M AY 2 0 1 3 • V O L 1 7 , N O 2
TFWA AP 2013
Asia's other giant p.
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On top down under p.
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Prestige Supplies accelerates p.
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Beauty Contest p.
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Letter from the Editor
Asian
awakenings
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hina recently relaxed visa restrictions for arrivals in Beijing and Shanghai for travelers transiting to other countries. The new 72-hour no-visa policy came at the end of 2012 without much fanfare, but it’s a big move. Not only does it make inbound travel easier, but it will also enable major international events to be held in China, a destination that event organizers have shied away from up until now. In this issue guest writer Alexander Glos, CEO of i2i Group, offers his view on what this new step means. Shortly after the no-visa window announcement, TFWA, in partnership with APTRA, hosted an industry conference in Beijing. “China’s Century” wrapped up March 7 and offered 372 delegates from 200 companies a close look at how the duty free and travel retail industry is faring in this fast-changing nation. By all accounts, exciting times are ahead. “We are only at the beginning of the air travel boom in China,” TFWA President Erik Juul-Mortensen told attendees. “Aviation analysts predict that passenger numbers in China—domestic and international—will quintuple to reach around 1.5 billion by 2030. The question is, are international brands ready for this huge opportunity?” China does get a lot of attention, and yet the nation’s vast duty free and travel retail potential is still more or less inaccessible thanks to a dense labyrinth of rules and regulations, in addition to political uncertainties. But there’s another rising star in Asia that has yet to get its share of the spotlight: India. India’s government has been busy removing obstacles to investment and economic growth, with particular focus on the aviation sector. The positive benefit for the country’s duty free and travel retail business—which has a long way to go to reach full potential—is clear. The Nuance Group and Delhi Duty Free Services, India’s two top duty free retailers, have already shown the kind of success that can be realized in this market, even amid an economic downturn. To support and develop the industry’s potential in India and across Asia, The Asia Pacific Travel Retail Association (APTRA) continues to produce invaluable research and information while also engaging in strong advocacy. At TFWA Asia Pacific in Singapore, APTRA President Sunil Tuli will give attendees a snapshot of the campaigns the association and its global counterparts are pursuing, whether it’s around public health warnings on duty free products, taxation issues, product display bans or heavyhanded inbound allowances that could strangle sales. A detailed development of Tuli’s talking points will be presented at the TFWA industry association working lunch on Monday May 13. Attendees will also work on action plans for the year ahead. I hope you enjoy this issue of Asia Duty Free. The industry in the region is certainly rife with new developments, and I’m looking forward to discussing all the happenings with you during the conference and exhibition portions of TFWA AP.
Asia Free & Travel Retailing (ISSN 1360-9548) is published annually by Global Marketing Company Ltd., 26 Pearl Street, Mississauga, Ontario L5M 1X2 Canada. It is distributed in the following countries, states, regions and territories on the Asian continent and in the Pacific Rim: Australia, Bangladesh, Bhutan, Brunei, Cambodia, China, Fiji, French Polynesia, Guam, Hawaii, Hong Kong, India, Indonesia, Japan, Macao, Malaysia, Maldive Islands, Myanmar, Nepal, New Caledonia, New Guinea, New Zealand, Philippines, Saipan, Samoa, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Tonga, Vanuatu and Vietnam. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor. May 2013, Vol. 17, No. 2. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2013 Asia Duty Free & Travel Retailing. Asia Duty Free & Travel Retailing 26 Pearl Street Mississauga, Ontario L5M 1X2 Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemagazine.ca PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR Hibah Noor hibah@dutyfreemagazine.ca ASIA ASSOCIATE EDITOR P. Convery padraic.asiadutyfree@gmail.com CONCESSIONS, LIQUOR, & TOBACCO EDITOR Ryan White ryan@dutyfreemagazine.ca ASSOCIATE EDITOR Melissa Silva melissa@dutyfreemagazine.ca ART DIRECTOR Patrick Balanquit patrick@globalmarketingcom.ca CONTRIBUTORS Andrew Brooks Claire Malcolm ADVERTISING SALES
Kind regards,
ADVERTISING & MARKETING MANAGER Kim Carrera kim@dutyfreemagazine.ca
Hibah Noor Editor hibah@dutyfreemagazine.ca
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ASIA DUTY FREE & TRAVEL RETAILING MAY 2013
CIRCULATION & SUBSCRIPTION MANAGER Deepa J deepa@globalmarketingcom.ca
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MAY 2013 • VOL 17, NO 2
42 In the know
LS TRAVEL RETAIL ASPAC
Armed with promotions and consumer knowledge, LS Travel Retail Asia Pacific is well positioned in China
Contents 12
SHILLA DUTY FREE
Asia Pacific Travel Retail Association offers industry group a chance to show what it can do
46 Above and beyond
BEIJING CAPITAL INTERNATIONAL AIRPORT CO., LTD.
Renovations and service changes anchor Beijing Capital International Airport’s growth strategy
Korea move
As The Shilla Duty Free rubs up against the boundaries of its home market, it's looking to court new customers and create new ventures abroad
16 Asia's other giant INDIA ROUND-UP
Forget getting into China. For international travel retailers, India is a more promising market for those willing to put the work in
22 On top down under AUSTRALASIA ROUND-UP
As Chinese travelers flood in, the prospects for retail at Australian and New Zealand airports have rarely looked brighter
Visa for China and mega 28 No shopping to come GUEST WRITER
Move to boost travel to or through China is good news for duty free
30 Experience makers DFS
While breaking new ground with the development of its first off-airport store, leading luxury retailer DFS hasn't forgotten its 50 years of experience
36 Rising to the occasion NUANCE-WATSON
Despite recent challenges, Nuance-Watson stays focused on new opportunities and future growth in Asia
40 Makers of change
XI'AN XIANYANG INTERNATIONAL AIRPORT
With a new commercial strategy and sense of place, Xi'an Xianyang International Airport is on its way to success
6
takes high-profile 44 APTRA stance APTRA
ASIA DUTY FREE & TRAVEL RETAILING MAY 2013
48
IN BRIEF Victoria’s Secret available in HKIA ■ Langkawi airport revenues set to surge after upgrade ■ Asian airports top rankings for service quality – again ■ Lion Air places huge order for new planes ■ Changi Airport works with Golden Myanmar Airlines
52 TFWA gears up TFWA
In advance of this year’s TFWA Asia Pacific Exhibition & Conference, we speak with TFWA President Erik Juul-Mortensen about the successful China conference held in Beijing earlier this year along with what’s in store for the TFWA AP trade show
56 The dragon awakes
CONFERENCE REVIEW: TFWA/APTRA CHINA
China’s burgeoning duty free market in the spotlight at landmark TFWA/APTRA conference
60 Asia and beyond PRESTIGE SUPPLIES INC.
Prestige Supplies Inc. carves out a strong foothold in Mongolian duty free, setting its sights on the Cambodia-Vietnam border and further expansion in Asia and Africa
62 Fresh products lead the way SPOTLIGHT ON TFAP EXHIBITORS
Product innovation, retail savvy and market exposure give these brands a leg up in duty free
70 Beauty contest SKINCARE REPORT
Skincare is one of the biggest-selling categories among travel retailers in Asia. With existing markets developing and new ones opening up, its importance will only grow as brands and retailers compete for increased spend
Contents
nature’s 73 Harnessing power YVES ROCHER
Yves Rocher recently introduced its botanical innovations to travel retail and is already seeing signs of success
74 76 Arctic advantage BEAUTY NEWS
Lancôme’s new Hypnôse Palette adds professional effect ■ Collistar thrives at 30
POLAAR
Polaar’s unique selling points position the new brand for success in travel retail
78 80 Royal recognition SUNGLASS NEWS
Maui Jim bulks up for Asia ■ Red Bull’s Racing Eyewear collection gears up for the travel retail market
ROYAL LONDON
Royal London’s prestige reputation promises success in travel retail
sophisticated 82 Afoundation LA PERLA
For lingerie brand La Perla, success in travel retail comes down to a sophisticated product offering
84 Fashion forward MISAKI
Pearl jewelry leader Misaki enjoys rapid growth in travel retail
86 Arté advances ARTÉ
Premium Spanish gem house continues to build on a century-old artisan reputation
88 Market driven GODIVA
With innovative novelties and an eye for cultural trends, Godiva builds a strong presence in the Chinese market
90 Aiming higher JELLY BELLY
Jelly Belly gets its travel retail push into high gear in Asia and around the world
92 94 All points east
CONFECTIONERY NEWS Ferrero builds its footprint in Asia ■ Giant Bars and Brookside to make Asia debut at TFAP
DIAGEO
Premiumization proves to be the way to Asian consumers’ hearts
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Contents
96 A sparkling success DISTILLERIA BOTTEGA
Distilleria Bottega showcases Bottega Rose Gold at TFWA AP in hopes of continuing the success it has enjoyed in Asia with perennial favorite Bottega Gold
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98 A taste for something new GULF BEVERAGES
With positive market penetration, 2013 is the year of product diversification for Gulf Beverages as consumer trends in India point to new tastes and brands
100 A taste for the East ASIAN-INSPIRED COCKTAILS
Asia Duty Free brings readers the best in cocktails that take their inspiration from the East
102 For all tastes
BROWN SPIRITS REPORT
This year’s TFWA AP exhibition features a number of innovations in brown spirits that are proof positive of the continued vibrancy of the subcategory
Regional demand for limited editions driving creative agenda for legendary Scotch whisky producer with premium flavors headlining brand appeal
Sailor Jerry drops anchor in Sydney Airport with Nuance Australia ■ Tequilera Corralejo to showcase portfolio in Singapore ■ SPI Group promises a flavorful TFWA AP ■ Genagricola exhibits Tenuta S. Anna fine wines and Proseccos for the first time at TFWA AP ■ Prowood offers two exquisite spirits from France and Armenia, expands portfolio with new offerings ■ Constellation Brands sees success with Inniskillin tri-pack, plans launch of duty free exclusive Icewine range in late 2013 ■ Ron Botran committed to Asia duty free channel, exhibits high-end rum portfolio at TFWA AP ■ Mouton Cadet named Official Supplier of Wine to the Ryder Cup for 2014 and 2018 ■ Armagnac Janneau exhibits for the first time at the TFWA Singapore ■ Labouré-Roi brings the best of Burgundy to TFWA AP ■ Bombay Sapphire East and Grey Goose Cherry Noir receive Asia premieres ■ Global Drinks Finland brings purity to the forefront ■ Lateltin showcases new products and special editions in Singapore
brands in a 116 Dynamic dynamic region
106 Innovation is the watchword 117 THE EDRINGTON GROUP
LIQUOR NEWS
STG
STG launches WØ Larsen pipe tobacco in Asia duty free and focuses on staff education as a means of capturing an ever more refined Asian traveling consumer
NEW & NOTABLE Absolut Denim ■ Face Matters Anti-Aging Elixir ■ Super Stick Solaire
Booth No.
H25
Visit us at TFWA Asia Pacific
Mr ELEGANT “Aeroplane“ KR12-61/LE
Cufflink keyholder, black leather loop with metal ring for keys and a cufflink closure, motif: Aeroplane
Shilla Duty Free
Korea move
Shilla was the first retailer to open a Louis Vuitton store in an airport, at Seoul's Incheon International
As The Shilla Duty Free rubs up against the boundaries of its home market, it's looking to court new customers and create new ventures abroad
T
hink of the name Samsung, and the first thing that probably comes to mind is a slick smartphone. It's a fact, however, that the sprawling South Korean mobiles-tomachine-tools conglomerate is the force behind what's arguably the country's standout travel retailer, The Shilla Duty Free. Shilla and its larger rival, Lotte Duty Free, part of another huge conglomerate, dominate South Korea's travel retail scene so completely that the government has recently taken steps to promote smaller retailers. But far from resting on its laurels, Shilla has redoubled its efforts to expand, both at home and abroad, and it's far from complacent about its market position. "We don't know what the future holds," says Shilla Executive Vice President Head of Duty Free Division Jason Cha, "but we need to renew our license every five years, so we still need to win concessions from Korean airports. There's a lot of pressure. "As far as the number of licenses is concerned, [South] Korea is packed already - it's full," he says. "And the government wants to impose some restrictions on the number of licenses for big companies such as Lotte and us. They want to give licenses to small and medium-sized companies." Cha is more than ready to face whatever challenges the business environment may throw at Shilla, however, and in spite of a slight slowdown this year, the retailer put in a stellar performance in 2012, chalking up a sales surge of 26.5% worth a cool US$1.7 billion. Cha attributes the recent softening in demand that the company has seen to a decline in business from Japanese customers. "It's not a big thing, but I think the problem of the weak yen is the main trigger for the current situation," he explains. "The yen is going lower, so duty free goods have become more expensive for Japanese travelers." However, he says that soaring sales to Chinese visitors to South Korea has more than offset the slowdown in sales to the Japanese, who were until recently Shilla's biggest customers. "Last year we enjoyed about 88% growth from Chinese customers compared to 2011, and the Chinese segment is still growing at a rate of around 30% [annually]. 12
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"But Chinese visitors to South Korea are still a very small portion of the total number of Chinese outbound travelers. We think just 4% of all Chinese outbound travelers come to [South] Korea, so there's still opportunity for growth. The biggest obstacle for Chinese travelers coming here is getting a visa. We have high visa restrictions for Chinese, so our government is trying to make it easier. And even as the Chinese government has made some changes to its policies on luxury goods [part of an anti-corruption clampdown on the widespread practice of luxury gift-giving, which Beijing links to graft], there's still room to grow the number of Chinese travelers coming here." The ranks of Chinese visiting South Korea have swelled so much that they outnumbered Japanese visitors for the first time in February, according to data from the Korea Jason Cha says the South Korean duty free market is very well catered to, and that Shilla is looking for further growth in Southeast Asia
Global travel retail excellence www.worlddutyfreegroup.com
Shilla Duty Free
Shilla is a household name in South Korea, thanks in part to its downtown presence
Tourism Organization. They're Shilla's biggest customer segment, and they're prompting the retailer to make changes to its offer. "Compared to Japanese and Koreans, Chinese travelers are really big buyers of luxury watches and jewelry,� says Cha."That's one big difference. The Japanese are very focused on luxury leathergoods like Hermès, Louis Vuitton and Gucci, but the Chinese are focused on brands such as Omega, IWC and Breguet. So we've allocated more space to luxury watches and reduced the space given over to fashion items." And Cha says Chinese travelers are definitely customers worth courting. "One thing we've found is that if they come once, they'll come again. The repeat rate is quite high about 40% - so we maintain our customer records and we contact those customers regularly to give them information about our stores. We apply customer relaCosmetics are an increasingly important part of Shilla's offer, and South Korean beauty brands are gaining recognition tions management and keep contact with them via email, Facebook and Twitter." Shilla has also established its own online presence specifically tar- carrier terminal that will serve Kuala Lumpur once construction is geting Chinese travelers: a Chinese-language pre-ordering website complete. Additionally, it operates a Bottega Veneta outlet and a Prada to boost their interest in the retailer's offer before they even get through shop at Singapore's Changi Airport, where it will bid for what Cha describes as "a very big concession for P&C and liquor & tobacco". South Korean immigration control. "We also participated in the retail tender for [Bangkok's] Don Cha says he's expecting two airport retail concessions to come up for renewal in South Korea soon - one at Gimhae, near the coun- Meaung Airport, but it failed," he says. "But if there's another try's second-biggest city, Busan, and the other on the popular tourist chance, we'll go again." Cha says that Shilla's well-established and high-profile position island of Jeju, off the southern tip of the Korean Peninsula. He says the contract in Gimhae is likely to be of five years' dura- at South Korea's biggest airport has put it in a strong position to tion and that the retailer and airport operators are still yet to hold expand in Southeast Asia. "We get a lot of exposure through Incheon airport, which is further meetings about it. Shilla and Lotte were both excluded from the running for a quite a successful airport, so all those customers from the Asia-Pacific recently re-tendered duty-free concession at Seoul's Incheon Inter- region who travel to South Korea already know our name. "The traveling population [in the region] is [predominantly] Chinational Airport that was open only to smaller companies, but Shilla says it wasn't attractive in any case. nese, Japanese and Korean - that's it," he explains. "About 95% of "[The airport] will start another process or KTO [the incumbent our revenue comes from just those three countries, so when we expand Korea Tourism Organization] will retain the current space," says Cha. our business overseas, the customer mix is still the same. Wherever He says there were no takers in both tender exercises because the we go, wherever we do business outside Korea, still those three minimum annual guarantee (MAG) the airport operator was ask- countries are the biggest portion of our business, and that's why we still have room to grow in Southeast Asian markets." ing for was too high. As The Shilla Duty Free gears up for the next phase of its growth, And Shilla is also looking beyond its home country's borders for expansion - specifically to Southeast Asia and the Pacific region. It's travelers in those markets seem likely to be seeing a lot more of the travel due to open four perfume & cosmetics stores at KLIA2, the low-cost retailer with the might of the Samsung business empire behind it. c 14
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India Round-Up
DDFS's world-class offer at Delhi's T3 is said by many to have raised the bar for travel retail in India
BY
F
P. CONVERY
Forget getting into China. For international travel retailers, India is a more promising market for those willing to put the work in
or years now, the international business community has been keenly focused on the rise of China. So too has the travel retail community. Yet the Chinese duty free market remains largely impenetrable, walled away behind layers of restrictions, red tape and uncertainty. Asia's other rising giant, however, has attracted rather less attention, despite its enormous potential and fast-changing commercial landscape. In recent years, India's government has been knocking down barriers to trade, development and investment - arguably nowhere more so than in the aviation sector - and in doing so has created fertile conditions for growth in the country's chronically under-exploited travel retail market. It's a paradigm shift perhaps best exemplified by the stunning success of the country's two premier duty free retailers, The Nuance Group India and Delhi Duty Free Services (DDFS), both of which have blazed a trail in Indian travel retail and set new standards in the industry, despite an economic slowdown in the country.
Nuance India Country Head Anirban Chowdhury says: "The slowdown hasn't affected us. Every year we have only improved our performance and it was the same last year. We have grown [sales] faster than passenger growth." His opposite number at DDFS, Chief Executive Steve O'Connor, says that the economic headwinds and the fall in the value of the rupee have hit passenger traffic through the national capital's hub, but that sales growth has continued apace. "It looks as if there would have been zero growth in passenger numbers
Nuance India has been refining its business model and retail offer in Bangalore for five years, and is beginning to expand its presence
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India Round-Up
Destination merchandise is an important part of Nuance India's offer, helping to establish a distinct identity
[over the past financial year], but our sales have grown by double digits over the last year. Our ATVs [average transaction values] have increased and people are spending more. And in research we did in relation to the rupee fall and the economy, we found that [among] the people who make up the 25% of our repeat customers, the vast majority haven't been impacted by the rupee. They're wealthy and it hasn't concerned them at all. There's been no impact." And it's from this strong base that both companies - the main foreign operators in India's travel-retail sector - are positioning themselves for further growth, DDFS at the capital's airport and Nuance nationally. DDFS opened an additional 70 square meter arrivals shop in December last year, and will open a 110 square meter electronics shop in arrivals in May that will be geared towards TV sales. O'Connor says: "Lots of Indians fly to places like Thailand and buy TVs and bring them back, and our objective is to capture these people coming back." DDFS is also developing its existing stores, particularly an outlet located at the junction of Delhi Terminal 3's two piers that opened last September.
O'Connor says: "All passengers go through the main shop in departures, so we want to do something in the other store that's unique and different ... we're looking at major brands, but product lines we don't have at the main shop. Something more high-profile, and with a lot more interactivity with the brands." In February, Nuance India won the right to retain its retail concession at Bengaluru International, its expanding home airport in Bangalore, and it has since been busy planning an upgrade to the outlets it has been deftly running for the past five years. "In terms of space, we'll have almost the same," says Chowdhury. "All of our existing stores will be relocated to the new terminal, and the number of stores has actually been reduced, but we've added a pier shop, and we have won an exclusive contract for electronics. Including electronics, we'll open five shops." And after five years of what Chowdhury describes as a learning process at Bengaluru, Nuance has set its sights on concession wins further afield. In January it was awarded the fashion, luxury and lifestyle duty free concession for T2 at Mumbai's Chhatrapati Shivaji International Airport, and Chowdhury says more contracts are there for the taking. "There are so many opportunities in India now," he explains. "There are many RFQs [requests for qualification] that have been sent out for airports such as [the newly opened terminals at] Chennai and Kolkata, so the entire landscape for us - and also for our competitors - will have changed in the next year or so. In terms of scale and revenue, it'll all be very different even six months from now. "Chennai is a big city with the third-largest airport in the country after Delhi and Mumbai. It's in an economically thriving state and it's attractive, [with] big demand for domestic travel, which always translates into demand in international because the same people are traveling. And if they're consuming, they'll buy because duty free represents value. From that point of view, Chennai is a very attractive place for any player to be. "Kolkata doesn't have a very large airport, but it has a lot of leisure travelers. For a player like us that already has an operational base set up in India, any airport is attractive, but Kolkata and Chennai - because of the scale and the proximity of the two cities and the potential for growth - [are] very attractive. There are several smaller airports that we're also tracking, and in the near term, Cochin could come up with a tender because it's getting a new terminal."
“There are many RFQs [requests for qualification] that have been sent out for airports such as [the newly opened terminals at] Chennai and Kolkata, so the entire landscape for us - and also for our competitors - will have changed in the next year or so.� Anirban Chowdhury, Country Head, Nuance India
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India Round-Up
The opportunities may be plentiful and attractive, but the operating environment in India can be challenging on a day-to-day level. O'Connor says DDFS was forced to suspend its popular whisky tastings more than a year ago after the local tax office began demanding the payment of excise taxes on each bottle it opened. "In all the years I've been in duty free in different countries, I've found that when it suits various government entities, you're 'not in the country' technically. But when it suits them, you 'are in the country' and you have to abide by the local rules," he says. "It's a constant conflict, although to be fair, if they have an issue with it, we have to come up with a solution that keeps them happy and meets their requirements, and that's what we're working on." At the end of the day, success in India, like anywhere else, comes down to doing the job well. DDFS and Nuance have amply proved themselves in that respect, and neither retailer is sitting on its hands. "One of the things we're going to do with travel agents going forward is to try to link up to target passengers with the right profiles, to be more creative in interacting with our passengers," says O'Connor. "We also have our own loyalty program in place, and ... we have a link between the information we have and the customer, so now we can target them, looking at what they buy and how and often they come through. We're looking the lifetime value of our customers." Chowdhury says: "What we really want to concentrate on at
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ASIA DUTY FREE & TRAVEL RETAILING MAY 2013
“Lots of Indians fly to places like Thailand and buy TVs and bring them back, and our objective is to capture these people coming back.�
Steve O’ Connor, Chief Executive, Delhi Duty Free Services
this moment is service levels, and in terms of store design, at every airport we are in we're trying to provide a sense of place and trying to be as efficient as possible. "My inkling is that there'll be opportunities every year for the next five years, and [our growth] depends on how we'll be able to capitalize on those. The main issue is for players to get a mix of large and smaller airports. [Retailers] that don't have a larger airport will find it a little difficult in the initial stages to operate in smaller airports, but I think it'll offer good economies of scale in the long term. [Companies] that are concentrating on the basics and getting their act right I would say will grow at a very attractive pace." India's minister for civil aviation said in March that the country is on track to become the world's third-biggest air travel market by 2020. The country's top duty free operators - and any other retailer that cares to join them in what's currently a sparsely populated field of international players - appear to be in a prime posic tion to capitalize on that enormous opportunity.
Australasia round-up
On top
Once Brisbane Airport's retail overhaul is complete, the airport will boast a light and airy shopping environment covering 2,400 square meters in its international terminal
down under As Chinese travelers flood in, the prospects for retail at Australian and New Zealand airports have rarely looked brighter P. CONVERY BY
I
t's almost half a century since Australian writer Donald Horne coined the phrase "the lucky country" to describe his homeland, but it's a description that still fits today, and applies also in many ways to Australia's smaller neighbor, New Zealand. As Europe and the US enter their sixth year of economic turmoil following the financial crisis, Australia, and to some extent New Zealand, have ridden out the storm relatively unscathed, thanks in no small part to their strong links with booming Asia. Australasia's Asian connection - in particular the Chinese dimension of that relationship - has also been a lifeline for travel retailers on both sides of the Tasman Sea, and industry insiders know it. "Massively important" is how Auckland International Airport Chief Executive Adrian Littlewood describes the mainland Chinese customers that patronize the airport's retail stores, pointing out that they have become the airport's second-biggest passenger segment, up from the fourth-biggest just 12 months ago. In 2012, Chinese arrivals into Auckland grew by more than 33%. Andrew Brodie, Brisbane Airport's General Manager of Terminal Retail & Commercial, says the Chinese are "an extremely important customer segment for all retailers at [the airport's] international terminal, as they are one of the highest-spending passenger [groups]." Melbourne Airport Manager of Retail Strategy Deborah Price says: "China's importance to Victoria and Australia cannot be underestimated," noting that Chinese visitors are now more numerous than travelers from the UK, and are the second-biggest segment among Australia's international visitors. Melbourne Airport welcomed 16.6% more visitors from China in 2012 than it did the previous year, making them the fastest-growing passenger group. Philippe Boyer, Chief Executive of The Nuance Group (Australia), says: "Australia's major international gateway airports are seeing double-digit growth in 22
ASIA DUTY FREE & TRAVEL RETAILING MAY 2013
Chinese passengers in most cases. Where we're operating duty free, we have seen growth in business from tour groups as well as an increase in the number of independent travelers." Behind the increase in the number of Chinese visiting Australia and New Zealand is an expanding network of air routes between the Chinese mainland and Australasian gateway cities, with direct flights linking Sydney, Melbourne, Brisbane and Auckland to a growing number of first- and second-tier Chinese cities including Beijing, Shanghai, Chengdu and Guangzhou. And as the Chinese pour into Australia and New Zealand, airport operators and retailers are increasingly adjusting their facilities and offers to cater for them, notably with Chinese-language signage and promotional material. As the Chinese pour into Australia and New Zealand, airport operators and retailers are increasingly adjusting their facilities and offers to cater for them
TRAVEL RETAIL DEPARTMENT: TRAVEL.RETAIL@LAPERLA.COM
Australasia round-up
"At Melbourne Airport, we have led the way on customer service for our Chinese passengers, with announcements and way-finding signage in Mandarin," says Price. "Many of our frontline customer service staff have also undergone cultural training to assist in making our Chinese visitors feel welcome and some of our staff are now also learning Mandarin. We've also introduced facilitation of groups of Chinese visitors where a Mandarin-speaking staff member will assist groups through the departure process from check-in, through to security and customs processing. Our retailers are also selected for their focus on providing our Chinese passengers with products that [they] aspire to have." Other airports have undertaken similar initiatives, marking Chinese festivals such as the Lunar New Year and running promotions that tie into those events. Nuance's Boyer says: "We issue a Chinese buying guide and a Chinese [Lunar] New Year catalogue. Both feature special offers tailored to the Chinese consumer, particularly in the areas of health and wellbeing, skincare, wine and liquor. They receive targeted distribution as well as being in-store, and are of course printed in Chinese. "We've continued to grow our range to include products we know are popular with Chinese passengers, particularly at the premium end of the market in the liquor and wine categories. They are attracted to limited-availability or travel retail exclusive products that represent an investment - for example Penfolds Bin 620 Coonawarra Cabernet Shiraz 2008, which can only be purchased at Nuance stores in Australia or at the Penfolds cellar door, and which is priced at A$1,000 (US$1,042). We also have one of only 12 Penfolds ampoules in the world, available
Melbourne Airport Manager of Retail Strategy Deborah Price is steering the airport's retail to be more responsive to the needs and tastes of Chinese travelers
for A$168,000 (US$176,000) in our Sydney store." More broadly, says Boyer, destination merchandise is a key category, and one whose importance is growing. "To us and to the airports at which we operate, it's a key method of really achieving differentiation within the offer compared with other airports and downtown markets," he explains. "Chinese passengers are obviously a key target segment here, as authenticity and quality are very important influences on their purchasing behavior. But gifting and impulse are still key drivers of spend among all customer segments and destination merchandise can be a strong driver of this. Product that's produced locally - and by this I mean at city, state and even country level - has a credibility and appeal that is quite different from major global brands that are also such an important part of our offer."
