The $65 Billion Issue - September 2015 Special Issue by Paramount Publishing Ltd.

BILLION

ISSUE

$65 THE

SEPTEMBER 2015 · SPECIAL ISSUE

Rapid growth in TR p. 6 Cruise market in Asia p. 16 Three-sided support p. 26

DUTYFREEMAGAZINE.CA

AIJAZ KHAN PUBLISHER

The Strong

Survive W

hen I created my first issue of Americas Duty Free & Travel Retailing magazine in 1989, the industry was a far different place from what it is now. There was no ASUTIL and no MEADFA. King Power was just starting up in Thailand. There was no DFS Galleria, no Lotte and no LS travel retail. Dufry, while important, was far from the force it is today. The world itself has also changed. We’ve been through a number of regional and global recessions since that time; these challenging times affect all businesses and are a true test of the strength of individual companies within the market. Few times were as challenging as post-2001. Getting through an airport became infinitely more of an ordeal than it had been before, leaving travelers time pressed and irritated—two states decidedly not conducive to shopping. MERS affected global traffic in 2003 and then the global economic crisis hit in 2009. The truth is, there really is always something the travel retail industry has to deal with. Yet here we are 26 years after that first issue was pulled from the printing press, and the industry is stronger than it has ever been. Global travel retail sales hit $60 billion in 2013, increasing tenfold over its US$6 billion figure when TFWA first came into existence. That figure is projected at US$65 billion this year, and Erik Juul-Mortensen, President of TFWA, feels there is no reason why sales can’t again increase tenfold over the association’s second 30 years, to US$600 billion by 2044. To achieve that lofty goal, the industry will have to collectively rise to the occasion. Michael Payne, President of IAADFS, says the solution is twofold: retailers must do more to get customers into the stores and the industry as a whole must fully embrace technology and realize it is a tool for their use. In 1989 approximately 15% of the population in developed countries owned a computer. Currently most travelers not only use a computer but also carry tablets and smart phones with them. Yes, there will be challenges. Political, economic and currency issues affect us all. But, as in the past, the strong companies will at the very least survive those times and many will come out stronger than ever. We do not know exactly what the global travel retail industry will have to face in the coming years, but with the industry’s associations fighting on its behalf, with the results of research into consumer habits and preferences being put into practice, and with the growth and innovation the industry has been known for, the future looks clear and bright. Kindest Regards,

SEPTEMBER 2015 · $65 BILLION · SPECIAL ISSUE

Global Marketing Company Ltd. 26 Pearl Street, Mississauga, Ontario L5M 1X2 Canada. It is distributed throughout Central America, South America, the United States, Canada, U.S. Virgin Islands, U.S. Pacific islands, and the islands in the Caribbean. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or the editor. September 2015, Special Issue. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2015 Global Marketing Company Ltd.

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

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

ADVERTISING SALES ADVERTISING & MARKETING EXECUTIVE Jacqueline Hammill jacqueline@dutyfreemagazine.ca CIRCULATION & SUBSCRIPTION accounts@globalmarketingcom.ca

Aijaz Khan Publisher aijaz@globalmarketingcom.ca

$65 BILLION ISSUE SEPTEMBER 2015

CONTENTS

What’s inside LEAD STORIES 6 TFWA numbers RAPID GROWTH

2012 Korea Service Grand Prix

Duty free and travel retail has quickly evolved from being little more than a cottage industry to being so large it’s referred to as the “sixth continent.” TFWA President Erik JuulMortensen offers insight into keeping that growth coming

12 Travel retail performance by region MIXED FORTUNES

Here, travel retail association chiefs give their fascinating insights into the performance of the travel retail industry in their respective regions, from east to west

16 Cruise market in Asia FULL STEAM AHEAD IN ASIA

The Caribbean may still remain queen of the cruise industry but there’s a new challenger snapping at her heels. Passengers in Asia are flocking to cruises at an exponential rate and this trend looks set to continue

22 Association News: APTRA THE APTRA PERSPECTIVE

APTRA President, Jaya Singh, pulls no punches when it comes to discussing the current state-of-play of the duty free and travel retail sector

26 The Trinity THREE-SIDED SUPPORT

Mathematically, the strongest shape is the triangle. Each side supports the others no matter which way you turn it

28 Brazil: RIOGaleão ADVANCING ON ALL FRONTS

When RIOgaleão took over operations at Tom Jobim International Airport, they wasted no time in revamping every area

FEATURES Significant events in duty free history The future of duty free Genius in a bottle On-trend Aeon expanding across Asia

24 32 34 36

Jewelry report: Precious cargo Here’s Johnnie! The perfect combination Liquor news

38 40 42 43

30 Fashion research: m1nd-set FASHIONING A TOP THREE CATEGORY

Dr. Peter Mohn, Owner & CEO of research specialist m1nd-set, casts fresh light on the huge potential of the fashion category in travel retail

TFWA NUMBERS

The largest-selling category in duty free continues to be Perfume & Cosmetics. This is also the category with the largest growth

Rapid growth by

Duty free and travel retail has quickly evolved from being little more than a cottage industry to being so large it’s referred to as the “sixth continent.” TFWA President Erik Juul-Mortensen offers insight into keeping that growth coming 6

$65 BILLION ISSUE SEPTEMBER 2015

WENDY MORLEY

hange did not come quickly over the first 199,000 years or so of human existence. Gradually we learned how to domesticate and make use of animals; we learned how to build fires, plant and cook food and use tools, and over time created wheels and improved building techniques. Eventually exploration helped our ancestors to realize global potential, but it wasn’t until the Age of Enlightenment that everyday life and possibilities really began to evolve for most people on earth. Never has that change been more rapid or extreme than in the past 100 years.

TFWA NUMBERS

The world gets smaller January 1st, 1914, marked the world’s first commercial flight, though such flights were rare until many years later, after World War II had ended. In 1947, Dr. Brendan O’Regan opened the world’s first duty free shop at Shannon Airport, where transatlantic flights often stopped for refueling, and started an industry that would eventually make its way to the smallest of border outposts throughout the world, as well as other duty free zones. Throughout the years duty free has grown in fits and starts, but the industry has now reached the point where, according to Generation Research, in 2014 global sales reached US$63.5 billion – a 5.8% increase on the $60 billion in sales in 2013. The majority of that growth has come in the past 31 years, since the Tax Free World Association (TFWA) came into existence. In the association’s first 30 years, duty free sales increased tenfold, from approximately US$6 billion. TFWA President Erik Juul-Mortensen believes it is possible for that kind of growth to continue: “Assuming we continue to demonstrate that strong leadership which will help us meet the challenges that surely lie ahead of us, I am optimistic that we can achieve a similar tenfold growth over the next 30 years, perhaps even creating a US$600 billion dollar industry by 2044,” he states. Currently, sales have been projected at $65 billion for 2015. Juul-Mortensen hesitates to be too precise in his forecasts, and questions whether that number will be reached, given current circumstances. “There is a catalogue of issues in our business environment that are sure to affect travel, consumer confidence and, ultimately, duty free and travel retail,” he says. “These include political unrest in various places such as the Middle East and North Africa, economic troubles in Greece and Russia, environmental issues like the volcanic activity in Indonesia and also the slowdown in China both in terms of economic growth and on spending in duty free. The industry seen as a whole is still struggling to overcome the massive issue of consumer footfall and penetration. We need to address and improve both. So, many challenges face our industry! However I remain optimistic because we have faced comparable challenges in the past and rallied.”

Regional markets As is always the case, business is stronger in some regions than in others. The industry has always been strong in Europe, although growth has inevitably slowed in that region. “Overall, Europe was the most sluggish region in 2014 but even it achieved growth in duty free and travel retail sales of +1.8%,” says Juul-Mortensen, this again according to Generation Research. In recent years the Asia-Pacific region has had the most acceleration, and this continues to be the case. “Duty free and travel retail sales in Asia Pacific continue to grow twice as fast as any other region,” he says. “Additionally, of the top-ten countries for duty free and travel retail shopping, five are within Asia. South Korea is the top of the pile by a considerable margin, with 12.3% of the total global market and sales up 22.8% on the previous year.” Indeed, we hear almost daily of new infrastructure developments for the industry in that country. “Fabulous new retail complexes are opening up in Korea to meet the insatiable demand of its people and its many visitors for beauty products, fashion, accessories, other luxury goods and increasingly, experiences and entertainment.”

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China comes second with 7.7% market share in spite of the new well-publicized policies regarding luxury spending,” he says. In fact a great many of the shoppers in Korean duty free stores are Chinese. “Again, in China there is massive development of retail facilities to cater to the demands of an enormous and increasingly affluent population,” Juul-Mortensen continues. “Whereas in most parts of the world the airport is the undisputed center of duty free and travel retail sales, in Asia the downtown duty free shops, border stores and cruiselines take a very significant piece of the revenue pie.” Unsurprisingly, the worst performers were those where there has been political and economical unrest, such as Greece, Spain, Russia, Turkey, and the war-torn countries of the Middle East. Despite China’s crackdown on conspicuous consumption and the fact that the Chinese customer is extremely important to duty free sales throughout Asia, Juul-Mortensen expects the region to continue soaring. “Given the expansion of the enfranchised middle class in China and other parts of Asia generating massive demand for travel, tourism and retail, I would expect Asia Pacific to continue to dominate the scene. The Middle East, particularly Dubai, continues to produce impressive results, but I would say the surprise performer is the Americas, which grew by 5% last year and holds huge pent-up potential.”

