Americas, Gulf-Africa and Asia Confecionery Special Issue June 2015 by Paramount Publishing Ltd.

CONFECTIONERY JUNE 2015 · SPECIAL ISSUE

m1nd-set’s sweet findings p. 6 Dubai Duty Free’s point of view p. 18 Mondelez shares secrets p. 26

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LETTER FROM THE EDITOR

Striving for full potential JUNE 2015 · CONFECTIONERY · 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 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, 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 EDITOR Wendy Morley wendy@dutyfreemagazine.ca ASSOCIATE EDITOR Ryan White ryan@globalmarketingcom.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca OVERSEAS CORRESPONDENT Claire Malcolm claire@dutyfreemagazine.ca CONTRIBUTORS Rebecca Byrne

onfectionery may lend itself to in-store fun, but it is an increasingly serious business in duty free and travel retail. The latest provisional sales performance figures from research experts Generation Research show that the confectionery category’s sales climbed by 5.7% in 2014 versus 2013 to exceed US$5 billion. TFWA President Erik JuulMortensen attributes the impressive rise to the “exceptional innovation in product and product design, and to attractive in-store activations by confectionery manufacturers.” He acknowledges the category’s universal appeal and notes that its success depends on retailers allocating high-visibility space. His words are echoed by Mars International Travel Retail General Manager Craig Sargeant, who appeals to retailers to give more space to high-potential segments such as sugar and gum—the latter already a strong seller in Asia. “We need the full support of the Trinity to unlock the potential from this fantastic category. Everybody loves confectionery. It brings smiles, it is great for cross-penetration sales and it is the most effective footfall driver.” The potential of the children’s sugar confectionery has not yet been reached, according to Susan De Vree, Manager Global Travel Retail of Perfetti Van Melle, who cites new research data commissioned by the Dutch company. Saba Tahir, Vice President for Purchasing at Dubai Duty Free, concurs that there is a long way to go before confectionery reaches its full potential, although the category is already a sales driver, making up 8.26% of the operator’s overall sales and growing. “Confectionery has outperformed overall sales growth and passenger number growth,” she says. The top retailer’s splashy promotions undoubtedly boost sales, and research by Peter Mohn, founder and CEO of travel research experts m1nd-set, supports this claim. He says promotion is highly important; 20% of confectionery browsers who did not go on to purchase cited a lack of promotions as the key reason. Product development is at least as important as promotions, however, and Godiva is at the forefront. In addition to its growing chocolate portfolio, the Belgian brand is introducing soft serve ice cream to travel retail, and is also exploring fresh retail formats such as pastries, according to Head of Global Travel Retail Asia Pacific, CS Lam. Development and innovation are also key for Mondelez World Travel Retail as it tests bold, new flavors such as Crushed Corn for its classic Toblerone brand and adds Oreo biscuits to its Milka chocolate in addition to revolutionizing customer communications via its webinar initiative. With original innovations like these, who could say no to more space? I hope you enjoy our first-ever dedicated confectionery digital magazine.

ADVERTISING SALES ADVERTISING & MARKETING EXECUTIVE Jacqueline Hammill jacqueline@dutyfreemagazine.ca

Kindest Regards,

CIRCULATION & SUBSCRIPTION accounts@globalmarketingcom.ca

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

CONTENTS

What’s inside LEAD STORIES 6 Confectionery overview A BAG OF SWEET FINDINGS

In a newly published report, Peter Mohn, founder and CEO of travel research experts m1nd-set, reveals the inner workings of the confectionery shopper’s mind in travel retail

10 Retailer point of view: DFS THE WHOLE PACKAGE

Success in confectionery and across all categories comes from DFS focusing on innovation, products, promotion, and most important, relationships

18 Retailer point of view: Dubai Duty Free SWEET FUTURE

With strategic focus on what’s proven to work, Dubai Duty Free sees the confectionery category outpace passenger and economic growth

30 10

24 LS travel retail – So Chocolate SWEET SUCCESS LS travel retail opens “So Chocolate” store at Singapore’s Changi Airport

28 Lindt & Sprüngli BRAND PERSONIFICATION IN THE LINDT DNA

With 2015 marking 170 years of confectionery excellence, the Swiss chocolatier is capitalizing on its heritage and people to consolidate global market presence

30 Sharing the secrets to drive confectionery MONDELEZ WORLD TRAVEL RETAIL

Mondelez World Travel Retail is reinforcing its retailer commitment with increased openness and data sharing headlining a new approach to communication

45 Tea Forté LUXURY TEA IS OUR FORTÉ

Tea Forté is taking its opulent approach to the world’s second most consumed beverage to duty free stores around the world

FEATURES 14 Operation smiles by Mars 16 Hershey’s addresses new opportunities 30 Living on a cloud 32 The next generation 36 Experiences through innovation 38 A Swiss success story

40 Be different, have fun, drive spend 42 Surprise, surprise 46 Golden era of opportunity for Ferrero 48 Innovation and indulgence 50 Surprise and delight 52 Industry feedback on confectionery

When words end, my begins. Experience the first personalised chocolate by Frey.

CONFECTIONERY OVERVIEW

A bag

of sweet findings by

Peter Mohn, founder and CEO of m1nd-set

CONFECTIONERY JUNE 2015

HIBAH NOOR

In a newly published report, Peter Mohn, founder and CEO of travel research experts m1nd-set, reveals the inner workings of the confectionery shopper’s mind in travel retail

onfectionery shoppers are health-conscious consumers who actively compare prices with downtown stores and appreciate well-targeted promotions, according to travel market researcher m1nd-set. For the past two years, the travel research firm founded by Peter Mohn has conducted tailor-made studies around the world for many leading confectionery suppliers. The surveys range from in-depth understanding of the path to purchase and the decisions the consumer takes, to large quantitative surveys on a global level. The latest m1nd-set chocolate and confectionery report uses data collected in Q4 2014 and Q1 2015, and consists of face to face interviews with 4,588 confectionery shoppers at departure gates in various key airports around the world. This global category-specific meta-analysis covers airports in Europe, Middle East, Asia Pacific, North America and South America. The average amount spent by each traveler in the confectionery and chocolate category is €34 (US$38). By region, the average amount is the highest in Middle East airports (€38 (US$43)) and

the lowest in Europe (€29 (US$33)) and North America (€26 (US$29)). Asia Pacific (€35 (US$39)) and South America (€35 (US$39)) are close to the average. The shopping baskets of confectionery buyers show that they also purchased perfumes and cosmetics in 44% of cases; alcohol in 27% of cases; tobacco products (20%); clothing (16%); and accessories and jewelry (16%). Turning to the destination of the confectionery purchase, 40% were gifts, 24% were for self-indulgence, 22% for immediate usage, and 15% because someone asked them to purchase. By region, gift-giving was highest in Asia Pacific (53%) and the Middle East (48%), and less so in Europe (42%), North America (39%) and South America (30%).

When asked about the key reasons for purchase, 27% cited a souvenir from their trip, 23% said they could not buy it in a shop, 19% said they were attracted by an airport special edition product, 17% wanted to stock up, and 15% wanted to save money. Of the confectionery browsers who did not go on to purchase, the reasons for not buying were as follows: more expensive compared to downtown (25%), going to/ did buy elsewhere (22%), did not want to carry more items (20%), no motivating promotions/sales (20%), wanted a local touch that the store did not offer (15%), did not find the kind of product I usually buy (13%), unsure about Customs/airline allowances (7%), too much choice (6%), and the product was out of stock (6%). On the subject of price comparison, some 43% of shoppers said they had compared prices with their home market. Of those who had compared prices, almost a third, or 29%, said the prices were higher than at home, 29% said they were the same, and 42% said they were lower than at home. Based on the 2015 report’s findings, m1nd-set’s Mohn urges confectionery suppliers to be creative and different compared to what is offered downtown, adding that this depends on the strengths of the portfolio of each firm. In addition, he says travel-related products and a local or regional touch to the packaging/ brand are appreciated by confectionery shoppers. Gifting also plays an important role, and he advises suppliers to meet different needs, such as for children, formal gifting, etc.

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CONFECTIONERY OVERVIEW

Thanks to his research, Mohn has spotted a number of trends in the category. “Confectionery shoppers are more health conscious and many expect more of an entertaining and local aspect in this category.” Mohn believes travelers are open to trying new brands they may not know about, but the main reason for buying is still the knowledge and the image of the brand. “However, certain segments are clearly open to trying new brands in duty free when traveling, especially if it is presented to them in an appealing way in the shops,” he notes. In terms of product marketing, m1nd-set has tested different and original activations, and most of them— though he stresses not all—“clearly have a positive impact on the shopping behavior”. According to the 2015 confectionery and chocolate report, one in five confectionery non-buyers did not buy because of a lack of motivating promotions. The preferred types of promotions were (in order of preference): quantity discounts (e.g. buy one, get one free), getting a sample product in addition to their main purchase, and lastly, a free accessory gift. Prize draws, such as scratch cards revealing the gift, were the least appealing promotion type. In conclusion, the main challenge facing the category is the price comparison aspect, which Mohn describes as a “serious threat and should be met by being creative and different from downtown shopping.”

CONFECTIONERY JUNE 2015

RETAILER POINT OF VIEW: DFS

The whole package by

Last year, DFS rolled out its new ‘Sweetravels’ concept store in San Francisco International Airport

Success in confectionery and across all categories comes from DFS focusing on innovation, products, promotion, and most important, relationships

onfectionery has historically been recognized as a key driver within DFS, says Thierry Canivet, Senior Vice President, Food, Gifts & Well Being, DFS Group. “It is good to see renewed interest in the category, both from within DFS and from our customer base,” he says. “Confectionery remains a solid performer within DFS and we have seen much growth in the category over the past few years.” For many if not most retailers, confectionery is a category on its own, but DFS looks at it a little differently. “Late last year, DFS made the conscious decision to establish ‘Food and Gifts’ as another core category of our business. This is a testament to our confidence that the Food and Gifts category, which includes confectionery, will continue to play an essential role in our business mix.

Innovation is key For DFS, the ability to innovate is high up on the list of what it looks for in a company whose products it’s considering. “DFS is always looking for innovation, and also looking for companies that can offer the whole package of great products, effective promotions such as pop-ups in addition to on-shelf displays,” says Canivet. As is the case throughout travel retail, promotions are imperative to the success of confectionery in DFS locations, and again innovation is important to the company. “We have a strong pipeline of promotional activities across all DFS stores around the world,” says Canivet. “One thing we are currently working on is ‘pop-ups.’ Most recently we had a Mars/M&M’s pop-up at Hong Kong International Airport, which was incredibly well received.” 10

CONFECTIONERY JUNE 2015

WENDY MORLEY

To commemorate the launch of Sweetravels, DFS introduced its own San Francisco-themed confectionary label

In line with this thinking, Canivet says DFS is “always on the lookout for new brands to elevate our product offerings and respond to our customers’ needs.” With over 300 brands currently listed in its confectionery portfolio, he says still DFS lists on average one or two new brand products each month. “Our customers’ needs are always evolving, and to keep up with this pace, we are constantly refining our mix.” A great example of this innovation is the Well Being subcategory. While Canivet says each of the company’s confectionery classifications are performing well, he’s seen especially good results in Well Being. “We have had good success with our Well Being category and have identified this is a growth engine within the company. The increasing health awareness among consumers has led the confectionery industry to consider ways to provide better options that appeal to them.” DFS also looks for new store concepts to help provide continued growth. “We look at each respective door, whether it’s an airport or Galleria, to identify additional locations for roll-out. Last year, we rolled out our new ‘Sweetravels’ confectionery store concept in San Francisco’s International Airport. The store has a whimsical feel to it, with colorful polka-dot patterns all across the space. In tandem, we also introduced our very own private San Franciscothemed label for a number Thierry Canivet, Senior Vice President, Food, Gifts & Well Being, says Confectionery of our chocolate, cookies remains a solid performer within DFS and candy products.”