ENJOY A GLASS FROM ONE OF OUR
“GREAT ESTATES”
Enjoy a glass from one of our “Great Estates”. Small print along bottom of image – please visit us at booth P30
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ASIA DUTY FREE & TRAVEL RETAILING MAY 2013
please visit us at booth P30
Australasia round-up
Brisbane Airport is embarking on an ambitious revamp of retail in international departures, due to commence in 2014
Amid the growth in passenger traffic from China and elsewhere, airport operators have been quick to spot the opportunity to boost their retail revenues, and have embarked on ambitious new upgrades to their terminals. Melbourne Airport completed a redevelopment of its international departures area at the end of 2011, with more space and better-focused retail, and it plans to spend A$10 billion (US$10.4 billion) over the next decade on a continuous improvement program. Brodie says Brisbane Airport's international airside retail area is also in line for a major overhaul. "The project will create a world-class airport retail environment," he says, "including walk-through duty-free concepts for arrivals covering approximately 800 square meters and departures with approximately 1,600 square meters, a retail layout that includes a new design for the specialty retail and food & beverage tenancies that will be uniquely themed as Brisbane/Queensland to ensure that the terminal provides the passenger with a sense of place." He says construction is set to get under way in little over a year. In Auckland, a new domestic terminal is being planned to accommodate newer, larger aircraft and gates at the international terminal are being upgraded to better handle large planes such as Airbus A380s. The abundance of positive developments in Australia and New Zealand has given retailers and airport operators alike plenty to cheer about, yet there have also been challenges, perhaps most significantly the tightening of anti-tobacco legislation in both countries, which has seen the introduction of the world's first plain packs in Aus-
tralia and a similar move contemplated across the Tasman. Retailers at every airport have seen their cigarette sales tumble as the restrictions have begun to bite. Littlewood says tobacco sales at Auckland Airport have suffered, but is reluctant to say by how much. "The impact on departures sales has been noticeable, as Australia is the top destination for outbound traffic from Auckland," he says. "But we work closely with our two duty-free retailers - DFS and JR Duty Free - to minimize the impacts while ensuring continual compliance with new display and presentation requirements. Both retailers have introduced new configurations of products, such as twopacks of cigarettes to meet Australia's 50-stick inbound duty-free limit." Boyer says Nuance has responded positively to the challenge. "We've revisited the design of all our stores and we work hard with all the stakeholders to ensure that we are compliant with the legislation," he explains. "We accept that this is the environment in which we now operate, and we are always seeking new ways to grow and develop our business in other categories." It's that kind of pluck and pragmatism that has kept travel retailers in Australia and New Zealand ahead of the game as they ride the wave of arrivals from China in particular and Asia more generally. And as the Chinese passenger surge shows no sign of abating, those retailers and airports look set to reap the rewards of their dedication to remaining at the industry's forefront for c many years to come.
Nuance Australia Chief Executive Philippe Boyer says Australian destination merchandise has an appeal that's all its own to travelers from China and elsewhere in the region In 2012, Chinese arrivals into Auckland grew by more than 33%
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A strong food & beverage offer is a key part of Melbourne Airport's identity
Guest Writer
No Visa for China and mega shopping to come Move to boost travel to or through China is good news for duty free
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BY
ALEXANDER GLOS, CEO, I2I GROUP
ate in 2012, China quietly introduced a 72-hour no-visa policy for visitors arriving at Beijing and Shanghai and transiting to other countries. This is a radical change for China’s inbound tourism. The change was introduced initially to encourage meetings and other incentives to travel into China. Most of the large international summits and congresses, especially those that attract several thousand delegates, have avoided China up to now because of the visa requirements. Their business has largely focused on venues in Hong Kong, Singapore, Korea and Japan. Most organizers felt that conference delegates would not go to the trouble and cost of applying for a visa to visit an international congress for only 48 hours. Now it's possible for visitors to stay in China up to 72 hours without a visa. The second motive for this change was aggressive lobbying by China's international airlines. These carriers have been unable to capitalize on international transit and onward-bound business because visitors had been required to obtain a Chinese visa just to transit at a Chinese airport. Beijing Capital Airport was the second busiest airport in the world last year, moving almost 90,000,000 passengers—but only 100,000 of those were international transit passengers. This is a small number compared to the international transit passenger business in Tokyo, Incheon, Hong Kong, Singapore, etc. Chinese international carriers, locked out of the global transit passenger business because of Chinese visa requirements, will now be able to sell tickets from New York to Singapore with a stop in Beijing or Shanghai. This will dramatically open up duty free business at the airports in Beijing and Shanghai. Presently, duty free shopping in these airports is relatively limited, certainly compared to the market leaders in Hong Kong, Singapore or Dubai. Yet Chinese outbound and inbound international tourists are the most aggressive international travel shoppers in the world. This unique combination will create an explosion in duty free shopping at these airports, potentially both outbound and inbound as well as transit. 28
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There is also a review of regulations pertaining to duty-free shopping in town. Since most airlines permit the printing of boarding passes 24 or 36 hours in advance, an outbound tourist with a boarding pass and passport can shop at an in-city duty free location prior to departure, show the receipts at departure and leave the country having benefited from the duty-free price in the city. Airport and duty free professionals in China report that the initial challenge is building retail space at these airports, which are relatively new but did not plan for the kind of retail space commonly found at global transit airports. According to these observers there is potential to double duty free sales in the next year. Within the coming year, extended retail space would be available, and duty free sales at these airports will probably quadruple compared to last year's sales numbers. Everyone is already familiar with the impact of Chinese global shoppers, but now that impact will be felt in China as Chinese duty free companies try to capture their share of their home market. Airports will aggressively seek duty free companies with global knowledge to co-develop this potential with them, no doubt in a minority position—but 49% of something this big is a good deal better than nothing. Alexander Glos, CEO of the i2i Group China, has resided in China for more than nine years and leads a diverse tourism marketing and sales consultancy in China with offices in Beijing, Shanghai and Hong Kong. Visit www.i2i-m.com. c
launches...
its new gifting range!
DFS
HNDF's store at Mission Hills Haikou will represent a total investment in Hainan of more than 10 billion RMB (US$1.59 billion)
Experience makers
While breaking new ground with the development of its first off-airport store, leading luxury retailer DFS hasn't forgotten its 50 years of experience BY MELISSA SILVA
S
ince 1961, luxury retailer DFS Group (DFS) has worked to bring luxury to travelers, creating a sense of place while improving each traveler’s experience. Beginning with a small concession at Hong Kong’s Kai Tak International Airport, DFS has become the world’s leading luxury travel retailer, operating in 10 countries and across three continents with 14 downtown Gallerias and in 18 international airports. In the 1960s, the DFS business model was centered on the Japanese traveler and the retailer focused on providing this group with a comfortable and familiar environment and appropriate product and gift opportunities. This formative experience with the Japanese has put DFS in a good position to do well with Chinese travelers today, over 50 years later. 30
ASIA DUTY FREE & TRAVEL RETAILING MAY 2013
Ahead of the game From 1955 to 1995, the Japanese economy grew to become the second largest in the world, second only to the US. Japanese travelers helped to develop major luxury brands such as Louis Vuitton, Cartier, Gucci and Hermes. “We were basically building shops where Japanese travelers were traveling to, filled with luxury brands to satisfy the Japanese consumer,” says CEO Philippe Schaus. Under founder and shareholder Robert Miller’s guidance, DFS learned to adapt and found that stereotypes are meaningless and that cultural respect is of utmost importance. This knowledge gave the company what it needed to become an industry leader. “The DFS of today is really based on the foundation of that business in the 1960s and 1970s,” says Schaus. “This is a business built
on customer understanding.” As traveler restrictions were lifted, high domestic tariffs and duties combined to make purchasing high-end and luxury products overseas an ideal proposition. By 2000, nearly 18 million Japanese were traveling overseas. Their appetite for high-end brands was legendary and their spending was enormous. All of this was good news for DFS at the time, but today it's the Chinese traveler that needs to be understood, as nearly 80 million travel overseas. The destinations and spending routes of the Chinese traveler are fundamentally different from the behavior of the Japanese traveler of 40 years ago. “The speed of maturity [with the Chinese] is also mind boggling,” says Schaus. “When I talk of maturity, I also talk about the ability to see beyond
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DFS
price, discount and purchases. Maturity naturally is the ability to appreciate the quality behind brands—the craftsmanship and heritage.”
“It's clear to DFS that the experiential elements must be enhanced and developed massively, both at the airport stores and downtown retail stores.”
One size doesn't fit all Once DFS was aware of the vast and increasing number of Chinese travelers, the retailer soon came to understand that although luxury will always exist and thrive, bespoke service and luxury products are not enough. What was needed more than ever was a more personalized experience for consumers. "It's clear to DFS that the experiential elements must be enhanced and developed massively, both at the airport stores and downtown retail stores," says Schaus. "This is if we are to maintain a high level engagement for our customers in this high paced, short attention-spanned world." In order to provide a more personalized experience, DFS needed to further understand the Chinese consumer profile, which is highly diverse and far from uniform. "China probably has the highest diversity of customers of any country in the world," says Schaus. "When you look at the PSC (DFS’ Platinum Services Club) customer, one size doesn't fit all—you have to be flexible. It's about sophistication." Part of being sophisticated as a retailer, according to Schaus, is maintaining sophisticated marketing campaigns and events, which is why DFS has organized events for its customers around the world, including Asia and China specifically. Recently, DFS held an event in Macau, its fourth "Masterpieces of Time" exhibition, showcasing 31 of the world’s preeminent luxury and watchmaker watch brands, which
The retail component, which opens end of the year will total 10,000 square meters and will include 21 retail categories of duty free commodities
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Philippe Schaus, Chief Executive Officer, DFS Group attracted customers from all over Asia and provided them with "a strong element of energy, discovery and learning." Schaus says the event wasn't about selling watches; it was about creating sophistication, educating the customer and creating a personal experience. "It's about bringing in visual merchandising concepts which are powerful," says Schaus. "We have a concept right now called ‘Passage to Paradise’ in our stores which is very powerful. Then it's about how we train our staff, and we have been putting in enormous effort for the last three years into moving from transaction mode into relationship mode."
Coming home In addition to the realization that the Chinese consumer requires a personalized and sophisticated shopping experience, DFS also recognized the need to bring the Chinese consumer home. With a large portion of Chinese consumers spending overseas, DFS felt there needed to be a significant focus on driving international travel retail into China from abroad. "We know from recent reports that China will become one of the world's
three international travel destinations by 2020," says Schaus. "Let's offer these international travelers a sophisticated shopping and entertainment experience in China." This goal led DFS to work together with Hainan Provincial Duty Free Company Ltd (HNDF) and Mission Hills Tourism Town Center in Haikou, China to build an off-airport store. Set to open by December 2013, the new downtown retail space not only marks a major milestone for the offshore duty free retailer, but also an expansion of its partnership with DFS. "We're a big believer in offshore duty free in providing great value to the consumer as well as keeping the shopping at home, so allowing the Chinese to travel within China and get the same value they would get from traveling abroad," says Michael Shriver, COO DFS. "A significant
DFS DFS recognized the need to offer international travelers a sophisticated shopping and entertainment experience in China, as the country is becoming one of the world’s top three international travel destinations
percentage of the mainland Chinese luxury purchases are made overseas, so this is an opportunity to bring them home." Established in 1992 and known for its pristine golf courses, Mission Hills decided in 2009 that it wanted to become a favorite tourist destination in Hainan and offer more than just golf to its visitors. By offering activities such as hot springs—the resort has a total of 168—and in the future a theme park, and having several five-star hotels and an array of food and beverage outlets, Mission Hill hopes to attract a range of visitors from the elderly to families. In addition, by being only 10 minutes from the mainland airport and only 10 minutes away from the downtown area of Haikou, Mission Hills is in a prime position as the first destination and last stop for visitors to Hainan. "Hainan Provincial Duty Free is very excited that we will be opening our first offairport store within the year,” says Zhang Yi Qing, General Manager of HNDF. "We are also proud to have DFS Group working with us on this new project. After successfully operating our airport stores for the past year with support from DFS, we are confident that together, we can create a truly world class duty free shopping experience that will not only delight our customers, but contribute to tourism generally in Hainan." Also helping to encourage tourism is the new international terminal at Haikou Airport that is set to open in the next few months. Due to the unique duty free policy exclusive to Hainan Province within China, nonresident shoppers are able to make duty free 34
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DFS believes HNDF's store will drive international travel retail into China from abroad
purchases of up to 8,000 Yuan (US$1,277) twice a year, in line with the expanded limit announced by China's Ministry of Finance in November 2012. By expanding into downtown retailing, HNDF will make it even more convenient for shoppers to enjoy shopping beyond the airport. "We are excited about working with HNDF and Mission Hills on this new project to bring even more Chinese customers and tourists the high quality shopping experience we deliver to travelers around the world," says Schaus. HNDF's store at Mission Hills Haikou will represent a total investment in Hainan of more than 10 billion RMB (US$1.59 billion). The space will occupy 100,000 square meters when completed. The retail component, which opens end of the year will total 10,000 square meters and will include 21 retail categories of duty free commodities.
To infinity and beyond Although one of DFS's main goals is to present an opportunity for customers to learn and make personal discoveries, the retailer itself has learned plenty through its many projects and experiences, its most recent being Mission Hills. "We have learned that you have to constantly adapt in all markets towards your customers, and you have to adapt over time,” says Schaus. "And for that, you need a long-term vision and we are blessed at DFS to have a long-term vision." Although Mission Hills is its current focus, DFS will soon be entering a new phase as a company, a group and a brand around September of this year, when Schaus says a big surprise and major events are to be expected. Until then, DFS's ongoing focus remains the same: creating a memorable and diverse experience for customers. c
Made by hand to touch your heart
Frédérique Constant and Nicole Faria share one passion: Supporting the International Children’s Heart Foundation. We will donate the cost of a life-saving heart scan for each Frédérique Constant Double Heart Beat watch sold. Contact. + 41 22 860 0440 www.frederique-constant.com
Bestsellers in the electronics category for Nuance-Watson are led by technological trends and innovations
Nuance-Watson
Despite recent challenges, Nuance-Watson stays focused on new opportunities and future growth in Asia BY MELISSA SILVA Perfumes & cosmetics, confectionery, electronics and fashion remain Nuance-Watson's top categories. High-profile, internationally renowned brands continue to be the bestsellers in perfumes & cosmetics as well as in confectionery. In electronics, bestsellers are led by technological trends and innovations; sales in the category last year were championed by Apple and Samsung, riding strong consumer interest in internet-related products and tablets. On the consumer front, Nuance-Watson has noticed the brand-conscious nature of mainland Chinese consumers, who differ from other nationalities like Westerners and Southeast Asians who tend to look for more choice and variety. “Nowadays, airport passengers are becoming increasingly internationally savvy and knowledgeable; their preferences and tastes are getting more sophisticated and also more receptive to high quality novelty brands,” says Alessandra Piovesana, Regional Managing Director of Nuance-Watson Asia. "Therefore, our merchandising strategy has always involved an optimally balanced brand and assortment portfolio." While offering international brands, Nuance-Watson also introduces up-and-coming brands that are supported by strong marketing activities, providing the operator with the flexibility to adapt to rapidly changing passenger profiles and evolving tastes and trends. "Our ultimate aim is to enrich and satisfy customers of all nationalities, ages and income levels," says Piovesana. Asian travelers continue to support Nuance-Watson's overall performance in the region. While the main contribution comes from mainland Chinese travelers due to the strong RMB value, travelers from other Asian countries such as Southeast Asia, South Korea and India also show increased spending. "We believe Asia’s travel retail market will continue to hold firm and sustain growth in the years ahead," Piovesana says.
High-profile, internationally-renowned brands remain the bestsellers in perfumes & cosmetics for the operator
D
espite losing its two core categories—airside general merchandise and perfumes & cosmetics concessions—at Hong Kong International Airport (HKIA) last year, Nuance-Watson has maintained substantial business with 17 licenses at the airport. The operator sustained a solid sales performance in 2012 with new launches in partnerships with vendors, enabling it to ride the growth it achieved with passengers and spending. The two airports in Asia where Nuance-Watson operates—Singapore Changi and HKIA—achieved record-breaking traffic numbers in 2012. Singapore Changi set a new record in passenger traffic with a total of 51.2 million passengers in 2012, an increase of 10% over 2011. Flight movements grew by 7.6% to 324,700 compared to 2011. As for HKIA, according to the Airport Authority Hong Kong, there was a 4.7% rise in passenger traffic during 2012 with 56.5 million passengers. Annual aircraft movement reported an increment of 5.3% to 352,000 with nine new airlines in 2012.
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The power of promotion Most of Nuance-Watson's promotions involve active brand partnerships. The length of the promotion periods varies depending on the nature of the products and promotional offers and themes.
DISCOVER THE ORIGINAL
Nuance-Watson
"Seasonal-driven or festive celebration promotions could span up to one or two months, whereas limited offers like exclusive prelaunches would have a shorter period in order to encourage purchasing," explains Piovesana. "Each promotion serves a different objective or purpose, whether it is to drive sales, traffic, awareness… our ultimate objectives are to enhance customers’ shopping experience and satisfaction, as well as to add value to our partners and the airport." Besides the newly launched shop-in-shop “iConcept” at Sound & Vision Enriching Life stores at HKIA, NuanceWatson also plans to carry out a renovation at The Atrium in the Venetian Macao-Resort-Hotel later Fashion remains one of top this year. An expansion of Nuance-Watson's categories in Asia retail space will enable the operator to bring in more brands and products and restructure the store zoning in order to present more offerings and an improved shopping experience. "Given Macau is a popular tourist attraction with world-class gaming facilities, it appeals to high spenders from mainland China and other parts of the world," says Piovesana. "By upgrading the shop environment, we aim to maximize business productivity and stay competitive in the mall." Nuance-Watson has new launches in the pipeline, planned jointly with its vendors across different categories. However the company cannot disclose details in advance of the launches. Piovesana says at Nuance-Watson, one of the company's core principles is to surpass customer expectations by constantly creating and refreshing choices that are seen as being unique across the industry. "Therefore, we constantly explore and develop initiatives to invite our brand and vendor partners to bring in premiere launches and exclusive offerings, value-added and personalized services, joint promotional events, etc.," she says. "Our goal is to continuously satisfy our customers’ growing interests in exclusivities and uniqueness, and at the same time raise penetration and conversion levels."
Planning for future growth Although Nuance-Watson doesn't have plans to launch any new shop-in-shop concept in Q3 2013, the operator plans to continue working with airport authorities to explore potential opportunities that will improve the shop appeal and environment to further enrich the shopping experience. Following the success of Taste & Delights, which opened at HKIA last November, Nuance-Watson will be opening two confectionery specialty stores at KLIA2 in Sepang, Malaysia this month. "The two store concepts embrace a variety of choices and distinctive offerings," explains Piovesana. More information will be released closer to the launch date. Nuance-Watson always aims to maintain a considerable presence in strategic airport hubs. In addition to its current licenses at Changi, HKIA and KLIA2, the operator plans to continue leveraging its expertise to explore opportunities as they arise and ultic mately expand its travel retail portfolio in Asia. 38
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Xi'an Xianyang International Airport
Terminal 3 at Xi’an Xianyang International Airport measures 250,000 square meters, holds 22 million passengers and features 66 retail outlets, such as Hugo Boss and Bally
Eight large Chinese-style lanterns were added to the commercial area in Terminal 3 to create a sense of place for passengers
Makers of change With a new commercial strategy and sense of place, Xi'an Xianyang International Airport is on its way to success
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or Xi'an Xianyang International Airport, change is good even if it isn't easy. When Wolfgang Weil, Deputy General Manager Operations, first visited the airport in 2008, it was evident that changes needed to be made, but making them happen would not be a simple task. At the time Samsonite was the only international brand that was being sold in the airport's commercial area. This discovery was worrisome for Weil, since Xi'an was then handling 12 million passengers annually . "We found Terminal 1, which was built in 1991 with a two million passenger capacity, had a mere six retail and four food and beverage outlets," says Weil. "Terminal 2, which opened in 2003 and handled nine to 11 million passengers, had basically the same infrastructure. An airport filled with passengers had no commercial strategy—definitely not international standards." The first step in Weil's plan for change was to tell all the airport stakeholders that there had to be a new understanding of the airport's "master plan," meaning that terminal design has a direct impact on the commercial layout. Next, Weil hired The Design Solution, a UK-based consulting company that focuses on retail planning and retail design. "The first thing we addressed was architecture," says Weil. "Chinese airports are built without having commercial concepts in mind. People who plan Chinese airports must be educated more to take commercial concepts and philosophies into consideration." A sense of place is becoming increasingly important for airports everywhere, so Weil and The Design Solution worked on building one at Xi'an, taking into account the rich forms and colors that characterize Chinese culture. Eight large red Chinese-style chandeliers were soon added to the commercial area, with a view to improving the shopping environment. "People should feel comfortable in the airport," Weil says. "Chinese airports are designed to get the passengers from the means of transport that comes to the airport, quick to the gates, sit down and don't move until you're called onto the airplane. People never thought about feeling comfortable at the airport." Weil feels there are many steps that can be taken to make the atmosphere enjoyable and comfortable, which in turn will help passengers relax—and ultimately shop. "The perception should be that at the airport you can enjoy, shop and dine," Weil says. 40
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BY
MELISSA SILVA
“The perception should be that at the airport you can enjoy, shop and dine.” Wolfgang Weil, Deputy General Manager Operations, Xi'an Xianyang International Airport
Seeing results
After four years, Weil believes Xi'an Xianyang has a commercial strategy which integrates space planning, retail planning and the introduction of concession-based contracts. "It took us one and a half years to establish a dedicated commercial department," explains Weil. "Chinese airports are dominated by administrative departments. Administration runs the show, but that's a more than 10-year-old approach. Airport management is not about administration— it’s about customer orientation and satisfaction, and it can be about delivering excitement." For three years now the airport has had a dedicated commercial department, and although it's not perfect, it's close. "We haven't reached 100%, we might be 75% or 80%," says Weil. Most importantly, Weil feels Terminal 3 is now a state-of-the-art facility, measuring 250,000 square meters, holding 22 million passengers and featuring 66 retail outlets. "I think that compares to other airports around the world," he says. Although significant changes have been made over the last few years, Weil strongly believes there is more that needs to happen, specifically amongst the planning authorities at Xi'an Xianyang and other airports in China. "The terminal designers and planning authorities must put the future operator’s and passengers' demands far more into consideration when it comes to planning terminals," Weil says. "So many airports and terminals are under planning and construction. It's not rocket science; it's just about real benchmarking with the industry’s best practices." Weil feels it would be helpful if retailers and brands become more involved, because he believes all parties want the best from the customers—their money. "The airports, the brands and the retailers in
the local Chinese markets have to be frank with themselves and have to say 'we are still a little behind our benchmarks in the region and on a global scale,'” Weil says. “We have to jointly develop by sitting together and learning from the best, educate and help each other." Although in Weil's opinion China is not a place for innovation, which makes it a challenge to introduce new concepts, he believes the task isn't impossible. "It's possible if it's truly explained to the people," he says. "But it takes more time." Another aspect that Weil wishes to look further into is quality control. "We have an outlet that was supposed to be a four-brand outlet for bags," says Weil. "The retailer that won the concession sliced it into four pieces and one of the shops is 2.5 meters wide by 9 meters deep. I haven't heard any complaints from the brand, but I don't have to explain it for the experts—it doesn't work. The brands should be a little more pushy." Ideally, Weil believes brands need to have the same focus on growth as the retailers and the airport. "Chinese retailers are not used to conversing with the brand, letting them know this and this doesn't work."
The customer is key
As is the case in airports everywhere, the customer is key, and Weil has noticed that 3% of the passengers in China’s airports hold "VIP" status and exhibit strong spending habits—but have zero exposure to any commercial offers as they are handled in separate facilities without any commercial areas. "All these people who have a far above average income are ‘neglected’ by the airports in China, if it comes to commercial offerings," he explains. “So what should the airports be doing? We’ll do customer surveys for VIP passengers as we do in the regular terminals and offer the products and
services they are asking for.” In addition to thinking in a more customer-oriented fashion, Weil feels there needs to be a change in the airport's tendency to think only for the short term. With Xi'an's Terminal 3 now open, things are moving more smoothly at the airport. Terminal 1 and 2 were originally designed to handle 11 million passengers and the airport had 21 million passengers in the facility in 2011. "So that was well beyond capacity," says Weil. "It worked, but it was full." The year prior, the two terminals handled 18 million passengers, which according to Weil was crowded but not uncomfortable. "Now with Terminal 3 open, we brought 11 million passengers out of the Terminal 1 and 2 complex into Terminal 3, which helped a lot," he says. Weil believes the work on Terminal 3 was done very well, even though there are still more aspects that need to be addressed. "I think we are 85% where we would like to be—a lot of little things have to be fine-tuned," he says. Looking ahead this year, the next challenge for Weil and his team is the upgrade of the ‘old-style’ Terminals 1 and 2. "We did a lot of modifications over the last few years, but it was more add-ons, because we were too busy to make a major change," he says. "That is what we are trying to do this year—make a plan to upgrade the Terminal 1 and 2 facilities in terms of commercial experience comparable to Terminal 3. There are limitations due to their respective footprints, but that's the task for this year." With 2011 being the first year the airport handled 20 million passengers, Weil expects that Xi’an will surpass 30 million passengers in 2015, which requires continuous hard work and ongoing improvements. "We want to be in the lead when it comes to commercial innovation and concepts for Chinese airports," he says. "We are not there c yet, but we are working hard to get there."
