GULF AFRICA Duty-Free & Travel by Paramount Publishing Ltd.

N O V E M B E R / D E C E M B E R 2 0 1 0 • M E D FA • V O L 2 0 , N O 4

MEDFA 2010

Tourism in Egypt p.

DDF: A winning combination p.

Swarovski – a cut above p.

Recessionbusting 101 p.

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Letter from the Editor

In with Cairo fter a very strong year for many countries in Africa, it is fitting that the region will play host to the 2010 MEDFA conference. The conference, themed “Reality and Opportunity,” will look at a number of key issues during its two-day run. On the agenda are thoughts on maintaining the push that South Africa gained from the World Cup this past summer. Also examined will be many of the region’s success stories, including increased political stability and an escalating economy. MEDFA’s President Anthony Chalhoub notes: “Development of tourism is attracting more investors and more visitors. Africa is getting richer and it has a stable and steady growth, which automatically boosts investments and triggers opportunities.” The move to Cairo has long been anticipated by many of MEDFA’s regular attendees; in particular, North African buyers and suppliers are ecstatic with this decision. The conference will head back to Dubai in 2011. Africa isn’t alone when it comes to change. There is also some rearranging taking place at the MEDFA Board as one of its long-time members, John Sutcliffe, retires this coming December. He will also be stepping down from his Managing Director position at Aer Rianta International Middle East (ARI-ME). Philip Eckles, the current Regional Manager for North America & the Caribbean, will fill Sutcliffe's position starting in January. On behalf of Gulf-Africa Duty Free I would like to send our best wishes to Sutcliffe, who has been a key driver in the growth of Aer Rianta and Middle Eastern duty free. He helped to create ARI-ME in 1993 and was also a significant player at Dubai Duty Free in the early days. We would also like to bid farewell to a popular duty free veteran, Stuart Bull. I met Stuart five years ago and ever since have known that I can always go to him for a great interview, good insight into the industry or simply for a laugh! All of us at Gulf-Africa Duty Free would like to wish him all the best in his future adventures. I look forward to seeing you all in Egypt.

Gulf-Africa Duty Free & Travel Retailing (ISSN 0954-0592) is published four times a year (Spring, Fall and Winter) by Global Marketing Company Ltd., 26 Pearl Street, Mississuaga, Ontario L5M 1X2 Canada. It is distributed to duty free operators and distributors in the following countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE, Yemen, Algeria, Azerbaijan, Benin, Cameroon, Cape Verde, Djibouti, Egypt, Ethiopia, Gabon, Ghana, Guinea, Iran, Ivory Coast, Jordan, Kenya, Lebanon, Madagascar, Malawi, Mali, Mauritius, Morocco, Mozambique, Niger, Nigeria, Namibia, Pakistan, Reunion, Senegal, Seychelles, South Africa, Sudan, Syria, Tanzania, Togo, Tunisia, Turkey, Turkmenistan, Uzbekistan and Zaire, as well as to duty free suppliers worldwide. Subscriptions: $200 for one year, $300 for two years and $400 for three years. Art and photographs will not be returned unless accompanied by return postage. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor. November/December 2010, Vol. 20, No.4. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2010 Global Marketing Company Ltd.

GULF-AFRICA 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 Hibah Noor hibah@dutyfreemagazine.ca CONCESSIONS, LIQUOR & TOBACCO EDITOR Ryan White ryan@dutyfreemagazine.ca MIDDLE EAST CORRESPONDENT Faye Rowe faye@dutyfreemagazine.ca ART DIRECTOR Patrick Balanquit patrick@globalmarketingcom.ca CONTRIBUTORS

Kind regards,

Andrew Brooks James Ross

ADVERTISING SALES

Hibah Noor Editor hibah@dutyfreemagazine.ca

ADVERTISING & MARKETING MANAGER Kim Carrera kim@dutyfreemagazine.ca SENIOR REGIONAL MANAGER Neelma Hasan nhassan@globalmarketingcom.ca CIRCULATION & SUBSCRIPTION MANAGER Deepa J deepa@globalmarketingcom.ca

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

NOVEMBER/DECEMBER 2010 • VOL 20, NO 4

OPERATOR NEWS: HAMILA DUTY FREE

Game face Hamila Duty Free battles a drop in passenger numbers across its operations and comes out on top thanks to timely promotions and new listings

12 16 20

IN BRIEF IDFT&A plans new store openings and works with suppliers on successful promotions ■ Man from Mars moves on ■ Beasts step out into travel retail

Where it all begins With tourism booming this year and growth expected through 2020, Egypt proves that it has the infrastructure to welcome an ever-increasing number of adventure seekers

OPERATOR NEWS: DUBAI DUTY FREE

A winning combination Amid numerous accolades for its retailing achievements this year, Dubai Duty Free takes time to give back by supporting the Dubai Cares initiative

OPERATOR NEWS: CAIRO AIRPORTS DUTY FREE

Inside and out

A buoyant year Bahrain Duty Free maintains a big presence in the Middle East with continued initiatives relating to virtually every facet of its business

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Building on past successes

OPERATOR NEWS: ALFARAG ADDIS ABABA

Back to basics Alfarag Addis Ababa focuses on staff training and product mix to discourage downtrading and keep high-end products foremost in the minds of passengers

36 38

OPERATOR NEWS: FLEMINGO MAURITIUS

Off to a great start While Flemingo Mauritius has only been in operation for little more than two years, booming sales have led to strong numbers and a highly anticipated new store opening

AVIATION REPORT

Positive rates In general, passenger traffic and revenues are climbing; it’s the details that are a little complicated

Cairo Airports Duty Free keeps its thumb on the pulse of the industry and as a result takes the next step in the evolution of both its stores and products

OPERATOR NEWS: BAHRAIN DUTY FREE

COMPANY NEWS: TOURVEST

After a very successful World Cup period, Tourvest—and indeed South Africa as a whole—looks forward to keeping the good times rolling

TOP STORY: DUFRY SHARJAH

Evolving with the times

A pioneering spirit Kreol Trading finds its roots in a groundbreaking venture at Cochin Airport, putting the same outside-the-box thinking to use in-store much to the delight of its clientele

TOURISM REPORT

OPERATOR NEWS: KREOL TRADING

TFWA WE REVIEW

TFWA World Exhibition ends on a high note Organizers of this year’s TFWA World Exhibition enjoyed a successful show, reporting an increase in visitors after a tough 2009

COMPANY NEWS: SWAROVSKI MIDDLE EAST

Swarovski – a cut above Growth beckons for Swarovski in the Middle East as it widens its product portfolio

CONFECTIONERY NEWS

Confectionery highlights New products, redesigned packages and displays, and indepth analysis of buying behavior

COMPANY NEWS: LVMH MOËT HENNESSY LOUIS VUITTON

LVMH – a brand for all seasons The Middle East travel retail market offers rich picking for LVMH Moët Hennessy Louis Vuitton

COMPANY NEWS: NIVEA

Nivea: from the Middle East to the world It was in the Middle East where Nivea cut its travel retail teeth. Now the brand’s appetite for the channel is taking it global

48 50 52

COMPANY NEWS: PUIG MIDDLE EAST

66 70 74

The Lure of fragrance

Sweet smell of sales The heady new fragrance launches being introduced this season are sure to fly off the shelves

BEAUTY BEAT: SKINCARE & COSMETICS

56 Beauty boost

Luxurious creams and a vibrant collection of new cosmetics promise to appeal to women travelers looking for a bit of pampering

COMPANY NEWS: FOSTERS

Selling up

COMPANY NEWS: BELVÉDÈRE DUTY FREE

Star power With Bruce Willis as spokesperson for Sobieski, Belvédère Duty Free prepares to take on the Middle East with a portfolio of brands that have proven to be stars in their own right

COMPANY NEWS: MONUS

Striking the perfect balance Monus Tobacco Company continues to attract attention in duty free with a wide range of new and classic brands that offer both quality and value

Building on a history of successful scents, Ajmal Perfumes introduces its newest launch: Lure

BEAUTY BEAT: FRAGRANCES

Recession-busting 101

After some recessionary “trading down,” Fosters Group sales through Dubai Duty Free are riding a new wave of consumer confidence

Traveller builds successful partnerships with leading airlines across the Middle East

COMPANY NEWS: AJMAL PERFUMES

FAST-GROWING LIQUOR BRANDS

Gulf-Africa Duty Free examines the explosive growth of three brands in Middle Eastern travel retail, discovering that above all, quality is the key to success in tough times

Innovative, exclusive fragrance promotions bring Puig Middle East dynamic growth

Sky is the limit

A world of opportunities Diageo’s Jane Ewing asserts that the possibilities in the Middle East are limitless given Diageo’s ever-evolving portfolio and the region’s recession-busting performance in 2010

The smell of success COMPANY NEWS: TRAVELLER LIMITED

COMPANY NEWS - DIAGEO

COMPANY NEWS: IMPERIAL TOBACCO

Full steam ahead Following 2010’s new and limited edition packaging, Imperial Tobacco is set to roll out impressive new furniture worldwide to continue strengthening its position in duty free

82 84

COMPANY NEWS: COMPANY NEWS - JTI

On the rise Despite increasing restrictions on the sale of tobacco products in many regions, JTI sees shipment volume improve from January to September 2010

NEW AND NOTABLE Chocolate shaped airplanes ■ Liberty by Tic Tac ■ Adidas Timepieces

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

Association News: MEDFA

Maintaining the momentum

Anthony Chalhoub discusses MENA and South Africa, indicating that the key to continued success in both regions lies in keeping the already successful duty free industry on upward path BY RYAN WHITE ppropriately given North Africa’s strong performance throughout the past year in terms of both duty free and travel, the 2010 MEDFA conference—themed “Reality and Opportunity”—will be taking place in Cairo November 28–29. Gulf-Africa Duty Free recently sat down with the organization’s President, Anthony Chalhoub, to discuss the opportunities that abound in the MENA region. Also on the table during this year’s conference are discussions toward maintaining the momentum that South Africa has gained from the World Cup, and Chalhoub frames this topic in terms of the numerous other successes that South Africa has enjoyed of late, such as increased political stability and a burgeoning economy.

opportunity lies for the future? What are some ways that the industry in the region can take advantage of these opportunities? Anthony Chalhoub, President, MEDFA: Yes, North Africa is performing well. Development of tourism is attracting more investors and more visitors. North Africa is getting richer and has a stable and steady growth, which automatically boosts investments and triggers opportunities. GADF: The issue of currency fluctuations will be discussed at the conference. How do you feel currency fluctuations will affect the industry? What programs are (or should be) in place to minimize any negative impacts on the industry in the region? AC: Currency fluctuation is a general and recurring issue, as some countries are based

“It is very important to cope with rapid growth, and adjusting extremely rapidly to customers’ profiles is vital.” Anthony Chalhoub, President, MEDFA

Chalhoub also touches on current and future challenges, from currency fluctuations to tobacco restrictions. He notes that the key to facing these challenges and continuing on an upward path is constructive dialogue with the aim of developing proactive means to combat future obstacles. Gulf-Africa Duty Free: By all accounts, North Africa is performing well in duty free compared to many other regions throughout the world. Can you tell us where you feel the

on the Euro while others and based on the US Dollar. Suppliers are invoicing traditionally with one of these two main currencies and therefore it is unavoidable to have a currency issue when duty free prices are compared to local markets during important fluctuations. Economists are probably better prepared to answer this question, [but] I really think we have to work closely with finance teams and banks to hedge part of the purchases and build price structures accordingly.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

GADF: Is coping with rapid growth an important consideration for the industry in your opinion? How do you feel this growth should be managed in the mid to long term? AC: Of course, it is very important to cope with rapid growth, and adjusting extremely rapidly to customers’ profiles is vital. GADF: South Africa is also a topic at the conference. What are some ways you feel that South Africa can continue to build on the increase in sales/passengers brought about by the World Cup? AC: The World Cup was an important event for South Africa and football, but South Africa also is a hugely important country. A lot is happening there. The growth of the economy, political stability and the development of the tourism industry, [apart from] football, have been increasing at quite an important pace. GADF: Can you comment on the changes in the MEDFA board of directors? AC: There will certainly be changes in the coming months in the MEDFA board as John Sutcliffe will be retiring to take an advisory role for Aer Rianta International Middle East at the end of the year. His replacement will be Philip Eckles. A new board will be elected in March or April 2011 during the next annual general meeting. GADF: Why do you feel conferences such as MEDFA are more important now than ever before? AC: We encourage suppliers, operators and landlords to attend the MEDFA conference and various events related to the trade. With dialogue and networking, and various presentations, we can help the travel retail industry develop and grow smoothly and steadily. It helps us also overcome various difficulties such as airport security and tobacco restrictions, as well as many other issues. c

In Brief Man from Mars moves on

Many gathered at the Carlton Grand Salon during the TFWA World Exhibition in Cannes last month to bid farewell to popular duty free veteran Stuart Bull. After a successful 40-year stint with Mars, Bull has decided to move on. The salon was packed full of Bull’s well wishers who listened intently while the Mars team praised Bull’s contribution to the company and the travel retail industry worldwide. Every person that has ever met Bull would know about his deadpan sense humor, which he demonstrated once again when sharing a little anecdote about his early days. “Selling Mars bars was a dream job for a fat boy from the North of England,” joked Bull. “There have been a lot of ups and downs, in fact quite a few downs, like the time I was fired in 1996.” Gulf-Africa Duty Free wishes Stuart Bull all the best in his future endeavors.

As a means of piquing the interest of travelers to Cairo Airport, IDFT&A recently ran a Lindor sampling event

IDFT&A plans new store open-

ings and works with suppliers on successful promotions

International Duty Free Trading & Agencies (IDFT&A) currently has four duty free shops in Cairo International’s Terminals 1 and 3: two Mont Blanc locations (one in each terminal), a Bijoux Terner store in Terminal 1 and a convenience store in Terminal 3. The company will soon be opening a Hugo Boss store in Terminal 1 and a Mont Blanc shop at Hurghada Airport. IDFT&A Marketing Executive Nermine Nassar notes that plans for more stores at Cairo’s Terminal 2 are also in the works: “We will be opening three more stores in Terminal 2 departures once airport construction is finalized. The three stores will be Montblanc, Hugo Boss and Bijoux Terner.” Nassar also says that one of the stores will contain a small shop-in-shop dedicated to Godiva chocolates. Of course, as Cairo International’s Terminal 2 closed for renovations in March of this year for an estimated 36 months, the company will be focusing on building sales in its other airport shops for the time being. And as a means of increasing spend in its existing locations, Nassar asserts that promotions are a very useful tool: “We’ve recently worked with Kraft on a Buy 3 Get 1 Free promotion for Toblerone and the response was very positive. Travelers at Cairo Airport also appreciated our Lindor sampling event. Both activations resulted in an increase in sales. We’ll certainly be planning more promotions for the rest of 2010 and into the new year as well.”

