.

CDFG’s parent, China International Travel Service (CITS) is developing a retail complex that will eventually occupy an impressive 400,000-square-meters, in which CDFG will operate the duty free.

“It’ll have a duty-free part and a duty-paid part, but we’re still working on the space allocation for each,” says the Executive, who is a regular source for Asia Duty Free. “We’re waiting for the detailed drawings, and then we’ll talk further with our suppliers.

He adds that the first phase of the project is likely to open in 2013.

Hainan has also been in the spotlight on the policy front. China’s Ministry of Finance

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announced in late March that mainland Chinese visitors to Hainan island would be able to shop duty free from April 20.

The new policy establishes a tax rebate for domestic visitors to the southern island province on purchases to a maximum value of 5,000 yuan (US$760) per person, twice a year. Hainan residents will be entitled to the same tax rebate once a year.

The refunded taxes include customs duties, importation value-added taxes and excise taxes. China currently levies VAT at around 17%.

Hainan attracted nearly 26 million tourists last year, 97% of whom were domestic visitors, according to the island’s Provincial Commerce Bureau. And CDFG is poised to cash in.

CDFG has also continued its drive to develop business in China’s so-called secondtier cities, most notably at Nanjing’s international airport, where it took over the dutyfree and other retail operations at the beginning of this year.

“The shops are still under renovation at the moment but they’re due to open in June,” says the CDFG Executive, adding that they will all operate under the CDFG brand.

“It’s similar to [what we did at] Hangzhou airport. In most airports, like Qingdao, we operate only the duty free, but at Hangzhou and in Nanjing we [will] operate all retail and food & beverage in the international area.

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

CDFG will manage a retail area of 1,000square-meters in Nanjing, and the Executive says: “If this model of operating all retail is successful, we’ll try to extend it to other airports.”

CDFG says Shanghai’s Expo boosted its bottom line, and that its “See You at World Expo 2010” promotion generated a “strong rise” in turnover at the 53 duty-free and three L’lle du Luxe duty-paid stores that participated in it.

“We had a shop in the Expo park with a total area of 800-square-meters,” says the CDFG Executive. “The shop was good, and sales at the stores that participated in See You at World Expo were very good – up 15%.”

He says the company’s experience with Shanghai’s Expo served as a reminder of the opportunities presented by large-scale events, and that it also demonstrated the importance of a partnership approach to running promotions.

“Joint promotions are important for us,” he says. “Previously, brands had own promotions, duty-free shops had their own promotions and they’d have to allocate some money to do promotions. But for Expo we did joint promotions – CDFG, the individual shops and the brand suppliers got together. We all participated and focused on the promotion.

“CDFG was in charge of running the

Regional Report: China

general promotion atmosphere – like lucky draws and spot prizes of World Expo-licensed products for spending a certain amount – and brand suppliers also arranged their promotions in this period, moving their usual promotions from November, for example, to the Expo period. Also the duty-free shops themselves initiated some promotions to manage their stock. For instance, with some older stock, they wanted to sell it fast, so they organized promotions.

“We all did this together,” he says. “It’s better to do this than fighting [for sales] alone.”

The retailer plans to build on its off-airport success with a downtown store in Beijing, catering to the city’s diplomatic community. “[Foreign] diplomatic personnel in China have the privilege to be able to buy duty-free even without going abroad, so we’re going to offer a one-stop shopping experience so they can buy liquor and tobacco, and also imported goods such as imported cheeses and other luxury products,” the Executive explains.

He sees a ready-made market for CDFG’s foray into diplomatic retail.

“If an embassy wants to hold a ceremony or an event, with the approval of local Customs, they can buy, for example, 200 bottles of French wine for it.”

The Executive says CDFG plans to open its diplomatic shop by mid-2011.

He says, however that expansion is not always easy – even for a company with the market domination that CDFG enjoys.

“The challenge is twofold,” he says. “There are not so many big [airports and other entry/exit points] left that don’t have dutyfree shopping. So we need to figure out which points have potential. Maybe they are small right now but they might develop very fast in the future. We always try to open shops in such places.”

But he also says that CDFG’s plans are shaped by more than just business considerations, reflecting the company’s place in China’s centrally planned capitalist development.

“We sometimes open duty free shops to facilitate the functioning of a border crossing or an airport,” he explains. “Even if the traveler numbers are small, we operate dutyfree shops there because it’s our responsibility.”

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“We are forming a company for this part of the world in order to adapt to the different culture, customs and buying behavior. We believe there will be opportunities for future business in China.”

Steffen Brandt, CEO of Heinemann Asia Pacific

Smaller rival Sunrise Duty Free didn’t expect much of a revenue bump from Shanghai’s Expo, and didn’t get one.

“The Expo was mainly an attraction for domestic travelers,” says Sunrise Chairman Fred Kiang. “Obviously, there was some short-term sales growth, but all in all it wasn’t anything like a Chinese holiday, where there’s a tremendous amount of foreign travel bringing in very good [dutyfree] business.”

“Overall, we had a respectable year,” he says.

Sunrise has 10-year contracts for its outlets at China’s top three airports – Beijing Capital International Airport and Shanghai’s Hongqiao and Pudong airports – and it has been working to expand its operations.

“At Beijing Capital Airport, we’ve had organic sales growth. But what is significant is that we have enlarged and reconstructed our arrivals shop there, and we’re hoping that it will become a much better operation.”

The store occupies an area of around 120square-meteres and opened just before the peak Chinese travel season of Lunar New Year.

“We’re constantly looking at new opportunities, and as those open up, we’ll consider them,” says Kiang. “We looked at Hangzhou and Chongqing, but we felt that they’re remote from what we operate, and we looked at how

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

hard they were to get and at how much effort we’d have to devote to something that might not bring us the return that we want.”

But he likes the retail model that CDFG operates at Hangzhou, in which it runs all the airside retail, not just duty free.

“That’s what we’re doing in Beijing,” he says. “Both the duty free and duty paid on the airside are our operations, so we like that kind of approach.”

For the time being, however, Sunrise is letting CDFG – which Kiang jokingly calls “our big brother” – press ahead in locations where its huge resources cannot be matched.

If companies such as Sunrise seem dwarfed by the overwhelming dominance of CDFG, spare a thought for the long line of foreign travel retailers queuing up to get into the China market.

For many foreign operators, China – with its enormous population and booming economy – is the holy grail of travel-retail markets. But the Chinese government has been reluctant to open that market to nonChinese companies, maintaining the virtual monopoly enjoyed by CDFG. Dufry is one foreign firm that has made some inroads in China. The Switzerlandbased retailer operates stores at Shanghai Hongqiao Airport and at Beijing Capital

Regional Report: China

Dufry’s Hermés store in China

International Airport. All its stores are in the domestic areas of the airports and all are duty-paid.

Another non-Chinese firm in the Chinese travel-retail market is Heinemann Asia Pacific – a subsidiary of German trading house Gebr. Heinemann – which has established partnership arrangements with China National Service Corp for Chinese Personnel Working Abroad (CNSC) to supply downtown duty-free stores. It began by supplying a single CNSC outlet in Shanghai, then extended the arrangement to a Dalian shop.

In the past 12 months Heinemann has added one CNSC store in Kunming and another in Hefei. It also independently operates a duty-paid Bvlgari store at Beijing Capital International Airport.

Yet despite these examples of modest progress, the CDFG Executive says Beijing is unlikely to open the country’s travel-retail market to foreign firms at any time in the foreseeable future.

And he’s not alone in holding that view.

A Senior Executive at Dufry who also declined to be identified, citing concerns about the sensitivity of the subject, says: “It’s eventually going to happen. It’s definitely going to happen, but nobody can put a date on when.”

He is also skeptical about the policy plans announced for Hainan and says developments on the island suggest that the Chinese duty-free market will remain off-limits to foreign firms.

“There was a time when the governor of Hainan was lobbying for a foreign company to be part of [the island’s duty-free trade]. But if you look at the results today, you can see it’s not going to be duty free but a tax refund. It’s going to be strictly a Chinese company operating things, and no for-

24

eign company is anywhere close to any such duty-free opportunities.

“So the message is very clear: if they’re not even going to allow a foreign company to be part of what’s essentially a tax-refund scheme, when it comes to being part of duty free… well, you can do the maths yourself. Despite the lobbying of the governor of Hainan – the highest-ranking official on the island – if his personal lobbying doesn’t make it happen, that sends a signal about how the government wants to regulate the sector.”

Steffen Brandt, CEO of Heinemann Asia Pacific, says that in spite of the limitations on the duty-free trade in China, he is quietly satisfied with the growth he is seeing in Heinemann’s operations there.

“It’s relatively small business,” he says, “but everything is moving in the right direction. We are forming a company for this part of the world in order to adapt to the different culture, customs and buying behavior. We believe there will be opportunities for future business in China.”

And despite the difficulties of market access, the Dufry Executive also regards the opportunity that the country could come to represent in the future as impossible to ignore.

“It’s a very underdeveloped market with huge potential,” he says. “I don’t think there’s a lack of business potential, and I don’t think there’s a lack of purchasing power.

But because of these regulatory decisions and other issues, the whole travel-retail segment [in China] is not properly regulated or implemented and it doesn’t reflect the true potential of the market.

“China has some of the richest people in the world today, and it’s the second-biggest luxury market in the world. Also, Chinese consumers have a mentality geared to domestic

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

consumption rather than just buying abroad, and therefore the potential is there. But if you don’t offer them anything, they can’t buy.”

The Dufry Executive says that despite the obstacles to development and expansion, his company maintains its operations in China for two reasons.

“The first is that the potential of the market is so huge,” he says. “There are a lot of complaints about how the Chinese dutyfree market is today, but if you look at any major duty-free market in the world today – maybe Brazil, maybe Spain, for example – at some point they were all protected, all very underdeveloped. But somebody believed in them, stayed there and benefited at the end of the day. China is going to be the same. It’s not for sprinters – it’s for people who want to go the distance.

“The [second is that] Chinese travelers are not going to walk to the end of the world to get the best deal possible – and this is a fundamental reason why we have a big focus on China. It makes business sense for us to be there. I get asked a lot why I’m in the dutypaid business. I tell people that for every one international passenger I have nine domestic passengers. Those nine passengers may not spend as much, but if I put their spend together, it’s almost equivalent to what I get from an international passenger – and this is still an underdeveloped market.”

“What China needs now is a lot of belief,” he says. “[Being there] has to make business sense, but what’s important is that you have to be able to stay there and follow your work through to see the full potential of it.”

Given the glacial pace at which the Chinese regulatory environment appears to be changing, patience such as that seems to be c the only option.

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Regional Report: Australasia

“Australian way” in Brisbane Airport

Think global, act local Australasian airports are increasingly aligning their retail operations with home-town destination branding. Ironically, they’re tapping a worldwide travel trend to do it BY P. CONVERY ompared with many AsiaPacific destinations, Australia and New Zealand sometimes seem like a long way from anywhere. But if Australasian airport operators and travel-retailers have anything to do with it, travelers will remember their first and last sights in the two countries for more than simply feeling far-flung.

Especially in Australia, airports are making an effort to establish retail themes that reflect the distinct characteristics of their locations. Brisbane Airport Corp has tried to create areas that explicitly represent southeast Queensland and the airport’s home city.

Andrew Brodie, the airport operator’s General Manager of Retail, says: “The international terminal has been designed specifically to reflect Queensland’s architecture and lifestyle, using high ceiling, sculptures and large, bright spaces. And since its expansion in 2008 the [number of] retail offerings in the terminal have doubled.”

Further south, Sydney Airport Corp has gone for an upmarket “forum” concept, with a wide range of upscale brands such as Burberry and Giorgio Armani in its new Terminal 1, which was completed early last year. Alongside these premium brands is the first Victoria’s Secret lingerie outlet in an

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Australian airport, reflecting Sydney’s reputation as a commercial capital that also knows how to have fun.

In Australia’s political capital, Canberra, the pitch is to a sophisticated passenger profile, with lounges decked out with custom-made furniture and Italian leather. In a clear nod to its clientele, the airport’s NewsLink bookstore devotes a proportion of its offer twice its typical size to politically-themed books.

In Melbourne, the retail is all about what Australia Pacific Airports Corp Retail Manager Deborah Price calls “the cultural aspects of the city – being the food capital of Australia and having a more relaxed lifestyle and a huge sporting culture”.

Price says: “Our emphasis is on food & beverage and we’ve been able to bring really strong off-airport brands into the airport.”

She says this new direction has been made possible by an expansion of International Terminal 2E. “Originally the airport retail was just built into the old terminal,” she says, “but the extension is purpose built and now we’re able to bring those great aspects of Melbourne into it.”

The first phase of the expansion was completed last November and the second, final phase is due to open in September.

And there have been branding efforts

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

across the Tasman Sea in New Zealand, too.

Wellington Airport, which serves the capital city, runs its commercial operations under the tagline “Wild at Heart”, suggesting the creative buzz for which the city is known.

Grant Archibald, CEO and Managing Director of locally-based retailer Duty Free Stores New Zealand, says: “I’m not sure whether many other airports in New Zealand have gone down that road, but it makes a lot of sense for airports that are in highly identifiable tourist areas.”

Duty Free Stores New Zealand operates at airports in Rotorua, Hamilton, Dunedin, Queenstown and Wellington (where it has threatened to pull out over a distribution dispute reported by Asia Duty Free in February). It also runs stores at Adelaide and Gold Coast airports in Australia, and Archibald says destination branding – at the latter, in particular – is key.

“Our retail offer is always dedicated to the [location] of the airport that we’re in, particularly because destination merchandise is such a big part of duty free these days – up to 15% of our total sales,” he explains.

Ivo Favotto, Director, Sydney Airport for The Nuance Group (Australia), doesn’t bind the company’s duty-free offer tightly to the freewheeling, even slightly flashy image pro-

Brisbane Airport F1RST Tax and Duty Free is located in Brisbane Airport

jected by the city’s airport (“We have to be all things to all men,” he says. “We have to cater for 18-year olds going on their first holiday to Bali as well as to high-spending Chinese luxury buyers”). But he does observe that the

destination concept can play a significant and growing role in airport retail.

Nuance operates a highly successful concept named “World of Wine”, and Favotto says: “For Australia, wine is a destination

An aerial shot of Brisbane Airport

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

29

Regional Report: Australasia

And destination merchandise may be set to become more important as another Australasian and regional travel trend gathers pace – rising Chinese passenger traffic.

Melbourne Airport’s Price says the airport has changed its destination merchandise offering by stacking the shelves with souvenirs that are made in Australia rather than Australianstyle products made in... China.

“China in the past five years has become the number one long-haul market from Melbourne,” she says, adding that the airport saw a surge in Chinese passenger numbers in February of 20.6%.

At Brisbane Airport, Chinese passenger traffic is up 21.4% this financial year, says Brodie, overtaking US traveler numbers to make the Chinese the airport’s fourth-largest market.

Duty Free Stores New Zealand’s Archibald also recCafé Vu in Melbourne Airport ognizes the destination merproduct – it’s a souvenir as much as it is a chandizing and branding potential repreconsumption category. Wine makes up sented by the growing Chinese travel market. around 20% of our overall liquor category, “The Chinese are becoming more imporbut – more interesting than that – is that it’s tant in our Australian airports,” he says. “Our the growing part.” merchandise mix is carefully tailored towards Favotto says Nuance has done a lot of Chinese consumers – we’re talking about work on developing the display of Aus- souvenirs, confectionery and gifting catetralian wines, working with major brands gories, which are particularly important.” such as Penfolds and Jacob’s Creek, and that Favotto’s experience at Sydney Airport has it opened the first rare and aged wine store some parallels, but also differences, mainly in an airport environment. when it comes to the categories favored by “We sell quite a lot of rare and aged bot- Chinese customers. tles,” he says, “and we have a very strong “[The Chinese] have changed our offer strategy, so you can come into our store and – no question,” he says. “Chinese passengers find 15- to 20-year-old wines that have been make up about 5% of the total, but they’re appropriately cellared available for purchase. a greater proportion of the spend. They If you’re a wine connoisseur and you know punch above their weight in terms of spendthat 1996 was a great year and we’ve got one, ing. So we think of them as a distinct segment then we get your attention. We did it first and and we stock products we know they’re interwe’ve gone after it in quite a big way and it’s ested in – such as Penfolds wines and cognacs. been very successful.”

“We also stock a number of Chinese drinks

30

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

such as maotai [a Chinese liquor]. I can’t get my hands on enough maotai!” he says. “I need more supply... I sell as much as I can get.

“The Chinese also have their favorite brands in perfumes and cosmetics – one Australian brand that’s very attractive to them is Jurlique. And we’re also doing quite well out of vitamins, royal jelly and honey, which are big-sellers.”

“The high-end brand distribution system in China is still immature,” Favotto says. “So when they come to countries like Australia, where they can be sure that the supply chain is secure, and that there are no knock-offs or any of that sort of thing, they buy upmarket stuff. We’ve been through this phenomenon before with the Japanese, who behaved in exactly the same way in the 1980s.”

And just as airport retailers went to considerable effort to court Japanese travelers then, so are doing today – possibly more so.

Mandarin is a language that’s heard more and more often in retail outlets at airports in both New Zealand and Australia.

“We always have Chinese-language trained staff in our stores,” says Archibald.

“About 50% of our staff at Gold Coast Airport are Asians.”

Chinese signage is also becoming a more common sight.

“Having more in-store communications in Mandarin is part of our ticketing strategy,” says Favotto. “But our idea is not to create a segment in the store that groups together all the things that we think are of interest to Chinese people and then say, “Chinese people come here”. We’re exposing brands that we know are of interest to the Chinese in their category space and therefore making sure that we cater for the market – but also trying to broaden their interests into a wide range of products.”

And concessionaires and airport operators are combining their destination branding efforts with a little home-from-home for Chinese travelers, mounting promotions and events such as Lunar New Year celebrations, Chinese food festivals and lion dances. In travel retail, it would be hard to find a better example of thinking globally and c acting locally.

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Airport News: Malaysia Airports

Malaysian persuasion

Malaysia Airports has an enticing lineup of new developments this year that it's betting will tempt passengers and non-passengers alike into spending more in travel retail. Asia Duty Free asked Senior General Manager of Commercial Services Faizah Khairuddin to explain what's in store BY P. CONVERY Asia Duty Free: What can you tell me about Malaysia Airports' overarching retail development strategy?

Faizah Khairuddin, Senior General Manager of Commercial Services, Malaysia Airports: Malaysia Airports operates 39 airports nationwide, including five international airports, and the commercial development of these airports is classified under four airport commercial models: Lifestyle, Leisure, Community and Corporate Responsibility.

The Lifestyle Model focuses on destination creation and provides more for business-oriented customers. The commercial offerings under this model are more refined and exclusive. The Leisure Model aims to develop vibrant commercial hubs bustling with activities. The offerings comprise mid- to mass market chic, entertainment and casual dining.

ADF: What developments is Malaysia Airports undertaking at its main Lifestyle airports?

FK: The continuous enhancement of the Satellite Building at Kuala Lumpur International Airport (KLIA) [has seen us introduce] new concept brands such as MAC and Shu Uemura Boutique as well as Poney, Khazanah Home Gift & Décor and Fauchon.

Under KLIA's Main Terminal Building Retail Optimization Project, we are further enhancing the shopping offerings and ambience. Phase I started last year and Phase II commenced this year, focusing on product placement as well as brands and zoning proposition, with plans for optimal usage of the terminal area - especially the Viewing Gallery in the departure hall and end-to-end development in the arrival hall. Upon completion, which is targeted for 2012-13, the commercial space is expected to have increased by 61%.

At Kota Kinabalu International Airport — Malaysia's second-busiest international airport — two of the highlights lined up are the introduction of a high-end boutique, complemented by Sabah specialty and travel needs products, and an open mall offering [such products as] chocolates and confec32

tionery, perfumes and cosmetics, toys, fashion accessories and Eraman Malaysia’s very own brand, Uniq. The open mall will also feature a cafe. All in all, upon completion this year the project is expected to boost commercial space [at Kota Kinabalu] by 117%.

ADF: What is Malaysia Airports up to at its key Leisure airports?

FK: KLIA's Low-Cost Carrier Terminal has seen continuous commercial enhancement, with the introduction of new brands and the re-engineering of travelers’ airport experience. Some of the new brands are 100 Vision, Diesel, Lagenda Cafe, Boost Juice Bar, Passage Thru India [vegetarian F&B] and Nuri Reflexology. The redevelopment has increased commercial space in the terminal by 585%.

But KLIA2 is the most exciting development of all. The new greenfield terminal is being developed within the KLIA environment and will boast a leisure-oriented customer profile. More business passengers are also being [targeted] as airlines upgrade their services to long haul flights with more destinations. KLIA2 is destined to be a new and exciting, bustling retail hub, a centre for fine selections of F&B, complemented by the High Street “fashion walk” concept. It’s a place where shopping and dining [will] intertwine. The space for retail, F&B and lounges will be more than 35,000 sq m and tender exercises are planned for the second half of this year.

ADF: What major airport refurbishments will you be carrying out this year?

FK: Plans for the transformation of Langkawi International Airport include interior design enhancement in terms of facade concepts, [as well as] kiosk and service-counter models with the objective of further improving product placement and presentation. It'll be our firstever initiative on such a scale in an international airport other than KLIA. Among the new product offerings are a pharmacy, books and news, passenger business lounge and a beverage bar.

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

Penang [International Airport] is also undergoing a major redevelopment to increase passenger comfort and to support passenger segregation, with a new domestic departure hall. When it's complete in 2012, the project should have increased the airport's commercial space by more than 200%.

ADF: What plans do you have for more retail in arrivals?

FK: The retail plan for arrivals is to support impulse purchases [with such stores as] children's boutiques, sunglasses shops, newsstands and convenience and personal care offerings, as well as to enhance service offerings such as telecoms and banking facilities. Another key segment is meeters and greeters, for whom the array of F&B offerings will be further expanded.

A key highlight for the year will be the public concourse in arrivals at KLIA. Development there will focus on services and F&B, and on the realignment of products, with the central area given over largely to family-oriented offerings and the far right end of the hall to lifestyle services such as nail parlors and hair salons. c

Faizah Khairuddin, Senior General Manager of Commercial Services at Malaysia Airports

www.neuhaus.be

Airport News: Hong Kong International Airport Pages covering a variety of topics within the magazine

HKIA releases admire, a new leisure magazine BY

HIBAH NOOR

HKIA’s admire covers 280 shops at the airport along with interesting travel tips ong Kong International Airport (HKIA) has released the inaugural Regular features will include: ■ Fashion & Beauty: the latest fashissue of its quarterly ion at HKIA shops and skincare leisure magazine, called tips for travelers from renowned admire. The bilingual publication international brands provides more in-depth information ■ Dining: dining choices and recon the 280 shops, over 80 catering ommended dishes at HKIA outlets and 4 entertainment zones at ■ Hot Spot Travel: special features on HKIA, as well as unique, contempodestination traveling rary lifestyle and traveling information ■ People’s Talk: airport staff sharing and travel tips for today’s sophistitheir stories cated travelers, both before and dur■ News & Events: the latest events ing their time spent at HKIA. and activities at HKIA With interesting feature articles, The magazine is distributed at the interviews, anecdotes and informafollowing points of Hong Kong tion on the latest promotions at the International Airport free of charge: airport, admire aims to enlighten Customer Services Counters, readers with fresh perspectives and leaflet racks and selected retail and ideas on where to go and what to dining outlets at Terminals 1 and 2. look for at HKIA. Designated points at the restricted The cover story of the launch area of Terminal 1, starting from issue is “My Dream, My Dream AirFront cover of HKIA’s quarterly magazine, admire March 28 to April 26. These locations port.” The magazine speaks with three visionary personalities who are successful in their unique include the luxury brand boutique boulevard at Departures East Hall disciplines on what an ideal airport should be. The issue also (Level 6), near Gate 21 at Departures Central Concourse (Level 6), includes an exclusive story on the 50 millionth passenger of HKIA, the airline desk areas E1 and E2 at Arrivals Pre-immigration Hall (Level and his exciting surprise of receiving 50 gifts totaling over HK$188,000 5) and the promotional booth at Departures Check-in Hall (non(US$24,000) from the airport authority and various airport busi- restricted area) from March 28 to May 3.

