Gulf-Africa MEADFA 2016 by Paramount Publishing Ltd.

MEADFA 2016

DUTYFREEMAGAZINE.CA NOVEMBER 2016 · MEADFA · VOL 26 · NO 3

Brand makeover for Bahrain Duty Free p. 8 IDFS maps out Morocco market growth p. 20 Mazaya shisha tobacco excels p. 70

GALAXY® is a registered trademark. ©MARS 2016.

LETTER FROM THE EDITOR

NOVEMBER 2016 · MEADFA · VOL 26 · NO 3

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 2016, Vol. 26, No.3. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2016 Global Marketing Company Ltd.

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 SENIOR EDITOR Wendy Morley wendy@dutyfreemagazine.ca ASSOCIATE EDITOR Jas Ryat jas@dutyfreemagazine.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca CONTRIBUTORS Claire Malcolm Mary Jane Pittilla

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

Up in

the air T

rading in a Volatile World was a theme of the MEADFA 2015 conference and, one year on from the Dead Sea gathering, the duty free and travel retail landscape in the region still presents an unstable economic and geopolitical environment. Switch sides to look at the aviation industry as a whole, and airport infrastructure development in particular, both the Middle East and Africa are ploughing ahead with multi-billion dollar investments into servicing forecasted future capacity growth. The Middle East is fast tracking airport expansion plans with the UAE alone investing US$32.7 billion. This includes the phased Al Maktoum International Airport, Abu Dhabi’s highly anticipated Midfield Terminal, and the Ajman International project, which, is slated to handle over one million passengers per annum. Bahrain’s new passenger terminal is pegged for a 2018 unveiling while Jeddah’s 20-year King Abdulaziz International Airport expansion program is underway; and, over in the Sultanate of Oman, funding for the overhaul of its international and regional portfolio is already committed. The vast continent of Africa is also looking to the skies with IATA predicting passenger volume growth of 4.7% per annum to reach 294 million by 2034; up from 107 million in 2015. Uganda has floated plans to resuscitate its national carrier, and fleet expansion is on the cards for Air Tanzania and RwandAir. Rwanda is also hoping to establish Kigali as a regional hub, with the national airline expanding its network to include Asia and Europe. Ethiopia has mooted plans to build the continent’s largest airport in Addis Ababa, with capacity to process up to 120 million passengers each year; and the Nigerian government recently instigated the concession process for four major airports, while Tanzanian authorities are actively seeking investors for the expansion of three existing airports and construction of a fourth facility. It’s a waiting game for the travel retail industry on all fronts as market forces in the short term continue to impact traveler spend despite increased passenger volume across the region. And with bigger airports, expanded route connectivity, expected growth in budget carriers and reduced transit passenger times defining the mid to long term landscape, there are clear-cut topics on the table at this year’s conference. Our MEADFA 2016 issue adds timely perspective with Rajeev Bhatia of Bhatia Traders providing candid commentary on how solid expertise and a back to basics approach is needed to secure sustained commercial success, while newly promoted Dubai Duty Free COO, Ramesh Cidambi, gives us the insider track on the ins and outs of managing large-scale multisite operations. We also look at development for IDFS in Morocco, where in excess of US$2 billion was poured into tourism sector development in 2015, but where airport openings don’t always run to plan. And Bassam Al Wardi, General Manager of Bahrain Duty Free talks big brands and big plans for the Arabian Gulf ’s original aviation hub. See you in Dubai! Kindest Regards,

Hibah Noor Editor-in-Chief hibah@dutyfreemagazine.ca www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

CONTENTS

What’s inside LEAD STORIES 8 Bahrain Duty Free BRAND MAKEOVER FOR BAHRAIN DUTY FREE

With work on the kingdom’s largest infrastructure project, the US$1.1 billion expansion of Bahrain International Airport, underway, renovation of its existing duty free space is also ushering in a new era of commercial potential for the Aer Rianta International (ARI) managed operation

8 12

12 Dubai Duty Free THE NUMBERS GAME

Three decades’ experience with Dubai Duty Free have given its Chief Operating Officer, Ramesh Cidambi, unique hands-on insight into exactly what makes this business fly

20 International Duty Free Stores IDFS MAPS OUT MOROCCO MARKET GROWTH

With new store openings in Marrakech and Casablanca wrapping up a busy year, International Duty Free Stores (IDFS) is mapping out new future potential across the country

24 Bhatia Traders BHATIA TAKES BUSINESS MODEL TO AFRICA

With over three decades’ experience in duty free operations, Bhatia Traders is taking its expertise into new markets with a two-country joint venture on the African continent

32 Russia Market Watch UPDATE: RUSSIAN DUTY FREE AND TRAVEL RETAIL

TFWA held a “Russia Market Watch” session in Cannes to update attendees on future of this market

36 Dufry Sharjah DUFRY SHARJAH SET FOR SEPTEMBER REVAMP

Operator aims to leverage the emirate’s growing appeal as a business and leisure hub with a strategic upgrade to its airport shops

FEATURES Airport News Hey young spender

30 31

TFWA WE Review

CONTENTS

LEAD STORIES 44 INCC Parfums ENGINEERING A SUCCESSFUL FRAGRANCE BRAND

INCC Parfums is driving forward its classy fragrance family Mercedes-Benz Parfums with lots of new initiatives taking place across local and travel retail markets

46 Hanse Distribution HEALTH FRONT OF MIND FOR HANSE

The Germany-based company is taking the pulse of the duty free and travel retail industry with wellbeing products the trending sub-category

52 Wonderful Company CRACKING TRAVEL RETAIL

The Wonderful Company’s line of pistachio snack products are making inroads among duty free operators as the company works to improve the lives of its employees

58 VP Brands International A BIG FLIRT

VP Brands International’s FLIRT Vodka, the fastest growing brand in the UAE and popular throughout the Gulf region, is now turning its gaze to sub-Saharan Africa and beyond

60 Brown-Forman PROMOTING AUTHENTICITY

Brown-Forman and Jack Daniel’s are bringing their strong background into play with activations and promotions targeting the sub-continental Millennial

68 Davidoff DAVIDOFF CELEBRATES ITS ROYAL RELEASE

As a company well known for bringing true luxury to the cigar aficionado, Davidoff stays true to its soul with this extraordinary new release

70 Alzawrae/Mazaya PIPE DREAMS

Launched in 2010 by Jordan’s Alzawrae Company, Mazaya shisha tobacco has transitioned from the regional domestic market to the global duty free stage

72 Villiger A GOLDEN OPPORTUNITY

Swiss tobacco products specialist Villiger is expanding its highly successful line of Gold tins with new products and fresh formats

FEATURES Capi focuses on healthcare innovation 48 Dyrberg/Kern mixes it up in travel retail 50 NITR’s Stewart Dryburgh talks millenials 54

Ricola’s distinctive approach Hershey’s gets personal The Underberg story

56 57 67

BAHRAIN DUTY FREE

A dedicated premium fashion section will add further value to the new retail footprint

Brand makeover for Bahrain Duty Free With work on the kingdom’s largest infrastructure project, the US$1.1 billion expansion of Bahrain International Airport, underway, renovation of its existing duty free space is also ushering in a new era of commercial potential for the Aer Rianta International (ARI) managed operation. by CLAIRE MALCOLM

Bassam Al Wardi, General Manager, Bahrain Duty Free

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

ahrain International Airport handled 8.6 million passengers in 2015, and with the new terminal promising capacity for 14 million travelers by the time it opens in 2020, non-aeronautical revenues will be a crucial cog in Bahrain’s aviation industry wheel. According to Bassam Al Wardi, General Manager, Bahrain Duty Free, despite a challenging year to date, which saw an H1 2016 decline in year-on-year earnings of 35.4% due to drop in investment income, with net recorded profit of US$8.92 million, followed by the start of an extensive renovation programme, the new departures store holds endless future promise. With new brands and a new look and feel re-energizing the space, this is already paying dividends, and the September 2016 launch of a 48-square-metre Candy Cloud store, the first international outlet for the award-winning ARI-originated confectionery concept outside of Dublin Terminal 1 is setting the right business tone. “When we were talking through our plans with the airport authority, we told them it was time we had something fresh and exciting in place, and the opening of Candy Cloud makes a clear statement about what Bahrain Duty Free can do, and how we can make a difference to the airport experience,” he says. Indicative of the retailer’s customer centric approach to the renovation, this was the first of what Al Wardi says will be many openings to come by the time the 1,500-square-meter departures store is completed by the end of this year. The tobacco category renovation has also been completed with the liquor space the latest to be unveiled anchored by the Johnny Walker ‘House of Walker’, in partnership with Diageo. Says Al Wardi: “It’s another milestone for us and will be the first of its kind in the region.

Bahrain Duty Free is focused on social media activity to support on-the-ground operations and engage traveling consumers

“Following this will be our most exciting category, Perfume & Cosmetics (P&C); plus we are also adding a new section with a dedicated premium watches retail footprint, and we feel that this will add significant value to the business and for our shareholders.” The revamped P&C space is the result of a series of intensive customer surveys, which Al Wardi says were key to delivering the right offering and driving sales for the future. “Research is a vital part of the planning process and we wanted to know exactly what passengers want out of the P&C experience. I can confidently say that the team has done a fantastic job in securing more than 90% of the brands and products that our survey respondents wanted on-shelf,” he says. A shop-in-shop concept from MAC Cosmetics will be one of the headline features, stepping into the shoes of the Diageo Global Travel and Bahrain Duty Free unveil existing temporary travel exclusive first ever Johnnie Walker House in Middle East sets pop-up shop that has been a star performer for the category at Bahrain also extends to our new premium watches collection with brands Duty Free. such as Omega and Hublot part of the luxury demand-led portOther brands making an appearance include Jo Malone, folio,” remarks Al Wardi. Bobby Brown, Amwaj, and a wealth of private collection labels Technology is also playing a role in the new space, as he from the likes of Bulgari, Hermes, YSL and Armani Privé. explains: “We previously had just two or three screens and a “We have a lot of changes, new assortments and that special lot of media lightboxes in place. Now we will have 65 screens element of exclusivity coming through for the category, which www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

BAHRAIN DUTY FREE

In September 2016, Bahrain Duty Free unveiled a 60-squaremetre Candy Cloud store, the first international outlet for the awardwinning ARI-originated confectionery concept

ranging in size from 32 to 85 inches, all wirelessly connected and remotely controllable from our marketing offices, so we can select the appropriate messaging dependent on flight arrivals, passenger demographics and seasonal offers. According to Al Wardi, the team is also focused on social media activity to support on-the-ground operations and engage traveling consumers, with Bahrain Duty Free active across all the expected channels, and with a particular fondness for youtube uploads. A different retail beast from its regional neighbours, Al Wardi still treats the operation with the same respect as a much larger operation, as he explains: “While we are not the biggest in the business, we are continually striving to be the best in terms of what we do and this is centered on providing a quality driven retail environment complemented by stand-out service. “It’s not merely a matter of investing in the physical space, but is about providing the right service experience, and we put our

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

people first so that they, in turn, are delivering across all 3,300 square metres of our operation.” He reports that Bahrain Duty Free’s employee retention levels are consistently high, and with recent 25-year anniversary celebrations reinforcing the team spirit, Al Wardi used the opportunity to remind the team that positive change is what drives this fast-paced business. It is something that he also hopes travelers through Bahrain International Airport will appreciate, with the new-look departures duty free store reflecting the dynamic evolution of travel retail in general, and demonstrating ARI’s 70 years’ commitment airport duty free excellence. “Even though we are still in the process of renovation, some of the frequent travelers coming through are already amazed by the change, and this adds immense value in terms of customer satisfaction, not only for us but for the airport,” he adds.

DUBAI DUTY FREE

Terminal 1 and the newly launched Concourse D are also home to a mix of international and low-cost airlines

THE NUMBERS GAME Three decades’ experience with Dubai Duty Free have given its Chief Operating Officer, Ramesh Cidambi, unique hands-on insight into exactly what makes this business fly by

CLAIRE MALCOLM

A Ramesh Cidambi, Chief Operating Officer, Dubai Duty Free

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

key member of the executive team since 1987, Ramesh Cidambi initially joined Dubai Duty Free to help set up its technology function. Since then he has come full circle, taking over the logistics function in 2004 to develop a new 20,000-pallet automated distribution centre, project managing various retail and airport expansion initiatives over the years; and now overseeing the operation as COO. “For the last few years I’ve been looking at retail development as it relates to ongoing physical expansion, renovation and addition of new retail spaces, so I’ve had great exposure across all aspects of the business as we work to keep pace with development at both airports,” he says. Cidambi tends to play down the enormity of the undertaking with its 36,000 square meters spread across two airport locations, four terminals and multiple concourses, which has seen him at the coal front of each high profile opening including Concourse B in 2008, Concourse A in 2013, the new passenger terminal at Al Maktoum International Airport in the same year and, most recently, the launch of Concourse D at Dubai International.