IDFT&A recently worked with Kraft on a Buy 3 Get 1 Free promotion for Toblerone

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

In Brief

Beasts step out

into travel retail

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Tourism Report

Where it all begins With tourism booming this year and growth expected through 2020, Egypt proves that it has the infrastructure to welcome an ever-increasing number of adventure seekers ulf-Africa Duty Free magazine caught up with Samy Mahmoud of the Eg y ptian Tourist Authority to discuss how the country has fared in 2010 with regard to tourism. As operators and airports throughout North Africa have reported traffic increases, it should come as no surprise that the country as a whole is well above last year in terms visitors. Perhaps more importantly than this year’s performance, however, is the fact that this growth is forecast to continue through 2020. From January to September of this year, 10.5 million tourists visited Egypt. This represents an increase of 18.2% over the same period in 2009. The total number of tourists to Egypt in 2009 was 12.5 million, while the number of tourist nights was 126 million. Tourism-related revenues were just over US$10 billion. “By the end of this year we expect to welcome about 15 million tourists,” says Mahmoud. “When all is said and done, we’re expecting to be about 20% over 2009 in terms of visitors to the country. Moreover, the increase that we’re experiencing at the moment is indicative of things to come. By 2020, we expect about 25 million tourists.” Mahmoud asserts that in addition to the improving economy, travel to Egypt is

increasing for a number of reasons, not the least of which is because of a boom in spas and wellness centers, a wide range of golfing options, safari and adventure packages, watersports in such tourist hotspots as Sharm el-Sheikh and of course the innumerable cultural and historical destinations that the country has to offer. Business travel is another important contributor to Egypt’s economy, and the government has invested considerably in facilities designed as MICE (meetings, incentives, conferences and exhibitions) destinations. Indeed, Egypt is an ideal choice

Who’s visiting? According to the Egyptian Tourist Authority’s data, the following countries round out the top ten when it comes to visitors to Egypt from January to September 2010:

Country Russia UK Germany Italy Poland France Libya Saudi Arabia Ukraine Israel

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

No. of visitors (millions) 1.9 1.081 0.944 0.891 0.481 0.439 0.351 0.291 0.267 0.184

RYAN WHITE

for corporate events as visitors have any number of options for doing business during the day and even more possibilities for entertainment at night or on weekends. “It is also important to note the Egyptian Tourist Authority’s latest advertising campaign, which operates under the slogan ‘Egypt, where is all begins,’ says Mahmoud. “The initiative costs over US$40 million dollars annually and we cover 26 markets in Europe, North America and Asia in addition to seven Arab markets.” Mahmoud further notes that since the end of the nineteenth century, Egypt has been evolving quickly: “Egypt’s political, economical and cultural life has undergone striking changes,” he explains. “From the inscription of the first hieroglyph to the construction of the new hi-tech Smart Village, Egypt has always been a pioneer on the frontier for emerging information technologies in the Arab world. From tradition to modernity, Egypt is a country which has succeeded in creating a present c that is as fascinating as its past.”

Timing is everything The Egyptian Tourist Authority’s records also contain useful information on the average length of stay for visitors to the country:

Nationality European North American Asian Arabic African

Average length of stay (days) 10.6 17.0 6.5 19.0 8.1

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Top Story: Dufry Sharjah

Evolving with the times BY

Dufry Sharjah makes use of information on passenger profiles and purchasing habits taken from Dufry’s worldwide database in order to tailor offerings to its specific clientele

RYAN WHITE

Dufry Sharjah continues to transform itself according to passenger profiles and purchasing habits, with the latest step in the operator’s evolution coming in the form of two new Hudson News locations n a recent interview with Erik van der Veen, Deputy COO of Dufry Sharjah, Gulf-Africa Duty Free learned that the company has a number of initiatives planned for 2011, not the least of which is the noteworthy rollout of Dufry-owned Hudson News stores beginning at Sharjah International Airport. Looking toward 2011, van der Veen also discussed catering to passengers of various nationalities and ensuring that product mix and promotional activities keep the excitement strong throughout the year. Regardless of the topic of conversation, it’s clear that van der Veen sees the continued evolution of the business as a major contributor to Dufry Sharjah’s success.

Up to speed Passenger numbers at Sharjah International Airport have been increasing steadily over 2009, and Dufry Sharjah’s sales so far this year have been in line with these traffic increases. The company has two stores landside in departures, three shops airside in departures and one arrivals shop. The main shop in departures, as well as the separate luxury store in the same area of the airport, also caters to a small number of arriving passengers. The main store measures nearly 2,000-square-meters, while the fashion location measures 320-square-meters. Dufry Sharjah’s lastminute store, which carries the most popular SKUs, is 45-squaremeters, the arrivals shop is 110-square-meters and the two landside stores—which are linked together—total 150-square-meters. It’s no doubt that the company has a huge presence in the airport, and as a result Dufry places great emphasis on staying on top of passengers’ preferences when it comes to shopping duty free. “As a major duty free operator, our offering needs to be as broad as possible,” explains van der Veen. “Of course, at the same time it’s important to concentrate on key categories and brands. For example, we cater to many Russian passengers. These travelers tend to spend more than passengers from, say, Nepal, who also shop at our stores. It’s very important to have detailed information about the purchasing habits of a given group of consumers.” And to that end, Dufry has a database that provides regional Dufryowned stores with useful information on consumer trends throughout its worldwide operations. The folks at Dufry Sharjah regularly consult this information system as a means of tailoring the product mix and pricing to the passengers that are shopping in their stores. “People tend to be very brand-loyal when purchasing categories 20

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

such as tobacco, but this type of information really comes in handy for spirits and fashion items, for example, where consumers are open to trying new brands,” continues van der Veen. “The database helps us in the sense that it takes some of the guessing out of which brands customers are open to buying.” While European purchases fell slightly last year, van der Veen notes that he’s starting to see spending from this group of passengers bounce back. He explains that tracking trends was very important at the height of the recession as it allowed Dufry Sharjah to keep on top of who was spending and who wasn’t. “Our main customers are Indians, but European spending is on the upswing, meaning that we have to keep a close eye on product mix,” van der Veen says. “Europeans tend to spend more when returning home, especially on cigarettes and spirits, because of the significant tax savings they see from shopping at our stores. However, food and confectionery are also very popular with other passengers, so we’re always very cognizant of stocking the right products.”

Out with the old… Every April and October Dufry Sharjah switches up its assortment at the stores. Of course, van der Veen notes that there are core brands—perennial bestsellers such as Johnnie Walker to name but one—that remain year-round. All in all, however, about 15% of the products in store get changed out bi-annually based upon data collected from the previous financial period. “This keeps our assortment fresh and exciting, and we’re always willing to try something new provided we feel the product is attractive to our customers,” van der Veen says. “Although I can’t mention specific products at the moment, I can tell you that we’re currently in the process of implementing a wide range of new products in the stores for 2011.”

… and in with the new “Our landside departures convenience and luggage shop will be converted into a Hudson News location in Q1 2011,” van der Veen explains. “Furthermore, the arrivals shop will also be converted into the same. These will be the first Hudson News locations in the region and will serve as nice contact points in the Middle East for airports here that are considering a Hudson News in their facilities.” In 2008, Hudson Group merged with Dufry. The transaction included an exchange of shares of Hudson Group's common stock

Two new Hudson News locations are set to open at Sharjah Airport in Q1 2011 (pictured is Dufry’s first Hudson News outside of the US and Canada, located in Puerto Rico)

into Dufry equity. In simple terms, Dufry now directly owns 100% of Hudson. At the time of the merger, Hudson Group operated 540 dutypaid stores in 70 airports and transportation terminals throughout the United States and Canada. Of course, Dufry is set to give Hudson News a new global presence, and the 2011 opening of the two stores in Sharjah Airport is essentially an early taste of what will eventually be a wider rollout worldwide. The new Hudson News locations will take up approximately 260square-meters in Sharjah Airport and feature the same custom-developed concession programs and trend-setting store concepts for which Hudson Group is known. Hudson News’ mix of nationally recognized brands and quality local products, in combination with a distinctly customer-centric business philosophy, are sure to prove popular in Sharjah.

Piquing interests In addition to the above developments, promotions will continue

Commenting in 2008 on the merger of Dufry and Hudson Group, CEO of Dufry Julian Diaz said he was “delighted about this transaction. Hudson sets the standard in duty paid travel retailing. The combination of Hudson's retailing expertise and Dufry's know-how in international markets and global footprint are a perfect match to create a duty paid news and convenience store concept on an international scale. “Hudson even generates higher returns in duty paid than the average duty free operation, thanks to its focus on travelers' needs,” continued Diaz. “For Dufry, this transaction is a great opportunity to build up a strong position in the duty paid convenience store segment, which complements Dufry's duty free business at a similar profitability.”

to play a big role in Dufry Sharjah’s activities during the year to come. In addition to regular gift with purchase and 2-plus-1 deals in many categories that run year-round, the operator has something big planned for 2011. “We’re planning on a scratch and win promotion in 2011, with the grand prize being a new car,” explains van der Veen. “We’ve done this type of activation in the past and have had a really good response. Many of our Indian customers are really driven by promotions when it comes to purchasing, so again this is another way to try to meet the needs of our specific passenger profile here at Sharjah International. “We’re looking forward to the new year and continuing to grow c sales,” concludes van der Veen. “Watch us in 2011!”

Operator News: Dubai Duty Free

(From left) Anne Smith, Manager-Corporate Responsibility of Dubai Duty Free; George Horan, Deputy Managing Director, Dubai Duty Free; Yasemin Kanan Saib, Senor Fund Development Manager of Dubai Cares; and Saba Tahir, Manger-Purchasing, Dubai Duty Free

winning combination

Amid numerous accolades for its retailing achievements this year, Dubai Duty Free takes time to give back by supporting the Dubai Cares initiative BY RYAN WHITE ubai Duty Free recently presented Dubai Cares with the first donation generated from sales of Dubai Cares merchandise at Dubai International Airport. This joint initiative, which commenced in May 2010, was launched to raise funds for Dubai Cares and to increase awareness of the Dubai Cares brand around the world.

Commenting on the initiative, Colm McLoughlin, Managing Director of Dubai Duty Free, said: “We are delighted to be part of this retail initiative, which is the start of something exciting for both organizations. We are also happy to be presenting the first cheque to Dubai Cares to aid them in their aim of improving access to primary education for children in developing countries.”

“We are… happy to be presenting the first cheque to Dubai Cares to aid them in their aim of improving access to primary education for children in developing countries.” Colm McLoughlin, Managing Director, Dubai Duty Free

Respected in the trade In related news, Dubai Duty Free was recently presented with the Retailer of the Year award at the Retail City Awards held to coincide with the Cityscape exhibition at the Dubai International Convention Centre. The award acknowledged Dubai Duty Free’s retail achievements over the past year, in which its turnover reached US$1.14 billion (2009). The operation was once again named as the largest single airport retailer in the world. Commenting on this latest award, Managing Director of Dubai Duty Free Colm McLoughlin said: “We thank the organizers of the Retail City Awards for recognizing our efforts at Dubai Duty Free and those of the retail sector in the UAE as a whole. The retail sector has come through a difficult period globally but this sector continues to be dynamic and innovate here in the UAE and we are delighted to be a part of it.” The accolade comes hot on the heels of another major award win. Earlier in the year, Superbrands Middle East announced that Dubai Duty Free won the Brand of the Year honor at the sixth annual

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Sean Staunton, Manager-Operations at Dubai Duty Free, received the Retail City Awards on behalf of Dubai Duty Free from Peter Walichnowski, CEO of Majid Al Futtaim Property

Featuring the Dubai Cares logo, the range at Dubai Duty Free includes affordable items which appeal to departing and transiting passengers. “This partnership with Dubai Duty Free and the success that this joint initiative has enjoyed to date highlights the rapidly increasing focus that corporate and government entities are giving to corporate social responsibility,” said Tariq Al Gurg, CEO of Dubai Cares. “Dubai Duty Free caters to millions of travelers every year and we are confident that this is just the start of a long-term and mutually beneficial relationship,” Al Gurg continued. “We welcome and deeply appreciate the support of Dubai Duty Free and its customers who are helping us achieve our objective of improving the lives of millions of children across the world by providing them with access to quality primary education.”

Superbrands tribute event. Sixty-two top brands were awarded the Superbrands status out of thousands available in the UAE. The brands that scored more than 80% of the total possible marks were declared Superbrands by the Brand Council. To win this accolade is a powerful endorsement and evidence for existing customers, potential customers, the media, suppliers, investors and employees of each brand’s exceptional status. Accepting the award on behalf of Dubai Duty Free, Managing Director Colm McLoughlin said, “We are delighted to receive the top Superbrands award and thank the council members and associates for voting for Dubai Duty Free. As a brand, we have always understood the importance of marketing and in having a meaningful relationship with our customers, our suppliers and our own employees. This award reflects our efforts over the past 26 years.” “Even after 26 years of success, Dubai Duty Free is a brand that continues to excel and grow—a perfect example of a Superbrand,” said Mike English, Director, Superbrands Middle East. “They are one of the most trusted and recognized brands internationally. We would like to congratulate them on this feat and wish them even more success in their future endeavors.”

Shadow for Him now available at Select Duty Free outlets. For enquiries, please call + 971 4 269 01 02 (Ext. 273), e-mail dutyfree@ajmal.net or visit www.ajmalperfume.com

Operator News: Cairo Airports Duty Free

Inside and out Cairo Airports Duty Free keeps its thumb on the pulse of the industry and as a result takes the next step in the evolution of both its stores and products BY RYAN WHITE

n a move to distinguish itself from other retailers in Cairo International Airport, Cairo Airports Duty Free (CADF) has undertaken a new branding initiative that will eventually see all of its stores exhibiting a more homogeneous look. The facades of the Terminal 3 stores now feature gold-, turquoise-, coral- and lapis lazulicolored stripes meant to evoke the hues of traditional Egyptian jewelry. “The new look premiered in August at our six stores in Terminal 3,” says CADF Managing Director Nadia Rashad. “We felt that we had to stand out, and this was really the impetus for the new project. We’ll be extending this theme to the six terminal 1 stores in 2011.”

to changing the look of the stores themselves, we’ve also matched our shopping bags and advertising accordingly. Once the Terminal 1 stores are updated next year, passengers will be able to immediately recognize CADF’s stores, which is certainly important from a branding perspective.”

