Gulf-Africa TFWA WE October 2016 by Paramount Publishing Ltd.

TFWA WE 2016

DUTYFREEMAGAZINE.CA OCTBER 2016 · TFWA WE · VOL 26 · NO 2

Bhatia Traders opens in Mina Zayed p. 18 Dufry Sharjah set for revamp p. 22 07.09.16 MMI refines its offer p. 30

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LETTER FROM THE EDITOR

Rising

above D

espite some difficulties in certain parts of the Middle East and North Africa and a travel retail industry hit by currency fluctuations, strict carry-on restrictions by certain airlines and a slowdown in passenger growth, the region continues to be a duty free hub, with residents, visitors, those who work in the Gulf and even those just passing through all making the most of travel retail shopping. Travel to and from the region remains on a growth pattern far above global averages, and operators are not letting these opportunities pass them by. Whereas Dubai has received the most publicity in recent years, other emirates are also stepping up to be counted. Abu Dhabi Airports has seen continuous growth, and recently opened a number of creative new retail spaces. A summer of promotions and events has resulted in allover positive performance for Abu Dhabi Duty Free, which also recently launched its e-commerce site. The upcoming Midfield terminal building will offer even more opportunity for travel retail in the emirate. Long before Abu Dhabi’s airport came into existence, its seaport has welcomed ships. Mina Zayed is the UAE capital’s oldest port, and is earmarked as a world class cruise destination. Bhatia Traders has opened both a duty free store and a seaman’s club to provide service to visitors and sailors alike. Dubai’s next-door neighbor Sharjah is being promoted as a top tourist destination, with a vision to attract over 10 million visitors by 2021. Dufry Sharjah, located at the Sharjah airport, is readying itself to make the most of this influx, which has already begun. While other emirates grow, Dubai continues to hold its own and then some. Maritime & Mercantile International (MMI) has also seen a successful year, with a stellar transaction growth of 30%. Much of this growth comes from the company recognizing its own strengths and playing on them by satisfying a growing demand for truly distinctive rare wines and spirits. Travel is an industry especially affected by geopolitical and economic forces, and travel retail is affected also by regulations. The growth and success in this region only serves to demonstrate the resilience and strength of this industry, and we at Gulf-Africa Duty Free are thrilled to share this with you. Kindest Regards,

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

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

OCTOBER 2016 · TFWA WE · VOL 26 · NO 2

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. October 2016, Vol. 26, No.2. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2016 Global Marketing Company Ltd.

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

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

CONTENTS

What’s inside LEAD STORIES 8 Abu Dhabi Airports ABU DHABI AIRPORTS’ ERA OF EVOLUTION

After reaping the rewards of a summer full of popular promotions, Abu Dhabi Airports is looking forward to implementing a number of strategic enhancements and unveiling innovative retail spaces within the impressive Midfield Terminal Building

32 18

12 Dubai Duty Free BUILDING ON RETAIL EXCITEMENT

Since its February 2016 debut, Dubai International Airport’s new Concourse D in Terminal 1 accounts for almost 15% of total sales for Dubai Duty Free. And there are more developments to come across the operator’s ever-growing business

16 MEADFA TOP SPEAKERS TO ADDRESS MEADFA

This year’s MEADFA Conference in November, managed by TFWA, promises a lively and informative debate on regional issues in an impressive Dubai hotel setting

18 Bhatia Traders BHATIA TRADERS OPENS IN MINA ZAYED

Newly opened duty free shop and seamen’s club enhances the proposition at Abu Dhabi’s oldest port

32 Malaysia Airports CHANGING FOR GROWTH

Malaysia Airports (Niaga) Sdn Bhd, also known as Eraman Malaysia, wholly owned by Malaysia Airports Holdings Berhad, continues to change with the travel retail market to ensure maximum profitability

34 m1nd-set Research AN INDIAN SUMMER LOOMS

Travel retail research specialist m1nd-set believes that India will be the second most important market in Asia in the near future. Here, the company reveals consumer insights on Indian travelers in duty free

FEATURES Dufry Sharjah revamps store MMI refines its offer

22 30

A floral symphony for Amouage Agatha Paris’ modern spirit

36 38

CONTENTS

LEAD STORIES 40 Duty Free Development Consulting DDC GAINS MOMENTUM IN TR

Duty Free Development Consulting is a specialist practitioner in steering famous brand names through the often choppy waters of travel retail. Here, founder David Dayan lays out his plans

42 Furla BETTING ON EXCLUSIVES

The travel retail exclusive handbag is now a permanent fixture in Furla’s line-up, as Global Travel Retail Director Gerry Munday explains

44 Eden Park RUNNING WITH THE BALL

Parisian men’s sportswear house Eden Park is celebrating its 30th birthday at the TFWA World Exhibition with a colorful special edition duty free collection that salutes its home country

48 Editor’s Choice TRAVELERS’ DELIGHTS

Spring into the new season with a selection of the best and most luxurious treats to lift your mood, as chosen by our Associate Editor

54 Davidoff NEW RELEASES

Looking at the enormous number of announcements and releases by Davidoff this year, it’s no surprise that this cigar company continues to hold its lofty place in the world of cigars

62 China International Duty Free LUXURIOUS SMOKEFILLED ROOM

FEATURES Liquor News 50 VP International has a spectacular year 52 Brown-Forman’s portfolio helps it thrive 56

Diageo’s new man at the helm Distell understands Gulf-Africa Tobacco News

58 60 61

Chinese brand marketer China International Duty Free has unveiled a one-of-a-kind showcase for high-end Chinese tobacco products in partnership with the world’s leading luxury travel retailer

ABU DHABI AIRPORTS

Abu Dhabi

Airports’ era of evolution

Abu Dhabi Airports launched its e-commerce website www.addf.ae in July

The new children’s play area is a hit among younger passengers

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

FAYE BARTLE

espite the travel retail industry being faced with a number of challenges including currency fluctuations, geopolitical issues and a slowdown in passenger growth, Abu Dhabi Airports has seen ongoing growth in passenger traffic. As such, a positive performance has been recorded across the business during the first half of 2016. “We see good performances in categories such as duty free and F&B where sales have been buoyed by the increasing Asian passenger base,” said Acting Chief Commercial Officer Dan Cappell. “Our promotions such as the Big Ticket – with monthly grand prizes of up to AED7 million (US$1.9 million) in cash prizes – have done particularly well during the first half of the year. Sales have also been strong for sunglasses, perfumes and watches while gifts, souvenirs and pharmacies have performed well.” With ‘spend & win’ promotions, the screening of the 2016 Summer Olympics and the new Souk area in Abu Dhabi International Airport’s Terminal 3 helping to keep business lively over the summer months, the company has successfully managed to avoid the seasonal dip in business that typically affects the emirates. In fact, Abu Dhabi Airports seized the chance to capture the attention of even more passengers. “This year, Ramadan, Eid and the school break all coincided, which provided us with an excellent opportunity to present an

unprecedented number of promotions, retail exclusives and culinary treats,” said Cappell. “Our ‘spend & win’ promotion across all shops, offering cash vouchers upon purchase, seems to have been especially popular among travelers during this period. We have just launched our ‘spend & win’ summer edition to create additional customer engagement which, for the first time, has been extended across all our F&B units as well.”

More to entertain A hub that is continuously being enhanced, Abu Dhabi International Airport (AUH) has recently welcomed a new spa and children’s play area into the fold. “Our initiative of introducing play areas has proven to be a hit with our younger passengers and we are currently in the process of adding more play areas in the coming months,” said Cappell. “Tosa Spa, which is located in Terminal 1, continues to offer express services that satisfy our departing and transfer passengers, helping them to relax before their journey.” In another new venture, Abu Dhabi Airports launched its e-commerce website www.addf.ae in July. “While in its infancy, www.addf.ae allows travelers to plan their shopping ahead of their journey and pick up their purchases when they arrive at the airport,” said Cappell. “Currently

we offer up to 1,000 of the most popular products, from beauty, fragrances, food and confectionary to jewelery, sunglasses, watches, souvenirs and toys.” Products are available for guests departing, arriving, or transiting through the airport, as well as those who are using the exclusive VIP Terminal. Online orders can be made between two weeks and up to four hours before a flight. In addition, passengers who do not yet have a confirmed date of travel can shop and create a ‘Wish List’, which will allow them to keep their items for later when their trip is booked. “We are currently offering a special launch promotion of five percent off on all duty free items purchased online,” said Cappell. “The website is continuously updated to incorporate new offers, and registered visitors will receive special offers via email.”

Global appeal Looking to the remainder of the year, there are a number of events such as the Abu Dhabi Grand Prix in November, National Day and Seasonal periods that are helping to lure international arrivals. “Abu Dhabi Duty Free is actively involved in supporting local initiatives such as the Abu Dhabi Summer Season campaign and the Abu Dhabi Grand Prix,” said Cappell. “We have been work-

Novel features, such as the reading corner, are inspired by the ever-changing demographics of passengers arriving at AUH

Tosa Spa, located in Terminal 1, offers express services

Several enhancements are being planned for Duty Free and F&B over the next few months

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ABU DHABI AIRPORTS

ing closely with the Abu Dhabi Tourism & Culture Authority and just last week launched a special promotion especially for passengers arriving into Abu Dhabi, who can win some wonderful hotel stays and events’ tickets.” In order to further elevate the passenger experience and satisfaction levels, several enhancements are being planned for duty free and F&B over the next few months. “We are motivated by the ever-changing demographics of passengers arriving at AUH, and we strive to keep up with that and adapt our services to cater for all tastes as best we can,” said Cappell.

An icon in the making As for the upcoming Midfield Terminal Building (MTB), all core commercial contracts are on track to be awarded by the end of the year. “The majority of the MTB RFP’s have been issued and a number of the key contracts have already been awarded, for example

duty free & F&B,” said Cappell. “It is expected that we will have completed and awarded all the concessions by the end of 2016. New partners include Aer Rianta, Lagardère and Emirates Leisure Retail. We are looking forward to continuing our relationship with operators such as SSP, HMS Host and Airest who have also been successful in acquiring contracts for the new terminal.” As the terminal takes shape, the vision to create a unique space is holding strong. “We are working very closely with all of the successful parties to deliver a design that is spectacular, sensational and exceptional,” said Cappell. “Once operational, the MTB will constitute a number of world first exclusives in terms of its F&B offering, including celebrity chef inspired outlets that are unique to AUH. These innovative ideas will be spread across 11,300 square metres of dining space.” With all the major retailers estimated to be on-site in the first quarter of 2017, there will certainly be more cause for celebration when the world gets its very first glimpse of the new set-up.

The 2017 Summer Olympics was screened in Abu Dhabi International Airport’s Terminal 3

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

Abu Dhabi Airports’ ‘spend & win’ promotion has been extended across all its F&B units for the first time

DUBAI DUTY FREE

Newly opened Concourse D in Dubai International Airport, Terminal 1 is delivering healthy levels of penetration

Building on retail excitement Since its February 2016 debut, Dubai International Airport’s new Concourse D in Terminal 1 accounts for almost 15% of total sales for Dubai Duty Free. And there are more developments to come across the operator’s ever-growing business

ith a capacity of 18 million passengers, Concourse D opened in Terminal 1 at Dubai International Airport on February 24, 2016 and is home to 60 international carriers operating 350 daily flights to over 90 destinations. Colm McLoughlin, Executive Vice Chairman and CEO, Dubai Duty Free, says the opening of Concourse D is already helping to grow its business, delivering healthy levels of penetration. The sales performance as of August 31 has been very much in line with expectations, generating over US$176.6 million in sales since its opening. The best performing categories are fragrances and liquor. Fragrances have contributed over US$36.2 million in sales by value, while liquor has generated US$21.8 million in sales during the same period. In addition, the special brand concepts, such as Ralph Lauren, Burberry and Tiffany among others, have achieved over US$5.59 million sales in retail value, which Tahir describes as “very pleasing”, despite the way-finding challenges caused by the new, unfamiliar location. Overall, the operator is pleased with the sales performance considering how difficult the year has been for luxury goods.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

pletely re-planning its retail offer in the Departures duty free area of this building due to this expansion. The opening of Al Maktoum International Airport Phase II, with two concourses, one terminal building, and a capacity for over 120 million passengers, is still slated to be around 2023. The work on the master planning for the retail areas is at an advanced stage, and the design concept is nearly completed. Each concourse has three nodes and each of the nodes will have retail areas in addition to the retail space in the terminal building. The initial planning of the retail areas, and the planning for other commercial activity in the nodes such as food and beverage, has been done in a way that provides the best opportunity for success for the commercial activity in these nodes. Dubai Duty Free is expected to operate about 88,000 square meters of retail areas in Al Maktoum International Airport Phase II.

