Global Travel Retail Magazine Spirits & Tobacco 2023 by Paramount Publishing Ltd.

JULY 2023 SPIRITS & TOBACCO VOL 35 · NO 4 SPECIAL ISSUE SPIRITS & TOBACCO

advertisement removed for legal reasons

Premiumization and innovation

Global travel has returned, passenger numbers are good, per-passenger sales are high, and borders have all finally re-opened. There’s plenty to smile about in travel retail these days.

Not only has travel picked up, but sales have been exceptional, with some retailers at some locations reporting numbers that surpass even 2019’s.

Spirits in particular have benefitted, despite some trends that might suggest otherwise. While the clear trend has been toward drinking lesser quantities, sales of low- to no-alcohol spirits are skyrocketing, and the duty free shopper’s penchant for premiumization has only increased — consumers are buying less, but buying better. This offers near-infinite opportunities for spirits companies in the channel. For Beam Suntory, one of the premium focuses for 2023 is in Cognac, with a rebranding of Courvoisier.

Along with premiumization, innovation is important in the channel, and Fraternity Spirits is offering a truly innovative new product that allows for the “aging” of spirits without the time commitment. With this company’s new product, the consumer can create the flavor profile of an aged liquid in a matter of days — and have fun doing it.

All news is not rosy, however, as regulation continues to be a thorn in the side of many categories in TR — none more so than tobacco.

As always, our resilient industry has stepped up to make things work despite the climate. For ANDS, the TR channel is an important part of the company’s strategy as they rely on science to create potentially safer nicotine distribution systems.

Oettinger Davidoff has made a fine art of listening to its customers. Customer requests brought about this year’s launch, bringing elegance to the fore by offering a series of cigars from the past in a format rarely seen these days. For VCF, it’s been a time of expansion for its premium hand-rolled Oliva cigars — perfect timing as Nicaragua becomes ever more popular for its luxury hand-rolled cigars.

Our industry continues to face its challenges. But it is an exciting time and place to be as the world’s borders open up and as travelers — who have been chomping at the bit — reach the skies once again. For Spirits and Tobacco, duty free continues to offer opportunities unavailable in other markets.

We at Global Travel Retail Magazine wish you the very best of the summer season, and we hope you enjoy this, our annual Spirits & Tobacco issue. Please feel free to share with colleagues.

JULY 2023 · VOL 35 · NO 4

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. July 2023, Vol 35. No. 4. 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

Kindest Regards,

HIBAH NOOR Editor-in-Chief hibah@gtrmag.com

4 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Letter from the Editor

advertisement removed for legal reasons

WHAT’S INSIDE 10

REFRESHINGLY CURIOUS CURIOUS

PLEASE DRINK THE UNUSUAL

RESPONSIBLY.

The time is right

Despite economic uncertainty and a general trend toward moderate consumption, premiumization, the concept that is so important in duty free, is increasingly important to the global spirits consumer — even Gen Z, at an age when previously the spirits shopper would be looking for cheap and plentiful, is now seeking a unique premium experience

There’s no question that the alcohol consumption landscape is changing. For both economic and health reasons, consumers are choosing to drink more moderately — and this is even more the case with Gen Z — but that trend does not portend gloom for spirits companies. Another clear trend is toward premiumization; as people become choosier about when and how much they drink, they also tend to become choosier about the quality of that drink.

Given the increased interest in learning about premium spirits and sophisticated cocktail making during the pandemic, plus the unfortunate closing of many locations and now the overall economic uncertainty, on-trade consumption remains low. Home consumption has

by HIBAH NOOR

grown, however, and this, combined with the continued increase of travel, bodes well for the sale of premium, super-premium and luxury spirits at duty free locations.

We’ve also witnessed the rise of low- and no-alcohol spirits, sales of which have now reached well over US$10 billion, expected to continue to grow at a rate far outpacing spirits growth over the next three years, arriving at sales of US$13 billion by 2025/2026. This offers spirits companies a whole new avenue for sales and marketing, and is clearly a premium item.

Hainan, ever important

The Chinese traveler has long been the main target market for luxury items globally, and luxury spirits are no exception.

Hainan as a duty free shopping location has become incredibly important — first, as virtually the only duty free shopping location globally and then, as the rest of the world opened up, the only duty free location Chinese residents could shop until the Chinese border finally opened earlier this year.

Jeremy Speirs, Edrington Regional Managing Director, Global Travel Retail, says Hainan will continue to be a major focus for the company. “We don’t see the incredible growth there being a short-term phenomenon, but a long-term play backed by the Chinese government willing to invest in the region. Of course, we are delighted that increasing numbers of shoppers will be traveling internationally, given their affinity for The Macallan and typical propensity to shop in duty

8 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Category Report

The Macallan Boutique in Hainan that opened late last year, is Edrington’s largest boutique in global travel retail

advertisement removed for legal reasons

free. This will be good news for Hong Kong and Macau, as well as a range of other locations within Asia but also internationally.”

The Macallan Boutique in Hainan, opened late last year, is Edrington’s largest boutique in global travel retail. Speirs says the boutique gives Edrington plenty of scope for storytelling and engagement.

“We have focused on offering an incredibly powerful retail experience which conveys The Macallan’s history and craftmanship through the overall design concept. We also have several other pop-up and shop-in-shop spaces in Hainan which bring to life the heritage of our brand. This storytelling element remains central to our strategy for engaging with Chinese shoppers moving forward,” he says.

China is also a crucial market for Diageo Global Travel, according to Andrew Cowan, Diageo Global Travel Managing Director. “This is not only in terms of passenger numbers and a taste for Scotch, but also in value terms. The Chinese traveler likes to buy luxury items in the prestige segment, recognizing the rare quality and heritage of many of our brands. The scope for innovation, gifting and design is huge.”

“Hainan, China’s giant travel retail hub, is a hugely exciting place to showcase our incredible portfolio of rare Scotches. We’ve found a new home in Hainan with our new whisky boutique there – an experience like no other in sampling, gifting and more, and it’s brilliant to follow this opening with our recent launch of Johnnie Walker Blue Label Cities of the Future

Hainan limited edition. We're delighted to see Johnnie Walker Blue Label launching in Haikou, Sanya and other locations within travel retail with this beautiful and exclusive bottle design, giving travelers and shoppers an exciting glimpse of a future Hainan.”

Premium, rare and unique

Hand in hand with the desire for drinking premium liquid is the desire to see, experience and own something unique, new or rare. William Grant & Sons recently released Glenfiddich’s Grand Yozakura 29-Year-Old. This whisky is a unique fusion of the finest flavors from Scotland and Japan. Only a limited number of Grand Yozakura bottles are available globally; within travel retail, the release is

10 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Category Report

With William Grant & Sons’ Glenfiddich’s Grand Yozakura 29-YearOld comes an installation celebrating the fleeting beauty of Hanami, Japan’s renowned cherry blossom festival. The installation can be experienced at Taiwan Taoyuan International Airport

available at only a handful of key strategic airports, for a limited time only.

With the release comes an installation celebrating the fleeting beauty of Hanami, Japan’s renowned cherry blossom festival. The installation can be experienced at Taiwan Taoyuan International Airport from June 2 until August 31.

A whisky that is premium, rare and unique also offers the sometimes elusive “experience” sought by virtually all travelers. The installation features an eyecatching back wall with a digital screen that showcases different works of art by Japanese artist, director and designer, Fantasista “Uta” Utamaro, which portray the cherry blossoms illuminated at night. In addition, VR sets are available to allow passengers to fully immerse themselves in a one-of-a-kind virtual gallery, that also features exclusive behind-the-scenesvideos with Uta.

William Grant & Sons Managing Director Global Travel Retail David Wilson says, “As the first single malt scotch whisky to be finished in Japanese

ex-Awamori casks, this exceptional liquid has an unforgettable taste – and we have created an equally memorable digital art activation to support it.

“The innovative, immersive installation delivers an exceptional shopping experience for this region’s discerning and knowledgeable travelers. This limited edition release, and its corresponding marketing campaign, is yet another example of Glenfiddich’s commitment to innovating strongly within the single malt category, to drive excitement and further satisfy the strong consumer demand in Asia.”

For Edrington, premiumization is compulsory. “Premiumization informs every part of our portfolio, from the core travel retail exclusive range to limited editions and ultra-premium bottlings,” says Speirs. “Our goal is to recruit new consumers and then offer them compelling reasons to trade up within the portfolio while also ensuring we cater to the collectors and aficionados who are already looking to purchase at the higher

price points. Our innovation pipeline reflects this, so you’ll see plenty of news around ultra-premium offerings such as The Macallan Red Collection, with some very high-aged statements being added to the range, as well as some new launches which will contribute to our reputation for driving significant value for retailers.

“If you look at The Macallan’s trackrecord in travel retail I think it would be fair to say that we have really led premiumization in both single malts but also more widely in the luxury spirits category. It has been a cornerstone of our overall approach for many years and is something that lies at the heart of The Macallan’s appeal to retailers.”

Reaching Gen Z

The generation born from around the mid-90s until 2010 is savvy, wise, and grew up in a digital landscape.

“For the most part, Gen Z shoppers will be relatively new to the spirits category, so this is where our recruitment strategy is key. Education and storytell-

12 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023

Category Report

Diageo showcases Johnnie Walker Blue Label Cities of the Future Hainan limited edition in Hainan

ing really matter, particularly with a lot of research pointing to the fact that Gen Z shoppers find heritage and provenance particularly important,” says Speirs. “Digital engagement is also crucial, whether that is through e-commerce and social platforms or through instore elements, so we continue to sharpen our focus on delivering a first-class experience online and on screen.”

We might note that this digital engagement is also crucial for Edrington in its messaging to the Chinese consumer, as Chinese are extraordinarily digital-savvy.

For The Macallan, price promotion and discounting is at odds with the company’s overall premiumization strategy so doesn’t play a part in Edrington’s approach to reach Gen Z, says Speirs. “Instead, you will see us looking to engage and recruit Gen Z shoppers with in-store activations and pop-ups as well as affordable collectibles and limited editions that bring excitement and innovation.”

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 13

Jeremy Speirs, Edrington Regional Managing Director, Global Travel Retail

Growing

by HIBAH NOOR opportunity

Challenging times bring opportunity and the chance of rebirth. For Beam Suntory, the pandemic was a time to look at the corporate structure of the Americas and make some changes, bringing Mexico into the fold, as one example. It has also been a time to look at some of the company's most important brands and rethink how they are being presented.

Earlier this year, Ella Blake began her role as Global Key Account Director, Beam Suntory GTR, Americas, looking after the newly defined region. “LATAM is definitely an opportunity for us,” she says. “We did a slight structure tweak, bringing Mexico over as part of the region, which it was not previously. It’s a growing area of opportunity for us.”

