Gulf-Africa MEADFA & MEE Nov 2014 by Paramount Publishing Ltd.

NOVEMBER 2014 MEADFA & MEE • VOL 24, NO 3

MEADFA & MEE 2014

Dubai Duty Free: Bigger & better p.

Cautious optimism for Egypt’s IDF p.

African skies p.

Boutiques de Maputo rises p.

Letter from the Editor

Ahead of the pack

he Middle East continues to be a beacon among emerging markets, both in terms of the aviation industry in general and duty free specifically. The International Air Transport Association’s (IATA) latest numbers indicate that the Middle East was well ahead of the worldwide average in terms of passenger traffic—11.7% growth for the region versus 5.9% for the world—and in a recent speech, Tony Tyler, the organization’s Director General and CEO, highlighted the region as exemplary of the way in which governments should work together with the aviation industry. From the airport perspective, Airports Council International (ACI) also reports robust growth for the Middle East during the month of August. ACI also made specific mention of Dubai World Central upon announcing its August statistics, noting that the airport is poised to trump all others when it comes to freight and passenger capacity. All of this bodes well for duty free in the region, but what are operators doing to capitalize on the strong passenger traffic growth? In this issue you’ll hear from many of the major retail players in the region on how they’re continuing to entice travelers to purchase at their stores. Dubai Duty Free, fresh from regaining the title of the world’s single biggest airport retailer, has plans well into 2015 for new store space. Even farther down the road, the operator is looking forward to Expo 2020 and the boost it will provide, not only to Dubai’s already strong passenger numbers, but also to the operator’s sales. In the more immediate future, the Dubai Duty Free is preparing for its famous anniversary celebrations and coinciding sale extravaganza. Also preparing to open new stores is ATU Duty Free. The company has proven its merit with unique offerings in Turkey, Tunisia, Latvia and Saudi Arabia, and it will soon open over 5,000 square meters of selling space in a number of Tunisian airports as part of a consortium that includes Gebr. Heinemann SE & Co. KG and Hamila Duty Free. You can read all about the above new developments in this issue of Gulf-Africa Duty Free, in addition to much more on operators across the region. And of course, to some extent retailers are only as good as the products they sell, and we’ve got plenty of news on the suppliers that are keeping travel retail in the region on the cutting edge with new products, duty free-tailored promotions and much more. I hope you enjoy our 2014 MEADFA issue and I urge you to get the most from this important conference for travel retail in the region. Kindest Regards,

Gulf-Africa Duty Free & Travel Retailing (ISSN 0954-0592) is published four times a year (Spring, Fall and Winter) by Global Marketing Company Ltd., 26 Pearl Street, Mississuaga, Ontario L5M 1X2 Canada. It is distributed to duty free operators and distributors in the following countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE, Yemen, Algeria, Azerbaijan, Benin, Cameroon, Cape Verde, Djibouti, Egypt, Ethiopia, Gabon, Ghana, Guinea, Iran, Ivory Coast, Jordan, Kenya, Lebanon, Madagascar, Malawi, Mali, Mauritius, Morocco, Mozambique, Niger, Nigeria, Namibia, Pakistan, Reunion, Senegal, Seychelles, South Africa, Sudan, Syria, Tanzania, Togo, Tunisia, Turkey, Turkmenistan, Uzbekistan and Zaire, as well as to duty free suppliers worldwide. Subscriptions: $200 for one year, $300 for two years and $400 for three years. Art and photographs will not be returned unless accompanied by return postage. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor. November 2014, Vol. 24, No.3. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2014 Global Marketing Company Ltd.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING 26 Pearl Street Mississauga, Ontario L5M 1X2 Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemagazine.ca PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@dutyfreemagazine.ca EDITOR Wendy Morley wendy@dutyfreemagazine.ca ASSOCIATE EDITOR Ryan White ryan@globalmarketingcom.ca OVERSEAS CORRESPONDENT Claire Malcolm claire@dutyfreemagazine.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca CONTRIBUTORS Faye Bartle

ADVERTISING SALES ADVERTISING & MARKETING EXECUTIVE Jacqueline Hammill jacqueline@dutyfreemagazine.ca CIRCULATION & SUBSCRIPTION MANAGER Monica Kucharski monica@globalmarketingcom.ca

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

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

Introducing

Wood Sage & Sea S alt The Joyful New Scent

NOVEMBER 2014 • VOL 24, NO 3

Contents

12 Lucky number five

34 Double time

14 Further, faster, bigger, better

38 African skies

18 Stand and deliver

40 Nation on the rise

24 Upwardly mobile

44 Upping the ante

ATU DUTY FREE

ATU Duty Free wins tender to operate duty free stores at five more international airports in Tunisia

DUBAI DUTY FREE

From new store space and preparations for its upcoming anniversary to yet another honor for Executive Vice Chairman Colm McLoughlin, Dubai Duty Free continues its upward trajectory

BAHRAIN DUTY FREE

Fadi Allam, General Manager at Bahrain Duty Free, tells Gulf-Africa Duty Free that delivering excellent service is the basis for all of the company’s many new projects happening this year

SAUDI DUTY FREE

Traffic to Jeddah’s King Abdul Aziz International Airport is on the rise and Saudi Duty Free is well placed to meet the needs of travelers to the Kingdom

26 Exceeding expectations MMI

From its customer service and product selection to its sales performance and future prospects, Le Clos Finest Wines & Luxury Spirits goes above and beyond

28 Forging ahead

CAIRO AIRPORT DUTY FREE

Cairo Airport Duty Free continues investing in its business on the road toward improving passenger traffic and sales

32 Cautious optimism the

INTERNATIONAL DUTY FREE TRADING & AGENCIES

2015 mantra for IDF

Recovery for Egypt’s beleaguered tourism and duty free sectors appears to be finally turning a corner with the latest government data showing an uptick in arrivals

ABU DHABI AIRPORTS

Not only is traffic to Abu Dhabi Airport increasing, but a number of new stores also ensure that travelers will have ample choice when visiting the emirate

TOURVEST

After an in-depth tendering process, Tourvest Inflight Retail Services regains its contract with Kenya Airways

BOUTIQUES DE MAPUTO

Mozambique’s economic future has never looked brighter and Boutiques de Maputo is also looking at new opportunities to expand its duty free concept outside of airport boundaries

QATAR DUTY FREE

Qatar Duty Free’s new retail space at Hamad International Airport brings new meaning to the word “luxury”

48 Breaking the mold

QUEEN ALIA INTERNATIONAL AIRPORT

In less than two years of operation, Queen Alia International Airport’s new terminal has racked up an impressive list of accomplishments, and operator AIG says things are just getting started

only private duty52 Egypt’s free operator keen to OVERSEAS DUTY FREE2

raise regional profile

Overseas Duty Free2 is relying on its duo of successful Red Sea locations and unique positioning to act as a launch pad for future Middle East expansion

growth story 54 Dubai dominates MEADFA MEADFA

Conference 2014 agenda Retail opportunities presented by destination’s ambitious tourism targets and DWC expansion to be hotly debated

58 A showcase for the region

84 MITR ups the ante

60 The growth path

World ambitions 85 New for Old World favorite

MIDDLE EAST EXCLUSIVE

Retail buyers and traders to attend Dubai’s international Middle East Exclusive exhibition

IATA

The Middle East makes news as a region to watch according to recent statistics from the International Air Transport Association

sunglasses 64 Putting on a pedestal

MARS INTERNATIONAL TRAVEL RETAIL

The chocolate powerhouse pulls out all the stops with yet more fun-filled in-store promotions

RITTER SPORT

Colorful German chocolate brand, Ritter Sport, is aiming big in 2015 with plans to take its travel retail range to the Americas

LUXOTTICA

Enhanced airport facilities in the Middle East are providing a unique platform to support Luxottica’s vision of positioning travel retail as expert channel for eyewear sales

exclusives 66 Fragrance pay dividends for AJMAL PERFUMES

Ajmal Perfumes

Limited edition lines and private labels drive firm’s travel retail sales growth

ME growth 70 Ambitious plan for Perfume Holding PERFUME HOLDING

Fragrance firm opens new Dubai office to support 2015 expansion strategy

74 “A sense of freedom” COACH INTERNATIONAL

Coach’s brand values align with the mindset of travelers while at the same time staying true to what made the brand successful in the domestic channel

76 Building on a heritage brand AIGNER

Aigner grows its business in the Middle East with an impressive collection of quality leather items

digit potential 78 Double prompts Middle PUIG

East investment

The scent of commercial success is extra sweet for Puig this year as the Barcelona-born fashion and fragrance house celebrates regional growth and 100 years of business

Travel 82 International Retail’s path to success

88 Calling all chocolate lovers GODIVA

Godiva’s exquisite new chocolate counter concept – Chocology – makes its tasty way into the Middle East

96 Whisky, redefined DIAGEO

When the world’s largest liquor company, the world’s most renowned football player and one of the world’s greatest impresarios create a product together, the category will never be the same

98 Everyone knows how to flirt VINPROM PESHTERA

With its Flirt vodka line, Vinprom Peshtera is appealing to the young, hip traveler in markets around the world

100 Strong brands, bright future GULF BEVERAGES

A combination of new brands and exciting launches with its current brands leaves Gulf Beverages in an enviable position

102 Double down PERNOD RICARD

Recognizing its strengths in the Gulf region, Pernod Ricard will be launching two new Chivas Regal products in the space of just a few months

104 A place of their own

JAPAN TOBACCO INTERNATIONAL

In most circumstances, smokers easily respond to nonsmoking spaces by going outside, but in airports that is not so easy

106 Categorically important BRITISH AMERICAN TOBACCO

British American Tobacco International recently contracted Counter Intelligence Retail consultants to gain insight on the Western European and Middle Eastern tobacco buyer in the duty free channel

INTERNATIONAL TRAVEL RETAIL

Lebanon’s International Travel Retail continues to grow from the ground up with a trio of new launches and plans to open in a new market in 2015

celebrates 30 years 108 TFWA and continues to grow TFWA WE REVIEW

A record number of attendees flock to Cannes for TFWA’s 30th World Exhibition

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

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

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

They sell as good as they taste

ATU Duty Free

Lucky number

ATU Duty Free’s existing operations; the operator has just won a tender to operate over 5,000 square meters of new stores in a number of Tunisian airports

FIVE

TU Duty Free has announced that the consortium between ATU Duty Free, Gebr. Heinemann SE & Co. KG and Hamila Duty Free has been awarded the tender to operate the duty free shops at the five Tunisian international airports: Tunis‐Carthage, Djerba‐ Zarzis, Sfax‐Thyna, Tozeur‐Nefta and Tabarka‐Ain Draham. The consortium won the tender for an operating period of 8 years, 2 months with an offer of €32 million (US$40.8 million), starting November 2014. The total shop area amounts to 5,406 square meters and served 8 million passengers last year. The tender itself was organized through a competitive bidding procedure, including a prequalification stage. In securing this important win, the consortium faced strong competition from global duty free operators, including Dufry, Lagardere, World Duty Free Group, Aer Rianta and Flemingo. ‘’Winning this tender is very important to us,” said ATU Duty Free General Manager Ersan Arcan. “It marks a major expansion of our operational network in Tunisia, which started in 2009. I believe a key feature of our success was the strength of the consortium itself. We combined with Gebr. Heinemann SE & Co. KG, which is the largest duty free retailer and supplier in Europe, who took the lead in the bid. We also had the opportunity to benefit from valuable insight and support from our other partner, Hamila Duty Free, a strong Tunisian duty operator. “Serving 8 million passengers in 2013,

ATU Duty Free wins tender to operate duty free stores at five more international airports in Tunisia by RYAN WHITE

these airports will be very important operation points for us,” he continues. “Aviation and tourism is making rapid progress in Tunisia and the potential for further growth will help fuel our future success. Our new Tunisian operation will open the gate of Africa to us, where we believe there are genuine opportunities to increase the scope and scale of our business. “Airports are generally the first point of contact with visitors to any country,” Arcan noted. “It is part of our business culture to offer our customers the best welcome possible. Whether in Tunisia or the six other countries where we operate, our main aim is always to create real added value by delivering the best international retail standards as well as featuring and supporting local culture.” Arcan also emphasized the importance of continually improving the product range. “Providing customer satisfaction is key to us. We aim to offer famous global brands at the best possible prices. Given our strong supply chain and logistics, our intention is to deliver a wide and diverse range of brands to the Tunisian duty free marketplace,” he said. “We are also very proud to continue the process of creating a new generation of jobs for the industry.” Gebr. Heinemann is a leader in the global travel retail market. Founded in 1879, the company is based in Hamburg, Germany. Today,

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Heinemann is, uniquely, a fourth generation family business. With a turnover in excess of €2 billion (US$2.5 billion), the company has 74 subsidiaries and holding companies in 37 countries. Hamila, a Public Limited Company, was founded in 1983. The company is one of the first companies active in the duty free sector in North Africa. With 30 years of expertise, the company covers a large set of duty free premium services such as downtown diplomatic sales, duty free onboard airlines and ferries, and duty free sales in seaports and airports. 

Dubai Duty Free

Further, faster,

bigger, better

“Since December 10, 1983 DDF has grown from a relatively small start-up to being the single largest airport retailer in the world, and one that is on target to record US$1.9 billion in sales this year compared with just US$20 million in year one.” COLM MCLOUGHLIN, EXECUTIVE VICE CHAIRMAN, DUBAI DUTY FREE

RYAN WHITE

s the year nears its end, Dubai Duty Free (DDF) isn’t slowing down in the least. The operator, which in 2013 recorded sales of US$1.8 billion to make it the world’s single largest airport retail operation for the fourth time, is currently preparing to open more store space at Dubai International (DXB), seeing good performance in its stores at Al Maktoum International (AMI) and readying not only for its upcoming anniversary celebrations, but also for Expo 2020. Furthermore, DDF’s Executive ice Chairman Colm McLoughlin has been named a recipient of the Irish Presidential Distinguished Service Awards 2014, underscoring his and the operation’s significant contribution not only to duty free, but also to the world of business in general. Needless to say, things are busy, but DDF, an operation that accounts for nearly 3% of global duty free and travel retail sales and 5.19% of the worldwide airport duty free business, wouldn’t have it any other way. “Our retail operation at DXB, which currently measures 26,000 square meters, will expand by a further 7,000 square meters with the opening of Concourse D in 2015,” says Colm McLoughlin, Executive Vice Chairman at DDF. “In its entirety, the new concourse covers some 65,000 square

Dubai Duty Free is currently planning for its 31st anniversary celebrations; pictured is Concourse C during the 30th anniversary sale

From new store space and preparations for its upcoming anniversary to yet another honor for Executive Vice Chairman Colm McLoughlin, Dubai Duty Free continues its upward trajectory

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

meters and will be the home of more than 100 airlines that currently operate from DXB’s Terminal 1, Concourse C. The new building will be linked to Terminal 1 via an elevated train.” Concourse D is designed around a central atrium, as opposed to the long linear structures of the nearby concourses. As a result, the overall design is very bright and spacious with a number of interesting architectural features. There is “open gate” boarding for passengers so traditional holding areas will not exist and passengers will be able to board their flights directly from the gate. The DDF offer will be located within the central atrium, along with the food and beverage outlets, making it a very vibrant and dynamic environment that is easily accessible for all passengers. Indeed, the furthest gate is only a ten-minute walk away. “We are excited about the retail offer in Concourse D and there will be a number of new retail offers, but it is probably too early to talk about them at this stage,” McLoughlin adds.

Still growing

AMI opened on October 27th last year and we’re told that to date DDF has had very positive feedback. The new airport will increase the number of airlines it serves in due course, but from a retail point of view, the operator has 2,500 square meters of space and the product listing there is working for the passenger mix, McLoughlin says, but as always DDF will continue to monitor the situation and make adjustments as necessary. The operations at AMI have recorded sales of over US$15.5 million year to date, accounting for 1.2% of total DDF revenue so far in 2014. The long term plans for AMI at Dubai World Central (DWC) are certainly exciting, and a recent announcement confirmed that the project will be carried out in two phases. The first phase involves the construction of two satellite buildings with a collective capacity of 120 million passengers annually, accommodating 100 A380 aircraft at any one time. This phase will take between six to eight years to complete and will cost US$32 billion. When the initiative is complete by

GODIVA’S CONTEMPORARY REFINEMENT IN a special gift With a Belgian heritage dating back to 1926, Godiva Chocolatier is the global leader in premium chocolate. This legendary name is the reference for signature recipes such as the delicious praliné still made in-house by the talented Chefs chocolatier. This year Godiva reinforces its heritage by introducing a new Limited Edition, Création Pralinés. This travel retail exclusive sets the gold standards with a new interpretation of the worldwide loved praliné. With four indulgent flavours, this new chocolate selection calls all the senses thanks to a high quality of the ingredients used, offering a full chocolate sensation.

Dubai Duty Free the mid 2020s, DDF will have around 40,000 square meters of store space at DWC.

Big things coming

Of course, DDF celebrates its anniversary every December with a huge sale across its operations. Indeed, the annual event has become so famous that many even plan their travel around it so as to take advantage of the savings. As part of its 31st anniversary celebrations, DDF will ensure a party-like atmosphere throughout the retail operation on the day. Plans are in place to conduct a Millennium Millionaire draw, a Finest Surprise Luxury Car draw and a series of other promotional activities that will involve both travelers and staff. “Since December 20, 1983 DDF has grown from being a relatively small start up to being the single largest airport retailer in the world, and one on target to record US$1.9 billion in sales this year compared with just US$20 million in year one. We are owned by the Government of Dubai and have been given great encouragement to run our business successfully. My own boss, H.H. Sheikh Ahmed bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority and Chairman of DDF, is a terrific role model, and a great supporter of our operation,” McLoughlin tells us. Of course, in talking about highly anticipated upcoming events, it’s hard to forget Expo 2020. The event is set to increase traffic to the Emirate significantly, says McLoughlin: “The fact that Expo 2020 will attract an additional 25 million passengers in its six-month span is very exciting for all of us, and for Dubai Duty Free in particular it means that we will have the opportunity to attract more customers passing through the two airports,” he explains. “By that time, it is expected that phase one at Al Maktoum International will be well underway, while DXB will be in full operational mode. There are really great prospects ahead for the whole of the UAE as a result of Expo 2020.”

contribution to Irish business and communities abroad. The Presidential Distinguished Service Awards were introduced by the Irish government in 2012 with the aim of recognizing persons living abroad who have given sustained and distinguished service in key areas such as business, education, community, arts and culture, sport, charitable works and peace. Colm McLoughlin has been nominated in the category of Business and Education, while his support of the Irish community in the UAE is also acknowledged. The ten recipients of the 2014 awards were announced yesterday by Minister for

Dubai Duty Free’s shopping area at Al Maktoum International at Dubai World Central

Deserving of the honor

DDF’s influence reaches far and wide, as does that of Colm McLoughlin, who has been with the company since the very beginning and in the 31 years since has become the face of the operation. McLoughlin has been named as a recipient of the Irish Presidential Distinguished Service Awards 2014 for the Irish abroad, making him one of a select group of people, and the first Irish person living in the UAE, to be recognized by the Irish government for his outstanding 16

Dubai International’s new Concourse D, where Dubai Duty Free is opening 7,000 square meters of new store space

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Foreign Affairs, Charlie Flanagan T.D., who is on an official visit to the US. Minister Flanagan noted: “We owe a huge debt of gratitude to these remarkable people for what they have individually contributed to Ireland, to the Irish abroad and our international reputation.” Following the news of his nomination, McLoughlin said: “I am absolutely thrilled and honored to be selected for this award. Although it is designated as a personal award, I recognize that it belongs equally to many Irish people in the UAE, both past and present, who have supported the Irish community here. I am also delighted that the UAE is being recognized in this way.” 

A NEW DAY IS DAWNING

Faster

Smarter

Partner

Contact Joe Harvey T:+44 (0)1293 772 711 M:+44 (0)7557 922 609 joe.harvey@tourvestretail.com www.tourvestinflightretail.com

Bahrain Duty Free

Promotions are important elements of Bahrain Duty Free’s business strategy

Stand and deliver by

Fadi Allam, General Manager at Bahrain Duty Free, tells GulfAfrica Duty Free that delivering excellent service is the basis for all of the company’s many new projects happening this year

arlier this year, Bahrain Duty Free (BDF) completely redesigned its 185-square meter arrivals store, enlarging areas that were performing particularly well as a means of increasing sales to passengers arriving to the kingdom. Fadi

Allam, General Manager at BDF, tells us that research into customer behavior informed the operator’s decisions when renovating. “Our approach was a simple one that took into account the fact that arriving passengers are keen to shop but do not want to spend a whole lot of time doing so; they want to get their baggage and get home to see their loved ones, or begin their getaway to Bahrain,” he explained. “From speaking to customers we understood that they wanted simplicity and speed as part of their shopping experience.” As a result of the above feedback, the operator focused on a category management approach for wine and spirits, one of its most popular categories. The response over the last eight months, says Allam, has been

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

RYAN WHITE

positive, with sales increasing at a strong rate. “We believe we’ve succeeded in making the customer experience better,” says Allam.