170 years of LINDT Swiss Premium Chocolate As the global leader in the premium chocolate sector, Lindt & Spr端ngli looks back on a long standing tradition of 170 years which takes its origins in Zurich, Switzerland. LINDT chocolates are known worldwide for their incomparable taste and fine melting texture. The creation of such fine chocolate is an art that our LINDT SWISS MASTER CHOCOLATIERS have perfected since 1845, driven by their passion for high quality chocolate and creative excellence.

Visit us on www.lindt.com

RETAILER POINT OF VIEW: DFS

Local for community and sense of place As a company, DFS consciously supports local brands. “We have long supported local products because they are a large part of a customer’s experience,” says Canivet. “It is important that we communicate a sense of place to our customers and that they have the opportunity to bring home a gift or memento of that destination.” Canivet says the company has set this directive both as a way to offer something customers want, whether those customers are locals or travelers looking for souvenirs, and to support the local community. “Where we can, we buy local brands. In Hawaii, for example, we have a longstanding partnership with Honolulu Cookies Company. In Hong Kong we work closely with the Kee Wah Bakery to showcase local traditional delicacies.” The stores also carry DFS brands exclusive to certain regions. “We sell items important to each location under DFS-exclusive brands such as Kiwi candy in New Zealand, Kangaroo jerky in Australia, fresh pineapples in Hawaii and spices in India,” says Canivet.

Strong relationships For over 54 years, according to Canivet, keeping up great connections and partnerships with brands and suppliers has been an important aspect of how DFS operates. “One of our core values is to ‘act with integrity,’ and it is important to maintain positive relationships with our brands.”

He says this is the case across the range of categories and no less so in confectionery. “Like our other product categories, we have strong relationships with our brand partners in the Confectionery segment—they represent some of the most trusted luxury brands and are among the best in the industry. Our top performing products differ by location but chocolates and biscuits generally remain on top.”

Expanding category Canivet and DFS see confectionery as both growing and expanding outside of its current bounds. “Over the coming years, we see the confectionery category expanding outside its comfort zone of chocolate and biscuits to become more of a total food category. With that said, there is still a lot of opportunity for growth in the category and we are confident that confectionery will continue in a positive manner for DFS.” Like any company, DFS has its challenges to face, but Canivet chooses to see these challenges as opportunities. “Because of our complex network, every day brings new challenges. But this gives us the opportunity to problem-solve and create best practices.” He sees value in the trend toward research-driven decisions in the marketplace to help bring about this positive future. “We have a strategy and market-development group within DFS and this, along with insights from our respective brand partners, gives us the opportunity to try new things and validate our assumptions.”

DFS looks for effective promotions such as pop-up stores. The Mars/M&M’s pop-up at Hong Kong International Airport was incredibly well received

It has always been important for DFS to offer local brands, both to serve the customer and to support local communities

CONFECTIONERY JUNE 2015

The T Galleria in Singapore offers local and international delicacies and treats, with plenty of price promotions to encourage purchasing

Be Exceptional.

MARS INTERNATIONAL TRAVEL RETAIL

Operation Smiles Mars International Travel Retail (MITR) is gearing up for the opening of a new airport store as its Smiles campaign gets under way by

HIBAH NOOR

lobal confectionery giant Mars International Travel Retail (MITR) is continuing to put smiles on the faces of both travel retailers and travelers as it strives to double the size of the confectionery category by 2020. MITR’s “Smiles” campaign, that began last year, has received very good feedback and the company is talking with key retailers about how to implement the promotion in their key locations, according to MITR General Manager Craig Sargeant. “There has been overwhelming support for making confectionery the key driver behind making the overall shopping experience more fun,” he says. “It’s too early to give any figures in regards to the Smiles campaign but we continue to be proactive in our ambition of doubling the size of the confectionery category by 2020,” he adds. “By leveraging

CONFECTIONERY JUNE 2015

M&M’s as our lead brand and with the use of exciting, innovative promotions and activations, we are determined to convert more travelers into shoppers. Our highprofile, very engaging M&M’s characters are the anchor for us to lead unlocking more smiles for our travelers.” With M&M’s as its beacon brand, MITR has invested heavily in a new team and marketing strategy to ensure that it is completely focused on its ambition for 2020. On the subject of new airport stores, Sargeant says location is key. While there is no target ambition to have a certain number of M&M’s stores, later this year a new shop will begin trading at Amsterdam Schiphol in Amsterdam. “We are extremely excited,” he enthuses. In terms of regional performance, the company believes every region has a role to play in accelerating the potential of the category. As Sargeant explains: “For us, we notice that certain regions and retailers have more appetite for change, and therefore will drive confectionery as a priority category. In general, Europe has always been ahead of the game in unlocking the potential of confectionery, but we are now noticing

stronger appetite from Asia, the Middle East and the Americas. Especially in the context of the world of luxury retailing, what has landed very well with these retailers is the opportunity of leveraging confectionery as a category to drive incremental impulse purchases on top of their more premium category purchases.”

Change in philosophy In particular, in Asia MITR has noticed “a distinct change” in philosophy on the role food/confectionery can play as key players continue to source the best way to drive sales amongst the growing number of Chinese travelers, notes Sargeant. M&M’s and Snickers continue to be MITR’s strongest performing brands globally. In addition, the company has strong performers such as Galaxy (Dove) and Maltesers. The focus for these brands varies depending on the traveler profile. For example, Galaxy (Dove) is a priority focus for MITR with travelers from the UK, Asia, China and the Middle East, while Maltesers is a brand that is “huge” in the UK, notes Sargeant. The company therefore tailors promotions and activations depending on the traveler profile of an airport.

MITR brings a new M&M’s summer campaign into travel retail with its M&M’s Travel Pillow

From left: Craig Sargeant, MITR’s General Manager, Leon Falic, DFA President and Alan Eley, VP of JFK Terminal 7 officially open M&M’s branded store

Sargeant believes that an underdeveloped area in certain regions and retailers within travel retail are the sugar and gum segments, with global leading brands such as the Skittles sugar brand and Extra gum providing significant growth potential. To drive sales, MITR is emphasizing the functional benefits of gum—fresh breath, stress-beating, confidence and making it more appealing to retailers. “We are confident that we will develop a winning format for sugar and gum and with gum being big in Asia/China already. With more partnership and risk-taking, we are sure we can develop this undeveloped category.” On the topic of the potential for confectionery as a category, Sargeant has a clear message for retailers: “We need the full support of the Trinity to unlock the potential from this fantastic category: everybody loves confectionery (it brings smiles), it is great for cross-penetration sales and it is the most effective footfall driver. Most people buy for themselves (45%) or for sharing purposes (35%), even though they may buy formats which are targeted as gifts,” he notes. Meanwhile, the outlook for this year is positive. “2015 has been and will continue to be an exciting year for us. We have

come into the year with a very strong category vision and we are well on the way to helping all elements of the Trinity. Our Category Vision One Pager has received positive feedback and we will continue to discuss our new strategy with airports and retailers throughout 2015 to ensure that we see our dedicated strong plan of action take hold,” he says.

major shopper needs, Trip Memories and Showing Thought, which will launch at the TFWA World Exhibition 2015. M&M’s summer campaigns are attracting more and more attention every year, according to Sargeant. “It is definitely a priority for MITR to bring a new M&M’s campaign into travel retail and this year it is all about the M&M’s Travel Pillow.” There are five pillows based on each of the famous, colorful M&M’s characters. They all feature a printed quote that reflects their personality and which aims to put a smile on travelers’ faces. Targeted as a gift for travel retail— particularly as they are designed to make travel more comfortable—the Travel Pillow will be given free with the purchase of three Maxi Pouches. The promotion will be launched into the sector along with a wide range of promotional material that aims to stimulate browser to shopper conversion. To support the campaign, promotional areas will be created in high traffic locations to build the brand and attract traveler attention. “These promotions act as a fantastic tool to both drive footfall and, at the same time, to create theatre on the shop floor,” concludes Sargeant.

Focusing on shopper needs Among the innovations under development are M&M’s color mixes, pouches, family ranges, tins, M&M’s sticks, and new M&M’s tubes/toppers, which will be aimed at adults rather than children through GWPs such as phone zoom lens and photo holders. Also new will be stand-up bags with global designs and destination sleeves for multi boxes, including Snickers Brazil, London, New York and Frankfurt. MITR will be mainly focusing on existing products, and introducing exclusive packs and presentations. It will be concentrating on two of the main shopper needs, Home Sweet Home and Travel Treats, to appeal to the growing number of middle class travelers. It is also working on some innovative concepts to appeal to two other

“In general, Europe has always been ahead of the game in unlocking the potential of confectionery, but we are now noticing stronger appetite from Asia, the Middle East and the Americas.” CRAIG SARGEANT, GENERAL MANAGER, MARS ITR

www.dutyfreemagazine.ca CONFECTIONERY

HERSHEY WORLD TRAVEL RETAIL

Gifting new opportunities in Asia market growth Hershey reveals that 65% of Asian buyers have gifting at the top of their shopping list as it shares results of a global market study by

CLAIRE MALCOLM

Hershey’s new America-themed travel retail-exclusive tins are set to be a travel retail bestseller

T All new Brookside Crunchy Clusters debuted at last month’s TFWA Asia Pacific Show

New for travel retail, the company will shortly launch its Hershey’s Kisses Deluxe Chocolates

CONFECTIONERY JUNE 2015

he research findings from Hershey World Travel Retail’s 2014 global confectionery study, which used intelligence provided by Counter Intelligence Retail (CiR) also reported that up to 60% of Asian consumers plan to make a purchase from the confectionery category. With gifting a prime opportunity for targeted product development, Hershey World Travel Retail will be launching Hershey’s Kisses Deluxe Chocolates and America-themed travel retailexclusive tins. Commenting on the findings, Amy Wilson, Hershey World Travel Retail Team Lead Europe & Strategy Manager, says: “Our latest research has been the foundation for much of our development for the last few months. We’re using the key findings to drive our new product development along with our category development plans.” Results from CiR’s research with Asian buyers also reveal that quality and the stocking of well-known brands are key to the decision-making process for buyers looking to make confectionery category purchases. Major purchase triggers were quality (40%) and the attraction of a well-known brand (23%). In addition, buying for snacking and self-consumption remain an important focus as they represent more than 30% of all purchases made. Planned purchases accounted for 60% of all decisions with 40% of those surveyed driven by impulse. The research also highlighted at 56% male versus 44% female gender split with 28% of respondents traveling for business and 72% for leisure. In terms of confectionery preference/desire, 72% buy chocolate products while 13% opt for candy, with other confectionery accounting for the remaining 15%. Looking at top-selling product lines, Hershey’s Brookside brand has maintained strong performance in the Asia region due to its snacking positioning, which has clearly resonated with consumer desire. The research also flagged the role of customer service as vital to the sales conversion opportunity, where US$28 is the average

total spend on confectionery, with 51% of consumers interviewed actively seeking category navigation. The company showcased its new gifting solutions at last month’s TFWA Asia Pacific exhibition in Singapore and launched its new Brookside Crunchy Clusters to complement and enhance the existing Brookside brand range. ”We’re committed to unlocking the potential for growth that confectionery represents. Our focus on building strong brand connections to create exciting snacking and gifting opportunities remains at the heart of our strategy,” says Wilson. She also confirms that Hershey World Travel Retail will continue to share data with its customers, and will be using the latest market intelligence to reinforce its category vision and strategy, which was originally presented in 2014. The company has also been named one of the world’s most ethical businesses for 2015 by the Ethisphere Institute. This is its first appearance on the global listing and underscores The Hershey Company’s commitment to leading ethical business standards and stakeholder practices. Hershey is one of only five global companies in the food and beverage category honored this year.

