Duty Free Confectionery Special Issue - June 2016 by Paramount Publishing Ltd.

CONFECTIONERY JUNE 2016 · SPECIAL ISSUE

Category update: Confectionery p. 6 Perfetti’s local flavor, global appeal p. 12 DDF’s Saba Tahir talks confectionery p. 18

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LETTER FROM THE EDITOR

Pick ‘n’ mix

for a sugar high JUNE 2016 · 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. June 2016, Special Issue. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2016 Global Marketing Company Ltd.

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

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

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

he confectionery category occupies a unique position in the duty free and travel retail proposition, with the ability to cross cultures, generations and income levels. Emotive, subjective and persuasive, it is the stuff of childhood memories, a cravings fix, a sweet souvenir of a great travel experience or thoughtful gift. This all-rounder appeal should make it an easy sell but, as we are all too aware, the challenges facing the category are impeding current performance and forcing strategic re-evaluation. M1nd-set’s 2015 Travel Retail Category Insights: Focus on Chocolate & Confectionery report adds new consumer perspective to the situation with its latest global survey revealing that while 52% of respondents were active duty free shoppers, with 25% chocolate and confectionery browsers, just 12% actually made a purchase. With numbers like this placing further pressure on the existing category landscape, from the Americas to Asia Pacific and the Gulf-Africa region, operators and suppliers alike are putting their thinking caps on and upping the creative ante in order to engage, convert and retain travelers. For our annual category report we spoke to the industry movers, shakers and innovators to get the inside track on the current state of play and its future outlook. R&D is the foundation for sustainable growth and the category has the necessary tools at its fingertips to make this a reality, with a reputation for serious investment into consumer research. TFWA President, Erik Juul-Mortensen has talked about the need for a smartthinking bespoke market approach using this wealth of available data while APTRA’s Jaya Singh advocates, among other things, development of cross-category partnerships to create multiple touch-point opportunities. High profile operators like DFS Group report healthy category growth in North America, India and Japan in particular, and highlight the need for trinity partners to be quick to react to an evolving consumer profile as well as economic influences. Category drivers for key players like Dubai Duty Free include indigenous/souvenir items and this is another area where confectionery has the upper hand, with a track record for producing destination products that resonate with the traveling audience. The operator-supplier dynamic is also moving in a new direction, with the former experimenting with branded shop-in-shop concepts and augmenting calendar activity with grandstand promotions developed in partnership with both big gun brands and smaller premium labels. However, with the M1nd-set report noting that 20% of category browsers were dissuaded from purchase by a lack of motivating promotions or sales, a pick ‘n’ mix success formula is clearly needed. Juul-Mortensen sums it up perfectly: “The number of people who walk past our ‘shop windows’ would be the envy of many high street retailers, and it’s up to us to give them good reasons to stop and buy.” Kindest Regards,

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

CONTENTS

What’s inside LEAD STORIES 6 Confectionery Category Overview

24 22

CATEGORY UPDATE: CONFECTIONERY

The art of persuasion is something that keeps the collective brows of the duty free and travel retail industry permanently furrowed, and with browser to buyer conversion rates fluid, the confectionery category has its work cut out

12 Perfetti van Melle LOCAL FLAVOR, GLOBAL APPEAL

A diverse international portfolio means that Perfetti van Melle has more than one sweet treat in the bag when it comes to satisfying worldwide market demand

14 DFS Group A DESTINATION CATEGORY

In this fascinating interview, Thierry Canivet, Senior Vice President Food and Gifts at world-leading travel retailer DFS Group, reveals what he expects from confectionery suppliers and where he sees the category heading

18 Dubai Duty Free TRIED AND TESTED TACTICS DRIVE SALES

Middle Eastern travel retail powerhouse Dubai Duty Free is tempting travelers with exciting promotions and product innovations amid challenging times for the confectionery category

28 36

22 Lindt & Sprüngli THE LINDT STRATEGY

Putting its maître chocolatiers on the duty free frontline as brand ambassadors is one way that Lindt & Sprüngli continues to reinforce its 170 years of craftsmanship and market expertise

24 Neuhaus THE BELGIAN CONNECTION

With 22 window collections released every year, premium chocolate company Neuhaus has a ganache, praline or gift for every occasion

FEATURES Nestlé puts a spin on Swiss fairytale Godiva celebrates 90th anniversary Duc d’O stands out Haribo creates dedicated TR team

26 28 30 32

Ritter Sport offers unique collection Leonidas stays true to its brand DNA Ferrero unveils souvenirs

34 36 38

CONFECTIONERY CATEGORY OVERVIEW

Category update: Confectionery The art of persuasion is something that keeps the collective brows of the duty free and travel retail industry permanently furrowed, and with browser to buyer conversion rates fluid, the confectionery category has its work cut out Millennials are excited about original products that have their own status and credibility, and may be less drawn to the traditional concept of luxury

CLAIRE MALCOLM

I Peter Mohn, CEO, M1nd-set

CONFECTIONERY JUNE 2016

n its 2015 Travel Retail Category Insights: Focus on Chocolate & Confectionery report, travel market research experts M1nd-set surveyed 4,588 global confectionery shoppers on their retail habits. A total of 52% of those surveyed were active duty free shoppers, out of which 25% were chocolate and confectionery browsers, yet just 12% overall saw it through to purchase. Asia Pacific (ASPAC) and the Middle East were the most dynamic regions for the category, with conversion rates of 45% and 76% respectively, although this only translates into buyer figures of 13% for ASPAC and 24% for the Middle East. A bespoke market approach is key. “We have a wealth of data about our customers, and we need to share this and be smarter about how we use the data to ensure that we offer a product mix and price range to best match the customer profile if we are to make a real impact on conversion rates,” says Erik JuulMortensen, TFWA President. Adds Jaya Singh, President, APTRA: “The numbers speak for themselves. If you look at the key nationality groups in the Middle East they are primarily made up of sub-continent nationals, and if you look at average spend, they rank amongst the highest in the world. Also, the primary motivation is gifting as these shoppers are employed in the Middle East and they tend to return home to visit their large or extended families where gifting is a cultural must. “The other driver is the role of confectionery and legislation on this impulse driven, basket-filler category. In Dubai, for example, where there is a big arrivals business driven by gener-

FLAVOURS of the World

CONFECTIONERY CATEGORY OVERVIEW

ous allowances in alcohol as well as tobacco, this automatically drives up the basket size and given the role of confectionery and its impulse nature, the spill-over effects are obvious.” Confectionery is also prime for cross-category tie-ups with 44% of confectionery buyers globally spending €42 (US$48) on confectionery and €82 (US$93) on P&C, and 27% spending €60 (US$68) on alcohol. “Cross-category in a simple way represents a multiple touch-point opportunity. Visibility drives impulse purchases, so making confectionery available in a planned category automatically drives up basket size and value. I think we will see more and more of this. In Sydney, Melbourne and Birmingham, for example, when confectionery was placed in the alcohol category, as well as P&C, it actually drove up the relevant category values leading to increased total basket value,” says Singh. ARI’s Candy Cloud concept was a hit in Dublin airport last year. More and more companies are surrounding the confectionery category with special interactive displays