More to come

BDF took the learnings from the recent renovations and put them to good use when it opened a new 465-square-meter luxury store in October. The shop offers a number of new fashion brands for the operator, including Ralph Lauren, Lacoste, Lanvin, Fendi, Villebrequin and others. “This is exciting for us as we believe it will raise the bar in terms of the customer experience and will allow us to offer our customer access to the brands they have been seeking,” Allam says of the new store. “It will also give additional exposure to our

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Bahrain Duty Free sunglass offering, which has shown strong growth since April 2013.”

Growing potential

With passenger traffic to Bahrain International Airport increasing—partly as the result of new strong-performing routes to Iran, Iraq and Saudi Arabia—BDF is taking the opportunity to ensuring that travelers are enticed to shop through engaging promotional activity. At press time the operator was finalizing its promotional campaign for the holiday season, and Allam notes that expectations are high. “We believe our end of year promotion will be another exciting event for us,” he says. “Our promotions are normally focused on increasing average transaction spend while at the same time offering our customers a chance to share in significant prizes. “Given our experience with past promotional campaigns we aim to create a sense of theatre in the store, which not only has a great impact on sales but also relieves the boredom of travel for passengers through

Bahrain International Airport,” continues Allam. “It’s also fun for our staff, who we specially train on how to best perform on these promotional concepts.”

Thinking long term

While new routes are contributing to growth, Bahrain International Airport’s biggest routes are established ones such as Dubai, Abu Dhabi and Qatar. The airport’s largest group of passengers are heading for the Indian Subcontinent, as well as travelling within the GCC region. The airport’s passenger profile has changed somewhat over the past few months, with an increase in passenger traffic being noted as the result of additional efforts being made by national carrier Gulf Air. Over the longer term, the airport is preparing for further growth, and BDF is ensuring that it is ready. The operator is currently in the advanced planning phase for a refit of its main departures outlet totaling over 2,300 square meters. Given the popularity of the Perfume category, this section of the

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

“Within the region in general the quality of service being offered to customers is extremely strong, and we intend to ensure that we continue to enhance our customer service.” FADI ALLAM, GENERAL MANAGER, BAHRAIN DUTY FREE

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Bahrain Duty Free

The Fragrances and Cosmetics offer at Bahrain Duty Free

operation will be allotted more space. “We have some new concepts in mind for our customers,” says Allam. As part of the renovations the operator is also focused on creating a sense of place for travelers, as well as developing dedicated spaces for promotional activities. “We are excited about the prospect of what we can achieve,” says Allam. “We expect that the renovations will be complete toward the end of 2015.”

Ensuring excellence

“Our biggest challenge is, and will always be, continuing to improve in terms of our customer service performance,” Allam tells us.

“The feedback we receive from customers is great, and from that feedback we know that they are extremely happy with the service we offer. However, within the region in general the quality of service being offered to customers is extremely strong, and we intend to ensure that we continue to enhance our customer service.” In order to manage high expectations on the part of travelers that have become accustomed to the high level of service in the Middle East, BDF focuses heavily on staff training. The operator also ensures that it’s getting regular feedback from shoppers and taking quick action to ensure customer service excellence.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Another initiative that is sure to help increase customer satisfaction is BDF’s newly automated Shop & Collect service. “We have a lot of passengers travelling for short periods within the GCC region,” Allam says. “Our Shop & Collect system is now extremely easy to use and takes no more than 20-30 seconds at the point of purchase.” The service allows travelers to purchase duty free and then collect their purchase at the gate, allowing them to move through the airport unencumbered until boarding. Allam notes that about half of all shoppers are now using the service, with BDF keeping regular tabs on their experiences to ensure that the service is as convenient as possible. Finally, BDF is also planning on launching a loyalty card before the end of the year, effectively adding a new dimension to its focus on customer service. “For Bahrain Duty Free, keeping in regular contact with our customers and really listening to what they want is of the utmost importance,” Allam concludes. “Delivering excellent customer service is about listening and then making sure you deliver on what your clients want.” 

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Saudi Duty Free

UPWARDLY

MOBILE

Traffic to Jeddah’s King Abdul Aziz International Airport is on the rise and Saudi Duty Free is well placed to meet the needs of travelers to the Kingdom by

RYAN WHITE

A recent M&M’s promotion at Saudi Duty Free

Saudi Duty Free’s operations in Jeddah

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

audi Duty Free began operations in 2013 to cater to the retail shopping needs of passengers passing through Jeddah’s King Abdul Aziz International Airport (KAIA). The first duty free shop launched in April 2013 and is located at the South Terminal of KAIA, dedicated to national carrier Saudia. The second shop was opened in the airport’s North Terminal, which is used by foreign carriers. Together the shops span over 3,500 square meters. The project is a cooperative initiative between Saudi Arabia’s Al Musbah Group and World Duty Free Group (WDFG). Both of the walkthrough stores have been fitted out to cater to the unique passenger profile of the airport, with 13 product categories available including cosmetics, food and confectionery, watches and accessories, toys, electronics, mobile phones and gold. “The shops were designed by Indesign— travel retail experts based in Spain—in consultation with the technical team of WDFG,” says Irshad A. Cader, Executive Director, Al Musbah Group. “In addition, WDFG led the technical team that designed the shop floor in line with the latest trends. As such, the shops have made a huge impact in the region.”

Spend trends

Customers sampling dates at Saudi Duty Free during the Kingdom’s National Day

Passengers from Egypt, the GCC and the Asian subcontinent top the list of Saudi Duty Free’s best customers, and Cader says that the business has performed well since its inception: “We are happy to say that we have experienced an increase in sales turnover at Saudi Duty Free in spite of the sociopolitical situation in the region,” he explains. “We believe that Saudi Duty Free is well on its way to becoming an integral part of the Kingdom’s burgeoning travel industry.” Specifically, this year’s Hajj and Umra seasons have been exceptionally good to Saudi Duty Free. The operator saw a 20% year-over-year growth in both of its shops. Further good news is that in addition to the overall rise in sales, spend per head has also increased significantly.

On the rise

A recent Harley Davidson giveaway in conjunction with Mancera

Something for everyone

Cader tells Gulf-Africa Duty Free that currently Saudi Duty Free’s bestselling categories are Beauty & Fragrance, Confectionery and Electronics. Within those categories, some top-selling brands are Dior, Giorgio Armani, YSL, Gucci and Givenchy; Nido and Tang; and Samsung and Apple. Despite having only opened last year, Saudi Duty Free is making sure that it is on the cutting edge of retailing by constantly upgrading its stores. Boutiques have been added that feature the likes of Tag Heuer, Ferragamo, Swarovski, Frey Wille, Samsonite and Delsey. Furthermore, special promotions are currently being planned for the holiday season which feature names such as Calvin Klein, Boss and M&Ms. There are even giveaways planned in conjunction with Harley Davidson and Mini Cooper. “Our past promotions have proven successful,” Cader says. “One of the more

memorable activations featured Harley Davidson giveaway in conjunction with Mancera as well as a number of other very special gifts.” In terms of other products on offer, Cader tells us that the shops will have a special area called Thinking Saudia, which is dedicated to local food such as dates, nuts and souvenirs. The area has Arabic-style furniture and a decorated palm tree for an authentic ambience. And in terms of offering a variety of products to passengers, Cader points out that all major brands in every category are present. “The categories are well marked so that when passengers walk through the store it is easy for them to differentiate between product types,” Cader explains. “In addition, there is clever lighting for good visibility— all in all they are first-class examples of duty free stores.”

Despite sociopolitical tensions in pockets of the region, Saudi Arabia is up and coming as a destination. The last decade or so saw passenger numbers at KKIA increase by over 60% and in 2011—the latest statistics available from the Kingdom of Saudi Arabia’s General Authority of Civil Aviation—the airport welcomed nearly 15 million passengers. While domestic and international traffic are essentially evenly split, the latter has risen substantially in recent years. To help cater to passengers, Saudia this year opened the Al Fursan lounge in the domestic terminal of KKIA. The new lounge is located on the mezzanine level and measures 1,200 square meters with a capacity of about 220 guests. The new lounge features modern facilities and services, including a hospitality area and a full business center. The lounge is also equipped with a prayer room and a special area for smoking. For Saudi Duty Free’s part, Cader tells us that the operator’s focus on customer service aligns nicely with that of the airline. “Customer satisfaction is our main priority. We always strive to reach the utmost in customer satisfaction at all our stores. “We have the best staff along with strong commercial and operational support to help us achieve our goals,” he concludes. “Furthermore, our marketing and communications team is always geared to design and implement regular and seasonal offers. In the end, it’s all about serving the passengers, and given rising traffic at the airport, we’re pleased to say that month after month we have the opportunity to serve more and more clients.” 

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

MMI

Exceeding F expectations by

RYAN WHITE

From its customer service and product selection to its sales performance and future prospects, Le Clos Finest Wines & Luxury Spirits goes above and beyond The limited edition Les Réserves Grand Siècle from LaurentPerrier is available for the first time in travel retail through Le Clos

or many, duty free is about value for money. For others it’s about luxury. While it may at first appear that these two traits contradict each other, a skilled retailer can indeed offer both. Gulf-Africa Duty Free speaks with Ben Odgers, General Manager of MMI-owned Le Clos Finest Wines & Luxury Spirits, to discuss the company’s booming business in Dubai International Airport and how it continues to make sure it has something for everyone, from the world-traveling connoisseur to the vacationer that just wants to bring home a quality bottle of wine at an attractive price. Gulf-Africa Duty Free: How have sales been so far this year? Ben Odgers, General Manager, Le Clos: In July this year we achieved record sales, after smashing our travel retail record for a single transaction by 5%. A single sale of AED 407,000 (US$110,807) included several of our finest whiskies available—the limited edition Macallan in Lalique 62 Year Old, Highland Park 50 Year Old and Balvenie 40 Year Old. Records such as these not only highlight our world-class portfolio, created through trusted partnerships forged and nurtured with international wine and spirits producers, but also our exceptional customer service developed for the ever changing global consumer. We have some incredibly high-end products available, such as a Chateau Margaux 2009 Balthazar and Opus One, right the way through the spectrum to fantastic wines starting at USD $28 from both the Old World and New World, which we see a great level of interest in. GADF: What are some of your bestsellers? BO: Le Clos houses more than 1,000 wines and 500 spirits from all over the globe. Wthin our wine portfolio, although the most successful wine region is Bordeaux, we are seeing strong sales growth from other regions including Burgundy, Italy, California and in particular, the Napa Valley, such as wines across the Ridge portfolio, Heitz Cellars and the iconic Opus One. In addition to this, whilst proactively researching feedback from our customers and based on the level of interest we receive for our existing New World wines, we are always working on enhancing our portfolio. Not only do we want to help our customers broaden their wine experience in this category, but we see great opportunity in

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Australian wine. We are looking to do this with an invigorated range that includes a number of Australia’s most recognized and awarded brands such as Clarendon Hills, Chris Ringland and Jeffrey Grosset, as well as championing what we believe will be the icons of tomorrow, including William Downie and The Jamsheed. We are seeing continued interest and excitement for brands with a rich history and provenance and we are experiencing regular and consistent sales of our older aged segment, with products aged 40 years or more driving this. We have a strong whisky portfolio, including a world leading collection of The Macallan whisky, which receives a lot of interest from our global customers and in particular from China. We believe that our spirits portfolio will see continued interest as global demand increases and there will be an increasing focus on the boutique and unique, with cognoscenti searching out rare items with a real story attached like Cognac Croizet Cuvee Leonie 1858, favored by Winston Churchill and General Eisenhower. We are also seeing a trend towards Japanese whiskey, as consumers are becoming increasingly aware of its quality and unique story. We currently have a great selection of Japanese whisky from the more well-known brands such as Nikka to the more boutique producers such as Karuizawa. GADF: Which nationalities are purchasing the most and which trends are you noticing in terms of purchasing habits? BO: Situated at the crossroads of the world, we ensure that everything we do is relevant to our customers, including those from our key markets of China, Russia, UK and the US. Currently our leading consumer markets are China and Russia and we have experienced a lot of activity from customers traveling through Dubai. Incidentally, Dubai is climbing up the list as a preferred tourist destination amongst high net worth individuals from China, according to the Hurun Report 2014, and is now at number three. We also see South America as an emerging market and it is currently in growth. With this in mind and given that we are situated in a global hub, we have seen consistent growth alongside an ever changing consumer climate. This means that the kind of travelers influencing high-end wine sales is dynamic, which is great, as everyone is a potential customer to us. We look to capture

their attention with both the iconic and the bespoke brands we have in-store. GADF: Have you run any promotions lately? How are you providing value for your clients? BO: We constantly strive to offer value to our customers and regularly deliver promotions that we know create great excitement, such as Gruaud Larose 2004, which was on promotion at US$100 for two bottles last month, as well as Cloudy Bay Pinot Noir, which is priced at US$35 this month. We also pride ourselves on the ability to offer our customers special access to rare collections. We currently have a Clarendon Hills set available for US$525, which includes Astralis 2010, a wine that received 100 points from Robert Parker. From the acclaimed Japanese whisky distillery Nikka, we have the Nikka Collection retailing for US$826 in a beautifully presented boxed set of six bottles and unique glassware, which illustrates the full palette of whisky styles as well as offers a different expression for every occasion or palate preference. GADF: Has Le CLos listed any new products recently? BO: Earlier this year, we announced that we were offering the limited edition Les Réserves Grand Siècle from Laurent-Perrier, available for the first time in travel retail. The Prestige Cuvée is a blend of wines from three of Laurent-Perrier’s “vintages of the century”: 1995, 1993 and 1990. The Magnum is priced at AED 8,000 (US$2,220) and a Jeroboam for AED 20,000 (US$5,555). We also announced that we are retailing The Macallan in Lalique 62 Years Old “The Spiritual Home” edition, priced at AED 100,000 (US$28,000). It is the fifth and penultimate decanter to be released from the global sellout series, The Macallan in Lalique Six Pillar Collection. The partnership we have with The Macallan is exceptionally strong and one of which we are very proud, as we have the most extensive collection in the world.

Le Clos’ flagship store in Concourse A, Terminal 3 of Dubai International Airport

Macallan 62 yo in Lalique was part of a record-breaking single sale valued at US$110,807 at Le Clos in July

GADF: Are there any renovations planned in the near future? BO: As part of the MMI-ELR retail and food & beverage offering in the new Concourse D at Dubai International, we are opening our sixth airport store at the beginning of 2015 which will encapsulate our core values of customer interaction and engagement first and foremost. We will continue to push our groundbreaking and award-winning concept even further, raising the bar within travel retail with our world class product offering and high level of customer service, and we will continue exceeding expectations. 

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

Cairo Airports Duty Free Preparing for improved business down the line, CADF recently renovated its perfumes shop, doubling the store’s size

Forging ahead by

Sales are down in 2014 over 2013, but those who are buying are likely to be purchasing supermarket items such as cigarettes, alcohol and confectionary

airo Airports Duty Free (CADF) has certainly weathered its share of storms over the last few years given the much-publicized sociopolitical instability in Egypt and the resultant drop in passenger traffic to Cairo International Airport. The operator’s most recent sales statistics (January to September) indicate a drop of 9.2% over the same period in 2013, while international passenger traffic to Terminals 1 and 3 dropped 2.0% for the same period as compared to last year. “The stability of the political situation, which is reflected positively in the local market, does not have the same impact on

WENDY MORLEY

Cairo Airports Duty Free continues investing in its business on the road toward improving passenger traffic and sales

duty free,” notes Nadia Rashad, Country Manager. “We are suffering from a decrease in sales due to a drop in not only the number of passengers but also in their power of purchase.” For the travelers that are purchasing, Rashad tells us that supermarket items such as cigarettes, alcohol and confectionery; perfumes and cosmetics; and electronics—travel accessories specifically—are the best-selling categories. In terms of brands, Philip Morris, Hennessey, Chanel, Dior and Lancôme are making their mark at the top of the sales books. Of course, CADF is serving different clientele between the T1 and T3 shops. In T3,

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

most people shopping at the operator’s stores are European, while the traveler makeup in T1 is mostly Middle Eastern.

Picking up on trends

Having a keen eye for trends and capitalizing on what’s popular is arguably more important in tough times than in good times, and CADF has noticed travelers leaning toward lower-cost items. “Passengers are looking for hot prices and promotions,” Magued Mounir, CADF General Manager, says. The above, combined with a tendency on the part of travelers toward last-minute purchases, has led CADF to develop targeted promotions and launches. A good example

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Cairo Airport Duty Free of recent activity is an on-concourse visual for La Vie Est Belle in cooperation with Lancôme on a high-visibility pillar in T3 along with brand ambassadors engaging travelers. The operator also put out a summer flyer featuring savings across categories. “We have a number of objectives when we run promotional activities,” says Rashad. “High on our list of priorities is to drive traffic to the shop, link and cross sales with ancillaries, raise awareness of the shops in general and of course increase sales.”

Staying ahead of the game

In addition to continuing to invest in promotions, CADF is ensuring that when sales numbers and traffic do return to normal, its

stores will be in tip-top shape. Recently the operator has renovated its perfumes shop. During renovation part of the store was closed for refurbishing while the other part continued day-to-day operations. CADF doubled the store’s size; refreshed the concept and merchandising with personalized wall units and gondolas; giving better display for the brands and adding new brands like Dunhill, Mont Blanc, Chopard and Koto. In fact, new brands are being added across a number of CADF stores. Shoppers at the gift shop can now find products from Zeades and CICLAMINI, while the supermarket now features Loacker, Mondelez, Cadbury, Johnnie Walker Double Black in 1-liter bottles, Amber Leaf Rolling Tobacco, L&M 400s, and Parliaments Ks and Lights.

CADF recently opened up Eye Zone Sunglasses, which offers high-end fashion eyewear from Luxottica

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Recently CADF has also opened a new store called Eye Zone Sunglasses, featuring high-end Luxottica eyewear. It is the first Luxottica boutique in the Middle East and the first in an Egyptian airport. Shoppers will have no shortage of brands from which to choose, with the new store featuring Ray-Ban, Bvlgari, Vogue, Oakley, Emporio Armani, Burberry, Dolce & Gabbana and more. Finally, CADF is also moving to a new warehouse with the goal of helping the business grow in the future. “The goal is to always make sure we’re doing the best we can to meet passenger needs, and all of these recent developments bring us one step closer to fulfilling this very important objective,” Rashad concludes. 

