Gulf-Africa MEADFA 2018 by Paramount Publishing Ltd.

MEADFA 2018

DUTYFREEMAG.COM NOVEMBER 2018 · MEADFA VOL 28 · NO 3

Beirut Duty Free undertakes expansion projects p. 8 IDFS unveils new stores at Casablanca Terminal 1 p. 16 Dubai Duty Free marks milestones p. 22

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Letter from the Editor

NOVEMBER 2018 · MEADFA · VOL 28 · 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 2018, Vol. 28, No.3. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2018 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 ASSOCIATE EDITOR Jas Ryat jas@dutyfreemagazine.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca CONTRIBUTORS Olivia Cuthbert Mary Jane Pittilla Claire Malcolm

Continued

optimism T

he importance of the Middle East as a region in duty free can hardly be overstated. Its strategic location straddling Europe, Asia and Africa make it especially attractive for airlines and passengers, while its residents are also known as healthy duty free consumers. Indelibly connected to passenger travel, the duty free industry is strongly affected by sociopolitical realities. In recent years, however, passenger traffic continues to rise globally across all regions, whether or not these tensions exist. In the Middle East, despite the Qatari diplomatic crisis and other pockets of instability, passenger traffic still rose 4.7% year on year in 2017, with monthly YOY growth in 2018 sometimes reaching into the double digits. This sub-regional instability hit the MEADFA Conference itself last year, causing the event to be moved in both date and location. Instead of being held in Beirut, Lebanon in November 2017 as planned, the event was postponed and held in Dubai in January. This year, however, the MEADFA board has once again decided on Beirut, because of its position as a strong destination in its own right and also as a regional hub – a representation of the industry’s optimism. In response to the region’s growth and this optimism, operators in the Middle East have been investing in their stores. In this issue, we discuss the major expansion and renovations at Beirut Duty Free. North Africa has shown especially strong growth of late, and this is reflected in the new terminal in Casablanca, Morocco, where International Duty Free Shops prepares to open two new stores. We hope you enjoy reading about these expansions and more in this issue of GulfAfrica Duty Free magazine, and we wish you great success at MEADFA and throughout the region in the coming year. Kindest Regards,

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

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

www.dutyfreemag.com GULF-AFRICA DUTY FREE & TRAVEL RETAILING

Contents

What’s inside

Lead Stories 8 Beirut Duty Free

Creating space to thrive Beirut Duty Free has undertaken a series of expansion projects that have significantly boosted sales for this ambitious travel retailer

16 International Duty Free Shops Making the most of Morocco

30 years experience is distilled into two state-of-the-art IDFS stores recently completed at the new Casablanca Terminal 1

22 Dubai Duty Free 2018 in the bag for Dubai Duty Free

The milestone moments are coming thick and fast for Dubai Duty Free in 2018 as it wraps up the latest round of major refurbishment, edges closer to its US$2 billion sales goal and prepares to celebrate 35 years in business

28 Iraq Duty Free

Iraq Duty Free flies ever higher Iraq Duty Free has clinched its first inflight contract as it seeks to enhance the airline duty free business of the country’s main carriers

36 Hunter Palmer -

Global Retail Solutions Enhancing the customer journey With over 25 years of retail expertise, Keith Hunter, Co-Founder of Hunter Palmer - Global Retail Solutions, reveals how to create the ultimate customer experience

22 Features Kreol Group distributes Şölen Guest writer: Kian Gould

20 30

Middle East’s growth pockets 40 New device puts travel safety first 42

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Contents

48 52 Lead Stories

44 Ajmal Perfumes

The magic of the Orient With over 67 years of experience in the art of Arabic perfumery, Ajmal Perfumes is tapping into the trend for oriental fragrances in the west

46 Rituals

Rituals feels good in travel retail Luxury home and body cosmetics brand Rituals is building momentum in the Middle East market and beyond with its sustainable gift sets

54 Diageo Global Travel Diageo focuses on retail transformation in the Middle East

Scotch whisky power brand Johnnie Walker leads the way in the Middle East for Diageo Global Travel as compelling – and dramatic – innovations hit the shelves

56 Roberto Cavalli Vodka

Vodka with a fashion attitude A new boutique showcasing Roberto Cavalli Vodka is the blueprint for future stores that Mariem Mersni Ben Cheikh, CEO of International Travel Retail, wants to open in the duty free channel

58 Oettinger Davidoff AG Time beautifully filled

Under new Chief Commercial Officer Jim Young, Swiss-based cigar supplier Oettinger Davidoff AG is undertaking some major product and retail initiatives

Features Lindt makes travel magic Fazer focuses on the good

48 50

Anthon Berg sweetens the holidays 52 Pernod’s TR team on a mission to win 6 0

Beirut Duty Free

Beirut Duty Free has expanded the entrance of the Departures store and increased the ceiling height

Creating space to thrive Beirut Duty Free has undertaken a series of expansion projects that have significantly boosted sales for this ambitious travel retailer

Adrian Bradshaw, General Manager of Beirut Duty Free

8 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

by HIBAH NOOR

drian Bradshaw, General Manager of Phoenicia-Aer Rianta International (Beirut Duty Free), has been overseeing the completion of a major four-month project this year to renovate the retailer’s main store in the Departures area. The renovation, initiated by the previous General Manager Andrew Baker, involved a full category re-distribution based on performance and business projected growth in addition to a new re-merchandising for all brands in the tobacco, liquor, confectionery and toys, while souvenirs were moved to a new location in the terminal. The company expanded the entrance, increased the ceiling height, introduced more lighting and repositioned its promotional spaces more strategically to help grow the business. Bradshaw explains that the revamp was necessary as the last time this shop was renovated was in 2010. “We needed to re-plan and expand the space for a few categories, mostly for tobacco and confectionery, as sales were growing significantly for these

Beirut Duty Free

categories, while overall sales for the shops were behind the passengers’ single-digit growth. Our aim was to take advantage and introduce bigger and newer brand displays, exposing the brands more to the passengers and making more shelf space for stock and new products. Freeing up some valuable spaces was also seriously required in order to introduce new brands and product lines like the e-cigarettes.” The renovation project was done in three phases over a period of four months. Work started in February and finished in May.

Highlighting premium product lines

Inside the 1,200 square meter store, Beirut Duty Free expanded the space for Diageo/Johnnie Walker from a 6-meter wall bay to 25 square meters, including a sampling bar and a large light box, by re-allocating it from a back wall behind tobacco to the shop entrance, granting the brand premium visibility. In addition, Pernod Ricard/Chivas was moved from a 2-meter back wall behind a promotional space to the front center of the shop, leading the category with an 8-meter wall bay highlighting the premium product lines above 12yo and expanding the range. The retailer also introduced e-cigarettes to its shop with two showcases covering 4 square meters. The molasses space was expanded from two floor displays to four wall bays and three floor displays. Bradshaw describes this as a significant improvement for the category, which was growing at a rate of more than double in the past three years. Meanwhile, the company has almost doubled the spaces for each major confectionery brand and created a new space of 23 linear meters for brands on wall bays when it used to have only six linear meter wall bays. In an exciting development for Beirut Duty Free, the retailer is also offering Lindt’s Pick & Mix confectionery concept. “With Lindt being our number one confectionery brand, we were very excited to collaborate with them and immediately accepted the Pick & Mix project, which was rolled out in major airports around the world. We wanted to differentiate ourselves from duty

Beirut Duty Free has increased the space for Diageo/Johnnie Walker and Pernod Ricard/Chivas for greater brand visibility

10 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

As part of the retailer’s Arrivals offer, Beirut Duty Free has partnered with digital services provider Inflyter to allow travelers to shop and collect at one stop

free operations for our size by offering something new to chocolate lovers, giving Lindor customers the option not only to buy more flavors but to mix their favorites from a wide range. Having said this, we have also decided to give more attention to other major confectionery brands like Kinder, M&M’s and Toblerone by significantly increasing their spaces.” The revamped store is also set to carry Philip Morris’ IQOS e-tobacco products, as Bradshaw explains. “The most important features that convinced us to consider listing IQOS were both the technology and research put behind the product development and the claim that it reduces risk versus the traditional combustible tobacco. We were following the results of IQOS launches and the market share acquired in the tobacco category in addition to the retail concept stores opening downtown in major cities around the world. We were hoping to be the first in the Middle East by launching earlier this year as we were ready with the space and agreed with Philip Morris International, but local laws and regulations delayed us and we are hoping to launch between November this year and January 2019 at the latest.” During the TFWA World Exhibition the retailer held some serious discussions with major tobacco suppliers on launching their vapes and versions of Heets next year into its portfolio. “Earlier in 2018, we launched two vape products and several liquid flavors which are performing as forecasted, and sales/ demand is growing month on month, attracting mainly new, younger consumers,” notes Bradshaw.

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Beirut Duty Free

Fast-track service for business travelers

Recently Beirut Duty Free partnered with Dior to stage a pop-up in the main atrium of departures

Expanding the perfumes and cosmetics category

Another interesting development at Beirut Airport is the introduction of a separate fast-track check-in area for business travelers in the main terminal. The airport authority introduced this project around eight months ago due to the rapid growth in passengers and the need to facilitate the check-in process. Work is expected to start in the coming two months and to be completed within a maximum period of four to six months. The airport authority has separated part of the existing Arrivals level in the main terminal and dedicated this space for the fasttrack project. Passengers will pass through security, check in and go up an escalator to

