Gulf-Africa Duty Free & Travel Retailing TFAP May 2015 by Paramount Publishing Ltd.

TFWA AP 2015

DUTYFREEMAGAZINE.CA MAY 2015 · TFWA AP · VOL 25 · NO 1

Dubai Duty Free’s Colm McLoughlin named recipient of Irish Presidential Distinguished Service Award p.6

Iraq DF in new terminal p.16 Prestige Suppliers: Pioneers in Southeast Asia p.18 Opulence in Arabia p.30

LETTER FROM THE EDITOR

MAY 2015 · TFWA AP · VOL 25 · NO 1

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. May 2015, Vol. 25, No.1. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2015 Global Marketing Company Ltd.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING 26 Pearl Street Mississauga, Ontario L5M 1X2 Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemagazine.ca PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@dutyfreemagazine.ca EDITOR Wendy Morley wendy@dutyfreemagazine.ca ASSOCIATE EDITOR Ryan White ryan@globalmarketingcom.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca LAYOUT Sarit Scheer sarit.scheer@gmail.com ADVERTISING SALES ADVERTISING & MARKETING EXECUTIVE Jacqueline Hammill jacqueline@dutyfreemagazine.ca CIRCULATION & SUBSCRIPTION MANAGER Monica Kucharski monica@globalmarketingcom.ca

New

openings I

n this special issue to coincide with the TFWA Asia Pacific Exhibition & Conference in Singapore, we are taking inspiration from the dynamic event format to bring you a publication that’s packed with the latest news and insightful features. Our original stories, many of which are excusive to Gulf-Africa Duty Free, showcase all the latest developments from the industry’s movers and shakers, from limited edition products to store openings and strategies for future growth— it’s all inside this must-read magazine. Of course, we’re known for having our finger on the pulse when it comes to the Gulf-Africa region and this issue’s line up won’t fail to impress. Highlights of the stories inside include an update on the last phase of Baghdad International Airport’s five-year expansion project, which will culminate in the opening of Samara Terminal in September. Nabil Mohsin, Director of Business Development at Iraq Duty Free provides an insight into the two stores it is opening there, as well as the technological innovations they will boast. We’ve also got the latest from Dubai Duty Free as it prepares for the opening of Concourse D in August. Colm McLoughlin shares how the operator has renovated many of its existing stores, opened a batch of new ones, listed a number of novel products and activated promotions across almost every category to help keep customers happy. Last but not least, make sure you read our article on Flemingo International, which is fast making a name for itself. Indeed, the Dubai-based company is striving to reach US$2 billion in global sales by 2020. With over 210 locations in 34 countries and Q1 2015 sales in the region up 12% on 2014, Flemingo is on track to reach its goal. This year marks the 20th anniversary of TFWA Asia Pacific Exhibition & Conference and, as we celebrate together, we hope to meet contacts old and new on the show floor and at the various networking opportunities taking place throughout the week. As always, we’d love to hear your feedback and just in case you haven’t got space in your suitcase to take this packed issue back home with you, remember you can find every issue online at www.dutyfreemagazine.ca, along with our contact details and all the latest regional news. See you at the Swing!

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

CONTENTS

What’s inside LEAD STORIES 10 Retailer News: Flemingo International DIPLOMATIC RELATIONS

Dubai-based Flemingo international progresses toward its lofty goal by finding niches

12 Retailer Report: World Duty Free Group/Dufry TAILORED TO THE TRAVELER

Whether in Kuwait or Saudi Arabia, World Duty Free Group’s Middle Eastern operations offer the perfect mix of global bestsellers and local favorites

18 Border Retailer: Prestige Supplies PIONEERS IN SOUTH EAST ASIA Prestige Supplies Inc. continues its rapid expansion of duty free in emerging markets of Mongolia, Cambodia and Laos

30 Luxury Spirits OPULENCE IN ARABIA

Whether from tourists or residents, sales of luxury spirits in the Gulf region are not slowing down

34 Spirits: Brown Forman A GENTLEMAN’S WHISKEY

Gentleman Jack is just one of the members of Brown-Forman’s Jack Daniel’s family that has been doing extremely well in the MENA region

FEATURES Iraq DF to open at new terminal Airline News Airport News Lindt

16 20 22 28

Liquor News Tobacco News Questionnaire

32 36 38

RETAILER NEWS: DUBAI DUTY FREE

Promotions from Jameson and Lindt; at any given time, DDF runs over 500 promotions weekly throughout its retail operations

package

The complete

From new products and stores to renovations, promotions and staff training, Dubai Duty Free continues to surprise and delight travelers looking for their next duty free purchase by

RYAN WHITE

ubai Duty Free (DDF), the world’s biggest singleairport retailer, has been busy of late. In addition to preparing for the opening of Concourse D in August of this year, the operator has renovated many of its existing stores, opened new stores, listed a number of novel products, put on stunning promotions across essentially every category and continued to emphasize staff training as a means of ensuring excellence in customer service.

Up to snuff Colm McLoughlin, Executive Vice Chairman of DDF, told GulfAfrica Duty Free that ensuring customers are happy starts even before they speak to a member of the staff. “We place a great deal of importance on the ambiance of the stores because it plays a role in shoppers’ comfort level,” he explained. McLoughlin cited the renovations to DDF’s Terminal 2 stores as an example where more of a walkthrough shopping area was created. Since work was completed in 2014, a 10% increase in sales has been recorded for those locations. Terminal 1 of Dubai International Airport (DXB) is currently undergoing a major refurbishment and the DDF Arrivals operations have been relocated. The retailer’s Public Shops (landside) in Terminal 1 are also being renovated, as are the Public Shops in Terminal 2. 6

GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

Big things coming “Of course, I can’t mention the work being done on our stores without noting that Concourse D at Dubai International is scheduled to be fully open and functional from the third quarter of this year,” McLoughlin said. The New Concourse D will cater to all the non-Emirates flights, with a capacity to handle a staggering 18 million passengers annually. DDF will have a total retail area of 7,000 square meters in the new space. “We have exciting plans in place for this new retail area,” McLoughlin noted. “The opening of the new concourse will definitely cater well to the growing passenger numbers and further drive Dubai Duty Free’s sales.” And there are other recent new additions in terms of stores. The Jet Aviation terminal at DXB resumed full operations in July 2014 after a rebranding, and the terminal now offers airside duty free shopping—courtesy of DDF, of course—serving crew and passengers using the private and charter jet facility. Also completed just last year is DDF’s Fashion Boulevard in Concourse A, which is dedicated to Emirates’ A380 fleet. “We added Hermes and Chanel shops to the existing Ferragamo and Gucci shops,” McLoughlin explained. “They are doing very well.”

Making it an experience At any given time, DDF runs over 500 promotions weekly through-

RETAILER NEWS: DUBAI DUTY FREE

Dubai Duty Free’s Liquor shop at Dubai International Airport’s Concourse A

Keeping it fresh In addition to promotions, DDF makes a point of keeping its offering fresh. Already in 2015 the operator has listed new products across essentially every category: Carven, Eisenberg and Montale in Perfumes; Gucci in Cosmetics; Swarovski in Pens; Caterpillar phones, Rollei cameras and Blaupunkt headphones in Electronics; and Vilebrequin Men’s swimwear in Fashion. “As in past years, we also have many Dubai Duty Free exclusive launches spread across various categories in agreement with various suppliers,” McLoughlin added. Notable exclusive launches yet to come include: Lindt Airplane Napolitains 750g; Godiva Mousses Meringue; Johnnie Walker Blue, Black and Gold Label Dubai Duty Free editions; the Elie Saab Resort Collection; Sisley Soir De Orient; Boss bottled Intense; Ralph Lauren Oud; Tom Ford Noir Extreme; and seven more worldwide exclusive launches in the Fragrances category.