DUBAI DUTY FREE

Dubai Duty Free has worked to improve its retail offer at Terminal 2 to service a wide customer demographic

ment is much quicker and demands a quick and easy core category offering.” That said, Cidambi also points out that a traveler flying to Kathmandu with flydubai today may well take an Emirates business class trip to Paris next week. “Around 15% of flydubai passengers connect to other airlines, with the majority taking an Emirates flight, so this prompted us to improve the retail offer at Terminal 2 to service this wide demoAdapting to the changes in the passenger mix at graphic,” he notes. Concourse A is a current focus for Dubai Duty Free Terminal 1 and the newly launched Concourse D are In his new role he also holds executive responsibility for the also home to a mix of international and low-cost airlines, and purchasing and finance discipline, with 180 shops under his Cidambi admits that this adds to the challenge of creating a comwatchful eye and the challenge of managing multiple locations pelling duty free offering. and a diverse passenger demographic, as he explains: “We really He remarks: “When you have an airport that connects to need to make sure that our offer covers all the bases as well as more than 130 destinations, and with Emirates alone flying to suiting the specific traveler demographic. over 100 locations, it’s not really possible to merchandise or “The spend per passenger flying with Emirates tends to be create assortments for a particular ethnic or nationality profile, higher than with other carriers using Terminal 1, and we also so you have to have brands and products that cater to as wide a have the low-cost model at Terminal 2 where passenger movesegment as possible.” 14

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

DUBAI DUTY FREE

The redevelopment of 16-year old Concourse C, which is on track for a phased relaunch from this December, will deliver an initial 1,300 square metres of retail and Cidambi is excited about the new passenger experience. “With passengers now checking in at Terminal 3 and accessing the new concourse after arriving into Concourse B, we have completely refreshed and rejuvenated the space so that it is much more in sync with the passenger journey, and the retail offer is extremely attractive,” he says. While Concourse A has hogged the limelight in recent years, it too is under review, as Cidambi explains: “With Concourse A we incorporated everything we learned from our Concourse B and [original] C projects. It has very wide retail area circulation and fantastic use of digital screens with the entire network integrated into the fitout and design, plus we use the products to signpost the categories so passengers can quickly identify what is where. “Our current challenge is how we can adapt to the changes in the passenger mix as some flights that previously departed from Concourse A have moved to Concourse C, which is now Emirates-exclusive, so there is a drop in passenger volume.” Transit passenger spend is another area on Cidambi’s radar. With 65-70% of Emirates passengers taking onwards flights, the sheer size of Dubai International with gate-to-gate journey distances of up to two kilometres, and tight connection windows, means limited potential dwell time. Says Cidambi: “What we need to do, not just with transit passengers but all passengers, is to better communicate the retail offer, whether that’s using our digital screens, through apps or other

The Al Maktoum International Airport duty free operation is part of a total retail floorprint of 36,000 square meters

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

means; and this has to be part of our overall digital strategy. “We are currently re-evaluating our strategy. Once this is in place and we gain traction in terms of communication, personalization and messaging, then we can look more in-depth at the transit passenger’s needs, and this is something we will work on with the airport.” The travel retail leader is exploring opportunities with various travel partners, and recently launched a unique redemption program for Emirates Skywards cardholders, who can now spend their miles at its Dubai Duty Free stores. It was also one of the emirate’s entities that participated in the Dubai Government-organized Dubai Week, which took place in Shanghai, China in October. The event was established to initiate B2B dialogue between Dubai and Chinese travel and hospitality businesses, and was a platform for Dubai Duty Free to announce its newest initiative. “The Chinese are very digitally savvy consumers and we have literally just launched an initiative with leading online travel agency, CTRIP, so we can communicate with travelers before they even catch a flight,” says Cidambi. As an incentive, any of CTRIP’s 141 million active members flying to Dubai International Airport will receive a 7% discount on their duty free purchases from January to June 2017. In addition, Dubai Duty Free has also signed a Memorandum of Understanding (MOU) with long-time partner UnionPay International, for future marketing tie-ups. Commenting on the signing, Colm McLoughlin, Executive Vice Chairman & CEO, Dubai Duty Free, said: “Both the number of Chinese travelers flying through Dubai International and those

DUBAI DUTY FREE

Colm McLoughlin made Master of the Quaich in Scotland Dubai Duty Free’s Executive Vice Chairman & CEO Colm McLoughlin was inducted as Master of the Quaich for his outstanding contribution to the Scotch whisky industry at a traditional ceremony held at Blair Castle in Perthshire, Scotland. McLoughlin was among a select group of five members inducted as Master of the Quaich. He was made a member of the Keepers of the Quaich in 2006 in recognition of the work undertaken by Dubai Duty Free in the promotion of Scotch whisky since 1983, when the operation opened for business at Dubai International Airport. Over its 33 years of business, the operation has grown to become the largest single airport retailer in the world with sales of US$1.888 billion in 2015, with Scotch whisky accounting for US$116 million in sales last year. Commenting on his induction as Master of the Quaich, McLoughlin, who was accompanied by his wife Breeda, said: “I am delighted to be part of such an historic society and it is a great privilege to be selected as a Master of the Quaich. This is an exclusive international community committed to promoting Scotch whisky, and I am honored to represent Dubai Duty Free on this very special occasion.” During the evening, the Society also inducted 47 new Keepers of the Quaich. The Keepers of the Quaich was founded in 1988 by the leading Scotch whisky distillers and takes its name from the two-handled drinking bowl which is described

in the Gaelic language as a ‘quaich’ – a vessel long associated with Scotch whisky drinking. To date, there have been 2,549 Keepers of the Quaich, 50 Honorary Keepers and only 200 Masters have ever been awarded the title. Members come from over 100 countries. Dubai Duty Free’s Executive Vice Chairman & CEO Colm McLoughlin was inducted as Master of the Quaich for his outstanding contribution to the Scotch whisky industry at a traditional ceremony

shopping at Dubai Duty Free has increased substantially in recent times and we believe that by teaming up with CTRIP and UnionPay we can interact directly with them before they fly, and help them make informed purchasing decisions at Dubai Duty Free. “In line with this, our e-commerce website is available in Mandarin for the first time, thereby providing Chinese travelers with an insight into a range available online products.” Cidambi adds: “One lesson we learned with Chinese travelers is that as far as any purchasing decision is concerned, it’s too late to influence them once they land. If the pilot scheme is successful, there is also the potential to possibly roll it out to other demographics.” He barely has time to breathe it seems, with the next major project – the physical repositioning of the Terminal 3 arrivals duty free space - already underway, as he elaborates: “At the moment we have two large stores, totalling around 18,000 square metres positioned to the left and right of the arrivals hall as you exit. “One of the difficulties we have is that because of the arrivals hall layout, which is huge with giant columns running throughout, people don’t necessarily see the offer before exiting.” The new single store will be located on the left hand side of the hall, just off centre, and with a tentative launch date of Q1 2018, Cidambi is pushing through with the requisite permissions to make it happen. He concludes: “We think it will dramatically improve the penetration we have at arrivals and expose the offer in a much more accessible way.” The Terminal 2 low-cost model with fast passenger movement demands a quick and easy core category offering

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

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IDFS

After almost a decade in the making, IDFS is excited to see its new Casablanca spaces launch later this year

IDFS maps out Morocco

market growth With new store openings in Marrakech and Casablanca wrapping up a busy year, International Duty Free Stores (IDFS) is mapping out new future potential across the country

ith a goal of 20 million visitors by 2020 and projected tourism revenues of US$16.6 billion, the Moroccan government is firmly focused on securing its position on the global tourism map before the end of the decade. In 2015 more than US$2 billion was ploughed into tourism sector development and despite regional unrest negatively affecting tourism arrivals into Egypt, Tunisia and Turkey, Morocco is holding its own. Christopher Tantoco, Executive Vice President – General Manager, IDFS

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

The country’s Treasury & External Finance Agency reported a 1.3% decline in the first nine months of 2015 following a decade of sustained growth, which peaked in 2014 with 10 million visitors, and airport infrastructure enhancements are vital to the attainment of the government’s Vision 2020 goal. The November 2016 opening of the new terminal at Marrakech Menara International Airport, ongoing expansion program at Mohamed V Airport in Casablanca and rumours of development plans at Agadir Al Massira Airport are fuel for Morocco’s duty free industry. Christopher Tantoco, Executive Vice President – General Manager of Casablanca headquartered International Duty Free Stores (IDFS), is gearing up for a positive start to 2017 with the imminent opening of the company’s new 996 square metre space at Marrakech Menara International’s new terminal and December 31 pegged for the unveiling of a duo of new stores at Casablanca’s refreshed Terminal 1. “Marrakech will open in time for the high profile United Nations Cilmate Change Conference (COP 22) and the new departures store is significantly larger than our previous 600-square-metre space. It’s also our first semi walk-through store and the design is more luxurious than our other locations, which was a landlord requirement in keeping with the airport’s high quality positioning,” says Tantoco. IDFS worked with renowned German design firm Blocher Blocher Partners (BBP) on the upgraded concept. Says Tantoco: “They’ve worked with us in the Philippines and mainly design for high-end luxury brands as well as public spaces. For Marrakech they used a lot of black and woods versus the predominantly white theming we have in Casablanca, and this has delivered a luxury finish and feel.” While brand uniformity is a priority for IDFS, Tantoco believes that destination differentiation is also important, as he explains: “We have our overall design blueprint but each city has its own unique appeal and we want to reflect this by incorporating local elements into each airport space.”

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The terminal’s high ceilings also allow for increased use of large-scale focal installations such as big feature walls. Inspired by Moroccan architecture, BBP fused traditional and modern elements to create a contemporary ‘glocal’ feel. Curved walls were added to guide customers through the shop, with modern fixtures further delineating merchandise categories to increase the dwell time in a luxurious and friendly environment. The brand mix remains the same, with the addition of Italian fashion brand Liu Jo. It also has a different category split, as he explains: “The store is divided into equal thirds, which is a departure from the old space which was around 60% tobacco, 30% P&C and other traditional categories, with just 10% for fashion. “Now we have one third entirely dedicated to fashion and accessories, which was something we really wanted to do from the beginning, and we are hoping to grow the category. I’m also confident that there is strong potential to develop the P&C category with the new store format.” He also says that there was a disconnect in the old terminal between the tobacco, wines & spirits section and the rest of the shop. “Because we knew they were planning to close the old terminal down it didn’t make any sense to invest into a short-lived refurbishment, so with the new store we have been able to apply all our ideas and create what we believe is the ideal retail environment.” As well as hosting the world’s largest annual sustainability conference, Marrakech continues to lead tourism arrivals into the country, and according to an Oxford Business Group report, between 2000 and 2014 inbound visitor numbers rose from 591 million to just over 2.1 million with the expansion at Marrakech Menara Airport designed to increase overall annual capacity to 10 million passengers, up from nine million. Tantoco and the team will barely have time to draw breath before Casablanca’s new Terminal 1 makes its year-end debut.

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

IDFS

“After almost a decade in the making we are excited to see this come to fruition. We have two locations covering 400 square metres apiece, with one on Level 1 and the other on Level 2,” he explains. IDFS worked with Dash Design on its newest project, the same team that it partnered for the Casablanca Terminal 2 refurbishment and rebranding. Says Tantoco: “This meant guaranteed continuity and was also a chance to see what they could do with a dual concept as we have two very different spaces. “Our Level 1 Store is all about ‘grab and go’ as there’s nothing to distract passengers on that level and no seating areas, so the flow of traffic will be fast. This means we will need a mixed category focus with top selling items.” Originally scheduled as a 2017 project, the terminal opening has been fast tracked, and IDFS is still playing with ideas to maximize on the split space layout. “Level 2 is more relaxed with more dwell time opportunities as passengers move through to their gates, plus we are strategically sited opposite Starbucks and another food outlet, and are the only duty free store on the upper level,” he remarks. “Here we can also play with the different categories a little more and experiment with other brands as customers will have more time to explore. Passenger volume is predicted to be strong with the Moroccan Airport Authority, ONDA, dividing traffic 60/40 between Terminals 1 and 2 to alleviate current congestion, and forecasting passenger capacity of 14 million by 2014, up from the current seven million. And Casablanca is currently looking to augment its tourism offering with OBG reporting that an estimated US$1.2 billion has been allocated to sector development for a total of 46 regional projects including a marina, tourism fishing port and cruise port and terminal. Says Tantoco: “It’s been a busy year. One of my proudest moments was opening the Tantoco Corporate Centre just two months ago, which is named after my grandparents, which consolidated our head office and warehouse operation. “We’ve doubled our warehouse capacity and tripled our office space and this has been a milestone moment for IDFS.”

The ongoing expansion program at Mohamed V Airport in Casablanca is fuel for the future of Morocco’s duty free industry

IDFS is working with Dash Design on its latest Casablanca project

Casablanca is currently looking to augment its tourism offering with the government allocating an estimated US$1.2 billion to infrastructure development

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

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BHATIA TRADERS

Bhatia takes business model to Africa With over three decades’ experience in duty free operations, Bhatia Traders is taking its expertise into new markets with a two-country joint venture on the African continent by

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

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BHATIA TRADERS

hatia Traders’ new joint venture in Africa covers a brace of airports and two diplomatic shops in the Democratic Republic of Congo (DRC) and two further airports in Zimbabwe. According to Rajeev Bhatia, Managing Director, Bhatia Traders, the partnership was first and foremost all about seizing an opportunity, as he explains: “We believe this is a great market to do business in, and the more challenging that Africa becomes in the next few years in terms of its geopolitical issues, this will open that many more opportunities for operators to enter the market and introduce new services.” “What happens in some of these smaller countries, is that you tend to have local players running business who are great partners but who need a degree of expert support. These are exactly the kind of opportunities we identify with, as this is where we started more than three decades ago when we launched our first seaport retail operation.” Fast forward to 2016 and Bhatia has an established presence on the regional non-airport scene with duty free outlets, bonded warehouses and seafarers clubs throughout the UAE. Its Abu Dhabi operation alone covers 10,000 square feet of food and beverage and retail space offering 17,000 listed items, as well as a sports bar.