The magazine will also be available for free at downtown locaness partners.

Additionally, a special supplement on wine in Chile comes with tions starting in mid-April. Selected Caltex fuel stations in Wanchai, this launch edition. Through an intoxicating journey of three Chilean Sing Woo Road in Happy Valley, Waterfront in Causeway Bay, wineries, including world-renowned winemaker Montes, the secrets Repulse Bay, Princess Margaret Road, Waterloo Road, Taikoo Shing, Tsing Yi, Jockey Club Road in Fanling and Tai Hang Tung are of the growing grapes and making Chilean wines are unveiled.

The magazine also highlights special skincare tips and offers among the locations that will offer the magazine. Furthermore, selected for travelers, as well as the latest fashion trends that shoppers will Pacific Coffee outlets in Causeway Bay, Central, Sheung Wan, be seeing at the airport this spring and summer. There is a special Kowloon Tong, Lantau Island, Shatin, South District, Taikoo Shing, story on a famous local Hong Kong food delight, wonton noodles, Tsim Sha Tsui, Tuen Mun and Wanchai will also carry admire.

To view a copy of the magazine online, please visit www.hongkonwhich introduces the extensive types of wonton noodles available c gairport.com/admire. at HKIA restaurants.

H

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ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

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Operator News: Nuance-Watson (HK)

People powered Nuance-Watson (HK) is betting on its staff as the best protection against the volatility of the travel-retail business BY P. CONVERY

s the global economy has come back to life in the past year, Nuance-Watson (HK)’s determination to weather a difficult period and prepare for better times ahead has seen it ride the crest of the recovery at Hong Kong International Airport. Two key developments were the opening of its 108-square-meter Scent & Beauty shop and a major overhaul of its anchor department store, the Plaza.

But perhaps the most fundamental change in the retailer’s business as it geared up for 2011 was the settlement and implementation of its core development plan.

It’s often said that any business is only as good as its staff, and it’s this understanding that’s at the heart of Nuance’s planning for its future.

“A company ‘re-engineering’ forms the fundamental basis of our corporate development plan,” says Regional Managing Director for North Asia Alessandra Piovesana.

“With the long term in mind, this is a very strategic move aiming to rejuvenate our organization to optimize our processes for satisfying customers, strengthening our competitiveness, [keeping] pace with change and promoting management advancement.”

She says: “What stimulated the thinking behind this re-engineering project is the fact that our airport business is highly volatile, with increasing competition, global political and economic changes and short concession terms. We feel it important to be able to manage the future – or else we will

A

36

run the risk of the future managing us.”

While such a slew of challenges might daunt some people, Piovesana took a simple approach to addressing them.

“We started with the customers and worked backwards,” she says.

She explains that Nuance has overhauled the organizational structure of each of its departments – from Operations and Merchandising to Information Technology – to realign them with the goal of better serving and satisfying customers.

The results, she says, speak for themselves. “[Our staff] have become more empowered, managers have become coaches, and the emphasis has moved towards teams’ achievements in ensuring customers are satisfied. Our people feel they have more space for individual performance and career progress, efficiency is higher and – most importantly – the company is becoming more productive as we identify and validate skills and drivers.”

A big part of Nuance’s drive to nurture top quality customer service among its staff is its Six-Star Best Service Competition, a structured program based on what Piovesana calls “six-step best selling practices”.

“It has reinforced skills and cultivated a strong team spirit in achieving customer service excellence,” she says. “And the end result is a highly motivated team that are eager and enthusiastic to keep improving themselves, striving to exceed customers’ expectations.”

She adds that the timing of the Six-Star Best

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

Service Competition awards in February is designed to give staff the maximum possible boost in time for the retailer’s peak sales season of Lunar New Year, and that Nuance also partners with brands to organize recruitment events and training programs.

Nuance has sharpened its focus on such seasonally-driven offers and promotions.

“At Christmas, we ran a purchase-withpurchase promotion with a ‘Forever Friends’ cuddly plush, creating a heart-warming ambience for our customers,” Piovesana says. “And at Chinese New Year, we hosted a promotion named ‘House of Prosperity and Treasure’, offering goodie bags containing different gifts to customers as a symbol of luck, which all our customers were keen on at this traditional Chinese festive time.”

She says both promotions lifted penetration rates in Nuance’s stores and drove higher spending among its customers.

Also boosting the bottom line for Nuance has been its customer loyalty program, which debuted in 2010.

“Our loyalty program had as its primary focus the recruitment of customers for some of our newly launched boutiques,” says Piovesana. “Customers’ responses to our program have been enthusiastic, especially in terms of repeat purchases and spend maximization. So we’re now aiming to include in the loyalty program a broader range of our retail portfolio.”

As the travel-retail trade enters a period of renewed volatility, with oil prices spiking and potentially reducing passenger traffic, Nuance’s clear-eyed focus on the staff that form the building blocks of its business c right seems right on the money.

Operator News: Delhi Duty Free Services

Delhi Duty Free Services' store in Terminal 3 of Delhi's Indira Gandhi International

The bold and the

beautiful Delhi Duty Free Services has come a long way in less than a year at Delhi’s elegant new Terminal 3. Asia Duty Free asked its CEO about how the company has blazed a trail in Indian duty free in such a short time BY P. CONVERY hen Delhi’s Indira Gandhi International Airport opened its impressive new third terminal last year, it was clear that such a world-class facility would require a retail offer to match. Delhi Duty Free Services (DDFS), a joint venture between airport operator Delhi International Airport Ltd, Indian Duty Free Services and Aer Rianta International, boldly stepped up to the plate.

With more than 4,380-square-meters of shopping area, the retailer has the lion’s share of T3’s airside concession space, which has been designed specifically to showcase its offer.

“If you went through the old terminal, it was equivalent to something like Southampton airport,” says DDFS Chief Executive Nicholas Godard-Palmer. “Now it’s more like when you walk through, say, the King Power operations at Bangkok [Suvarnabhumi]. The design is a lot more open and there are so many perspectives from which it’s better.”

Good design seems to have provided a considerable boost to DDFS’s sales, contributing to what Godard-Palmer describes as “a phenomenal year”. But behind the retailer’s success there has been a willingness to take risks and pitch an ambitious offer in a market regarded by many as undeveloped.

“We’ve been very bold,” he explains. “A lot of people used to say, ‘Well, we don’t know if [Indian travelers] are quite ready for that’.

But they certainly are!

“We’ve done exclusive global launches with Chanel, exclusive launches with some of the liquor companies, [and] we brought in two cars into the terminal last October. Okay, in places like Dubai, it’s been done, but here it’s absolutely new, and it’s a thing people aspire to... it’s phenomenal for people to see cars in a shop for the first time in India.”

But Godard-Palmer says promotions and activities that typically drive sales elsewhere are not always effective in India, as it’s a relatively new travel-retail market.

“You’re setting the standard and setting the tempo, so it’s still kind of trial and error,” he says.

And it’s a market that’s changing fast.

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38

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

“We opened up, and people said, ‘This is great, well done’,” he explains. “And as we raised the standard, [our customers’] expectations rose and spend rose as well. The customers were basically telling us, ‘This is your new benchmark’. And as we raised the standard further, they stepped up again.

“Of course we still had customers at the other price points as well, but as we kept raising the bar, we found we were selling US$2,500 bottles of cognac, as opposed to Johnnie Walker Black, which is the traditional drink of the market here. And so we asked where it might stop, and we haven’t found that ceiling yet. I don’t think the passengers quite know where the limit is or what they want. It’s only when you show something to them that they’ll say ‘Yes, that’s what I want’.

“In the past nine months I’ve been amazed at how diverse it is.

It’s gone from night to day. We introduced Hugo Boss, and we introduced Montblanc, and we’re selling John Lennon pens at US$1,000 each – and it’s all been embraced.”

Following its whirlwind debut, DDFS has already expanded its operations in T3, opening a clutch of fashion outlets and two 50square-meter last-minute-concept stores in the airport’s piers.

“We’re developing another 350-square-meter shop this year and we’re looking at new concepts for that and for new things we can do,” says Godard-Palmer. “We also have Formula 1 hitting Delhi in October, which will be fantastic for Delhi and India and DDFS because we’re going to embrace that.”

And even more growth seems to be in the pipeline.

“Now we have buy-in from the brands – they were a little bit skeptical about [us], having been in Delhi themselves for years – because now they’ve seen the shops and the opportunity and the potential for growth. So we’re getting lot of brands and suppliers coming to us and saying, ‘We want to work with you to really develop things’.

And we’re getting more exclusive launches and more partnership deals for things like promotions and launches.

“You don’t get a moment’s peace!” he jokes.

Many travel retailers may well be wishing they had Godardc Palmer’s problem.

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Airport News: Changi Airport Group Ruyi by Tunglok at Changi *Photo courtesy of Changi Airport Group

Lion City spirit

BY

P. CONVERY

Life is never dull at Singapore’s Changi Airport – not in 2010 and not for the foreseeable future

C

hangi Airport Group (CAG), the airport’s operator, has energy and drive that seem boundless when it comes to making its eponymous air hub the envy of the travel-retail world. Its efforts paid off in 2010, with robust traffic growth and retail sales whose expansion outstripped the growth in passenger numbers.

The airport ended 2010 having handled a record 42 million passengers – 13% more than the previous year – and concession sales were 15% up. According to Generation research, Changi ranked number four among the world’s airports in terms of concession sales.

And in 2011, CAG is aiming to better even that stellar performance.

Central to its strategy are promotional activities, which CAG Executive Vice-President of Commercial Lim Peck Hoon says play “an anchor role in creating buzz and excitement within the airport’s terminals”.

CAG is planning to repeat several promotional success stories from 2010, the stand-out being “Be a Changi Millionaire”, which debuted in June 2010 and made a Singapore-dollar millionaire of a local former radio DJ in January this year.

To participate, visitors to the airport – passengers and non-travelers alike – simply had to spend a minimum of S$60 (US$48) on shopping or dining. Besides the grand prize, the promotion saw 188 other cash prizes with a total value of more than S$200,000 (US$159,000) given away.

Lim says: “During the six-month campaign, concession sales at Changi grew by about 13% year on year, above passenger traffic growth of 12% in the period. The millionaire draw was also successful in raising the amount spent in single transactions, [with] sales receipts of S$500 (US$397) and 40

above [climbing] 20%.”

Be a Changi Millionaire will return this year and a new winner will be crowned early in 2012.

CAG extended its goods & services tax absorption program to almost all of the retail in the public areas of all the airport’s main terminals in 2010, and has now made it permanent. And to mark Lunar New Year, it added a program offering shoppers a double-GST refund on their purchases from January 28 to March 28 this year.

“Be a Changi Millionaire” made a Singapore-dollar millionaire of a local former radio DJ in January this year. *Photo courtesy of Changi Airport Group The airport operator is also extending its Changi Rewards loyalty will increase by 25% and total concession program until the end of 2011 as part of its space will go up by more than 10%.” drive to boost sales.

When the upgrade is complete, she says, And a number of improvements to the air- there will be more than 70 retail shops and port’s terminals are on the cards, says Lim. over 30 F&B outlets in the terminal. The final In T3, levels B2, L2 and L3 of the build- phase of the redevelopment is due to be ing will gain additional retail space, she says. finished by the end of the year.

“A key part of the revamp of T3’s public In T2, meanwhile, the airport operator areas will see the retail space on B2 increase recently opened a retail zone named The by some 30% to 7,500-square-meters,” Lim Fashion Gallery, which features 17 top brands, explains. “Upon its completion, there will be including Agnes b., Boss, Bottega Veneta, some 50 retail and dining outlets on that level Salvatore Ferragamo and Marc by Marc alone.”

Jacobs. Lim says it’s one of the largest fashThe first phase of the overhaul is due to ion outlets at any airport on the world and be completed during the second quarter of that CAG is looking forward to adding some this year, and the remainder by year’s end. of the brands there to the offering in T1.

Lim says T3’s Level 2 will get some 2,600Lim says: “Over the next few months, square-meters of retail space – or about six some of the new retail shops arriving in the additional shops – and that the retail area on T1 Departure Transit Mall include Marc by Level 3 will be revamped and reconfigured. Marc Jacobs, Longchamp, Hugo Boss, Alfred “In addition, CAG is rejuvenating its 30- Dunhill, Salvatore Ferragamo and Godiva.” year-old T1 … to a level comparable to terThat’s more proof – if ever it were needed minals 2 and 3,” she says. “The number of – that Changi’s long-running retail roll looks c concessions at T1, both airside and landside, set to continue.

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

Airport Developments: India

Nuance India store in Bengaluru International Airport (also see below)

Delhi Duty Free Services operates most of T3’s travel-retail stores at Delhi’s Indira Gandhi International Airport

One thing leads to another

The opening of Delhi airport’s Terminal 3 last year set a new benchmark in India’s aviation development, but will Delhi’s example raise standards for booming airport construction in other Indian cities?

BY P. CONVERY he past 12 months have seen impressive progress in India’s bid to become a nation of air travelers, most notably with the opening of the new Terminal 3 at Delhi’s Indira Gandhi International Airport last July, before the Commonwealth Games began three months later.

The new terminal is the world’s sixth largest and boosted the annual passenger capacity of the airport to 46 million. Fourth and fifth terminals are also planned, eventually taking the airport’s annual passenger capacity to 100 million.

The terminal sets a new standard amid India’s sometimes ramshackle airports, marking a clear recognition of the huge commercial potential of retail business to airport operators.

For many years upscale retail brands had steered clear of Indian airports due to the relatively poor quality of their shopping environments, but T3, alongside several other airports around India, has placed an upgraded

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retail offering front and center of new airport development in the country.

Delhi Duty Free Services operates most of T3’s travel-retail, with more than 4,380square-meters of shopping space.

Nicholas Godard-Palmer, the company’s CEO, says: “Terminal 3 is a new beginning, a new benchmark. At its inauguration, the Aviation Minister — Mr [Praful] Patel, at the time — said, ‘This is a proud moment for Delhi and a proud moment for India. [India has] set this standard and it’s something we now hope to do in Mumbai.’ So even from those early days, I think [the government] has been saying, ‘Yes, this is the future.’”

India’s second-busiest airport is engaged in its own process of expansion and upgrading, too. Mumbai International Airport Ltd (MIAL), which operates the city’s Chhatrapati Shivaji International Airport, is currently implementing a master plan for the airport that includes the construction of a new, integrated terminal with capacity for passenger traffic of 40 million travelers annually.

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

Godard-Palmer expects the new terminal to maintain or even better the standard set by Delhi’s T3.

“Mumbai is a totally different part of the country and has a different passenger profile,” he says. “But you’ve got Bollywood there and a lot of industry, and so they’ll want the very same [as Delhi’s T3] if not more.”

Travel retailers are already lining up for concessions at the new terminal.

“The airport everybody is waiting for is Mumbai,” says Rolf Blaser, Country Head of Nuance Group (India).“We’re expecting Mumbai [Chhatrapati Shivaji International Airport] to call a tender within the next couple of months. Mumbai offers huge, huge business and we obviously want to be part of that.”

But even MIAL seems to recognize the limitations posed by operating just one airport for a fast-developing city the size of Mumbai, and is preparing a bid to operate a proposed second airport for the city, in the district of Navi Mumbai.

The Navi Mumbai airport project has

Airport Developments: India

been in the works for several years, and subject to numerous delays, but it was finally announced in March that bid documents for the airport will be issued in June, allowing developers to submit tenders for it.

Like many of India’s new airport projects, it will proceed under public-private partnership arrangements, with the City and Industrial Development Corporation (Cidco) and the Union government holding a combined 26% while the winning private-sector developer will hold the remaining 74%.

MIAL says it is in a position to bid for the project without the balance-sheet strength of its parent, GVK Power & Infrastructure Ltd. Rival GMR Group, which operates Delhi’s international airport, among others, is also expected to throw its hat into the ring.

Cidco expects the first phase of the new airport to be completed in 2014, serving about 10 million passengers annually.

Further south, a slew of airport developments is also under way.

In Bangalore, India’s IT industry capital, Bengaluru International Airport’s Terminal 1 is being expanded to boost its capacity from around 10 million to 17 million pas-

44

sengers per year. The work, which is expected to cost 10 billion rupees (US$220.2 million), is due to be completed no later than mid-2012 and result in “radiant interiors and new exteriors [that] will mirror the rich culture of Karnataka and the vibrant colors of this garden city,” says Bangalore International Airport Ltd Managing Director Sanjay Reddy.

Nuance India operates the duty free at Bengaluru, which Blaser hails as a model airport.

“It’s not huge,” he says, “but it’s a pearl of an airport from a retail and operational perspective. And I think it must be one of the best airports in India in terms of passenger spend ratio. Even if it’s not number one, it must be in India’s top three.”

Blaser also says Nuance is eyeing Chennai for its next expansion into India’s airports.

The city has one airport and may be close to getting another, although plans for a greenfield international airport on the proposed site at Sri Perumbudur have been mired in a stop-start approvals process for several years now.

The Airports Authority of India, which operates most of the country’s airports, says a second airport is necessary in Chennai as

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

the limits to expansion of the city’s current airport are reached.

“The existing airport has structural limitations which will allow only limited expansion to cater to growing traffic projections,” says a source at the AAI. “Hence a second airport is necessary.”

Despite increasing pressure to move ahead with a new airport at Sri Perumbudur, a decision on the project is not expected until at least May, after state elections have been held.

There has been no such stalling in Thiruvananthapuram, where Trivandrum Airport’s new international terminal opened on March 1. The terminal has capacity for traffic of 1.8 million passengers annually.

Ahmedabad’s airport, Sardar Vallabhbhai Patel International, also has a new international terminal, completed in September 2010. It takes design cues from Singapore’s Changi Airport and won second place in India’s National Structural Steel Design & Construction Awards.

At Kolkata, meanwhile, a new, integrated terminal is due to open by the end of this year.

The development comes in response to a huge increase in passenger traffic in recent

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Airport Developments: India

years and will give the airport capacity for 20 million passengers a year. Once it is completed, the airport will be able to accommodate large aircraft such as the Airbus A380 super-jumbo.

And larger aircraft are part of expansion plans at Pune’s Lohegaon International Airport, near Mumbai. The airport’s runway is to be extended this year so wide-bodied planes such as Airbus A340s and Boeing 747s can use it. Currently the largest aircraft that fly from Lohegaon are Airbus 319s and Boeing 737-8s, which seat between 120 and 180 passengers.

As much as this pace of development might seem to promise a potential boom for travel retailers, hurdles remain.

P.K. Thimmaya, CEO of local retailer Flemingo, which operates duty-free at 13 Indian airports and nine sea ports, says: “Over the past five years there has been a real change of outlook towards airport retail and the AAI has realized that there are possibilities to increase non-aeronautical revenue. And they have done quite a bit. But there is much,

much more that should have been done.

“Most shops are not designed keeping in mind the passenger flow,” he says, “and catchment areas in retail have not been designed in a way that works with the passenger flow. There’s a long, long way to go.”

Thimmaya is doubtful whether the example set by Delhi’s T3 will be carried through to many other airports in the country.

“We’ve seen airports like Mumbai, Hyderabad, Bangalore and Delhi, and they’re very, very different from other airports in India,” he says. “But beyond that, there’s not really been any progress. And unfortunately it’s still not changing because airports’ commercial departments have no role to play in the design of the airports themselves.”

He also says there is no shortage of hostility in some quarters towards PPP schemes, pointing out that such arrangements could have saved the retail at Chennai’s airport, where Flemingo is the sole remaining concessionaire after other retailers pulled out, citing unfavorable trading conditions and onerous fees.

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But Godard-Palmer is convinced that the airport sector is on track for a wave of new-build projects, with commercial considerations providing a lead.

“Future development will definitely be on people’s minds,” he says. “You can fix existing operations, piecemeal something together and put on better [retail] offers, but at the end of the day you need new terminals, new buildings. I think there’ll be a different mindset going forward.

“We benchmark our pricing against [airport retailers in Bangkok, Singapore, Dubai and London,” he explains. “We consider retailers at those airports our competition, and the airport operators themselves will be looking at things in exactly the same way, thinking, ‘We need to encourage airlines, so how are we going to attract them?’ It’ll be the same sort of mindset.”

As Indians take to the skies in ever greater numbers, travel retailers will be hoping the current and potential future operators of India’s airports take a lead from the bold approach taken in the nation’s capital. c

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Operator News: LS travel retail Asia Pacific

T i h The Fashion Gallery was created in order to offer exciting retail solutions that go beyond travelers’ expectations and deliver airports’ needs

HKIA releases admire, a new leisure magazine Beyond expectations BY

HIBAH NOOR

LS travel retail goes above and beyond in its travel retail offerings and in turn sees robust growth in one of the world’s most dynamic regions

lthough it’s only May, LS travel retail ASPAC has already achieved more than many operators do in a full year.

While the recent high-profile opening of The Fashion Gallery in Changi Airport’s Terminal 2 has dominated headlines of late, LS travel retail ASPAC is far from a one trick pony. The recent purchase of a portfolio of 10 Whitcoulls bookstores located in New Zealand’s airports, the planned opening of between 30 and 50 news and gift stores in Shenzen metro and at the new Shanghai high-speed train stations and the upcoming launch of three new stores in Changi Terminal 1 have effectively made LS travel retail ASPAC one of the biggest players in the travel retail industry in the region.

Asia Duty Free recently sat down with Emmanuel de Place, COO Lagardère Services with responsibility for LS travel retail ASPAC, to discuss the many exciting developments taking place at the moment. While his team has a lot on its proverbial plate with a total of nearly 200 travel retail and domestic stores throughout Asia, it’s clear that de Place sees LS travel retail ASPAC’s recent successes as part of a natural evolution given the company’s 20-year history in the region and keen understanding of consumer preferences in its key areas of operation.

A

A tailored approach As mentioned, LS travel retail ASPAC opened The Fashion Gallery, a specialist, luxury brand fashion store, during February in Terminal 2 of Changi Airport. The company calls The Fashion Gallery “the most dynamic expression” of its ability to “create exciting retail solutions that go beyond travelers’ expectations and deliver airports’ needs.”