Historically Mexico wasn’t part of Beam Suntory’s international region. “We have now brought it from a domestic to international perspective,” says Blake. “Travel retail sits within that as well, so we have a good foundation.” Blake says sales are strong in Mexico, with some brands doing “fantastically well.”

Beyond Mexico

Blake is looking forward to working in Brazil, linking travel retail to a strong domestic market. “There’s a natural synergy there, you get maximum ROI, maximum consumer visibility,” she says.

In North America, the company’s top performers include Beam’s full American whisky portfolio, Courvoisier Cognac and Japanese whisky, with Jim Beam as

the “bread and butter.” Blake says Cruzan rum is also seeing increased movement, especially in the Caribbean.

The big rebranding

Courvoisier is a big part of the story for post-pandemic Beam Suntory Americas. The brand is doing “very well,” Blake says, but good sales notwithstanding, it is going through a complete rebrand.

“Our category strategy for Courvoisier is around the consumption occasion. It’s about why and when our consumers are enjoying it. We ask, why are people going to be having that brand in the moment? What are they doing?” says Blake. “Historically, Courvoisier was a dark, masculine, nighttime-driven occasion.”

Taking Courvoisier away from this moody place, Beam Suntory is focusing on presenting it as more seasonal, lighter, brighter, fruity. “As part of that we’ve had to change the branding,” says Blake.

“We’ve realized there’s a real disconnect between the masculine nature and dark branding that we had previously, and the new occasion that we have going forward.” The new campaign is called “Joie

14 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Category Report

Beam Suntory has no dearth of iconic brands to work with, but the global spirits company is not resting on its laurels; Ella Blake, Global Key Account Director, Beam Suntory GTR, Americas and Europe, explains which strategies are helping the company soar into the next phase

The red seal of Maker’s Mark was made iconic by Margie, the wife of the bourbon's creator. Every bottle is still hand dipped To celebrate House of Suntory’s 100th anniversary, Beam Suntory will host a series of exciting events this year

advertisement removed for legal reasons

de Vivre.” It is about the joy of life, socializing, and it comes with a lot of light, airy, cheerful branding.

Aspirational brand

Cognac works well in North America and Europe, says Blake, adding that the company is exploring possibilities for the sub-category in South America as an aspirational brand with strong heritage. “We have the Napoleon Seal. Courvoisier is the most awarded cognac there is. We are keeping that as a focus.”

In line with the aspirational aspect of Courvoisier, Beam Suntory will continue to bring out more higher value expressions. “Some of the more premium brands such as XO Royal, L’Essence and Initial Extra are, to a certain extent, marketed more to an Asian market because there is more of an appetite for those higher end slightly more collectible products,” says Blake. “One of our shining stars we bought out this year was an extremely limited edition, the Mitzunara Japanese Oak Cognac. It is aged, with final aging in Senura casks. These were very limited. Travel retail released 30 in total, including some in JFK, but those sold out.”

Trading up

Premiumization has been the trend in travel retail for some time, but it is also now a trend in general society, and not only with the traditional older generations but also younger people. “What we have seen particularly is that certain generation’s drinking habits are changing,” says Blake. “People are drinking less but they’re drinking better. So what you’re

seeing is a lot more focus on premium liquor than you are on the everyday. Though there is a bit of a split, because we do have a price-sensitive shopper that is looking for great value and great quality at value. We need to have a product at every pocket and price point that everybody can afford.”

Cocktails were already becoming increasingly popular pre-pandemic, but during the pandemic cocktail making became a clear trend. “We talk about serves in GTR more than we used to historically,” says Blake. “People will drink liquor with a mixer, but if we can give them an accessible cocktail to make, we’re seeing people buy into it, and they are prepared to trade up.”

Again, the trend is premiumization. “People want to trade up, with the perspective: ‘if I’m going to choose to drink, I’m going to drink something better,’” Blake says. “We see that in scotch and absolutely in bourbon, especially in some of our small batch products. Maker’s Mark is doing fantastically well in terms of our trade up to the Jim Beam portfolio.”

Maker’s Mark has a wonderful story behind it, one that may help bring women over to dark spirits, according to Blake. The bourbon was made iconic by Margie, the wife of the Maker’s Mark creator. “It was her idea to make it look unique and different. She had the idea to put the iconic hand-dipped red wax seal on the bottle. Every bottle is hand dipped; it’s B Corp accredited, and every label is hand cut. All because of the matriarch of the family,” says Blake. “We will keep the craft nature of the brand, but we’ll still expand.”

Japanese whisky

Japanese whisky has become increasingly popular and well known outside of Japan in recent years. As the House of Suntory celebrates its 100th anniversary this year, Beam Suntory will host a number of campaigns around that. “You’ll have seen campaigns in some of the domestic markets already, and they will be coming to TR in July this year,” says Blake. “The Japanese whisky trend is linked into to a lot of the other trends we’re seeing, such as the appeal of Japanese food and Japanese culture.”

“When we look at the liquid, it has a completely different nature from other whiskies. The Japanese do everything in a much more precise and focused manner,” says Blake. “And our branding is incredible.”

Beam Suntory has been introducing more premium Japanese whiskies to the TR market; for example the oldest Japanese whisky, Yamazaki 55, which retailed in TR last year at a super-premium price point. “It wasn’t sold in the Americas, but we’ve been looking at where we can temper specific initiatives. You’ll see it in New York, LAX, SFO. We will be making sure to have visibility of Japanese liquor, even though it’s so limited – and it really is.”

Growing markets, post-pandemic

Blake says in GTR, emerging markets and Chinese travelers are always a topic of conversation. “Chinese demographics, Indian passengers, where are they traveling to. There is always a lot of focus on that, and it will continue to be a big part of our strategy. But we also need to support other channels that offer a real opportunity.”

Some of the opportunities Blake mentions include borders, inflight and cruise. “How are we trying to grow all those areas of the mix? I think we learned a lot in the pandemic. We can’t rely on one or two airports, and we can’t rely on one or two areas. So, I think that’s what we’re trying to do.”

For Beam Suntory, recovery has been strong. “We bounced back a lot quicker than we expected,” says Blake. “We moved out of rebuild, and now we’re starting to accelerate. But we’re rebuilding in a slightly different capacity. So, it’s not about doing what we did before, it’s just about being as efficient and effective with the channels that have emerged during this crisis and making sure that we have the right strategy for those locations as well.”

16 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023

Category Report

Courvoisier is a big part of the story for post-pandemic Beam Suntory Americas

advertisement removed for legal reasons

Spirit of commitment

In

by JANE HOBSON

Global Travel

Brown-Forman kicked off 2023 delivering several pieces of good news. Among them regional leadership appointments for its GTR business, strong yearto-date net sales growth and its second consecutive year being named one of the World’s Most Ethical Companies by Ethisphere.

In this interview Global Travel Retail Magazine (GTR Magazine) speaks with David Rodiek, Brown-Forman's VP, Managing Director Global Travel Retail, on these achievements and what is to come in the year ahead.

Regional GTR leadership appointments

A new structure for Brown-Forman’s GTR organization was unveiled in February

with two new appointments and a focus on three geographic areas: Americas; EMEAI (Europe, Middle East, Africa, India); and APAC (Asia, Australia, New Zealand, Pacific Islands).

Rodiek says the aim is to simplify the GTR business structure by consolidating it into three geographies, which will better position the company for future growth.

The GTR Director, EMEAI, the second strongest travel retail region for BrownForman, is now Oscar Camargo, who previously held the position of Director GTR Europe. Camargo has been part of the Brown-Forman GTR team for more than five years.

Dreamy Zhou, who joined BrownForman seven years ago, is the Senior Manager GTR APAC. Zhou previously served as Manager GTR Southeast Asia,

Australia & New Zealand.

The role of GTR Director, Americas, the strongest travel retail region for Brown-Forman, is currently vacant. The previous VP, Director GTR Americas, APAC, and IMENA, Montgomery E. Wilson, retired at the end of last year.

Taking this opportunity to “recalibrate,” Rodiek says the company was guided by prioritizing growth, driving efficiency, encouraging agility and providing talent and capability development opportunities.

Rodiek says Camargo brings a wealth of knowledge across super-premium spirits including single malts. The company has enlarged his footprint from exclusively Europe to include the Middle East, Africa and India to focus on growth in these regions.

18 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Category Report

this interview David Rodiek, VP, Managing Director

Retail Brown-Forman, says the company is focused on growth in the Americas, EMEAI and APAC in the year ahead with new leadership appointments, and plans to push on as a multi-portfolio player

David Rodiek, VP, Managing Director Global Travel Retail Brown-Forman Dreamy Zhou, Senior Manager GTR APAC Oscar Camargo, GTR Director, EMEAI The Brown-Forman portfolio

There will also be a clear focus on the Americas with a new Director for GTR Americas based in South Florida (Miami or Fort Lauderdale area), which represents an ideal location for the GTR business across the Americas and good access to Latin America.

Meanwhile, based in Singapore, Zhou will lead business in Asia Pacific, which Rodiek notes as a somewhat newer exploration for Brown-Forman. He says Chinese and other Asian travelers and their emerging middle class with disposable income will be important target demographics in the year ahead.

“We believe that we have a wonderful multi-category and super-premium portfolio, especially with our super-premium whiskeys including Jack Daniel’s single Barrel and Woodford Reserve, our single malt scotches and the recent two acquisitions Gin Mare and Diplomático rum.”

Growth in the channel

Brown-Forman Corporation celebrated strong year-to-date net sales in its third quarter, which ended January 31. The travel retail channel sustained strong growth with a reported net sales increase of 48% (+52% organic) compared to the same prior-year period, driven by higher volumes across much of the portfolio as travel continued to rebound.

“The Brown-Forman team is doing a tremendous job. We certainly believe that there are bright opportunities ahead for the industry, but also for Brown-Forman to grow its portfolio looking at Asia Pacific. We have done a lot of work to become a multi-portfolio player,” Rodiek tells GTR Magazine.

Brown-Forman Corporation references broad-based reported net sales growth across all geography clusters, with

the travel retail channel driven by strong demand and the continued rebuilding of distributor inventories.

Rodiek says EMEAI has been a key performing region for the GTR portfolio, with Jack Daniel’s Tennessee Whiskey and single malts, as well as gin, such as Mediterranean brand Gin Mare (popular in southern Europe), doing well.

“We have high expectations for GTR to be a key driver for Brown-Forman, both in terms of geographies but also from a super-premium footprint.”

The healthy return of travel in the Americas has also contributed to growth, especially with record bookings in the cruise channel that started in January, Rodiek says.

The focus will continue to be on its flagship Jack Daniel’s, as well as American super-premium whiskey and single malt scotches.

Rodiek says Brown-Forman is very confident about the future.