Beirut Duty Free has also expanded the space for perfumes and cosmetics by a total of 45 square meters, equivalent to a 10% increase in the shop space. Due to strict space constraints and tender complications, the operator was not able to develop this area as it had really wanted to in the past five years. However, it is planning to list new makeup brands such as Benefit, Nars, Bobbi Brown and Urban Decay, and is looking at expanding MAC and moving it to a new major location in the middle of the Departures terminal passenger pathway. The company is looking at other projects in expanding the premium Beirut Duty Free uses two fragrance offer with Jo Malone, Acqua di Parma, mobile carts that drive to the gates, offering the top Creed, Kilian and others. It is also planning items from tobacco, liquor, a major project with La Prairie by expanding fragrances and confectionery its space from 2 meters to 15 square meters, to include a service/consultation cabin. The retailer is seeing success with high-end fragrance lines, the Departures level, where they will immediately enter the duty as a number of brands have introduced to travel retail their free shops from the far west side of the fashion area, facing the private lines and/or collections which were previously boutiqueperfume shop. Bradshaw explains that this was one of the reasons only exclusives. “This trend is still continuing in our region and why the perfume shop was expanded exactly facing that entrance it seems to be more appealing than before to our consumers,” on the other side. he says. “Those [private lines] represented an incremental To cater to the growing number of business travelers, Beirut increase of business of an average 15% to their brands in our Duty Free is looking at reviewing the current fashion brand shops. Again, we wanted to be more serious about our offer by distribution and adding new brands to its offer. “Those passenintroducing more premium brands that are available elsewhere gers have very high spending power and are mainly looking for in major duty free shops and we missed out on because of the premium or exclusive brands,” observes Bradshaw. He adds that retail space limitations.” the majority of business travelers will be Lebanese customers. Turning to the passenger mix, Beirut Duty Free’s Lebanese As a result of the fast-track expansion, the retailer is also travelers represent around 70% of passengers, with many of them reviewing its selection of jewelry, watches and accessories, and holding two nationalities, living or working abroad and visiting might expand some standalone spaces it has for brands such as Lebanon frequently or in the holiday season. Over the past eight Montblanc. This department store features several categories and years the passenger mix for other nationalities has changed. The “super corners” for some brands, says Bradshaw. operator saw a drop in the number of GCC tourists, which negatively impacted some luxury categories and premium products, Space doubled at last-minute shops while it saw a significant increase in Syrians, Iraqis and other Currently, Beirut Duty Free has two main last-minute stores, Arab nationalities from outside the GCC region. As a result, sales three smaller shops and two mobile carts that reach the gates. in tobacco, confectionery and fragrances benefited from this They offer a top-selling product range of tobacco, liquor, confecchange, says Bradshaw. tionery, fragrances and some electronics accessories. 12 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

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Beirut Duty Free

New till points have been added in the retailer’s two Departures shops, which are located at each end of the terminal

Just a year ago, the company only had two main shops at the Departures terminal wings, but the retail space has since doubled due to opening unused space, which started in 2017. The west wing shop services gates 1 to 12 and the east wing store services gates 13 to 23. “We added three new shops, each equivalent to half the size of the main shops, and on top of that we added mobile shops that can reach the travelers seated at each gate. So basically, we doubled the retail space at the gates,” explains Bradshaw. The project started back in 2017 and it took around 12 months to finalize, as works were done in three phases. The expansion will be completed by the end of this month. The company uses two mobile carts that drive to the gates, offering the top items from tobacco, liquor, fragrances and confectionery. They move around according to the flight schedule. In total, the company managed to double its sales in the gates area thanks to this last-minute service. Travelers mainly buy tobacco, liquor and fragrances.

Beirut Duty Free’s Lulu brand

Beirut Duty Free’s Lulu confectionery brand was introduced in October 2017. The design was a collaboration between a local marketing agency and Beirut Duty Free Business Development Manager Lynn Zeidan. All products are Lebanese made and

14 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

Beirut Duty Free’s Lulu brand of Lebanese-made delicacies has acquired a very strong market share in the confectionery business

offer a wide range of chocolate, Arabic sweets and healthy Lebanese delicacies. After launch, Lulu quickly grew to rank third in the confectionery mix and is expected to move up to second position by the end of this year, having acquired a very strong market share in the confectionery business. It is available in the company’s Lebanese food shop at Departures in addition to the last-minute shops.

Expansion of Arrivals

Beirut Duty Free has two Arrivals shops at each end of the terminal after passport control and facing the belts. West Arrivals has been expanded by 60 square meters and East Arrivals by 15 square meters. “This has significantly helped sales as it allowed us to expand in retail space for some categories such as confectionery, tobacco and liquor and to introduce more promotional space for brands at the shop entrance,” says Bradshaw. The promotional spaces were expanded from one in each shop to three, and two new till points were added in each shop. This expansion project was undertaken late last year and finalized in around two months.

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International Duty Free Shops

The second shop on Level 2 spans a larger area of 540 square metres that gives customers ample space to enjoy the full scope of IDFS’ carefully curated product range

Making

the most of

Morocco 30 years experience is distilled into two state-of-the-art IDFS stores recently completed at the new Casablanca Terminal 1 by OLIVIA CUTHBERT

16 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

he feel is Moroccan but the focus is firmly international at two stores to be unveiled by International Duty Free Shops (IDFS) when the shiny new Casablanca terminal opens its doors. With an expanding portfolio of passengers set to pass through, the new outlets have been carefully designed to attract a diverse customer mix that caters to the traditional consumer base, including a high percentage of business travelers, alongside the growing number of younger tourists that the past five or six years have brought in. “Due to the dramatic change in demographics, we have switched our focus to ensure that we are catering to all nationalities including niche markets,” says Christopher Tantoco, IDFS’ President. Tweaking product prices and offers to ensure they retain their competitive edge in the global market, making snappy decisions in implementing new projects and ensuring that the language and level of service maintains a close customer connection have kept the company ahead during a turbulent time for travel retail. Now, with the industry picking up again, IDFS is enhancing its footprint in one of its most established markets with not one but two new stores to match the varying requirements of today’s traveler. The first outlet, located on Level 1 of the terminal, caters to transit passengers and is designed accordingly. With limited

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International Duty Free Shops

Artistic renderings of different spaces on Level 1 of IDFS’ stores at new Casablanca Terminal 1

time to catch people’s attention as they head towards their next flight, the store maximizes its 380 square metre retail space via a walk-through market concept that engages the consumer as they pass by. New Grab & Go promotion areas feature a simplified assortment and easy-to-navigate display for the fast-paced shopper with only a few moments to pick up gifts or personal items as they walk through on their way to the next destination. Meanwhile, four zones compartmentalize the broader product offering, with sections for fashion, perfumes and cosmetics; tobacco, wines and spirits; confectionery; and the company’s signature Travel Morocco corner. Attention-grabbing digital devices ensure the most attractive offers and latest product lines draw the attention of passengers, with lifestyle towers that display vertical screens and moving video featuring cross-merchandised presentations. One level up, the second shop spans a larger area of 540 square metres that gives customers ample space to enjoy the full scope of IDFS’ carefully curated product range. Situated in the boarding area, passengers here have more time to browse and

IDFS’ Travel Morocco Concept was recently completed in Casablanca T2 which was extended to the new T1

18 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

buy, which is reflected in a design that encourages people to engage with the displays and explore the collections at their leisure. For shoppers who prefer to try before they buy, there’s every opportunity to get a feel for the different brands in the Fragrances and Cosmetics Consultation Zone, the Chocolate Bar Tasting Station and the Cigar Cave, which doubles as a Men’s Lounge for customers to experience the selection on display. According to Tantoco, it’s about “creating a sense of place that the customer can see, feel and taste.” While the retail opportunities on offer cater to the international tastes of consumers passing through, the environment in both stores retains a strong Moroccan flavor with swooping canopied ceilings, ornate Moorish arches and elegant curved doorways that capture the essence of the country’s distinctive architecture. This detailed design was not without challenges. Construction began in February 2017 and was only completed in September 2018, due partly to the difficulty in sourcing materials that would create the right look and feel. Local Moroccan artisans were

employed to build each space, fusing modern techniques with traditional artistry in a graceful synthesis of old and new. Above the high hooded doorways, IDFS’s logo, familiar from its 30-year history in the country, promises passengers a brand they know and trust. In the past, Terminal 2 has catered primarily to Royal Air Maroc, which accounts for more than 60% of passengers in Casablanca’s airports. Now, Morocco’s flagship carrier will shift to the new Terminal 1, ushering in a more eclectic consumer mix, with direct flight routes from Europe and North America as well as domestic and international transit passengers bringing more people in from across the MENA region.

A larger number of Asian travelers, particularly Chinese, are coming to Casablanca via the Middle East further diversifying the clientele browsing IDFS’ displays. In recognition, the company celebrated Chinese New Year for the first time in 2018, creating promotional areas in major locations and highlighting key product offerings that appeal to this consumer base. 2019 marks the 30th anniversary of IDFS in Morocco so the company will be rolling out the party wagon and inviting everyone to make the most of the occasion. “We will be reminding the market what IDFS is known for – our global expertise and best prices,” Tantoco promises.

www.dutyfreemag.com GULF-AFRICA DUTY FREE & TRAVEL RETAILING

Kreol Group

Our road map is ready Kreol Travel Retail CEO Lal Arakulath is brimming with optimism about the potential of confectionery brand Şölen across the globe by HIBAH NOOR

“K

reol Travel Retail is enjoying an amazing journey with Şölen, and we are ready for take-off to all corners of the globe.” Those are the enthusiastic words of Lal Arakulath, CEO of UAE-based Kreol Group and subsidiary Kreol Travel Retail (distributor to travel retail), which took over the Turkish confectionery company’s travel retail account for India and selected GCC countries in 2015. “Ever since we re-launched the travel retail distribution of Şölen products, we have stamped our footprints across the GCC region and the Indian subcontinent through major duty free outlets at the international airports in Dubai, Sharjah, Muscat, Doha, Mumbai, Bangalore, Hyderabad, Cochin and many more,” he tells Gulf-Africa Duty Free. “We have recently doubled sales through a Royal Enfield motorbike promotion in Cochin. Similar promotions are in the pipeline at other locations in India.” With a 29-year-old history, Şölen offers over 200 products in the categories

of snacks, children’s products, souvenirs and treats to consumers of all ages, selling in over 100 countries. Şölen relies on its “family of almost 2,000 employees” in its production facilities at Gaziantep and Istanbul. Şölen ranks 54th in the Candy Industry Top 100, which is one of the world’s most important confectionery lists. As Turkey’s top chocolate and chocolate products exporter, it has offices in the US, UAE, Saudi Arabia, Algeria, Azerbaijan, and regional managements in the Levant Region, Canada and Latin America.