THE ESSENCE COLLECTION

Luxury, Power & Elegance

International Duty Free Trading & Agencies

Cautious optimism

the 2015 mantra for IDF by

CLAIRE MALCOLM

Recovery for Egypt’s beleaguered tourism and duty free sectors appears to be finally turning a corner with the latest government data showing an uptick in arrivals

Loacker summer promotion at Cairo Airport Duty Free, Terminal 3

Mars watch promotion at Cairo Airport Duty Free, Terminal 3

ollowing the May 2014 election of President Abdel Fattah Al-Sisi, the last few months have seen a calmer landscape emerge, prompting countries to re-address blanket travel bans and lift travel advisories for the Sinai Peninsula. According to the Ministry of Tourism, tourist arrivals grew by 15.8% in July 2014 against the same period in 2013 with STR Global reporting hotel occupancies of 67.9% in August of this year. However, visitor numbers are still way behind 2011 levels, with tourist arrivals for the fiscal period 2013/14 totaling 7.9 million, which is a 42% drop on 2009/10 figures. The country’s Minister of Tourism, Hisham Zaazou, has also talked about the potential of a ‘full recovery’ for the tourism sector by the end of 2015, with the country’s ambitious 2020 vision targeting in excess of 25 million tourists within the next five years. For sector veterans like International Duty Free (IDF) Trading & Agencies, which has been doing business in the country for more than 30 years, the outlook for 2015 is cautiously optimistic. “We’ve had a tough couple of years with all the political instability, and for the first time things began to calm down from the end of last year, so starting from 2015 we hope it will be a positive year for IDF and there are good indications that it will be,”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

says Nermine Nasser, Marketing & Communications Manager, International Duty Free (IDF) Trading & Agencies. Egypt’s 2020 plan is focused on an intensive three-year marketing campaign that aims to drive both tourist arrival numbers as well as attract investors. This is coupled with sustained lobbying to reverse existing travel advisories. Says Nasser: “Action on the part of the Egyptian government and the country’s tourism industry to re-assert our position as an attractive destination for leisure travelers is ongoing and all efforts are being made to see these [Sinai Peninsula] bans lifted. “And we are already seeing some success in terms of increased flow at Sharm El Sheikh and Hurghada International Airports. In August 2014, for example, we saw a 78% increase in arrivals against a very bad month in 2013.” Germany, which sent 850,000 tourists to the country in 2013, lifted its travel restrictions in July 2014 with a number of other countries, including Italy, France, Ireland, Denmark and Spain following suit. Nasser points out that while arrivals are trending upwards, duty free spend levels are not mirroring passenger number increases, as she explains: “The spend per head is not where it needs to be and is nowhere near where it was prior to 2011. In order to attract tourists to Egypt we are seeing heavily

discounted travel offers, hotel rooms and other activities, and this is also resulting in a trend towards lower spend customers.” Overall, IDF sees “positive indications” for the future growth of the country’s duty free market for a number of reasons - and thanks to the efforts of its various operators - including the launch of EgyptAir Duty Free Shops’ new Hurghada terminal; the company’s partnership with Cairo Airport Duty Free and their ongoing calendar of joint promotional activities; Overseas Duty Free’s renovation program for Hurghada; plus the new high profile Heinemann operation. Heinemann Egypt’s three departures-sited stores at the busy Red Sea airport include a core category unit offering 773 square meters of space dedicated to showcasing a wide choice of international and local merchandise including spirits, wines, tobacco and confectionery. Its 87 square meter gifts and souvenirs store presents a collection of Egyptian inspired items, with a third 28 square meter outlet focusing on accessories. In arrivals, a 143-square meter store features all the main core categories. “While arrival numbers are on the rise, our challenge for the foreseeable future is the basket value, which is not rising in tandem. But with EgyptAir Duty Free opening the new Hurghada Terminal in 2015, plus our exclusivity agreement with Heinemann Egypt, these are already two very strong possibilities for us for next year,” remarks Nasser. “We expect to see further rises in passenger numbers at both airports and growth of the confectionery category in general next year, so personally, I am very optimistic, but also conscious of the need for continued caution as the situation is always unpredictable and with unrest around the region continuing, we have to be mindful of the potential threats,” she adds. 

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

Abu Dhabi Airports

Double time

Fragrances is the most popular duty free category at Abu Dhabi International Airport

RYAN WHITE

Not only is traffic to Abu Dhabi Airport increasing, but a number of new stores also ensure that travelers will have ample choice when visiting the emirate

bu Dhabi Airports recently announced that passenger traffic at Abu Dhabi International Airport increased by 24.8% in the month of August. A total of 1,920,934 passengers passed through Abu Dhabi Airport in August 2014 compared with 1,538,632 in the same month during 2013. Aircraft movements in August 2014 were also on the rise, reaching 13,395 movements and representing a 15.4% increase over the 11,608 movements that took place in August 2013. Cargo activity in August 2014 increased to 66,215 tons, a 9.9% increase when compared to August 2013. Commenting on the latest passenger figures, Eng. Ahmad Al Haddabi, Chief Operations Officer at Abu Dhabi Airports, said: “The month of August recorded another double digit growth in passenger numbers for Abu Dhabi International Airport which is due to residents flying back from their vacations in time for the beginning of the school season. Additionally, Abu Dhabi is increasingly being seen as a preferred tourism and business destination as well as one of the fastest growing aviation hubs in the region with access to over 90 destinations around the world.

“We constantly work hard on enhancing our services through various initiatives, including the capacity enhancement program which aims to develop the airport’s current facilities to withstand the increasing number of passengers,” Al Haddabi continued. In August 2014, the top five routes from Abu Dhabi International Airport were Bangkok, London Heathrow, Doha, Manila and Bahrain. The top five routes accounted for 15% of all traffic.

The stores to match

Abu Dhabi Airports also this year opened a number of new retail outlets to ensure that travelers to the emirate have a wide range of shopping choices. The newly opened stores include two new multi category duty free stores in the newly opened Terminal 3 bus gate facility and pier, refurbished UAE souvenir stores in both Terminals 1 and 3, and the introduction of a new “Fragrances of the World” store in Terminal 1. WHSmith also opened their second store at Abu Dhabi International Airport this year, while Terminal 3 added to its extensive F&B offerings in its T3 pier with international brands such as Lavatazza, Cinnabon, Flat White, Grab & Fly and urban food market Espressamente illy. Abu Dhabi Duty Free’s

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

popular Big Ticket opened additional locations around the airport, and during the first six months of the year gave away more than AED 18 million (US$4.9 million) in cash and prizes along the way, creating four AED multi-millionaires and two US Dollar Millionaires. Also this year, Abu Dhabi International Airport opened its new “Fragrances by DFS” boutique. The new boutique, located in Terminal 3, is luxuriously designed over 250 square meters and displays a range of fragrances from around the world, many of which are exclusively available in the Middle East. Visitors to Abu Dhabi are now greeted in the airport’s arrivals hall with a new Abu Dhabi Tourism & Culture Authority Welcome Centre to help create wonderful experiences. All of these have contributed to the growth in sales, with the top performing categories being Fragrances, Luxury Fashion and Jewelry. The main drivers behind this have been the introduction of new and exclusive fragrance brands, attractive Spring and Summer luxury fashion collections available in many of the airport’s boutiques and the glittering diamond jewelry collections available from Pure Gold Jewelers stores.

Abu Dhabi Airports

Providing a first-class shopping experience for travelers is ADAC’s top priority at Abu Dhabi International Airport

“The continuing improvements and additions of new retail outlets at Abu Dhabi International Airport are clearly making their mark on the company’s commercial revenues,” said Abu Dhabi Airports Chief Commercial Officer Mohammed Al Bulooki. “Passengers here benefit from a wide array of shopping, food & beverages and entertainment services that are available. It is very important that they are given the widest possible choice of activity when they are guests in the airport, and with passenger numbers increasing month by month, that requirement becomes more urgent. Fortunately, a carefully planned programme of development is in place to ensure that there is sufficient capacity in place to achieve this. This will continue, with more brands expected to open in Abu Dhabi International Airport and take advantage of its growing status as a world leading global transportation hub.”

airport and business-friendly environment. This growth is destined to continue to grow in parallel with the developments in the nearby Abu Dhabi Airports Business Park as new companies continue to set up in the free zone, thereby providing a full range of support services to the growing community. Commenting, Mohammed Al Bulooki, Chief Commercial Officer, said: “Abu Dhabi Airports is delighted to welcome Starter Supermarket at Skypark Plaza. The team believes there is a growing demand for quality convenience shopping in this location to serve the neighborhood community and so, in line with the company’s strategy to expand Abu Dhabi International Airport’s retail offering and enhance its customers’

experience, Abu Dhabi Airports is progressing with a variety of new ideas, concepts and improvements within this segment.” The new supermarket will be open daily from 6 am to midnight, seven days a week, and is stocked up with a full range of everyday items, fresh produce and frozen foods. The bakery will serve freshly baked bread daily and customers will be able to pick and choose from a variety of hot and cold meals. A gift and souvenir section will help with any last-minute gift shopping for those special occasions when you just haven’t had time to get to a mall. The supermarket is accessible to all public from the Terminal 3 car park. “Flemingo’s entry into the Middle East market comes with a tailor-made and exclusively built supermarket, Starter, for airport staff and passengers,” said Kartik Bhatt, Group Business Head (Shopping and Eating), Flemingo International. “The store offers an effortless and comfortable shopping experience to customers comparable to other large-format hyper markets, owing to the carefully planned merchandise width and professionally defined adjacencies.” Additionally, Abu Dhabi Airports will offer free parking for visitors using any of Skypark Plaza’s outlets. A delivery service is also in the pipeline to further service the neighboring companies and wider community, including Masdar City, Abu Dhabi Aircraft Technologies and Al Ghazal Golf Club to name a few. 

Keeping good on the promise

And indeed, more brands have opened up since the above statement. Abu Dhabi Airports recently welcomed the opening of the “Starter Supermarket” at Skypark plaza in Abu Dhabi International Airport. This excellent addition to the overall Skypark Plaza facilities will further serve passengers, residents, visitors and employees around the airport community. Skypark Plaza has an ongoing plan to increase and strengthen the retail and food & beverage offering as the surrounding commercial area continues to grow at a rapid rate due to the close proximity to the 36

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Jewelry is the number three category for Abu Dhabi Duty Free in terms of sales at Abu Dhabi International Airport

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Tourvest

African skies After an in-depth tendering process, Tourvest In-flight Retail Services regains its contract with Kenya Airways

arlier this year, Tourvest Duty Free sent a strong signal out to the travel retail world when it changed in its name to Tourvest In-flight Retail Services (TIRS) and simultaneously announced a number of appointments to its management team. Recently, TIRS announced that it had been re-awarded a contract with Kenya Airways to manage its in-flight retail despite a “very tight tender process” and stiff competition from other operators including Flemingo and DFASS (a NAS Servair/Inflight Sales Group partnership), according to TIRS CEO Clive Jones. He believes the company’s focus on innovation and its novel ecommerce solution were instrumental in its being awarded this contract. “Client retention forms a critical part of our stated objective of becoming the dominant player in the global travel retail in-flight sector, and we saw the renewal of the Kenya Airways contract as the first real test for our recently strengthened executive,” Jones says. “It is a great accolade for our Kenya-based team and a testament to the positive effect the implementation of a series of strategic

WENDY MORLEY

initiatives has had on the company, which included entrenching our corporate values and culture within our people.” Tourvest, a South African company that is a strong player in many areas of travel and tourism, has shaken up the in-flight retail sector in 2014. According to the company’s management team, Tourvest’s solid history in all areas of the travel industry give the company a valuable, in-depth understanding of the traveler. The company has made a point of bringing different items to this market segment, and indeed 20% of its products are new to in-flight retail. The customer is Tourvest’s focus, and therefore the company seeks products that are exciting an appealing to the traveler. The company’s innovation does not begin and end with products, however. Of huge importance for the company is e-commerce. Jones says, “We see the implementation of our e-commerce strategy as the catalyst that will help us lead the industry into passenger personalization. Direct-to-passenger engagements will be offered through a number of initiatives aimed at a wide crosssection of passenger contact points.”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Clive Jones, CEO Tourvest In-flight Retail Services, and Mbuvi Ngunze, CEO Kenya Airways, sign the contract awarding the management of the airline’s in-flight duty free sales to Tourvest

Kenya Airways seems to recognize the value of these innovations and initiatives. Kenya Airways CEO Mbuvi Ngunze says, “We were very thorough, and TIRS’s overall proposition proved to be the most innovative and forward thinking of all the bidders. I believe we have partnered with an in-flight retail concessionaire that will help us further differentiate our airline and which is aligned with our corporate culture and our vision for Kenya Airways.” Ngunze added that the airline needed to ensure it was aligned with global best practice with regards to its in-flight retail offering, and that is why it had tested the market through a tender process, inviting all the leading global duty free businesses to participate. Tourvest, which currently holds concessions for eight airlines, is one of the top three in-flight duty free providers in the world. The company has received more that 16 international awards, and processes over 1.7 million sales transactions each year. With its data-driven personalized e-commerce system, Tourvest is looking to be a strong retail partner for an ever-growing number of airlines around the world. 

BELGIAN CRAFTSMANSHIP

No two Duc d’O truffles are the same. The reason for this is very simple. The light chocolate mousse is sent on a journey through a large bed of chocolate flakes. Dancing over them, the truffles wrap themselves in the wildness of Belgian chocolate. Only then are they ready to find their way into civilisation. That’s why all Duc d’O truffles are indecently delectable. But each that little bit unique.

Boutiques de Maputo

Nation on the

rise The 70-square metre departures store at Maputo International continues to have a strong focus on perfumery, with 25% growth year-to-date

Mozambique’s economic future has never looked brighter and Boutiques de Maputo is also looking at new opportunities to expand its duty free concept outside of airport boundaries by

CLAIRE MALCOLM

Centre: Abílio Soeiro, Chairman, Boutiques de Maputo Duty Free

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

ooming foreign direct investment (FDI) and an international monitor-approved general election in October hold promise for Mozambique’s continued economic growth, and the aviation sector is also playing its part. As the gateway to the country, Maputo International Airport currently welcomes close to one million passengers per annum, the majority of which are business travelers, and that number is growing steadily. South Africa is a major connecting hub for air travel into the country and with the addition of Mozambique to the Qatar Airways regional route network in late 2012, and enhancement of its South Africa operations earlier this year, which saw frequencies to Johannesburg rise to 10 per week, traffic numbers are on the up for Maputo International. In October 2014, Qatar’s Civil Aviation Authority also signed a MoU with Mozambique and initialled an Air Transport Agreement (ATA), which includes full operations rights with an unlimited number of passenger and cargo flights between the two nations, with the aim of enhancing co-operation in the air transport sector. While Mozambique has long been a favorite destination for South Africa tourists, the country hopes to build on its international arrivals figures, which stood at 2.1 million in 2012. This also has the potential to drive tourism as well as business passengers, and the phased expansion of Maputo International Airport, which includes the 2010-launched new international passenger terminal is also a key driver for sector development. And this is also good news for Boutiques de Maputo, the duty free operator at Maputo International Airport. According to Abílio Soeiro, Chairman, Boutiques de Maputo Duty Free, the new post-election situation and continued FDI flows are a sign that the country is entering a new era of economic opportunity.

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the _ Macallan

Boutiques de Maputo “With this new situation, more companies will be looking to come to Mozambique, and so we see the possibility of increased passenger arrivals as well as a higher value customer, who will spend more and purchase more expensive items,” he says. With around eight to 10 daily flights from South Africa, six weekly flights from Europe and other African nations such as Kenya and Ethiopia also linking to Mozambique, Soeiro is optimistic about prospects for the airport duty free operation in 2015. “We will also open a new 50-square metre duty free shop in arrivals this November, and this is a very exciting opportunity as we will be able to capture arriving passengers looking to pick up small purchases such as perfumes, a few bottles of wine or a bottle of whisky, or their cigarette allowance,” he says. Boutiques de Maputo is also expanding into the downtown duty free arena with a unique diplomatic store concept, as he explains: “We also got the authorisation to open a diplomatic shop and we are looking to create something very special. At the moment we are considering two or three locations but want to find the right place. “Our focus will be very different from the airport as embassy personnel are looking for something more specialised. So it won’t be perfumes and cosmetics driven but will feature liquor and fine food items such as a caviar house.” Soeiro and his team are currently speaking with embassies in order to create

almost a custom-shopping list of items to match the concept ahead of a scheduled mid-2015 opening. “One other area we are looking at is water. We don’t pay tax to import in-demand European waters and I think that this could also be an opportunity for us at our diplomatic store,” he adds. At last month’s TFWA WE exhibition in Cannes, Soeiro was also scoping out other complementary products to enhance both the airport operation and for the new diplomatic outlet. “For example, we saw a lot of high-end biscuit suppliers, brands such as Jacobsens, as we also see this as a new opportunity for our duty free operations; I think embassy staff, in particular, would appreciate this, as well as other items like luxury chocolates.” The 70-square metre departures store at Maputo International continues to have a strong focus on perfumery, with Soeiro reporting 25% year-to-date growth in 2014, which has been supported by a calendar of activations and increased advertising. “We have had a lot of supplier support for our promotional calendar with large three-metre displays on both sides of the space plus television screens showing the latest advertising campaigns to drive passenger interest. We have tow entrances to the store so we have made every effort to capture people form both sides,” he remarks. Perfume, cigarettes and liquor lead category performance, but Soeiro is also adding an authentic flavor of Mozambique to the

Based on the success of its airside operation, Boutiques de Maputo will also be expanding into the downtown duty free arena with a unique diplomatic store concept

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

retail offering, as he explains: “We have a new concept based on local cashews which are one of our most famous food exports. We have special packaging and sell them in six different flavors including natural, salted, sugar and chocolate coated. “They are extremely popular and a lot of passengers are purchasing all six flavors at a time.” In the perfumes category, Chanel is the number one bestselling fragrance line with Paco Rabanne’s One Million also popular. Invictus is a current bestseller for men and the launch of Lancôme’s La Vie est Belle has also added it to the list of bestselling female fragrances. Marlboro leads cigarette sales with Johnnie Walker Black its liquor equivalent. “We also have concession exclusivity for Heineken beer, which also sells extremely well,” he adds. Expansion opportunities outside of Mozambique are also on the cards for 2015. Says Soeiro: “We will continue to concentrate on our Mozambique operation, but we have also been invited to consider a possible partnership in Cameroon. “This would be an airport duty free operation whereby we would invest as well as supply credit in terms of goods. I am looking at an investment figure of around 25%; we prefer to work this way so that we can give the local partner an opportunity to build up the business with Boutiques de Maputo supporting them with industry expertise and regional know-how.” 

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Qatar Duty Free

Upping the ante

At Chocology, passengers will be introduced to entirely new and innovative ways to enjoy their favorite ingredient, chocolate

Qatar Duty Free’s new retail space at Hamad International Airport brings new meaning to the word “luxury”

ne of the biggest developments sure to be discussed at this year’s MEADFA conference is Qatar Duty Free’s (QDF) world-class shopping proposition for passengers travelling through Hamad International Airport (HIA). QDF now offers passengers unprecedented access to selected designer labels, high street fashions, electronics, gourmet foods and much more. With bespoke QDF concepts as well as an impressive array of boutiques from international brands, the retail proposition at HIA has pushed the boundaries of innovation, redefining travel shopping to create an enriching experience for its passengers. “Passengers will experience at HIA unique store environments that have been designed around their needs,” said Qatar Airways Chief Executive Officer, His Excellency Mr. Akbar Al Baker. “Based on our deep understanding of passenger preferences, we have developed stores that are comfortable to explore and filled with beautiful products.” One of these innovative store concepts is Esquire, a unique and exclusive boutique designed by QDF for the fashion-savvy man. Esquire offers a wide range of leather goods, travel accessories, apparel, unique skincare ranges, and even the most original of electronic gadgets—everything for today’s 44

travelling businessman. “Another creative store concept developed by QDF is the Marmalade Market, a food store designed by QDF for gourmet food lovers. Marmalade Market provides the ultimate opportunity to sample and purchase the most exotic foods from around the world,” said Keith Hunter, Senior Vice President, QDF. And for all things chocolate, there is Chocology, where passengers will be introduced to entirely new and innovative ways to enjoy their favorite ingredient, chocolate. Delightful treats such as ice cream, chocolate drinks, and fresh food dipped in chocolate will be there to tempt passengers, while world-class chefs will carve marvelous chocolate creations. The list of innovative QDF store concepts goes on with Pulse (consumer electronics store), Bumble Tree (toy shop), Junction (for contemporary fashion), Boulevard (high-fashion accessories) and GMT (Swiss watches). And no duty free environment would be complete without an extensive lineup of world-class brands. Passengers at Hamad International Airport will be spoiled for choice with boutiques and stores from the likes of Bally, Bvlgari, Burberry, Chanel Watches, Harrods, Hermes, Michael Kors, Rolex, Tag Heuer, Tiffany, Swarovski, Virgin Megastore and WH Smith. In addition,

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

“As Qatar Duty Free is part of a major international five-star airline, we understand the needs and expectations of our passengers.” KEITH HUNTER, SENIOR VICE PRESIDENT, QATAR DUTY FREE

many more brands will launch their stores in the coming months.

But wait, there’s more!

