Global Travel Retail Magazine Pre-TFW September 2023

Page 1

Dubai Duty Free's Colm McLoughlin provides glimpse into another successful year

P. 14

Dufry’s travel retail revolution p. 10 Cyprus Duty Free: Reach, engage, delight p. 18 MEADFA talks strength in numbers p. 24 GTRMAG.COM SEPTEMBER 2023 VOL 35 · NO 5

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Growthtrajectory

With company after company posting double- and triple-digit growth in 2023 over 2022, in many cases with sales that rival or even surpass those of 2019, the future of our industry is looking very rosy indeed. We at Global Travel Retail Magazine expect this news to herald in an exceptional year at TFWA World Exhibition in Cannes.

In this issue we find why Dubai Duty Free is one of those seeing exceptional sales. Despite still awaiting some of the airport retailer’s highest-spending passengers from China, sales are already 9% higher than during the same period in 2019. DDF Executive Vice-Chairman and CEO Colm McLoughlin says travel retail exclusives, new launches and promotions are the driving factors. With Chinese passengers expected to return in force by early 2024, next year should create a new benchmark for the travel retail operator.

Cyprus Duty Free is seeing similar growth; as of May of this year sales reached over 90% of those in 2019, with only 80% of passengers. Both of these figures are sure to rise in the next quarter. For Cyprus Duty Free and other ARI stores, the strategy to drive these sales is encapsulated in ARI’s Customer Value Proposition.

Dufry, meanwhile, has unveiled its company strategy “Destination 2027,” with a mission to lead a travel experience revolution to make travelers happier. The joining of Dufry and Autogrill creates a customer-centric global player capable of easily and effectively responding to evolving consumer demands.

The industry’s hard-working associations are all busy — as TFWA gears up to shine in October, MEADFA and FDFA are getting prepared for November. For MEADFA, the big news is that the association is preparing for its first-ever Sub-Saharan event, truly bringing Africa into the fold. Among other reasons for this choice, MEADFA President Sherif Toulan noted, “Ghana has been positioning itself as a hub for business in the region, and hosting the conference there will give MEADFA delegates the opportunity to explore the potential of the African market.”

FDFA’s event is also big news, as — due to the extended border closure in Canada — it’s the association’s first conference in four years. Executive Director Barbara Barrett and her team are continuing to work hard on behalf of the country’s border stores, currently focused on seeking debt relief.

News about operators and associations are overarching, but the TFWA World Exhibition wouldn’t exist without the brands. In this issue, we speak to Andrew Cowan, Managing Director, Diageo Global Travel, about the release of Tequila Don Julio 1942 in European travel retail and accompanying activations; the expansive beauty and fragrance focus in Asia, including local and international brands; the disappearing daigou and what that means for sales and profits; and so much more.

We are sure you’ll glean valuable information from this, our Pre-Cannes issue, and that you’ll enjoy the read while doing so. Looking forward to an exceptionally prosperous Cannes for us all, and to seeing you there.

Kindest Regards,

Global Travel Retail Magazine (ISSN 0962-0699) is published seven times a year by Paramount Publishing Company Inc. It is distributed digitally worldwide. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or the editor. September 2023, Vol 35. No. 5. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. Paramount Publishing Company Inc.

GLOBAL TRAVEL RETAIL MAGAZINE Tel: 1 905 821 3344 www.gtrmag.com

PUBLISHER

Aijaz Khan aijaz@globalmarketingcom.ca

EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@gtrmag.com

DEPUTY EDITOR Laura Shirk laura@gtrmag.com

SENIOR WRITER Alison Farrington alison@gtrmag.com

SENIOR EDITOR Wendy Morley wendy@gtrmag.com

SENIOR EDITOR Mary Jane Pittilla maryjanepittilla@hotmail.com

ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

6 GLOBAL TRAVEL RETAIL MAGAZINE SEPTEMBER 2023  Contents SEPTEMBER 2023 · VOL 35 · NO 5

WHAT’S INSIDE 16

Top stories

10 Travel retail revolution

Dufry’s “Destination 2027” strategy and combined business with Autogrill demonstrates a new era of retail and F&B convenience; plus, the team on consumer monitoring and optimizing retail space

30 New language and digital optimization

A deep dive on omnichannel retailing, full-funnel marketing and Beam Suntory’s response to the growing Gen Z consumer segment

34 Testament to tequila

On location: Diageo Global Travel cites premiumization trend driver for Tequila Don Julio 1942 pop-up at London Heathrow T5

Features

RETAILER NEWS

14 Cause for celebration

Dubai Duty Free's Colm McLoughlin gives Global Travel Retail Magazine a glimpse into another successful year

16 Beauty boost

DFS partners with 15 global luxury brands to deliver its biggest shopping experience of the year

18 Reach, engage, delight

At Cyprus Duty Free, decisions are made using ARI’s Customer Value Proposition to ensure a positive experience throughout the customer journey

ASSOCIATION

NEWS

24 Strength in numbers

Since the beginning of his first term as President of MEADFA, Sherif Toulan has prioritized increasing the association’s effectiveness through relationship-building

26 The road ahead

Following the reopening of the border, FDFA continues to present a united front working toward the future; the association will hold its first convention in four years at the end of November

BRAND NEWS

28 Shisha’s flavor innovation

Mazaya has multi-regional growth on its agenda for 2023; the leading shisha brand speaks to Global Travel Retail Magazine about its strategy to grow listings with existing partners through category building activations

32 Strong reputation and champion whisky

Taiwan’s renowned Kavalan Distillery is ramping up its limited editions, further cementing its place in the creation of distinguished whiskies that are most suitable for travel retail

36 Fashion forward TFWA

Category leaders partner to host Sunglasses sundowner event at TFWA Cannes; Thélios reveals key eyewear styles from its luxury Maisons ahead of the exhibition

8 GLOBAL TRAVEL RETAIL MAGAZINE SEPTEMBER 2023
Contents

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Travel retail revolution

Dufry’s “Destination 2027” strategy and combined business with Autogrill demonstrates a new era of retail and F&B convenience; plus, the team on consumer monitoring and optimizing retail space, passenger flow and revenue generation

Following the unveiling of its new company strategy “Destination 2027” last year, Dufry Group (Dufry) has been on a mission to lead a travel experience revolution. With a focus on consumer and traveler insights and addressable market evolution, the purpose of this four-pillar strategy is a seemingly simple, but lofty one: to make travelers happier. Founded on environment, social and governance (ESG), geographical diversification and operational improvement culture, the retailer’s value proposition is set to advance in the next several years.

Described by Xavier Rossinyol, Chief Executive Officer at Dufry, as an inherent part of its vision to deliver a holistic travel experience, this direction is supported by the transformative business combination with Autogrill. According to the company, with this combination it is embarking on

a new era of retail and F&B convenience for travelers and well-positioned to maximize all of the opportunities provided as an integral part of its global growth strategy.

Dufry and Autogrill have joined forces to become a customer-centric, combined global travel experience player and be best placed to respond to the evolving consumer demands in both travel retail and travel food and beverage. Commercial space and product assortments will be adapted to travelers’ needs and digital engagement initiatives will further enhance the overall customer experience throughout the journey.

With the support of a consumerfocused approach and data insights, domestic and international traveler profiles across North America will be continuously monitored to identify new behaviors and requirements. According to the team at Dufry, this process of listening to customers, which is at the heart of “Destination 2027”, allows the company to fine tune its offering – not only matching, but exceeding the expectations of its customers and stakeholders.