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LS Travel Retail ASPAC
At the end of 2012 LS travel retail China's opened fashion stores in Terminal 3 at Xi'an Xianyang Airport from Salvatore Ferragamo, Hugo Boss, Coach and Kent & Curwen
In the know
Armed with promotions and consumer knowledge, LS Travel Retail Asia Pacific is well positioned in China
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BY
MELISSA SILVA
ike many operators in the Asia region, LS travel retail Asia Pacific (LS travel retail ASPAC) understands the significant opportunity the Chinese traveler offers the travel retail market. With a 71% increase in 2012 of mainland Chinese travel overseas—up from 53% in 2008—and a 58% increase in duty free shopping by Chinese global shoppers in the third quarter of last year, LS travel retail ASPAC is working diligently to reap the benefits of this newfound opportunity. Formerly known as Lagardere Services Asia Pacific, LS travel retail ASPAC maintains a leading position in travel retail with stores at airports and major transport hubs in Australia, Singapore, Malaysia, Hong Kong, India, Taiwan, China, New Zealand and New Caledonia. The company's portfolio of retail brands covers core duty free and luxury items, specialty, gifts & souvenirs, books, news & convenience as well as a growing presence in food & beverage. LS travel retail has recognized that 56% of Chinese travelers prefer known luxury brands, while 69% will pay a premium for well known popular brands. In addition, the company together with Aeroports de Paris, observes that Chinese traffic in Paris Charles de Gaulle Airport (CDG) has remained stable over the past 2 years and that Chinese basket spend is six times higher than that of the average consumer. "Over the years, we have built upon an in-depth understanding of the Chinese passenger, our Chinese customers share the same core demands we see among other passenger nationalities: across the categories they want a great retail experience backed by great service, but especially the luxury categories," says CEO Emmanuel De Place.
company must ensure it presents attractive offers. "Chinese shoppers have an exceptional awareness of price comparison that manifests in their decision process," says De Place. "Across the categories, they are attracted to achieve a GWP or discount on a beauty purchase for example, so we ensure that every store always has a promotion underway." De Place has also found that Chinese shoppers can be persuaded to buy when approached in the right way by the sales team offering accessories and smaller items at lower price point strategy. Offering unique and differentiating services such as engraving or embroidering on-the-spot can also help turn reluctant browsers into shoppers. This is especially effective at Chinese domestic airports. LS travel retail ASPAC also believes that it's essential to welcome the Chinese traveler by showcasing best selling products on dedicated fixtures supported by a strong presence of Mandarin-speaking ambassadors. "We need to transform them from browsers into shoppers," says De Place. "We invest very strongly in the quality of our sales team, expanding with Mandarin speaking ambassadors, and we ensure that these people are positioned strategically in each store." Through LS travel retail ASPAC's ISO certified training program, OSCAR, the company embeds a level of service when dealing with groups of Chinese travelers. "Our staff will discreetly identify who has a strong influence on others and we focus more attention on this unique person using detailed product knowledge and sales skills," says De Place. Sales staff will quickly identify the labels the shopper is wearing from their watches, handbags and jewelry.
Catering to the consumer
A lasting impression
De Place believes the Chinese traveler profile is unique and more complex than any other, and that their behavior differs depending on where they travel. "They're traveling more frequently, and their choice of final destinations is evolving each year," he says. "And with each journey, their needs and expectations of travel retail are changing." According to De Place, the world's largest concentration of Chinese travelers at a single international destination outside of Asia Pacific is CDG. Between 2011 and 2012, sales growth at the airport exceeded 40%. "The French airport is the number one destination for Chinese passengers," he says. This is likely due to the fact that Chinese travelers feel a sense of prestige when bringing luxury products home from Paris. These expectations mean LS travel retail ASPAC has to ensure luxury products are always on hand, while also taking note of Chinese consumer trends, such as the increasing importance of digital communication, especially social media. With Chinese travelers using mobile devices while in stores to compare prices of luxury goods online, the
Following LS travel retail China's successful 2012 year end, when it opened fashion stores in Terminal 3 at Xi'an Xianyang Airport from Salvatore Ferragamo, Hugo Boss, Coach and Kent & Curwen, LS travel retail ASPAC recently announced a fashion and luxury contract at Shenzhen Airport’s new domestic Terminal 3. Set to open late this year, the 1,700 square meter contract is the next step in the company's successful expansion in Asia and specifically China. "This is a lucky Chinese century and we must not forget that we are privileged to have the opportunity to serve these travelers," says De Place." When we serve them, let us ensure that we give them the retail experience that makes them feel that 'yes, this store, this assistant, this brand, this product, gives me exactly what I want.'" LS travel retail ASPAC plans to keep growing, with expansion into the luxury beauty category. As the company continues to take advantage of the opportunity presented by Chinese consumers, De Place says that to stay successful "we must begin where our retailers have always c begun: know your customer."
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.com DRINK WITH CARE.
STOLICHNAYA® Premium vodka. 40% Alc./Vol. 100% Grain Neutral Spirits. © 2013
APTRA
Sunil Tuli, President, APTRA
APTRA takes high-profile stance Asia Pacific Travel Retail Association offers industry group a chance to show what it can do
T
he Asia Pacific Travel Retail Association (APTRA) is forging ahead with research, information and advocacy designed to support the development of travel retail across Asia and the Pacific region—and the organization isn’t afraid to shout about it. APTRA will be very visible at the TFWA Asia Pacific Conference & Exhibition, with presentations in the plenary session and a special industry associations’ workshop on Monday May 13 as well as a stand in the exhibition hall itself from May 14-16. APTRA President Sunil Tuli will address TFWA conference delegates on the challenges faced by the industry and how industry associations are working to counter threats and drive the business forward. A key theme of his presentation will be that a challenge or a threat which emerges in one country or region can spread like wildfire to other parts of the world. Tuli will summarize the campaigns on which APTRA and its counterparts around the world are currently working, including public health warnings related to products sold in duty free, taxation issues, product display bans and overly restrictive inbound allowances which threaten the future development of duty free sales. The advocacy themes introduced by Tuli will be developed in much greater detail during the TFWA industry association working lunch on May 13 when action plans will be formulated for the coming year. As suppliers and retailers well know, to sell to the customer you have first to know who they are and what makes them tick. Tuli will also touch on the results of research undertaken on behalf of APTRA members into the shopping behavior of traveling consumers in the Asia Pacific region. APTRA will be present throughout TFWA Asia Pacific with a stand at P25 in the exhibition hall to showcase this research work and demonstrate the new Responsible Retailing Training Program (RRTP) currently under development. RRTP is a training initiative designed to implement the principles 44
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of the industry-wide self-regulatory code of conduct for alcohol sales. The training program is already attracting strong interest from liquor suppliers, ten of whom have stepped forward already to pledge over 50% of the development costs. The RRTP will involve physical train-the-trainer sessions, where suppliers explain the importance of responsible retailing to retail staff, as well as an online training module so all teams, most of whom work on shifts, can obtain the course certification. The program is intended to ensure that alcohol sales in duty free and travel retail are conducted in a legitimate, responsible and customer-friendly manner. APTRA will also be taking its research and training programs out on the road. They and consultancy firm KPMG, together with APTRA’s research partner m1indset, will embark on a seminar tour of key markets in Asia during September and October to communicate the principal findings of recent research studies and to explain how stakeholders can, and should, engage in the campaign to safeguard the industry. KPMG will contribute invaluable learning from its own Chinese luxury traveler study as well as the latest trends in customs and taxation issues around the Asia Pacific region. The venues will include Singapore, Thailand, Korea, Malaysia, New Zealand and Taiwan, with APTRA members and relevant stakeholders in each location being invited to participate. With this kind of membership benefit in clear view, many AsiaPacific companies have already joined APTRA—but recently their ranks have been swelled by some new members based outside Asia who have strong business links with the region. The latest of these is Tourvest Duty Free of South Africa, which manages the inflight retail programs of 11 airlines. Applications from other such companies are invited. Further information about membership, the Responsible Retailing Training Program, the Seminar Tour, current campaigns, challenges and threats can c be found at www.aptra.asia or by contacting info@aptra.asia.
AIG NE R M UNI C H. C OM
Beijing Capital International Airport Co., Ltd.
Above and beyond
Renovations and service changes anchor Beijing Capital International Airport’s growth strategy MELISSA SILVA BY
A
s operator of one of the busiest airports in the world, with passenger volume ranked second worldwide in 2011 and 2012, Beijing Capital International Airport Co., Ltd. (BCIA) focuses on maximizing results for its retailers and passengers. Vice President Wei Zhang believes an airport must improve the quality of its environment to maximize commercial revenue and successfully create an enjoyable service experience for passengers. With this belief in mind—and in response to an influx of passengers—BCIA launched a large-scale renovation of Terminal 2 international and domestic at the end of 2012, which will see the addition of a business area, lunch rooms and more business rooms and commercial areas when completed. “Terminal 2 was built in 1999, so we have to change the design of the whole terminal,” says Zhang Hang, Director, Marketing Department. “Firstly we will expand the central area, so after security passengers will feel more relaxed.” Because the terminal has to be used during the renovation process, the estimated completion date could be as late as 2014 or possibly the beginning of 2015. In addition to improving the atmosphere at Terminal 2, BCIA is also improving the terminal’s commercial area. “We will invite more luxury brands and also introduce some local brands that represent Chinese culture,” says 46
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Hang. “The commercial ambiance will feel more relaxed and look more attractive,” he adds. The airport’s total commercial area is over 68,000 square meters and features 181 retail stores including designer brands, watches, jewelry, perfume & cosmetics, liquor & tobacco, books and gifts. BCIA’s retail business has already increased by 23%, and these changes will likely cause this figure to rise. Zhang feels the addition of high-end brands will attract more “high-quality” passengers to the airport. As a result, Zhang has diversified BCIA’s brand offering to promote business development. “We have a direct bid process and we have improved the access of quality brands,” he explains. “Maximizing commercial value is not just about revenue, but is also about per capita consumption and brand value.” In addition to the changes underway in Terminal 2, BCIA has plans to also transform Terminal 3 domestic this year with 22 new stores for a total of 4,788 square meters of commercial space. In addition BCIA will implement a trade promotion plan this June that will see an additional 2,000 square meters of books, clothes, jewelry, gifts, and liquor & tobacco stores. And with contracts ending at Terminal 3 in June, BCIA will launch a new tender sometime between now and June. “We have contacted some foreign companies and foreign brands... more and more foreign companies and brands want to enter this market,” says Hang. “Sometimes they
think Chinese culture isn’t ‘deep’ and is difficult to understand, but we feel we have to be willing to be open to foreigners and the foreign market.” Hang feels meeting face-toface with foreign companies will be advantageous for the airport. “We may have difficulties progressing because sometimes it’s hard to understand each other, but I think we have the same goal—to make money and explore our business potential.” To keep pace with change, BCIA substantially altered its traveling visa requirements in January of this year with the introduction of the 72-hour visa-free transit allowance to stimulate international routes and transit passengers. “Passengers are the most precious asset of an airport,” says Zhang. “Your customer is your starting point—you must provide a joyful experience to be profitable.” Looking ahead, Zhang plans to maintain BCIA’s management philosophy, which is designed to meet the diverse needs of passengers through international, branded and specialized commercial service. “We endeavor to realize commercial value maximization in the process of creating an enjoyable experience for passengers.” With terminal renovations still underway, an estimated 85 million-plus passengers for this year and the opening of Beijing Daxing International Airport scheduled for 2015, BCIA may have its hands full, but the company understands c where its priorities lie.
NEW TRAVEL RETAIL EXCLUSIVE
Industry & Retailer News
In Brief
Terminal 3 of Changi International Airport, Singapore
Asian airports top rankings for service quality – again
Airports in Asia-Pacific have once again swept the board in Airports Council International's annual Airport Service Quality (ASQ) Awards. Singapore Changi scooped the honor for Best Airport with annual passenger traffic over 40 million passengers, Seoul Incheon topped the league among those with 25-40 million, Seoul Gimpo was named best in the 15-25 million passenger segment, Japan's Nagoya won in the 5-15 million category, and Inner Mongolia's Hohot won in the 2-5 million bracket. All of the airports with annual passenger traffic of more than 5 million were in Asia, and among those with more than 40 million, Beijing, Hong Kong, Shanghai Pudong and Guangzhou were ranked second-, third- and fouth-best after Changi. ACI World Director General Angela Gittens says: "This is an exciting time for airports. As airports and their operators increasingly
accept the positive correlation between passenger satisfaction and airport revenues, we see more and more airports striving to meet, and in some cases exceed, the levels of customer service that their passengers expect from their favored product and service providers. "Airports that deliver superior customer service stand apart from the competition and superior customer service remains one of the most important differentiators in the increasingly competitive airport industry. "I am delighted to see longstanding favorites take home ASQ awards as it is testament to the growing and accepted wisdom in the airport community that maintaining customer service excellence is central to a winning business strategy. I am equally excited to see other airports rank for the very first time this year, which stands to prove that it is never too late to adopt a winning customer service orientation to which the ASQ program is fundamental."
Langkawi airport revenues set to surge after upgrade State-owned airport operator Malaysia Airports has finished renovating and expanding Langkawi International Airport in a move that it says will give a significant boost to revenues at the tourist island's air gateway. Faizah Khairuddin, Malaysia Airports Senior General Manager of Commercial Services, says: "We have increased the total retail and F&B space in this airport by 5%. This is expected to generate additional revenue of 15% - roughly M$7.6 million (US$2.45 million) - in the coming year." Malaysia Airports says it has remodeled the airport as a "worldclass leisure airport", introducing new concepts and brands to appeal to a cross section of international tourists. Products were also realigned to offer travelers a more diverse yet focused experience. The airport is now host to new international and local names such as Casa Impian, Gloe, Fila & Shock Proof, Marrybrown and Plaza Premium Lounge. Khairuddin says: "Working together and with the support of our business partners, we have incorporated the leisure concept in the [airport's] overall design and ambience. We have re-aligned our products and retailer mix [and] streamlined outlet locations. " Malaysia Airports is celebrating Langkawi International Airport's
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new commercial model with an 11-day entertainment and promotional campaign, with travelers given a snapshot of Malaysian hospitality and culture in the form of traditional dances, games and shows. Travelers can also take part in the "HappyBox Passport Challenge". For every M$50 (US$16) a traveler spends at the airport, they will be given a stamp in a HappyBox Passport. Upon collecting three stamps, they will be given the opportunity to try to crack the digital code to a HappyBox and win prizes such as shopping vouchers or products. Airports in Kuching, Miri, Mulu, Labuan and Lahat Datu have undergone similar revamps, and renovation and terminal development is in progress at Kuala Lumpur International, Penang, Kuala Terengganu, Kota Bahru, Ipoh, Bintulu, Sibu and Tawau airports.� Faizah Khairuddin, Senior General Manager of Commercial Services, Malaysia Airports
In Brief
Lion Air places huge order for new planes Indonesian carrier Lion Air has placed a second record-breaking order for new aircraft, with a deal for 234 A320 planes from Airbus. Lion Air co-founder and Chief Executive Rusdi Kirana signed the Airbus order with Airbus President and Chief Executive Fabrice Brégier in a high-profile ceremony at the Elysée Palace in Paris, with French President François Hollande in attendance. The deal follows its signing of Boeing's biggest-ever order - for 230 737 jets - in the presence of US President Barack Obama. Jakarta-based Lion Air will take delivery of 60 standard A320s, 109 new fuel-efficient A320neos and 65 larger A321neos. In a single-class layout the A320 can seat up to 180 passengers and the A321 can accommodate up to 236. Kirana says: "The fuel-efficient A320 family will enable Lion Air to achieve the lowest possible operating costs and continue to offer the most competitive fares in the Asian region. This landmark order will ensure that the Lion Air Group will continue its expansion with one of the most modern and advanced fleets in the world." Lion Air is expected to distribute the new planes between its three main carriers - Lion Air, Batik Air and Malindo Air, a newly launched low-cost carrier based in Kuala Lumpur. Lion Air currently boasts a fleet numbering around 90 aircraft, but its latest order takes the tally of planes on order to more than 540 aircraft. Brégier says: "This announcement marks our first order from Lion Air - one of Asia's fastest-growing and most successful low-cost carriers. The news underscores the marketleading position of the A320 family, which continues to attract new customers for both the current and new engine options. We very much look forward to welcoming Lion Air as a major new operator of Airbus aircraft." Lion's Airbus order is worth more than US$23 billion at current list prices.
Victoria’s Secret available in HKIA
Specialty retailer of lingerie and beauty products Victoria’s Secret plans to open its first Beauty & Accessories store in Hong Kong International Airport (HKIA). The store will be opened in partnership with DFS Hong Kong Limited. The new space is scheduled to open May 16, and will offer customers access to an assortment of best-selling Victoria's Secret beauty products including the well known prestige fragrance Victoria’s Secret Bombshell, which was the recipient of the FiFi Award. Also on offer will be the newest launch fragrance Fabulous, in addition to the brand’s popular scented VS Fantasies body care range. Victoria’s Secrets new space will offer Victoria’s Secret’s unique collection of accesan assortment of best-selling Victoria's sories is sold exclusively through the Beauty & Secret beauty products including its newest launch fragrance Fabulous Accessories concept stores and are designed to appeal to customers who are looking for gift-giving opportunities as well as self-indulgence purchasers. For glamour-oriented customers on the go, the Beauty & Accessories locations offer a wide range of Victoria’s Secret branded cosmetic cases, bags and totes, scarves and sunglasses, as well as luxury small leather goods and high-tech, styled business accessories and luggage. For frequent flyers that need to stay organized, travel wallets are on offer in styled coated canvas and Saffiano genuine leather. VS Jet Set passport covers come in a range of stylish colors and finishes including a pink pearlized patent leather, rose gold graffiti or a hand-painted nude with pink stripe. An assortment of glamour and cotton panties will also be available in a wide range of styles, colors and prints. The new HKIA outlet will take design cues from the airport’s own contemporary architecture and design, with a modern-look façade and designed storefront. The store interior features accent elements such as black cherry fixtures, lit focal walls, a gallery of black and white imagery and a video wall featuring Victoria’s Secret Supermodel video footage, showcasing products “in an environment that’s sexy, sophisticated and forever young.”
Changi Airport works with Golden Myanmar Airlines Changi Airport Group (CAG) announces the arrival of a new carrier, Golden Myanmar Airlines, at Singapore Changi Airport. The carrier will operate daily services connecting Singapore via Yangon to Mandalay, the financial capital of Myanmar. The new service by Golden Myanmar Airlines further enhances Changi Airport’s position as a key gateway to the region. CAG’s Senior Vice President for Market Development, Lim Ching Kiat, says, “We are extremely delighted to welcome Golden Myanmar into Changi’s family of airlines. This is a significant milestone for us given the tremendous growth opportunities for business and leisure travel between Singapore and Myanmar. We are confident that the additional flights will make it easier for people to travel between the two countries and we look forward to working closely with the airline to realize the growth potential that exist in the two markets.” Golden Myanmar Airlines will operate daily services connecting Singapore via Yangon to Mandalay, in Myanmar
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CoCktails aNyoNe? us at Visit 35, FNa D a ee asi r F x a t pore siNga
You can never be too generous
TFWA
TFWA gears up
In advance of this year’s TFWA Asia Pacific Exhibition, we speak with TFWA President Erik JuulMortensen about the successful China conference held in Beijing earlier this year along with what’s in store for the next trade show
Asia Duty Free: Did the TFWA/APTRA China conference that was held earlier this year, meet your expectations overall? Erik Juul-Mortensen, TFWA President: TFWA and APTRA were delighted by the overwhelmingly positive reaction to our industry conference on China. We were applauded from the start by virtually everyone for taking the initiative and organizing the first industry association event in China. We have been most gratified by their reactions during and post-event. We were pleased, and not a little relieved, when the number of registered delegates topped 300 and in the end we welcomed an astonishing 372 people from 200 companies around half of whom were ‘locals’ from Asia. We are grateful to our excellent line-up of speakers, many of whom traveled half-way around the world to take part. The content of their presentations was without exception fascinating. The logistics of an inaugural event such as this are daunting but with the help of our partners in Beijing, in Singapore and elsewhere we believe we achieved what our members had asked us to provide: high value content from experts in the field and the chance to meet and do business with key stakeholders in China. 52
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Our popular One2One meetings service facilitated 112 meetings and the refreshment breaks, lunches, opening cocktail and gala dinner provided ample opportunity to network in delightful surroundings.
In the intervening year, 2014, we may consider running an event of some sort in another part of the world. The MC has tasked the TFWA executive team with assessing the value and potential of such an event
“Growth overall has slowed down a bit in Asia but it remains the region with the greatest untapped potential across all categories.” Erik Juul-Mortensen, President, TFWA ADF: What are you expecting for the next conference? EJM: At the Management Committee meeting in Rome in late March it was decided that the industry conference on China would for the moment be a bi-annual event and the next such industry association event is therefore due to take place in early 2015. This will allow time to build a strong program with worthwhile content every bit as challenging and interesting as this year.
TFWA
in various locations. Their report will be presented to the MC at the next meeting in June 2013. ADF: What type of feedback did you receive from delegates? EJM: As soon as delegates got home they received an invitation to complete an online survey and the response rate was good enabling us to draw solid conclusions. 86% rated the content as good, very good or excellent in terms of the quality of information and 91% said the conference met or exceeded their expectations. All the speakers scored well, as did the conference venue, the social events and the organization. There were some problems with accommodation in one of the four hotels used which will be addressed. In conclusion, nearly everyone – 96% of respondents – said that the conference should be repeated and that the preferred time frame was every two years. We are very gratified by the positive responses we received and we have taken careful note of all the comments made. These contributions will have a profound effect on our planning of future events. ADF: Can you tell me what you have planned for the TFWA Asia Pacific exhibition and conference? Will there be any notable changes from last year? What special events do you have planned? EJM: Planning for TFWA Asia Pacific Exhibition & Conference 2013 is well advanced and we are delighted that the positive trends in evidence last May—high demand for stands and excellent visitor figures—seem to be continuing this year. You will notice that we have changed the name of the event, as the One2One meeting service is now well established as an integral part of the event and does not need to be included in the title. However, the most exciting change this year is that TFWA Asia Pacific Exhibition & Conference will move to a brand new venue: the Marina Bay Sands Expo & Convention Centre. The move was forced upon us because the rebuilding work at the usual venue, Singapore Suntec, will not be completed in time. We are working extremely hard to ensure that the inconvenience caused by this move is kept to a minimum and we are confident that the event will achieve its usual high standards. 54
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Demand for exhibition space has been greater than ever: over 240 exhibitors are confirmed on nearly 8,000 square metres of exhibition space which is a new record. This demand from major international brands to participate is testament to the rapid growth of our industry in Asia Pacific.
try in the region can sustain growth in 2013? EJM: Growth overall has slowed down a bit in Asia but it remains the region with the greatest untapped potential across all categories. It is also worth noting that the demand for premium and super-premium goods is more marked here than elsewhere.
ADF: Who are the confirmed speakers for the Asia Pacific conference? What topics will be discussed? EJM: The theme of the 2013 TFWA Asia Pacific Conference on Monday May 13 is “Striving for Perfection.” We have invited speakers both from the industry and from the broader commercial world so we can expect a stimulating program. We will be offering two fascinating workshops after the plenary: “Perfect Journey,” exploring how store design, terminal layout and commercial branding can engage the traveling consumer, and “Perfect Pitch” on how partnerships and sharing skills can create the perfect consumer proposition. After the lunch break we will offer “e-Perfect,” on harnessing technology and new media to ensure we are at the top of our game, or “Perfection Personified,” which will show how ‘the human touch’ remains central to customer service. The afternoon workshops will be followed by a closing plenary to draw the various threads together.
ADF: Can you tell me about sponsors who have already signed on? EJM: Singapore Airlines is the official carrier; Interparfums will partner with us on the traditional golf tournament; many of our wine & spirits colleagues will supply the TFWA Asia Pacific Bar; and a host of other sponsorship and advertising agreements have been drafted or are in the pipeline.
ADF: How do this year’s confirmed exhibitors compare to last year’s? EJM: Last year we accommodated 236 exhibitors by spilling over onto the mezzanine level. Roughly a quarter of all exhibitors were fragrance & cosmetic companies, with jewelry & watches and wine & spirits accounting for 17% each and fashion, accessories & leathergoods occupying 14% of stands. The confirmed total is currently 241, already more than the same stage last year, with proportions by category fairly constant. ADF: Can you give me your opinion of the duty free business in Asia in 2012? Are there any categories or regions that are outperforming right now? Do you think the indus-
ADF: Have there been any notable changes of post within the TFWA? EJM: John Rimmer took over as Conferences, Research and External Affairs Director at the end of March, following the departure of Michael Barrett, and will, I am sure, cope admirably with the challenge of following a class act! In addition, Ana Homawoo has been promoted to IT Director, having successfully led the IT department for almost ten years. Although working mostly behind the scenes, the IT team at TFWA has played a major role in our recent successes and is a very strategic component of the TFWA permanent structure going forward. All our best wishes to Ana and John in their new positions, and indeed to Michael c for his future plans.