QDF has also unveiled a unique selection of food and beverage outlets to please the palates of every passenger travelling through HIA. With more than 30 cafés and restaurants spread across 15,000 square meters, passengers can now enjoy a sumptuous selection of global and regional cuisine at a series of exclusive food and beverage outlets. “As QDF is part of a major international five-star airline, we understand the needs

Qatar Duty Free and expectations of our passengers, and so we have developed a unique and comprehensive food and beverage offering,” said Keith Hunter, Senior Vice President, QDF. “Starting from a blank sheet of paper, we have created entirely new concepts to offer our passengers a truly enjoyable and innovative experience, and to provide them with unlimited choices and authentic cuisine.” The dining proposition at HIA is as innovative as it varied, combining a mixture of brands developed and owned by QDF, as well as joint-venture and concessionbased outlets. “We wanted to create a renaissance in airport dining, and to develop a complete culinary experience based around our passengers’ needs. We have therefore built an environment that promotes high-quality, healthy and authentic cuisine, matched with efficient and exceptional service,” added Hunter. A perfect example of this is Jamocha Café, which has been entirely developed by QDF. Jamocha offers a tempting selection of high-quality food and beverages, allowing passengers to enjoy everything from a cup of organic espresso, to a creamy gelato or a freshly-baked croissant. Everything is also prepared using the very finest of ingredients, such as the coffee, which has been organically grown in South America and then meticulously sourced and carefully crafted with the benefit of the customer foremost in mind. Jamocha Café can also adapt its selection of snacks and drinks very rapidly, making adjustments between flights based on the number and origin of passengers travelling via HIA. QDF’s Marché restaurant is another example of a highly passenger-focused

offering. Open 24 hours a day, Marché can accommodate up to 560 guests at a time, and has been designed to satisfy the tastes of every passenger, with a broad range of international cuisine prepared from the very freshest of ingredients. Similarly, the QDF seafood restaurant, Caviar House and Prunier, is the only restaurant in the world that produces its own caviar and salmon, and everything is prepared fresh in front of the passengers, creating a unique culinary destination for seafood lovers. And for those with a sweet tooth, there is Farggi, the Barcelona-based producer of premium ice-cream and cakes that has been delivering delicious treats to consumers since 1957. Now HIA passengers can enjoy Farggi’s premium ice creams, with superb latte coffee, and delicious crepe and waffle creations all while waiting for their flights.

The latest addition

QDF has also officially opened Argo Tea Cafe in the arrivals hall at HIA. Attended by the visionary entrepreneur behind the hugely successful concept that is taking the United States by storm, Arsen Avakian, the opening was an excellent opportunity for travelers passing through the airport to gain an insight into the personality behind the brand and be inspired by his passion for tea. DiversiTEA, CreativiTEA and QualiTEA are just some of the unique philosophies that underpin this dynamic brand, which has become synonymous with challenging the traditional perception of tea, and is now filling a niche in the beverage market for a premium tea chain with the potential to emulate global coffee brands. With 30 signature blends of tea available

at the new outlet, customers are invited to taste four different blends that are rotated every day at the tea host table with guidance from an Argo Tea specialist, all trained at the company’s universiTEA. “With Argo Tea’s rapid expansion into the Middle East, we wanted our passengers at HIA to be some of the first to enjoy the unique experience that this unique beverage concept has to offer,” said Hunter. “Argo Tea is a great fit in our food and beverage portfolio as it exemplifies our strategy of handpicking niche brands to enhance our passengers’ journey through the airport while adding an element of discovery and surprise when they are looking for dining options.” Argo Tea was launched by Arsen Avakian in the United States 12 years ago and has attracted a strong following of tea lovers inspired by the 100% natural fusions of tea, juice, flowers, honey and spices that are blended by his team of mixologists and nutritionists into healthy but flavorsome tea combinations. “We are honored to be part of the prestigious Hamad International Airport and to open one of our flagship outlets for the region here,” said Avakian. “Qatar is becoming a global hub for regional and international travellers and we are delighted to have such diverse exposure to our brand in this strategically important location,” he concluded. As well as the menu of signature tea blends and Illy Coffee, passengers will also find a wide selection of fresh and healthy food available at Argo Tea Cafe. Black, white and other traditional teas are also on offer for passengers who want to enjoy a classic blend of their favorite beverage. 

Esquire is a unique and exclusive boutique designed by Qatar Duty Free for the fashion-savvy man

Marmalade Market provides the ultimate opportunity to sample and purchase the most exotic foods from around the world

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Queen Alia International Airport Queen Alia International Airport in Jordan

BREAKING THE MOLD In less than two years of operation, Queen Alia International Airport’s new terminal has racked up an impressive list of accomplishments, and operator AIG says things are just getting started

2014

has been a good year for Queen Alia International Airport (QAIA) in Jordan. It experienced two record-breaking months in terms of passenger traffic, and after coming off with two big wins at Airports Council International’s (ACI) prestigious Airport Service Quality (ASQ) awards in 2013, Airport International Group CEO Kjeld Binger has ambitions to further raise the profile of the airport and make it one of the best in its class. We started off by asking Binger about passenger traffic, and he noted that traffic has been robust to say the least: “In August and September we surpassed our previous passenger traffic benchmarks for those specific months,” he explained. “QAIA welcomed 785,685 passengers in August and more than 614,336 in September.” The August and September figures represent year-over-year increases of 13.2% and 9.5% respectively. Aircraft movements were also up for both months by 12% in August (7,242 movements) and 12.8% in September (6,395 movements). Year to date up to and including September, QAIA welcomed 5,554,309 passengers, representing

an increase over the same period last year of 11.8%. Year-to-date aircraft movements also increased significantly to 56,021, a 9.5% increase over last year’s September year-todate figures. “Overall, QAIA has been experiencing robust traffic results with monthly growth in statistics since the beginning of 2014, culminating in a 3.5 million passenger count by end of H1 2014,” Binger said. “This trend is mainly driven by traffic from the GCC, North Africa, Levant and parts of Europe.”

Talking travelers

We asked Binger to go a bit more in depth on who is traveling through QAIA. He told us that, not surprisingly, Jordanians account for a large proportion of travelers, around 43%. Apart from travel by Jordanians, the top three nationalities passing through the airport are Iraqis (7%), Americans (4%) and Palestinians (4%). The remaining group is made up of a mix of nationalities from across the Middle East, North Africa, Europe and Asia. We asked Binger what makes Jordan an attractive destination for travelers. “Jordan’s strategic location and resilience as a politi-

Despite having been operational for less than a year, QAIA won first place in ACI’s ASQ awards in the category of “Best Improvement by Region: Middle East” and fifth place in the category of “Best Airport by Region: Middle East.”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

cally stable country have been the driving factors behind its popularity among regional and international vacationers and business travelers,” he explained. “This has been especially notable in recent years, during which a significant part of the area’s traffic was redirected through Jordan due to prevalent circumstances in neighboring countries.” Indeed, despite sociopolitical issues in some parts of the Middle East, Binger tells us that Jordan has secured a reputation as a safe haven for locals and visitors alike. “This has been instrumental in enabling the country to consistently attract leisure and business travelers from the region and beyond,” he says.

Great expectations

With passenger traffic performing strongly and Jordan seen as a safe and attractive location to visit, it’s no surprise that Binger and company have some big plans for QAIA. Airport International Group aims to establish QAIA as one of the world’s 20 best airports in its category. Binger noted the key role that airports play in local economies and said that the objective is for QAIA to “serve as a sustainable pillar for Jordan’s prosperity and a source of pride for all Jordanians.” To achieve these goals, the concentration has and will be on safety, efficiency, profitability and service quality, said Binger. An

Queen Alia International Airport excellent indication that QAIA is making good on its pledge is that in 2013, despite its new terminal having been operational for less than a year, the airport won first place in ACI’s ASQ awards in the category of “Best Improvement by Region: Middle East” and fifth place in the category of “Best Airport by Region: Middle East.” QAIA was also named among the world’s top 40 public-private partnership projects, earning Gold recognition as “Best Emerging Market Infrastructure Project for Europe, Central Asia, the Middle East and North Africa” in Emerging Partnerships, a globally-respected industry publication co-released by the International Finance Corporation and Infrastructure Journal.

Duty free takes center stage

Of course, part of ensuring quality service is making sure that a respectable duty free offering is on hand for travelers, and Binger told us that this was a consideration from the early planning phases of the new terminal. “Duty free was part of the new terminal’s design and was set up to complement QAIA’s improved layout with a focus on intuitive passenger flow, ensuring 100% passenger walkthrough,” he explains. “The duty free space was also deliberately located right after the security checkpoint to enable passengers to enjoy an unhurried shopping experience after screening their luggage and before heading to their boarding gates.” To create a retail mix that guaranteed the highest levels of passenger satisfaction, QAIA employed customer surveys, benchmarks and downtown comparisons. As a result, the airport’s mix features local F&B brands popular among both Jordanians and tourists; a variety of international beauty, cosmetics, electronics and confectionery brands; and a wide variety of authentic Jordanian souvenirs by local companies.

“Overall, QAIA has been experiencing robust traffic results with monthly growth in statistics since the beginning of 2014, culminating in a 3.5 million passenger count by end of H1 2014.” KJELD BINGER, CEO, AIRPORT INTERNATIONAL GROUP

World Duty Free Group (WDFG) is the duty free operator at the airport. QAIA increased the duty free store space by 25% as compared to the old terminal and the retailer now has just over 6,000 square meters with which to work. Also increased was the number of retail outlets, which now stands at 33 compared to 29 previously. Given the airport’s clear vision for its duty free business, it’s no surprise to find out that non-aeronautical income makes up a respectable 31% of total income, with duty free accounting for 60% of overall non-aeronautical returns. The remaining 40% comes from F&B outlets, lounges and rent from land use.

Looking ahead

“Our traffic forecasts indicate a 5% increase in the total number of passengers achieved each year, bringing annual passengers to 9 million in five years and 12 million by 2024,” Binger says. “QAIA recorded annual passenger traffic of 6.5 million in 2013, which we expect to top in 2014 given our robust monthly traffic growth.” QAIA’s current capacity stands at 7 million passengers. Upon the completion of its second expansion in 2016, which carries a

QAIA’s traffic forecasts indicate a 5% increase in the total number of passengers achieved each year, bringing annual passengers to 9 million in five years and 12 million by 2024

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

price tag of US$200 million, the airport’s annual passenger capacity will increase to 12 million. By 2032 capacity will be at 16 million. “In order to drive traffic growth and meet ambitious targets, our route and market development strategy focuses on attracting new airlines, working with existing airlines and collaborating with internal governmental and private sector parties to market Jordan as an attractive destination and stopover point,” Binger explained. “We also constantly monitor economic and regional changes to anticipate their possible impact on traffic, routes and airlines’ performance, whether positive or negative, and adjust our strategy accordingly.” The new terminal has already enjoyed numerous milestones and accolades in its short life, but Binger stresses that the operation is still a work in progress. “Notwithstanding all that we’ve already achieved, we aim to expand QAIA’s capabilities and further enhance its service quality to deliver an exceptional passenger experience,” he concluded. “With the support of our partners and key stakeholders, we have no doubt that we can deliver a world-class airport worthy of Jordan and its people.” 

HOW DO YOU LIKE YOUR COFFEE

YOU CAN NEVER BE TOO GENEROUS

Overseas Duty Free2

Egypt’s only private duty-free operator

keen to raise regional profile by

Overseas Duty Free2 is relying on its duo of successful Red Sea locations and unique positioning to act as a launch pad for future Middle East expansion

ollowing the launch of its Hurghada International Airport operation in March 2014, Ahmed Essa, the company’s Chairman, is optimistic about long-term business growth potential, but also confirms that the company is looking outside of Egypt for future growth. “Hurghada is our second Red Sea-located operation, with Marsa Alam International Airport also under the Overseas Duty Free2 name, and from 2015 we are looking at opportunities in other locations in the region, with the Gulf area and Saudi Arabia in our development plans,” he says. Essa cites the combined decades of experience of Overseas Duty Free2’s senior management team as integral to the company’s future expansion plans, as he explains: “All of our senior team is ex-EgyptAir Duty Free. I was operations manager, our Vice Presi-

dent, Abdelkader Katamish, was purchasing general manager and Rawia Hamdy, our Advertising Promotion & Rentals Manager was in marketing. So we know how we can drive the business in the future, plus we are a private company, which differentiates us from other operators here.” And this high level of in-house expertise is also underpinning the company’s development vision. Says Katamish: “We set up the company to address the gaps in the market left by other operators, and as Egypt’s only private duty free company we are a niche operator in terms of what we offer and what we can do for the duty free sector.” The Saudi market has been earmarked as of particular interest with airport infrastructure investment a government-led priority and a domestic market hungry for new retail offerings. “We are looking at both the local (downtown) market in KSA as well as at duty free, so there are multiple opportunities,” adds Katamish. The Hurghada operation is under close scrutiny by the team as duty free growth continues to reflect Egypt’s own resurgence, as he explains: “We have only been open for six months but we see business picking up nicely in line with increased traffic through

Overseas Duty Free2 is looking at opportunities in the Gulf area and Saudi Arabia to expand their operations

CLAIRE MALCOLM

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

the airport since the end of the first quarter of 2014. With Egypt’s new-found stability, there are good indications for growth for our industry and at our two locations.” The 600-square meter departures space also has a unique design. “We have the retail concept set around a very nice lounge concept, which is open to all passengers and is a great spot to relax in with dedicated smoking areas,” he clarifies. “The ‘lounge-in-shop’ idea is a new concept in duty free design in Egypt,” he adds. Category sales at Hurghada are led by perfumes, followed by cigarettes, with Katamish noting encouraging performance from accessories as well. “The brands that are selling well include Dior and L’Oréal Deluxe names in P&C with Philip Morris, Imperial Tobacco and JTI bestsellers in cigarettes,” confirms Hamdy. Cigars will be added to the tobacco offering by the end of 2014. Russians continue to dominate sales with German travelers also spending at Hurghada where the passenger mix is weighted 40% Russians, 35% German nationals and then other nationalities. This is in stark contrast to Mars Alam where Italians account for 54% of total passenger numbers and retail highlights also include good levels of spend on Oriental products – aka souvenirs ad gifts – and diving watches. “The airport currently handles around 560,000 departures per annum and while cigarette sales lead category performance, we have sustained interest from Italian travelers in Egyptian souvenirs as well as diving watches from high profile brands like Suunto,” notes Katamish. “We have heard that there are expansion plans for Marsa Alam and we certainly hope to grow with it and increase our presence if this happens,” he adds. 

traveller@mailmac.net

ّ A captivating new oud scent for him and her ‫وجــذاب مــن الــعــود لـه ولــهـــا‬ ‫عـــطــر جــديــد‬

MEADFA

Dubai growth story dominates

MEADFA Conference 2014 agenda

Retail opportunities presented by destination’s ambitious tourism targets and DWC expansion to be hotly debated by

GEMMA GREENWOOD

ubai’s ambitious plans to boost tourism arrivals, create the world’s largest airport and host the World Expo 2020 will set the tone for this year’s Middle East & Africa Duty Free Association (MEADFA) Conference, which takes place at Jumeirah Creekside Hotel from November 24 to 25. “The opportunities presented by the recently-announced expansion of Dubai World Central – Al Maktoum International Airport (DWC) to the tune of US$32 billion are very exciting for the travel retail industry,” says MEADFA President Sean Staunton. “The challenge for the sector is a good one in that we have to keep pace with demand—the number of air passengers passing through Dubai each year will reach at least 100 million by 2020 and 200 million once DWC is fully operational. “Add to that Dubai’s target to attract 20 million tourists by 2020 plus 25 million during the six-month Expo period and the growth potential for Dubai Duty Free (DDF) is phenomenal.”

UAE clout

The emirate’s determination to realize its vision to “position Dubai as the leading tourism destination and commercial hub in the world,” will be addressed in the MEADFA conference’s opening session, presented by Issam Kazim, CEO of the Dubai

Sean Staunton, President, MEADFA: DWC expansion poses “very exciting” opportunities for travel retail

Corporation for Tourism and Commerce Marketing (DCTCM). Kazim will explain how Dubai is mobilizing its key sectors, including retail, to achieve its goals. The opportunities to create a worldclass travel retail offering at DWC will be highlighted in the closing session on day two, presented by Dubai Airports and DDF. The soon-to-be-announced speakers will reveal how the airport’s commercial space will play a vital role in redefining the air passenger experience. Infrastructure developments in neighbouring Abu Dhabi will also be discussed in depth, with Abu Dhabi Airports Company Senior Vice-President Business Development Dan Cappell updating delegates on the retail vision for the new Midfield Terminal Complex (MTC) at Abu Dhabi International Airport, which will include 28,000 square metres of commercial space when completed. “Dubai and Abu Dhabi are very important to a lot of retail travel suppliers so these sessions will provide them with essential information,” says Staunton. A further indication of the UAE’s pulling power was an anticipated boost in delegate numbers to between 540 and 550, he continues. “This will represent the largest number of delegates the conference has ever attracted, with more interest being registered from

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

outside the region, particularly Europe,” he reveals. The delegate count hit the 510 mark at last year’s Doha edition and its previous record, 518, at the 2012 Dubai event, Staunton confirms.

Program highlights

Another standout session planned for the 2014 conference program, which is organized on behalf of MEADFA by TFWA, is ‘A year in travel retail: highlights of 2014 in the Middle East and Africa’, which will outline this year’s travel industry milestones. Opportunities for sector expansion are evident in Egypt, Oman and Kenya where major retail tenders have been announced, says Staunton. On the flipside, the MEADFA Debate will foster lively discussions about whether or not retailers do enough to support suppliers by providing an environment appealing enough to help brands thrive. By the same token, the session “Challenges to growth in the Middle East” will provide a run-down of regulatory and legislative measures that threaten the travel retail sector’s prosperity. “For example, tobacco legislation impacts our industry and we are already working with the relevant authorities to find a winwin situation,” says Staunton. “The MEADFA conference is a good forum for this type of debate, bringing together duty free authorities from all

Years of Challenges Ans de DĂŠfis

over the world to exchange ideas, trends and experiences. “We are always keen to hear what is happening in the duty free market in other parts of the world, in order to prepare us for what might happen here.”

Building BRICS

In addition to speaker presentations, MEADFA 2014 will offer workshops based on delegate feedback that last year’s conference format benefitted from this education offering. One session will look at how new developments in technology and connectivity on board aircraft could enhance the in-flight retail experience to new levels. Speakers including John Baumgartner, Director of Business Development at Nordic travel retail specialist Inflight Service Europe AB, Sweden and Gary Mayger, Sales & Business Development Director EMEA at GuestLogix, will cover subjects such as marketing, customer engagement, product range and assortment display. The second workshop, “Understanding BRICS travelers,” draws on recent TFWA research studying the buying patterns of travelers from BRIC nations. Counter Intelligence Retail Managing Director Garry Stasiulevicuis will lead the debate on this topic, asking senior industry representatives for their views on whether or not current airport retail offerings are catering well to these lucrative markets and how the Middle East’s duty free sector can get in on the action.

Staunton says that 4% cent of travelers passing through Dubai International were heading to China, but accounted for 12% of Dubai Duty Free’s (DDF’s) business. The Chinese market accounted for 35% of skincare sales and 39% of watch purchases, he revealed. “We have noticed that Chinese passengers used to be very brand conscious, but now they are more price aware,” Staunton notes. “This is our fastest growing market.” Russian travelers remained “significant buyers” he continued, while passengers travelling to the Indian SubContinent commanded DDF largest proportion of sales at 22%.

Africa’s potential

Africa is another growth market, with passengers traveling to the continent accounting for 24% of all electronics purchased at DDF. “Around 8% of our passengers flying to Africa represent 12% of our business and these consumers are much more brand driven than they used to be,” says Staunton. “Africa is a very interesting market and one of the conference sessions, ‘Re-imagining Africa’, presented by Brand Leadership Founder Thebe Ikalafeng, will look at African consumer demographics, tastes and disposal income.” Duty free sales in Africa are growing 10.9%, outpacing the global increase of 7.5%. Africa was incorporated into MEADFA (formerly MEDFA) in 2013.

“A number of our members operate in Africa and so it was the natural progression of our association to include the continent,” says Staunton. MEADFA’s three newest members— Heinemann Duty Free, Groupe Mado and LS Travel Retail—have a strong African presence, he noted. “As we look to boost our membership, we see gaps for more representation from East and West Africa, particularly Kenya and Nigeria (respectively),” Staunton adds.

Sponsors and supporters

MEADFA 2014 is supported by several partners and sponsors including official airline, Emirates; DDF (gala dinner); Dufry Sharjah (welcome cocktail); and Platinum Sponsors Pernod Ricard, Imperial Tobacco, ARIME, Bahrain Duty Free, Airstyle Travel Retail and Heinemann Duty Free. Staunton says the event was well timed for delegates seeking to maximise business and leisure opportunities during their visit to Dubai given it coincided with travel retail show Middle East Exclusive (November 25 to 27 at Dubai World Trade Centre) and dovetailed with two mega sporting events - the Abu Dhabi Grand Prix (November 23) and Dubai Duty Free World Cup golf tournament (November 26 and 27). “Many of our delegates attend all of these events to make the most of their trip,” he confirms. 