Featuring new categories, exclusive products and hybrid shop concepts, the combined business will also deliver attrac-

Consumers can benefit from the convenience of online services such as RED by Dufry and Reserve & Collect 10 GLOBAL TRAVEL RETAIL MAGAZINE SEPTEMBER 2023  Retailer News
Dufry’s Just Walk Out Hudson store at Dallas Love Field Airport

EXPANDING HORIZONS!

tive offers to concession partners in existing and new locations and enable airports to optimize retail space, passenger flow and ultimately, revenue generation.

Traveler mix and nextgen personalization

When it comes to consumer and traveler mix (2019 vs. 2025), Dufry reports an increase in Gen Y and Z of approximately 30% and a growth in sales directly influenced by online of approximately 20% (to over 30%). When asked how it is preparing to respond to the rise in discovery via Meta technologies and the desire for next-gen personalization, the company points out that Dufry is continually developing an omnichannel approach to boost consumer engagement via multiple touchpoints, as well as creating online and digital services. Along with interactive technologies available in-store, consumers can benefit from the convenience of online services such as RED by Dufry and Reserve & Collect.

Dufry combines online services with complementary physical experiences in-store via hybrid and experiential store environments, innovative campaigns and a wide range of leading brands across all core categories. The retailer has the advantage of being able to work in close collaboration with its long-standing brand partners to introduce personalized product and service options – from bespoke engraving of products to personalized analysis to help customers discover the perfect product for themselves or gift for others.

As shared by the retailer, social media and AI-technology analysis by Dufry shows three “new personas” (Working Wanderers, Experience Seekers and Young Explorers). While discussing how the company adapts its business model to address these different groups of travelers, it is noted that alongside the characteristics of the personas, it is important to remember that a key factor is tracking the passenger profile and the demographics at

specific airport locations. Research shows consumers are seeking digital engagement, tailored experiences, sustainable products and wellness and local offerings; in addition to the appearance of new trends, Dufry expects these findings to further evolve.

The nature of travel retail and ESG integration

Conducting business in an environmentally conscious manner is an essential component of “Destination 2027” and because of the special nature of the travel retail and F&B industry in which Dufry operates it works closely with third parties to reduce the environmental impact of its business.

Looking at key ESG initiatives that Dufry has executed in the first half of 2023, it is evident that the retailer is making strides across the developing sustainability movement. According to Dufry, in March, it received validation from the Science Basted Targets initiative for its greenhouse gas emissions reduction targets covering scopes 1, 2 and 3. As of June, as part of its commitment to fight climate change and an alternative to single-use bags, Dufry has teamed up with advocacy and ocean conservation group Oceana to offer reusable bags made of 100% recycled plastic bottles at select stores.

The phasing out of plastic packaging and waste management is also on Autogrill’s agenda. The company is taking the next step forward on the way to substituting single-use packaging items with non-plastic, recyclable and compostable materials. The goal is to reach 100% sustainable guest packaging by 2025.

The two are working on integrating the companies’ individual ESG strategies into a combined one moving forward. The basis for this is the development of a new joint Materiality Matrix, which is currently ongoing.

On applying Dufry’s zero-based budgeting approach to its 2023 budget, the company says leveraging this methodology ensures constant operational improvement. Dufry assesses every single activity – plus, how it contributes to the business and how it can be improved. At all levels of operation, Dufry teams are fully aligned in terms of managing costs, improving efficiency and focusing on what is necessary to run successfully.

12 GLOBAL TRAVEL RETAIL MAGAZINE SEPTEMBER 2023
Retailer News
Based on a new joint Materiality Matrix, which is currently ongoing, Dufry and Autogrill are in the process of integrating the companies’ individual ESG strategies Focusing on consumer and traveler insights, Dufry’s four-pillar strategy “Destination 2027” positions the retailer as a global leader in the travel experience space

A cause for celebration

During a recent interview with Colm McLoughlin, Executive Vice Chairman and CEO of Dubai Duty Free, Global Travel Retail Magazine learned that the year is shaping up to be better than ever for the busy retailer. Passenger traffic at Dubai International has now reached nearly 99% of 2019 levels, but for Dubai Duty Free, sales are even better than those of pre-pandemic times, despite some remaining challenges.

McLoughlin says 2023 sales have reached US$1.121 billion as of July 10. “This is 35% higher than the same period last year and 9% higher than pre-pandemic in 2019,” he says. “Overall, the recovery is doing well. As per the latest forecast for traffic growth at the airport, and based on the current sales trajectory, we expect a full rebound this year. We are positive that we will meet our target by year end, which is AED7.5 billion, or more than US$2 billion.”

Returning passengers keen to shop McLoughlin says passengers are still returning to travel, but those who are shopping in duty free are demonstrating a greater willingness to spend. “Our spend per head, which was around US$39 pre-pandemic, sits at around US$47 currently,” he says. “While there is a slight

drop in penetration, those who are shopping are spending more, a trend that has continued for the past couple of months.”

One reason for the greater spend is the company’s investment in luxury boutiques, according to McLoughlin. While the company already had an appealing and strong fashion retail offer, the newer investment is being reflected in the sales growth. “Apart from our current renovation plans for our Arrivals and Liquor and Tobacco shops, we will continue to work closely with our suppliers to ensure we offer a great product range, and that our growing staff continues to provide excellent customer service. All these factors will ensure penetration and average spend continue to improve,” he says.

Routes and destinations

Dubai International Airport currently serves 234 destinations across 99 countries. Emirates is now serving over 140 destinations on six continents. The airport’s main destinations are India, Pakistan, Thailand, the Philippines, the UK, France, and the US, with regional traffic to Lebanon, Jordan and Dubai.

“Passenger traffic this year has largely been driven by the airport’s standard travel destinations, including India, Pakistan, Saudi Arabia, and the United Kingdom,” says McLoughlin. “Russia

as well has been a major market. With China further easing travel restrictions and the annual seasonal peaks and festive holidays, Dubai International Airport will likely see millions more passengers come through the key east-west transit point. A significant peak in outbound travel is expected to continue throughout the summer holidays.”

The return of the Chinese

The Chinese traveler is normally of great importance to Dubai Duty Free — a cohort that has been completely absent for three years. McLoughlin says with the reopening of the country, Dubai International has seen a steady increase in China-bound flights since Q1 of this year. Currently, almost 46% of prepandemic Chinese passenger numbers have returned for travel through Dubai International. “We have long recognized the importance of this sector at Dubai Duty Free, which already accounts for 6% of our business in the year to date, and we have no doubt that this will rise even more as we look forward to fully regaining it by Q1 of 2024,” McLoughlin states.

Wellness, sustainability and promotions

With one exception, buying habits have remained relatively unchanged since

14 GLOBAL TRAVEL RETAIL MAGAZINE SEPTEMBER 2023  Retailer News
Dubai Duty Free's Colm McLoughlin gives Global Travel Retail Magazine a glimpse into another successful year Colm McLoughlin, Executive Vice Chairman and CEO of Dubai Duty Free Colm McLoughlin pictured with the first members of staff at Dubai Duty Free in 1983

pre-pandemic times. That exception is the awareness of passengers about sustainability and wellness products. “Most brands and suppliers have integrated these in some of their products, where applicable, which addressed this trend,” says McLoughlin.

Otherwise, travel retail exclusives, new launches, and promotions continue as the usual driving factors. “We have lots of ongoing promotions, new product launches and offers,” says McLoughlin. “These include great discounts across a wide range of selected products and top brands, including gifts with purchase on some products — both in-store and online — that are intended to further enhance the overall shopping experience of visitors both locally and abroad this summer, particularly during the summer months, which see peak travel.”