“I know that there's been lots of discussions around recession, but we truly don’t see such a big threat and such a big cloud on the horizon. We see that people are still looking into super-premium brands. The luxury market focus is still on premiumization. Playing with a bigger portfolio now and having better structure to highlight it and a better focus on three regions, we will be better and do better.”

World’s Most Ethical

In March, Brown-Forman announced that it has been recognized by Ethisphere, a global leader in defining and advancing the standards of ethical business practices, as one of the 2023 World’s Most Ethical Companies. This marks the second year in a row that the company has received the recognition.

On this accomplishment, Rodiek says as a multi-generational business, the company is guided by three major values linked to ethical behavior: integrity, trust and respect.

“We talk not only about the work and the what but how we do things in the company. We dedicate ourselves to our ESG efforts by living a spirit of commitment every day. Our commitment is held up by a history over 150 years deep and puts our values into action. It focuses on the areas of Alcohol Responsibility, Environmental Sustainability, D&I and Community Relations,” Rodiek says. Brown-Forman believes that having a diverse workforce will help the company move forward with more perspectives and achieve better overall results.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 19

Brown-Forman announced the completion of the purchase of Gin Mare brands in November 2022

A taste of the city

Pernod Ricard GTR’s Jameson “Arrive Like a Local” omnichannel campaign featured a specially curated digital library of “City Guides” and spanned over 35 airports worldwide

by LAURA SHIRK

Earlier this year, Pernod Ricard

Global Travel Retail (PRGTR) introduced its global campaign “Arrive Like a Local” in partnership with Irish Distillers and a host of collaborators including Tripadvisor. Featuring the Jameson family brand name, the campaign launched ahead of St. Patrick’s Day (March 17) at over 35 airports worldwide. With a focus on global travel retail exclusive Jameson Triple Triple, as well Black Barrell, “Arrive like a Local” spanned 12 major cities: Dublin, Amsterdam, Bangalore, Bangkok, Barcelona, Johannesburg, Kuala Lumpar, London, New York, Paris, Sydney and Toronto.

As shared by PRGTR, the omnichannel campaign evolved the brand’s ethos to “Widen the Circle” and engaged travelers across their journey via multiple touchpoints including digital, social, retailer

integration, out-of-home marketing and interactive in-store experiences. The campaign was exclusive to the channel and could be accessed via a QR code or dedicated web page, which provided Jameson-recommended places to explore, eat and drink in the form of a specially curated digital library made up of “City Guides.”

Travel retail ecosystem

As a speaker at ASUTIL, Greg Ford, Pernod Ricard General Manager Travel Retail Americas, presented on digital opportunities in duty free and the company’s evolution in travel retail from digital to omnichannel marketing. According to Ford, 81% of duty free shoppers are exposed to online touchpoints at some point(s) across their travel journey and duty free alcohol shoppers who are

exposed to multiple touchpoints spend up to 72% more.

During his presentation, Ford detailed PRGTR’s vision to connect with passengers across the full travel retail ecosystem, steps to change the industry via brand-retailer partnerships and ways to leverage consumer data to grow value and engagement. Along with referring to its Royal Salute Kingdom Club 3D virtual store, introduced in partnership with Lotte Korea and Changi Airport Group, and AI-powered Martell boutique at

20 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023

Featuring the Jameson family brand name, PRGTR’s “Arrive Like a Local” spanned over 35 airports across 12 major cities worldwide

Category Report

Greg Ford, Pernod Ricard General Manager Travel Retail Americas

Singapore Changi Airport, Ford discussed PRGTR’s “Arrive Like a Local” campaign.

Consistent messaging & omnichannel planning

After the trade show, Global Travel Retail Magazine followed up with Ford to learn more about the campaign and PRGTR’s mission to deliver seamless and consistent online-to-offline shopping experiences in travel retail.

With shoppers more connected now than ever, he says the effectiveness of marketing channels depends on the preferred media of each target group and/or nationality. Since consumers are driven by a range of different touchpoints and content, it is about finding the right mix in line with the company’s campaign objective and audience. Regarding “Arrive like a Local” PRGTR found second party data partnerships such as Tripadvisor, particularly effective in increasing audience engagement and driving shoppers to its brand sites; video assets also generated strong uplift in brand equity metrics including ad recall and brand awareness.

“[Arrive Like a Local] was one of our first full-scale, global campaigns that properly leveraged omnichannel planning and required a significant amount of stakeholder management across brand teams, business units, retailers, media supplier partnerships, agencies, domestic

markets, and our brand company, Irish Distillers.

“Given that every touchpoint had a different role to play, consumer-centricity was paramount to touchpoint planning in making sure the media placement and creative assets met the needs and context of our audience at any given moment between pre-trip and in-airport. As a

result, we discovered a highly engaged audience that over delivered on all of our key benchmarks. This demonstrates that delivering the right message at the right time is key in driving brand awareness and meaningful engagement,” explains Ford.

Pernod Ricard Global Travel Retail worked closely with Irish Distillers on a global creative position and tagline in order to deliver consistent messaging across its key touchpoints and airport media. To drive personalization and relevancy, the company adapted its online assets and creative content to “call out” the specific city location via pre-trip touchpoints during the research stage of the travel journey. For example, in London, the Jameson City Guide found in PRGTR’s digital library directed visitors to the London City Guide.

“From a digital media perspective, our analytics suggest New York, Dublin, London and Paris gained the highest engagement across our Jameson-curated ‘City Guides’ when consumers were in the research stage of their journey,” adds Ford.

As the home of Jameson, PRGTR created a Travel Wallet web-based app in Dublin only using NFT and blockchain technology to provide special offers and unique experiences in the city including tours of its Bow Street Distillery. With over 1,000 wallets created, this initiative reached 1.5 million travelers.

22 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023

Category Report

Available exclusively in Dublin, PRGTR created a Travel Wallet web-based app using NFT and blockchain technology The global campaign focused on GTR exclusive Jameson Triple Triple, as well as Black Barrell

Trusted name in the game

airport

by LAURA SHIRK

Tito’s Handmade Vodka has strengthened its distribution in Asia Pacific with the securing of high-visibility duty free listings at airports in Thailand, Vietnam, Malaysia, Japan, Australia and New Zealand and the appointment of new domestic distributors in Thailand and Indonesia. The Texasbased spirits brand previously shared the news, noting that as travel retail continues to rebound across Asia Pacific, consumers will increasingly be able to find its product at prime business and tourist destinations in the region.

Tito’s Handmade Vodka is now available at Kuala Lumpur Airport with Eraman Duty Free; at Bangkok Airport, Phuket Airport and Chiang Mai Airport with King Power; and at Tokyo and Osaka airports with Japan Airport Terminal Co. Additional new listings include Australia’s Cairns and Adelaide airports and New Zealand’s Auckland and Queenstown airports with Lagardère Travel Retail Pacific. The brand is also working with DFS Group to expand its presence in Ho Chi Minh City, Hanoi and Saigon.

John McDonnell, Managing Director, International, at Tito’s Handmade Vodka, tells Global Travel Retail Magazine that because of the channel’s scope and importance in order to truly be a global brand, brands need to reinforce their position in duty free. With this in mind, the shopping approach of Asia Pacific travelers has become more intentional with the return of travel and Tito’s Handmade Vodka is relying on brand loyalty to help meet the category expectations of the demographic.

“Travelers in the region – especially Gen Z and Millennial consumers – are increasingly more open today to white

spirits. They aren’t only interested in brown spirits, not anymore. And particularly, when it comes to white spirits, people are looking for high-quality, affordable brands like Tito’s Handmade Vodka that they know and trust, and can share every day or across any occasion,” says McDonnell.

He adds this is further evident by the growth in popularity of the brand’s smaller format bottles like its Tito’s Handmade Vodka 200ml.

A social boost

Referring to the removal of the line between online and offline engagement – specifically via livestreaming – taking place in Asia Pacific, McDonnell says Tito’s Handmade Vodka is aiming to grow its social media presence in countries around the world and looking to partner with a social media agency to support its team in the Philippines. The brand is also working closely with duty free retailers to leverage their digital and

social media audiences. For example, in connection with Ever Rich Duty Free in Taiwan, the company is reaching out to the retailer’s 400K+ Facebook members to promote Tito’s Vodka at Taipei International Airport.

When asked about how the shop floor approach of the spirits category in duty free needs to improve to make digital engagement in the channel more effective, McDonnell reiterates that it’s long overdue the travel retail industry come together to develop a global app to make duty free shopping more convenient and seamless.

“Every other industry has figured this out. I can land in practically any city in the world and with the touch of an app call an Uber to pick me up – and I don’t need to worry about local currency. If we don’t act in a meaningful way to address e-commerce and adequately communicate and reach consumers on the platforms that they’re glued to on their phones, then unfortunately, duty free will see an erosion of customers,” he warns.

24 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Category Report

Tito’s Handmade Vodka secures new

listings across Asia Pacific and reinforces its position as a global brand

Tito's Handmade Vodka's Independence Day bottle bag release for 2023; the company releases a new version each year Tito’s Handmade Vodka on display at Sydney Airport

EXPANDING HORIZONS!

definedElegance

by WENDY MORLEY

THE CIGAR INDUSTRY,

Always innovative, Oettinger Davidoff is not a company to keep an unchanging portfolio and produce the same cigars year after year; instead its consistency is in producing excellence in new cigar experiences.

This year, a new series was chosen as Davidoff looked back to some of its most beloved releases, selecting classic cigars from the White Band Collection that played a crucial role in the company’s history, in formats rarely seen today.

“We are hugely excited to re-launch formats that were so popular in the past. By listening to our fine connoisseurs, we knew that they would appreciate us bringing back those elegant formats,” says Jean-Christophe Hollay, Head – Partner Markets & Duty Free EMEA & Americas. “Countless consumers have pleaded with us to bring back the elegant Millennium Lancero. So finally, it is with great pride that, 23 years since the original release and after approximately 10 years out of market, we have brought back a true connoisseur cigar format.”

It’s a challenge for Davidoff’s master blenders to recreate a cigar that has been out of the market for a certain period, confirms Hollay. “To succeed, you need to have a large tobacco inventory and a quality crop-to-shop process in place,” he says.

“The last and very important piece is the expertise of our master blenders to ensure that the taste is the same as in the original one.”

26 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Category Report

THIS YEAR, DESPITE GLOBAL CHALLENGES IN

OETTINGER DAVIDOFF AG IS WELL POISED FOR A SERIES OF RELEASES THAT WILL SATISFY THE DESIRES OF THE MOST DISCERNING CONNOISSEURS

Cigar lovers have been pleading with Oettinger Davidoff to bring back the Millennium Lancero, which the company has now relaunched Jean-Christophe Hollay, Head – Partner Markets & Duty Free EMEA & Americas, says the company’s expansive tobacco inventory has helped the company to grow rapidly during these challenging times, especially in GTR

Keeping up with demand

Cigar demand is far outpacing supply these days. As Oettinger Davidoff AG has the largest tobacco inventory in the world, tobacco supply has not been an issue for the company, says Hollay. “Post-COVID, the challenge we encountered was being able to produce enough to match demand because expert skills are needed to make our cigars, which are handmade. It takes 10 years of training and experience to roll Davidoff. In 2021/2022, however, we created and implemented a plan that maximizes our existing resources and ensures we are able to maintain and grow our business. The success of this plan is enabling Oettinger Davidoff AG global results to grow rapidly, especially in GTR.”