Time to play In addition to the new-look stores, the products within—at least in terminal 1—have also changed considerably. Around the beginning of the year, CADF began to see a shift in purchasing habits away from high-end items. Magued Mounir, Operation Manager at CADF, explains: “From 2009 to 2010,

“We started bringing in more toys and confectionery in March and since then the response has been great.” Nadia Rashad, Managing Director, CADF

The traditional elements of the new aesthetics work extremely well given some of the stores that CADF opened recently in Terminal 3. Taste of Egypt and Egyptian Treasures were designed according to the new theme and appropriately contain Egyptian products such as wine, olive oil, olives, cigarettes, herbal teas, coffee, honey, dates and much more. “The stores really attract passenger attention, and of course that’s what we’re looking to accomplish,” says Rashad. “In addition 24

we’ve seen a gradual drop in sales of luxury items. Passengers are still buying items for gifting purposes, but are shifting from one category to another.” Star Alliance and Egypt Air don’t have a presence in terminal 1 of Cairo International Airport, meaning that CADF caters mostly to tourists in its stores there. Of course, it’s no secret that the industry in general has lately seen passengers trading down as customer confidence remains weak, and like many others operators CADF has

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

The facades of CADF’s terminal 3 stores now feature gold-, turquoise-, coral- and lapis lazuli-colored stripes that evoke the hues of traditional Egyptian jewelry

learned to roll with the punches. The company has changed its product mix in one of its terminal 1 stores to offer passengers more of the products they want. “Our top selling categories in terms of sales are confectionery, toys and Egyptian souvenirs,” says Mounir. “In 2010 we’re seeing a shift toward toys and confectionery. We’ve introduced a number of new toy and confectionery brands into our stores. Adaptation is key, so for that reason in one of our terminal 1 stores toys take up about 70% of the space, whereas before in the same store, toys only occupied about 5% of the total space.” With the increase in space dedicated to toys, CADF has necessarily begun working with a number of new toy suppliers such as Cartoon Stores, Wizz and Russ, to name a few. “There’s really a huge variety of options for passengers of all ages,” adds Rashad. “We started bringing in more toys and confectionery in March and since then the response has been great.” Indeed, CADF has seen sales remain stable this year in comparison to 2009, with some obvious differences in average ticket value and the number of transactions given the fact that consumers are opting for lowerpriced items. “At the end of the day, passengers are still spending, so we’re pleased,” says Mounir. In 2011, CADF will be focusing on the thematic redesign of its terminal 1 stores in addition to continuing to pay close attention to ever-changing spending habits. “We’ve shown this year that we have the ability to both adapt successfully and proactively make changes that need to be made in order to remain a key player in the airport,” concludes Rashad. “Our aim is to continue c innovating for a long time to come.”

Operator News: Bahrain Duty Free

Bahrain Duty Free recently opened a new Bijoux Terner-branded shop measuring 15-square-meters at Bahrain International Airport

A buoyant year

Bahrain Duty Free maintains a big presence in the Middle East with continued initiatives relating to virtually every facet of its business BY RYAN WHITE

ahrain Duty Free Shops Complex has had a buoyant year to date. The operator reports that sales results have been positive despite the global recession, indicating “tighter controls, improved efficiencies and the support of our loyal customers” as the keys to success. Bahrain Duty Free reports that its airport, seaport, in-flight and training operations all performed well and contributed strongly to the overall business. The company notes that the Hidd Port contract for the cruise line terminal opens shortly and is expected to help in the continued growth, adding value to the overall business. Bahrain Air’s business continues to grow steadily, largely as a result of the addition of new routes, and Bahrain Duty Free has just launched the third Bahrain Air in-flight magazine. Furthermore, the operator’s retail training division company, Bahrain International Retail Development (BIRD), has also expanded and won additional training contracts. BIRD has added both training modules and partners to its portfolio this year to meet the growing needs of Bahrain and the country’s 2030 objectives. “Our main focus continues to be on customer service, customer care and innovation in products, promotions and service to ensure a better experience for the customer at Bahrain Duty Free,” says Steve O’Conner, General Manager of Bahrain Duty Free. The Bahrainization policy adopted by the company since its inception has played a major role in attracting many tourists to the Bahrain Duty Free shops at the departures area in Bahrain International Airport. The growth in Bahrainization has been consistent, having now reached a current rate of 60%. By the end of the year, the rate is expected to rise to 63% as the trainees 26

presently employed finish their studies. On the other hand, the training scheme instills in the newly recruited trainees the fact that a successful salesperson does not necessarily have to be an expatriate individual. As result a number of the existing staff members have been promoted to supervisory positions in a very short period of time after joining and completing training. Some of these trained staff members are being prepared to further assume higher positions. This policy has had a significant impact in reducing the rate of resignations in comparison to the past three years, the company reports. Bahrain Duty Free invests around BD180,000 (US$478,000) annually on training and development projects, with a tendency to increase its annual training and development budget to meet its continuing policy of Bahrainization. The success of the operator’s Human Resources management was highlighted earlier this year by its winning the prestigious award as the best company in human resources management and nationalization in the region. Bahrain Duty Free’s Corporate Human Resources Director was also honored by the Supreme Council for Vocational Training and the Ministry of Labor in the field of training and human resource development.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Of course, Bahrain Duty Free has not skimped on airport investment, as it completed an upgrade to the perfume area, a new Zummerod shop, the introduction of a Bijoux Terner shop, the refit of the souvenir area, a move to a larger location for sunglasses, moves for luggage and travel, expanded space for the book shop, the upgrading of the A-Z shop with food area and the addition of shopping trolleys. Bahrain Duty Free notes that further planned upgrades for its duty free operations during the rest of this year and into 2011 are for pillar lightboxes to be installed, a Montblanc premium shop, a major refit of the electronics area and an upgrade of promotional and car sites. “We’re aiming to have the Montblanc store opened around the beginning of December so that we can have it finished before our peak period,” notes O’Conner. “The store will measure 40-square-meters and it will be located beside our Givenchyand Hugo Boss-branded departures stores.” Finally, O’Conner notes that there’s plenty to be optimistic about for the rest of the year: “We’re going into a period of the year that is generally busy for duty free in this region, so we expect a lot more airport travel, c which should in turn generate sales.”

Bahrain Duty Free has increased the sunglasses department by 10-squaremeters in its main departures store

Operator News: Hamila Duty Free

Game face

Hamila Duty Free battles a drop in passenger numbers across its operations and comes out on top thanks to timely promotions and new listings BY RYAN WHITE hile operators generally try to keep their sales well ahead of passenger numbers, it can be said that this is a feat much more easily accomplished when traffic is on the rise—increased travel generally corresponds with an increase in disposable income, after all. However, Hamila Duty Free put on its game face in 2010, developing promotions and securing new listings that have captured the interests of shoppers. “In general we’re 3% above the same period last year in terms of sales,” says

For Eid, the period marking the end of Ramadan, the operator ran a 25% off promotion on all accessories. “During this period, people usually by a lot of presents,” says Ben Cheikh. “The 25% off promotion really helped sales and gave people the extra incentive they needed to spend a little more at our stores. Furthermore, if you look at sales only during Ramadan, of course there is decrease in liquor purchases. However, liquor sales doubled both before and after Ramadan this year, which really helped business.”

“Considering the drop in passenger numbers this year, we’ve performed extremely well. In 2011 we’ll be looking at how we can continue this strong performance.” Mariem Ben Cheikh, Managing Director, Hamila Duty Free

Mariem Ben Cheikh, Managing Director of Hamila Duty Free. “We’re very pleased with these results because across all of our operations we saw a drop in passenger numbers of about 12%.” Ben Cheikh notes that the Islamic holy month of Ramadan—the timing of which varies from year to year on the Gregorian calendar—was during the summer in 2010. As a result, sales at La Goulette Harbor took less of a hit than they normally would have (liquor sales generally dip during Ramadan) because summer is high season in Tunisia.

Specific products that are currently selling well are Paco Rabanne’s 1 Million, Dior perfumes, Guerlain makeup, L’Oriel France products and Revlon cosmetics. In spirits, Grey Goose Vodka and Absolut are continuing to sell well. Finally, Hello Kitty products are proving to be extremely popular with children. Earlier in the year, Ghofrane Zitouni, Sales and Development Director of Hamila’s parent company YKH Holding, noted that the company is “just starting out” at Enfidha Airport, and for that reason sales haven’t been quite as robust as at the seaport locations.

Hamila’s two stores at Enfidha Airport in Tunisia measure a total of 272-square-meters and offer Tunisian duty free products such as souvenirs, wines, tobacco and more

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Ben Cheikh confirms that low passenger traffic due largely to a lack of routes to and from the airport is still a cause for concern, but maintains that the company is planning a promotional calendar for 2011 that will no doubt generate better results. Apart from promotional activities, a sure way to pique the interest of shoppers is new listings. With that in mind, Hamila has added a number of interesting products to its stores. “We’re currently increasing the number of brands in our jewelry category, and we’ve added some really nice products from Scorpio and Pierre Cardin,” says Ben Cheikh. “We’ve also noticed a shift in the passenger profile and as a result we’re rounding out our skincare and makeup with brands such as Maybelline, Body Shop and L’Oriel Paris. Again, travelers are really responding well to these additions.” The company’s in-flight duty free sales are also impressive. As can be expected, cigarettes, fragrances and spirits make up the bulk of purchases. However, Ben Cheikh asserts that watches and accessories have come to the forefront in 2010. In 2011, Ben Cheikh plans on concentrating on Hamila’s ferry business as it represents a sizeable 25% of overall revenue: “We’re going to be renovating our shops to make them look more modern and trendy,” she says. While Hamila doesn’t plan on opening any new duty free stores in 2011, Ben Cheikh did confirm that a new store dedicated to perfumes will open next year in the domestic market. While details are still under wraps, she notes that the concept is unique and should garner a lot of attention. “For the moment in duty free we’re concentrating on our existing stores,” she concludes. “Considering the drop in passenger numbers this year, we’ve performed extremely well. In 2011 we’ll be looking at how we can continue this strong performance in the stores we’re currently operating through continued promotions and product listings.” c

Operator News: Kreol Trading

Alpha-Kreol India Limited manages two stores in Cochin Airport in India, one in arrivals measuring 790-square-meters and one in departures measuring 465-square-meters

A pioneering spirit

Kreol Trading finds its roots in a groundbreaking venture at Cochin Airport, putting the same outside-the-box thinking to use in store much to the delight of its clientele BY RYAN WHITE AE-based Kreol Trading Establishment runs an extensive duty free operation at Cochin Airport in Kerala, India in partnership with Aldeasa. The airport boasts the fourth-largest passenger traffic in India with 450 flights per week. The facilities are spread over 526 hectares of land. Of this, 323 hectares are currently in use for the airport activities while 200 hectares have been earmarked for aviation maintenance, a convention center, hotels and an Information Technology Zone. While the airport is owned by the Kerala state government and Indian financial institutions, the major shareholders are 11,000 expatriate Indians living in 30 countries. Indeed, Cochin International Airport marks the first ever public-private-government venture of its kind, and Kreol Trading and Aldeasa are committed to extending this pioneering spirit to their duty free operations at Cochin. “Kreol Trading is delighted about their partnership with the global duty free giant Aldeasa, as this has taken their joint-venture operations to a higher level,” says A.S. Lal, Chief Executive at Kreol Trading. “Our joint venture is also grateful to Cochin International Airport for giving us the opportunity to be a part of this unique venture.” One of Kreol Trading’s many strong suits is that it has an extensive knowledge of local clientele and a product mix to match passenger tastes. This, combined with a business

plan that consists of year-round promotions highlighted by special raffles and draws at various times of the year to increase per passenger spend, means that Alpha-Kreol is well positioned to handle the airport’s rise in traffic over 2009. Last year, 1.9 million passengers were serviced by Cochin Airport. By the end of 2010, a projected 2.2 million passengers are expected to be processed. The operator has kept well ahead of this trend, with sales this year that are about 30% higher than last year. Average customer spend is at a respectable US$46 while the penetration rate stands at 25%. Not surprisingly, liquor is the number one category in terms of sales, accounting for 57% of Alpha-Kreol’s revenue. Confectionery accounts for about 17% of sales, with customers particularly fond of Mars products. Also representing 17% of sales are grocery items. Within this last category Nido powdered milk is the most popular product. “I would put the rise in sales down in part to more tourists heading to affordable India, particularly for the natural beauty of Kerala state and its mix of spices, Ayurveda [a system of traditional medicine practiced in India] and breathtaking wildlife,” says Lal. While the rise in passenger numbers can be explained by an influx of tourists, spending by vacationers is only a part of the reason for Alpha-Kreol’s sales increases. In fact, natives of Kerala state make up the majority of shoppers at the store, and as men-

“Kreol Trading is delighted about their partnership with the global duty free giant Aldeasa, as this has taken their joint-venture operations to a higher level.” A.S. Lal, Chief Executive, Kreol Trading

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

tioned, a keen eye for consumer preferences has resulted in sales that far exceed the increase in passenger numbers. “The natives who visit the store live and work all over the world,” explains Lal. “Within this category lies the large segment of those who work in the Middle East, usually returning to visit their families every year. Our knowledge of the local trends in Kerala, as well as an understanding of the aspirations of the migrant workers, has guided us in creating a product mix that fits the needs and budgets of our target customers.” Alpha-Kreol has literally lightened the load for these passengers, understanding that many of them are already carrying bags laden with gifts and supplies from abroad for family members. Thus, the arrivals store carries confectionery, groceries, cosmetics and toiletries as it has become clear that these are the types of products that returning expats desire. Of course, nothing increases spend from all demographics like promotions, and Kreol Trading has developed year-round offers punctuated with special raffles for some very special prizes, including gold, an apartment and various cars. Regular promotions include gift with purchase offers and 2-for1 deals. For the upcoming Christmas season, the operator will offer special pricing on Diageo’s portfolio of spirits (incidentally the best selling spirits in Alpha-Kreol’s liquor category) and confectionery products from Nestlé, Mars, Ferrero, Cadbury and Kraft products. Kreol Trading is also focusing on the travel retail distribution side of its business in Asia and the Arabian Gulf Region while continuing to list new items. “Cadillac perfume is the latest addition to our distribution portfolio and we’re very pleased with the reaction to the brand,” explains Lal. “We’re also negotiating for a number of new food and confectionery items to be included in store as a means of continuing to offer passengers the c products they want and need.”

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Tourvest sold 6,705 decorated ostrich eggs during the World Cup, and sales in the four-week period for this item alone topped US$250,000

Operator News: Tourvest

Building on

past successes After a very successful World Cup period, Tourvest— and indeed South Africa as a whole—looks forward to keeping the good times rolling BY RYAN WHITE

ulf-Africa Duty Free recently spoke to Eric De Jager, Tourvest’s CEO Retail Merchandising, to get a sense of the company’s successes throughout 2010, and especially during the World Cup. His words reveal that while Spain may have taken home the trophy, it certainly wasn’t the only winner this summer. Appropriately at this year’s MEDFA conference, Selwyn Grimsley, CEO of Tourvest Duty Free, will take the stage to discuss the next step in extending sales in South Africa in the long term. As for De Jager, he sees the popularity of the World Cup boding well for tourism in South Africa well into 2011. Perhaps the most exciting development for the company in H1 2010 was that just prior to the World Cup, Tourvest was awarded the tender for a new souvenir shop at O.R. Tambo. Not being a company to pass up an opportunity, they opened a temporary store within a week of being allocated the space and patiently waited for the influx of soccer fans. Indeed, the company’s decision to open the temporary shop paid off in spades. The location was originally stocked with US$105,000 worth of goods, and in just 19 days the company did US$263,000 in sales. Of course, this is only one of the stores at O.R. Tambo. Also located in the airport is the company’s biggest shop, Out of Africa, which measures 450square-meters. Add to the above stores in Cape Town and in well-known destinations such as Robben Island, the V&A Waterfront and Kruger National Park, and a bigger picture in relation to the company’s sales during the World Cup begins to emerge. “In terms of souvenirs, we sold 1.2 million individual items,” says De Jager. “Top sellers included vuvuzelas and what has become a local icon—the Zuma scarf. Our President Jacob Zuma wore the scarf to an official function and it became a bestseller overnight.” Gulf-Africa Duty Free obtained the hard numbers on Tourvest’s sales during this peak period: Over the four weeks of the tournament the company sold 48,310 vuvuzelas; 32

57,152 African animal plush toys; 49,768 t-shirts, the most popular of which was chocolate-colored and featured the African continent on the front; 125,025 pieces of costume jewelry, mostly ethnic in style and composition; and 44,559 fridge magnets, the most popular being the South African flag. Tourvest also sold an impressive amount of decorated ostrich eggs— 6,705 in total, to be exact. Of these, 75% were decoupage eggs retailing at R380 (US$50), meaning that the company sold over US$250,000 worth of this item alone during the World Cup. “Trading patterns changed over the time of the World Cup,” notes De Jager. “The purchasing was male-driven and sales at the souvenir stores grew by over 80% year-onyear. In terms of traditional duty free merchandise, the focus was on ‘guilt purchases’ such as jewelry and ladies’ watches.” As an in-flight promotional item during the World Cup, Tourvest launched the Telefunken tv-enabled mobile phone, which proved very popular with African customers. Other items that sold well during the tournament were cosmetics and liquor, with sunglasses performing beyond expectation.