Where credit is due

out its retail operations. “Some of the most successful promotions this year have been part of the Dubai Shopping Festival campaign,” McLoughlin said. In fact, DDF has renewed its support for the 2015 Dubai Shopping Festival as a Strategic Partner. Now in its 20th year, the Festival is the largest shopping and entertainment extravaganza in the Middle East. Drawing visitors from across the globe, the event kicks off Dubai’s calendar of events each year with a wide variety of activities and promotions. This year, the Dubai Shopping Festival was held from January 1 to February 1. “Liquor, Perfumes, Confectionery and Electronics have been the key categories where promotions tend to work very well for us,” McLoughlin said. “The mechanics that work best are price offs, buy one get one frees, gifts with purchases and win a prizetype promotions.” In terms of upcoming promotional activity, McLoughlin cited Dubai Summer Surprises, Chinese-focused promotions specific to Union Pay cardholders and various Liquor category promotions as the most prominent. Dubai Summer Surprises is part of Dubai Festivals and Retail Establishment’s Summer Retail Promotions program. Last year, during the promotion’s five-week period, customers spending Dhs500 (US$136) and above had the chance to win Dhs20,000 (US$5,445) worth of DDF shopping vouchers every week, or a total of Dhs100,000 (US$27,225) in vouchers over the entire course of the event. And given that high-spending Chinese travelers generally contribute a great deal to DDF’s overall sales, the operator has teamed up with Union Pay to offer 5% off on varied spend limits across different categories such as Liquor, Tobacco, Perfumes, Food, Fashion, and Costume and Precious Jewelry. The promotion is currently ongoing until June. Finally in terms of promotions, DDF is currently running a host of buy two get one free offers on whisky. On the other hand, vodka fans currently receive 20 or 37.5 cl bottles free with the purchase of various brands. Price offs are also ongoing in Liquor, and DDF has a special allowance awareness program currently running in Arrivals.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

Customers interested in the above products, or any of the items on offer at DDF’s stores for that matter, can rest easy knowing that trained staff are on hand to advise them on their purchases. “Our staff are among the most highly trained in the world, I believe, as we know that a trained workforce is extremely vital to the success of the company,” McLoughlin explained. In 2014 alone, DDF put on a total of 907 training sessions— from product seminars and beauty advisor training to induction programs and skills training—with over 15,000 participants. “Whether it’s renovations, new stores, the products we sell, experiential promotions or staff training, Dubai Duty Free is united in its commitment of giving travelers a shopping experience that they can’t get anywhere else,” McLoughlin concluded. “I’m fortunate to work with a very dedicated team, many of whom have been with us since the very beginning. I am also lucky in having a dynamic boss in H.H. Sheikh Ahmed bin Saeed Al Maktoum. President of Dubai Civil Aviation Authority and Chairman of Dubai Duty Free, who provides me with great support and encouragement. “Dubai has become a world center of aviation in relatively short order and I’m proud of the role that Dubai Duty Free has played in that success,” he added.

Colm McLoughlin, Executive Vice Chairman of Dubai Duty Free, was named a recipient of the Irish Presidential Distinguished Service Awards in 2014 for the Irish abroad, making him one of a select group of people, and the first Irish person living in the UAE, to be recognized by the Irish government for his outstanding contribution to Irish business and communities abroad. He is pictured here with the Irish President, Michael D, Higgins and Taoiseach Enda Kenny (seated) at an official ceremony held at Aras an Uchtarain, the official presidential residence in Dublin.

AIRPORT NEWS: FLEMINGO

DIPLOMATIC RELATIONS Dubai-based Flemingo international progresses toward its lofty goal by finding niches by

WENDY MORLEY

Despite the fact that Flemingo International’s head office is located in Dubai, its STARTER store at Abu Dhabi airport was its first in the Middle East

n its short 15-year history, Flemingo has made a very large name for itself in travel retail. It has grown to such a degree that the company has announced a clear goal to reach US$2 billion in sales by the year 2020. By all accounts, it seems unlikely that Flemingo will not reach that figure. The company now has 210 locations in 34 countries, and those numbers are growing surely and steadily by way of new concessions and store openings throughout the globe. Flemingo has made a thriving business out of stealthily establishing itself in areas that other travel retail companies don’t talk a lot about. This business philosophy has brought the company success in the often very busy airports of emerging markets throughout the world. Flemingo also has a large global presence providing the diplomatic community with duty free goods via its online store, including tobacco, liquor, electronics, fragrances, household goods, luggage and sports equipment. In the Gulf-Africa region, the company has established businesses that serve the general traveling public in airports and seaports, and also services

the diplomatic market through brick and mortar stores. Despite being based in Dubai, Flemingo opened its first location in the Middle East last year with its STARTER convenience brand. Located in the Skypark Plaza in Terminal 3 of Abu Dhabi International Airport, this store services the airport staff and passsengers. As a supermarket, it carries a wide range of groceries, personal care, dairy, travel accessories and frozen foods. It also features a bakery and food counter that serves an assortment of cooked, precooked and ready-to-eat food options.

Changing demographics, growing sales in Africa First quarter sales in the region for 2015 are up 12% for Flemingo over Q1 of 2014 for like-for-like business. Airports show the same sales growth rate as the region overall. Since airport traffic is up only 5% for the airports in which it operates, Flemingo is achieving substantial real growth. In its diplomatic and UN commissary stores, Flemingo sees little change in its

GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

customer base, which also consists of UN workers. But in its stores that serve the general public, the travel retailer says demographics are changing. These changing demographics are inevitably resulting in a changing product mix. In airports in this region, Flemingo confirms 35% of the company’s customer base is European, mainly from Portugal, Germany, the UK, Luxembourg and the Netherlands. The big change is in the number of Chinese travelers to the region, whose numbers have increased dramatically. The number of East Asians frequenting Flemingo airport stores now make up 20% of the total. In its seaports throughout Africa, Flemingo is seeing a trend toward CIS countries and again, East Asians. In part because of this influx of Chinese customers, the company has found a big shift in its sales of Cognacs and cigarettes, and has adapted to make the most of its current customer base. To that end, Flemingo has increased its offering of Chinese spirits and tobacco, and has expanded its range of Cognacs in select markets. The company keeps

The STARTER store in Abu Dhabi provides a wide range of groceries for airport staff and passengers

Unlike most airport stores, Flemingo’s Abu Dhabi STARTER store carries frozen goods

constantly abreast of shoppers’ habits and desires, and frequently evolves its selection of products and brands at the location level. This is in part to service and also benefit from customer needs, but also to stay ahead of the game. “We continuously change the merchandise and introduce destination products to be exclusive at the airports,” says a spokesperson from Flemingo International’s African operations.

The company’s latest promotions have been with liquor, its top-selling category. These promotions vary in length from one week to one month, and might be anything from a price promotion to a gift with purchase to a scratch card offering the potential to win a free gift. Recent promotions include those for Chivas, Amarula, Heineken, and a Jameson promotion for St. Patrick’s Day.

Top categories

As one might expect from a company focused on growth, Flemingo seems to reveal almost constant developments. This includes a number of locations opened up in the past year in other parts of the world in addition to the STARTER store in Abu Dhabi. In fall of 2014 Flemingo announced a merger with Harding Retail, an on-board retailer in the cruise industry, adding a whole new sector to its ever-growing portfolio. The company also announced a couple of interesting financial developments over the past year. It announced the addition of Cartesian Capital Group, a global private equity firm, as an investor to support its

For most duty free retailers, Perfume and Cosmetics (P&C) is the best-selling category. For Flemingo, the top category is liquor, followed by tobacco and then confectionery. Perfume comes in fourth. This is in great part thanks to the specific types of stores the company opens, which are generally not the typical duty free store. Flemingo’s top-selling liquor brands are Martell, Johnnie Walker and Heineken. Top tobacco brands are Marlboro, Dunhill and Benson & Hedges. In confectionery, top brands are Mars, Lindt and Nestle, and for Fragrances, brands are Carolina Herrera, Calvin Klein and Hugo Boss.