Amy Wilson, Hershey World Travel Retail Team Lead Europe & Strategy Manager

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RETAILER POINT OF VIEW: DUBAI DUTY FREE

Sweet future With strategic focus on what’s proven to work, Dubai Duty Free sees the confectionery category outpace passenger and economic growth by

WENDY MORLEY

ubai Duty Free (DDF) has proven itself a leader in travel retail again and again, and the confectionery category is no exception. The category is number four for this operator, who offer 33 different categories in total. As with most retailers, DDF’s biggest selling category is perfume, followed by liquor and tobacco. Confectionery makes up 8.26% of overall sales but the category is growing. “January to April 2015 confectionery sales figures grew at +3.66% over the same period last year,” says Saba Tahir, the company’s Vice President for Purchasing. She adds that this is a positive result, given the current economic climate. Tahir feels the confectionery category has a lot of ongoing potential because there is a clear correlation between passenger numbers and confectionery sales, and passenger numbers continue to climb in the region. She suggests that the category can outpace passenger growth, however. “Historically it must be noted that confectionery has outperformed overall sales growth and passenger number growth. It has been a category driver for the company.” She goes on to state that, given current market situations and currency fluctuations, in general it is a challenge to keep sales growth in line with increasing passenger numbers. As a company DDF believes confectionery is a category with

Promotions, high-impact displays and gifting opportunities are all important in driving category sales in confectionery

the potential to do so. Tahir states that there is a long way to go before the category reaches its full potential, and that DDF has identified some areas that can be focused on in order to achieve this.

Promotional success High-impact promotions are essential for this kind of success. “Multi-buys, price off, gift with purchase, mix-and-match promotions and such have always been the key promotional drivers for volume turnover. Theatrical displays of promotions and worldwide exclusive product launches in Dubai Duty Free have been a successful tactic to bring in penetration and attract footfall into the confectionery shops.” Dubai Duty Free has never been shy of big splashy promotions, and the chance to win a trip is pretty big and splashy. “Fazer’s ‘Win A Trip for two to Finland’ raffle draw promotion in the month of April, 2015 was very impactful and created a positive response towards the brand from DDF confectionery shoppers,” says Tahir. The brand Duc Do held a “Win A Trip for two to Belgium” raffle draw throughout the month of May, 2015. “Hopefully we will find it brought Dubai Duty Free and the confectionery category additional revenue and increase footfall,” Tahir expresses.

Duty free exclusives

Adhering to the tried and true strategies of having visibility, promotion and competitive pricing has helped make Galaxy one of DDF’s most successful brands

CONFECTIONERY JUNE 2015

Exclusivity is important to the duty free industry as a whole, and certainly as part of DDF’s marketing strategy. “In March 2015, Dubai Duty Free was the first retailer in the world to showcase the Lindt Lindor Fashion chocolate range,” Tahir says. “The fashion range consisted of two Lindor tubes of 250g and a Lindor chocolates travel bag of 400g. The exclusive item had special visibility across all concourses and was highlighted with sampling activity and price-off promotion.” This exclusive was far from the only one at DDF this year. “Lindt Airplane Napolitans 750g were a world-wide exclusive to Dubai Duty Free from April 15 to May 30, 2015. This promotion was displayed in selected ‘Sweet Spots’ of the confectionery category to drive the exclusive gift purchase,” says Tahir.

RETAILER POINT OF VIEW: DUBAI DUTY FREE

Dubai Duty Free finds high-profile promotions essential for success. Fazer’s ‘Win A Trip for two to Finland’ raffle draw promotion in April, 2015, is one example

Saba Tahir, the company’s Vice President for Purchasing, feels the confectionery category has a lot of ongoing potential

Another upcoming exclusive in confectionery include the very first global exclusive from Godiva. Two new Mousses Meringue chocolate boxes of 110g and 200g will be exclusive to DDF in July of this year. In June, DDF will see the global launch of the Butlers Dessert Collection box. Tahir explains the company’s thoughts on promotions in this category: “Dubai Duty Free has always encouraged its trade partners to conduct various high-profile promotions [HPPs] across different categories in an effort to boost penetration, foot-fall and sales.” She goes on to say that the company has chosen to focus on increasing HPP activity over the past few years, especially in the confectionery/fine foods segment. “Another prime reason for the surge of HPP activities in Dubai Duty Free is that leading international brand powerhouses have identified [our location] as an ideal platform to showcase or reveal the new product launches and exclusive promotions.”

Brand and price How does Dubai Duty Free choose its confectionery products? Tahir says “brand and price” is the catchphrase the company uses, but these are not the only desired features. “There are various criteria that connect new brands or products, including maximum presence in the domestic and international market, competitive price points, profit margins and strong promotional or marketing campaigns. Lastly there has to be space availability in the Dubai Duty Free confectionery category. All of these influence the product selection decision.” The ability to provide DDF customers with something new and exciting is also relevant to the company’s selection process. “We are [continuously] discussing and looking out for new travel retail exclusives, special animations, promotions and new flavor

CONFECTIONERY JUNE 2015

One of Dubai Duty Free’s mandates is to offer the best value for money to traveling customers

assortments in addition to reaching agreements with our trade partners to be the first duty free travel retail operator to showcase their new launch of travel retail-exclusive products,” Tahir says. Regional considerations are also important. “Approximately 40% of confectionery sales come from the Indian sub-continent,” Tahir says, explaining that brands popular with that community are essential to carry. “Local market products are also welcome, provided they have the right product, quality, price, packaging and service, which are some of the key elements we look for.”

Children drive sales One trend Tahir is noticing is the resurgence of gifting for children as a subcategory in confection. “The children’s gift subcategory has been a key draw for shoppers, resulting in a growth of around +10%. We have a lot star-studded Disney and other cartoon characters on offer in Dubai Duty Free. Shoppers gravitate to them for impulse buying for their loved ones as gifts.” One response to this trend was the opening of their M&M’s store in 2013.

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One of the most popular food brands, now available in travel retail with a full range of exclusive products

RETAILER POINT OF VIEW: DUBAI DUTY FREE

Other trends she sees driving the category include new innovations, travel retail exclusives, premium gifting and indigenous/ local souvenir products. “This year we have seen more shoppers focused on getting better value for money. We are continuously seeking better offers and deals from our trade partners.”

Currency and other challenges According to Tahir, the biggest challenge faced so far this year has been the volatility of major currencies including the Euro, Swiss Franc and especially the Russian Rouble, though she is optimistic that the next few months will bring a positive sales trend, especially with the opening of Concourse D in September. Other challenges include weight restrictions levied by budget airline carriers, in addition to space and category management: “This is a major challenge because of the enormous growth of passengers and product range. We ensure that we are on target every year and do not want to lose focus. Our traditional DDF approach to solve the problems and challenges relies on logical tried and tested methods.”

Top ten Dubai Duty Free’s top 10 products for January to April 2015 were:

1) Toblerone Tiny Mixed Bag 300g 2) Lindt assorted Napolitains 500g 3) M&M’s Candy Tin 250g 4) Galaxy Mixed Minis 500g 5) Ferrero Rocher T30 375g 6) Galaxy Jewels Box 400g 7) Crispo Assorted Chocolate Bag 1kg 8) Ferrero Collection T24 260g 9) Kit Kat 4 Finger box 24x45g 10) Galaxy Jewels Box 650g

Where is confectionery headed? Tahir and DDF feel the confectionery category, which was once almost an afterthought of travel retail, has a strong place in the industry’s future. “We believe the confectionery category is here to stay,” she says. “Surprisingly, the sub-continent passengers are becoming less dominant. We have seen an influx of shoppers from the Middle East, Far-East Asia Pacific and Africa, and we can say the category will only grow from strength to strength. “We also see a lot opportunities with local and indigenous products that might appeal to the international travelers and to shoppers who want to savor the Arabian experience. Brands such as Al Nassma and Patchi, which are iconic in the region, are available in all our Foodplus outlets.” She says recent research into the category is helpful in this respect, giving insight into customer behavioral patterns and regional trends.

Insider advice What can brand owners and suppliers do to see success in Dubai Duty Free? Tahir’s advice: “Stick to the basics as outlined below.” Promotions: Focus more on seasonal promotional planning to increase transaction value. A number of multi buys, mix and matches and value off ’s are initiated throughout the year for this purpose. Passengers from the sub-continent are the prime target market for promotions and not coincidentally our largest group of customers. Competitive Pricing: Our goal is to offer the best value for money to the traveling customer. Exclusivity: We emphasize the listing of travel retail exclusives, in order to differentiate the offer from the domestic markets. Destination Products: The confectionery category has the benefit of offering a potential souvenir, through postcard-type packs from Paton’s Macadamia, for example, and Al Nassma camel milk chocolate. This enhances the regional flavor appeal and will be a key area of focus in month to come. Service and Training: There is a need to conduct year-round product training of staff to improve customer service, product knowledge and sales skills. Dubai Duty Free also partners with external distribution organizations to help improve product knowledge of staff.

The exclusive Lindor fashion range had special visibility across all concourses and was highlighted with sampling activity and price-off promotion

CONFECTIONERY JUNE 2015

Mars ITR is a leading player in the confectionery category. We combine insights, vision and global strength with powerful brands to create fantastic in-store opportunities. Contact your local account manager and see what we can accomplish together!

Let’s face it, if consumers can’t resist M, how can you?

® M&M’s and the M&M’s Characters are registered trademarks. © Mars 2014.

They sell as good as they taste

Sweet success

LS travel retail opens “So Chocolate” store at Singapore’s Changi Airport by

The premium section offers top end brands such as Godiva and Venchi

REBECCA BYRNE

The largest So Chocolate store opens in Changi Airport, Singapore, Terminal 2

Iconic local brands such as Pineapple tarts and Merloin chocolates are on offer for travelers purchasing souvenir products

CONFECTIONERY JUNE 2015

SO CHOCOLATE

Innovative promotions include a Selfie corner and a Magnum arcade

S travel retail opened its multi-brand So Chocolate concept store in Changi Airport’s T2 on April 22, 2015. At almost 190 square meters, this will be the largest of four new stores set to open in the terminal. The dedicated confectionery store will offer the most extensive list of brands in a single airport store, including premium gourmet chocolates such as Godiva, Fauchon, Venchi; world favorites such as Kraft, Cadbury, Toblerone; and local products. Three other stores will open in T2 in June 2015 and replace existing stores in T1, now closed, and T3, which shuts down later this year. These three stores combined will occupy almost 200 square meters. Emmanuel De Place, COO of LS travel retail Asia comments on the importance of the region to the company: “Asia Pacific is a significant and important geography for the group and we intend to stay here and grow across all three business units. We will continue to not only adapt to the travelers in Asia but also be adaptive and resilient to changes in Asian travelers’ consumption habits. We are continuously enriching and refining our concepts and merchandising across all three business segments which we operate in Duty Free & Luxury, Travel essential and Foodservices. We shall continue the good results achieved and great momentum that we have been building.” The So Chocolate concept was first introduced into Singapore in 2011 followed by Hong Kong in 2013 where LS travel retail occupies 108 square meters in the North Satellite Concourse at Hong Kong International Airport. This existing store and the Changi Airport stores are split into four distinct sections, called universes, aimed at capturing the different customer segments: travelers shopping for international brands; travelers looking for iconic local products; travelers wanting children’s confectionery; and those purchasing premium quality products. At Changi Airport, to give the shopper new and innovative experiences, So Chocolate has increased promotional touch points. Travelers can take a customizable selfie in the So Chocolate Selfie Corner to print in store or share through social media. Furthermore, the So Chocolate Connoisseur Club provides a highly interactive flexible area for exclusive global brand launches and events. Passengers will be treated to the first airport chocolate ice cream interactive arcade shopper gaming stand where they can win merchandise and shopping vouchers for Magnum products. Mr. Lee Charn Cheng, General Manager of LS travel retail Singapore comments: “We are delighted to continue to infuse new interactive innovations and operate LS’s confectionery concept in Singapore and the region. I firmly believe that So Chocolate is a truly innovative store that will consistently and continuously deliver a confectionery experience which is truly exciting, engaging, satisfying and memorable for the shoppers and commercially effective for our partners and ourselves.” Operating in more than 29 countries throughout Europe, North America, Asia and the Pacific, LS travel retail, a division of Lagardère Services, is a world leader in Travel Retail. It operates more than 4,100 stores across the world, including a presence at over 150 airports and 700 stations. It runs the largest international network of duty free and luxury, travel essentials and foodservice stores.