However, Tourvest does plan to upgrade stores at Sun City, the Palace of the Lost City and in Kruger National Park. Historically, World Cup host countries experience double-digit growth for at least three years after the event. This, combined with Tourvest’s already successful business, gives De Jager a distinctly positive outlook for the near future that hints at the

“The spectacular success achieved by South Africa as the host nation bodes well for the future of our tourism industry.” Eric De Jager, CEO Retail Merchandising, Tourvest For the rest of the year, Tourvest will remain busy with the opening of a “Made in South Africa” store at O.R. Tambo. The store will measure 70-square-meters and will be designed to promote established and emerging craftspeople in the country. Apart from the company’s iconic Out of Africa store at O.R. Tambo, most of its airport outlets were built in just the last two years in preparation for the World Cup.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

tone that South Africa-related discussions at MEDFA may take: “The spectacular success achieved by South Africa as the host nation bodes well for the future of our tourism industry,” he c concludes.

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Operator News: Alfarag Addis Ababa

The operator has seen a 15% increase in sales over last year, with average customer spend currently hovering between US$50 and $80

Back to basics

Alfarag Addis Ababa focuses on staff training and product mix to discourage downtrading and keep high-end products foremost in the minds of passengers ust as operators have been affected by the economic downturn in any number of ways, there are also numerous avenues toward combating the decrease in customer spend, from running large-scale promotions and investing in advertising to renovating or changing product mix. Alfarag Addis Ababa Duty Free, located in Ethiopia, has gotten back to basics by concentrating on staff training and ensuring the correct product mix this year, and as a result the operator has seen a significant sales increase over 2009. The company operates two stores measuring 600-square-meters and 470-square meters in Addis Ababa Airport’s departures area. The stores carry a range of high-end brands in a number of categories such as confectionery products (e.g., Nestlé, Mars, Ferrero, Goldkenn, Toblerone); tobacco (e.g., Philip Morris, JTI, Imperial Tobacco, Villiger); watches (e.g., Rado, Tissot, Longines, Calvin Klein, Cartier); writing instruments (e.g., Montblanc, Parker, Waterman); cosmetics and perfumes (e.g., Christian Dior, Chanel, YSL, Givenchy, Kenzo, Paco Rabanne and premium L’Oreal brands such as Lancome, Giorgio Armani, Cacharel, Diesel, Guy Laroche and more); sunglasses (e.g., Ray-Ban, Oakley, YSL, Guess, Giorgio Armani, Bvlgari); luggage from Samsonite; electronics (e.g., Sony, Panasonic, Nokia, Canon); jewelry (e.g., Swarovski, Calvin

Klein) and sports clothing and accessories With so many high-end products in the stores, downtrading may have been a serious issue this year. However, the passenger make up at Addis Ababa Airport includes a number of demographics that have traditionally been seen as ready to buy if given the proper attention. “We have many Chinese and Indian passengers coming through our stores,” says Anwar Farag, Managing Director at Alfarag Addis Ababa. “Of course, as Ethiopia is the hub for Ethiopian Airlines flights flying from all across Africa to the rest of the world, we have a significant portion of travelers from West Africa followed by passages from East and Central Africa.” The purchasing power of Chinese travelers is legendary, and the upper middle class of India has emerged as a segment of the world’s population that also has disposable income to spend when traveling. As a result, Alfarag Addis Ababa has concentrated on training staff to ensure that the virtues of all the products in the stores are properly communicated to passengers. The operator has seen great success in categories that often suffer the worst from downtrading during recession. “Cosmetics and perfumes is our number one selling category, and within that Christian Dior, Chanel and the L’Oriel range of products are the top sellers,” says Farag. Despite the recession, Alfarag Addis Ababa Duty Free’s top selling categories include P&C and electronics, in addition to confectionery and tobacco

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

RYAN WHITE

Quite remarkably, electronics is tied for third place in sales with confectionery, a fitting testament to both the purchasing power of Alfarag Addis Ababa’s customers and the operator’s concentration on going above and beyond when it comes to staff training. Sony, Canon and Nikon cameras, as well as Nokia mobile phones are particularly popular items in the category. In addition to the above products, Farag notes that passengers are also consistently buying high-end watches and sunglasses. The results speak for themselves. The operator has seen a 15% increase in sales over last year. The product mix also seems to be suited perfectly to the clientele; while duty free customers are traditionally viewed as pressed for time, passengers that enter Alfarag Addis Ababa’s stores generally spend 20 to 30 minutes inside. As one would expect given the high-end products the store offers, average customer spend is relatively high, currently hovering between US$50 and $80. Despite Alfarag Addis Ababa’s success so far this year, Farag is quick to point out that the increased sales are actually the end result of efforts from various parties. Indeed, as has been proven time and again in travel retail, cooperation between operators, airport authorities and even governmental bodies is key to the continued growth of the industry. “The government has made an extensive effort to support this business category, and this goes hand in hand with the work being done by the Ethiopian Airport Authority and Ethiopian Airlines to increase the number of passengers flying through the airport,” Farag explains. “Given the cooperative effort that is being put into growing the tourism industry, the future of the Ethiopian duty free—and of course Alfarag c Addis Ababa—certainly is bright.”

Operator News: Flemingo Mauritius

Flemingo Mauritius runs two downtown duty free shops at Grand Baie and the Caudan Waterfront (pictured here), as well as one duty free seaport store

Off to a

great start

Johnnie Walker Red Label, Marlboro cigarettes and Paco Rabanne fragrances are among the bestsellers in Flemingo Mauritius’ duty free catalogue

While Flemingo Mauritius has only been in operation for little more than two years, booming sales have led to strong numbers and a highly anticipated new store opening BY RYAN WHITE

lemingo Mauritius operates three duty free stores on the island nation off the southeast coast of the continent of Africa. The company runs two downtown duty free shops measuring 50-square meters and 40-square-meters at Grand Baie and the Caudan Waterfront, as well as one duty free seaport store (a joint venture with state-owned Mauritius Shipping Corporation) measuring 110-square-meters. Flemingo Mauritius will also be opening a fourth store in the heart of Grand Baie before the end of the year. The operator is a fledgling arm of larger Flemingo International, having opened the doors to its first store in mid-2008. Despite the challenges faced by any new operation, A. Roland Maurel, Director of Flemingo Mauritius, asserts that the stores have performed extremely well this year, with liquor and tobacco accounting for an impressive 72% of sales. The three most popular brands among shoppers are Marlboro cigarettes,

Johnnie Walker Red Label blended Scotch whisky and Paco Rabanne perfumes. “In addition to the very popular liquor and tobacco categories, perfume makes up 15% of our total sales and confectionery 13%,” says Maurel. “Although we’re relatively new to the duty free channel in the area and starting from a small base, the last 12 months have been considerably better than 2009 from the standpoint of sales. We’ve seen a 50% increase in sales in 2010 over last year, despite the lagging tourism market and worldwide economic concerns.” As a whole, Flemingo International is known throughout the region as a strong force in duty free. While the Mauritius venture certainly could have burst onto the scene on a much grander scale, Maurel notes that starting slowly was part of the plan right from the beginning. “We could certainly have opened more stores but have chosen to limit our presence

Jack of all trades

In addition to its downtown and seaport duty free stores, Flemingo Mauritius has been busy with the distribution side of its business in the region. Flemingo Duty Free Services Ltd. distributes a range of duty free goods to Indian Ocean operators, while General Distribution Ocean Indien Ltée is the exclusive distributor of Philip Morris cigarettes to duty free operators in the same region. Finally, Flemingo Distribution Ltd handles distribution of Philip Morris products in the Mauritius duty paid market. In short, Flemingo covers a vast area when it comes to duty free distribution, from Mauritius, Reunion and Madagascar to Mayotte, Comoros and Seychelles.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

to centers with a high amount of tourist traffic,” he says. “Likewise, we were also very careful to choose high profile locations where international and luxury brands would like to be listed.” As mentioned earlier, Flemingo Mauritius has actually just completed a deal for a new location in the heart of Grand Baie on Sunset Boulevard. The store will measure 85square-meters and will open at the end of this year. Of course, given the care that Flemingo takes to ensure that it associates itself with the right projects, it goes without saying that both the shop and the products contained within will be impressive. Given the recession, the last couple of years have been difficult to say the least for duty free operators who cater largely to European travelers. However, Maurel says that both travel and spending on the part of Flemingo Mauritius’ largely European consumer base has been steadily increasing, as is evidenced by the company’s double-digit sales growth over last year. He notes that he stores also attract a fair number of shoppers from South Africa, India, China and Australia. “We make a real effort to tailor our product mix so that regardless of nationality, shoppers will find any number of products that satisfy their preferences,” explains Maurel. “In our current shops, and of course in our new Sunset Boulevard location, we’re looking forward to further success in 2011 as we continue to offer shoppers both luxury and value on their visit to Mauritius.”c

Aviation Report

Positive Rates In general, passenger traffic and revenues are climbing;

it’s the details that are a little complicated he first decade of the new century has been one that most airline executives would probably rather forget. It started with the catastrophe of the 9/11 terror attacks—the aftershocks of which were felt throughout the aviation industry for years—and ended with the global recession that hit in 2008. Globally, airlines lost some $50 billion over the decade, according to the International Air Transport Association (IATA). Fortunately, IATA sees the beginning of a global rebound as the decade ends. However, prospects remain uncertain. “The upturn has been stronger than anticipated,” noted Giovanni Bisignani, Director General and CEO of IATA, in his address to the annual general assembly of the Arab Air Carriers Organization (AACO). The meeting was held at the end of October in Cairo and provided an opportunity for Bisignani to reflect on the year, the decade, and the outlook for the future. Traffic is already 2 to 3% above pre-crisis levels. Overall capacity increases have been well managed – in this context this means that capacity increases don’t match the pace of growth in demand, because when the rate of capacity increase outstrips the growth in demand, profitability takes a hit. Overall, capacity has increased 7% while demand has improved by 11%. Yields have risen between 7 and 8% in 2010, which is providing the impetus for increased profitability. “However, 2011 will be different,” Bisignani warned. “The inventory re-stocking cycle that drove growth this year is completed and we must now rely on consumer demand to achieve a sustainable recovery. With little improvement in employment levels around the world, this seems unlikely. We see global capacity growing by 6% ahead of a 5% demand improvement.” This means that yields will stop growing and profitability will fall to $5.3 billion. Aviation will remain a “fragile” industry, considering that there is still a cumulative total of US$210 billion in debt on the books.

ANDREW BROOKS

At the beginning of October, Airports Council International (ACI) released figures that showed a global increase of 6.3% in international passengers in August 2010 compared with the same month in 2009. The comparable increase for domestic passengers was 4.9%. The top performers were Asia-Pacific and Latin AmericaCaribbean: international passenger traffic was up 11.6% for AsiaPacific and 17.4% for Latin America-Caribbean. Global domestic traffic growth was even stronger at 19.2%. In the Asia-Pacific region, only Bangkok Suvarnabhumi Airport recorded a drop in passengers—a mild –0.5%—while the other 36 airports in the sample all reported growth, led by China and India. The 11.6% increase in international traffic was supplemented by 9% growth in domestic passengers, for 9.9% overall growth. IATA’s September 2010 figures were released at the end of October. International passenger traffic increased 10.5% year over year, much better than the 6.5% rise in August. According to the benchmark, which compares figures from September 2010 with the same month in 2009, traffic for North American carriers has regained prerecession levels, growing 11.1% compared to September 2009. Capacity increases trailed, coming in at 7.2%. European carriers boosted capacity by 5.9%, backstopping an 8.4% increase in demand. The region is 2% ahead of pre-recession levels, unlike Asia-Pacific, which saw traffic grow 8.6%, and which now sits at 2% below pre-recession levels. Latin American carriers saw the slowest growth in the world, at 6.6%, followed by a 0.5% increase in capacity. IATA noted that the folding of Mexicana had a big negative impact. African carriers, on the other hand, saw a 16% growth in demand, far ahead of capacity, which declined 10.1%. Africa is 7% ahead of pre-recession levels. Middle Eastern carriers topped the charts with a 23.9% increase over September 2009. “The earlier occurrence of Ramadan dampened demand in August, but boosted September’s traffic,” IATA noted. “This

“The inventory re-stocking cycle that drove growth this year is completed and we must now rely on consumer demand to achieve a sustainable recovery.” Giovanni Bisignani, Director General and CEO, IATA

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

outstripped capacity growth of 15.3%. Nonetheless, load factors of 76.8% were below the industry’s 80% performance.”

Growing pains ACI noted the same idiosyncratic September decline, but the Middle East and North Africa (MENA) region has proven to be an exception to many of the rules that apply elsewhere. Indeed, in a statement on October 10, IATA called attention to the challenges posed by the remarkable growth of airline traffic in the region. “Over the last decade, the carriers of the Middle East and North African region have grown from 5% of global traffic to 11%,” said Bisignani. “Planned aircraft purchases of US$200 billion over the next decade will support this growth into the foreseeable future. This expanding global presence brings with it the challenge of playing a larger role in the global aviation community.” According to IATA estimates, MENA carriers will make a US$400 billion profit in 2010, a sharp turnaround from a loss of US$600 billion in 2009. One reason is that in spite of an expected 21% rise in traffic over 2009, regional carriers have held their capacity increases to 15.9%. So if the 10.6% capacity expansion predicted for 2011 outstrips expected growth—which is 10.4%—the US$400 billion in 2010 profit will accordingly fall in 2011 to a predicted US$300 billion. Though predictions are always uncertain, MENA carriers would be following a global trend: For 2011, IATA expects global profitability to fall to US$5.3 billion from the US$8.9 billion expected this year. Speaking at the Asociación Sudamericana de Tiendas Libres Conference in Puerto Rico on September 2, ACI’s Director General Angela Gittens noted that the global aviation industry is undergoing “significant structural change.” Gittens was commenting on ACI’s just-released survey of aviation in 2009 as well as the organization’s take on the first half of 2010. Broadly speaking, the results showed a bottoming out of global passenger traffic in February 2009 and an uneven rebound since then. The rebound wasn’t enough to stem the 1.8% overall reduction in global passen-

ger traffic for 2009, however. The H1N1 virus scare combined with the recession to dampen passenger traffic in the US and Europe particularly. MENA ruled the roost over the whole year, with the exception of December, and in fact was the only region to post no negative figures for any month. The Middle East was also the only region that showed growth in international passenger traffic, which was down 3.9% overall. Gittens noted that a revival of domestic traffic in the second half of 2009 “saved the industry” and helped keep the overall traffic decline to 2%—the product of flat domestic traffic and a 3.9% decline in international traffic. The Middle East was the only region to avoid a decline in the international category. However, international numbers surged strongly through the second half of the year, a surge that continued into 2010, with international traffic overtaking domestic in January. To determine how much of the improvement represents new growth as opposed to the recovery of lost ground, ACI’s analysis compared traffic numbers for the first half of 2010 with the first half of 2008, before the economic crisis. The organization made some notable conclusions: ■ For the six-month period in 2008, North America and Europe had larger total traffic volumes than other regions, but both reported about 7.5% fewer passengers for the same period in 2010. ■ Using the same two time periods as a comparison, Asia-Pacific traffic rose 11.5%, Latin America-Caribbean figures were up 7%, Africa was slightly higher and Middle East traffic boomed by 19%. “In short, the established markets of North America and Europe remain well behind their respective 2008 pre-crisis levels, whereas the other regions are experiencing new growth,” Gittens emphasized. Aside from the stellar performance of the Middle East, Gittens pointed out that the Asia-Pacific region had more passengers per semester than Europe or North America for the first time ever. This development had been predicted, but wasn’t expected to happen until 2015, meanc ing that the recession brought it about sooner than expected.