What’s new?

growth plans. Cartesian has a minority position and a seat on Flemingo’s board. The firm will help support Flemingo in acquiring new business and developing its existing business around the globe. The company also announced late last year that it had secured investment from Samena Capital. This investment group is focused on opportunities within the Indian subcontinent, Asia, the Middle East and North Africa (collectively known as the SAMENA region). Samena Capital will be present on Flemingo’s board, and will help the company access any number of business leaders and policymakers in the region, in addition to offering strategic guidance. As for the months ahead, Flemingo is renovating some locations. “We are upgrading some stores, bringing them in line with company standards. This will create a better shopping experience for the customer, and it will also allow for better merchandising, resulting in an increase in revenues.” says a company spokesperson, who also confirms that Flemingo has just won the tender for a new UN store in the region, though he says he is unable to give more details at this point.

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RETAILER NEWS: WORLD DUTY FREE/DUFRY

TAILORED

TO THE TRAVELER A rendering of WDFG’s refurbished store in Kuwait International Airport

Whether in Kuwait or Saudi Arabia, World Duty Free Group’s Middle Eastern operations offer the perfect mix of global bestsellers and local favorites RYAN WHITE

orld Duty Free Group (WDFG) has recently renewed an agreement to operate two stores in Kuwait International Airport. The company’s Middle Eastern operations are an important aspect of Dufry’s takeover, as the larger retailer had limited operations in the region. In Kuwait, WDFG has recently begun a refurbishment project costing EUR 900,000 (US$975,000). The project should be near completion by the time Dufry takes possession, which is slated for the third quarter of this year. The refurbishment is expected to take six months. Pedro Castro, Chief Operations Officer International at WDFG, says

“The stores will have a complete range of products based in the core business categories, excluding Spirits.” Given the popularity of Beauty products in travel retail, the category will be the store’s mainstay, followed by Tobacco. Castro also notes that in Kuwait specifically, gold jewelry is very popular; as such, the stores will have a wide selection. Indeed, WDFG has been operating at the airport since 2006 and has a very clear understanding of what travelers there are looking for when they shop duty free. “The dynamics of the airport—and perhaps more importantly the potential we see in the passenger demographic—are very well known to us,” says Castro.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

The refurbishments will effectively allow WDFG to take its existing knowledge of the airport and its passengers, and tailor the new operations accordingly— something that the operator has seen great success within airports around the world. “For WDFG, while all of its stores have some common elements, there is no one size fits all,” Castro adds. In discussing not just the new stores but the operator’s 9-year span at the airport, it’s clear that Castro sees this latest development as an opportunity to expand on a legacy. “There is no doubt that this operation is a real success story and we believe that at this moment we have the right elements to improve upon our previous performance.”

RETAILER NEWS: WORLD DUTY FREE/DUFRY

Three’s a charm We also took the time to ask Castro about WDFG’s Saudi Arabia operations. The company is present in three of the country’s airports—Riyadh, Jeddah and Dammam— together with its partner Al Musbah under the Saudi Duty Free brand. At King Khalid International Airport in Riyadh, WDFG operates two stores. Located at T1 and T2, both measure 1,520 square meters. The operator’s biggest stores in the country are located in Jeddah at King Abdulaziz International (KAIA) Airport. WDFG’s store space at the airport measures in at a total of 3,682 square meters divided up between two stores, one in the northern part of the airport and the other in the southern portion. The Dammam operations—the newest addition to WDFG’s portfolio in Saudi Arabia—are located in King Fahd International Airport and consist of one store measuring 939 square meters.

Finding commonalities Much like in Kuwait, Beauty is the most relevant category in Saudi Arabia for WDFG. From here on, though, some differences emerge. Food and Confectionery, for example, takes second place. Hearkening back to WDFG’s focus on making sure a store’s mix accurately targets passengers, Castro tells us that the range of offerings in Saudi Arabia is actually bigger than in Kuwait. “We’ve also got Electronics, Toys,

Souvenirs, Watches and Accessories, and some products from the Luxury category at our operations in Saudi Arabia,” he says. While the categories present may differ, Castro explains that local travelers play a key role in determining what’s on offer: “It is true that WDFG has a strong global commercial model, but it is adapted to each retail location. We also adapt the product offering, commercial offers and campaigns specifically to the destination where we are operating. One quite relevant point that we make sure to develop wherever we are is to create a strong sense of place. We’re aware, for example, that in the case of Indian subcontinent travelers it is very important to offer Food and Confectionery category. At the same time, Kuwaitis are more demanding when it comes to the Beauty and Gold Jewelry categories. We need to make sure that we’re meeting the needs of all the major traveler demographics passing through the stores, so necessary the mix will differ, sometimes greatly, from place to place.” In terms of sociopolitical tensions in either country, Castro says that they haven’t affected business. “Both countries are very stable,” he says, “and doing business in Kuwait and Saudi Arabia hasn’t been an issue from that standpoint. We definitively feel very comfortable there and we really trust in our local partners

WDFG’s operations in Riyadh, Saudi Arabia

GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

“There is no doubt that this operation is a real success story and we believe that at this moment we have the right elements to improve upon our previous performance.” PEDRO CASTRO, CHIEF OPERATIONS OFFICER INTERNATIONAL AT WDFG ON THE COMPANY’S OPERATIONS IN KUWAIT INTERNATIONAL AIRPORT

who are helping us quiet a lot in terms of understanding the different regional sensibilities.”

DRIVE BUY...

Email: info@prestigesupplies.com Website: www.prestigesupplies.com

THE WORD’S FINEST AND RELAXING SHOPPING DESTINATION AT PRESTIGE DUTY FREE

Bavet City, Cambodia.

RETAILER NEWS: IRAQ DUTY FREE

Samara Terminal brings fresh opportunities for Iraq Duty Free

IRAQ DUTY FREE TO OPEN AT NEW BAGHDAD AIRPORT TERMINAL

t used to be called Saddam International Airport but these days Iraq’s largest transit hub is known as Baghdad International. A progressive image overhaul throughout the last five years has seen the facility transform into a modern hub that counts London, Frankfurt, Vienna and Kuwait and other global destinations among its connections. In 2010, plans were unveiled for the renovation of the airport’s three terminals with the aim of increasing its capacity to more than two million passengers per annum. This last of these, Samara Terminal, will be completed in September this year. According to Nabil Mohsin, Director of Business Development at Iraq Duty Free, the Samara Terminal renovation and expansion is being conducted in response to an increase in flights following the purchase of 30 new Boeing aircraft by Iraqi Airways. The new aircraft, seven of which are already in place at the airport, will be delivered over a period of six years. “The national carrier, Iraqi Airways has already recruited and approved more than 100 local trainees and dispatched them to Europe in order to study aviation. “The idea is that they will return eligible to pilot the new aircraft over the coming years,” he said. “For every new aircraft that joins the fleet a new route will be opened up. The airline has already added China and Malaysia to its roster in response to the first deliveries,” added Mohsin. With the newly launched terminal, growing fleet and ever-

GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

expanding network of flight routes, traffic through Baghdad international Airport is set to increase significantly. In anticipation of the growing volume of customers projected to pass through the doors of its two shops at Samara Terminal, Iraq Duty Free has taken on eight additional staff and introduced a series of technological innovations, including a customer penetration count and an SAP point of sale. “These measures will enable us to see how the layout of the store affects the number of customers passing through, allowing us to develop a more efficient supply chain,” Mohsin said. The stores, one of which is located in the departure lounge while a smaller outlet greets passengers in arrivals, mirror the layout and design of Iraq Duty Free’s outlets in the airport’s two other terminals, Nineveh and Babylon.