www.dutyfreemagazine.ca CONFECTIONERY

MONDELEZ WORLD TRAVEL RETAIL

Sharing the secrets to drive confectionery category growth Mondelez World Travel Retail is reinforcing its retailer commitment with increased openness and data sharing headlining a new approach to communication by

CLAIRE MALCOLM

t can be a tough call to convince existing and potential retail partners that confectionery deserves a little TLC in a crowded travel retail environment, but Mondelez World Travel Retail (WTR) is investing in a long-term strategy to grow the category profile through its Delighting Travelers program. Delighting Travelers has been the Mondelez raison d’être for some time, but is naturally evolving into a new phase and focus, according to Anna Szentivanyi, Manager, Customer Marketing, Mondelez World Travel Retail (WTR). “We’ve seen fantastic uplift since implementing the findings of the Delighting Travelers vision and program, but we have also undergone a big learning curve since our last update in Cannes. The speed of adaptation has not been as fast as we first thought and this prompted us to hold our first ever webinar,” she says. Airports, brand owners and retailers were invited to dial in and digest a wealth of global case study insight back in February this year, with Mondelez 26

CONFECTIONERY JUNE 2015

WTR using the webinar to share its latest research data as well as gauge exactly what the industry felt was working, or missing, from the confectionery side of the table. “Often at conferences, when you are presented with a whole range of theories, there is the question in the back of your mind—‘so what?’—where you want the speakers provide clear recommendations and real-time action. And this was exactly the feedback we were getting from our retail partners,” says Szentivanyi. A re-evaluation of the company’s communication strategy and approach to partner engagement and inspiration was called for and Szentivanyi reaffirms that Mondelez WTR will continue to use Delighting Travelers to deliver valuable insight and market-relevant actions each year. “To do this we will be more vocal and open, and also be very clear in terms of what we actually research, knowing that it needs to be fresh and market relevant with each passing year,” she remarks. That said, it’s still a case of reaching

out to retailers and pressing the right buttons, as she explains: “Those retailers that already take confectionery seriously tend to pay more attention so that, during implementation, the process moves much quicker. But for those retailers where confectionery is not front of mind or who are not so focused on the category, we need to talk more about the category to explain how and what we can create for their business.” A recent example was a key global retailer who confectionery share was less than the global average of 9-10% of total revenue, where Mondelez worked with them to develop a completely new store concept, which included confectionery while not taking space away from other categories. “We basically reconfigured the entire shopper experience and now they are rolling this out globally, and already seeing incremental sales thanks to the confectionery category,” she confirms. But convincing partners to change an engrained mindset is not easy. Says Szen-

tivanyi: “It’s very personal and depends on the retailers and to what arguments they are willing to listen to. “Sometimes they will listen to the lost revenue message or the revenue potential, and some people simply need to get the argument that their shopper profile says that over half of all travelers never visit the store because they fear that the assortment is too premium, thus making a case for placing an affordable offering close to the store entrance to bring those customers in.” Once on board, Mondelez WTR works just as hard to place innovation and excitement under the consumer nose, and the second half of this year will see many of its Cannes-debuted lines take flight. “It’s full speed for us in the coming six months with Toblerone and the Oreo-Milka alliance finally on shelf, plus some fun promotional activations too,” says Szentivanyi. The launch of Toblerone Crushed Corn has been a success marker for the iconic

brand, as she explains: “We wanted to create that ‘fresh from the field’ feeling in the Frankfurt duty free store setting and so we developed a little farmer’s marketstyle stand with digital animations where you could throw a ring over the corn and win a prize. “We’ve done this before but this simple game really took customers back to their childhood, and it was amazing how much noise and laughter was generated in the store. It also drew in different genders and generations, plus the retailers liked it because it was easy to understand; sometimes we make things too complicated when all you need is an eye-catching opportunity.” Mondelez WTR will take the promotion to Oslo and other Heinemann locations with activities scheduled for Asia Pacific later this year. The decision to step away from traditional flavor profiles has also worked well. Says Szentivanyi: “This is what Toblerone stands for; it doesn’t want to be known

as the traditional chocolate brand but as more edgy. It’s already the world’s only 3D chocolate brand and the team is always keen to come up with new ideas. “Crushed corn as a flavor is very distinctive, and we are seeing incremental sales as it adds something new to the Toblerone range. It’s currently only available in a limited number of markets and we find that those who love Toblerone will definitely try it.” Oreo is another Mondelez WTR global success. “It’s amazing how fast the brand has grown and the little Oreo tin is the number one bestseller almost everywhere,” she explains, adding: “What is also worth noting is that there are domestic consumers who are consciously trying to eat less chocolate, and we recognize that adding elements like biscuit into chocolate seems to be highly favored right now. “It’s perceived much more like a snack or energy boost during the day, and so the Oreo and chocolate bar combination is for those who want a quick bite and who love both elements.” The team has also been pleasantly surprised by the Milka Oreo results. “Putting Oreo into a Milka tablet proved to be a big challenge for the team with the two factories working together to streamline the process and eliminate breakages. But the feedback we are getting from the market is that it is a big hit.

Oreo is another Mondelez WTR global success

Anna Szentivanyi, Manager, Customer Marketing, Mondelez World Travel Retail

www.dutyfreemagazine.ca CONFECTIONERY

LINDT & SPRÜNGLI

Brand personification

in the Lindt DNA

The Lindt stand at TFWA AP 2015 in Singapore

CLAIRE MALCOLM

With 2015 marking 170 years of confectionery excellence, the Swiss chocolatier is capitalizing on its heritage and people to consolidate global market presence

Lindor is a popular choice for female travelers of all ages

CONFECTIONERY JUNE 2015

op culture may advocate contemporary, cutting edge strategies as a hook for changeable consumers but for heritage brands such as Lindt, close to two centuries of tradition is the lynchpin in capturing the hearts—and wallet—of the traveling consumer. “We are celebrating our 170th anniversary this year, which makes us the oldest confectionery company in the market, so there is a real story and history behind the brand,” says Peter Zehnder, Global Duty Free Division Head, Lindt & Sprüngli. The creator of fine melting chocolate, Lindt has built on its historical positioning since 1845, with its origins still visible today in its logo as well as imagery across all advertising and marketing campaigns. At the heart of its heritage are Lindt’s maître chocolatiers—professionally

trained chocolate experts responsible for both quality control and groundbreaking innovation. “We’ve had maître chocolatiers at Lindt since the beginning. They are essentially our R&D people but also our brand ambassadors and we feature them across our imagery as they play an important role in communicating our chocolate competence,” says Zehnder. They also add a uniquely personal touch to Lindt campaigns, as he explains: “As well as professional mastery of chocolate, and craftsmanship, they bring in the creativity that you see across our entire range, both domestically and in travel retail, and this is an essential part of our DNA.” Lindt has six international production facilities, each with its own R&D team of maître chocolatiers, including young

The company extends its brand history and reputation through its elegant packaging

Lindt Swiss Thins resonate particularly well with the Asian consumer

Lindt’s maître chocolatiers are brand ambassadors and are a visual hallmark in its advertising and marketing campaign

Lindt Swiss Thins are popular in Asia, complementing consumer preferences

talent ‘in training’, and, according to Zehnder, having these experts present at major launches or trade events reinforces Lindt brand equity. While a global portfolio approach is applied to all markets, regional nuances demand constant innovation from the R&D teams with the Swiss Thins working particularly well in Asia, for example, and complementing local preference for delicate, smaller bites and sleek packaging. The multi-generational appeal of Lindt chocolates has also given rise to the introduction of new brands such as Hello and Diva, but Zehnder points out that bestselling products such as the Assorted Napolitains are an all-time favorite across the different age groups and the “perfect product”. Asia is one region where Lindt is using the maître, history and its classic products as key messages as it looks to increase market share as well as physical space.

Says Zehnder: “Chinese and Indian travelers, for example, are very interested in the history of the brand and European brands in general, and we get lots of Asian visitors come to our factory in Switzerland as they want to see where Lindt comes from.” Lindor is the number one bestselling brand in Rio and São Paolo, and Argentina and Chile are also growing markets. In North America, Zehnder reports that Lindt is starting to see significant growth since taking over travel retail from the domestic operation two years ago. And Africa is also on the radar. “With Heinemann now in South Africa, we are able to launch bigger promotions and have a huge Diva promotion coming up. South Africa is definitely the entry point for the continent and countries like Nigeria are also potentially very interesting,” he concludes.

Lindt’s R&D experts are also its brand ambassadors

www.dutyfreemagazine.ca CONFECTIONERY

ARI: CANDY CLOUD

ARI’s new Candy Cloud concept store is a departure from its usual confectionery offering in Dublin, which is heavily skewed toward premium Irish brands

Living T on a

cloud In Dublin, ARI creates an enchanting and whimsical new candy concept store

WENDY MORLEY

CONFECTIONERY JUNE 2015

hanks to Aer Rianta (ARI) and London-based company The Design Solution, which specializes in airport retail space, Dublin has a brand-new, exciting, 90-squaremeter concept store in the confectionery category.

Designed for the senses Travel is, perhaps unsurprisingly, the theme of this retail shop. But the focus is on a different aspect of travel than is normally highlighted. The groundbreaking Candy Cloud store takes to the skies, with clouds, planes and candy shapes visible virtually anywhere a customer might look. Cloud-shaped gondolas feature candy-cane legs and lollipop signs. The ceiling’s cloud installation is meant to evoke “clouds” of meringue, and the floor has a design that at once makes one think of clouds and swirling candy floss. A hot-air balloon basket in the middle of the store is attached to a bunch of balloons that threatens to carry it away over the rainbow. The trend these days is toward a multisensory approach, and Candy Cloud does not disappoint. Customers experience bespoke scents and a parabolic sound system, bringing to life a

memorable retail experience and encouraging the customer to spend more time in the store. The Design Solution created this spectacular store based on a detailed brief brought about after a great deal of market research by ARI. The travel retail company held a design competition with children from a local school. The winning entries helped guide everything from the look and feel of the store to its range of merchandise. The final result features a kids-only zone that features an “enchanted forest” filled with giant lollipops and marshmallows.