Emmanuel de Place, COO, LS Travel Retail

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

RYAN WHITE

The new store functions as a reinforcement of Lagardère Services’ luxury brand expertise and represents a step change in its fashion store experience in the region, evidencing an innovative approach to high-end fashion retailing.

Located in Departure Lounge North, the 764-square-meter store is one of the region’s largest multi-brand airport fashion outlets. Created to provide an exceptional fashion shopping experience, the stylish and elegant store showcases a range of 17 internationally renowned luxury designer fashion brands. Each brand has been carefully selected to meet the desires of the luxury shoppers among the 12 million international passengers traveling through Changi T2 every year.

Despite the challenges of running a multi-brand fashion store, de Place tells Asia Duty Free that sales have topped expectations largely as a result of some well-timed research: “The reaction to The Fashion Gallery has been extremely positive,” he says. “When you take over such a large multi-brand fashion store, it's difficult to improve sales month after month because you need time to really understand the customer's expectations—what they buy and how they buy. We did a lot of studies before opening the store to see what the passengers expected, and this has paid off.”

Another key to LS travel retail ASPAC’s success in Changi’s T2 has been a focus on customer service. The operator takes care to train each salesperson as the purchase of high-end products usually requires a very tailored, personal approach. Furthermore, the company has customized the product offering to suit T2’s travelers—mostly passengers departing to Malaysia, Indonesia, India, Thailand, China and Australia.

“As there is really no winter to speak of here, we have to adapt

“We began dedicating many more resources to Asia last year, and since that time we’ve really seen the fruits of our labors.”

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BY

The staff at The Fashion Gallery are trained in sales techniques, language courses and have intensive product knowledge

rebranded as Relay stores.

In addition to the recent Whitcoulls purchase, LS travel retail ASPAC is planning to open between 30 and 50 news and gift locations in the metro in Shenzen and the new high-speed train stations around Shanghai and beyond. The company is making a concerted effort to develop its travel retail news and gift network in China, says de Place.

Despite LS travel retail ASPAC’s success in China in the realm of news and gifts, the company has no immediate plans to parlay its success in Changi by opening airport stores beyond Hong Kong.

However, de Place notes that he wouldn’t entirely rule out the possibility in the future.

“Opening airport stores in China is something we’ll continue to investigate,” he says, “but for the moment we have no specific plans.

Having said that, I can tell you that we definitely feel that we have something to bring to the table as far as airport duty free is concerned, especially given our success in Singapore. There will be some big tenders in Hong Kong this year and we will surely be present there. We really believe that we can bring some added value and something new for the airport and the consumers.”

Opportunities abound to the weather in Asia by selling the appropriate fashion items,” explains de Place. “We try to address this by looking at the profile of our customers and following changes closely. Also related to this is the fact that we identified this season’s trend for more colored products as opposed to selling a lot of black and white items.”

Indeed, addressing the needs of consumers is of paramount importance to de Place. For this reason, the opening of the Fashion Gallery saw an innovative campaign incorporating facebook. The initiative effectively played to the overwhelming popularity of the social media site in Asia.

The campaign encouraged shoppers to pre-plan their visit by becoming a member of The Fashion Gallery facebook page. Once in store, travelers could interact with a facebook “magic mirror,” which captured a stylish image of the traveler that was then sent directly to their facebook page to share with friends around the world.

“It was a great way to create animation and innovation in the store,” says de Place. “Changi is also very keen on this type of initiative. Customers are very aware of this technology and increasingly are expecting retailers to incorporate it into their promotions. We're constantly making sure that we're up to date in this regard.”

A literary endeavor The recent purchase of 10 Whitcoulls bookstores—5 located in Auckland, 2 in Wellington, 2 in Christchurch and 1 in Rotorua— effectively adds to LS travel retail ASPAC’s already impressive lineup of Relay, NewsLink and Watermark Books locations in Asia. At press time, the New Zealand locations were in the process of being

The Fashion Gallery showcases a range of 17 internationally renowned luxury designer fashion brands

Despite no immediate plans to open up airport stores in China, LS travel retail ASPAC is moving ahead with its highly successful airport duty free business in Singapore. At the beginning of this month, the operator’s multi-brand confectionery store, called So Chocolate, opened in T1. The location measures 300-square-meters and is the company’s first experience with a large confectionery store.

Given the success of the magic mirror campaign in The Fashion Gallery, LS travel retail ASPAC will also be using the initiative to attract shoppers to So Chocolate.

In addition to the above opening, Q3 will see two boutiques, Longchamps and Dunhill, opening in T1. The terminal is a great place for these brands given its passenger mix, says de Place.

“In Terminal 1, Australians are the number one passenger group,” he notes. “However, Chinese passengers also make up a large proportion of total travelers in the terminal. As Dunhill and Longchamps are popular brands in China, we’re expecting a great response.”

Other opportunities are present for LS travel retail ASPAC in Australia, where a number of smaller tenders may be up for grabs later this year. Furthermore, the operator continues to be open to acquisition and partnership options that align with its renewed focus on Asia.

“We’re working hard to continue developing the business in Asia,” concludes de Place. “We began dedicating many more resources to the region last year, and since that time we’ve really seen the fruits of our labors. We’ve always held the belief that possibilities in Asia are limitless, and we’ve been proven right. We’re looking forward to watching LS travel retail ASPAC continue to develop as the rest c of this year unfolds.”

A traveler interacts with The Fashion Gallery’s innovative magic mirror, which captures a stylish image that will be sent directly to his facebook page

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

Operator News: Eraman

Eraman General Manager Umar Bustamam says the retailer is aiming for a higher profile this year as it focuses on both consolidation and expansion

Eraman gears

up for growth

BY

P. CONVERY

Eraman gains momentum with a series of new store openings ravel retailer Eraman Malaysia has launched a push for stronger growth this year, with a range of initiatives, promotions and plans that it hopes will raise its profile regionally and drive sales.

A key part of the company's strategy is a focus on integrating food & beverage (F&B) offerings into the retail environment.

"We believe in interspersing both our retail and F&B outlets," says Eraman Malaysia General Manager Umar Bustamam. "The availability of both shopping and dining outlets complements and enhances the retail mix to benefit travelers at the airports [where] we operate and provide varied choices for their comfort and convenience."

The retailer is looking to open nine new outlets in four of the airports at which it operates this year, seven of which will be devoted to F&B. The airportâ&#x20AC;&#x2122;s in line for the new retail and F&B outlets are Kuala Lumpur, Kota Kinabalu, Kuching and Langkawi international airports.

It is also planning to give its outlets a makeover.

"Eraman's current activities are focused on both consolidation and expansion," Bustamam says. "In terms of the former, this includes the roll-out of facelifts for most of our outlets located in all the international airports in Malaysia. The most immediate of [these] will involve our outlets at Penang International Airport and Kuching International Airport.

These two outlets will undergo renovation works both externally and internally."

And it seems the retailer is eyeing opportunities farther afield than the airports in which it already has a presence.

Bustamam says: "We are constantly looking at growth opportunities whenever additional retail space becomes available, either within or beyond the airport, as well as overseas airport locations as and when such opportunities are also available.â&#x20AC;?

Eraman is also planning on expanding its offer, with Bustamam saying it wants to add at least another three or four brands in the fra-

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ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

grances and cosmetics category, two brands in liquor, several brands in both local and imported chocolates and several brands in fashion and accessories.

Another tool the retailer is using to drive sales is a series of joint promotions.

Bustamam said: "Eraman has started a strategic marketing campaign with Commerce International Merchant Bankers Berhad [CIMB], the largest bank in Malaysia by market capitalization. With this marketing collaboration, all CIMB credit card customers from Malaysia, Indonesia and Singapore are rewarded with an exclusive discount structure for purchases made at our outlets."

Under the arrangement, CIMB World MasterCard and Visa Infinite cardholders are eligible for discounts of up to 15% at Eraman outlets and Platinum, Gold and Classic cardholders for reductions of 10%. These discounts are offered on merchandise such as fragrances and cosmetics, chocolates, liquor and fashion apparel and accessories.

Eraman has also launched a similar collaboration with Hyundai Card in its effort to boost sales.

And, as reported by Asia Duty Free on April 12, the retailer has also teamed up with Express Rail Link, the operator of the Kuala Lumpur International Airport Express rail service, to offer airport express ticket holders a 10% discount across its outlets at the Malaysian capital's hub airport.

And the work hasn't stopped there.

"We have embarked on creating an entirely new and fresh advertising campaign," said Bustamam. "We plan to establish a better presence at international travel retail exhibitions by [running] advertisements in international industry publications ... to reinforce our brand presence at [the] TFWA [exhibition] in Singapore and [in] Cannes."

It seems the travel retail world and Eraman's customers alike will be hearing a lot more from the Malaysian retailer this year. Watch this space and look out for Eraman at TFWA c Asia Pacific in May.

EST. 1757

WWW.HANKEYBANNISTER.COM

TFAP Exhibitors

It’s show time This year’s TFWA AP show welcomes a unique range of exhibitors to the trade floor.

Here is what attendees can expect from some of the industry’s leading brands BY

KIM CARRERA

Madhav Kanchan, Marketing Director, Nutty Nuts Can you give us an overview of your company?

The company started in 1991 with Dr. Purshottam Kanchan as its sole employee and has grown tremendously over the years. Our premium range of quality products are manufactured, flavored and packaged in the most hygienic conditions using the best available technology. All our nuts are 100% dry roasted and nutritious without any preservatives, artificial flavoring, chemicals or MSG. What are you exhibiting?

We will be exhibiting our broad range of nuts in a wide variety of packaging, which includes cans and pouches as well as new range of nutrition bars.

Have you released any new collections/lines in Asia?

We have recently introduced a new range of nutrition bars that were specially designed for the 2010 Commonwealth Games. With no sugar, sweetener, grains or oats added to taint the health properties, they allow one to derive the maximum and natural nutrition from the best source of energy - nuts and dried fruits.

What are some of your best sellers?

Our 225 gram sweet boxes come in a wide variety of flavors: Apricots, Dates, Dates with pure cocoa chocolate and Figs.

What do you wish to achieve during the TFAP show?

To promote our high quality products in the international and domestic market and to increase our presence worldwide.

Nutrition Bars

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ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

YOT Watches

Kawita Sukul, Marketing and Communications, Gerzon Can you give us an overview of your company?

Gerzon, a Dutch family business, has over 35 years of retail and wholesale experience in luxury fashion and accessories. We operate both in the Dutch and worldwide markets.

What are you exhibiting?

We will launch some new brands to our portfolio, such as YOT watches, Kipling bags and accessories, Just Cavalli Jewels, Miss Sixty jewels and watches and so much more!

Have you released any new collections in Asia?

Not yet, we want to launch all our new brands and products during the Singapore show.

What are some of your best sellers in Asia?

Gerzon has its own jewelry brand Vivaldi. The Vivaldi sets are fashion items that are inspired by the newest fashion trends, which make them so popular. Our Vivaldi sets are best sellers because the sets can be adapted to all of our clients’ wishes.

What do you wish to achieve during the TFAP show?

We are always attentive to the newest developments in the market and try to represent the best brands out there at the exhibition! We hope that this will attract new customers.

David Butler, Head of Global Sales, Clogau Gold of Wales Ltd Can you give us an overview of your company?

Started in 1994, Clogau Gold made its debut with its unique range of rare welsh Royal gold. Today, Clogau Gold is one of the fastest growing jewelry brands on the U.K. high street and continues to release new and inspiring collections.

What are you exhibiting?

In Singapore we will be featuring our new Royal collections: Royal Roses, Lillibet and Kensington.

In addition, our team will also be promoting the new silver collection which will be ideal for airline listings.

Have you released any new collections in Asia?

We plan to launch all of the new collections during the show.

What are some of your best sellers in Asia?

The small fairy locket and butterfly pendant are selling very well on the airlines. We have other new nature inspired jewelry to show in Singapore as well.

What do you wish to achieve during the TFAP show?

I need a couple more airlines, Korean Air and Singapore Airlines would be nice. I would also like to start making inroads into the airport business with some of the big players in the region.

Royal Roses

Yasmina Pedrini, Communication Director, Frédérique Constant S.A. Can you give us an overview of your company?

Frédérique Constant is numbered among today’s leading Geneva watchmakers. This private family company has achieved this esteemed position through a well-executed program of expansion since the launch of its first products in 1991. Still independent and family-owned, Frédérique Constant’s ultra-modern watch manufacture is now based in Plan-les-Ouates, Geneva, reaching a production of 100,000 timepieces in 2010.

What are you exhibiting?

During the TFAP show, we will be exhibiting the entire Frédérique Constant & Alpina new watches along with the regular collections.

Have you released any new collections in Asia?

We have already officially launched the new Amour Heart Beat collection designed by our Ambassador ShuQi, and this new collection has met a huge success.

What are some of your best sellers?

The Amour Heart Beat watches designed by ShuQi, the Chocolate Double Heart Beat model from the Ladies Automatic collection, the Delight collection, and the Junior collection.

What do you wish to achieve during the TFAP show?

Our objective this year is to seduce new duty free customers and continue the development in Asia as we do in all over the world.

Amour Heart Beat Collection

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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TFAP Exhibitors

Jan Jacobsen, Managing Director and Owner, Jacobsens Bakery Can you give us an overview of your company?

Family-owned and operated since 1967, Jacobsens Bakery continues to grow and remain successful. The company produces a wide range of attractive and unique designs, along with greattasting confectionery products.

What are you exhibiting?

At the show we will exhibit our new and exciting recipes and designs. The assortment includes cookies with pieces of real fruit, caramel crunch, chocolate bits and so much more.

Have you released any new collections in Asia?

Tivoli in particular is an exciting product. (It’s a) new concept idea - small diameter tins, unique flavors in combination with pieces of fruit and chocolate.

What are some of your best sellers?

We sell several very successful product lines, mainly cookies in decorative tins: the popular Jacobsens designer tins, selling year round; blue tins in gift boxes for Chinese New Year; and small-size tins for various store formats.

What do you wish to achieve during the TFAP show?

This is the first time we are participating at TFWA Asia Pacific and we are excited to showcase our products in this important setting. We look forward to meeting key industry and sector representatives.

Lara Candido, International Marketing Executive, Storck Travel Retail Ltd. Can you give us an overview of your company?

Storck Travel Retail Ltd. is the travel retail sector of the leading German confectionery manufacturer August Storck KG. Storck is a family-owned business founded in the village of Werther, Germany in 1903.

What are you exhibiting?

Our new Werther’s Original Chocolate Specialties & Caramelts 305g pouch – plus our classic Brand Heroes: Toffifee, merci & Werther’s Original Candies.

Have you released any new collections in Asia?

Werther’s Original Chocolate Specialties & Caramelts were launched in January 2011 with great success in key markets: The new range combines Werther’s trademark butter candy with quality chocolate in six assortments: Milk Chocolate, Dark Chocolate, Milk Chocolate Caramel, Caramel Mousse, Dark Chocolate Caramel, and Caramelt (caramel-taste, chocolate-texture).

What are some of your best sellers in Asia?

All our core brands are performing well, particularly our merci Finest Selection 250g – the ideal informal gift. We’re also anticipating strong brand development with our new Werther’s Original Chocolate Specialties & Caramelts.

What do you wish to achieve during the TFAP show?

Productive meetings with current and potential customers, increased exposure of our well-loved brands and to emphasize our continued development of business in the region.

Chocolate Specialities and Caramelts

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Tivoli Cookies

Philippa Thomas, Brand Development Manager, Nougat London Can you give us an overview of your company?

Nougat London Limited started life as a fashion collection in London’s West End in 1990. Today, the Nougat London logo adorns numerous beauty treatments and skincare products, all using the finest ingredients, none of which are tested on animals, and resulting in what Nougat themselves describe as “the ultimate in self-indulgence.”

What are you exhibiting?

The main focus for us at the show will be to launch the Bath, Body and Home collection to the travel and tax free industry. Within the collection we have a selection of essentials for all travelers including our Come Away with Me and Flight Companion sets, and for men, our Shaving Essentials Kit is perfect for every weekend bag.

Have you released any new collections in Asia?

Whilst our collection has been available across parts of Asia for many years in independent boutique stores, in 2009 the company decided to push expansion plans across this booming market. Now we can be found in some of the most exclusive department stores including Harvey Nichols in Hong Kong.

What are some of your best sellers in Asia at the moment?

Our Eau De Toilette and our Nurturing Hand Cream are always fabulous sellers in any market however we notice that in Asia our Cherry Blossom fragrance sells exceptionally well. Chinese New Year saw a huge increase in the sales of our Handbag Essentials range as people were buying Nougat as gifts for friends and family.

What do you wish to achieve during the TFAP show?

Our aim for the TFAP show is to introduce the Nougat London brand to buyers and decision makers within the travel and duty free industry.

NGT by Nougat for Men

Jean-Pierre Grivory, President, Cofinluxe Can you give us an overview of your company?

Cofinluxe is an independent family business, a French perfumery company based in Paris-Created in 1976 by Jean-Pierre Grivory.

What are you exhibiting?

We will be showcasing our collections: Parfums Salvador Dali, Parfums Charriol, Parfums Barthet, Parfums Café and Parfums Taxi.

Have you released any new collections in Asia?

The new feminine Salvador Dali fragrance Dalilight was launched in Korea at the beginning of 2011, reaching a big success. It is exactly the type of perfume – elegant, light, fresh – that is very popular in Asia Pacific.

What are some of your best sellers in Asia?

We find that fresh and light fragrances do well in Asia Pacific. At the moment, Dalilight is selling strong in Korea.

What do you wish to achieve during the TFAP show?

Our main goal is to reinforce our links with our existing distributors and to expand our visibility in Asia Pacific by seeking new distributors for some of our brands in Hong Kong, China and Japan.

Robert Tateossian, Managing Director and Founder, Tateossian Can you give us an overview of your company?

Tateossian began over 20 years ago selling stylish and innovative cufflinks. Since then, the brand has grown considerably, progressing from men’s accessories to our first ladies collection eight years ago.

We now have four stand alone stores in London and over 1,000 points of sale worldwide.

What are you exhibiting?

For ladies this year we have our Trio Nugget set which is exclusive to duty free. With Tateossian leading the trend of stacking bracelets, these rhodium, gold and rose gold bracelets, available as a duo or trio, work perfectly together for the layered look.

Have you released any new collections in Asia?

There have been quite a few releases lately, our most recent with Singapore Airlines. They will soon be listing our perfect matching set for ladies, the ultra feminine and delicate Nugget necklace and bracelet set made using signature Tateossian fibre optic glass.

What are some of your best sellers in Asia?

One of our most successful sellers in Asia is our leather braided bracelet, listed on ANA. Using our signature sterling silver clasp and sumptuous Italian leather, these bracelets have continued to sell really well to be one of the most popular styles in our collection.

What do you wish to achieve during the TFAP show?

When it comes to the TFAP show it is always essential for us to identify corners at airports and establish retail procedures. It is also important for us to use the opportunity to find additions in network airlines and in-flight sales.

Trio Collection Dalilight Fragrance

Paolo Selva Brand, Development Manager, Boggi Milano Can you give us an overview of your company?

Established in 1939, Boggi Milano is a prominent Italian menswear retailer and produces Italian lifestyle wear inspired by the quintessential “Milanese” business style. Since its creation, Boggi Milano has become an international group with a growing global presence.

What are you exhibiting?

We will be presenting a diagonal cut of our range in a small but yet fully representative shell.

ADF: Have you released any new collections in Asia?

Yes, we launched the new casual wear BM39 Resort collection. The range represents the sporty side of the Boggi’s universe and strives to become the benchmark for new consumers, satisfying as well the needs of the already loyal clientele that tries to match the typical elegance of the brand with recent casual and informal styles.

What are some of your best sellers?

As always our shirting range is selling extremely well in all our stores and in all its different patterns, from most classical to the casual ones.

What do you wish to achieve during the TFAP show?

The motivation behind our drive to develop the business in Asian Travel Retail is strictly tied to our clientele. We have been exhibiting in Cannes with positive results and as the brand aims to expand soon into Asian markets, coming to Singapore is the most logical consequence.

BM39 Resort Collection

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Company News: LATR

ADVERTORIAL

David Dayan, LATR’s International Director

LATR, fashion forever Guess Jewellery

fter Lacoste, Vilebrequin and Parker, LATR continues its ascent with one of the most fashionable brands of the decade, Guess Jewellery.

David Dayan, LATR’s International Director, defines his company’s ambitions clearly: to become the incontestable leader in luxury accessories distribution in travel retail.

With its strong history in the travel retail channel, in 2005 LATR decided to strengthen its presence in the market. The decision was made just one year after its last distribution acquisition (Parker).

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Vilebrequin brand

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In 2009, with the launch of the Vilebrequin brand, a worldwide leader in men’s swimwear, LATR succeeded in introducing the brand to more than 50 points of sale. Some openings are currently underway: Punta Cana, Iguazu, Cuidad del Este, Punta del Este, Montevideo and Beirut.

In 2010, Parker Company contracted LATR for its worldwide exclusive distribution. It was a wise move. Six months after its collections were presented at the Cannes Tax Free Show, more than 50 point of sales opened within prestigious airports such as Miami, New York and Beirut.

Parker is motivated to strengthen its presence in travel retail, an aim it has proven by conducting an extensive three-month billboard campaign that began in Hong Kong airport.

Inspired by the pink gold trend, Parker is introducing its new Sonnet Feminine collection, a premium range of accessories with feminine and modern finishes, created for women around the world.

New for Spring-Summer 2011, Parker’s latest releases have reinterpreted the brand’s signature in three new styles to produce a stunning collection of pens in a luxurious palette of metallic pink gold tones, in line with the latest trend.

Whether in their twenties, thirties or at any age, women worldwide will connect with the beauty and style of the new Sonnet range designed exclusively for them. Leave an eye-catching Sonnet pen behind in the boardroom, at a restaurant or a party, and the pen’s signature

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

feminine glamour will guarantee that everyone knows to whom it belongs. As unique as the women who choose them, these dazzling pens are the ultimate lifestyle accessory – modern, beautiful and on-trend.

The most recent acquisition by LATR was the worldwide distribution in travel retail of Guess Jewels. For Fall 2011, Guess Jewellery updates the “Charmed by Guess” series with a new look that is a must-have for any Guess Girl’s accessory wardrobe.

With new charms Parker pens introduced every season, it is a great way for the Guess Girl to create her own personalized look. The charm collection features designs inspired by Guess accessories, including a sexy black crystal stiletto, red and black enamel handbag and a perfume bottle. Other designs include signature pave hearts, keys and whimsical motifs.

With so many fabulous styles to choose from, the Guess Girl won’t want to stop until she has collected them all.

The perfect gift for holiday, the “Charmed

by Guess” bracelet set is as much fun to give c as it is to receive.

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Company News: Estée Lauder

Sophisticated BY

HIBAH NOOR

Re-Nutriv Ultimate Lift Age-Correcting Creme

skincare

Time and again Estée Lauder successfully meets the demanding expectations of discerning Asian customers sia Pacific is known as the center of skincare and it’s no surprise that Estée Lauder has a strong presence in the region. Skincare is a key component in Asian travel retail for the giant beauty house, explains Javier Simon, VP/General Manager, Estée Lauder Travel Retailing – Asia Pacific.