BORDER RETAILER: PRESTIGE SUPPLIES

Land border store in Zamiin-Uud

Pioneers in Southeast Asia

REBECCA BYRNE

similar in concept to the ship channeling business,” explains Lukas Coates, Purchasing Manager. “We have set up a shop to cater directly to the mining industry of Mongolia and China. At any given day at this international checkpoint there can be up to 2,000 trucks crossing the border carrying gold, copper, coal and other natural resources.” The store, situated in Gashun Sukhait, is 25 square meters and its primary product is Chinese tobacco, with brands such as Double Happiness. ‘The concept has been well received,” continues Coates, as he talks about plans to roll out the groundbreaking model to further sites along the border. Other opportunities Prestige Supplies intends Lukas Coates, to capitalize on in the near future Purchasing Manager, include Mongolia’s new internaPrestige tional airport, currently under construction and set to cater to 10 million people, and the relaxation of visa laws with Russia, which has increased border traffic. 2014 saw an economic downturn in Mongolia, however, encouragingly, the company did not lose ground. “In spite of the unpredictable economic and political circumstances, sales remained

ver the past seven years Prestige Supplies Inc. has been growing and consolidating its foothold in travel retail and wholesale in Southeast Asia. From its first store presence in Mongolia, which opened in 2007, the company has added a further seven stores across three countries, with more planned for 2015. In Mongolia, Prestige Supplies now has six stores, covering international, diplomatic, downtown and land border channels. The most recent addition, a land border store situated on the MongolianChinese border, showcases a unique concept called truck channeling. “This is

Prestige Supplies continues its rapid expansion of duty free in emerging markets of Mongolia, Cambodia and Laos

GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

stable during the year,” reports Coates, and on a positive note he adds that: “We are off to our best start yet in 2015. We are experiencing an increase of 27% in sales turnover compared to the same period last year.” Prestige Supplies has a strong presence in Cambodia. The company’s store in Bavet on the Vietnamese border opened in February 2013 and has exceeded expectations. “We are the sole operator at the border and this is our largest operation at 2000 square meters,” says Coates. Bavet caters to more tourists and locals entering and leaving Cambodia than anywhere else in the country. “We saw extremely aggressive growth here last year with sales of 400% over the previous year. We have reaped the advantage of government restrictions on duty free in Vietnam as it has pushed business our way and we are also tied into the tour bus companies, which represent a good portion of our business,” Coates adds. In terms of brand offering at this site, Prestige Supplies has seen growth in the perfume and watches concessions, particularly in mainstream brands such as Bvlgari and Dior in perfume and Armani, Fossil, FIYTA and Cerruti in watches. The company also has a presence in

BORDER RETAILER: PRESTIGE SUPPLIES

Prestige Supplies Inc. has six duty free stores in Mongolia

Laos with its first land border store, which opened in July 2013. This 70-squaremeter store is situated in Boten, on the Chinese border, and focuses on liquor and upmarket tobacco brands such as Lesser Panda, Furongwang, Yuxi International in cigarettes and VSOP, XO in Cognac. “This store is extremely popular with the rich educated Chinese from the Yunnan province,” Coates says. In fact plans are afoot to double the size of the store to include confectionary, focusing on brands such as Godiva, Lindt and Ferrero. Building on this success, Prestige Supplies is targeting a further five stores in Laos over the next 18 months. Prestige Supplies has traditionally focused on liquor and tobacco sales. However, as they increase their stronghold in Southeast Asia, the company has diversified its offering. “In the last two

years we have seen many more brands coming on board in perfume and cosmetics, electronics, accessories and food products,” says Coates. This includes sportswear brands such as Adidas and Puma, sunglasses including Chanel and Cartier. The company has continued to expand its liquor concession to include wines such as Santa Carolina, Mouton Cadet, Mapu and Escudo Rojo. Prestige Supplies also has a thriving wholesale arm. “Most of our wholesale supply business is focused in Mongolia where we supply independent operators. Our split is 70% retail to 30% wholesale. As we expand our retail presence in Laos and Cambodia it makes sense to also introduce our wholesale business over the long term” explains Coates. This is in line with Prestige Supplies’ vision to create a chain of retail outlets

across the Asia Pacific region serviced by its distribution and wholesale businesses. “Many companies want a stake in Asia,” says Coates, “but it is a tough market to get involved in. We are one of the first to create such a strong foothold within the region, and over next year our focus is to see existing projects come to fruition and continue to try and diversify our supplier base as and when it is required.“ Coates concludes: “Our long-term aim in Asia is to continue to create the fastest growing network of travel retail outlets across the region and we will do this by creating an environment that adds value to the world’s finest brands from our suppliers and leverages our extensive retail network to offer end customers a unique shopping experience.”

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

AIRLINE NEWS

Fly SAA Duty Free re-launches online shopping with Extraordinair South African Airways (SAA) recently announced the launch of its newly designed Fly SAA Duty Free online shop: www.flysaadutyfree.co.za. The site has a fresh look, a devise-responsive layout, and offers a more convenient way for customers to browse and purchase duty free products before they fly. The goal with this redesign is to bring customers an improved online experience. With this experience in mind, the site has been designed to assist customers to find topquality brands at duty free prices with ease. The airline also offers exclusivity, specials and discounts. For an enhanced experience, SAA has identified two areas for improvement: prices and convenience. Using considerable research, SAA has worked tactically to find the best price and offers duty free prices for up to 45% lower than found locally. Products on offer at these prices range from fragrances through to watches, sunglasses, jewelry, cosmetics, cameras, handbags, wallets and even toys. A representative for SAA states: “Let’s face it, online is more convenient. There is no need to rush around at terminals searching for the perfect gift, or your favorite brand. There is no need to panic when you have forgotten to get that special gift on board for your loved one. And there is certainly no need to worry that you will not find it at a duty free cost. All you have to do is visit the online store at www.flysaadutyfree.co.za, select your product and pay.” SAA’s online store allows for even greater convenience. Customers can shop in the comfort of their homes and then have their purchase delivered directly to their seat upon their next flight. To celebrate the new design, SAA is offered a 10% discount during the whole month of March (Order in March, receive

www.flysaadutyfree.co.za – South African Airways’ revamped website

the discount for delivery to your seat for any flight booked between March and October 2015), on all products ordered for delivery to the customer’s seat inflight.

ulf Air boosts loyalty program with elite G black card Bahrain flag carrier Gulf Air has launched a premium black Falconflyer loyalty program card, introducing new benefits for its most elite level of frequent flyer members. The new black card supplements the program’s existing blue, silver and gold loyalty tiers. During its two-year validity period, cardholders can access a superior and exclusive range of benefits, including 25kg excess baggage allowance, complimentary upgrades to Falcon gold class and no redemption charges for cancellations or booking changes. Additionally, the black card comes with the one-off ability to allow members to offer a selected person with a complimentary Falconflyer gold card. Commenting on the offering, Gulf Air Acting Chief Commercial Officer Ahmed Janahi said: “We are delighted to launch this new initiative, a premium membership level that not only rewards our valued Gulf Air Falconflyers for their loyalty but also gives the airline’s premium fliers access to premium rewards.” Gulf Air Senior Manager Customer Experience Kavita S. Al Jassim commented: “At Gulf Air we embrace a loyalty mindset companywide—not only for our workforce, but also our passengers. Accordingly, we are delighted to recognize some of our most loyal members and reward not only their commitment to Bahrain’s national carrier but that of other frequent travelers. We are looking forward to their positive feedback on our newest black tier Falconflyer card.” Gulf Air’s Falconflyer loyalty program boasts over one million members across 100 countries.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

AIRLINE NEWS

Global traffic strong in February, says IATA The International Air Transport Association (IATA) reports global traffic is up 6.2% over February of 2014. This is considerably higher than January’s year-on-year increase of 4.5%. IATA suggests that February’s number was positively impacted by the Lunar New Year holiday, which occurred in February this year and January in 2014. While Lunar New Year travel undoubtedly contributed to increased traffic growth in February, IATA’s Director General and CEO Tony Tyler states: “It is also clear that solid demand for connectivity is offsetting economic weakness in some regions including the Eurozone.” International passenger demand rose 6.8% in February 2015 over February 2014. The only region that did not have growth reported by its airlines was Africa. Unsurprisingly given the holiday, Asia-Pacific carriers saw the greatest increase in international travel, at 10.4% over the same month last year. Capacity rose 8.2% and load factor increased 1.6 percentage points to 78.2%. In the Middle East, demand rose 8.7% in February over February 2014. Capacity shot up 11.0%, which caused the load factor to decrease 1.6 percentage points to 77.2%. Latin American airlines jumped 7.4% in traffic over last February. Capacity increased 6.5% and load factor rose marginally to 79.7%, the highest in the world. European airlines report an increase of 4.8% YOY. Capacity increased 3.4% and load factor rose 1.1 percentage points to 78.3%.