Erik-Juul Mortensen, President of TFWA, believes the industry can reach US$600 billion in sales by 2044

TFWA NUMBERS

SALES BY REGION Region

Sales

Share of market

Asia Pacific

US$24.5 billion

38.6%

MARKET SHARE BY CATEGORY, 2014 Category

Sales

Market share

Fragrances & Cosmetics*

US$19 billion

30%

Wines & Spirits

US$10.4 billion

16.4%

Fashion & Accessories

US$9.3 billion

14.6%

Europe

US$20.5 billion

32.3%

Americas

US$11.7 billion

18.5%

Tobacco

US$7.9 billion

12.4%

Middle East

US$5.9 billion

9.2%

Watches, Jewelry & Fine Writing

US$6.6 billion

10.4%

Africa

< US$1 billion

1.4%

Electronics, Gifts & other goods

US$5.2 billion

8.2%

Confectionery & Fine Food**

US$5.1 billion

8.0%

Information provided by Generation Research

What’s coming up? The forecast sales for 2019 are $80 billion, according to Generation Research. What is necessary in order to achieve this figure, and in order to achieve the tenfold increase that he feels is possible by 2044? Much of what challenged the industry is beyond our control. As mentioned earlier, political and economic instability have a large impact on the industry. Another issue that can have huge impact and that we cannot control are epidemics such as Mers, Ebola and the return of SARS. But Juul-Mortensen believes there are things those in the industry can do to combat these inevitabilities. “Obstacles we, as an industry, have influence over include the attractiveness of the offer in terms of assortment, pricing, presentation and theater,” he begins. “We absolutely must work together to overcome an increasing flow of regulation of our industry from regulators who sometimes do not understand the specifics and requirements of our market,” he continues. “Here the industry needs to work together and all stakeholders need to support the associations and bodies that deal with these issues on behalf of the industry. Unfortunately, this is not always the case today.”

The duty free industry began in 1947 in Shannon Airport, where transatlantic flights often stopped for fuel. A great success, the model has now spread to the remotest corners of the earth

$65 BILLION ISSUE SEPTEMBER 2015

* The fastest-growing category ** The second-fastest-growing category Information provided by Generation Research

He also suggests those in the industry need to work collectively on improving footfall and penetration, to understand the drivers for existing and coming travellers. “What motivates shoppers, and what holds people back from shopping? How can technology be used to improve in this area? We need to better understand and use technology. It is very much a part of the world for our customers, the travelers. Nothing of this is insurmountable and the importance of getting it right is clear.”

The importance of associations, conferences and exhibitions “In October 2014, TFWA World Exhibition & Conference celebrated its 30th year,” he says. “In 1985, the TFWA event had 3,000 visitors and about 6,000 square meters of exhibition space. By 2014 we welcomed 6,700 trade visitors and we had nearly 21,000 square meters of exhibition space. “This event and our rapidly expanding TFWA Asia Pacific Exhibition & Conference in Singapore are providing essential forums where key stakeholders and brands can get together, do business, become updated on attitudes and trends and gain insight from experts both within and outside the industry. We at TFWA believe our events, along with those organized in the Americas and by MEADFA in the Middle East, are making a vital contribution to the development of our industry. Every year we strive to enhance and improve the events to the satisfaction of our members and the industry as a whole, and I would submit that we are successful in achieving that objective.” The industry will undoubtedly continue to see changes and the ongoing consolidation will continue for some more years, reshaping the industry as we know it. How will these changes affect the outcome? “An optimist by nature, I see the global travel retail industry continue to grow, hopefully at least in line with the increase of international travel,” says Juul-Mortensen. “There will be serious setbacks, as we have seen in the past, but exactly as we have seen in the past the industry is remarkably resilient, and I see no reason for this not to continue.”

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TRAVEL RETAIL PERFORMANCE BY REGION The commercial area at the new RIOgaleão airport in Brazil will be clean and modern, inspiring shopping in LATAM’s biggest tourism destination

Mixed fortunes by

MARY JANE PITTILLA

Here, travel retail association chiefs give their fascinating insights into the performance of the travel retail industry in their respective regions, from east to west While the Middle East has its economic challenges, airport shopping in Dubai and duty free in general continues to shine

t’s been a mixed year in terms of sales across the world, according to regional travel retail association leaders. They also all agree on one thing: 2014 has been a challenge. Shaky economies, currency movements, government edicts and war have all weighed on the sector’s performance.

Asia Pacific still on top The Asia Pacific region was the star of the travel retail firmament again in 2014, achieving an impressive sales tally of US$24.5 billion – up nearly 10% on last year. But, despite outperforming the original star of the show, Europe, by around US$4 billion, the region had its fair share of challenges, notes Jaya Singh, President, APTRA. “The Asia Pacific region has once again had a year of mixed fortunes,” he notes. “On the one hand we have increased our market share to nearly 39%, outperforming the original ‘top dog’ Europe and making us once again the most successful region for travel retail sales (source: Generation Research). We have seen extraordinary retail centres open in South Korea, China and Taiwan among others, and enhanced terminals open across the region with travel retail at the heart of their design. “On the other hand, we were powerless to resist another government decision to slash the inbound tobacco allowance, namely New Zealand, which followed Australia’s anti-tobacco policy, and these

$65 BILLION ISSUE SEPTEMBER 2015

TRAVEL RETAIL PERFORMANCE BY REGION

restrictions impact all product categories in travel retail worldwide. Then there was the MERS virus which decimated air travel and retail in South Korea in June.” South Korea and China outperformed the rest of the regional field with growth in travel retail sales which far exceeded any other country at 23% and 19% respectively in 2014 versus 2013. Japan and Taiwan each lifted sales by around 14% compared with 2013, which is testament to the strength of their economies and their future-forward approach to duty free, observes Singh. Hong Kong, a more established market, is not growing as rapidly but is still the number five location in the world for travel retail shopping with nearly 5% of the market, according to Generation. South Korea, Thailand, Taiwan, Japan and Hong Kong, all of which have developed “sophisticated and enticing” retail facilities, are strong markets in their own right and are also favorite destinations of Chinese travelers, says Singh. “The sheer size of the Chinese market is guaranteed to make it a major influencer in today’s market and in the future,” he asserts. Singh’s thoughts on China are echoed by Erik Juul-Mortensen, President, TFWA,

Lotte’s downtown Seoul store is one of the many reasons for South Korea’s huge success in travel retail

2012 Korea Service Grand Prix

$65 BILLION ISSUE SEPTEMBER 2015

who also notes the “massive development” of stores that cater to the increasingly affluent population.

The Americas: regional differences In the Americas, Michael Payne, Executive Director, IAADFS, says the past year has shown mixed results. Performance has been strong in some areas such as North America but a bit weaker in South America, he notes, driven primarily by shaky economies in places like Brazil, Argentina and Venezuela. “Even where there is growth, there are examples of downward trends such as a decrease in Russian spend; Asian travelers are spending less on luxury goods; and EU to dollar values have diminished the purchasing in duty free stores by Europeans leaving the US,” he says, adding that the Caribbean region is having a solid year. Passenger numbers are generally up, including air and cruise passengers, but when it comes to forecasts for the coming year, Payne says it will be difficult to predict as travel is increasing but the economies in many places may negate that benefit. “I think it will be spotty,” he concludes.

Putting the spotlight on South America, José Luis Donagaray, SecretaryGeneral, ASUTIL, says that up to the end of 2014 it was a very good year for the region. “We had good growth in the economy and in commodities. Also, because of the weakness of the dollar, it was very cheap for Americans to travel in Latin America. We benefited from those two things.” But performance differed across the region. “The Pacific coast is doing better than Brazil and Uruguay. Mexico, Central America, and Argentina are developing well.” Passenger numbers are growing, particularly among high-spending US travelers. “There are more international travelers, mostly from the US and Europe. The international passengers with the most money are from the US because of the strong dollar. The euro currency situation has made travel more expensive for Europeans.” Looking ahead to the coming year, Donagaray believes the economic situation and political problems in Brazil—the region’s biggest tourism engine—will affect travel retail throughout the region. “We were expecting growth next year and I would say today we will continue with the same level, no growth,” he says.

TR strong in Middle East Turning to the Middle East, Sean Staunton, President, MEADFA, notes that it has been a challenging year for the region due to currency headwinds, but he is sanguine. “The main challenges have been the fall of the euro and the Russian currency crisis. All countries in our region are experiencing this challenge, and I believe it will continue for the coming year.” Passenger numbers continue to grow overall, he says, adding that he believes the surge in spend and travel from African nationals will continue. “Our region faces many challenges but the travel retail industry is very robust and resourceful. Air transport continues to expand with passenger numbers rising all the time. This leads to tremendous opportunity for our business.” Undoubtedly all the association leaders quoted here would agree with Staunton about the tremendous opportunity that lies ahead for the travel retail channel.

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â&#x20AC;&#x201A; CRUISE MARKET IN ASIA

Full Steam

Ahead in Asia The Caribbean may still remain queen of the cruise industry but thereâ&#x20AC;&#x2122;s a new challenger snapping at her heels. Passengers in Asia are flocking to cruises at an exponential rate and this trend looks set to continue by

REBECCA BYRNE

The Chinese Cruise Liner, The Golden Era, showcases luxury brands to its 1,800 passengers.