Targeting the millennial generation

Year to date, Concourse D now accounts for 14.75% of total sales at Dubai Duty Free. Since Concourse D opened, the only change has been the upgraded location for Cartier watches within the watches section. But many exciting developments are planned elsewhere at Dubai International Airport. The renovation and refurbishment of Concourse C is on track and Dubai Duty Free expects to open the first part of the new retail areas, and around the Control Tower in the area linking Concourses B and C, in December of this year. This part of the retail area is around 1,300 square meters and is designed to help the company to attract the departing passengers who are walking from Concourse B to C for their flight after checking in at Terminal 3. The remaining development of the retail areas in Concourse C will be completed in phases in 2017 and stretching until early 2018.

Expansion of Al Maktoum International Airport Meanwhile, the expansion of the passenger terminal building in Al Maktoum International Airport is well under way and should be completed by the third quarter of 2017. The contract for this work was awarded earlier this year. Dubai Duty Free is com-

To woo the millennial generation, Dubai Duty Free will soon launch a new social media marketing campaign to engage passengers through various channels such as Facebook, Twitter and Instagram. McLoughlin hopes that with the original content and an efficient marketing campaign, these platforms will help to form stronger relationships and encourage customer engagement that bolsters loyalty and pre-awareness of the duty free offer and services. Via social media, Dubai Duty Free intends to share information about store concepts, product variety, trends and niche products availability, sales discounts, promotions and special offers, facts and tips about travel, shopping and exclusive offers to travel retail. A new Dubai Duty Free campaign is set to take place on the ground, too, and details will be revealed in the coming months. Furthermore, the operator has revamped its website (http:// online.dubaidutyfree.com) with improved navigation for a better customer experience and an integrated section on promotions/ offers, which are now applied in real time as you shop. Also, there are more calls to action, such as Buy Now, to better engage the customer, and a reduced number of steps for faster check-out. Other new options include a dedicated landing page for brands to better display their products, an area to showcase exclusive/premium/limited-edition products, and enhancements to the Win With DDF competition that includes easy option to buy tickets for a beneficiary. In 2015, Dubai Duty Free’s online sales reached US$17.5 million and the operator is looking to increase that this year. Future plans include building a mobile app, which is part of the next phase of its e-commerce platform. “We expect mobile technology to be much more prevalent in our operations, so as you walk through Dubai Duty Free you will receive a message on your smartphone telling you to go to a particular store and get a 20% discount,” says McLoughlin. To support its growing operations, Dubai Duty Free opened a purpose-built, state-of-the-art distribution center in 2008, and was the first retailer in the region to have an automated storage and retrieval system. The retailer has both pallet and tote warehouses. The pallet warehouse is used to store big items mainly in cartons (such as Nido and Tang) and the tote warehouse is used to store small products like electronics, costume jewelry, cosmet-

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DUBAI DUTY FREE

ics, etc. It has special handling areas, including a strong room for expensive items, cold storage for chocolates, chiller rooms for caviar, etc, humidifiers for cigars, and manual handling areas for fast-moving goods. The distribution center aims to provide a comprehensive, endto-end system that allows the company to manage inventory and to analyze warehouse performance. Also, it enables the firm to respond to a variety of business requirements and meet complex and changing shop floor requirements with the ongoing retail expansion projects.

Management restructure In order to ensure that the management structure is in place for Dubai Duty Free’s significant growth plans, the company has made a number of management changes. In light of the retirement of George Horan, President of Dubai Duty Free, who left the company at the end of May after 33 years of dedicated service, Colm McLoughlin, Executive Vice Chairman and Chief Executive Officer, announced the appointment of Ramesh Cidambi, from Senior Vice President Logistics and IT, to Chief Operating Officer. Cidambi has played a vital long-term role in heading up key back-room functions for the retailer. He now reports directly to McLoughlin. In his expanded role, he also leads the finance and purchasing departments.

Ramesh Cidambi is the new Chief Operating Officer

Salah Tahlak, formerly Senior Vice President – Corporate Communications, has been appointed Executive Vice President

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

George Horan, President of Dubai Duty Free, retired after 33 years of service

In addition, Salah Tahlak, from Senior Vice President – Corporate Communications, and Nic Bruwer, Vice President, Human Resources, have been appointed as Executive Vice Presidents under Cidambi, Further announcements will be made shortly, according to Dubai Duty Free.

Nic Bruwer, formerly Vice President, Human Resources, has been appointed Executive Vice President

Colm McLoughlin, Executive Vice Chairman and Chief Executive Officer

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MEADFA

Top speakers

to address

MEADFA This year’s MEADFA Conference in November, managed by TFWA, promises a lively and informative debate on regional issues in an impressive Dubai hotel setting MEADFA President Sean Staunton

eading players in travel retail from across the Middle East and Africa will be heading to Dubai in November for the 2016 MEADFA Conference, managed by TFWA. Following a welcome by MEADFA President Sean Staunton, top-flight speakers from the region and beyond will lead two days of debate focused on the challenges facing the industry in the region. Among the business leaders sharing their insights are Dubai Duty Free Executive Vice Chairman and CEO Colm McLoughlin, Lagardère Travel Retail Chairman and CEO Dag Rasmussen, and Jack MacGowan, CEO of Aer Rianta International. They will be joined by senior representatives from leading regional retailers, including Tourvest Duty Free, Hamila Duty Free, Flemingo International, IDFTA and IDFS Morocco. Among other speakers at the MEADFA Conference, UN World Tourism Organization director for the Middle East Amr Abdel Ghaffar will be sharing his views on the region’s development, Richard Dean, one of the Gulf ’s most experienced business commentators, will explore the economic outlook, and young entrepreneur Suzie Wokabi will be looking at the business climate in Africa. Delegates will also hear a Middle East perspective on the growing millennial

consumer group from Vrinda Singh, a travel industry analyst at Google, and Elena Nikolova, the founder of influential website MuslimTravelGirl.com. This year’s venue is the impressive Le Méridien Dubai Hotel & Conference Centre. Located near Dubai International Airport, the hotel has undergone a major renovation. A lively program of social events will include a welcome cocktail reception sponsored by Dufry at Le Méridien Dubai Hotel and Conference Centre, and a gala dinner hosted by Dubai Duty Free at the Jumeirah Creekside Hotel. Customized sponsorship packages are available, with opportunities to exhibit products, showcase brands, and more. Several companies have confirmed their sponsorship: Platinum sponsor KT International; Lunch sponsored by Qatar Duty Free; Gold Sponsors Aer Rianta International and Diageo; Silver sponsor Aphrodite Duty Free Shop; and Smoking lounge sponsor JT International. Exhibitors include: Philip Morris International Services, Heintz Van Landewyck, Oriental GT Inc, Mars ITR, Panzerglass and Oriental General Trading. Coffee Break sponsors are Furla and Nestle International Travel Retail. Lagardère Travel Retail will provide the lanyards and Travalo the portfolio. Commenting on the event, Staunton

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

said: “After enjoying the famous Jordanian hospitality in 2015, we’re returning to Dubai this year for what I am sure will be an extremely lively and informative conference. We’re honored that a number of senior industry leaders have accepted our invitation to address our event this year, and we’ll also be hearing from several experts on travel, tourism and consumer trends. “This has been, and continues to be, a challenging period for many companies in the Middle East and Africa regions, and that makes it all the more vital for the stakeholders in our industry to come together to discuss ways to drive the business forward. As ever, the MEADFA Conference will gather all the region’s major retailers, brands and landlords for two days of debate, exchange and networking, at a fantastic venue.” TFWA President Erik Juul-Mortensen said: “The Middle East and Africa is one of duty free and travel retail’s most exciting regions and Dubai, as the region’s leading market by sales, is undoubtedly one of the world’s most important duty free locations. We are delighted to be returning to this exciting city in 2016 for what is promising to be an outstanding event.” The MEADFA Conference 2016 will take place on November 28-29, with the opening cocktail held on November 27.

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BHATIA TRADERS The company’s latest duty free complex stretches around 500 square metres

Bhatia Traders opens in

Mina Zayed

Newly opened duty free shop and seamen’s club enhances the proposition at Abu Dhabi’s oldest port Bhatia Traders’ shops offer more than 5,000 products from various categories

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

FAYE BARTLE

Seamen’s clubs feature multi-cuisine dining, a live band, free Wi-Fi, two pool tables, foosball and an outdoor patio set-up for live barbecue stations

harjah-headquartered Bhatia Traders has added an impressive new location to its growing portfolio, with a duty free shop and seamen’s club at Abu Dhabi’s Mina Zayed. The UAE capital’s oldest commercial port, Zayed Port (also referred to as Mina Zayed), is situated in the northeastern part of the emirate and has played a vital role as the main city port for the last 40 years. “Our new duty free shop opened a day before Ramadan – 5 June 2016 – while the club has been operational since 1 May,” said Managing Director Rajeev Bhatia. “The format is very similar to the other ports of UAE where we have presence.” Covering an area of 5.1 square kilometres, Zayed Port comprises three basins with the main port handling the growing RoRo, general and bulk cargo volumes, as well as the emerging cruise business. The emirate’s plans to develop the port as a world-class cruise destination complete

with a state-of-the-art terminal building and a traditionally themed souk and heritage area is catching the attention of those in the tourism industry, with its central location is proving attractive to a growing number of cruise tour operators around the globe. “The overall area of our duty free complex is about 500 square metres and we split it so that 350 square metres is for the club and 150 square metres is for the shop,” said Bhatia. “In terms of services, just like all our other clubs, there is multicuisine dining, a live band, free Wi-Fi, two pool tables, foosball and an outdoor patio set-up for live barbecue stations during the winter. The duty free shop follows the format of our current shops, offering more than 5,000 products from various categories.” The move further builds on Bhatia Traders’ network of seven seamen’s clubs, ten duty free shops and multiple bonded warehouses across seaports of the UAE.

“With this location we can proudly say that, since its inception in 1969, Bhatia Traders is now present in all the major seaports of the UAE,” said Bhatia. “This is a big advantage for the shipping industry, presenting captains and chandlers with the convenience of dealing with the same format and prices across all seaports of the UAE. Having a presence in the capital city is exciting and it gives us another reason to bolster our business dealings in Abu Dhabi.”

Charting a smooth course The company is already looking to take the next step in developing business. “The seaport business is dynamic and is affected by a number of global factors, including the needs and requirements of seamen that continue to evolve over time,” said Bhatia. “We started by offering basic mobile phones, for instance, and now offer multi functional smart devices in the assortment. The same goes for confec-

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BHATIA TRADERS

Bhatia Traders is now present in all the major seaports of the UAE

tionery: we began chocolate bars and now carry travel retail packs of Ferrero, Toblerone, Hershey’s, Cadburys, Nestle and Lindt. Growth opportunities cannot be structurally defined, but they are there for sure.” In the meantime, Bhatia Traders continues to look for new product suppliers and to forge collaborations with everyone from Lindt, Mondelēz International to Kipling, Revlon and L’Oréal skincare. “Seamen spend most of the time on board away from their loved ones,” said Bhatia. “We took a decision to offer them a similar experience to that of airport travelers. After all, everyone shops at duty free for one simple reason and that is gifting for loved ones. Our suppliers understand this and have done extensive research on the purchase ethics of travellers. They know their pack sizes versus value for money offers and come up with great products that are not available on the domestic market. This helps us enhance our position as a duty free operator and differentiates us from any regular retail store present outside the seaport. Seamen are excited to find special products with distinct designs and pack sizes. It satisfies their shopping experience.” As the region’s maritime industry continues to develop, all eyes are on the opportunities ahead.

“With the growing potential of the shipping industry in the UAE, liners from across the globe are increasingly choosing UAE ports as a stop off destination,” explained Bhatia. “This gives us a vast opportunity to cater to different nationalities. Unlike in the past, where most of the seamen were from Asia Pacific, today we cater to US Navy, French Navy, Indian and Sri Lankan ship liners as well as Turkish ships. This is in addition to customers from China, the Philippines, Korea and Vietnam. Our strategies have adapted in line with this and we offer products that are suitable for all. Revlon color cosmetics, for example, are a big hit with all nationalities as they are easy to pick a gift set for ladies.”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

Bhatia Traders is attending TFWA World Exhibition in Cannes with networking at the top of the agenda. “The show has always been important for our business,” said Bhatia. “Our aim is always the same: to seek, explore and acquire new partnerships with multiple brands.” Further expansion plans and new announcements are expected to be made before the year-end. Bhatia Traders’ duty free outlets, bonded warehouses and seamen’s clubs are located in Sharjah, Jebel Ali, Umm Al Quwain, Fujairah, Khorfakkan, Ras Al Khaimah, Ajman, Abu Dhabi and Hamriyah Free Zone. To find out more, visit www.houseofstbhatia.com.