North American airlines saw a 3.5% increase over one year earlier. Capacity rose 2.3% and load factor was up 0.9 percentage points over February 2014. Africa was the only region to see a decrease in international traffic. Carriers in that region saw a 2.0% drop YOY. ASKs dropped 1.7%, resulting in the lowest load factor of any region at 63.5%. The IATA suggests this was likely caused by adverse economic developments, including a severe drop in the price of oil. Nigeria is Africa’s largest economy and it relies heavily on this commodity to increase the number of passengers it carries.

Oman Air 2014 revenues climb 4% Oman Air unveiled positive financial results for 2014 at its annual meeting, held at the airline’s headquarters in Muscat. Oman Air’s revenues climbed 4% to RO398.389 million (US$1 billion) in 2014. The airline’s losses were reduced by 4% to RO95.866 million (US$249 million). In addition, Oman Air carried 5.1 million passengers in 2014, up from 4.9 million the previous year. More than 23,500 round trips were recorded and capacity rose to 15.2 billion available seat kilometers, with an average seat factor of 74.4%. The year saw Oman Air add new aircraft to its fleet, with the first of the Airbus A330s and Boeing B737s it has had on order being delivered in the fourth quarter. The airline also opened four new destinations. Oman Air’s staff at Muscat International Airport handled 41,450 flights and 8.7 million passengers during the year. The airline’s catering division served 6.7 million meals in 2014, up from 6.5 million in 2013, and boosted revenues year-onyear by 3%. A healthy growth in income from rooms, food and beverage was also recorded. Oman Air’s Chairman, His Excellency Darwish Bin Ismail Al Balushi, commented: “Oman Air is guided by a development

plan which was endorsed by the Board of Directors in 2013. This has seen our company invest significantly in new narrow-body and wide-body aircraft, new destinations, technology and staff. The size of our fleet is expected to increase as per this plan to 50 aircraft by 2018, with a further increase to 70 aircraft being achieved by 2020. “In parallel with the onset of this ambitious expansion, we have continued our focus on quality, productivity and increasing revenues over the full course of the year. Throughout, we have held fast to two fundamental aims: to ensure that every Oman Air customer experiences the best possible products and services, and to pursue our unwavering commitment to achieving profitability.” Following the refurbishment of Oman Air’s premium check-in facility at Muscat, the airline opened its upgraded first class and business class check-in facility in September. This was complemented by “excellent” facilities at Salalah International Airport, the Chairman said. In addition, in November 2014 Oman Air unveiled new business class and economy class cabins, which enable the airline to increase the number of passengers it carries.

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AIRPORT NEWS

Dubai Airports invests US$1.2 billion in upgrades Dubai Airports has confirmed that its US$1.2 billion investment in new and upgraded facilities for the over 110 international airlines that operate from Dubai International’s Terminals 1 and 2 will deliver a significantly enhanced customer experience on completion. Concourse D, when it opens later this year, will become the new US$517 million home to nearly 100 airlines that currently occupy Concourse C. It will feature 21 contact stands, of which four will be able to accommodate Airbus A380 or Boeing 747 aircraft, and 11 remote stands. Designed around a central atrium, the emphasis in Concourse D is to create a more efficient customer experience with short walks to connect passengers with their aircraft. The facility will also feature open gates, which will allow travelers to board directly from the waiting area, giving them more time to enjoy the food and beverage outlets, the airport operator said. Construction is on track for completion mid-year, paving the way for a rigorous testing program. A total of US$490 million is being invested in a major phased refurbishment and modernization of Terminal 1 and operational areas surrounding it and Concourse D. Upgrades include the refurbishment of landside arrivals – including new food and beverage and retail outlets – and the modernization of the check-in and departure hall. A new train station is also being built to transport passengers to Concourse D. The work also includes a reconfigured immigration area and a new airside arrivals route from the new train station. On the northern side of the airport, a further US$163 million has been invested to upgrade Terminal 2, which includes a more spacious check-in area with 48 counters, a newly expanded transfer area and 40 additional immigration counters. In the Terminal 2 departures area, new retail outlets and a broader range of food and beverage options were introduced. “With traffic growth continuing at a rapid pace, we are investing heavily to ensure that the 110-plus international passenger airlines that fly to and from Dubai – and their customers who use our airport facilities – experience a significantly enhanced product, reflective of the high service standards Dubai has set,” said Dubai Airports CEO Paul Griffiths.

Paul Griffiths, CEO, Dubai Airports

Israel Airports Authority announces winner of Ramon airport tender Recently it was announced that the Africa-Israel Investments Ltd. unit Danya Cebus Ltd. has won the tender to build a 30,000-squaremeter airport terminal at Ramon Airport, also known as Timna Airport, which is currently under construction. Construction at the new airport is well under way, with the control tower, apron and runways all currently being completed. The runways, which were originally 3.1 km long, have been increased to 3.6 km in order to accommodate all types of airplanes. Highways are also being built to aid passenger travel to and from Eilat. This airport is replacing Eilat and Ovda airports for both domestic and international flights. The new terminal will have spacious arrivals and departure halls with a duty free shopping area. The airport will be built at an estimated cost of US$425 million, and is slated to open in 2016.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

AIRPORT NEWS

Tehran Imam Khomeini Airport averages 23% capacity growth per year Opened in 2004, Tehran Imam Khomeini Airport (IKA) was originally set to replace the city’s Tehran Mehrabad Airport (THR). While IKA was originally intended to replace THR, that has not been the case. However, in 2007 IKA began receiving the majority of the city’s international flights. Since then, all international flights have moved over, but THR remains the busiest airport in the country in terms of passenger traffic and aircraft movements. IKA has one passenger terminal with the capacity of 6.5 million passengers, but a second terminal is being built. The airport serves more than 40 airlines connecting to over 30 countries worldwide. During its first full year of operation, the airport had only 360,000 seats. As expected, that number increased over 100% the first year, and has been on a relatively strong growth trajectory since then, with the exceptions of 2011 and 2012, where seats dropped 3.1% and 4.0%, respectively. In 2013 the airport saw 3.4% growth and that number increased to 12.1% in 2014, for a total of 2.85 million. Dubai is the top destination of those departing from IKA, and the city is serviced by 67 weekly departures. Mahan Air is the top carrier by far, followed by Iran Air, Emirates, Turkish Airlines and Saurdi Arabian Airlines rounding out the top five.