Four out of 10 Chinese cruise passengers are under 40

he cruise business has taken Asia by storm. Not only are travelers expanding their horizons, but, crucially, Asians are traveling more than ever. The region includes more than 168 destinations across 18 countries, making traveling by cruise ship one of the easiest ways to see all that Asia has to offer. In 2014, 1.4 million people holidayed on a cruise liner, a 34% increase over 2012. Current estimates believe that the Asian market could grow to 3.8 million by 2020. It is no surprise, therefore, that over the past three years ports in Singapore, Hong Kong and elsewhere have injected huge investment into their infrastructure in anticipation of this booming market. Asia may still only account for a small portion of cruise ships and total capacity across the world, but there is clearly a huge untapped opportunity. As ship makers cannot build ships fast

$65 BILLION ISSUE SEPTEMBER 2015

David Goubert, Senior Vice President, Luxury Cruise Retail and Asia office at Starboard Cruise Service

David Goh, Secretary General of CLIA

CRUISE MARKET IN ASIA

Cruise liners are being deployed to Asia from other destinations

enough to supply the ever-increasing demand of the Asian market, cruise liners are being deployed from other cruise destinations. David Goh, Secretary General of CLIA, the world’s largest cruise industry trade association, comments: “There is a lot of investment coming into Asia. Six percent of ships worldwide are currently deployed in Asia and many are being redeployed from other areas such as South America, the Mediterranean and Alaska to cope with the increased demand. In fact during 2015, cruise liners have increased their Asian capacity by 20% and are now offering more than 1,000 Asian cruises.” Mainland China is a driving force behind this rapid deployment, as half of all travelers in Asia come from China. Home to a population of almost 1.4 billion people and a staggering 600 million in the 25 to 54 age bracket, China offers huge opportunities for the cruise business. In 2014 China had 120 million travelers yet only 700,000 took a cruise, a mere drop in the ocean. Leading cruise companies are capitalizing on this trend and investing in China. Carnival Corporation, for example, has not only moved its Chief Operating Officer from Miami to Shanghai, but has recently announced that it is deploying two ships to China in 2016 which will increase its offering in the region by 58%. In addition to expanding its presence in China, Carnival has also announced that the latest ship under construction for its Princess brand will be based in China when introduced in 2017. Home ported in Shanghai, the ship will be the first year-round international luxury vessel designed and built specifically for Chinese guests. Similarly, Royal Caribbean has moved Quantum of the Seas to Shanghai from New York, to offer three to eight night round trip cruises to destinations in North Asia. More recently the company redeployed and rebranded a cruise liner as part of a joint venture with Ctrip and Stone Capital. SkySea Golden Era’s inaugural cruise took place in May 2015 from Shanghai. Cruise liners have recognized the need to bring their best

$65 BILLION ISSUE SEPTEMBER 2015

ships and amenities to the region. New onboard offerings tailored to the Asian guests include activities aimed at multi-generational families and high-end shopping. Among the changes on SkySea Golden Era was a rethink of the restaurant menus, to include familiar and regional favorites, and the addition of an ice bar, trampoline and mini-golf. Starboard Cruise Services, a leading retailer in the cruise industry owned by LVMH Moët Hennessy Louis Vuitton, has also tailored its offering to the Asian market. The company’s Senior Vice President, Luxury Cruise Retail and Asia office, David Goubert comments: “The Asian market is one that is

The growth of passengers in Asia has been exponential over the past two years

evolving fast and we need to make sure that our retail environment works at the same pace. It is no longer enough to have stand-alone brands for one product—we need to have multi brands and work outside the four walls of our store. For example, we have had great success with shopping talks about products and jewelry auctions. We still see luxury brands selling well in watches and jewelry, but increasingly our customers want to have a spread from US$5 to US$50,000. We are constantly looking at new brands for the region, as we believe that the brands we will have in the next couple of years could be very different to what we are offering today.”

Ports are also keeping an eye on the Asian market. Trevor Moore, Managing Director of Hong Kong’s Kowloon’s recently opened Kai Tak Cruise Plaza, has noticed a trend towards a younger demographic which ties in with the fact that within China four out of 10 passengers are under 40. This ‘Generation X’ category has been educated aboard, travelled a bit around the region and have money for luxury items. Moore comments: “With 91% of Asian passengers cruising within Asia alone, it is vital that the retail offering supports this market. We are seeing a demand for luxury products but also a move towards volume of products. Our dominant category at this stage is beauty, driven largely by skincare, with Korean cosmetics being incredibly popular. Luxury items, such as watches and jewelry, still enjoy some demand but at lower price points than Hong Kong has traditionally enjoyed. Unsurprisingly, souvenirs are popular with our cruise passengers as we are also a tourist destination.” Looking into the future, with Asian growth continuing to outpace the rest of the world, cruise ships are continuing to look at ways of capturing this market. Goh concludes: “We are seeing a trend of larger ships with 5,000 passengers looking to become destinations in their own right as they offer activities such as surfing and ice skating. In time to come there will be a range of cruise vessels in Asia, looking for a different mix of customers. The upward trend will only be hampered by the capacity issue, as it is not easy to build a new ship in a year. However, redeployment of existing vessels, emerging nationalities The Chinese Cruise Liner, The Golden Era, and new destinations in Asia will all help to showcases luxury brands to its 1,800 passengers drive future growth.”

www.dutyfreemagazine.ca $65 BILLION ISSUE

ASSOCIATION NEWS: APTRA

The APTRA perspective APTRA President, Jaya Singh, pulls no punches when it comes to discussing the current stateof-play of the duty free and travel retail sector by

CLAIRE MALCOLM The APTRA board

Jaya Singh, President, APTRA

“A

gainst the backdrop of geopolitical tensions and challenging environmental factors, it is a wonder that the duty-free and travel retail industry continues to thrive,” he says as an opener. “The simple fact is that people around the world who are enfranchised and economically liberated choose to travel. Their motivations are multifarious: to expand their business, to visit relatives, to experience new cultures; to broaden their minds. Whatever their reason, it is self-evident from the statistics published by Generation Research that those who choose to travel also choose to shop, and our industry is responding with alacrity,’ he adds. And industry statistics bear out his comments. In 2014, global duty-free and travel retail sales totaled US$63.5 billion, up 5.8% on 2013. Of this, Asia Pacific’s share was 38.6%—or around US$24.5 billion—making it once again the dominant region. Asia also has some star performers when looking at worldwide performance with South Korea heading the list of countries for duty free and travel retail shopping with 12.3% market share. China 22

$65 BILLION ISSUE SEPTEMBER 2015

ranks second at nearly 8% and there are seven other Asian countries listed in the top 25. Says Singh: “In Asia Pacific, fragrances and cosmetics is the largest and fastest growing product category, with fashion and accessories ranking second, followed by wines and spirits then watches, jewellery and fine writing instruments. “Tobacco ranks a strong fifth and, besides being a popular product category in its own right, it is also a proven footfall driver in airport shops and downtown duty free stores. Globally cigarettes remain the top-selling single product in duty free and travel retail with 10.7% market share. Even women’s fragrances can claim only a little over 9% of sales.” Tobacco is a category under constant global threat, from all sides. “Many factions are well-intentioned but illinformed, and we capitulate at our peril. APTRA is actively engaged in the campaign to protect the sales of tobacco goods in airports, airlines, ferries and downtown duty free stores,” remarks Singh. But more needs to be done following recent events like New Zealand’s slashing of the inbound tobacco allowance, following the precedent set by Australia.

“The concern here lies not just in the absolute loss of sales; it also presents a challenge to our ability as an industry to behave responsibly towards our consumers,” says Singh. In July 2015, APTRA was party to an appeal to travel retailers around the world to respect the reduced inbound allowances set by various countries, including New Zealand. “If we as an industry continue to sell products to travelers bound for these countries and on arrival those goods are confiscated or tax is levied, we have done irreparable damage to the image of duty free and travel retail in the mind of the consumer. He will not trust us again. He will not buy from us and nor will his friends.” APTRA took a similar approach with the sale of liquor products in duty free and travel retail, as Singh explains: “We established a code of conduct and a retail staff training course which are intended to ensure that those engaged in this business behave responsibly—respecting allowances, not selling to minors, and so on —so that the image of our sales channel is one of integrity and lawful trading.”

SIGNIFICANT EVENTS

Significant events i SHANNON, IRELAND

1947

HONG KONG

1960

HONG KONG

1968

CHINA

1979

The world’s first duty First Duty Free Shoppers DFS opens first down- First duty free store opened in China (DFS) opens town duty free store free store opens

PARIS, FRANCE

1952

WASHINGTON DC

1966

Weitnauer’s (later The International Dufry) opens its first Association of Airport Duty duty free store Free Stores (IAADFS) founded

$65 BILLION ISSUE SEPTEMBER 2015

BASEL, SWITZERLAND

1983

Weitnauer changes its name to Dufry

COLOGNE, GERMANY

DUBAI, UAE

PARIS, FRANCE

Heinemann opens its first duty free store

Dubai Duty Free opens

Tax Free World Association (TFWA) formed

1970

1983

1984

CHINA

1984

China Duty Free Company established

OTTAWA, CANAD

1985

Frontier Duty Free Association (FDFA) founded

in duty free history SEOUL, KOREA

1985

Shilla Duty Free opens its first store

MIAMI, USA

DFASS Group is founded

1987

BANGKOK, THAILAND

1989

King Power launches first downtown duty free store

BEIJING, CHINA

1990

DUBAI, UAE

GUAM

AUSTRALIA

1990

1995

The first DFS GalLagardère Services air- leria department store opens port operations begin

MONTEVIDEO, URUGUAY

1994

First downtown duty free store in China Asociacion Sudamericana de Tiendas Libres (ASUTIL) is founded

HEIHE, CHINA

1996

China Duty Free Group (CDFG) opens first duty free border store in Asia

JEJU, KOREA

2000

Lotte Duty Free launches

HOLLYWOOD, FLORIDA

2001

Falic brothers acquire Duty Free Americas

2002

First MEDFA Conference takes place

SINGAPORE

2015

Shilla opens world’s largest duty free store for perfume and cosmetics, and DFS Group opens the largest single retail space for wines, spirits and tobacco

www.dutyfreemagazine.ca $65 BILLION ISSUE

THE TRINITY

Three-sided

support

Dulles recently rolled out selfservice kiosks to help automate the international arrivals process, reducing the wait for passengers and allowing more time for shopping

Mathematically, the strongest shape is the triangle. Each side supports the others no matter which way you turn it

ll industries have their relationships, and in duty free that relationship is known as the trinity: suppliers, retailers and landlords. The relationship between these three can sometimes be contrary. Suppliers want more space, a better location or simply to gain access to store shelves. Retailers feel that they have to pay too much to their landlords. Meanwhile, the landlord has to appease airlines by keeping its fees down. This might seem like a catch-22, and indeed keeping all three members of the trinity in a state where they are each happy and contended is not easy. But in business, being happy and contended may not be necessary; in fact it may not even be positive. Success is positive, and to achieve success in duty free, the three members of the trinity, or sides of the triangle, must support each other; they all have to succeed or none will succeed. Jaya Singh holds two important positions in global travel retail: President of APTRA and Mondelez World Travel Retail Regional Director Middle East & Asia Pacific, giving him a more comprehensive view of the industry. He believes that the most important action and, he says, “the most difficult to achieve,” is for everyone within the industry to work together toward a common goal. While the subject matter may be slightly different, José Donagaray, Sec-

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retary General of ASUTIL, agrees that working together is the key to achieving success. “The industry needs to collaborate,” he says. “Airports/ landlords all have the goal to make more non-aeronautical revenue and that comes mainly from duty free and travel retail. Retailers have their hands tied; they have to pay landlords, so it’s difficult for them to achieve their desired profits. To be successful they need to have more promotions, they need to be more aggressive in offers.”