Strongest categories

Always a strong category at Dubai Duty Free, Gold has remained in the top five. The others in that rarefied circle

include Perfumes, Liquor, Cigarettes & Tobacco and Electronics. Perfumes sales reached US$186 million, representing a 28% increase over 2022. Sales of Liquor increased 23% to US$162 million, while Gold sales were up by 33%, amounting to US$110 million. Cigarettes & Tobacco increased by 34% with sales amounting to US$105 million while Electronics came in fifth place with sales of US$93 million, representing a 46% increase.

Current challenges

The global supply chain was severely disrupted early in the pandemic, and has yet to return to pre-pandemic reliability, but McLoughlin says he is seeing a significant improvement in supply chain from a logistics standpoint, depending upon the category. “We are still anticipating a shortage of supply in some categories due to scarcity/unavailability of raw materials,” he says. “Liquor has particularly been a challenge. Allocations from suppliers have been fair to Dubai Duty Free, but far from what we need. Perfumes and Cosmet-

ics probably have the greatest number of remaining issues with raw materials. The Food category has pretty much recovered from all the logistical issues. We are closely working with brand/ suppliers on forecasts and allocations to ensure maximum fulfilment of our business requirement.”

Inflation is also presenting challenges around the globe, with retailers like Dubai Duty Free still unsure of the eventual outcome on sales. “Increased cost is another thing on our radar, and we continue to monitor its eventual effect on our business,” says McLoughlin. “Although there appears to be consumer acceptance as these increases are consistent worldwide, there is only so much we can pass on.”

Finally, in this positive time of regrowth and renewal, Dubai Duty Free will be celebrating its 40th anniversary. “We are currently reviewing our plans for the 40th anniversary of Dubai Duty Free, which will be in December this year,” adds McLoughlin. “We are very excited to celebrate this major milestone. So, watch this space.”

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE SEPTEMBER 2023 15

DFS partners with 15 global luxury brands to deliver its biggest shopping experience of the year Beauty

BOOST

Leading luxury travel retailer DFS Group (DFS) has launched Explore New Dimensions, its most forward-looking beauty experience of the year. At select DFS stores in Hong Kong SAR, Macau SAR, Singapore, Bali, Guam, Saipan, Paris and Venice, the retailer is bringing together 15 world-renowned brands, leveraging AR and AI technology and limited-time offers to curate a series of consumer experiences, personalized shopping journeys and exclusive deals.

Two anchor brands, Guerlain and Jo Malone London, along with Burberry, Charlotte Tilbury, Clarins, Clinique, Estée Lauder, Ginza, Kiehl’s, La Mer, Lancôme, L’Occitane, Sol de Janeiro and Sulwhasoo will deliver a variety of pop-up and atcounter experiences.

At select DFS stores in August, luxury French beauty brand Guerlain is offering two exclusive-to-DFS workshops: “Honey Tasting Workshop” and “Melliferous Flower Workshop,” showcasing the

16 GLOBAL TRAVEL RETAIL MAGAZINE SEPTEMBER 2023  Retailer News
At the Explore New Dimensions beauty event, customers are invited to express themselves, explore one-of-a-kind experiences and sample new products DFS has partnered with Galaxy Promenade to promote the clean beauty and wellness category and the first Clean Beauty Pop Up Store

brand's new Abeille Royale Honey Treatment Night Cream. Practicing the latest techniques and technologies, Guerlain is also offering a range of facial treatments conducted by expert beauty therapists.

Jo Malone London is exhibiting a Whimsical World, with pop-ups at T Galleria by DFS, Hong Kong, Canton Road; T Galleria by DFS, Macau, City of Dreams; and T Galleria by DFS, Macau, Shoppes at Four Seasons. When making a purchase, shoppers can play the digital claw grabber on-site to win Jo Malone prizes and benefit from personalization services.

Tech innovation and AR generation

Supporting DFS’ metaverse exploration, digitalization is an essential feature of its journey to “Explore New Dimensions.” Using the AR-generated face filters Magic Mirror, customers can experience a fun and instantaneous digital Glam Up and Glow Up transformation.

To celebrate the launch of the multidimensional beauty event, a special Beauty Night Out took place at 19 locations globally on August 4, with the flag-

ship event kicking off at T Galleria Beauty by DFS, Galaxy Macau. The shop is home to a livestreaming studio, a high-end fragrance section, a Meitu Make-Up digital activation, the first expression of DFS Beauty Collective concept and a number of Spa Cabines.

Clean beauty

DFS Group is also partnering with Galaxy Promenade to promote the clean beauty and wellness category. The first Clean Beauty Pop Up Store at T Galleria Beauty by DFS, Galaxy Macau, and the first “green” store within DFS’ network coincide with its biggest annual beauty event the year.

To learn more about the concept and category, shoppers can explore the 11 clean beauty and wellness brands exclusive to Galaxy Promenade including Argentum, Bioeffect, Christophe Robin, Davines, Farmacy, Leonor Greyl, Malin + Goetz, Omorovicza, Philip B, Supergoop! and Tata Harper and enjoy a series of promotions such as gift coupons, digital mini games and themed workshops.

“We are extremely excited to be back live in-person to present our biggest beauty event of the year in partnership with 15 world-renowned brand partners. Bringing our discerning customers entertainment, technology-driven exploration, and exclusive products and services that you simply can’t find elsewhere and, in the way only DFS knows best,” says Christophe Marque, President, Merchandising, DFS.

At all DFS stores during the beauty event, customers will receive a complimentary compact mirror upon a designated spend amount.

To maximize rewards and increase engagement, customers are invited to join the DFS global loyalty program –DFS Circle – through mobile APP (iOS, Android), WeChat mini program or the DFS website. DFS Circle members will earn additional points when they make purchases during the months of August and September.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE SEPTEMBER 2023 17
Located at the Jade Lobby of Galaxy Promenade, the Clean Beauty Pop Up Store will run until September 3. DFS’ multi-dimensional Beauty Night Out flagship event kicked off at T Galleria Beauty by DFS, Galaxy Macau, and took place globally at 19 locations

The Mirror Box is an innovative new digitally immersive visual and aural experience designed to attract and engage Fashion & Accessories shoppers. Digital investment has enabled not only effective and engaging marketing, but also the ability to cut back on the materials traditionally used for POS and in-store branding

REACH, ENGAGE, DELIGHT

Reaching, engaging and delighting the customer is Aer Rianta’s modus operandi if not its motto. Toni McDonald, Retail & Marketing Manager, Cyprus Duty Free, says, “The customer is simply the focus of everything we do. At Cyprus Duty Free we have created a modern retail experience for customers that’s designed to connect with them across all touchpoints on their journey.”

For example, ARI has recently redesigned the retail space at Larnaca Airport to center on the customer journey and offer an authentic and engaging sense of place. “We’ve also recently made improvements to the store layout and product range in our Pafos store, so we are confident that once a customer enters our stores they are guaranteed a world-class shopping experience.”

But it’s about more than just a great shopping experience once travelers arrive at the airport. “We’re also prioritizing early engagement with customers to help drive awareness of our offering before they enter a store, and ultimately to enhance conversion,” says McDonald. “Digital and social media play a crucial role in our customer strategy as they

facilitate engagement with customers before they enter or leave the island, while also enhancing their in-store experience.”

Hyperconnectivity

ARI greatly enhanced its digital space over the pandemic, something that had been already in the works, and it couldn’t have rolled out at a better time. Digital transformation for the business has been two-fold – extending across both online and in-store. “Hyperconnectivity” is a core element of ARI’s Customer Value Proposition and over the last few years,” says McDonald. “We launched Cyprus Duty Free’s new e-commerce platform in 2022 and it has been performing well so far. We don’t expect online sales to account for a huge portion of our revenues and it’s still a relatively new concept in travel retail. However our e-commerce platform serves as an important awareness driver of our offering and provides customers with the ‘shop window’ preview that we don’t have versus high street stores.”