Bhatia Traders opened a new duty free shop at Mina Zayed on 5 June 2016

DUFRY SHARJAH

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

Dufry Sharjah set for

September revamp by

FAYE BARTLE

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

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

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

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

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

The refurbishment project is expected to be complete by May 2017

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

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

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

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

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MCM

Storing up

success In less than two years, MCM has grown its travel retail footprint massively. Now, the German luxury brand’s sights are set on further expansion in the Middle East, Europe and the Americas by

MARY JANE PITTILLA

The Milla Primary is a classic tote made from Italian leather in bold Bauhaus colors such as blue, red and yellow

ess than 18 months ago, MCM embarked on a rebooted travel retail strategy under its Travel Retail Director, Nicolas Roptin. Today, the German luxury brand is thriving in the airport and downtown channels. The new strategy for the 40-year-old brand is working like a dream. Roptin reports a double-digit upswing in travel retail sales over the past year – an impressive result, given the various geopolitical events that have profoundly affected all players in this sector. “We’re doing well,” he says, noting the travel retail channel’s resilience in the face of such challenges. “Like everybody Dubbed Munich Epoque, the Autumn/Winter 16 collection continues MCM’s year of 40th anniversary celebrations and features “boldly elegant” designs inspired by its birthplace in the German city

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

else, we are facing geopolitical and economic issues, but overall we’ve been more resistant and we keep growing.” MCM is popular among Asia’s luxury-loving travelers and the company is seeing increasing numbers of South East Asian customers. Middle Eastern customers are also “very important”, notes Roptin. The ambitious company’s objective is to open good-sized stand-alone stores in well-targeted locations across Asia, Europe, the Middle East and the Americas. This has been achieved in Asia, where a major location spanning over 240 square meters began trading in April 2016 at Hong Kong International Airport Terminal 1, directly operated by MCM. The brand created a special-edition airport range for this milestone event. Fans of clever retail visual merchandising techniques can also delight in the store’s airport-style baggage carousel display for the accessories. A sizable, 100 square meter shop opened in Singapore Changi Terminal 1 in July, in partnership with Dufry. Also in a strategic location is a new store recently opened at Bangkok Suvarnabhumi Airport, operated by King Power. In China, a 60 square meter stand-alone shop opened at Shanghai Pudong Terminal 1, operated with King Power Group (Hong Kong) subsidiary Orient King Power, boosting the operator’s fashion and luxury offer at the domestic terminal. Taiwan is proving a rich seam of sales for MCM, where the brand boasts three Taoyuan airport locations in Taipei, comprising two stand-alone stores and a shop-in-shop. Over in Australia, Gebr Heinemann opened a 60 square meter space at Sydney Airport in May.

This Luxus backpack in croco-embossed Italian leather from the Autumn/ Winter 16 collection comes in a signature MCM shape

Bag charms are among MCM’s bestselling products

Other Asian region openings during 2016 have included Kuala Lumpur International Airport and Beijing Terminal 3. In September, a 75 square meter store was scheduled to open in Shenzhen Airport’s domestic terminal, featuring a “very high” façade, says Roptin. In Europe, a key travel retail target, Munich Airport is another significant opening for the brand, which was established in the German city in 1976. Also in Germany, a directly operated airport shop in Frankfurt opened for business in September. Meanwhile, Lagardère Travel Retail is operating an MCM space in its multi-brand store at Amsterdam Schiphol Airport. In the Americas, where Roptin sees huge potential for the brand, MCM has debuted at Toronto Airport. This follows the opening of a store at Los Angeles Airport in November 2015. Now, the focus is on London and Paris airports, where the company is scouting for locations, and is looking to return soon to Dubai International. There’s certainly lots more in store for 2017.

Autumn/Winter 16 collection hits the shelves In early July, the Autumn/Winter 2016 collection landed on travel retail shelves. Dubbed Munich Epoque, the collection continues MCM’s year of 40th anniversary celebrations and features “boldly elegant” designs inspired by its birthplace. Looking to Munich’s artistic heritage, the collection incorporates Baroque-inspired patterns juxtaposed against clean yet vibrant colorways. Reds, gold, deep blues and yellow ochre create the palette.

Taken in part from Munich’s Residenz Palace, the motifs and colors that run through the collection bring the designs back home with a contemporary feel. Details include hand-sewn embroidery, brocade, Swarovski crystals, applique velvet, beading and waxed canvas. The Baroque Print line is a stylish and modern interpretation of classic German artisan tradition. This print adorns key silhouettes such as the lightweight Kira shopper and Stark backpack. Inspired by MCM’s classic heritage travel collection, the lightweight Berlin Series pieces pay homage to the archive with the addition of bold rivets and studs. New season color ruby red is introduced as well as a Tambourine cross body style. Newly restored from MCM’s archives, the youthful Patricia shoulder bag is deceptively roomy. The bag features an adjustable strap with shoulder tunnel adornment, automatic laurel lock and rhodium hardware. The Milla Gepard boasts luxurious calf hair, leopard patterns and a detachable fox-fur charm, and is available in tote, clutch, and backpack shapes. Resurrected from MCM’s archives, the Mitte Brocade bag pays homage to the rich art of brocade in colored silks with gold and silver threads, and metal embroidery. Inspired by a vivid range of Bauhaus colors, the Milla Primary offers a classic tote made from Italian leather in bold hues such as blue, red and yellow. The Luxus line features croco-embossed Italian leather and is available in a range of styles including backpack, messenger, and briefcase.

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

TFWA

Time to

GROW

Fresh data demonstrates the power of duty free and travel retail as a pathway to new consumers and increased sales in the watch and jewelry category

recent study from leading duty free and travel retail association TFWA has highlighted how the duty free and travel retail channel can provide a lucrative market opportunity to watch and jewelry brands. The watches and jewelry report is part of the TFWA Category Reports series, produced by Counter Intelligence Retail, travel industry research and insight specialists. It is based on approximately 1,000 shopper interviews conducted at four key airports across the globe. A minimum of 50% of the sample were duty free buyers. The study found that a substantial 78% of shoppers buying for themselves purchased a brand they do not usually buy, while 40% purchased the brand for the first time and seven in ten buyers had no prior awareness of the brand. “This indicates that the channel can offer outstanding exposure to new audiences, and that the travel retail sector is a sound springboard to new customers.

It is also the perfect place to upsell, with one in five trading up from their domestic product ranges and brands,” says TFWA President Erik Juul-Mortensen. However, only one in two watch and jewelry buyers purchased for themselves, the lowest of all categories in the survey, while almost one in every two purchases are for a gift. With the gift buyer a key travel retail customer, this also presents significant opportunity for the category, TFWA believes. Another opportunity lies in turning the category’s many browsers into buyers. While one in seven shoppers visit watches and jewelry, only 5% buy. This equates to a conversion rate of just 34%, the lowest of all the categories. “The watches and jewelry category in global duty free and travel retail was valued at US$5.7 billion in 2015,” says JuulMortensen. “However, the sector needs to do more to turn the very substantial amount of watches and jewelry browsers into buyers, as currently about one in

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

seven airport shoppers visit the category but only 5% buy. By focusing on improving conversion, the category has plenty of scope to capitalize on the significant opportunity presented by the duty free and travel retail channel.” The study also found that on average, watches and jewelry shoppers visit 2.1 categories, which is significantly higher than shoppers overall (1.5). This would indicate that those visiting the category have more time to shop, making them valuable within the airport retail environment. “While passenger numbers are increasing significantly across the globe, our ability to turn these travelers into customers has not kept pace, and conversion is a major issue for our industry,” warns JuulMortensen. “As the poorest performer, there is clearly considerable scope to drive sales in watches and jewelry.” The full report is available as an exclusive benefit to TFWA members at www. tfwa.com.

MARITIME & MERCANTILE INTERNATIONAL

MMI refines

its offer A knack for courting stellar sales while satisfying a growing demand for rare and unique liquor has led Dubai-based Maritime & Mercantile International to enjoy 30% growth in transactions in the space of a year by

Online revenue has grown by more than 200% versus last year

FAYE BARTLE

reaking a world record for the largest duty free liquor transaction – for 19 bottles of The Macallan Fine and Rare worth US$361,000 in December 2015 – cemented the reputation of Maritime & Mercantile International (MMI) as a leading player in global travel retail. Far from being a rare achievement, the company, which is a leading alcohol distributor in the UAE and Oman, has also sold through its initial allocation of The Macallan ‘Golden Age of Travel’ – three bottles priced at US$40,000 per bottle.

“We have seen more than 30% growth year-to-date in transactions underlining how our strategy for quality and value driven items has resonated with a wider customer base,” said Iain Delaney, Chief Operating Officer. It marks a significant milestone for the company, a subsidiary of Emirates Group, which is fast making a name for itself as a preferred supplier of innovative products to duty free retailers – namely the award winning Le Clos finest wine. “We have grown sales of our rare and unique items, which has been demon-

strated through significant purchases of The Macallan,” said Delaney. In the wine category, MMI has enjoyed significant sales of collectable cult Napa Valley wine Screaming Eagle and classics, such as pre WWII Château Lafite. “Our recently enhanced ecommerce site and increased digital focus has seen online revenue grow by more than 200% versus last year and we believe this is the tip of the iceberg,” continued Delaney. “It provides customers with the convenience to order from the comfort of their own home or even while in-flight and our team meets them with their purchases when they arrive at Dubai International.”

A bespoke drop

Iain Delaney, Chief Operating Officer, Maritime & Mercantile International

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

MMI’s newest store, which opened in Dubai International’s Concourse D in March – its sixth outlet at the hub – is characterized by an enhanced store design with an easier flow for customers to navigate the range, a dedicated tasting area featuring 16 wines to sample – 11 of which are available to ‘try before you buy’ on an complimentary basis – and engraving services that allow customers to personalize any bottle. “We strive to continually deliver exceptional customer experiences, from offering niche and unique items such as launching world’s most expensive bottle of wine the Château Margaux Balthazar

MARITIME & MERCANTILE INTERNATIONAL

The world’s most expensive bottle of wine, the Château Margaux Balthazar 2009

2009 and showcasing the world’s most complete collection of Penfolds Grange through to providing a range of products that deliver quality and value,” said Delaney. “Great examples of our quality and value proposition include the US$28 Clarendelle from the famed Château Haut Brion, a champagne range that starts at only US$28 and showcases boutique growers such as Champagne Delamotte through to popular maisons such as Pol Roger, Ruinart and Billecart Salmon.” The company has also enhanced its spirits portfolio, which features the largest range of boutique gins in travel retail through to whiskies from the Highlands of Scotland, such as The Macallan and Ledaig, to the Far East with Kavalan from Taiwan.

Taking the taste test Around 40% of MMI’s customers participate in a tutored tasting – a strategy that has proven effective at building loyalty as well driving volume growth. Indeed, the exercise typically doubles the rate of sale of the wines featured. “The First Growth tasting is a unique offering as Dubai International is the only airport in the world where you can 30

sample all five of Bordeaux’s most famed estates,” said Delaney. “Customers can taste five iconic First Growths available as a flight of five at US$100 or by the glass for US$30. We have created a value driven offering with this service to make it an accessible treat for enthusiasts and give collectors the ability to taste to aid their selection. We have received an overwhelming response from our customers both new and existing.”

Popping the cork on new arrivals In terms of new novelties, the RSP US$333,500 Dalmore Constellation Collection has been performing well since its arrival in May. Le Clos was selected as one of four retailers in the world to feature the exclusive drop – an extremely rare ensemble that, for the first time, brings together a spectrum of single malt Scotch whisky vintages created in The Dalmore’s iconic Highland distillery between 1964 and 1992. Comprising 21 bold, individual rare whisky releases, it is currently on display in Le Clos’ main shop in Concourse B at Dubai International. “We have had interest in the product from customers locally and internation-

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

Dubai International is the only airport in the world where you can sample all five of Bordeaux’s most famed estates thanks to the First Growth tasting

Concourse D Macallan A new store opened at Dubai International’s Concourse D in March

ally, selling some additional bottles from The Dalmore Constellation range,” said Delaney. “We find that many whisky lovers traveling through the airport will pop in to see the collection and will often take a photo with this rare display.”