Abu Dhabi International Airport sees February traffic jump Passenger traffic at Abu Dhabi International Airport surged by 21.5% in February 2015, according to Abu Dhabi Airports. A total of 1,715,540 passengers passed through the airport during the month, compared with 1,411,881 in February 2014. There were 12,852 aircraft movements in February 2015, up 15% yearon-year. Commenting on the latest passenger figures, Eng. Ahmad Al Haddabi, Chief Operations Officer at Abu Dhabi Airports, said: “The monthly traffic figures continue to match the long-term forecasts of growth in passenger numbers, with airlines connecting a growing number of new destinations with Abu Dhabi International Airport. Against this backdrop, we are working tirelessly to upgrade our existing infrastructure to meet this sustained increase in demand and make sure that when passengers spend time at the airport, they enjoy the experience in a comfortable environment. “The latest phase of this upgrade was the recently announced Terminal 1 expansion, which is already having a positive effect on passenger flows and efficiencies at the whole airport. We are implementing a full program of further capacity enhancements both inside and outside the terminals, enabling the existing infrastructure to gear up ahead of the opening of the Midfield Terminal.” In February, the top five routes from Abu Dhabi International Airport were Bangkok, London Heathrow, Manila, Doha and Jeddah. The top five routes accounted for 16% of all traffic last month.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

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GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

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What’s your favourite

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CONFECTIONERY: LINDT

Achieving a new level of elegance LINDT’s Swiss Pralines selection is available in various formats to suit different budgets

LINDT is showcasing its new POS fixtures that center on the Swiss chocolate brand’s premium gifting offer by

HIBAH NOOR

LINDOR tubes contain six assorted seasonal flavors

INDT of Switzerland has emphasized its commitment to the Asia market as it prepares to showcase its Swiss travel retail exclusive product portfolio during the TFWA Asia Pacific exhibition this month. The company is seeking to lift its market share in this dynamic yet diverse region, and build on its considerable progress in Asia in recent months. The launch of its DIVA range in Thailand, Malaysia, Singapore, Japan, Hong Kong, Macau, Taiwan and the Philippines was a particular highlight, the company said, while the opening of its LINDT boutique in Kuala Lumpur was hailed as elevating the brand’s presence in the region to a new level of elegance. Similarly, considerable investment in the region into its Brand Ambassadors program (which offers customers advice and tastings so that they can learn more about the brand and choose the perfect gift) has done much to boost sales, the Swiss chocolatier noted. Peter Zehnder, Head of the Lindt & Sprüngli global duty free division, said that the Asian market clearly presented the travel retail sector with some impressive opportunities. “The Asian passenger is spending less than in the past, and price is becoming more and more important. As a highly approachable category, confectionery can benefit from this trend,” he noted. Zehnder said that LINDT would debut its new POS furniture, featuring enhanced gifting cues and highlighting the Master Chocolatiers at the show. “In 2015, we will be focusing on increasing our POS footprint in the region, particularly in mainland China, Hong Kong and Singapore. We’re aiming to increase awareness of the LINDT brand, and reflect the premium quality of the product in the highest quality presentation at POS.”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

Speaking about Asian consumers, he observed how travel retail exclusive products would play a key part in the regional strategy. “Asian customers are highly connected through social media, and their experiences are shared and followed. To be able to grow in duty free, we need to offer something special that sets travel retail apart from the domestic market. Confectionery is often an impulse buy, and it’s at the point of sale where we can make the difference. In the premium sector particularly, its important to enhance the consumer experience to tempt customers to buy,” he said. Commenting on LINDT’s presence at the show, Zehnder added: “The Asian market is particularly interested in brands with heritage and history, and this event is the ideal opportunity for us to shine a spotlight on the expertise of our Swiss Master Chocolatiers.” Gifting is an important motivation for purchase in Asia, and LINDT’s own research conducted by M1nd-set found that 47% of Asian travelers who purchase chocolate at the airport do so as a gift. At the Singapore show, LINDT will be highlighting the suitability of its ranges as gifts. To this end, its Swiss Pralines selection contains “seductive fillings - beautifully decorated and carefully packed by hand”, and they are described as a premium gift for chocolate connoisseurs and enthusiasts of dark and milk pralines. The Praline selection is offered in a range of formats and sizes to suit different travelers’ budgets. The Asian spring launch of the striking pink LINDOR Limited Edition Spring tube will be followed with the Asian debut of the turquoise summer/autumn tube. The popular 400g tubes contain smooth melting LINDOR chocolate balls in six flavors chosen to complement the season, including two new recipes, coconut and strawberry cream.

BELGIAN CRAFTSMANSHIP

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

LUXURY LIQUOR REPORT

OPULENCE IN ARABIA by

WENDY MORLEY

Whether from tourists or residents, sales of luxury spirits in the Gulf region are not slowing down

Disronno Riserva’s bottle is similar to the liqueur’s iconic vessel, but sleeker and presented in a frame with a transparent film, making it appear suspended

oak barrels that had previously contained Marsala wine produced by Illva Saronno’s wine company Duca di Salaparuta. The resultant liquid offers notes of vanilla, almonds and fruit with a peppery, dried fruit and madeira finish. Disaronno Riserva, which is presented in a bottle reminiscent of the original Disaronno, but with a new sleekness, has had a good response. “The reaction has been very positive,” says Martin Howey, Disaronno’s Global Travel Retail Director. “Disaronno Riserva has quickly proven a big hit with connoisseurs who recognize the rarity value of this product and appreciate its unique taste profile,” he adds. Howey admits that the liqueur’s base in the region is small, but says, “Disaronno has been well received in the Gulf region and we are optimistic about its future.” He says the foundation is growing stronger with the popular Disaronno sour drink. “Sampling will be key along with continued expansion of the Limited Edition Series with a new launch in October 2015,” he says, referring to Disaronno’s Italian designer series begun in 2013 with Moschino and continued in 2014 with Versace. “The Versace Edition has proved to be immensely popular in this region; Italian designerthemed products fit very with local consumer aspirations and needs.” Howey adds that he’s keen to discuss the possibility of activations with retailers in this and other regions.

Roca Patrón brings highend tequila to the Gulf It’s no secret that tequila is not especially well known outside of the US and Mexico, but that reality is beginning to change. Few com-

he luxury goods market has continued to grow in the Gulf region at a rate of 5% to 8%, according to Gulf Business. While a large portion of these sales comes from the region’s thriving tourist trade, growth rates in luxury goods are strong for residents as well. Dubai may be the unofficial world capital for lavish purchases, but in this entire exciting region, superior quality is king.

Old flame, new incarnation Disaronno has a centuries-long, rich history. Well known around the world, the Italian liqueur is easily recognizable with its iconic bottle and square topper. In 2014 Illva Saronno, owner and producer of this historic liqueur, presented an innovative concept at TFWA WE in Cannes. Disaronno Riserva is an exceptional liquid made by the marriage of Disaronno with Scotch whisky. Together they are matured for six months in

GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

Roca Patrón is made with the traditional tahona process, a time-consuming and labor-intensive method that creates a rich, complex flavor profile

an unaged tequila, Roca Patrón Reposado, which has been aged for about five months, and Roca Patrón Añejo, which has been aged for about 14 months. All aging occurs in single-use American bourbon barrels.

Shine bright like a diamond Edrington’s Macallan is well known for offering some of the rarest and most collectible Scotch whisky in the world, from exclusive vintages offered in very limited quantities each year to incredible series such as The Macallan in Lalique, which offers the finest whiskies aged at least 50 years, presented in the finest crystal in the most sophisticated design. Exclusive to travel retail, Macallan offers the 1824 series. The Macallan Oscuro (which means “dark” in Spanish) is whisky distilled between 1987 and 1997 that has been further matured in Oloroso sherry casks. As these casks are primarily first fill, the incredibly smooth whisky is imbued with a deep, rich color and intense flavor, with notes of vanilla, chocolate, red berries and sherry. This year, the highly acclaimed whisky was given a new look. While the liquid retains its taste and character, the bottle has been given a sleek, edgy design reminiscent of a tapered baguette-cut diamond and housed in a split-front display box. Reaction has been strongly positive. “The Macallan travel retail performance in the Gulf region is very strong,” says Tellis Baroutsis, Managing Director Global Travel Retail. “The financial year ending March 2015 reported another year with double-digit growth. Future expectations continue to be high for this exciting region.” In the Middle East, Roca Patrón was available exclusively at Dubai Duty Free for Q1 of 2015

panies are in a better position to change it than Patrón Spirits. This company, renowned for its superior product, is especially suited for the task; the Gulf region is well known for its appreciation of the highest-quality goods, and Patrón is able to satisfy that desire by offering the superlative Roca Patrón line. Created entirely using the tahona process, this line has been available in the Gulf region exclusively in Dubai Duty Free throughout the first quarter of 2015. The tahona process is a painstaking method wherein the agave, which in Patrón’s case has been roasted in clay brick ovens, is slowly crushed by a two-ton wheel made of volcanic stone. The resultant liquid is actually a mix of agave liquid and fiber, which is fermented together in small batches within wooden vats. The eventual outcome is an especially rich, distinctively complex tequila, with definite notes of roasted agave. Patrón is no stranger to the tahona process; the company’s core line is made with a combination of tequila made using the tahona process and that made with the more modern roller method. The Roca line, however, is produced exclusively using the tahona process. Very few distilleries still use this method because it is so time consuming and labor intensive, making Roca Patrón an even more exclusive offering. “We’ve seen tremendous enthusiasm for our new line of Roca Patrón tequilas,” says John Kilmartin, Global Director, Travel Retail at Patrón Spirits International. “We were very excited to work with Dubai Duty Free as our first partner for this exclusive line of artisanal tequilas in the Middle East.” The Roca Patrón line of tequilas includes Roca Patrón Silver,