“Whilst we are waiting for the 2010 market results of The Generation AB report, we believe that skincare will represent more than 50% of the total market sales, which is an increase on 2009,” explains Simon.

The positive vitality of skincare performance is due to the “above average growth, mainly in Greater China, Korea and South East Asia,” says Simon.

Estée Lauder is satisfied with the growth of its brands, which is being driven by a very healthy market dynamic, the success of its products in the region’s domestic markets and investments on the qualitative aspects of its business in travel retail venues, according to Simon.

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night-time repair of damage from smoke, pollution, toxins and chemicals. Next is the Re-Nutriv collections, which combine rare ingredients with some of the most scientifically advanced technology, all meticulously sourced from across the globe.

The cream lifts, firms and perfects skin’s appearance.

The Clinique Repairwear Laser Focus, another strong seller, is a de-aging serum formulated to work day and night to reduce the appearance of lines and wrinkles, and repair and help prevent UV damage with results remarkably close to a dermatological laser treatment. Especially formulated for Asian skin types, Clinique’s Derma White Clinical offers a level of brightening that dramatically reverses visible traces of damage. It helps build skin’s resistance to darkening.

Last but not least, there is Crème de la Mer, which carries The Miracle Broth at its heart and

“Whilst we are waiting for the 2010 market results of The Generation AB report, we believe that skincare will represent more than 50% of the total market sales, which is an increase on 2009,” Javier Simon, VP/General Manager, Estée Lauder Travel Retailing – Asia Pacific

As always, the skincare category will continue to be a major focus within its Asia Pacific business. Research and development centers around Japan and China, in conjunction with other Estée Lauder centers in key cities around the world, regularly develops products specifically for Asian consumers’ needs. “We have found that Asia is a source of innovative products that have proven successful in other parts of the world,” says Simon.

Estée Lauder’s best sellers for its Asian clientele include the Estée Lauder Advanced Night Repair, which provides optimized 58

is comprised of ingredients such as rare sea kelp, harvested twice a year off the coast of California and natural ingredients transformed by a secret biofermentation process into a powerful healer.

Skincare has always been a high priority in Asia Pacific.

The increased consumer Advanced Night Repair Synchronized Recovery Complex

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

Repairwear Laser knowledge regarding skincare prod- Focus Wrinkle & UV Damage Corrector uct usage has benefited the entire category worldwide, and as a result has increased usage of high-end brands and products.

However, along with the interest of high-ticket products comes the expectation of good quality. The interaction between the consumer and beauty advisors is pivotal in delivering on customer expectations. Our company’s brands recognize their needs and cater to them. This ensures that the experience at the counter is customized to meet customers’ specific needs, regardless of the time they have to spend at its counters.

“Travel retail in Asia remains a fast paced shopping environment and, like anywhere in the world, the consumer expects the same high level of service,” says Simon.

Estée Lauder and its team has also been attentive to the recent natural disasters that have impacted the Japanese market. Despite the ongoing crisis the company has every confidence in the resilience of country and the capacity of its people to overcome these major difficulties, which will be with them for months to come. c

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Beauty Beat: Fragrance Launches

Fragrance frenzy A host of alluring scents fill the air as suppliers roll out their best offerings yet for the warmer seasons

Sea Rem Company: Reminiscence Description: Perfumer Céline Rippert was asked to create a scent inspired by mermaids. Her nose led her to ingredients from the ocean. The fresh, transparent and ultramarine note in this new fragrance stems from the natural extract of red seaweed, used for the first time here in a perfume

Vanitas Versace Company: EuroItalia Description: This rich perfume is comprised of tiare flower, lime and freesia, enveloped with accents of cedar wood and tonka bean. The classic packaging is entirely gold with a contrasting shiny and opaque surface and an embossed black logo at the center

In the Mood for Love Tender by Gianfranco Ferré Company: ITF Description: The floral fruity green scent starts with the sparkling top notes of tangerine, cassis and polygonum. A glamorous, floral heart combines jasmine sambac, wisps of timeless rose damascene and hints of lotus accord. The perfume rounds off with cypress, soft musk and deep benzoin of siam

In the Mood for Love Man by Gianfranco Ferré Company: ITF Description: The timeless fragrance includes comforting notes of lavender, spicy pepper and the sparkling Clinique Happy Summer Spray freshness of grapefruit. Cardamom Company: Estée Lauder Travel Retail Description: This light edition just for summer and coriander combined with warm notes of orange flower add to the is only available in travel retail for a limited time. The 100ml eau de toilette is enclosed in allure. The intense woody and patchouli blends with the a vibrant new limited edition packaging creamy softness of tonka bean and Virginia Agent Provocateur L’Agent cedarwood heightens the Company: Designer Parfums sense of masculinity Description: A provocative potion that is made up of oriental florals, intoxicating amber and erotic musk. Its potent John Richmond for Men heart features captivating ingredients Company: EuroItalia of geranium bourbon, rose de mai, Description: The new masculine jasmin sambac, tuberose EDT by John Richmond is made absolute and osmanthus. The up of bergamot, orange and heart has been secretly ginger in the opening notes. The nurtured by adding Davana heart adds spicy aromas of oil, Baies rose, ylang ylang, cardamom, black pepper and rosewood and angelica. The rosemary, along with juicy melon, base includes ingredients like while a base includes warm patchouli, sandalwood, nuances of cedar, amber and amber crystals, tonka beans, musk. A silver metal guitar rock rose, myrrh and black plectrum that hangs on the stylish incense musk flacon reads “It’s only rock ‘n’ roll”

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The Alluring New Fragrance from the House of Ajm al

e a u d e pa r f u m

For enqu iries, plea se ca l l + 971 4 269 01 02, e-ma il dut y fre e@ajma l .net or visit www.ajma lp erf ume.com

Beauty Beat: Skincare & Cosmetics

Beauty regime Creative cosmetics and revolutionary skincare: traveling consumers will have plenty of options to choose from this spring and summer

Studio Secrets Professional Smoothing Resurfacing Primer Company: L’Oréal Paris Description: This exclusive travel duo contains a silky lightweight formula which smoothes on easily to disguise fine lines, wrinkles and pores, making skin smooth and soft with a velvety touch

Extra-Firming Body Cream and Lotion by Clarins

Yves Saint Laurent palette Company: L’Oréal Group Description: This travel retail exclusive features shades inspired by the emblematic colors of Yves Saint Laurent, encased in an ultra-flat fuchsia case adorned with a golden YSL logo. The palette includes a wide mirror, four applicators, four eye shadows, two lip shades and a pink pastel color for blush

Company : Clarins Description: A complete skin care action to ensure youthful-looking body contours thanks to firming and replenishing benefits. Skin is soft, firm, hydrated and visibly younger-looking, with a choice of two different textures to satisfy all women whatever their preference, skin type or season. Launches in spring 2011 in travel retail in the Americas and the Caribbean

Rouge Pur Couture Company: Yves Saint Laurent, L’Oréal Description: A new-generation lipstick inspired by Monsieur Saint Laurent’s iconic color palette – red, fuchsia and orange – in a collection of captivating couture shades that offer each complexion a customized look.

Lips are saturated with intense, stay-true color, thanks to the Coloreveal Technology, while natural extracts provide comforting moisture that lasts all day

Volume Million Lashes Company: L’Oréal Paris Description: L’Oréal Paris Extra Volume Collagene has expanded its mascara range to include extra lash-by-lash volume for lashes that look instantly multiplied and three times thicker.

Volume Million Lashes extra black and waterproof are now available in travel retail

Magic Brush Mascara Company: Artdeco cosmetic GmbH Description: A two-in-one mascara offered in an easyto-use dual-wiper system: the wiper in the smaller cap refines the application for a clean sweep and a natural day look, while using the larger cap loads the lashes for greater impact and a dramatic look and volume at night

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Magnascopic Eye Set Company: Estée Lauder Description: A quad of eye essentials to dramatize eyes with supercharged volume. This special value collection includes the Magnascopic Maximum Volume Mascara, Lash Primer Plus, Advanced Night Repair Eye (10-day supply) and Gentle Eye Makeup Remover (30ml deluxe travel size)

Sunglass Report

Sunglasses sales in Asia are growing as the appetite for luxury brands increases. Asia Duty Free reports on a market that is reaching new heights, but which also has its own particular demands BY JAMES ROSS he travel retail market in Asia has been described by one sunglasses manufacturer as “the most competitive and active in the world”. For sure it is a growing one, with more airports being built and more shops filling them up, and that means there is greater competition between brands for bigger spaces, and extra pressure on retailers to increase their sales per square metre.

On the plus side, more space also means more opportunities to get listings, and sunglasses suppliers have availed themselves of this in Asia in recent years, especially after the 2009 downturn because Asian travel retail markets continued to grow, unlike their US and European counterparts. However the region does have some specific demands, among which one of the most important is the right design to fit Asian faces.

Relative newcomer to travel retail, Polaroid Eyewear is advancing fast in the east. Global Travel Retail Manager Rebecca Harwood Lincoln says: “Asia is a market that is expanding more rapidly for us than any other at the moment. While we don’t have a separate collection that we offer here, we do guide retailers towards styles that will fit an Asian face.”

At Maui Jim, a US brand, with Hawaiian roots, the company has also been expanding worldwide, with annual double-digit growth in every market, except in the downturn year of 2009. Director Global Travel Retail Giles Marks says: “Asia has a growing appetite for luxury goods – more so than elsewhere – and sunglasses are no exception. Consumers are looking for big brand names that they recognize but they are also very motivated by the performance of the lenses and the technical aspects of the sunglasses.

Maui Jim has strongly marketed the polarizing aspect of its lenses and this has proved to be a successful strategy in travel retail. In Asia, the brand is also looking at satisfying other needs. “The biggest difference is the need to have styles that fit the broader facial features of many Asian consumers,” believes Marks. “Over the past four years, Maui Jim has introduced numerous styles incorporating our polarized lenses to better accommodate the correct fit required for Asian passengers.”

This adaptability has been appreciated and, while Maui Jim sunglasses may not be the best known name in Asia, it is growing. Marks says: “We do not market ourselves as cutting edge fashion, but we are fashionable and we are establishing a reputation in the region for the excellence of our lenses which give superb colour and clarity.”

Among the biggest suppliers in the market is Safilo whose brands include Alexander McQueen, Boss by Hugo Boss, Dior, Giorgio Armani, Gucci, Marc Jacobs, Valentino and Yves Saint Laurent. While the company declined to comment on its travel retail business in Asia, in March the Italian company revealed global net sales growth of +6.8% to €1,079.9 million for 2010, compared with 2009, driven it says by “the good performance of the American and Asian markets where consumer demand for premium eyewear collections was more solid, in particular in sunglasses”. In Asia sales totalled €161.6 million, increasing by +23.7%. The company also made special mention of the duty free market, saying: “The travel retail business continued to support the region’s performance, whereas trading conditions in Japan marginally improved.”

In the current climate following Japan’s multiple earthquakes and the ongoing uncertainty surrounding the resulting nuclear reactor damage at Fukushima, there is expected to be at least a medium term drop off in travel to and also from Japan, and growth here is not expected to pick up for a while. “Travel retail recovered quickly from recession and was booming in Asia Pacific prior to the terrible events in Japan, Australia and New Zealand,” comments Marks. “We will have to expect an impact on tourism in the region which will depress the travel retail market in the short term, but long term I anticipate steady growth.”

Safilo’s arch-rival is Luxottica, also from Italy, which has a 45-strong stable of brands among which are Ray-Ban and Oakley (in house) plus Bulgari, Burberry, Chanel, Dolce & Gabbana, Donna Karan, Polo Ralph Lauren, Prada, Salvatore Ferragamo, Tiffany and Versace (licensed). The company has a dominant position in the travel retail channel and in an investor presentation released

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Sunglass Report

in March, the manufacturer – which celebrates its 50th anniversary this year – revealed sales in 2010 of €5,798 million, up +14%, and predicts that emerging markets, in which Asia falls, will see the strongest growth in 2011 at around +20%. For 2010, the company pointed to double-digit comparable retail sales growth in China of +10.7%, and a +19% lift in sales of Ray-Ban, the biggest sunglasses brand in travel retail.

At Marcolin, which saw record results in 2010 with consolidated sales rising +15.2% to €207.7 million compared with 2009, Asia has also been a powerful force. Referring to 2010, the company says: “The markets of the Far East and Middle East are those recording the highest growth rates. Korea, Singapore and the Arab Emirates in particular showed the greatest increases in absolute terms.”

As for travel retail in Asia, Marcolin export area manager Chiara Polverini adds: “Asian airport malls are continuously renovating and creating beautiful and appealing environments. Asian consumers are always very up-to-date about the latest fashion trends and look for the highest quality. We are seeing a consistent growth (here) and we look forward to improve on that since the brands in our portfolio are particularly appreciated by these consumers.” Those brands include Tom Ford, Diesel (which, last year, signed a five-year exclusive licence agreement for the production and worldwide distribution of sunglasses and spectacle frames), Dsquared, Tod’s, Hogan, John Galliano and, from the end of last year, Swarovski eyewear.

From a trends point of view, suppliers have already pointed to the general Asian demand for luxury labels, especially in China, but there are other aspects that can also swing a sale.

Polaroid’s Harwood Lincoln says: “Metal aviators are always popular with men, while plastic sunglasses with metal detail on the temples sell well for ladies. We have also launched our range of suncovers (sunglasses that fit over an optical frame) that are top-selling styles in the Nordic market, and we have expanded them into a global offering. The feedback we’ve had from Asian customers is that these will be equally popular here too. As in western markets, gift with purchase options are very popular with Asian travel retail customers.”

In duty free, Luxottica says it aims to offer the “best-in-class experience in the channel” when it comes to its retail chain Sunglass Hut. It is also adding a new product development hub in Shanghai and has been busy creating new Asian fittings for Ray-Ban with key adaptations to temple widths and lengths, nose pads and the bridge. Its Oakley brand is also promoting the ‘Asian Fit’ logo in some of its advertising to get the message across to Asian consumers that it is tailoring its product to their requirements. It has also adopted advertising visuals featuring Asian icons such as popular Taiwanese singer and actor Vaness Wu. As well as the importance of special fits, group travel retail director at Luxottica, Francis Gros points to the fashion sense of Asians as key to some sales.

“North and south-east Asian consumers are passionate about fashion from western brands,” he says. “We have seen an important trend in the way they buy models that translate from another item of a fashion brand’s merchandise such as ready-to-wear, handbags or shoes.” He cites the Animalier range from Dolce & Gabbana or features like Burberry’s check or Versace’s Veritas bow as examples.

For Marcolin the aim this year will also be to roll out new Asian ‘fits’ for certain collections. Polverini says: “We are now introducing the Asian fitting styles in our duty free selection and we think the feedback will be great. Asian travelers have very high quality standards and they like, first of all, a comfortable and light accessory to wear. That means light lenses and round shapes. Luxury details and decorations are a must as is a recognizable brand; not so much one that shouts out its logo, but one which has an unmistakable design and personality.”

Marks at Maui Jim agrees about the popularity of lightweight sunglasses. “They have been really enthusiastic about the styles from the lightweight, but robust Maui Sport range and the latest designs from the streetwear collection,” he says, adding that expectations for the new MauiFlex range – lightweight frames that remember their shape – are very high. “We think they will go down really well as they have fantastic lenses and styles which are great for all face shapes,” he enthuses.

The brand will however also be pushing the performance side of its collections which, according to Marks, is appreciated in markets like China. “With the numerous enhancements we are introducing to our lens technology, we are well positioned to offer a comprehensive c choice of styles at different price points,” he concludes.

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Mauiflex Fleming Beach

Polaroid DONNA - big is in

Tom Ford Maximillion

Starring role Vaness Wu for Oakley

Your world.

See the brilliance.

Welcome to color. mauijim.com

®

Business is Brilliant with Maui Jim

How can it be otherwise? Maui Jim is the number one selling polarized sunglass in the world. That’s because they offer the utmost in protection from glare as well as extraordinary clarity and color enhancement, all courtesy of our patented PolarizedPlus®2 technology. And now they are available in more must-have styles than ever.

Bring Maui Jim on board at your Duty Free shop and see just how brilliant business can be. For more information, please contact Giles Marks, Director of Duty Free Sales, at gmarks@mauijim.com.

Giles Marks, Director Global Travel Retail, Maui Jim

Company News: Maui Jim

The art of eyewear Maui Jim has come a very long way – and it’s enjoying market success at its own relaxed pace, on its own terms BY HIBAH NOOR

hortly after the Duty Free Show of the Americas wrapped up on March 23, a group of journalists who covered the event were flown to Peoria, Illinois, the home of Maui Jim, the celebrated manufacturer of premium polarized sunglasses, to tour the facilities and hear the company’s leaders explain how Maui Jim has managed such a successful track record of growth and innovation since its inception in 1980.

The tour came at a time when Maui Jim was releasing a brand new product technology, and benefiting from the company’s firstever advertising campaign – a major departure from its word-of-mouth-only approach.

The new product technology is called MauiGradient, and it features single-gradient lenses, where the lens starts dark at the top and gradually lightens toward the bottom – an adaptation that makes it easier for the wearer to read without having to remove the glasses. Up to now, Maui has been known as the leader in double gradient lenses, which feature tinted areas at top and bottom and a lighter band across the center.

“Our market research shows that some people prefer single gradient lenses but up until now these could not be found with the high level of polarisation for which Maui Jim is famous,” says Giles Marks, Director Global Travel Retail.

“With our MauiGradient collection we have great styles with single gradient lenses which will enhance how our customers see the world around them. I am confident that these will be very popular in travel retail.”

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Maui Jim Pau Hana Tokyo tort rose model RS238-10L-HQ, MauiGradient collection

The single gradient lenses are precision-engineered using Maui Jim’s SuperThin lenses, which are very light, scratch- and impact-resistant, and 20% thinner than conventional laminated polarized lenses. Each lens uses the company’s patented PolarizedPlus2 technology to cut glare and enhance color. Ultraviolet ray reduction is enhanced by incorporating up to nine layers of built-in protection. MauiGradient lenses are available in five frames: Lava Flow, Pau Hana, Lani, Baby Beach and Wiki Wiki.

At the same time, Maui Jim has approached its market niche somewhat more aggressively than before, thanks to a new advertising campaign launched last year.

“We’ve never really advertised to consumers until last year,” says President Michael Dalton. “That was the first time. We would advertise in partnership with a retailer that wanted to advertise, [but] we didn’t do it by ourselves.

Up until now all of our growth has been organic.” Last year, Dalton notes, Maui Jim experienced the largest single dollar sales increase in its history, ending up US$40 million ahead of the year prior.

Aside from its remarkable market success, what’s unique about this company is that it came into being as the result of a series of more or less chance occurrences, all of them motivated by a simple personal encounter with a superior product. That relaxed, low-key approach is still reflected in its corporate culture, Dalton says, and has definitely been a cornerstone of success.

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

Michael Dalton, President, Maui Jim

“It’s been a lot of fun. We’ve gone from 15, 16 employees to 700 people worldwide. Double-digit growth every year until 2009. 2009 we were down about 9 or 10%. We have about 12 subsidiaries that we own around the world and we only had two markets that were down that year, which were the US and Dubai.”

Maui Jim doesn’t make three- or five-year plans, and the company doesn’t have a mission statement. “If we had one it would go along the lines of: ‘here’s what we tell our people at repairs, nobody at Maui Jim will get in any trouble for doing too much to keep a customer happy,’” Dalton says.

Some typically Maui Jim quirks: the biggest repair the company does is fixing frames that have been chewed up by a customer’s dog, Dalton says. So when the repaired glasses are sent back, a bone is included to keep the dog occupied. At Christmas Maui Jim doles out candies, and offers a brand new glasses case and cleaning cloth at no charge.

“That’s part of what we do,” Dalton says.

“And if we get past our three-day turnaround, we end up giving out free new sunglasses. c We’re just easy to do business with.”

Company News: Bijoux Terner

Bijoux Terner’s customized A La Gate Cart display

Eyes on the prize Bijoux Terner still going strong with new concepts and merchandising iami-based gift specialist Bijoux Terner unveiled four new concepts during the Duty Free Show of the Americas in Orlando.

The unique company, which sells gifts at one price point of US$10, has become a portfolio brand. It is diversifying its products and price points to fit a different structure and its brands now include Voux, Déjà Voux and X’est Jolie.

“Bijoux Terner continues to be the core of our business and we continue to be behind it. In addition we try to do several different things in our branding strategy. We try to develop brands to go up to different price points,” says Gabriel Bottazzi, CEO & President, Bijoux Terner.

The company believes in clarity of brand concept and its relationship to price point.

Instead of trying to take Bijoux Terner to multiple price points, it has developed different brands with each one focused on one price point.

However, the core continues to be Bijoux Terner and the company nurtures this concept.

“You can see how we’re really going up to the trends, we’re bringing new categories, bringing new trends within the categories that we can track specifically, like animal prints. From a trend standpoint (this) is going to be huge for Bijoux Terner. Every time we show it we haven’t been able to produce enough because it just goes out,” says Bottazzi.

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packaging. For example, Bottazzi says that for Voux, “we have the ties packaged in a box that has the same fabric of the tie outside with matching cufflinks. We have nice watches with colored metals, with beautiful packaging the box is ready for gifting.” The packaging also features leatherette inside the box to protect the merchandise.

In total, Déjà Voux offers three gift pieces.

“It’s not just one watch; it’s a watch with a pen and a wallet or a watch with a matching necklace and earrings,” says Bottazzi.

X’est Jolie (US$29.99) The X’est Jolie line of accessories is about natural elements, explains Bottazzi. “We have Majorica pearls, natural stones; we have pashminas with leather fringes.” The range is for women only. The packaging is minimalistic but elegant and also functions as a protector of the jewelry.

Bijoux Terner started developing the three concepts a year and a half ago. The key was the brand concept and positioning. “It’s the same essence of Bijoux Terner, it’s on trend, high value, right pricing, right presentation.

It’s the same thing but now we are taking that same concept to a different price point and different consumer needs,” says Bottazzi.

The company started shipping the items to a select group of customers in September 2010, and has now rolled out the line with all its partners.

BY

HIBAH NOOR

A La Gate Cart Shifting to the display of Bijoux Terner products, the company is investing in a customized A La Gate Cart to maximize the visibility of its brands.

“We live in airports where traffic is always shifting. You have this fixed infrastructure that you cannot move around. So we’ve developed this mobile store. The nice thing is it looks like a solid fixture. If you have a store, you can park it in the store – if it gets slow then you take the store to the gates,” says Bottazzi.

The new display will further reinforce Bijoux Terner’s philosophy which is to “jump on the right trend at the right time.”

“The right trend is not just right product, not just packaging, not just pricing or color. It’s also merchandising and the store concept. We’re looking at new concepts of the store that bring together all of our brands.

All our brands can live independently but we also have developed a new store concept called AdiXion,” explains Bottazzi.

The idea behind AdiXion is to create a space where all Bijoux Terner’s brands can coexist. The fixtures picked for this concept are modern and attractive.

“We are looking forward to the development of our AdiXion store concept. It will house all our brands in a sophisticated shopping environment,” says Bottazzi.

The first AdiXion store is scheduled to c open in Miami in May.