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Conference Review: TFWA/APTRA China
The
dragon
awakes
China’s burgeoning duty free market in the spotlight at landmark TFWA/APTRA conference
T
he industry conference on China, organized by TFWA in partnership with APTRA, closed on a high note on March 7 in Beijing after two days of detailed analysis of the development and potential of the duty free and travel retail trade in the country. Rui Chenggang, Anchor and Director for the CCTV Business Channel presented a powerful, frank and fascinating summary of the business and political landscape in China, designed to augment the industry’s understanding of the Chinese consumer. In total 372 delegates from 200 companies attended this industry association event, which was titled “China’s Century: The Fast Pace of Change in China Duty Free & Travel Retail.” In his welcoming address, TFWA President Erik Juul-Mortensen set the scene with a summary of the aviation market in China and the opportunities open to travel retail. “We are only at the beginning of the air travel boom in China,” he said. “Aviation analysts predict that passenger numbers in China, domestic and international, will quintuple to reach around 1.5 billion by 2030. The question is— are international brands ready for this huge opportunity?” APTRA President Sunil Tuli added his welcome and echoed the optimism about the opportunities ahead, but cautioned that the entire industry should be alert to dangers that may threaten any one category and should work together to protect the interests of all. Dong Zhiyi, Executive Chairman of the Board of Beijing Capital International Airport, official host of the event, said that his airport, which is already the official gateway to China, has ambitions to become the number one airport in the world. His colleague Zhang Wei, Vice President 56
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of BCIA, outlined various measures which will stimulate travel and retail, including a new 72-hour visa-free transit policy, extended retail areas in the terminals and a reformed bidding process enabling BCIA to approach high-end brands on a one-to-one basis in order to secure the desired product mix for their passenger profile. Charles Chen, Vice President of China Duty Free Group, reported an increase in annual revenue at CDFG in 2012 of 30% over 2011— higher even than the growth rate of 21% for Asia-Pacific as a whole. During the Golden Week in February, the Sanya Duty Free store achieved revenue of US$24 million and on Valentine’s Day alone sales exceeded US$4.8 million, a 230% increase over last year. He identified cruise ships, the new high speed rail and the purchasing behavior of Chinese people as future opportunities for growth. Taking exception to the common description of China as an emerging market, DFS CEO Philippe Schaus said it is today a highly developed market with great potential. He said that DFS was built on the wave of outbound Japanese tourists in the 60s and is now adapting to the new Chinese consumer. “When we look at the PRC customer, one size does not fit all,” he said. “You have to be flexible and meet their growing sophistication.” By 2020 China will be one of the top three inbound travel Many companies supported the conference; Furla sponsored the lunches during the event
destinations, according to the World Tourism Organization, he said. Schaus then took the opportunity to announce that DFS will partner with HNDF (Hainan Provincial Duty Free Co. Ltd.) at the operator’s first off-airport store at the Mission Hills Tourism Town Center in Haikou, Hainan Island, which will be a center of shopping, leisure and entertainment.
Slowing but still strong In a commentary on the evolution of the Chinese economy, James Kynge, Editor of China Confidential, identified three factors which will influence the future development of China: urbanization, which is a key policy of the new administration—by 2025 there will be about 25 cities in China with a population of over 500,000; the expanding middle class which will double in size by 2020; and reforms designed to combat negative effects of growth such as corruption and environmental degradation. Kynge said that although the growth rate is slowing the country still offers enormous potential. The pursuit of excellence in duty free was addressed by Retail Viveca Chan, Founder and CEO of WE Marketing Group explored the concept of buying for self-indulgence versus where the shopper buys to impress, and the impact these traits may have on travel retail
Consultant Mark Riches in a session chaired by Doug Newhouse, Editorial Director of The Travel Retail Business. Riches said airports have to get the basics right, including knowing the customer, making shopping easy, providing great service and giving the retail area a strong sense of place. China’s aviation landscape and its commercial potential were analyzed by three experts in the region. Peter Harbison, Executive Chairman CAPA – Centre for Aviation summarized China’s aviation policy and its impact on airlines; Wolfgang Weil, Chief Operations Officer, Xi'an Xianyang International Airport illustrated how current commercial development strategies are being put into practice; and John Woodhouse, Head of Business Development, China & East Asia, AerRianta International offered the retailer’s perspective and warned that there is still much work to be done to ensure passengers understand the retail offer. Sunil Tuli, Managing Director (Duty Free) King Power Group HKG, described his company’s 30-year history in China and said that the first opportunity seized by this entrepreneurial company in 1979 is dwarfed by the scale of opportunity in China today. He advocated that travel retailers should take careful note of how Chinese consumers have evolved and cater to their needs. In a compelling case study Freda Cheung, CEO Canada, World Duty Free Group explained how Vancouver Airport has boosted the influx of visitors from China by implementing a dynamic marketing plan and a commercial offer which is tailored specifically to the needs of this group of high fliers. The airport has achieved extraordinary daily sales with just 6,000 passengers which exceed the previous daily record set with 8,000 passengers during the winter Olympics 2010. Emmanuel De Place, CEO, LS Travel Retail ASPAC ended his engaging address on reaching China’s consumers, in which he emphasized that “a generic experience—the ‘cookie-cutter approach— will simply not work,” with the announcement that his company had just been awarded a 1,700 square meter luxury and fashion contract at the new domestic Terminal 3 at Shenzhen Airport which will open later this year. Heading up the second day of the conference, in an absorbing presentation titled “From Revolution to Evolution,” Andrew Wu, LVMH Group President, Greater China discussed how Chinese consumers have emerged from decades of material deprivation to enter an era of domestic consumption in the space of just one generation. A panel of three expert researchers explored the nature of the Chinese consumer at home, abroad and on line. Andrew Stockwell, VP Asia Pacific, Forrester Research described the “age of the consumer” in which empowerment of the consumer will revolutionize the way brands and retailers will operate. Viveca Chan, Founder and CEO of WE Marketing Group explored the concept of ‘dai gou’ or buying for self-indulgence versus ‘shai’ where the shopper buys Peter Harbison, Executive Chairman CAPA – Centre for Aviation summarized China’s aviation policy and its impact on airlines
Conference Review: TFWA/APTRA China
The gala dinner was staged in the Golden Hall of the Beijing Hotel with an artistic performance of “The Moving Forbidden City” by Hu Xiaodan
Rimmer, Michael Barrett and Trevor Lai, the sponsors and the partners. He reported that 112 meetings were organized through the One2One appointments service, which puts airports and operators in touch with brands and distributors. The opening cocktail was held in the stunning Tai Miao Imperial Ancestral Temple on Tuesday March 5 and the gala dinner on Wednesday was staged in the Golden Hall of the Beijing Hotel with an artistic performance of “The Moving Forbidden City” by Hu Xiaodan. The partners supporting the event were Diamond and Gala Dinner sponsor King Power Group (Hong Kong); Diamond sponsor Patrón Spirits; Platinum and lunch sponsor DFS; Gold sponsor Puig; Silver sponsor Sunglass Hut; lunch sponsor Furla; coffee break sponsors Chivas, Ferrero, Perfetti Van Melle and Toblerone; and other sponsors Colorful Licenses International, c Kipling and Lacoste. to impress, and the impact these traits may have on travel retail. Finally, Garry Stasiulevicius, MD, Counter Intelligence Retail offered a detailed analysis of Chinese customer motivations when shopping in duty free specifically. From his in-depth research into the purchasing motivations of the wealthiest members of Chinese society, known as the ‘Xingui’ or new aristocracy, Rupert Hoogewerf, Chairman and Chief Researcher of the Hurun Report, drew some compelling conclusions about the implications for luxury brands.
Looking at luxury Representatives of some of those luxury brands took part in a panel discussion about how they are adapting their approach. Francis Gros, Group Travel Retail Director, Luxottica in the fastest growing category, sunglasses, talked about designing sunglasses to suit Asian faces; CS Lam, Travel Retail Regional Director, Asia Pacific, Godiva International described limited editions destined for Chinese markets; and Patrick Bouchard, Global Travel Retail Managing Director for Puig outlined some of their fragrance and cosmetic products adapted specifically for the Chinese consumer. Further expert opinion on the concept of luxury in China was provided by a panel including Christian Blanckaert, Professor of Management, ESCP Business School, who considered that European brands would continue to drive the luxury market in the foreseeable future but that the Chinese luxury brands would emerge gradually. Among the observations made by Davidoff CEO Hans-Kristian Hoejsgaard was that shopping for luxury goods can be intimidating so the retail environment and education are important. Head of Wine, China for Christie’s Simon Tam shared insights on China’s high-end wine buyers and said that the biggest difference between the wine cellar in Europe and that in Beijing is that in Europe there is dust on the bottles; in China fine wine is bought to be given and/or consumed. The final member of this panel was Muriel Zingraff-Shariff, BAA’s Director of Retail Concessions, who said that exceptional service, including personal shoppers, has contributed to the airport’s success in selling to the traveling Chinese consumers. Like many other speakers she also emphasized that Chinese shoppers are dedicated users of the internet, and that BAA itself has responded with a ‘Heathrow Boutique’ reserve and collect service. In his closing remarks Erik Juul-Mortensen thanked all those involved in organizing the event, including the moderators John 58
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President Erik Juul-Mortensen recently reviewed TFWA events and future plans Tax Free World Association (TFWA) announces that the next ‘China’s Century’ Conference will take place in 2015, following positive feedback and internal discussion after the inaugural event in Beijing March 5-7. The likelihood is that it will continue as a biannual event with TFWA looking at holding other regional conferences in emerging and emerged markets in the intervening years. Both Indonesia and Russia were mentioned as possible venues. The announcement was made at a press briefing at the Lancaster London hotel, UK, where TFWA President Erik Juul-Mortensen plus members of the TFWA Board and permanent staff also revealed new branding for the organization and progress on the formation of a Travel Retail World Council. TFWA announced very positive results for 2012, against the backdrop of a duty free and travel retail industry now worth some US$49 billion (according to Generation). Growth occurred in all regions except Europe, which remained flat, with Asia Pacific the most important region for sales (up 16.3% in 2012). This growth, said Juul-Mortensen, contributed to the success of last year’s 17th TFWA Asia Pacific event in Singapore. Visitor numbers were a record high of 2164, with 919 companies exhibiting. The TFWA World Exhibition in Cannes in October 2012 saw a total of 6074 visitors, with 4260 key buyers, landlords and agents attending. TFWA’s first China’s Century conference was voted a success with 372 attending delegates. In addition, 17 Chinese airports and 71 operators and retailers attended the event. TFWA-organized press briefing at the Lancaster London hotel, UK
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Prestige Supplies Inc.
Jack of all trades
The focal points of Prestige Supplies’ business are primarily in the retail and wholesale realms, ensuring quality products reach the right consumers at the right time
Prestige Supplies Inc. carves out a strong foothold in Mongolian duty free, setting its sights on the Cambodia-Vietnam border and further expansion in Asia and Africa BY RYAN WHITE
P
restige Supplies Inc. was established in 2007 and has become one of the fastest growing and most respected duty free suppliers in emerging markets around the world today. “Our uncompromising belief in creating a world-class supply chain network, partnering with world famous brands and putting our customers, suppliers and people first enable us to meet various market demands,” says Grace Murphy, Duty Free Sales Executive at Prestige Supplies. As a strategic supplier to the travel retail environment, Prestige Supplies’ services encompass a variety of roles—that of wholesaler, retailer, consultant, distributor and warehousing solutions provider. However, the focal points of the company’s business are primarily in the retail and wholesale realms, ensuring quality products reach the right consumers at the right time. “With the insights gained, infrastructure in place and relationships forged, we are further diversifying our supplier base in all categories ranging from alcohol, confectionery, cosmetics, perfumes, electronics and tobacco to cater to the current demand and future opportunities,” explains Murphy. “With a supply footprint that spans across more than twenty countries, a direct presence in three countries and focus on some of the world's fastest growing markets, we believe our journey has just begun.”
Asia expansion With an already well established foothold in the Mongolian travel retail market, Prestige Supplies recently completed refurbishments of duty free shops in cooperation with its local retail partners in Chinghis Khan International Airport. Murphy reports that the renovations have resulted in an increase
of more than 40% in sales turnover at Mas L’ecrin Duty Free Shop and Bat Sarai International Duty Free Shop. Furthermore, the refurbishments have provided more space for category expansion, which Murphy notes plays an integral part in Prestige Supplies’ pursuit for added partners in Perfume and Cosmetics, fashion and accessories. “These changes have continued to bring further recognition to the Mongolia travel retail business and the timing couldn’t be better considering Mongolia has been the world’s fastest-growing economy for three straight years,” she explains. Indeed, the number of international travelers visiting Mongolia increased substantially in 2012, with direct flights from Ulaanbaatar to Istanbul via Turkish Airlines, daily flights to Hong Kong and chartered flights to Delhi, Singapore, Dubai, Hanoi and Bangkok. In fact, four airlines (MIAT, Mongolia Airlines, Eznis Airways and Chinghis Airways) with international destinations throughout Asia, Middle East and Europe are using Chinghis Khan International Airport in Ulaanbaatar, Mongolia as a “home base,” further bolstering the airport’s status as a major up and comer in the region. The successes achieved in Mongolia have enabled Prestige Supplies to expand its footprint throughout Asia with a newly constructed 1950-square-meter travel retail outlet in Bavet, Cambodia along the Cambodia-Vietnam border. The duty free shop was opened officially by Deputy Prime Minister of Cambodia Mrs. Men Sam An on March 25 with a turnout of over 1,500 guests. The retail outlet is focused on a more up-market approach that caters to the existing passenger demographics of the travelers visiting the region, says Murphy. The store boasts more than 250 square meters dedicated to Perfumes and Cosmetics, 190 square meters for fashion and accessories, 100 square meters for electronics, 105 square meters for confectionary items/foodstuff and an extensive alcohol and tobacco section. Added to this are a money exchange and restaurant for consumer convenience. “The store is the first of its kind in the region and so far its performance has exceeded expectations,” concludes Murphy. “With continued success Prestige Supplies has plans for further expansion into Asia and Africa by the beginning of 2014, so watch this space!” c
As a strategic supplier to the travel retail environment, Prestige Supplies’ services encompass a variety of roles—that of wholesaler, retailer, consultant, distributor and warehousing solutions provider
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Spotlight on TFAP exhibitors
Fresh products
lead the way Product innovation, retail savvy and market exposure give these brands a leg up in duty free
Furla’s Candy Lifestyle adds Siberian flavor
F
urla says its Candy Lifestyle collection is enjoying major success in the Far East, and plans to make it a strong highlight at the upcoming TFWA Asia Pacific exhibition in Singapore (stand H15). This year sees the Candy Lifestyle collection expanding with new shapes including a Mini Cross Body, a trend-oriented Backpack and a Minibag pouch with shoulder strap. Material combinations include Gomma Gel with Saffiano Multirighe, Nappa Borchiata, Vit St. Siberian and Lucertolina. “Bright and funky colors such as Bouganville, Speed, Shocking, Mauve and Electric are on-trend for Gomma gel bags, while those with material combinations combine more subtle colors such as Fume and Burro with Onyx for a striped or spotted base,” Furla says.“For evening glamour there are Gomma Gel Glitter bags in silver or gold with Vit St. Lucertolina and Metal Lux in Cormo and Antik Oro.” New for 2013 is Gomma Gel Sfumata, with an unusual effect where colors ‘degrade’ from one to another throughout the body of the bag. Mauve, Shocking and Electric options, changing to Onyx, are all offered and create a range of alternatives for day or evening use. To add to the Candy bag line, Furla is now additionally offering a range of diamante charms to personalize each one. Apart from dressing up a bag, they can be used to stretch a shoulder strap and complement the textile elements. Typical travel retail prices for the Candy bags are €299-€682 (US$390$890), while the Mini Cross Body retails at €394 (US$514), the Backpack at €651 (US$850) and the Mini Satchel at €259 (US$338). One of the material options for Candy this year is Vit St. Siberian, which Furla believes is the signature material for 2013 and is present across the Autumn Winter collection. Anticipated as a strong seller for the 2013/14 season, the dynamic Siberian print has good shelf standout value, whether used as the central material theme or as a contrast trim. “For the consumer who wants to stand out in a crowd, Vit St. Siberian will be the perfect choice,” Furla says. Travel retail prices range from €339€854 (US$442-$1,115). “Asia is a vitally important market for Furla representing 40% of our total business in 2012 and with some phenomenal sales increases during the year,” says Director of Travel Retail Gerry Munday. “Sales in Macau and Hong Kong, for example, were up 123% and 42% respectively over 2011, while sales in Korea and Japan were both up 14%.” China is a rapidly growing market for Furla with 100 new stores projected to open in the next four years. “We’re seeing the growth on domestic markets reflected in our travel retail business in the region. In 2012 we opened 14 new doors in Asia and for this year we’re targeting another seven. So we’re expecting a very busy Singapore show this year and are very much looking forward to introducing the Autumn Winter 13 collection to existing and new customers.” 62
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Furla’s Grande Siberian and Grande Onyx Electric (below) bags from the Candy collection
Toscow favors floral with La Vie en Rose With floral being a major trend for summer 2013, premium jeweler Toscow has chosen to launch its latest collection, La Vie en Rose. The collection hinges on a bouquet of pink ornate roses interspersed with natural fresh water cultured pearls amid a scattering of clear crystals. “What woman can resist beautiful roses?” says General Manager Francis Ng. “Toscow combines the romance of roses, allure of pearls and sparkle of crystals to create this adorable collection.” La Vie en Rose is trend-focused, as the Spring Summer 2013 catwalk shows are all demonstrating floral as key components of the seasonal wardrobe. “Rose is an excellent emblem of love and romance and these roses stand the test of time.” Toscow says La Vie en Rose has been designed “to subtly draw attention and be the talking point wherever it travels.” While designed for casual daily wear, the collection is also well suited for summer garden party wear and events as formal as weddings. La Vie en Rose includes an ornate necklace, pendants, bracelets, ring and earrings. Prices range from US$79-$489.
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It’s not retail... ...it’s for the journey
Exclusive, treat-time solutions
NEW: Travel retail exclusive aeroplane design and cash till-point solution
Perfect Store™
Always at the heart of the shopper
Keyrings are Troika’s global best sellers
Spotlight on TFAP exhibitors Capi says accessories such as Hugo Boss cases are very popular fashionable must-haves
New Capi Global to leverage retail know-how
Capi International has announced a consolidation with Sea & Sky Supply and Dufri-Global Lifestyle to create Capi Global. Sea & Sky Supply and Dufri Global are both part of B&S International, which acquired Dufri in April 2012 and Capi’s parent Royal Capi-Lux a few months later. The formation of Capi Global is “a logical next step to bring about synergies that benefit its customers,” the company says, noting that integrated warehouse operations will increase logistical efficiency, while commercial synergies are created “by providing a dedicated assortment of consumer electronics and accessories to business partners in duty free and travel retail.” Capi Global specializes in consumer electronics and lifestyle products in the travel retail and duty free channel. General Manager Jaco Vlemingh makes particular mention of the house brand MiTone, which is a travel retail exclusive. “We’ve been developing our brand further,” Vlemingh says. “The products have brand new packaging and each one features part of a travel story. Readers are invited to finish the story on our website www.mitone.eu and write a travel story of their own. If we like the story, we will print it on a next product packaging and send the author a MiTone Bluetooth twist speaker.” Vlemingh says Capi Global’s main differentiator is its retail background, which enables it to give business partners expert advice on how to operate a profitable business in consumer electronics. “For us, it’s a combination of quality products and retail know-how. With our partners we carefully select an assortment of A-brands and niche brands and MiTone products, which suit the requirements of our business partner.” Vlemingh has noted a market shift from hardware to accessories such as headphones, earphones and cases. “Accessories such as Hugo Boss cases are very popular fashionable must-haves at the moment. We have an exclusive distribution contract for these fashion items. Accessories such as cases and covers are the ideal way for travelers to customize their smartphones or tablets.” Capi Global’s TFAP booth will feature information about Capi’s retail marketing strategy, brand portfolio consisting of leading niche brands, as well as the MiTone brand. There is also a dedicated Hugo Boss presentation. Capi Global will continue to house its operations at its current Netherlands facilities in Dordrecht and Hoofddorp. 64
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Troika sets out to charm the East After two years operating a strong dedicated travel retail operation, gift designer, developer and distributor Troika delivers to more than 100 POS around the world and boasts some very successful inflight listings, says International Marketing Manager Mirjam Sturm. Based in Müschenbach, Germany, which is between Frankfurt and Cologne, Troika sells especially heavily in Europe along with South America, but Sturm notes that Asian efforts are bearing fruit as well. “Currently we have POS at the following locations: Bangkok, Singapore, Hong Kong, The Philippines and Korea,” Sturm says. “Further we are working very successfully with Asiana Airlines. In the local market Troika is very strong in the Asian market, and therefore we believe that there is big potential in the duty free market as well.” China, Japan and Korea are turning in the best Asian results for Troika, Sturm says. The brand plans to reach the major travel players at TFAP in order to build its duty free momentum in the Asian theater. It will also present its keyring products along with the POS displays used to showcase them. Leather products, pens (roller ball, ballpoint and fountain pens) and card cases including newly developed counter display units for POS selfservice will also be shown. Keyrings are Troika’s global best sellers, Sturm says. “The sale of keyrings is an impulse purchase and they are the hallmark of one’s keys. Troika’s individual ideas for design and functionality transform ones keys into a modern status symbol.” Sturm says that besides being exclusive, innovative and high-quality, Troika’s keyrings also benefit from the broad variety of displays used to showcase the products. Troika has new individual “Charming Friends” keyring charms that can be hung on bags, bracelets or chains, Sturm says. “Charms are much-loved accessories that reveal something about their owner in a unique way. They enchant us in the truest sense of the word. The word charm evokes magic, beauty and grace.” Made with Swarovski Elements, the charms have been designed in the shape of a heart, a shamrock and a butterfly. The Charming Friends line features motifs that can be combined individually to provide a personal touch. The S-Grip “Pad” business-class iPad protector is another new offering that Troika will be highlighting. The S-Grip material used for the protector is made of 100% polyurethane and combines the soft feel of leather with the functionality of high-tech fabrics. The protector has a magnetic fastener. Troika says that S-Grip combines premium resistance and durability and is easy to clean, even when heavily used. “Its super-soft touch will win you over in an instant—a material as soft as leather yet as sturdy as a synthetic fabric,” the company says. S-Grip is guaranteed free of hazardous azo dyes, which means “it not only protects what's inside, but also the environment.” The S-Grip “Pad” businessclass iPad protector will be offered by Troika at TFWA Asia Pacific
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Spotlight on TFAP exhibitors
Colorful Licenses takes on Brunotti’s brand build Brunotti has announced a new licensee for the development of the Brunotti bag collections. The company Colorful Licenses signed on to develop the Brunotti bags as of January 1 this year, taking over the license from Dutchbag BV. Brunotti says that the new partnership gives it the chance to pursue further international expansion and build the brand experience. Colorful Licenses started Colorful Licenses is the new licensee for Brunotti bags out developing the Oilily lifestyle products in the 90s. The company quickly developed a broad portfolio of cosmetics, perfumes, bags and lifestyle products from well known brands like Pip, Quick and Leontine Hagoort in addition to Oilily. Today Colorful Licenses has a worldwide distribution network with representatives on every continent. Cees Homburg, the Founder and Managing Director of Colorful Licenses, is pleased with the new addition to the brand portfolio. "Besides the brand Quick, we do not have another sports brand in our range,” Homburg says. “Brunotti is developing towards lifestyle, which offers many opportunities for a wide range of products for men, women and children. Also Brunotti has a strong and sporty brand experience." General Director of Brunotti Henk Bergsma is similarly pleased with the new license. "After six years of cooperation with Dutchbag, this is a new and exciting step and it fits into our present time and designs. Innovation in range, quality and international expansion is important in these times and we need it to allow the growth that we have in mind. With Colorful Licenses we have found a suitable partner." Dutchbag maintained production and supply for the Brunotti Bags of the 2012 Winter collection up to the switchover date. They have said that they will honor all warranty and service work for previously delivered goods.
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British American Tobacco Global Travel Retail Asia Pacific continues innovating British American Tobacco Global Travel Retail Asia Pacific (British American Tobacco GTRAP) has announced that it plans to showcase two super-premium product offerings in Asia Pacific this year, including Dunhill Gran Cru and State Express 555 Platinum. Dunhill Gran Cru Special Reserve Uganda Taste contains 61% Virginia, Burley and delicate Maryland tobaccos acquired from the Nile Valley in Uganda during 2010, which proved to be a special year for the tobacco leaves. Justinus Nurman, Head of Global Travel Retail Asia Pacific at British American Tobacco GTRAP, tells us that after 18 months of aging, the leaves were complimented with the finest Maryland and Oriental tobaccos. “The resulting sensation has a deeper, toasted experience with hints of spice and cedar wood,” he says. The concentration for Nurman and British American Tobacco GTRAP is to maintain a given brand's identity while at the same time making sure new ideas are regularly being brought to the table. The above offering is a good example of this. By giving consumers a new way to think about the Dunhill brand, British American Tobacco is effectively enhancing the smoking experience. Nurman concluded by telling Asia Duty Free that British American Tobacco GTRAP is present in all duty free channels in the region and sees opportunities for 2013: “We see a growth market for travel retail proven by the increasing number of travelers through major airports and their increasing spending power.”
Dunhill Gran Cru Special Reserve Uganda Taste contains 61% Virginia, Burley and Maryland tobaccos acquired from the Nile Valley in Uganda during 2010, which proved to be a special year for the tobacco leaves
Enjoy the Chocolate Side of Life
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Spotlight on TFAP exhibitors Travalo Touch Rollerball, Swarovski Edition
J. Cortes focuses on continued growth in Asia on the back of popular Neos brand Asia Duty Free recently had the opportunity to speak with Tissa Dissanayaka, Export Manager for the Middle East, Asia Pacific and South Asia at J. Cortes, about business in the region of late. He tells us that progress was made in Indonesia through the forging of a new partnership with Plaza Bali Duty Free which resulted in listings in Jakarta International Airport and Bali Ngurah Rai International Airport. “J. Cortes was also successful in entering Bandaranayake International Airport in Colombo, Sri Lanka with World Duty Free Group at the beginning of 2012,” Dissanayaka says. “Despite spatial constraints in the cigar category at Swarnaboomi Airport, our combined strategies of entering new markets and increasing penetration yielded 17% year-on-year growth in 2012.” For 2013, J. Cortes is taking a very targeted approach in Asia travel retail. “Every single location is important for us,” says Dissanayaka, “and different locations pose different challenges and require different strategies.” Kuala Lumpur, Singapore, Indonesia and Vietnam are all on the radar for either increasing existent business or securing a presence. At this year’s TFWA AP exhibition, J. Cortes plans on concentrating on its popular Neos brand, which generates the lion’s share of sales in travel retail. “Although new product innovations are certainly in the pipeline, we don’t have plans to introduce them at TFWA AP this year,” explains Dissanayaka. “Our focus in Asia is the Neos Aromatic range, which is naturally appealing to Asians as they are generally variety seekers. Thus, our brand theme, messages and packaging focus on highlighting these Asian-specific elements.” For more information on J. Cortes, attendees to this year’s Singapore exhibition are encouraged to visit the company at booth J10.