GTR strategy

In GTR, Davidoff’s strategy is to engage retail partners with the company’s leadership category management approach and work together to deliver sales growth beyond expectation, according to Hollay. “Within a few years of doing so, we will more than double the GTR category size,” he says. “We will challenge retail partners to re-evaluate existing category practices and to change direction. We know the opportunity is enormous. Only 9% of category purchase occasions are utilised in GTR, and our category is unique in its ability to build cross-category basket spend, benefitting other categories and the retailer. Oettinger Davidoff AG will be driving a new long-term vision for category space, position, and merchandising, in GTR.”

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 27

The elegant format of Oettinger Davidoff’s White Band Collection’s classic cigars will be appreciated by connoisseurs

NON-COMBUSTIBLE REVOLUTION

An enjoyable vaping experience

by HIBAH NOOR

ANDS (Alternative Nicotine Delivery Service) was founded by a community of forwardthinking based on the vision that adult smokers are entitled to better alternatives than combustible cigarettes. “We planned to provide the best products in this category, verified and tested by globally accredited labs, while binding ourselves to local and regional regulations,” says Arnaud Piorkowski, Head of Travel Retail. “We have made this our target, and all our operations and activities lead to that goal.”

As travel is part of the new norm, the company’s travel retail channel is essential. Piorkowski says airports are a vital point of purchase, posting a solid increase month after month. “Travel retailers have understood the importance of having this new category on their shelves as it reflects a strong worldwide consumer demand,” he says. “Therefore, it is a critical touchpoint for us, as it introduces millions of travelers to our products.”

In collaboration with Beirut Duty Free, ANDS has opened a vaping room at Rafic Hariri airport. “It was the first of its kind in the Middle East and probably one of only a few worldwide,” says Piorkowski. “We wanted to allow adult travelers to use their vape devices in a comfortable lounge without being exposed to the unpleasant smell and second-hand smoke from smoking lounges. Vaping is becoming an accessible tool for people trying to quit smoking, and those people deserve to use their devices properly and comfortably.”

Piorkowski says the company is discussing offering this experience in various regional airports in partnership with duty free operators. “Where and when?

This will be a surprise that we will reveal in due time,” he says. “We dedicate these rooms to vapers who wish to use their devices away from combustible cigarette lounges; the lounge also displays a stand for our products and the science behind them, so adult travelers can take a look while using their favorite devices.”

Global expansion

ANDS is expanding at a rapid pace in both domestic and travel retail markets, according to Piorkowski. “We have a presence in all major MENA markets, where the category is legally accepted, dealing with local and global operators,” he says.

“We are also accelerating in European markets. We are currently present in Germany and Austria, with market

entries in the UK and other countries by Q3. We have started our expansion in Asia and Latin America. Overall, we are already present on four continents. We aim to be present in 50 different markets in the next 12 months.”

To accelerate that expansion, the company is actively looking for talent to join in their exciting journey, and they are also looking for distributors in certain territories, specifically those that can handle domestic and local duty free. “We operate on a mixed model depending on the market and customer requirements,” says Piorkowski. “We do not have a onesize-fits-all approach. We aim to be agile, fast, and close to our customers and consumers.”

Communication and regulation

Getting new people to try your brand is challenging no matter the product or category, but this is more the case with vaping products. “This industry is one of the most regulated in the

28 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Products, Retailers & Innovation

ANDS’ recent successful implementations of shop-inshops is one of the company’s key marketing initiatives

A relatively new company, but one with the ability to invest in science, grow the vaping category and quickly expand globally, ANDS is changing the vaping landscape in duty free

Arnaud Piorkowski, Head of Travel Retail, says GTR is a critical touchpoint for the company as it introduces millions of travelers to their products

DISCOVER THE CLEAR SMOOTHNESS OF JALISCO'S HIGHLANDS Inquiries: Patrick Nilson Haleybrooke International p.nilson@haleybrooke.com Since 1904

world,” says Piorkowski. “We face two main challenges: misinformation about the category, which is confusing to consumers, and the restrictions around communication.”

For ANDS, the key is science. “These products have been designed based on scientific research,” says Mohmmad Agrabawi, Senior Director of Corporate Affairs & Communications at ANDS. “As a relatively new category, there will be much skeptism around it, which can only be explained by establishing proper communication channels with users to properly define the advantages and risks behind these products. We will have to overcome the challenge of reaching adults with this information through the responsible use of media and social media channels and using proper scientific and factual data about the category.”

Agrabawi says the company tries to be at the forefront of what is happening worldwide from scientific, medical, and research perspectives. “Our scientific team and partner research and compliance company always aim to bring in better products, conduct more testing on the current portfolio and ensure that our products are always 100% compliant with local rules and regulations,” he says. “We just announced the recruitment of Dr. Marina Murphy – Senior Director for

ANDS brings its TR partners recognized brands with specific assortments targeting passenger profiles and nationalities. Strong marketing support and a team of travel retail industry experts complete the recipe for success

Scientific and Medical Affairs, to be based in our UK offices.”

Marina is a well-known researcher on the Tobacco Harm Reduction Concept, and Piorkowski says she’s a great addition to the team as she brings in more insights about the science behind the products. “She works closely with our manufacturing partners to develop better and more reliable products through innovative and disruptive technologies,” he says.

Growing the category

The category is booming as more and more smokers are switching to potentially less harmful alternatives, says Piorkowski. “Our strength is our large portfolio and famous brands that are present globally in various domestic and duty free markets. We offer our travel retail partners recognized brands with specific assortments targeting passenger profiles and nationalities. Add strong marketing support and a team of travel retail industry experts to complete this recipe for success.”

In-store growth of the category will be driven by ANDS’ proven track record and experience. “Our mission is to guide retailers in the portfolio selection and the commercial deployment of the category,” says Piorkowski. “Recognized portfolio and price points are important, but activation and support are also key. Our recent

successful implementations of shop-inshops and the vaping room are some key marketing initiatives. We will continue to provide an outstanding experience to travelers and operators.”

Sustainability

The company’s foundation is built on a good cause mission, states Agrabawi, adding it must take a stand on crucial cases ethically, and the environment is at the top of these priorities. “We developed our sustainability program to cover the rising issue of disposable vapes and their effect on the environment,” he says. “We started this project in the UAE and a couple of duty free locations by incentivizing adult consumers to return their used devices and drop them in dedicated recycling bins. They are then collected and adequately handled by waste experts to recycle the components that can be recycled.”

The other part of the company’s sustainability program, which Agrabawi says will be disclosed soon, is related to product development. “We are working on launching a breakthrough device to address sustainability concerns,” he says. “This is not the final stage of our effort to have a good sustainability and CSR practice, but we are proud to take such steps and call on other industry players to consider such concerns.”

30 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023

Products, Retailers & Innovation

THE #1 SELLING CANADIAN VODKA

YOUR MOST VERSATILE COCKTAIL COMPANION. WE ARE CANADA’S VODKA.

PLEASE DRINK RESPONSIBLY. PRODUCT OF CANADA. 40% ALC./VOL. ICEBERG.CA

Breaking barriers

With the increasing popularity of aged spirits in recent years, Raffaele Berardi, CEO and Founder at Fraternity Spirits, is introducing a new concept that gives consumers the taste of an aged liquid, but with the flexibility to choose and create their own preferred flavor profile — while also giving them the exciting experience of making it happen.

Don Leonardo, founder of both Tequila Corralejo and Ron Prohibido, has created a way to “age” spirits at home, without having to invest in the finances, time and space of purchasing a barrel and filling it with newly distilled spirits.

Easy, fun system

Rompe las Barreras del Tiempo, Ron Prohibido Aged Rum Kit, includes a 750ml bottle of Ron Prohibido, an American oak stick with extra toasting, a stylish glass decanter with a wooden stopper, and a decanter cork. To “age” the spirit, the

consumer simply fills the decanter with rum, inserts the barrel stick and waits as the flavor slowly infuses into the drink. The wood brings a sense of aging to the liquid, providing the experience of drinking aged rum in a matter of days or weeks. The consumer can watch as the liquid becomes darker, with a taste profile that changes the longer you leave it in.

“We want to enhance the consumer experience by giving them the opportunity to experiment and choose their own preferred taste,” says Berardi. “They can then start trying to drink, to taste and experience new flavors coming out of that wood barrel. After three or four days, the liquid will seem to have aged. You can experience an evolving taste with new flavor notes. You decide when the product you’re buying has the peak flavor for your palate.”

Perfect for sharing and gifting Berardi says Rompe las Barreras del Tiempo is a wonderful conversation piece

As with barrels used for aging rum, whiskey and tequila, the wooden stick that comes with Rompe las Barreras del Tiempo is made from American oak, with extra toasting to increase the flavor profile

that is perfect for sharing. “You can make a custom drink that you can share with your friends, and suggest they taste with you after a certain number of days has passed, and then again in another few days. It’s a great gift,” says Berardi.

As a premium, exclusive item, the price point will be higher than for the rum itself — or tequila, as Fraternity is also offering this concept with its Tequila Corralejo, though Berardi says the system could actually be used with any type of spirit. “It's a gift, something to give you the opportunity to make a new experience and to share with your friends,” says Berardi. “It's an experiment, and you can repeat the experiment multiple times. You can purchase a bottle of rum, and then use the stick and decanter again and again.”

This new creation has been designed for travel retail, and will launch in second semester 2023.

32 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Products, Retailers & Innovation

by HIBAH NOOR Raffaele Berardi, Founder and CEO, Fraternity Spirits, shows Global Travel Retail Magazine the company’s innovative new product that allows for the aging of a spirit without the time commitment Fraternity’s Rompe las Barreras del Tiempo allows the consumer to experiment with the preferred flavor profile by leaving the stick in the liquid for longer, “aging” the spirit in a matter of days

advertisement removed for legal reasons

INDEPENDENT BUT GLOBALLY COMPETITIVE

While the company’s focus continues to be on innovations within its two global brands The King and Corset, it is also developing alternative NGP products and eco-friendly products, to be launched in 2023 and 2024

While KT International (KTI) now has a sizeable global footprint, the company must still compete with the tobacco giants for shelf space in a high-cost environment. Despite this, KTI is seeing some real successes in the TR channel, including new listings in several Dufry-operated airports. “We are currently in seven Dufry airports, with the latest being Antalya and Istanbul Sbiha Gokcen. We will soon be entering the major Spanish airports,” says Stuart Buchanan, COO, KTI. “It is very encouraging to see Dufry, a global player in travel retail, adopting a positive stance on allowing smaller independent players the chance to showcase their brands in prime locations globally. We see this as a very positive move not only for leading the travel retail industry but also in giving consumers more value through choice.