CONFECTIONERY JUNE 2016

“It’s also one way to add value by offering customers something they cannot get on the high street,” remarks Juul-Mortensen. The M1nd-set research highlighted that, globally, gifting accounts for 40% of purchases and self-consumption 24%, closely followed by snacking at 22%, with ASPAC gifting figures reaching 53% and the Middle East just behind at 48%. Says Singh: “The category as a whole is driven by promotions. The promotional dollar value contribution to total category sales varies from country to country but, as a percentage of the category retail mix, it is high double digit. “Confectionery is also driven by ‘new news’ and this primarily takes the form of new products/flavors. This constantly drives the gifting offer and there is always a role for super niche brands within the category, and the key to unlocking value in this seg-

CONFECTIONERY CATEGORY OVERVIEW

Erik Juul-Mortensen, President, TFWA

ment lies in innovative packaging as well as flavor and format developments. Shoppers in this segment are very specific and willing to pay a premium for these premium brands. Discounting is not the platform to unlock value here. Engagement through tastings/samplings and ‘live’ displays of how these products are made delivers on the sensory appeal and is the way forward.” Retailer fondness for what some confectionery players tag as ‘over-premiumization’ is another hot topic, as Singh explains: “This is something that everyone is constantly trying to address. There has been a fundamental change in spending behavior following the introduction of Chinese austerity measures and retailers are adjusting their overall offer in response to this. “The most important thing is that one has to stay on top of changing trends and have the flexibility to adjust the offer accordingly. For the category itself the key area of focus is engagement. An overly premium image Jaya Singh, President, APTRA has a tendency to act as a barrier to penetration which then has a negative impact on engagement as well as conversion.” Says Juul-Mortensen: “As more Millennials take to the skies, we need to take account of the viewpoint of this all-important demographic. These passengers are excited about original products that have their own status and credibility, and may be less drawn to the traditional concept of luxury. To them, luxury means outstanding service, something unique or an offer that is personalized. Any brand can deliver this luxury experience – no matter how small or large the price tag.” And with snacking on the rise, both agree that there are untapped opportunities to consider. “The offers at cash tills as a whole can be stepped up based on insights and refreshment, as well

CONFECTIONERY JUNE 2016

as snacking, are ‘need’ states at the cash till. We have data showing that if we get the right snacking products on the tills we can expect an incremental of around 5%,” remarks Singh. When it comes to key reasons for purchase, souvenir shopping snared 27% of M1nd-set research respondent votes with 23% viewing it as an opportunity to find a product not available back home. However, when analyzing reasons for not buying, 25% said that duty free was more expensive than downtown, 22% admitted to purchasing elsewhere, with 20% turned off by a lack of motivating promotions or sales. This raises the issue of balancing attractive offers with brand positioning objectives to capture the elusive non-buyer, as Singh remarks: “it’s about understanding the critical price point triggers within the category, then positioning the offer/brands around them. Retailers have the advantage that they have a huge portfolio of brands as well as products and that really means that they have at their disposal the ability to price and brand position accordingly. I do not see conflict here but opportunity.” Says Juul-Mortensen: “We have to offer value, but it’s not just about slashing prices. This can only lead to a downward spiral that means, ultimately, we all lose. All the players within the trinity need to make sure they are doing their part to keep our business as competitive as possible. “But we also need to use our imagination to create engaging retail offers that capture hearts as well as minds. The number of people who walk past our ‘shop windows’ would be the envy of many high street retailers, and it’s up to us to give them good reasons to stop and buy.”

PERFETTI VAN MELLE

Local flavor, global appeal A diverse international portfolio means that Perfetti van Melle has more than one sweet treat in the bag when it comes to satisfying worldwide market demand by

CLAIRE MALCOLM

The Mentos Gum Nano bottles collection is popular for self-consumption as well as gifting

he appeal of local brands and evolving consumer preferences is an aspect of the duty free and travel retail industry that Perfetti van Melle is keeping a watchful eye on. “We are seeing growth in the number of local brands in some Asian destinations and places like Turkey, which have quite specific products and fine foods that are confectionery oriented,” says Susan de Vree, Manager, Global Travel Retail, Perfetti van Melle. “I’ve noticed that different brands and different local products are getting more attention, but we also know, from M1ndset research, that the primary reason for traveler purchase is always the brand,” she adds. While well-established global brands will invariably continue to enjoy market dominance, de Vree highlights the uniqueness of certain products in adding a further layer of brand security. She says: “We don’t see any possibility of competing products, especially when you have a unique product, like Mentos, which are neither jellies nor a hard-boiled sugar confection. There are lots of copies out there, but they will never reach the quality and uniqueness that we have.” That said, the company isn’t writing off local brands entirely, at least not from its own portfolio perspective, as she explains: “We are a huge company worldwide and we do have other brands as well as

CONFECTIONERY JUNE 2016

localized brands, so it raises the question, should we invest more in this area? “Meller, for example, which sells well in Russia and Scandinavia, as well as in destinations where those nationalities holiday, is a delicious high quality caramel chew with chocolate filling, yet the brand is only known in those markets. You’ll never get good distribution on local brands but it all depends on the evolution of the traveler, so you never know.” The importance of innovative packaging and effective promotional strategies Susan de Vree, Manager, Global Travel Retail, Perfetti van Melle

The Mentos secret box with its global landmark imagery, is a top seller

is another tick in the Perfetti checklist for success. Says de Vree: “This is where we really stand out and retailer feedback is that we are really innovative, which is a major USP for Perfetti, and a way for us to differentiate ourselves. “We also have significant knowledge and expertise when it comes to working with special packaging and the ability create a product around our candy, by including a toy, for example.” The Mentos secret keepsake book is a perfect example, with the decorated

Popular in Russia and Scandinavia, local brand, Meller, is a high quality caramel chew with a chocolate filling

box featuring global landmarks and opening up to reveal eight rolls of fruitflavored candies. “With products like this we never really know at the beginning how the retailer and consumer are going to react; we have an idea but it’s usually more of a gut feeling and we trust that it’s the right product. Each time we go to Cannes, it’s exciting to see how the trade reacts to our latest innovations,” says de Vree.

“The box is one of my personal favorites, and a lot of retailers like the higher priced SKUs but with border trade, for example, there is a lot more price sensitivity. However, we are also seeing a shift within the confectionery category with consumers apparently willing to pay up to €45 (US$50) for something really special.” Perfetti’s focus remains on smaller items and the brand’s Mentos Gum Nano Bottles with its gifting collection of five different flavored mini bottles is hugely

popular for self-consumption as well. Says de Vree: “Obviously we have traditionally focused on blow-ups with our giant Mentos roll and Chupa Chups lollipop but we are now exploring more of the much smaller items, such as the Nano bottles. “The product is so interesting for the consumer, that even on the bottom shelf it is performing well; but with a nice top shelf or checkout presentation, the product is really flying.”

From top to bottom, Mentos Gum Nano shows strong performance

Color and content epitomize Perfetti van Melle’s duty free presence

www.dutyfreemagazine.ca CONFECTIONERY

DFS GROUP

The new M&M’s shop-in-shop at DFS, Hong Kong International Airport carries destination-themed products to capture the imagination of souvenir-seeking travelers

This M&M’s dragon boat at DFS, Hong Kong International Airport brings vibrant retail theater to the leading Asian gateway

A destination

category

CONFECTIONERY JUNE 2016

enior Vice President Food and Gifts at DFS Group, Thierry Canivet is helping to steer a growing business that he believes still has potential. Here, he discusses key issues such as promotions, the rise of downtown stores, and the vital importance of destination products. Americas, Asia & Gulf-Africa Duty Free & Travel Retailing: How is the confectionery category performing overall? Thierry Canivet, Senior Vice President Food and Gifts, DFS Group: While travel retail as an industry has experienced some shifts in customer behavior due to changing travel patterns, for DFS we have seen very strong growth in the confectionery category specifically in North America, India and Japan.