While Macallan Oscuro retains the same rich color and taste, its packaging now reflects its exclusivity to a greater degree

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

LIQUOR NEWS

New classification, distinctive packaging Appleton Estate, Gruppo Campari’s premium rum range, has announced new naming classification and design for its core range, though the liquid inside each bottle remains the same. In making these changes, the company’s goal was “to bring a consistent and coherent naming structure, to help consumers appreciate the differences among our three core variants as well as the hierarchy between the new variants” says Richard Black, Global Integration Director for Rums at Gruppo Campari. He adds that the new system celebrates the art of blending so important to the rum industry. Appleton Estate V/X, Appleton Estate Reserve and Appleton Estate Extra 12 Year Old will now be called Appleton Estate Signature Blend, Appleton Estate Reserve Blend and Appleton Estate Rare Blend 12 Year Old, respectively. While the names and packaging of the core variants have changed, the brand’s luxury variants Appleton Estate 21 Year Old Jamaica Rum and Appleton Estate 50 Year Old Jamaica Rum remain the same. Packaging changes are intended to reflect the brand’s crafted approach and provenance. The bottle itself is well known and will not change. Packaging changes include the cap, which will include the signature of Master Blender Joy Spence. The words “Estate Distilled” and “Jamaica Rum” appear at the base of the closure. The names of the variants have been moved from the cartouche to the main label, and Appleton Estate’s heritage since 1749 is highlighted on the cartouche. The new label features the landscape of the estate and Jamaica’s Cockpit County where the estate is located. The logo has been updated, the words “Crafted in the heart of Jamaica” have been added to the bottom of the logo, and the brand’s historic medals and the Estate heart icon appear at the bottom of the label. The updated bottles have begun roll out globally.

Along with packaging design changes that reflect the brand’s craftsmanship and heritage, the core variants have new names. Appleton Estate Extra 12 Year Old is now Appleton Estate Rare Blend 12 Year Old

Poliakov reveals classic flavor range

Instead of producing an ever-increasing number of flavors, Poliakov decided to refine its classic range

GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

While many vodka companies continuously produce new flavors, Poliakov, which sells 1.3 million cases per year in 50 countries, instead decided to dial back. The company refined and revamped its classic flavors, using exclusively natural ingredients. Nadège Perrot, Poliakov Brand Manager, cites “flavor fatigue” as the reason for this decision. “The new flavors and general renewal have brought more dynamism to an already dynamic brand,” she says. “We are especially proud of Poliakov Lemon, which won a Gold medal at the Spirits Business Vodka Masters 2014.” Poliakov achieved its goal of increasing the number of countries carrying the brand, and is on a considerable growth trend. It is now one of the fastest-growing vodka brands, with strongholds in Europe, Oceania and the Middle East. The flavor range, which includes Mandarin, Lemon, Green Apple, Cranberry, Peach, Caramel and Strawberry, is available to sample at the La Martiniquaise booth L2 at TFWA Asia Pacific.

LIQUOR NEWS

Travel retail exclusives featured International Beverages will again be focusing on single malts, with particular emphasis on travel retail exclusives. At TFWA Asia Pacific Exhibition, the company will showcase Old Pulteney’s Lighthouse Collection of exclusive bottlings. This collection features three expressions of the award-winning “maritime malt,” each named after a historic lighthouse near the distillery. The three releases are Noss Head, Duncansby Head and Dunnet Head, each matured in a different type of barrel. anCnoc Highland single malt Scotch whisky will present two travel retail exclusives launched for 2015. Black Hill Reserve, named after the whisky’s Highland home Knockdu Distillery (Knockdu means “Black Hill” in Gaelic), and Barrow, anCnoc’s first peated travel retail expression. Other travel retail exclusives heading to the show will be Balblair 2004 Vintage, which is matured in bourbon barrels, and Balblair 1999 Vintage, matured in a mix of ex-bourbon and ex-sherry barrels. Each Balblair whisky is part of a limited release of a certain vintage, selected with great expertise by a Master Distiller.

“Barrow,” anCnoc’s first peated travel retail expression, is one of many that will be featured at International Beverage’s booth at TFWA AP in Singapore

Vinprom brings a little Flirt to Singapore Produced after multiple distillations of 100% grain alcohol, Flirt Vodka then runs through a filtration system of silver ions, a long and complicated process that allows for precision removal of any impurities. This precise process is modern and the brand relatively new, but Bulgaria, its country of origin, has a long history of vodka production. The first and oldest spirits factory in the Balkans is the one that produces the distillate for Flirt, meaning there is tradition along with the purity in every sip. “Flirt is the outcome of the desire to create an exclusive vodka offering not only high quality, but an ultimate vodka experience. It represents the stubborn, eager, free spirit of the young generation. Its exquisite nature drives through limits and cultural dogmas,” says Elka Khounova, ATL Manager, Vinprom Peshtera. You can taste Flirt Vodka at booth G33 during the TFWA Asia Pacific Exhibition.

Flirt Vodka captures the purity of silver, the tradition of Eastern European vodka making and the free spirit of youth www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

Jack’s Bar & Grill was the location for the first airside musical event ever in Dubai International Airport

SPIRITS: BROWN FORMAN

A GENTLEMAN’S WHISKEY Gentleman Jack is just one of the members of Brown-Forman’s Jack Daniel’s family that has been doing extremely well in the MENA region by WENDY MORLEY

he Middle East and North Africa has been especially strong for Brown-Forman over the past year. The company’s whiskey portfolio in particular has helped bring about stellar sales in the region. In fact Dubai Duty Free is the number-one retailer in the world for Jack Daniel’s Tennessee Whiskey. “We have been extending our whiskey range with more premium expressions,” says Tony McIver, Area Director, Middle East, North Africa, Israel. “The recent launch of Jack Daniel’s Gold No. 27 in duty free in the UAE has been a big success.” Jack Daniel’s Tennessee Honey is now available in travel retail throughout the region and continues to represent a large percentage of the sales volumes. In addition, a Jack Daniel’s-Gentleman Jack pack was launched as a Gulf exclusive last year. “It was designed in this region for this region and it is providing us with great sales growth,” says McIver.