Selling merchandise Of course, a store isn’t only about design; the idea is to sell product. This concept store has been created to appeal to children and adults alike. The retail offer is made up of 180 different lines, including top-sellers such as M&M’s, Skittles, Haribo and Nestlé along with Candy Cloud’s own exclusive brand, quirkily flavored popcorns and a range of branded toys and stationery. The store’s goal is to drive incremental sales for ARI with its appeal to children—and the child within each adult. The company’s 1,950-square-meter walkthrough store, The Loop, has a confectionery business heavily skewed toward Irish specialty brands such as Butler’s, Lir and Lily O’Brien’s. Paul Neeson, Retail Director ARI, estimates that newly opened Candy Cloud concept will significantly increase the retailer’s children’s confectionery sales. The confectionery category is one of the key drivers of penetration in travel retail because customers have such a wide range of motivations, including gifting, snacking, sharing, selfindulgence and impulse buys. Kevin Patience, Creative Director of London-based company The Design Solution, says he and his colleagues are very proud of the outcome. “This is a stunning confectionery store. Wherever you look, even right up to the fun of the ceiling ‘clouds,’ there’s a childhood fantasy theme and sense of play. We wanted to create a sensation that the whole store is made out of sweets. Often the best ideas come when you’re out of the studio and for me, the main inspirations for this concept came from watching the film Wreck it Ralph and reading Carl Werner’s A World of Food with my children.”

The design of Candy Cloud is intended to give the feeling of a world made of sweets

www.dutyfreemagazine.ca CONFECTIONERY

MILLENNIALS

The next generation For more than a half-century the baby boom generation controlled the market, but a paradigm shift has turned retailers’ collective eye to the newly coveted cohort: the Millennial by WENDY MORLEY

The Millennial generation will surpass the Baby Boomers in numbers in 2015 and in spending power by 2017

orn roughly between the years 1982 and 2000, the age group referred to as “Millennial” is gaining increasing importance in global retail, both travel and domestic. While this generation tends to have greater debt than older generations, due mainly to the student loans and the everincreasing cost of education, they also have strong buying power in part because of sheer magnitude. In 2015 this cohort will surpass the infamous and influential

CONFECTIONERY JUNE 2015

baby boomers in numbers, and despite sometimes crushing debt and meager employment prospects, is expected to pass that older generation in purchasing power by 2017. While this is arguably the most important demographic to capture, it may also be the most elusive. Each generation poses challenges to the retailer and producer, but that is more the case for the Millennials than any before; anyone wishing to sell to this generation must

determine effective strategies for buying and marketing before sales to that group will follow.

Highly influential For businesses that do manage to capture the Millennial as a customer, even greater benefits will come their way. The Millennial is the most influential customer right now, helping to determine the purchasing habits of not only peers but also those older and younger. Hilmi H. Abdullah

MILLENNIALS

Neto, Commercial Department, Siñeriz Free Shop, says of Millennials: “They are very rigorous with discerning quality and value. After being convinced of a product or brand, they can easily change their friend’s mind.”

Always connected This is the first generation whose members have used computers for the majority of their lives, in some cases since infancy. They also have a higher education level than any previous generation, with global tertiary type A education levels at 20% higher now than even 15 years ago, according to OPEC statistics. Always connected, this group is a savvy bunch who research absolutely everything, from quality to price to user ratings, and who rush to social media to get friends’ reactions—all often while still considering their purchase. And any marketer trying to pull the wool over their eyes will find his or her product quickly dismissed or ridiculed. Abdullah Neto says the Internet is very relevant when considering the shopping habits of Millennials: “This group has sufficient money to buy and they are very integrated with the Internet. Older people have money but are not so integrated whereas younger people are integrated but don’t have much money.” Abhijit Das, Head of Marketing for Delhi Duty Free, says while Millennials are “tough customers,” at the same time they offer great opportunity because of the different way they view confectionery. “Confectionery is seen more as snacking option for them than with other age groups,” he says, adding that confectionery can easily work within the Millennial’s requirements for food: “easy to share, easy to consume on the go, easy to eat well and meet dietary needs, and easy to eat in smaller amounts.” This means the confectionery category can be used not only as a treat or gift, but also may be considered part of the Millennial’s daily diet.

Higher end Das says, “Millennials are more likely to buy the top range of mix-ins in the confectionery category, with more functional benefits such as on-the-go snacking.” He adds that whether or not Millennials are willing to buy higher end across the board in the category is not so clear. Abdullah Neto agrees. “I think it depends on the importance of the product

CONFECTIONERY JUNE 2015

The category is being brought in a whole new direction by Millennials, who are more likely to consider confectionery products as part of their daily diet

for them; if is a product that they value, they will buy higher end.”

Key differences Research done by Delhi Duty Free comparing generational purchasing habits shows that Millennials are significantly different from Gen X or Baby Boomers in a few key areas: price, whether the product meets dietary needs and whether the food is easy to use, eat or prepare. Other significant differences noted by retailers and demonstrated in research often quoted by business magazines include the Millennial’s wish to support companies whose practices they agree with. Authenticity is imperative.

What’s new? Millennials and their habit of innovation are helping to create a whole new direction for confectionery, says Das. “In India, premium confectionery is now being seen as alternate to desserts and traditional sweets. This is solely because of buying behavior of Millennials and their say over other family members,” he says. Joe Harvey, Head of New Business Development at Tourvest Inflight Retail Services, says Millennials are more adventurous than other age groups. “They will try new products that sit on the fringe of the more mainstream conventional products,” he says. “Novelty is always a factor for consideration for this age group.” “Millennials have a different relationship with confectionery to other age groups,” says Abdullah Neto. He explains that they are trendsetters and thus an especially important demographic to capture. “They create new tendencies and the other groups follow.”

Brand consciousness While Millennials may look for novelty and products that are on the fringe, they still know their brands. The brands this age group chooses most, according to

these three retailers, are Mars, Lindt, Kraft and Nestle. Das says Oreo is also a strong brand for Delhi Duty Free, and Abdullah Neto says Milka is a strong brand for Siñeriz. Harvey and Das both agree that this age group is “extremely brand conscious.” Das continues: “Millennials want to talk about brands on social media. They want brands with a cult following. Brands with health benefits and a greener image are more likely to followed by this demographic.” Abdullah Neto, meanwhile, says: “While they are brand conscious, they are also susceptible to nice offers.” Headphones, speakers and savings for multi- or mix & match purchases are some of the GWPs Das says Delhi Duty Free uses to target this age group, adding: “During holidays when students travel we have pop-up stores at strategic purchase points with confectionery mega promotions. Cross-category promotions are also key activations used to drive purchase.”

Building a connection “Listening to Millennial consumers is a great way to gain their respect and loyalty, especially when considering they often believe that new is better, faster and more convenient,” says Das. “Blogs and fan pages on Facebook and Twitter can elicit their opinions and feedback on stores and products offered. Smart retailers and marketers should become engaged in this dialogue, seek their opinion and respect their input as loyal brand ambassadors. “Its vital to know that innovation is key to attract and bond with them,” he adds. “But the most important thing to consider is speed. Speed translates in our business to the rate at which we adapt to their changing lifestyle. So there is now a fifth “P” in addition to Product, Price, Placement and Promotions: Pace. This is important to attract and retain Millennials.”

All Wrapped Up & Ready To Go Internationally recognized for quality and innovation, Jelly Belly® offers a comprehensive range of products and turnkey merchandising solutions that are perfect for the impulse buying environment. From unique tins to our upscale lines of gift boxes and gift bags, Jelly Belly makes it easy to please the discerning traveller. As you look for new ideas for growth, look to us as your dedicated partner for success.

NEUHAUS

Experiences through innovation

A century ago, Neuhaus invented both the praline and the ballotin – and the Belgian chocolatier has not stopped innovating to this day

The original Neuhaus shop in the Galerie de la Reine, Brussels (1900)

The Neuhaus shop in the Galerie de la Reine as it looks today

Neuhaus founder Jean Neuhaus

ince inventing the first filled chocolate (praline) back in 1912, which sparked the Belgian chocolate tradition, Neuhaus has striven to innovate in the luxury chocolate category as a global player. The company’s history dates back even earlier, to 1857, when Jean Neuhaus opened an apothecary shop in the Koninginnegalerij/Galerie de la Reine in Brussels where he started enveloping the unpleasant-tasting medicines he dispensed in a chocolate coating. It would be another 55 years until Jean Neuhaus Junior decided to replace the medicinal content with a tasty filling, thereby inventing the first filled chocolate. Naming it the “praline”, Neuhaus Junior came up with a product that went on to put Belgium firmly on the world map. In 2012, Neuhaus celebrated the 100th anniversary of the invention of the praline. The company is also proud to have lifted chocolate to a luxury gift with the invention of the ballotin (chocolate gift box) in 1915. In addition, the brand is known for creating luxurious experience gifts, such as the “When Haute 36

CONFECTIONERY JUNE 2015

Patisserie joins Neuhaus” collection, which is like a trip along the dessert tables of nine famous pastry chefs translated into chocolate, and the “When Neuhaus meets Single Malt Whisky” collection, drawing on today’s food pairing trend. The company has a four-pronged philosophy. First up is quality: since it is a luxury brand, it only works with the best natural ingredients. Second, innovation: the company creates new recipes on a daily basis, but it respects the traditional ingredients such as nuts, fruit, etc. Third, craftsmanship: all Neuhaus chocolates are made in its ateliers in Brussels, Belgium. “Most of them are handmade, piece by piece by passionate people who have sometimes worked for the company from 25 to 30 years,” notes the firm. Fourth, timeless elegance: a lot of effort is expended in developing elegant, timeless packaging in order to be the “ultimate chocolate gift”. Neuhaus’ broad range takes in a wide variation of shapes, colors and natural flavors. In addition, all pralines have their own name, such as the Bonbon 13 (1937), time-honored favorite Tentation (1958) and Jean (2009). The brand’s oldest recipes go back to 1937, but its icon choco-

LANDMARK DATES IN THE RICH HISTORY OF NEUHAUS

Workers in the chocolate factory

Neuhaus employees pack the ballotins

A Neuhaus ballotin from 1915

lates are Caprice and Tentation, two chocolates that were invented in 1958 for the World Exhibition in Brussels. Today they are still its best-selling pralines. Meanwhile, the timeless ballotin is a clear best-seller in the travel retail business, along with special travel retail products such as the City Collections, and impulse items, which perform very well, according to Philip Geeraert, Director International Sales, Neuhaus. As part of its global expansion drive, Neuhaus first entered duty free and travel retail more than 30 years ago, in Brussels Airport. So how has Neuhaus changed over the years? “The brand started as a local pharmacy in Brussels, but we’ve invented a product that’s globally known and appreciated. But beyond that, we still stick to our tradition,” says Geeraert. Geeraert says its proudest achievements are international expansion and continuous innovation, concluding: “We are very happy that we can make people happy every single day. The nicest achievement is that people are proud to give a Neuhaus product.”

1857

Jean Neuhaus opens an apothecary shop in the Koninginnegalerij/Galerie de la Reine in Brussels.

1912

Jean Neuhaus Junior invents the first filled chocolate, dubbing it the “praline”.

1915

Jean Neuhaus Junior’s wife designs a small elegant gift wrap box replacing the paper cone which pralines were previously wrapped in. The box allowed for the pralines to be evenly and appealingly arranged, like gems, without getting damaged. Dubbed a “ballotin”, the new box soon became the gift par excellence.

1937

The Bonbon 13 and Astrid pralines are created and go on to become Neuhaus classics. Astrid was created in tribute to Queen Astrid of Belgium, who captured the hearts of all Belgians. Today, 75 years on, the Astrid praline continues to be made according to the same authentic recipe.