The growth potential of the African duty free market remains a hot topic for debate

The MEADFA conference is the place to “exchange ideas, trends and experiences”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Middle East Exclusive MEE 2014 will secure up to 40 exhibitors, representing a 40% increase on 2013, revealed show organizer, Channels Exhibitions

A showcase for the region by

RYAN WHITE

His Highness Sheikh Ahmed Al Maktoum (left) and Channels Exhibitions CEO Justin Boutros (middle) meet delegates at MEE 2013

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Retail buyers and traders to attend Dubai’s international Middle East Exclusive exhibition

nternational retail buyers, duty free specialists and traders will be gathering at Dubai’s Middle East Exclusive (MEE) exhibition, held from November 25–27. This year’s MEE event will showcase consumer products and brands from around the world as suppliers meet at the Dubai World Trade Centre to explore new distribution and trade opportunities. “Regional and international companies will be at MEE to present their latest products, including both luxury goods and duty free essentials,” says Justin Boutros, CEO of Channels Exhibitions, which hosts the event. “This is a great business event and a fantastic opportunity for everyone involved in duty free and consumer goods retailing.” With the support of Dubai Duty Free, the world’s most successful duty free retailer, the show attracts strong attendance from senior buyers in the travel retail sector including airlines, agents and distributors, hotels, boutiques, leisure retail, in-flight retail, cruise lines, importers and exporters and top retail buyers.

New watch and jewelry suppliers are set to exhibit at MEE 2014

MEE 2014 will showcase a wide range of products including electronics, smartphones and tablets, drinks and beverages, fine food and confectionery, tobacco, luggage, gifts, watches, clocks, jewelry, fragrances and cosmetics, travel goods, leather goods, fashion and clothing, toys, gifts and much more. The three-day event offers a unique opportunity for traders, retailers and senior professionals to meet, network and source the latest products.

Crunching the numbers

This year’s event is shaping up to be a good one. Earlier in the year Boutros told GulfAfrica Duty Free that he was pleased with exhibitor registrations up to September. ““We are on target to secure between 80 and 100 exhibitors, who will represent many more companies, distributors and brands,” he said. “This represents a 40% increase in exhibitor numbers compared the 2013 show with many new suppliers coming on board across all categories.”

The swell in business could partly be attributed to a booming aviation market, he said, with the fast-paced growth of airlines and aviation infrastructure in the Middle East playing an influential role. “You only have to look at the number of aircraft Emirates and flydubai are receiving each month to see where demand is coming from,” he commented. “Plus add to that the development of new airport facilities, particularly at Dubai International and the new Dubai World Central, where large amounts of space is being dedicated to duty free retail.” Indeed, Emirates is currently receiving at least two aircraft per month on average, while Concourse D at Dubai International takes the airport’s capacity to 90 million annually. “The airport recently took number one slot for international passenger traffic over London Heathrow,” said Boutros. “Dubai is a major hub for trade and the Middle East’s biggest duty free market by far.”

“This is a great business event and a fantastic opportunity for everyone involved in duty free and consumer goods retailing.” JUSTIN BOUTROS, CEO, CHANNELS EXHIBITIONS

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

IATA

The Middle East placed strongly in IATA’s recent 20-year passenger traffic forecast; the region will grow at 4.9% and will see an extra 237 million passengers a year by 2034

The growth path The Middle East makes news as a region to watch according to recent statistics from the International Air Transport Association

iven the strong center for air travel growth that it is, the Middle East has made the news many times in the last few months in conjunction with the International Air Transport Association’s (IATA) reporting on passenger and cargo traffic. At press time, the most recently released traffic statistics were for the month of August. Overall, global passenger traffic results for the period showed a slight pick-up in demand over the previous month. Total revenue passenger kilometers (RPKs) increased 5.9% compared to August 2013, which was above

the 5.4% year-over-year increase recorded in July. August capacity climbed 5.5%. The load factor stood at 83.9% which is a 0.3 percentage point rise over August 2013. International passenger traffic rose 6.7% in August, with all regions showing growth over the previous year. Capacity also rose 6.7% and load factor was stable at 84.2%. Middle East carriers specifically had the strongest year-on-year traffic growth in August at 11.7% as airlines continued to benefit from the strength of regional economies and solid growth in business-related premium travel. Capacity rose 10.3% and load factor rose 1.0 percentage point to 83.0%. African airlines’ demand rose 7.5%, while capacity climbed 5.9% and the load factor improved 1.1 percentage points to 75.0%. Despite this, because significant volatility in volumes for this region can occur, IATA warned that the strong traffic growth could not be immediately interpreted as a trend change.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Cargo

Global air freight markets showed continued robust growth in air cargo volumes in August. Measured by freight ton kilometers (FTKs), volumes rose 5.1% during the period as compared to August 2013. Capacity grew at a slower pace of 3.4% from the previous year. This is the second strong month for cargo volumes in a row, following the 6.1% year-on-year rise recorded in July. Carriers in all regions reported an expansion in volumes. Closely following improvements in world trade and business activity, airlines in the Middle East, North America and Asia reported the strongest growth in the 5–8% range. By comparison, demand in Europe and Latin America lagged in the 1–1.5% range as a result of Brazilian economic weakness and EU sanctions on business with Russia, respectively. Middle Eastern carriers reported cargo growth of 7.8%, a little below the yearto-date average of 9.6%. The Middle East

Wonderful fragrances Collecta able cosmetics Exquisite jewellery One way to have it all

www.duba aidutyfree.com

IATA continues to expand strongly on its growing links to developing markets, as well as diversifying into important commodities such as perishables. Capacity was up 6.0%. African airlines reported the strongest growth of air cargo demand with a 9.2% year-on-year expansion. Although this is the second consecutive month of strong growth, IATA again warned about the volatility of African data coupled with the slowdown in key African economies such as South Africa. The organization noted that this means it is too soon to understand the extent to which this represents a real and sustainable acceleration. Capacity in the region grew 4.2%.

Ahead of the curve

IATA recently released its first 20-year passenger growth forecast, projecting that passenger numbers are expected to reach 7.3 billion by 2034. That represents a 4.1% average annual growth in demand for air connectivity that will result in more than a doubling of the 3.3 billion passengers expected to travel this year. Among the highlights of the report is the expectation that China will overtake the United States as the world’s largest passenger market (defined by traffic to, from and within) by 2030. Both markets, however, are expected to remain the largest by a wide margin. In 2034 flights to, from and within China will account for some 1.3 billion passengers, 856 million more than 2014 with an average annual growth rate of 5.5%. Traffic to, from and within the US is expected to grow at an average annual growth rate of 3.2% that will see 1.2 billion passengers by 2034 (559 million more than 2014). The report, the first from the new IATA Passenger Forecasting service, produced in association with Tourism Economics, analyzes passenger flows across 4,000 country pairs for the next 20 years, forecasting passenger numbers by way of three key demand drivers: living standards, population and demographics, and price and availability. The Middle East placed strongly in the report. The region will grow at 4.9% and will see an extra 237 million passengers a year on routes to, from and within by 2034. The UAE, Qatar and Saudi Arabia will all enjoy strong growth of 5.6%, 4.8%, and 4.6% respectively. The total market size will be 383 million passengers.

An exemplary region for aviation

In a recent speech, Tony Tyler, Director General and CEO of IATA, discussed airline taxation in Europe and gave the Middle East as an example of how governments should be working to foster aviation’s growth: “This year the total European tax bill for airlines and their passengers will reach nearly US$40 billion,” he said. “To put that into perspective, that is more than double what is paid in the Asia-Pacific region. “There is a stark contrast between Europe and much of Asia and the Middle East, where many governments value aviation more for the long-term economic value that the industry makes possible than for its short-term tax receipts,” Tyler continued. “The remarkable performance of some of the Gulf carriers, for example, is inextricably linked with the vision of their governments to place aviation at the heart of their economic strategies. Airlines in the

“Airlines in the Middle East are expected to contribute US$2.2 billion to the industry’s US$18.7 billion profit this year. In absolutes terms, that is a record.”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

TONY TYLER, DIRECTOR GENERAL AND CEO, IATA

Gulf are provided with world-class infrastructure and a regulatory and fiscal framework that promotes, rather than hinders, aviation connectivity.” Perhaps largely as a result of Middle Eastern governments’ views on aviation’s contribution to the economy, Tyler also noted in a recent press conference that “airlines in the Middle East are expected to contribute US$2.2 billion to the industry’s US$18.7 billion profit this year. In absolute terms, that is a record. And this figure gives some insight into the success of the region’s carriers in relative terms. “If the region contributed to industry profits in line with its share of traffic, you would expect a contribution of US$1.7 billion,” he concluded. “It is not an exact comparison because many factors influence an airline’s profitability compared to the traffic it generates. But it does give an indication of the success that is being realized here.” 

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Luxottica

Putting sunglasses on a

Luxottica’s first interactive digital game promotion from Ray-Ban and Oakley took place in partnership with DFS at Hong Kong International Airport

pedestal by

CLAIRE MALCOLM

Enhanced airport facilities in the Middle East are providing a unique platform to support Luxottica’s vision of positioning travel retail as expert channel for eyewear sales

rowing momentum in the Middle East aviation sector where multi-million dollar airport upgrade and renovation projects are creating a new retail landscape is providing new scope for leading sunglass producer and distributor, Luxottica, to take the category to the next level. For Francis Gros, the group’s Head of Global Channels, the key opportunities in 2015 lie not only in the company’s largest market, Dubai, but in other up-andcoming locations, as he explains: “Qatar Duty Free is currently working on two new dedicated sunglasses standalone corners, which are due to open in 2015. We’ve been working extremely closely with them to advise on category management best practices such as ranging, product displays, merchandising etc. “We have also implemented a Ray-Ban pop-up concept, which can be re-used in different locations around the airport, highlighting the flexibility of this format.” Abu Dhabi is another hotspot. “Everyone in the industry—not just sunglasses—is also keeping a close eye on Abu Dhabi and the upcoming tenders there. The vision that ADAC has outlined for retail in the new midfield terminal is extremely exciting,” he notes. While 2015 is looking promising, sales in 2014 were somewhat disrupted by infrastrcuture development and enhance-

ment programs, with Gros reporting performance as “relatively flat” versus the previous year. Powerhouse brands Ray-Ban and Oakley dominate in the Middle East & Africa, as in other markets, and Gros highlights the attraction of luxury brands for Middle East consumers as a prime opportunity. “[We can] showcase them in innovative ways, including dedicated special collections. Recent examples of these are the Le Gemme collection from Bulgari, and a tie-up between Ferrari and Oakley – the Scuderia Collection,” he remarks. The team is also on top of global trends with Gros pinpointing customization as one to watch. “Customers want to be able to create a product that is unique to them. This is something we’ve been working on with Ray-Ban particularly. “We’re also seeing consumers become more knowledgeable – they are increasingly interested in polarized and hydrophobic lenses, lightweight and cutting-edge materials. The results of our R&D efforts—such as LiteForce—are clearly driving this trend.” Luxottica also relies on its strong partnerships with “glocal” retailers who, Gros reports, excel in category execution and which he fully expects to see increasingly being awarded space in tenders in the region due to their prime location-based capacity to react to local trends. The results of the latest Generation research painted an exciting picture for the future growth of the sunglasses market as part of F&A category growth. With US$3 out of every US$100 spent on sunglasses,

Luxottica is looking to support the category through its goal of positioning travel retail as the expert channel for sunglasses. “[We see it as] ‘go-to’ shopping channel for discerning, affluent consumers and will continue to execute our strategy of multiformatting, and look for more opportunities to showcase the sunglasses category at different points throughout the customer journey,” notes Gros. “One area we are also investing heavily is interactive promotional activations – a strategy in which sunglasses has been playing catch-up to other categories until recently. We’ve had highly successful activations with Oakley at Okinawa, where we featured an interactive cycling competition, and our first interactive digital game promotion from Ray-Ban and Oakley with DFS at Hong Kong International Airport,” he adds. Gros additionally identifies the need to support retailers on merchandising, supply chain and new product development – all of which play a part in ensuring that the choice of sunglasses in travel retail can meet customer expectations. 

Francis Gros, Head of Global Channels, Luxottica

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Ajmal Perfumes

Fragrance exclusives pay dividends for

Ajmal

Perfumes

GEMMA GREENWOOD

Limited edition lines and private labels drive company’s travel retail sales growth Ajmal recently introduced its first signature range; the W- Series

jmal Perfumes is carving out a niche in the competitive travel retail market by developing exclusive fragrances with local references but global appeal. The strategy, which has been rolled out over the last 18 months, has paid dividends for the 63-yearold Dubai-headquartered firm, delivering travel retail sales growth of 30% year to date. “It’s been a great year for Ajmal’s travel retail business and our target is 35% growth each year for the next three years, with a view to doubling our turnover for this division by 2018,” reveals Ajmal Perfumes General Manager Abdulla A. Ajmal. “Our growth is being driven by a combination of factors; new travel retail channels, which have improved our brand’s local and international exposure, more consumer-led promotions, but most importantly, the addition of more travel retail exclusives.” Examples, he says, included exclusive products designed for the souvenir sections of airport duty free outlets Gulf-wide. “These are an easy purchase because they are representative of our culture and the price point is attractive,” says Ajmal. “These perfumes are doing really well.” Unlike the bigger perfume brands, Ajmal Perfumes offers retailers flexibility—the vertically integrated company can produce “limited edition ranges to suit specific purposes or occasions very easily.” “For UAE National Day this year, for example, for a period of three weeks we will introduce the Watani (My Nation) range, packaged in the four colors of the UAE flag,” he says. “We have similar ranges planned for other GCC national days.”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Ajmal Perfumes Ajmal also produced a special-edition fragrance collection for the DSF Masters of Fragrances event, which this year was staged at Abu Dhabi National Airport for the first time. The “Dahn Oudh Al Ittihad” fragrances, available at Abu Dhabi International exclusively, were derived from 20-year-old concentrated Indian Dahn al Oudh perfume. They were encased inside an iconic falcon-shaped bottle made from Murano glass in UAE flag colors, with a gold-plated diamond-encrusted lid (the falcon’s head). The concept was designed to represent the spirit of the UAE union. “This was an example of a very successful region-orientated product,” says Ajmal.

Ajmal Perfumes General Manager Abdulla A. Ajmal

Ethnic chic

The fragrance specialist has also started developing exclusive private label ranges for a number of duty free retail outfits, including Saudi Arabia’s national carrier, Saudia. “In this respect Ajmal is becoming an important offering in the duty free market because retailers in this part of the world are looking for an edge; something different or unique,” Ajmal explains. Further leveraging its Arabian heritage, Ajmal this year introduced its first signature collection, the W- Series featuring “unique, captive ingredients” across a trio of “niche fragrances” —Amber Wood, Hatkora Wood and Santal Wood. “The packaging for this series is best described as ethnic chic, appealing to a true global audience,” Ajmal confirms.

The limited edition “Dahn Oudh Al Ittihad” collection was encased in an ornate falcon-shaped bottle

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Branching out

The company’s general travel retail fragrance offering, carefully selected from Ajmal’s 300-plus-strong portfolio of perfumes, is proving a big hit with Gulf and ex-pat Arabs, Russians, and increasingly, Westerners, predominantly English and German consumers. Ajmal was therefore poised at press time to sign a distribution deal for travel retail outlets in Europe at last month’s TFWA WE, with a view to further leveraging this lucrative market. The company is also currently growing its business with UK flag carrier, British Airways, adding more lines to its in-flight offering; pursuing distribution opportunities with Gulf airlines Emirates and Etihad; and developing exclusive products for airlines and airports in Pakistan, India and Bangladesh. Ajmal believes that as more airports globally become leisure destinations in their own right, as opposed to mere transit facilities, the scope to grow the firm’s travel retail business and brand presence with larger ranges and standalone displays is substantial. “Looking beyond the aviation industry, the big opportunity for us is cruise lines,” he reveals. “Once we have built up our brand presence in Europe, we will pursue this channel, probably from 2016.” 

2015

International Association of Airport Duty Free Stores

DutyFree Show of the

AMERICAS MARCH 22–25, 2015 Orlando World Center Marriott

Orlando, Florida, USA

The most important week of the year for your business Join us for the 2015 Duty Free Show of the Americas — your chance to connect with more than 160 exhibitors showcasing thousands of brands to more than 300 duty free store companies from over 60 countries! Conduct business on the tradeshow floor, and enjoy additional networking opportunities provided by IAADFS social events. Come see why attendees and exhibitors consistently say that our show is “the” place to do business.

www.IAADFS.org/DutyFreeShow |

See what attendees are saying about the show! “We made very valuable contacts in the industry, from buyers to travel retail agents.” “The most promising part was the new business generated, as well as contacts to follow up on.” “We got great response from travel retail operators in the Americas.“

The Duty Free Show of the Americas is hosted by the International Association of Airport Duty Free Stores, representing the duty free industry for more than 45 years.

Perfume Holding

Ambitious ME growth plan for Perfume Holding

The Ferrari Essence Collection is a top Middle East seller

Fragrance firm opens new Dubai office to support 2015 expansion strategy by

GEMMA GREENWOOD

Strategically located This has involved evolving its FerrariT H Ebranded ESSE N C E to Csuit O Lregional L E C Ttastes, ION in Dubai Airport Free products Zone (DAFZA), the with the Scuderia, Cavallino and Essence Luxury, Power & Elegance new regional headquar- Collections all proving particularly popular, ters will initially employ he reveals. a five-strong sales and “We must also pay tribute to our commarketing team and pany’s Vice President of creation, Brigitte house a showroom where Wormser,” he said. “She has spent a lot current and potential of time in the region, studying consumer clients from the general tastes and creating fragrances suited to this and travel retail sectors demographic.” can view the company’s Examples, he says, included new prodportfolio of branded ucts in the high-end Atkinsons fragrance fragrances. range, with Oud Save the King (for men) “Perfume Holding has and Oud Save the Queen (for women) A Dubai Duty Free launch realized the importance already selling well at general retail level is on the cards for the Atkinsons range of the Middle East mar- regionally, with duty free launches planned ket and the need to invest next year. in dedicated resources here,” says Malek. “A good starting point for the travel erfume Holding has set its sights “The region currently accounts for a retail launch of our Atkinsons fragrances on doubling its Middle East significant 20% of our total turnover and will be DDF,” says Malek. “There’s high travel retail business in 2015. “Today our travel retail sales there is plenty of potential to significantly demand for this fragrance collection; it’s already one of the top 20 selling brands at account for between 15 and 20% grow this contribution in the near future.” Perfume Holding will also spend the next Bloomingdale’s Dubai.” of our business in the region, but we have the Perfume Holding also recently acquired capacity to double that in a year,” revealed 12 months investing in sales staff training Patrick Malek, Sales Director for Middle to ensure its brands are correctly pitched the exclusive licence for the fragrance to the consumer at all retail outlets region assigned to global fashion house LIU JO. East, Africa and Indian SubContinent. Already launched in Italy and Benelux “We have a strong growth plan for next wide, from Harvey Nichols to Dubai Duty this year, the Middle East market is next on year, which will include targeting new Free (DDF), added Malek. the agenda given Dubai-based LIU JO stores airports in the region, as well as other key have successfully raised brand awareness distribution channels.” Brand power Putting its money where its mouth is, But expansion would not be on the cards amongst consumers. Once again, DDF will be the travel retail Perfume Holding will kick-start its Middle had Perfume Holding not spent the past East expansion campaign by opening an three years refining its brand offering in port of call for the distribution of this brand, says Malek. office in Dubai this month. the Middle East market, Malek continues.

P 70

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Perfume Holding

New channels

DDF currently accounts for around 60% of Perfume Holding’s Middle East duty free business and sales through this channel increased an impressive 136% last year, Malek reveals. “We are looking to get additional outlets and expand our brand offering at DDF going forward, but our main focus in 2015 will be to get more airports and airlines in the region selling our fragrances,” he says. Abu Dhabi International, Jordan’s Queen Alia International, Kuwait International, Riyadh’s King Khalid International and Jeddah’s King Abdulaziz International are all being targeted, “plus airlines will also become an important facet of our distribution strategy,” Malek continues. He named Emirates Airline and Saudia as priorities and said low-cost carriers would be considered as a channel for selling the Ferrari Scuderia range. “We will use the upcoming MEADFA conference to discuss the details of our growth strategy with current and potential clients in the Middle East,” Malek confirms. “The event will also help us source opportunities to expand in African markets such as Nigeria and Ghana,” he reveals. “It’s not an easy task, but we hope to get some distribution deals in place before the end of the year.” 