Travalo to showcase two new luxury Swarovski products at TFWA Asia Pacific Building on the success in the Asia Pacific region last year and noticing an increase in gift sales, Travalo has answered the demand for higher value luxury Travalo products with two new launches—The Touch Rollerball, Swarovski Edition and the Skyline, Swarovski Edition. Both novelties will be launched at this year’s TFWA AP show. The Touch Rollerball is available in a pack of two and features signature Swarovski crystals. The two rollerballs can be separated via a perforated seal to tie in with the region’s gift giving culture. Premier Portfolio secured listing of this product on Singapore Airlines via DFASS. The Skyline has the Travalo patented refilling system with Swarovski crystal details. Initially presented as an inflight exclusive, Skyline is available in gold, rose gold, silver and c pink.
The Neos Aromatic range is a major focus for J. Cortes in the Asia region this year
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Skincare Report
Retailers insist that personalized service and advice is an integral part of a quality skincare offer
Beauty contest
BY
P. CONVERY
Skincare is one of the biggest-selling categories among travel retailers in Asia. With existing markets developing and new ones opening up, its importance will only grow as brands and retailers compete for increased spend
La Prairie expands its White Caviar collection to include four new complementary items
I
n March this year, one of the world's biggest cosmetics firms announced a plan to hire thousands more staff over the coming years as part of an aggressive expansion in Asian markets. Now, Estée Lauder's announcement serves as a bellwether for the industry, as Asian consumers step up their purchases of skincare products and the enormous potential of the Chinese cosmetics market continues to develop. As it expands its operations in Asia, Estée Lauder which in addition to its own brand also boasts a portfolio that includes Clinique, Origins, MAC and Aveda - expects to achieve annual sales growth in the region of around 8%. It outstripped even that figure last year, with regional sales up 10%, thanks largely to sales in China, its third-largest market. Rival L'Oréal - the biggest beauty company in the business, with brands including Lancôme, Kiehl's and Yue-Sai - grew its sales on the Chinese mainland by 12.4% last year. China is also L'Oréal's thirdranking market. La Prairie expects to grow in the double digits by increasing its penetration in Asia, which already accounts for almost half of its travel retail business. "Out of our top 10 travel retail counters worldwide, seven are in Asia," says La Prairie President Patrick Rasquinet, adding that Greater China accounts for the biggest portion of its sales in the region. 70
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Also betting on China is American giant Procter & Gamble, which has launched four new brands on the mainland in recent months. It's little wonder that the world's top-ranked cosmetics and skincare companies are lining up for a slice of the action in Asia: an international survey conducted by Elle magazine in January found that Asian women are among the biggest spenders on beauty products, especially those between the ages of 25 and 34. That's a finding reflected in La Prairie's own research, which shows Asian women using more skincare products than consumers in most other markets. "On average they use 10-plus products a day," says Rasquinet. Teresa Li, Department Director of General Merchandise at King Power (Hong Kong), says that skincare accounts for 70% of all sales in the retailer's perfumes & cosmetics category, which itself is its second-biggest
Estée Lauder introduces Osiao, a new brand developed for the unique needs of Asian skin
anything that can make you look lighter is a key element for them.” In both India and Greater China, that focus is all about status and projecting an image of wealth and sophistication. And that's a dynamic that retailers and brands say works in their favor, encouraging customers to be experimental and actively to pursue new products. Li says: "Our customers are loyal to existing brands, but they're also very open to new products, especially nowadays with so much advertising. And even though mainland Chinese customers may not be so open minded as customers from more developed countries in the region, they're still willing to try new things, especially if it shows their status. If something's on trend, they want to know about it and they want to have it." Piovesana says international brands with an established reputation are still what Nuance-Watson's customers want, but that they're also willing to branch out. "There's a high probability of them trying out new products from their favorite brands," she explains. "Also, Asian customers are used
Nuance-Watson (HK) puts its frontline staff through a thorough training program before sending them out to the shop floor to advise customers
“Our customers are loyal to existing brands, but they're also very open to new products, especially nowadays with so much advertising.”
Teresa Li, Department Director of General Merchandise, King Power
category after the duty free mainstay of liquor & tobacco. "It's very crucial," she says, adding that King Power's biggest customers are mainland Chinese. Alessandra Piovesana, Regional Managing Director of NuanceWatson (Asia), says skincare makes up more than half of the retailer's beauty business, and that mainland Chinese are also a vital and fastgrowing customer segment. Delhi Duty Free Services (DDFS), which operates the duty free retail in Terminal 3 at the Indian capital's hub airport, is another retailer that relies heavily on skincare to generate revenue. "P&C is our second-biggest category," says DDFS Chief Executive Steve O'Connor. "Whiteners are huge, moisturizers too. It's a cultural tradition - Indians want to look whiter, so moisturizers and
to a longer beauty ritual - typically a daily skincare routine involves more than five or six products, so it's not surprising that they're willing to try new items." "They're brand-loyal, but in India it's all about differentiating yourself from others," says O'Connor. "They're very eager if something is new. They come to the shop and one of the first questions they ask is 'What's new?', or 'What offers are on?'. They're very eager and dynamic in that regard. They want to know what's new because it can differentiate them from others, so if there's anything new, they're eager to look at it and try it." Customers across the region may be a lucrative market for the latest products, but retailers are keenly aware that - more than in most other categories - skincare products don't always sell themselves. They www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING
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Skincare Report
A King Power (Hong Kong) store at Macau airport. The retailer says mainland Chinese make up the majority of its customers and that the mainland market for skincare products is developing fast
say fielding staff that actively engage with potential customers is a vital part of driving sales. "Customer service is very important," says Li, "so we provide internal training regularly for the brands and we also provide very intensive training for beauty consultants. We encourage customers to learn about more products and try to educate them. Mainland Chinese travelers are our biggest customers, and although [many are] very rich nowadays and may know the brands through advertising, they may not have deep knowledge of the products, so that's one of the things that we focus on." O'Connor says: "Interacting with customers is imperative. It's imperative in Indian culture, never mind anything else. People here like that interaction - they want people to tell them about the products, they want that service. It's not like in the West, where you'll only go looking for assistance if you're not sure about the product and have questions. In India they want you to sell it to them and give them all the information and help - it's a whole process." Li says promotions are another key means of driving sales. "We run intensive promotions every month for the major brands, and we tie that up with marketing campaigns when the major brands introduce 'newness', so whenever they launch a new product we'll run a promotion with them, and like all duty-free operators we run staff-incentive promotions linked to sales targets and gift-with-purchase offers for customers." Late last year, EstĂŠe Lauder made arguably its most direct appeal to Asian skincare consumers, launching Osiao, a brand specifically designed with the Asian market in mind. But Li says that skincare brands The skincare market in Asia has huge potential, thanks in no small way to the large number of beauty products Asian women typically use
have subtly been targeting the Asian market for many years, citing such well-established names such as Japanese cosmetics giant Shiseido. "Even though they use some Western celebrities in their advertising, their brand positioning already suggests they're targeting Asians," she explains. "More recently, EstĂŠe Lauder has used quite a number of Asian faces as models. That's one of their strategies for developing the mainland Chinese market. And L'OrĂŠal has used celebrities like Gong Li and a number of other Chinese actresses. They also manufacture some of their products in China, and the formula is more tailor-made for Asians." And it's not just Asian women that are in the sights of the big beauty brands. An increasing number of men are also scrubbing themselves up with the help of male skincare products. "Men are becoming much more focused on skincare, particularly younger men in India," says O'Connor. "They're all into skincare. Everybody's looking for an advantage - anything that can give them an advantage in their career or in business or whatever, so even the guys are quite vain. They want to look good and be presentable. In arrivals last year, we put in men's products and they just flew out, so we're going to do a lot more of them there." Li says: "I think the sales momentum will continue, because even men nowadays are getting used to using skincare products. They're not seen as luxury items but as things for daily use." As the major skincare brands battle it out for their share of the world's most dynamic and potentially most lucrative beauty market, travel retailers looking to cash in on the booming popularity c of their products have their work cut out for them.
Yves Rocher
Harnessing nature’s power Elixir 7.9 features seven plants and nine anti-aging patents that work together to double the anti-aging effectiveness of the user’s usual skincare
Yves Rocher’s Ovale Lifting Serum is a high-performance concentrate that redefines the facial outline by smoothing wrinkles
Ambre Noir, Yves Rocher’s new masculine fragrance features notes of patchouli, vetiver and tonka bean
Yves Rocher recently introduced its botanical innovations to travel retail and is already seeing signs of success
B
eauty brand Yves Rocher is performing strongly in the first trimester of 2013, following up on the double-digit growth it enjoyed in 2012 when compared to 2011. At this year’s TFWA AP show, Yves Rocher will present two main launches: its Ovale Lifting Serum and Ambre Noir fragrance for men. The Ovale Lifting Serum is a high-performance concentrate that redefines the facial outline by smoothing wrinkles. The serum creates an anti-slackening wrap around the skin, which gives the appearance of an instant lift. Ambre Noir is Yves Rocher’s new masculine fragrance. The oriental and woody fragrance features notes of patchouli, vetiver and tonka bean. Yves Rocher has several opportunities in travel retail in Europe this year, specifically in France, Turkey, Ukraine, Romania and the Czech Republic, and is looking to repeat this success in Asia. Zone Director Eastern Europe and French Overseas Territories HenriBernard Bedoin believes retailer buying trends have changed when it comes to the skincare and cosmetics category. Bedoin feels retailers are looking to discover new brands and products with natural ingredients that are both effective and safe. As for consumers, Bedoin feels that in Asia they’re looking for safe products with natural ingredients. The region’s bestsellers include Elixir 7.9, which will have a new launch at this year’s TFWA World Exhibition in Cannes, and Hydra Vegetal Serum. Elixir 7.9 is paraben-free, and features seven plants and nine anti-aging patents that work together to reinforce the anti-aging effectiveness of the user’s usual skincare portfolio. It can be used every day in the morning and evening under everyday skincare, or alternatively, as a one-month intensive treatment two to three times per year when the skin needs it. To continue meeting customer expectations and demands, Yves Rocher organizes meetings to discuss current trends. “We organize consumer meetings in many countries to understand the trends and to feel if our roots and pillars are in accordance with consumers’ expectations,” says Bedoin. It was through this process that the company discovered the demand in Asia for natural ingredients, product safety and efficacy. In addition, Yves Rocher’s researchers are constantly analyzing the properties of plants, specifically their ability to survive, adapt and compete in their natural environments. This is what Yves Rocher calls “Plant Intelligence.” By decoding the biological functions of plants Yves Rocher is able to discover new active ingredients for cosmetics. Bedoin feels current consumer trends mirror the evolution of the skincare category as a whole. “Skincare is evolving towards greater efficacy, natural tolerance, historic ethics and natural ingredients,” he says. “This is what we have claimed our products are about for several years through Botanical Beauty.” Yves Rocher defines Botanical Beauty as the infinite power of plants revealed and enhanced by science. Aside from Botanical Beauty, Bedoin feels Yves Rocher’s innovation lies also in the brand’s “sensoriality” and biodegradability. Asia, Turkey and Russia currently offer the greatest opportunity for the brand’s growth, and Yves Rocher plans to expand its presence in several airports in Europe and Asia while it continues to use inflight magazines to proc mote its products to consumers. www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING
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Beauty
Terre d’Ivoire from the “Star Eyes” palette Eclat d’Azur from the “Doll Eyes” palette
News
Collistar thrives at 30
To celebrate its founding in 1983, Italian cosmetics pioneer Collistar will showcase a five-product lineup at this year’s TFWA AP tradeshow in Singapore, with a heavy accent on special anniversary editions. “Now that Collistar has gained international presence and prestige we have decided to celebrate our first 30 years with the Anniversary Collection, a special limited-edition expression of extreme luxury,” the company says. “For Collistar, this marks the beginning of a new Golden Age.” The Anniversary Collection consists of five top-selling gold-themed products. Leading off is a special edition of Deep Moisturizing Cream Gold, based on the patented hydrating NMF Complex. The cream, also available in an Extreme version for very dry skin, provides a vitamin and protein boost in a light, fondant texThe updated Puro Lipstick formula is ture. The special edition formula has been available in six colors enriched with colloidal gold, which Collistar says “brightens the skin with a natural, transparent and stunning glow, while the cream retains its original whiteness.” This year Puro Lipstick, originally released in 1991, has been issued in an Icon Lipstick Gold limited edition. The lipstick is presented in a new case with gold finish and a delicately scored “sunray” surface recalling the rays of the sun. The revised formula has been issued in six shades: petal, nude, magenta, cherry, peach blossom and icon red. Collistar’s Special Perfect Body Line has been complemented with the Talasso Scrub Gold exfoliator. The new formula contains gold glitter mixed with a blend of 90 types of sea salt and plant oils. The maxi-jar is encircled with a gold bracelet featuring two charms depicting the Collistar logo and the number 30, symbolizing the years of the brand. The special edition Supertanning Water Gold microspray tanning water is part of Collistar’s Special Perfect Sun Line. The gold version incorporates gold microparticles suspended Collistar’s in the formula, and the bottle features golden charms. Talasso Scrub Gold exfoliator Finally, in the aromatic water range, Collistar will show30th anniversary case Profumo di Benessere, Profumo dei Sensi and special edition Profumo della Felicità. Profumo di Benessere is a unisex body water; Profumo dei Sensi is a floral-oriental body water with silk proteins and moisturizing extracts, characterized by floral, vanilla, incense and woody notes; and Profumo della Felicità, launched in 2011, features hints of grapefruit, mandarin, lotus flower, pink pepper, bilberry and osmanthus.
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Lancôme’s new Hypnôse Palette adds professional effect L’Oréal Group’s Lancôme has introduced “Hypnôse Palette,” a “high-expertise” eye makeup offered in a range of palettes, each with different shades and effects. “Doll Eyes” emphasizes natural shades for a wide-open effect; “Star Eyes” furnishes more upfashion harmonies for a sophisticated look; and “Drama Eyes” relies on intense smoky shades for what Lancôme calls “spectacular” impact. The Hypnôse Palette black lacquer case contains four shades and built-in eyeliner, with four harmonies per look. The new range also comes with all-new applicators to extend the user’s blending and layering options. The applicators are twice the length of traditional applicators, and Lancôme has added magnets so users won’t lose or drop them during application. The sponge side of the applicators enables the application not only of intense color blocks but also of light touches to the inner corner. The flexible flocked spatula allows the user to take up more precise quantities, and the natural-hair brush enables delicate color blending and adjustments to intensity. Lancôme says that the key to Hypnôse Palette is its “Wet technology.” This works by dispersing eyeshadow pigments in fluid. As the fluid evaporates, it leaves a dense color concentrate on the skin with even and optimally dispersed pearl pigments. Lancôme says that Wet technology keeps the pearl pigments from being crushed as they are in some other compact eyeshadows. “Pigments express their full color potential,” Lancôme says. “Result: ultraluminous make-up, with perfect coverage and hold.” Wet technology also enables the eyeshadows to be worn wet or dry. “Applied dry,” Lancôme says, “the texture veils lids in an ethereal shade to subtly illuminate eyes.” Applied wet—preferably using a toner for a more supple feel—the texture becomes slightly creamy and works lids over “in a refreshing, silky film for a sensual result” with added intensity and hold.
Polaar
At this year’s TFWA Asia Pacific show, Polaar will exhibit Ice Pure and Ice Repair
Arctic
advantage Polaar’s unique selling points position the new brand for success in travel retail BY HIBAH NOOR
B
eauty company Polaar has a decidedly unique selling angle that must be the envy of its competitors: according to Founder Daniel Kurbiel, every product the company manufactures and sells is derived from “polar-active” ingredients from the Arctic or Antarctic. Kurbiel comes from a family of polar scientists who have been involved in arctic research for 35 years. “Eight years ago,” he says, “we decided that we have technology that no one else had, which are polar active ingredients, and we could put it in cosmetics. No one has done this. These microorganisms are really very potent.” The extreme cold weather in the Arctic and Antarctic is the key to the ingredients Polaar uses. Sometimes no photosynthesis occurs in arctic regions for six months of the year, with temperatures reaching minus 70 Celsius. “It’s extremely harsh,” Kurbiel says, “but as they say, ‘what doesn’t kill you, makes you stronger.’ It’s the same thing with our ingredients. It’s the best natural selection and breeds the most potent ingredient in the world. It’s really from the worst of conditions that the best cosmetics come.” One active ingredient is PPNF3, defined as a “glycosylated peptide extracted from a cryophilic (i.e. living in extreme cold) organism.” The peptide has selfhealing and anti-aging properties that enable it to restore collagen and elastin levels. PPNF3 is used in Polaar’s IceRepair Fundamental Anti-Wrinkle Cream and Fundamental Anti-Wrinkle Serum. The cream fights wrinkles and offers hydration and nutrition, targeting all of the skin’s layers. The serum’s wrinkle-correcting action kicks in after the first application, Polaar says. Another key ingredient is Arctic Cotton, a plant that thrives in extreme Arctic conditions. The plant is active in Polaar’s three-product Arctic Cotton range: Micellar Water, Velvety Cleanser gel and Gentle Scrub. Arctic Cotton contains what Polaar calls the most potent and purest natural antioxidants. The plant is high in glucids, which nourish skin cells, while high levels of minerals help to revitalize the skin. Flavonoids—natural pigments—add soothing properties. Polaar has a strong foothold in the domestic market in France, where it is offered in more than 800 stores. Products are also sold in South Africa, the UK, Belgium and elsewhere in Europe as well as in Dubai, Morocco, Algeria, Martinique, Guadeloupe, Tahiti and South Korea. Kurbiel says the products are “surprisingly affordable,” with face creams starting at €35€40 (US$45-$51). 76
ASIA DUTY FREE & TRAVEL RETAILING MAY 2013
“When we conceived our products we didn’t know it, but we were already travel retail oriented.”
Daniel Kurbiel, Founder, Polaar
Consumer research is a big factor in Polaar’s success. “We talk to existing customers, what they like, what they don’t like,” Kurbiel says. “We also talk to non clients—how can you make them buy Polaar? What are their needs?” In new markets one question Polaar explores is how much male customers shave. If they don’t, what is their main activity? (Kurbiel suggests that cleansing is the likely next answer, at least in Asia.) “When we conceived our products we didn’t know it, but we were already travel retail oriented,” Kurbiel says. “These are practical products, small in size, not bulky, easy to use. Our client is a travel retail client.” Asia in particular is a key target for growth in travel retail, he says. “We think our very original unique positioning will appeal to the Asian population.” Given the sheer size of the region, Polaar will focus on a few countries initially. At this year’s TFWA Asia-Pacific event, Kurbiel says that Polaar will exhibit the brand “as a whole,” without focusing too much on specific products or ranges, though he does note that Ice Pure and Ice Repair will be front and center. “The travel retail world doesn’t know about us yet, so the entire range has been renewed for this show,” he says. “We’re a new brand, talking to new customers. We want to create awareness in the Asia domestic market and we’re seeking a local and duty free distributor for Asia. If you find the right distributor the sky is the limit. We’re excited about what’s c going to happen this year.”
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Infiniti Red Bull Racing drivers Mark Webber and triple world champion Sebastian Vettel (pictured) sport Red Bull’s Racing eyewear
To help demonstrate the power of Maui Jim’s polarized sunglasses, the company has developed the Polage (Polarized Light Collage), which improves color resolution and enhances contrast while eliminating glare when seen through Maui Jim lenses
Maui Jim bulks up for Asia
Sunglass News Red Bull’s Racing Eyewear collection gears up for the travel retail market
When the Red Bull Racing Eyewear collection was launched in 2012, among its first customers were several airlines with a premium reputation. The range has since expanded across most European countries, into key markets in Asia, the Middle East and Canada, as well as Australia and South Africa. It is now following on its success by turning to the travel retail markets in those regions. As the company says, “success proves we’re right to drive the business by opening the world of Red Bull Racing Eyewear to duty free customers as well.” The Red Bull Racing Eyewear connection leverages the brand’s highvisibility racing sponsorships with precision high-tech design and the unusual, sporty contours that have become the collection’s signature. “The shades worn by Infiniti Red Bull Racing drivers Mark Webber and triple world champion Sebastian Vettel win the race by their sophisticated combination of technology and design,” the company says. On the Formula One side the eyewear accents protection, light weight and a high degree of tensile strength. The Red Bull Racing Eyewear collection develops the same elements into products positioned for optimum fit and comfort. During the TFWA Asia Pacific show in Singapore, Red Bull Racing Eyewear will present the new range of Carbon styles, Racing and Sports Function sunglasses. The company plans to establish Red Bull Racing Eyewear with key duty free operators in Europe and Asia to drive distribution within the travel retail channel. In 2013 Asia and Europe will be the focus for growth, with media selection in travel retail focused on inflight magazines and online channels. “Shopping on airplanes and at airports is for a lot of people who travel ‘part of the journey,’” says Karl Stoiber, Sales Director Travel Retail. “Red Bull Racing Eyewear is meant to be an enrichment both while traveling The Red Bull range has expanded and ‘on the pole position of life.’” across most European countries and into key markets in Asia, the Middle East and Canada, as well as Australia and South Africa
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Maui Jim has announced the appointment of Jeremy Tan as Travel Retail Manager for Asia Pacific. “Jeremy brings a wealth of travel retail experience and expertise to Maui Jim as this fast-moving brand continues to expand across the region,” says Giles Marks, Director, Global Travel Retail. In his previous position with Paton’s Macadamia Ltd., Tan was responsible for both travel retail and domestic markets in Asia over the last five years, successfully establishing the brand with major retailers in the region. Tan’s official start date was April 16, working from his home office in Melbourne, Australia, and reporting to Marks. Tan will join Marks at Maui Jim’s booth (stand K9) at the TFWA Asia Pacific show. Maui Jim’s goal in Asia is to enhance the brand presence with the major retailers in the region with unique promotions and customized displays. Maui Jim is so far just “scratching the surface” with two or three other major operators, Marks says, so there’s still lots of untapped potential. A recent win came with a position in downtown Taiwan with Ever Rich, which paves the way for a move on the city’s airport, Marks says. A domestic distribution centre opened in Hong Kong two years ago, and Maui Jim is now contemplating a service center in China for Asian customers, along the lines of what the brand is doing in Sydney. “It will show them our commitment to the Asian retailers and consumers,” Marks says. “Maui Jim is serious about operating not just globally, but having a strong foothold in Asia.” One challenge in Asia is the strong preference Asian customers have for established fashion brand names. “It’s a challenge for us because we don’t have the history of some of the other brands that have been out there, and we’re not affiliated with fashion houses,” Marks says. “We’ve been able to work through those challenges by showcasing the features and benefits of the product.” Fortunately, he says, Chinese buyers in particular are very focused on features and benefits, and polarized sunglasses. Marks says that Maui Jim’s “Polage” display gives the brand a critical advantage wherever there’s space to display it. The unit has been customized by Austine, an LA-based designer who works exclusively with Maui Jim and actually signs each one. The unit educates customers about how Maui Jim lenses reduce glare. Polage was deployed in Hong Kong a few years ago and Austine customized a unit based on Hong Kong Harbour, with positive results. More recently in Europe, Austine and Maui Jim created a Swiss alpsthemed Polage for Nuance’s store in Zurich airport.
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Royal London
Royal
recognition
At this year’s TFWA Asia Pacific trade show in Singapore, Royal London will be focusing its main efforts on profiling its new collection of British designed watches featuring high-end automatic movements
Royal London’s prestige reputation promises success in travel retail
R
oyal London may be relatively new to the travel retail market, but Raj Bhudiya, Export Manager for the Condor Group, is optimistic that the brand’s first steps in this new direction, buoyed by its solid reputation in traditional retail channels, is a good predictor of success. Bhudiya feels that travel retail will prove to be a good new platform to further develop the brand’s already well established profile. “We exhibited at the ARC show in London last year and we have sold products to Air Arabia and to cruise ships via Dufry,” Bhudiya says. “Our brand name is very well received in peoples’ perception, as most have heard of London and the British Royal family. They connect the two. Mating this with a high quality product, the brand is gaining ground in many markets around the world.” At this year’s TFWA Asia Pacific trade show in Singapore, Royal London will be focusing its main efforts on profiling its new collection of British designed watches featuring high-end automatic movements. Bhudiya notes that this type of watch is currently enjoying very good traction with the watch-buying public. The new watch collection, which features men’s and women’s models, incorporates the high-profile and well respected Citizen Miyota automatic precision movements, and is being sold at what the brand says are “exceptional” value price points. The full range boasts 11 individual designs and 52 stainless steel models, some of them featuring gold plating. The watches in the range include the date and day, which work 80
ASIA DUTY FREE & TRAVEL RETAILING MAY 2013
on Skeleton movements. A multi-function power reserve model has been added to the range for the initial launch. In releasing this new collection, Royal London states: “Considerably more expensive than other inferior quality automatic timepiece movements, Citizen Miyota automatic parts are not used in any other watches produced within the highly competitive price points offered by Royal London, so you can be assured that this latest range really is the best in its class.” The company has been careful to emphasize that its automatic watches use only genuine Japanese made Citizen Miyota movements. This positioning, the brand says, ensures that stores can sell a Royal London watch with the utmost confidence. Royal London watches are designed by the company’s own appointed designers, which Bhudiya says ensures that the end products are unique, offering more than mere “off-theshelf” designs. He adds that the company has engaged a Swiss-trained British watch designer and has given her the task of developing new collections on a regular basis over the course of the year. Looking ahead, Bhudiya expects that the Asia market will offer the greatest growth potential for the brand. Europe, where Royal London has already developed good distribution into the high street retail market, is lagging somewhat at the moment thanks to the region’s economic uncertainties, but the brand has started a joint venture in Germany and the French market is coming along nicely, he says. And he is hopeful that TFWA Asia Pacific will give it the opportu-
nity to develop contacts with buyers from the Asia, a huge and high-potential market where Royal London has already made a start with distribution in Indonesia and Vietnam and is actively pursuing further potential business. Royal London’s media attack plan for duty free is still in its early stages, Bhudiya says, with the brand as new as it is to the travel retail side. “However,” he says, “we have put many adverts in trade magazines in a few countries such as Belgium, Germany, Austria and Ukraine. Our distributors in some countries have put adverts on bus stops, c street furniture, rickshaws, etc.”