Brand-building skill

Today, Şölen is one of the fastest-growing players in its own sector in Turkey and the world; not only for its production power but also for its brand-building skill. Its food safety and quality control policies are in line with international standards, and the company is environmentally and socially conscious and respectful of labor. The company undertakes projects that impact society in areas such as education

Kreol Arakulath, Executive Director of Kreol Travel Retail, with Şölen’s management team at the TFWA World Exhibition in Cannes

20 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

Şölen’s assorted Max Bar Collection of nougat, caramel, peanut and coconut bars

and health. It has built schools in Sivas and Gaziantep and supported the construction of a community health center in Istanbul. In addition, Şölen supports women’s employment and has revived the production of traditional handicrafts. Şölen is also the main sponsor of the Mosaic Road Project to protect Turkey’s cultural heritage. Backed by the Ministry of Culture and Tourism and several metropolitan municipalities, the project aims to introduce Anatolian mosaics to the world. Şölen seeks to introduce the unique flavors and culture of Gaziantep, the land where it was born, to the whole world through this project. For its part, Kreol Travel Retail has rekindled the Şölen brand with a rationalized SKU mix, appropriate pricing and a thoughtfully tailored promotions strategy, resulting in an excellent performance, enthuses Kreol Arakulath, Executive Director, Kreol Group. “As a brand, Şölen has enormous appeal to consumers looking for valuefor-money deals when making a confectionery purchase,” he concludes. “Şölen has an innovative approach to its product offerings which covers an extensive catalog that ranges from elegant gifting items to on-the-go chocolate snack bars. An effective promotion strategy has resulted in a high sales growth of the brand across all outlets in travel retail. We are now looking to move to the next level by taking Şölen to China, Southeast Asia and Africa. We already have a road map ready.”

Strength. Vision. Leadership.

With a passion to succeed and belief in our strengths, we have grown to become leaders in Duty Free Operations; with Duty Free Shops, Seamen’s Clubs and Bonded Warehouses across ports in UAE. Our way of saying ‘Thank you’ to all our stakeholders is to never stop getting better.

P.O. Box 5968, Sharjah, UAE Tel: +971 6 5634033 Fax: +971 6 5634022

Email: customercare@bhatiatraders.com Web: www.bhatiatraders.com

Dubai Duty Free

2018 IN THE BAG FOR

DUBAI DUTY FREE

Dubai Duty Free’s Ctrip partnership promotion has achieved sales growth of 33.60% YTD

Dubai Duty Free will mark its 35th anniversary in December 2018 with three days of celebratory discounts and promotions

22 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

n expected 91 million passengers will have traveled through Dubai’s two airports by the end of the year, many of whom will have contributed in some part towards Dubai Duty Free’s revenue target of US$2 billion. A more buoyant first six months of 2018 has been superseded by a slower second half, but company COO Ramesh Cidambi is confident of year-end success following year-on-year growth of 7.6% (as of Q3 2018). The impact of the January 1, introduction of VAT and excise duty has been felt across the business, with a 3.8% drop in overall sales, led by liquor and tobacco. Dubai Duty Free has countered this with a 10% discount for customers who purchase the full liquor allowance, with Cidambi confident that this will appeal to regular customers. With VAT not applicable on the majority of sales in departures, this has resulted in an increase in cosmetics (24%), cigarettes (29%) and electronics sales (19%) by departing and transit passengers. Departures business has grown by 8.7% YTD, further boosted by the latest round of retail refurbishment, which yielded particularly strong results for Concourse C with the introduction of new brands and concepts. A revamp and relocation of the T3 arrivals offer by Q3 2019 to improve passenger visibility - is also imminent, and Cidambi is also bullish about the potential for 2019 sales with this new benchmark offering.

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THE ABC OF RENOVATION • A total of 4,343 square meters (88%) of the Concourse C retail area has been renovated with the addition of a Victoria’s Secret boutique pegged for November and an additional 537 square meters of space for gold, gifts from Dubai and fashion opening later in the month (followed by a sister store in Concourse B). • Over in Concourse B, the success of the year-old Bulgari store will hopefully be mirrored by the introduction of Gucci and Ferragamo boutiques in late December, and Chanel in Q1 2019. A sports store will complete the phase one project with phase two heralding redevelopment of the remaining central and east retail product, and introduction of a fashion store.

A total of 4,343 square meters (88%) of the Concourse C retail area has been renovated to date

Strong bric performance

Chinese travelers continue to spend their hard-earned renminbi at Dubai Duty Free stores, accounting for 15% of total sales and Cidambi reports that the 5% discount incentive program for Ctrip members is paying off. “Sales growth through the Ctrip promotion has reached 33.60% YTD with cosmetics, watches, liquor, precious jewelry and tobacco collectively contributing close to 90%,” he notes. “By teaming up with Ctrip we are able to interact directly with travelers before they fly and help them make informed purchas-

Colm McLoughlin, Executive Chairman & CEO, Ramesh Cidambi, COO, and the Dubai Duty Free dream team

24 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

• Improvement plans for Concourse A are slated for 2019 works with a number of retail shops to get a full upgrade.

ing decisions. Over 53,700 Ctrip customer sales transactions valued at US$52.5 million YTD* have been recorded,” he adds. Dubai Duty Free was the first retailer in Dubai to accept the domestic UnionPay cards, back in 2012, and is gearing up to introduce the ALIPAY payment system across its operation. A pick-up in Russian tourist numbers to Dubai is also welcomed by Cidambi, who reports a 34% increase in passenger volume and 15% sales increase, putting it back at the top of the agenda for 2019. India is similarly high profile, accounting for 19.87% of sales.

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Opened in December 2017, the Bulgari store in Concourse B has jumped in category rankings from ninth to third spot in 12 months

“The UK continues to be a key market. At this stage, we don’t know what the impact of Brexit will be on UK visitor numbers and spend, so that uncertainty is something we have to factor in to our plans for 2019,” he confirms. “In light of currency fluctuations, particularly a strong dollar versus a weakening in key currencies such as the Euro and Indian Rupee, we have also worked closely with our suppliers on our pricing structure in order to make us competitive both in the international and local market,” he adds.

E-strategic outlook

On the ground developments across the Dubai Duty Free portfolio is one thing, but the company is also looking to the cloud as it works on a multi-million-dollar upgrade and enhancement program for its online offer. “This will be rolled out next year and will enhance the e-commerce customer experience as well as adding functionality and implementing processes both in-store and online,” explains Cidambi. “Hand in hand with this, we are launching a major digital marketing initiative as part of our ‘Road to 3 billion dollars’ project. This initiative will see us invest in both people and technology to increase digital marketing capabilities to our customers, and to improve customer engagement and service. We are very excited about the opportunity to reach the 90 million passengers using the airport in a more targeted way,” he adds.

26 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

EYES SOUTH Recent expansion of the existing retail offering at Al Maktoum International Airport (DWC) with 2,555 square meters of renovated space (representing 56% project completion), has seen sales increase by 5.7% year-on-year for the period January through September, despite the reported Q1 2018 6.7% dip in passenger traffic. Says Cidambi: “This was supported by an increased range of products due to our recent expansion.” Completed in Q2 2018, the airport has not as yet announced the operational readiness and occupancy plan for its new terminal building, nicknamed the Hammerhead, “We expect to open a total of 2,017 square meters of retail (44%) within the expansion plan,” he remarks. Dubai Duty Free’s DWC operation is also set to benefit from the planned 45-day Q1 2019 runway upgrade project at Dubai International Airport. While Cidambi anticipates a decline in sales at Dubai International, with the reduction of some Emirates flights, he notes that “DWC during this period will see a growth of nearly one million passengers over the previous year, which will be very positive for our operation [there].”

Iraq Duty Free

Iraq Duty Free flies ever higher Iraq Duty Free has clinched its first inflight contract as it seeks to enhance the airline duty free business of the country’s main carriers by HIBAH NOOR

raq Duty free is diversifying into the airline business and recently signed its first inflight supply contract with Al Naser Wings Airlines. “We’re expanding the business of Iraq Duty Free into Iraq-based airlines,” Fouad A. Jabbour, Iraq Duty Free General Manager tells Gulf-Africa Duty Free. “The country has three airline companies. Iraqi Airways [based at Baghdad International Airport] is the main government-owned airline, and there are two privately owned airlines, Fly Baghdad and Al Naser Wings Airlines, which are low budget airlines for charter flights. They cater to most of the Arab countries, including all over Iraq.” The company’s contract with Al Naser Wings Airlines covers the operation and management of the onboard sales and will begin by the end of 2018. The retailer is designing the carts that will be used onboard so they cater to the products. The focus will be on perfumes, tobacco and confectionery with a few accessories and electronics such as international adapters, cables and headphones which are best-sellers. Iraq Duty Free will supply the stock, so at the end of every flight the company will

Fouad A. Jabbour, Iraq Duty Free General Manager

refill the carts. The operator’s warehouse is located by the airport, which will make delivery easy. Iraq Duty Free is seeking to improve the inflight business tremendously. “These airlines didn’t have onboard duty free,” says Jabbour. “This is a new experience for them. It’s an excellent business. We will also be handling the whole production of the inflight magazines.”

A step to the future

The operator is meeting with Fly Baghdad and Iraqi Airways to present the idea so it can expand its business with all of the airlines. “This is a step to the future. During the TFWA World Exhibition in Cannes we met with all of our existing suppliers, we’ve presented the results, and everyone was happy. We’re looking forward to 2019.” He adds: “We’re securing new suppliers in the confectionery, tobacco, perfumes, fashion and accessory categories. You can see that the interest is there.” Currently, Iraq Duty Free operates in

Iraq Duty Free’s contract with Al Naser Wings Airlines covers the operation and management of the onboard sales and will begin by the end of 2018

28 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

three airports with a total of eight shops. In Baghdad Airport, the retailer operates stores in Arrivals and Departures in both terminals, with the third terminal soon reaching completion. It also operates shops in the Arrivals and Departure areas of both Basra Airport and Sulaymania Airport, and more Iraqi airport locations are on the horizon. Last year, the retailer received a 10-year extension of its contract to operate within any airport in Iraq. Additionally, Iraq Duty Free is confirmed as the sole operator in any discussion for opening a duty free shop in Iraq’s airports. This contract extension provided the impetus for the company to completely renovate and reconfigure its shops in both currently operating terminals in Baghdad Airport, as the third, Samara terminal, nears completion. The renovations at the Arrivals shop in the Iraqi Airways Nineveh Terminal in Baghdad have brought the store up to a modern standard. They included premium fixtures and new displays, including supplier gondolas and special display units for the Liquor room. The company is set to reintroduce cigars, new lines for PMI as well as new perfume brands. “The renovation is aimed at uplifting the level of shopping experience for our consumers in line with the expansion of our brands assortment and the increase in passengers we are seeing,” enthuses Jabbour.