DFS GROUP In an exclusive promotion at DFS, San Francisco International Airport, Belgian artist Oli-B paints a life-size version of Godiva’s limited-edition 90th anniversary chocolate box

DFS officials toast the opening of the new M&M’s destinationthemed shop-in-shop at Hong Kong International Airport

CONFECTIONERY JUNE 2016

Q: Are you running any high impact/ notable promotions? A: As consumables, the confectionery category is always very promotionally driven, especially in Asia. Here at DFS, we have seen a change in our customers’ spending patterns recently and have quickly adapted our promotions to a “buy two save 20%” promotion from the standard “buy three get one free”. We have also been running some more creative promotions, engaging customers who purchase with a chance win great prizes such as an iPhone and offering higher percentage discounts to customers who spend more. We’re constantly looking for ways to keep our customer engaged and we see great opportunity in this category to delight them not only with the product line-up but the in-store promotional experience as well.

well-known brands, represent a location or that they can’t find anywhere else. Q: Is there a specific product concept that is working particularly well? A: DFS has a long successful history of selling destination items. Destination products are items that have a global flavor palate, chocolate-covered nuts or dried mango, for example, but are packaged in location-themed packaging. In San Francisco it might be chocolate packaged with a photo of the Golden Gate Bridge on the box or in Cambodia a candy medley decorated with images of Angkor Wat. Our customers want to be able to bring home gifts for family and friends that signify where they’ve been and let them celebrate that experience with those they love. Q: Is there a message you’d like to send out to these suppliers? A: Our key message for suppliers these days is that they offer us destination items and activations. We feel that the combination of a strong global brand with a sense of place is a winning mix. We’ve seen great success with destination versions of global brands that we carry, such as Godiva, Mars, Bounty, M&M’s and Kee Wah, in various locations as well as shopin-shops with a destination focus, such as the new M&M’s shop-in-shop at DFS, Hong Kong International Airport.

Q: Has confectionery reached its potential? What is the potential? A: For DFS, we still see strong growth potential for the category. Particularly as a travel retailer, we have many different customers in a variety of destinations looking for a mix of items, from local gifts to big global brands to premium fresh food options. All of this creates great opportunities to continue to surprise and delight our customers wherever their journey takes them. Our team has been very busy creating many new concepts to fill all of these needs. For example, we recently teamed up with Godiva in May to exclusively launch the brand’s worldwide 90th anniversary celebration at DFS, San Francisco International Airport. Together with Godiva we brought Belgian artist Oli-B into the store, where he painted a life-size version of

Godiva’s limited-edition 90th anniversary chocolate box to the delight of customers and travelers. These experiences not only drive penetration and sales, but create memories for our customers driving an emotional connection that keeps them coming back. Q: What type of products are you looking for when buying confectionery items? A: It really depends on the location or concept that we are sourcing for, as our goal is to create localized, special experiences for our customers. We generally look for items that offer something unique: different flavors, clever packaging or fun shapes. We are always on the lookout for great local products that offer both a sense of place, great taste and also value for money. Our customers want to bring home gifts that are either from

Q: Do you have any new dedicated spaces just for confectionery? A: We have been working on expanding the confectionery footprint in our T Galleria by DFS stores over the last year. We have recently opened confectionery segments in our T Galleria by DFS, Singapore store as well as our T Galleria by DFS, Angkor store. Our airport business continues to remain strong as well, and we have also experimented with branded shop-in-shops at our DFS airport locations with Lindt and Mars shop-in-shops. Q: Where do you see the confectionery category in next five years? A: Overall, we see confectionery continuing to grow and evolve into a mix of standalone themed shops in both airport and downtown travel retailers. We also see great potential to grow the premium segment including fresh food items and a continuing focus on local foods.

www.dutyfreemagazine.ca CONFECTIONERY

DUBAI DUTY FREE

Tried and tested

tactics drive sales

aba Tahir, Vice President – Purchasing, Dubai Duty Free, is looking forward to the peak summer holiday season, when confectionery sales should get a boost following a slight slowdown over the first five months of the year. In this interview, Tahir discusses the operator’s plans for this promising category in the year ahead, and beyond. Americas, Asia & Gulf-Africa Duty Free & Travel Retailing Magazine: How is the confectionery category performing overall? Saba Tahir, Vice President – Purchasing, Dubai Duty Free: The confectionery category is showing a slight dip in sales based on January to May 2016 figures compared to the same period last year. There are numerous challenges facing the category at the moment. The Euro and Sterling currency devaluation, carryon luggage restrictions imposed by low cost carriers has been a significant issue, the decline in Russian passengers, and the

CONFECTIONERY JUNE 2016

Middle Eastern travel retail powerhouse Dubai Duty Free is tempting travelers with exciting promotions and product innovations amid challenging times for the confectionery category

drop in Chinese spend are mainly behind the weak performance in travel retail. However, we are expecting that sales will pick up with the forthcoming holiday season, and we should finish the year on a par with or just above 2015 sales figures. Q: Are you currently running any high impact/notable promotions? A: The success of the confectionery category is largely dependent on promotion offerings to customers. Throughout the year, we have many high profile promotions from various suppliers in a bid to bring additional footfall and convert potential customers into sales and to attract a wide range of nationalities. We have increased the amount of HPP promotions that include winning trips and holidays in order to give an extra reason to buy. The promotions have been given extra features within our shops, as we are optimistic that these theater activities will yield positive sales results.

Q: Has confectionery reached its potential? What is the potential? A: We have always said that the confectionery category is one of the key pillars that is driving the overall company sales and there is still a great deal of potential to grow this category. We are continually working with suppliers to generate ideas and promotions to drive this forward. As for this year, we do not see a huge growth, but look to ending 2016 on a par with 2015 sales numbers. If all things fall into place, we expect to see again a growth of 2-4% in 2017. Q: What type of products are you looking for when buying confectionery items? A: From 2011 to 2016 we have been capturing the boarding cards during various months of the year. We have observed that approximately 40% of our customers in the confectionery division come from the Indian subcontinent. Over the years the percentage has come down from almost 50% to 40%. Middle East customers and

Far East customers (mainly Chinese) are growing in numbers and very soon we will see an increase in average spend per customer with a surge in demand for new and unique products to be retailed in Dubai Duty Free. One of our targets is to source products that appeal to a broad spectrum of customers and not just to one niche nationality. Driving current sales are indigenous/ souvenir products, new innovations, travel retail exclusives, premium gifting, and children’s gifting. We will continue searching for more products on those lines. Q: Is there a specific product concept that is working particularly well? A: Based on January to May 2016 sales, destination gifting comprises nearly 3% of our total confectionery sales and is growing at 17.9%. There is a growing demand for indigenous food as a souvenir. Home grown and unique Al Nassma camel chocolate, Patchi, and Butlers destination products have been a perfect example of this with great success.

clearer understanding on market trends, thereby providing valuable insights to Dubai Duty Free, and also where we stand in relation to the competition. Q: What are your top 10 confectionery products overall? A: Based on January to May 2016 sales, the top 10 products are: Lindt Napolitains 500g, Galaxy Mixed Mini Pouch 491.5g, M&M’s Candy Tin 200g, Ferrero Rocher 16-piece box 200g, Ferrero Rocher 30-piece box 375g, El Soteno bag 1kg, Kit Kat Limited Edition bag 517g, Galaxy Jewels 400g, Lindt Limited Edition Airplane Naps 750g, and Crispo bag 500g.