Voux & Déjà Voux (US$19.99) The concept of Voux and Déjà Voux is very much focused on gift giving, and the company has placed a significant emphasis on 70

A gift set for men from Bijoux Terner’s Voux line for US$19.99

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

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Fashion Report

Pal Zileri’s winter season collections are inspired by 1930s Chicago

La-Tweez a simple idea, well executed

The fashion and accessories category is shaking off its somewhat restrictive high-end image as more accessible brands come aboard

The trendytraveler BY

JAMES ROSS

t’s a complaint heard time and again about airport fashion: “It’s just too expensive for me”. And with airport authorities historically vying to include prestige luxury brands like Hermès, Salvatore Ferragamo or Burberry in their fashion offers, it is no surprise that many passengers walk on by. Not only do these top-flight names often merely solicit only aspirations to buy – especially now that a newer, less well-off demographic is emerging thanks to low cost carriers – but the classic look inherent in some of these labels is not everyone’s cup of tea.

Tintamar’s vanity case Trendy, as well as more accessibly priced brands in travel retail have been harder to come by, because fashion listings have rigidly required that brands be both international and well-known.

This is changing as can be seen by the number of varied fashion and

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lifestyle labels entering the channel such as Billabong, Desigual, Pal Zileri and Vilebrequin.

Their numbers are increasing for good reason: passengers want the choices they see on the High Street, and airport retailers still do not have that choice, and neither are they always able to create concepts that are trendy enough to attract many passengers.

Consumers today are fussy in their search for clothing and accessories and are more demanding. For example at France’s Les Accessoires Travel Retail, which handles upscale swimwear Vilebrequin among other brands in the channel, International Director David Dayan says: “Issues have emerged surrounding organic materials and sustainable development and this awareness will inevitably have an impact on our future collections.”

In leathergoods, quality is paramount, but so is design. Piquadro spokesperson Paola Di Giuseppe adds: “Our top range collections are always our bestsellers. Customers continue to appreciate fine Italian leather, manufacturing and details which characterize Piquadro products even if that implies paying a higher price.” Meanwhile, Belgian bag brand Kipling, has always appealed across price ranges which is why it sells 23 bags every minute thanks to a mix of color, eclectic design and a distinctive look. Kipling Travel Retail Manager Ralph Bou Nader says: "The future of travel retail is not in the high end, the middle market will increase more and more."

Its current season catalogue for example features a large selection of styles including some vintage looks, as well as large totes, body bags, travel holdalls and wheeled suitcases; one the Teagan duffle comes in bright pink. Crucially all of its products have functionality at their heart often identified by its oversize zips. Debuting this season is its New Horizons range, a more sophisticated take on the brands usual theme of fun.

Briefcase from the Piquadro Pearson fall collection

Lacquer colors are the trend-setter currently according to Bou Nader.

Like Piquadro, Singapore-based accessories supplier Mitch & Marc is finding demand for “quality luxury items” possibly because its main markets are in Asia, where the focus is at the high end, and it is seeing especially strong demand for its new watch winder whose sales have increased by 40% year-on-year.

Staying with watches at the mid-market end, multi-colored IceWatch is also seeing high growth. “People are making a statement with their timepiece and it doesn’t have to be a Rolex or Tag Heuer,” says Christian Jamin, President of Kronos America, the distributor for IceWatch in the US. “White watches are really ‘in’ right now, as are vibrant colors.” Ice-Watch’s best-selling collection remains Sili For- accessories market is moving in the right direction to allow greater ever which comes in ten colors and three sizes, with bigger faces access to more interesting fashion and accessories brands. If airports appearing to be most popular not just with men but women as well. really believe in the ‘sense of place’ theme they always espouse then There are many more brands out there that are staking a claim one way to do that will be to bring more local and regional fashc to be a trendsetter in fashion and accessories. One of the most ion brand into their future mix. influential companies in bringing these to the attention of buyers has been UK-based McG Consultants which, over the years, has introduced or fast-tracked, many ‘brands with a twist’ into travel retail including bag maker Tintamar, Pashma shawls and accessories, If you have not heard of Dialog Worldbutik, it is probably because the fair trade brand is relatively new and only available in ten marand jeweler Tateossian.

McG Principal Richard McGratty says: “Our core strength lies kets globally – but the ambitions of the founders, Cassandra in our ability to identify innovative brands and their products and Postema and Dong Shing Chiu extend much further.

Having launched the Worldbutik line in 2009 as a collection of whimestablishing them in duty free and travel retail.” His latest client is La-Tweez which makes a clever gadget – illuminating tweezers fea- sical fashion forward bags and clutches made from hand-crafted texturing a Swarovski crystal – a combination that is both practical and tiles found throughout Asia, Dialog is now ramping up its store presence and has travel retail in its sights. Director Cassandra Posterna says: “Our luxurious which should be a winning formula in the channel.

Another potential brand that could enliven the channel is Dia- biggest bag, Simba, is proving perfect for onboard luggage, while its log Worldbutik a fair trade player that has more creative flair than smaller version Nala is also a great staple for the travel market as well many existing fashion brands, and which is currently eyeing travel as our cross-body selection. Our Mai Thai cross-body bag in Saori handweaving, for example, always gets a good reaction. So far retail (see panel). we have used relatively conservative colours such as tans, In the aftermath of the global financial crisis there appears to be browns and muted tones of violet and green but this summer room for greater flexibility for new brands and price points. Dayan we are offering brighter colors such as lime yellow, cobalt and says: “The crisis we have just been through has changed the mode watermelon and I feel brights will carry through to fall.” of purchase. For sure, depending on the products, higher VAT rates Dialog’s handbags all feature a recycling technique – 33% was applied to luxury goods in France – mean that passenfrom Malaysia that incorporates small origami folded gers are aware about the savings they can make in travel retail. In squares of mixed scrap fabrics. The trims are made in general, purchasing is more thoughtful, especially at the high end.” cooperation with charities in local communities such as But Dayan admits that the crisis has also meant a reaction to buydrug rehabilitation centres, women empowerment ing “safe haven” brands which has helped sales of luxury fashion initiatives, vocational training and community develas well, and this has been seen by Mitch & Marc. Director Travel opment projects which encourage skills developRetail Jessica Tay says: “After the downturn shoppers are buyment, create income and lead to sustainable ing products that are more expensive. The trend has been employment. Working this way, the sale of Diaa shift towards the luxury sector (for us) and the most radColor connection log handbags have injected over ical movement has been in China and Indonesia.”

Dialog's Mai Thai bag US$90,000 into these communities At Piquadro, the company believes passengers since 2007. will continue to buy more expensive products if Posterna says: “Our product is the balance between price and performance is very different, and the consumer is there. “Our clientele is made up of young procaptured by the background story. fessionals and executive with a keen eye for ItalPlus we have a good price point so ian style and a great attention to performance, we don’t find too much resistance but they are also sophisticated customers who on that front. We are also open want to pay the right price,” says Di Giuseppe. to create stock targeted to a Post-downturn, demand has risen for Icecertain markets as long as the Watch too. Jamin says: “There has definitely been quantity commitment is there. So an increase in spending on ‘affordable’ luxury goods for example, we have targeted over the past year. Ice-Watch price points in particcolors for our Danish distributor, black ular are so accessible that this gives our product that is doing very well there.” extra lift, especially when it comes to impulse buying.”

On the whole, it appears that the fashion and

It’s all in the Dialog

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Jewelry report

All that glitters

We poll some of jewelry’s

BY HIBAH NOOR leading lights for their views on the market – and for a glimpse at what’s new and exciting e notice there is a strong demand for colorful crystals as well as large, chunky jewelry,” says Francis Ng, General Manager of Toscow. “This is quite different from what people perceive Asian taste is.” Most people think Asian customers prefer more subtle colors as well as smaller sized jewelry, but this is changing, Ng says.

Today, people favor jewelry and other accessories that make them more conspicuous.

For Ng, the state of the duty-free market for jewelry is probably best summed up by the results of Toscow’s recent opening of a shop-in-shop at Muscat Duty Free: “overwhelming” is his description. Ng says that Toscow’s best sellers in Asia are its multi-colored crystal jewelry and the 18K gold Tahitian Pearl. In crystal the top attractions are the Spangle Slendour Bangle, now listed with Cathay Pacific, Singapore Airlines, Dragon Air and Philippine Airlines. It has

“W

This timepiece is from Equss’ Meteórico watch line

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also been taken up by Qantas, which up to this point had confined itself to handling only Toscow’s opal jewelry.

“Most jewelry brands are working more and more on the creative part,” says Wessam El Mona, Duty Free Manager for Frey Wille.

“Customers expect more and more – we have to be unique and offer a wide variety.” While many brands have expanded their portfolios to encompass luxury items beyond mainline jewelry, Frey Wille has chosen instead to focus on working its core competency.

“Men’s jewelry is amongst the hottest categories in fashion,” says Gregor Kroll, Managing Director of Pranda Public Co. Ltd. Kroll believes that fashion-conscious consumers of jewelry are increasingly seeking a way to stand out from the crowd and accentuate their individuality – an analysis that echoes Francis Ng’s comments. “Simple stainless steel accessories for men are no longer enough,” Kroll says, “as the consumer searches for more elegance and higher quality jewelry.”

Pranda was established nearly 35 years ago, and is today a globally recognized manufacturer of medium- to high-quality jewelry.

Aside from its expertise in its chosen market, the company is especially strong on matters of corporate responsibility and environmental stewardship. Pranda has some 5,000 skilled workers in five plants in Thailand, Indonesia, Vietnam and China, in addition to the company’s Design and Product Development Center, where more than 200 highly skilled design, model and mold makers work on devising new concepts and turning them into reality.

Then there’s Equss. Since 2005, the Australia-based company has become one of the fastest-growing brands in travel retail, keeping up its focus on its wide range of qual-

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

Pieces from Toscow’s Starlight collection

Toscow’s Spangle Slendour Bangle

ity jewelry, watches and leather goods, with an emphasis on affordability.

“Our products can be found in airport duty free shops and in-flight catalogs, and through major resellers around the world,” says Managing Director Alex Chaves. In 2008 Equss launched its first retail store at Roshana Mall in Jeddah, Saudi Arabia, and since then the expansion program has continued with further new openings.

Current trends are pointing to the value of vintage concepts, says Chaves. “To cope with this trend, rose-gold accessories have been brought to centre stage. Instead of traditional silver and gold, this season we are launching a new collection of rose-gold crystal jewelry in clean and architectural style.”

This is the Pearl Collection, made with highquality pearl in sterling silver. Pearl will be front and center at TFWA Asia Pacific.

Sharing the spotlight will be the Meteórico watch line, one of the bestsellers for Equss.

Made of sterling silver, the crystal pendant offers a feminine touch with its oversized crystal on a stainless steel watchcase in luxury rose gold plating. The watch also features Austrian crystals on the dial, Swiss movement and a one-year international warranty. It comes with a matching croco-calf genuine leather strap.

The new Mirabelle collection from Réminiscence features 29 pieces ranging in price from €45 to €320

Pranda’s Caï men’s multistrand leather bracelet

Equss is also launching floral printed handbags and a new leather collection for this season. Equss products have recently been listed at Bahrain Airport, Chaves says.

Show stoppers At TFWA Asia Pacific Toscow will be launching two new collections. Paradise Garden is a product of the company’s aptitude for mixing and matching colorful crystals, and adds a new twist with crystal flowers. The second new collection is Starlight. Here the lead role is taken by hand-cut crystals in the shape of flowers – “elegant but not traditional,” is Ng’s description.

Toscow has recently been busy with promotions around Christmas and the Chinese New Year, creating the Christmas Tree, Angel and Snowflake crystal pendants and offering them as gifts-with-purchase to buyers of Toscow jewelry. The company also created a crystal rabbit pendant to mark the advent of the Chinese Year of the Rabbit.

Pranda’s top performers in Asian duty free are the Baldessarini Roma FCO 4010

watch and the Caï men’s multistrand leather bracelet. The Baldessarini watch line was launched at Basel World 2011 as a complement to the Baldessarini luxury jewelry family of products, and it has helped to develop the company’s reputation for quality and detailing further.

Baldessarini watches and jewelry are being offered on Lufthansa, and Kroll says that Pranda always remains open to similar promotions with other partners.

Globally, Frey Wille’s best sellers are its pendants and bangles, and, adds El Mona, the global trends hold true in Asia as well.

“We don't really have a particular item that sells in Asia better than other parts of the world. Globally, Frey Wille customers appreciate the art and uniqueness of the jewelry, and most purchases are very close. Some designs might be more beloved in certain regions than others, but in general customer behaviors are similar.”

For 2011 the company is presenting its Hope collection, based on the August Klimt painting. “Klimt was inspired by hope, and explored its meaning and its effect throughout his golden phase,” says El Mona. “The celebrated painting ‘Hope II,’ which Klimt used to express one of mankind’s most powerful emotions, was the inspiration behind this new and rejuvenating collection.” The 21-piece collection reflects the essence of Klimt’s work, El Mona says, incorporating similar rich col-

Frey Wille’s Hope collection is based on the August Klimt painting

ors, freehand designs and the astute use of symbolism.

When it comes to travel retail operations, Frey Wille has launched its shop-inshop concept in Beirut Duty Free, and will soon follow up with launches in Tehran Duty Free and in Jeddah, Saudi Arabia. More are in the works, El Mona says.

Reminiscence is always busy with new releases, as well as introducing new interpretations of existing concepts and products.

New and notable jewelry collections include Water Lily, which puts the accent on delicate, feminine shapes and subtle colors. Water Lily features faceted glass Swarovski stones, sculpted and resined mother-of-pearl, leafshaped sculpted amazonite, silver metal and beads rendered in glass and ceramic. The product line comprises a total of 25 pieces that range in price from €90 to €450.

The new Mirabelle collection from Reminiscence features 29 pieces ranging in price from €45 to €320. The focus here is a playful rabbit character, and the intended buyer is a consumer who still cherishes her inner child. The pieces are one-of-a-kind ceramic, decorated with spangles, cloth and glass beads, Swarovski beads, hand-cut and decorated mother-of-pearl, chalcedony and silvered chains. Finally, the new Pacific collection favors a sporty, spontaneous, outdoors-loving customer who appreciates jewelry that puts the accent on natural materials. With 28 models ranging in price from €65 to €450, Pacific features mother-of-pearl, natural shells, Swarovski beads, ceramic beads and pieces in silver metal. c

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Watch news Unique bonbon Designer and manufacturer of timepieces since 1989, bonbon watch brings an original line up of watches: more than 800 creative styles are available in over 80 colors.

The Paris-based designer of the company, Alexandra Pisarz, has come up with casual and dressy styles. Bonbon watch is a unique collection for women and men who wish to stay up to date with the latest trends.

The company stands by its “creativity and originality,” which it says is expressed through its products. And orange and silver background is used for window case packaging, contrasting with the off-white furniture supplied by bonbon watch. This concept is available in boutiques in Paris, Tokyo, Fukuoka and Osaka.

watches

Harston highlights

latest collections from

Jacques Lemans

Harston Group is highlighting the latest lines from the Jacques Lemans Sports Collection which focuses on sporty luxury, feminine elegance and glamorous looks. The collection will be showcased at the TFWA Asia Pacific show, Booth P26.

New lines from the Sports Collection include the new Liverpool Day Date – an exclusive sporty and elegant chronograph. The case is made of solid stainless steel/ip black bicolor or IP black. The high grade strap is either a caoutchouc-grain leather strap combination or a high tech ceramic solid stainless steel strap.

Another timepiece is the new Liverpool GMT. This sportive multifunctional watch features a date as well as dual time and is available in a sporty black-red color as well as in classic black/solid stainless steel or solid stainless steel IP-rose/IP-black. The models are equipped either with a high grade caoutchouc-grain leather strap combination or a High Tech Ceramic/solid stainless steel.

Also new is the Rome Sports series, available as a chronograph or analog watch. A new definition of sporty luxury, the watches are water resistant to 100m and come with a silicone strap, hardened Crystex Crystal and a screwed case bottom.

The elegant Flora series from the La Passion Collection is a feminine watch with eyecatching Swarovski elements, perfect for dazzling appearances at summer events.

Another novelty from the La Passion Collection is the Capri series, an elegant watch that is available in various trendy colors such as marine and camel, while the new Vedette is the perfect watch for any spring or summer occasion. Available in a variety of colors.

Visitors can also find the latest collections from leading brands such as Puma Time, Esprit (MYWA), Jacques Farel and Jacques Farel Kids, Cuffwear and Arren at the Harston booth.

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ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

Scorpio adds Jacques du Manoir to watch portfolio Scorpio has extended its extensive portfolio of watches with Swiss brand Jacques du Manoir. It has exclusive distribution rights for the brand for inflight and travel retail sales worldwide.

The collection will be presented at the TFWA Asia Pacific show, Booth K28.

These high quality Swiss watches are manufactured by the Boegli family and have a tradition that goes back four generations. The modern Jacques du Manoir watches have been made for the past two decades and include wrist-watches, pocket watches and pendant watches, both quartz and mechanical. Scorpio will initially be offering 20 skus ranging in price from US$169 to $249.

“These are classical Swiss watches, very well made and of excellent quality, but which are far more affordable than others on the market,” says Scorpio Group Sales & Merchandising Director Richard Kennedy. “We are introducing them to buyers in Singapore and have high expectations for the brand.”

The Jacques du Manoir watches join a highly successful portfolio of watches that already include Scorpio’s top of the range Aviator watches, now available in 32 skus and with many new models, along with Avalanche, the colorful Quartz watch range, now extended with two new designs: Alpine and Electric.

All Avalanche watches come with a free Carabiner bottle opener and are presented in colorful, transparent packaging which is easily stackable. A double sided full merchandising display system has been introduced to maximize sales potential for the brand.

Confectionery Report Neuhaus at Düsseldorf Airport

You can’t beat sweet

BY

ANDREW BROOKS

Traffic growth, self-consumption and impulse buying all play their part in the resilience of the confectionery category

ravel retail recovered impressively in 2010,” says Philip Geeraert, Director International Sales, Neuhaus. “People got a level of comfort in which they are prepared to spend again. Most markets showed record sales.” Passenger volume growth is reflected in sales figures, and while the tragedy in Japan can be expected to have an impact, it may well be offset by growth in China, India and Brazil.

“April 2010 was a memorable bad month where sales almost came to a hold for two weeks,’ says Geeraert, referring to the Icelandic eruption. “This April will for sure be a good month. Perspectives in the short and medium term are very good. In the past the customer would have to go and find his needed goods, and now more and more the shopping malls come to the customer. More and more airports have massive investment plans.”

Denmark-based chocolatier Anthon Berg grew 12% in 2010 compared with 2009, and 2011 looks set to continue the trend. “We’re expecting exceptional figures for April and May,” says Travel Retail Director Peter Dige,

“T

“and then June will probably be back to normal.” Growth is in the double digits and the Middle East and Asia, he says.

Aside from traffic growth, another factor is that even (or especially?) when customers are feeling the pinch, a sweet is an accessible indulgence. So while gifting has felt some constriction, self-consumption has to some extent covered the losses. “When I look at competitors I see a lot more in the self-consumption side,” Dige says, “where in the past the trend was definitely towards gifting.”

While Anthon Berg has a strong, established network in Asia, recent market research into the Middle East has pointed up some big increases in spending power and passenger numbers there, so it remains the market to watch from his point of view.

“2010 was a strong year for us in Asia, with sales up 38%,” says Mars Regional Travel Retail Manager Asia Pacific, Alvin Tan. “The opportunity for confectionery across Asia is huge, as we have the single most impulsedriven category in travel retail – and large populations of emerging travelers hungry to try global brands, particularly in confectionery where consumption is on a sharp rise.” Ongoing efforts to understand consumer motivation is a key to leveraging the market power of the Mars portfolio, which is led by Snickers and M&M’s, the top two confectionery brands in the world.

Your impulse buy: the M&M’s Choco single pack The classic Mars single

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ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

The Neuhaus “Irrésistibles” collection

A key to cracking the Asian market is being aware of regional distinctions, Tan says. The focus in the south is on family sharing, “and value packs of Mars bar brands – Snickers, Mars, Bounty, Twix and Milky Way – and the five flavor variants of M&M’s are the top SKUs.” The market for low-cost carriers has grown in recent years, and accordingly the buyer mindset is focused on valuefocused offers. “That mindset drives an increase of the total confectionery spend due to the low cost of travel,” Tan says.

In the north, the big opportunities are in China, Taiwan and Korea. Here, Tan says, purchase motivation is driven by gifting. The result: a huge innovation opportunity for M&M’s, as Mars develops exclusive travel retail collectible gift packs across the full range.

“There’s a huge opportunity in this region to leverage the benefits of focused category management,” Tan says. “We’re working with a number of retail partners in Thailand, Singapore and Malaysia to help them develop their strategies to maximize the unique impulse opportunity of the confectionery category as a whole, as well as the benefits to Mars’ brands.”

This includes training store staff and retail management to create a more compelling shopper experience, with purchase motivation as the clear focus. “This kind of effective merchandising has an instant positive impact on

Chocolate Specialities and Caramelts The new Nestlé Swiss Collection

Nestlé’s new Disney – Mickey pack with collectible figurine

sales of around 15%,” Tan says.

“So far, 2011 has started at an aggressive pace,” says Alan Brennan, Customer Marketing Manager for Nestlé International Travel Retail (NITR). Asia, the Middle East and South America are the key drivers, he says. Brennan says that all categories are showing year-over-year growth, but he sees self-consumption – a sub-category within snacking and sharing – as a key driver.

“Nestlé identified the importance of the snacking-sharing sub category within the ‘Perfect Store’ initiative through the category driver of ‘On the Go Snacking,’” he says.

“This provides the right platform to capitalize on this growing shopper need: through secondary merchandise location, optimization of the impulse nature of confectionery resulting in the growth of the basket size and ATV.”

Category contenders With self-consumption in mind, Storck introduced the travel retail exclusive 305g standup bag of Werther’s Original Chocolate Specialties & Caramelts at the beginning of this year. Strong brand development is anticipated, says Lara Candido, International Marketing. The bag contains an assortment of six confectioneries, featuring milk chocolate, dark chocolate and the unique Anthon Berg’s “Sweet “caramel” incarnation, which Moments” combines the taste of caramel marzipan discs with the texture of chocolate. with three flavour fillings The Werther’s brand is distributed in some 80 countries, and joins Storck’s other travel retail heavy hitters merci and Toffifee. At TFWA Singapore Storck will highlight Toffifee (400g), the merci Finest Selection (250g) and Werther’s Original Candies (220g).

For Anthon Berg, which boasts some 70 products exclusive to the travel retail market, the biggest sellers by far are the Chocolate Liqueurs, especially in the 26-piece “tube” packaging format. These products are equally suited for gifting and self-con-

sumption. New products include the “Sweet Moments” bags of marzipan in bar and disc form. The discs are in an array of flavour mixes - strawberry and champagne, plum in madeira and grape in muscat wine.

Anthon Berg also has released two new nougat boxes. The dark chocolate box features strawberry with lychee fruit, blueberry with balsamico and cranberry with apple, while the milk chocolate box offers nougat with spelt, nougat with orange, nougat with passion fruit and nougat with chilli. Both assortments are heart-shaped. As this went to press, the boxes had just made their debut at Copenhagen Airport.