The airport perspective As Donagaray notes, airports are seeking all the non-aeronautical income they can find. While the duty free industry runs on the triad of suppliers, retailers and landlords, the airline industry has its own triad: Airports want airlines, airlines want passengers, and passengers want inexpensive flights. That means high nonaeronautical revenue. To achieve that, an airport needs to ensure that passengers have the commercial locations and an environment suited to shopping and dining. An airport also needs to ensure that passengers get through ticketing, gates and security quickly, and that the experience does not put them in a negative frame of mind.

Dry, comfortable and well fed In 2013 the Metropolitan Washington Airports Authority (MWAA) announced

a complete overhaul of both Dulles International and Reagan National airports. At Dulles, an increase in capacity is necessary. While the airport has a strictly controlled schedule and perimeter, the government has allowed increases over the past 10 years, raising the annual passengers from 15 to 20 million. That number is expected to surpass 22 million this year. Therefore the rebuilding of that airport is in great part to increase the airport’s capacity. For both airports, however, the main purpose behind the renovations and reconstruction is to improve the customer experience. At Reagan, the renovations will mean some passengers who formerly had to brave the elements to board the plane will no longer have to, since some of the outdoor boarding areas will now be covered. Dulles, meanwhile, recently rolled out “Dulles Passport Express,“ self-service kiosks to help automate the international arrivals process, reducing the wait for passengers to be seen by a U.S. Customs and Border Protection officer,” says Baker. At both these airports, the MWAA has also made it a priority to improve the shopping and dining choices. Many of the commercial units have already been upgraded, and this process will continue into next year. “The Airports Authority makes it a priority to provide passengers with an enhanced travel experience, and retail is a

Bacardi holds successful activations at many around the world that attract customers and engage them with the brand, like this recent one for John Dewar & Sons Fine Whisky Emporium

part of that strategy,” says Steve Baker, Vice President of Customer and Concessions Development at MWAA. “Concessions allow travelers to do last-minute shopping for things they need or desire while traveling, and also dine at locally known and nationally recognized restaurants.” Baker also has a solid understanding that to increase sales and thus nonaeronautical revenue, airports need to work closely with retailers on promotions. “Retail and dining promotions are consistently occurring within the airport,” he says. “For instance, our marketing teams at Reagan National and Dulles International recently concluded a Fourth of July sidewalk sale and Cherry Blossom Festival Event in the spring, where concessionaires highlighted pink themed promotions, in honor of Washington, DC’s, annual Cherry Blossom Festival. We continue to hold grand opening celebra-

tions for new retailers, and our holiday promotions featuring special performances and gift-with-purchase offers will be an ongoing theme to create a festive shopping environment.”

Inducing the traveler to buy As airports and retailers understand that they need promotions and activations to get the traveler enthusiastic about shopping, so does the supplier. The cost of big activations can certainly be prohibitive to smaller suppliers, however, and sometimes even if they’re willing to spend the money it can be tough to convince the retailer that they will achieve enough sales of the independent or lesser-known product. Even smaller suppliers can benefit from promotions, however, if on a smaller scale. Gifts-with-purchase or 3-for-2 promotions, for example, can be very successful.

Greg Cohen, Vice President of Corporate Communications for Patrón, says: “We work very closely with our duty free partners to design programs that best benefit their stores and their customers. And of course we pay particular focus on getting people into the store in the first place. For example, in many stores we have designed eye-catching sampling programs in the front of the store, where we often mix a cocktail or conduct a demonstration. For a brand like Patrón, it’s important that we not only communicate that our tequila is a sophisticated, luxury spirit, but also that it’s highly versatile and mixes well into any number of cocktails.” While the three sides of the duty free industry’s triangle may sometimes be at odds with one another, in the end the challenges they each bring to the table must be overcome by all, hopefully strengthening the entire industry as they work to do so. The MWAA is upgrading the shopping and dining experience for travelers at both Dulles International and Reagan National

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BRAZIL: RIOGALEÃO

Advancing on

all fronts

When RIOgaleão took over operations at Tom Jobim International Airport, they wasted no time in revamping every area by WENDY MORLEY The Gol Airlines area of RIOGaleão’s apron

n spring of 2014, the consortium RIOgaleão signed a contract to take over operations at Rio de Janeiro/ Galeão–Antonio Carlos Jobim International Airport, otherwise known as Tom Jobim International Airport. The consortium, made up of Odebrecht (which specializes in construction and infrastructure), Changi Airport Group and Infraero, the Brazilian governmentrun airport company that had previously run the airport on its own, began as the airport’s operators and administrators in August of that same year after a period of assisted operation and transition. With over 17 million passengers in 2014, Tom Jobim Airport is one of the busiest in Brazil, and numbers at its airports continue to rise, doubling within the next five to seven years and reaching 80 million pas-

sengers per year by 2038, toward the end of RIOgaleão’s concession period. Reaching these numbers is something the consortium takes seriously. “Our commitment to growth and improvements at the airport made possible an increase of 3% on the number of domestic passengers and more than 7% on the number of international passengers when comparing the first five months of 2015 with the same period of 2014,” says Sandro Fernandes, Chief Commercial Officer for RIOgaleão. The FIFA World Cup took place in Brazil while the consortium was still transitioning into its new position. Currently the country is gearing up for 2016’s Summer Olympics. RIOgaleão, which quickly began renovating, updating and increasing its commercial area when it took over operations last August, is intent

on making the most of this busy travel time while preparing for the predicted future growth. “[During the World Cup] it was already possible to see a slight increase in the number of foreign visitors and, consequently, a positive impact on trading income,” says Fernandes. “Since we will be better prepared to receive a greater flow of passengers with security and comfort, due to the completion of the improvement to the airport infrastructure, our expectations for the Olympic Games are extremely positive.” Once the airport is completed in 2016, over 100 new commercial units will offer a large variety of goods and services to meet customer demand. In addition, there will be specific areas of the airport designated for the Olympic Committee Rio 2016 which will prepare special activities relating to the games (similar to the “Fan Zones” installed at the airport during the World Cup in 2014).

Commercial is key

A rendering of the new food court demonstrates how important the atmosphere is to the new management

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Once the RIOgaleão consortium took over commercial space immediately increased, and it will increase much more in the coming year. “We had less than 5,000 square meters of commercial area before taking over the concession. Since taking over, we have added 60 new retail and F&B outlets, around 2,500 square meters of commercial area. New outlets include McDonalds, Dominos, Koni, Starbucks, Katz Chocolates, Havaianas,

Airside migration A significant change RIOgaleão is making to the airport’s commercial structure is to increase the airside space. “Brazilian airport terminals traditionally have a strong orientation towards landside shopping. However, airside is where we see the potential, as the dwell time is longer, and passengers are more relaxed and will be in a better mood to spend. Terminal 2 is undergoing a mega refurbishment, which will create more airside space. An entire new floor of shopping and dining is being created for our departing passengers.” Brazil legislates a cap on aeronautical tariffs in the country, and that makes non-aeronautical income even more important. “Airports are also constantly under pressure from airlines to reduce cost, given their challenging operating conditions,” says Fernandes. “The only way to increase our revenue is to focus on non-aeronautical. We want to make it as pleasant as possible for our airport users to help us achieve that, with an exciting retail offer, sensational F&B choices and innovative new services.”

Chocolate Q, Life by Vivara, Maria Oiticica, Zeppelin Arts and Hudson News, among others. Next year, with the construction of the new pier and revitalization of Terminal 2, we will have around 25,000 square meters of commercial area. This translates to more than 100 new outlets by the Olympic Games of 2016.”

Understanding the customer Once the consortium had taken over operations, it conducted a large-scale passenger survey to understand the passenger demographics, shopping and dining preferences. “With the results, we began introducing new retail and F&B outlets that passengers had been demanding. That’s why you see new McDonald’s, Starbucks, Dominos’ Pizza, Koni’s, Espaço Sushi, Café Sulicy, 365 Deli and Piola outlets at the airport,” says Fernandes, explaining that this research also brought about some smaller retailers. “Maria Oiticica specializes in eco-friendly, handcrafted jewelry made from materials that reflect the livelihood and culture of various indigenous peoples of the Amazon region. Zeppelin Arts specializes in Rio de Janeiro-themed souvenirs. Chocolate Q

gives passengers a taste of the purity and originality of Brazilian cocoa. Many of these first-in-Rio, first-in-a-Brazil-airport concepts are changing our passenger’s perception of the airport and operators’ perception of the business opportunity in RIOgaleão.” While many airport retailers seem to be streamlining their product offerings across the world, RIOgaleão is taking a cue from significant research and offering authentic local products. “We want to make RIOgaleão distinct from other airports. We are in Rio de Janeiro; this airport will be a showcase of our Carioca culture. We will offer the most important and prestigious Carioca brands to give that distinct sense of place and appeal to a broad spectrum of shoppers.” Fernandes is excited about the new pier, which will have nearly 2,000 square meters of new commercial area. “I dare say that this range of retail and F&B options will be unlike anything in any of the current Brazilian airports,” he says. “We aim to create new commercial opportunities at RIOgaleão that cater to passengers from all walks of life.”

Wayfinding, parking, hotels and more As a hub where millions of people pass through each year, an airport must offer much more than just ticket counters and suitcase delivery to be truly functional, and also to help passengers have the time and be in the right frame of mind to shop. RIOgaleão continues to improve services, offering extra counters and bilingual professionals, free wifi, new wayfinding design and signage, to make life a little easier. It also has acquired 33 new boarding bridges, which will be installed later this year. Soon a large hotel will be open on the property. While the year since RIOgaleão took over operations has not been positive for the Brazilian economy, Fernandes says this has not had a negative impact. “We are very optimistic. Commercial revenues are expected to be solid with new stores at the airport in addition to the increase of passenger numbers. In February of this year, for example, international flights peaked to their highest number since 2012 and there was 10% increase over the previous year. Domestic flights also increased by 6% over the same period.”