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Guest writer

Creating a Digital Airport Commerce Ecosystem Kian Gould, CEO and Founder of omnichannel e-commerce company AOE, reveals the key to sustainable growth and stability for airports and airlines amid the digital revolution

The US$68.5 billion (2017) global travel retail market is contracting, spend per head is decreasing Source: TFWA, IATA, ACI

30 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

Kian Gould, CEO and Founder of omnichannel e-commerce company AOE

on-aviation revenues are the most important financial source of income for airports today. The problem: The days when passengers wanted merely to purchase duty free alcohol and perfumes at unbeatable prices are over. Today’s passengers have different expectations of travel retail offerings and, above all, are interested in other goods – particularly highend electronics and premium consumer brands. At the same time, spend per passenger is declining globally – despite a steady increase in passenger numbers. As a result, airports must rethink their non-aviation revenue business model. To make their business models ready for the

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Beneficial collaboration of travel retail stakeholders with a digital marketplace Source: AOE

future, airports need to know their customers and their customers’ needs. Armed with this knowledge, airports can address their customers with targeted offerings. The challenge here is twofold. Firstly, airports don’t always have the necessary information to really know their customers. Secondly, digitalization is disrupting traditional revenue streams and business models of airports and airlines. To resolve these issues, airports need to collaborate with the other stakeholders in the aviation industry – airlines, retailers and brands – and digitalize their business. Only through cooperation and creating a Digital Airport Commerce Ecosystem will they be able to create sustainable business models.

The future of travel retail lies in The New Quaternity

We believe that success in this new digital travel retail environment, and the foundation of the Digital Airport Commerce Ecosystem, is what we call “The New Quaternity of Travel Retail”, which includes retailers, airports, airlines and brands. Through collaboration, these stakeholders can create a truly seamless omnichannel customer experience and a digital airport ecosystem. Airports, airlines, brands and retailers pursue different, and sometimes competing, interests. This makes it seem difficult at first glance to find a solution that is equally beneficial for all parties. However, if one considers the overall benefits that can be created with appropriate cooperation and which takes all major concerns of each individual stakeholder into consideration – and factoring in the risks of major e-commerce competitors beyond

the aviation industry, such as Amazon or Alibaba – then the question can really only be “How can such a joint solution be achieved?” Airports, airlines, brands and retailers all have some advantages and disadvantages in terms of e-commerce, but none of the stakeholders can fully meet all requirements. Everyone is dependent on partners in certain areas or has to build up capacities at great expense. The overall goal for all players is to create a truly seamless customer experience in a Digital Airport Commerce Ecosystem. This is where a mutual collaboration between all stakeholders must start. Each key player can contribute his or her core strengths to this joint proposal. In this model, the airport evolves into the (digital) marketplace provider, bringing all key players together and providing the required services such as logistics, wayfinding, real-time delivery, real-time flight information, etc – services that only airports have the facilities to provide. The retailers and brands can provide a fitting and compelling product offering, both digital and physical. Collaborating with airlines, retailers and brands allows airports to engage with the passenger from the very beginning, even before the passenger starts his or her journey.

Competitive advantages for e-commerce at airports

However, what competitive edge do airports have when implementing e-commerce? Is an airport competition for Amazon or Alibaba or is it a completely different value proposition? The airport is a unique environment where service and product tend to blend seamlessly, unwittingly into each other. During the past five years of helping airports to realize their digital potential, we

Benefits of a holistic Digital Airport Commerce Ecosystem for all stakeholders Source: AOE

32 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

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Guest writer

Some promising results of digital marketplaces based on OM³ Source: AOE

have come to realize that airports have several unique competitive advantages: Competitive advantages for consumers: • Immediate product availability: No waiting time for passengers, immediate access to purchased products • Product look & feel: Passengers can look at and check out real products in the store, before taking them with them • Omnichannel experience: The combination of online and offline contributes to a higher conversion rate and creates a more satisfying customer experience Competitive advantages for retailers: • Low cost of returns: Approximately 30% of costs for e-commerce are for shipping and returns. For airports, return costs are very low, as most people either return the product directly or don’t return it because they are already abroad • Low traffic acquisition costs: Traffic acquisition is the second major cost driver in e-commerce. But for airports, traffic acquisition comes almost for free, as potential customers are already at the airport and/or checking out the airport’s website

All products and services consolidated in one digital marketplace

A key aspect for the development of a digital airport marketplace is the consolidation of all digital products and services on one platform. When all stakeholders such as airports, airlines, retailers and brands offer their own digital solutions, customers face a wide variety of e-commerce platforms. Only very few platforms are noticed by passengers, and even less are actively used. The redundant costs for operating and marketing these digital solutions are not even considered. A shared digital marketplace has the advantage that passengers only have to register once and then have access to all products and services from all providers. Creating these consolidated digital marketplaces has already shown dividends at airports across the globe. For example, the digital marketplace at Frankfurt Airport, based on AOE’s OM3 Suite, has increased the customer growth rate by 62% and the average basket value increased by 230%. Webrooming (researching information about available items and prices online before buying in-store) has also had a positive effect on retail sales; 14% of the people using the site to browse products and check prices actually end up not buying online but in the store. These figures indicate solutions such as OM³, once integrated with all non-avi-

34 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

ation revenue streams at an airport, have the potential not only to reverse a downtrend, but also provide significant additional revenue potential for international airports.

Premium product range with cross- and upselling

An important factor for successful digital commerce is a suitable and attractive product range. Passengers use airport e-commerce platforms primarily to gain access to the entire range of luxury and high-end products such as jewelry, handbags, leather accessories, watches, laptops, cameras and noise-canceling headphones. One reason for this is that these are the categories where scarcity is a real concern for global shoppers. Accordingly, an attractive product range with a focus on electronics, luxury and premium articles is highly effective in meeting passenger needs. This approach is also ideal for targeting advertising and marketing efforts. Sophisticated digital platforms enable brands and retailers to offer targeted products and convenient crossand upselling.

Set-up of partnerships for API commerce and relevant traffic

In addition, the premium products and tailor-made promotions must be offered to passengers at relevant touch points. In order to generate sufficient traffic and meet passengers at the right time at the point of sale, the relevant sales channels need to be utilized more efficiently. For airports, for example, partnerships with airlines and booking portals such as booking.com or C-Trip make sense when offering travelers airport services such as Fast Track or VIP services during flight booking or in an aircraft – via API (Application Programming Interface) commerce in the partners’ channel – without acting directly as the airport.

Creating sustainable growth and a unique customer experience

Airports, airlines, retailers and brands are currently facing unparalleled challenges in the aviation industry, both in the way they do business as well as in the industry itself. Rapidly changing purchasing behavior by customers is having a profound impact on travel retail, and the evolving e-commerce industry as well as digitalization are disrupting traditional revenue streams and business models of airports and airlines. The key for sustainable growth and stability for all stakeholders is in collaborating to build a Digital Airport Commerce Ecosystem – which will benefit the industry and customers alike.

â&#x20AC;&#x201A;Hunter Palmer - Global Retail Solutions

Keith Hunter, Co-Founder of Hunter Palmer - Global Retail Solutions

Enhancing the customer journey With over 25 years of retail expertise, Keith Hunter, Co-Founder of Hunter Palmer Global Retail Solutions, reveals how to create the ultimate customer experience by HIBAH NOOR

36 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

eith Hunter co-founded Hunter Palmer - Global Retail Solutions to help fill the void he felt existed in the travel retail marketplace: access to a consultancy that offers practical retail solutions on the ground, in person, at any stage of development. The company works with airports, airlines, investors, operators, architects, designers, and hospitality companies looking to develop a commercial landscape, strategic positioning and create a world-class offer. Gulf-Africa Duty Free: What is wrong with the airport concessions model? Why does the system fail customers? Keith Hunter: Opinions vary depending on which airport or operator you talk to. Equally, who is to blame is an even bigger cause for debate. The answer lies in the fact that generally the concession deals agreed today follow the same antiquated

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Hunter Palmer - Global Retail Solutions

formats as those employed for the past decade or so. They don’t offer flexibility to reflect varying market or environmental conditions that may benefit one party at the expense of another. This can lead to ongoing resentment that pitches both sides in a constant game of one-upmanship, inevitably diverting attention away from the customer. Travel retail has changed and continues to evolve on an almost daily basis, as have the expectations and habits of its customers. Retailers and brands have had to deliver more flexibility, innovation, experience and dynamism in their retail offer while still working under the same restrictive financial parameters. It can either be a case of unrealistic rent and MAG expectations, or an undeliverable bid for space that leads to an unworkable model, but regardless of the cause, the passenger experience and service are the first things to suffer. Whilst it may be considered too radical by the naysayers, one solution is to build in more flexibility into the concession agreement, allowing both landlord and concessionaire to benefit when sales are good, but equally share the pain when the opposite is true. Surely this would encourage a more proactive relationship to ensure financial success is achieved by all. If nothing is done to address the flaws in concession agreements, there is an ongoing risk of shops closing when retailers pull out mid-contract because they can no longer afford (or they are no longer prepared) to pay the rent agreed, or due to the fact that quality of the retail offer has been compromised as a result of reductions in staffing, product range, promotions and digital investment because rent is rigid and funds are not available or not made available. G-ADF: How would you transform the airport customer experience? KH: Some airports have made positive advances in this regard but standards and requirements vary. Ultimately, all stakeholders need to ensure they put the customer at the heart of everything they do. Some businesses already use this sentiment as their mantra, but only a precious few actually mean it and deliver on it. There is no singular action that can be taken to achieve retail nirvana, but progress towards it must involve a willing-

ness among all stakeholders and service providers to collaborate. Any customer touchpoint, no matter where its location, is a means to lead the customer seamlessly across the service landscape, ensuring that no commercial opportunity is lost. By linking everyone to a common platform, both digitally and tactically, an airport can continuously enhance the customer journey, both inside and outside the airport environment. The possibilities become limitless, affording a dialogue with each and every customer before, during and after their trip. Through relevant communication online via multiple channels, and physically when customers are present, a wealth of product, services and experiences can be presented in a manner that allows each customer to control and tailor them to their own requirements. G-ADF: Can you give us examples of airport operators getting it right? KH: As an independent consultant, it would be unfair to name and shame, but I can say that I remain impressed with Copenhagen Airport’s website and their fantastic use of social and digital media, as well as their marketing campaigns. There seems to be a well-thought-out strategy of coverage to convey an exciting retail offer across all media. I always enjoy my journey through Singapore Changi. There remains a consistency of quality and a focus on new experiences, involving all categories and tastes. There is always plenty to see and do, evolving at a pace that never gives in to complacency, ensuring it remains fresh for every visit. I have a special affinity for the Middle East airports, in particular Hamad International and Dubai International. This is mainly because I am aware of just how much effort is put into creating the worldclass shopping experiences. Starting with the fusion of retail and food & beverage offers, apposite use of advertising programs to complement airport offers and services and the constantly evolving smart airport initiatives delivered through technology, these hubs keep up with and often exceed the pace set by the key Asian airports when it comes to the ultimate customer experience. G-ADF: Can you give us examples of brands getting it right in airport activations?