“I believe that innovation is part of the Neuhaus DNA,’” says Philip Geeraert. A good example is the Lady Chef gift box launched in September 2010, containing 18 signature praline confections by renowned female chefs. Now Neuhaus has launched a new collection featuring Neuhaus Irrésistibles, and the Neuhaus Star product with the company’s top-selling handmade Caprice, Tentation, Desir Plaisir offerings and more.

“Neuhaus has 22 collections per year,” Geeraert says. “Only the top collections are introduced in travel retail.”

NITR boasts a high-recognition lineup of best sellers; these include global brands like Smarties and Kit Kat, but also regional favorites such as Quality Street and After Eight. With the strength of self-consumption or “selftreat,” Nestlé’s ‘Mini Sharing Bags’ of leading brands have met with success, Brennan says, and are ideal for cash till point [CTP] sales, a current focus point for NITR’s efforts.

“One best seller we can mention is Nestlé Swiss,” says Frederic Porchet, Marketing Manager for NITR. “The brand delivers what it promises; its beautiful packaging and modern treatment clearly speaks to the shoppers, who always come back to us asking where they could buy the products in their local markets. Telling them that it’s a travel exclusive brand – hence that they’d need to travel to buy the products – is often perceived as another great factor of success.”

New Nestlé products include the 180g boxed “Nestlé Swiss Selection,” incorporating three chocolate square varieties, the new 400g “Nestlé Swiss Dark Orange” flavour, the “Smarties – Disney Mickey Box,” containing 38g tubes along with a collectible Mickey, Minnie or Donald figurine, and the “Kit Kat – Singles Pack,” containing 12 individually wrapped 80-calorie single finger wafers – a response, Porchet says, to the trend toward portion control. Nestlé also has a range of new self-consumption products that build on the success of the “Sharing Bags.”

“Confectionery is the most impulsive category in travel retail,” Brennan says. “Our research clearly indicates it has the highest rate of sale at the cash till point in comparison to other categories, and has the ability to increase the basket size and average transaction value.” Eighty-five percent of shoppers surveyed indicate that those who buy confectionery in the main store will also purchase confectionery at the CTP if the c product offer is right, he adds.

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Confectionery news Perfetti

caters to kids and teens in Singapore At this year’s TFWA Asia Pacific show, Perfetti Van Melle’s focus will be on innovation and on finding out what is important to its customer and translating that in ways that boost mutual growth.

With great enthusiasm, the company is looking forward to bringing its latest product range to the channel, including the following items.

Chupa Chups Flower bouquet: Flowers and sweets are a perfect gifting combination. Each flower comes with a personal note card and contains two Chupa Chups.

Chupa Chups Surprise: The Surprise Travel Pack is a great value for money. With 12 different surprises this is a perfect collector’s item and classic success. One pack includes four Chupa Chups, each with its own surprise toy.

Mentos Mini: Great for long trips or children’s get-togethers. A whole bag is filled with 20 miniature Mentos rolls in the favourite flavors of Strawberry, Cola, Lime and Orange.

Mentos Kidz: These little sweets in a box are delicious and soft, making them the perfect treat to be enjoyed by children. Each bag contains 15 miniature boxes in a wide variety of fruit flavors. For extra-added fun there is a game to play on the back of every bag.

For more information visit Perfetti Van Melle at TFWA AP in Singapore, Booth N3.

Chupa Chups Surprise

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Godiva’s Strawberry collection

Godiva

introduces delectable seasonal specialities Godiva shows its continued commitment to travel retail with the introduction of seasonal limited editions at TFWA Asia Pacific show, Booth H2.

Godiva’s chocolatiers have created delicious new recipes delicately placed in seasonal boxes designed to bring newness within the company’s travel retail offerings. These limited editions capitalize on increased demand during the summer period, Christmas festive season and Chinese New Year.

Sensational Strawberry limited edition summer collection Everyone knows that strawberries and chocolate are a match made in heaven, and by pairing these two pure and delicious ingredients, Godiva has perfected the balance between smooth cocoa and sweet fruit. Promising a divine taste experience with each bite, this collection celebrates the arrival of the summer season.

Demonstrating the innovation of Godiva’s chocolatiers, a limited edition Milk Chocolate Strawberry Truffle has been added to the delicious Gems Collection. The perfect fruity pick-me-up, the Gems Strawberry truffle is filled with a delectable strawberry mousse and coated in smooth milk, then foil-wrapped to look like a mini strawberry (22 per box).

Building on the successful launch of the Tablets Collection in 2010, Godiva has selected the scrumptious strawberry flavor as the latest addition to the range. The limited edition Milk Chocolate Strawberry Tablet (100g) is the perfect treat to share with friends, or to hide in your desk drawer, combining creamy milk chocolate with a hint of fresh strawberry.

These two recipes are available from May 2011, offering the ultimate treat for a sensational summer.

Chocolat Frey launches Chocobloc Air Chocolat Frey is to unveil its new addition Chocobloc Air during the TFWA Asia Pacific show.

Chocobloc Air is made up of milk chocolate, with airy bubbles which are added to almond, honey and nougat.

The appealing size of the individual pieces and package makes this product a perfect gift as well as a treat for you.

The attractive wrapping of shimmering metallic red alongside gold foil printing and tactile embossing. The unit size of the chocolate is 11 X 27 grams (297 grams).

Chocobloc Air

Company News: Pernod Ricard

Asian travelers are known for having a keen eye for luxury offerings and brown spirits, and Pernod Ricard caters to both tastes with a wide range of new releases BY RYAN WHITE sia Duty Free recently sat down with John O’Sullivan, Marketing Director at Pernod Ricard Asia Duty Free, to discuss the numerous new launches in the region that coincide with the TFWA AP exhibition in Singapore. We also took the opportunity to ask him about business in general in the region and get an update on last year’s big news during the exhibition, the Martell Experience Boutique.

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Adding excitement to duty free Absolut Watkins, a limited edition exclusive to travel retail, was launched to the Asian market at Changi Airport in February 2011 and was then rolled out in Hong Kong, Thailand, Malaysia and Korea throughout March.

Absolut Watkins offers the distinct qualities of freshly ground coffee with notes of

Only 3,000 bottles of the Chivas Regal Christian Lacroix edition were produced, of which a select number will be sold in Asia duty free

almond, caramel and warm chili. The detailed image on the limited edition bottle is created by celebrated Swedish fashion illustrator and artist Liselotte Watkins, famous for her designs for fashion brands such as Miu Miu, Anna Sui and Barney’s, as well as for magazines such as Vogue and The New Yorker.

In addition, Pernod Ricard Travel Retail launched its limited edition Chivas Regal 18 Year Old by Christian Lacroix in key Asian airports in March to showcase the new masterpiece and bring to life the brand values of luxury, craftsmanship and excellence. Only 3,000 bottles of this striking limited edition design were produced, of which a select number will be sold in Asia duty free.

The activity kicked off at Hong Kong International Airport and Singapore Changi Airport where elaborate displays were positioned in high traffic locations to generate impact. The product was rolled out in April to Incheon International Airport and Kuala Lumpur International Airport.

Also early this year, Royal Salute 62 Gun Salute was rolled out in Asia at Hong Kong International Airport, Taiwan Taoyuan Airport, Singapore Changi Airport and Korea Incheon Airport. The product was positioned on premium display units in the first class and business lounges of Korean Air. “Innovation is a key driver for Pernod Ricard and we have had some very successful recent launches,” says O’Sullivan. “As many have come to expect, Absolut has led the way with Glimmer and the travel retail exclusive Absolut Watkins.

“The Chivas 18 Year Old by Christian Lacroix, the latest release in the Chivas 18 designer series, was a huge success,” he continues. “The product is very limited and will only be in store for a short time before it is sold out. Probably the most high profile launch we had this year was for Royal Salute 62 Gun Salute, which was supported with luxurious

displays in key airports.”

Luxury leanings At this time last year, the Martell Experience Boutique concept at HKIA and Kuala Lumpur—designed to showcase Martell’s unique combination of traditional, cultural and modern attributes—was making headlines for its high-end, educational offering.

O’Sullivan tells Asia Duty Free that over the last year Pernod Ricard’s expectations have been exceeded, both in terms of sales and making quality connections with travelers.

“Selling was never a primary objective for the Martell Experience Boutique as this is the role of main duty free shops in the airports,” he explains. “Having said that, we have had some good sales, mainly to Chinese and Malaysian travelers. More importantly from a sales perspective our overall performance in Hong Kong and Kuala Lumpur International Airports has been very positive since the boutiques opened. The growth has been driven by our Prestige range, which consists of Martell Cordon Bleu, Martell XO, Martell Creation and L’Or de Jean Martell.”

Given the popularity of both brown spirits and luxury offerings in Asia, Pernod Ricard is certainly in a good position going into the second half of the year with brands such as Chivas Regal, Royal Salute, Ballantine’s, The Glenlivet, Jameson and Martell. O’Sullivan asserts that outside this subcategory, vodka continues to show growth on a smaller scale, and Pernod couldn’t be happier with the innovations coming from the team at The Absolut Company.

“All of these brands appeal to Asian customers because they are leading brands, if not the leading brands, in the categories,” O’Sullivan concludes. “They are also all premium brands, most of which fall into the super premium and above categories, which is c important to the Asian customer.”

The Martell Experience Boutique concept was launched last year to showcase Martell’s unique combination of traditional, cultural and modern attributes

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Company News: Diageo

The power of partnership At TFWA AP, Diageo GTME Asia Pacific will continue to communicate the benefits of a trinity model that is already shining a spotlight on the spirits category in the region BY RYAN WHITE

cross all regions worldwide, Diageo has made significant headway in changing the way retailers, airport authorities and other suppliers view the spirits category in travel retail. While signs of economic recovery are good indicators of the possibilities that abound in travel retail, there is arguably no region more dynamic at the moment than Asia Pacific. We recently had the opportunity to speak with Jay Woo, Diageo GTME Asia Pacific’s General Manager, to discuss both his team’s accomplishments since the beginning of the year and plans for the rest of 2011.

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“I think there’s huge potential in the region. I can certainly see GTME Asia Pacific representing an even bigger part of Diageo GTME’s overall business in the future.”

Jay Woo, General Manager – Asia Pacific, Diageo GTME

Given Diageo’s well publicized activities in the Americas and the Middle East, many may be surprised to know that Asia Pacific is actually Diageo GTME’s fastest growing region. The company’s Asia Pacific team is currently comprised of over 30 travel retail experts that cover the business throughout Korea, Japan, parts of China (Shanghai and Beijing airports), Singapore, Australia and New Zealand, while another business unit covers India, the rest of China and Malaysia.

Although all of Diageo’s regional business units have experienced growth this year, GTME Asia Pacific brings in about 20% of the total business. Indeed, GTME Asia Pacific’s business has grown over 30% in the last 12 months. “I think there’s huge potential in the region,” says Woo. “I can certainly see GTME Asia Pacific representing an even bigger part of Diageo GTME’s overall business in the future.”

As may be expected from a region of the world fond of both brown spirits and luxury products, GTME Asia Pacific has the biggest super deluxe Scotch (defined as bottles costing US$65 or higher) business of all of Diageo GTME’s regional offices.

“There is huge opportunity here,” says Woo. “In line with Diageo’s global strategy, our aim is to double total category sales of spirits in travel retail from US$6 to $12 billion. This means that we have to get a number of things right, and high on that 84

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list are considerations such as retail transformation, capturing the gifting moment and high-profile promotions.”

Diageo GTME Asia Pacific has already taken many important steps toward incorporating these key tenets in the region.

The company recently opened a new airport store in Taiwan called the Collection Shop. The location is a joint project in cooperation with Casa Ming, Diageo’s main retail partner in the country. The Collection Shop is completely dedicated to the luxury shopping experience, consumer education and traveler engagement. The store specifically targets the increasing number of Chinese traveling to Taiwan and doubles as a high-end lounge area.

Another project that has worked very well for Diageo GTME Asia Pacific is the Malts Wall at Sydney Airport. The wall represents the total malts category, and not A recent Smirnoff Espresso just Diageo’s SKUs.“The idea is concourse activation in Bangkok’s to educate and demystify the Suvarnabhumi Airport in cooperation with King Power is an example of malts category,”says Woo.“With the type of experiential promotions the help of our highly knowl- that Diageo GTME Asia Pacific feels will grow the category edgeable brand ambassadors, sales have increased by 90% at the location just since the wall was installed. This malts category solution is something that we’d like to bring to other locations across Asia in the future.”

At the beginning of April, a Smirnoff concourse activation was launched in Bangkok’s Suvarnabhumi Airport in cooperation with King Power to communicate the launch of Smirnoff Espresso. Given his goal of making duty free shopping more experiential for travelers, Woo sees this as a great example of the type of concourse activation Diageo is able to create with a like-minded retail partner.

“Other major concourse activations have been run at Sydney, Incheon and Changi.

We continue to look for ways to drive footfall and conversion, as well as give something new to consumers,” he says.

Of course, activations of any significant size and scope require that retail and airport partners are on the same page. For this reason, Woo sees the TFWA AP exhibition as the perfect time to discuss objectives with all of Diageo’s partners in Asia.

“We have a responsibility to gain more ground in Asia Pacific when it comes to the trinity model,” he concludes. “That’s my personal goal. I think the shoppers need to be our prime focus, and this means thinking about the category as a whole and having suppliers across the category working with retailers and airport authorities toward bigger, c more experiential activations.”

GTME Asia Pacific has the biggest super deluxe Scotch (defined as bottles costing US$65 or higher) business of all of Diageo GTME’s regional units

Experience a unique variety of refined, delicate flavours

Company News: BB&R Spirits

A concentration on quality

BB&R Spirits continues to make inroads in Asia Pacific travel retail by focusing on a range of quality spirits that includes The Glenrothes range BY RYAN WHITE

The idea behind No. 3 London Dry Gin was to develop a quintessentially English gin that would act as the key to the best dry martini

erry Bros. & Rudd (BB&R) Spirits continues to see success in the Asia Pacific travel retail market, spearheaded by the excellent performance of The Glenrothes, which has only been on store shelves in Asia for the last 18 months. Of course, high-end positioning, quality and unique gifting opportunities are known to be extremely important to Asian travel retail consumers, and Asia Duty Free recently found out from Johnny Roberts, Regional Business Director – Asia at BB&R Spirits, that the company’s portfolio addresses all three of these vital criteria.

The Glenrothes is distilled in the tallest stills on Speyside at an unusually slow rate, ensuring an elegant and fruity spirit. In addition, maturation in a combination of Sherry-seasoned and refill oak casks develops the balance and complexity of the whisky’s flavors, a mélange of ripe fruits, juicy citrus notes, creamy vanilla and hints of exotic spices that has proven very popular with Asian consumers. The spirit is bottled only when it has reached what is considered to be the peak of its maturity, making for either Vintage or Reserve expressions.

“The elegant Speyside liquid and pioneering Vintage and Reserve

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“ BB&R Spirits is very well placed to meet the needs of an emerging group of customers today and in the future.”

Johnny Roberts, Business Manager – Asia, BB&R Spirits

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concepts have been embraced by travelers across the region and I am confident the brand has a strong future,” explains Roberts.

Of course, given the expertise that goes into making The Glenrothes, travelers often become buyers after having the opportunity to sample the liquid. To this end, BB&R Spirits has been running a series of sampling promotions, most recently in Taiwan. The purpose of the promotions is to introduce The Glenrothes duty free range to consumers by offering a range of GWPs and positioning the activation in high-visibility locations.

“Giving travelers the opportunity to sample the quality of the liquid has translated into heightened levels of interest for the brand both in domestic and duty free markets,” explains Roberts, “so much so that this continues to put pressure on the availability of Vintage stocks.”

As a means of continuing to attract new consumers, BB&R Spirits has recently introduced two new products that will be available in Asia: the John Ramsay Legacy and No. 3 London Dry Gin. The John Ramsay Legacy expression of The Glenrothes was developed

by John Ramsay, the Malt Master at The Edrington Group, when he retired after over 40 years of service. “This is a truly unique expression developed by an important industry figure,” notes Roberts.

No. 3 London Dry Gin was recently introduced to the Americas travel retail market at this year’s IAADFS show in Orlando and is currently available in selected domestic markets in Asia. Roberts asserts that the idea behind No. 3 was to develop a quintessentially English gin that would act as the key to the best dry martini. Interestingly enough, the input for No. 3’s creation came from a combination of the best London gin bartenders, writers, distillers and gin creators.

While Asia is generally considered a brown spirits market, Roberts asserts that there may be a future in Asia travel retail for a quality spirit like No. 3: “The popularity of classic cocktails such as dry martinis is not widespread in Asia today, but there are pockets of interest, for example in Hong Kong,” he says. “I believe interest in cocktails will develop over the longer term and seeding No. 3 Gin today will provide a platform for future growth.”

Indeed, BB&R Spirits has over 300 years of expertise as a fine wine and spirits merchant. Over this period the company has built a huge amount of trust with its customers as a supplier of only the highest-quality products. In a region that focuses heavily on tradition and craftsmanship, this long history bodes well for the future of BB&R Spirits in the Asia Pacific region.

“This heritage and reputation,” says Roberts, “coupled with the quality of the liquids we offer, means we are very well placed to meet the demands of an emerging group of customers today c and in the future.”

The Glenrothes is bottled only when it has reached what is considered to be the peak of its maturity, making for either Vintage or Reserve expressions

© 2010 WILLIAM GRANT & SONS LTD. GLENFIDDICH® SINGLE MALT SCOTCH WHISKY IS A REGISTERED TRADEMARK OF WILLIAM GRANT & SONS LTD.

Cognac Report Camus 1973 vintage cognac

The Louis XIII Century in a Bottle pillar display with brand image staff

Spirit of success

Cognac is doing well in travel retail, buoyed by the strength of the high-end of the market, a more modern marketing approach and the surge in Asian demand BY ANDREW BROOKS or Matthieu Frey, Rémy Cointreau Global Travel Retail Marketing Manager, the times are good. Frey’s positive view of the global travel retail market is reinforced by the fact that certain parts of the world are doing even better than the norm—and by the fact that wines and spirits are setting the pace.

“The travel retail market has done particularly well in 2010/11 across all categories,” Frey tells Asia Duty Free. “According to Generation’s ‘Best & Most’ report, total travel retail sales have increased by 18.8% in the past 12 months, with an increase of more than 16% in wines and spirits. Asia-Pacific airports lead this positive trend, with growth of 28.7% in revenues, and wines and spirits revenues increased by 27% in 2010 in Asia-Pacific airports.”

The growth in the market has come largely from the “new” travelers from and within Asia who have a taste for luxury and for major international brands, Frey believes. These customers have a different style, gravitating toward more conspicuous consumption as part of the display of wealth and sophistication. “There’s more consumption of cognac in bars, clubs and restaurants,” Frey says.

“It has become a trendy drink.”

Frey notes that Rémy Cointreau Global Travel Retail outperformed the overall wines and spirits market in 2010. “We had a very good year in all areas, but especially in Asia,” he says. Australia and Japan lagged behind due to currency strength, but this was common throughout the industry, Frey asserts.

Signal contributors to Rémy Cointreau’s performance in Asia are its Rémy Martin VSOP, the overall leader in travel retail, followed 88

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by Rémy Martin XO Excellence. Moreover, the LXIII Grande Champagne Cognac performed so well across Asia last year that stocks are tight now and the product is on very strict allocation.

“Business is definitely growing,” says Anne Blois, Commercial Director Asia-Pacific for Camus Wines & Spirits. The economic downturn definitely hit the duty free business, she says, but the prognosis is positive. “In January–February 2010 we were already showing positive growth compared with the same period in 2009, and the growth is continuing this year. The economy is definitely recovering and we’re quite optimistic about the future.”

In Asia-Pacific, Camus’ bestsellers are XO Plus and above, with category growth driven by China. “The mainland customers are travelling more and more, and they have an eye for quality, rarity and collectibles,” Blois says. “In Asia we’re definitely seeing younger customers: they’re interested in cognac and they’re looking for products with an origin, a story, a terroir — and cognac fits the bill.”

As a well recognized brand that’s still 100% family-owned, Camus has an edge here, Blois says.

“The travel retail market is showing good figures,” says Aristide Chevaillé, Asia Sales Manager for Bache-Gabrielsen and Dupuy. For now the company is working almost exclusively in the European dutyfree market, whereas in 2010 it experienced a good increase in sales volume and even better performance in terms of value of sales. Right now job number one, Chevaillé says, is to bulk up in Asia.

Current bestsellers there include the new Dupuy XO Tentation, a 20-year-old cognac which hews to Dupuy tradition with its floral aromas and smoothness of taste. The product boasts brand new

Maturity matters, not age Share responsibly. www.theglenrothes.com

Cognac Report

The Baron Otard Fortis & Fidelis crystal decanter has garnered positive reviews from operators

packaging with an accent on elegance and modernity. Special edition cognacs up to 50 years old are also doing very well in Asia, and demand is on the rise.

“The new packaging is very distinctive, modern and elegant,” Chevaillé says. “This is the perfect alliance between tradition inside the bottle and modernity in the packaging. Our Asian customers have shown high interest in this range and we think it will also interest duty free.”

A. de Fussigny Cognac has gained a lot of attention and therefore a lot of exposure in travel retail in the past few years, says Jean-Dominique Andreu, Owner and President. “Even with the global crisis, we managed to experience very good rotations and reorders, especially in the high-end segment of the business,” he says.

“And thanks to new distribution partnerships with some of the major duty free operators, we opened new markets and increased our worldwide sales by 54% within a year.”

Part of the success is undoubtedly a result of new ownership that came onboard in 2008, when Aroma Trade House bought the company. The new owners maintained a strict high-quality focus but revamped the brand to reflect a younger, more modern and dynamic approach that Andreu believes holds promise for the future.

Top of the line Part of the reason for the success of specialty makers may lie in the fact that their focus on the high end of the cognac market puts them in a segment that is enjoying especially rapid growth right now.

“The growth of high-end cognac is clearly a reality,” Andreu says.

“Take a look at sales volumes in this subcategory—they’re excellent.

Consumers are definitely looking for quality products, and they demand real luxury at each and every level, both inside and outside the bottle.” All of A. de Fussigny’s products are high-end, quality-oriented cognacs that represent “a certain art de vivre,” says Andreu. The main line, called Creation, is composed of Sélection in the VSOP category, Supérieur Fine Champagne in the Napoleon category and XO Fine Champagne, the company’s flagship and top seller.

Philippe Jouhaud, Sales and Marketing Director for Bacardi Global Travel Retail’s Baron Otard Cognac, endorses the view that high-end cognac is a growing subcategory, although to some extent perhaps on the back of growth in the broader category. “We are currently seeing very strong growth in Asia for cognac, mainly fuelled by the Chinese market,” he says. “China is now the fastest growing A. de Fussigny’s XO 24 Carats Premier Grand Cru

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market in the world for cognac and the second largest after the US. Part of the growth is coming from the super/ultra premium category, and this is a trend we’ve seen for a couple of years.”

Baron Otard is ready for the challenge with two new products: Baron Otard Extra 1795 and Baron Otard Fortis & Fidelis, a new crystal decanter which is now appearing in select accounts in the Asia Pacific region. “We’re very excited about the potential for this decanter in Asia, especially in travel retail,” Jouhaud says. “From the incredible reactions we are receiving from different operators, we feel very positive.”