“The established markets of North America and Europe remain well behind their respective 2008 pre-crisis levels, whereas the other regions are experiencing new growth.” Angela Gittens, Director General, ACI

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

TFWA WE Review

TFWA

World Exhibition

ends on a high note Organizers of this year’s TFWA World Exhibition enjoyed a successful show, reporting an increase in visitors after a tough 2009 BY HIBAH NOOR ast month’s TFWA World Exhibition in Cannes was a success on both a business and a networking level and met the high expectations of visitors and organizers alike. “We are very happy with the outcome of TFWA World Exhibition this year,” commented Erik Juul-Mortensen, President of TFWA. Speaking at the closing press conference in Cannes, Juul-Mortensen continued, “We all recognize that 2009 was not easy. The show reflects the very positive start we have made to this year and the positive state of the industry.” TFWA World Exhibition 2010 which ran from Monday October 18 to Friday 22 in the Palais des Festivals, was visited by a total of 5,398 people

C O N T I N U E O N PA G E 4 2

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Concert snapshots courtesy of TFWA/Jacques Gavard

On the second last day of the exhibition, TFWA organized a fantastic private concert by Mika, which was the highlight of Le Premium Evening

L a s t m o n t h â&#x20AC;&#x2122;s T F W A Wo r l d Exhibition was visited by a total of 5,398 people from 2,570 companies, up 8% from 2009

A grand opening cocktail was held at the glitzy Carlton hotel on the Croisette

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TFWA WE Review C O N T I N U E D F R O M PA G E 4 1

from 2,570 companies. This represents an 8% increase in visitors on 2009. Of that total 3,852 (71%) were duty free operators, retailers, landlords, agents and distributors. The visitors found spread out before them thousands of the latest and most innovative products of the 457 exhibiting companies present, including 51 companies which were new to the show or returning after a short absence. This event, the 26th TFWA World Exhibition, got off to a flying start with a selection of leisure activities on Sunday – golf, tennis, jogging, hiking, pétanque and a cookery class – which gave over 220 delegates an enjoyable start to the week. In the evening more than 1,550 people caught up with friends old and new at the delightful opening cocktail at the Carlton Hotel. Unfortunately the usual fireworks were cancelled because of heavy rain. The Conference on Monday was attended by over 820 people – a record attendance – attracted by the strong line up of speakers: Jean-Paul Agon, CEO L’Oréal, Lord Alan Watson, Chairman Havas Media UK, branding expert Martin Lindstrom and TFWA President Erik Juul-Mortensen. Three business workshops provided food for thought for delegates. Over 160 people turned out early on Tuesday for the Airline Workshop with Chris Tarry, Senior Associate Nyras Capital, presenting the revenue potential of low cost carriers. There were 165 people that attended the Asia Pacific Workshop on Wednesday to hear Paul Husband, MD Husband Retail Consulting, Sunil Tuli, President APTRA, and Matthieu Vanhalst, International Sales Manager TFWA discuss retail opportunities in the region. The TFWA Industry Association Workshop on Wednesday afternoon provided an update on issues facing the industry and was chaired by Michael Payne, Executive Director IAADFS and Frank O’Connell, President ETRC. The social highlight of the week was Le Premium Evening which started with a dinner cocktail in the Riviera Beach followed by a private concert by Mika and continuing into the early hours with dancing at The Scene. In addition to the business and social activities, the delegates at the TFWA World Exhibition participated in several charitable events including the Women in Travel auction and raffle in aid of Hand in Hand for Haiti which raised almost €19,000. TFWA Care and Caritas coordinated a collection of gifts for underprivileged people and Imperial Tobacco donated over €10,000 to flood victims in India and Pakistan. Announcing the total raised by these charitable initiatives, Juul-Mortensen said, “This is a very generous industry and as such I am very proud to be part of it.” The TFWA World Exhibition will return to c Cannes in September 2011.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

820 delegates kicked off the week with a conference, which offered an impressive line-up of speakers

Conference pictures courtesy of TFWA/Jacques Gavard

Several companies used the busy week to the fullest by hosting elaborate evening cocktails and dinners for clients and friends

T h e b u s y t r a d e s h o w c l o s e d i t â&#x20AC;&#x2122;s doors on Friday October 22

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

Company News: LVMH Moët Hennessy Louis Vuitton Givenchy and Guerlain products are available at Dubai Duty Free’s new stores at T3

LVMH – a brand for all seasons BY

JAMES ROSS

The Middle East travel retail market offers rich picking for LVMH Moët Hennessy Louis Vuitton VMH Moët Hennessy Louis Vuitton has been on a roll this year – the company has seen improving results and its Chairman, Bernard Arnault, has been extremely upbeat about the momentum for the luxury segment for the rest of the year and into 2011. Sales in the nine months to September reached €14.2 billion (US$19.7 billion), an increase of 19% compared to the same period in 2009 with strength being reported in several regions including Asia, Europe and the US. In a statement the company says: “The excellent performance of LVMH in the first nine months has confirmed its confidence for 2010. The Group will continue its targeted geographical expansion in the most promising markets. LVMH will rely on the power of its brands … to strengthen its global leadership in luxury products.” The Middle East is one of those promising markets where luxury is in demand. Through its DFS travel retailing operation for example, LVMH’s selective retailing divi-

Dior Aqua Fahrenheit launches in March 2011

sion now has a presence in the region at Abu Dhabi’s Terminal 3 in what is widely regarded as one of the most luxury-focused travel retail concepts anywhere. On opening last year, the list of branded boutiques was impressive, ranging from Jimmy Choo with its first ever airport shop, and Hermès with its first dedicated presence at a Middle East airport, to Chloé, Burberry, Coach, Hugo Boss, Cartier, Bvlgari, Polo Ralph Lauren, Rolex, TAG Heuer, Montblanc and Swarovski. That luxury mix is doing well. Duty free turnover at Abu Dhabi International grew by 19% during the first half of 2010 to US$75 million, outperforming the airport’s passenger growth of 11.7% over the same period. And spend per passenger increased by 7.2% to US$14.47. Huraiz Almur bin Huraiz, Abu Dhabi Airports Company’s Chief Commercial Officer, says: “Retail spending is significantly stronger than passenger growth, a clear sign that we are succeeding in encouraging travelers to spend more. Two key trends are at play: consumer confidence is returning; and ADAC’s investment program in Terminal 1 and the upgraded retailing in Terminal 3 are delivering results.” That is good news for LVMH which is seeing strength in the region. Under the company’s geographical breakdown, the Middle East is included in the non-Japan Asia market which at mid-year 2010 had a 26% share of sales, up significantly by 2% from the 24% it had at the same time in 2009. That 2% represents €341 million (US$475 million) based on the company’s €17,053 million (US$23.7 million) turnover in 2009 and it looks as

LVMH sales in the first nine months of 2010 € millions Wines & Spirits Fashion & Leather Goods Perfumes & Cosmetics Watches & Jewellery Selective Retailing Other Activities and eliminations Total *With a comparable structure and constant exchange rates.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

though this share will continue to increase as economies in Asia and the Middle East outpace LVMH’s other key markets of France, Rest of Europe and the US. The latter was, this year, eclipsed by non-Japan Asia as the luxury conglomerate’s most important market. In travel retail, beauty is the core product category for the company and the newlyformed LVMH Fragrance Brands– which handles Kenzo perfumes and Kenzo ki skincare, Givenchy perfumes and cosmetics and Emilio Pucci and Fendi fragrances – operates direct from Dubai supplying the channel. Globally, perfumes and cosmetics has been the slowest growing division of LVMH in the first nine months of 2010 at 14%, but in the Middle East one travel retailer reports that “the Kenzo marketing plan for 2011 is very promising” while Christian Dior Parfums, LVMH’s biggest beauty brand in travel retail has consistently high rankings at leading duty free stores in the region; at Dubai Duty Free for example it is ranked second for perfumes and third for cosmetics. Dior has benefited from the worldwide success of a number of its perfumes and its lipstick, Rouge Dior has been a strong performer. Other initiatives from the beauty division that have taken place in the third quarter include the launch of Abeille Royale, Guerlain’s new skincare range and the feminine version of Givenchy’s Play, while Fendi will return to the perfume segment with Fan di Fendi and a new fragrance will be added to the recently designed line of perfumes from Pucci, all of which are likely to eventually roll out into the Middle East region in the coming months.c

First 9 months 2010 2,148 5,464 2,246 687 3,713 (48) 14 210

First 9 months 2009 1,761 4,537 1,971 533 3,167 (23) 11 946

Variation 2010/2009

First 9 months Reported

Organic*

+22% +17% +20% +14% +14% +10% +29% +22% +17% +14% — — + 19 % + 14 % Source: LVMH

Company News: Nivea

Nivea:

from the Middle East to the world It was in the Middle East where Nivea cut its travel retail teeth. Now the brand’s appetite for the channel is taking it global BY JAMES ROSS

ivea is one of the world’s best known skincare names with more than 500 different products in its portfolio. Yet the Beiersdorf brand, with sales of almost €3.7 billion (US$5 billion) in 2009, has been slower to take advantage of the travel retail channel than rivals like L’Oréal Paris, which is now an established and expanding player in duty free. Nivea has been more circumspect. It has used the Middle East region, where Antoine Bonvin is the Area Manager, as a travel retail test bed and, over the years, has developed a strong presence here, helped by the unusual mix of passengers in the region which, as well as wealthy westerners transferring across hemispheres and indigenous Arabs, there is a sizeable migrant labour population from the Indian sub-continent. Bearing in mind Nivea’s accessible price positioning – a Nivea day cream costs around €13 (US$18) – the brand has been an ideal one for servicing this latter profile in the airport. For example, in Dubai International Airport Nivea has been happy to be sold in the Food Plus area alongside household items, milk powder and budget cosmetics. One reason Nivea may have been shy about actively entering the duty free channel is its parent’s ambitious corporate goal. In a statement Beiersdorf says: “The aim is for Nivea to secure leading market positions in individual product categories in as many countries as possible. Nivea already occupies 149 number one slots in different product categories worldwide, including men, face, hair, and deodorants.” Presumably the brand has the same aims in travel retail, so after honing its travel retail skill set in the Middle East, Nivea is now looking at the bigger picture – and Europe is the next target on its wish list of regions to conquer. At the TFWA World Exhibition in Cannes this year the brand revealed a new strategy for expansion including the announcement

of a travel retail division, new products and logistics support. The company has teamed up with Germany’s Gebr Heinemann as its distribution partner, with which it has also rolled out in some of its airport stores. The tie up allows it access to an expansive distribution network, especially in Eastern Europe. Ilka Schütte, Beiersdorf Director of Global Travel Retail says: “We’ve been very successful in expanding Nivea’s travel retail presence in the Middle East over the last three years and much of this experience has played a role in our international strategy. We are happy to be cooperating with the best possible partner in Europe, Gebr Heinemann. Our first step will be to establish a presence inside German airports such as Frankfurt, Hamburg and Munich, as well as airports in Copenhagen, Istanbul and Vienna.” In order, Nivea plans to expand globally in travel retail as follows: Europe and the Middle East & Africa to the end of 2011, Asia the following year, and then the Americas. Over 65 products and a variety of exclusive travel sets are now also available for airports, inflight, border shops and ferries and cruise lines. Travelers will be able to select from the Nivea Visage, Nivea for Men and Nivea Body lines, personal care products such as sunscreen, deodorant and shower products, as well as Nivea Lipcare, until now only available in a few countries. The brand plans to exploit passenger segments that are currently little targeted in the beauty market. Last year, as part of a global segmentation study of the beauty market covering 10,000 consumers in seven countries, Nivea established that travel retailers are losing out on valuable sales. Schütte says: “About 70% of travelers currently make zero purchases in airports shops, as they’ve been unable to find products that meet their needs and their budget. We will offer a very attractive range of Nivea products for both men and women, with the particular needs of two target groups, families and charter travelers, in mind.” c

“We’ve been very successful in expanding Nivea’s travel retail presence in the Middle East over the last three years and much of this experience has played a role in our international strategy.” Ilka Schütte, Beiersdorf Director of Global Travel Retail

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Neuhaus, the magic of Christmas

www. neuhaus.be

Company News: Puig Middle East Aldeasa in Jordan promoted that Carolina Herrera 212 VIP fragrance based on a “paparazzi” theme, with displays first surprising shoppers and then guiding them through the role of a celebrity visiting a posh New York nightclub

The smell of success Innovative, exclusive fragrance promotions bring Puig Middle East dynamic growth BY HIBAH NOOR

or Puig, growth has become a good habit. The fashion and beauty company is growing faster than the market it operates in – in other words, it’s increasing its market share. The Spain-based, family-owned company sells into more than 100 countries and has a direct on-the-ground presence in 22, with a staff of 3,500 employees worldwide. The company owns the fashion houses Carolina Herrera, Nina Ricci and Paco Rabanne and markets both proprietary and licensed brands. One of the best-known brands Puig works with is Prada, which is operated through a joint venture that holds the licence for Prada beauty products. Puig also has licence agreements for brands like Comme des Garçons and Adolfo Dominguez, retail names such as Mango, Zara and Massimo Dutti – and even celebrities like Antonio Banderas and Shakira. Puig is also well known for the innovation and impact of its promotions. In July, for example, the company teamed up with World Duty Free, Autogrill’s UK travel retail operation, to launch a temporary threemonth “pop-up shop” for Paco Rabanne at London’s Heathrow Airport. Puig’s promotions are based on strong customer engagement, achieved through faceto-face contact, and what Puig calls “retailtainment.” Retail-tainment includes multimedia presentations, personal interaction, a unifying theme or story, and sometimes even live music. The idea is well exemplified by the promotion of a new Paco Rabanne launch that Puig initiated with Gebr Heinemann at Frankfurt Airport in the fall. The push featured plasma screens running TV spots and role-playing models to make contact with shoppers and promote the launch. The new fragrance

was “Lady Million,” the feminine counterpart to the best-selling 1 Million fragrance for men, which Paco Rabanne launched in 2008. Another example was the promotion of the Carolina Herrera 212 VIP fragrance in Aldeasa travel retail outlets in Jordan. These were based on a “paparazzi” theme, with displays first surprising shoppers and then guiding them through the role of a celebrity visiting a posh New York nightclub.