McDonald adds that a crucial aspect of building the company’s digital footprint has been its investment in content and

influencer marketing for engagement with customers pre-, during and post-travel to help drive in-store conversion and brand recall. “Katerina, our Social Media & Digital Marketing Officer, has greatly enhanced our work in this space,” she says.

The store refurbishments at both Larnaca and Pafos Airports have included the introduction of digital on a significant scale, says McDonald. “Our Larnaca store alone has over 250 digital screens to facilitate better engagement with our

18 GLOBAL TRAVEL RETAIL MAGAZINE SEPTEMBER 2023  Retailer News
Toni McDonald, Retail & Marketing Manager, Cyprus Duty Free, says the customer continues to be at the heart of every decision
At Cyprus Duty Free, decisions are made using ARI’s Customer Value Proposition, ensuring a positive and fruitful shopping experience that connects with customers throughout their journey
by
NOOR

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customers and greater cut-through with our messaging.”

Additionally, and in line with the company’s sustainability strategy, increased digitzation has allowed the retailer to cut back on the materials traditionally used for POS and in-store branding.

Digital news

McDonald says there is plenty of news under ARI’s digital banner. “Digital is a constantly changing environment and we are always exploring ways to engage with customers and enhance their journey with us – making it more interactive but also more convenient and shopping on their terms,” she says. “Through our e-commerce platform we offer online shopping with digital lockers for both Click & Collect at Departures and Shop & Collect in our Arrivals shops.”

Earlier this year, the retailer introduced its very own futuristic sales assistant. “CandyBot is a 24/7 robot, serving confectionary at the Departure gates,” says McDonald. “This unique concept offers something exciting and memorable for customers, as well as alwayson convenience.

Recently, her team also launched two new interactive digital experiences. “The Selfie Experience, located at the entrance to the store, allows customers to take a selfie in a custom-built photobooth as a parting memento of their time in Cyprus. We also launched the Mirror Box – an innovative new digital installation designed to attract and engage Fashion & Accessories shoppers. It is an immersive visual and aural experience, complemented by a Fashion Garden inspired by local seasonal Cypriot flora. Already, we’ve seen a hugely positive reaction from both customers and brands.”

Growth and recovery

Unsurprisingly, 2020 was a difficult year for Cyprus Duty Free as international travel ground to a halt, but McDonald says they began to see strong growth as early as mid-summer 2021 as some of the COVID-19 travel restrictions relaxed.

“Thankfully, from the beginning of Q2 2022 we saw compelling growth in passenger numbers, which reached just over 80% of the 2019 passenger totals that year, despite the loss of the bulk of Russian

20 GLOBAL TRAVEL RETAIL MAGAZINE SEPTEMBER 2023
Retailer News
The Selfie Experience, located at the entrance of the store, allows customers to take a selfie in a custom-built photobooth as a parting memento of their time in Cyprus Cyprus Duty Free has seen customers return to purchasing fragrances, cosmetics and skincare, with double-digit growth in the category this year
P
PATRICK DEMPSEY WEARING THE
’ 8963 SUNGLASSES

travelers due to the war in Ukraine,” she says. “The outlook for 2023 continues to be positive, with passenger numbers likely to hit close to 2019’s total passengers.”

While passenger numbers in 2022 reached just over 80% of 2019 totals, McDonald says a higher average spend (PAS) meant sales reached almost 91% of 2019. “This was a really strong performance and a positive sign that many of the decisions we made back in 2020 – along with the great support from both our operations in Ireland and Bahrain –bore fruit last year and continue to do so in 2023,” she says.

As travel restrictions were lifted, a great hunger welled up for international travel, especially holiday destinations, says McDonald. “Cyprus has been positively impacted by this. Also, both the Cyprus Government and Hermes Airports deserve a lot of credit for bringing new and additional routes into Cyprus that did not exist three years ago. We are focused on enhancing our offering for both existing and new customers, ensuring that we are meeting the ever-evolving customer expectations with an exceptional range, true value, and an authentic experience – in short, delivering on the key pillars within ARI’s Customer Value Proposition. Our success in delivering this is reflected in our continuing sales growth in 2023

and this will to be key to our continued growth throughout this year and beyond.”

Kypriaka and other categories

The key categories for Cyprus Duty Free are Perfume & Cosmetics, Confectionery, Liquor and Tobacco, says McDonald. “The offers in our shops are constantly evolving and changing, so new brands such as Le Labo will shortly launch in our stores. We noticed a significant return to customers buying Cosmetics and Skincare with strong double-digit growth year to date in 2023, and Fragrances are continuing to grow very well. The other key categories of Confectionery and Tobacco are performing very positively, with expected growth from Liquor throughout the year.

Cyprus Duty Free was ahead of the sense of place curve when it launched Kypriaka – which means “the best of Cyprus” — 10 years ago. “Kypriaka has been a great success since it was created, and it continues to go from strength to strength,” says McDonald. “Originally, it occupied 80 square meters of space; however, in the new build at Larnaca Airport this has been increased to 160 square meters – such is its importance to the business and to the overall customer experience at Cyprus Duty Free.”

“We identified that customers were seeking a truly authentic experience with

great products that delivered the tastes and aromas of Cyprus,” says McDonald.

“We have worked closely with a number of creative local vendors to develop a range of unique and exclusive products for Cyprus Duty Free that deliver truly original flavors of Cyprus. Some of these products include Ovis Whiskey, the first whiskey launched in Cyprus. It is matured in Commandaria casks to give a sweet and distinctive experience. Last June we launched Chypre Perfume, inspired by the fact that over 3,000 years ago Cyprus had a thriving fragrance industry and distributed fragrance around the Mediterranean region.

“And in August of last year, we launched Yolanda’s chocolates, handmade and painted confectionery with amazing flavors and a visual feast for the eyes. We intend to continue to further develop our exclusive range of products, delivering great and authentic tastes and flavors of Cyprus that will leave abiding memories of this beautiful island.”

Challenges and initiatives

McDonald says that for Cyprus Duty Free, staffing has become one of its major challenges. COVID-19 has affected people in a way that made them reconsider their priorities, such as the desire to spend more time with their families. As with ARI as a whole, Cyprus Duty Free considers the positive and respectful treatment of its staff as imperative. “Our people are our priority, and we make sure that we offer an environment where they feel supported, respected, and empowered in their roles,” says McDonald. “There are no easy answers to the issue of recruiting additional people, but we remain flexible and values-driven in our approach.”

McDonald says several exciting new initiatives are underway as part of Cyprus Duty Free’s retail strategy, with the shaping of ARI’s Customer Value Proposition.

“We continue to keep our customers at the heart of everything that we do in our business, ensuring the very best brands at great value, with engaging and innovative retail experiences,” she says. “We work closely with our many brand partners to improve the product offering, promotional events and create a true sense of place and occasion – including the introduction of both new brands and new technologies, while also bringing the element of fun, engagement and entertainment into our retail spaces.”

22 GLOBAL TRAVEL RETAIL MAGAZINE SEPTEMBER 2023
Retailer News
Ten years on, Cyprus Duty Free can confidently claim the success of its Kypriaka shop, where local goods are sold. The floor space has grown considerably, with more items being offered all the time

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Strength in numbers

This year Sherif Toulan began his second term as President of MEADFA. He could not have found a more challenging time to begin this position than when he did in 2021. Immediately, he made a point of strengthening MEADFA’s relationship with other associations around the world, as in general, what one faces they all face, and there is strength in numbers. There has never been a time when this was more the case.