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â&#x20AC;&#x201A; FASHION RESEARCH: M1ND-SET

Fashioning a top three

category by

HIBAH NOOR

Dr. Peter Mohn, Owner & CEO of research specialist m1nd-set, casts fresh light on the huge potential of the fashion category in travel retail

ravel market researcher m1nd-set has some good news for airport fashion retailers: most travelers want to see a broader selection of fashion shops and products in travel retail. m1nd-set, which is currently conducting bespoke research for several important players in the fast-growing fashion category, has been mainly focused on cultivating an in-depth understanding of the reasons why travelers prefer or choose not to buy in duty free versus downtown. Additionally, the company has undertaken research to define the key triggers and what could be improved, as well as understanding what could boost conversion rates among fashion shoppers.

Dr. Peter Mohn, Owner & CEO, m1nd-set

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According to m1nd-set Owner & CEO Dr. Peter Mohn, “We clearly see that in all parts of the world—from China to South America—most travelers wish to see the fashion category grow and offer a wider and broader selection of fashion shops and items compared to what is currently available. In this sense, fashion is quite the contrary to almost all other categories.” When it comes to consumer shopping trends in the fashion category, Mohn has observed that more and more men are shopping and buying fashion items. “Many men say they are starting to take this channel seriously when shopping for fashion, especially since they can mainly shop alone (without their wives or partners), and they have more time to shop at an airport compared to at home, plus they appreciate the appealing shopping atmosphere at airports, especially in Asia, where they often find downtown too crowded.” In general, discovering new things can spur travelers to purchase in the category. “The mindset of travelers is always different compared to when they are at home, and they are consequently more likely to try new brands. However, most shoppers decide on the brands they already know,” he noted. According to Mohn’s research, 56% of travelers at airports bought fashion items to treat themselves. Other reasons for buying fashion at airports included convenience (cited by 41% of those polled), as a gift for others (38%), to save money (33%), to have a memory of the trip (22%), promotion/special deal (19%), and because they could not find the item at home (17%). Some 16% said they made a fashion purchase because it was guaranteed to be authentic. Only 8% said they were asked to buy something for someone, while just 8% cited duty free exclusivity as a reason for purchase. Most fashion purchases at airport shops were spontaneous, with only 31% of purchases pre-planned. When buying fashion at airports, 45% of travelers compared prices with downtown shops, while 34% did not compare prices.

Only 12% compared prices against the internet, and 9% compared prices against other airports. When it came to the disadvantages of buying fashion at airports, 42% of people cited the limited selection of brands/products. Other disadvantages included bringing the purchased item on the trip (21%), difficulty of exchanging purchased items (17%), and limited time to shop/try products (17%). Regarding challenges facing the fashion category, despite the price perception being an important issue for shoppers, other unmet needs exist and should not be overlooked, said Mohn. The main reason for not purchasing is the inability to find a suitable brand or item. This is also reflected by the fact that the most frequently mentioned required improvement from the traveler is a greater selection of brands and products. In addition, some convenience issues could be addressed in order to facilitate the shopping experience. The ability to exchange products in a downtown store or to pick up the purchase when returning from the trip would be a welcome addition to the current offer in the fashion category, he said, adding: “In order to match travelers’ expectations, the fashion category should offer a balanced mix of emotional self-indulgence products, well-known global brands, which are always expected, but also products suitable for gifting, as well as local and authentic products.” It is difficult to predict what the category will be worth in the next five years, since external, uncontrollable factors might impact the growth. However, Mohn believes fashion will belong to the top three categories in future. “This category is becoming more relevant for the traveler and a greater part of the whole travel and shopping experience. Over time, we see more and more travelers arriving early at the airport to have time for shopping, and shopping fashion plays a more significant role compared to two to three years ago.”

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FUTURE OF DUTY FREE

Crystal ball It’s been an extraordinary rise for duty free and travel retail. Can this trajectory continue? by

WENDY MORLEY Jaya Singh, APTRA President, believes the Chinese traveler will remain a pivotal factor in our business for the foreseeable future, despite recent slowdowns

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he past of duty free and travel retail is remarkable, begun by the visionary Dr. Brendan O’Regan, who had great success with the concept, but it took a long time to spread. In the 1960s, the industry opened up elsewhere, ultimately making its way around the globe, but its growth was not slow and steady. Until 1960, growth was insignificant; the industry hadn’t yet moved outside Ireland. That year, however, Duty Free Shoppers (DFS) opened up in Hong Kong. Soon the company began opening locations in Europe and elsewhere in the world. Other companies soon followed. The International Association of Airport Duty Free Stores (IAADFS) was formed in 1966. By the mid 1980s, the industry was coming out of its adolescence. The Tax Free World Association (TFWA) was formed at this time. Global duty free sales reached US$6 billion. The industry was on the precipice of exponential growth, with sales increasing to 10 times that number over the coming years. And big changes have occurred during those years. Recently, the most significant changes have come about because of a series of acquisitions, most notably Dufry’s acquisitions of Nuance and World

Promotions and activations are key to getting customers into the duty free stores and encouraging them to buy

Duty Free. Mergers and acquisitions are headline grabbing and certainly relevant to business, but in reality the industry is constantly in some sort of flux brought about by global economic and political situations, by government regulations, notably tobacco and also, in the case of China, by stemming conspicuous consumption; also by the battles to win tenders, by airports wishing to make more money and by airlines restricting carry-on allowances.

Looking ahead Long-term success relies at least in part on foreseeing the future and preparing for it. So what does the future hold in duty free and travel retail? What can— or must—a business do to survive and thrive? Sometimes business leaders, even (or especially) enormously successful business leaders, become stuck where they are, doing the same things each day, filling out the same orders and going through the motions and not keeping up with the world as it changes. But research and technology are meant to be used to a business’s advantage. Plenty of big businesses have been blindsided by technology, making the mistake of not viewing it as a

countries such as the UK and the US. Despite the recent slowdown, China outbound travel is expected to rise +10% in 2015. However, Russian travel will slip by -2% after a -15% contraction in 2014, affecting all their popular destination markets. India and Indonesia are expected to drive the global market through the increasing wealth and changing consumer habits of their populations.”

Threats from above

It is imperative that the industry present a united front to the authorities and cultivate an image of integrity, honesty and fairness to the traveling consumer. APTRA has created a Code of Conduct for the sale of alcohol in duty free, among other measures

powerful tool. And the results of research are sometimes simply ignored. For Michael Payne, President of IAADFS, the key to success is an obvious truth that sometimes gets forgotten: the industry needs to get more people into the stores and ensure they purchase while they are there. “Absolute focus needs to be on improving passenger penetration rates,” he says. “We have to do a much better job getting them in the stores and then getting them to buy. A huge number of customers just walk by without stopping in to look or, even more important, make a purchase.”

Tricks of the trade Suppliers, retailers and landlords agree that one of the most important ways to improve this is with promotions and activations. Creative activations and effective promotions both serve to draw the customers in and encourage them to buy, and that’s not going away anytime soon. Greg Cohen, Vice President of Corporate Communications at Patrón, says sampling in travel retail was, and continues to be, incredibly important for the company. “We work very hard to communicate that Patrón is an ultra-premium 100% agave tequila that’s every bit as sophisticated and flavorful as a fine scotch or cognac. Many

of our early activations and promotions – still to this day – are focused on education and sampling, and positioning Patrón as high-quality, sophisticated spirit. We owe much of our international growth and success to the travel retail channel.” Payne, meanwhile, believes that—in line with research—retailers will need to offer more local products in combination with the established global brands. For the industry as a whole, he believes the future holds more mergers and acquisitions; he sees a move toward improved stores that offer a greater product selection. He also sees a continued investment in airport infrastructure that should support these improvements and this technology.

The rise of Asia APTRA President Jaya Singh sees a gradual development of Asian countries in duty free, saying both India and Indonesia have massive potential that will not be realized overnight. “The APTRA research indicates that the purchasing power of the Chinese traveler will remain a pivotal factor in our business for the foreseeable future,” he says. “Euromonitor International’s latest travel research suggests that international arrivals will grow by +4% in 2015, driven by forecast economic growth of +5% in developed

Singh feels regulation and legislation are a great threat to the industry. “We are faced constantly with legislative and regulatory challenges which threaten the future development and prosperity of our business. Although we may be tempted, for example, to dismiss a restricted allowance of one single product category in one country as an isolated incident, this is far from the case. It can inspire copycat action and widespread repercussions all over the region, and indeed the world. We urge our members and the industry as a whole to be vigilant and to alert their fellow stakeholders and representative associations so swift action can be taken to inform, educate and influence the decision-makers.” Singh believes the very most important action, “and the most difficult to achieve,” is to work together towards a common goal. “We—retailers, brands and landlords—must present a united front to the authorities and cultivate an image of integrity, honesty and fairness to the traveling consumer.” APTRA has created a Code of Conduct for the sale of alcohol in duty free, and also an online Responsible Retail Training Program for staff with that very objective in mind. Erik Juul-Mortensen, President of TFWA, believes that it’s possible for the industry to grow tenfold again over the next 30 years as it did in that timeframe previously. While Singh may not put a number on it such as that, he does believe that there is considerable room for growth. “If we have political, economic and overall environmental stability then the size of the pie will continue to increase significantly. The investments in infrastructure in air transport and the sheer number of people who are having increasing access to travel have been and will continue to be the structural growth drivers to the business model that we all share.”