“As an independent manufacturer we have been very encouraged further by the recent developments with certain opera-

tors in Western Europe as our brands get listed in more international airports. We see this as a sign of not only our growing corporate reputation but also driven by our purpose-built portfolio offering quality international brands at accessible price points.”

Innovation and differentiation

Diversifying the range of tobacco brands offered by retailers benefits both consumers and the industry as a whole, according to Buchanan. “Diversity provides consumers with more choices, supports smaller businesses, encourages innovation, and helps retailers adapt to changing consumer preferences,” he says. “Embracing other brands alongside big tobacco brands allows retailers to create a more vibrant and dynamic market environment.” This market provides consumers with more choices and allows them to explore different options, he says. “Some

34 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023

Products, Retailers & Innovation

KT International COO

Stuart Buchanan discusses the company’s expanded availability in major TR retailers and how its model of dealing directly with customers helps KTI deliver what consumers are looking for in travel retail

by WENDY MORLEY

Stuart Buchanan, COO, KTI

consumers may be looking for niche or specialty tobacco products that offer unique flavors, blends, or packaging experiences.”

This principle applies across all categories, not only tobacco, says Buchanan. “By giving these smaller brands an opportunity, retailers can tap into the potential for new and exciting offerings, which can help differentiate their stores and attract a diverse customer base. Working with smaller or niche brands can lead to innovative marketing campaigns, joint promotions, and mutually beneficial relationships. These collaborations can generate excitement and interest among consumers, as well as create a sense of novelty and exclusivity that can drive sales.”

Competitive advantage to challenges

Tobacco products are subject to various regulations, and these regulations vary significantly from one country

or region to the next. This creates challenges for tobacco companies operating in the global travel retail sector, as they need to navigate and comply with a complex web of regulations across different jurisdictions.

“Dealing directly with our partners across multiple cultures as well as our own internal diversity we believe is a major contributing factor to our success in this area,” says Buchanan. “It has fostered a climate of collaboration within our own teams and with our partners, which ensures that we constantly listen to customer needs and respond with appropriate actions or products. We furthermore produce all our global demand in one factory, which ensures that not only do we have global consistency in our product, but we are very quick to transfer product improvements or innovations across multiple markets. This combination of diversity, flexibility and quick response we see as our main competitive advantage.”

Innovation and diversification

The tobacco category in TR has reached a level of saturation in many markets, particularly in developed countries where smoking rates have been declining, according to Buchanan. “As awareness of health risks and regulatory measures increase, there is a growing decline in demand for tobacco products. This declining demand poses challenges for the future growth of the tobacco category. To adapt to changing market dynamics, tobacco companies are likely to continue investing in innovation and diversification particularly in the NGP sector.”

“The KTI strategy on NGP products has until now been a wait-and-see approach,” says Buchanan. “This is due to a lack of clarity on the regulatory and excise mid term horizon.” The company believes that the perceived health benefits and risks, particularly in disposable vaping products, are now becoming more recognized, and a regulatory/ excise framework is now starting to emerge. “We see a proper regulatory environment as essential for these categories and for this reason we will be entering the NGP product space in late 2023/2024,” says Buchanan.

Two-brand focus, but more to come

Buchanan says as a producer KTI consciously focuses on two global brands, The King and Corset. “Globally The King is our biggest volume brand. With Corset, our world’s first shell pack, a constant pipeline of taste/flavour and filtration innovations has seen the brand establish itself as a true global contender for consumers wanting variety, premium quality and differentiation from the mass offer.”

Besides entering the NGP product space Buchanan says the company continues to invest in the expansion of its traditional portfolio, with new formats and flavors. “We believe our portfolio is uniquely suited to the global travel retail channel, where innovation is a key driver. We have also a number of new eco products being developed as a small part of our overall sustainability plan, on which we will have some more exciting news later this year.”

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 35

KTI is uniquely situated in travel retail, with strong partner relationships plus the ability to react quickly to changing consumer behaviours, innovation and tailored customer promotions

Iraq Duty Free has been focusing on upgrading its stores and has embarked on a retail expansion strategy that will see more downtown store openings over the next few years

Great expectations

Further to new airport terminal expansions and downtown openings in Baghdad, Iraq Duty Free has high expectations for a successful year ahead with sales forecasts in excess of pre-pandemic levels in 2023

by ALISON FARRINGTON

Making the most of its newly expanded store portfolio — now across both departures and arrivals as well as a new downtown location — has been top of the agenda for Iraq Duty Free, which tells Global Travel Retail Magazine that sales to date in 2023 have already “far exceeded expectations.”

Iraq Duty Free is the long-term travel retail operator in the Republic of Iraq, with the agreement in place until 2039, which means the well-established travel retailer with stores at Baghdad, Basra and Sulaimaniyah international airports, has the exclusive rights to run and manage all duty free business within any of the airports that are managed by the Iraqi Civil Aviation Authority (ICAA). Iraq Duty Free’s main retail operation is at Baghdad’s International Airport passenger terminal that comprises three concourses: Nineveh, Babylon and Samara, which are all names of ancient cities in Iraq. Baghdad aiport is served by Al Arabiya, Fly Baghdad and

Iranian airlines.

Over the last few years, Iraq Duty Free has been steadily renovating all its stores for international and domestic travellers and says it wants to raise standards to match and rival nearby travel retail destinations.

The ICCA opened its third and last terminal, Samara, at Baghdad in December 2022 in order to “take the strain off” Baghdad’s other international terminal. As a result, Iraq Duty Free has benefitted from the increase in international passenger numbers and the opportunity to enlarge its retail offer within the new terminal. Iraq Duty Free now manages 510 square meters of departures retail space as well as 92 square meters of arrivals space.

“We have been focused on upgrading our retail spaces with new design and fixtures. In terms of investment we have renovated all our existing shops to international standards with the exception of one still to come, which is in the departures area for the international concourse

known as Babylon, and is due to open in the last quarter of 2023,” says an Iraq Duty Free spokesperson.

H1 is on track, with a positive sales uplift for Q1 of 4% higher than 2022, according to the company. “Going into summer months and the high season for travel in Iraq, we are confident to reach our goal of surpassing the 7.5% increase in sales vs. 2019 that we reported for 2022.

“The expansion of the new Samara terminal came as a necessity to take a load off the existing two terminals and to divert the low budget airlines to this terminal. We have not yet reached the full potential of the terminal in terms of passenger numbers, but we will be moving towards that goal, especially with the high traffic expectation over the summer.”

Further bolstering Iraq Duty Free’s store portfolio are new boutiques at Kirkuk International Airport in northern Iraq where the shops have been completed, and the retailer awaits an official opening date, due later this year.

Iraq Duty Free says its customer profile is becoming more diverse. “Our airport passengers are still dominated by Iraqis representing around 70% of travelers. Expats represent around 30% of our visitors, from various countries with a high number of Chinese that are working in

36 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Products, Retailers & Innovation

advertisement removed for legal reasons

the oil and gas industry in the region.”

Iraq Duty Free’s category mix comprises many major international brands across Beauty, Fragrances, Cosmetics, Wines & Spirits and Fashion Accesories such as sunglasses. “Our number one category is still Perfumes, followed by Liquor, Confectionery and Tobacco, and Cosmetics is also growing,” says the company.

“Spirits is our number two category and is growing on a yearly basis. In numbers, we do have room to improve these results by introducing new and alternative brands our customers are requesting, especially premium single malts, which we are beginning to expand into now. Our best sellers from spirits will be from both Johnny Walker and Chivas Regal followed by single malts, vodka, and also wine.

“Tobacco is our number four category. We work with the existing Philip Morris and Japan Tobacco International (JTI) brands, where we have noticed increased sales and customers looking for more duty free offers. We are still in negotiations with other suppliers to expand this category.”

Downtown concept

After just one year of operations, Iraq Duty Free’s new downtown location in the

heart of Baghdad is a welcome addition for both retailer and customers.

Further to winning the ten-year contract awarded by the Iraq Ministry of Trade, Iraq Duty Free launched its first ever downtown location with the aim of targeting international travelers, as well as local Iraqis who can buy duty free goods in-store for up to 30 days after arriving home and at the same prices as at the airport. Furthermore, the store’s success has led IDF to plan ahead for further downtown locations, with a location on the eastern side of the city likely to be the next opening, ahead of others in major Iraq cities.

“Our first ever downtown duty free

store has resulted in an amazing concept launch, and since it opened in May 2022, is performing much better than our expectations,” says the company.

“Initially for Iraqis the concept of coming to the shop with their passport to be able to enter the store after returning from their travels was a new mindset, but the word has spread and now our business at the downtown shop is bringing us amazing results; so much that we intend to open a second store in Baghdad very shortly.”

With new retail concepts and expansion plans on the horizon we can expect more to come from Iraq Duty Free this year.

38 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023

Spirits is Iraq Duty Free’s second most popular category and is growing year-on-year

Products, Retailers & Innovation

Iraq Duty Free’s number one catetory is fragrances, with the retailer eyeing growth across its beauty portfolio

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

by ALISON FARRINGTON

“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.

40 GLOBAL

RETAIL MAGAZINE JULY 2023 Products,

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

TRAVEL

Retailers & Innovation

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.”

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 41

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

Eye to the future

Serving the US tobacco market, Altria is in the process of a rebirth of sorts, “Moving Beyond Smoking” and using profits from combustibles to finance the creation of a whole new tobacco world

by HIBAH NOOR

Tobacco remains an important category for travel retail, and this is the case for combustible products such as cigarettes and cigars. But, as with the industry as a whole, this category continues to evolve.

Evolving too is Altria, which has always been one of the largest tobacco companies in the world.

While a substantial portion of its profits continue to arise from the combustible segment of its offerings, with Marlboro as the leader, the company’s Vision is to move adult smokers away from this traditional use of tobacco and into a smokefree future.

Beyond smoking

Titled “Moving Beyond Smoking,” this Vision will be fulfilled using different approaches, many of which can work within the travel retail channel.

First and foremost is to lead the industry in operating responsibly and preventing underage use of adult products, which is something the travel retail industry is already committed to.

Further, Altria continues to invest in developing and delivering a portfolio of innovative, FDA-authorized smokefree products, and is committed to equitably transition adult

42 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Products, Retailers & Innovation

smokers to them. The ability to invest in innovative smoke-free products relies on the current profitability of combustible products, however, and therefore Altria will focus on maximizing the profitability of its combustible products, appropriately balancing investments in combustibles with funding the growth of its smoke-free portfolio.