Toasting to opportunities With a reputation for staying a step ahead of the curve, MMI is currently leveraging the growing interest in Japanese whisky. The company began building reserves

several years ago through its partner relationships and auction-based strategy. Over the next few months the company will be launching a number of exciting additions to its range, which includes new icons such as Old Pulteney 1989, Kavalan Vinho Barrique, Camel Valley Sparkling wine, Yamazaki 18 Year Old and Et. No 1, an extremely rare and boutique pre-phylloxera cognac presented in a hand blown art glass for which Le Clos is the regional exclusive retailer.

Further enhancing the customer experiences is also a core part of the plan. “We have partnered with a number of high profile wine and spirits producers to create a program of ‘money can’t buy’ customer events over the next six months,” said Delaney. These will include an intimate dinner with Chateau Margaux, a wine maker dinner with Californian winery Peter Michel, an interactive experience with leading tequila producer Patron and a Champagne evening with Billecart Salmon. “Moving forward we will continue to focus on our digital shop front with the website being a key focus area, offering an enhanced range of exclusive products and promotions with an education slant appealing to the enthusiast through to the collector,” said Delaney. “We are continuing to work with our partner Dubai Airports to expand our footprint and reinforce the premium shopping proposition to passengers. We are also working with Emirates to provide more convenient shopping opportunities for passengers within its Dubai lounge network. This is on top of working to expand our customer reach with some of their loyalty programs, such as Emirates High Street, where we are working on a broader range to appeal to an even wider audience.”

MMI has seen more than 30% growth year-to-date in transactions

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MALAYSIA AIRPORTS

Changing for Growth Last year Eraman officially opened its spectacular departures emporium in klia2 as the main concessionaire of the terminal

raman started out with high-end fashion boutiques at Sultan Abdul Aziz Shah International Airport in Subang in 1998. Since then the company has expanded its business in Malaysia to five international airport and two domestic airports including KLIA and klia2. Positioned as the largest duty free and airport travel retailer, Eraman offers a wide range of competitively priced duty-free, lifestyle and F&B products at major Malaysian airports, backed by excellent customer service. The company has continuously placed great emphasis on creating a memorable airport experience for travellers, fostering a sense of place. In this regard, Eraman continues to provide customers with a wide selection of local and international quality merchandise at competitive prices while actively pursuing customer service excellence which is complemented by a ‘one-stop shopping centre’ concept for the customer convenience. As such, Eraman believes in interspersing both retail and F&B together. The availability of a wide choice of both shopping and dining outlets complements the overall offering provided to travellers. Zulhikam Ahmad, General Manager, Malaysia Airports

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

Malaysia Airports (Niaga) Sdn Bhd, also known as Eraman Malaysia, wholly owned by Malaysia Airports Holdings Berhad, continues to change with the travel retail market to ensure maximum profitability by

REBECCA BYRNE Liquor and tabacco are among the key product categories which generate the highest revenue for Eraman

(Niaga) Sdn Bhd comments: “Our philosophy is to ensure that our customers will have a pleasant shopping experience, akin to bringing the concept of downtown shopping into the airport, which means that even though customers might be in the airport, they can still be spoilt for choice and shop as if they are in the city with plenty of options of brands and product categories to choose from.” Looking to the future, the company will continue to maximise target revenue by several methods. These include leveraging strategic partnerships with a number of travel retail distributors, banking players and other business partners; adopting a more lifestyle approach in Malaysian airports retail presentation to enhance the airport consumer experience; providing an exclusive experience, ensuring sustainability of its own brands; and nurturing its business partnerships in travel retail industry. More initiatives such as thematic and tactical marketing programs have been implemented to improve footfall to the outlets. Zulhikam adds: “For each financial quarter, there will be a major marketing promotion campaign aimed at increasing per ticket spending and more importantly, to drive incremental rev-

The year-long Eraman Shopping Extravaganza Campaign includes the opportunity for a customer to win a car

One lucky passenger at Malaysia Airports is presented with his car, a prize in the year long Shopping Extravaganza Campaign

Zulhikam Ahmad, General Manager, Malaysia Airports (Niaga) Sdn Bhd

enue. There will also be more online promotions, more social media awareness and engagement programs, boosting the features of our Eraman Privilege Card (EPC) loyalty card to be more competitive and relevant. We are looking to drive more impactful relationships within the strategic marketing collaboration partnership with a leading local bank as well as the brand principal.” With this in mind, the company launched a year-long Eraman Shopping Extravaganza Campaign. This consists of three contests, namely Shop & Style, Shop & Win and Shop & Drive. The program offers a range of promotional activities, aimed at increasing brand awareness, rewarding loyal customers, tapping effectively into the number of travellers patronising the airports and elevating awareness of the location of Eraman outlets. All shoppers have to do is spend a minimum of RM250 in a single receipt or cumulative receipts and stand a chance to take home weekly prizes and a grand prize of a car in each campaign. Zulhikam adds; “We are pleased with the response received for the first phase of the Eraman Shopping Extravaganza: Shop & Style. This campaign was meant to increase the brand awareness

for Eraman and the location of its outlets, as well as tap into the pool of travelers patronizing the airports. We are proud to say that this campaign has succeeded. Malaysia Airports (Niaga) Sdn Bhd by itself has been on a positive growth compared to the very challenging 2015, achieving a 14% growth on a year to date basis”. Zulhikam talks about the demographic visiting the airports: “Our main target market are consumers from Malaysia, India, Indonesia, and the People’s Republic of China for both KLIA and klia2. Of course, in addition to this any person using the airport is our target as we cater for all retail and F&B categories which applies to businessman, families, tour groups as well as independent travellers.” Liquor, cigarettes, chocolates, perfumes and cosmetics by rank are among the key product categories which generate the highest revenue for Eraman With its cutting edge strategy and impressive outlets, Eraman is set to deliver on its promise to provide the best retail and F&B experience for travellers, as well as ensuring a positive revenue growth.

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M1ND-SET RESEARCH

Indian summer

looms

ndia is on course to become the second biggest market in Asia in the near future. That’s the view of travel retail researcher m1nd-set. According to m1nd-set’s macroeconomic research, the travel behavior of this nationality will be driven by a forecast GDP growth rate above the world average. Furthermore, the Indian middle income group is on course to grow to 174 million households by 2030. m1nd-set’s latest survey of Indian nationals’ travel behavior polled international travelers who had visited a duty free shop in the Asia Pacific region in the last three months. Some 800 people responded to the online survey. The average age of the Indian duty free visitors surveyed was 41, with 81% males and 42% millennials. Some 43% of respondents had income well above the average, with 50% in either senior or middle management. Around half (51%) were on a business trip. More than 60% (64%) said they visited duty free shops on every trip, with 22% citing every second trip and 9% every third trip. Indian visitors to duty free shops on average shopped 3.6 product categories: confectionery was listed by 72% of respondents, alcohol 62%, perfumes 57%, electronics 41%, cosmetics 28%, souvenirs 25%, fashion 24%, accessories and jewelry 18%, tobacco products 15%, and stationery 11%. The average conversion rate (buyers out of visitors) was 51%, with alcohol at 72%, confectionery 70%, tobacco products 69%, perfumes 57%, fashion 50%, souvenirs 46%, cosmetics 45%, stationery 42%, electronics 38%, and accessories and jewelry 24%.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

Indian duty free visitors purchased on average 2.3 categories, with confectionery the most popular category at 58%, alcohol 51%, perfumes 37%, electronics 18%, fashion 14%, cosmetics 14%, souvenirs 13%, tobacco products 12%, accessories and jewelry 5%, and stationery 5%. Of the share of wallet, some 24% was spent on alcohol, 20% on electronics, 17% on perfumes, 13% on fashion, 10% on confectionery, 7% on accessories and jewelry, 6% on cosmetics, 2% on tobacco products, and 1% on souvenirs.

Convenience is key In terms of the motivations for buying in duty free, around half of respondents cited convenience, followed by the price being lower than local stores (32%), it was their favorite product (27%), prices were lower than other duty free shops (25%), an appealing promotion (24%), someone asked me to purchase (23%), the display caught my attention (21%), and the product purchased could not be found at home (20%). In total, across all product categories, 56% of purchases were planned. The most planned purchases were: alcohol, with 82% of Indian duty free visitors planning this purchase, followed by 67% planning souvenirs, 64% tobacco products, 62% cosmetics, 61% electronics, 47% confectionery, 39% perfumes, and 32% fashion. Half of Indian duty free buyers made price comparisons, with nearly one third

(27%) comparing prices with their local shops and 18% making a comparison against other duty free shops. Only 6% compared prices online. The findings are interesting when broken down by category. More than 60% (64%) compared prices in both the tobacco and electronics categories. A similar percentage (61%) compared prices for alcohol purchases, with 58% comparing cosmetics prices, and 55% comparing perfume prices. The percentages were 46% for souvenirs, 40% for fashion and 36% for confectionery. Some 43% of Indian visitors to duty free shops interacted with sales staff, with more than 50% interacting with personnel in both the alcohol and electronics departments. Half of visitors interacted with staff in perfumes, with 44% in tobacco products, 43% in cosmetics, 42% in fashion, 38% in confectionery, 37% in accessories and jewelry, and 31% in souvenirs. Nearly one third had no interaction at all with salespeople. Almost one third (31%) of Indian duty free buyers were strongly influenced by the sales staff, though 43% said that staff had no influence over their final decision to purchase. Nearly 60% of Indians who bought fashion said they were strongly influenced, followed by purchasers of cosmetics (46%). More than half (51%) of Indian duty free buyers were influenced by promotions, with 25% saying they bought more because of a promotion. Promotions were

effective across the board, but particularly in the categories of fashion, perfumes and cosmetics, alcohol and confectionery. Indians who did not purchase anything in the duty free shops cited a number of factors. The most popular reason for not buying was that they were just browsing, followed by not wanting to carry their purchases, not being attracted by anything, and lack of attractive prices/ promotions. The non-buyers said they would possibly have been motivated to buy if offered more duty free exclusives, or better promotions and sales. Generally, Indian duty free visitors felt that they were being offered excellent or good value for money, with only 7% citing poor or very poor value. Around one quarter of respondents (23%) consulted duty free websites to see what brands or products were available in the duty free shops before their trip, with only 6% pre-ordering duty free products online, and 12% checking on a duty free smartphone app what products/brands were available before their trip. Finally, turning to Customs regulations, 37% of Indian duty free visitors were unsatisfied with their level of information about Customs regulations and 55% sometimes refrained from buying in duty free because of uncertainty over these regulations. This reveals an opportunity to improve communication, m1nd-setâ&#x20AC;&#x2122;s research concluded.

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AMOUAGE

A floral symphony

The elegant fougère fragrance Bracken for Man is said to evoke a subtle and enigmatic masculinity and is named after bracken, one of the oldest and most resilient ferns

The new men’s and women’s fragrances from luxury house Amouage are subtly elegant and intricate creations encased in packaging inspired by flowers and ferns

nternational luxury brand Amouage has launched two new fragrances for men and women, inspired by classical femininity and subtle masculinity. Lilac Love for women, the first fragrance in The Secret Garden Collection, seeks to capture the true spirit of classical femininity in the modern woman. The Secret Garden is a collection of intricate feminine fragrances. “We are so busy trying to keep up with modernity that we sometimes forget about the simple and traditional things in life and ourselves,” explains Amouage Creative Director Christopher Chong. As the scent of the lilac flower cannot be extracted, Lilac Love harmoniously recreates the lilac accord to express animalic and powdery tones with a balance of jasmine and rose. The accord is deli-

cately blended with top notes of gardenia, peony, and heliotrope. The floral scent is then refined with a gourmand heart of orris, cocoa bean, and tonka bean. The warm tone of sandalwood also lends sensuality in the base, along with the richness of patchouli and soft facets of vanilla, creating a timeless floral symphony with a romantic musky veil, the company says. The floral gourmand fragrance is presented in Amouage’s signature crystal bottle in a delicate lilac hue with silver and white detailing, accentuated by a purple Swarovski crystal in the cap. Lilac Love was launched exclusively in Harrods in London, Tsum and GUM in Moscow in the first quarter of 2016, followed by all Amouage stores later in the year.