Toulan confirms this relationshipbuilding will continue into his second term, and the association also has a number of other priorities to focus on in the coming years. Currently, MEADFA is working to foster itself internally by increasing the activity of its members in addition to looking outward. “Our objective is to expand MEADFA’s outreach by collaborating with other relevant associations and focusing on strengthening the impact of the MEADFA committees,” he says. “We would also like to increase

member participation and engagement in the different committees. While achieving this, we will enhance the services we offer and actively seek feedback and comments from our members to identify areas for improvement, prioritize our members’ needs, and deliver tangible benefits.”

Toulan says strengthening the effectiveness of the association itself is an overarching focus. “We will work on enhancing the capabilities of the MEADFA advocacy committee to become the most effective advocate in the region and enhance our partnerships with other associations that share our interests and have a broad reach,” he says. “Effective communication is essential, and we will leverage our involvement in other associations to support our members’ needs.”

A committee that will be getting particular attention is that of sustainability, according to Toulan, with the promotion of the sustainability committee in the Middle East and Africa region one of the association’s primary goals.

Supporting a growing market

Soon after he began his first term as President of MEADFA, Toulan announced that MEADFA as an organization has made it a mandate to be more inclusive of Africa as a whole, as traditionally the organization has been more focused on the Middle East.

This year for the first time, MEADFA will be taking place in Sub-Saharan Africa, specifically in Accra, Ghana, November 19-21, 2023. When Toulan was asked why Ghana was chosen and not one of the countries already strong in travel retail, his response was, “Why not Ghana? Our choice is based on a variety of factors, including the country's growing economy, political stability, strategic location in West Africa, and the support that we are getting from our partners. Ghana has been positioning itself as a hub for business in the region, and hosting the conference there will give MEADFA delegates the opportunity to explore the potential of the African market.”

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Since beginning his first term as President of MEADFA, Sherif Toulan has made it a priority to increase the effectiveness of the association through connection and relationship-building

As a whole, travel retail in Africa has been stagnant, though there has been continued talk that the continent is ripe for substantial growth. Toulan says, “There are certainly signs of growth, although it remains a challenging market. The pandemic has impacted travel and tourism worldwide, but as the world is open up again, there is optimism that the African travel retail market will bounce back.”

As referenced earlier, this market varies considerably from one city and airport to another. Toulan says, “At the moment, the strongest cities and airports in Africa are Cairo, Johannesburg, Kenya and Casablanca. However, there are also emerging markets, such as Lagos and Addis Ababa, that are expected to experience growth in the coming years. New airports are also being built, such as the new international airports in Kigali and Dakar, and others. This will bring new opportunities and will boost travel retail in the region.”

Important passengers

For some airports in the Gulf, the Chinese traveler is very important. That traveler has been completely absent for years, now just beginning to venture beyond China’s borders but at the moment is far from previous numbers. Toulan says despite this it is anticipated that the sales levels of 2019 will be reached and possibly exceeded by next year. “The reopening of outbound travel from China has a positive impact on travel retail sales in the Gulf region due to the large number of Chinese tourists who visit the region annually. Prior to the pandemic, Chinese tourists were the highest spenders globally, and their return to travel will help the industry recover. This is likely to result in a surge in demand for luxury goods, particularly among Chinese tourists who have a high disposable income and a strong affinity for luxury brands,” he says.

The Russia-Ukraine war has also affected travel to and from that region. According to Toulan, MEADFA is seeing other nationalities filling the gap left by

the war between Russia and Ukraine, and the industry is likely to continue to attract visitors from other countries.

The MEADFA Conference

With the exception of the location, details of the MEADFA conference are not yet finalized, but Toulan says the focus is expected to be on the global trends and challenges of the travel retail industry, as well as exploring opportunities for growth and innovation in the region with a focus on Africa. “Speakers are yet to be confirmed, but they are likely to include government officials, industry experts, and representatives from leading travel retail companies,” he shares.

The location of the conference in Ghana is a positive step toward promoting the travel retail industry in Africa, says Toulan. “Over the years we have received a load of feedback to hold the conference in Africa, now that we are ready and this has become a reality, I truly believe it is a great opportunity for all to explore and learn about the real African market.”

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THE ROAD AHEAD

Canada’s border stores went through quite a time, to say the least, with over two and a half years in total of strict border regulations — from complete closure with enforced isolation for citizens to expensive and invasive testing requirements once the border reopened. Throughout most of that time, these border stores saw sales drop from -95% to -100% compared to 2019.

Constant pressure

Throughout, the country’s Frontier Duty Free Association (FDFA) worked extremely hard on its members’ behalf, and the association’s efforts enabled these border stores to survive a crisis of unimaginable proportions.

“Our work with the Coalition of Hardest Hit Businesses helped our stores become included in Wage and Rent subsidy relief measures, and being named as one of only 20 industries in Bill C-2 — the extension of these relief measures,” says Barbara Barrett, Executive Director, FDFA. “As things were opening domestically and Canadians were enjoying domestic travel and tourism, our stores were left behind. It was imperative for FDFA to get the border open, despite there being no signs of it being considered.”

Therefore, the association put continuous pressure on political leaders to re-open the border and restore nor-

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FDFA’s member stores needed a lot of help to get through 20 months of closure, and the association was there every step of the way.
Now, together they are moving toward a positive future, including its first convention in four years
Some members from Frontier Duty Free Association that helped to apply pressure on political leaders to re-open the border and restore normalcy

malcy. And it wasn’t just the Canadian duty free stores suffering the brunt of the restrictions; border communities across the US and Canada and businesses within those communities were being disproportionately affected by the closure that, according to Barrett, no longer made scientific sense.

“We at the FDFA organized political leaders — mayors, congressmen and Members of Parliament – on both sides of the border to do public and media panels and apply the pressure to their own parties, which was covered widely by US and Canadian media. Federally, and at the grassroots level across Canada, FDFA did not let up,” Barrett says. “Our work resulted in the government dropping testing, opening the border and remarkably, dropping the need for the use of the ill-designed ArriveCan app, allowing our land border duty free stores to finally step on the road to recovery. So yes, our members did make it through and proved that duty free business is strong and resilient.”

FDFA has more work to do as residual effects from the long closure continue, according to Barrett, but the association continues to make its voice heard and its members remain optimistic. “Duty free may be a small industry, but we have proven our mightiness.”

FDFA has always maintained close relationships with groups like the Tourism Industry Association of Canada.

“Through the pandemic, it was an essential connection. Post-pandemic, there is still much advocacy work to be done in the tourism space and where our goals overlap, we will work together to reach them. An example of that would be the call for the return of the Visitor Rebate Program. Our strong relationships and coordinated advocacy plans are what will bring this to fruition,” she says.

The future is here Thankfully, Canada’s border stores are now on the road to recovery, but store traffic has yet to reach pre-pandemic levels. “FDFA is working with government and tourism groups on ways to increase the rubber tire travel and to encourage our American neighbors to return to Canada, and moreover, ensure that such a closure never happens to our border again,” says Barrett.

Now, after a four-year hiatus, FDFA’s convention is back. “We are very eager to bring our partners together in our original convention format, providing a platform to share ideas and visions that will ultimately grow their businesses while building relationships and brands,” says Barrett. “We believe that by working with our partners, together we can build a thriving industry, which inspired our theme this year: Canadian Duty Free – Building Tomorrow. The convention will take place November 27-30, 2023, in Toronto, Ontario.”