New directions

According to Altria, over 20 million US adult smokers are seeking less harmful alternatives to cigarettes. With adult smoker demand for smoke-free alternatives, the opportunity for innovation and an appropriate regulatory framework, Altria looks to seize the current opportunity to “make more progress on harm reduction in the next 10 years than we have in the past 50 years. In fact, our future success depends on it. Over the next 10 years, we will invest in our business and our people to transform Altria and our industry,” states Altria’s Responsibility Focus Areas section of “Reducing Harm and Preventing Underage Use 2020/2021.”

While Altria owns a leading portfolio of tobacco products for US adult tobacco consumers, the company’s stated Vision, which demands responsibly leading the transition of adult smokers to a smoke-free future, transitioning them to potentially less harmful choices, offers a substantial opportunity — for tobacco consumers, for society and for the company’s business.

Therefore, Altria has branched out considerably from the manufacturing of combustible tobacco products, though its subsidiaries include leading manufacturers of both combustible and smoke-free

products. In combustibles, Altria owns Philip Morris USA Inc. (PM USA), the most profitable US cigarette manufacturer, and John Middleton Co. (Middleton), a leading US cigar manufacturer.

Meanwhile, Altria’s smoke-free portfolio includes ownership of US Smokeless Tobacco Company LLC (USSTC), the leading global moist smokeless tobacco (MST) manufacturer, and Helix Innovations LLC (Helix), a leading manufacturer of oral nicotine pouches.

Altria’s majority-owned joint venture with JT Group, Horizon Innovations LLC (Horizon), operates for the marketing and commercialization of JT’s heated tobacco stick products in the US. Through a separate agreement, Altria retains the exclusive US commercialization rights to the IQOS Tobacco Heating System® and Marlboro HeatSticks® through April 2024.

Science-based approach

Altria’s approach to tobacco harm reduction is science-based, with an investment in research and technology that supports the company’s smoke-free product development and the science needed for product applications submitted to the Food and Drug Administration (FDA).

The company’s Chief Scientific Officer leads the regulatory science team to generate the scientific evidence needed to demonstrate that smoke-free tobacco products result in lower exposure to harmful and potentially harmful constituents and/or are lower risk when compared to conventional cigarettes.

This team follows a rigorous scientific framework for evaluating potentially reduced-risk tobacco products and supporting product applications to the FDA, enabling Altria to evaluate tobacco

products from product design to individual product risk assessments to overall population impact. The Regulatory Affairs team then applies this rigorous framework to substantiate candidate products demonstrating protection of public health to bring new reduced-risk products to adult tobacco consumers.

“We are committed to ongoing, transparent communication of the results of our research. We regularly update Altria’s Science website with data we present or publish, and we actively engage with members of the scientific community and share our research through conferences, meetings and other forums,” states the ‘Science, Research & Development’ section of “Moving Beyond Smoking.”

New insights

Employees from across the organization have been given a mandate to gain new insights that will support future product development. “For instance, we’ve maintained a robust adult tobacco consumer database and have developed unique consumer connections through loyalty programs. We are enhancing these tools by working with our retail trade partners to increase the depth and breadth of point-of-sale purchase data. These tools enable deeper understanding of purchasing behaviors and consumer journeys that inform product development to best meet the needs of adult tobacco consumers.

“Altria’s scientists, engineers, product developers and consumer researchers are accelerating investments to build unique intellectual property and a robust pipeline of differentiated, innovative smoke-free tobacco products. We are combining our deep knowledge of adult smokers, data analytics and behavioral science to better understand what would motivate and then help adult smokers transition to smoke-free products,” states the ‘Science, Research & Development’ section of “Moving Beyond Smoking.”

Altria’s five-year goals

Altria’s 2028 Enterprise Goals clarify the company’s aspirations to continue to lead in the US tobacco space, maintain strong operating margins, generate earnings growth, steadily grow dividends and maintain a strong balance sheet.

“We're confident in our ability to achieve our financial aspirations while we advance our Vision and remain focused on creating long-term value for our investors,” states Altria’s 2028 Enterprise Goals.

44 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023

Products, Retailers & Innovation

Solis t Vinh o Barrique

P OWERFU L & COM P LEX

Citrus and melon, warm caramel, and hints of oak.

Sips & trips

AS TRAVEL RETURNED, DELHI SAW A SURGE OF PASSENGERS IN THE LATTER HALF OF 2022, HELPING THE AIRPORT ROCKET UP THE GLOBAL RANKINGS. DELHI DUTY FREE CEO ASHISH CHOPRA SAYS THE RETAILER HAS BENEFITTED FROM THIS PAX GROWTH, PLUS THE INCREASING PURCHASING POWER OF THE INDIAN MIDDLE CLASS

by HIBAH NOOR

As has long been predicted, India has transformed into a true global powerhouse, and its air travel is no exception. With incredible growth in both tourism and in per capita GDP, the country is one of the fastest-growing markets in aviation and travel retail, preparing to reach more than one billion passengers by 2040.

The political capital of India, with a rich cultural history and a booming economy, Delhi’s Indira Ghandi International Airport served just shy of 60 million PAX in 2022, which catapulted the airport into the top-10 ranking of world’s busiest, thanks in large part to the return of domestic traffic.

Recently, Global Travel Retail Magazine connected with Ashish Chopra, Chief

Executive Officer at Delhi Duty Free, for an update on the operator and its consumer base. He says the duty free spirits

market in the region is expanding at a substantial rate, which he attributes to factors such as an improvement in economic conditions, an increase in disposable income and a shift in consumers’ lifestyle.

“Middle-class consumers are the largest contributors to economic development and have the spending capacity to support the growth of the duty free industry in the global market,” Chopra says. “Middle-class consumers are also the largest contributors to the growth of

46 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Products, Retailers & Innovation

DDF’s duty free spirits market in the region is expanding at a substantial rate Delhi Duty Free’s top three categories in H2 2022 were Spirits (62%), Perfumes and Cosmetics (19%) and Confectionery (8%)

international travel. As a result of this increase in the median income of middleclass households, their spending patterns, mode of travel and demand for premium brands will also increase, which will in turn drive the continued growth of travel retail sales.”

Top categories

Chopra says sales in general and categoryspecific sales in particular are benefitting from the increasing number of Indian citizens who are well traveled and who fly frequently. The retailer experienced strong passenger recovery in the second half of 2022. Overall sales were up 45% vs the first half of the year, with Arrivals sales up +48% and Departures sales up +39%.

Overall, the retailer’s top three categories during H2 2022 were Spirits (62%), Perfumes and Cosmetics (19%) and Confectionery (8%); in Arrivals, the breakdown was as follows: Spirits (73%), Perfumes and Cosmetics (15%), Confectionery (10%); in Departures tobacco replaced confectionery for the third spot: Spirits (38%), Perfumes and Cosmetics (26%), Tobacco (15%).

A new dimension

While tourism is on the upswing, the cost of travel remains high. Chopra says this has led to the creation of a new dimension at all contact points across the traveler journey: spending on experiences.

“Customers who travel less frequently but for extended durations may place a higher value on experiences over material possessions if they have the opportunity to do so. As this relates to duty free, customers may be more likely to spend money on higher variants, travel retail exclusives, new releases, limited editions and other similar items,” he adds.

Chopra stresses the importance of incorporation of premiumization of the offer as a business move, as it not only attracts high-end shoppers who are prepared to spend more, it also has the potential to improve the retailer’s brand image. Chopra stresses too a trio of strategic benefits of premiumization: advantage in the market, increased consumer satisfaction and enhancement of perceived value. In the second half of this year, Delhi Duty Free will introduce a number

of new brands as well as adjustments to shop layouts in order to further improve customer engagement and experience.

While the region is currently transitioning from recovery to growth, Delhi Duty Free and its brand partners continue to face familiar challenges such as ongoing supply chain issues. Chopra lists

global shipping disruptions, deficiencies in the availability of basic materials and a surge in pricing across all modes of transformation as issues affecting the ability to receive goods. With this in mind, he says, Delhi Duty Free remains proactive and adaptable in its planning in order to preserve consistency and reduce risk.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 47

The retailer experienced strong passenger recovery in the second half of 2022. Overall sales were up 45% vs. the first half of the year, with Arrivals sales up +48% and Departures sales up +39% Delhi Duty Free will introduce adjustments to shop layouts soon to further improve engagement

Tobacco rundown

by LAURA SHIRK

Leading up to the release of Global Travel Retail Magazine’s Spirits & Tobacco report, the magazine took a closer look at m1nd-set’s Q1 2023 tobacco findings, which highlight post-pandemic duty free shopping trends (2021, 2022, Q1 2023) compared to pre-pandemic duty free shopping trends or previous years (2017 – Q1 2020).

The main focus of the study is on international airport travelers. The scope of the data collected via m1nd-set’s B1S tracking survey spans footfall and conversation rates, purchase drivers, the decisionmaking process of duty free tobacco buyers, channel influences and barriers to purchase.

According to the agency, the footfall of shoppers visiting the tobacco section at duty free shops returned to pre-COVID levels in Q1 2023. Although the conversion rate in the same quarter was lower vs. previous years, it has recovered significantly compared to 2021 and 2022. Additionally, while the purchse rate has remained stable over time, the pandemic

has continued to affect the average spend on tobacco. The primary driver to visit the section in Q1 of this year was having a specific purchase in mind; the search for promotions ranked second and the desire to browse ranked third. The visual attractiveness of a given duty free store gained importance during this period.

Regarding the decision-making process, brand loyalty became the number one driver to purchase among tobacco buyers in Q1 2023. Despite a loss in importance compared to pre-pandemic, price-related factors including good value for money and price advantage remained key drivers. The majority of tobacco shoppers in duty free purchased for personal consumption (68%); this is higher than in previous years. Although purchasing to share increased in Q1 2023, sharing and gifting combined accounted for approximately one quarter of purchases. Shoppers were more likely to purchase products exclusive to the channel (50%), on promotion (50%) or for the first time (41%) than in 2017 – 2020.

Main takeaways to note in terms of channel influences and barriers to purchase: the share of travelers aware of online pre-ordering services is considerably lower than those who would be interested in using the services available and the unavailability of usual products has been seen to deter tobacco visitors more than ever before.