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La Perla
A sophisticated
foundation
For lingerie brand La Perla, success in travel retail comes down to a sophisticated product offering BY MELISSA SILVA
W
ith new lines, several store openings and first-time exhibitor plans, luxury lingerie brand La Perla is enjoying a very successful year. As a relative newcomer to duty free, La Perla’s key to success lies in sophistication, quality and innovative design. Asia is a strong market for the brand and Managing Director Andrea Bonardi believes the reason is the Asian consumer’s interest in sophistication, quality and design. “Consumers are increasingly looking for quality and innovative design, less for the brand as such,” he says. “This is a very good development that we are very happy about considering the product we sell. It seems like there is an acceleration of sophistication amongst luxury consumers.” Sales in Asia are up about 20% on average this year from last, making the region one that offers the greatest growth for the brand. At this year’s TFWA AP show, La Perla will be presenting its Fall/Winter 2013 collection, notably its new Black Label line, which Bonardi describes as a very edgy and sensual series, one that he feels will perform well in the brand’s airport stores. For Spring/Summer 2013 the brand has two collections: “Sicily de Luxe,” the new beachwear collection, and “Sicilian ’800 style,” the new lingerie collection. Sicily’s landscape, specifically multi-colored tiles and tapestries and baroque buildings, serve as the inspiration for the designs in Sicily de Luxe. Colors include burgundy, sage green, terra-cotta, sky blue, yellow, white and black. The collection features unconventional swimwear materials and accents such as traditional lace, Swarovski crystals, bright stucco-work and embroidery. The design scheme in the Sicilian ‘800 style collection harkens back to 19th century Sicily’s baroque palaces, society balls and boudoirs. The collection features bows, lace inserts, hooks, strings, pleats and embroidery along with period-inspired colors such as sage, green, terra-cotta, corn yellow, pink, beige, white and black. Lace is combined with mesh inserts crossed by veins that simulate the 82
ASIA DUTY FREE & TRAVEL RETAILING MAY 2013
whalebones of corsets. Short petticoats also make an appearance in the collection. La Perla also continues its creative collaboration with Jean Paul Gaultier this season with both beachwear and lingerie. For beachwear, La Perla has edited one of the best known Jean Paul Gaultier garments, the Cage Bustier, with a cage motif that becomes the principal detail of the collection’s bathing suits and dresses. La Perla is busy this year with store openings in both the domestic and travel retail markets. “We are planning about 15 new openings in 2013 across the world,” says Bonardi. In the domestic market, La Perla is opening its flagship store in Ginza, Tokyo, which Bonardi says is a major breakthrough for the brand in Japan. Later this year in September, the brand will open its first flagship store in Seoul in Gangnam. In travel retail La Perla will open a store at Sydney Airport in June, its third airport store in the APAC region. “In other markets, development plans are moving at a good pace in the Middle East, with openings in Abu Dhabi and Saudi Arabia as well as in the former Soviet Union—a particularly strong region for us—with two more openings in Moscow, Baku and Kaliningrad,” Bonardi says. La Perla is also in negotiations with a partner for the opening of a store in Munich. Presently, the brand’s top priority is to open more and more airport stores. “Our strategy is to open in airports through travel retail operators that are better equipped than us to work in the industry,” Bonardi says, adding that with the opening of new stores, the travel retail team will have to grow to accommodate the brand’s partners. Looking ahead, this fall will see La Perla participate in the TFWA World Exhibition in Cannes for the first time, where Bonardi expects to see a strong acceleration of the brand’s travel retail business. La Perla also Pieces from La plans to focus more on the Latin Perla’s “Sicilian ’800 American market, where Bonardi feels style” collection feature delicate lace there is still untapped potential. c inserts, hooks and
strings, reminiscent of 19th century Sicily
Misaki
Misaki highlights it’s “Summer Road Trip” collection at TFAP
Fashion forward Pearl jewelry leader Misaki enjoys rapid growth in travel retail BY
84
HIBAH NOOR
ASIA DUTY FREE & TRAVEL RETAILING MAY 2013
ewelry and watch specialist Misaki’s well defined identity is one of the secrets of its success, says Deputy Head of Sales Stefano Marazzato, who believes that current retailer buying trends tend to focus on distinctive brands. The Asian market, of course, has its own unique preferences, notably favoring more classic designs such as simple pearl pendants with matching studs or classically styled pearl sautoirs with a twist. “In Asia, Misaki’s interesting color combinations or design touches, such as crystal pavé or silver beads, are particularly appreciated,” Marazzato says. When it comes to Misaki’s watch designs, the pearl designs have proven to be most popular with Asian buyers. “Our Asian consumers also generally look for quality cultured pearl jewelry items for special occasions like wedding gifts.” Misaki’s winter collection “Glam Reloaded” has been especially successful in Asia, Marazzato says. “The Cleopatra set was a bestseller, and its graphic shape and vintage feel were particularly appreciated. In general, elegant pearl pendants such as our Cherish heart-shaped pendant and colorful pearl sautoirs that add an easy touch of style to any look work very well.” Misaki offers a varied product assortment to cater to the needs of a range of different customer tastes, Marazzato says. “We offer fashionable pieces that combine pearls with leather and other innovative materials as well as more classic pieces. Our thematic twice yearly jewelry collections always have a strong artistic influence and showcase trendy and modern creations.” Misaki’s international design team develops its creations by analyzing marketplace trends and finding artistic ways to incorporate these into the brand’s jewelry designs. Marazzato has noted that the jewelry category is increasingly embracing a strong fashion connection. “Major fashion brands are now developing their own fashion inspired jewelry lines,” he says. “Misaki is a pioneer in the development of trendy pearl jewelry designs, making a link between pearl jewelry and the most advanced trends. We continue to innovate by integrating more original materials, colorful combinations of pearls, semi-precious stones such as white jade and also more gold plating in our designs, as you will see in our Summer Road Trip collection.” Marazzato says that Misaki’s travel retail sales in 2012 advanced at a double-digit growth rate, riding the wave created by the pace of the brand’s new openings and supported by the development and growth of the Misaki self-service offer, which is increasingly well represented in duty free locations around the world. The airline business has also increased at a double-digit rate year over year. At the TFWA Asia Pacific Singapore show this year, Misaki will highlight its new “Summer Road Trip” jewelry collection, which Marazzato defines as “a wildly chic collection with a free spirited and young-at-heart ethos, perfect for a summer getaway.” The new men’s and women’s watch collection, including the Shark range, will also be prominently featured. To heighten in-store activity and grab consumer attention, Misaki has developed a new furniture design concept which features LED lights and a focus on more modern aesthetics. Misaki will be implementing this new furniture in the coming months as it embarks on a major renovation of its network of duty free points of sale. Right now Misaki anticipates that the majority of its growth will stem from the Middle East, Asia and Russia. “We are particularly confident of the growth potential of our brand in India,” Marazzato says, “where we will be present in several points of sale in the coming month and where we will be deploying a complete marketing and PR strategy with our new partner.” Misaki adapts its marketing approach depending on the market/category being addressed, but Marazzato says that in general the brand communicates its messaging to the end consumer through advertisements in inflight magazines, online and in the consumer press, by means of billboard signage and through celebrity product placements. c
Arté
Arté
advances Premium Spanish gem house continues to build on a century-old artisan reputation
W BY
HIBAH NOOR
hen the originators of Arté - the Barranco family decided to exhibit their passion for art and jewelry by transforming it into a business in 1898. Their premium, artisanal approach paid off by marrying precious gems and rare metals in its Madrid workshop. It didn’t take long for the fledgling business to develop a global reputation and earned a unique cachet among affluent customers, including show business luminaries and even the Spanish royal family, says Executive Director Caren Lee. “Arté was born of a deep Spanish passion and commitment to a world brimming with color, beauty, fashion and imagination,” Lee says. Arté went beyond the typical bounds of jewelry design, and actually developed its own synthetic gemstone to circumvent the design limits imposed by natural gemstones. Similar to diamonds, the hardness level of the synthetic gemstone is between
Arté develops its own synthetic gemstone to circumvent the design limits imposed by natural gemstones
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Arté’s flagship Deseo collection offers 22 stones in assorted colors and sizes
8.5 and 9.1, which almost equates to the level 10 of a diamond. And Lee says that the synthetic stone’s refraction level, scintillating effect, color and purity (IF grade) all actually exceed those of diamonds. “The Arté synthetic stone is available in a kaleidoscope of over 3000 color combinations, making it superior to diamond,” Lee says. “Thanks to its meticulous craftsmanship and innovative designs, Arté is able to create a myriad of jewels in various sizes, shapes and colors.” Taking pride of place in Arté’s lineup is the brand’s flagship Deseo collection. The collection offers 22 stones in assorted colors and sizes. Lee defines Deseo (the word is Spanish for “desire”) as “a symbolic representation of meticulous craftsmanship filled with unbounded imagination and ingenuity.” Deseo is offered in platinum, yellow gold and rose gold colors. “We believe each single piece of jewelry has its own character, which is an art piece, just like our brand,” Lee says. “We keep abreast of the latest trends in fashion and what’s happening in different societies when working on the design. We have to be creative but maintain our unique style.” To maintain that signature style while at the same time staying well away from the market mainstream, Arté offers a number of other collections, including Holiday in Spain, which draws its inspiration from Arté’s country of origin. Deseo will be the highlight for Arté at this year’s TFWA AP show in Singapore, but Lee notes that the brand will also showcase new collections encompassing more than 100 new products created by the brand’s Spanish design team. For 2013 Arté plans to maintain its pace of growth in travel retail, with the huge, potential-rich Chinese market being a major focus. Arté also plans to con-
Arté products are already onboard with some of the major Asian airlines
tinue work on building its worldwide travel retail distribution infrastructure. Arté products are already onboard with some of the major Asian airlines. These include Cathay Pacific, ANA, Jet Airways, Dragon Air, China Airlines, Eva Air, Trans Asia and Hong Kong Airlines. Two more listings were recently secured with Korean Air and Air Macau. “We are confident that we will have more than 20 international accounts to be opened in the airlines and airport duty free stores in 2013,” Lee says. While marketing and advertising placement so far is focused on inflight magazines, Arté is also paying more attention to the airport duty free side. “As more people want to travel internationally, we see the potential for us to step into this growing market,” Lee says. “Also it will help to broaden the distribution platform of the brand and support its development in travel retail worldwide. To date travel retail is one of Arté’s fastest growing channels, and one that still holds plenty of untapped c potential.”
Godiva
Market
driven
With innovative novelties and an eye for cultural trends, Godiva builds a strong presence in the Chinese market
F
or over 80 years, Godiva has been creating quality Belgian chocolates by paying close attention to ingredients, styling, selection and packaging. China’s recent emergence as a booming market has presented Godiva with the opportunity to strategically produce novelties that cater to this growing market, focusing specifically on the category’s gifting element. China is the second largest luxury market in the world today—29% of the total luxury goods sales are from China, up from only 1% in 2003—and is expected to be the world’s largest luxury market by 2015, so the opportunities for Godiva are plentiful. “China is a huge market with over 100 million luxury consumers, including over 95 billionaires, over 1.4 million millionaires and over 250 million middle-class consumers,” says CS Lam, Travel Retail Regional Director Asia Pacific. Adding to such statistics, Lam notes that the number of wealthy households in China as of 2010 was 223 million, which is above that of the US, Japan and Germany combined (220 million). “By 2015, the number [for China] will go up to 273 million and 320 million by 2020,” he says. In addition, China has the world’s youngest luxury market, with the majority of the population in their 30s, a group referred to as the ‘Elevated Elite.’ “They are more aware of brands and more familiar with luxury goods,” says Lam. He adds that this consumer group understands the relationship between quality and price; they appreciate the authenticity of luxury products and are looking for quality over the importance of a brand logo. “The young luxury consumer appreciates brand history and craftsmanship,” says Lam. “Authenticity is important to them and Godiva’s position matches this profile 100%.” All of the above factors have made the Chinese market a very significant prospect for Godiva, especially given the importance of giftgiving in Chinese culture. Also advantageous for the company is the absence of a premium chocolate market in China and the fact that Chinese travelers are the number one outbound nationality. “The developing China market is not only benefiting travel retail but our domestic business especially in Europe because a lot of Chinese tourists go to our Belgium store to buy Godiva chocolates,” Lam explains. The first Godiva boutique in China was opened in September 2009, and today the company has 35 retail boutiques in 13 cities, including two flagship stores in China—one in Beijing and one in Shanghai. “Godiva is accessible nationwide via our e-commerce business,” explains Lam. “We are now reaching 60 cities in China and we have a special delivery van in Shanghai.” In travel retail, Godiva now has 21 POS locations in seven airports. Based on Godiva’s consumer research, Lam says Chinese consumers learn about luxury chocolate first from traveling overseas, which is 88
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Following this year’s Chinese New Year gift boxes, Godiva has also created a Chinese New Year gift box for 2014
To capitalize on the popular gifting concept in Chinese culture, Godiva created the Chinese souvenir box
why Godiva offers the same unique shopping experience to consumers in both domestic and travel retail markets. “Our domestic shop in Brussels and our airport shops at Singapore Changi Airport [have] the same design concept and deliver the same shopping experience to consumers,” Lam explains. To strengthen its position in the market, Godiva believes in creating opportunities for consumer engagement such as organizing chocolate schools in its shops and consumer real time on Weibo. Additionally, to reinforce Godiva’s Belgian heritage, the company invites Chinese press to Belgium to meet its chief chocolatier. In terms of products, Godiva has created innovative novelties for Chinese consumers to celebrate different important events celebrated in Chinese culture, such as its Mid-autumn Festival gift boxes and, for Chinese New Year, its Year of the Snake and Year of the Dragon gift boxes. Godiva also created Chinese New Year gift boxes for travel retail with the same design concept. “For the Year of the Snake, we created chocolate in tea flavors for Chinese consumers,” says Lam.“We have milk chocolate Green Tea, Jasmine and dark chocolate Black Smoked Tea.” Capitalizing on the popular gifting concept in Chinese culture, Godiva also created the Chinese souvenir box. “We are combining modernity with Belgian heritage,” says Lam. Looking ahead, Lam says Godiva plans to open an additional 15 new boutiques in domestic markets. As for travel retail, with the Chinese traveler making more domestic trips than international, the company is currently exploring the opportunity to enter domestic c airports in China.
Jelly Belly Candy Company
Aiming higher
Jelly Belly gets its travel retail push into high gear in Asia and around the world
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ith new placements in Singapore and Japan, Jelly Belly Candy Company is enjoying solid growth in the Asian market. Working together with Focus Network Agency (FNA), Jelly Belly has successfully developed a large number of retail properties and programs in Asia that put the brand front and center. FNA owns Cocoa Tree locations at Singapore’s Changi Airport, which are kept fresh with renovations every few years. Two Cocoa Tree stores in Terminal 3 recently installed Jelly Belly Bulk Combo displays in a custom-fit unit in a design that complements the space. The displays highlight a selection of gift boxes and gift items for the traveling consumer. Jelly Belly says that its Bulk Jelly Beans are successful in travel retail because they allow shoppers to experiment, discover flavors and create their own mixes. The bulk format creates entertainment value and encourages customers to linger at the display. FNA has also placed Jelly Belly’s 125g Fabulous Five Gift Box in the Peach Shop inflight boutique on Peach Aviation, a Japanese domestic airline which also connects 90
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A Jelly Belly Bulk Combo display in Changi’s Terminal 3
through South Korea, Hong Kong and Taipei. The placement adds to Jelly Belly’s inflight presence with United Airlines and British Air. “We’ve seen nice increases in all travel retail channels, including airports, border stores, airlines, and even cruise ships and ferries,” says Director of Communications Tomi Holt. “Jelly Belly is particularly suited for travel retail as the brand is a premium brand with a high perceived value among consumers—perfect for gifting, personal consumption and for sharing.” Holt says Jelly Belly’s new line of travel retail products has been put together to provide a sense of fun with an emphasis on easy portability, a key purchase criterion for travelers. The line features a dedicated
design and key price points tailored to travelers and will be a key focal point for Jelly Belly’s presence at TFWA Asia Pacific in Singapore, but Holt points out that Jelly Belly’s success in duty free stems in large part from the depth of its offering. “Along with our exclusive travel retail line, we’ve also had good success with the Jelly Belly everyday line. We’ve placed bulk displays in certain travel retail locations with a great deal of success in engaging the consumer in a fun activity while spending time in the airport. On a case-by-case basis we’ve been expanding our promotional efforts with more sampling opportunities and consumer promotions.” In Asia, travel retail best sellers are the bulk individual flavors and special collections, as well as 100g bags in 20 and 50 Flavor Assorted and Tropical, Sunkist Citrus Mix, and Fruit Bowl Assortments, Holt says. Asian markets have a preference for fruit flavors, although Jelly Belly has been quite successful with the recent introduction of Cocktail Classics, a five flavor collection developed from popular cocktails (non-alcoholic). “We also sell gift boxes, with the most popular sizes being our 20 Flavor Gift Box as well as our 50 Flavor Gift Box,” Holt says. “Regional flavors like Jelly Belly Sakura are also popular. Jelly Bean Chocolate Dips, our newest introduction of a chocolate covered jelly bean, is starting off quite well.” Travel retail is a key focus area for Jelly Belly going forward. Holt says China should deliver the best growth in Asia in the coming year, with Singapore and Korea also showing good increases. Globally, Jelly Belly has tapped into its network of international distributors in over 75 countries to help develop travel retail, as well as taking on a dedicated brokerage group in the Caribbean and Latin America. Local offices in Shanghai, Hamburg and now Canada are also developing programs and focusing on c this lucrative channel. The Fabulous Five Gift Box has taken to the air with Japan’s Peach Aviation
©2013 The Hershey Company
Discover HersHey’s portfolio of iconic global brands and innovative Travel retail exclusive products. ®
These travelers’ favorites are joined in 2013 by premium BrOOKsIDe chocolates, made with smooth ®
dark chocolate-covered real fruit juice pieces offering unique flavor combinations.
Connect with us at Stand D231 at the Tax Free Asia Pacific Show.
H ERSH EY ’S ® I H ERSH EY ’S ® KI SSES ® I R E E SE ’ S ® I I C E B R E A K E R S ® I J OLLY RA NC H E R ® I B R OOKSI D E ®
Confectionery News
Ferrero Travel Market’s Marketing Director Alberto Donnini
Ferrero builds its footprint in Asia For Luxembourg-based Ferrero Travel Market, the Asian duty free market is performing well, growing organically based on the strength of China in combination with the contributions registered by large air hubs throughout the region. “Growth is pretty healthy as a business,” says Marketing Director Alberto Donnini. In other more established markets like Europe, he finds that players with the biggest market share are too strong to allow small ones to successfully get space and increase sales dramatically. “In Asia, instead, some small players still have the chance to push hard and bring additional growth to the category. It is much more a feeling than a real number-based analysis - the only information available is declared sell-in from major players provided by Generation - but he is quite convinced that is actually the case. Ferrero, despite being one of the first players in market share in Asia, continues to enjoy healthy grow. The company distributes through most of Asia, although in Japan and Korea the presence it is extremely limited. Also in
China distribution is building, but Donnini says the brand still needs to build more shelf space and visibility. Ferrero Rocher is the brand’s number one contender in Asia, supporting the market success of the flagship Ferrero Pralines. “Our challenge would be to keep the flagship strong and then develop our other brands like Kinder, Tic Tac and then Nutella,” Donnini says. “Those are the three big growing brands.” “We have a great range of skus for Kinder, covering both children’s gifts (the territory Kinder owns) and snacks, but in Asia we are under-represented. Tic Tac has just been properly launched in travel retail with the new collection and to date the results are excellent, but it is too early to give proper feedback. As for Nutella, we are developing plans. In fact, if on one side of the European domestic market it is an amazingly strong brand, and it is growing in the rest of the world, on the other side to date in travel retail it gets little space, often cannibalizing existing space Kinder owns, and has poor visibility. But we are working on it,” concludes Donnini.
“Tic Tac has just been properly launched in travel retail with the new collection and to date the results are excellent [so far],” says Donnini
Giant Bars and Brookside to make Asia debut at TFAP
Continuing its tradition of bringing goodness to consumers around the world with great tasting snacks, Hershey’s World Travel Retail will be giving two World Travel Retail Exclusive products their Asia Pacific debut. Two new extra-creamy chocolate bar flavors, Hershey’s Creamy Milk Chocolate Bars and Hershey’s Creamy Milk Chocolate Bars with Toffee and Almonds will make their debut. Both bars are 193g and come in an easy-to-open pack for convenience on the go. In addition, Hershey is introducing an exclusive, new Variety Box, which offers an assortment of four consumer favorite Hershey bars. Each bar is 100g making it perfect for snacking and sharing. The assortment includes a Hershey’s Creamy Milk Chocolate Bar, Hershey’s Creamy Milk Chocolate with Almonds Bar, Hershey’s Special Dark Bar and Hershey’s Cookies n Crème Bar. The Variety Box showcases Hershey’s Milk Chocolate’s bold logo and iconic color. The two new bars and the convenient Variety Box are travel retail exclusive and will be available beginning May 2013, debuting at TFAP in Singapore. “Our new extra-creamy chocolate bars bring traveling global consumers the taste profile they prefer while showcasing our iconic, high-quality milk chocolate elevated to new levels,” says Steve Bentz, Hershey World Travel Retail General Manager. “With
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our Variety Box, our consumers will be able to snack and share a number of our best-loved chocolate bars anytime, anywhere.” Also being shown is Brookside, which is an ideal fit, according to Hershey’s, for duty free with its range of rich dark chocolate and healthy fruit. Hershey will be highlighting three core Brookside products– Dark Chocolate Pomegranate, Dark Chocolate Acai with Blueberry and Dark Chocolate Goji with Raspberry. Brookside is already a proven success in Canada and the other global markets where it is available. Brookside offers a range of rich dark chocolate and healthy fruit
Finest Swiss Praline Creations Since 1887, Chocolat Frey has been creating tempting chocolate dreams and pralines to the highest standards. The No. 1 chocolate manufacturer in Switzerland follows a recipe for success based on tradition, innovation and a passion for perfection. Real premium chocolate, 100% Swiss-made!
The Johnnie Walker Explorer’s Club Collection will headline Diageo’s presence at TFWA AP this year; pictured is The Gold Route, the second release in the series
Diageo BY
A global travel exclusive with a recommended retail price of US$300, Johnnie Walker Blue Label – The Casks Edition is crafted from some of Diageo’s rarest casks
Premiumization proves to be the way to Asian consumers’ hearts
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John Walker & Sons Odyssey has become a popular gifting purchase in addition to being enjoyed by Asian luxury brand aficionados
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CLAIRE MALCOLM
sia and Scotch continue to be the perfect pairing for Diageo, maker of the iconic world-leading Johnnie Walker label, as the premium drinks producer and distributor returns to the annual TFWA AP exhibition this May. According to Peter Khemlani, Diageo’s Regional Marketing Manager - Asia Pacific, the Johnnie Walker Explorer’s Club Collection will headline Diageo’s presence this year, along with Johnnie Walker Blue Label and John Walker & Sons Odyssey. Launched with great fanfare at Cannes last year, the Explorer’s Club Collection was Diageo’s biggest investment to date in the travel retail channel, embodying the company’s historic links with adventure and travel. The idea for the collection was based on Alexander Walker’s famed 1890s “Travelers’ Room,” with the first whisky in the collection—The Spice Road—offering a spicy, smooth and honeyed flavor profile accented by a signature smoldering smoke finish. Retail performance in the Asia market for Johnnie Walker’s Explorer’s Club Collection – The Spice Road has been extremely positive, says Khemlani. The second whisky in the collection, The Gold Route, debuted in March this year, and Khemlani reports that the final release, The Royal Route, will be launched regionally from July 2013. Market demand and opportunity from China continues to be a major focus for Diageo as it looks to build on its current successes by winning more Chinese passengers and capitalizing on the boom in affluent high-net-worth consumers for whom luxury purchase decisions are the new norm. With the number of Chinese millionaires expanding by 31% between 2009 and 2010 alone, and over one million six-digit income earners across the country, this is fuelling premium spirit market growth in travel retail, and the market as a whole is forecasted to grow by anywhere between 60 and 129% over the next five years. This is where Johnnie Walker Blue Label – The Casks Edition and John Walker & Sons Odyssey are making a play. Launched in March and September 2012 respectively, these ultra desirable brands are part of the premiumization trend identified by the Diageo team. A global travel exclusive with a recommended retail price of US$300, Johnnie Walker Blue Label – The Casks Edition is crafted from some of Diageo’s rarest casks. The liquid exhibits intensified wood flavors to produce a robust and powerfully flavored blended Scotch whisky. Sitting pretty at the top end of the market, John Walker & Sons Odyssey has become a popular gifting purchase in addition to being enjoyed by Asian luxury brand aficionados. The award-winning rare triple malt has a recommended retail price of US$950. Odyssey commemorates the 80th anniversary of one of Alexander Walker’s most memorable innovations—a whisky decanter that replicates the movement of the sea. Housed in a specially designed crystal decanter, the bottle gently swings to and fro when pushed and can rotate a full 360 degrees as the case is turned. Khemlani confirms that Diageo remain focused on the demand for differentiated travel retail exclusive offerings: “There is demand for new and exclusive products that shoppers cannot buy at home, and that’s the opportunity for Johnnie Walker c Explorer’s Club Collection and JW Blue Label – The Casks Edition.”
«YEAR OF THE SNAKE» Limited Edition 2013
www.davidoff.com
Smoking seriously harms you and others around you
Distilleria Bottega
A sparkling
Amarone Prêt-à-Porter is garnering attention in Asia travel retail and was recently listed at Changi with DFS and in Malasia Airport with Eraman
success
Distilleria Bottega showcases Bottega Rose Gold at TFWA AP in hopes of continuing the success it has enjoyed in Asia with perennial favorite Bottega Gold
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t this year’s TFWA AP exhibition in Singapore, Distillieria Bottega will be showcasing a number of products—both new and classic—for operators in the region, including Bottega Rose Gold, Amarone Prêt-à-Porter and Il Vino dei Poeti Bolgheri Rosso Doc. Sandro Bottega, President of Distilleria Bottega, tells Asia Duty Free that business in the region has been good: “Changi Airport is one of our strongest performing customers,” he explains. “South Korea and Malaysia airports are the other strong spots at the moment. Sales of our products are also growing quickly in Hong Kong and Bangkok Airports.” In terms of the Bottega range, Bottega Gold is the clear bestseller in the region. Always looking for products that have a luxury look and feel, Asians seem to appreciate the gilded gold bottle, says Bottega. In addition, Amarone Prêt-à-Porter is also garnering attention in the region. It was recently listed at Changi with DFS and in Malasia Airport with Eraman.