Q: Is there a message you’d like to send out to these suppliers? A: 2016 will be a challenging year and driving the category will be indigenous/ souvenir products, new innovations, travel retail exclusives, premium gifting, children’s gifting, etc. We will be looking to these tools in driving the business forward. Customers are always looking for better value for money and at any given point in time we are continuously seeking better offers and deals from our trade partners. We expect to see more HPP activations in 2016 and moving forward into the coming year. We will be strongly looking at new travel retail exclusives, special

Q: Many confectionery companies are gathering research to enhance the category. Is this helping business? A: Yes, this has benefited the suppliers and Dubai Duty Free, as it gives the supplier a

www.dutyfreemagazine.ca CONFECTIONERY

DUBAI DUTY FREE

animations/promotions for children’s gifting, new flavor assortments, and agreements with our trade partners to be the first travel retail operator to showcase the launch of their travel retail exclusive products. Q: What type of challenges are you facing? A: The ongoing poor state of the European economies, coupled with luggage restrictions imposed by low cost carriers, the decline in Russian passengers and the drop in Chinese spend were behind the weak performance in travel retail. The Russian Rouble has been showing its weakness since last year, losing half of its value against the US Dollar. The decline has made traveling abroad more expensive for Russians who earn in Roubles. At the same time, the economic slowdown in China, coupled with the recent devaluation of the Yuan, is not playing well with outbound tourism.

CONFECTIONERY JUNE 2016

Major challenges are in space and category management due to the growth of passengers and product range. We ensure that we are on target every year and do not want to be off track and lose focus. Our traditional approach to solve the problems and challenges relies on logical tried-and-tested methods. Q: Do you have any new dedicated spaces just for confectionery? A: We recently opened our new Concourse D facility in February 2016. Concourse D is a non-Emirates terminal with a capacity to handle 18 million passengers annually. Dubai Duty Free has a total retail area of 7,273 square meters. The opening will definitely add to the passenger numbers and overall sales. Q: Where do you see the confectionery category in the next five years? A: We see the confectionery category as one of the leading categories driving

overall company sales, with high profit margins. At the same time, providing great value for money to the customers. The category will continue to be heavily driven by promotions and we expect to see more aggressive promotions coming our way from various suppliers. With the advent of Expo 2020 and the ever-growing UAE economy, we expect the category to soar and would not be surprised if we experience sales growth of 10% in the coming years. Q: Have you listed any new confectionery brands? A: In 2016, we listed a home grown brand – Chocovana. Q: Are you offering any region-specific exclusive brands/products? A: Most of our products are widely available in the other markets, but we do keep some duty free exclusive brands such as Goldkenn and Chocovana.

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LINDT & SPRÜNGLI

The Lindt

strategy

Putting its maître chocolatiers on the duty free frontline as brand ambassadors is one way that Lindt & Sprüngli continues to reinforce its 170 years of craftsmanship and market expertise by

CLAIRE MALCOLM

The eye-catching Love LINDOR range made its Asia debut at the 2016 TFWA Asia Pacific Exhibition & Conference

CONFECTIONERY JUNE 2016

Peter Zehnder, Global Duty Free Division Head, Lindt & Sprüngli, and Thierry Canive, DFS

n times of crisis, price-related offers are often viewed as a temporary Band-Aid to shore up sales but for leading premium confectionery brand Lindt, discounting will never be an option. “At Lindt, we would rather focus on continuing on the track of high quality executions and passenger edutainment,” says Peter Zehnder, Global Duty Free Division Head, Lindt & Sprüngli. Lindt’s maître chocolatier is its sweet secret weapon when it comes to amplifying consumer spend in the duty free segment and the company continues to highlight the brand’s chocolate competence and appeal to the travel retail sector via a range of eye-catching HPP events, including live master chocolatier demonstrations.

Lindt craftsmanship is a key brand USP

Lindt’s Pick ‘n’ Mix concept is relatively new to travel retail but is already proving to be a popular traveler choice

The Lindt Pick ‘n’ Mix experience at Hong Kong International Airport

Taste the Difference LINDOR LINDOR makes the perfect blissful treat. Once you break the milk chocolate shell, the irresistibly smooth filling starts to melt and so will you.

What makes LINDT Chocolate so exceptional?

EXCELLENCE With EXCELLENCE you will discover the expertise and craftsmanship of our LINDT Maîtres Chocolatiers: blending the most aromatic cocoa beans with the finest ingredients to create elegantly thin chocolate of intense flavor.

Driven by their passion, dedication and innovative spirit since 1845, the LINDT Maîtres Chocolatiers create the world’s finest chocolate delights.

The Lindt Difference info brochure

According to Zehnder, Lindt’s master chocolatier is its finest brand ambassador and has been a symbol of the company’s innovative spirit since 1845; making it an essential element when it comes to driving duty free consumer spend. Says Zehnder: “Our new Swiss Masterpieces gifting collection, as presented at TFWA Singapore, presents a great opportunity to involve our maître chocolatier at POS and to really showcase the craftsmanship and tradition of the brand heritage. “This is reflected in sound commercial returns, and at the launch events in Zurich and Dubai for example, we saw triple percentage increase in sales.” While certain destinations have permanent master chocolatiers in residence, there is also a traveling contingent, and

Zehnder highlights recent promotions in Jordan, Spain, Chile and Sri Lanka, in co-operation with World Duty Free, as successful examples. A new mini brochure called the Lindt Difference has also been introduced to reinforce the company’s heritage and USPs. Lindt also hopes that with products such as the glamorous Love Lindor range that debuted at TFWA Singapore, and its Pick ‘n’ Mix proposition, market share in Asia will continue to grow, as Zehnder explains: “Last year we continued to see global growth but there is still some way to go for the brand in Asia.” A staple in the domestic candy arena, but relatively new to travel retail, is the Pick ‘n’ Mix concept. So far it has only been available in Zurich, Qatar, Stock-

holm, São Paolo, Singapore and Kuala Lumpur. More recently, two new locations opened: Nice (with Lagardère) and Hong Kong (with DFS). “It’s a really interactive concept which drives footfall to the store. It serves different purposes, from encouraging higher spend as well as communicating the different Lindor flavors and seasonal opportunities to adding personalization and individualization at airport locations,” says Zehnder. “It requires a certain location and only really works in large airports where there is an expanded duty free set-up with a shop-in-shop so that there is the requisite space and room for staffing. So far, the response has been very good and we are seeing a lot of interest from retailers and operators,” he adds.

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NEUHAUS

Neuhaus’ souvenir destination collection has been refreshed, adding more color to create additional visual impact

The Belgian connection With 22 window collections released every year, premium chocolate company Neuhaus has a ganache, praline or gift for every occasion

W Philip Geeraert, Director International Sales, Neuhaus

CONFECTIONERY JUNE 2016

ith 22 window collections released every year, premium chocolate company Neuhaus has a ganache, praline or gift for every occasion. “Innovation is a major part of our brand DNA, but for travel retail we obviously can’t showcase the full extent of what we do, so innovative airport exclusives are that give a new experience to customers are extremely important and our new Flavours of the World collection does just that,” says Philip Geeraert, Director International Sales, Neuhaus. “Our maître chocolatier has shared his own travel impressions and played with different ingredients from around the world to create a unique collection in which he has incorporated Belgian speculoos biscuits, Canadian maple syrup, jasmine from India, Japanese matcha and vanilla and banana from Madagascar. It’s a great way to discover our gourmet flavors and is already doing very well in Asia, as well as Europe and the US,” he adds. This level of innovation is crucial to maintaining a competitive edge in a well-populated marketplace, and Geeraert believes this is key to retaining existing customers as well as winning new ones.