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BEAUTY: PERFUMER’S WORKSHOP The Amouroud Collection will officially launch this fall, starting in Dubai and Saudi Arabia

Genius in a bottle Perfumer’s Workshop International is tapping by CLAIRE MALCOLM into new interest in niche fragrances with a line that fuses east and west

he demand for niche fragrances is growing worldwide. In 2013, in the US, the subcategory grew by an impressive 25% against just 4% in the prestige fragrances category. An increased propensity by a certain level of consumer to spend more on something that has niche appeal is also driving fragrance development, and the Amouroud Collection from Perfumer’s Workshop International takes a rare and much-prized ingredient, and reinvents it with contemporary flair. In the business for more than 40 years, Perfumer’s Workshop is known around the world for its signature Tea Rose fragrance, and Samba, its master brand, which first launched in 1987. The move into an oud-based collection has been four decades in the making, as company President, Donald G. Bauchner, explains: When we opened in Selfridges, London, in the early 70s, that was when Lebanon’s civil war started and a lot of people from the Middle East who would traditionally spend their summers there, were coming to London instead. “We kept hearing the word ‘oud’ and this piqued our interest as we were already working with 64 essential oils, and looking at new notes; so we researched the ancient origins of oud and its deep, rich, sensuous notes.”

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Keen to develop its own version, Bauchner spoke to some of the company’s Middle Eastern distributors who nixed the idea, commenting that a western perfumier would not have the understanding and background required to develop such an inherently eastern fragrance. Bauchner stayed interested in the idea and the technicalities of working with such a valuable ingredient, but it wasn’t until the arrival of niche brands into the market a decade or so ago, that he resurrected the concept. “Maybe four or five years ago we began to see the word ‘oud’ pop up again in the niche arena. Even brands like Tom Ford and Guerlain were picking up on it, and we decided that the time had come for us to get involved,” he says. The team took an unconventional approach to the development of the Amouroud Collection, taking familiar notes and blending them with a variety of oud notes and interesting western notes, to see how the personality characteristics could be brought out. “We did this to make a western perfume more interesting to that market and, by the same token, create a new perfume for consumers from the east who would be open-minded in terms of oud mixed with different elements,” says Bauchner. “Amouroud is probably the first line to feature more traditional types of beauti-

ful fragrance notes, with each fragrance containing a special oud element to create something unique. It is simply a great mixture of cultures,” he adds. The Amouroud Collection, which was previewed at TFWA 2014, will officially launch this fall, starting in Dubai and Saudi Arabia followed by a rollout to other key locations including Russia, Pakistan and Singapore. “Singapore will be the first market in Asia because of its strong retail positioning and high volume of tourists who will purchase and then spread the word back in their home countries about this category of commercial niche fragrances,” notes Bauchner. The elegant gold and black-packaged collection will have 10 fragrances including Miel Sauvage, Dark Orchid, Midnight Rose, Oud du Jour, Silk Route, Agarwood Noir, Bois d’Orient, Santal des Indes, Oud After Dark and Safran Rare. “We are planning to launch three or four to begin with so that each one gets a lot of attention. We will probably run with Miel Sauvage, Santal des Indes, Oud du Jour and probably Dark Orchid,” confirms Bauchner. “It’s a meeting of minds between us and our distributors as we all have our own taste, and what we also like to do is have our distributors pull together their savviest performers on the floor and get their opinions,” he adds.

10 years

dedicated to caring for your business (2005 - 2015) You have the passion for excellence in duty free and travel retail. We have the means to help you sustain this in the long-term - connectivity, research, advocacy and training. APTRA would like to thank our members for their loyal support over the past decade.

JCI JEWELLERY

On-Trend Aeon

Expanding Across Asia An established brand on-board UK and European airlines since 1995, Aeon Jewellery is taking its ‘impulse purchase’ appeal into new markets by

CLAIRE MALCOLM

Bracelets are a popular on-board purchase, with double or triple sets offering value for money

Bangles will continue to a big thing moving forward, according to Aeon, continuing the trend of the last few years

Aeon’s Fiesta bracelet, with its tribal ethnic appeal, is a favorite with the younger, trendy traveler

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successful sub-brand of Belfast-headquartered JCI Jewellery, Aeon has tripled its sales figures over the last 12 months and is hoping that its cross-demographic products will resonate with new audiences in Asia and the Middle East. The company already has listing with Cebu Pacific, Myanmar Airlines, Air Vanuatu, MIAT Air Mongolia, Jetstar Japan and Air Niugini, and recently secured new listings for China Airlines and TransAsia. “We are looking forward to the challenge that comes with entering the region. We are already doing business with a couple of companies including King Power, and we now want to target the wider market,” says Jeannie Archer, Head of Sales/Development, Aeon Jewellery.

As well as Asia Pacific, the Aeon brand is being pitched to a Middle Eastern audience with Archer keen to get on-board big regional carriers. “Our approach is getting to know a market and finding out what the customer wants, not just offering a standard range. So, if they’re looking for something a little different or in a certain price band, then we are very adaptable in that respect,” notes Claire O’Donnell, Key Account Manager, Aeon Jewellery. Aeon has also introduced a collection with a higher price point, called Luxe London, which is strengthening its overall offering. “In Asia, customers tend to go for smaller pieces that are a little more delicate. For the Middle East we are looking a products with a bit more bling,” explains Archer.

For its Middle Eastern customer, the company will be retailing products with the added ‘bling’ factor

2 Rose gold is in high demand with Aeon customers this year

The company is also able to tailor product packaging to suit the specific requirements of each airline

“It’s always something of a compromise as there are a lot of Europeans on these flights as well, so we aren’t targeting exactly the same market as Middle Eastern suppliers; we are trying to fit between the two. Essentially we are aiming for the widest possible market—that’s a basic Aeon target,” she adds. The value proposition is also winning Aeon new fans, as its collections are affordably priced, with an upper limit of around €55 (US$62), yet communicate a quality message. “One of the advantages we have is that we are exclusive to travel retail and so, in that respect, we have an edge and this also allows us adaptability in terms of the products we are presenting,” remarks O’Donnell. “We do look at a higher price point for those markets that can accommodate it

and where the overall travel retail offering is at a higher level. We also make use of our owning company, JCI’s, 30 years’ of experience, which is an added benefit especially when entering new markets,” she adds. Plenty of operators and retailers are familiar with the JCI name and the Aeon brand, she says, brings something fresh and new to the inflight travel retail mix. The Middle East is one region where Aeon will be retailing its premium collection, as Archer explains: “We are introducing a slightly higher price brand as we researched the market and saw that the scheduled airlines are selling slightly higher than in Europe, for example. So this gives us a bit more scope and we can bring in the expertise of our parent company, which will enable us to come up with some lovely pieces.

“Working with our parent company means that we get extremely good prices as there’s nobody between us and the customer; so this is another reason why we are able to offer excellent value for money.” The traditional core range of sterling silver and plated jewelery is complemented by new collections that pick up on global trends. Another successful brand is Love Lily, which debuted in 2014 and, following domestic success, has been listed on Aer Lingus, Virgin, Thomas Cook Denmark and TUIFly. “Bracelets are incredibly popular right now, especially in a combination of several colors and rose gold is something that customers are asking for at the moment. Bangles will continue to a big thing moving forward, and this trend has been around for a few years already,” says O’Donnell. Aeon’s Fiesta bracelet, is a favourite with the younger, trendy traveler, and with a retail price of between €25 (US$28)- €29 (US$33) has just gone into Scandinavia for a second year, with a listing on EasyJet coming up. Says O’Donnell: “We work very closely with our buyers, and what we can do is put together unique sets to achieve a certain price point for an airline, like a three-piece bracelet set. “The good thing about this is that we can also tailor the packaging to the specific requirements of each airline. We have the option of presenting in a box or pouch, which again works to suit their on-board space constraints.” New for Aeon this year is a watch collection, which launched in 2014 under the brand ‘Moon’. Priced at an average of €15 (US$17), Archer reports that they are seeing positive sales figures from clients such as Ryanair, Air Aigle and Aer Lingus. Says O’Donnell: “The collection is being added to continually and we also designed and produced specific packaging for the brand. There is definitely a market for our watch brand with this target price and there are more exciting developments to come. “We are constantly exploring opportunities in new markets and the watches are a good example of where we identified a potential niche.”

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JEWELRY REPORT

Precious

cargo by

CLAIRE MALCOLM

Classic jade, timeless pearls and on-trend rose gold are inciting travelers to reach for their wallets this season. We speak to three regional jewelers about their favorite products and new collections Sun Jewelry Taiwan’s Sun Jewelry has been in the jade jewelry business for almost 30 years, and has a loyal following, but the company has its eye on a new, younger audience. Retailed in-flight and on board airlines such as Malaysia Airlines, Thai, Singapore Airlines and Tiger Air it also has listings with other international carriers like Swissair and Northwest Airlines. According to Elaine Chou from the Brand & Marketing Division, the company is adapting to market demand and picking up on global trends to grow its duty free and travel retail presence. Its core product, jade, is sourced predominantly from within Taiwan, with some coming from Myanmar, and pendants are the top sellers in Asia.

The Mona Lisa themed line from sun Jewelry is an attractive option for Asian travelers interested in western culture and history

“It differs from region to region but jade is always a popular stone with Asian customers, as it symbolizes happiness and good fortune. The round pendants, especially the multi-function one that has two sides and can be flipped around to show the different colors, are our best seller,” she says. Moving away from jade, the Elizabeth brand is aimed at a younger audience, primarily female office workers, according to Chou, who are looking for something fun and pretty. “We also have another brand called Sophie, and this is our youngest generation-specific brand, targeting 18-year-olds,” she notes. “Although Sun Jewelry is our main focus and is very well known, we are now appealing to a younger audience with Elizabeth and Sophie, whereas it is a slightly more mature customer who is purchasing from our Jade Collection,” she adds. The brand is also keen to combine elements of both eastern and western culture in its Jade range, bringing innovation into the design arena to increase the appeal to a new generation of traveler. Its most unusual collection to date is inspired by the Mona Lisa, as Chou explains: “This is our new design for 2015. We chose the Mona Lisa as the central image as it is a historic painting and recognized by most people; so it is attractive option for those interested in western culture and history. “It’s currently available inflight as well as at our new duty free store in Haitang Bay, which is doing very well.”