38 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

KH: It is encouraging to see so many experiential activations popping up in airports all around the world. There is always a high level of ambition seen in activations from the beauty, liquor and confectionery categories. L’Oréal Luxe, Dior, Diageo, Whyte & Mackay, Bacardi, Mondelez and Mars have always invested very heavily in such opportunities. The most successful ones are those that focus on interacting and engaging with the customer in a way that provides a whole new level of understanding and experience when it comes to encouraging them to try and buy. The theatre on offer really puts the fun back into shopping. A worthy mention must be the Bombay Sapphire campaign developed by Bacardi Global Travel Retail in conjunction with Gebr Heinemann and Aelia Duty Free at Amsterdam Schiphol and Auckland airports, involving an innovative sensory experience within a replica glasshouse that targets the millennial passengers. Also, the interactive counter that showcased Shiseido’s Essential Energy range at Galleria Beauty by DFS proved a huge hit with shoppers as well as digital bloggers, all of whom were invited to a live-streamed launch, creating millions of impressions. L’Oréal Travel Retail recently created a space to mimic a luxury hotel within Hamad International Airport, as well as a chance to win prizes in a scratch competition. These are great examples of brands getting it right, but there are dozens of other, just as worthy, activations, showing that this trend is on the rise. G-ADF: How far should an airport retail operation be digitalized? Do you agree with people who put forward a digital ecosystem approach, as seen at Frankfurt Airport? KH: I think it is important that the right balance is achieved, not forgetting that passengers’ expectations are broad and ever evolving. We must also not forget that there remains a traveling demographic who are not as digitally reliant or savvy and physical interaction and communication remain a necessity. The main advantage that travel retail has beyond a basic online transaction is the ability to engage first-hand with the customer and to truly offer an interactive, face-to-face retail experience. But, to answer the second part of the question, yes, I do.

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Middle East Air Traffic

Cautious optimism Middle East slows but there are some growth pockets

he Middle East has traditionally been a buoyant market for global air traffic development. Key airports and their carriers – particularly Emirates at Dubai International Airport and Qatar at Doha’s Hamad International Airport – have been successful in creating hubs in the region. This is reflected in the growth of seat capacities. According to actual and forecast data from air travel intelligence group, OAG, between 2014 and 2018, capacities at Dubai and Doha have risen by 27.3% and 35.1% respectively. They have helped to shift air connections away from the northern European hubs, while the extra transfer passengers have been good news for the duty free business in the Middle East.

40 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

In 2018, these airports are the top two in the region based on available airline seats (see chart), followed by Jeddah and Riyadh’s King Khalid International – both in Saudi Arabia. King Khalid has pushed Abu Dhabi International into fifth place. This is partly thanks to King Khalid’s own strong development, but also due to a slowdown at Abu Dhabi, as well as hub carrier Etihad’s own strategic review and reduction in seat capacities since 2016. Overall, across more than 140 Middle East airports monitored by OAG (the analyst uses the IATA geographical definition which includes Israel), seat growth between 2014 and 2018 has averaged 33.7%. But this year it is expected to be just 0.9%, with flat or negative seat availability among the top five airports. The best capacity growth is forecast to be from King Khalid International (1.9%). Looking further down the list of the top 15 airports, the sixth seventh and eight-ranked airports – Ben Gurion Airport in Tel Aviv, Kuwait International and Muscat International – look to be strong bets for duty free sales. Capacity growth in 2018 is forecast at 15.6%, 8.2% and 6.7% respectively, while all three have seen above-average seat growth in the four years to 2018. However, seats don’t tell the whole story. Qatar Airways, for example has continued to increase its capacity despite a blockade

against Qatar by GCC member countries due to political tensions that are now over two years old. According to ACI World, Hamad International has suffered badly with total passengers falling by -14.8% in the five months to May 2018. This compares with an average Middle East traffic downturn of -0.8% over the same period. Looking ahead to next year, the picture is somewhat mixed, but it looks as though Saudi Arabia will buoy the region. Its 27 airports witnessed a passenger traffic rise of 7.7% to 91.8 million in 2017, according to the General Authority of Civil Aviation. This was at a time when Middle East traffic grew by +4.7% (below the world average of 6.4%) based on ACI data. Meanwhile Dubai’s domination (88.2 million passengers in 2017) will not be challenged. “It is twice as large as its nearest competitor and I would expect to see growth of between 4-5% into 2019,” says John Grant, OAG’s Senior Analyst. “Doha will be pretty flat unless the current dispute with the other GCC members is resolved and they start flying to those destinations again in which case there may be some growth.” He notes that both Emirates and Etihad have “a quite significant order book of deliveries for 2019” which will likely mean more capacity going into 2020 and could see a resurgence for Abu Dhabi – provided those seats can be filled.

TOP 15 MIDDLE EAST AIRPORTS BASED ON ONE-WAY* SEAT CAPACITIES, 2018 Rank 2018

Airport

Seats 2017

Seats 2018

2018 vs 2014 (%)

2018 vs 2017 (%)

Dubai International

57,326,612

57,318,205

27.3

0.0

Doha

24,719,899

25,095,922

35.1

1.5

Jeddah

23,986,641

23,864,708

27.8

-0.5

Riyadh King Khalid Intl

17,991,788

18,336,016

37.4

1.9

Abu Dhabi International Apt

15,285,314

14,000,142

5.6

-8.4

Tel Aviv-yafo Ben Gurion International

11,174,641

12,920,069

59.5

15.6

Kuwait

10,197,902

11,038,492

45.6

8.2

Muscat

9,576,599

10,214,101

74.7

6.7

Tehran Mehrabad International Airport

7,714,009

7,871,006

53.3

2.0

Dammam

7,271,485

7,065,730

94.8

-2.8

Bahrain

6,574,594

6,616,742

9.0

0.6

Amman Queen Alia International Apt

5,280,569

5,611,302

14.7

6.3

Beirut

5,389,857

5,605,056

32.4

4.0

Sharjah

6,148,233

5,531,104

11.0

-10.0

Madinah

5,051,667

5,282,948

62.2

4.6

Source: OAG * Double the numbers for the total seats available in and out.

www.dutyfreemag.com GULF-AFRICA DUTY FREE & TRAVEL RETAILING

WanderSafe

WanderSafe electronics device and mobile application is designed to empower travelers and keep them safe

New device puts travel safety first Travel technology company JOZU for WOMEN Inc has developed an innovative non-violent personal safety alarm for use by travelers

by MARY JANE PITTILLA

former travel retail executive has developed a new, hi-tech personal safety alarm specifically for use by travelers. WanderSafe is a non-violent anti-rape, anti-assault and anti-trafficking device that pairs via Bluetooth with a smartphone application and delivers locationrelevant safety information in real time. The product, owned and created by female-founded travel technology start-up JOZU for WOMEN Inc, premiered at the TFWA World Exhibition’s Digital Village in October 2018. Fittingly, the first day of the Cannes show, October 2, coincided with Mahatma Gandhi’s birthday and the United Nations International Day of Non-Violence. WanderSafe is an Internet of Things consumer electronics device and mobile application designed to empower travelers and keep them safe. It is described as a discreet, holdable personal safety device created for travelers, students and those most vulnerable, including travel retail employees, that celebrates innovation in the consumer electronics category and a safer future of travel. WanderSafe was designed by a former travel retail consultant and frequent solo business traveler, Stephenie Rodriguez,

in collaboration with a retired 25-year US Central Intelligence Agency (CIA) safety expert, Thomas Pecora. The device has anti-rape deterrent features built into its sleek, discreet design including high lumen quick-click flashlight, second click disorienting strobe light, and a patentpending twist-top 140db personal siren for attracting attention or frightening a potential assailant.

The rise of female international travelers

When pressed, the WanderSafe Activate button notifies present contacts, including friends, loved ones, employers or law enforcement, of the user’s immediate longitude and latitude with a distress signal. The smartphone application, free to download from iTunes, provides users with relevant location-based safety information in real time sourced from trusted data providers including the US Department of State’s OSAC. In uncertain times and the rise of more female international travelers, Founder and CEO Stephenie Rodriguez believes WanderSafe is a travel essential, whether for an international trip or a local commute. “The future of travel is most definitely female with more than 850 million

42 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

women traveling this year. More than 68% of all study abroad students are female and in the US, more than 11 million women over age 30 take solo international trips more than five times per annum. WanderSafe isn’t just for women, but we believe we are empowering more women to travel further with greater peace of mind and unlike pepper spray or tasers, is completely non-violent and poses no threat to its users.” Retired CIA security expert and advisor to WanderSafe Thomas Pecora believes three important principles of personal safety have been engineered into the product: information, environmental awareness and equipment. WanderSafe delivers on these with an integrated hybrid of hardware and software, and in partnership with the world’s leading anti-trafficking organizations including Airline Ambassadors, Purchased.org, and CrimeStoppers International. The WanderSafe device will retail at US$59.95 in travel retail.

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Ajmal Perfumes

The magic of

the Orient With over 67 years of experience in the art of Arabic perfumery, Ajmal Perfumes is tapping into the trend for oriental fragrances in the west

jmal Perfumes enjoys a prominent presence in the travel retail arena, with some of its most notable clients being Dubai Duty Free, Abu Dhabi Duty Free, Muscat Duty Free, Bahrain Duty Free, Cairo Duty Free, Cyprus duty free shop and Best Value (Romania Duty free). The company’s travel retail strategy is to look at new opportunities to boost its global footprint beyond its Middle Eastern heartland. Currently, the Dubai-based brand does not have a great presence in Europe through the duty free channel, but Oscar Menezes, Head of Travel Retail, Ajmal Perfumes, is determined to change that. The company is working actively to approach more operators for an opportunity to list its products. “We believe we have a very good proposition, we hope to convince more people to imbibe the brand and enjoy the success that it will surely bring,” he says. During the TFWA World Exhibition in October, the company’s objective was to find distributors and retailers in Europe. “The overall experience was fantastic, we got several leads for inflight and duty free through it,” says Menezes. “We are hopeful we will be able to close in on those lead and announce new partnerships very soon.”