Neuhaus created a duo of Magritteinspired gift boxes with a distinctive cover

Neuhaus’ new Flavours of the World collection is its latest airport exclusive and embodies the company’s reputation for innovation

It’s been a positive last 12 months for the company, as he explains: “We’ve seen fantastic results in the US, had a great year in Europe and then more mixed results in Asia. We also had a fantastic Orlando fair this year, the best in 10 years of participation. “As we all know, some airports come with their own challenges while others are driving the category, but overall we saw positive growth last year and we expect a good 2016.” In order to accelerate this growth, innovation comes into play yet again, with Geeraert identifying localization as one trend with the potential to either positively influence or potentially negatively impact development. “Besides global brands, travelers are starting to buy more local products. We are seeing this impact in terms of shelf space, and there in also growth in the functional health products segment, in some Asian airports, which is a new category with strong performance,” he says. “On the plus side, the total retail space in airports is growing and, specific to the traveling consumer, we have also refreshed our souvenir destination collection, which we have made more colorful with added impact, whilst still elegant. And in the markets where we have launched, we are seeing a good response,” he adds. A fun side of the Neuhaus portfolio is storytelling through its Belgian connection. Says Geeraert: “So we have our Smurfs gift boxes, for example, and we have also worked with Tintin, another great Belgian character.” He says that these collections appeal to a different consumer, who collects or likes to secretly relive their childhood. In 2015, Neuhaus celebrated the life and works of another renowned Belgian – René Magritte - to tie in with the 50th anniversary of his passing, creating a duo of special gift boxes with a distinctive cover. Geeraert also says that snacking is growing and is a nice “shelf perk”. “These small items are a little treat, and travellers who know the brand but want something for themselves can pick up a snack on impulse, although some nationalities, like the Japanese, will still pick up 10 boxes as gifts.”

The Smurfs tin gift boxes appeal as much to the big kid in every adult as to Neuhaus’ younger fans www.dutyfreemagazine.ca CONFECTIONERY

NESTLÉ INTERNATIONAL TRAVEL RETAIL

Cailler is the original Swiss chocolate brand with a 200-year history

A new spin on a

Swiss fairytale Nestlé International Travel Retail is leveraging nextgeneration technology and 200 years of history to create a compelling new offer for its Cailler brand

Stewart Dryburgh, General Manager, NITR

CONFECTIONERY JUNE 2016

ech-centric promotional mechanisms and a hidden confectionery gem are headlining Nestlé International Travel Retail’s (NITR) latest campaign as the company continues its focus on traveler engagement and the creation of truly compelling offers. The original Swiss chocolate brand, Cailler, which dates back to 1819, had been lingering in the shadows of the Nestlé portfolio, but is now making waves in travel retail. According to Stewart Dryburgh, General Manager, NITR, since launching Cailler on home turf last October in Zurich and Geneva, it’s been flying off the shelves. “We started in Switzerland and have also taken it into Dubai and Singapore, where it is already the number three premium chocolate brand at Changi,” he says. The brand’s (almost) 200-year-old pedigree is clearly a big draw, and Dryburgh credits Cailler’s rich history, exquisite

Launched at Zurich Aiport last October, the brand is already flying

Nestlé is leveraging nextgen technology to create compelling new offers

Nestlé’s pioneering Perfect Store virtual reality initiative will be road tested by a sample of British and Chinese consumers

packaging and quality execution, with dedicated units and brand ambassadors in place, as key to its early successes. Says Dryburgh: “It really is a hidden gem and a new experience in terms of a brand that has a fascinating back story, which is the chocolate factory at the foot of the Swiss Alps. “We are supplementing this with activities like the ‘Taste of Real’ virtual reality experience in Zurich, so even if people haven’t visited the Cailler factory, they can enjoy a virtual walk-through.” A “super premium” product, priced on a par with Godiva, chocolate aficionados are clearly buying into the tradition, but

Drybrurgh reveals that NITR’s retail partners are also sold on the story. “The feedback I’m getting from Zurich is that it is driving the entire category, which is fantastic, especially when a lot of retailers are struggling to grow the confectionery category,” he says. It’s still early days for Cailler in the channel and for a wider rollout of the virtual reality experience, but Drybrurgh confirms that NITR is very open to taking this particular engaging experience to other markets. “It’s critical that we give consumers experiences they don’t normally get. And when it comes to retailers, we know from experience that if you go to them with a compelling proposition they will respond positively, especially right now as while people are still traveling, they aren’t spending,” he remarks. “Research data shows that 52% of people don’t even go into a duty free shop

and, out of those who do, a further 50% don’t make a purchase; and that’s a frightening number, as well as an opportunity,” he adds. Dryburgh also addresses the issue of category balance, saying: “I’m getting a sense that a lot of the industry has really premiumized the offering, targeting the higher spending emerging market consumer who has now started to dry up. “So it’s critical to tailor the offering and the range that you put in front of consumers by really understanding what they are looking for and giving them a reason to put hands in pockets. However, it’s not always just about promotions, you need to strike a balance.” Next up for NITR is a deeper foray into the hi-tech arena with Q4 2016 pegged for the launch of its pioneering Perfect Store virtual reality initiative where travelers will be invited to experience different activations and engagements in a walkthrough store journey. The traveler sample will initially focus on Chinese and British nationalities, with the latter selected as representative of the European traveler demographic. Says Dryburgh: “By using technology such as eye-tracking capabilities, this will give us far greater insight into what consumers respond to. This will allow us to tailor the different touch points of the journey to increase penetration and, work with our key partners to convert that 50% of non-purchasers.”

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GODIVA CHOCOLATIER

CHOCOLATE

ARTISTRY

comes to the fore

Renowned chocolatier Godiva is celebrating its 90th anniversary year vibrantly and colorfully, thanks to a special collaboration with a famous Belgian artist

odiva Chocolatier has collaborated with world-leading travel retailer DFS to mount a special 90th anniversary event at San Francisco International Airport featuring the work of renowned artist Oli-B. The event is just one of the celebrations being held throughout 2016 to mark the Brussels-based chocolatier’s 90 years in business. Belgian-born illustrator Oli-B decided to express the milestone with bright and colorful designs for gift boxes, displays and merchandising items. In May, Oli-B flew to San Francisco, where he completed an exclusive work of art commissioned by Godiva. Its firework-like brilliance and bright colors against a luxurious gold backdrop aimed to symbolize the brand’s timeless values of quality and refinement as well as its zest for originality and innovation. Watched by passing travelers, Oli-B put the finishing touches to his illustration. His canvas was a set of 36 goldcolored Godiva gift boxes mounted in a two-meter frame in a specially decorated

Godiva looks ahead to Chinese New Year 2017, the Year of the Rooster, with striking red and gold colored gift boxes in a cockerel design

zone in the airside travel retail shop at San Francisco International Terminal. Travelers were invited to have their photo taken with Oli-B against his artwork and surrounded by display units filled with Godiva chocolates. The artist signed commemorative greeting cards and presented some lucky travelers with mini-ballotins of Godiva chocolates. A complimentary Oli-B rainbow-colored backpack was offered as a free gift to each customer who spent over US$85 on Godiva products. The 90th anniversary promotion will move to Los Angeles International Airport in time for a special event on August 13 at which Oli-B will also be present. This year, Godiva has introduced a number of products to highlight its anniversary. The Godiva 90th Anniversary Truffles Collection is a travel-exclusive