1958

For the World Exhibition held in Brussels, Neuhaus creates Caprice and Tentation, two refined pralines with artisanal nougatine, hand-filled with whipped cream or ganache and coated in chocolate. These two pralines continue to rank among the Neuhaus star gallery.

1959

On July 2, 1959, Albert, Prince of Belgium marries Italian princess Donna Paola Ruffo di Calabria. Neuhaus’ Maître Chocolatier decides to put a whole Piedmont hazelnut into the Albert praline, referring to the Italian descent of the future queen of the Belgians.

1960

On December 15, 1960, Baudouin, King of the Belgians, marries Dona Fabiola de Moray Aragon, who becomes the Queen of the Belgians. Neuhaus creates two new pralines: Fabiola and Baudouin.

2009

In homage to the people and places that have played an important part in the history of Neuhaus, the pralines in the Discovery Collection are named after them: Grand Place, Adelson, Galerie, Jean, Suzanne, Frederic and Louise. These pralines are the living link between the heritage and savoir-faire of bygone days with the sense of creativity of the 21st century.

2012

As part of the centenary celebrations of the invention of the praline, Neuhaus crafts the Precious Collection, a selection of new pralines in attractive shapes that aim to exude timeless elegance.

2013

The Haute Patisserie collection is launched—the result of its collaboration with nine internationally renowned patissiers, each of whom has created a special praline for Neuhaus.

2014

When Neuhaus meets Single Malt Whisky is introduced. The line is described as the result of a search for the pure taste symbiosis between two refined and richly nuanced products: pralines and whisky.

2015

Neuhaus will launch a special collection to highlight its rich history (details have not yet been revealed at press-time).

www.dutyfreemagazine.ca CONFECTIONERY

CHOCOLAT FREY AG

A shop displaying Chocolat Frey products

Chocolat Frey’s best-selling items are its Chocobloc creations

A Swiss success story

With its long heritage in the European chocolate industry and top sales ranking in its home country, Swiss chocolatier Chocolat Frey is forging its own path in travel retail by HIBAH NOOR

Robert Frey (left) and Max Frey (right) co-founded Chocolat Frey 128 years ago

CONFECTIONERY JUNE 2015

wiss-based chocolate company Chocolat Frey AG is celebrating 128 years in business and seven years in the travel retail arena with its distinctive brand of chocolates. According to the venerable Swiss chocolatier, the history of Chocolat Frey AG is almost as old as the European chocolate industry. This traditional company played a significant role in the development of chocolate from being an exclusive treat consumed by a privileged few to a sweet pleasure enjoyed by a large part of the population. R. & M. Frey was founded by the brothers Robert and Max Frey in the Swiss city of Aarau in 1887. By 1900, Frey acquired a good reputation in the luxury foodstuffs market. However, following the outbreak of World War I in 1914, sales plummeted. In order to avoid layoffs, a large part of the workforce was obliged to stay at home and temporarily forfeit their salaries. In 1939, after the outbreak of World War II and the mobilization of Switzerland, production was maintained with great difficulty. In order to maintain healthy growth in the medium and long term, the decision was taken in 1981 to begin exporting Frey chocolate. The Confectionery Annexe aimed to significantly increase production capacities through the use of the most upto-date technology. In 2012, Frey celebrated its milestone 125th anniversary. Today, Chocolat Frey is the number one chocolate brand in Switzerland and has been voted “Switzerland’s most loved chocolate” for over 30 years. Claudia Rosenberg, Head of Travel Retail at Chocolat Frey, enthuses: “Is there anything sweeter for a chocolate manufacturer than to be number one in the country with the highest chocolate consumption in the world? We don’t think so. This is why we are doing all we can again and again to please demanding chocolate lovers in Switzerland and throughout the world with our chocolate creations. Since 1887 all of Frey’s chocolate products have been 100% manufactured in Switzerland. In the processing, too, nothing is left to chance.” The company’s philosophy is to create world’s best chocolate by only using high-grade ingredients from sustainable sources (under the international UTZ certified program). Frey entered the travel retail industry in 2008 with several global accounts in all

regions, and chocolate tablets remain a core part of the product portfolio. The brand’s best-selling items are its Chocobloc creations which have a distinctive shape and refined combination of almonds, honey and nougat. Chocobloc comes in five varieties: Milk, White, Dark 55%, Dark 72% and Orange. These five popular varieties have been combined in premium golden packaging, exclusive to travel retail. Over the years, Rosenberg says that Chocolat Frey has evolved from a local producer of fine chocolate to a global player in the confectionery industry with innovative products such as Message

For You in its portfolio. Message For You enables consumers to personalize their product box quickly and simply by opening the lid, rotating the selection of wrapped and worded chocolate pralines to spell out their message of choice. Asked what the company’s proudest achievement is, Rosenberg has no hesitation: “It is the consumer that makes us the uncontested number one in Switzerland. Our quality is appreciated every day by the most critical chocolate consumers in the world: the Swiss people! Nowhere is chocolate consumption higher than in Switzerland, which shows credibility and success.”

Vintage advertising campaign by Chocolat Frey

A visual of old packaging of the Chocolate tablet

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NESTLÉ INTERNATIONAL TRAVEL RETAIL

Be different,

have fun, drive spend by

CLAIRE MALCOLM

By adapting its travel retail offering to present a more compelling purchase argument, Nestlé is tackling the challenging 2015 trading environment head on

T Alan Brennan, Global Head of Sales, Nestlé International Travel Retail

CONFECTIONERY JUNE 2015

he confectionery category has not been impervious to the overall impact on year-to-date travel retail performance of a strong US Dollar and weak Euro, which is a double-edged sword depending on the home currency, as well as the struggling rouble an softening of Asian spend. “This convergence of economic factors is really putting back the level of growth in confectionery, and also global travel retail in general. As a business we are showing growth and the outlook for the remainder of 2015 is good, but tough,” says Alan Brennan, Global Head of Sales, Nestlé International Travel Retail. “In some areas it’s a lot tougher, particularly in South America because of the Brazilian Real, and with US Dollar retail prices increasing, people are not spending as much,” he adds. Nestlé is addressing this by urging its key customers and partners to work together to “try something different” and not be necessarily risk averse. Says Brennan: “It’s clear that the same old-same old level of redemptions is not being achieved. It’s about being adaptable and flexible on both sides, especially if we find that the level of offer is not compelling enough in the current circumstances, and so we are tweaking things and changing certain promotional mechanics.”

Nestlé Swiss revamp Another popular line has also undergone a revamp this year with a new-look for travel retail exclusive brand Nestlé Swiss. Says Brennan: “The packaging has really changed, and we’ve emphasised more on the Swiss origination, so there’s a bigger play on the mountain range and also the appetite appeal on the brand is much stronger.”

Summer 2015 will see the brand roll out its latest global travel retail exclusive, building on the successes of the previous Breaker’s Breaks campaigns

A successful example is in the Middle East market where, historically, confectionery is one of the leading categories. “We wanted to enhance the value offer, so rather than give another multi-purchase of the same item for free, and using a product very specific to the region—milk powder—we targeted blue-col-

lar travelers with a limited wallet, and linked KitKat with Nido,” explains Brennan. Its biggest global success story, KitKat continues to win new fans and increase market share, with Brennan reporting “aggressive” growth, not least of all in European duty free. “We’ve spent the last two years really pushing the KitKat agenda with European airport retailers, and it took some persuasion on our part to communicate the power of the brand, which is obviously extremely well-distributed in the domestic market. A big part of the sales story was to convince our partners that KitKat deserves more space, and the right location, and this is now paying dividends.” Asian consumers continue to clamour for KitKat from Japan, and with nearly 25 million Facebook fans, Brennan and his team are keen to tap into this emotional attachment. “Down the line we can see Japanese KitKat entering other markets. The problem is that the factory simply can’t accommodate additional demand, but it’s something we are working on,” he notes. Summer 2015 will see the brand roll out its latest global travel retail exclusive, building on the successes of the previous Breaker’s Breaks campaigns, such as the light-hearted Q1 eyeshade promotion. “This summer we have the beach towel promotion, which is linked to a minimum spend, and it’s based on identifying the type of breaker that you are - whether it’s gym, spa or beach, with the gift of a free towel,” explains Brennan. “We also have a huge event for this campaign taking place in Singapore in August, so watch this space,” he adds. At the heart of Nestlé’s strategic approach is the relevance of establishing a common theme and touch points, no matter what the delivery channel, as Brennan explains: “Rather than having the local market doing one thing and duty free another, but still providing a strong point of differentiation, this kind of continuity of the overall marketing strategy is invaluable.”

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PERFETTI VAN MELLE

Surprise,

New this year is the Minnie Mouse suitcase

surprise by

HIBAH NOOR

Susan De Vree, Manager Global Travel Retail of Perfetti Van Melle, cites new research as she speaks out on the gifting potential of sugar confectionery for children

Children’s backpacks are Perfetti Van Melle’s best-sellers

CONFECTIONERY JUNE 2015

eveloping entertaining products for the children’s category is second nature to the team at Dutch sugar confectionery maker Perfetti Van Melle, which is known for its vibrantly packaged lollipops. Now, Manager Global Travel Retail Susan De Vree wants these products to shine out even more in the travel retail arena. For children, Perfetti always strives to make multi-functional products with more than one use, and not only in confectionery. She cites the example of the company’s travel kit, whose packaging boasts a second use as a pencil case. For Mentos, Perfetti launched a money bank last year, while this year it introduced some Minnie Mouse items such as a suitcase with stickers and some lollipops. The company also aims to have portioncontrolled packaging so the child can postpone consumption over time or share with others. The overall aim is to offer products that are travel related. On the subject of a perceived lack of variety in travel retail, De Vree is keen to point out that the sugar confectionery segment is still being neglected. “If we compare the domestic market with travel, we could conclude that the variety is quite limited. Over 90% of the assortment within confectionery is still chocolate and chocolate is mainly aimed at adults. Out of research we conducted with m1nd-set, we know that parents are more willing to

buy sugar for their children over chocolate. I think we are experts in having the right gifting assortment for children. Sixty percent of gifting in the sugar confectionery is bought for children compared to 22% within chocolate. Fifty percent of the travelers have children at home. A huge potential for confectionery!” There is definitely more potential in the children’s segment, reckons De Vree. “I do believe the potential is not fully utilized. As I mentioned, 50% of the travelers have children. A big part of the travelers without children have grandchildren, nieces, nephews, children of friends, etc, etc. If the child is happy, the parent is happy. It is always very much appreciated if you surprise children. A small gesture creates sweet smiles.” Perfetti gets inspiration for its children’s products by looking at other categories. “Children look up to adults. They like children’s versions of adult things, like a little suitcase or a backpack, but in kids’ style. They like soft, big, small, colorful, licenses, sugar. Children are easily made happy. They don’t see the value but they love a surprise. Therefore we always try to surprise children and look at the smaller things,” she says. Perfetti’s backpack remains one of its best sellers. As the brand only had boys-oriented characters, it decided to create girlish dino in pink, which will be launched this summer. In addition, its

Perfetti aims to have portion-controlled packaging so that children can postpone consumption over time or share with others

Minnie Mouse suitcase has also been well accepted and the first results are “very promising”, she reveals. Turning to Perfetti Van Melle’s overall performance in travel retail, De Vree points out that it depends on the region. “In general we are doing very well,” she says. “Our business is still growing, but we suffer with the Russians, especially with our brand Meller, which is a huge brand in Russia.” The company has also noticed lower sales in Malaysia, due to a decrease in Chinese travelers, though De Vree adds that sales in Latin America are recovering. While the Russian situation remains a concern, the long-term future certainly looks brightly colored.