Toscow Australia

With a 30-year pedigree, Sun Jewelry can be found onboard major carriers such as Malaysia Airlines, Thai, Singapore Airlines, Swissair and Northwest Airlines

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Francis Ng, General Manager for Toscow Australia is hoping that the company’s ultra-feminine pearl line will win new admirers as it prepares to launch two collections at TFWA World Exhibition. “We are renowned for our crystal jewelry but our pearl jewelry is also doing very well in travel retail and we will debut our Bloom rose gold plated collection of pendants, bracelets and earrings featuring freshwater cultured pearls and flowers,” he says. The second collection, called Ivy, is an elegant interpretation of entwined ivy leaves and stems accented in two-tone rose gold and rhodium plating. “It is perfect for everyday wear as well as special evening occasions,” remarks Ng. China remains the star performer for Toscow in Asia with its shop-in-shop stores at Beijing and Shanghai International

Airports performing extremely well in the first half of 2015. Its recent listing on board Korean Air is also taking the brand places. Says Ng: “Our downtown and border Toscow’s new Bloom shops also beat budget collection fuses forecast, thanks to the plated rose gold freshwater cultured increase of travelers pearls and flowers in China.” The Enchanted Wings collection also still occupies top spot in terms of customer demand, despite being on the market for the last two years; with new designs added at TFAP in Singapore helping keep the collection front of mind. “Talking trends, rose gold color is the most popular color for 2015 and we forecast this trend will continue till at least the start of next year. Service and products are the two main factors that allow us to grow stronger and expand, and we provide fast market response and implement proactive initiatives to keep us ahead of our competitors,” he says. “Christmas and Chinese New Year 2016 are the two key events coming up for us next and we will have special pendants designed to celebrate the festivals, which will be given as a gift with purchase,” he adds.

Pica LéLa

The “rising star” this year is its Dynasty Collection, which was launched at TFAP in May. Says Lynch: “It has already been picked up by key partners such as Singapore Airlines and Eva Air. We also launched two inflight exclusives in Singapore and you will see listings from these exclusive pieces in the coming months.” With price points from US$70-$300, the brand offers something for everyone, but with a rising average spend, as Lynch explains: “In recent years we have definitely witnessed a growth in the average price point, with most of our sales now coming from the US$100-$150 mark and trending constantly upwards. “Singapore Airlines, for example, features the Esmeralda Collection necklace at approximately US$268 and will launch a US$220 set from the new Dynasty Collection in September.” “However, lower price points are required for certain regions such as Africa, where we try to offer pieces for under US$100,” she adds. Lynch also picks up on the trend for rose gold, as used in the Dynasty Collection. “This is substantially present in the Asia region, perhaps due to the fact that the subtle rose gold tone is very complimentary to Asian skin tones.” “Modern interpretations of classic styles and the use of materials such as pearl, is also striking home in terms of popularity as consumers increasingly look to classic styles with great attention to detail.” In addition to new partnerships with United Airlines, South African Airways and Vietnam Airlines in 2015, the brand will shortly debut at Cairo’s international airport. “Travel exclusivity is critical whether it takes the form of exclusive product, pricing, packaging etc., and for in-flight consumers we find that value-added gifts are key to attracting attention and aiding push-through,” she says. “In duty free, the offer is more all-inclusive of the complete product and marketing elements and the whole package and presentation is key,” she concludes.

Strong performance and growth in China and Singapore are boosting market share for Wellington Jeweller’s Pica LéLa line, with the company investing significant resources into product design and marketing to further broaden its appeal. “Due to the increasing endorsement of the Pica LéLa brand by our consumers, we have also been able to introduce new styles at higher price points which has helped support growth,” says Sarah Lynch, Senior Manager, Marketing & Business Development, Wellington Jeweller.

The “rising star” for Pica LéLa in 2015 is its Dynasty Collection, which was launched at TFAP in May

Pica LéLa has seen a growth in the average price point in recent years, with most of its sales now coming from the US$100-$150 mark

www.dutyfreemagazine.ca $65 BILLION ISSUE

COMPANY NEWS: JOHNNIE WALKER HERITAGE

The Tasting Bar at the JOHNNIE WALKER HOUSE Singapore, where consumers can enjoy whiskies from the luxury portfolio

Here’s Johnnie! With exclusive products and packaging, pop-up shops and now complete experiential stores, Johnnie Walker truly set the bar for liquor sales in travel retail by

ohnnie Walker is the leading brand in global travel retail, and is the world’s best-selling blended Scotch whisky (IWSR 2013). One of the oldest global liquor brands, Johnnie Walker has been available throughout the world since the early 1900s and by 1920 it was on the shelf in 120 countries. Because Johnnie Walker was already a well-established global brand, it was an easy choice for early duty free stores during the late 1940s and 1950s. “Johnnie Walker was one of the first Scotch Whiskies sold on Cunard cruise liners including the Queen Mary and the Queen Elizabeth and it was one of the first brands to be sold on board Pan Am transatlantic flights,” says Gillian Naylor, Head of MarFar ahead of the curve, Johnnie Walker was displayed in special showcases in the 1950s, as shown here in this image from Prestwick Airport, 1957

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WENDY MORLEY

keting for Johnnie Walker in Diageo Global Travel and Middle East (GTME). The Johnnie Walker brand seems almost to have been preordained for travel retail. The name itself, “Walker,” the iconic image of the walking man, and the travels the whisky made around the globe—this all foretold a future rich in travel and global success. “Travel is in the DNA of Johnnie Walker,” says Naylor “The Walker family members were quick to realize the export potential of their whiskies and sent agents across the world to develop their business. In fact in 1932 they even designed a unique bottle shape, ‘Swing,’ perfect for travel by ship, as it swings back and forth to cope with the rocking of the sea.”

Premiumization and differentiation Johnnie Walker has also been a frontrunner of the trend toward premiumization that is so strong throughout the industry. “Johnnie Walker has been integral to our development of luxury shopping experiences as, along with our strategic retailing partners, we seek to drive the transformation of the liquor category,” says Naylor. “With this focus on luxury activations, we are seeing very strong growth of Johnnie Walker Super Deluxe and core variants. The Johnnie Walker range of Blended Scotch Whiskies has continuously evolved and the brand has been heavily promoted in global duty free outlets for many years. As the speed of growth of travel retail accelerated, it became a key channel for the brand’s innovation and we began to premiumize Johnnie Walker.” Premiumization is an important aspect of Diageo’s travel retail philosophy, but no more than differentiation. Travel retail, or the sixth continent as it’s often referred to, is the perfect spot to release products that are completely unique and unavailable else-

where, either as a test, with the aim of introducing the item to the domestic market after a certain amount of time, or as a perennial travel retail exclusive. As a brand with passionate fans and collectors, Johnnie Walker’s travel retail exclusives work exceptionally well, and Diageo has released a number of them. In the last five years, Johnnie Walker travel retail exclusives have included Johnnie Walker® Double Black™ in 2010, Johnnie Walker® Blue Label™ The Casks Edition™ in 2011 and then four whiskies in the Johnnie Walker® Explorers’ Club Collection, among others. “Travel retail exclusives resonate strongly with consumers, giving them Johnnie Walker blends not available in domestic markets and marking them as travelers,” says Naylor.

A new branded shopping experience “How the brand has been sold in duty free has developed rapidly in line with our strategic focus on premiumizing Johnnie Walker and developing the luxury opportunity. In the pioneering spirit of the brand, we have worked closely with customers over the years to help transform the liquor category from the old concept of ‘supermarket shelves’ to a true shopping experience that gives consumers time and space to immerse themselves in brands,” says Naylor. The natural progression meant pop-up stores and then recently a much more significant investment in creating Johnnie Walker Houses in travel retail, which Diageo believes will be game-changers for the luxury spirits segment. While Johnnie Walker Houses are not exclusive to travel retail, having opened domestically in Shanghai and then later in Seoul, Chengdu and Beijing, travel retail has now become a focus. Naylor says, “We have opened three of these multi-sensory Scotch whisky ‘embassies’ in travel retail, in Singapore, Mumbai and Taipei. Each offers an enticing experience for luxury consumers, enabling them to really immerse themselves in the brand and purchase exclusive products not available elsewhere in duty free.” It’s safe to bet more locations are on their way. Naylor says: “Diageo GTME is deeply committed to giving travellers unparalleled luxury shopping experiences. The creation of Johnnie Walker Houses remains a key part of our strategy for the brand, along with other bold activations at scale that are disruptive and capture the imagination of travellers.“

A busy year in 2015 This year has been an especially busy one for Johnnie Walker in travel retail. A limited edition of Johnnie Walker Blue Label was released to commemorate the inauguration of Johnnie Walker House Singapore. This is available exclusively at Changi Airport. “The ivory-colored bottle features the landscape of Scotland and the skyline of Singapore in the brand’s hallmark Willow design,” says Naylor. “The collectible was illustrated by Dawn Ng and pictorially depicts the historic journey of Johnnie Walker from Scotland to Singapore in 1885 as one of the world’s first modern luxury icons.” Other exclusives and limited editions this year include JOHN WALKER & SONS™ KING GEORGE V™ blended Scotch whisky, the release of which marks the 80th anniversary of the awarding of the Royal Warrant to John Walker & Sons and has been crafted as a visual celebration of the arts and craft movement that blossomed during the 1930s. More recently, Diageo launched Johnnie

Walker® Blue Label™ Cities Collection, celebrating the iconic travel destination of Singapore, in time for the SG50 celebrations. Naylor says, “We partnered with internationally renowned artist and paper sculptor, Jeff Nishinaka, to develop a series of limited edition design travel exclusives for 2015 featuring depictions of some of the world’s most famous cityscapes. This new release, embellished with a Jeff Nishinaka-inspired design, brings to life the iconic Singapore skyline. Large-scale activations of the collection included a striking window display featuring Jeff Nishinaka’s handcrafted Singapore cityscape paper sculpture in Terminal 3 of Changi Airport, and displays in all departures and arrivals stores in all terminals.”