The Godiva 90th Anniversary Truffles Collection is a travel-exclusive assortment that combines traditional truffles created by Godiva’s Chefs Chocolatiers

CONFECTIONERY JUNE 2016

assortment that combines traditional truffles created by Godiva’s Chefs Chocolatiers over the last nine decades with new multi-sensory textures and flavors. Decorated by Oli-B, the elegant circular gift box has bright flashes of pink and yellow against a rich dark brown background, creating a spectacular gift presentation. The second celebratory limited edition is the new 90th Anniversary Gold Collection, an 18-piece assortment of chocolates encased in a gold and rainbow-colored box designed by Oli-B. The collection contains signature chocolates representing Godiva’s savoirfaire over time. The hero piece has been developed especially for Godiva’s anniversary: Egérie Noir is described as a complex, contemporary creation of smooth raspberry ganache, delicately balanced with essence of rose petals, and covered in dark Belgian chocolate. Other pieces include Lady Noir, a recreation of one of the earliest recipes of Pierre Draps, Godiva’s original Maître Chocolatier, from the 1920s; Signature Lait, a velvety coffee ganache decorated with a feather, which was created for the movie Gone With The Wind in 1939; Ecusson, liquid caramel covered in rich milk chocolate, bearing a lion rampant to mark Godiva’s appointment to the Royal Court of Belgium in 1968; Coeur Blanc (1945); Noblesse (1959); Nippon (1972); Azteque (1992); and Mousse Meringue (2015).

In March, Dubai Duty Free staged the exclusive pre-launch of the 90th Anniversary Gold Collection. The retailer showcased the 18-piece collection at Dubai International Airport throughout the month before the formal roll-out took place in April in domestic and travel retail markets worldwide. Godiva Chef Chocolatier Jean Apostolou said: “The Gold Collection contains eight of our most precious and iconic chocolates alongside a brand new fresh and fragrant rose and raspberry-flavored piece. This collection is where tradition and imagination artfully come together.” Explaining his choice of rainbow colors for the box, Oli B said: “I wanted to make the box colorful and joyful – 90 years in business is a cause for great celebration, so my main inspiration was fireworks and all the energy, color and happiness that they bring.” Commenting on the debut of the collection at Dubai International Airport, Saba Tahir, Vice President – Purchasing, Dubai Duty Free said: “Dubai Duty Free has enjoyed a very close partnership with Godiva Chocolatier over many years and we are pleased to have been chosen to stage the global launch of this 90th anniversary assortment. Godiva is justly proud of its unique heritage and we are confident that consumers traveling through duty free will be delighted to

find an exclusive product from an iconic brand which is celebrating a milestone in confectionery history.” Looking ahead to the festive season, the Godiva Christmas Collection includes a chocolate assortment, a truffles collection, an advent calendar and a pouch of chocolate carrés, all decorated in seasonal green and white designs which were created by talented artist Dinara Mirtalipova. The classic tale The Nutcracker was the inspiration for the 2016 collection, evoking warmth, happiness and the magic of Christmas for families all over the world. The nine-piece Christmas Truffles Assortment and the 20-piece Chocolate Carrés Pouch both feature the Nutcracker theme, with a whimsical ballerina pirouetting across a dark green backdrop, framed by winter foliage and seasonal red trimmings. Reminiscent of sparkly Christmas decorations and snowflakes, and trimmed

with scarlet ribbon is the 20-piece Godiva Silver Ornaments box. The Silver Ornaments collection includes two exclusive pieces: Decouverte, smooth milk chocolate ganache with a slight caramel taste made with cocoa beans from the Vanuatu islands in the Pacific Ocean; and Delicate, dark chocolate raspberry ganache covered in dark chocolate and sprinkled with flakes of real raspberry. Godiva is also looking ahead to Chinese New Year 2017, the Year of the Rooster, with striking red and gold colored gift boxes in a cockerel design. The Godiva Christmas Collection includes a chocolate assortment, a truffles collection, an advent calendar and a pouch of chocolate carrés, all decorated in seasonal green and white designs which were created by artist Dinara Mirtalipova

Belgian-born illustrator Oli-B decided helped Godiva celebrate its anniversary at San Francisco International Airport

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DUC D’O

On a mission

to stand out Now owned by a major chocolate producer, Belgian truffle specialist Chocolaterie Duc d’O is set to go places in travel retail

Duc d’ O launched new packaging for its chocolates at the TFWA WE in Cannes last year

CONFECTIONERY JUNE 2016

hocolaterie Duc d’O, the world’s biggest manufacturer of flaked truffle chocolates, has an exciting future ahead of it as part of a large confectionery group. Following its acquisition by the Baronie Group at the end of 2014, Duc d’O launched new packaging at the TFWA World Exhibition in October 2015 to enhance the products’ stand-out on the shelves. The packaging design centers on the unique characteristics of the truffle: each truffle is rustic, irregular, and rough in appearance, and this translates into a wooden touch and feel to evoke the authenticity and craftsmanship behind the product. The packs are now color coded, so that the consumer can readily identify the product range. They also feature bigger, clearer visuals, and importantly, they emphasize the brand’s proud Belgian roots. The company does a lot of cross promotions and cross merchandizing, and tries to create different user occasions to boost the attraction of the product. For example, the white chocolate truffles with strawberries can be enjoyed with a glass of Champagne. This type of promotion has been staged with different travel retail operators “We are trying to group the products together,” explains Global Travel Retail Manager Erik De Troyer. “Our dark chocolate goes extremely well with Burgundy or a glass of Merlot, a very robust, strong wine, but also with Cognac and brandy. So we’re looking at a lot of cross promotions and merchandizing activities to get the message across to people.” The product range targets affordable

luxury gifting. A bag of truffles, depending upon the market, retails at US$14, and a 200g box is priced at about US$12, which is designed to sit competitively alongside other premium brands. Duc d’O wants to bring something special to travel retail with its artisanal truffles. “We have an original product, and this is also what we want to bring to travel retail,” says De Troyer. “I think it’s important when passengers come into the airport that they can find excitement, activities, that they can taste and discover new things, and then traveling becomes a rich experience that is to the benefit of the travel retail industry. Of course you need to have the big must-have brands, but you need to keep space for niche and special brands to bring excitement and novelty to the category. That’s why at Singapore Changi Airport and other airports we have created wooden fixtures – a storeready fixture that has a wooden touch and feel about it, with nice product visuals that are appealing to the passengers. This works, because it brings something new and exciting to the confectionery category, and also to the overall travel experience.” Following the pack re-launch in

Cannes, the company organized sampling activities at airports to boost brand awareness. “It was extremely successful. With every activity at key airports we saw quite strong uplifts in sales. For example, with Heinemann at Frankfurt Airport, we had big tables dressed with the look and feel of Duc d’O, which were highly visible outside the normal fixtures in the confectionery category. We had a person there doing tastings and activities, putting the brand message across.” The company’s strategy as a small brand is to be in the key international airports with many Asian passengers, who are big purchasers of the brand. The products are also popular with Russian travelers, and the brand performs well in Northern Europe. Travel retail makes up 25% of the company’s business. Europe is still the most important region, and it works with Heinemann and Belgian Sky Shops, as well as Schiphol Airport Retail, WDFG, and Dufry. In Asia, where the brand has been well-established for the last decade in locations such as Changi, Seoul and Hong Kong, the products are presented in a very qualitative way. In the Middle East the brand is listed at Dubai Duty