Says Bhatia: “This is what gave us the vision for these unique locations and what we do is partner with the right people. The idea for Africa is to apply there what we’ve done with our business in the last few decades, as well as re-innovate to find what works specifically for the market.” The company’s new partners will also benefit from Bhatia’s logistical expertise, operational knowledge and strength in numbers, with the team handling the operation from procurement through to day-to-day management. His strategy for success is simple – get the basics right – and with a reputation as a non-conventional operator, Bhatia Traders and its forthright MD don’t hold back in pointing out that this is something he believes the industry as a whole needs to take on board, especially in the current global economic climate. “There needs to be a serious rethink of strategies as duty free players. If I use Africa as an example, we’ve gone into the DRC stores and told them they are doing too much. There have been certain products listed that don’t fit the market, and too often the response is that it was offered on trial, so they took it,” he remarks. “So, rather than innovating, it’s time to go back to ground zero and get the basics right first.”

Premiumization is key to driving commercial success in the new locations

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

BHATIA TRADERS

Transformation of physical spaces and the product mix is being implemented over the coming months

Bhatia says that this has been the mantra for success for large-scale airport formats, as he explains: “Operators there have invested in the main category product lines and not diversified; so liquor, tobacco and P&C have been given prominent space and that’s what works. “If a product category doesn’t perform within a three to maximum six-month window then it needs to be out of there.” Back in Africa, Bhatia says that while the company has already taken over the operational reins, transforming the business will be a measured process. “We are going to take it slowly and focus on bringing in the right product mix to each location, plus make a lot of noise about it in the diplomatic concessions and at the airports,” he says. “You need to make the right noise and we know that, over time, as people fly into these airports or come to the diplomatic shops, they will then remember you. We are also going to use social media channels as well as media on the floor, and will host events like diplomatic gatherings,” he adds. Bhatia Traders did the same thing with its UAE ship chandling business, hosting awareness events that provided an opportunity to communicate what the company stood for as much as about what it could offer. Premiumization is key to driving commercial success in the new locations, especially to the diplomatic corps. Says Bhatia: “If you look at value packs, for example, this is a way to premiumize my customer so that tomorrow maybe they’ll buy a more expensive product. “For me as a retailer it’s about making more money; my brand is premiumized and my consumer is drinking or taking premium products, which is communicated as a value proposition.” 28

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

He continues: “However, we also have to consider that the retailer may have tried with value add in the past but hasn’t been able to provide the variety of product because they aren’t in multiples and not present in so many airports. This is where our strengths lie as we have the logistical advantage and are able to provide more extensive product lines. Plus, our willingness to take that risk in multiple stores is a game changer.” Bhatia is looking to see real change within six months of operational handover and is willing to test the market to see what works, as he explains: “I’m not saying that 100% of the changes will work, but we will apply what we have done successfully and try new things so if we achieve a 20-30% success rate, that’s good.” The starting point is a reconfiguration of the product mix and reworking the flow of the stores themselves. “There is always the issue of space utilization, at seaports in particular, where listing so many items within a constrained area is an ongoing challenge. Again, we will bring our expertise into play to see how we can maximize on space and product selection, making sure that whatever sells has enough variety and exposure,” he notes. E-commerce will also play a significant role in extending the service offering, as Bhatia explains: “We will also develop websites to serve the needs of the diplomatic customer in the comfort of their home or office. “We will have customer service agents with iPads make personal sales calls, and talk them through what’s available and help them make an immediate purchase. It’s a great hook.”

AIRPORT NEWS

New US$2.25 billion airport opens in Turkmenistan Ashgabat International Airport has opened in Turkmenistan at a practices and technologies of the industry from check-in systems cost of US$2.25 billion with capacity for 14 million domestic and to baggage handling. international passengers per year. The new Ashgabat International Airport complex has already Constructed by Polimeks in Turkmenistan’s capital city, Ash- gained many international awards. The tribal carpet patterns (“Cargabat, the design of the new airport complex was inspired by pet Gul”), located on the roof of the main terminal building, which Oguz Khan and the falcon, which is one of the national symbols are the symbols of the five provinces of Turkmenistan, are registered of Turkmenistan. by Guinness as “Largest Gul of the World” record. The bird-shaped complex consists of 266 buildings on 12 milThe US-based World Record Academy gave record registration lion square meters, including runways, taxi ways and aprons. The in its “Largest Bird Shaped Building” category. new airport is able to host 14 million domestic and international Global network communication systems manufacturer Cisco passengers per year. certified the new Ashgabat International Airport as the “World’s The new runway is suitable for landing and take-off of Airbus First Smart Airport”. A380 and Boeing B747-8 aircraft. The new airport complex also Business Initiative Directions (BID) awarded Ashgabat Airport includes 50 aircraft parking stands, an inflight catering building, and with “International Gold Star for Quality” for outstanding commitpassenger car parks with a capacity for 3,000 vehicles. ment in quality and excellence. With unique architecture, the main terminal building Ashgabat International Airport has opened in of Ashgabat International Airport was constructed by Turkmenistan inspired by Oguz Khan and the falcon Polimeks on an area of 166,000 square meters. The building aims to provide the best service to passengers from main entrance hall to luggage area, from cafes and restaurants to duty free shops, from business and VIP lounges to its five-star hotel. The building’s duty free and retail area covers 1,100 square meters, while food & beverage spans 3,900 square meters. In addition, the main terminal building has “smart building” features with high-tech systems and includes the best

October passenger traffic surges at Cyprus airports Larnaka and Pafos airports in Cyprus boasted record-breaking passenger numbers of more than 1 million in October. Between October 1 and 31, 738,275 passengers traveled through Larnaka International Airport, while another 270,983 passengers used Pafos International Airport. Overall, both international airports handled 1,009,258 passengers during October, an uptick of 31.5% over the same period last year. The countries with the highest increases in passenger traffic during October were Russia, Greece, the UK, Israel, Switzerland and Ukraine. Eleni Kaloyirou, Chief Executive Officer of airport operator Hermes Airports, said the fact that this year’s sustained increase in passenger numbers continued during a non-peak season was very encouraging. “It seems this trend will continue during the winter months also, proving that the goal of promoting Cyprus as a year-round destination is achievable,” she said.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

Abu Dhabi International Airport reports 5% passenger upswing in September Abu Dhabi International Airport welcomed 2.1 million passengers in September, marking an increase of 5% on September 2015. Since the beginning of the year, passenger traffic has grown 6% from the same period last year, with 18,528,723 passengers between January 1 and September 30. Total departures numbered 352,067, a 10.1% increase on September 2015. Passenger traffic to India climbed 10% on 2015, maintaining its position as the top destination, with 355,328 passengers in September. Passengers to Qatar totaled 70,627, representing an upswing of 18.4% compared to September 2015. Saudi Arabia rose to become the third busiest destination, with traffic to and from the country jumping by 19%. Traffic to and from Egypt surged by 37.9% to 57,885 passengers.

M1ND-SET RESEARCH

HEYyoung spender

As part of its extensive analysis, travel retail researcher m1nd-set has unearthed some fascinating findings about the travel and shopping behavior of UAE residents

hey’re young, and they want to spend. That’s the conclusion of specialist research firm m1nd-set, which has unearthed some interesting facts about the travel and shopping behavior of United Arab Emirates residents in the travel retail channel. First, they are youthful. The average age is 35, and 53% are aged between 25 and 34 – the millennial generation. Some 35% are between 35 and 44 years old, while some 7% are 45 to 54; 4% are over 55; and 5% are 18 to 24. Second, the respondents are frequent travelers. More than a third (31%) travel one to two times per year, with a slightly larger number, 35%, traveling three to four times per year. Nearly 20% (19%) make five to six trips annually, with 15% citing seven trips and above. Of those surveyed, 65% are of foreign nationalities, and 35% UAE nationals. According to Dr Peter Mohn, Owner and CEO, m1nd-set, the biggest shopper segments are: • 29% Local Touch Seekers: This group like local and authentic products, and are not very brand sensitive;

• 27% Emotional Brand Image shoppers: This group are very into brands and image and exclusives; • 18% Rational Pre-Planners: They like to plan their purchases in advance; • 17% Price-Sensitive Shopping Lovers: This group seeks value in their purchases; • 11% Low Income Buyers: Around one in 10 of those surveyed don’t have much money to spend. Looking specifically at duty free shop visitors and buyers, they are among the top spenders in the world, similar to South Korean, Russian and Chinese. If they buy in other countries, it is mainly in the US and the UK, m1nd-set found. They are mostly like to purchase souvenirs, accessories, jewelry and fashion and clothing when traveling internationally.

Gifting is very important

Dr. Peter Mohn, Owner and CEO, m1nd-set

When shopping at airports, they mainly buy for themselves and for gifting. Gifting, in particular, is significantly higher compared to most other residents around the world, according to m1nd-set. The main reasons for visiting airport

stores are: wanting to buy a gift (38%); shopping is part of the travel experience (35%); enjoying shopping at airports (31%); and finding exclusive and unique products at airports (30%). Many people – some eight out of 10 of those polled – plan in advance what they want to shop for when traveling abroad, which is much higher than compared to most other residents around the world. And most prefer to buy brands they are aware of, but not available in their own country, m1nd-set discovered. The majority – 85% – plan to allow some time specifically for shopping at the airport shops, which is among the highest in the world, mostly between 30 and 45 minutes. And nearly everyone – nine out of 10 – compares prices when shopping at airports, mainly with downtown prices on their mobile devices. In terms of payment preferences, three out of four prefer to pay with a credit card, m1nd-set said.

Profile & Travelling Behaviour UAE Residents Age Groups

18 - 24 years old

Foreign vs. Local Nationals 5%

25 - 34 years old

Av. 35 y.o.

52%

45 – 54 years old 55+ years old

35%

Foreign

65%

Number of Annual International Air Trips 31%

Local Nationals

35%

35 – 44 years old

m1nd-set Segmentation

34%

11%

64% 27%

17%

19%

18% 29% 3 to 4

5 to 6

Rational Pre-planners Local Touch Seekers

15%

1 to 2

Emotional Brand Image Shoppers

Price Sensitive Shopping Lovers Low Income Buyers

7 and above www.m1nd-set.com

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

RUSSIA MARKET WATCH

View of new Moscow City buildings in winter

UPDATE:

Russian duty free and travel retail

TFWA held a “Russia Market Watch” session in Cannes to update attendees on future of this market by

CLAIRE MALCOLM

ngoing currency woes, economic sanction fallout and an historic dependency on high oil prices has forced Russians to re-evaluate their spending habits and travel patterns, but the shared insight of three retail industry experts at the recent TFWA WE 2016 Market Watch session painted a more hopeful picture for the future. The hour-long session opened with a presentation by Irina Kulikova, Manager, Bain & Company, Moscow, who shared the latest data from Generation Research. According to figures, the duty free and travel retail market registered a 36.8% 32

decline last year, exacerbated by a drop in Russian travelers to popular destinations such as Egypt and Turkey. The country’s real GDP also dropped by 4% last year, and despite a nominal growth outlook through to 2020, consumer confidence remains low with further decreases in disposal income spend, including vacations, expected. “In 2014/5 we saw a 20% drop in travel by Russians and this trend is set to continue with a 13% decline expected this year,” she said. The Q3 2015 Transaero bankruptcy led to a hike in airfares, particularly for long haul destinations, and Kulikova has also noted a shift in destination desirability. “Certain countries gained traffic largely due to the redistribution of tourists from Turkey and Egypt, to places like Spain, Greece, Georgia, Cyprus and Bulgaria,” she said.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

Irina Kulikova, Manager of Bain & Company, Moscow

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RUSSIA MARKET WATCH

Denis Shundrovsky, General Manager Russia & CIS, Furla

However, domestic travel is on the rise with destinations like Sochi, host of the 2014 Winter Olympics gaining both summer and winter popularity thanks to infrastructure development and government promotional campaigns. “Little has changed for the ultra-rich Russian traveler in terms of consumption; they still travel and still want luxury goods. We have seen a lot of change with higher middle income professionals, who are cutting consumption, travelling more domestically and buying Russian designers,” she said. Furla General Manager for Russia & CIS, Denis Shundrovsky cited the ‘Milan Pricing’ campaign by leading Russian department store Tsum as a retail turnaround success story, as he explained: “This is now their main focus and [the campaign] guarantees the best prices for goods comparable to London, Milan and Dubai; which is tripling the turnover of some brands.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

“Russians are still hungry for something special, and if you want to attract them, this is key.” The final speaker, Fatima Dzoblaeva, Executive Director, Eurasia Duty Free Association provided an update on the impending addition of arrivals duty free to the region. With the new Customs Code set to be ratified by Russia and its partner countries in the next few months, she noted that the sector is already seeing the benefits of the launch of various government programs designed to encourage inbound tourism and investment in major infrastructure projects. “While the trends in outbound tourism are not positive, inbound tourism has grown by 5%, mainly fuelled by the increase in passengers from Asia Pacific and China. This adds to the potential for the arrivals duty free market in Russia, with the first stores expected to be in place by late 2017 or early 2018.”