On the stand Hoping to spark the imagination of operators this year and continue from the success of Bottega Gold, the company will be showcasing Bottega Rose Gold at its stand at TFWA AP. The offering is a new sparkling wine that completes the Bottega wine collection. The packaging of the bottle is characterized by its charming pink color. Bottega Rose Gold is a Pinot Noir sparkling wine, produced with a selection of grapes harvested in Oltrepò Pavese. This area, located in Lombardia region of Northern Italy, is largely appreciated by winemakers and wine connoisseurs alike. The peach-colored wine appears brilliant with a fine and lasting perlage. The bouquet is distinctly flowery with the scent of mixed 96
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berries—mainly currants and wild strawberries. The taste is fresh, with a good acidity that is described as harmonious, delicate and persistent. Also being showcased at the stand this year is Amarone Prêt-à-Porter, which is aged for a period of 4 years, making it a very elegant, full-bodied and long-lasting wine. Attendees will also see Il Vino dei Poeti Bolgheri Rosso Doc, a red wine produced in Castagneto Carducci in Tuscany, an area well known for its red wines.
In the store Education is a key objective for the company this year in Asia, but luckily Bottega tells us that consumers there are generally well grounded in wine basics: “The area is very developed for wines and liqueurs, and consumers are very eager to know more about wines and spirits. Asia is an area where a high number of people attend wine education courses.” As a way of gaining more visibility in travel retail and starting a dialogue with travelers, Bottega has been running a successful promotion with select travel retail operators in Asia wherein consumers are given the opportunity to taste the products. “Tasting is the closest thing to getting a firsthand experience of Italy,” explains Bottega. As value for money is also important, all Bottega products offer consumers the maximum in quality—including artistic and original packaging. “The main objective with any activity of this nature is to work more closely with the operators while at the same time raising the profile of our brand,” Bottega adds.
A bright future Bottega ended our conversation with his opinions on the future of travel retail in Asia, and specifically on the continued success of the Bottega brand: “I feel that the region will continue to grow in 2013,” he said. “From the trends I’m noticing, I think Italian wines and sparkling wines are going to continue to become more and more popular every year. “Good news for Distilleria Bottega is that Prosecco is especially growing in Asia and is starting to be very well known by consumers in the region,” he concluded. “I’m very happy with our performance to date in Asia and look forward to strengthening bonds with operators even further at this year’s TFWA AP c exhibition in Singapore.”
“Good news for Distilleria Bottega is that Prosecco is especially growing in Asia and is starting to be very well known by consumers in the region.”
Sandro Bottega, President, Distilleria Bottega Bottega Rose Gold is a Pinot Noir sparkling wine, produced with a selection of grapes harvested in Oltrepò Pavese
By the year 1700, Spanish ships arrived to the colonies in the New World loaded with products from Spain. One popular product was sweet wine stored in barrels, which were later emptied after use. These empty barrels were filled with Chinguirito, which is rum that was produced in Mexico, and shipped back to Spain. As the rum aged in the sweet wine barrels during the trip back to Spain, it absorbed wood flavors and aroma from the sweet wine barrels, which gave it very special characteristics. The resulting product became very popular in Spain, and local producers saw it as a threat to the sales of their products. Consequently, the King of Spain prohibited the production of this rum in the New World. Chinguirito was also known as Habanero because the last stop on the way back to Spain from the New World was Habana, Cuba.
VISIT OUR STAND B02
TFWA SINGAPORE
Gulf Beverages
A taste for
The Glenrothes Elders’ Reserve, matured for over 18 years
something new With positive market penetration, 2013 is the year of product diversification for Gulf Beverages as consumer trends in India point to new tastes and brands
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ndia’s growing thirst for imported brands and the emergence of a fledgling appreciation for wine holds new commercial promise for UAE-headquartered Gulf Beverages, with 2013 set to be a banner year for business growth. According to the company’s Business Development Director Leon Ashford, Gulf Beverages is looking to double its India business in 2013, shipping 50,000 cases to the subcontinent’s most populous destination. “We more than doubled our business from 2011 to 2012, and are aiming to replicate that again this year. India is a logical extension for travel retail servicing from here as we are able to source products from around 40 countries, bring them in to Jebel Ali, pack into containers and then ship it to Mumbai, for example, in just five or six days,” says Ashford. Changing consumer taste and awareness campaigns are also driving new beverage trends, with Ashford highlighting a “surprising” level of interest in imported beer brands, as he explains: “India is a massive beer market, with big brands like Carlsberg, Fosters, and now Heineken, all brewing locally, but the consumer is still interested in imported brands and certain retail concepts are experimenting with niche brands such as Belgium’s Delirium. “There are also retailer venues, like The Pint Room and Beer Café in Delhi, that focus on imported brands. Marston’s Pedigree is the first English ale on draft in India, and that’s working really well, plus it has the cricket link, which the Indian market loves and this makes it a good fit.” Government imposed restrictions on personal importation has also prompted additional travel retail focus on the higher end whiskies with demand concentrated in the urban hubs of Delhi and Mumbai, which together account for around 75% of imported alcohol sales. José Cuervo tequila and Jägermeister are Gulf Beverages’ sales stars, but Ashford reports that single malts are performing particularly well, due in part to increase consumer awareness that is driving entry-level product sales.
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“If you look at Delhi Duty Free, before the new airport opened it was a very poor retailing environment, but in the new set-up the single malts have a fantastic display, which educates consumers, plus the fact that we are seeing more retailers with great brand knowledge,” he says. The company is also looking more into the wine space, and Ashford feels that India is underplayed in this area, with an even more pressing need for both retailer and consumer education. “There is a real opportunity around wine, and for us to develop retailers’ ranges with the right offering and style. The market is at entry level in terms of consumer understanding; they don't really know what they like and there is a lot of work to be done in terms of educating people about the different price points,” he comments. Ashford also sees a future for increased Champagne sales. “Laurent Perrier is already in India, but it just being launched from a domestic perspective, as well as travel retail, and Laurent Perrier Rosé is very popular,” he says. Port is also a potential opportunity, which, he says, is a good transitional product for consumers with little or no wine knowledge, with the company already stocking Taylor’s Port. New products on the 2013 roster will see some exciting brands make their India debut, as he explains: “From Glenrothes we have their new Robur Reserve range and will also be introducing two new lines – Elders and Ministers from Berry Bros. & Rudd. These will have age statements on them - which the Asian market loves. “We’re also launching Beluga Vodka, a beautiful vodka produced in the depths of Siberia. Their top end product is Gold Line, which comes in a gorgeous bottle that has a little hammer to break the seal, and which retails for around US$185.” While whisky accounts for 90% of imported spirits, Ashford says that vodka is up-andcoming, and there is a growing trend amongst younger consumers, which they hope to cap-
Beluga Vodka’s top end product is Gold Line, which comes in a bespoke bottle that even features a small hammer to break the seal Laurent Perrier Rosé is a very popular offering in India
italize on with the introduction of major US brand Svedka Vodka later this year. White and Mackay’s Dalmore Constellation will also be launched in Delhi. “It’s a fabulous range of vintage aged malts, each 30 to 40 years old and they have the distillation date on them. They are phenomenally expensive, but great for a celebration, and we also have the Shackleton range, based on a master blender recreation of whisky from the legendary explorer’s Antarctic adventure,” adds Ashford. In terms of new partnerships, Gulf Beverages is in the process of formalizing its relationship with Berry Bros. & Rudd for Glenrothes, which will bring with it several new products that Ashford is eyeing for India distribution. “They have a premium gin called No 3 London Dry Gin, which has a key with the number three attached to it. India is a tricky category when it comes to gin, but it is having a bit of a renaissance. We will also be launching a King’s Ginger Liqueur, which is c great for mixers,” he comments.
THE MINIS
Asian-inspired Cocktails
Be bold Swap the conventional for the highly creative and add a splash of sunshine to your beverage repertoire. The creation of Ungava Canadian Premium gin global brand ambassador Joshua Groom, this vibrant primary color cocktail was designed with Asian cuisine in mind, blending lime and cilantro with Ungava’s distinctive Arctic tundra botanicals, including Nordic juniper, wild rosehip, cloudberry, crowberry and Labrador tea, to amplify the freshness of the other ingredients. Asian Persuasion ■ 30 ml Ungava Gin ■ 30 ml lime juice ■ 15 ml green tea syrup ■ 30 ml soda ■ 1 kaffir lime leaf each ■ 1 cilantro (stem and leaf) each Method: Load preferred glass with crushed ice, add all the ingredients and top up with soda, adding a cilantro garnish for a bright color contrast.
Fresh from the heart(land) Combining the finest quality wheat grains with soft glacial water from the frozen north to create a classic Russian spirit with a superbly smooth taste, take a leaf out of Peter the Great’s cocktail manifesto and add a 21st century twist to 200 years of tradition. Filtered through charcoal, this perennially popular 40% ABV vodka is muddled with red raspberries indigenous to the Caucasus mountains of Asia Minor, as well as North America, for a true taste of summer. Raspberryoska ■ 15 ml Russian Standard Original ■ 6-8 raspberries ■ Juice of half a lime ■ 3 tsp sugar ■ Crushed ice Method: Muddle the lime juice, sugar and raspberries, top up the glass with crushed ice, add vodka and stir. Finish with extra crushed ice and garnish with a couple of raspberries.
Asia Duty Free brings readers the best in cocktails that take their inspiration from the East
T
here’s nothing that evokes a favorite travel anecdote more than a cocktail, where the first sip—and familiar flavors—trigger a flood of memories. Take time out from the action on the show floor at TFWA AP and stir up reminiscences of trips to the furthest reaches of exotic Asia, with a selection of seasonal concoctions that will take you on a palate-pleasing journey from the c comfort of your barstool.
Cultural exchange Delicacy is the watchword when seeking out that perfect blend of flavor profiles, and 12-month minimum aged Patrón Añejo’s special blend of unique handmade tequilas is the ideal match for iconic Japanese sake maker Huchu Homore and the finest Chinese plums. From Mexico’s Jalisco mountain region and the world’s best double distilled Agave piña to Japan, the home of Watari Bune, the floral fruit-forward notes of “The 55” cult sake are a marriage made in heaven with Patrón Añejo’s distinct oakwood, vanilla, raisin, honey and caramel notes.
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Keshigomu ■ 1 tsp ume purée ■ 30 ml honey simple syrup ■ 30 ml lime juice ■ 45 ml Patrón Añejo ■ 30 ml Watari Bune “The 55” ■ 1 drop ume plum vinegar ■ Shiso leaves Method: Combine all the ingredients and serve in a rocks glass with a single large ice cube. Garnish with a shiso leaf for a final flourish.
CAMPAGNA FINANZIATA AI SENSI DEL REGOLAMENTO CE N. 1234/07
o c c e s o r P e Th
VISIT US AT TFWA ASIA PACIFIC - CONFERENCE & EXHIBITION SINGAPORE, 12-16 MAY 2013 - Level B2 - stand A02
Brown Spirits Report
For all tastes BY
RYAN WHITE
This year’s TFWA AP exhibition features a number of innovations in brown spirits that are proof positive of the continued vibrancy of the subcategory
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t is well known that brown spirits are all the rage in Asia, but the category is much more diverse than one might at first think. Of course, companies such as The Edrington Group and Rémy Cointreau Global Travel Retail are continuing to innovate on tried and tested favorites such as Highland Park Single Malt Scotch Whisky and Rémy Martin Cognac, but a slew of relative newcomers are enticing Asians to challenge their palettes—and perhaps also their perceptions—when it comes to purchasing brown spirits in duty free. Old Pulteney, although well known and very popular in Europe, is still a relative newcomer to the Asian market. We speak with International Beverage’s Global Travel Retail Manager James Bateman about the brand and its new travel retail exclusive Lighthouse series. Patrón Spirits International is also seeing its fair share of successes in Asia in terms of listings and has just released what is, for the moment at least, a travel retail exclusive: Gran Patrón Piedra Extra Añejo Tequila. Finally, after promising success in selected domestic markets in Asia, Head of Asia for Cognacs Bache-Gabrielsen and Dupuy Aristide Chevaillé tells Asia Duty Free that the time is right for a move into duty free on the back of a number new launches set to be showcased at this year’s TFWA AP exhibition in Singapore.
Mischief makers
It appears that Loki, one of the most treacherous and mischievous characters in Norse mythology, has turned on his adopted brother Thor for taking all the glory in last year’s whisky launch by trying his hand at creating his very own Highland Park expression. Highland Park Loki, a 15 YO limited edition single malt bottled at 48.7% ABV, comes housed in the same unique, award-winning wooden frame as Thor, echoing the fearsome contours of a traditional Viking long ship. Loki is the second in The Valhalla Collection of four unique whiskies from Highland Park, taking inspiration from the legendary Nordic gods of old and continuing the groundbreaking achievement of creating Thor—a 16 YO malt actually designed around the personality traits of an individual. The Orkney whisky maker has now created a unique flavor profile for its follow up. While unquestionably Highland Park, this time it mirrors the unpredictable, shapeshifting Loki character and, as with the trickster god of fire himself, all is not as it seems. There are classic traces of sweetness and spice, but the liquid has been matured in both traditional Spanish sherry casks and also some heavily peated casks, giving it a smoky punch while retaining a light color. The finish is intriguing and complex. It is a whisky that is constantly changing, chameleon-like, from appearance to finish. The Edrington Group has noted that the few lucky and expert palates who have savored it to date describe it as “enigmatic” and “truly another whisky of the Gods.” “Thor was the first of its kind—a true quality malt built around an individual’s personality,” says Gerry Tosh, Global Marketing Manager for Highland Park. “This proved massively successful and it sold out globally. Loki will continue to take Highland Park and The Valhalla Collection into new territory. “While everyone will recognize the definite ‘Highland Park-ness’ of this 15-year-old single malt, it will be the unexpected and surprisingly smoky dynamics that will really get palates excited and mouths talking. This is unlike any expression that has come before and will beguile and fascinate with its complexity and trickery. Remember, all is not as it seems.” Highland Park Loki will be showcased at the TFWA AP exhibition on The Edrington Group’s stand (A16) and will be rolled out in travel retail in Asia thereafter. 102
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Loki is the second in The Valhalla Collection of four unique whiskies from Highland Park, taking inspiration from the legendary Nordic gods of old
A perfect fit
Louis XIII Rare Cask 42.6 was recently launched in Udaipur, “the City of Sunrise,” in India. The release is only the second such cask to join the Rare Cask collection. Given its exclusivity, the product seems a perfect fit for Asian travel retail. A Rare Cask is a single, extremely rare barrel discovered among the hundreds of century-old tierçons that will one day go into making Louis XIII. No two tierçons are ever quite the same size, and this Rare Cask is one of the smaller ones, sufficient for just 738 decanters and distinguished by a small but significant increase in alcohol content beyond the expected 40%. This new Rare Cask expression takes its title from its unique alcohol content of 42.6%. Louis XIII Rare Cask 42.6 celebrates the classic Louis XIII blend of 1,200 eaux-de-vie, 100 years in the making and featuring salient aromas that are unique to this one precious cask. Rémy Cointreau Global Travel Retail cites notes of plum and dates, mingling with flavors of gingerbread, prune stone and ginger, punctuated by a final touch of tobacco leaf. Certainly made with high-end cognac fans in mind, Louis XIII Rare Cask 42.6—with its decanters numbered from 001 to 738—will be available in travel retail at carefully selected outlets, including airports in London, Amsterdam, Paris, Los Angeles and Singapore.
Louis XIII Rare Cask 42.6 celebrates the classic Louis XIII blend of 1,200 eaux-de-vie, 100 years in the making and featuring salient aromas that are unique to this one precious cask
Spirit of exploration
“There is a lot of excitement and opportunity for smaller suppliers these days,” says International Beverage’s Global Travel Retail Manager James Bateman. He cites the increasing popularity of craft breweries and distilleries as one of the reasons why people are more curious about smaller Scotch single malt brands these days. Packaged in boldly colored designs that reflect the distinctive, high-quality whisky inside, the Old Pulteney Of course, many of the brands Lighthouse range will be rolled out to the global travel retail and duty free channel from late summer 2013 represented by International Beverage—Balbair and Old Pulteney honey, chocolate and oranges; and Pentland Skerries, matured in Spanto name but two—are already quite popular within Europe, but ish ex sherry casks for a sweet, full-bodied taste with hints of raisins, when it comes to the international stage, Bateman says the interest spices and chocolate. in lesser known distilleries has helped. “Although the industry seems to be consolidating more and Visibility is key for a brand that is smaller on the worldwide scale, more into big companies, you've got this whole new generation of and travel retail certainly acts as a good shop window. As such, Inter- very interesting whisky products being made, matured and packnational Beverage has just announced the release of a duty free exclu- aged in creative ways,” says Bateman. “There's a willingness on the part of buyers and consumers alike to be more open to these brands. sive Old Pulteney series called “Lighthouse.” The series will feature three distinctive, new expressions of the There's occasion in the marketplace to drink better, and we think award-winning “maritime malt.” Packaged in boldly colored designs Old Pulteney is a great representation of this dynamic trend. We’re that reflect the distinctive, high-quality whisky inside, the range looking forward to seeing what buyers and attendees at this year’s will be rolled out to the global travel retail and duty free channel from TFWA AP exhibition think of our latest offering.” late summer 2013 and exhibited at this year’s TFWA AP exhibition. Lighthouses situated near Pulteney distillery’s northerly coastal location in Wick were selected to develop the series, which includes Noss Head, matured in American Oak ex bourbon casks, producing a full bodied, sweet and spicy malt with hints of coconut, lemons and oranges; Duncansby Head, matured in ex James Bateman, Global Travel American bourbon and ex Spanish sherry casks for a Retail Manager, International Beverage whisky with a sweet, full bodied taste with notes of
“You've got this whole new generation of very interesting whisky products being made, matured and packaged in creative ways.” www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING
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Brown Spirits Report
Luxury driven
Patrón Spirits, producer of the world’s highest-quality ultra premium tequila, has announced the launch of the brand’s first extra añejo tequila to be available exclusively in global duty free before it eventually reaches the domestic market. Meticulously aged for more than three years in new American and French oak barrels, the new Gran Patrón Piedra offers a distinct range of flavors and aromatics to satisfy even the most sophisticated and discerning palates. While including a tequila in a brown spirits report may be unconventional, John McDonnell, President – International and COO of Patrón Spirits, tells us that the company’s success has more than a little to do with the fact that its tequilas are unconventional by design. Indeed, Patrón has been making a splash in Asia of late with Patrón XO Cafe, and given Gran Patrón Piedra’s high-end positioning, McDonnell expects this latest expression to do well in the luxurydriven Asian travel retail channel. “Year-to-date our duty free performance is up 35.6% to March across the entire portfolio, and Patrón XO Cafe specifically is up almost 40% over the same period,” McDonnell tells us. “We’ve been getting Patrón XO Cafe into a lot of airports but there are still many new listings coming on line for the brand, such as at Hong Kong
Airport. The news used to be that we cracked this or that airport, and to an extent that’s still the case, but now we’re really focusing on the job of getting more SKUs in with operators that have already had success with one or more of our products.” Asia has proven to be key to Patrón’s continued growth. In fact, the region outpaced all others last year. Duty free and domestic combined, Patrón saw growth of almost 42% in Asia during 2012, and the hope is that this boom will continue. McDonnell tells us that at this year’s TFWA China conference in Beijing, the company met with a number of operators from China. He looks forward to seeing them again in Singapore at stand L25 and showing them Gran Patrón Piedra. “We’re thrilled about the extraordinary addition of Gran Patrón Piedra to our portfolio of ultra-premium spirits, and our first-ever duty free exclusive,” says McDonnell. “Travel retail represents an important and significant sales channel for us, and we’re excited to make this exquisite spirit available first to our valued duty free partners and consumers.”
“The news used to be that we cracked this or that airport, and to an extent that’s still the case, but now we’re really focusing on the job of getting more SKUs in with operators that have already had success with one or more of our products.” John McDonnell, President – International and COO, Patrón Spirits
Tradition meets innovation
Bache-Gabrielsen will be showcasing its Bache-Gabrielsen and Dupuy Cognacs at this year’s TFWA AP exhibition in Singapore. Aristide Chevaillé, Head of Asia for the company, tells us that the brands have done well in selected domestic markets in the region. As such, duty free is the next logical step. “Bache-Gabrielsen and Dupuy Cognacs are actually very strong in duty free in Scandinavia,” Chevaillé says. “At this year’s TFWA AP exhibition we’ll be showcasing our new luxury packaging for the XO, Extra and Hor’s d’Age expressions, as well as some new formats.” In terms of the successes that the company has already achieved domestically in the region, Chevaillé notes that Asian consumers have taken a shining to the 20 YO and XO expressions of both Bache-Gabrielsen and Dupuy. Not surprisingly in Asia, the company also does well with its high-end vintages, which range from 1940 to 1988. Given the success of these choice offerings, Bache-Gabrielsen is releasing Auguste, a 70 YO Cognac with vintages as old as 1917 in the blend. “Asians really appreciate and now know how to taste old, quality spirits,” says Chevaillé. “Because of this, we spend a lot of time and investment on education in order to build our brand over the long term and to gain loyalty from connoisseurs. We’ve managed to keep our packaging unique—modern, classy and elegant. Furthermore, the taste of our cognacs can be described as smooth, elegant, complex and not too oaky, strong or heavy.” A fitting testament to the quality of the brand is that Bache-Gabrielsen is just coming off a “Best Cognac” win at the Hong Kong International Wine & Spirit Competition. Chevaillé invites all interested attendees to visit the company’s stand (L02) at this year’s TFWA AP exhibition to see a variety of new offerings across both the c Bache-Gabrielsen and Dupuy ranges. 104
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Meticulously aged for more than three years in new American and French oak barrels, the new Gran Patrón Piedra offers a distinct range of flavors and aromatics Dupuy’s new highend offering Auguste is a 70 YO Cognac with vintages as old as 1917 in the blend Bache-Gabrielsen’s XO Cognac is sporting new packaging for this year’s TFWA AP exhibition in Singapore
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Regional demand for limited editions driving creative agenda for legendary Scotch whisky producer with premium flavors headlining brand appeal
T
he producer of some of the world’s best-loved Scotch whiskies, The Edrington Group will be targeting buyers at this year’s TFWA Asia Pacific Conference & Exhibition with a collection of classic blends and innovative variations. According to Ryan Hill, Edrington’s Regional Director - Asia Travel Retail, the high profile lineup will include The Macallan and Highland Park single malt whiskies, as well as a quartet of blends from The Famous Grouse family, which includes The Famous Grouse and The Black Grouse. Rounding out the selection will be a showcase for The Glenrothes, Edrington’s third party Speyside single malt, as well as Cutty Sark, which Hill reports is beginning to make its mark in travel retail. “We are continually innovating to keep the offer fresh and the allocations up to scratch, so we will also have the new Warrior Series collection from Highland Park, which offers a spectrum of flavor grounded in the brand’s gently smoky but surprisingly sweet character,” he says. Giving other brands a run for their money in the aesthetic stakes, visitors to TFWA 2013 will also be able to enjoy the flavors and presentation of The Macallan Oscuro in Lalique boxed gift set, which comes with a stunning crystal Cheval Kazak running horse. The Asian palate has also developed a taste for top drawer brand Brugal rum, says Hill: “This brand is cutting a niche in travel retail in Asia and has some exciting new developments, such as Brugal Papa Andres, an exclusive ultra-premium rum previously reserved for the Brugal family, and Brugal Especial Extra Dry, a cask-aged rum of a quality not usually associated with white rum.” He also reports positive brand performance overall from the burgeoning Asia Pacific region, with some obvious brand leaders. “The Macallan is probably still our star player and has showed very steady growth in China, Hong Kong and Taiwan in particular. “Southeast Asia performance is picking up, with focus on Singapore and Malaysia,” Hill continues. “In terms of potential I would highlight India, which is showing strong potential growth across the Edrington brands, and most particularly for our blended whiskies.” Despite a slow start for some destinations, the business forecast for 2013 is set to see double-digit growth for Edrington, with Hill naming India as the one to watch. “The Indian subcontinent is a vast market and a priority for the growth of Cutty Sark and The Famous Grouse in particular,” he remarks. The early success of limited editions like Brugal 1888, launched in 2012, augur well for other specialty products. “It’s already attracting very favorable reviews and winning awards, so we are expecting a lot of excitement around the new Brugal Papa Andres, which has a limited worldwide release of just 500 individually numbered Italian crystal decanters,” he says. 106
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Another new portfolio addition will be Loki, the The Macallan Oscuro in Lalique boxed gift second edition in Highland Park’s Valhalla Collec- set comes with a tion. “Bottled at 15 years old with an ABV of 48.7%, stunning crystal Cheval Kazak Loki is designed to reflect the characteristics of the running horse powerful Norse god of the same name. The limited release of just 21,000 bottles worldwide is beautifully presented in a wooden frame designed to look like a Viking longship. This year will also see iconic global favorite The Famous Grouse present a limited worldwide release of a rare 40 year-old blended malt Scotch, with a quantity destined for the Asia Pacific region. Another visual work of art, the blend is housed in a beautifully engraved decanter, designed by Timorous Beasties, complete with a bespoke Scottish Silver stopper. The appeal of Edrington brands in the region comes with its own distribution challenges, reports Hill. “There are some issues as a result of the overwhelming popularity of The Macallan and Highland Park, but we are working closely with operators on the forecast plan to try to meet the demands right across the region.” Supply issues aside, demand across the entire portfolio is on the rise and, according to Hill, one trend that is boosting travel retail revenues is the interest in limited editions and special packaging. “Consumers want a gift that offers excellent quality and which is a step above what is on offer in domestic channels. They are looking for a very premium product in terms of the liquor, the packaging, the heritage Brugal Especial and brand romance. We are Extra Dry is always exploring new ways described as a cask-aged of packaging and are also keen rum of a quality not usually to release limited editions associated with exclusively for travel retail,” white rum he concludes. c
Asians have developed a taste for Brugal rum, and the latest high-end, limited release— Papa Andres—is sure to make waves in the region
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Liquor News William Grant & Sons recently teamed up with Nuance Australia to promote Sailor Jerry Rum; those purchasing a one-liter bottle could enter a draw for a Limited Edition Sailor Jerry “Airline” Guitar
Sailor Jerry drops anchor in Sydney Airport with Nuance Australia In a one-off promotion that engages directly with passengers, William Grant & Sons (WGS) recently teamed up with Nuance Australia in an eight-week promotion at Sydney Airport for Sailor Jerry Rum. Launched on February 1, the promotion aims to inspire passengers with the life and work of Norman “Sailor Jerry” Collins, the famous American tattoo artist. The activation combines a dynamic and vibrant Sailor Jerry Bar area, supported by column and display signage, plus a rare video screening of Hori Smoku Sailor Jerry, narrating the life and artistic legacy of Norman Sailor Jerry Collins and the emergence of his enduring art form. Brand hosts were onsite sampling Sailor Jerry Rum to passengers, giving them the opportunity to play a Sailor Jerry Ukulele and try the Sailor Jerry Inkview Tattoo iPad application to experience how flash art tattoos can look on their skin. Those purchasing a one-liter bottle of Sailor Jerry Rum could enter a draw for a fabulous chance to win a Limited Edition Sailor Jerry “Airline” Guitar. Targeting primarily Australian and New Zealand consumers, the promotion aims to emulate the Sailor Jerry old school values of “keeping it real” with the tattoo artist’s reputation as a “freedom-loving, self-made man” striking a chord (Airline Guitar in this case) with these passengers. In terms of wider objectives in Asia across the portfolio, WGS invites all at TFWA AP this year to toast a record year of success in Asia Pacific travel retail during 2012. With the team extended last year, WGS says it continues to raise the bar in consumer engagement with first class brand activations in core brands Glenfiddich, The Balvenie and Hendrick’s Gin. All core brands reported growth rates significantly above category in value and volume last year, notes WGS.