Susan De Vree, Manager Global Travel Retail of Perfetti Van Melle

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TEA FORTÉ

Luxury

tea is our forte by

HIBAH NOOR

The travel exclusive Passport Collection is designed as a memorable souvenir

Tea Forté is taking its opulent approach to the world’s second most consumed beverage to duty free stores around the world

G Moshé Cohen, Vice President of Global Sales and Travel Retail, Tea Forté

A Tea Forté branded fixture

CONFECTIONERY JUNE 2015

ourmet tea brand Tea Forté is looking to expand its travel retail reach among the big global duty free players, following the success of its finely packaged teas at stores operated by DFS and International Shoppes. The US-based global luxury tea company is renowned for the variety and quality of its hand-crafted teas, designdriven accessories, exquisite packaging and luxuriant approach. “We are more than a luxury tea brand, we are a luxury lifestyle brand, and the world’s most exceptional tea experience,” enthuses Moshé Cohen, Vice President of Global Sales and Travel Retail, Tea Forté. He explains: “A lot of it has to do with the foundation of the company. It wasn’t just started by a tea lover, but by a designer. It is very innovating and bringing into a traditional commodity, exceptional, opulent beauty in the packaging.” Tea Forté was founded about 11 years ago, initially selling to the upscale hotel chains Ritz-Carlton and W in the US. The products rapidly went on to expand

worldwide in 45 countries, where they are available in hotels, restaurants, prestige resorts, cruise excursions, airlines and luxury retail. The company uses tea leaves from only the top 1% of the world’s tea production, sourced from countries such as China and South Korea, and creates its own blends. It creates traditional flavors, as well as an additional 100 flavors that are developed in-house. The leaf tea expands in hot water, releasing essential oils, flavors and tannins. The tea is dispensed via a distinctive, pyramid-shaped infuser that is handcrafted and filled by hand with the tea. “The infuser design is patented—it is the only infuser in the world that will never bend,” says Cohen. “The material is made out of food grade mesh that allows the tea to float to the top because it is not compressed, so it won’t sink. The infusers deliver an outstanding quality together with bringing beauty, extravagance, and classiness to the table when you serve it.” The teas are blended in Germany and then hand-packaged in Europe and Asia, in the company’s own facilities.

Travel retail exclusive Chocolat Tea is infused with the taste of rich, dark chocolate

“The entire process is controlled; we go through organic certification in US. We are also one of the only companies that have organic European certification. It starts with an outstanding quality product, packed by hand and dispensed in our state-of-the-art pyramid with the opulent packaging. We wanted to do something quite unique.” Tea Forté entered the travel retail channel about 18 months ago, and business has been going “very fast”, he says. The company chose the channel for several reasons, as Cohen explains. “Of course it’s the business opportunity but beyond that our goal when I joined the company three years ago was to go from that great American success story to becoming the global luxury brand in tea, and if you want to be in that luxury world, you need to be in duty free. “The association with Cartier, Rolex and all those great brands makes us part of the club by being there. Also, the passengers have time to appreciate and discover experiences. We made a choice to deliver our experience in the best possible setting, and the best state-of-the-art showcase is evidently travel retail.” The company also uses travel retail as a test-bed for products and collec-

tions, which can then be implemented six months to a year later in the domestic market. “It’s one point of entry to multiple doors,” notes Cohen. The company wants its teas to be located in the fine food section of a duty free store. Cohen is open about the challenge of selling tea (the second most popular beverage in the world) in US travel retail stores. “We are quite pioneering because tea is not a product that you would find traditionally in duty free as you would in Asia or even Latin America. In those areas you’re starting to see a lot of tea. For us the challenge was not only to sell our brand but was to sell tea to begin with. Buyers are doubtful until they see that we’re not selling just tea, we are delivering something quite unique.” In Latin America, the company has seen that tea is already part of the culture, as it is part of the wellness trend, Cohen notes. The company first dipped its toes into travel retail about three years ago with DFS at its Hawaii Galleria. “It was an immediate success,” says Cohen. After that, the company realized the business opportunity, as well as the marketing and brand potential. Some 18 months ago, International

Shoppes listed the brand in locations such as Boston, Philadelphia, New York JFK and Miami airports. Then the brand started expanding in Latin America. Now the major duty free chains are in its sights. Gebr Heinemann will be listing Tea Forté lines in the US in Houston, and following other promising meetings in Asia, Cohen believes that within six months global expansion is on the cards. Recently, Tea Forté underwent a new narrative of the brand with a contemporary logo and completely new packaging with gold lettering that now opens like a jewelry box. The company has also designed two products specifically for travel retail: the Passport Collection and Chocolat Tea. Cohen describes the Passport Collection as “an entrancing selection of the world’s finest teas and the perfect memorable souvenir”. Each of the compact round gift boxes features a stamped location seal from its port of purchase, and is targeted at gift givers. Chocolat Tea is said to be a flavorful blend of the finest teas, fruit and blossoms infused with the taste of rich, dark chocolate. The large heart-shaped box contains 12 infusers, while the small heart box contains five. Blends include: Chocolate Rose (organic black), Cocoa Coconut (black), Hazelnut Truffle (black), Belgian Mint (herbal), and Swiss Apple (organic herbal, small heart box only). Retailing at about US$35-37, the products will be launched by September 2015. Among the company’s other new offerings are the Lotus Collection with an “eastern promise of relaxing teas for mind, body and spirit” and the introduction of the 23 carat gold-plated ICON Au gold pyramid tea infuser centering on the company’s signature design that is sold in premier properties worldwide. “Tea is a fantastic gift,” says Cohen. “A significant portion of our buyers are not tea drinkers at all. They find it to be a light, innovative gift and easy to transport.” He adds: “We are very committed to this industry. We have learned about promotions, and training is a major part of what we like to do. We have certified trainers. This means staff will understand tea, which is also a good thing.”

www.dutyfreemagazine.ca CONFECTIONERY

FERRERO

Golden era of

opportunity

for Ferrero by

CLAIRE MALCOLM

Kinder is set to release a new minis platform

A unique variation on a classic is helping the iconic confectionery brand further its global reach and gifting appeal

With TicTac, Ferrero is exploring new opportunities in the sugar category

CONFECTIONERY JUNE 2015

he launch of Ferrero’s Golden Gallery collection has resonated with retailers in markets where the brand is already a major player, but the company is eager to capitalize on opportunities in other parts of the world. “The level of maturity between different markets means that while we are one of the leaders in Asia for example, we see huge opportunity in markets like America; and by increasing the visibility of our pralines through the launch of Golden Gallery, we are using product innovation as a catalyst for growth,” says Sebastien Deflandre, Marketing Manager, Ferrero.

Sebastien Deflandre, Marketing Manager, Ferrero

Ferrero Rocher, Rondnoir, Manderly, Tenderly Nougat and Cappuccino make up the Golden Gallery boxed offering, and present a dedicated SKU for the channel that puts classic Ferrero flavors together with new exciting combinations. “With Golden Gallery we are targeting the higher end range of the praline segment, using refinement and new tastes as the entry point. Variety is crucial in this segment as well as having a premium positioning,” remarks Deflandre. A gifting ‘natural’, he believes that Golden Gallery will put Ferrero in a position to “own the [premium pralines] segment.” Global rollout began in Europe and Asia in February this year, followed by the Middle East with a high profile launch at Dubai Duty Free. While it is still too early to comment on initial results, Deflandre says that acceptance has been positive and is in line with expectations. “The trade retailers were expecting something new from Ferrero and we are very happy with the initial response, and have very good distribution, so now we are waiting for consumer acceptance,” he notes. Increasing distribution in the Americas region is a major strategic focus for Ferrero, as Deflandre explains: “It is crucial for us to develop in North America, particularly the US. It’s a tough market because there are many retailers and it is very complex to build something big. Secondly, the space for confectionery is quite limited. “Our strategy is to push on priority and for this market we want to focus on the pralines and Kinder to build standalone categories.” For the Americas, Ferrero is working on securing presence in top-ranked airport locations and is using a different argument to convince prospective partners. “If we look at South America where we have a huge brand portfolio and significant presence in the domestic markets in Brazil, Argentina and Mexico, as well as Canada in North America, this is the first message that we convey to retailers as we know it drives business. However, it isn’t always enough, so we also concentrate on highlighting how Ferrero is dynamic in terms of product innovation, which is our company strength,” he says. Ferrero is also innovating through its other portfolio brands with a new minis platform set to be released under the Kinder label, Nutella continuing to capitalize on its multi-generational family appeal, and TicTac a potential ‘one to watch’ for the future. “The sugar category is becoming more and more focused because it taps those chocolate ‘rejectors’, plus it is more affordable, so all the big confectionery brands are looking at opportunities in this category—as are we.”

The Ferrero Golden Gallery collection targets the higher end range of the praline segment, using refinement and new tastes as the entry point

Nutella continues to capitalize on its multigenerational family appeal in all major markets

www.dutyfreemagazine.ca CONFECTIONERY

& indulgence GODIVA

Innovation

From top: Godiva’s Chinese New Year Collection 2016, Christmas Collection and Mousse Meringue Collection

Another year of fresh product developments beckons for Godiva, as sales jump in the all-important Asia Pacific region

elgian chocolatier Godiva is embarking on another year of innovation as it unveils its seasonal collections for 2015 Christmas and 2016 Chinese New Year. The company’s ongoing focus on product newness has gone down well particularly in the Asia Pacific region, which showed double-digit growth last year. “Godiva continues to perform well in Asia Pacific,” observes Head of Global Travel Retail Asia Pacific CS Lam. “We continue to innovate, not only on chocolate but also on our self-treat range such as introducing soft serve (ice cream) in travel retail. We are exploring new retail formats, such as testing pastries in the market.”

CONFECTIONERY JUNE 2015

With creative innovations each year showcasing Godiva’s Belgian quality and heritage, each new line is about offering “decadent and luxurious” flavors attractively packaged for travelers. In addition, seasonal times are used to showcase Godiva’s Chef Chocolatiers’ talent in creating new chocolates. The Godiva Christmas Collection 2015 incorporates a design inspired by holiday ornaments and baubles—iconic festive symbols that are carried throughout the offer. The design features Christmas tree decorations on a dazzling array of colorful gift boxes in red and Godiva’s signature gold, to evoke treasured memories. The presentation is further enhanced with shimmery papers and festive novelties,

which seek to lend extra sparkle to holiday celebrations. The collection includes four different holiday gifts: a gift box of 20 pieces including two limited-edition pure chocolate pieces in milk and dark, a 12-piece truffle box, and for children, a new designed Advent calendar and a Christmas pouch filled with milk carrés. To celebrate the Year of the Monkey in 2016, red boxes, decorated with a monkey drawn in delicate gold brush strokes, are introduced in two limited editions. Red represents fire and symbolizes good fortune and joy in Chinese culture. A touch of gold aims to enhance the elegance of this box and portray the premium quality of Godiva.