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DUFRY SHARJAH

Dufry Sharjah started the refurbishment of its retail space at Sharjah International Airport in September

Dufry Sharjah set for

September revamp by

FAYE BARTLE

Operator aims to leverage the emirate’s growing appeal as a business and leisure hub with a strategic upgrade to its airport shops

Iain Forrest, General Manager, Middle East, India & SubContinent, Dufry Sharjah is expecting the downturn in Russian and CIS passengers to carry on for some time

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

he United Arab Emirates is attracting the lion’s share of visitors to the Gulf and, outside of Dubai and Abu Dhabi, the role of the northern emirates is not going unnoticed. Sharjah in particular is being heavily promoted as a top tourism destination and business hub, with the modern services and facilities at the international airport a key part of the proposition. As a case in point, Sharjah is currently in the spotlight as the Capital of Arab Press 2016 and, in line with its tourism vision for 2021, is aiming to attract more than 10 million visitors by 2021 when the UAE celebrates its 50th anniversary. All of this has provided a platform for Dufry Sharjah to make the most of the influx of passengers to Sharjah International Airport. Indeed, the hub experienced more than a 12% increase in passenger traffic in the first quarter of 2016 marking its busiest three months ever. A total of 2.69 million passengers traveled through the airport from January to March compared to 2.39 million in the same period last year. The airport already has an impressive mix of duty free space, with Dufry Sharjah operating nine duty free stores and one duty paid store at the hub. To keep pace, the company started the refurbishment of its retail space there in September. The project sees a complete revamp of the main departures shop as well as the introduction of a new 110-square-metre Hudson convenience shop with the entire project expected to be completed by May 2017. “Key considerations being taken into account for the transformation include an enhancement of the beauty area with a dedi

The project will see a complete revamp of the main departures shop as well as the introduction of a new 110-square-metre Hudson convenience shop

The refurbishment project is expected to be complete by May 2017

cated space, as well as a bespoke Oud fragrance collection that will bring more of a sense of place to the shop,” said Iain Forrest, General Manager, Middle East, India & SubContinent, Dufry Sharjah. “Furthermore, the addition of more local foods and luxury confectionery brands such as Patchi will help enhance the Middle Eastern experience we aim to provide.” As the number of flight links continues to rise – Air India Express expanded its operations to Sharjah over the summer by introducing daily flights from Sharjah to Mumbai, for instance – the newly revamped space will go one step further to catering to the evolving passenger profile. “Passenger traffic at Sharjah International Airport continues to grow steadily with the transit passenger segment certainly experiencing good growth,” said Forrest. “We have already opened three nomad shops that cater especially for these passengers who tend to dwell nearer their departure gates rather than the main concourse due to the shorter connection times between flights.”

A year for transformation Although passenger numbers are on the up, it’s no secret that the emirates have suffered their fair share of tourism challenges recently. “The first half of 2016 has been as anticipated, with trading slightly down on previous year, as the decrease in CIS passengers continues to impact the business,” said Forrest. “This, in conjunction with stricter cabin baggage regulations now implemented on some Indian carriers, has clearly changed passengers’ purchasing habits.”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

Passengers can expect to see an enhanced beauty area with a dedicated space, as well as a bespoke Oud fragrance collection

Forrest is referring to the decision in August last year by both Air India and Air India Express to introduce a strictly a cabin luggage restriction of seven kilograms, including duty free purchases. “This had a major impact on duty free sales as the Indian customer profile regularly carry this amount to maximize their luggage allowance as most are returning home,” he explained. Streamlining the offer is helping to add strength to the business during tough times. “In Sharjah, both food and beauty are the two main categories that are considered to be key drivers for the business. The importance of these pillars will continue to grow as is evident thanks to the increase in space that has been dedicated to them within the new shop layout,” said Forrest. “On top of introducing Patchi, as mentioned earlier, in the beauty category we will introduce Bobbi Brown as well as the niche products from Tom Ford.” Looking to the future, the company is taking a measured approach to growth while bearing in mind the various factors that are having the biggest influence on operations. “We expect the downturn in the Russian and CIS passengers will carry on for some time. Our core Indian passenger segment continues to grow, however, and therefore we will continue to focus on value driven promotions for this important customer profile,” said Forrest. “Although the renovation work on our stores is starting slightly later than we first envisaged, we are very optimistic that the second half of 2016 will see an upturn in the general trading conditions that will continue through into 2017 and the opening of our new shop.”

TFWA WE REVIEW

6,443 visitors attended the event, down only 2% from 6,558 last year

Attendance to TFWA World Exhibition down only 2%

ast year TFWA president Erik Juul-Mortensen closed the TFWA World Exhibition & Conference with a comment on how buoyant the mood had been. And at this year’s closing press conference, he said that despite the challenges the industry had faced, the atmosphere was still upbeat. 6,443 visitors attended the event, down only 2% from 6,558 last year, and a healthy figure under the circumstances. They represented a total of 2,948 companies, down from 3,026 and by 3% in 2015. However the number of visitors from the key categories of duty free operators, travel retail operators, landlords and agents was up from 4,625 in 2016 compared with 4,584 in 2015, with 1,811 companies represented compared with 1,788 last year. The other statistics around the conference were also cause for optimism for the future of the duty free and travel retail The opening cocktail on to kick off the tradeshow welcomed 1,737 guests

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

Despite economic challenges around the world, TFWA’s President, Erik Juul-Mortensen says mood is upbeat overall causing cautious optimism

business. The exhibition occupied a total of 22,475.55 square meters space, up 2.9% compared to 2015 at 21,840 square meters. This year there were 492 exhibiting brands on 472 stands, including 10 official boats in Harbour Village. This is an increase of 2.1% compared to last year when there were 482 exhibiting brands on 462 stands. For the first time this year, Beach Village featured two marquees. 59 of this year’s exhibitors were new or returning companies. New to Cannes this year, the ONE2ONE meeting service has proved to be a welcome addition, and 220 meetings were arranged for 36 visitors and 94 exhibiting companies. The conference at the beginning of the week was attended by a record 1,634 delegates, an increase of 8.6% from the figure in 2015. Opening the proceedings, Erik Juul-Mortensen said that there were reasons for cautious optimism and likened himself to former British prime minister Harold Wilson, who stated that he was an optimist, but always carried an umbrella.

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TFWA WE REVIEW

The week-long event closed with a successful annual Le Premium evening gala dinner

CEO of Dufry, Julián Díaz González then took to the stage to outline his perspective on how travel retail is evolving. He highlighted how a more experience driven, personalised offer was required to attract the all-important Millennial traveler. Randi Zuckerberg, an influential authority on the development of technology and how it shapes consumer behavior, outlined a concept she termed ‘dot complicated’. She explored how new technology offers us opportunity, but also creates fresh challenges and complications. David Miliband, president and chief executive of the International Rescue Committee and former UK foreign secretary, provided a fascinating big-picture perspective on a changing world. He cited the reasons why the world is currently in such a chaotic state; the world has never been a global market like the one that currently exists, economics and politics are pulling in opposite directions, globalisation is exhibiting structural weakness, and the political status quo is changing. A series of workshops throughout the week provided plenty of insight into a range of topical issues. On Tuesday morning 153 early risers, 5.5% more than last year, gathered to hear about the potential of the Russian market. On Wednesday morning, an inflight focus workshop was attended by 174 delegates, a rise of 9.4% compared with last year. And finally on Wednesday evening, an audience of 89, 2.3% more than last year, came to a workshop outlining TFWA’s latest research findings. This is an increase of 2.1% compared to last year when there were 482 exhibiting brands on 462 stands

The social scene surrounding the exhibition and conference has also been a great success. The opening cocktail on Sunday welcomed 1,737 guests, which is a record high. 87 players competed in the pétanque tournament, while 111 enthusiastic runners took part in the third TFWA Charity Run which raised €1,765 (US$1,947)for TFWA Care and Samu Social Cannes. The golf tournament was, as ever, fully booked at a very early stage, and the two new leisure activities were well attended; 39 participants took to the waves in the regatta while 25 yogis enjoyed a relaxing yoga session on the Majestic Hotel jetty. Erik Juul-Mortensen summed up the week by saying; ‘The success of this week, and the color of the mood around the exhibition halls and in the conference, goes to show that we have much to feel good about in the coming months and years.’ The TFWA Product Showcase containing press information on brands exhibiting at the show will remain live for one month after the show and can be accessed at www.tfwaproductshowcase.com.

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INCC PARFUMS

Engineering a successful

fragrance brand INCC Parfums is driving forward its classy fragrance family Mercedes-Benz Parfums with lots of new initiatives taking place across local and travel retail markets by

MARY JANE PITTILLA

rench fragrance manufacturer INCC has achieved a lot in the past five years since it motored into the travel retail arena with its prestige Mercedes-Benz Parfums line. Speaking after a super-busy week at the TFWA World Exhibition in October, Thibaud de Vaulchier, Vice President Sales, INCC Parfums, reflects on the brand’s successes. “Our fragrances are listed in 95 countries, and 10,000 doors in local and travel retail markets. We’ve seen 25-30% growth per year.” The company’s biggest markets are Europe and Asia, and the sales ratio by gender is currently 80% men’s and 20% women’s. The overall strategy right now? Further expansion.

Mercedes-Benz Woman is described as a rare, gourmand fragrance composed by a woman – acclaimed master perfumer Honorine Blanc – for women

“We want to be a big player,” asserts de Vaulchier. “In travel retail, for example, we’re opening with Dufry in Brazil. We are also in Duty Free Americas in Brazil, though not the USA, and Mumbai Airport in India with DFS. We’ve undergone a big expansion and we’ve had a great result since launching with Dubai Duty Free, but we still have a lot of things to do.” Certainly, the company has already done a lot so far. Mercedes-Benz Man was launched this year with many activations in both travel retail and domestic markets. The brand just revealed its 2017 major launch, Mercedes-Benz Woman. Mercedes-Benz Man and Woman follow the 2014 launch of MercedesBenz Club for young urban men, and Mercedes-Benz Original, targeted at business executives, in 2012 – its first fragrance. Mercedes-Benz Woman edp is described as a rare, gourmand fragrance composed by a woman – acclaimed master perfumer Honorine Blanc – for women. The luxuriant, sensuous floral oriental fragrance opens with the subtle intensity of Brazilian gardenia that inscribes its sensual notes on the acidic base of blackcurrant leaves, softened by the pulp of pear. Then comes orange blossom, whose warm, powdery accords are escorted by the

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

Described as a timeless classic fragrance for everyday wear, Mercedes-Benz Parfums’ first Cologne for men is available starting October 2016 in travel retail

heady, captivating scent of jasmine. And finally the luxury of a rich, sophisticated accord composed of sandalwood, vanilla, musk and cashmere woods prolongs the addictive, gourmand bouquet. One exciting initiative for MercedesBenz Parfums this year is the launch of its first cologne for men. Mercedes-Benz Cologne is available starting October 2016 in all domestic and duty free markets. It is described as a timeless classic fragrance, for everyday wear. This fragrance opens with a harmonious citrus trio – the refreshing, invigorating accents of grapefruit, mandarin and Brazilian orange – along with exhilarating, explosive notes of pink pepper. At its heart, the fresh, sparkling accord includes ginger, softened with delicate verbena. An unprecedented blend of blond woods, vetiver and musk forms its base. Developed by French Master Perfumer Olivier Cresp, this new fragrance is a modern Cologne, in harmony with the values and principles of the brand. The elegant and pure lines of the brand’s emblematic bottle are subtly reinvented in a gradation of turquoise that recalls the line of the horizon, the company said. This latest addition allows the brand to have an extensive range of fragrances for its Original line, going from Cologne to Le Parfum, targeted at chic and modern men.

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HANSE DISTRIBUTION

Health front of mind for

Hanse has seen dramatic development in the wellbeing category but is looking for niche products to specifically suit the Middle East market

Hanse

The Germany-based company is taking the pulse of the duty free and travel retail industry with wellbeing products the trending sub-category by

CLAIRE MALCOLM

Anna Berezhnaya, Sales Director, Hanse Distribution

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

anse Distribution’s portfolio of cosmetics, gadgets, jewelry and watches is found on board over 130 regional and international airlines including Air Arabia, Emirates, Etihad Airways, Jazeera Airways, Kenya Airways, Kuwait Airways, Oman Air, South African Airlines and South African Express. According to sales director. Anna Berezhnaya, opportunities to grow the wellbeing category in this part of the world is still a work in progress. “From fairly simple gadgets we went in the direction of wellbeing with products like the Snore Stopper, which was a sellout on quite a few airlines. I was skeptical initially as it’s probably the most unsexy product in our portfolio, but the sales figures were phenomenal and we even got calls from other airlines where we weren’t listed, expressing interest,” she adds. “We’ve seen the wellbeing category in general develop dramatically since last year, but in the Middle East we still need to find the right niche products to suit the market,” she remarks. While the Snore Stopper isn’t set to debut on a regional carrier anytime soon, products like pain relief pads and travel-sized abdominal trainers have potential. “The difference in the Middle East, in my understanding, is that passengers are looking for more luxury oriented goods. They can be lower priced but still need to look good and have that high quality appeal; hence the Snore Stopper is not a good fit with the market,” she says. Asia and Europe are leading markets for Hanse’s wellness products, but Berezhnaya admits that with more and more brands entering the arena, it’s becoming increasingly challenging to maintain market share.