Lilac Love, a floral gourmand women’s fragrance, is presented in Amouage’s signature crystal bottle in a delicate lilac hue with silver and white detailing, accentuated by a purple Swarovski crystal in the cap

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

A retro touch for a distinguished men’s fragrance For men, Amouage has launched Bracken for Man, a new fragrance evoking a subtle and enigmatic masculinity. Created under the guidance of Creative Director Christopher Chong, this elegant fougère is inspired and named after bracken, one of the oldest and most resilient ferns. Unveiling an aromatic freshness, the fragrance begins with vibrant top notes of lavandin, nutmeg, and clove. “With a spectrum of light caressing the woods, both lemon and bergamot open this fragrance by blanketing a sensation of brightness over wet earth,” says Chong. Geranium, cinnamon, cedarwood and sandalwood come together with the earthy character of musk and patchouli in the base, lending a retro touch to this distinguished fragrance. With a design mimicking the fern nature of the scent, Bracken for Man is presented in Amouage’s emblematic clear glass crystal bottle with gold foil illustrations of a fern leaf surrounded with swirling vines behind the Amouage insignia. The white cap is accented with a peridot Swarovski crystal, and the bottle is housed in a retro paisley box with a design mimicking the scent. With removable inserts, the boxes are designed to be reused to safe keep ornaments and mementos. Bracken for Man is the latest addition to the Midnight Flower Collection that comprises Hope, Love, Happy, Smile, and Joy candles and complementary room sprays, as well as Sunshine, a fragrance available for men and women.

AGATHA PARIS

A modern and

cheeky

In the past three years, Agatha Paris has expanded considerably in the travel retail network

spirit

French costume jewelry company Agatha Paris is taking its Scottie dog emblem around the travel retail world as it celebrates multiple listings with major operators and its first stand-alone store

gatha Paris, the French specialist in premium fashion jewelry, is seeing a renewed surge in Chinese travelers this year, boding well for its first standalone travel retail store in Hainan Meilan International Airport, recently opened in partnership with Hainan Duty Free. Karan Tuli, Global Head, Travel Retail, Agatha Paris, says the brand is growing at a fast clip since its travel retail debut three years ago. “2013 marked the launch of the brand in travel retail. However, we focused solely on inflight sales to get some exposure for the brand. We have expanded the network and now work with major operators and landlords alike,” he explains. In the past three years, the brand has expanded “considerably” in the travel retail network. “We have had several airline listings – up to 30 – and currently have 14 locations in South East Asia and Middle East, and we’re growing.” Since a South Korean celebrity endorsed the brand, Tuli is optimistic about future sales in Asia. “We are sanguine about prospects in South East Asia – the brand has a surge in popularity in South Korea, Japan and China since we

partnered with Park Shin-Hye, a major TV celebrity in Korea.” Agatha Paris is strongly focused towards costume/fashion jewelry and its price points reflect its key target of 25-35 year old females. “Our products are ideally suited for gifting items as well,” says Tuli. 2016 has proved to be a difficult year for retail in Asia. “Q1 and Q2 saw a slow growth rate for us. However, since June, we have been able to secure several new listings, as there is some surge in Chinese travelers once again. We have opened our first stand-alone travel retail store in Hainan Meilan International Airport, with Hainan Duty Free,” notes Tuli. In the next two to three years, Tuli sees Agatha Paris “piggybacking off our domestic growth; the potential for the brand to grow its travel retail footprint is more positive than ever. Costume jewelry is a tough category, but the spending trends recently have supported a positive outlook for us.” When it comes to best-selling items, Agatha’s leather bags have been a huge hit with the Chinese airlines, while in-store, its new Bliss collection has been a strong product. Agatha Paris does offer tailor-made exclusives, in terms of gift sets to various customers. “We will show some of the new sets in Cannes this year,” promises Tuli, as he prepares for the TFWA World Exhibition.

Fresh and cheeky spirit So, what is the Agatha Paris brand concept? Established in 1974 by Frenchman Michel Quiniou, the brand describes itself as having a fresh and “cheeky” spirit, and 38

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

“combining the notions of elegance and boldness”. The emblematic Scottie dog was created in 1989, after which the brand developed strongly in France and abroad. Agatha Paris subsequently caught the attention of the King Power Group, and Antares Cheng acquired the brand in 2006. Two years later, the brand created its first charms collection, and success followed, based on its iconic products that exude casual chic with a twist of Parisian style. Today, Agatha Paris is one of the top fashion jewelry brands in France and is present in 25 countries with 330 points of sale worldwide. Nearly half (46%) of its €80 million (US$90 million) turnover are export sales. In 2016, the company unveiled a new retail store concept with feminine and elegant codes, incorporating a brass color designed to give warmth to the logo and accessories and new furniture to highlight the products. The collections are divided into five themes: Iconic, Timeless, Modern Chic, Classy, and Sparkle. Four capsule lines are offered, for Spring, Summer, Autumn/ Winter, and Christmas. New collections for 2016 include the themes African Art Deco, Grand Palais, Opera, Olympia, Eternel, and Bow, among others.

Discover the exclusive chocolate creations of nine Worldâ&#x20AC;&#x2122;s Top Chefs!

DUTY FREE DEVELOPMENT CONSULTING

Duty Free Development Consulting gains momentum in TR

Duty Free Development Consulting is a specialist practitioner in steering famous brand names through the often choppy waters of travel retail. Here, founder David Dayan lays out his plans

avid Dayan is well known in the duty free and travel retail market, having developed many prestigious brands over the last 30 years. The dynamic executive’s roll-call of success stories includes Lacoste, Parker, Lalique, Rituals, Eden Park, La Maison du Chocolat, Wolford, Vilebrequin, and Kusmi Tea. In 2012, Dayan decided to set up his company in partnership with foreign investors. Duty Free Development Consulting (DDC) was created to meet brands’ growing demand to enter the market or accelerate their development on this specific market, which can be difficult to navigate for brands. Thanks to his team and his expertise, DDC gets partnership requests from brands wishing to conquer what he calls “this new El Dorado that is the duty free business”. To meet brands’ international development as well as duty free business requirements, DDC has opened offices in New York, Dubai, Hong Kong and Paris, in partnership with Immediate Boarding. Depending on the customer’s needs, the company supports all the steps in strategy and development: from design and furniture manufacturing, to product selection and the design of specific products dedicated to travelers, and negotiation with operators and airport authorities. In addition, DDC supports and organizes all international exhibitions and 40

conferences related to travel retail for its customers. “With a large customer portfolio and a presence in more than 200 airports, 30 cruise lines and 50 airlines worldwide, Duty Free Development Consulting is a real accelerator for brands wishing to expand rapidly on this market,” says Dayan. “Whether in airports, onboard airlines or border shops, Duty Free Development Consulting will find the best way to represent brands.” The DDC and Immediat Boarding group consists of four departments: perfume and cosmetics, fashion and accessories, fine food, and consulting and strategy. Each department is managed by an experienced specialist in the category. In 2016, the portfolio has expanded with four prestigious brands, namely: La Cure Gourmande, in confectionery; Nuxe, in cosmetics; Puressentiel, in perfumes; and La Comtesse du Barry, in fine food. Duty Free Development Consulting and Immediat Boarding have enabled its customers to open a large number of stores this year in various airports worldwide. Austrian lingerie specialist Wolford has debuted at the airports of Manila, Kiev, Vienna, Istanbul, Nice, Brussels, along with the Monalisa downtown duty free shop in Paraguay. French men’s sportswear firm Eden Park has a presence at airports in London, Doha, Abidjan, Marrakesh, Cairo, and

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

Dayan works with a number of prestigious brands including Rituals and Wolford

Paris Charles de Gaulle. French confectionery company La Cure Gourmande has opened its doors at the airports of Doha, Brazzaville, Madrid, and Dakar. Meanwhile, Italian fashion brand Mandarina Duck has locations in the airports of Tel Aviv, Rangoon, Bangkok as well as cruise lines. Despite difficult economic conditions, DDC and Immediat Boarding continue to develop POS worldwide in 2017 for its clients. Dayan is keen to point out that every year, more than 90 airports emerge worldwide. He has a confident outlook, saying: “2017 is already shaping up with beautiful projects for DDC, with new openings in Nigeria, Lagos, Montreal, Minsk in Belarus, Frankfurt, Singapore, Moscow, Shenzhen, and also the USA with Miami, New York and Philadelphia.”

David Dayan, Founder of Duty Free Development Consulting

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FURLA

Over the past 12 months, Furla has opened a 20 square meter semi-personalized location in Siem Reap Galleria, Cambodia, with DFS

Betting on exclusives The travel retail exclusive handbag is now a permanent fixture in Furla’s line-up, as Global Travel Retail Director Gerry Munday explains by

MARY JANE PITTILLA

“T

ravel retail exclusives are a very important part of our business,” asserts Furla’s Global Travel Retail Director Gerry Munday, as she muses on the Italian accessories brand’s stellar success in duty free. “This is the fourth season that Furla has offered a travel retail exclusive to retailers,” she continues. “For Spring/ Summer 17 we are introducing the travel retail exclusive Erica bag, a small, sophisticated and extremely functional handbag in three colorways, each with an external pouch in a contrasting color.” Munday is seeing demand for such products grow, as she explains. “The success of the previous exclusives supports the growing demand by retailers and consumer for exclusives in the fashion sector. Offering an exclusive creates a point of difference compared to domestic stores and online, essential in today’s competitive environment.” The travel retail channel as a whole has shown a significant increase in sales – up 36% in 2015 – thanks to Furla’s presence in 48 countries with a total of 195 airport doors, versus 174 in 2014. “We couldn’t have asked for a better year. We are delighted with the results and expect that this year and beyond to echo the same sentiment.” Asia is a “vitally important” region for the brand, says Munday. Japan accounted for 23% of the company’s consolidated turnover in 2015 and the rest of Asia Pacific 19%. “Overall, Furla saw 30% growth globally, but geographically Asia Pacific enjoyed a massive 53% growth and Japan 24%, which shows the continuing 42

dynamism of the region – even though we know there are challenges,” she says. Asia is different from other regions because downtown duty free outlets play a very important role. For example, in Korea, Furla has 13 corners in downtown duty free shops in Busan, Jeju and Seoul, as well as distribution at Seoul Incheon, where it has four separate corners, and Gimhae International Airport, Busan. Munday notes that in Korea the brand has more travel retail/duty free outlets than domestic, because the key customer focus is the Chinese shopper. In Greater China, the brand’s domestic market footprint is strong, in turn helping the brand to grow its travel retail presence. Today, Furla boasts five shops and five corners in China, including one in Macau. It’s a similar story in Taiwan. Furla has a powerful presence in travel retail with seven corners at Taipei Taoyuan and Songshan airports, Taichung Airport and downtown – again targeting primarily Chinese shoppers. The store count in Asia continues to climb. Over the past 12 months, Furla has opened a 20 square meter semi-personalized location in Siem Reap Galleria with DFS; a 15 square meter personalized

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

During the TFWA World Exhibition in Cannes, Furla is launching the travel retail exclusive Erica bag. This small, sophisticated and functional handbag comes in three colorways, each with an external pouch in a contrasting color

Furla has celebrated the opening of a 15 square meter personalized corner in Taipei Taoyuan Airport Terminal 2 with Taiwanese operator Tasa Meng

corner in Taoyuan Airport with Tasa Meng; a 3 square meter generic corner in Singapore Changi Airport with Lagardère Travel Retail; two 22 square meter personalized corners in the North and South terminals of Okinawa Airport with DFS; a 12 square meter personalized corner at Hong Kong International Airport with DFS; a 6 square meter personalized corner in Siem Reap International Airport with Dufry; and a 12 square meter personalized corner in Taipei Songshan Airport with Ever Rich. The next few months will see many new Furla stores opening in the Asia Pacific region, including Cambodia, Kaohsiung, Phuket, and Yangon. Munday is optimistic about Furla’s travel retail future, despite the challenges, particularly from online retailing. “We maintain that as long as there are consumers traveling, with price differentials around the world, and added value in most airports, then our travel retail business will continue to grow and prosper.”