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Perfume Holding has spent three years raising Ferrari brand awareness in the region

Travellers looking for a delicious â&#x20AC;&#x153;after check-in snack-inâ&#x20AC;? will be delighted by the arrival on shelf of the new Kinder Miniatures collection of the three best-loved Kinder products. Presented in premium light card pouches, exclusively developed for travellers, with tempting images of the contents and strong branding, the Miniatures trio will appeal as a snacking as well as a sharing purchase for passengers of all ages.

Coach International

“A sense of

FREEDOM” Coach’s brand values align with the mindset of travelers while at the same time staying true to what made the brand successful in the domestic channel by

HIBAH NOOR

The Fall 2014 Collection keeps Coach’s strong tradition and heritage intact, while at the same time offering a modernized and reinvented perspective for a new audience

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

mericas Duty Free recently had the pleasure of interviewing President of Coach International Giorgio Sarné to learn about the company’s latest developments. He began by stressing the importance of the travel retail channel to Coach’s overall business. “The development of our travel retail business in the Americas is a key strategic priority for Coach,” says Sarné. As with many businesses, there are synergies between the domestic and duty free markets, and Sarné notes that this is especially true for Coach where Latin America is concerned: “Travel retail is complementary to our sustained development in the domestic market in Latin America. It’s also a key part of our plan to reinvigorate our business in the US.”

Tapping into trends

Another part of ensuring that Coach’s business in travel retail stays strong is picking up on current and emerging trends. And surely no trend is more pervasive around the world than mobile phones. Given the fact that most travelers can now quickly compare duty free prices and availability with the domestic markets in their home or destination countries via mobile phone, Coach is making sure that its travel retail offer is up to par. However, for Sarné it’s about more than just pricing and special editions; for Coach, the quality of the offer is of paramount importance and duty free is anything but an afterthought. “We see that travelers are more savvy about products—they have access to all sorts of information through their smartphones,” he explains. “They know more about the brands and the fashion trends. As a result, it is very important that we can offer a shopping experience in travel retail that is comparable to the one we offer in domestic markets in terms of the product selection and offering the very best quality.

“We are enhancing our shopping experience in travel retail so that the consumer can have the same level of service they receive in any other Coach shop throughout the world,” he adds. “We also offer exclusive travel retail products, which are always a compelling offer.”

Aligning with travelers’ needs

Of course, travel retail is as much about the experience as it is about the products, and Sarné says that Coach aligns well with the adventurous mindset that many people possess when traveling: “Coach offers something unique—a modern approach

to luxury that I think is unlike any other brand,” he says. “Coach is about feeling good—a sense of freedom and authenticity. This aligns well with the way many travelers feel when they’re in an airport. “Fashion is always changing and reflects w h at i s h app e n i n g around us,” Sarné continues. “At Coach, our designs feel fresh. This is what we’re about and it’s an exciting challenge to be able to communicate this to our consumers. We have a clear DNA, a long heritage and a great creative team.” To help keep the mood high in airports across the globe, Coach is launching a new collection this fall, the first designed by Stuart Vevers, the company’s new Executive Creative Director. The Fall 2014 Collection keeps Coach’s strong tradition and heritage intact, while at the same time offering a modernized and reinvented perspective for a new audience. Sarné explains: “Rich fabrics, refined leathers and finishes mixed with utilitarian ideas—luxurious craftsmanship mixed with functionality. It’s about an ease and effortlessness that is rooted in American sportswear.” Underscoring Sarné’s notion of keeping the travel retail channel on par with domestic, Coach will launch the collection in both markets at the same time. “We want to communicate to consumers that our travel retail shops have the latest and best products available,” he says. In discussing how Coach marries its domestic and travel retail businesses, Sarné gave the example of the company’s experience in US duty free. Over the last two years, Coach has opened up several shops in the country and has seen success with both international and US travelers. He credits Coach’s retail partners for helping ensure that the physical characteristics of its travel retail stores closely match those of its domestic retail outlets. Sarné is adamant that this synergy between duty free and domestic has been fundamental in Coach’s success in travel retail.

Getting it right

Of course, as much as airport retailers have helped Coach reach the heights that it enjoys today, there is always more that can be done. Sarné notes that space—always a prime concern for suppliers and store owners alike—can make all the difference in the world when it comes to attracting shoppers. “We want to offer a seamless shopping experience across all our shops, so we need to have the right sized real estate coupled with a compelling environment,” he says. “Our goal is always to reproduce in travel retail what consumers have come to know and trust in their home markets.” Sarné cites LAX’s Tom Bradley International Terminal, where Coach is among the many retail options available, as exemplary of the exciting developments happening where specialty retail is concerned. “We are hopeful that we will continue to see new developments like this, where attractive shopping environments play a key role in growing brands. “In the end, it’s the partnership between brands and retailers that makes the shopping experience better for the traveler,” concludes Sarné. 

Giorgio Sarné, President, Coach International

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

Aigner

Building on a heritage brand Aigner grows its business in the Middle East with an impressive collection of quality leather items

erman fashion brand Aigner is registering growth in the Middle East travel retail market as it builds on its strong luxury heritage with an exciting new Spring Summer 2015 collection. “The Middle East has seen a great deal of positive growth for us over the past year,” comments Travel Retail Manager Amanda Garbarino. “Our brand is popular all over the globe but we are aware of the huge potential both in this region and Asia, so we will be concentrating hard on extending our presence in these areas.” In June, the brand opened a corner at Qatar Duty Free’s new Hamad International Airport. Aigner also plans to open a pop-up store with Dubai Duty Free in Concourse A this December, along with a corner in the new Concourse D in early 2015, providing the luxury fashion brand with a presence in all four concourses at the airport. In addition, Aigner continues to extend its presence in other airports, opening corners in Mumbai Airport and KLIA 2 and, recently, a shop at the Kai Tak Cruise Terminal in Hong Kong. Next year will also see the opening of a pop-up store at Munich airport in February. 2015 also marks Aigner’s 50th anniversary and the brand will celebrate with a number

HIBAH NOOR

Headlining the Travel Collections for 2015 is the new “Triple Zip” bag

of events globally, including a major event attended by international celebrities in March in Munich and more activities in the Middle East. To mark the occasion, the company has created a limited edition collection of 50 unique Cybill bags in exotic leathers, from stingray to alligator. They are available in selected travel retail outlets from December 2014 onwards, including in Dubai, Doha, Munich and Frankfurt airports. As part of its Spring-Summer 2015 introductions, the company will continue to focus on its practical Travel Collection for women, and will highlight its extensive range of Saffiano leather products for men. “We are extremely optimistic about our new SS15 collection,” says Carbarino. “Consumers love the brand for its quality and heritage combined with fantastic styling and both classic and modern designs.” Headlining the Travel Collections for 2015 is the new “Triple Zip” bag, an inno-

Men’s SLG offers the male traveler a variety of wallet styles made from Saffiano leather

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

vative, practical shape with one inside zip compartment, two open compartments, two large compartments and one smaller middle compartment. Available in nylon with cowhide trimmings, the Triple Zip bag comes in a variety of basic colors, as well as seasonal colors like sky blue, pittaya pink and taupe. This “it” bag for 2015 is also offered in sky blue and rose nylon Jacquard. The women’s Travel Collection divides into three—Uni, Icon Jacquard and Icon Fabric—with popular carryover styles such as Piccolina featuring in all. Uni features mainly nylon material with cowhide trimmings in a variety of colors and shapes. The collection also includes a Mini Saffiano leather bag and two varieties of bracelets. Icon Jacquard offers two stunning bags in two colors: taupe/rose and taupe/sky blue made from Nylon Jacquard and Cowhide trimmings. Icon Fabric is a Piccolina bag with an exquisite pattern and a magnetic locker. Included in the offerings for men are: Men’s SLG, which offers the male traveler a variety of wallet styles made from Saffiano leather, is available in a variety of sizes such as wallet with card compartments, long wallet, travel wallet and wallet with removable credit card case. Manufactured from cowhide, Aigner’s Men’s Belt sets have been especially designed for the male traveler. Each set comes with a choice of two buckles, with a reversible element that gives the consumer a choice of either Saffiano or plain leather. 

There are cumulus, nimbus, and cirrus clouds. There’s also time to notice the difference. Maui Jim sunglasses’ UV protection blocks 100% of harmful UV light, for heightened clarity. Style shown: Baby Beach

Puig

Double-digit potential prompts

Middle East investment

The Prada Candy Florale display at Heathrow Terminal 5

Patrick Bouchard, Managing Director, Global Travel Retail, Puig

The scent of commercial success is extra sweet for Puig this year as the Barcelona-born fashion and fragrance house celebrates regional growth and 100 years of business

ith the Perfumes & Cosmetics category dominating global duty free and travel retail activity at more than 50% of market share, Puig’s long-established presence in the Middle East market is benefiting from both its reputation and high traffic numbers in numerous retail locations. “We have been celebrating Puig’s 100th anniversary with a campaign of consumer surprises throughout the year, and we have also seen high demand for high-end and premium brands in the Middle East travel retail market, with key retailers giving extra exposure to the category,” says Patrick Bouchard, Managing Director, Global Travel Retail, Puig. “We have also noticed that bringing novelties to the consumer is an important growth lever; however, as brand owners, Puig has to find the right balance between launching and maintaining its core business,” he adds. According to research by Generation, in 2013 the P&C category was an important growth contributor to the global duty

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

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Valentino Uomo

free industry, generating 8.4% of total sales, which represented a 7% year-on-year increase. “Looking specifically at travel retail, for Puig the main growth levers are investment in point of sale (POS) via ‘retailtainment’ and a multi-dimensioned promotional plan,” he notes. This two-pronged strategy is translating into increased investment into POS activations, with Bouchard citing the example of the Prada Florale campaign at London Heathrow Terminal 5, and a focus on a select number of brands aligned with local market investment and insight into the traveler profile. Strong and sustained Middle East market presence is also key to enhancing the company’s global business portfolio as Bouchard explains: “The Middle East is a strategic region within the global travel retail business unit, accounting for close to 10% of total volume. Along with Asia, it is the only region that has a double-digit growth rate. “It is also part of our expanding brand footprint, especially for Paco Rabanne, Carolina Herrera and, lately, Valentino.” While growth forecasts look positive, Bouchard sees further opportunity for development in the region. “Our Middle East travel retail market share, which currently stands at 8%-plus, is still below overall group market share within travel retail of over 9%.” In July 2014 the company appointed Buddy Abraham as its new General Manager, Travel Retail, Middle East to spearhead regional expansion. As the P&C landscape becomes increasingly competitive, Puig is relying on its well-balanced portfolio to support overall P&C category growth. Says Bouchard: “We have a long-term strategy in place for this strategic channel and have identified regional initiatives for implementation.

Lady Million Eau My Gold! By Paco Rabanne

The latest from the Carolina Herrera 212 franchise, VIP Rosé

“Over the years we have also established good relationships with the key retailers and they know that Puig can bring growth to the P&C category thanks to our innovative products and reputation for quality.” Its strategy for strengthening brand position moving forward includes continued investment in POS initiatives with the allocation of additional beauty advisor resources, investment into fixtures, and, where possible, alignment with local market investment to benefit from the “halo effect.” There’s just one thing on Bouchard’s regional development wish list. “We just need a fair share of space for our story-telling strategy to be implemented at point of sale.” The last quarter of 2014 will see Puig wrap up its 100th anniversary campaign, and second semester activity has another anniversary, for Invictus, as well as the launch of Eau My Gold, part of the One Million franchise, plus sustained promotional efforts for Uomo and development of the Caroline Herrera 212 franchise with a focus on 212 VIP Rosé. 

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

International Travel Retail Le Grand Amour by Ragheb Alama

International Travel Retail’s path to success

Cavalli Collection Wine

Lebanon’s International Travel Retail continues to grow from the ground up with a trio of new launches and plans to open in a new market in 2015

arving something of a niche for itself in the business, International Travel Retail is taking a considered approach to growth by developing the Roberto Cavalli Vodka and Wine range and building its perfume portfolio. This year sees the launch of a new women’s perfume, El Hob El Kebir, which translates as “the biggest love”. Further to this, in 2015 we can look forward to a special edition Ragheb Alama perfume Le Grand Amour that is launching just for fans and is already being described as a collector’s item. The company will also be unveiling a flavored vodka in the Roberto Cavalli Vodka and Wine range. “Cavalli Vodka is experiencing double digit growth and it has been listed in new duty free outlets at Geneva International Airport, Zurich Airport and Istanbul Atatürk Airport,” says Mariem Ben Cheikh, CEO, International Travel Retail. “In addition, we are working on the launch of an exclusive perfume range for an important group that I cannot reveal the name of just yet. We will start by developing a new teenage perfume brand with them and, following on from this, there will be make-up.” When it comes to working with suppliers, the aim is to chase quality over quantity. “I am 100% dedicated to Roberto Cavalli

Vodka and developing the perfumes,” says Ben Cheikh. “This takes up so much of my time that I’m not able to work with any new suppliers as, if I can’t take good care of the brands I currently have, then I prefer not to take on any more. It’s not a question of quantity but quality for us.” When asked what makes a good partnership, Ben Cheikh responds from the heart: “Hard work confidence, love, conviction and respect.” But then we’d expect nothing less from the businesswoman that has always injected a dose of passion into anything she turns her hand to. “My biggest challenge was to succeed starting from zero after 10 years heading up my ex-company,” she says. “It’s amazing but I realize now the courage I had and thanks to God I can say I did it!” It takes a determined personality to strike out on their own in such a competitive landscape but Ben Cheikh references her self confidence and faith for guiding her through the challenging times. Of course, she also relies on a team of loyal employees who are dedicated to helping her achieve her goals. Indeed, International Travel Retail is unique in that it has had same team in place since the business launched in 2011. “My faithful team is very active and the employees are bringing great results,” says Ben Cheikh. “I am traveling most of the time

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

and they are taking good care of our needs from the office.” The company’s major aim for 2015 is to open in a new market with either Asia or the US as the desired target. Keeping up with category trends plays a vital role in ensuring the proposition is relevant. “I am always present at the major exhibitions and conferences and read e-news in order to stay updated,” she says. “I also enjoy close relationships with my clients so I am always up-to-date with what’s important to them.” As many retailers will testify, it’s insight and attention to detail such as this that’s worth its weight in gold. 

Mariem Ben Cheikh, CEO, International Travel Retail

Mars International Travel Retail

MITR ups the ante

ollowing the success of its 2014 activations, Mars International Travel Retail (MITR) will add further fun to travelers’ journeys with yet more innovative promotions supporting its new confectionery strategy. With an enticing portfolio of new products and activations that engage and entertain shoppers, MITR aims to help increase passenger footfall and basket-spend in travel retail locations moving into 2015. The company has developed unique promotional areas suitable for high-traffic locations that allow retailers to differentiate and drive impulse purchasing. The new M&M’s promo area and Skittles promo area create premium pop-up shops, perfect for highlighting special promotions and exhibiting the latest products from MITR’s successful brand portfolio. The eye-catching areas are adjustable to almost any size, making them flexible for any retail space. Creating a fun, shop floor atmosphere, they help attract travelers and then convert them into shoppers. The M&M’s promo area has a life-size blow-up M&M’s character, adding a special wow factor and providing a unique photo opportunity. As well, following on the heels of a successful Copenhagen promotion carried out with Gebr Heinemann called Colourhagen, MITR is introducing What’s your favourite colour? Neither a game nor a shop, the concept is more of a game in a shop-in-shop. It includes a display unit for each M&M’s character that communicates some of the typical characteristics of Red, Yellow, Blue, Green and Orange. Each is filled with the

The chocolate powerhouse pulls out all the stops with yet more fun-filled in-store promotions

For those who like to keep their contop-selling merchandise of that color and bestselling chocolate items. The M&M’s fectionery purchases away from high temcolor selector allows travelers to check peratures, the MITR Cooler Bags provide which color suits their personality by hold- a practical solution. Designed with the ing hands with the unit and letting the Color Middle Eastern market in mind, where temperatures soar, this is the perfect GWP for Selector “read” their color. And then there is the exclusive platinum a traveler wishing to bring home chocolate promotion—the M&M’s Travel Mug— without the risk of it melting. Available in which will roll out in summer 2015 as a its three core brands: Galaxy, M&M’s and fun and attractive GWP. Exclusive to travel Snickers, the premium quality item is porretail and available only while stocks last, table and eye-catching. For the perfect seasonal offering, the this GWP comes in five colors representing the famous M&M’s characters. Customers Jewels Gift Bag and Celebrations Gift Bag can carry their favorite drink while enjoying were designed to stimulate chocolate gifta snappy quote. There is a quote for each ing and celebrate special occasions such famous character, for instance, “Another as Ramadan and Christmas. Combining day to be awesome?” from the Red charac- luxury and gifting into one confectionter. Available at high-traffic locations, this ary item, these offerings are based on the GWP is a total shop floor concept, avail- best-selling Jewels Casket and the Celebraable with catchy POS materials including tions Jar. The promotion gives travelers the a sitting cash-till display. Available with opportunity to personalize their gift with a every three maxi pouches purchased, the special message.  exclusive GWP represents the ultimate brand-building tool MITR’s successful Copenhagen promotion carried out in peak season. with Gebr Heinemann was a game in a shop-in-shop MITR Activation Manager Lindy Spierings comments: “Along with driving sales, all of our activations are fun and interactive and aim to provide excitement to an otherwise dull journey for travelers. We are confident that with the combination of our new activations and the introduction of our new category management strategy, MITR will be at the forefront of driving the growth of the confectionery category.”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Ritter Sport

New World

ambitions for Old World favorite

Colorful German chocolate brand, Ritter Sport, is aiming big in 2015 with plans to take its travel retail range to the Americas by CLAIRE MALCOLM

he 102-year old family business has already successfully crossed continents with its color-coded bars a familiar favourite on shelves from Africa to Asia. Katharina Tyrolt, Global Travel Retail Manager, reports that 2014 to date has been a good year with a number of new listings in Asia Pacific, in particular, supporting its expansion plans. “We are with DFS in New Zealand, Japan and Mumbai and we are still growing with Heinemann, which is one of our biggest customers; plus we are in Delhi Duty Free for the first time,” she says. Looking at the Middle East-Africa region, Ritter Sport is also following the tourist trail with presence at a number of North African airports in Tunisia, Morocco and Egypt. “Business in this region is relatively stable. In general we’ve seen quite good growth across Europe thanks to the fact that we are a pretty well known German brand; and the Heinemann partnership is also performing well,” notes Tyrolt. Next year will see the brand break new ground with the Americas in its sights for 2015. She says: “We are talking to several clients in North America as well as Latin and South America.” As year-end approaches, Tyrolt confirms that the company is on track in Asia Pacific in terms of sales performance with Ritter Sport’s overall global travel retail division recording medium double-digit growth both in sales and volume. Brand familiarity is a major influencer in the purchase decision and domestic presence in over 100 countries has proven to be a firm foundation for travel retail sector growth. It also has wide demographic appeal, picked up by tourists as well as frequent

travellers, with the age profile ranging from young adults through to customers in their late 50s. “Packaging is extremely important. The Ritter Sport 100g Tower, for example, showcases our brand values. It’s colorful, has lots of varieties packed in, and people instantly recognize the colors of the individual bars,” Tyrolt explains. Three new products were on show at last month’s TFWA WE exhibition in Cannes, and are scheduled for global rollout from April 1, 2015. “They are all based on our standard product and what we do is develop new and travel retail exclusive packaging. We have a 160g single or 320g double pack Ritter Choco Cubes tin, which is our praline product, and the only product not a regular tablet. These contain 20 and 40 pieces respectively,” she explains. “We also have a 65g Ritter Sport Tower, the ‘baby brother’ to the 100g option,” she adds. In addition to perennial demand for gifting and sharing options, one new trend that Ritter Sport is also planning to exploit in the travel retail domain is consumer interest in seasonally packaged products, as she explains: “We haven’t had this in travel retail before but we do pick up on it domestically in Germany. “However, rather than look at Christmas, Easter, Chinese New Year and Eid specific packaging, for example, we focus more on the time of year as in Spring, Summer and Winter, so we will probably do that in travel retail as well.” She adds: “This with also be supported with promotional activations. We ran some extremely successful consumer promotions with our partners this year, with tastings and samplings. We are also now building tailor-made POS units for our special customers.” 