Current high performing products include inflight-approved male-oriented accessories

“Watches and jewelry perform extremely well in the Middle East. We don’t work with any A brands, but can still deliver a premium Swiss made watch or one that is simply beautiful to the eye and thus appeals to the market,” she says. “But what is interesting to note is that while previously price was never really an issue, we are now seeing more price sensitivity from consumers in this part of the world, as well as in other markets,” she adds. With the appointment of David Butler, former Inflight Sales Director Head for Pandora, as Business Development Director, Hanse is also exploring new channel opportunities and expanding its brand listing. “Being a travel retail exclusive company we do need a second leg to support our business. We are excited about new opportunities in 2017, such as the cruise and ferries sector where we are exploring partnerships in the UK, Caribbean and Scandinavian countries, as well as looking at products that specifically suit this market,” notes Berezhnaya. Other high performing products include “fun little accessories” with male appeal, such as Hanse’s inflight-approved version of a classic Swiss army knife. “It doesn’t matter where we list this - Qantas, Lufthansa, wherever - the sales are crazy,” she remarks. A major strength of the company is its flexibility, as she explains: “We really look and listen to the market and can move very quickly in response to trends and demand. “As well as distributing classic brands like Ted Baker jewelry and having our own in-house travel retail exclusive brands we work hand-in-hand with our airline partners and have created private label watches for Etihad among others.”

Berezhnaya reports a recent trend towards increased price sensitivity from customers in the Middle East, as well as other key global markets

Watches and jewelry perform extremely well for Hanse in the Middle East

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

CAPI

Capi homes in on house and healthcare innovation Capi’s own MiTone range of electronics offers an affordable alternative for budget and quality conscious travelers

ravelers on the hunt for a new set of wireless headphones or an innovative gift idea outside of traditional category offerings are the bread and butter for global retailer and supplier Capi, The Travellers Electronics Company. Present on three continents with 25 stores and franchise partners in destinations including Cape Town, Johannesburg, Hainan, Amsterdam, Frankfurt and Copenhagen, the Netherlands-headquartered company’s lifestyle travel accessories and electronics portfolio is available in airports, on board cruise lines and at diplomatic stores. Functionality, portability and that golden ticket combination of innovation and fun define the Capi approach and, according to Managing Director, Peter Wiggers, portfolio diversity together with focus are crucial. “We offer a mix of leading A brands such as Apple and Samsung, premium niche brands like Bang & Olufsen and Leica, alongside our own private label brands, MiTone and Clöudz. Travelers want to have an element of excitement while travelling and they expect a unique, inspiring duty free shopping experience”, he says. In 2016 the company debuted its ‘Travellers Choice’ concept, with customers selecting their favorite products, which has enabled Capi to really home in on bestselling items and drive sales. Its stores also feature a prominently sited gadget/gifts table, used as an innovations showcase and designed to visually engage travellers as well as provide a hands-on experience before they purchase.

Engaging retail environments, unique gifts and new technology are keeping the Dutch retailer and supplier ahead of the competitive curve by

CLAIRE MALCOLM

Says Wiggers: “Our approach is to both attract customers in search of a specific travel accessory and those looking for a unique gift, something other than a traditional category purchase. “We place a lot of emphasis on the gifting opportunity, and with products at various price levels we can service the customer who wants an A brand item as well as offering alternatives with our own MiTone range of electronics, for those who don’t want to spend money on Bose headphones but for whom a quality product is still essential.” He identifies smart home gadgets and personal healthcare as two key areas of opportunity, with Capi registering strong consumer interest, as he explains: “The smart home category is constantly growing with products like Ring’s video doorbell, Bose SoundTouch series and Canary’s all-in-one home security device in demand. Drones are still popular as well.

Capi’s in-store gadget/gifts table is an innovations showcase and is designed to visually engage travelers

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

“We are also focusing on ‘beautytronics’ with products like Philips’ facial cleansing device VisaPure and Braun’s ionizing hairbrush. With brands like Philips and Braun innovating in this area we see significant growth opportunity.” At Cannes 2016, new accessories on show under the extended MiTone range included sleeping masks, TSA locks and luggage straps, with electronic accessories such as a Bluetooth adapter playing on the current wireless tech buzz. Capi continues to expand its physical presence in the region alongside its portfolio, with space secured at the new Muscat International Airport through API and other opportunities all over the world, varying from Europe to the Middle East. “Since our retail strategy and brand portfolio are internationally orientated looking at our international audience, we are able to expand our presence worldwide”, says Wiggers.

DYRBERG/KERN

Dyrberg/Kern mixes it up in travel retail The bestselling Danish fashion brand is yet again adding its own unique sparkle to the travel retail market with a new mix and match concept inspired by the next generation of travelers by

CLAIRE MALCOLM

nnovation and versatility continue to define the Dyrberg/Kern design approach but the company is also bucking the general market downturn according to Nina Agerskov Myrlund from its PR & Marketing team, with 2016 performance well exceeding forecast following five years of continued year-onyear business growth of 10-15%. “We are launching a number of very innovative products, which we tested out at the Singapore show earlier this year, and which have been refined and are now ready to hit the travel retail market,” she says. Dyrberg/Kern has taken up the mantle and is capitalizing on the market trend for tennis bracelets with a collection of the classic arm accessories in different colors and using Swarovski crystals, something that resonates well with the Middle Eastern audience. Another exciting innovation is the Compliments Collection of stainless steel

Dyrberg/Kern’s men’s line has even been spotted on the wrists of pop celebrities, such as One Direction’s Niall Horan

gold, silver and rose gold tone finish ring bands with a selection of pick your own ‘toppings’. “The feedback for this has been phenomenal so far; it’s a really funky concept and with the interchangeable topping meaning that you can change the ring to suit your mood or occasion, it’s all about customization. Plus they are also come in four sizes and we also offer inserts, so they can fit even the smallest finger and this is great for travel retail,” says Agerskov Myrlund. With special launch price points and packages for travel retail, Compliments is currently being rolled out to the duty free community with a travel exclusive set of a ring and either two or three toppings of choice, priced at €65 and €99 respectively. “This positions it as a ‘starter kit’ and new toppings are also going to be added to the collection every three months, so we hope that this will encourage repeat purchases,” she notes. The hit of last season, the Pennika bracelet and Travel Fairy Tale set, are also still big sellers for the brand and have been refreshed with new season color options. Says Agerskov Myrlund: “They are specific to travel retail and are icons for the brand. They are almost a second skin rather than an accessory and are very Scandi-cool.” Other successes include the men’s line, which has been something of a surprise hit for the company, as she explains: “We took quite a risk in going down this route and are tapping into the millennial male who has no issue with wearing accessories. The demand is definitely there and we are receiving substantial orders.” Dyrberg/Kern’s men’s line has even been spotted on the wrists of pop celebrities, with Niall Horan, of boy band One Direction, a fan. The challenge of engaging a younger breed of consumer as well as retaining

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

The Ipanema SS17 collection has dual appeal, using earthy colors and Aztec-inspired designs that have both a contemporary and almost vintage feel

the more mature brand aficionado has also partly prompted the company to reduce the focus on its satellite collection themes in favour of promoting the mix and match idea. “We’ve been going through a major rebranding back in Denmark, and what we found was that people who wore us 30 years ago, still wear us today. We love the support we’ve had from loyal customers all these years, but we needed to expand our reach and focus on a younger trendsetting audience, which led us to a more conceptualized product strategy. Compliments is just one end result of this,” says Agerskov Myrlund. The new Ipanema SS17 collection has dual appeal, using earthy colours and Aztec-inspired designs that have both a contemporary and almost vintage feel at the same time; thus appealing to a multigenerational audience. She adds: “These days it’s all about individual style, so you don’t have to be just a Dyrberg/Kern girl, and might wear one silver ring and then a rose gold Commitment piece, and this fits our open minded approach to jewelry.” Through its partnership with Conaxiss Trade and Scorpio, Dyrberg/Kern is looking to take the brand outside of purely inflight, which accounts for 85% of its business, with plans to target airports and cruise ships as part of its ongoing strategic growth program.

WONDERFUL COMPANY

Cracking travel retail The Wonderful Company’s line of pistachio snack products are making inroads among duty free operators as the company works to improve the lives of its employees by RICK LUNDSTROM The Wonderful Wellness Center sees thousands of company employees per year

Sydney Airport is one of the places where Wonderful pistachios can be found for sale in duty free

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

t this year’s Tax Free World Association event in Cannes, the Wonderful Company sought to make its mark among massive rooms filled with stands by engaging a group of visitors - known to be on the move much of the year - with a bit of high-tech marketing befitting the company’s unique approach and product mix. Visitors had the chance to win one of two US$600 Bluesmart roll-aboard suitcase by accepting a digitally sent invitation that was scanned and validated at the company’s stand in the Blue Village. They were then kept abreast of happenings throughout the massive event with the help of an app. To pull off the bit of high-tech marketing and outreach, the company made use of Mighty Media Group a “digital, mobile and proximity marketing bespoke solution” that is part and parcel of an even larger marketing effort that is bringing the Wonderful Company’s product to everyday consumers. Wonderful Company is spending millions on its marketing efforts to make a prominent place for pistachios in the snack food industry, hiring well-known celebrities and purchasing expensive advertising airtime, including the 2014 Super Bowl football game. Behind the scenes, the company’s community involvement in California’s Central Valley is improving the lives of its thousands of employees. Gulf-Africa Duty Free and Travel Retailing visited the Wonderful Company’s pistachio orchards and production facilities 150 miles north of Los Angeles in mid-September, when the first of what would become a harvest of more than 800 million pounds of nuts were shaken from the short, sturdy trees on the company’s 189,000 acres pistachios and almonds.

Pistachio nuts are shaken from the trees and collected

The last leg of the harvest. Pistachio nuts are loaded to trucks headed to one of four processing plants

This year’s harvest of Wonderful pistachios was expected to top 800 million pounds

After roasting, workers inspect the finished product before packaging

Making room in duty free The Cannes giveaway was part of the company’s efforts to reach out in a larger way to the duty free and travel retail channel that it entered four years ago. It has already resulted in some key customers. “Our existing partners are seeing great growth and we have some promising new locations recently brought on which include Heinemann in Kuala Lumpur, several Carnival Cruise ships out of Miami as well as Sydney International Airport,” said James Kfouri, Director of Sales Australia, Southeast Asia and Global Travel Retail, in the September’s announcement of the company’s promotion at TFWA. “Global travel retail sales have seen double digit growth consistently over the last three years and we are excited to see where this year’s crop will take us next.” Eight ships in the Carnival fleet are stocking Wonderful Pistachios. The products are also now sold at Golden Duty Free shops in Asuncion Airport in Paraguay. The company’s first steps into duty free and travel retail began in 2012. By then, Wonderful Pistachios had established its position in the domestic market and expanded its distribution to more than 30 countries. Kfouri said the snack product is a perfect fit for travel retail buyers that wish to expand and diversify skus in the category. “Currently travel retail snack choices are pretty much restricted to chocolate, crisps and sweet based products,” he said. “Wonderful Pistachios give consumers a healthier option for a satisfying, tasty snack – one that is perfect for snacking solo and for sharing on the go.” The road to the company’s pistachio orchards runs north of Los Angeles through dry, rolling hills east of Bakersfield in an area dotted with small towns and fields filled with oil drilling equipment. Visitors in September were fortunate to catch a mild spell at a time of year when temperatures routinely climb into the high 90s to 100 Fahrenheit. A combination of dry, hot weather and cool evenings are needed for a successful harvest. Even though days are swelter-

ing in the Central Valley, the weather still provides the necessary 1,000 hours of temperatures below 45 degrees Fahrenheit that are needed for a harvest as successful as the one the company predicted for 2016. With the trees planted in tight rows, two pieces of harvesting equipment are used. The first piece grips the tree by the trunk and shakes the pistachio nuts onto a another vehicle that collects them and transports them to a conveyor truck that dumps the harvest into a vehicle bound for one of five plants with a combined area of 4 million square feet devoted to processing.