A runaway success

In terms of product, some of the brand’s best-sellers in duty free are Amber Wood, Aurum, and Wisal. The company has started introducing exclusive travel retail products over the past few years, namely Fasety for Him, Fasety for Her, Pearles-

Duty free exclusive women’s fragrance Pearlescent Black has recently been listed onboard Dutch carrier KLM Fasety for Her is a travel retail exclusive floral spicy fragrance with a woody base for the modern woman

cent Black, and two variants of Luminescence for men and for women. The response has been very good, according to Menezes, and they have been performing extremely well. “Slowly but surely, these products are moving out of our core markets in duty free, to new inclusions and providing us with a great impact in terms of sales,” he says. Turning to the inflight business, where Ajmal Perfumes has listings onboard more than 17 airlines, Menezes points to a particularly good relationship with Dutch carrier KLM. “We have had a runaway success with them with Amber Wood,” he enthuses. “This product has been the best performer onboard, going as high as number one onboard for a couple of months at a stretch. Pearlescent Black is our latest listing with them, and early signs point to the same amount of success as Amber Wood.” Recently, Ajmal Perfumes has increased its listing from two to five products seeing potential on account of great

44 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

onboard sales and demand on Ethiopian Airlines, Kenya Airways and South African Airways through a great partnership with Tourvest inflight retail services. In terms of trends, Ajmal Perfumes has seen a global inclination towards oriental perfumery, which bodes well for the company, as Menezes explains. “This is our mainstay, our core strength. We are not only pioneers when it comes to Arabic perfumery and its modernization, we also act as consultants for our friends from across the globe when it comes to the use of oriental ingredients in perfumery. The more the west opens up, the greater the opportunity for us to share with the world the magic of oriental perfumery,” he says. 2018 has been a good year overall for Ajmal Perfumes. “We have been consistent in showing growth and that is something to be proud of in the current environment. We hope that we continue this upward trend for the remainder of this year and close on an all-time high in terms of sales,” he concludes.

Contact your Hershey business partner today.

Rituals

RITUALS

Renewed Luxury Gift sets by Rituals feature the new 100% paper inlay which aligns with the firms approach to sustainability

feels good in travel retail Luxury home and body cosmetics brand Rituals is building momentum in the Middle East market and beyond with its sustainable gift sets

Neil Ebbutt, Director of Global Travel Retail, Rituals

ome and body cosmetics specialist Rituals has come a long way since it launched a travel retail business unit in 2012. Today, the brand has 400 shop-inshops, comprising about 300 physical shop-in-shop locations and 120 on cruise and ferry lines. By the end of the year Rituals will have 12 standalone stores that are either company-operated or retaileroperated, according to Neil Ebbutt, Director of Global Travel Retail, Rituals. The company has divided its travel retail business into five sales channels: standalone stores, shop-in-shops, cruise and ferry, airline, and the hotel B2B business. Brand awareness is picking up speed. Rituals has a heavy footprint in Europe and now has a presence in the Middle East/Africa. “There’s a lot happening in the Middle East. We’re currently listed in Dubai Duty Free, and we will be going into other areas,” he says. In the Americas Rituals has partnered with Essence Corp. as an exclusive distributor. By the end of the year, the company will have 25-30 points of sale in the Caribbean and Latin America. Brand awareness is also growing in

the Americas domestic market. “We are convinced that we can get ahead of the game. In travel retail we are in over 40 markets and domestic we are in about 27,” says Ebbutt.

Big launch in Asia

For 2019, Asia will be a big focus. Rituals recently partnered with DFS to open two shop-in-shops at the retailer’s downtown Hong Kong locations: T Galleria by DFS, Canton Road (July) and Causeway Bay (November 2017). Now, it is teaming up with Dufry to open stores in Macau. “As a company we are focusing our eyes on Asia. We are doing a big launch there – setting up an office, opening up a distribution centre in Hong Kong, so we are building the organization to give us the platform to go into Asia. The local presence will help us create awareness for the travel retail business.” Turning to the Rituals brand itself, inspiration is drawn from ancient Eastern traditions which are brought over to the West and commercialized in gift sets. “The route we are going to take [in Asia] is almost to pay tribute to their beautiful Eastern rituals and respect that. I think those markets will appreciate that we have

46 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

taken on their rituals and commercialized them and paid respect to them.” Product inspiration comes from rituals as diverse as Turkey’s hammam culture; Ayurveda from India; and the Dao relaxing/slowdown ritual from China. Turning to new initiatives, Rituals showcased its relaunched gift sets at the TFWA World Exhibition in October. The sets have 100% paper inlay, which is therefore sustainable. After putting the paper in water it is completely gone after seven days, according to Amber den Hartog, Trade Marketing Manager Travel Retail. The sustainability angle came about after listening to its customers. “We are going to grow into a sustainable brand, conducting Life Cycle Assessment (LCA) studies on all our product packaging (done by the LCA Centre),”she says. Rituals has also relaunched some of its products as free from sulphates, parabens, etc. Ebbutt adds: “Ultimately the goal is to have a carbon neutral footprint. We will have the ambition to continually improve our sustainable offer. The refills are selling very well. Consumers like the pricing and also there is no waste going into the market.”

Lindt

Making travel magical Leading confectionery brand Lindt is conjuring up tempting new products to appeal to the Middle East’s strong gifting and souvenir segments by JAS RYAT

The World Traveller Collection continues to be a major success as it appeals to travelers globally

“M

ake traveling magical” is the exciting objective for Swiss confectionery brand

Lindt for 2019. Offering a degree of personalization, such as creating eye-catching displays and engaging promotions and service, will help to convert browsers – an important segment in the confectionery category – into shoppers, according to Peter Zehnder. “At Lindt, we believe that duty free should be a magical place, with a dash of magic,” he enthuses. For Lindt, this will be achieved in a number of ways, as Zehnder explains. First, Product Power: stocking surprising, travel retail exclusive products to appeal to a global audience; Passion: hosting in-store confectionery events placing Lindt Master Chocolatiers at center stage to engage travelers, increase store perception, and enhance POS; Premium: offering high quality products, production and sourcing; Perfection: delivering perfect execution in product, packaging and point of sale; Partnership: establishing long-lasting and mutually beneficial business relationships with partners; and Pace: being quick to adapt to ever-changing consumer and traveler trends. Turning to the Middle East market, this is an important region for Lindt in travel retail, as the company has close relationships with its trade partners there and has been the number one brand in Dubai, for example, for many years. In addition, Lindt has been able to expand its presence with new magical POS set-ups in the region: just these days a new shop in shop in Beirut including an

eye-catching Pick n’ Mix fixture is opened together with renewed and highly visible features in Dubai, Qatar and the new new Pick n’ Mix in Muscat.

Growing demand for souvenir gifts

Zehnder observes that the market performs differently from the rest of the travel retail confectionery sector: it’s the only region where snacking/selfconsumption is not on the increase but declining. “Instead, premium gifting is growing stellarly, and it is the region with the highest growth in destination gifting,” he reveals. In consequence the assorted Napolitains plus the newly launched souvenir gifts in this range, such as the Tin Suitcases have become best-sellers, tapping into the growing demand for souvenir gifts. These products have been supported at POS with eye-catching trolley-like displays and activation campaigns In the Middle East, Lindt regularly pre-launches interesting product concepts with Dubai Duty Free. For example, in March 2018, the company premiered its Naps Suitcase. Top-selling gifting products in the key Middle East locations are the Lindor flavor editions, such as its 2018 Coconut edition Also The Assorted Pralines is an important line, as gifting is inherent in Middle Eastern culture. Turning to global trends generally, Zehnder observes that passenger numbers are growing, but spend per passenger is going down, so supplying gifts, sharing products and snacks and self-consump-

48 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

Recently unveiled during TFWA World Exhibition, the LINDOR Mini Tubes, are meant in to introduce a new gifting option

tion products at lower price levels is key for 2019 and beyond. During the TFWA World Exhibition, Lindt & Sprüngli unveiled a new assortment of travel retail-exclusive innovations catering to a range of tastes and age groups, including Mini Pralines, an informal gift for younger consumers; and the LINDT Maxi Plaisir snacking range appealing to the millennial target; also more gifting options including the new LINDOR Dark Selection, the LINDOR Mini Tubes and the Naps World Traveller Collection got presented, together with an activation plan of stunning, interactive and digital executions. “Due to the nature of our business and the strong focus on many nationalities of gifting, the art of gifting will ever remain important,” he adds. “The trend goes to more personalized gifting solutions, so this is certainly a trend we are looking into for future developments.”

Fazer

focuses on the good Finnish confectionery specialist Fazer is betting on a packaging redesign for its best-selling product that emphasizes its gifting potential

The Geisha chocolate continues to be a popular purchase in the Middle East region as the quality chocolate is offered in luxury packaging

by JAS RYAT

ordic food company Fazer has been busy updating its travel retail portfolio. New to the channel is a larger offering of gifting items with an improved look and feel. These newly designed products launched in April. Fazer’s big focus for 2019 will be on the Nordics, Europe, Middle East and Asia. The company has been successful in the Middle East market. Kirsi Nordberg, Senior Marketing Manager at Fazer, notes that Middle Eastern customers are partial to gifting, so Fazer fits into this category. One particular product stands out. “Geisha is a big product for us and resonates very well as the box is beautiful and the chocolate contains hazelnuts. The packaging is nice, and you can spot it far away as it is unique on a shelf.” Susanna Selin-Taha, Senior Commercial Manager, confirms that Geisha is the number one seller in the Middle East region because of the attractive packaging and high product quality. Dubai Duty Free and Qatar Duty Free are major customers. As well as implementing a packaging redesign, Fazer has updated Geisha’s com-

munication concept, “Focus on the good”, to combine mindfulness and chocolate indulgence.

Use of responsible cocoa

Business generally has developed well for Fazer in the last 12 months, Nordberg says. Although the new portfolio has only been selling for the last three months, she is hopeful of good results. Nordberg is keen to point out that Geisha sells strongly in airports because of its focus on gifting. “Millennials love it as it’s a great looking product. Personally, I think it appeals to everyone as it looks great. Men like it because it makes a great gift.” Fazer’s key message with the Geisha product is its use of responsible cocoa, which is 100%responsible. Fazer has partners and also runs direct programs in cocoa growing communities where it can for example help children to attend school and train people how to take care of the farms in sustainable manner. “That way everyone can enjoy the cocoa . 100% responsible cocoa has cocoa has been our

50 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

main goal since 2017 and we reached it, so we are proud and happy.” Fazer wants responsible cocoa to be a key message going forward, so it is included on packaging and on its website. All the products will carry the responsible cocoa sign. Fazer’s strongest region is the Nordics, as it is based in Finland. The company has amassed many airport listings and is present on the region’s ferries. “We are number one in ferries and on the top 3 in chocolate in most of the Nordic location in travel retail. Chinese people come on the ferries and we are really keen on reaching them with our product,” enthuses Nordberg. Fazer’s confectionery brands are sold in thousands of outlets in more than 50 countries through a network of travel retail partners. The most international brands include Karl Fazer, Geisha, Dumle, Fazermint and Liqueur Fills. Long-term growth and success in the travel retail market will be based on the company’s continuing emphasis on product quality and a tempting offering of gifting products, Nordberg concludes.