According to Barrett, FDFA staff were thrilled by the immediate response after registration opened in mid-June. “Our supplier members were extremely motivated and enthusiastic to secure their participation,” she says. “We have also received a very positive reaction from the border store operators. These early indications are leading us to anticipate extraordinary attendance this year, which is very welcome after the last few trying years. We look forward to giving everyone a warm Canadian welcome in Toronto!”

FDFA agenda

While the long-term effects of the pandemic continue, with the fully reopened border FDFA’s focus going forward is removing any barriers to success the industry faces. "This includes advocating for the removal of unnecessary, illogical domestic red tape on such things as domestic labeling regulations, and seeking a clear understanding among all federal departments that we are export only and thus removing any inclusion in domestic regulations,” Barrett explains. “Longterm we will also be advocating for the re-instatement of the Visitor Rebate Program, and we will continue our work with border community mayors to protect our border and ensure it is never closed again.”

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FDFA has more work to do as residual effects from the border closing are ongoing; however, the assocation remains optimistic about the future FDFA Executive Director Barbara Barrett

Shisha’s flavor innovation era

Leading shisha brand Mazaya has expansion plans and multi-regional growth on its agenda for 2023, as the company talks to Global Travel Retail Magazine about its strategy to grow listings with existing partners through category building activations and innovative new products

“Luckily, we have kicked off the year with an astonishing performance in all stores,” says Mazaya Global Duty Free Manager, Rawan Elayyan. “Our Q1 figures have a double-digit growth versus 2022, which is a great starting point for the year. We are working towards sustaining or even increasing this growth rate this year.”

“This performance reflects our strong global travel retail position, not only in the Middle East but the performance outside the Middle East is also developing. Our major focus will continue to be within our core region, but we are shifting our strategy towards global penetration and exposure in other markets, says Elayyan.

Expansion strategy

Mazaya’s post-pandemic expansion strategy had an early boost with two important new listings in 2021: Lagardère Travel Retail in airport duty free shops in Saudi Arabia (Riyadh, Jeddah and Dammam) and Dufry in Morocco (Casablanca and Marrakesh).

“Our recent listings for 2022 and into 2023 have been performing well. We have taken great care to nourish them postpandemic with a lot of hard work. The most impressive performances are with Lagardère Travel Retail Saudi Arabia (KSA) duty free stores and Iraq Duty Free with its multiple stores across the country.”

There is another new market listing with Tunis Duty Free, says Elayyan. “We are extremely excited with our partnership with Hamila in supplying Tunis Duty Free; it has coincided with the recent revamp Tunis had completed to update the tobacco trading channels in the country.”

Loyalty activations

Traveler activations are an important engagement tool for Mazaya. Further to the brand’s refresh in 2021, Mazaya is keen to reconnect with its customers through more gift-with-puchase (GWP) offers, such as its limited edition artist collaboration glass shishas that have been successful at growing sales and rewarding loyal customers.

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Caviar Drops Mint Mania is one of the line’s bestsellers
News

Mazaya has strong brand awareness in the Middle East, but Elayyan says this is because shisha is already part of the lifestyle. She adds Mazaya has a good understanding of its target audience, and increasing opportunities to trial new products and flavors, to generate interest with new audiences is a driving factor behind the constant focus on increasingly product-driven experiential activations. These ensure Mazaya is able to get closer to its customers and build brand memories.

The luxurious new Caviar Drops line has been developing a following since it launched in Cannes in 2022.  Created from concentrated flavor essence, the Caviar line comes in the form of drops and is available in six different flavors: Fruity Fusion, Icy Frost, Luscious Lemon, Mint Mania, Rich Licorice and Sleek Vanilla. The drops can be added to the existing tobacco flavor in a shisha as it is being smoked to enrich it or combined to create a new flavor mix. It was designed to create an even more optimal shisha experience, says Elayyan.

“All operators were extremely excited about the Caviar project and that is for many reasons: the idea is unique and the product itself is an innovative gadget to have for shisha smokers — it provides the option of altering or even making your own mix, which has gone down well with customers. Also it’s a beneficial addition to our shisha accessories offer. And finally, it entertains the consumer by providing a DIY concept in line with the worldwide trend.

“The operators have already seen the benefits of the Caviar project and we are looking forward to implementing it as a GWP in duty free stores.

Luxe NPDs

Elayyan says Mazaya is constantly focused on new product developments (NPD). “We at Mazaya pride ourselves on using only the best-in-class ingredients; to provide the perfect balance of tobacco strength and flavor intensity and guarantee a flavorful and long-lasting shisha smoking experience.”

One of the newest products in the market is Two Apples Masri — a new variant of the brand’s best-selling Two Apples flavor. It was produced in response to demand from customers for bolder tasting shisha flavors and its creation reflects Mazaya’s drive for innovation in the category. “We’ve been the process of adding Two Apples Masri flavors in duty free stores since Q4 2022, currently it is available in all stores in various sizes. The flavor has been performing well as it is another variant of Two Apples, which is one of the best-selling flavors in the shisha tobacco category.

“Currently we are growing listings with the new Love flavor. It’s a special mix with a desired after-taste that comes in playful packaging. In Mazaya we always make sure to have a range that caters and targets all consumers with several taste palettes. We believe that this flavor is modern and and in harmony with the younger consumers’ preferences who are open to change and tend to like different flavors and mixes.

The Caviar GWP project is set to start in the second half of 2023, says Elayyan. “In the meantime, we have been active updating our cycle plan (HPP, SPP and price promotions). Many portfolio evaluations have taken place to assess the performance per SKU and decide on the needed action plan.”

The company wants to develop more digital marketing in line with its mission to target new (younger) customers. “Many of our plans have been focusing on new customers with different age groups, that’s why we have so many progressive projects (Caviar Drops) and new flavors (Love) that have taken place. We also have the Two Apples Masri product to attract different consumers who tend to be loyal to their standard flavor but yet open to new variants and this is what we do in the travel retail channel only.”

Mazaya’s overall vision and plans is to always have new flavors in the pipeline. These flavors are carefully picked and produced after researching the industry trends.

“We have a wide range of shisha devices that serve different types of customers but the travel retail channel has a limited environment due to available space shared by different categories, and this does limit how much we are able to showcase the wide range of innovations we can provide.”

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The Caviar Drops line allows customers to mix their own flavor combinations Mazaya is returning to more activations this year; its recent glass shisha GWP promotions have been popular to attract new and loyal customers

NEW LANGUAGE AND DIGITAL OPTIMIZATION

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With omnichannel retailing and a major shift in consumer and traveler mix set to transform traditional airport shopping, Global Travel Retail Magazine spoke to Manuel González Soto, Global Marketing Director at Beam Suntory to learn more about its response. According to m1nd-set, Genz Z will represent 70% of duty free shoppers in 2025. González Soto says the company recognizes the importance of adapting and evolving its strategies in order to effectively target this consumer segment.

Before the growth of Gen Z hit the channel’s radar, Beam Suntory had already started to implement the concept of full-funnel marketing to generate brand awareness and increase performance across duty free and travel retail. This approach requires an understanding of the consumer journey and the ability to identify which touchpoints – online and offline – are most relevant per segment to adapt strategies pre-, during and post-trip. At the center of full-funnel marketing is the retail experience, with activations playing a lead role. González Soto shares brand storytelling, immersive spaces and consumer engagement have become key for Beam Suntory and its shoppers. The company is increasingly harnessing the point of sale “to bring these concepts to life.”