Reshaping the Valley The privately owned Wonderful Company relies on local labor for the seasonal harvest. Nowhere in the Central Valley is the company’s presence felt more than in the community of Lost Hills. Over the past several years, the company’s Vice Chair and Co-owner Lynda Resnick has launched a widespread effort to improve the lives of employees and the town. The Wonderful Company is investing more than US$15 million in local infrastructure, adding a community center, park and affordable housing development. Roads have been paved and streetlights, bus shelters and drainage systems have been installed. The company’s Wonderful Wellness Centers in Lost Hills and Delano offer medical screening and guidance for 12,000 San Joaquin Valley employees and their families, their education program reaches 55,000 students across 24 school districts in the Central Valley. Students can also embark on a career in agriculture with the company’s career preparation programs. Pistachios and almonds are part of a mix of several products that make up The Wonderful Company’s portfolio. The company also has Halos mandarin oranges and Scarlett’s Texas red grapefruit. Beverage products are Fiji water and POM pomegranate juice. The Wonderful Company also owns two California wineries: Landmark Vineyards and Justin. Finally, The Wonderful Company owns the Teleflora flower delivery service. www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

NESTLÉ ITR

Wired for experience by

CLAIRE MALCOLM

There’s a need for speed when it comes to understanding and engaging the millennial consumer. Stewart Dryburgh, General Manager, NITR, tells us more

NITR has also revealed details of a new global activation called Live Your Break

he need to engage the millennial traveler using experiences as the hook has been identified as a key focus for Nestlé International Travel Retail (NITR) with plans to launch the KITKAT Chocolatory concept in 2017. Previously unveiled to domestic audiences in Australia and Japan, the activation twins experience with customization in the form of a personalized premium packaged KITKAT box, with passengers able to select a design and message using a 90-second digital interface. While passenger traffic growth numbers are looking good, travel retail spend is falling short across all categories and it’s this conundrum that Stewart Dryburgh, General Manager, NITR, is keen to address with initiatives like Chocolatory. “The fact that millennials have access to what they want, when they want it is something new, and their horizons are far broader. For the younger generation it’s about seeing the world through experiences rather than ownership of things; and that’s the fundamental difference,” he says. Dryburgh’s consumer insight, garnered from time spent in Brazil, China, Japan, Malaysia, Turkey and the UK, confirms

that whatever the location, the millennial consumer is wired with different expectations. He says that this is something the travel retail industry needs to get on board with and believes that this is what will get things moving again business-wise. “As an industry, we need to really get to grips with and give people in this channel an experience, because that’s exactly what makes this channel exciting and full of possibilities. Especially with the shift to an increasingly digitalised world.” The NITR team is confident that the new KITKAT box taps into this desire for experiential pleasure, as well as delivering a take-home gift and sharing mechanism. An added sweetener will be the presence of an on-location chocolatier. Aside from delivering fresh experiences, Dryburgh also flags changes in the way that the industry needs to respond to opportunities, with speed of the essence, as he explains: “As brand owners, If you go back to the 50s/60s, the whole industry was geared to engage consumers via four major communication channels: television, radio, press and outdoor. “In those days the planning and execution cycle for a 30-second television

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

commercial took around 18 months, but now, with social media channels delivering instantaneous messaging, there is no more luxury of time.” And the proof is in the messaging with KITKAT’s most successful branded tweet to date when popular boy band, One Direction, announced their split. “They were huge KITKAT fans and it was always requested in their contract rider. When they split, we tweeted ‘Enjoy the break & see you soon’, and replaced the brand logo with the names of the band members,” he explains. “This was so successful because it was a combination of brand equity – breaks, which KITKAT has been talking about since 1937 – and relevance to a specific, brand connected consumer group; plus we delivered the message via a widely used medium,” he adds. From 18-months of planning half-acentury ago to a 30-minute idea transformed into a globally circulated brand message in 2016, Dryburgh nonetheless believes that travel retail still holds a trump card. “Even though the online world is changing the retail environment, one thing we mustn’t forget is that, for a limited amount of time, we have the customer physically present and a golden opportunity to interact with them. “So human interaction as part of the Chocolatory concept means that our ability to engage becomes not just incrementally, but exponentially, more important as we go forward.” Stewart Dryburgh, General Manager, Nestlé International Travel Retail

w w w. n e u h a u s. b e

RICOLA

A distinctive

approach How has Ricola, the Swiss herb drops manufacturer, set itself apart on the crowded confectionery store shelves? Gulf-Africa Duty Free finds out by MARY JANE PITTILLA

ntering the travel retail channel has been a steep learning curve for Ricola, but in a short time the company has gained a clear and decisive insight into its strategy. The Swiss herb drops manufacturer now positions itself as a Herbal Travel Essential, and not just another confectionery product placed on the duty free shop shelves. Ricola AG is a family-owned manufacturer of herb drops and tea specialties in Switzerland. The company is a pioneer in herb cultivation and places great value on using carefully selected locations and controlled, environmentally friendly cultivation methods without the use of pesticides, insecticides and herbicides. Ricola has concluded fixed long-term purchase agreements with more than 100 herb farmers in Swiss mountain regions. Because of the nature of travel, when the body’s immune system comes under pressure through extensive air conditioning, Ricola discovered that traveling consumers demanded smaller pack sizes for individual consumption. All are 100% exclusive to travel retail. “We offer the confectionery category a unique portfolio of products, and our new launches fill a gap in the marketplace,” says Andreas Reckart, Regional Manager Middle East & Travel Retail, who is based in Dubai. “Two years ago, we

started with gifting and sharing products, but our extensive research found an untapped niche. The research revealed that consumers like to purchase Ricola to use immediately as a remedy. Ricola offers taste, refreshment and remedy.” Reckart is keen to point out that the company does not target children, and is primarily aimed at individual consumption as well as adult gifting. The new travel retail exclusive range comprises three products in smaller pack sizes, reflecting the company’s decision to move away from using domestic packaging in travel retail. They consist of a 60g tin with premium packaging; a 100g tin with a mixed assortment of the brand’s most popular flavors; and a 125g resealable pouch. The three duty free exclusive lines were exhibited for the first time at the 2016 TFWA World Exhibition, where Ricola was returning to meet buyers for the second year. The products are scheduled to be launched into travel retail next year. Ricola is already well distributed in travel retail stores across Europe, and is now heavily expanding in Asia, where brand-building efforts have led to growth in the region. “Asia is the biggest and most dynamic region in travel retail and we want to be there. Asia is where we want to grow,” says Reckart, noting that there are

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

At the 2016 TFWA World Exhibition, Ricola showcased its new travel retail exclusive range comprising three products in smaller pack sizes, reflecting the company’s decision to move away from using domestic packaging in travel retail

still further opportunities for the brand in Europe. In Asia, Ricola products are listed in the Cocoa Tree shops at Singapore Changi Airport and in DFS stores at Hong Kong International Airport. The brand also has a presence in the Philippines at the famous Fiesta Mall, which Reckart describes as a competitive market where domestic market prices are low. “We have a small presence in Asia, but we can grow,” he says. Business is “growing nicely” at Dubai Duty Free, where the brand has experienced a significant growth this year, according to Reckart. There is a lot of brand activity in the domestic market in the United Arab Emirates as well, which has led to increased brand awareness, in turn lifting duty free sales. Reckart notes that the brand will have a big presence in the wider Middle East and Asian domestic markets from next year, with expansion foreseen in Iran, India and Turkey. Where does Reckart see Ricola in three years? “Doubling our turnover would be great, but we hope for more.” Confident words indeed, as Reckart believes the brand has no direct competitors in the marketplace right now. “Our Herbal Travel Essential positioning sets us apart.”

HERSHEY WTR

Hershey’s

gets personal

The global travel retail confectionery player has added a fourth category growth pillar to its strategic vision with captivation adding new opportunities for customization to the Hershey’s experience by

CLAIRE MALCOLM

The new Hershey’s Kisses bulk machine lets travelers pick ‘n’ mix their own bag of favorites and can be customized with destination messaging

he feedback from the latest Global Shopper Study commissioned by Hershey’s World Travel Retail in conjunction with Counter Intelligence Retail (CiR) has prompted the confectionery giant to add a new pillar to the mix as Amy Wilson, Team Lead for Europe, Middle East and Africa, explains: “We are still focused on the previously launched pillars, which are ease of shop, maximimising impulse and unlocking occasions, and have added captivating shoppers to the mix.” With a decline in footfall and conversion rates a concern for the industry at large, getting people to stop, be entertained and ultimately persuaded to

Personalization in the form of interactive printyour-own sticker software is a consumer valueadd, which Hershey’s will roll out next year

purchase is a big ask, but one that Wilson says Hershey’s is committed to achieving. Innovation and experiential marketing is fundamental to success and the company is getting personal with the rollout of a series of new initiatives that focus on customisation and localization. Says Wilson: “For example, at TFWA in Cannes we debuted a Hershey’s Kisses pick ‘n’ mix bulk solution where customers can fill a ‘With Love from Cannes’ bag with their favourite selection. “Gifting accounts for 46% of all confection purchases and destination appeal is a prominent purchasing driver*. This is a perfect solution to engage shoppers and create excitement for the confection category at retail.” New travel retail exclusive Hershey’s World Traveler Collection boxes are also set to appear on shelves in Q1 2017, filled with Reese’s, Hershey’s Miniatures and Hershey’s Kisses mixed assortments. According to the CiR 2016 Global Shopper Study, having a greater offering of gifting solutions is considered a key means of driving future purchasing. “In Cannes, we also featured our new Giant Bar Merchandising Unit that can be customized by destination. Customers have the opportunity to pick their assortment of giant bars which are then inserted into a destination box which makes for the perfect gift,” she notes. Following on the success of the Brooskide brand, Hershey’s recently added barkThins to its portfolio. These thin, crispy bites of Fair Trade sourced dark chocolate are combined with a

choice of almond, blueberry, coconut or pretzel pieces to deliver an elevated snacking experience. Says Wilson: “We are excited about the launch of barkThins in travel retail as the Global Shopper Study results revealed that 47% of confectionery buyers in travel retail said they’d like to see a greater range of snacking options.” The Brookside brand has also been extended with the introduction of a new Merlot grape flavor. “Brookside is performing well and is one of the fastest-growing travel retail brands for Hershey. We have also had recent success with retailers by offering Brookside chocolate and whisky or cognac pairings to engage shoppers,” she says. “With 17% of confectionery buyers also purchasing alcohol and almost a quarter of buyers purchasing confectionery from a display solution in another category, this kind of cross-category promotion offers clear benefits for the retailers as it is an opportunity to convert more shoppers into buyers and increase spend levels,” she adds. Potential for further brand expansion across the region is being constantly evaluated, and with Wilson now responsible for the Middle East and Africa, she is keeping a watchful eye on the markets, as she explains: “The Middle East is still a growing region for us and there is a lot of opportunity to turn our confection category insights into activation to further develop this region.” *CiR 2016 Global Shopper Study

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

VP BRANDS INTERNATIONAL

A big

FLIRT VP Brands International’s FLIRT Vodka, the fastest growing brand in the UAE and popular throughout the Gulf region, is now turning its gaze to subSaharan Africa and beyond by

WENDY MORLEY VP Brands’ FLIRT minis offer a selection of flavors and are perfect for travel retail

hile travel retail in the Gulf region has slowed in recent years, this has not been the case for VP Brands International, and the Gulf has been a key regional focus for the Bulgarian company. “The slowdown in the region has been noticeable over the last 18 months and although many brands have been adversely affected, we have been fortunate that not only have we not experienced any decline, quite the contrary. Our strategic brands have performed remarkably well,” says Plamen Vasilev, Duty Free Manager for the company. “Historically, the Gulf region has always been quite volatile with unpredictable growth and changing purchasing habits, due to the particular constraints associated with alcoholic beverages. Nonetheless, it is one of the key regions for our company and

we have had consistent and outstanding results in the past few years.” VP Brands International carries a substantial number of brands including wines and spirits, but in regions outside of Bulgaria and certainly in travel retail the company has focused on its vodka brand FLIRT. That decision has proven to be a good one. “Our focus has been on our flagship brand FLIRT vodka, which is currently available across almost every country in the Gulf region. The greatest share of the growth has been driven by the UAE market, where FLIRT is arguably the fastest growing brand in the country,” says Vasilev. “FLIRT is already a formidable player in the UAE and is among the top three brands in terms of volume.” Promotions are always important in travel retail, and a strong promotional calendar has helped both to create the success of the FLIRT brand and to help it remain successful during a time of difficulty in the region. “Together with our partners we implemented a significant investment plan focused on consumer promotions with added value and this

VP Brands International understands the importance of promotion, and its gondolas definitely stand out in the marketplace

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

helped mitigate the general economic slowdown,” says Vasilev. “Our biggest campaign to date will be in December, 2016, with 1,777 awards for consumers, including cash prizes worth up to US$1,000.” What’s next for the brand? Geographical expansion. “After our unrivalled success in the UAE we have focused our strategy on replicating our success in subSaharan Africa with Kenya and Nigeria as our regional hubs. Our brand and product propositions are a perfect match with consumer experiential expectation and the region’s developing lifestyle trends,” says Vasilev. who adds that the company is also setting its sights further east. “India is in our sights for the coming years. Currently we are building our strategic plans, which are scheduled to be implemented in 2018.” Promotions and strategic planning are incredibly important to success, but at the end of the day it’s about quality, says Vasilev. “We provide a product with exceptional price/quality ratio, allowing the consumer to choose a brand at an affordable price that not only has quality cues associated with premium products but also delivers on the brand promise. We are pleased to say that we have 24 different flavors, a flavor for every hour of the day.