Travel retail: an important channel The travel retail channel is especially important to Brown-Forman in this part of the world for special items such as Jack Daniel’s Sinatra Select. This product is now in all key domestic markets, and McIver credits travel retail with building awareness. “In fact Jack’s Bar & Grill in Dubai International Airport Concourse A was the first bar to pour it,” he says. Brown-Forman held an extraordinary 34

activation in both Jack’s Bar & Grill and Dubai Duty Free last year for the launch of Jack Daniel’s Gold No. 27. Tens of thousands of customers who purchased a bottle of any Jack Daniel’s product during the campaign were entered into a draw to win a one-kilo 24-carat gold bar. “The lucky winner was a 26-yearold from Bangladesh who had bought a bottle of Jack Daniel’s Gold to celebrate receiving a Green Card to work in the United States,” says McIver. The winner traveled right back to Dubai to collect his prize after the draw. “The promotion was very impactful due to the large displays and the extraordinary visibility of the brand. Passengers especially liked the gold bars that were on display on our personalized furniture.”

the first-ever airside music event in Dubai. “The music was provided by Dubai-based acoustic guitarist, Abbo,” says McIver. “He is originally from the UK and served as an engineer in the Royal Air Force before embarking on his musical career. This unique event was a great success, generating rich PR around Jack’s Bar & Grill and the Jack Daniel’s brand.” This year will bring plenty of action for the company. First, Brown-Forman just launched its super-premium Casa Herradura tequila range in this region. There will also be something very special happening to commemorate what would have been the 100th birthday of Frank Sinatra, one of Jack’s biggest and most famous fans.

See you in September When asked if Brown-Forman will consider an activation along these lines again, McIver says that September is always a special month for Jack Daniel’s in Dubai Duty Free. “We celebrate Mr. Jack’s birthday for the whole month. We intend to continue with this tradition and ensure that fans of Jack are fully engaged and have the opportunity to win a nice branded gift.” The contest to win a gold bar may have been the most notable event on the Jack Daniel’s calendar in the region, but it was not the only one. Jack’s Bar & Grill hosted

GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

Brown-Forman held an extraordinary activation in Dubai Duty Free to launch its Jack Daniel’s Gold No. 27

Frank Sinatra, who was one of Jack Daniel’s greatest fans and who inspired Jack Daniel’s Sinatra Select, would have turned 100 this year. Brown-Forman’s Area Director says to be prepared for something exciting in the Gulf region

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TOBACCO NEWS

Agio celebrates Year of the Goat For the Chinese Zodiac Year of the Goat, Agio released a special limited edition of Balmoral Dominican Selection Collection 12’s. The special edition of the Balmoral Collection gift box, available only in select duty free markets, was created to honor those born in the Year of the Goat, who are artists and lovers of harmony, beauty and aesthetic pleasures. This Balmoral Collection sampler is presented in a decorated wooden box containing four small Panatelas, four Panatelas, two Coronas and two Corona Tubos cigars. These cigars all feature a shade-grown Ecuadorian wrapper to ensure a rich, mild flavor. The binder is of Dominican Olor and the fill is a blend of Dominican Olor, Piloto Cubano, and Brazilian Bahia leaves. The cigars are made at Balmoral’s production facilities in San Pedro de Macoris in the Dominican Republic. During the TFWA Asia Pacific Exhibition, Agio will present several of its new innovations, highlighting the Balmoral Dominican Selection, in booth H9. Balmoral’s special Year of the Goat collection was presented in a decorated wooden box containing four small Panatelas, four Panatelas, two Coronas and two Corona Tubos cigars

Imperial Tobacco highlights Davidoff cigarettes’ “For the Hunters” campaign

Imperial Tobacco will present a new booth and smoking room at TFWA AP, capturing the look and feel of its new campaign

GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

Imperial Tobacco’s luxury cigarette brand Davidoff will have a starring role in the company’s booth at the TFWA Asia Pacific Exhibition in Singapore. Davidoff’s new “For the Hunters” campaign, which was just recently launched in the Middle East, is intended to strike a nerve with the brand’s target customer by bringing a fresh, modern edge with visuals based around three key descriptives: For those who know when to strike; For those who own the game and For those that set the pace. These descriptives highlight certain reputed characteristics of Davidoff cigarettes and of the brand’s targeted smokers, including a dedication to quality, confidence, style, luxury and distinction. Along with the new campaign, Imperial Tobacco is bringing a brand new stand along with a new-look smoking room. The stand is designed to reflect the luxuriousness and fresh, modern vibrancy of the Davidoff brand, with a meeting room that Christian Münstermann, Sales & Marketing Operations Director Global Travel Retail, says “aims to give customers a sense of the campaign and truly incarnate what it is to be a hunter,” though he is secretive as to just how. “Visitors to the stand are in for a real treat – we always aim to bring theater and entertainment to the Imperial Tobacco stand and Singapore is no exception.” Meanwhile, the new smoking room offers the look and feel of a prestigious lounge, with a self-service mini-bar and a glass overlook, allowing visitors to view the exhibition hall. Imperial Tobacco will be at booth C38.

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QUESTIONNAIRE

ALL ABOUT

Matthieu Mercier, CEO, LS travel retail Pacific

Q: Where were you born and raised? A: I was born and raised in Paris. Q: If you attended post-secondary school, what did you study? A: I attended business school in Rouen. I wasn’t quite sure what to do at the time and this seemed like a door opener. Q: Are you married? Do you have children? A: Married with three kids; my daughter is 15 and my twin boys are nine. Q: What is your favorite movie? A: Grand Départ—it’s a very personal preference, as it is written and directed by my brother Nicolas. Q: What is the last book you read? A: In Search of Lost Time by Marcel Proust. Started a few years back and I’m still not finished so I did lose a little time on the way! Q: What would you choose as your last meal? A: A taste of summer holiday at my grandparents’: peeled tomato salad with vinaigrette and frog legs à la provençale, finished with a lemon tart. Another option would be a heart-shaped waffle, filled with butter and sunk into a hot chocolate. Q: Your favourite drink? A: I assume and I hope we’re talking alcoholic drinks! In this order, depending on the time in the evening: Champagne; a Bordeaux red (Pessac-Leognan is my favorite) or a Burgundy white such as a Pouilly Fuisse; gin and tonic. Q: Do you have a passion in your life (or more than one)? What? A: Too many indeed, which sometimes puts me in trouble at home: Antiques,

vintage watches, ’70s and ’80s sports cars, tennis and sports in general (playing more than watching), 19th century classic literature. Q: Do you have pets? If so, what type of animal and what is its name? A: No pets. I have made attempts with goldfish and turtles. I’m always very sad to see them die and so I will not make other attempts. Q: Do you prefer country or city? A: I really need both, at different times of year. But if I had to choose one for good that would be country for sure. Space, air, nature—no city can compete with that in my eyes. Q: What is your favourite place to vacation? A: Sounds cheesy but true: wherever I can spend my time with good friends is always my favourite holiday. Q: What’s the first thing you do in a new place? A: When moving to a new country I usually do the following: Learn the language, find a place to live, find a school for the kids and a tennis club, and have a big night out to get a feeling of the place and of the people when they let go. Q: If you could choose any place in the world to live, where would it be? A: I feel very privileged to live in Sydney and for now I cannot think of a better place. Next one would be a place I haven’t lived in: South America, Africa or Asia. Q: Which living person do you most admire? A: Honestly everyone who, maybe for very different reasons, has to fight hard to make it through the day and actually

GULF-AFRICA DUTY FREE & TRAVEL RETAILING TFAP MAY 2015

makes it, day after day. Most of us are so privileged with health, education, jobs and a home to go to at night. Q: Which historical figure do you most admire? A: It is recent history but it would be L’Abbé Pierre for sure. A man who, born in a wealthy family, was a member of the resistance during World War II and a leader for decades in the fight against homelessness and so many righteous and important political fights. Q: Where and when were you happiest in your life? A: Every time I’ve managed to feel settled and home in a new country has felt amazing, a nice feeling of belonging to a new place while still rich with home culture. I was lucky enough that I got this feeling in the USA, in Spain, in Bulgaria and now in Australia. Every time I feel surrounded by friends and family, though that never occurs often enough! Q: What in the world would you most like to change? A: The condition of less fortunate children as a very broad choice, from health to education and of course homelessness. Q: What about yourself would you most like to change? A: My crappy forehand, which drives me totally crazy and to the edge of a nervous breakdown. Q: What is the most important piece of advice anyone ever gave you? A: Take risks. Q: What is something about you that most people would find surprising? A: I’m more terrified than a kid by any movie that’s a little scary. 

Years of Challenges Ans de DĂŠfis

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