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Bowmore x Aston Martin “Dark and Intense” 10-YO Single Malt Scotch Whisky is matured in Spanish oak sherry casks and hogsheads culminating in a fruity and rich taste
deep dive on omnichannel retailing, full-funnel marketing and Beam Suntory’s response to the growing Gen Z consumer segment
Manuel González Soto, Global Marketing Director, Beam Suntory

“We are working internally on developing the next evolution of our legacy, and our brands, bearing in mind what is relevant for Generation Z. Concepts such as trusted and transparent brands, sustainability and of course, digital, are fast becoming part of our daily language,” says González Soto.

Speaking about how Beam Suntory uses experiential retail and in-store elements to draw visitors and convert shoppers, González Soto references the new Bowmore by Aston Martin “Made to Move You” activation. The campaign is described as a great example of how digital, technology and personalization can play a pivotal role in attracting consumers and increasing levels of interaction.

“’Made to Move You’, which starts pre-trip with a geo-localization marketing activity, delivers a unique experience at the point of sale. A quick questionnaire allows passengers to discover the Bowmore Designed by Aston Martin expression that best suits their individual palate, in addition to creating a personalized piece of art using advanced cymatics technology,” he explains.

Pre-trip communication and collaboration

While initiated in China via exclusive partnerships with China Duty Free Group, Beam Suntory’s focus on the pre-trip stage of the traveler journey is expanding across Asia and into Europe and the Americas. As noted by González Soto, where pre-trip communication and the overall digital environment is concerned, the only constant is change, and the different platforms,

touchpoints and mechanics are evolving at pace. This is why consumer research and product testing have become essential.

“Within Asia – specifically in China – we have developed a ‘club’ app to stay close to consumers, informing them in real time of live activities. This has also proven very successful on connecting online and offline events. For example, special promotions in our recently opened Courvoisier boutique in Hainan,” he adds.

When it comes to coordinating its efforts across all stakeholders and successfully integrating online and offline shopping within the channel, Beam Suntory wants to be recognized as the best possible digital partner by retailers and airport partners. With this in mind, the company has established a series of “topto-top forums” across its retailers to understand how it can best collaborate. This year, Beam Suntory is reviewing its digital presence across its retailer web pages to optimize and introduce new dynamic content that focuses specifically on Gen Z.

Pre-order services and the future

The share of shoppers who currently pre-order online is minimal versus the potential. When asked how Beam Suntory is working to build awareness and promote an understanding of this service – including delivery policies, pick-up points and associated costs – González Soto admits that it is a work in progress. He says the onus is on brand owners and retailers to highlight the benefits and is confident that the channel will see a rise in pre-order sales in the short-term future.

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The Bowmore by Aston Martin “Made to Move You” campaign shows how digital, technology and personalization can play a pivotal role in attracting consumers and increasing levels of interaction

Strong reputation and champion whisky

TAIWAN’S RENOWNED KAVALAN DISTILLERY IS RAMPING UP ITS LIMITED EDITIONS, FURTHER CEMENTING ITS PLACE IN THE CREATION OF DISTINGUISHED WHISKIES THAT ARE MOST SUITABLE FOR TRAVEL RETAIL

Since exploding onto the international whisky scene by winning “World’s Best Single Cask Single Malt” at the World Whiskies Awards in 2015/2016, Kavalan has gone from win to win in major competitions, with a name that is becoming increasingly recognized by whisky connoisseurs around the world. Regional Manager Kyle Lee says this is the result of creating a consistently high quality liquid.

“The exceptional quality of our whiskies ensures consistent success and heightened interest in the brand on the part of consumers,” Lee says.

“While the Vinho Barrique expression has gained popularity and become a favorite, we have also observed a growing curiosity about our other offerings.” He adds that the company’s wide range of sherry cask-matured expressions has attracted considerable attention. “This is particularly true of the Solist Amontillado Sherry Cask Strength Single Malt Whisky after winning

the 2015/2016 ‘World’s Best Single Cask Single Malt’ award.”

Growing popularity

The whisky’s reputation has meant ever-increasing popularity for tourists and the global on-trade. “The exceptional taste and unique maturation techniques of Kavalan whiskies make them popular souvenirs for consumers,” says Lee.

“Their smooth, elegant, and fruity profiles leave a lasting impression, and the whiskies embody the distillery's excellence, making them highly coveted keepsakes. In terms of whether consumers ask for our whiskies, Kavalan has consistently stayed in the top-five ‘trending’ whiskies of the prestigious Drinks International Annual Brands Report, which surveys 100 of the world’s top bars. Trending whiskies are the brands customers increasingly asking for, perhaps because of word of mouth or even on bartenders’ recommendations.”

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Kavalan Solist Vinho Barrique is a uniquely crafted cask-strength expression infused with European red and white wine before being recharred and filled with Kavalan Whisky Kavalan is planning to release a new global travel retail exclusive either at the end of this year or in early 2024

Inflight and TR focus

With approximately 50% of sales coming from Taiwan and the other 50% from international markets, closed Taiwan borders certainly affected the distillery’s business during the pandemic. “Despite the challenges posed by the pandemic, the reopening of both domestic and global markets has contributed to a positive sales outlook for the company,” says Lee. Now that international travel has renewed, Kavalan will once again focus attention on travel retail, both for inflight and in travel retail stores. “Normally, only one product is listed for inflight sales. However, through inflight sales and inflight media advertisements, we can reach a larger number of potential consumers who may not have heard of Kavalan Whisky before but are willing to give it a try,” says Lee. “Once they experience our whisky, we have confidence that they will be inclined to purchase it in the future or even buy it as a thoughtful gift for others.”

South Korea market

An especially strong travel retail market for Kavalan is South Korea. Lee shares, “We have performed quite well in other countries, but particularly in South Korea, where we are strongest in the travel retail channels for several reasons:

• Celebrity endorsement: Several celebrities have shown their love of Kavalan Whisky and featured it on their YouTube channels

• Movie appearance: Kavalan Whisky can be seen in the movie Decision to Leave, directed by Mr. Park Chanwook

• Distributor efforts: Its official distributor, Golden Blue International, has made significant efforts to advertise and increase the availability of Kavalan Whisky in South Korea

New releases and future editions

Kavalan’s most recent new release is Kavalan Triple Sherry Cask, which is available

in global travel retail. “Currently you can find it at King Power duty free shops, and more duty free shops will be listing Kavalan Triple Sherry Cask,” says Lee. The company will also soon be releasing a new global travel retail exclusive. “If all goes as planned, we anticipate this release to occur in late 2023 or early 2024.”

The beautiful, limited edition Kavalan Artist Series was released a couple of years ago, and the company is currently in the process of collaborating with internationally renowned artists for future editions of the Kavalan Artist Series.

“Building on the success and beauty of the previous limited edition release, we aim to continue bringing together the artistry of whisky and visual arts in unique and captivating ways,” says Lee. “Stay tuned for upcoming announcements as we strive to create more extraordinary concepts that celebrate both the world of whisky and the talents of renowned artists.”

Kavalan’s Solist Amontillado Sherry Cask Strength Single Malt Whisky won “World's Best Single Cask Single Malt” at the World Whiskies Awards in 2015/2016

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Kavalan’s Distillery tours are a popular destination for travelers to Taiwan, who inevitably leave with a souvenir bottle

TESTAMENT TO TEQUILA

On location: Diageo Global Travel cites premiumization trend driver for Tequila Don Julio 1942 pop-up at London Heathrow T5

To mark the release of Tequila Don Julio 1942 in European travel retail, Diageo Global Travel has partnered with World Duty Free for a luxury-positioned pop-up at London Heathrow Terminal 5, which opened on August 3.