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EDEN PARK

Running

with the ball Parisian men’s sportswear house Eden Park is celebrating its 30th birthday at the TFWA World Exhibition with a colorful special edition duty free collection that salutes its home country

or the second year, French men’s sports brand Eden Park is set to showcase its new collection at the TFWA World Exhibition in October. But this year’s attendance at the show will see an extra frisson of celebration, as the brand will mark its 30th anniversary in 2017 with a special Spring/Summer 2017 duty free collection showcased on its booth. Well-known travel retail executive David Dayan, International Director of the Duty Free Development Consulting Group, will once again accompany Eden Park on this exciting project. The Parisian house was founded in 1987 by CEO Franck Mesnel, a former

Duty free veteran David Dayan will accompany Eden Park during the TFWA WE show

French rugby union footballer, and has a signature pink bow tie in its logo. Eden Park is currently active in 34 countries with nearly 536 sales outlets, including 188 abroad. It has five airport locations: Harrods in the UK; Qatar Duty Free in Qatar; Abidjan, Ivory Coast; Dakar, Senegal; and Marrakesh, Morocco. The colorful sports line, inspired by flags from around the world, has kept the French touch that aims to make the brand stand out abroad. The line uses patchwork, floral prints, jacquard and military style on all its products: shirts, polos, T-shirts, windjammers and swimming trunks. The collections always keep its fundamental pieces, such as the brand’s iconic blazer, worn with jeans or trousers and jersey to give a “je ne sais quoi” Parisian touch. The look seeks to be timeless, a little quirky and with particular attention to detail, which the company believes are the keys to the success of this elegant Parisian sports-inspired brand.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

A love of detail remains one of the label’s core characteristics, along with a blend of nonchalance, audacity and unconventional style, which Eden Park calls “preppy à la Française”. The garment range is accompanied by a selection of accessories, luggage and perfumes that have been carefully designed to respect the specific requirements of duty free. For Eden Park’s 30th birthday in 2017, the company has designed a special limited edition with the color codes blue, white and red, a salute to the brand’s country of birth. The company is continuing to expand, and it sees its presence at the TFWA World Exhibition as key to its growing footprint. “The presence of a stand at TFWA in Cannes is essential for the continued development of the brand,” said CEO Franck Mesnel, who will be present from October 4 to 6 to meet with the show’s principal buyers on the company’s booth (Red Village L17).

RITUALS

The sweet smell

of success

Rituals is all action as it targets the US market, where it sees huge potential for the fast-expanding beauty brand by

“T

he USA is by far the biggest opportunity for us,” says Neil Ebbutt, Director Wholesale, Rituals Cosmetics, who is spearheading the beauty brand’s travel retail expansion in this huge market. “Our presence in the domestic market there is really helping our brand awareness. In September we opened a stand-alone store on New York’s Fifth Avenue and another in Grand Central Station. In addition, we have a nationwide distribution with Barneys department stores and Cos skincare stores, and an ongoing dialogue with a number of high-profile cosmetics retailers, to further increase the distribution and awareness on the back of an excellent performance in Europe, the Middle East and Africa.” In addition, Ebbutt notes that Radisson hotels also carry the Rituals amenity products globally, which includes 121 hotels in North and South America. He says this kind of high-profile presence significantly enhances interest in Rituals within the US travel retail market. The European travel retail channel has been the brand’s strongest region for growth over the past 12 months, thanks to “huge support” from customers such as Dufry, World Duty Free and Gebr Heinemann, as well as some strong local partners like Kappe and IDF. Now, Ebbutt’s attention is turning to the Middle East and Africa for a distribution boost. “We are starting to look harder at growing our distribution in the Middle East and North Africa travel retail markets. We recently opened a stand-alone store in the Mall of the Emirates in Dubai and Marina Mall in Abu Dhabi, which has boosted our brand profile in the UAE. We have a distributor there now, so we are in a position to deliver against our ambitions for this region.” 46

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

HIBAH NOOR

Rituals is already present in all travel retail channels, and one area for growth is with the cruise ship sector. Harding Retail has been a very important customer in this channel.

Travel retail exclusives essential to portfolio The defining rationale behind Rituals products is to transform everyday personal grooming and homecare routines into meaningful rituals. This means that the brand has an almost universal appeal to both men and women, explains Ebbutt. The core customers are mainly women in the 25 to 45 year age bracket, but men are becoming increasingly important customers, particularly for its gift, shaving and skincare products. Travel retail exclusives are essential skus in the product portfolio, notes Ebbutt. In spring this year the company launched seven product packs exclusively for travel retail. “They have done exceptionally well, far exceeding our expectations,” he enthuses. “I am sure this is partly to do with the fact that the products we offered were not just exclusive, but also highly relevant to travelers because they focus on skin and hand care, which long haul travel does have a huge effect on.” Ebbutt believes that the other big factor behind the success of these products is the fact that the company first conducted extensive social media-driven research, asking Rituals users what they’d like to find if it were to put together a collection for them when traveling or on holiday. When it comes to retailing, the strategy is essentially a dual one, says Ebbutt. The firm aims to be both a wholesale supplier for shop-in-shop retail through the major duty and tax free concession operators and also has stand-alone Rituals stores in airports operated in partnership with these same companies. Rituals currently has just over 120 shop-in-shops in airports

Rituals is already present in all travel retail channels, and one area for growth is with the cruise ship sector

worldwide. The most recent began trading in September at World Duty Free’s store in London Gatwick South Terminal. The five airport standalone shops include Amsterdam Schiphol, London Stansted and Zurich and two airport spas, with another three in the pipeline before the end of 2016. “These stores perform exceptionally well and, of course, the extra space means we can offer a very much wider range from our product portfolio,” enthuses Ebbutt. Turning to how Rituals appeals to the vitally important millennial consumer, Ebbutt is clear. “I think we got there first with them. Millennials are famously more concerned with lifestyle and well-being and less interested in acquiring things as opposed to having experiences. Rituals’ entire product philosophy has

always spoken to that kind of motivation, and while we don’t target millennials overtly, we know from our own customer analysis that our products appeal to them.” Rituals’ travel retail best-sellers have been the new Travel Retail Exclusives, launched in April 2016. Beyond these seven new skus, the brand performs strongly in four complementary product categories on the duty free perfumes and cosmetics floor: bath, body, home and gift. As it looks ahead to the TFWA World Exhibition in Cannes, the company’s main focus will be its Ritual of Sakura range, which was relaunched in spring 2016, and on its Home Collection, spanning products such as fragrance sticks and scented candles in elegant glass jars.

The European travel retail channel has been the brand’s strongest region for growth over the past 12 months, thanks to “huge support” from customers such as Dufry, World Duty Free and Gebr Heinemann

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EDITOR’S CHOICE

Travelers rejoice in the latest luxuries

The latest travel indulgences will make sure you travel in superior style, as chosen by our Editor-in-Chief 1

1. The Griffin’s Toro cigar: This Toro format is a great blend of Nicaraguan, Dominican and Honduran tobaccos with a typically Nicaraguan bittersweet stimulation. The new format delivers a pronounced spiciness and intensified notes of bitter chocolate, chilli, oak wood and a creamy aftertaste. The cigars also bear a black main ring with the griffin hot-foiled in chilli red to complement the darker wrapper 2. Oral-B Genius 9000 and 8000 by Braun: Oral-B unveils the world’s first electric toothbrush that combines position detection technology with triple pressure control and a professional timer. The stylish travel case charges the brush and smartphone or other small device with a single plug. Multi-voltage on the Genius 9000 makes traveling easier than ever 3. Sisley Crème pour le Cou: Sisley’s neck cream formula helps to firm and refine the neck and recover more defined contouring. It promises to firm the neck, smooth the skin texture and to refine and reshape the contouring

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

4. Asbach Fire liqueur: This new liqueur from the house of Asbach is spiced with cinnamon and chilli. Its distinctive notes of cinnamon with hints of vanilla and chocolate can be served as a shot and also as an aperitif, as a long drink or mixed with sparkling wine 5. Danzka vodka twin pack: Premium Danzka vodka is now offered in an attractive twin pack that makes a valuable gift at an attractive price point. The pack combines the brand’s distinguished style and aesthetic in an easy-to-carry set that is safe for traveling 6. Radley SS17 mainline collection: Radley’s classic handbag puts function at the forefront, with the brand’s timeless styling. The handbag has a luxurious leather design that bursts with color and originality inherent to Radley style 7. Frederique Constant Delight Automatic watch: This elegant and feminine Frederique Constant watch features a discreet dial with mother-of-pearl outer ring that embraces the wrist for the perfect fit. The timepiece will attract those who appreciate the most sophisticated design

14 8

10 8. Travalo Milano set: Travalo is extending its fragrance atomizer range by introducing the new Milano set this fall. The set comes with one case and three interchangeable engines and offers four classic color choices in black, orange, red, and white 9. Guylian Belgian Chocolate-Coated Fruits: Guylian’s new range consists of combinations of real fruit covered in the finest Belgian chocolate. These bite-sized snacks satisfy cravings for fruit and smooth chocolate, and are a tasty combination of health and indulgence. Resealing the pouch makes it easy to snack

12. Lego City Airport Passenger Terminal: This new Lego set allows both young and experienced Lego City builders to pack their bags and get ready to go on vacation. Head to the airport and check in at the terminal. Enjoy the whole experience from putting your luggage on the conveyor belt to buckling in and enjoying your trip 13. Aigner mini bag: This stylish cross-body bag is made of calfskin and is a fashion must-have. The mini bag features a waffle optic, an artful clip closure with the embossed A-logo and a gold shoulder chain. The bag is available in sea shell grey and black colors

10. The Platinum Collection by Butlers Chocolates: This new luxury chocolate collection promises a superior chocolate experience for travel retail customers. Available in two sizes, 210g and 420g, the alcohol-free selection includes classic and new favorites such as Pink Himalayan Salted Caramel, Raspberry Panna Cotta and Crème Brûlée

14. Tumi Alcott backpack: This Tumi backpack is offered in three classic colors: neutral, black and grey. It includes both a dedicated padded laptop compartment and a tablet pocket. The leather pleated gusset allows easy access to the main compartment without having to fully unzip it, while the Add-A-Bag strap allows the backpack to be

11. Baldessarini Travel Edition: This set of popular Baldessarini men’s fragrances by Mäurer & Wirtz is available in special travel sizes. The travel edition comprises four 15ml masculine fragrances, giving travelers a fragrance to suit their mood wherever their travels may take them

15. Beluga Hunting Berry: This Russian bitter created by Beluga’s master blenders is a unique combination of the herbs and berries grown in Siberia, malt spirit, artesian water and traditions of distillery. Beluga Hunting Berry contains 38%abv and is available in 500ml and 700ml bottles

stacked on top of Tumi wheeled travel pieces

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LIQUOR NEWS

Disaronno launches new limited edition Icon bottle with fashion house ETRO Since its first Icon edition in 2013, Disaronno has kept the world on edge each fall waiting for its next surprising ensemble. This year, Disaronno’s unique look was designed by renowned fashion house ETRO. The annual Icon project benefits Disaronno’s ongoing charity partner Fashion 4 Development, sponsored by the United Nations. As was the case in previous years’ designs by Italian fashion brands Moschino, Versace and Roberto Cavalli, a portion of the proceeds from sales of the DISARONNO wears ETRO collection will be donated to the development of this unique project to develop the textile trade and fight poverty in Africa. The DISARONNO wears ETRO design draws inspiration from the brand’s Autumn/Winter 2016 season and features striking paisley done in vibrant blue, orange and gold hues. The exclusive limited edition 50cl bottle is available from the beginning of October in major travel retailers globally, supported by activations and promotions, including tasting bars. Again this year, the designer edition will also be available in six different coordinated mini bottles, which will be offered in packs of three. “There is always a huge amount of hype surrounding each year’s new launch, and it’s something our partners, retailers, and consumers get very excited about,” says International Sales Director Domenico Toni. “The Disaronno ICON bottles are perfectly suited for travel retail, with their strong shelf appeal, collectability factor and unique design all being key sales drivers. The previous three Icon editions have all achieved better-than-expected results in travel retail and we anticipate another successful year for DISARONNO wears ETRO.” The new limited edition icon bottle will be showcased at this year’s TFWA World Exhibition on the Illva Saronno stand (Green Village, M52).

Lauder’s new Oloroso Cask and Ruby Cask releases helped the company’s sales explode up 36% throughout the year 2015

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

Disaronno by ETRO is the fourth in Milan’s famous liqueur brand’s Icon project, which supports Fashion 4 Development

MacDuff goes from strength to strength MacDuff’s blended whisky brand Lauder’s Finest Scotch whisky jumped a massive 36% in retail sales for the full year of 2015, moving up two places in the blended Scotch category, to ninth. This growth is especially meaningful since it came at a time when the category itself was shrinking. Lauder’s growth was helped by the addition of two unique cask finishes to the range: Lauder’s Oloroso Cask and Lauder’s Ruby Cask. The company has plans to launch a super-premium 25-year-old version of Lauder’s as a strictly limited edition at the TFWA World Exhibition in Cannes. Its Islay Mist and Grand Macnish brands also saw growth, pushing the parent company MacDuff International from seventh to sixth place in the list of global suppliers. Islay Mist was recently awarded a gold medal at the International Spirits Competition 2016. In addition, following 2015’s one-off release of Islay Mist 8-year-old Manzanilla La Gitana Cask Finish, a second unique cask finish will be unveiled at Cannes. This year the company also announced a strategic partnership with Inchdairnie, “Scotland’s most modern new single malt distillery.” This offers MacDuff a unique single malt for the future and allows the company to sustain the growth of Lauder’s, Grand Macnish and Islay Mist.