Timeline of Johnnie Walker premiums and travel retail exclusives • 2010 - Johnnie Walker® Double Black® • 2012 - Johnnie Walker® Platinum Label™ and Johnnie Walker® Gold Label Reserve™ were launched to cater for changing shopper tastes (note - also in domestic) • 2010 - John Walker & Sons XR™ 21 launched in GTME Asia to cater for the Asian shopper (note – also launched in domestic Asia) • 2011 - Johnnie Walker® Blue Label™ The Casks Edition™ • 2012 - The Johnnie Walker Explorers’ Club Collection™, first blend launched • 2014 - Johnnie Walker® Gold Label Reserve™ Exclusive Travellers’ Edition • 2014 - Johnnie Walker® Blue Label™ Skyline Collection • 2014 – Johnnie Walker House Mumbai opened in Chhatrapati Shivaji International Airport • 2014 - Johnnie Walker House™ Taoyuan Airport opened • 2015 - Johnnie Walker House™ Singapore opened in Changi Airport • 2015 - John Walker & Sons™ King George V™ Limited Edition • 2015 - Johnnie Walker® Blue Label™ Cities Collection Dubai and Singapore Editions

Johnnie Walker Double Black was released exclusively to travel retail in 2011. It was later released domestically www.dutyfreemagazine.ca $65 BILLION ISSUE

COMPANY NEWS: BROWN-FORMAN

Jack Daniel’s is Brown-Forman’s crown jewel, and the Jack Daniel’s family is a solid performer in travel retail

The perfect combination

In September 2014, Brown-Forman had an overthe-top promotion with Dubai Duty Free where the winner walked off with a kilo of real gold

Like Jack and Coke, Jack and global travel retail make an enduring and beloved cocktail

ithout question, Jack Daniels is one of the best-known liquors in the world. According to IWSR, it’s the best-selling premium whiskey globally and ranks in at number three of all liquor brands in global travel retail (GTR). “This position is especially exciting for us, since we had a relatively late start in the channel compared to other liquor brands,” says Jeannine Wise, Marketing Director for Brown Forman. “Although Jack Daniel’s has been available in GTR for many years, it wasn’t until the late 90s that we started putting more focus on the channel from a sales and marketing perspective. Given the brand’s strong position globally and the exciting historic and projected growth rates, the future in travel retail looks very positive.”

Early GTR exclusives The first Jack Daniel’s travel retailexclusive product was Jack Daniel’s Silver Select Single Barrel in the late 1990s, and it has been so successful that it’s still going strong in GTR today. “We launched a very successful collectible travel retail-exclusive series called ‘Scenes from Lynchburg’ in 1998, with limited edition bottles in the series,” says Wise. “At this time we also launched Jack Daniel’s Monogram, for the Asian travel retail market. Our focus has evolved recently; we now introduce super premium extensions in GTR before entering select domestic markets.”

Activations and promotions The brand’s early activations were mainly on-pack promotions for Jack Daniel’s Tennessee Whiskery, says Wise. “In 2003 we began increasing our focus on merchan-

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dising and experiential activity of the whole Jack Daniel’s family of whiskeys, with sampling and gift-with-purchase activity.” In 2000 the Jack Daniel’s travel retail family contained four members; today there are nine. “Packaging has also expanded, to take into account traveler’s needs and buying motivations,” says Wise. “We’ve extended our offer from single-bottle to multiple bottle gift packs. We’ve developed addedvalue packs with popular Jack Daniel’s merchandise such as T-shirts.” September is an important promotion month for Jack Daniel’s, because it is the month Brown-Forman celebrates Mr. Jack’s birthday. In the decade that this has been a key promotional time for the company, the scale has grown larger and more tailor-made to individual retailers. An example is the Jack Daniel’s pop-up store in Munich airport. And some of the promotional locations are open throughout the year. “We have a Jack Daniel’s shop in the Las Vegas airport an Jack’s Bar & Grill in Dubai airport,” says Wise. “These are examples of how we’re bringing the Jack

Daniel’s brand experience to travelers in a way that complements and amplifies the activity we have in travel retail stores.”

Reaching the potential Wise says Brown-Forman has only recently begun to tap into the potential in GTR. “We believe travel retail is the channel to offer rich experiences from a brand level, introduce special offerings, and most importantly reach new consumers and purchase occasions. I’m a huge fan of the on-premise for our industry, and travel retail allows you to achieve everything available in the on-premise and more, while linking the experience to an often very premium purchase. For that reason this channel is extremely important to Jack Daniel’s going forward.”

LIQUOR NEWS

Antic brings flavor to liqueur category

Antica’s Classic and flavors all offer a natural, distinctive choice that bring new life to cocktails

A few years ago flavors breathed life into the vodka category, and now Rossi D’Asiago is bringing the flavor revolution to Sambuca. The company has had its international awardwinning Sambuca and Sambuca-based liqueurs listed at James Richardson Duty Free shops and DDFS India, but will be now focus heavily on Europe and Asia in a bid to raise its profile in the travel retail market. Antica Sambuca Classic is made from only natural ingredients. The century-old recipe creates a distinctive liquid distilled from anise star, oranges, cinnamon, nutmeg, fennel and pepper. But Antica brings a whole new dimension to Sambuca with its flavor range, including Liquorice, Raspberry, Banana, Apple, Coffee, Cherry and Tropical. Retailers are able to create real standout displays on shelf with the decorative bottles and multiple colors. Rossi D’Asiago will be exhibiting this range at TFWA WE in Cannes this year for the first time. Export Director, Nicola Dal Toso comments: “[This] is a real dream for us, offering the perfect opportunity to showcase our exciting range to key industry figures. We have seen huge success in the domestic market with Antica Sambuca Classic; it’s the number one Sambuca brand in the UK and second in the world within the category. Emulating this success in the travel retail market is our main objective, and we truly believe that we have the product range to do it.”

Royal Brackla makes regal entrance

Bacardi is giving second-stage luxury shoppers exactly what they desire, with heritage age-statement whiskies like Royal Brackla

As Bacardi continues focusing on its age-statement Scotch whisky portfolio, it has just unveiled a new range of proprietary premium selections from Royal Brackla distillery, one of Scotland’s oldest and most venerable distilleries, and one with a truly unique royal heritage. This regal portfolio includes three age statement single malts, each at 40% ABV: ROYAL BRACKLA® 12-year-old, ROYAL BRACKLA® 16-yearold and ROYAL BRACKLA® 21-year-old. Following the exclusive travel retail launch at Singapore Changi Airport, the new expressions will initially be launched with DFS in their other key airport locations. The Royal Brackla distillery was established over two centuries ago, in 1812, by the “fiery” Captain William Fraser. His distillery’s reputation gained notice of the monarchy, and King William IV soon bestowed “Royal” status upon Brackla in 1835. The first-ever Scotch whisky to garner a royal warrant, this led to its nickname: “The King’s Own Whisky.” The distillery still maintains its traditional production techniques that create its unique and wonderful taste and quality, including taking extra time at the fermentation stage, which acts for up to 80 hours; far longer than most Scottish distilleries. In addition, the especially tall stills run at a very slow pace, filtering out the sulfur notes. Then the whisky is finished in premium first-fill sherry casks. Combined, these steps create an intriguing complexity and fruitiness. Mike Birch, Managing Director of Bacardi Global Travel Retail, explains: “This launch demonstrates our commitment to leverage the full strength of the remarkable John Dewar & Sons Whisky portfolio as the catalyst to power whisky category growth. Second-stage luxury shoppers are seeking to discover exceptional quality whisky from revered distilleries that carry age statements with engaging and authentic brand stories. The ROYAL BRACKLA range fully addresses those needs in everything from its commitment to age with three aged SKUs—12YO, 16YO and 21YO, traditional craftsmanship to its unique royal heritage. Working in close partnership with DFS we look forward to an intensive in-store program that will drive advocacy and engagement in a memorable shopper experience and deliver growth for the category.” www.dutyfreemagazine.ca $65 BILLION ISSUE

LIQUOR NEWS

Tequila Corralejo celebrates 20th anniversary with new gift box Fraternity Spirits has released its new Special Edition Tequila Corralejo Gift Box to help celebrate the 20th anniversary of the star product in its portfolio. It will be available to see at the company’s booth in Blue Village, E01. Corralejo is a product of great quality, with a unique look and feel that makes it completely different from its competitors, and that legacy is represented in the gift box. The box carries illustrations of the beautiful Hacienda Corralejo and other images that represent its origins. Eye-catching colors and a promotional campaign will attract tequila lovers, for whom the special edition box is the ultimate gift. The new gift box will first be available only in selected retail locations, giving it an element of exclusivity. “We are extremely grateful to our customers and consumers who have helped us get Tequila Corralejo to where it is today,” comments Raffaele Berardi, CEO of Fraternity Spirits. “The gift box is a real work of art, and we are very excited to showcase it to our current and potential customers at TFWA World Exhibition “Next year we will expand the offering of the gift box to stores worldwide, making it available to all consumers. We want to broaden Tequila Corralejo’s appeal, especially to the younger consumer, so we will be upping our game when it comes to supporting retailers with promotional material. Connecting to our target consumer is essential and we want to do this through online advertising and electronic marketing to get closer to the younger generation” continues Berardi.

The third in Russian Standard’s travel retail exclusive sleeves, the Cloisonné limited edition celebrates the ancient technique sometimes used to decorate prized Fabergé eggs

The exclusive gift box that celebrates Tequila Corralejo’s 20th anniversary depicts the beautiful Hacienda Corralejo and its history

Cloisonné artwork brings Russian beauty to vodka shelves For the third year running, Russian Standard Vodka has released incredibly beautiful exclusive bottles of its Original vodka, each of which celebrates classic Russian craft. The first release depicted the magical ‘Zhar Ptitsa’ firebird, which is famous in Russian folklore and tradition. Last year’s St. Petersburg Edition celebrated the rich artistic heritage of St Petersburg, the “Venice of the North.” This year’s exclusive launch in global travel retail is the Cloisonné Limited Edition. This travel retail limited edition is inspired by the meticulous and highly prized Cloisonné artwork predominantly used in jewelry making and for decorating small objects. The ancient technique uses intricate metalwork to create exquisite patterns incorporating enamels and gemstones. Many of the beautiful Fabergé eggs created for the Russian Imperial family were carefully crafted with fine enamels. These are the inspiration for this Limited Edition design. The Cloisonné limited edition of Russian Standard Original will reach travel retail stores in October and be priced in line with Russian Standard Original.

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