The Ritter Sport 100g Tower showcases the company’s brand values

Double pack Ritter Choco Cubes tin

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

Duc d’O

The finer things

in life Duc d’O’s strategy of giving travelers a moment of “untamed delicacy” through duty free-specific offerings spells success as the company expands into the Middle East by RYAN WHITE

hile Duc d’O has had a very strong position in travel retail in Asia for quite some time, it wasn’t until the brand re-launch, complete with the tagline “Untamed delicacy,” that the company really cemented its position in Asia. The re-branding also brought with it new prospects in the Middle East, and the expansion into the region started in arguably the best way it possibly could have—with a listing secured at Dubai Duty Free, the biggest single-airport retailer in the world. Duc d’O began selling its fine chocolates at Dubai Duty Free in January of this year and Luuk Reijnders, Sales & Marketing Director at Duc d’O, says that the company is now looking to expand to other regions in the Middle East given promising sales performance so far at Dubai International Airport. “The arrival of Duc d’O at Dubai Duty Free was a key milestone in our Middle East strategy,” he says. “Our focus now has spread to other operations that we feel are key in the Middle East. “We see consumers in the Middle East as being very open to new tastes and top-quality products,” Reijnders continues. “Next to that, Middle East consumers appreciate international brands. We offer premium quality Belgian chocolate. Furthermore, our brand positioning is unique in the global travel retail landscape. This gives us confidence that our brand will find traction in the region.”

Tailored to the channel

And given the importance of travel retail to Duc d’O’s overall business strategy, the

company has made a concerted effort to tailor its offerings to duty free. To better meet the needs of the travel retail consumer, the company has optimized its travel retail assortment by adding new gifting concepts and customizing existing bestsellers. Duc d’O now offers a special gifting bag that contains two 200g boxes of its popular flaked truffles. Bringing together its most popular taste creations, the bag features flaked milk truffles and flaked milk truffles with hazelnut. Further indication of Duc d’O’s concentration on the channel is that the bag is designed for travelers, making it easy to carry on planes and through airports. According to Reijnders, Duc d’O’s main objective is to ensure that it’s meeting travelers’ needs while staying true to its artisanal Belgian heritage, and another product which is doing just that is the promobox luxury bag, which features two 200g boxes and comes in two different versions. Finally, there’s a new 3+1 valuepack, which features easy carry handles for ease of transport. The valuepack has been re-envisioned and now features see-through sides and a see-through front so that consumers know exactly what they’ll find inside. The valuepack is available in two versions, one containing four 200g boxes of milk truffles and the other containing four 200g boxes of dark truffles. As Duc d’O expands across travel retail in the Middle East and continues to grow its business in Asia, Reijnders tells us that the company’s concentration will remain firmly on pleasantly surprising travelers with the finest artisanal chocolate truffles from Belgium presented in eye-catching and travel retail-specific packaging. 

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Duc d’O began selling its fine chocolates at Dubai Duty Free in January of this year

Find out more @NestleITR

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Godiva

Calling all chocolate lovers Godiva’s exquisite new chocolate counter concept—Chocology —makes its tasty way into the Middle East

uxury confectionery company Godiva has significantly strengthened its presence in the Middle East with the opening of a stunning new counter concept at Hamad International Airport (HIA) in Doha, Qatar. With its exclusive premium chocolate area, Chocology, the new Godiva chocolate counter, presents travelers with a unique chocolate experience, raising the bar in confectionery retailing. Travelers are invited to engage all of their senses in a world of chocolate discovery. Combining the best that Godiva has to offer, plus exclusive products and an element of theatre, the counter delivers a completely new chocolate experience with professional chocolatiers. Trained by Godiva’s Chef Chocolatier, their 24/7 presence at the counter offers a one-of-a-kind opportunity for passengers to purchase treats, savory biscuits and creative decorations made fresh all day long. With five sections, the Godiva counter offers a selection of seasonal treats dipped in chocolate and all uniquely decorated. Fine delicate Belgian biscuits are offered in exclusive tin boxes, making them an ideal gift, while the main chocolate case holds chocolates and truffles, including three unique chocolate creations made exclusively for Chocology. For those looking for refreshment, Godiva Chocolixir is available in both hot and cold versions and six indulgent varieties. Travelers looking for a special gift to take home need look no further than the

Chocology, the new Godiva chocolate counter, presents travelers with a unique chocolate experience

Godiva luxurious gifting section. Exclusive gift boxes, designed in an eye-catching peacock blue, offer the perfect Qatar souvenir. Those who cannot choose can purchase a selection of the best that Godiva has to offer in a chocolate hamper. Ramon Iglesias, Regional Director EMEA, says, “We have seen positive results since the opening of our new chocolate counter, with sales outperforming all expectations in the first few weeks. Travelers are attracted by the theatre, excitement and choice that the counter provides, creating a truly engaging and innovative experience that they will not forget. The addition of a trained Chocolatier ensures that travelers are receiving the freshest, handmade chocolates available. Both the exclusivity of the products on offer and the element of watching the fine art of chocolate making results in us providing a truly unique and engaging offering.” In addition to the new chocolate counter, Godiva is also present in all of the confectionery areas situated in HIA, including the Main Shop, Express Shops, and Marmalade Market—one of Qatar Duty Free’s

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

own concept stores. Iglesias adds, “Having a presence in all the confectionery areas at HIA is evidence that Qatar Duty Free recognizes Godiva as a strong, important, premium brand, which fits perfectly with its new airport concept of creating a worldclass experience.” “We believe that Godiva’s presence at the airport, particularly the unique chocolate counter, is an important element of this world class experience – raising the bar and setting new standards in chocolate retailing at airports,” adds Leen Baeten, Senior Manager Marketing & Business Development. “We hope that this concept will act as a showcase for what Godiva is capable of, executed in a way that is exclusive and customized to this key location.” “By working closely with our customers,” continues Baeten, “together we will continue to define and strengthen the premium confectionery segment. We are convinced this new Godiva concept can be easily adapted to various environments. As part of our growth strategy within travel retail, we are looking forward to adding new retail formats and experiences to the list.” 

The Tastes of Happiness.

Iconic brands. Delicious choices. Travel Retail Exclusive products. You bring all this and more to your customers with Hershey’s extraordinary portfolio of chocolate and confections. For more information, contact your Hershey Business Manager today.

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Liquor News A Cannes debut Zamora International’s focus product for travel retail, Licor 43, made a more sophisticated debut in Cannes this October during the TFWA World Exhibition. The bottle containing the golden Spanish liqueur is tall, suave and worldly, with an indented swirl that wraps around the label, in keeping with the modern trend of inviting consumers to touch, in a multisensory experience. The cream and black “43” logo is enlarged, and the design in its entirety speaks of the premium liquid inside. The family crest and Diego Zamora’s signature have been incorporated, alluding to the Zamora family’s ownership since 1946, though the liqueur’s history purportedly dates back 2,000 years. Now available in 68 markets worldwide, Licor 43’s international sales have more than doubled in the past five years. Currently its largest markets are in the Americas, especially Mexico, Brazil and the US, and in parts of Europe, but its importance to the liqueur market is spreading. Antony Kime, Zamora International’s Director of Global Duty Free, expresses his pleasure at presenting the updated design: “We are delighted to unveil the new look of Licor 43 at TFWA Cannes ahead of its 2015 global launch. Licor 43 has grown consistently and from strength to strength in recent years, and the new bottle will heighten awareness and drive the brand’s continued global success. As part of our overall growth strategy for Licor 43, travel retail plays an important role in building consumer awareness and trial. This industry is integral to our ambition for it to become a one million case brand.” The new design will be available globally from February 2015.

Disaronno Riserva’s bottle is sleek and modern while remaining recognizable as a member of the Disarrono family

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Licor 43’s sophisticated new design will be available worldwide beginning February, 2015

Unique packaging for a unique liquid Disaronno is one of the most well known spirits in the world, with an easily recognizable bottle. Recently, Illva Saronno has been extremely innovative with its icon. For two years the company has worked together with top fashion designers to create limited-edition fashion-inspired bottles; in 2013 the bottle was designed by Moschino, and in 2014 it was designed by Donatella Versace. But the innovation has not been limited to the outside of the bottle. In Cannes, Illva Saronno announced an exciting release that offers a drinking experience unlike any other. Disarrono Riserva is an exceptional product created by marrying Disaronno with Scotch whisky. First the easily recognizable flavor of Disaronno is enhanced with the added blend of Scotch whiskies nurtured in the Highlands and Speyside. These delicious liquids are then aged together in oak barrels that had contained Marsala Reserves. This ageing process takes place in Cantine Florio, in Sicily. The company found that the original wood floors had been covered in concrete, and they unearthed the old wood, allowing for a greater interaction with the natural environment. Because the ageing takes place in this warm location by the sea, the humidity is high. This unique mix of liquids, conditions and casks join together to create the exquisite Disarrono Riserva. The bottle is reminiscent of Disarrono’s, but with its own sleek, modern design that should cause a great stir on travel retail shelves.

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Liquor News The number 001 decanter of Dupuy Auguste was recently sold at auction for €11,000, nearly quadruple the expected bid of €2,800 Distell’s Black Bottle whisky has gone back to its roots in both bottle design and in blend

A new horizon

BACK IN BLACK Great excitement has surrounded the relaunch of Distell’s Black Bottle whisky. Soon after its first appearance 1879, Black Bottle developed a following for the rich, smoky whisky in its namesake black bottle sourced from Germany. Despite its name, however, the brand appeared in a green bottle for most of its existence, starting when World War I cut the company off from its supplier. Black Bottle whisky is going back to its roots. The design of the new black bottle was inspired by an archival version from 1906. While the blend of the whisky had changed over the years, the blend, too, is going back to its origins. The brand’s new retro expression won the World’s Best Relaunch Award at 2014’s World Whisky Design awards. The new one-liter Black Bottle was presented at a trade launch event at TFWA Cannes in October, where guests were treated to a true multisensory experience in addition to drinking cocktails made with the delicious new blend and listening to a lovely trio of singers.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

The cognac market has been unkind to many companies since 2013. This is especially the case with those companies that overextended their reach in China at the expense of other regions. For Bache Gabrielsen, a cognac company that looks to markets others might not, this period of time has been both steady for sales and enlightening in terms of future growth. “Our Dupuy Tentation range is entering the Middle East market,” says Hervé Bache-Gabrielsen, Owner and Chairman of his namesake company. “We have been receiving a surprisingly and strongly positive reaction from that region.” Both the Dupuy Tentation range and Bache Gabrielsen are now listed in Duty Free Antalya in Turkey, run by the Nuance Group. “Sales volume has remained at 1.3 million bottles per year,” says Gabrielsen. “In general our two main brands did very well in 2013, especially when you consider the Cognac downturn in Asia.” Both brands, Dupuy and Bache Gabrielsen, recently won high awards at the 2014 Cognac Masters. Also, this fall the number 001 decanter of Dupuy Auguste was recently sold at auction for €11,000, firmly establishing the brand as a must for collectors.

Six regions for a truly Scottish blend Grand Macnish, one of the oldest blended whiskies on the market today, has been in continuous production since 1863. As befits its illustrious history, the brand has been mentioned in many quotes throughout the years. When writing about a plane crash he had been in, Ernest Hemingway stated in Look magazine, 1954: “… secondly, to conserve our water supplies, thus rationing the one bottle of water, the four bottles of Carlsberg beer and the bottle of the Grand Macnish Scotch Whisky, which I will recommend without any hope of recompense.” A new chapter has been added to the Grand Macnish story with its 6 Cask edition. Each whisky-producing region of Scotland has its own distinctive flavors. In the 6 Cask edition, six different whiskies from the six regions—Highland, Speyside, Islay, Campbellton, Lowland and Islands—are blended together to give a taste of “Scotland in a bottle,” according to John Scott, Export Sales Director of MacDuff International. A neck booklet comes along with each bottle, explaining the six regions and their associated characteristics.

While MacDuff International continues to launch new Grand Macnish products with new labels and boxes, the signature six-pinch bottle remains

NEW

So Jennie

These Bubbles La Grande Epicerie de Paris, the finest epicerie in Paris, will offer a full wall of So Jennie, pictured here with Founder and CEO Jennie KergoatRuelland, for two months over the ChristmasNew Year season

As if to highlight its French pedigree, So Jennie’s showroom is located just steps from the Eiffel Tower

have legs by

With its popularity soaring in the Middle East, in Japan and throughout the world in high-end shops, restaurants and spas, So Jennie proves that a beverage does not need to contain alcohol in order to be luxury

S The exquisite bottle is made by Saverglass, in France. The bottle is decorated with dainty little butterflies serigraphed in 14 carat gold

o Jennie Luxury Bubbles has found its place in luxury stores, restaurants and spas around the world, and it is now moving determinedly into travel retail. Qatar Airways pours the luxurious nonalcoholic drink, and in fact a description of the product and striking image of the bottle take up the entire first page of the beverage menu for business and first class. Qatar Duty Free has answered the cry from those desiring this product, and it is now listed with them as well. Founder and CEO Jennie Kergoat-Ruelland hears constantly from people around the world who have tasted the beverage and are trying to find it. More and more, she’s able to tell them of a place nearby. While high-end and luxury alcoholic wine and spirits have an important place in the travel retail industry, many people throughout the world do not drink alcohol, either on a temporary basis, because they are driving or because of pregnancy, for example, or as a long-term life choice. It was a group of such people that inspired Kergoat-Ruelland. After her position running United Airlines in France came to an end post-9/11, she began working in the Gulf region producing large events, mainly weddings. She noticed that at these events, thousands of women would have a row of Baccarat crystal glasses

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

WENDY MORLEY

in front of them holding different beverages, but the celebratory champagne glasses would be filled with a lovely but thick juice drink. It seemed a shame to her that the beauty of the crystal was being obliterated by the juice, and she set about making a product befitting the celebration. Yes, dealcoholized bubbly wine drinks do exist, but they are not optimal. First, the key word is “dealcoholized.” Dealcoholized drinks might still contain up to 1.4% alcohol, whereas So Jennie has 0% alcohol because from creation to bottling it never contains alcohol. In addition, a person celebrating a momentous occasion or someone who just appreciates quality will never be satisfied with an inferior product, and thus it took two years of working with master beverage makers for Kergoat-Ruelland to find a liquid she was satisfied with, a product with tiny bubbles with a delicious flavor, one that feels luxurious on the tongue. A drink of such stature cannot appear in just any bottle. Kergoat-Ruelland selected one of exquisite fabrication made by Saverglass in France. The refined label is printed on the glass, and the bottle is decorated with dainty little butterflies serigraphed in 14 carat gold on the bottle itself. The butterflies are an important symbol to Kergoat-Ruelland: “They are light, graceful and beautiful, and they symbolize the light, free feeling you get when you don’t drink alcohol.” So Jennie doesn’t just offer a light, free feeling, but it also is very low in calories and this has made it a favorite in high-end spas. With her domestic market exploding and travel retail becoming a focus, KergoatRuelland has just signed on with Global Travel Retail Distribution, who will handle travel retail everywhere in the world except Qatar. For more information, go to www. gtrd.com or www.sojennie.fr. 

Diageo GTME

Whisky,

redefined

David Beckham, here in Cannes, is no mere figurehead for HAIG Club; he has history with HAIG and helped develop the new product from its inception

When the world’s largest liquor company, the world’s most renowned football player and one of the world’s greatest impresarios create a product together, the category will never be the same by

WENDY MORLEY

here has probably never been a Scotch whisky like HAIG Club, and there has certainly never been a launch like the launch for HAIG Club. It is without question helpful to have a real A-list celebrity on board to attend opening events, but with HAIG Club, Diageo has much more than that; its A-list celebrity is also a partner. And David Beckham did not come alone. Simon Fuller’s name may not be as recognizable as Beckham’s, but he is just as powerful an addition to the brand. Fuller has created some of the best-known entertainment brands in existence, such as the “Idol” series: Pop Idol in Britain, American Idol in the US, and others throughout the world. Together with Diageo, these two successful men have created a product and a launch that is setting tongues wagging.

Exclusive debut in Changi

HAIG Club had its debut in Changi Airport with a month-long exclusive at DFS before it began to roll out around the rest of the world. The Changi exclusive began with a bang as David Beckham greeted thrilled crowds. These crowds may have been especially thrilled, but everyone who passed through during that first month experienced something special as they were treated to an activation that featured a wall of attractive HAIG Club bottles and visuals featuring Beckham. Following in the footsteps of HAIG’s history, this liquid comes in an unusual bottle. The unexpected squared blue bottle will stand out on shelves, but there is much more to the story than that. The blue glass and copper color of the stopper are based on the blue glass and copper used by whisky masters, so like the distillery, the brand’s bottle is at once both modern and traditional. The same can be said for David Beckham, who is no mere figurehead for the brand. He began working with Diageo on this product almost immediately after retirement, and he says the HAIG brand holds a special place in his heart. He has a clear memory of visiting HAIG Club kicked off with a bang at Changi his grandfather as a young airport for a month-long exclusive before boy, and seeing him pour rolling out to the rest of the world his HAIG Scotch whisky.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

Since Beckham is a partner and not only a figurehead, he has been not only willing but also excited to appear in the commercials and at launch events for his product. It is as obvious to those who take part in these events as it has been for Diageo that this is no ordinary whisky. The liquid itself, a single grain whisky, is smooth and light. It is intended to appeal to whisky drinkers and non-whisky drinkers alike, and so far that seems to be the case. Reviews have been very good. HAIG Club is as easy to drink neat, on ice or in a cocktail like the one offered at a launch event recently at TFWA WE in Cannes, where members of the travel retail press were invited to meet Beckham and taste the whisky served over ice with apple juice and ginger bitters.

A charming partner

At the event, Beckham charmed the press with stories, talking about his days as a boy with his grandfather and about how excited he was to see HAIG Club in a recent inflight travel retail magazine – so excited that he bought a bottle. Beckham also answered questions, including the question of whether his wife is a fan of the liquid. (While definitively not a Scotch drinker, she does like this one.) If ever there were a trifecta of success, the partnership between David Beckham, Simon Fuller and Diageo would appear to be it. And in case anyone was worried that new Scotch drinkers would not be coming along in future, their fears have just been laid to rest. 

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Vinprom Peshtera

Everyone knows how

Vinprom Peshtera is banking on its Chocolote flavor of vodka to get the attention in travel retail this year, especially in the Gulf Africa region

to flirt With its Flirt vodka line, Vinprom Peshtera is appealing to the young, hip traveler in markets around the world by

WENDY MORLEY

ith 1,500 hectares of vineyards, the company grows Cabernet Sauvignon, Cabernet Franc, Merlot, Syrah, Chardonnay, Muscat Ottonel, Sauvignon Blanc, Ugni Blanc and more. As such a large company, in addition to growing its own grapes Vinprom Peshtera purchases grapes from 200 other growers in the country, covering over 100,000 more hectares. The company also sets aside a number of hectares for testing. While wine is an important part of the Vinprom Peshtera story, it is only part of the story. While the company has five wineries it also has two distilleries, and these are the most modern distilleries in the country. For the domestic market, Vinprom Peshtera makes the most well-known brand of Rakia, a grape-based spirit that is the national drink. In its distilleries it also makes Black Ram whisky, Peshtera mastika, Paralia ouzo, Peshtera Mint liqueur, Lion Dor and Clocktower of Peshtera brandies, Sixth Sense gin, and Alaska and Flirt vodkas. While these

products are strong in the domestic market, only in the past several years has the company begun to focus on the other side of the Bulgarian borders. Started in 1939 and government owned until 1996, in the year 2000 Vinprom Peshtera invested a great deal of money in modernizing its distillation facilities, bringing them up to high EU standards. Its products are now available in over 40 countries, and the company is putting a lot of resources into the travel retail market. Only in the past two years or so has the focus been on the Gulf-Africa region. Vinprom Peshtera has significant presence in East Africa, and that is where its efforts will be over the coming year. While it has had distribution, the company is looking for a brand builder in the region. “We want to work with a long-term partner to achieve brand awareness,” says Zhelyav Kolioski, the company’s Marketing Manager. “We do not want someone to merely bring bottles to stores, but instead we want to work together with them to build brand awareness in the region.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

We are looking for a long-term partner.” In the coming months, the focus in travel retail in the region will be Flirt vodka. “Everyone knows the word ‘flirt,’ says Kolioski. “And the vodka and its flavors are very accessible.” Flirt is a multiple-distilled grain spirit that is filtered through silver ions to remove any impurities. Especially popular with the young and hip, the vodka is also renowned for its quality, and has won numerous awards. Previously available in Classic, Green Apple, Cool Mint, Vanilla, Lemon and Orange, Flirt is now also available in Chocolate, and that is the flavor the company is promoting in travel retail. Chocolate flavor has been available in the Gulf-Africa region for only a few months, but Kolioski expects it to do exceptionally well. The younger adults who drink Flirt vodka love the flavor for a chocolate martini or served in a cocktail. With its enormous success domestically combined with its modern facilities and its investment in travel retail, Vinprom Peshtera is sure to become more and more of a player in global travel retail in the coming years. 