LIQUOR NEWS

DANZKA sets itself firmly as the image of design

WGS reveals new packaging in Cannes

DANZKA’s family of award-winning vodka has been joined by an elegant new member. DANZKA THE SPIRIT, a brand-new, pure vodka created using the original traditions of vodka distilling, will be presented during a traditional Danish Frokost on Monday, October 3, between 3 to 5 pm at the Waldemar Behn booth, H52 Green village. At the Frokost will be Rüdiger Behn, Managing Director, Waldemar Behn, GmbH and fourth-generation distiller, together with Timothy Jacob Jensen, Chief Designer of Jacob Jensen Design, who together developed the new vodka combining the highest distilling arts with Scandinavian design traditions. “DANZKA THE SPIRIT began as an idea between friends by the beautiful Limfjord in Denmark,” explains Rüdiger Behn, Managing Director, Waldemar Behn, GmbH. “It will be our pleasure to introduce you to DANZKA THE SPIRIT in Cannes, where we can explain the full story behind this remarkable new spirit.” DANZKA has had a very successful year in travel retail in 2016, with expanded volume, distribution and facings/listings worldwide, with Middle East, Asia and Australia showing particularly strong potential. The company also introduced a striking new campaign in Denmark, created by Jacob Jensen Design and underlining the message that DANZKA THE SPIRIT is the “Design vodka,” bringing the brand back to its roots with its unique aluminum bottle that both sets the consumer apart from the crowd visually and chills faster. Also at Cannes, DANZKA is introducing a 4 x 1L briefcase-style pack, a 4 x 30mL gift- pack of DANZKA miniatures (The Original, Apple, Citrus, CranRaz), and a new luxurious flavor: DOOLEY´s: Liquorice is a subtle blend of premium vodka, Dutch cream and superior Belgian Toffee with a hint of licorice.

In time for the TFWA World Exhibition and Conference, William Grant & Sons (WGS) is offering new and refreshed packaging in key collections in its portfolio, and also offering glimpses into its fun and unique activations from Hendrick’s Gin and Monkey Shoulder blended Scotch malt whisky. The highlight for the company this year is the new packaging for Glenfiddich Cask Collection, exclusive to global travel retail. WGS will also be revealing a new pack for Drambuie Scotch liqueur. Drambuie is a truly beloved brand that was acquired by WGS in late 2014. While beloved, the brand is clearly associated with a certain era, and the company has spent the nearly two years since the acquisition examining the best way to connect the brand to a new generation. A new presentation is the first step, and this will be showcased in Cannes. The company is also introducing new packaging for Tullamore D.E.W Cider Cask Finish Irish whiskey and Tullamore D.E.W. Phoenix Irish whiskey. Both of these special Irish whiskey variants are exclusive to global travel retail and offer a perfect choice for impulse purchasing, says WGS’ Global Travel Retail Managing Director Ed Cottrell. “Constantly reviewing and refreshing the portfolio is absolutely necessary if we are to ensure the total offer is right for our travel retail partners and, in turn, their customers. The changes and additions this year sit alongside our most recent collections such as Grant’s Elementary, a GTR exclusive range, and brands such as Glenfiddich, The Balvenie, House of Hazelwood, Monkey Shoulder and Hendrick’s Gin, which create a compelling and undeniably ‘must-stock’ offer.”

In addition to its new DANZKA THE SPIRIT, the company is launching a new, luxurious flavor: Dooley’s Liqourice

A well-known brand, Drambuie is associated with a certain era; its new look is WGS’ first step toward reaching a new generation

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VP INERNATIONAL

FLIRT Vodka has worked in GTR in part because of appealing offers such as this 5x100ml package. The company promises plenty more exciting items over the coming year

Breaking

ground by

WENDY MORLEY

ormerly known as Vinprom Peshtera, VP Brands International has had a successful year despite a challenging environment. The company has had a good year in international markets, with expansion in domestic and global travel retail. “We have significantly expanded our presence this past year, especially in the regions of Africa, Middle East and Asia,” they say at the Export Department of VP Brands International. Those three regions will be the company’s priority over the next couple of years. “We believe that the strongest potential for business development is there, bearing in mind the current market complications the industry faces in the western world and in South America,” the VPBI Export department explains. “We have managed to develop several key hub markets such as Kenya, Nigeria, Egypt, UAE and Malaysia, and it is at these locations where all our efforts, main investments and expertise will be directed over the coming years. Our strategy is to utilize these markets as primary centers for our products and expand exponentially in the surrounding territories. All of them can be considered emerging markets with a growing population of legal drinkers who are brand adventurous and open to new propositions.” While the decline in luxury goods has hurt some companies in GTR, VP Brands International has found quite the opposite

Over the past year VP Brands International made the most of its strengths, having a spectacular year in all markets, including GTR

effect because of the company’s insistence on offering good value for their high quality products. “We as a company believe that there is a great potential for products with exceptional quality at a very attractive price level. In this sense the decline in luxury goods has given us the opportunity to attract a wider consumer base that is not only interested in discovering new and exciting brands, but has also transformed their traditional purchasing decisions.” After such an impressive time of growth and expansion, VP Brands International expects 2017 will be very exciting for the company and for its consumers. “We are working on exciting and innovative exclusive GTR propositions. We will be launching a GTR-exclusive SKU which will be very distinct from anything we have seen before. In addition, we are planning a variety of value-added promotions that will be a first for the industry.” As in the past few years, VP Brands International’s main focus will once again be the vodka category on its flagship brand FLIRT. But that is only the beginning. VPBI will be launching several new brands in the whisky and wine categories. “We will give the global consumer contemporary, competitive and attractive alternatives to the mundane offered by other brands in these categories,” announces the VPBI Export department. Whereas traditionally a customer was loyal to a global brand in vodka and

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

VPBI has done incredibly well in Africa and the Middle East, thanks in part to displays such as these

whisky, VP Brands International is seeing this change, and feels its contemporary choices are the perfect choice for this new legal drinking age consumer. “A young LDA consumer is willing to experiment not only with new brands but also in subcategories. For example, this group is more interested in trying flavored vodka and whisky. We also noticed resurgence in flavored spirits such as aniseed.” The company understands that variety is not the only reason for purchasing a new product, and offering superior value at a good price is an important one. “There are great differences in consumer purchasing patterns in GTR, but one theme seems to be constant: consumers want to know they have got a real deal.”

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DAVIDOFF

At Davidoff’s Ladies Masterclasses, women find a comfortable meeting place where they can learn about cigars, from seed to enjoyment

New releases Looking at the enormous number of announcements and releases by Davidoff this year, it’s no surprise that this cigar company continues to hold its lofty place in the world of cigars by WENDY MORLEY

his has been a year of a seemingly endless series of announcements by Oettinger Davidoff. In addition to a number of new cigars, the company has released a newly designed line of accessories, a beautiful new Limited Art Edition humidor and launched its Art in Lounges program. In truth, one would need an entire magazine devoted to Davidoff in order to give space to everything the company has been up to in just the past few months. Here’s a small sample.

New line of accessories

Women’s Masterclasses

Davidoff has revamped its accessories line through a cigar-inspired design developed in collaboration with Swiss architecture and design agency Atelier Oï. Based in La Neuveville - Switzerland, Atelier Oï has been striving to create a new transdisciplinary design genre and skills to play with materials, shapes and functions. The rollout of this new design across the accessory range is true to Davidoff ’s values of craftsmanship and timelessness, with a contemporary touch of elegance.

Davidoff ’s Ladies Masterclasses were founded to create a place where women can meet without being disturbed, while discovering new things about the cigar world, from the choice of cigar to the lighting and cutting, right through to the enjoyment. These Masterclasses have been held in major cities, including Amsterdam, Brussels, London, Madrid, Vienna and Zurich as well as in Dominican Republic, the home of Davidoff cigars. The most recent addition was Barce-

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

The perfect marriage of art and cigars is presented for the second year in a row, with The Davidoff Limited Art Edition

Escurio and Nicaragua lines. Participants enjoyed a pairing session with selected champagnes, white and red wines, rums, specially prepared cocktails, chocolate and coffee.

Part of the revenues generated by the Davidoff Limited Art Edition 2016 will be dedicated to sustaining the Davidoff Art Initiative and supporting artists from the Caribbean.

Limited Art Edition 2016: Olivia McGilchrist

lona, where more than 40 women met in the beautiful gardens of Can Travi, set in an authentic 17th-century Catalonian farmhouse. The program included a short introduction to the entire process, from the seeding, harvesting and blending of the tobacco to the handcrafting of the cigars in the Dominican Republic. The participants were able to sample different blends and formats available in Davidoff ’s wide range of cigars, from the mild Davidoff No. 2 and ‘2000’ to the more complex and intense Winston Churchill,

For the second year in a row, Davidoff has chosen an artist and a work to be featured on its Limited Art Edition. The Davidoff Limited Art Edition 2016 is limited to 7,000 unique boxes, each featuring an exclusive still extracted from McGilchrist’s video “from many sides.” Olivia McGilchrist is a JamaicanFrench visual artist whose works explore themes of translocation and issues of Caribbean cultural identity. Each box will carry 10 exquisitely flavorful and well-balanced perfecto cigars, an exceptional format, which only 10 experienced Davidoff torcedores (cigar rollers) are able to craft. A highly limited run of Collector’s Editions were released during Art Basel in June, consisting of one of 16 numbered editions of the commissioned video, a cigar box featuring a unique still image from the video, and a signed certificate by the artist, Visitors also had the opportunity to immerse themselves in a 3D virtual reality video piece by McGilchrist.

Davidoff’s new line of accessories was developed in collaboration with Swiss architecture and design agency Atelier Oï

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

BROWN FORMAN

Strong

foundation Despite a fragile GTR market, American whiskey continues to thrive – this helps keep Brown-Forman strong as the company journeys into single malts by

WENDY MORLEY

rown-Forman is in the enviable position of having the best-known brand of American whiskey in the world at a time when this subcategory is one of the few bright lights in global travel retail. “American whiskies continue in high demand around the world both in domestic and in travel retail markets,” says Eric Helms, Marketing Director, Brown-Forman Global Travel Retail. “We have focused our efforts on Jack Daniel’s Old No. 7 as well as Jack Daniel’s Tennessee Honey and Woodford Reserve.”

Challenges in the south Helms says the Middle East and Australia are traditionally robust regions for the company: “The Middle East has been very strong for Jack Daniels and we see this continuing. There does seem to be an upswing in discounting for blended Scotch whisky and others, but Jack Daniel’s is thus far not affected. Australia is a strong region for the Brown-Forman Travel Retail portfolio. Jack Daniel’s continues to remain vigorous and Woodford

Reserve is gaining in appeal. Of course we have benefited considerably from the currency devaluation by Australia not too long ago.” While these regions continue to be strong the company sees Asia as an area of great opportunity, especially with the company’s journey into single malts with its acquisition of The BenRiach Distillery Company and its three Scotch whisky brands. “We feel our brands have a promising future and considerable opportunity in Asia,” he says. “Admittedly, spirits growth has been a challenge as a result of policy changes initiated by China. But Asia has a long affection for Scotch whiskies and we feel that the addition of BenRiach to the Brown-Forman Travel Retail portfolio will prove to be an asset for us.”

Outperforming the market While American whiskey has continued to do incredibly well around the world, the same cannot be said for other spirits such as tequila, although Brown-Forman’s ultra-premium tequila brand Herradura is

Brown-Forman’s focus over the past year has been Jack Daniel’s 150th anniversary, in addition to Jack Daniel’s Tennessee Honey and Woodford Reserve

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

The Jack Daniel’s family of products remains strongest for the region, but Woodford Reserve is gaining in appeal

holding its own. “As with most spirits that are not American whiskey, tequila has been dealing with some real challenges lately,” says Helms. “Last year the entire category was down double digits, and it remains sluggish so far in 2016. Herradura is somewhat of a bright spot among tequilas, however; even at a premium price it is outperforming the category. Just like Jack Daniel’s and Woodford Reserve, Herradura is authentic, offers premium value and is just a great tasting tequila.” While the US and Mexico remain the primary markets for tequila, Herradura is showing growth in several markets in Europe and Australia as well as Latin America. Brown-Forman is no stranger to activations and promotions, especially with its Jack Daniel’s family. “We are in the midst of a year-long celebration of the Jack Daniel Distillery 150th Anniversary Celebration. We have a variety of promotions and activations in conjunction with this event in markets around the world,” says Helms. The company has many announcements in the coming months and will surely have a great many more events on the horizon.