To appeal to Chinese tastes, the brand’s Chef Chocolatiers have developed three different tea flavors, combined with praliné in white, milk and dark chocolate for the Year of the Monkey. There are two choices: a 15-piece chocolate box containing three exclusive recipes, and a 48-piece Carrés gift box containing two exclusive carrés: Milk Belgian Wafer and Dark Bresilienne. A third major focus for 2015 are Sablés, Godiva’s fine butter biscuits, which bring together recipes from different cultures: spicy ginger from Asia, buttery pecans from Central America, dark chocolate from the African continent and almond speculoos from Belgium, all dipped in Godiva milk chocolate. Importantly for the Asian market, each biscuit is individually wrapped for freshness and sharing. Reflecting the importance of variety, Godiva is offering an 18-piece assortment

of Ultimate Chocolate, Macadamia Ginger and Almond Speculoos, an exclusive Travel Retail Quattro Pack (two Ultimate Chocolate mono-packs, one Pecan Chocolate Chips mono-pack and one Almond Speculoos mono-pack) along with three mono-packs with six sablés inside: Almond Speculoos, Pecan Chocolate Chips and Ultimate Chocolate. The Sablés biscuit collection is decorated with playful Jules Verne balloons that embody the spirit of adventure, presented on a sky blue background with embossed detailing. To complete Godiva’s new offer for 2015 are Mousse Meringue and Coeur Iconique Limited Edition, both affirming the brand’s ability to deliver innovation. Mousse Meringue has daring flavor combinations, combining the lightness of meringue with the depth of mousse, enveloped in Godiva’s signature dark, milk and white Belgian chocolate.

Nestled in the centre of each Mousse Meringue is a crisp mini-meringue encased in six flavors: Chocolate, Fraise, Citron, Café, Praliné Piedmont, and Mandarine Amande. Mousse Meringue is presented in two sizes, 9- and 16-piece, in blush pink square boxes, subtly adorned with pale whirls that evoke the meringue inside, and embossed with gold lettering. Tapping into the pop art trend, Coeur Iconique Limited Edition is a one-time offer for the 2015 summer season, exclusively for airport shops. Playing on the keepsake factor, it comprises a cute heart-shaped box containing six Godiva hearts in milk, dark chocolate and white versions. For instant shelf appeal, the vibrantly colored box comes in fresh mint and soft pink or flashy purple and vibrant orange.

Sablés: Godiva’s fine butter biscuits

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â&#x20AC;&#x201A; RETAILER POINT OF VIEW: LONDON SUPPLY

At London Supply, promotions are likely to surprise the customer, eliciting smiles and stirring the imagination

Surprise and delight At London Supply, management tries to stay one step ahead of customers, filling both recognized and unrecognized desires by WENDY MORLEY 50

CONFECTIONERY JUNE 2015

Marketing surprise

One of London Supply’s biggest “retailtainment” promotions this year was sponsored by Lindt, with a choir and symphony for Easter

In London Supply’s Puerto Iguazu store the element of surprise is an important component of marketing. This is the case with promotions, with “retailtainment,” which is the buzzword for activations in the store, but it is also the case with product offerings. “We try to do more than just satisfy the consumer’s needs. We also like to surprise them with products they didn’t imagine they would find in our store,” says Plaza. As for promotions, she says, “There are some general purchasing trends, but what really works best is to have special promotions. Appealing gifts and fun activities engage customers with the brands.” London Supply’s promotional calendar is always very busy. “We have two special exhibitions every month that we handle with a promotional calendar. On top of that there are several retailtainment activations throughout the year. We had a choir and symphony perform for Easter, sponsored by Lindt, and we are planning something special with Nestle for the second half of the year.”

Information and perception

Lara Plaza, Division Manager, Confectionery, Spirits & Tobacco for London Supply

Between special exhibitions, huge spectacles and regular promotions, London Supply’s promotional calendar is always busy

Recently there have been plenty of research studies into consumer behavior in the confectionery category in travel retail. Plaza has made note of the results, and says: “Knowledge always helps. But it’s not only having the information, it’s how to use the information that makes a difference. We work very closely with the suppliers and try to keep them informed about what we sense in the consumers: their demands, advice and comments regarding the brands and the category.”

Economic reaction

massive renovation last year doubled the size of London Supply’s Puerto Iguazu confectionery section, but that’s just one way the company is making changes to this category. “Overall, the confectionery category is performing well and growing,” says Lara Plaza, Division Manager, Confectionery, Spirits & Tobacco for London Supply. “But we believe travel retail needs to think in terms of a wider category, not only confectionery, but an entire food category that includes gourmet products, regional specialties and more.” In light of this philosophy, it is not surprising that the store’s recent product

introductions mostly veer away from traditional confectionery. “Since the expansion of our Iguazu store last year, we have been trying some new food categories that we didn’t carry before: snacks like pistachios and almonds, but also fois gras and other gourmet items,” says Plaza. “There is a demand for these kinds of products, and we are trying to fulfill that demand.” While Plaza says the retailer has picked up some new brands of cookies recently, for the most part the category grew in other ways. “As with most categories, the evolution in confectionery is toward a more sophisticated assortment, with more sub-categories and specialties for different demands.”

While the economies of both Argentina and Brazil have been highly unstable recently, this has not affected London Supply, as tourism to the Puerto Iguazu region has increased. “Thankfully we have not had to face big issues caused by the economy,” says Plaza. “We acknowledge that there are some economic changes in the region which produces uncertainty and might retract spending, but we haven’t been affected by this yet. I can say we are more alert than usual, especially considering we have a three-month lead time; any reaction in terms of purchases is a challenge whether that means big growth or negative growth. On the other hand, tourism is growing in the region. We are very blessed.” www.dutyfreemagazine.ca CONFECTIONERY

ASSOCIATION FEEDBACK

Universal

appeal Here, travel retail association chiefs reflect on the impressive rise of confectionery in the duty free market

“

Erik Juul-Mortensen, President, TFWA

The latest provisional figures from industry analyst Generation Research indicate that confectionery sales in global duty free and travel retail amounted to US$5.02 billion in 2014 and that the product category’s share of the total market was 8%. This compares with market shares of 7.9% in 2013 and 7.8% in 2012. Biggest regions for confectionery sales continue to be Europe, followed by Asia Pacific. Looking at year-on-year growth within the confectionery category itself, we see that sales increased by 5.7% versus 2013, a performance exceeded only by fashion and accessories (+6.8%). This impressive growth in sales and the modest increase in market share year-onyear can be attributed to the exceptional innovation in product and product design and to the attractive in-store activations by the confectionery manufacturers. However, the success of confectionery is due also to the willingness of retailers to embrace, promote and allocate high-visibility retail space to a category which appeals to all ages, gender, race and culture. Take the new So Chocolate concept recently launched by LS travel retail at Singapore Changi as a perfect example of brands, retailers and landlords working together to generate confectionery sales. At the recent TFWA Asia Pacific Exhibition & Conference 2015 in Singapore, 36 of the exhibitors were confectionery and fine foods companies—12% of total exhibitors—including five which were new to the event: Abtey Chocolaterie, Favarger, Galler, Leonidas and Loacker. This enthusiastic participation is evidence of the dynamism within the confectionery category and, in recognition of this, in October we increased the confectionery representation on the TFWA management committee from three to four seats to better reflect the importance of the category.

Confectionery is a growing and essential component of the global duty free offering. The quality and variety of confectionery brands represented in duty free has grown spectacularly over the years and now offers travelers a much wider selection and varied price points compared to previous years. In cultures with a propensity for gifting, confectionery presents a desirable and at times duty free exclusive opportunity to provide a special gift for friends, family or business connections. Importantly, confectionery can appeal to all age ranges and taste. From its earliest beginnings when the Mayans and Aztecs began using beans for currency and producing a form of chocolate drink, this category has become a staple for duty free operators with exciting branding opportunities and customer loyalty that bodes well for the future.

CONFECTIONERY JUNE 2015

“

Michael Payne, Executive Director, IAADFS

ASSOCIATION FEEDBACK

“

Sean Staunton, President, MEADFA

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Overall across the region of MEADFA, the confectionery category continues to perform well. Confectionery brands have put a significant amount of resources into the development of this category. This has been initially through intensive research from the brands. As a result of this consumer research, there has been real innovation in the presentation and promotion of this category. Confectionery brands have added real in-store entertainment. Confectionery is no longer a category that was seen for many years as being an additional purchase product, but now it is a destination product in its own right. In the past, a duty free confectionery buy was based on traditional confectionery products. Whilst such products are still a duty free favorite, there are now new aspects of the duty free confectionery market. There is the fun side of duty free confectionery for both adults and children. There is the value pack and in particular duty free exclusives. There has also been an increase in the luxury aspect of duty free confectionery. Chocolatiers have observed this rebirth of confectionery within the duty free market, which has led to an increased interest from new suppliers. Gifting continues to be an important aspect of duty free confectionery purchases. Likewise, destination-themed confectionery packaging has been a real winner with consumers. As a result of this research, innovation and the actual reality of delighting the customer from many confectionery brands, retailers are now giving confectionery greater pride of place.

At the end of 2014, new rules came into force in Europe on the provision of Food Information to Consumers (FIC). The new rules provide for strict food labeling on aspects such as allergens, ingredients and nutritional information as well as enshrining a minimum font size. The regulation also calls for the information required to be provided in a language best understood by the consumer in the market where the food in sold. For confectionery producers in particular, these new rules, if interpreted strictly, will have a major impact on a manufacturer’s ability to supply the duty free and travel retail channel. Many of their products and packaging are for gifting and are exclusive to duty free and travel retail and with a separate supply chain to the retailer. The requirement to provide information in the 23 different EU languages, if enforced, would lead to a reduction in the product offer to the international traveler as it would not be economically viable to produce some skus in all national languages. Duty free and travel retail is a unique market. The need for information to be provided in the national language, while understandable for the domestic market, makes no sense in an international environment such as at European airports, ports and on board aircraft and ferries. In many cases, the traveler may not even speak the language of the airport they are traveling through or the airline or ship they are traveling on. The same rules also apply to catering for consumption and sale on board of aircraft, creating further problems for suppliers.

CONFECTIONERY JUNE 2015

Keith Spinks, Secretary General, ETRC

ETRC has been working with the regulatory authorities at EU and national level to seek a pragmatic and flexible approach to the enforcement of the new FIC rules. At the same time, ETRC is working with the industry to find innovative, alternative technological solutions to provide information to consumers. We are also seeking to ensure that similar future EU regulations do not inadvertently impact the products we sell in our specific retail channel.”

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ASSOCIATION FEEDBACK

Confectionery is a very important category in travel retail in Asia, especially in markets like China and India where the gifting culture is so prevalent—hence the focus in this year’s agenda for APTRA research. There is clear potential for the category in the region, as we demonstrate in the APTRA Confectionery Category 2015 Report, which finds that Asia Pacific consumers express a strong preference for purchasing confectionery in duty free shops, as opposed to domestic, whether for souvenir purchasing, buying new edition collections or purchasing confectionery as a gift. Our research, which we commissioned from m1nd-set, reveals some interesting results also in consumer behavior when it comes to pricing and promotion. The vast majority—around 80% of consumers we interviewed—say they clearly expect duty free confectionery to be less expensive than downtown and nine out of 10 travelers, especially from the younger age bracket up to the age of 24, say that promotions are very important for them in the decision-making process. After lack of choice, the lack of promotions is the second most cited reason among travelers who chose not to make a purchase of confectionery on their last international trip. We find that our members are placing increasing importance on the research we publish, as the insights help them to formulate concrete strategic directions, and even redirections in some cases. We were impressed to hear recently that one member completely revised its positioning based on one of the reports we released.

Jaya Singh, President, APTRA and Regional Director, Middle East & Asia Pacific, Mondelez

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Confectionery is absolutely a growing category. There are new companies coming to the market. They may not necessarily be known on the local markets but they’re making their entry into Latin America through travel retail. There are some excellent local brands coming from Argentina, Chile and Brazil. I don’t think this is a disadvantage. Consumers like to try new things and if the taste is good, they will buy. I think the confectionery segment can easily grow by 5% year-on-year.

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CONFECTIONERY JUNE 2015

José Luis Donagaray, Secretary-General, ASUTIL