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BROWN-FORMAN

Promoting authenticity Brown-Forman and Jack Daniel’s are bringing their strong background into play with activations and promotions targeting the sub-continental millennial by

WENDY MORLEY

With Jack’s Bar & Grill located in the Dubai airport, Brown-Forman had extra opportunity to celebrate the 150th anniversary of the Jack Daniel distillery

A Brown-Forman is increasing its focus on having a strong digital presence, as it does with Boingo Internet Provider

Activations located in Dubai Duty Free for the Jack Daniel’s Tennessee Fire launch included changing screens

s other liquor categories have slowed or dropped into negative territory in global travel retail in recent years, American Whiskey continues to do well globally, and this is in no small part thanks to Brown-Forman and Jack Daniel’s. This company and its family of whiskeys have helped the entire category, and nowhere is this truer than in the Gulf region. With such offerings as Gentleman Jack, Jack Daniel’s No.27 Gold and Sinatra Select, Brown-Forman has elevated American Whiskey to premium and superpremium levels, helping to change its perception in a very positive way. The company has held some spectacular activations and promotions in the Gulf region, such as the launch of Jack Daniel’s No 27 Gold in 2014 when Brown Forman gave away a kilo of gold. This year’s launch in the Gulf was Jack Daniel’s Tennessee Fire. “Jack Daniel’s Tennessee Fire was launched in Dubai Duty Free in March,” says Eric Helms, Vice President, Marketing Director, Global Travel Retail, BrownForman Corporation. “For the launch, we activated with a strong gift-with-purchase mechanic to encourage consumers to purchase and trial the product: ‘Buy a bottle of Jack Daniel’s Fire and receive a free t-shirt.’”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

The right product in the right place The brand had strong visibility with this launch, with changing screens and heavy branding on gondolas and elsewhere. “The launch concept was visible in all concourses and terminals across the Dubai airport,” says Helms, who also asserts that the liquid works well with travelers in the region: “The cinnamon flavor resonates with our core sub-continental consumers due to its prominence in the local flavors and food.”

Interactivity key with Millennials As the generation most recently come of age, the largest cohort globally and a group most keen on traveling, the Millennial generation really is key to future success in travel retail. While well established in older generations, Jack Daniel’s also works well for this generation, for which heritage and authenticity are especially important. To reach this group in particular, the company looks to interactivity. “Last year we focused on the gaining momentum with the millennial consumers by developing and implementing an engaging and interactive campaign,” says Helms. “This year, we widened our perspective and focused on all core areas

BROWN-FORMAN

within Dubai Duty Free. Throughout the month of September, the 150th anniversary of the Jack Daniel distillery was highlighted in each location. As part of this celebration, the specially selected ‘By the Barrel’ Single Barrel bottles were available throughout Dubai Duty Free.” The company also sees its flavors as being strong with the Millennial generation, Helms relates: “We are placing an emphasis on engagement and communication with the Millennial consumer through the trial and communication of the Jack Daniel’s flavor portfolio: Jack Daniel’s Tennessee Honey and Jack Daniel’s Tennessee Fire. To complement the Jack Daniel’s twinpack, we are planning to trial a Jack Daniel’s Honey pack in the future.“

One of the biggest strengths Jack Daniel’s has with all consumers but Millennials in particular is its strong heritage and authenticity, which Brown-Forman highlights here with the Jack Daniel’s bench promotion

The Indian subcontinent becomes increasingly important

The launch of Jack Daniel’s Tennessee Fire in the region this year was supported by heavy brand presence

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

Indians are also of growing importance to travel retail, within India itself and also certainly in the Gulf region, which sees an enormous number of Indian passengers. “We believe that harnessing the synergies that exist between the India travel retail and UAE travel retail channels are key for the growth of our business in this region. The majority of our Jack Daniel’s consumer base in Dubai Duty Free originates from the sub-continental region. These consumers are extremely loyal to brands and eager to explore and interact with the Jack Daniel’s portfolio. “ Certainly one of the secrets of BrownForman’s—and Jack Daniel’s—success is its comprehensive and far-reaching promotional commitment, and this will certainly continue in coming months. “We continue to focus on adding value to the consumers who purchase from the Jack Daniel’s portfolio. For this reason, we will be activating throughout the holiday period with a two tier gift with purchase spend mechanic.” In the coming year, the region will continue to be an important one for Brown-Forman. While exploring and implementing activities that harness the synergies across the India-Middle East travel retail channel, the company will focus on launching its single malts in this channel. In addition, Helms says, BrownForman will have activities planned for the launch of new airports in the region – Muscat International Airport & Abu Dhabi International Airport.

LIQUOR NEWS

William Grant & Sons celebrates Diwali Throughout October and November of this year, William Grant & Sons has run a special high-profile “mega-promotion” celebrating Diwali, in partnership with Hyderabad Duty Free. The promotion offers passengers the chance to win a Nissan Terrano car when they spend over US$90 on Glenfiddich products in Hyderabad Duty Free. India is a massive Scotch whisky market and is a region of promise currently in duty free. Despite high import tariffs, the market is expanding rapidly with huge potential. Annual whisky sales in India are estimated at over 180 million cases. The whisky market in India grew by 41% in volume and 28% in value in the first six months of 2016 alone, according to the Scotch Whisky Association. Rajiv Bhatia, Regional Director Middle East, Levant, Indian sub continent and Africa for WGS, says the opportunity for Glenfiddich is massive as Indian consumers begin to value the quality and cachet of Scotch whiskies as opposed to local brands. “What’s

particularly important to passengers is that they know the products they are purchasing at the airport are genuine and authentic,” he says, “and this promotion linking to a high value vehicle such as the Nissan Terrano is a further indication of that quality and superiority,” Hyderabad Duty Free is one of WGS’ most important and fastest growing customers. “We anticipate that this one-of-a-kind promotion will build our business further and cement a lasting and mutually beneficial relationship with Hyderabad,” says Bhatia.

This promotion offers one of the biggest prizes on offer in the context of Indian Duty Free, and is the most expensive car to ever be offered in a mega-promotion at Hyderabad duty free

Long a staple in bars around the world, Marie Brizard is entering the spotlight with a new logo, new bottle shape and new campaign

Marie Brizard brings the French feminine to cocktails Marie Brizard brand has been a staple in bars since its inception in 1763, and the past year has been exciting for the over-250-year-old company. 2016 has brought strong renewed focus to the duty free channel for the company, which has also undergone a massive redesign of its multiple-award-winning Gautier Cognac, its overall marketing and now its iconic Marie Brizard brand. The liqueur brand’s new look is sleek, sensual and synonymous with freedom of mind, non-conformism and refinement, asserting Marie Brizard’s strong personality through a new visual identity that cleverly brings some set traditions into play while breaking others. The historical slender feminine lines of the bottle are enhanced with multiple facets, for a defined contemporary look. The logo has been brought up to date. All arms of Marie Brizard liqueurs have now been brought in line, with a similar bottle, look and feel. “This year’s relaunch sees the unveiling of an exciting new design and activation plans to engage with travellers. The Cannes exhibition provides the opportunity to share those plans with Global Travel Retail customers,” says Kevin Baker, Global Travel Retail Director for the company. Along with the bottle and logo redesign has come a new marketing campaign, which playfully highlights the power of the French feminine. While Marie Brizard liqueurs have often been part of world famous cocktails, the new campaign brings them into the spotlight. “Cocktails have been growing dramatically around the world and Marie Brizard is perfectly positioned to reflect that trend in Travel Retail,” says Baker. “The Marie Brizard brand is widely recognized amongst the world’s best mixologists for its quality and versatility and they enter the Marie Brizard Masters global cocktail competition in great numbers, culminating in the final in Bordeaux in November.”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

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LIQUOR NEWS

Pernod Ricard launches Chivas Regal Ultis

The Chivas Regal Ultis bottle offers unique features such as the textured base and pen-clip closure, which the label and gift box remind the consumer of its celebration of the brand’s five Master Blenders

Since its beginnings in 1909, luxury blended whisky Chivas Regal has had five master blenders, and its newest offering, Chivas Regal Ultis, pays tribute to all five. The first blended malt Scotch whisky from the House of Chivas, Chivas Regal Ultis uses only five of Chivas Regal’s most precious, signature single malts from Speyside: Tormore, Longmorn, Strathisla, Allt A’Bhainne and Braeval. Less than 1% of Chivas Brothers’ inventory of millions of casks is used, with each cask individually nosed and hand selected for this luxurious blend. The Chivas Regal Ultis bottle is designed to stand out on shelf and will appeal to discerning drinkers looking to impress at special occasions as well as Scotch whisky aficionados searching for their next luxury whisky. The slender bottle features a unique pen-clip closure etched with five rings. The heavy textured base contains the Roman numeral “V,” a unique detail that further underlines the distinctiveness of this offering. Colin Scott, Chivas Regal Custodian Master Blender, comments: “I am honoured to have been one of only five Master Blenders for Chivas Regal, and I believe that Chivas Regal Ultis represents the true essence of this iconic Scotch whisky. With the release of Chivas Regal Ultis, only the most precious single malts from five signature Speyside distilleries have been selected to craft this luxury blended malt whisky from the House of Chivas.”

Amarula’s Name Them Save Them campaign to protect the African elephant is launched To Distell Spirits and its world-renowned cream liqueur brand Amarula, elephants are more than just a symbol. As an African brand, Amarula has been committed to the protection of the African elephant since 2002 and has donated US$642,000 to the cause over this period. Lately, that support has been stepped up, with a new campaign and a new video. The Amarula Name Them Save Them campaign seeks to make the prospect of losing an African elephant personal to viewers by sharing how like people elephants are, then through the action of inviting people to name the surviving elephants. In the campaign, viewers are guided through an immersive online experience into a virtual digital savannah, By offering the opportunity to name one of the few African elephants that remain, Amarula hope’s to make the future of these intelligent creatures more important to us

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

where they can choose an elephant, design it with a range of colorful patterns, then name and share it with friends online. To protect Africa’s heritage and further entrench its commitment to conservation, Amarula has joined forces with WildlifeDirect’s CEO Dr Paula Kahumbu, who is internationally acknowledged for her conservation work. Dr Kahumbu appears in a video created as part of the campaign, shot on location in the Amboseli Park, Kenya, in front of Mt Kilimanjaro. She introduces viewers to elephants by name, showcasing their behavior in their natural habitat and discussing their intelligent, human-like behavior. The short film, shot by Felix Seuffert from Butterfly Films, has been made to raise awareness of the plight of the African elephant, while building the bond between humans and elephants. “Awareness created by this campaign, combined with the expertise of Dr Paula Kahumbu and the WildlifeDirect team, will help us continue to protect the continent’s elephants that are such an important part of Africa’s heritage and Amarula’s story,” said Dino D’Araujo, Amarula Global General Manager. “Our objective is simple – to make sure that for generations to come, we continue to meet the elephants beneath the Marula trees.” For details, visit www.amarula.com or search Amarula #Namethemsavethem on YouTube.

UNDERBERG

A glass of wellbeing: The Underberg story Unique positioning, distinctive packaging and a 170year pedigree are ensuring that Underberg retains its crown as the king of natural herbal digestives

nspired to create a unique digestive beverage following a trip to the Netherlands and Belgium, where he became acquainted with an intriguing herbal elixir served in local inns, Underberg was the brainchild of company founder, Hubert Underberg. First patented in 1851, he used 43 herbs from 43 countries and the latest 19th century production techniques to develop a soothing aromatic digestive that swiftly became a commercial success in his native Germany, renowned for its consistent quality and beneficial properties. According to fifth generation family member, Dr Hubertine Underberg-Ruder, current President of the Board, the brand’s global status has always been supported by an active approach to marketing. “The first two generations of the family used the hugely popular World Exhibitions as a platform to reach international markets. Underberg was also an appointed purveyor to the royal courts of Austria, Denmark, Sweden, Russia, the Netherlands, and as far afield as China and Japan,” she says. Its arrival into travel retail, and success ever since, is largely credited to the development of the single portion bottle The king of natural herbal digestives, Underberg is made from 43 specially selected herbs

The brand’s arrival into travel retail, and success ever since, is largely credited to the development of the single portion bottle in 1949 by Emil Underberg I Underberg’s travel retail presence launched in neighboring Baltic Sea countries and today it is available in duty free locations around the world

in 1949 by Emil Underberg. Says Dr Underberg: “This way, it could be easily transported, so it has been a case of ‘convenience since 1949’. “A special five-bottle pack was developed especially for duty free, and is still our most relevant SKU today. This pack is an opportunity for operators to generate additional turnover as a personal use item.” Underberg’s travel retail presence launched in neighboring Baltic Sea countries and today it is available in duty free locations around the world. Its original slogan – ‘Underberg – every day for your wellbeing’ – is still the raison d’être of the brand. The challenge of maintaining position, and numbers, in a crowded category doesn’t unduly concern Underberg, as she explains: “It is a unique product starting with the liquid itself, which is crafted with care from specially selected herbs using a gentle extraction method that preserves the integrity of the ingredients. “The unique packaging in the form of a paper-wrapped single portion bottle ensures that it really stands out on the shelf, and the hygienic-meets-accessible design enables it to be consumed while on the move.” Secondary placements at payment points or shelf topper advertisements are also used to promote visibility and attract spend, but direct consumer contact is

another area that Dr Underberg places significant emphasis on. “This is of increasing relevance for any brand and we split our activities into two areas: our ‘Tops & More’ loyalty campaign and social media activities. Indeed, we are seeing increasingly loyalty from millennial consumers,” she remarks. The ‘Tops & More’ programme rewards customers with premiums when turning in bottle tops and, according to Underberg, the Nordic region was one of the first markets to really buy into ‘rooting’ the brand at outdoor events and festivals. Underberg also has a strong community of followers in South America, led by Brazil, which she credits to active social media presence. “Events like Oktoberfest are also equally popular, and we sponsor the one in Brazil, which is the second largest in the world after Munich; and this is the ideal place to reach millennials.” Dr Underberg is already looking to the next decade and opportunities for further brand growth as part of its Vision 2021 strategy, which is focused on the company motto ‘In the service of wellbeing, worldwide’, as she explains: “We want to enhance the wellbeing of people in as many places as possible; this is our mission.” For the Gulf-Africa region, this includes prioritized expansion into South Africa, while, globally, the Nordic countries are top of the list.