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Anthon Berg

The holidays

just got sweeter Anthon Berg toasts to the holiday season with new limited edition advent calendar by JAS RYAT

Anthon Berg’s ‘A Toast to Celebrate the Holidays’ offers its popular liquor-filled chocolates in a new Christmas advent calendar format

nthon Berg has given consumers another reason to look forward to the holidays with its limited edition ‘A Toast to Celebrate the Holidays’ advent calendar. Aimed towards the male liquor aficionado, the advent calendar presents 24 doors that reveal 24 liquorfilled miniature chocolate bottles to enjoy in December while counting the days until the holidays commence. Anthon Berg’s motto, ‘You can never be too generous’, translates seamlessly into the new advent calendar. The product is tapping right into the holiday spirit of generosity, and is perfect for gifting as well as for self-indulgence. The individually wrapped miniature chocolate bottles are manufactured

24 liquor-filled miniature chocolate bottles make the count-down to the holidays something to look forward to

in-house from 50% Ghana cocoa beans. The liquor-filled chocolate bottles reveal a variety of spirits such as whisky, rum, vodka, tequila, and many other international favorites. The bottles are wrapped in colorful foils, each displaying the labels of the different liquor brands. The advent calendar makes for the ideal Christmas décor at home as it’s shaped like a Christmas tree. This makes for an easy decode of the new advent calendar, even from afar. The content of the calendar is presented with the miniature bottles aligned under the Christmas tree and again on the back. The iconic silhouettes of the Anthon Berg liquor bottles combine with a selection of other

52 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

stylish Christmas ornaments in a striking Christmas tree outline. The packaging offers a premium look and feel as it comes in a deep burgundy shade, with the use of gold hot foil and Iriodin varnish on the front as well as the back. The calendar contains a total of 24 miniature bottles in a mix, including The Famous Grouse Whisky, Galliano Liqueur, Cointreau Liqueur, Camus Cognac, Drambuie Liqueur, Mount Gay Rum, Danzka Vodka, Remy Martin Cognac, Sobieski Vodka, Licor 43 liqueur, Calvados Boulard, and Borghetti liqueur. A Toast to Celebrate the Holidays advent calendar will be available as of July 2019.

Diageo Global Travel

Diageo focuses Diageo collaborated with TV network HBO on the release of White Walker by Johnnie Walker Blended Scotch Whisky, a limited-edition Scotch whisky blend inspired by White Walkers characters from Game of Thrones

on retail transformation in the Middle East Scotch whisky power brand Johnnie Walker leads the way in the Middle East for Diageo Global Travel as compelling – and dramatic – innovations hit the shelves by HIBAH NOOR

Anna MacDonald, Marketing and Innovation Director, Diageo Global Travel

he Middle East is a very important region for Diageo Global Travel, and Anna MacDonald, Marketing and Innovation Director, sees the region as an area of significant opportunity with a number of very important airports. Dubai International is the number one for revenue generation. While a lot of Dubai Duty Free’s business is driven by whisky, it’s also the number one vodka airport in the world, she notes. “The tendency is to think of the Middle East as very whisky-focused, but vodka is a huge part of our business.” Johnnie Walker blended Scotch whisky is certainly a key brand for the region. “We’re investing a lot in permanent visibility globally, so one of the big initiatives this year is refreshing our official identity of Johnnie Walker, and some of what we’re doing in the Middle East is the best,” she says. “Creative consistency is truly important for global brands when building recognition. Visibility and innovation is hugely important and we will continue to work closely with our partners in the region to showcase our iconic brands.”

54 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

Johnnie Walker Blue Label Casks Edition – Middle East Limited Edition. The bottle features a design by renowned artist Rana Zaher, which depicts the journey of the Johnnie Walker brand from Scotland to the Arabian Gulf in the Middle East

MacDonald describes the region’s passenger mix as interesting, and in terms of marketing, Diageo puts the traveler firmly at the heart of everything. “It’s so important, because the passenger mix is ultimately a huge driver of sales. For example, in the Middle East there are a lot of local passengers and a huge number of passengers from the Indian subcontinent. Brands like Vat 69 and Black & White whisky are disproportionately important in India. You tend to see those brands sell really well in the Middle East.”

Focus on malt whiskies

The company is also seeing a lot of interest in single malts. “The whisky business is always in good health and blended Scotch continues to be the number one sector. Within Scotch, malts are growing faster than blends, so that’s an area that definitely in the Middle East we want to focus on. We’ve got four strategic brands that we focus on globally, but I would say that that the two for the Middle East would be The Singleton and Talisker.”

MacDonald has observed a trend for stock-up purchases in some airports in the Middle East, particularly among passengers from the Indian subcontinent. “For example, many passengers know they want to buy Johnnie Walker Black Label. The motivation for this purchase is driven by value and convenience – so price is an important factor for many. In fact, we are seeing more and more passengers use digital technology to price-check items now.” Diageo aims to make it convenient for travelers stocking up by offering easy-tocarry twin- and tri-packs, and grab-andgo packs. MacDonald points out Diageo is committed to working smarter at driving footfall and improving conversion. There is a lot the company can do in the region without hosting tasting sessions. “Where we can sample [products], there are some products that disproportionately respond to sample; we know the Triple Cask liquid profile is slightly sweeter than Black Label. A lot of our brands need visibility and

staff engagement, which are more effective than sampling,” she continues. Diageo has seen a number of successful launches in the region recently, including Johnnie Walker Aged 18 Years, a rebranding of its multi-award-winning Johnnie Walker Platinum Label. MacDonald describes the product as an indulgent blend of up to 18 different whiskies. The new name and packaging celebrate its credentials as the best 18yo blend ever made by the world-famous Scotch brand. Other releases from the world’s number one Scotch have also been a success in the region, including Johnnie Walker Blue Label Casks Edition – Middle East Limited Edition. The bottle features a design by renowned artist Rana Zaher, which depicts the journey of the Johnnie Walker brand from Scotland to the Arabian Gulf in the Middle East. More recently, Diageo collaborated with TV network HBO on the release of White Walker by Johnnie Walker Blended Scotch Whisky, a limited-edition Scotch whisky blend inspired by the chill-inducing White Walkers characters from the fantasy drama Game of Thrones. Inside the frosty white bottle is a new whisky to the Johnnie Walker portfolio, featuring notes of caramelized sugar, vanilla, and fresh red berries with a touch of orchard fruit. “We will support the launch with a number of inspiring in-store and digital experiences that will bring to life this exciting new product launch in the region. I can’t reveal too much information on this activity just yet but stay tuned,” says MacDonald. Looking beyond the Scotch whisky category, MacDonald says gin has become one of the fastest-growing spirits categories in travel retail, and the business was “very pleased” with the recent launch of Gordon’s Premium Pink Gin in the region. For the year ahead, Diageo has an exciting innovation pipeline aimed at recruiting consumers, driving penetration and driving overall category growth. “There is a lot happening in the Middle East, and we will continue to work with our partners in the region to showcase our iconic brands, set the benchmark for retail excellence and create engaging shopping experiences for travelers,” concludes MacDonald.

www.dutyfreemag.com GULF-AFRICA DUTY FREE & TRAVEL RETAILING

Diageo Global Travel

VODKA

with a fashion attitude

The new La Casa della Vodka boutique in downtown Beirut offers Roberto Cavalli spirits in a white interior design that gives out positive vibes

ariem Mersni Ben Cheikh, CEO and owner, International Travel Retail, distributes Roberto Cavalli Vodka globally in duty free, and has just opened a concept store for the brand in Lebanon. La Casa della Vodka, the first Italian spirits boutique, opened on July 5, 2018 in the heart of downtown Beirut, where Mersni resides. “La Casa della Vodka is in the most trendy street, Avenue Fosh, where all the famous fashion brands are, and in the middle of the most trendy pubs and bars,” she enthuses. La Casa della Vodka exclusively sells all spirits from the Italian fashion designer Roberto Cavalli, namely vodka, wine, grappa, and a unique gin called Ginarte. “The boutique’s white interior design gives out a lot of positive vibes, keeping the fantastic product I am offering in the ideal atmosphere,” she adds. Mersni’s background and experience is in duty free – a channel that she loves for its luxury aesthetic. She has been distributing Roberto Cavalli Vodka globally in duty free via her company International Travel Retail for seven years now. “I am fully in love with it, because I am selling a unique quality and taste with the best design,” she smiles. Since she took on the distribution, the brand’s performance has been higher than expectations. In fact, it has shown doubledigit growth yearly since the start.

A new boutique showcasing Roberto Cavalli Vodka is the blueprint for future stores that Mariem Mersni Ben Cheikh, CEO of International Travel Retail, wants to open in the duty free channel

Inspired by Italian fashion and lifestyle

Speaking further about why she took on the brand, Mersni states: “I was also inspired by the Italian elegance and the fine concept. I am attracted by Italian fashion, the Italian lifestyle, and the Italian cities, especially Florence and Milano.” Mersni is also proud to observe “the professionalism, humble and classy attitude of the Cavalli family, and especially Tomaso Cavalli, Roberto’s son, with whom I appreciate collaborating each day.” Tunisian-born Mersni loves Beirut, where she has been living for nine years in what she describes as “a city full of life, of exclusivity, positive vibes and joy”. It was only natural that she would want to open a store for Roberto Cavalli Vodka in the city she adores. Her Tunisian origins have also played a part in her company’s success, she notes, as it is “the country of jasmine, with a warm welcome and beauty.” The idea for La Casa della Vodka was born from all these factors. Now, Mersni plans to export the concept to Turkey, Greece, Spain France and Germany in the coming five years. She describes La Casa della Vodka’s signature as “a fashion attitude, because coming to this boutique is a moment of pleasure, like enjoying wonderful shopping, and also because I am selling the

56 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

A model wearing Roberto Cavalli Vodka branded wings poses outside the new Beirut store on the opening day in July 2018

fashion on the rocks with Roberto Cavalli Vodka.” La Casa della Vodka aims to offer the best vodka, gin and wine. “It offers a dream, pleasure and a unique welcome that make you feel like home… A casa, as the Italians say.” Mersni concludes: “My aim is also to see La Casa della Vodka corners in all airports where travelers can enjoy this beautiful concept and product.”