The trend towards top-line cognacs, says Jouhaud, corresponds to the strong demand from Asian consumers for high-end luxury products generally, and reflects trends seen in other categories such as fashion or accessories. As you might expect, he rejects the notion that other categories are being cannibalized. “On the contrary,” he says, “cognac is paving the way for other categories to develop in the luxury segment.”

High-end cognac is in great demand in parts of Asia, says Matthieu Frey of Rémy Cointreau. “It’s bought as a prestigious gift and for display as evidence of its owner’s success. For this reason we felt that there was a market for a premium cognac, and we created Rémy Martin Centaure de Diamant for travel retail.” That confidence has been rewarded, judging by the rapid uptake enjoyed

by Rémy Martin’s ultra-prestige Louis XIII Grande Champagne Cognac, as well as by the limited-edition Louis XIII Rare Cask and Louis XIII Black Pearl.

“To stand out in this category is actually an easy thing to do,” A. de Fussigny’s Andreu says. “Suppliers must just answer this particular demand, as we do.” This approach will never undermine other product categories, he says, because while there are broader, general trends, the great diversity in tastes, cultural behaviors and demands will always ensure that product offerings remain varied.

“The value of the cognac sold in Asia is showing a very good increase, and the market seems to be continuing this very good trend,” says Bache-Gabrielsen’s Chevaillé. This applies not only in China but in countries throughout Southeast Asia, he says.

Anne Blois of Camus agrees that the high-end category is growing. “And being a family-owned company, for us it’s easier to develop high-end items as we’re smaller compared with others.

Plus we have access to some very old cognac, and that reinforces our image as a producer of handcrafted, high-end cognac. You need to have access to the juice!”

Blois says that Cyril Camus, the family scion now at the helm, is very strict when it comes to certifying the age of Camus vintages—not a minor point in the Asian market. “When we release a 1940 vintage it is absolutely certified and guaranteed,” Blois says. In mainland China in particular people are very concerned about this, so much so that many customers there prefer to buy duty free outside the country, she says.

Aside from the inroads being made by high-end

Cognac Report

cognacs, there are other, more general trends afoot. “I’ve personally noticed that innovative products in general are the ones with the most success in duty free markets,” says A. de Fussigny’s Andreu.

“This is the case with cigars, for example, which is a fun, high-end and quality product as well. With A. de Fussigny, we believe that an innovative approach is undeniably necessary.”

Andreu points out that using something as basic as color as a market differentiator can be very effective, especially at a trade show like TFWA Asia Pacific. “There’s no magical recipe, [but] having our own display booths and communicating on the young and lively A. de Fussigny color codes happens to work quite nicely,” particularly in cognac, where coloring is typically darker and more “traditional.”

That kind of departure from the somewhat staid traditions of the cognac market is echoed elsewhere. “Cognac is no longer the preserve of old men in smoking jackets beside a log fire,” says Frey of Rémy Cointreau. “It’s a young and vibrant drink which is enjoyed, particularly in Asia, in clubs and restaurants as well as at home. The same can be said of certain liqueurs, and we’ve responded with a much more youthful approach to Cointreau, with a voluptuous brand ambassador [Dita Von Teese] and a bright colorful association with the cocktail culture.”

Frey also observes that gifting, always important in travel retail, has prompted vendors to respond with vibrant, colorful packaging and innovative presentation. “This trend is set to continue,” he says, “and the wine and spirits category is giving the perfumes and cosmetics sector a run for its money in the design stakes.” Prominent examples from his own company’s portfolio would have to include the POS material backing up the Cointreaupolitan cocktail promotions and the yacht-shaped display for Mount Gay Rum that was featured in the Heinemann promotion in Hamburg.

Philippe Jouhaud of Baron Otard highlights some other developments. “We see more and more limited editions and special gift packs,” he says. The trend isn’t new, he says, but rather corresponds to demand from operators to offer products that are exclusive to Bache-Gabrielsen’s Dupuy Tentation range

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Among a number of new launches at TFWA Asia Pacific this year, Camus will release a new entry in the “porcelain book” series titled Woman in the Garden

their channel. “However,” he says, “a limited edition just for the sake of it doesn't make much sense. There must be a strong concept behind it, not just nice packaging, and it needs to contribute to the communication of the brand story.”

Anne Blois of Camus opines that XO remains the big category for Asia. “We do see some development of VSOP, though that’s not in duty free so much. For duty free it’s mostly XO and higher.”

Best in show For this year’s TFWA Asia Pacific event, Dupuy and Bache-Gabrielsen will be showcasing the classic VS, VSOP and XO range, says Chevaillé.

“On top of that, we’ll show many different limited editions, such as our Pure and Rustic range. This range shows cognac with a more straight taste that corresponds to a new trend among cognac drinkers. Their design also makes them special among other cognacs.”

Additionally, some older vintages will be on display.

A. de Fussigny will highlight the launch of its brand new XO 24 Carat Grande Champagne, which Andreu describes as “an outstanding cognac composed of very old eaux-de-vie from the finest appellation, released in a luxurious and modern packaging.” Other than that, Andreu says that A. de Fussigny is “preparing a wonderful surprise that we will release later in the year. It is unfortunately a little too early to speak about it now.”

For Camus, the accent will be on special vintages, in particular a new 1940 Cognac as well as a new third edition Cuvee that won’t be released before the end of 2011. Camus will also launch a new entry in the “porcelain book” series, titled Women in the Garden. The Berneroy Calvados range, among others, will have new packaging and a new Cuvee 2.105 will be on show. The three-bottle “Ile de Re” range will be shuffled, with a new “Cliffside Cellar” number launched to replace the current Ile de Re XO. Rémy Cointreau’s best foot forward at TFAP this year will include the new Centaure de Diamant, created especially for travel retail.

This is a blend of 300–400 of the most precious eaux-de-vie in the Rémy Martin cellars, all from the top quality Grande and Petite Champagne crus. Frey describes the flavor as rich and intense, with the deep mahogany color well highlighted in a chiseled glass carafe. “The presentation coffret is ingenious,” he adds. “It opens backwards to act as a display case on the shelf.”

Other Rémy highlights to look for will include the VSOP Cannes Exclusive Limited Edition, which was created to mark the 64th Cannes Film Festival in May (Rémy Cointreau is an official partner of the event). This year’s design features dramatic black with a

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www.1691.ie

L35 TFWA AP

In North America The Wild Geese Irish Whiskey Collection is sold under the ‘brand name’ of “The Wild Geese Irish Soldiers & Heroes”. The Wild Geese, The Wild Geese Rare Irish Whiskey, The Wild Geese Irish Soldiers & Heroes, The Wild Geese Soldiers & Heroes and Untamed are registered trademarks. Made under the authority of the trademark proprietor. © Avalon Group Inc. 2002 – 2011.

Cognac Report

gold-colored celluloid film decoration. High-profile promotions will take place in major airports around the world in April and May. The company will also highlight a new Cointreau pack inspired by brand ambassador Dita Von Teese and echoing the Cointreaupolitan cocktail theme Rémy has been developing over the last couple of years.

Other news from Rémy includes a new Mount Gay Rum Eclipse Black 100 Proof, currently on an exclusive promotion with Heinemann Duty Free in Hamburg Airport, which will later be rolled out selectively worldwide. A limited edition Mount Gay Rum sleeve on a nautical theme will also release soon, Frey says.

“Besides the VSOP Cannes Limited Edition, we have a few other interesting ideas up our sleeve for this popular Rémy Martin cognac, including an urban downtown-themed presentation c that will be unveiled soon.”

When it comes to cognac, Rémy Martin VSOP holds the distinction of being the overall leader in travel retail; pictured is the newest limited edition created for this year’s Cannes Film Festival

The art of ice.

Perfected.

PLEASE ENJOY RESPONSIBLY.

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ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

Wine Report

Points east

Gérard Bertrand’s Legend Vintage Maury 1929

New wines, new wineries, new promotions, new customers and even new bottles are making the market in Asia BY ANDREW BROOKS

he Asian market is growing rapidly—it’s a truism in travel retail these days. But for Aurelie Degoul, Public Affairs and Communications Manager for premium French winemaker SPH Gérard Bertrand, Asia is just the tip of the iceberg.

“The premium market changes every year,” says Degoul. In addition to recently locating an export manager in Singapore to take advantage of the Asian boom, Gérard Bertrand finds itself ideally situated to capitalize on a couple of other trends that Degoul and her colleagues have noticed recently.

“There’s growing demand for two different kinds of product,” she says. “The first is organic wines. This is good for us because more than 20% of total production is from organic grapes. Then there’s the growing demand for very highend premium wines, which again also fits our portfolio. As a result, the trends are quite beneficial for us!”

Duty free and travel retail is a relatively small part of total sales for Gérard Bertrand, but the signs of growth are there. The company recently appointed its first Global Travel Retail Director and evidently sees no reason that the travel retail slice of the pie can’t get a lot bigger.

Diverse Flavours has only been around since 2009, so Managing Director Anthony Budd says simply, “everything is on the up!” when asked how the

T

Paul Sapin will be showcasing Tamoko, a New Zealand Sauvignon Blanc (pictured), and Chateau Blomac, a French red, at the pool party at the Mandarin Oriental Hotel on Tuesday, May 17

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market is doing. The South African company works with seven wine estates as well as one brandy maker. Budd says he has exciting business with Korean Air, where Hidden Valley Secret was the first South African wine listed in the airline’s Cyber Shop. Wt DFS in Singapore, Deetlefs Familie Range boasts the most expensive white and red South African offerings at the Wine Boutique in T2 and T3.

The main duty free market trend Budd has noticed is very simply a growing number of consumers for wine. “It’s not just about spirits anymore,” he says. “Consumers are more open to new products. Duty free gives them a great opportunity to be more irrational in their purchase decisions and therefore willing to try new things. This is where South African wines will do well, as they really are a new, interesting and developing category in Asian duty free.”

“So far we find the travel retail market is keeping pace with last year,” says Violaine Creuzé, International Travel Retail Manager for Spanish winemaker Bodegas Torres.

“But it will be mainly in spring and summer that we’ll have a clear idea of the tendency for 2011 as most of our promotions start at that time of year.”

If it’s possible to be an “old hand at innovation,” Torres fits the bill with its promotions. The company turned heads earlier this year when it released a special limited edition of Viña Esmerelda featuring a bottle encased in silver mesh and accompanied by a bracelet of green Swarovski Elements crystals. Other recent developments include “Torres Experience,” a new concept that features visits, blind dinners, conventions, fashion events and other goings on at its winery. The winemaker has also turned to social media, launching an online photo contest with a winery visit as first prize.

“Traditionally, the promotions that work best for us are those which are useful for the customer and are easily implemented on the market,” Creuzé says. “For example, cross-merchandising promotions usually help product rotation because we pop out of the fully packed shelves and we locate our brands in other categories with similar consumption.” Similarly, pack promotions increase impulse purchases by offering gadgets that are usually wine-related, such as

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

Gérard Bertrand’s newest release, the Gris Blanc very pale rosé

corkscrews or wine glasses.

Talking to Barry Geoghegan, President of Barry Global Innovation, the exclusive global travel retail agent for Paul Sapin wines, is an education in the practicalities and potential of form versus content—in this case a looming revolution in wine bottling. Besides making its own wines and marketing a range of New World vintages, Paul Sapin has introduced multi-layer PET (MLP) plastic wine bottles, which Geoghegan says can transform how wine is shipped, handled, marketed and sold in travel retail.

“We as an industry have always let the needs of production drive the wines,” Geoghegan tells Asia Duty Free.“We never asked people why they buy and why they don’t buy.”

The answer to the second question is twofold: weight and breakage. Carry-on restrictions limit what you can buy in duty free, and the heft of a glass bottle has to be subtracted from total weight. Breakage is also a problem, as anyone who’s had a bottle break inside a suitcase can tell you. Plastic, usually PET (polyethylene terephthalate), addresses both challenges. The problem is that the wine industry has some image hangups and is still mostly stuck on glass.

Attendees to this year’s TFWA AP exhibition can see bestseller Mas La Plana, which is made with 100% Cabernet Sauvignon, at the Torres booth

“People associate wine with the pinstripe set and formal dining,” Geoghegan says. “But most buyers aren’t in pinstripes—they’re in flip-flops! People buy wine to have on the deck, on the beach, at a picnic, on a hike, wherever and whenever. It’s informal, but it’s often in places where weight and especially breakage are real issues.”

MLP is also efficient where shipping is concerned. Glass bottles must be packed tightly with protective materials, which take up space. MLP bottles don’t need the extra clothes.

Geoghegan says that a 40foot container that holds 1,540 cases of glass-bottled wine can hold 2,244 MLPbottled cases. “Roughly speaking, you use two containers for the amount of wine that used to take three,” he says. “That’s a huge efficiency.”

The crowning touch is shelf life, which is where PET is problematic. PET-bottled wine typically lasts about six months since PET is relatively permeable to oxygen. MLP consists of two layers of PET separated by a layer of nylon mixed with a “scavenger” that blocks oxygen transfer. This results in a shelf life around four times longer.

“Being lighter is just one part of it,”

Geoghegan says. “The wine lasts longer, the bottles are cheaper to ship, you can carry more on-board, airlines can stock more for in-flight, the bottles don’t break and it’s easier to have different packaging for different markets. At the last IAADFS we talked about a ‘revolution in wine.’ That’s what this is.”

Star attractions Diverse Flavours will be exhibiting and tasting more than 60 wines at TFAP, all appearing at the show for the first time. “There will be a range of reds, whites, rosé, single varietals, blends, Method Cap Classique (MCC) sparkling, dessert wine and Cape Ruby,” Budd says. “We may also have one of the most expensive bottles of wine in South Africa, a very rare and unique Muscat D' Alexandrie 1974 from Deetlefs.” Budd will also be showing off the new packaging of the Avondale range, which will retail at US$35–$90 in duty free.

Gérard Bertrand has a number of new products, notably Gris Blanc, a very pale rosé released a week before press time. The wine was released in conjunction with a promotion featuring ice bags and gift bags— the latter a good clue as to the vintage’s travel retail potential. The winery has also released Muscato, a 100% dry Muscat with a light alcohol content of just 10%.

Naturalys, a new range of varietals made with organic grapes, will be at TFAP, as will the main varietal range, Réserve Spéciale, and “Icon” wines such as Corbière and Minervois. Legend Vintage, a collection of vintage fortified wines dating from 1929, 1945 and 1951, packaged in wooden boxes, makes an ideal gift, Degoul says.

Bodegas Torres’ bestseller is undoubtedly Sangre de Toro, launched in 1954 and now a familiar bottle in 140 countries

Bodegas Torres’ bestseller is undoubtedly Sangre de Toro, launched in 1954 and now a familiar bottle in 140 countries. For single-estate wines, the star icon wine is Mas La Plana, which is made with 100% Cabernet Sauvignon. These will be the staples at the Torres booth at TFAP, Creuzé says, as there won’t be any new launches this year.

Barry Geoghegan will be showcasing Tamoko, a New Zealand Sauvignon Blanc, and Chateau Blomac, a French red, at the pool party Paul Sapin is hosting at the Mandarin Oriental Hotel on Tuesday, May 17. Even here, Geoghegan says the MLP bottles will be a star attraction. “Normally you don’t see glass bottles poolside because of the breakage risk,” he says. “Hosting a pool party is our way to show people in travel retail how restrictions c like that can be a thing of the past.”

The Avondale range is a heavy hitter for Diverse Flavours

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Liquor news Bottega brings Italian luxury to Singapore At this year’s TFWA AP exhibition, visitors to Distilleria Bottega’s booth will be treated to a taste of luxury. The company will be showcasing the stylish Amarone Bottega, Il vino Prêt-á-porter and Bottega Diamond sparkling wine.

Amarone Bottega, Il vino Prêt-á-porter features a white leather label and is nestled in a white leather case embellished with debossed black lettering: a collectible piece that brings to mind a vintage suitcase. The case is enriched with metal studs (the latest, hottest fashion trend) and has a metal plaque engraved with the Alpinestars by Denise Focil logo. The leather case and label are Denise’s signature touch, as her specialty is leather. Indeed, she has been creating leather jackets for Hollywood stars for almost a decade.

Bottega Diamond is a special Pinot Noir from Oltrepo’ Pavese (Lombardia, Italy) bottled in a unique package. The charming diamond bottle is enriched by crystal diamonds

that reproduce the Bottega logo. This dry, harmonic and velvety sparkling wine is characterized by a straw yellow color and a fine and persistent perlage. Dry, velvety, fruity and persistent on the palate, it is enriched by a slight aroma of bread crust and a pleasant aftertaste of fresh fruit and spices.

Sandro Bottega, President of Distilleria Bottega, is optimistic about the opportunities that Asian duty free offers. In fact, Amarone Bottega, Il vino Prêt-á-porter has already been listed with DFS. Furthermore, the company’s products are part of Singapore Airlines’ new home delivery program.

“Spending power in Asia is growing and oriented towards quality products,” Bottega says. “The best buyers are not only from Japan and China, but also from India and Indochina. The interest in Italian fashion and lifestyle symbols is always high, and this includes Italian wines and cuisine.”

Highland Park Leif Eriksson pays tribute to ancient explorer Highland Park will unveil a unique expression that celebrates the achievement of the first European traveler to reach America over a thousand years ago. Highland Park Leif Eriksson, a limited edition single malt Scotch whisky exclusive to travel retail, will be revealed to Asia at this year’s TFWA AP exhibition and offered to travelers, collectors and connoisseurs in selected airports across the region Thought to have been born in Iceland circa AD970, the courageous Leif Eriksson set out from the Orkney Islands north of mainland Scotland at the dawn of the 11th century to make the perilous crossing of the North Atlantic and establish settlements in Labrador and Newfoundland, a feat which earned him the nickname “Leif the Lucky.”

Orkney had been associated with the Vikings since the 8th century when fearless Norse explorers sailed in magnificent handcrafted oak longboats to colonize the islands. Highland Park Leif Eriksson is a tribute to the bravery of the early explorer. It owes its distinctive flavor and color to Orkney’s unique aromatic peat combined with maturation in American oak casks from both bourbon and sherry.

Yellow gold in color, Highland Park Leif Eriksson has a honey-tinged sweetness of orange blossom on the nose with suggestions of vanilla, spicy dried oak, mango and melon.

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Offering up soft vanilla and sweet barley on will appeal both to shoppers buying for themthe palate with a hint of grape, it has a finish selves and those looking for a distinctive preof Muscovado sweetness balanced by wisps of mium gift.”

Orcadian peat smoke.

“Highland Park Leif Eriksson brings together our Viking heritage with the adventures of this great heroic traveler to create a distinctly different single malt,” says Gerry Tosh, Head of Brand Education, The Edrington Group. “For consumers who have tasted our new make spirit, they may note how its character comes through very strongly in this latest expression; honey sweetness from the peat and a delicious maltiness.”

“The association of this unique American oak cask bottling with Leif Eriksson's extraordinary voyage provides a striking and strongly themed on-shelf presence in travel retail,” adds Steven Sleigh, Area Director Global Travel Retail, The Edrington Group. “The Highland Park Leif Eriksson release is a malt of exceptional character and heritage, which Highland Park Leif Eriksson owes its distinctive flavor and color to Orkney’s unique aromatic peat and maturation in American oak casks from both bourbon and sherry

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

Bacardi maximizes

Bottega Diamond is a special Pinot Noir from Oltrepo’ Pavese bottled in a very unique package enriched by crystal diamonds that reproduce the Bottega logo

convenience for Asian travelers

The Bacardi Mojito ready to serve (RTS) launched in AsiaPacific last month. The Bacardi Mojito RTS has effectively established a new category in travel retail, allowing Bacardi Global Travel Retail to access new consumer occasions through convenience. The strong performance of the Bacardi Mojito RTS in the Americas and Europe has led to its launch in Asia Pacific, as well as two new additions to the range: Bacardi Pina Colada RTS and Bacardi Strawberry Daiquiri RTS. Both were launched in global travel retail last month.

For nearly 150 years, Bacardi Superior Rum has inspired cocktail pioneers to create some of the world’s most famous drinks, including the mojito, the daiquiri and the pina colada. The Bacardi RTS range offers these same classic cocktails made with Bacardi Superior Rum in a readyto-serve package.

Bacardi notes that the Mojito RTS has achieved exponential growth in airports, cruise and ferries and it is hoped that this success will be repeated by the two new variants.

Patrón’s global duty free business is up 55%, and Asia Pacific is the company’s fastest growing market

An in-store Patrón display from the Philippines

The strong performance of the Bacardi Mojito RTS has led to two new additions to the range: Bacardi Pina Colada RTS and Bacardi Strawberry Daiquiri RTS

Patrón goes dark at this year’s TFWA AP exhibition Anyone who has followed the duty free spirits category in recent years is well aware of Patrón’s meteoric rise to the top of the tequila subcategory, and perhaps more importantly its breakout status as a brand that has taken market share from other subcategories as a result of its versatility and quality. While Patrón’s popularity in the Americas has been well-publicized, the company’s entire range—especially Añejo and Reposado—has outperformed in the Asia Pacific region.

Year to date, Patrón’s global duty free business is up 55%, and Asia Pacific is the company’s fastest growing market as a result of triple-digit year-to-date increases. The company’s handmade tequilas are currently listed in airport duty free stores in Singapore, Bangkok, Taipei, Kuala Lumpur, Manila, Sydney and many other locations.

Jason Nussbaum, Director of International Marketing for Patrón, spoke with Asia Duty Free about the importance of the TFWA AP exhibition in Singapore. “The Singapore show is particularly important to us as there are still several airports in the region where we aren’t yet listed, and of those where we are, we hope to increase listings with other offerings like Patrón XO Cafe,” he says.

Indeed, Patrón XO Cafe has received a warm response in many other markets throughout the world, from both tequila fans who want to try something a little different and those who are curious about tequila but haven’t yet made the jump to Patrón Silver.

“XO Cafe is working on many levels,” explains Nussbaum. “Fans of Patrón Silver, Platinum, Añejo and Reposado have really taken to it, but because of its lower price and great coffee taste, it also acts as a nice point of entry for those reluctant to give tequila a try.”

Patrón is known for being extremely proactive when it comes to tastings, and the company intends to continue with this strategy during 2011 in Asia. Furthermore, the company has developed a number of new GWP items designed specifically for travelers.

“Items such as laptop cases, voltage adapters and passport holders are items that travelers can use on a regular basis,” Nussbaum says. “For this reason we’ll be offering these GWPs in conjunction with our comprehensive tasting program. Sampling is such a priority for us because once people taste Patrón, they instantly understand what we’ve been communicating in terms of quality. The liquid itself is really the best marketing tool there is.” www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

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Liquor News International Beverage will showcase a travel retail exclusive limited edition Balblair 1995 vintage single malt at its newly redesigned stand at this year’s TFWA AP exhibition

International Beverage concentrates on quality and tradition in Asia It can be said that understanding cultural preferences is a major factor in cracking the Asia Pacific duty free market, and International Beverage Group certainly has a distinct advantage in this aspect given that its parent company, Thai Beverage (ThaiBev) PLC, is listed on the Singapore Stock Exchange and is the largest spirits company in Southeast Asia.