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DIAGEO

New man

at the helm Diageo has created a new structure, separating MENA from Global Travel. Under the new structure, Global Travel moves to London, where Dayalan Nayager has taken on the leadership role by

WENDY MORLEY

iageo’s new Global Travel Managing Director Dayalan Nayager takes the helm at both a challenging time in travel retail and a time of transition for Diageo’s Travel Retail department as it relocates to London, England. “We want to ensure that we have the right structure and resources in place and that we’re focused on the biggest growth opportunities and bringing the business even closer to the customer,” he says. “It’s an exciting time for the Global Travel business and I’m delighted to be taking the helm.”

Areas of attention After many years of strong growth, travel retail has been facing challenges of late. Nayager sees geopolitical and currency issues in addition to changing passenger demographics as the key areas needing attention: “In Asia, for example, China continues to be a key driver of PAX growth, but there is a significant shift in where passengers are flying from: in 2011, 66% of Chinese PAX departed from Shanghai, Beijing or Guangzhou; by 2015 this had dropped to 26% with the balance flying from less affluent ‘second tier’ cities*, which clearly impacts purchase intent, and we have had to adapt to this.” (*Air4casts 2015)

Diageo’s new Travel Retail Managing Director Dayalan Nayager is excited with the company’s plans for travel retail over the coming year

Nayager is working on the assumption that global volatility is unlikely to change. “This is becoming ‘the new norm,’ and we need to work harder than ever to deal with unpredictable movements across categories and geographies going forward, as well as working closely with our retail partners to build this positive value proposition,” he says. “We also recognize traveling can be a stressful experience and customers today have more distractions than ever, so gaining their attention is key to success. Therefore we aim to create a more engaging shopping experience that will encourage more travelers to visit the alcohol section of duty free. We want to make this visit as inspiring, educational and easy as possible and showcase products ideal for gifting across various price points and occasions.”

Plenty of opportunity Despite such challenges, Nayager sees travel retail as offering enormous opportunity. “The reality is that of 100 people who go into an airport today, currently only 12 will buy alcohol [Diageo Global Shopper Study 2015]. We see this as a huge opportunity for growth in the coming years, but also as a challenge to continue evolving our offerings to compete with other suppliers,” he says.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

“We know that consumers are looking for something different in travel retail – exclusive products that can’t be bought at home. Therefore we have created a range of differentiated liquids exclusive to travel retail, across all spirits categories. Recent TR exclusive launches have included Johnnie Walker Island Green, The Singleton Of Glendullan Range, Talisker Neist Point, and Baileys XC.” For the year ahead, Nayager is excited about Malts: “The category is on fire, showing double-digit growth and huge potential for the future. Diageo holds over 40% of the entire Malts industry stock in some 28 Scottish Malt distilleries and this extensive range we have means that there is a whisky to suit all preferences. The launches of Mortlach, Talisker and The Singleton in travel retail have been well received, but we’re not stopping there. Diageo’s ambition in Malts is to lead the category by 2018, and as such, we will continue to invest significantly behind our four core brands: The Singleton, Talisker, Oban and Mortlach.” Please see the interview in its entirety at www.dutyfreemagazine.ca/asia/industry-news/people-news/diageos-new-manat-the-helm

DISTELL

Local nuances While a truly international brand, Distell has a particularly strong understanding and representation right in its home continent by

WENDY MORLEY

make sure that for generations to come, we will continue to meet the elephants beneath the marula trees.” According to Baumgartner, the bottle has been incredibly well received by trade and consumers alike. “The Jabulani bottle has been launched exclusively to travel retail channels worldwide. This is being followed by a phased roll-out into various domestic markets, including South Africa, Europe and the Americas, later in the year.”

Competitive portfolio

challenging times, this is not the case with Distell. “We have kept our focus on our core portfolio of brands,” says Baumgartner. “Some of these expressions are available only in travel retail. Local nuances in different regions demand a good representation of well-positioned and wellpriced wine and cider. We pride ourselves on understanding these, especially in the African context.”

While Amarula tends to get a great deal of attention, Distell has a range of brands that compete in ciders, wines and spirits categories, covering the breadth and depth of the price spectrum. In travel retail, the focus is on malts, with Bunnahabhain, Cognac, with Bisquit, and of course Amarula, in addition to some of the company’s wellknown wines such as Nederburg. Baumgartner says the company is seeing a return to growth in the Middle East. “This is a good sign for global travel as a whole. South Africa is also showing good growth in terms of tourist numbers, due to a weak currency.”

Amarula’s new bottle: more than just good looks

Building on regional successes

For years Distell’s Amarula, the quintessentially African cream liqueur, has been involved in helping the preservation of elephants, and the elephant has always been the emblem of the Amarula brand. This year, these facts are being emphasized even more with the brand’s new travel retail-exclusive bottle. “The new Jabulani bottle features sleek new curves and the shape of an African elephant etched into the glass,” says Baumgartner. “Amarula has been involved in elephant conservation since 2002 by sponsoring research studies through the University of Kwazulu Natal. This year, we have extended that support to Wild Life Direct, a formidable Kenyan based conservation group led by Dr Paula Kahumbu. Our objective is simple – to

This year, the launch of the new Amarula bottle will be Distell’s focus for activations and promotions. “We are rolling out new artwork across Africa and updating our thematical displays in key airports including OR Tambo in Johannesburg, South Africa and Dubai International Airport,” she says. “We also have some unique and exciting gifting items coming in the festive season.” Africa is part of Distell’s long-term strategy, and the company plans to build on regional successes. “We believe the continent has plenty of opportunities. As a company, we also have the right mix of brands to take advantage of any of these opportunities. We have some exciting travel retail exclusives available in this region in the coming year.”

Distell Global Travel Retail is showcasing a hand-picked selection of limited release malt whiskies at TFWA in Cannes from its premium malt portfolio, which includes Bunnahabhain, Deanston, Ledaig and Tobermory

outh Africa-based Distell has had a good year, winning multiple awards, posting strong numbers and releasing a new bottle for its most iconic brand, Amarula. “Travel retail continues to offer exciting opportunities, notwithstanding tough trading conditions that impact consumer spending,” says Andrea Baumgartner, Distell’s Head of Marketing, Global Travel Retail. While some companies have changed their offer to reflect these

Amarula’s new packaging, a travel retail exclusive before rolling out to domestic, reflects the brand’s commitment to elephant preservation

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

TOBACCO NEWS Together with José Oliva, Gilberto Oliva Fred Vandermarliere have created an “all-in win-win” deal

Two families

unite B

elgian cigar specialist J. Cortès has acquired US-based Oliva Cigars, with branches in Miami and Nicaragua. The deal was effective on July 1, 2016.With this acquisition, J. Cortès aims to diversify its product portfolio and further establish its position in the worldwide market. Their combined annual turnover equals US$100 million. “A family business firmly branching out in two continents is unprecedented in the cigar industry,” said J. Cortès in a statement. The two companies are family owned but are run differently: J. Cortès cigars are manufactured on a production line, while Oliva cigars are rolled by hand. Where J. Cortès is mainly active in Europe, Oliva plays an important role in the American market. J. Cortès CEO Fred Vandermarliere said he had chosen to continue to manage Oliva as a business, including the brands it owns and its current management team. “Oliva Cigars is a fantastic, wellrun business with strong brands and plenty of future opportunities. This acquisition allows us to further strengthen both businesses’ strategy and to stay focused on brands, people and dedication to great products for cigar lovers,” said Vandermarliere. Oliva Cigars CEO José Oliva described the deal as an “all-in win-win,” He will continue running the firm, with guaranteed continuity in both brands and the workforce of 1,115 people. “As a family, it was important to us to be part of a company whose spirit and culture is much like our own, a company that appreciates and wants to continue

When Fred Vandermarliere, CEO of family-owned J. Cortès met José Oliva, CEO of family-owned Oliva cigars, they felt an immediate connection. Four years later J. Cortès’ acquisition of the AmericanNicaraguan company has created a perfect working arrangement

Whereas J. Cortès produces machine-made cigars, Oliva Cigars are rolled by hand

While J. Cortès has acquired Oliva Cigars, the company will continue to be run as it always has

working with our entire team. It is a new and exciting chapter for our company,” said Oliva. J. Cortès Cigars has been in the hands of the Vandermarliere family since 1926. The company holds a strong position in the European market, producing 100% machine-made cigars, and is active in 80 countries worldwide. Core activities are brands such as J. Cortès, Neos and Amigos. It has 2,250 employees worldwide and a total annual production of 500 million cigars.

Thanks to solid growth over the past 10 years, Oliva Cigars, based in Miami and Nicaragua, has a strong position in the American market for premium handrolled cigars, branded Oliva, NUB and Kaïn. Total annual production is 15 million handmade cigars. A wonderful film about the partnership can be found here: http://www. jcortes.com/news or here: https:// www.youtube.com/watch?time_ continue=85&v=h0_MJoxBPLQ

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

CHINA INTERNATIONAL DUTY FREE

Luxurious smoke-filled room Chinese brand marketer China International Duty Free has unveiled a one-of-akind showcase for high-end Chinese tobacco products in partnership with the world’s leading luxury travel retailer by

REBECCA BYRNE

hina International Duty Free (CIDF), in partnership with DFS Group, has unveiled its first shop-in-shop concept as part of the world-leading luxury travel retailer’s new Wines and Spirits Duplex at Terminal 2 of Singapore Changi International Airport. Housed on the second floor of the two-level store, the Jasmine House is described by CIDF as the first premium Chinese tobacco boutique outside China, offering customers an opportunity to explore the rich history of premium Chinese tobacco by traveling back in time to a luxurious, classical Chinese home of the 1940s. The store showcases only the most premium and exclusive selection of CIDF’s ever-growing portfolio of Chinese tobacco products. The concept behind Jasmine House was to create the look and feel of a modern Chinese gentleman’s study, filled with items collected from his travels around China. Inspired by China’s rich design heritage, traditional elements such as the intricate brass fretwork and carefully curated antiques are presented alongside more contemporary accents, such as the colorful tiled flooring and beautifully illustrated wallpaper featuring birds and plants. Carefully lit shelving highlights a number of specially selected antiques dotted around the shop, with an impressive collection of traditional Chinese smoking pipes and artefacts for customers to learn about bygone smoking customs, once prevalent in China. 62

Inspired by China’s rich design heritage, traditional elements such as the intricate brass fretwork and carefully curated antiques are presented alongside more contemporary accents in the shop-in-shop

“Jasmine House aspires to feel warm and inviting to customers with some familiar elements but also sparkling to the eye, with different details to discover across the entire space,” says CIDF, which specializes in marketing Chinese consumer brands in duty free. Products on sale include Diaoyutai, Baisha Harmonization and the newly launched F132, a ginseng-infused tobacco product based on Chairman Mao’s smoking preferences. Described by CIDF as “truly unique in the travel retail space”, the Jasmine House showcases Chinese tobacco in a sophisticated but accessible light. Fred Combe, CEO and Founder of CIDF, said: “CIDF is delighted to launch the Jasmine House, the first-ever luxury Chinese tobacco boutique in the world, in the beautiful, new DFS Wines and Spirits Duplex in Singapore Changi Airport. As the leading multi-category marketer of Chinese consumer brands in duty free, CIDF prides itself on showcasing the finest of Chinese brands with the best consumer engagement experience. The Jasmine House represents a masterpiece in classic Chinese luxury.” Speaking about the attention to detail that has gone into the space, Jayan Lad, Design Director at travel retail design specialist FILTR, said: “CIDF’s portfolio of Chinese brands offered a unique opportunity to reinterpret the presentation of tobacco products and accessories to smokers of legal age in travel retail, in partnership with DFS and Changi Airport. We established key design pillars of

GULF-AFRICA DUTY FREE & TRAVEL RETAILING OCTOBER 2016

authenticity, sophistication and attention to detail to beautifully curate an inspiring and immersive environment.” Commenting on the ambitious showcase, Brooke Supernaw, Senior Vice President Spirits, Wine, Tobacco, Food and Gifts, DFS Group, concluded: “DFS’s Terminal 2 Wines and Spirits Duplex is inspired by the heritage of craftsmanship in the wine, spirits and tobacco worlds and we’re thrilled to partner with CIDF to bring that strong Chinese tradition to life for our customers through the Jasmine House. From the exceptionally curated collection to the eye-catching details, we’re confident the Jasmine House will delight travelers looking to explore the rich heritage of premium Chinese tobacco.” Customers at the DFS Wines and Spirits Duplex at Terminal 2 can explore the rich history of premium Chinese tobacco by traveling back in time to a luxurious, classical Chinese home of the 1940s

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