Free, and in the Americas it has a border shop presence with the likes of Shopping China, Neutral, and Monalisa. Asia remains one of its key, strategic markets, not only for Duc d’O but also because the brand is part of the Baronie Group, one of the top three chocolate producers in Europe. The group has 11 factories, €650 million (US$739 million) turnover, and a vast portfolio of brands and products. Thanks to the group’s industrial might, Duc d’O is set to branch into new segments. Today, gifting is the brand’s priority, but the wider group boasts many snacking, sharing, and self-consumption products, so the next step for Duc d’O is to bring other consumer moments to the range, while keeping the focus on gifting. “If you look at the big fixtures we have in Asia, we have a lot of room to bring variety to the range,” says De Troyer. “By doing so we will be widening the consumer profile of our brand. Today it’s adult-driven, it’s people who really appreciate high quality products. But we also want to attract a younger consumer, and I think by bringing these new concepts to market, this will definitely help to increase awareness and to reach a wider consumer profile.”

Duc d’O POS units in Kuala Lumpur International Airport, Malaysia

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HARIBO Over the past year, major retailers have welcomed Haribo into their stores

Full exposure

In April, Haribo launched Maoam candy chews in Europe

CONFECTIONERY JUNE 2016

Following the creation of a dedicated travel retail team, Haribo is aiming to replicate its success in European travel retail globally – with impressive results so far

uan Miguel Cabrera, Head of Travel Retail at Haribo, has been a busy man since he joined the German sugar confectionery company at the end of 2014. He has been tasked with expanding the brand’s travel retail presence worldwide – and that has been no mean feat, as he acknowledges that the brand didn’t have global visibility outside of its European stronghold. The pace of change at the company has been rapid over the past 18 months. The first thing Cabrera did was to start hiring a team for a dedicated, new travel retail division. The division is an independent business unit based in Luxembourg that handles the travel retail segment worldwide. Next up, the assortment. Cabrera found that the selection that Haribo was presenting in duty free outlets was similar to that offered in local stores, so it wasn’t really appealing. In addition, the visibility of the brand needed boosting. And furthermore, distribution was also a major

issue, as an overwhelming 95% of Haribo’s sales in travel retail worldwide were made in one single region – Europe – in 2015. The new Haribo travel retail unit set to work, and in one year since creating the division, some 20% of turnover has been achieved outside of Europe, and the brand is present on all continents. Haribo products are well distributed in Europe. The brand is well positioned in the local markets of each European country, but outside Europe, even in domestic markets, it is still working on its position. The travel retail division is taking advantage of Haribo’s increasing international exposure, but Cabrera believes that it can also work the other way: travel retail can be a window for new markets to enter. He notes that the brand is now available in travel retail in countries where the local market presence is low. “We are happy to announce now that 20% of Haribo’s business is located outside of Europe, in the Middle East, Asia and Americas,” enthuses Cabrera. “The

business has not decreased, indeed it’s growing. We finished 2015 with doubledigit growth and the current year is looking even better, because we had 36 new clients last year. 2016 is a year of continuing to grow the business. That’s the target.” The travel retail team has grown from just two people in September 2014 to 11, as of mid-May. “The team has grown considerably in one-and-a-half years, but that was necessary,” emphasizes Cabrera. High on Cabrera’s agenda after joining the company was customer service. The company opened new warehouse facilities in the Netherlands for travel retail goods on January 1, 2016. That has helped with deliveries to accounts outside Europe. The travel retail team’s hard work is paying off. “Over the past year, the main retailers have accepted the brand very well. We’ve seen an increase in space, in visibility, but also during 2015 it was the year of creating new travel retail exclusive articles.” To address the assortment, which featured almost no gifting products, Haribo launched a range of travel retail exclusive pouches at the TFWA World Exhibition in October 2015, which hit the shelves in April 2016. Also in April, the travel retail team launched Maoam candy chews, a brand that also belongs to the Haribo group. This brand is mostly being rolled out in Europe. “We’re also giving a small opportunity to Chamallows [marshmallow range] which is not currently present in travel retail. We’re the first ones to launch something like this,” adds Cabrera. In addition, new POS materials have been introduced that can be easily adapted to today’s shops. As for initial results, Cabrera says sales in the Gulf, Asia and Middle East are all growing fast, because until a year ago, the brand had no presence or visibility in these three regions. “In Asia, we were only present in DFS shops and at Singapore Changi Airport. Now you can see Haribo in many other locations as well.” On the sugar versus chocolate debate in travel retail, Cabrera is vocal in his views. Sugar represents only 10-13% of total travel retail confectionery sales. “It’s unfair – it’s a titan’s fight,” says Cabrera of the chocolate category’s dominance. “For many buyers, we’re just a brand. The right approach should be that we are a category

or a sub-category. But I think that we are doing well in the circumstances.” Cabrera then cites a surprising fact about how far Haribo has come in the channel. “We’re the number one sugar brand in sales volume in travel retail.” In a major step for the brand, Haribo recently changed its logo, and this has been launched in travel retail worldwide. Distribution is also steadily increasing. “In some Asian locations, and also in the Middle East, they have created a dedicated space for Haribo, outside of the normal confectionery area. We have our own space there, like in Europe, and that’s nice. I think that’s a step forward.”

Haribo launched a range of travel retail exclusive pouches at the TFWA World Exhibition in October 2015, which hit the shelves in April 2016

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RITTER SPORT

The 100g tower waves the national flag for the German confectioner

HEARTS and HEROES

Color is at the heart of Ritter Sport’s visual presence

Ritter Sport is distinguishing itself from other brands in the crowded travel retail marketplace with a quirky play on its visually distinctive collection by

CLAIRE MALCOLM

Ritter Sport has added a new dimension to its popular minis gift boxes with heartshaped packaging

C Katharina Tyrolt, Global Travel Retail Manager, Ritter Sport

CONFECTIONERY JUNE 2016

olorful German chocolate brand, Ritter Sport, is tugging the heartstrings of traveling consumers in Asia as sales of its heart-adorned minis-filled gift box support regional growth. “The minis have been part of our portfolio for a long time and were first introduced in the 1980s with the latest SKU launched on April 1, 2016 as a travel retail exclusive,” says Katharina Tyrolt, Global Travel Retail Manager, Ritter Sport. A market star performer, this is helping further establish Ritter Sport as an important confectionery travel retail brand. Says Tyrolt: “Europe and Asia Pacific are our most important markets, and ASPAC in particular is showing good growth despite the downward trend indicators for the region.” Ritter Sport’s original travel retail strategy was focused on impulse purchasing and on-the-go snacking, as she explains: “In Europe, Ritter Sport is known as a trendy grab and go brand but, in the last couple of years, we have introduced gifting items and at the moment, the split is probably 50/50 gifting versus selfconsumption and we expect to maintain this balance.”