Oettinger Davidoff AG

Time

beautifully Under new Chief Commercial Officer Jim Young, Swiss-based cigar supplier Oettinger Davidoff AG is undertaking some major product and retail initiatives

filled

by HIBAH NOOR

Major product launches for next year will include a range to celebrate the Chinese Year of the Pig

Davidoff’s Gift Selection of nine cigars is a new travel retail exclusive product, available from November/ December 2018

58 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

im Young has just stepped into the newly created role of Senior Vice President and Chief Commercial Officer at Swiss-based cigar supplier Oettinger Davidoff AG. With global sales under his remit, he has a wide – as well as new – brief. “Our CEO [Beat Hauenstein] put this role in place,” he tells Gulf-Africa Duty Free Magazine at the TFWA World Exhibition in October. “His thinking was the opportunity to be more consistent in terms of how we go to market around the world and our commercial approach, seeking to leverage what works well in one part of the world with more ease. Having one person responsible facilitates that a bit more. It’s a flatter structure.” Young has been in the company for seven years. He ran Davidoff ’s North American business, one of the company’s most significant business units. The region is by far the biggest market in the world for premium cigars, generating 60% of total industry sales. He has a background in premium cigars and accessories and previously worked at alcohol companies Diageo and Seagram.

retail but also in domestic markets. Besides actively doing face-to-face trainings, we implemented our Jim Young, Senior own state-of-the-art eLearnVice President and Chief Commercial ing platform the Davidoff of Officer, Oettinger Geneva Academy.” Davidoff In travel retail, Davidoff worked with its retail partners and recently opened new walk-in humidors at Zurich and Moscow Sheremetyevo airports. A similar unit began trading in October in Geneva, and in November, Davidoff will have two in Istanbul’s new airport in partnership with Gebr. Heinemann. The strategy is to follow the travelers and their spending. The company’s energy and resources are directed towards the places where the traveler is concentrated. These locations make up an important part of its business, notes Young. Major product launches for next year will include a range to celebrate the Chinese Year of the Pig. The company performs well with these annual Chinese gifts in travel retail, as well as the accessories that go with them. Part of this success lies in the special cigar blend that changes each year. “Our consumers usually expect more than a package change,” says Alice Roeseler, Marketing Manager Global Travel Retail, Oettinger Davidoff. “The blend changes each time. We have been able to satisfy their expectations of a very special blend created explicitly for purposes of the Chinese zodiac launch. The year of the Pig cigar is a Gran Toro format with a pigtail and will delight our consumers Davidoff has recently opened new walk-in humidors at Zurich and with woody, peppery yet creamy sweet flavors.” Moscow Sheremetyevo airports

Exciting sensory journey

Vision for Davidoff

From a commercial point of view, Young believes it is a distinct advantage that Davidoff has its own brick-and-mortar stores in a variety of places around the world: Europe, the US, and Asia. “We grow our own tobacco in the Dominican Republic and Honduras and manufacture in both countries. We are cigar makers and we own retail. We like to call it ‘From crop to shop’, which is really important in terms of being completely in control of our quality standards, but we also work very closely with partners all the way up that chain, from buying tobacco all the way up to partnering with retailers who have our products in their stores.” Young’s vision is to make sure that the experience the consumer has encountering and buying its product – whether it’s in the store owned by Davidoff or operated by a partner – is just the same. This means merchandising products in a way that is very shoppable and ensuring that retail staff are engaging and well trained. “They must be knowledgeable to encourage the shopper to make a smart choice. Providing that experience to the consumer is the vision that we have,” he says. “To do that we need to be really good with our commercial partners in travel

For the upcoming holiday season, Davidoff has also introduced new gift formats, including Davidoff Gift Selections. The selections, available from November/December 2018, feature cigars from the four corners of the world, crafted with a variety of tobaccos, and represent an exciting sensory journey into the rich flavors of some of the most sought-after Davidoff blends. In addition, the new and limited Gran Torpedos bring the exotic and intense flavors of Nicaragua, Brazil and the Yamasá region of the Dominican Republic, while the Yamasá Robusto is now available in a tubo version. Turning to the challenge of tobacco health warnings, Young notes that the impact of these on consumption and purchases is low. He has strong views on these government regulations. “We haven’t seen any impact,” he says. “It’s partly because our consumers are typically 35+ and they’re educated. The government doesn’t make decisions for them. The flipside of this is that the design and sizes of health warnings is different from country to country. The whole point of that is to make it costly and add complexity on companies like ours. It’s a reality and it’s not going to get easier.” He continues: “From Davidoff ’s point of view, we need to comply with the regulations and adapt as they adapt, and we need to do that in a systematic way. We have to create complying with regulation as a core competence of our company and we’re well on our way to be able to do that,” he concludes.

www.dutyfreemag.com GULF-AFRICA DUTY FREE & TRAVEL RETAILING

Pernod

PERNOD RICARD’S travel retail team on a mission to win All eyes on Pernod RIcard Global Travel Retail as it brings its A-game to travel retail by JAS RYAT

ernod Ricard Global Travel Retail (PRGTR) has reason to celebrate as it closes the chapter on 2018. It has been a little over one year since Pernod Ricard’s Asia Pacific, EMEA and Americas businesses consolidated into one team – Pernod Ricard Global Travel Retail. Since then, there is no sign of slowing down. According to Nodjame Fouad, Vice President Marketing at Pernod Ricard Global Travel Retail, travel retail is a strategic battleground for Pernod Ricard – one that is considered a priority must-win battleground. Gulf-Africa Duty Free spoke with Fouad about PRGTR’s travel retail strategy and how the company plans to win in this highly competitive industry. The team has reorganized to have a major focus on upweighting certain elements that it believes are key strategic drivers for the future. “Our strategic pillars are around three priority areas, one being innovation,” she says. “We have a very strong innovation pipeline that is to come over the next few years in multiple categories, and we think that’s a key driver of the future. Digital acceleration is another one – being able to start working with different partners across the industry to see how we can start connecting data to make it much more valuable. And finally, we think that consumer insights are fundamental to be able to deliver and develop differentiated offers across different nationalities and different markets.” Fouad explains that the division has a “great” funnel of innovation, which is crucial to fuel momentum going forward. PRGTR recently launched Chivas XV, a 15yo blend, which is one of the first innovations to be launched this fiscal year. 2019 will continue to be peppered with newness by different brands and more focus on travel trail communications and experiences, as the brand moves away from redundant bottle-onshelf offerings. Turning to the digital developments, PRGTR is upweighting the team to focus on driving footfall. “That’s our key priority next year, as you will see that we will be investing more in pre-travel,

60 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018

Chivas XV, a 15yo blend, is one of the many new innovations that will be highlighted this year

so ahead of the airport, ahead of the retail store, focusing on trying to – especially with Nodjame Fouad, Chinese travelers – get travel retail on their Vice President travel agendas. We have learned there Marketing at Pernod Ricard is a very high level of planning when Global Travel Retail this nationality travels. That’s a very key shares her insight on the strategies insight for us to drive our digital agenda Pernod Global and our pre-travel agenda,” says Fouad. Travel Retail is using to strengthen The innovations and digital strategy its message are based on the key insights PRGTR has been working on over the last year. The division is close to finalizing a massive shopper study that includes approximately 6 nationalities and 10 typographies. This is in an effort to truly understand the motivations, desires, drivers and the barriers that different shoppers present. Fouad explains: “From there we will be tailoring all of our marketing programs, our innovation programs, and our experiences against that. So that’s a big piece of work that we have been doing and is a major development for us.” Pernod Ricard is part of Fouad’s DNA as she has been with the company for over 10 years, having worked with The Absolut Company prior to Pernod Ricard acquiring the brand. “I really entered the industry not because I chose it because of the industry, but because of Absolut as a brand and the creativity that it represented. And I had a very strong connection with that,” she enthuses. This passion runs parallel to the firm’s commitment to travel retail. “We are the value leaders in travel retail and our mission is to continue to grow our value share leadership in terms of our priorities. It’s a brand value building platform as well as from a commercial standpoint definitely continuing to accelerate our commercial value share.”

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LIQUOR NEWS

The Macallan unveils unique single cask range This exclusive range of single cask whiskeys showcases the depth and diversity of Edrington’s The Macallan. Each whiskey reveals a subtly different flavor or aroma in the background, making each one unique. The range, an exploration into the captivating world of The Macallan’s Whisky Makers, entices customers to take a journey of discovery through this stunning array of Macallan whiskeys sampled and bottled straight from the cask. “At the heart of The Macallan Estate sits the sample room, and within it the Whisky Maker’s bench; the place where inspiration and dedication come together in the creation of The Macallan single malt. Over years, and even centuries, an incredibly diverse range of whiskey samples have graced the Whisky Maker’s bench. This stunning new range presents those particular cask samples which have taken our Whisky Makers by surprise. The Macallan’s Exceptional Single Cask range provides an opportunity to experience these moments,” explained Geoff Kirk, Director of Prestige, The Macallan. A limited number of bottles from two of the casks are being made available in travel retail EMEA and Americas. 582 bottles from cask number two (15YO) launched exclusively in EMEA travel retail with Dubai Airport retailer Le Clos with a recommended selling price of £375 (US$490)

The Balvenie celebrates the Fourth Chapter collection – Expecting the Unexpected The Balvenie single malt Scotch whisky has unveiled the penultimate chapter in The Balvenie DCS Compendium – Chapter Four, titled ‘Expecting the Unexpected.’ The collection brings to life the enduring mystery, magic, and alchemy inherent in whisky maturation, and highlights how in

his 56 years in the industry, Malt Master David C. Stewart MBE has mastered the art of nurturing the unexpected. “Despite spending many years studying the science and art of whisky maturation, there are still occasions when I find myself pleasantly surprised with the unexpected direction a liquid has taken. The nature of whisky making is unpredictable and in the case of The Balvenie DCS Chapter Four, means a selection of remarkable and distinctly different liquids have been released that would otherwise never have seen the light of day,” said Stewart.

The collection comprises the most distinct and unusual vintages completely different to The Balvenie’s usual style

62 GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER 2018