Another plus for International Beverage is the fact that it boasts a diverse portfolio of quality spirits that are inherently attractive to Asian consumers, from Balblair and Old Pulteney single malt Scotch whiskies to Mekhong Original Thai Spirit and Chang beer. James Bateman, Manager of Global Travel Retail at International Beverage, tells Asia Duty Free that growing the business in Asia (the company just appointed a travel retail manager for the region based in Bangkok) and staying true to the heritage and quality of the brands are the company’s top priorities moving into the second half of 2011.

“It’s very important to us to build the business in our own backyard of Southeast Asia,” says Bateman. “Equally important is maintaining a manageable growth that affords us the opportunity to communicate the virtues of our brands in a way that does justice to the work that went into making them the premium spirits that they are.”

When it comes to single malts such as Balblair or Old Pulteney, doing the brands justice often equates to educating staff about the liquids. Furthermore, Bateman notes that promotions focusing on added value incentives that communicate the quality of the brand—for example, a forthcoming Hankey Bannister promo in the Middle East will give consumers the chance to win a Savile Row suit—are also prime considerations. The promotion is a reflection of Hankey Bannister blended Scotch’s international repositioning to a higher premium, reflecting its quality and provenance as the whisky of Victorian London’s high society.

In terms of new products, International Beverage will be showcasing a travel retail exclusive limited edition Balblair 1995 Vintage single malt at its newly redesigned stand (M1). Bateman notes that Balblair is one of the company’s fastest growing premium spirits. He sees a great future for Balblair, and indeed for all the company’s brands, in the region.

“People are starting to take notice of the fact that we’re really catering specifically to the region by offering our single malts and blends, Mekhong Thai Spirit and Chang beer,” says Bateman. “We’re patient as we realize that this is a long process for up and coming brands. However, we’re happy that buyers and consumers alike are now taking note of the quality of our spirits and the fact that we’re promoting them in a way that speaks to their premium positioning.”

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ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

White Gold vodka releases Black Edition White Gold is one of the largest alcoholic beverage companies in Russia, founded in 2002 but with roots in the spirits industry since 1901. The company was named as a tribute to its most popular brand, White Gold vodka, a spirit that is well known in many countries around the world due to its uncompromising quality and strong ties with tradition. In fact, White Gold has won accolades in recent years from a number of esteemed organizations, including the IWSC. Duty free operators have now taken note of the company, and White Gold currently has brands listed with Gebr Heinemann, Dufry and Aer Rianta.

Given the popularity of White Gold vodka in both domestic and duty free markets from North and Latin America to Europe and Asia, the company has released a new variant called White Gold Black Edition. The limited edition spirit comes in a sleek black bottle and is triple-filtered in black coal and a silver ion filter for crystal clarity and a pleasant palate. The variant is designed to appeal to trendy clubgoers, with a design that pays tribute to the traditional cues of the original spirit while communicating a sense of modernity and mystery.

“This year, White Gold will continue its strategy of expanding the business through organic growth,” said a spokesperson from Given the popularity of White Gold vodka in the company. “Sales have dramatically both domestic and increased year by year and our continued duty free markets, the focus will be on exporting our main brands: White Gold company has released a new White Gold, White Gold Black Edition, variant called White Gold Black Edition Russian Gold and Gzheka.”

“People are starting to take notice of the fact that we’re really catering specifically to the region by offering our single malts and blends, Mekhong Thai Spirit and Chang beer.”

James Bateman, Manager of Global Travel Retail, International Beverage

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Liquor News

Protégé International to release line extension of The Wild Geese

Inniskillin’s new tri-pack is a travel retail exclusive that contains three 200mL bottles of Gold, Riesling and Cabernet Franc Icewine

Inniskillin releases new travel retail exclusive tri-pack Inniskillin has introduced a new travel retail exclusive tri-pack that consists of three 200mL bottles of Icewine: Gold (an oak-aged Vidal), Riesling and Cabernet Franc.

The tri-pack comes packaged in a convenient travel bag with a magnetic leather clasp and a handle on the top. The bag is durable and clear, meaning that it can be reused for any number of purposes.

“We don’t offer the 200mL format in single purchases, so this is truly something unique to the travel retail channel,” says Amanda Dolotowicz, Business Development Manager Travel Retail at Vincor Canada. “As such, we’re very excited about this latest travel pack and see it as something that is perfectly matched to duty free, which is known for offering unique, exclusive items.”

DFS was the first operator to list the Inniskillin tripack globally across its major locations. The tri-pack has also been listed with other operators in Hong Kong and Macau.

“We’re continuing to gain steady momentum after the recession and 2010 was an excellent year for Inniskillin,” says Dolotowicz. “We’re looking forward this year to continuing to innovate, and the new tri-pack is one of many more unique Inniskillin offerings to come.”

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ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

In a recent conversation with Andre Levy, Chairman of Protégé International, Asia Duty Free learned that in addition to continuing to make headway in Asia with the strong performance of The Wild Geese Irish Whiskey Collection, the company is currently developing a line extension that includes a premium rum as well as VSOP and XO cognacs. According to Levy, the three spirits will all fall under the already well established umbrella of The Wild Geese.

“The cognacs are being developed for the Asia and American markets specifically, and we expect them to do very well,” explains Levy. “There is fantastic growth at the moment in the cognac category. What we’re trying to do is build a platform of premium and super premium products without limiting ourselves to one specific subcategory. People who know The Wild Geese Irish Whiskey Collection understand that the quality of the liquid is uncompromising, and we see this perception of quality carrying over to the rum and cognacs.”

Indeed, The Wild Geese Irish Whiskey Collection recently won Best Irish Whisky at the World of Whisky Awards and Levy says that promotional activity underpinned by tastings has resulted in very encouraging results. This is particularly true in pockets of the domestic market in Asia, where Levy says The Wild Geese Irish Whiskey is giving Jameson a run for its money. Given the brand’s reputation and the popularity of the rum and cognac subcategories, Levy sees huge potential in the new line extensions, which will be launched in the summer.

In addition to this latest project, Protégé International continues to secure new listings for The Wild Geese Irish Whiskey Collection, the latest of which is in Delhi Duty Free. The company is also working on edgy new packaging for its Straight 8 and Five and Dime cigarette brands.

“Asia is a great region for us, particularly when it comes to Asians’ love of brown spirits,” concludes Levy. “We’ve been working on Irish whisky for a long time in that part of the world, actively pushing The Wild Geese as a great alternative to Scotch. It’s really starting to pay off with some very encouraging successes. We’re looking forward to this year’s TFWA AP exhibition to continue generating new business.”

The Wild Geese Single Malt Irish Whiskey, part of Protégé International’s Wild Geese Irish Whiskey Collection

William Grant & Sons continues to invest in Asia Pacific Following an outstanding 2010 and a strong, positive start to 2011, reigning International Spirits Challenge Distiller of the Year William Grant & Sons (WGS) is preparing for another highly successful TFWA Asia Pacific show with a strengthened regional travel retail team, powerful product portfolio and weighty program of high profile promotional activity at stand J2.

New to Asia Pacific markets is Glenfiddich Age of Discovery, the 19 Year Old global travel retail exclusive aimed at gifters and whisky connoisseurs. This Madeira Finish Single Malt uses casks sourced from Henrique and Henrique, an independent Maderia company, and has been introduced to celebrate the pioneering nature of the 15th century Portuguese merchants who were at the vanguard of finding new trading routes into the Far East and who started to map the world.

New premium packaging will also be introduced for Glenfiddich 21 Year Old, moving it into the rare range alongside 30, 40 and 50 Year Old. A totally new bottle and giftable outer case have been developed, improving the standout and highlighting the quality of the liquid inside. Global travel retail is the launch market for the new

21 Year Old and will have this packaging exclusively for at least 6 months.

Singapore also sees the launch of batch three of The Balvenie Forty, the most outstanding expression of this handcrafted Single Malt Scotch Whisky. The Balvenie is unlike all other single malt Scotch whiskies— each reference in the range is one of a kind, crafted by Malt Master David Stewart, the longest serving malt master in the Scotch whisky industry. The first batch of The Balvenie Forty, just 150 bottles, was launched at TFWA Asia Pacific last year exclusively to travel retail; batch two has been available in domestic markets across the globe and due to the incredible demand a third batch, again of only 150 bottles, becomes available this year, exclusively to travel retail.

“Travel retail remains a fundamental pillar in William Grant & Sons’ strategy and we will continue to invest in the category, building a stronger and more focused travel retail team, continuing to premiumize our brands, emphasizing travel retail exclusives and exclusive vintages, and creating high-end, high profile brand activations that give travelers unparalleled brand experiences,” says Travel Retail Global Marketing Manager of WGS Ian Taylor.

WGS will launch Glenfiddich Age of Discovery to Asia Pacific travel retail at this year’s TFAP AP exhibition in Singapore

Camus introduces Kweichow Moutai range extensions Kweichow Moutai, the most premium and respected liquor brand in China, is launching two new presentations and strengthening its merchandising identity in travel retail. First introduced by Camus Wines & Spirits in 2005 as a duty free exclusive product, Kweichow Moutai Small Batch Blend has become an essential brand for travel retail operators in Singapore, Seoul, Bangkok, Tokyo, San Francisco, Hawaii, Toronto, Paris, Moscow, Dubai and many other locations.

In addition to its current packaging (a 37.5cl bottle with two glasses), Camus is adding a compact version (a 37.5cl bottle without glasses) and a 4-bottle version (a 4x37.5cl bottle pack) to the Kweichow Moutai range. While the compact version is the perfect size for in-flight sales and last minute purchases, the 4-bottle pack is made to optimize the shopping experience at airport outlets.

These three products will be beautifully displayed at selected duty free shops across the world on customized wallbays and gondolas. The merchandising identity of the brand has also been rejuvenated with a new elegant and luxurious black, red and gold display unit that will enhance the brand’s visibility.

“Visibility is very important,” says Cyril Camus, President of Camus. “It’s the first step in getting people to know the brand. Sales will follow. I’m confident that Moutai will break into the top 50 best alcoholic brands in duty free shops globally this year.”

In addition to the new compact line extension (pictured), Camus is releasing a 4-bottle pack of Kweichow Moutai in coordination with a rejuvenated merchandising identity

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL

Company News: Vapor Corp.

Publicly traded pioneer leads electronic cigarette industry

After years of sustained domestic growth, Vapor Corp.’s revolutionary e-cigarette brands Fifty-One and Krave are set to take the duty free industry by storm BY RYAN WHITE ince 2008, electronic cigarettes have become increasingly more popular as an alternative to smoking traditional tobacco cigarettes. Most have no doubt done a double take at some point or another upon seeing someone using an e-cigarette in a place where smoking traditional cigarettes is not permitted. Indeed, with the increase in restrictions against smoking in public places in the US and abroad, electronic cigarettes have become the way to smoke virtually anywhere.

At the forefront of this burgeoning movement is pioneering e-cigarette company Vapor Corp. [OTCBB: VPCO], which offers a range of e-cigarette brands—from the rechargeable Fifty-One brand to the disposable Krave brand—to satisfy the varied needs of virtually any smoker.

S

What is an e-cigarette?

“Vapor Corp.’s e-cigarette brands are distinct from many other e-cigarettes available today, both in terms of the quality and the cuttingedge technology employed,” says Adam Frija, Director of Business Development at Vapor Corp. “Our electronic cigarettes do not emit any second-hand smoke. Instead, our products emit an odorless vapor. Our electronic cigarettes look like, taste like and feel like a cigarette, but they aren't cigarettes."

The filter of the Fifty-One contains flavoring, nicotine and an atomizer that essentially vaporizes the nicotine. When you inhale, a microcomputer activates the atomizer and the battery (contained in the white part of the e-cigarette). The end of the Fifty-One even glows when you puff it.

The Fifty-One starter kit will retail in duty free for about US$100,

after which time consumers will only need to buy refill cartridges. One cartridge can last as long as two packs of traditional cigarettes, and at a retail cost of US$3 per cartridge, the savings potential for consumers is enormous. The Fifty-One’s battery can run all day on a full charge and the starter kit contains a charger that can plug into a wall 104

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

socket or a USB port. Krave disposable e-cigarettes work in much the same way as Fifty-One does, but at a much lower price point, effectively allowing consumers to try e-cigarettes before they decide to move up to the rechargeable Fifty-One kit.

A match made in heaven Over the last 3 years, Vapor Corp. has crossed into virtually every distribution channel available in the US, such as convenience stores, tobacco shops and supermarket chains. The company also sells directto-consumer on its website and has carved out a very respectable niche selling in mall kiosks throughout the US. The worldwide duty free channel is attractive to a company like Vapor Corp. for two main reasons, says Frija: “First of all, airports are very high-traffic areas for retail, which is what any company looks for. Furthermore, e-cigarettes are a perfect fit for the duty-free customer, for the busy traveler on the go."

It has been proven time and again that smokers are very reliable customers in travel retail, with most entering stores ready to purchase on the spot. Obviously, operators have a lot to gain by listing a product that will give smokers the freedom to enjoy an e-cigarette in a number of environments where smoking cigarettes is typically prohibited.

Frija feels that it’s only a matter The filter of the of time before Fifty-One and Krave Fifty-One contains flavoring, become extremely popular on the nicotine and an shelves of duty free shops. After all, atomizer that vaporizes the travel retail has a well-earned repnicotine utation for innovation and forward thinking when it comes to listing new products.

"Vapor Corp. has increased its business exponentially year over year since its inception,” he concludes. “I have no doubt that both the traveling public and the duty free industry will see immense value in c our brands.”

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Company News: BAT Global Travel Retail Asia-Pacific

BAT’s newest display furniture at HKIA; in addition to product innovation, BAT continues to offer new shopping experiences through novel uses of space

an eye for innovation Asia Duty Free discusses the importance of creativity to BAT’s duty free business with Head of Operational Marketing Justinus Nurman egulatory pressures placed on the cigarette industry have created an environment in which innovation is key to offering the consumer new and exciting smoking experiences while still complying with increasingly restrictive legislation.

British American Tobacco (BAT) has always been known for its innovations, and at this year’s TFWA AP exhibition, the company is showcasing two brands that are sure to add some excitement to the category: Kent Convertibles and Dunhill Swiss Blend.

Asia Duty Free learned from Justinus Nurman, BAT Global Travel Retail Asia-Pacific’s Head of Operational Marketing, that both the company’s knack for innovation and increased PAX numbers during Q1 has resulted in an uptick in sales across its major markets in Asia.

Indeed, BAT has proven that despite the recent challenges the worldwide tobacco industry has faced, a blend made up of equal parts innovation, quality and inspiration is something consumers can get behind.

R

Switching it up Consumers introduced to Kent Convertibles are invited to “Click, Switch, Refresh!”

The catch phrase refers to the product’s The smoker may choose at any time during the smoking experience change the taste of Kent Convertibles by crushing a flavor capsule in the filter

106

innovative design, whereby the smoker may choose at any time during the smoking experience change the taste of the cigarette.

They can switch from the signature smooth Kent taste to a refreshing menthol sensation by crushing a menthol capsule in the filter.

“Our target consumer for Kent Convertibles is a progressive individual who looks forward rather than back,” says Nurman. Kent Convertibles will be launched in selected airports in Asia Pacific as a result of its success in South Korea.

While BAT is obviously continuing to innovate in terms of the design of its cigarettes, the company is also committed to offering smokers some distinctive taste profiles. Dunhill Swiss Blend is inspired by a traditional Swiss blend recipe that uses rare Tibagi and Maryland tobaccos and blends them with Virginia and Oriental leaves to offer a deep, full-bodied and robust taste experience. Dunhill Swiss Blend will be available in duty free worldwide, including in the Asia Pacific region, from early Q3. Nurman is expecting a warm response from Asian consumers given the fact that they are known for their refined taste.

“To keep this rich blend at its best for longer, Dunhill Swiss Blend features Dunhill’s exclusive Reloc technology,” explains Nurman.

“This allows smokers to reseal the pack to keep it fresh for longer. With this product, we’re targeting consumers who look for premium tobacco with quality underwritten by expertise. Indeed, Dunhill is known the world

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

BY

RYAN WHITE

over for using only the finest materials and ingredients, which combine to create a truly differentiated experience.”

On the up and up The first quarter of this year saw increased travel in Asia mainly as a result of Chinese New Year celebrations. In addition to yearon-year increases by more than 15% in Chinese travelers at HKIA and Taiwan, travel by Korean and Japanese passengers also increased in the first quarter.

“We were seeing double-digit growth in travel across key Asia Pacific airports,” says Nurman. “This resulted in continued momentum for Dunhill and Kent. We also successfully launched the new Chinese New Year packaging for our brand 555. All in all, the first quarter was excellent for BAT’s duty free business throughout the region.”

Nurman sees this trend continuing throughout 2011, with the obvious exception of a drop in Japanese travelers given the tragedy with which the country is currently dealing. He expects adult travelers throughout the region will continue to expect bigger things from their brands.

With the above in mind, BAT recently renovated the smoking lounge in Narita Airport, giving it a look and feel consistent with that of the Kent lounge opened last year in Kansai Airport. The lounge includes a “Discovery Wall” that allows adult travelers to access information such as flight times and learn more about BAT’s products should they wish to do so.

“The increased sophistication of our consumers will see them looking for more to satisfy their needs,” says Nurman. “As an international player with a strong portfolio, we will certainly strive to meet and exceed this c expectation.”

Aero-Cos International LTD Contact Nathan Barbanel 90 Myrtle Street, Cranford, New Jersey 07016 Tel: 908-709-0800 Fax: 908-709-0808 Email: cpaero@aol.com

Tobacco news KT&G brings ESSE and BOHEM cigarettes to TFWA AP This year KT&G will be returning to the TFWA AP exhibition in Singapore with ESSE Aura and BOHEM cigarettes. The company confirms that since the release of the products, both have proven extremely popular in duty free.

Asia Duty Free spoke with Kelly Song, KT&G Corporation’s Assistant Manager – Brand Management Department, to get the details on what will be happening at the company’s booth this year. She explains that ESSE Aura flavored superslims were released as a response to the popularity of the original ESSE line. As expected, the range extension has sold very well over the last year. Also showcased at this year’s exhibition will be KT&G’s BOHEM cigar-flavored cigarettes.

“The response to these latest products has been wonderful,” says Song. “We’re looking forward to continuing to expand our presence in duty free with these ESSE and BOHEM offerings.”

ESSE Aura cigarettes are available in two flavors: Pink Strawberry and Green Apple.

According to Song, the products were launched to “meet the needs of stylish smokers who are passionate, romantic and successful in their careers.” ESSE Aura delivers a mild, light taste as the result of a special filter technology.

ESSE Aura was launched in an effort to satisfy “the more diversified needs of global smokers,” the company says.

BOHEM is made of 30% premium cigar leaves and offers a unique taste and aroma that is distinct from other cigarettes.

Its fragrance and package design provides a new smoking experience for consumers who prefer sweet, profound aromas. Song says that BOHEM targets smokers with a bohemian sprit who have a “chic style, professional careers and self-confidence.”

“The response to these latest products has been wonderful. We’re looking forward to continuing to expand our presence in duty free.” Kelly Song, KT&G Corporation’s Assistant Manager – Brand Management Department

Villiger sees uplift in Asia sales, plans launch of new MINIS range in the region At the beginning of the year, Swiss cigar specialist Villiger developed new free-standing gondolas in the company’s signature black and red colors. The fixtures were installed in various locations, among them Zurich airport, Kuala Lumpur International Airport and Cairo Airport. The units were specially developed for Villiger’s best-selling range of machine-made cigars, Villiger Premium, and their recently launched range of aromatic cigarillos.

In a recent conversation with Asia Duty Free, Villiger’s Director of Export Sales Chris Pfister noted that the furniture investment, in Asia specifically, was well placed as sales of the company’s products have stayed stronger in the region than in many other locations throughout the world. “Our premium range of products is popular in Asia,” he says. “Our cigarillos have traditionally performed well and we’re waiting to see how the change from tins to cardboard will be received in Asia.”

Standout locations include Taipei, Taiwan, Korea and Singapore. Additionally, Villiger

108

1888s have been selling very well in Kuala Lumpur Airport. Indeed, Pfister is of the opinion that it is one of the top airports in the world for cigars. “Kuala Lumpur has six points of sale with walk-in humidors, which is fantastic,” he explains. “We have a full assortment there with our own gondolas in two retail locations.

They really do something for cigar sales there. We train them once a year and go over all the details to ensure proper customer service.”

At this year’s TFWA AP exhibition in Singapore, Villiger will be showcasing its new MINIS in tins. The product was introduced at the IAADFS show in Orlando earlier this year, but May will be the official introduction of MINIS to Asian travel retail.

For the rest of the year, Pfister says that Villiger will continue to focus on training sessions. As with any high-end product, cigars require a very tailored approach on the part of the salesperson.

“Customers want to know the opinions of

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

Villiger 1888s have been selling well at Kuala Lumpur Airport given the strong focus there on giving cigars adequate display space

someone who is educated in cigars,” says Pfister. “Educating the salespeople really helps a lot.

This way, they know that they’re selling quality products across the Villiger range and can communicate this important fact to the consumer.”

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New & Notable LIQUOR & TOBACCO

TRAVEL ACCESSORIES

Prince Hubert de Polignac

Garden Gang

Company: H.Mounier Description: The Polignac Cognac House has introduced a brand new range that includes VS, VSOP and XO cognacs. The new packaging of the range contains a new logo that is visually striking and evokes two intertwined swords, symbolizing the noble and historic values of the brand

Balmoral Dominican Selection Churchill Tubos

Company: Scorpio Distributors Description: Four cuddly characters aimed at the preschool market. Each character has its own name and personality and is made from soft washable velour material Booth: K 28

Silk-épil Bikini Styler Company: Braun GmbH Description: The Silk-épil Bikini Styler is a hair removal tool that allows precise styling in the bikini area thanks to the slim bikini zone cutting head and high performance 5mm precision cutting head. The product is available in pink or white and comes in an airline-friendly packaging Booth: E13

CONFECTIONERY

Company: Agio Cigars Description: The cigars are finished with a beautiful, Connecticut seed and a lightbrown wrapper from Ecuador. Each cigar is individually packed in cellophane to optimize humidity control and is presented in a tin tube for both protection and convenience.

The Churchill is sold in a cigar pack containing three cigars Booth: F5

Les Vinissimes Company: Camus Wines & Spirits Description: The Bordeaux wines range place a particular emphasis on distribution through the travel retail channel. With specialized packaging, including luxury gift boxes, this simple concept offers excellent value for money Booth: K 13

Smarties Disney Mickey Box Company: Nestlé International Travel Retail Description: Smarties Disney Mickey Box contains five 38g tubes along with a collectible figurine of Mickey, Minnie or Donald Booth: G30

Gems Milk Chocolate Strawberry Truffles Limited Edition Company: Godiva Chocolatier Description: Milk chocolate truffles filled with a delicious mousse made with real strawberries. A fruity wrapper describes the sweet flavor inside. The limited edition contains 22 truffles Booth: H 2

110

ASIA DUTY FREE & TRAVEL RETAILING TFWA AP MAY 2011

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