By the numbers

• In line with pre-COVID, 2021 and 2022 figures, the majority of duty free tobacco visitors and shoppers in Q1 2023 were middle-aged men traveling for leisure and in standard class; in both cases the average age has significantly decreased vs. pre-pandemic and males represent a bigger share in the Americas and Asia Pacific vs. the global average

• Compared to 25% in 2017 – 2020 and 19% in 2022, 28% of those surveyed in Q1 2023 named brand loyalty as their top driver to visit; compared to

48 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Facts & Figures

Although purchasing to share increased in Q1 2023, sharing and gifting combined accounted for approximately one quarter of purchases

19% in 2017 – 2020 and 23% in 2022, 33% named brand loyalty as their top driver to purchase

• Compared to pre-pandemic, gifting among shoppers decreased by 17% (29% vs. 12%) and purchasing based on request decreased by 10% (15% vs. 5%)

• In the first quarter of this year, less than one in five tobacco purchases were made on impulse (17%) – 25% of people planned to purchase an exact product and 16% planned

to purchase a specific brand; this signifies a return in specific planning to pre-pandemic levels following a decline in 2021 and 2022

• Specific planning among duty free tobacco shoppers was highest in the Middle East and Africa and lowest in the Americas in Q1 2023

• After peaking in 2021 and gradually declining throughout 2022, the share of travelers interacting with sales staff dropped slightly below pre-pandemic levels to 42%

• After peaking in 2021 and significantly diminishing in Q1 2023 vs. 2021, staff influence remained higher than in previous years at 57%

• Post-pandemic, duty free tobacco shoppers in the Americas and Asia Pacific are considerably more likely to interact with sales staff and perceive their interaction(s) as influential in their purchasing decision vs. those in the Middle East and Africa and Europe

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 49

In Q1 2023, 25% of those surveyed planned to purchase an exact product and 16% planned to purchase a specific brand; this signifies a return in specific planning to pre-pandemic levels following a decline in 2021 and 2022 Duty free tobacco shoppers in Q1 2023 were more likely to purchase products exclusive to the channel (50%), on promotion (50%) or for the first time (41%) than in 2017 – 2020

The DISRUPTER and the DISTRIBUTOR

Mark Anthony Brands International is an alcohol beverage business of distinction. A member of the Mark Anthony Group of Companies, one of the most diversified and successful private beverage companies focused on the alcohol beverage sector. Founded in 1972, the company grew organically from a one-person wine importing business to a producer and distributor of fine wine, spirits, premium beer and ready to drink brands, including White Claw Hard Seltzer and Mike’s Hard Lemonade.

At IAADFS Summit of the Americas in March, alcohol beverage business Mark Anthony Brands International and Global Travel Retail operators King of Reach by B&S announced a strategic global distribution partnership for its premium Spirits portfolio. The timely partnership comes after Mark Anthony Brands International’s White Claw™ Premium Vodka – the world’s first Triple Wave Filtered™ was launched in the US in spring.

In global travel retail, B&S will represent three brands from the Mark Anthony Brands International portfolio: newly launched White Claw Premium Vodka; luxury Irish gin and Irish whiskey maker Glendalough Distillery; and adventurous super-premium Canadian whisky brand, BEARFACE.

As Mark Anthony Brands International continues the global roll-out of its premium Spirits portfolio, this timing offered the perfect opportunity for its brands to be present with B&S at the TFWA Asia Pacific Exhibition in Singapore. This will also be the case at the TFWA World Exhibition in Cannes.

50 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Advertorial

Glendalough Distillery is an award-winning craft distillery that tells a story of disruptive craft and dedication to taste, creating innovative Irish whiskeys and luxury Irish gins BEARFACE is inspired by the elements, nature and seasonal flavors of Bear Country and brings something strikingly different to the global whisky marketplace

Premium craft and storytelling

For Mark Anthony Brands International, building premium brands with compelling stories that consumers embrace and call their own is paramount. Mark Anthony’s Founder and CEO, Anthony von Mandl, O.C., O.B.C., is a visionary leader and storyteller who has built the company organically with constant innovation, by pioneering new beverage categories and building brands from the ground up — these are the hallmarks of global travel retail.

Meanwhile, B&S brings a wealth of experience in global distribution, including travel retail, with a high-tech platform and supply chain expertise, providing sourcing, warehousing, distribution, marketing and brand development solutions that enhance choice, speed up delivery, drive conversion and increase reach.

Premium GTR portfolio including White Claw Premium Vodka

Mark Anthony Brands International transformed the RTD category with White Claw Hard Seltzer. And now, the company continues that trend with the world’s first Triple Wave Filtered vodka. White Claw Premium Vodka created through this first-of-its-kind filtration process that uses tremendous pressure equal to three 30-foot waves to give it distinctive taste, aroma, and smoothness.

Glendalough Distillery

In 2019 Mark Anthony Brands International acquired Glendalough Distillery.

The award-winning craft distillery tells a story of disruptive craft and dedication to taste, creating innovative Irish whiskeys and luxury Irish gins. Among the distillery’s prestigious awards include Ireland’s Distillery of the Year in 2022 and 2023 at the New York International Spirits Competition.

Mark Anthony Brands International and Glendalough Distillery recently announced the international launch of an elegant new bottle design for Glendalough Irish Gin, created in homage to the wild valley of Glendalough, the fresh botanicals used in the distillation process and the people who make its gins.

O’Sullivan stated, “At Glendalough Distillery, we are passionate about crafting liquids with a profound sense of place, and we aim to capture the purest expression of Glendalough in our luxury Irish gins. We have created a bottle which tells the story of Glendalough Irish Gin and the Irish landscape it is born of so now, not only will the depth of flavour in our gins transport you to the wild beauty of the Wicklow, but our new elegant new bottle will too. We are telling the proud story of this land and its people through this new bottle and showcasing it to the world.”

BEARFACE Whisky

Led by Master Blender Andres Faustinelli, BEARFACE Whisky is an adventurous and daring Canadian whisky, produced using a unique Elemental Aging™ process, in which hand-selected oak casks are aged

in repurposed shipping containers in the Canadian wilderness, exposing them to the elements, with extreme temperature fluctuations amplifying how the whisky and wood interact.

Last year, BEARFACE released the first of its limited Wilderness Series, a series of one-of-a-kind whisky blends. The Matsutake release used rare, foraged Matsutake mushrooms from Bear Country for a unique, umami finish.

BEARFACE is inspired by the elements, nature and seasonal flavours of Bear Country and brings something strikingly different to the global whisky marketplace — something bolder, smoother and wilder to create a whisky the world wishes it could make, but only Canada can.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 51

Glendalough Irish Gin has launched a new bottle design created in homage to the wild valley of Glendalough Next in the line of truly revolutionary products created by Mark Anthony Brands International, White Claw Premium Vodka features a one-of-a-kind Triple Wave filtration system

The new

standard

With over 100 years of craftsmanship and quality, from unsurpassed tobacco-growing land, Oliva Cigars are becoming increasingly well-known globally as a premium hand-rolled luxury item

by WENDY MORLEY

For the Vandermarliere Cigar Family (VCF), 2022 was an “outstanding” year in the travel retail channel, with new listings and locations. For the company’s handmade Oliva cigars, the year was exceptional. “We look forward to continuing to provide premium, handmade cigars to customers around the world. With the commitment to excellence and dedication to crafting the perfect cigar, Oliva Cigars is poised for continued success in the years to come,” says Thomas Gryson, Export Manager and Travel Retail Coordinator at VCF. Growth regions for the company are Asia, Europe, Middle East and Africa.

The playing field has shifted

Shortages of Cuban cigars have been an ongoing issue in recent years. The pandemic exacerbated the problem, with an increase in consumption around the world just as logistics became increasingly difficult. Many cigar enthusiasts and connoisseurs have turned to Oliva and New World cigars in general as a viable alternative, says Gryson. “New World cigars are cigars produced

in countries other than Cuba, such as the Dominican Republic, Nicaragua, Honduras, and others,” he says. “With limited access to Cuban cigars, the increased demand has resulted in a boost to the production and sales of New World cigars, with Nicaragua taking over the lead in terms of export to the US and the rest of the world.”

The absence of Cuban cigars has allowed New World cigars to gain a larger share of the global cigar market. To cater to the growing demand and fill the void, cigar manufacturers in New World countries have invested in improving the quality of their products and focusing on innovation, experimenting with different tobacco blends, fermentation techniques, and aging processes to create unique high-quality cigars that rival the reputation of Cuban cigars. This shift has led to increased competition and a wider variety of cigars available to consumers, especially in duty free locations such as airports, border shops and diplomatic shops.

Shopper engagement and experience

Shopper engagement and experience are increasingly important in the competitive travel retail industry. To create this engagement, VCF considers several strategies.

• Offer personalized and exclusive products: Providing exclusive and personalized products can make customers feel special and increase the likelihood of them making a purchase.

52 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Brand News

With new listings in top travel retail destinations, such as Istanbul’s walk-in humidor, Oliva Cigars has expanded its reach to new customers, while the presence in established locations has only grown stronger Oliva is a renowned name in the world of premium cigars, with a rich heritage and unwavering commitment to quality

• Provide excellent customer service: Training staff to be friendly, helpful, and ensure they are available to answer questions and assist customers. Staff needs to become knowledgeable about VCF cigars, such as understanding how and where they are made

• Use technology: Incorporating technology into the shopping experience, such as QR-codes with information about the cigars, to create a unique and engaging experience for customers

• Cooperation with the retailers and airports to provide comfortable and welcoming spaces: Creating a comfortable and welcoming environment can make shoppers feel at ease and encourage them to stay longer, increasing the likelihood of a purchase

Biggest challenges

Overall, the duty free and travel retail tobacco industry faces a range of challenges, including regulatory restrictions, competition from online sales and decreased demand.

“To remain competitive, companies in this industry may need to adapt their business models and marketing strategies to better

meet the changing needs of consumers,” says Gryson. “Many countries have implemented strict regulations on the sale and marketing of tobacco products. These regulations can limit the availability and visibility of tobacco products in duty free and travel retail environments, which can negatively impact sales. A good example is Amsterdam, with a dark market implemented.”

While e-commerce may not stand out as an important environment for tobacco sales, Gryson says it has become easier for consumers to purchase tobacco products online, often at lower prices than in duty free and travel retail stores. “This has led to increased competition and lower sales for duty free and travel retail tobacco. However, we see more and more countries stopping parcels with tobacco products at the borders.”

He says though there has been a global stabilization in tobacco consumption in recent years, the resultant decreased demand for tobacco products in duty free and travel retail environments has not reached premium cigars, as this is a luxury and niche product.

Restrictions and legislation

The traditional route of advertising cigars is becoming almost impossible in some markets, but Oliva cigars has the advantage of an interesting history and outstanding craftsmanship. Gryson says, “This offers a wonderful opportunity to share information through blog posts, videos, or even social media posts that highlight the history and tradition of cigar-making, as well as the specific techniques and skills involved in producing highquality cigars.”

By sharing this information, cigar brands can not only educate consumers about the product itself, but also build a deeper connection with their audience, says Gryson. “When consumers understand the level of skill and care that goes into making a cigar, they are more likely to appreciate and value the product. Additionally, by building a connection with consumers before they even arrive at the airport, cigar brands can increase the likelihood that these consumers will seek out their products when they do reach the duty free shops.”