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Gulf Beverages

Strong brands, bright future

Gulf Beverages’ exciting launch this season is Jagermeister Spice. Its vanilla and cinnamon flavor lends the product to sales in colder climates, and so cities such as Beirut and Delhi will be the focus

A combination of new brands and exciting launches with its current brands leaves Gulf Beverages in an enviable position

I by

WENDY MORLEY

n recent years the Gulf region has put enormous focus on increasing its international passenger travel, with new and expanding airports and a multitude of business, sporting and other events to draw people to the region. According to statistics, travel to and from the Gulf region has been consistently strong, and continuously record-breaking numbers being reported from airports in the region attest to that. It’s no surprise, then, that business has been good for Gulf Beverages. In the region as a whole, the company’s sales increased 30% in 2014 over 2013, and in Dubai the company sees steady growth.

New offerings

Gulf Beverages picked up a number of exciting new brands in the past year. Stolichnaya, the well-known, innovative vodka that started the premium vodka category many years ago, has been distributed by the company for the past few months. Leon Ashford, Business Development Director for Gulf Beverages, says reaction to the brand has been extremely positive. The distribution company also picked up high-profile Italian sparkling wine producer Bottega,

Stolichnaya, offered by Gulf Beverages over the past few months, has created quite a sensation in the region

100

Super-premium Beluga offers a leather gift box that speaks of the product’s exclusivity

famous for its gold Prosecco bottle. Bottega and the Italian wine range on the whole are very well received in the region. What Ashford considers the “real coup” for 2014, however, is the company’s agreement with Diageo. Gulf Beverages has begun to supply Johnnie Walker gift packs to some of the regional duty free operators. “This works well for both the customers and Diageo,” Ashford states. “This arrangement means the supply chain is dramatically shortened, increasing on-shelf availability.”

Existing brands, new directions

The brands Gulf Beverages has already had in its portfolio are also doing very well in the region. Corona’s move from the 6-pack to 12-pack has helped increase the momentum of the brand. Jagermeister sales continue to grow at 30% as people in the region find and embrace occasions to consume the brand at home. The super-premium vodka Beluga has launched in several new outlets including Delhi Duty Free, where it is performing very well. Beluga has created a leather gift box that speaks of its exclusivity, and this is being very well received by consumers in the region. While Gulf Beverage’s Italian wine offerings are doing well in the region, Wolf Blass and Penfolds also have strong sales. The new Wolf Blass Private Release range, compris-

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

ing a Chardonnay, Shiraz and Cabernet, is a travel retail exclusive and has been a top performer since its introduction mid-2014. Ashford is planning an exciting launch coming up with Penfolds in Dubai, but it’s currently too early for him to discuss particulars. While Jagermeister’s popularity has been climbing, the introduction of Jagermeister Spice is an especially exciting launch this season. The vanilla and cinnamon flavors in this seasonal drink are suitable for cooler climates, and therefore this special product will be offered at select locations. Ashford explains that cities where it gets colder in the winter, such as Beirut and Delhi, will be his focus for this product.

Things to come

The future looks bright for Ashford and Gulf Beverages, and for the coming holiday season and into 2015, Ashford expects to see continued growth. He does admit that the travel industry is easily affected by unforeseen forces that can impact business. Political and social unrest in the region can mean travel numbers drop significantly. The current unknown is the impact the Ebola virus outbreak will have if it continues to spread as it has been. Barring this type of unpredictable event, however, the coming year for Gulf Beverages looks very positive indeed. 

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Pernod Ricard Guests at the Chivas Regal Extra launch were treated to an informative and entertaining session in a hidden speakeasy bar room

Double Down Even without the red background at the Chivas Regal Extra launch event in Cannes, the red hue of this aged blended Scotch whisky is apparent

Recognizing its strengths in the Gulf region, Pernod Ricard will be launching two new Chivas Regal products in the space of just a few months by WENDY MORLEY

ccording to David Freeborn, Managing Director, Pernod Ricard Gulf, the Gulf region is a very exciting place to be in travel retail. In recent years there has been a huge investment in infrastructure throughout the region; Emirates, Etihad and Qatar Airways are ordering ever greater numbers of aircraft, and Bahrain and Omar airports will both be tendering in 2015. “The region is also interesting because it operates very differently from most in the world,” says Freeborn. “Because it’s a hub, a great many of the passengers that pass through, especially in Abu Dhabi and Dubai, are literally passing through. They are there simply in transit. Additionally, unlike in other parts of the world, in some airports of the region the arrivals business is almost as large as departures.” This is the case because

domestic consumption consumers tend to purchase when they arrive at the airport, and their allowances are relatively large at four liters of liquor and five bottles of wine per person. This offers a unique opportunity for travel retail. While Freeborn says various categories are growing in the region, especially the super-premium vodka category, the primary liquor has always been superpremium blended Scotch whisky of at least 12 years old, and it still is. So while Absolut is Pernod Ricard’s second most important product in the region, the most important is Chivas Regal. Introduced at TFWA WE in Cannes, Chivas Regal Extra will be of particular importance in the Gulf region. Though this new Chivas does not have an age statement, that certainly does not mean Chivas Extra is not an aged scotch. It is a blend of aged After learning about and sampling the new Chivas Regal Extra, guests were treated to complementary desserts created by world champion pastry chef Jérôme De Oliveira

102

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

scotches, and is positioned between Chivas Regal 12 and 18 years. “Chivas Regal Extra will satisfy the desires of the discerning whisky drinker with something exceptional, deep in aroma, rich in fruitiness and generous in sweetness,” says Freeborn. “It’s created with an exceptional blend of rare whiskies combined with malt whiskies aged in sherry casks from the Olorosso sherry bodegas in Spain.” The fact that this whisky has been aged in Olorosso casks will be no surprise to the individual who sees its red hue and tastes its sweet complexity. Performing activations and promotions in the Gulf region is a more complicated matter than in the rest of the world. The goal of Pernod Ricard Gulf is to market to the unique mix of passengers who travel to or through the region throughout their entire journey, so by the time they arrive the message has been received. Since its launch at TFWA WE, Chivas Regal Extra will be the focus of this marketing in the coming months. But toward the late spring or early summer of 2015, another new Chivas Regal product will be launched, Chivas Regal Icon. Not much about the new product has been divulged as of yet, but Chivas Regal already has an association with the “Icon” moniker. “The Blending of an Icon” is the Chivas Regal multisensory experience that takes viewers through the key stages of making Chivas Regal, enlightening them on the true art of blending. “Icon” is a word easily associated with this established high-end brand, and whisky drinkers everywhere will be anxious to try this new creation. 

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JTI

A place of their own by

In most circumstances, smokers easily respond to nonsmoking spaces by going outside, but in airports that is not so easy

n average, a passenger spends two hours in the airport before his or her flight, another half-hour or so on the tarmac, and then the flight itself. For a smoker, this time can be very difficult to pass. In many cases, there is no opportunity to smoke. Of the 15.3 million adult airline passengers who travel each day, 3.2 million are smokers. This leaves a huge number of frustrated people in airports without a smoking lounge, and provides an opportunity for airports to offer a choice that can give them the upper hand when passengers are choosing flights; the presence of a smoking lounge does nothing to deter a nonsmoker from using an airport, but when there is a choice, a smoker will certainly choose an airport with a smoking lounge over one without. Around the world, Japan Tobacco International, or JTI, is providing this solution for airports. By the end of 2014, JTI will have 212 lounges and cabins in 16 locations around the world, including locations in Dubai and Tel Aviv. All of JTI’s new smoking lounges have independent ventilation systems that operate separately from the airport’s system. Because the lounges are under negative pressure, more air is taken out through ventilation than brought in. This prevents the smoke from exiting the lounge when people enter or leave the room. Air from the room is continuously directed outside the terminal. 104

WENDY MORLEY

JTI’s smoking lounges all have independent ventilation systems that operate separately from the airport’s system. Negative pressure means air from inside does not escape when the doors are open

Smoking lounges offer a competitive advantage to airports, since approximately 21% of all adult airline passengers smoke

Not only do smoking facilities meet the needs of traveling adult smokers, but they also provide airports with a competitive advantage, as they have been seen to drive additional revenue for commercial outlets based in airports. Most recently, a JTI smoking lounge opened at Geneva airport. Representatives from Geneva International Airport and JTI Worldwide Duty Free attended a ceremony to officially inaugurate the new JTI smoking lounge at the airport. The lounge is located on the second floor of the departures hall, close to business lounges. “Out of a total of 14.4 million passengers who travel through Geneva airport every year, over 2.9 million are smokers. This lounge will be a world-class customer service facility that will significantly enhance the traveler’s experience at the airport. We

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

look forward to further strengthening our partnership with Geneva Airport with the help of innovative facilities and services in the future,” said David Francis, General Manager and Vice President of JTI’s Worldwide Duty Free business. “Comfort and efficiency are key values for all of our passengers, whether smoking or not. This renovated smoking lounge is really in line with our service policy. We are also very happy to have a partnership with JTI,” said Robert Deillon, CEO of Genève Aéroport. Smoking lounges in airports are winwin. JTI is the worldwide leader in building smoking facilities with sophisticated ventilation technology for airports, and the company plans to continue providing this important service throughout the world. 

Tobacco News New look, superior performance Neos cigars have been an extremely popular choice in travel retail, and this favored selection has been the focus for J. Cortes’ travel retail team globally. Currently, J. Cortes is launching new packaging for its Neos line. This packaging is sleeker in design and color, and perhaps most important, it highlights the name of the brand as opposed to the name of the flavor. The brand Neos has been performing well worldwide and exceptionally well in Dubai Duty Free (DDF), where it has seen an incredible 80% growth year over year from 2013 to 2014. This is many times greater than the overall category growth at the retailer. This growth is even more remarkable since it was achieved with only a two SKU assortment of the universally known and accepted Vanilla flavor and the European-inspired Cappuccino flavor. In coming months, more Neos flavors will be added to the selection at the store. While the new flavors have not been chosen yet, possible choices include Chocolate, Mango and Cherry, flavors well suited to the diverse demographic making up the global traffic that passes through Dubai airport. The new flavors and new package design will become available at DDF over the coming weeks.

This exclusive, limited-edition, highly refined cigar comes in a bespoke wooden box reminiscent of Chinese wooden architecture

Neos’ new packaging is sleeker and more modern, and highlights the globally important brand instead of the specific flavor

Celebrating Chinese New Year To celebrate the Year of the Sheep, Davidoff will soon introduce an exclusive limited-edition Piramide cigar, sure to be coveted and appreciated by the Chinese cigar aficionado. The Piramide is considered the most refined cigar shape by connoisseurs. The Year of the Sheep cigar will bring this refinement to another level, with a longer head. Eight of these beautifully handmade cigars will come in a bespoke wooden box, designed to reflect traditional Chinese wooden architecture. The cigar is made up of a complex blend of Visus tobaccos, with an intense aroma but with a medium and well-balanced strength. Intense flavors of oak and toast are present as soon as the cigar touches the flame. Sweet milky coffee follows, creating an enjoyable aftertaste. In the second third of the cigar, flavors of chile, dark chocolate and coffee pair with a creamy aftertaste. In the final third, the roasted flavors develop a slight pleasant bitterness. “The Zodiac sign of the Sheep has many values in common with Davidoff. The appreciation for craftsmanship and the sense of refinement and style which brings joy to others are at the heart of everything Davidoff believes in,” says Charles Awad, Senior Vice President Marketing and Innovation at Oettinger Davidoff AG. “In keeping with this belief, these exclusive cigars have been lovingly crafted using the rarest and most precious ingredient: time.” This exclusive item comes with elegant accessories crafted especially for this limited edition: an ashtray, prestige lighters and custom-made scissors. Only 7,000 of these Davidoff Year of the Sheep boxes will be available, beginning with appointed merchants in the US in November and worldwide from December 8th. www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

105

British American Tobacco

Categorically

important by

WENDY MORLEY

British American Tobacco International recently contracted Counter Intelligence Retail consultants to gain insight on the Western European and Middle Eastern tobacco buyer in the duty free channel

Christian Löwe, General Manager of BATI, says the company is committed to investing in the right tools to help the category keep up with the evolving consumer.

ecent research, conducted by Counter Intelligence Retail and contracted by British American Tobacco, offers substantial insight on the behavior of tobacco buyers versus the overall duty free shopper. It is an often-cited point in the duty free industry that tobacco buyers are especially important to the duty free operator because of their buying habits over all categories, and this research definitively supports that statement. For this research, Counter Intelligence interviewed over 7,000 adult passengers in six key international airports in Western Europe and the Middle East. The study found that in all aspects of the study— average basket spend, category spend and conversion rate, tobacco buyers came out on top. • Tobacco buyers’ average spend on the one category, at US$64, compared with an average spend of all other categories combined of US$95. • Tobacco buyer’s average basket spend was US$109 versus an average basket spend of US$95 for the duty free shopper. • The conversion rate, at 53%, was higher than that for purchasers in any other category.

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Recent research by Counter Intelligence Retail clearly demonstrates the importance of the tobacco buyer in the duty free channel

Other reasons a duty free operator would want to attract a tobacco buyer are that 55% of tobacco buyers also purchase items from another category, and 45% of them would not purchase anything if their tobacco products were not available. “Tobacco is known to be one of the most important categories in the duty free channel and British American Tobacco International (BATI) is committed to investing in the right tools to help the category keep up with the evolving consumer. We believe in driving growth by being consumer centric and we step up to the increasingly complex challenge of understanding the

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2014

consumer,” says Christian Löwe, General Manager, BATI. “The dynamics of the duty free channel are changing dramatically as well. Airports and retailers now have to focus more on enhancing passengers’ experience to meet the wide variety of behaviors and preferences present in duty free. Therefore, BATI is proud to bring insights on adult shoppers of different nationalities to its partners.” At TFWA WE in Cannes, BATI revealed key points to its trade partners, and over the coming weeks and months the company will be releasing more data gleaned from this research. 

2015 30 Annual Convention 30e Convention annuelle th

“Canada’s Exclusive Duty Free Convention”

November 15 – 18 | 15 – 18 Novembre Westin Bayshore, Vancouver, BC

www.fdfa.ca

TFWA WE Review

Snapshots of TFWA WE 2014 courtesy of TFWA

TFWA celebrates

30 YEARS AND continues to grow A record number of attendees flock to Cannes for TFWAâ&#x20AC;&#x2122;s 30th World Exhibition

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s the doors close on the 30th TFWA World Exhibition & Conference in the Palais des Festivals et des Congrès in Cannes, TFWA reports that once again visitor numbers have exceeded expectations, beating attendance at every other event in the Association’s history. “We are extremely satisfied with the whole event again this year,” comments Erik Juul-Mortensen, TFWA President. “So many of the stands in the exhibition have been outstanding, the content of the conference and workshops was fascinating and instructive, the general ambience has been very positive and the sun has shone done upon us all week. “The excellent visitor figures demonstrate that the duty free & travel retail industry is flourishing which, I hope, justifies my optimism that we will achieve impressive business development in the coming years and, hopefully, another ten-fold increase in global sales over the next three decades. “We will, as always, analyze every aspect of the event and make any changes which

are necessary to ensure that TFWA World Exhibition & Conference continues to serve the industry and its members.” A total of 6,701 visitors from 3,105 companies attended the event, which ran from Sunday 26th to Friday October 31, compared with 6,303 visitors (+6%) from 2,917 companies (+6%) last year. Of the total, 2,132 people (32%) are “key buyers”: duty free & travel retail operators and landlords of airports, airlines, ferry, cruise, border and downtown concerns. Adding agents and distributors to this figure produces a total of 4,511 influential trade executives from 1,750 companies. These trade visitors had come to do business with the 471 exhibiting companies, 45 of them new or returning after an absence, showcasing thousands of products. A record 1,351 delegates (+36%) attended the Conference on Monday 27 and heard excellent presentations from Gen. Colin Powell, USA (Ret.) 65th US Secretary of State, Alexandre de Juniac, Chairman & CEO, Air France-KLM and Erik Juul-Mortensen.

The Market Watch: Latin America workshop attracted 135 early-birds, 75 concerned individuals convened to discuss the threat of counterfeiting to the luxury goods industry and 167 attended the Airline & Retail: Inflight Focus workshop. The social events made networking a pleasure and, in some cases, raised vital funds for the charities supported by TFWA Care. The Charity Run on Sunday 26 entered by 152 sporty individuals raised €3,700 (US$4,646); the Golf and Petanque tournaments were oversubscribed and hotly contested. Over 1,620 guests, plus many of the delegates occupying rooms at the Carlton Hotel, attended the glamorous Welcoming Cocktail on Sunday with celebratory fireworks courtesy of the City of Cannes. The Scene after-hours venue was packed every evening with energetic dancing and plenty of socialising. Le Premium Evening at Port Canto on Thursday 30 provided a suitably glittering finale to a fabulous week with a live concert by Chic fronted by Nile Rodgers and dinner created by 3* Michelin chef Regis Marcon. 

www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

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Questionnaire

ALL ABOUT

Simon Forde, Group Chief Operating Officer, Flemingo International Q: Where were you born and raised? A: The UK; you can take the boy out of London but you can’t take London out of the boy

Q: Do you have a pet (or more than one)? If so, what animal and name? A: I would love a dog, but only if I had the time to train it and space to walk it.

Q: If you attended post-secondary school, what did you study? A: I attended Durham University, but looking back the term “studying” might be an exaggeration. I managed to get an honors degree in social science.

Q: Do you prefer country or city? A: City during the week, country on the weekend.

Q: Are you married? Do you have children? A: Yes to both, and I am now also a very youthful grandfather. Q: What is your favorite movie? A: For ability to watch repeatedly without boredom, The Great Escape. Q: What is the last book you read? A: The Mystery of Mercy Close by Marian Keyes. Q: What would you choose as your last meal? A: My wife’s roast dinner. Q: Your favourite drink? A: Diet coke or beer, both of which I am constantly trying to give up, and failing. Next year I hope to say water and green tea

Q: What is your favorite place to vacation? A: Living in Dubai, I love going back to the UK for the weather. Q: What’s the first thing you do in a new place? A: Source Diet Coke and beer … I mean water and green tea … Q: If you could choose any place in the world to live, where would it be? A: I am very happy in Dubai, as long as I get regular fixes of the UK. Q: Which living person do you most admire? A: I find Lord Coe quite amazing, and Simon Murray—former French Foreign Legionnaire and Chairman of Glencore, and currently Chairman of Gulf Keystone Petroleum—for their drive and ability to have been successful at widely different things.

Q: Do you have a passion in your life (or more than one)? What? A: Waiting for England to win the Rugby World Cup 2015.

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Q: Which historical figure do you most admire? A: King Canute, for his self belief. Q: Where and when were you happiest in your life? A: It takes a lot to beat being 10 years old and given your pocket money on a Saturday morning. Q: What in the world would you most like to change? A: Man’s inhumanity to man continues to shock, sadden and disturb me. Q: What about yourself would you most like to change? A: What is it with the Diet Coke and beer questions? Q: What is the most important piece of advice anyone ever gave you? A: “A lack of planning on your part does not constitute a crisis on mine.” Told to me as trainee Retail Sales Manager by my vastly experienced Floor Supervisor. Q: What is something about you that most people would find surprising? A: Maybe not a surprise, but I only ever wear red socks. 

A WORLD OF SHOPPING Wherever you go with Dufry, you have a world of shopping in your hands. The best brands and the best prices with the largest variety. A world made up of more than 1350 shops, at over 185 airports, seaports and railway stations in over 45 countries around the world. Dufry, we go far to be close to you. www.dufry.com