Strength in promotions Puig is doing exceptionally well in the Middle East, says Gillian Hawksby, Travel Retail Manager for Puig Middle East. “We know the fragrance department is trending at 10%... however Puig is growing at 30%,” Hawksby says. “This is thanks to strong and successful launches from our core brands.” Puig views Dubai Duty Free as a prime location for significant and exclusive launches. The Middle East launch of Lady Million was staged exclusively with DDF on August 15. “We booked key promotion sites in Terminal 1 and Terminal 3,” says Hawksby. “In addition, we had off-site light boxes from JCDecaux in Terminal 1 and Terminal 3.” These recreated the “Million Universe” with distinct gold and black decoration, gold-colored merchandising The Middle East launch of Lady Million was staged exclusively with DDF on August 15

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Gillian Hawksby, Travel Retail Manager for Puig Middle East

towers, and with digital screens running the Lady Million and 1 Million campaigns. A gold dress displayed in T1 was especially popular with shoppers, Hawksby says – many asked if they could buy it. “We decided to offer entertainment for this launch as the way to invite people to experience a fragrance,” Hawksby says. “The quality of the execution, the environment, how they finally discover and sample the fragrance – it all makes a big difference to the sales result.” With the purchase of Lady Million (80ml) or 1 Million (100ml), customers had the opportunity to open a safe and take out a scratch and win card. The card offered a description of the fragrance and entered the customer in a competition to win a certified 1 carat diamond. “The response was tremendous,” Hawksby says. “We sold 5,773 units in two weeks. This was the biggest fragrance launch until the end of August witnessed at Dubai Duty Free – the retailer was delighted with the results.” Hawksby says that the launch vaulted Paco Rabanne from ninth place in August sales to third place, gained it 2.62 points in market share and helped increase sales to 116% over 2009 figures. The fragrance was rolled out to c all duty free shops September 1.

Conduct a Year’s Worth of Business at One Show 1,000 buyers from 61 countries 300 distinct duty free store-operating companies 200+ exhibitors showing thousands of products The 2010 Duty Free Show of the Americas returns to the Orlando World Center Marriott in Orlando, Florida, February 21 – 24, 2010, with all show-related activities taking place under one roof. Don’t miss this opportunity to see your customers all in one place in an efficient and cost-effective business environment.

Visit www.iaadfs.org for updated information on the show and to register online

Duty Free Showof the Americas FEBRUARY 21 – 24, 2010

ORLANDO WORLD CENTER MARRIOTT

ORLANDO, FLORIDA, USA

IAADFS – for over 40 years, representing North, South, and Central America, Mexico, and the Caribbean Questions? Call: +1-202-367-1184

Company News: Traveller Limited

Sky is the limit

Traveller builds successful partnerships with leading airlines across the Middle East BY HIBAH NOOR

ubai-based inflight services company Traveller Limited is a well-known supplier of goods for onboard sales in the Middle East. Perhaps the most telling testament to the integrity of any business is the company it keeps. In this area, Traveller is way ahead of the game: it is currently working with distinguished names such as Estée Lauder, Dior, Lancôme, Gucci, Dolce & Gabbana, and Hugo Boss to name a few. Rami Madi, General Manager of Traveller Limited, explains: “We are always ambitious and on the lookout [for new brands] constantly. We welcome all big brands.”

always, a good opportunity for supplier and clients to interact and discuss and decide on the future course.”

Business as usual According to Madi, training is a key component to Traveller’s success. It is an ongoing process and is usually conducted at the launch of each new airline catalogue, or whenever required by the airline. Traveller Limited places a lot of importance on training to ensure that cabin crew is updated on brands, new onboard products, product knowledge, selling techniques and tips. The company also offers refresher courses. In 2011, the company will be pushing

“The airline business is unique in its own way and cannot be compared to the ground duty free or local market. Onboard sales are very specific, requiring a lot of focus, follow-up and commitment. It is in no way similar to the local market or duty free.” Rami Madi, General Manager, Traveller Limited

Last month, Madi visited the TFWA WE show, the largest show of its kind and a major exhibition venue for prominent brands. This year’s event, he says, was an improvement over last year. “The year 2010 was definitely better than 2009. Most suppliers and clients had easy meetings with no pressure or tension,” explains Madi. “After the recession-riddled year, all were discussing the achievements of the current year and optimistically planning for the coming months. It was, as 50

ahead with plans for a number of promotions and cabin crew incentives. Promotions and incentive schemes normally take place throughout the year. While tightlipped about future incentives, Madi says upcoming promotions will be revealed at the appropriate time. Last summer, Traveller collaborated with Etihad Airways in a promotion for their top-selling crew. Gift vouchers amounting to AED18,000 (US$4,900) were claimed by top sellers during a three-month period.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Gifts included three Faces gift vouchers: the first for AED3,000 (US$817), the second for AED2,000 (US$545) and the third for AED1,000 (US$272). Traveller also teamed up with Emirates Airlines to give away an iPad. The top selling crew members on Emirates needed to meet their target sales in order to win a prize. Traveller also gave away iPhones and an ultimate iPack to top sellers during the second half of 2010, from July to December.

Low-cost carriers When it comes to low-cost carriers, Madi says he does not consider “low-cost carriers” in terms of airfare but rather in terms of the passengers who travel onboard. In many cases, they are the same as other airlines and are targeted as one market. “The passengers across normal carriers and low-cost carriers are the same therefore we consider similar products for sales onboard,” says Madi. In the end, what is most important is for airlines to team up with a competent and experienced supplier of inflight goods. This is where Traveller plays a crucial role. “The airline business is unique in its own way and cannot be compared to the ground duty free or local market. Onboard sales are very specific, requiring a lot of focus, follow-up and commitment. It is in no way similar to the local market or duty free,” comments Madi. “This is where Traveller Limited steps in and plays an important role for suppliers and clients. The needs of both are met with desirable results, making us the preferred partner for both parties.” In the near future, Traveller will also be focusing on passenger behavior, studies and analysis, which will further benefit the supc plier and the client.

Company News: Ajmal Perfumes BY

HIBAH NOOR

The Lure of

fragrance

Building on a history of successful scents, Ajmal Perfumes introduces its newest launch: Lure ith nearly 60 years of expertise in the fragrance industry, Dubai-based Ajmal Perfumes, reports a growing network of 137 exclusive retail shops across the GCC and Asia, with an international US$200 million annual turnover. Abdulla Ajmal, Deputy General Manager of Ajmal Perfumes, says the company’s impressive plans include expansion in London by 2011 and other key cities soon. Ajmal is particularly well-known in its homebase in the UAE and across the GCC. Its clientele, including royalty and other VIPs, have come to expect the highest quality of oils and fragrances when it comes to Ajmal Perfumes. One of Ajmal’s newest developments is the rollout of its fragrances Lure for Him and Lure for Her. Ajmal gives us some insight…

GADF: How’s duty free business in general? Abdulla Ajmal: The market seems to be returning to movement mode after an extended period of low business. The overall sentiment is positive and a direct testament to that is this year’s TFWA exhibition in Cannes. GADF: What’s the inspiration behind your new fragrance Lure? AA: The inspiration was derived from the attraction between man and woman. The task was to create blends that complement one another yet at the same time speak of the individual qualities of the person who wears them.

GADF: Is it an oriental fragrance or more like your contemporary fragrance Believe? AA: Both Lure for Him and Lure for Her are created for an international audience and are contemporary in design like Believe. The concept behind Believe though is slightly different from a sales perspective because the fragrance was designed and launched specifically for the travel retail market, unlike Lure which can be found at all Ajmal showrooms and through select distributor channels. GADF: Who are you targeting? AA: Lure for Her is a fragrance designed for the emotionally dependant woman who loves the support of her significant other. She is an introvert and is very easy to get along with. She is extremely fashionable and is always dressed to impress. It’s a settled fragrance that invites users to revel within its fruity floral sweet splendor. Lure is created for the fashionable young woman who is sensible, intimate and has an easygoing nature. The fragrance combines apricot, orange blossom, and jasmine to reveal a fruity floral nature rounded of with woody notes and heliotrope to provide a sweet woody base. Lure for Him is designed for men who fall in the 25+ age bracket. They are mature and sophisticated individuals who are dependable and like to add a touch of class to anything they set out to do. The fragrance is designed to attract mature, sophisticated men who adore classic fragrances. Lure is a fresh spicy woody fragrance that builds itself into the classic mould with the use of ingredients like amber, lavender, vetiver, cedar wood and sandalwood. A fresh spicy demeanor encapsulated in woody, mossy, ambery undertones. Both fragrances are packaged in 85ml glass bottles.

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

GADF: Tell us a bit about the ad visual. AA: The creative aims to bring to light the element of attraction between the opposite sexes on a canvas and highlight the personalities of the type of individuals the fragrance is designed for. As you may note, the image is set against a bustling skyline indicating that the fragrances are very much in sync with all that is modern and lively. GADF: Can you elaborate on the exclusive launch with Abu Dhabi Duty Free. What type of feedback are you receiving? AA: Lure for Him and Lure for Her were launched together in August exclusively through DFS at Abu Dhabi Duty Free. The promotion lasted for a month during which we had a number of display units which were branded with the Ajmal logo and Lure creative. In addition to our dedicated Ajmal beauty advisors, we also enlisted the support of DFS Beauty Consultants to help give the novelty brand further exposure. Overall, passenger response was much better than we had initially anticipated and the sell out for the period was excellent. GADF: Will this fragrance be rolled out worldwide? When? AA: In travel retail terms, we have started with Bahrain Air and will eventually introduce the set across all our travel retail outlets and listings across the region. c

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Beauty Beat: Fragrances Vanitas Versace

Sweet smell of sales

Company: EuroItalia Description: This rich perfume is comprised of tiare flower, lime and freesia enveloped with accents of cedar wood and tonka bean. The classic packaging is entirely gold with contrasting shiny and opaque surface and an embossed black logo at the center

Calvin Klein Beauty Company: Coty Prestige Description: A new interpretation of a lily - a neo lily – is the heart and soul of the fragrance. Ambrette seeds enhance the spicy warmth, jasmine elevates the floral signature and a trail of cedarwood brings beauty to the drydown

The heady new fragrance launches being introduced this season are sure to fly off the shelves

Memoir Company: Amouage Description: Special ingredients of absinthe with other floral and wood accords make up this prestigious scent. The flacons are made of black glass crystal graduating from a dark to lighter shade with silver metal caps accentuated with a black Swarovski crystal

Blumarine Bellissima Parfum Intense Company: ITF Description: The sensual and feminine fragrance is enclosed in a bottle created by prominent Parisian designer Thierry De Baschmakoff. The scent features a rare satin label for the Intense Edition. The color is an intense, delicate peach; the fabric has a smooth, seductive touch

Reb’l Fleur by Rihanna Company: Parlux Fragrances Description: Award-winning rockstar Rihanna is ready to launch her new fragrance in 2011. The fruity scent was created by international renowned perfumers Caroline Sabas and Marypierre Julien of Givaudan, who have perfectly matched Rihanna’s vibrant personality

John Richmond for Men Company: EuroItalia Description: The new masculine EDT by John Richmond is made up of bergamot, orange and ginger in the opening notes. The heart adds spicy aromas of cardamom, black pepper and rosemary, along with juicy melon, while a base includes warm nuances of cedar, amber and musk. A silver metal guitar plectrum hangs on the stylish flacon which reads “It’s only rock ‘n’ roll”

Moschino toujours Glamour Company: EuroItalia Description: The contemporary floriental Moschino toujours Glamour is enclosed in its signature gold heart-shaped flacon, but this time with a touch of blue. The scent revives the signature scent with a refreshing twist of red currant and green violet leaves. It has a gorgeous heart of lily of the valley with jasmine and bitter almond, concluding with a base of heliotrope and benzoin

Michalsky Fragrances Company: Mäurer & Wirtz Description: A new fragrance and body care line by star designer Michalsky. The company says the line features classical elements that are reinterpreted and combined with innovative ingredients The folding box plays with the contrasts of high and low relief embossment and matte and glossy surfaces

Pure Custo Barcelona Woman & Pure Custo Barcelona Man Company: Idesa Parfums Description: Two new fragrances, one feminine and one masculine, that follow in the footsteps of Custo's first fragrance

Belle D’Opium

Kaloo Igloo

Bang by Marc Jacobs

Company: The Millennium Essence Company Description: Undercover in an irresistible Igloo box, the 100ml scented water and the mini patapouf are ready to brave the cold winter. Two sets are available: one for boys with notes of Tea and Orange Blossom and the other for girls with delicates notes of jasmine and rose

Company: Coty Prestige Description: The new men’s fragrance starts with an explosion of its signature threesome of black, pink and white peppercorns. The heart and the base of the fragrance are wrapped with primal masculine woods. Hypnotic elemi resinoid and aromatic benzoin join with vetiver, white moss and patchouli. For the first time ever, Marc Jacobs the designer appears in his own advertising campaign

Company: Yves Saint Laurent, L’Oreal Description: The “nextgeneration” version of the brand’s iconic Opium fragrance is an oriental scent developed by perfumers Honorine Blanc and Alberto Morillas. The notes include Casablanca lily, sandalwood, gardenia, white pepper, jasmine and narguile accord

Guess Seductive Company: Coty Beauty Description: A glamorous floriental woody fragrance for the seductive woman who is iconic, memorable and legendary

Fougère Royale Company: Parfums Houbigant Paris Description: First introduced in 1882, Fougère Royale was the first “fougère” (or fern-like) perfume ever created, establishing a completely new fragrance family which still remains today, says the company

Oilily Flowers

Oiliy Lucky Girl Christmas Special Company: Colorful Licenses Description: A fresh, flowery scent is perfect for girls entering adulthood. Top notes feature mango accompanied by apple, melon, berries and orange. White roses and lilac lend the scent a romantic middle note and a warm combination of musk and amber form the base notes

Company: Colorful Licenses Description: The fragrance is aimed at fun-loving girls. It is a timeless scent of Sicilian tangerines and Spanish lemons. The middle notes are of jasmine, cyclamen and lily of the valley as well as tropical melon, peach, plum, apple and fruity raspberry nuances balanced out with sandalwood, oak moss and vetiver www.dutyfreemagazine.ca GULF-AFRICA DUTY FREE & TRAVEL RETAILING

Beauty Beat: Cosmetics & Skincare

Beauty boost Luxurious creams and a vibrant collection of new cosmetics promise to appeal to women travelers looking for a bit of pampering

Source Defense Serum Company: Bvlgari Description: This cell-energy booster is designed to neutralize the effects of aging at its source by preserving mitochondria, the sole source of cell energy. Combined with a powerful anti-oxidant, this highperformance anti-aging weapon preserves skin’s youthfulness capital

Nivea Visage Lift and Contour System

Nivea Visage Skin Firming System

Company: Beiersdorf Description: Expert Lift is an innovative anti-sagging skin care system from Nivea Visage. With regular use, the Expert Lift system combines instant and long-term effects to give you noticeably tighter, redefined and smoother skin