Nicaragua: Tobacco, tradition and skill

Oliva is a renowned name in the world of premium cigars, with a rich heritage and unwavering commitment to quality. The increasing popularity of and appreciation for the Nicaraguan cigar is only serving to increase its renown.

“For over a century Oliva Cigars has been committed to crafting the highest quality cigars, and the hard work has paid off in a big way,” says Gryson. “The dedication to perfection is reflected in the premium offerings, which have quickly become a favorite among cigar aficionados worldwide. Oliva Cigars boasts state-of-the-art facilities where the magic unfolds. From seed to smoke, every step of the tobacco cultivation and cigar production process is meticulously executed.”

The fertile volcanic soils of Nicaragua provide the perfect environment for growing tobacco with unique characteristics. “The tobacco leaves are carefully nurtured, meticulously harvested, and skillfully aged to perfection, preserving their distinct flavors and aromas, ensuring an unforgettable smoking experience,” says Gryson.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 53

This is including our limited editions or cigars only available in travel retail Oliva Cigars takes pride in their handcrafted approach, where skilled artisans masterfully transform the tobacco leaves into exquisite cigars. Each roller, with years of experience and a passion for their craft, meticulously constructs cigars with precision and care, paying homage to the artistry passed down through generations Overall, the lack of Cuban cigars in recent years has provided an opportunity for New World cigars to flourish and gain recognition. Manufacturers in countries like the Dominican Republic and Nicaragua, known for their premium cigars, have been able to capture a significant portion of the market previously dominated by Cuban cigars. Here we see the Oliva farm and facility in Condega, Esteli, Nicaragua

A taste of the past and present

double the Welsh company’s total output

by LAURA SHIRK

This month, Penderyn Distillery – also known as The Welsh Whisky Company – will open the doors to its new distillery in Swansea, Wales. Located at the site of the former Hafod-Morfa Copperworks close to the Swansea FC soccer stadium, it is a welcome addition to Penderyn’s portfolio that includes its flagship distillery in Brecon Beacons and its Llandudno Lloyd Street location, which opened in mid-2021.

According to the company, the Hafod-Morfa Copperworks site has been under redevelopment for the last three years and is a main element of the regeneration program of the coastal city’s “historic industrial heartland.” Simon Roffe, Business Development Director, Penderyn Distillery, says having the opportunity to expand business into Swansea has always been a long-term goal and the nature of the site within the community program is representative of the values of the company. The project highlights a collaboration among local business, Swansea City Council, Swansea University and the Welsh government.

Housed in a Grade II listed building, the complex includes a visitor center, shop, tasting bar, exhibition space, offices and VIP area in addition to a cask maturation warehouse. It is expected to attract over 80,000 visitors annually and set to produce around

54 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Brand News

Located at the site of the former Hafod-Morfa Copperworks, Penderyn’s new distillery in Swansea, Wales, is expected to A group shot of the Penderyn team at the new distillery in Swansea The Swansea distillery is set to produce around one million bottles of Welsh single malt whisky each year, doubling Penderyn’s total output A picture of Hafod-Morfa Copperworks in the 1960s; the site of Penderyn’s new distillery in Swansea, Wales, had been lying dormant since copper smelting ceased in 1980

one million bottles of Welsh single malt whisky each year, doubling its total output.

In terms of bringing those experiences to the travel retail community, Roffe says, “As a small brand we invest where and when we can to build awareness. It’s a function of available and affordable opportunities; we’ve learned from our tasting masterclasses, visitor centers [and other brand experiences] that when consumers taste our whiskies first-hand, they truly understand the unique flavors of our spirits. This is no less the case in the travel retail space. We’ve implemented several extremely successful tastings with Dufry UK to promote Penderyn and we will be looking to expand this program with our growing number of travel retail partners.”

Trends and developments

When asked what category plans and business strategies have contributed to Penderyn’s 2023 duty free sales already exceeding those of 2022, Roffe shares from a company perspective it’s clear that business is benefitting from wider distribution and greater brand visibility. He adds from a consumer perspective, it’s apparent that trends centered on shoppers seeking new prod-

ucts, premium and innovative brands and unique brand stories remain strong. The increased spend per head and transaction values reported by retailers reflect this.

“The company is growing quickly with high-profile new businesses in duty free markets around the world such as China, India and North America, as well as driving a stronger platform within its UK travel retail business with World Duty Free. This includes a tasting promotion at London Heathrow Airport, Terminal 3. At TFWA Asia Pacific, Penderyn unveiled product development plans, which will officially launch at TFWA World Exhibition and Conference in October,” says Roffe.

The brand’s GTR exclusive, Penderyn Faraday, will be launched in Cannes in a new 1L format.

Also on the calendar, Penderyn Distillery relaunched its Dragon range 700ml in June, featuring an updated premium bottle and carton, an enhanced logo and eco-friendly packaging.

World whisky category

Considered a pioneer in the fast-growing “world whisky” category, Penderyn has extended distribution to key airport retail locations and developed business in non-aiport channels. The company is currently focused on supporting brand development in core markets and rebuilding the aiport opportunity.

“As ‘Pioneers in World Whisky’ for the last twenty years or so, Penderyn has invested in the category that encompasses exciting whiskies from around the world, while using the airport channel to build awareness of its international market expansion.

“My challenge to the [travel retail] industry is that the ‘world whisky’ opportunity has been small to date, but it’s among the fastest-growing components of the overall whisky category. Other than Japanese whiskies, the travel retail business has yet to fully recognize ‘Les Whiskies du Mondes,’ in terms of merchandising, category focus etc. We and our partner brands in the category are more than happy to support category initiatives,” he comments.

Penderyn is the eighth largest single malt whisky brand in the UK and available in more than 50 countries worldwide. Its established presence in Swansea will be vital in supporting the brand’s future expansion.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 55

The stills are in place and comissioning will start soon; the visitor shop is now open for business In addition to a cask maturation warehouse, the distillery includes a vistor center, shop, tasting bar, exhibition space, offices and VIP area

Proximo rides a

tequila wave

Proximo Spirits gives Global Travel Retail Magazine a run through of its GTR launches so far this year, with more to come as demand for limited editions within its portfolio grows stronger

by ALISON FARRINGTON

Premium tequilas are a key product focus alongside rare and exclusive whiskies for Proximo, as the spirits specialist pushes for a greater share of GTR sales in 2023.

“Super-premium is a major focus for Proximo across our range of tequilas and mezcals in GTR,” says a Proximo spokesperson who adds there is high demand for the company’s leading tequila brands Jose Cuervo, 1800 Tequila, Maestro Dobel Tequila as well as 400 Conejos, the leading mezcal range.

Proximo states the tequila category has been growing in popularity due to more consumers discovering cristalino products. The company is earmarking its Maestro Dobel 50 Cristalino as a key launch this year.

Premiumization

With some high profile retailer collaborations and brand awareness campaigns, Proximo sees the super-premium tequila category as an excellent growth opportunity within GTR.

A major trend in premiumization is being driven by consumers’ propensity towards treat spending for both themselves and as gifts when traveling. According to Proximo “We have seen real con-

sumer demand for our premium tequila brands, with Maestro Dobel tequila being a great example.”

Proximo’s super-premium tequila portfolio is a driving growth factor, and the company has planned a schedule of unique releases across super-premium and luxury lines for the next 18 months.

World of Tequila showcase

The company is investing in rolling out its World of Tequila retail program to further showcase its premium tequila brands together at airports, alongside educational messaging on the growing agave category. Activations have included key airports hubs in the US, Oceania and now Europe.

In June, Proximo launched its World of Tequila program as a high profile activation in Frankfurt and Munich in partnership with Gebr. Heinemann. The company also has plans to expand the activation across Europe in key airports.

For the first time in Europe, Heinemann and Proximo are offering the company’s complete 1800 range alongside its premium Maestro Dobel Diamante and Maestro Dobel 50 Cristalino expressions. Trained ambassadors are on hand to educate travelers across the Proximo collection of brands.

“Our World of Tequila activations allow us to communicate directly with consumers from a tequila category education perspective,” says the company.

“The current activations are an excellent example of giving passengers both education and product trial around super premium tequila expressions including Maestro Dobel 50 Cristalino.”

The future looks bright for Proximo with continued growth of super-premium tequila alongside its Bushmills single malt Irish whiskey offer. This gives travelers premium products as well as exclusive aged products with provenance and authenticity that consumers are actively seeking out.

56 GLOBAL TRAVEL RETAIL MAGAZINE JULY 2023 Brand News

Bushmills 25-Year-Old Single Malt Whiskey launched in GTR earlier this year Proximo’s hero tequila brand Maestro Dobel takes center stage as part of its World of Tequila promotion

Global Travel Retail Magazine Spirits & Tobacco 2023

advertisement removed for legal reasons

advertisement removed for legal reasons

Premiumization and innovation

advertisement removed for legal reasons

WHAT’S INSIDE 10

Top Stories

Features

CATEGORY REPORT

PRODUCTS, RETAILERS & INNOVATION

FACTS & FIGURES

BRAND NEWS

REFRESHINGLY CURIOUS CURIOUS

The time is right

Hainan, ever important

advertisement removed for legal reasons

Premium, rare and unique

Reaching Gen Z

Growing

Beyond Mexico

advertisement removed for legal reasons

Aspirational brand

Trading up

Japanese whisky

Growing markets, post-pandemic

advertisement removed for legal reasons

Spirit of commitment

In

Global Travel

Regional GTR leadership appointments

Australia & New Zealand.

Growth in the channel

World’s Most Ethical

A taste of the city

Travel retail ecosystem

Consistent messaging & omnichannel planning

Trusted name in the game

airport

A social boost

EXPANDING HORIZONS!

definedElegance

THE CIGAR INDUSTRY,

Keeping up with demand

GTR strategy

NON-COMBUSTIBLE REVOLUTION

An enjoyable vaping experience

Global expansion

Communication and regulation

Growing the category

Sustainability

THE #1 SELLING CANADIAN VODKA

Breaking barriers

Easy, fun system

advertisement removed for legal reasons

INDEPENDENT BUT GLOBALLY COMPETITIVE

Innovation and differentiation

Competitive advantage to challenges

Innovation and diversification

Two-brand focus, but more to come

Great expectations

advertisement removed for legal reasons

Downtown concept

Shisha’s flavor innovation era

Expansion strategy

Loyalty activations

Luxe NPDs

Eye to the future

Beyond smoking

New directions

Science-based approach

New insights

Altria’s five-year goals

Solis t Vinh o Barrique

P OWERFU L & COM P LEX

Sips & trips

Top categories

A new dimension

Tobacco rundown

By the numbers

The DISRUPTER and the DISTRIBUTOR