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

DAVIDOFF

Davidoff celebrates its Royal Release

Nothing is more sensual in the aficionado’s cigar ritual than the moment the flame appears. The product of a 500-stage quality-controlled process, this very limited Royal Release blue lacquered lighter guarantees that, from the very first pull, cigar aficionados will enjoy a harmonious, satisfying experience

As a company well known for bringing true luxury to the cigar aficionado, Davidoff stays true to its soul with this extraordinary new release by

WENDY MORLEY

t every turn, Davidoff continues to surprise us with innovations. In addition to a strong presence in the global art world, both through its partnership with Art Basel and with its own comprehensive Davidoff Art Initiative, the company continuously offers a multitude of unique and interesting events. These include the “Ladies Masterclass,” an opportunity in many cities around the world for women to learn about cigars in a comfortable environment; the “Tour Gastronomique,” a series of events that paired gourmet food and cigars, and many more. These events and partnerships certainly do not detract from the company’s core being, however, as Davidoff continues to offer exciting cigars and beautifully designed luxurious accessories. The newest offering, already available in the US but launching globally this month, November 2016, is Davidoff ’s Royal Release cigars and accessories line. These cigars have a true heritage. The seeds of the tobacco used were planted specifically with this release in mind, during 2004-2005, a year of optimal conditions. These plants were harvested separately from other crops, and cured in a special location referred to as the “Royal Barn.” Davidoff ’s head Master Blender visited daily to ensure that the tobacco’s color, texture and aroma were monitored closely and to exacting standards. Approved bales were aged for eight years, and then eight of Davidoff ’s best Master Rollers were then given the task of using their combined skill and knowledge in crafting and creating a Davidoff cigar that would sit atop an already superior selection. Each Davidoff Royal Release cigar is created to rise high above the ordinary, with a complex and balanced blend. These cigars have been chosen by a process of painstaking refinement and selection, ensuring only the pinnacle of quality. The 68

unique “Aromatica Dominicana” wrapper, used exclusively for the Davidoff Royal Release Edition, offers extraordinary beauty and shine. The binder is a “Habano Ecuador” and the filler is composed of different Dominican tobaccos. The Davidoff Royal Release Edition will be available in two formats: Robusto and Salomones. “Our aficionados will realize in one beautiful instant that this cigar is the result of a very privileged upbringing. From seed to leaf, to finally blending and rolling the cigar, every step along the way was characterised by the stringent selection criteria, meticulous attention to detail and love that yields an exceptional cigar. A most uncommon experience, a moment spent savouring this Royal Release cigar from Davidoff is unlike any other. It is a time beautifully and royally filled,” explains Charles Awad, Senior Vice

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

President of Global Marketing & Innovation at Oettinger Davidoff AG. Davidoff has released accessories to complement this new Royal Release cigar, including the Royal Release lighter, which they refer to as “the most reliable lighter on earth,” crafted by France’s S.T. Dupont. The exquisite Royal Release ashtrays are mouth-blown by celebrated Murano glass blowers, virtuosos in the art of glass for five centuries.

Taming crystal glass into this ethereal shape is a skill mastered only by the best glass craftsmen. Four layers of lead-free crystal glass sheets create this elegant hub around which to gather

Davidoff’s new cigar release has an extraordinary heritage, from the first tobacco seed planted and every step of the way to the aficionado’s enjoyment

ALZAWRAE/MAZAYA

Pipe

dreams Launched in 2010 by Jordan’s Alzawrae Company, Mazaya shisha tobacco has transitioned from the regional domestic market to the global duty free stage by

CLAIRE MALCOLM

Nour Anshasi, Marketing Manager, Alzawrae

With a GWP budget of US$20 per customer, previous activations have a crystal shisha

he line-up of flavors available as Mazaya shisha tobacco reads like a tropical cocktail menu. Iced mint, guarana, mojito, coco lemon, apple with cinnamon and kiwi rank alongside traditional flavors, as well as other unique combinations such as coffee and cardamom. Now enjoyed by customers as far as Brazil, it is swiftly becoming a niche leader in the tobacco category. “Shisha has been trending internationally for some time now and with Mazaya we have brought a product to the market that looks and tastes amazing for a number of reasons,” says Nour Anshasi, Marketing Manager, Alzawrae. The “all natural” positioning of Mazaya extends from a commitment to use only the best fresh French tobacco, natural sugar and flavorings in each mix, through to its innovative packaging concepts.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

According to Anshasi, Alzawrae chose to use fresh tobacco due to its low tar and nicotine levels, and high absorption rate of liquids, which makes for a longer and more enjoyable smoke. She says: “As a tobacco brand, packaging is the most important element of our marketing energy and we use the visuals to highlight the flavor, with 30% of the pack design bringing the ingredients to life in a colorful, impactful way. “We were the first brand to debut this style of packaging. We are very detail focused and it all looks very natural, and this is what attracts customers when they see it on shelf. We took this approach as we wanted to enhance the fresh appeal in comparison to what we see with our brands.” The high quality packaging and sourcing of fresh tobacco doesn’t mean an inflated price, with Anshasi explaining

The “all natural” positioning of Mazaya extends from a commitment to use only the best fresh French tobacco, natural sugar and flavorings

that Mazaya is positioned as a premium product made for the mass market but marketed at an affordable price, averaging at US$30 per kilogramme. Beirut Duty Free was the launchpad, in 2011, for Alzawrae’s travel retail journey, since then it has expanded across the region and into international waters. “We then started working with Aldeasa in Jordan, then entered Kuwait and Qatar properly a couple of years later; and sales are doing very well, and also with Jordan Duty Free,” she says. The serious work began last year, with a 12-month calendar of events and activations designed to drive awareness and support the brand in each market, as Anshasi explains: “Each month we have a different offer and gift for the end consumer. This gives us a competitive advantage and also encourages travelers to try the brand.

“In 2015 we secured space in Dubai Duty Free, terminals one and three, which has been extremely successful and sales are well above forecast. This prompted our decision to sponsor the Dubai Duty Free plastic bags, which will go live this November.” While shisha is synonymous with the Middle East and neighbouring markets, Alzawrae is eyeing more distant shores. “We are looking at Turkey, Europe and South America as we see huge potential in these markets. Take Brazil for example, in terms of domestic sales it is one of our biggest markets, number four in fact,” remarks Anshasi. She credits this to the current global appeal of shisha in overseas markets and also to the millennial generation, particularly in South America, who like to experiment when it comes to flavor combinations.

“We are big on R&D when it comes to growing our range of flavurs and the 18 to 25-year-old shisha fan in Brazil loves to mix up to five flavors at a time, and there is sustained demand for new or unusual mixes,” she says. With a GWP budget of US$20 per customer per month, Anshasi is able to gift outside of the box as it were, and previous activations have included buy two outers and receive a Bluetooth speaker, fitness tracker watches and crystal shishas. This is supported by regular promotions, such as buy one, get one free. “We want to deliver a premium message and as a relatively new entrant to travel retail, it is important to deliver added value. Travelers are in a different frame of mind when they get to duty free, and we want to add to their experience.”

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

VILLIGER

A golden opportunity Swiss tobacco products specialist Villiger is expanding its highly successful line of Gold tins with new products and fresh formats by

MARY JANE PITTILLA

in gold foil and the box is black in color, which is proving a winning combination. Also selling strongly are individual colored tins Black Mini, Gold Mini, Red Mini and Green Mini cigarillos.

Smaller-sized packaging

Villiger produces handmade cigars and has been introducing more brands to the travel retail industry, including Villiger 1492

wiss cigar specialist Villiger is still privately owned and managed by 86-year-old Heinrich Villiger, Chairman of the Board of Villiger Soehne AG. Mr. Villiger has spent more than 65 years in charge as an active, full-time executive – and his family-owned company shows no signs of slowing down any time soon. Villiger prides itself on producing its famous, “Numbers” line cigars (No1, No3, No7 and No8). Importantly, the cigars are presented in a slide box format with every cigar in aluminum foil, which has an enduring popularity with the brand’s loyal customers in Germany and Switzerland, the Middle East, and particularly Asia. While adhering to a tried-and-tested slide box format, Villiger has been busy modernizing the assortment for the past few years to attract consumers across Europe, the Middle East and Asia. For example, Villiger’s Gold tins are the brand’s number one selling product in Dubai Duty Free, especially prized by Chinese travelers, and also popular among gold-loving Russian and Middle Eastern passengers. Villiger also performs well at Dubai Duty Free with its limited-edition No3 gift pack, originally launched three years ago. The 20 machine-made cigars are wrapped

Villiger also produces handmade cigars. The company has been introducing more brands to the travel retail industry, including La Meridiana and Villiger 1492. The firm has also been producing cigars in smaller-sized packaging for the Middle Eastern and Asian markets, containing three or five cigars. “We’re producing smaller formats so that people can try the product, and try something

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

new,” explained Ioakeim Gavalas, Export Director for Africa, Middle East and South East Asia. Villiger’s highest-spending customers are from China, where the company enjoys a large market share, and where the percentage of smokers is pretty high, according to Gavalas. The company has observed a rise in the popularity of shorter smokes. “The Villiger No7 machine-made cigar comes in a smaller size that’s easy to smoke,” says Gavalas. In terms of regional growth, Villiger aims to step up its distribution in Europe, South America and the Americas in general.

Villiger’s Gold tins are the brand’s number one selling product in Dubai Duty Free, especially prized by Chinese travelers, and also popular among gold-loving Russian and Middle Eastern passengers

While adhering to a triedand-tested slide box format, Villiger has been busy modernizing the assortment for the past few years to attract consumers across Europe, the Middle East and Asia

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TOBACCO NEWS

19th annual Habanos festival announced Cuba’s 19th annual Habanos festival will take place in Havana from February 27 to March 3, 2017. An exciting international festival that brings together aficionados the world over, the Habanos Festival offers numerous activities. The Welcome Evening will start it off with a bang, and the week will continue with visits to the best tobacco plantations in Vuelta Abajo Zone, visits to the Emblematic Habanos Factories, contests including the International Habanosommelier Cigar Rolling Master Class Contest. There will be opportunities to pair food, spirits and cigars and any number of opportunities to learn and experience more at the Trade Fair and during seminars. Capping the week off will be the international celebrity-studded Gala Dinner and humidor auction. The coming festival offers some of the best-loved aspects found each year, and will also offer more. For more information, www.habanos. com will be updated in coming weeks.

Among other activities offered at the 19th annual Habanos Cigar Festival will be the International Habanosommelier Cigar Rolling Master Class Contest

J.Cortès and Oliva making their name in travel retail Leading cigar company J.Cortès’ recently acquired USA-based Oliva Cigars, with branches in Miami and Nicaragua. With this acquisition, J. Cortès aims to diversify its product portfolio and further establish its position in the worldwide cigar market. This year marked an exciting new beginning for both family-owned companies. The acquisition was announced in July with a lovely film commemorating the story. In keeping with the introduction of media to the centuries-old J.Cortès-Oliva experience, J.Cortès has launched a unique virtual reality experience that guides the viewer through the authentic Nicaraguan cigar craft shops, to celebrate this love and bring to life the story of the two families. The participant will find him- or herself in the middle of the tobacco fields, feel the craftsmen’s love for their cigars and witness firsthand how the cigars are hand rolled. The smell experience rounds off this unique adventure. J.Cortès, whose global and travel retail business has been growing substantially in recent years, brought this virtual-reality experience to visitors at TFWA World Exhibition in Cannes. Along with this focus on Oliva cigars, in duty free J.Cortès continues to focus on its Travel Retail Exclusive Neos Selection 50 cigars, offered in a luxurious tin, wrapped in a sleeve and topped off with a purchase gift. “In addition to that, we are targeting the Asian, European, the Middle-East and the American market of cigars and cigarillos, both flavored and non-flavored, with our Neos Flavor Collection,” says Thomas Gryson, J. Cortès’ Export Manager and Travel Retail Coordinator.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2016

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