Company: Beiersdorf Description: This set includes the Nivea Visage DNAge Cell Renewing System, which is an advanced skin-firming system with highly effective beautifying properties. The formulas, with a powerful combination of cellactive Folic Acid and Creatine, increase cell renewal from within

Hypnôse Precious Cells

Belvada Mascara Noir Company: Belvada Cosmetics Description: Unlike conventional mascaras, with the new Belvada package the reserve product is never exposed to the elements, only the brush and the product on the brush are exposed. The bottle remains closed and the reservoir material is kept fresh. The mascara is also pushed on to the brush via a plunger, this ensures that virtually all the mascara is used

Re-Nutriv Ultimate Lift Age-Correcting Crème Company: Estée Lauder Description: An ultra-luxurious, all-powerful breakthrough that both repairs and moisturizes for skin that looks dramatically younger, more lifted and energized

Phyto Star Eyes Palette Pure Color Peony Blossom Lip Pots Company: Estee Lauder Description: This beautiful new lip set features three lip pots in the floral peony design including Wild Lilac, Pink Innocence and Brazen Berry. This new limited edition lip trio set complete with applicator makes the perfect gift

Company: Sisley Paris Description: The new “gun metal” version offers four luminous and dazzling shades that can be used alone or combined for a natural or more sophisticated look. The colors include white pearl, black star, silver moon and blue lagoon

Black Velvet Collection Company: Bobbi Brown Description: Perfect for the fall season. Charcoal eye shadows, lips products in plum, red, maple and cherry are just some of the fabulous shades in this collection

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Company: Lancôme, L’Oreal Description: Hypnôse Precious Cells is the first visibly regenerating volume mascara from Lancôme. The mascara contains the lash densifier complex, with precious plant cell extract, designed to regenerate the lashes

A WORLD OF SHOPPING Wherever you go a world of shopping in your hands. The best brands and the best prices with the largest variety. A world made up of more than 1134 shops, at over 143 airports, seaports and railway stations in over 40 countries around the globe. Dufry, we go far tobe close to you. www.dufry.com

Company News: Swarovski Middle East

Swarovski

– a cut above Growth beckons for Swarovski in the Middle East as it widens its product portfolio

JAMES ROSS

s one of leading brands in the jewelry sector of travel retail Swarovski, the cut crystal company originally started in 1895, was an early pioneer of the channel and has extensive global distribution. In the Middle East, the company has been present in duty free since the mid-80s and it now has strong positions across the Gulf Cooperation Council (GCC) states – which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – and Lebanon. Rasmus Olsson is Swarovski CGB (Consumer Goods Business) Manager for the Middle East and has been in the role since 2003. As such he is an expert on the market and he says that Cairo in Egypt is now “coming up strongly” in addition to existing travel retail locations, and that there is plenty of scope for further development. He says: “The size of the market is significant. While I cannot comment on [our performance compared to] other regions, we are constantly working with our partners to maximize our business together.” The company, Swarovski ME FZE, is located in the now well established Jebel Ali Free Zone and is 100% owned by Swarovski. “In the region we don’t operate any of our own shops. We work together with partners in the local markets and, of course, with the duty free retailers at the airports,” he adds. Olsson describes the Middle East duty free market as very dynamic when it comes to assortment, stock management and promotional activities. “It is constantly in motion and we try to adapt to each market’s needs within our brand spectrum in order to continue to develop and create an even better shopping experience for our customers/passengers,” he says. These activities will come together in the form of a new store architecture called Crystal Forest. “We are starting with Dubai Duty Free in the final quarter of 2010,” adds Olsson. Crystal Forest is a concept that has already started its roll out in travel retail at terminals one and two at Singapore Changi airport and at Sydney’s luxury area in terminal one as well as several leading domestic flagship stores such as Bond Street in London. Dubai International Airport, where Dubai Duty Free operates, is the biggest travel retail location for Swarovski in the region and is also among the brand’s top five travel retail outlets in the world. The retailer says that the crystal company’s costume jewelry easily ranks number one with a share by value of almost half of the entire category. Overall, Swarovski’s fashion jewelry lines make a large contribution of 80% to the company’s duty free business in the region and the latest Autumn/Winter ranges of jewelry and accessories have proved to be a great success according to Olsson. “We are looking forward to the launch of the new Spring/Summer 2011 collection now,” he adds. Among the current season’s hits is the Under the Blue autumn/winter 2010/11 accessories collection which has three themes: Nordic Dream, Liquid Dream and Dream Box. Nordic Dream includes the statement Meteor necklace which contains large oval and rectangular cut black diamond, grey and white opal crystals. As well as the jewelry, Swarovski launched its new watch collection in selected duty free locations in the Middle East last year and it is said to be performing very well. A perfume is also on the way in 2011, which will help expand the reach of the brand and potentially bring its core lines some new and younger consumers. Rather than diluting the brand, Olsson sees the move as a way of strengthening it. “I don’t see anything negative with the widening of the Swarovski product portfolio,” he says. “All new lines have the c Swarovski characteristics and the Swarovski feel/look and DNA.”

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Confectionery News

Confectionery highlights New products, redesigned packages and displays, and in-depth analysis of buying behavior BY HIBAH NOOR

Storck Travel Retail reinforces its presence on Twitter Kidz Bags

Perfetti caters to consumer needs Perfetti Van Melle, maker of delicious Chupa Chups and Mentos brands, presented its latest additions to its product lines last month during the TFWA World Exhibition. In the Mentos Line the company introduces the Mentos Mini and Kidz Bags. The Mentos Mini is a bag filled with 20 miniature Mentos rolls in favorite flavors such as Strawberry, Cola, Lime and Orange. The product is great for long trips or children’s get togethers. Mentos Kidz is a bag containing 15 miniature boxes in a wide variety of fruit flavors. For additional fun there is a game to play on the back of every bag. In the Chupa Chups range, Perfetti presents the Chupa Chup Flower Bouquet and Surprise. Flower Bouquet is comprised of a flower with a personal note and two delicious Chupa Chups. With 12 different surprises, the Surprise product is a perfect collector’s item. One pack includes four Chupa Chups, each with its own surprise toy. All new products are aimed at the kids/teens age groups and are anticipated to become a huge hit among youngsters. Chupa Chups Flower Bouquet

Storck Travel Retail upgrades, boosts online presence Storck Travel Retail Ltd., based in the UK, recently announced that it has substantially reinforced its presence through online social media, by launching a corporate Twitter account on September 1. The Twitter account will be developed as a key communication tool over the next year, the company says. “Storck TR’s Twitter account is being used to increase corporate contact and interaction in a personable, informative and instantaneous way,” the company said in making the announcement. “The team are very excited about having a new way of communicating with their key stakeholders in real time – paving the way for the future of successful brand, product and people marketing at Storck and in the travel retail industry.” The account can be accessed at www.twitter.com/StorckTR. Storck TR has also revealed that it plans to revamp its website – www.storck-tr.com – over the course of 2011. The goal is to enable increased communication and interactivity with trade partners. Storck TR is currently reworking its travel retail POS to offer sided gondolas with one to four sides, lightboxes, display advertisements and pillar facings. The company also announced that in January 2011, it will be adding a new line of Werther’s Chocolate Specialties and Caramelts exclusive to travel retail. The line of 305g bags includes Werther’s Original Milk Chocolates, Original Dark Chocolates, Original Caramel, Original Caramel Mousse, Original Caramel Dark and Original Caramelts. January will also see the launch of a travel retail exclusive assortment of Werther’s Finest Selection. The launch will include a travel retail promotion with silent tastings, gift-with-purchase offers, samplings, and personalized POS and visuals adaptable to specific requirements. The new lines reinforce Storck TR’s present offering, which includes Werther’s, Toffifee 200g and 400g, Riesen 270g, Mamba 220g, and the Storck-branded Colourful World Milky Caramels, Paradise Fruits, EukaMenthol and Mint Chocs. The line of Merci Croquant, Finest Selection and Petits products, one of the leading specialty chocolate brands in Europe, was added just over a year ago. The company has a presence in airports, in border shops and on ferries in North America, Europe and Singapore. Werther’s Chocolate Specialties and Caramelts is exclusive to travel retail

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Confectionery News

Chocolate Frey expands

Switzerland-based Chocolate Frey AG, the top chocolate manufacturer in the Swiss market, unveiled a series of new products suitable for travel retail at TFWA in Cannes. The new product, Chocobloc Air, consists of quality milk chocolate – a Swiss specialty – that contain bubbles, giving the chocolate a light, airy texture. Almond, honey and nougat are also part of the mix, an addition that Chocolate Frey says is a world first. The company says that the size of the individual pieces and the 297g size of the package itself make Chocobloc Air suitable for gift-giving, or an ideal self-indulgence. At TFWA, Chocolat Frey also announced a “design relaunch” of its top-selling Chocobloc, Classique and Suprème lines, which it hopes will help further strengthen its brand image. The Suprème and Classique lines will keep their well known chamois color, ensuring easy recognition at the point of sale. The same approach has been taken for the Chocobloc line, where the current metallic packaging color will be intensified in order to reinforce this particular product group’s appeal as a premium purchase. “Switzerland’s number one chocolate manufacturer will decisively communicate characteristics such as highly-valued Swiss quality and Swiss origin,” the company said, “while appealing colors as well as appetizing chocolate images will positively catch the customer’s attention.” Chocolate Frey conducted market research in several countries to determine that the new design will be positively received by confectionery shoppers. Finally, Chocolate Frey summed up its POS campaigns over the last year, which helped to generate improved sales and increase and reinforce the brand’s profile. The company highlighted two events as especially reflective of the overall spirit of the POS campaigns. Both were held for large audiences at different airports. One event was a tasting festival where the Frey stand included an actual fountain of rich melted chocolate. Shoppers responded very well, the company said, and were able to participate, dipping a selection of dried fruit or marshmallows on skewers into the chocolate. A life-sized version of the company’s unicorn logo completed the tableau and helped to cement the brand image. The second event, which actually took place in more than one venue, offered a presentation explaining how chocolate is manufactured. During the presentation, a Frey Chocolatier prepared pralinés for the shoppers to sample. The life-sized unicorn logo was also part of the display. “The world of Chocolat Frey becomes an actual experience thanks to such occasions,” the company said. “Due to the very positive feedback by retailers and consumers, Chocolat Frey will continue and even increase these POS activities in the coming year.” Chocolat Frey announced a “design relaunch” of its top-selling Chocobloc, Classique and Suprème lines

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Anthon Berg’s liquor-filled chocolates are a hit in Middle Eastern duty free

Tom’s Confectionery expands in the East Danish company Tom’s Confectionery Group, owner of Anthon Berg, gains momentum in the Middle East and Asia after making its mark in the Nordic regions and Europe. “Now we want to expand in the Middle East. The growth rate in the Middle East and Asia is enormous compared to Europe – and of course we want to be part of this growth,” says Alex Soerensen, Business Manager, Tom’s Confectionery. The company’s products are present in Egypt, Lebanon, Qatar, UAE and Oman. “We are currently working on penetrating Kuwait and for the future, focus will be on the Kingdom of Saudi Arabia and Iraq/Kurdistan,” explains Soerensen. Anthon Berg’s liquor filled bottles are fairing well in the Middle Eastern duty free market. Soerensen comments: “Anthon Berg liquor bottles are popular because of the unique selection of brands that are infused in the hollow centre of the chocolate. Likewise is the shape of the chocolate cherished and the fact that Anthon Berg do not, like other manufactures, need to sugar- coat the inside of the centre to make sure the alcohol does not evaporate through the chocolate.” The company continues to push ahead with plans focusing on the consumer side of the business. "This means a greater focus on research as we want to get a good understanding on what is happening out there," says Soerensen. The consumer trends, added Soerensen, are different throughout the regions and the company makes every effort to cater to the different markets. “Our unique Anthon Berg Liquor chocolates are highly valued within the international airports, despite the high rate of passengers in the region who seek to avoid alcohol," notes Soerensen. “Other areas are stricter regarding alcohol and here we offer our large range of non-alcoholic chocolate like Anthon Berg tablets and Creamy Twist.”

Confectionery News

Nestlé’s confectionery concepts At a press conference at TFWA in Cannes on October 19, Nestlé International Travel Retail presented a comprehensive review of its confectionery category performance, as well as an overview of its marketing plan for 2011. The company’s confectionery category segmentation is based on a study of consumer buying patterns, with each of the five segments based on a unique purchase driver. The name of each segment conveys the prime motivation for the purchase in each category: Premium Gifting, Informal Gifting, Family Gifting, Snacking and Destination. In 2009, the main trend in buying behavior saw consumers seeking greater value in their purchases, but in 2010 spend levels have recovered. All five of Nestlé’s categories are up, with the three “Gifting” categories posting modest increases and the Snacking category turning in an impressive 15% growth figure. Overall, sales are up 8%. Within Snacking, the “Self Consumption” sub-category has seen the strongest growth, which the company attributes to impulse buying and a desire to maximize spend. Aside from corporate performance, probably the most

interesting aspect of the presentation was the detailed examination of shopper buying patterns, and the potential this information has to help improve sales. “The business opportunity to drive penetration and conversion into confectionery has never been greater,” the company said, “as shoppers rediscover the travel retail offer, and consider a wider choice of categories and products. Confectionery can benefit from this trend based on its high impulse nature, universal gifting and snacking appeal.” The sales potential of confectionery is impressive. Nestlé pointed out that 50% of all shoppers who enter a store with a confectionery section will go on to check it out, and just over 50% of those shoppers will make a purchase. Interestingly, about half of shoppers who had already made the decision to buy confectionery but didn’t necessarily know the exact product they wanted were influenced to make that selection by store fixtures. Having illuminated market buying behavior, it’s no surprise that Nestlé International Travel Retail has a detailed an ambitious category vision, consisting of six elements: ■ Confectionery in every basket, every time ■ Make confectionery easy to understand and easy to shop ■ Maximize shopper interaction to drive conversion ■ Make confectionery accessible to all shoppers in the total store ■ Build the category based on how shoppers shop ■ Lead category innovation The elements of this category vision provide the underpinning for Nestlé’s concept of “The Perfect Store,” which was unveiled last year. Already deployed with a number of customers, The Perfect Store leverages four purchase drivers – ease of shop, relevant gifting, on-the-go snacking and the ability to engage, entice and convert – to boost sales. Each driver is broken down into detailed analytical segments, which individually have the potential to boost sales by anywhere from five to 20%, Nestlé says. Nestlé International Travel Retail’s category segmentation is based on a study of consumer buying patterns

Ferrero presents new pocket-size Nutella Ferrero Travel Market recently launched its pocket-size Nutella jars, perfect for travelers on the go. The Nutella pocket-size 30g jar, which is exclusive to travel retail, can be sold individually at the checkout or in a 7-pack – one for each day of the week. Over the last 40 years, Nutella creamy chocolate and hazelnut spread has become one of the most famous spreads in the world and a member of the exclusive club of ‘timeless brands’. Such is the popularity of Nutella that children and adults all over the world are united in a ‘Facebook’ official fan club with six million contacts. The new products were launched at TFWA World Exhibition last month. Serge van Wijck, Marketing Manager, Ferrero Travel Market said: “The new travel retail exclusive Nutella items are part of a cult concept which will be backed by advertising and in-store merchandising. There are a lot of Nutella lovers in the world who can now find their beloved brand in travel retail.” Pocket-size Nutella jars available in a 7-pack or in individual 30g jars

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Global Power

International Travel Retail

Company News: Diageo

This year’s Mentorship Experience activation at Dubai Duty Free stands as an excellent example of Diageo’s continued support of the Trinity concept

A world of

opportunities

Diageo’s Jane Ewing asserts that the possibilities in the Middle East are limitless given Diageo’s ever-evolving portfolio and the region’s recession-busting performance in 2010 BY RYAN WHITE n an exclusive interview with Jane Ewing, Managing Director of Diageo GTME, Gulf-Africa Duty Free learned of the many successes the company has enjoyed this year, from continuing to be one of the industry’s most active proponents of the Trinity concept to successfully promoting its portfolio of premium brands in a time when many consumers are downtrading. Ewing also discussed upcoming activations and the ever-increasing importance of the MENA region as a center of creativity for the duty free industry.