The brand activation targets jet-set passengers traveling through the airport’s T5 as they head to Europe’s “hottest party destinations” such as Ibiza and Mykonos. To kick off the launch, Diageo partnered with renowned DJ and music producer Kayper who has created a summer playlist that passengers and brand fans can discover on-site via a QR code. DJ Kayper played an hour-long lunchtime set during the opening of the pop-up.

"We are delighted to bring an icon of luxury tequila and a brand synonymous with special celebrations to travel retail in Europe this summer.

“Tequila Don Julio 1942 will be available to purchase in travel retail stores throughout Europe from this summer for the first time. It’s an incredibly exciting time for this category. With our luxurious temporary experience in T5, we hope to give travelers just a taste and glimpse of what this brand has to offer. It is a truly exceptional liquid created by Don Julio González in 2002 in the heart of Jalisco Mexico to mark 60 years of generational tequila-making. Its heritage and craft speak for itself,” said Andrew Cowan, Managing Director, Diageo Global Travel.

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Global Travel Retail Magazine's Senior Editor Alison Farrington with DJ Kayper during her lunchtime set to launch the London Heathrow T5 pop-up

Growing importance

Discussing the growing consumer trend for tequila, Cowan explained, “We’ve really seen our tequila business ramping up over the last couple of years, as the drink has gained popularity in key US cities and our sales first doubled, then tripled. Tequila is now as important to Diageo as our vodka portfolio, in terms of growth potential. We want to internationalize tequila, and global travel has a key role; it’s the vehicle to grow into new markets.

“There will be iterations of this Don Julio 1942 brand activation. The London Heathrow launch is a statement piece – we feel the UK market is very important and is testament to our expansion plans into Europe. But we also see pop-ups in APAC, India, Dubai and Hainan. As well as doubling down on the Americas.”

According to Cowan, Don Julio 1942 is the pinnacle of Diageo’s premiumization strategy for the tequila category. “Consumers want exclusives or things they can’t get anywhere else – that’s why we believe Don Julio 1942 is capturing the best opportunity for appealing to discerning tequila drinkers. The London Heathrow T5 pop-up is a bullseye for what we’re trying to do in global travel.

“We will market the full Don Julio range of tequilas with the focus on Don Julio 1942 – the other products are also available in store. We want the customer’s aspiration to be about 1942, the luxury product where taste and profile make a real statement –and that’s reflected in the high-end destination pop-up experience. £180 (US$229) is nicely premium but it’s not out of reach for recruiting tequila drinkers,” he said.

Kevin Nichols, Global Head Tequila Don Julio 1942 – Luxury Portfolio and Experiential at Diageo added, “Tequila Don Julio 1942 is a testament to our founder's passion and love for the agave plant. It is an invitation to savor the finer things in life and share unforgettable moments with those who appreciate the extraordinary.

“1942 is painstakingly crafted using only the finest Blue Weber agave plants – hand-selected and harvested – and aged in American oak barrels for at least two and a half years to develop its rich, distinctive taste. The result? A sweet and smooth sip with characterful flavors of oak, vanilla and agave teamed with vibrant notes of caramel and chocolate. If you could bottle the spirit of the season, this would be it – its warming aftertaste recalls the lazy days and heady nights of summer.”

The focal piece of the new Tequila Don Julio 1942 pop-up is an agave leaf inspired archway enticing passengers into the luxurious world of monumental celebration. Passengers can sip a Tequila Don Julio 1942 signature serve at an elegant bar surrounded by a vivid bottle display on slatted shelving bathed in gorgeous tones of amber bronze metallic and gold.

“We are proud to have been able to work closely with our partners at Diageo Global Travel once again, to deliver this luxurious pop-up which really brings this iconic brand to life,” said Eve Fifer, Commercial Director for the UK at World Duty Free.

“I am delighted our passengers can explore the iconic world of Tequila Don Julio 1942 to kick off their summer celebrations in luxury. We are committed to offering our shoppers these unique experiences whilst also educating them on responsible drinking, to ensure everyone has a great journey through Heathrow,” shared Fraser Brown, Retail Director at Heathrow Airport.

Content curation

To complement the launch of Don Julio 1942 in the UK, Diageo Global Travel has partnered with travel and lifestyle creator Ashlee Major-Moss to create a bespoke online summer guide. Major-Moss’s guide explores everything from unforgettable DJ sets to must-visit restaurant and luxury bar recommendations (where Don Julio 1942 is available, naturally) and where to find the most Insta-worthy locations that Ibiza has to offer.

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From left: Eve Fifer, Commercial Director for the UK at World Duty Free; Kevin Nichols, Global Head Tequila Don Julio 1942 - Luxury Portfolio and Experiential at Diageo; Nico Wyckaert, Head of Marketing White Spirits, Diageo Global Travel; Kayper; Andrew Cowan, Managing Director of Global Travel Retail; Nancy Stewart, Heathrow Head of Category Duty Free, Luxury and High Street and Fraser Brown, Retail Director at Heathrow Airport

Fashion forward TFWA

Category leaders partner to host

Sunglasses sundowner event at TFWA Cannes; Thélios reveals key eyewear styles from its luxury Maisons ahead of the exhibition

Leading sunglasses category players EssilorLuxottica, Kering Eyewear, Marchon, Marcolin, Safilo Group and Thélios will host a Sunglasses sundowner event during the TFWA World Exhibition and Conference in Cannes. The by invitation only gathering will welcome industry stakeholders from airport authorities and airlines, travel retailers and sunglasses suppliers, as well as members of the travel retail trade media.

“Sunglasses Sundowner” will take place will take place at the beachfront Plage Goeland on the Boulevard de la Croisette on Tuesday, October 3 at 6pm. Dermot Davitt, Co-Owner & President at The Moodie Davitt Report, will be the Master of Ceremonies at the event, which will celebrate partnership and focus on networking.

The collective of sunglasses suppliers commented, “We’re incredibly proud of our unique category collaboration efforts that have now been running for over 15 years. Over this time, sunglasses has constantly raised the bar thanks to the faith in our category and the relentless pursuit of a common goal of growth. We look forward to welcoming our industry

partners – old and new – to the Sunglasses Sundowner event, as we plot the next stage in our category evolution.”

Luxury Maisons and key styles

Ahead of the show, Thélios, the in-house eyewear company of LVMH, has revealed key styles from its luxury Maisons, which will be available to the global travel retail market pre-Cannes.

According to the company, Thélios has been ramping up its focus on travel retail over the last two years and will exhibit collections from Maisons including Dior, Fendi and Loewe, which will see global

distribution with selected travel retail partners.

“Thélios is delighted to reveal its luxury Maisons’ eyewear statements for the travel retail channel. We’re looking forward to the TFWA event in Cannes, where we will be showcasing our full global travel retail ranges for new and existing partners from around the world,” says Alessandro Eucaliptus, Head of Global Travel Retail at Thélios.

The key styles are as listed: Dior Signature, CD Diamond, FENDI First, Fendigraphy, Celine Triomphe, Givenchy Giv Cut, LOEWE Anagram.

Shiny vintage Havana front and bi-layer black and crystal temples with solid petrol lenss
36 GLOBAL TRAVEL RETAIL MAGAZINE SEPTEMBER 2023  Brand News
Shiny classic Havana frame and shiny Endura gold metal with gradient brown grey lenses 10A0: Black frame and golden details with smoke lenses The annual event will take place at the Plage Goeland on the Boulevard de la Croisette on October 3
fdfa.ca @FDFAInsider @CanadaDutyFree BUILDING TOMORROW CANADIAN DUTY FREE –King Edward Hotel, Toronto ON FDFA Convention 2023
27–30
November

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