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Tequilera Corralejo brings chocolate cream tequila and prohibited rum to TFAP
Tequila Corralejo has added tequila cream with chocolate and a new rum to its portfolio. The products will be exhibited at TFWA AP this year at stand B02. Tequila Cream is a mixture of two major ingredients in the history of Mexico, tequila and chocolate cocoa, and has a unique taste and texture. Its creamy consistency and distinct tequila flavor with notes of chocolate and real cocoa make this an excellent after dinner drink. Also new is Marques De Cuba Habanero rum. By the year 1700, Spanish ships were arriving in the New World colonies loaded with products from Spain. One popular product was sweet wine stored in barrels, which were later emptied after use. These empty barrels were filled with Chinguirito, which is rum that was produced in Mexico, and shipped back to Spain. Now, Fraternity Spirits World is revitalizing this very special rum and making it available to travel retail globally. Also being shown is Quita Penas, a readymade Margarita Mix; Vodka Boker, an unusual Mexican corn vodka presented in a highly attractive deep blue bottle; and Tequilera Corralejo's special commemorative edition premium tequila 99,000 Hours. Marques De Cuba Habanero rum is new to the Fraternity Spirits portfolio and is available to travel retail globally
Armagnac Janneau’s special edition Dragon Vintages
Armagnac Janneau exhibits for the first time at the TFWA Singapore Armagnac Janneau has announced that it will be exhibiting for the first time at the TFWA AP exhibition in Singapore at stand A26. Janneau is the first export brand of Armagnac and the leading Armagnac brand in travel retail in Western and Eastern Europe, as well as in Russia. Janneau focuses on a premium positioning in Armagnac with VSOP and above qualities, and counts itself as the most awarded Armagnac in the world in terms of quality. The company sees innovation within the category as extremely important, having reintroduced double distillation to the region of Armagnac, launching a Single Distillery range and last year releasing a new Vintage Strategy and a new special edition called the Dragon Vintages. The company notes that even more new products are expected to be launched later this year. Specifically in the duty free channel, Janneau is looking at introducing more Vintages given the success of its Single Distillery range, which was recently listed at London Heathrow via World Duty Free. The company’s objective is to extend the leadership it has enjoyed in Europe to Asia, including China, South East Asia, Japan, Korea and Taiwan.
Stoli Hot and Sticki are based on Stoli’s original Pepper and Honey & Herb flavors introduced in 1962
SPI Group promises Global Drinks a flavorful TFWA AP Finland brings purity SPI Group, tells Asia Duty Free that sales of the company’s Stolichnaya vodka have been increasing year on year in travel retail. “The profile of Stolichnaya Premium vodka has progressed steadily worldwide in 2012 and has achieved a double-digit percentage increase on sales volumes in Asia from 2011 to 2012,” a spokesperson says. High on SPI Group’s list of priorities for Asia in 2013 is expanding its flavor range with the introduction of Stoli Salted Karamel and Stoli Chocolat Kokonut later this year. Furthermore, Stoli Hot and Sticki were recently launched across travel retail and SPI is expecting success in Asia with these two recipes, based on Stoli’s original Pepper and Honey & Herb flavors introduced in 1962. “Stoli Hot offers the warm, fiery sensation of jalapeño peppers—spicy on the palate yet with a delicate smoky quality, ideal for Bloody Marys,” explains the spokesperson. “By contrast, Stoli Sticki is inspired by the delicious, candied taste of the finest honey and incorporates complex floral notes to complement its subtle sweetness. “We envisage awareness in the vodka category will continue to expand and will be reflected in the sales volumes,” says SPI Group. “As a developing market for what is a very dynamic category, it is a particularly exciting time. Consumers are looking beyond their traditional drinking habits and moving towards the trends with a greater focus on innovation and quality.”
to the forefront
Global Drinks Finland (GDR) will be present at this year’s TFWA AP exhibition in Singapore showcasing its award-winning portfolio of spirits, which includes Laplandia Super Premium Vodka and Laplandia Super Premium Cloudberry Vodka. Given a warm response by the industry to its most recent products, GDR continues to invest in product development and manufacturing in the alcoholic beverages field in Finland with the aim of producing spirits for the global market. Laplandia Super Premium Vodka is described as subtle, delicious and pure. It is a super premium vodka expressing the essence of Europe's last great wilderness. Laplandia Super Premium Cloudberry Vodka, on the other hand, is clean and refreshing by nature, delicately mingling the taste of real cloudberry fruit, which grows in the Arctic Circle, into the vodka. To learn more about GDR’s portfolio of spirits, attendees to this year’s Singapore exhibition are invited to visit stand A1. Laplandia Super Premium Cloudberry Vodka delicately mingles the taste of real cloudberry fruit into the vodka
www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING
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Liquor News
Lateltin showcases new products and special editions in Singapore
At this year’s TFWA AP exhibition, Lateltin will be showcasing a new special tin packaging for Cresta Swiss Chocolate Liqueur
Lateltin’s Head of Export Martin Schneider tells Asia Duty Free that the company enjoyed “excellent performance” in Asia duty free last year, largely due to the popularity of Cresta Swiss Chocolate Liqueur. As opposed to hurting business, he says, the popularity of cognac and whisky in region has actually made Cresta a perfect alternative for consumers looking for something a little different from their spirits. “At this year’s TFWA AP exhibition, we’ll be showcasing the new special tin packaging for Cresta Swiss Chocolate Liqueur,” Schneider says, “which makes it even more of an attractive gift.” Also at Lateltin’s stand this year will be two new product lines, ProVokant and Gold Schnee. ProVokant is described as a young, fancy range of vodka liqueurs in trendy colors. “This range has existed in Switzerland for many years as ‘Bull Vodka,’ named after the colors—for example Red Bull Vodka, White Bull Vodka and so on,” explains Schneider. “Due to the existence of the Red Bull energy drink and the risk of product confusion, we never focused on export until consumers and business partners encouraged us to create a new brand to make export possible.” Schneider invites interested TFWA AP attendees to visit stand G31 to learn more about Lateltin’s portfolio of quality spirits. “We received a positive response at last year’s TFWA AP exhibition and we’re looking forward to continuing push into Asia duty free throughout 2013,” he concluded.
Ron Botran committed to Asia duty free channel, exhibits highend rum portfolio at TFWA AP Ron Botran will showcase its premium dark rum portfolio at this year’s TFWA AP exhibition in Singapore, as well as a new white rum designed specifically for high-end cocktails. Indeed, perennial favorites Botran Solera 1893 and Botran Reserva have helped usher in a new boom in highend dark rum in travel retail. “These two offerings are really our focus for Asia,” says Commercial Director of Exports for Botran Rums, Frank Quiñones. “Consumers here are very informed about high-end spirits and their attentions are now turning toward aged rum. Given the focus on luxury in this part of the world, we feel our dark rum portfolio is perfect for travel retail here.” Indeed, Botran’s dark rums stand out in the highly saturated rum subcategory due to their quality and uniqueness. Both Solera 1893 and Reserva are made with the finest sugar cane from the Botran estate in southern Guatemala. The cane is pressed into virgin sugar cane honey before being fermented, distilled and taken to the mountains for aging to develop the rich signature flavor. “We’re very pleased and excited about entering travel retail in Asia,” Quiñones says. “We’re taking a very targeted approach and growing the brand here in a way that will ensure sustainable growth in the long term. We invite interested parties to visit us at this year’s TFWA AP exhibition at booth B27 so they can see— and taste—Botran rum for themselves.”
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Genagricola exhibits Tenuta S. Anna fine wines and Proseccos for the first time at TFWA AP For the first time, winemaker Genagricola S.p.A will be exhibiting its Tenuta S. Anna fine wine offerings at stand A02 on level B2 during this year’s TFWA AP exhibition in Singapore. While the company isn’t yet listed in the region in duty free, Travel Retail Area Manager Andrea Pigni tells Asia Duty Free that the company has cut its teeth in Italian duty free aboard several major airlines. The success that Genagricola’s Tenuta S. Anna range has enjoyed in Italy has given way to the decision to concentrate on the channel around the world. “We will make our first appearance at TFWA AP in Singapore this year, which will be followed by the Cannes exhibition in October,” Pigni explains. “At this stage we are investing in order to improve our visibility in this market and attract buyers.” Genagricola’s portfolio of Tenuta S. Anna wines includes a variety of reds and whites, as well as five varieties of Prosecco (three of which will be exhibited at this year’s TFWA AP), all attractively packaged for the luxury-driven Asia market. As an example of the popularity of Prosecco on a worldwide level, Pigni notes that sales of Prosecco last year outpaced Champagne by volume. He explains that sales of Genagricola’s Proseccos have accordingly seen growth as the trend continues. Good news for the company—and operators interested in its wares—is that Genagricola has secured distribution in China and is able to supply operators with even small amounts of product in Asian countries where it still doesn’t have direct importers. “I invite attendees at this year’s TFWA AP to stop by booth A02 and see our products for themselves,” concludes Pigni. An increase in the popularity of Proseccos has resulted in increased sales for Genagricola’s Tenuta S. Anna Prosecco range Botran Solera 1893, made with the finest sugar cane from the Botran estate in southern Guatemala and aged for a rich, signature flavor
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Liquor News
Inniskillin’s duty free exclusive tri-pack has seen success in Asia, where gifting is an important cultural trend; Constellation Brands looks forward to more success in the region with the late 2013 release of a new range of Icewine
Constellation Brands sees success with Inniskillin tri-pack, plans launch of duty free exclusive Icewine range in late 2013 Amanda Dolotowicz, Business Development Manager at Constellation Brands, makers of industry-leading Inniskillin Icewine, tells Asia Duty Free that 2013 will see the launch of a new duty free exclusive range of Icewines. Given the popularity of the subcategory in Asia, she says a strong focus will be put on the region. “In 2013 we will be focusing on our new duty free exclusive Icewine tier, produced with the highest quality Icewine grapes and exclusive premium packaging for our global travel retailers,” Dolotowicz explains. “We will initially launch with selected retailers and support the initiative with a premium promotional mechanic. The full rollout will be late 2013.” Given the importance of gifting in Asian culture, Inniskillin’s tri-pack of Icewine, which comes in a convenient and reusable carrying case, was a strong seller last year. “The gifting culture is a strong driver for our Inniskillin Icewine sales, recognized as a premium, luxury item at the top of its class in quality, worldwide respect and recognition,” she explains. At this year’s TFWA AP, attendees will actually get a chance to see the new Icewine range before its launch later this year. Inniskillin is very well positioned in Asia, but nonetheless continues to secure new listings, most recently with Shilla Duty Free Group. Dolotowicz says she looks forward to catching up with current clients and meeting new prospective clients at this year’s TFWA AP exhibition. For those interested in stopping by, Constellation Brands will be located at booth P30.
Prowood offers two exquisite spirits from France and Armenia, expands portfolio with new offerings California-based Prowood Wine & Spirits’ (PWS) offering is steeped in the mystique and luxury of premium spirits. The brands are led by the aromatic and spicy but delicate Arman Cognac from France and an Armenian brandy called Kilikia, made from finest grapes grown in the Ararat Region. PWS is billing Arman Cognac, available in both the XO and VSOP expressions, as the jewel in its portfolio—the “Signature of a royal man.” The company says Arman Extra Old Cognac is a blend of a hundred rare and selected eauxde-vie from the premier growing areas of France kept in oak barrels for 20 to 50 years to achieve perfection. Kilikia brandy, on the other hand, is available in the XO expression and is named after the Armenian kingdom called Kilikia or “Little Armenia.” This Brandy is aged for 10 years. After tastings, experts described it as strong yet delicate, at the same time leaving a definite hint of toasted wood and touch of cinnamon. The company has also recently expanded its range of spirits. New this year are offerings such as Edward Gunpowder England Spiced Rum and Mamba Liqueur, packaged in a unique black bottle with a snake wrapped around it for maximum shelf standout. While Prowood will not be exhibiting at this year’s TFWA AP exhibition, operators interested in listings Prowood’s portfolio of premium spirits can visit www.prowoodusa.com or email Owner and President Henrik Sargsyan at henrik@prowoodusa.com.
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PWS is billing Arman Cognac as the jewel in its portfolio—Arman Extra Old Cognac is a blend of a hundred rare and selected eaux-de-vie from the premier growing areas of France
Labouré-Roi brings the best of Burgundy to TFWA AP Labouré-Roi produces a comprehensive range of appellations from Burgundy and the South of France, over 80% of which are exported to over 30 countries worldwide. The company will be on hand at this year’s TFWA AP exhibition in Singapore to showcase its newest wares to buyers in the region. In the last 10 years the company’s wines have won over 800 International awards, including Best White Wine of the World at the 2009 International Wine Challenge in London for its 2007 Clos de la Baronne Meursault. Furthermore, Labouré-Roi’s wines have regularly been selected in blind tastings for many of the world’s leading airlines, and can be found in leading restaurants around the globe. With respect for the environment in mind, Labouré-Roi is a part of the UNEP (United Nations Environment Programme) and Planet Urgence, which commits the company to planting one tree per bottle sold on selected wines. Attendees visiting this year’s TFWA AP exhibition can experience for themselves the fruits of over 500 years of winemaking by visiting Labouré-Roi’s stand at N201. Labouré-Roi plants one tree per bottle sold on selected wines out of respect for the environment
Liquor News
Available in Singapore Changi from July and receiving its Asian premiere at TFWA Asia Pacific, Grey Goose Cherry Noir is a masterful blend of Grey Goose vodka and the finest cherries
Bombay Sapphire East and Grey Goose Cherry Noir receive Asia premieres Bombay Sapphire East is continuing to make an impact in travel retail. To mark the launch of Bombay Sapphire East in Asia and to coincide with TFWA Asia Pacific, Bacardi Global Travel Retail will be bringing a flavor of the East to Singapore Changi Airport. A variety of prominent displays will bring the launch to life by taking their inspiration from the energy and excitement of Asian spice markets. They will include a spice cart showcasing the 12 botanical ingredients used to create the exotic new gin and even a bespoke tuk-tuk. Bombay Sapphire East takes the senses on a journey unlike any other. Paying homage to the subtle yet exotic flavors of Asia, two new botanicals have been added to the classic 10 which are used to create Bombay Sapphire—crisp Thai lemongrass and spicy Vietnamese black peppercorn. In other Bacardi news, Grey Goose Cherry Noir is the first new flavor in five years from Grey Goose vodka, the super-premium category leader. Available in Singapore Changi from July and receiving its Asian premiere at TFWA Asia Pacific, Grey Goose Cherry Noir is a masterful blend of Grey Goose vodka and the finest cherries, including rare black cherries handpicked in French Basque Country. Grey Goose is known for being a product of French craftsmanship and Grey Goose Cherry Noir is created with the same level of expertise. At the heart of its exceptional taste is Grey Goose vodka, made with the finest French wheat and blended with pure spring water from the Cognac region. The 100% natural essence of ripe cherries is then expertly blended with Grey Goose under the supervision of the Grey Goose Maître de Chai François Thibault.
Mouton Cadet named Official Supplier of Wine to the Ryder Cup for 2014 and 2018 José María Olazábal, who captained Europe to a remarkable Ryder Cup victory in the “Miracle at Medinah” last year, recently attended a special reception at Château Mouton Rothschild with the famous gold trophy in celebration of that acclaimed success. The occasion was the signing of an agreement between Ryder Cup Europe and the family-owned company Baron Philippe de Rothschild SA for Mouton Cadet to be the Official Supplier of Wine to the 2014 Ryder Cup at Gleneagles in Scotland and to the 2018 Ryder Cup at Le Golf National near Paris. Olazábal enjoyed the hospitality of his host, Philippe Sereys de Rothschild, son of the Baroness Philippine de Rothschild and President of the Board, as they inaugurated the new Ryder Cup partnership, which follows Mouton Cadet becoming The Euro-
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pean Tour’s Official Wine Supplier in 2012. mented Hugues Lechanoine, Managing Indeed, Mouton Cadet joins an august Director of Baron Philippe de Rothschild family of Ryder Cup sponsors. “In 1930, SA. “I am thrilled to see that almost a cenjust three years after the first Ryder Cup tury later we share, under the same etiwas played, Mouton Cadet was created by quette, the values of tradition, elegance, the Baron Philippe de Rothschild,” com- conviviality and respect.” Scott Kelly, Philippe Sereys de Rothschild, José Maria Olazábal and Hugues Lechanoine celebrating Mouton Cadet being named the Official Wine Supplier of the Ryder Cup 2014 and 2018
Meet us at TFWA Asia Pacific
Atelier Graphique du Cognaçais.
Marina Bay Stands - Stand L02 - SINGAPORE 12 - 16 May 2013
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Fo r i n q u i r i e s, p l e a s e co nt a c t M r A r i s t i d e C h e va i l l é , a r i s t i d e @ b a c h e - g a b r i e l s e n . co m
Tobacco News
Macanudo is another big brand for STG, and the company is planning launches this year in Asia
Dynamic brands
in a dynamic region
STG launches WØ Larsen pipe tobacco in Asia duty free and focuses on staff education as a means of capturing an ever more refined Asian traveling consumer
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candinavian Tobacco Group’s (STG) International Business Manager Patrick Zhang recently told Asia Duty Free that the company plans on launching WØ Larsen, the world’s number one premium pipe tobacco brand, in Asia travel retail this year. Additionally, the number one cigar brand in the US, Macanudo, will be a concentration in the region during 2013 given its unmatched quality credentials. “We are planning on launching a special limited edition of WØ Larsen pipe tobacco in Asia,” Zhang tells us. “It will only be available through selected operators and will feature a specially designed tin. Every year we’re planning on releasing a new limited edition tin, each with a special blend and a unique packaging design.” Zhang says that overall, last year was good for STG. In fact, he says business in the region has been on the upswing since 2010. “We’re seeing growth across all our major Asia markets,” he notes. “Our market share is pretty well balanced in the region.” Success last year had a lot to do with the extension of STG’s product portfolio, in addition to perennial favorites such as the Café Crème line of flavored cigarillos. Indeed, this year’s introduction of the WØ Larsen brand is STG’s way of continuing the momentum by adding yet another exciting offering for traveling consumers. “Being the largest pipe tobacco producer in the world, STG is able to provide more choices and offer the world’s most famous brands to customers,” Zhang says. “We received overwhelming results from various markets after launching pipe tobacco brands such as WØ Larsen, Borkum Riff, Erinmore and others. We trust that together with our valued partners, this new and exciting segment will ensure growth in the coming years.”
Spreading out In terms of objectives for the business in 2013, Zhang is intent on keeping STG in a leadership position in key markets. While Greater China is still the main 116
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focus, the company is actively looking into other regions such as Japan, Korea and East Asia. As is often noted, second-tier cities in Asia are bigger than most major metropolitan areas in other parts of the world. As such, Zhang sees exploring the region for growth opportunities as another key focus this year. And just as geographical coverage is important, so is ensuring that STG covers new product segments. Zhang assures us that the WØ Larsen launch is just the beginning of an exciting year for the company that will include other launches such as the number one US cigar brand Macanudo.
Promoting the best Of course, it’s important that salespeople are educated on the histories of tradition and quality that go hand in hand with the products in STG’s strong portfolio. As such, the company is targeting staff education this year. “We now have more resources as a means of providing more in-depth brand and product training to the frontline sales people,” Zhang says. “We believe better and more personal consumer interactions will result in more effective communication across channels, including duty free.” In an age where tobacco restrictions are becoming more and more prevalent around the world, Zhang tells us that Asia is still very much a developing region for the tobacco industry in general, with consumers acutely interested in discovering high-end brands. This, he says, is another reason why education of sales staff is important. “We see a trend where consumers are more knowledgeable and they
STG’s success last year had a lot to do with the extension of its product portfolio, in addition to perennial favorites such as the Café Crème line of flavored cigarillos
know what they want from their cigar or cigarillo,” he explains. “It stands to reason that a highly educated salesperson interacting with a more refined consumer will result in increasing success in the region. “We are fully confident in our business in Asia, and we see more new opportunities consistently popping up. At the same time, existing markets are maturing,” concludes Zhang. “Both of these factors have benefited STG’s brands. Given that we have a portfolio of the world’s most popular brands of the highest quality, combined with our aspirations and proactive stance in Asia, I think we’ll continue to see positive trends in c the region over the coming years.” STG expects big things in Asia with the launch of WØ Larsen pipe tobacco, the number one premium pipe tobacco in the world
New & Notable LIQUOR
Gold Schnee Company: Lateltin AG Description: Finest Swiss liqueur with 24 carat gold flakes available in cinnamon and mandarin flavors. Can be enjoyed ice cold in a cocktail glass or poured over favorite ice cream and desserts TFAP booth: G31
Absolut Denim Company: Pernod Ricard Description: Absolut Vodka has teamed up with denim fashion designer Loren Cronk, in a new collaboration that celebrates the iconic fabric. The denim guru has designed a special indigo denim sleeve for the iconic bottle, intending to keep the drink in a perfectly chilled temperature at all times TFAP booth: F24
Ritter Sport 100g Tower Company: Ritter Sport Description:The Ritter Sport 100g Tower offers something for everyone with its ten assorted 100g bars of different flavors: Whole Hazelnuts, White Whole Hazelnuts, Dark Whole Hazelnuts, Marzipan, Butter Biscuit, Whole Almonds, Praline, Alpine Milk Chocolate, Cornflakes and Peppermint TFAP booth:F8 Chupa Chups Pouch Bag Exotic Tropic Company: Perfetti Van Melle Global Travel Retail Description: The Chupa Chups Exotic Tropic range contains 25 lollipops in Banana & Strawberry and Coconut & Pineapple flavors TFAP booth: C232
CONFECTIONERY Jack Daniel’s Liqueur Delights Tin Company: Goldkenn Description: This stylish gift contains chocolate with a pool of Jack Daniel’s famous whiskey. The liqueur delights are individually wrapped for extra freshness Swiss Goldbar Milk Company: Goldkenn Description: The Swiss Goldbar Milk is the original, much loved Goldkenn Goldbar signature recipe, presented in its iconic gold box. The premium case holds 30 creamy milk chocolate pralines scattered with delectable hazelnuts and almonds
Werther's Original Caramel Selection Company: Storck Travel Retail Ltd. Description: This exclusively designed gold tube contains three traditional varieties, Classic Cream Candy, Toffee and Éclair and an exciting new flavor, Werther's Creamy Filling TFAP booth: D31
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New & Notable FASHION & ACCESSORIES
SKINCARE & FRAGRANCES
Kensington Pendant Company: Clogau Description: The handcrafted Kensington key pendant recreates a sense of magic and wonder. While containing a touch of rare Welsh gold, the pendant provides a suitable piece of jewelry to wear on any occasion TFAP booth: C2
Altiwhite Blanc Comme Neige, Whitening Intensive Serum Company: Alpure Description: This high performance serum is a genuine concentration of antimelanin ingredients (including vitamin C & E flakes) aimed to soothe and prevent brown spots TFAP booth: H34 Super Stick Solaire Company: Sisley Paris Description: Sisley is expanding its sun care range with a new waterresistant sun protection stick created exclusively for the sensitive areas of the face. The Super Stick Solaire SPF 30 uses active ingredients with emollient and nourishing properties such as camelia oil, mango butter and shea butter
Desigual Pashminas Company: Desigual Description: Desigual presents an exclusive pack that contains two pashminas with ethnic and tropical inspired print TFAP booth: D11 Versus Ibiza Company: Escale Holding Description: This model is light and colorful, expressing the energy and vibe of Versus. Marked by a rectangular aluminium case with arched lugs, a minimal dial with contrasting hands and hour markers, double patent leather strap with a purple lining and an extra single tour strap TFAP booth: K8
ELECTRONICS TOBACCO Balmoral Dominican Selection Short Corona 5 Company: Royal Agio Cigars Description: With a blend of Dominican and Brazilian tobaccos, this Short Corona will gratify every true cigar aficionado. Each cigar is individually packed in cellophane in order to guarantee optimum quality TFAP booth: H9
Sennheiser Momentum headphones Company: Sennheiser Asia Description: Available in black and brown, Momentum combines a sophisticated look with rich stereo sound. Its leather ear cushions and stainless steel ear cup slider provide maximum comfort, durability and custom fit TFAP booth: D1
PM 200+set Company: Beurer GmbH Description: The set consists of a receiver module, chest strap and sport armband turns almost every Smartphone into an indispensable training companion TFAP booth: K01
CXC 700 Company: Sennheiser Asia Description: The ear canal CXC 700 offer excellent audio performance enhanced by passive and active noise cancellation to effectively reduce surrounding noise. The TalkThrough function enables the user to communicate even without removing the earphones, and the ergonomic control box houses a single AAA alkaline battery that lasts for up to 16 hours of usage TFAP booth: D1
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