Promotional activations with Heinemann at Vienna International Airport is just one global example of successful brand awareness campaigns

The brand recently concluded a successful pre-sale tie-up with German travel retailer Wöllhaf Retail GmbH Wollhaf

Eye-catching packaging, bold colors and distinctive colorcoded bars define the Ritter Sport offering, and retaining these unique characteristics whilst keeping the brand fresh and modern, is the brand MO. It has also produced a new hero product in its red, black and yellow tower stack, which replicates the country’s national flag, and which is proving to be an unintentional top seller. Says Tyrolt: “It wasn’t expected to be such a fast seller, and apart from China, Singapore and maybe Korea, where the German heritage angle matters more, where a quality product comes from isn’t that relevant. “We actually had quite a few requests for a Germany-related product, not just because we are a German brand, but because it was a logical step for Ritter Sport to create an item that resembles our national flag, and I think we are pretty much the only confectionery brand that can do this by using the product.” “With our large choice of color-specific bars, we are the only brand that can really use the product itself to create a destination as well as play on the heritage aspect.”

Although the tower has only been on the market for a couple of months, it is already exceeding forecasted sales globally by 25%. Top markets for the brand right now are Frankfurt and Istanbul, while Singapore and Hong Kong are leading sales in Asia. Nevertheless, promotional activity is key to driving ongoing sales, as Tyrolt explains: “We just wrapped up a very successful promotion with German travel retailer Wöllhaf Retail GmbH. They have stores at Berlin and Frankfurt airports, and we ran a six-week pre-sale promotion with them that was very successful, as well as having huge special placements in Frankfurt and Vienna.” The most high profile product in travel retail right now for 2016 is the mini heart box and this is what Tyrolt and the team is focusing their promotional strategy on. “It’s a classic gift item for a loved one and works across multiple seasons. Due to the square format, retailers can get lots on the shelves and it even fits perfectly into most cashier placements,” she says.

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LEONIDAS

A taste for

Belgian

tradition

The new Baton multipack was developed in response to partner and retailer feedback

Staying true to its brand DNA is a nonnegotiable for Leonidas but its reputation for innovation is paying off in Asia by

CLAIRE MALCOLM

The focus for the brand in 2016 is its destination packs with Singapore and Hong Kong already on shelf

he ‘Made in Belgium’ tag is Leonidas’ ticket to growing regional market share according to the brand’s International Sales Director, Filip Van De Vyver, with a number of new China listings boosting its existing Asia coverage. The focus for the brand in 2016 is its destination packs with Singapore and Hong Kong already on shelf, and other locations to follow. “What is also new since May this year is our Baton multipack. This was developed in response to feedback from our partners and retailers as a gifting and sharing solution, and they are espe-

CONFECTIONERY JUNE 2016

cially relevant in Asia where multipack propositions are important,” says Nelly Sannwald, Leonidas’ Travel Retail Manager. “Another really strong first is our seasonal collection and the chocolate Mooncake box designed for the September mid-Autumn festival. It’s a very traditional premium presentation with a handmade dark chocolate mooncake centrepiece filled with a smooth matcha tea ganache, surrounded by seven flavored dessert pralines including almond, tiramisu and lemon,” she says. Dark chocolate is the brand’s big seller in Asia. Says Sannwald: “Asians don’t like a super sweet taste, and also like a com-

Leonidas’ new extended Christmas range caters to all price points and tastes

The chocolate Mooncake box has been specially designed for the September mid-Autumn festival

bination of dark chocolate with fruit combinations in smaller sized bites.” Next up in the seasonal calendar is Christmas, with Leonidas set to present an extended range to cater to all price points and tastes. Says Van de Vyver: “While it’s important to have the basics and get the permanent range right, travelers want to see seasonal items, and it’s also essential to do this in order to surprise those frequent travelers. “In the past, seasonal wasn’t so important from an operator perspective as it was viewed as too complicated to implement, but with airports increasingly on board with seasonal theming and keen to create exciting passenger experiences, which is particularly strong in Asia, it’s a must.” As a master chocolatier Leonidas also prides itself on its reputation for product innovation. “We definitely need to create some theatre in order to help bring people in-store. I think that seasonal and limited editions really help communicate that atmosphere, and it’s a win-win for everyone involved,” notes Sannwald. Both are confident of continued double-digit growth for the brand in the second half of 2016, and Van de Vyver highlights the flexibility that the company’s smaller size allows, as a major benefit. “Our distribution strategy and the fact that we are not available in any supermarkets or convenience stores – only in travel retail and dedicated Leonidas stores - also adds to our unique appeal, as well as our market presentation,” he remarks. “We will also always remain affordable, and that is something that has been in our DNA since Leonidas was founded,” he adds. Looking forward, digital and online marketing, plus e-commerce opportunities, are topics on the Leonidas radar, along with the issue of food safety, especially in emerging markets such as China. Says Sannwald: “The issues of labelling, ingredients and certification are also becoming increasingly complicated, and this is a challenge for the category as a whole.”

Filip Van De Vyer, International Sales Director and Nelly Sannwald, Travel Retail Manager, Leonidas

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FERRERO TRAVEL MARKET

Winning by a country mile

French travel retailer Aelia hosts a promotion for the Ferrero Rocher T48 Destination France edition at Paris Charles de Gaulle Airport Terminal 2

Ferrero Travel Market is catering to the travel retail demand for souvenir confectionery with its new range of T48 Destination boxes targeted at globetrotters

series of exciting airport promotions have celebrated the launch of Ferrero Travel Market’s new T48 Destination collection of travel-exclusive chocolate boxes themed around different tourist hotspots. The confectionery giant’s Luxembourgbased travel retail team staged its most recent activation at Frankfurt Airport earlier this year with leading German operator Gebr Heinemann. The promotion saw the launch of the new German edition of Ferrero Rocher’s already successful T48 Destination collection.

A specially designed, gold-colored Ferrero Travel Market fixture heralds the debut of the T48 Destination USA edition at Miami International Airport

CONFECTIONERY JUNE 2016

Travelers were able to enjoy a taste of the new treats in this Germanthemed travel-exclusive souvenir pack, which is decorated with designs of famous The T48 Destination France pack features landmarks and contains 48 of the brand’s drawings of famous landmarks, such as the Eiffel Tower, Arc de Triomphe and Notre Dame chocolate pralines. The Frankfurt Airport activation, which took place during April 2016, also highlighted the Ferrero Golden Gallery 34-piece and 22-piece boxes. Besides the buzzing metropolises of Hong Kong and Singapore, the Ferrero Rocher T48 Destination collection includes designs for some of the most popular tourist locations in the world, including China, France, Germany, Italy, the UK, Dubai and the USA. In addition, a World A red dragon, a panda and the Great Wall of China are among Traveller Edition has been the illustrations depicted on the T48 Destination China edition developed to appeal to tourists all over the world. “The response to the launch of the first the tagline “Choosing a gift has never designs in France and the USA confirmed been so easy” heralded the debut of the the findings of a pre-launch survey in T48 Destination USA edition. which consumers gave the souvenir boxes Over in Paris, leading travel retailer very high scores for giftability, modernity Aelia hosted a promotion for the France and appeal,” said Ferrero Travel Market’s edition at the tourist hub Charles de Head of Marketing Sebastien Deflandre. Gaulle Airport Terminal 2, where a hostIn Miami International Airport, a ess gave out chocolate samples from a specially designed, gold-colored Ferrero custom-designed, two-wheeled, FrenchTravel Market fixture emblazoned with style cart.

INSIGHT

25%

of shoppers would buy cash till offers in a duty free store.

CONFECTIONERY

• IS THE MOST SOUGHT AFTER CATEGORY AT CASH TILL. • HELPS TO DRIVE INCREMENTAL REVENUE.

Source: Global Duty Free Visitor Study, 2011 (11,000 interviews, 30 airports) Photo: Keflavik International Airport, Reykjavik, Iceland