“We’re continuing to make a real effort to push the Trinity agenda forward by trying new things; without this continued innovation, we’ll never know what truly works and what doesn’t.” Jane Ewing, Managing Director, Diageo GTME

Alive and well Travelers to any number of major airports throughout the world are no doubt aware that Diageo’s commitment to the Trinity approach and growing the liquor category in duty free is alive and well. Diageo’s current activations are of course highlighting core brands like Johnnie Walker, but such initiatives are also providing rising stars like Zacapa rum a larger platform for communication. “We’ve just gone live with our new Formula 1 activation in Abu Dhabi Airport, and what worked brilliantly was that we sat down several months ago with DFS and ADAC and we had a really fantastic 66

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

session where we all shared our views on what we wanted to achieve,” explains Ewing. “I genuinely feel the key to developing the very best activations is this type of equitable partnership between all parties, where everyone involved has a shared goal. The real breakthrough for us with this activation is that all of the parties have invested in the program and all are sharing data.” Ewing asserts that the current Formula 1 initiative is “certainly one of the best activations that Diageo has done to date.” She notes that both DFS and ADAC were “visionary” and made a real effort to partner with Diageo on the latest Johnnie Walker experience at Abu Dhabi Airport. Other recent Diageo activations that Ewing says exemplify the Trinity approach are a recent Zacapa rum activation in Miami and the Mentorship Experience, which ran at Dubai Duty Free earlier this year. The Mentorship Experience was centered on an immersive sampling journey that took the target shopper on a unique personalized discovery of Diageo’s elite portfolio. Situated between the First and Business Class Emirates’ lounges, the Mentorship Experience was hosted by Diageo Brand Ambassador Tony Shoushani inside a visually stunning “pod” with an intimate, predominantly black interior akin to that of an elite private club. Notably, this was the first spirits activation ever in the airport featuring tastings as a component. “We’re continuing to make a real effort to push the Trinity agenda forward by trying new things,” says Ewing. “Without this continued innovation, we’ll never know what truly works and what doesn’t. Again, the key is that all parties need to be involved. Where that’s not the case, it simply won’t work. Financially, there obviously needs to be a shared accountability.” Ewing notes that another important issue in the Middle East is that Diageo continues to be aware of cultural sensitivities when it comes to the tasting of alcoholic beverages. “The Mentorship Experience is a perfect example of a unique activation that takes into account regional restrictions on these types of activities,” she says.

Company News: Diageo

Loyalty is everything Promoting premium brands over the last year or two has been somewhat of an uphill battle for many suppliers given shoppers’ tendency to downtrade during difficult economic times. However, Diageo’s portfolio, which certainly contains its share of high-end brands, has actually remained extremely popular with shoppers since the recession hit in 2008. While a number of considerations are at play here, not the least of which is Diageo’s unfailing commitment to promoting its spirits, the question of brand loyalty is a very important aspect to Diageo’s success. “Brand loyalty is certainly key,” says Ewing. “For example, if you take Johnnie Walker, the brand has thrived through a lot more than a global recession. Johnnie Walker, and many of our other brands, have been around for hundreds of years and have survived good times and bad, and I have no doubt that they’ll continue to do so, largely because of the trust that consumers have in these brands. “Every consumer has a particular need or occasion in mind when shopping,” she continues. “One of the keys to the success of our portfolio is that our spirits have a long heritage of meeting many of those needs consistently.”

the winner in each local market going to the world finals.” The competition has been a big success in the UAE and Diageo will be launching it again in January, looking at how it can be tied in with travel retail. While no specifics have yet been decided, Ewing says that incorporating world-class bartenders making signature cocktails with Diageo’s spirits in airports may be a consideration for the future. “Showcasing our brands in such a creative way is something that’s very exciting for us,” says Ewing. “I have no doubt that the ripple effect of this very important competition will be felt in travel retail. Regardless, I can say that Diageo will continue to promote its brands in new, creative ways in worldwide duty free throughout 2011.”

Evolving the experience For the rest of the year and into 2011, Diageo will continue to concentrate on Johnnie Walker Double Black in travel retail. Furthermore, the supplier is just about to launch Baileys Hazelnut, the new flavor in the Baileys range. Much like Double Black’s early success, Ewing notes that the newest Baileys variant has tested “fantastically well.” “Baileys Hazelnut is going live in time for Christmas in Europe and we’ll roll out elsewhere in early 2011,” she explains. “We’re also testing some new single-serve formats of some existing brands, so there’s certainly a lot happening at the moment.” In addition to the above, Diageo is also working on a high-profile activation in December in Dubai. While the details of the promotion are still under wraps, Ewing hints that the experience will be one to remember. Diageo has also just agreed to a very exciting opportunity in Qatar to do some promotions outside of the store around the Qatar Masters golf tournament. The activation will center on Johnnie Walker Blue Label and exemplify the luxury for which both the spirit and Qatar Duty Free are known. “Another program we have at the moment is called World Class,” explains Ewing. “While it’s not specifically related to duty free, it certainly has an impact on the channel. As the name suggests, its a worldclass bartending competition highlighting Diageo’s portfolio. Bartenders compete by creating some truly fabulous cocktails, with 68

Continued concentration on the wildly popular Johnnie Walker Double Black (below) and the release of Baileys Hazelnut (above) will be priorities for Diageo well into 2011

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

The power of potential For a forward-thinking company like Diageo, few regions in the world present more exciting opportunities than the Middle East. “The MENA region has huge potential for growth, particularly in airports such as Dubai, Abu Dhabi and Qatar where we’re seeing more and more passengers coming from Asia, Africa and other regions as these airports develop themselves into major transit hubs,” says Ewing. “Our core brands continue to gain popularity in the MENA region, but we’re finding that duty free consumers are also willing to try newer brands like Ketel One and Zacapa.” Ewing also has kind words for the organizers of the MEDFA conference for encouraging dialogue on how best to manage growth in the MENA region. Of course, lucid communication between operators, airport authorities and suppliers is the catalyst that drives the Trinity concept, and many of Diageo’s most trusted operator partners will be playing a key role in the conference’s proceedings this year. “It’s great to see airport retailers and suppliers alike getting creative in terms of developing spaces and engaging travelers,” concludes Ewing. “It’s likewise very exciting that the MEDFA conference is being moved to Egypt. The market is fantastic and full of opportunity. The MEDFA conference is certainly an event that promotes discussion of important issues in the MENA region. Diageo will continue to play a major role in the region’s growth in the future, and we look forward to continuing to work with our valued Trinity partners to develop exciting activations that match the explosive growth in the Middle East and North Africa.” c

Fast-growing liquor brands

Recession-busting 101 Gulf-Africa Duty Free examines the explosive growth of three brands in Middle Eastern travel retail, discovering that above all, quality is the key to success in tough times BY RYAN WHITE

hile the worst of the economic downturn appears to be over, sustained double digit sales growth in duty free is still a lofty goal for many suppliers. There are, however, a select number of brands that have managed to capture the attention of the traveling public in a way that resists explanation. Gulf-Africa Duty Free recently spoke with Bacardi Global Travel Retail, Patrón Spirits International and Irish Distillers Pernod Ricard about their fastest-growing brands in the Middle Eastern duty free channel. We discovered that while these successes may seem like magic to many companies still struggling to recoup last year’s losses, outperforming the competition still comes down to a few basic principles, not the least of which are highend positioning, ensuring quality offerings and constantly promoting one’s virtues.

Going for gold When Erwin Van Outheusden, Bacardi Global Travel Retail’s Regional Manager for the Middle East, Africa and Greece, came on board in 2007, Scotch wasn’t a huge priority for the company in the region. However, after a thorough analysis of the markets, Van Outheusden The first Gold Rush promotion in the Middle East increased sales of Dewar’s by over 700%, while the second actually doubled sales from the previous activation

and Bacardi Global Travel Retail began creating programs that were essentially local takes on the global team’s worldwide activities. Since that time, the response to Dewar’s Scotch whisky has been one of the industry’s true success stories. “I think overall the Gulf region, with Dubai Duty Free leading the way, is a very dynamic market,” says Van Outheusden. “We’ve doubled sales of Dewar’s on a yearly basis since 2007. We’re also seeing robust growth in Abu Dhabi, Qatar and Lebanon. In fact, Beirut Airport is very big for us in terms of volume. Dewar’s 12 is the leading Scotch at the airport, with White Label also performing very well.” Bacardi has run the Dewar’s Gold Rush promotion twice now in the Middle East and to say that it’s been met with a warm response would be an understatement. The first Gold Rush increased sales of Dewar’s by over 700%, with the activation running in five airports. In November 2009 the second Gold Rush initiative was in place in six locations, with Beirut Airport added into the mix. Impressively, sales of Dewar’s doubled over the first Gold Rush promotion. “We’ve just begun launching the new Dewar’s packaging in the Middle East and we’re working on an interactive exclusive Callaway promotion in Terminal 3 of Dubai Airport,” explains Van Outheusden. “With the purchase of three bottles of Dewar’s, travelers can take home a free trolley bag. Participants also have the chance to win any number of golf-related prizes from Callaway, including 10 drivers. The activation is in a very high-traffic area of Dubai Duty Free’s shop and it’s really creating a buzz.” Notably, the brand is continuing to grow in the Middle East even when the promotions

“We’ve found that promotions are really the catalyst that allows people to experience the brand for the first time.” Erwin Van Outheusden, Regional Manager for the Middle East, Africa and Greece, Bacardi Global Travel Retail 70

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

aren’t on. Van Outheusden cites attractive gondolas and brand ambassadors educating consumers on a regular basis as keys to Dewar’s immense popularity in the Middle East. “We’ve found that promotions are really the catalyst that allows people to experience the brand for the first time,” Van Outheusden concludes. “Once consumers have tasted Dewar’s, the rest takes care of itself. The high quality of the brand keeps sales strong year-round.”

Perfectly positioned Year-to-date at Dubai International Airport, sales of Patrón’s portfolio are up double digits over the same period last year, spearheaded by “Simply Perfect” Patrón Silver. Even throughout the economic downturn, the company continued to see an upward curve in sales of its spirits, not only at Dubai Duty Free, but throughout the Middle East. This is certainly no mean feat given the fact that many brands in the super-premium category are still suffering from the effects of downtrading. “While the UAE is showing the most growth in the region, we recently signed on with Qatar Duty Free and the response has been wonderful,” says John McDonnell, COO of Patrón Spirits International. Patrón’s success in the Middle Eastern domestic market has actually helped sales considerably in duty free despite the fact that the company has engaged in a minimum of promotional activities in the region’s travel retail channel. However, Patrón did run a gift with purchase promotion at Dufry Sharjah earlier in the year. With the purchase of Patrón products travelers were gifted a tote bag, and although the activation ran during the height of the recession, sales of Patrón products doubled at the store.

“Airports continue to strengthen their fleets, routes and passenger numbers, so there’s plenty of exciting things happening in the Middle East.”

Given the success of a gift with purchase promotion at Dufry Sharjah earlier this year, Patrón will be concentrating on increasing the frequency of such activations in 2011

John McDonnell, COO, Patrón Spirits International McDonnell notes that the domestic market in the Middle East also helps to communicate one of Patrón’s key global messages to consumers: “One thing that appeals to essentially every demographic the world over is Patrón’s versatility,” he explains. “Patrón Silver can be sipped neat, mixed in any number of signature Patrón cocktails and even used to replace vodka, gin or rum in many drinks to great effect.” The on-trade plays a major role in this type of communication given the limitations on tastings in the Middle East, says McDonnell: “People interact with bar staff, see the range of cocktails that can be made with Patrón and the next time they’re traveling they pick up a bottle already understanding our message of versatility.” Patrón is in nearly every duty free store in the Middle East and is certainly well positioned moving into next year. However, McDonnell sees plenty of room for continued growth, citing Dubai, Qatar and Abu Dhabi as locations to watch in 2011. “These airports continue to strengthen their fleets, routes and passenger numbers, so there’s plenty of exciting things happening in the Middle East,” he notes. ”For 2011 we’re looking at how we can incorporate more gift with purchase promotions as they’ve

really proven popular for us in travel retail. Additionally, following the MEDFA conference Patrón will be a sponsor of Dubai Duty Free’s annual golf tournament for the second year in a row, and it’s really a matter of increasing activities like this that will allow us to build in 2011 on the very strong start we’ve had in the Middle East.”

Staying on top Jameson is by far the largest-selling Irish whiskey in the world and certainly the growth driver of the Irish whiskey category. Globally the brand enjoys in excess of a 60% share of this category. In worldwide travel retail specifically, Jameson is now the seventhlargest whiskey, and this year’s IWSR figures show a compound annual growth for Jameson between 2005 and 2009 that is higher than that of any of the top 20 spirits brands in the channel. Gulf-Africa Duty Free recently sat down with Michael Cunningham, Senior Regional Manager – Travel Retail at Irish Distillers Pernod Ricard to get a sense of why the spirit is so popular. We learned that much of Jameson’s appeal comes from the unique distillation process employed. “Jameson is triple distilled for smoothness,” Cunningham explains. “Most other whiskies are either single or double distilled. Even within the Irish whiskey category, not all the whiskies can claim the triple distilled distinction. Jameson is a blend of tradi-

tional Irish pot still whiskey and grain whiskey produced at Midleton distillery. Traditional Irish pot still, which is only produced at Midleton, is made from a mash of both barley and malt. The resulting whiskey character is smooth, rich and creamy.” Seasoned whiskey fans will find in Jameson an exceptional smoothness. Discerning palates will be able to pick up on the character imparted during the maturation process: sweet vanilla and toasted wood notes, as well as sherry undertones with nutty notes. Likewise, the uninitiated will take notice of the spirit’s versatility and taste. Jameson is pleasant to drink straight, with ice or with a number of mixes. Perhaps due to the brand’s appeal for both aficionados and new whiskey fans, it is proving popular in the Middle East. Jameson is investing in in-store merchandising throughout the region, the most recent of which was installed in Terminal 1 of Dubai International Airport earlier this year. Cunningham asserts that 2011 will see the continuation of this activity in other parts of the region as a means of maintaining Jameson’s firm positioning c as the world’s favorite Irish whiskey.

Jameson is the seventh-largest whiskey in worldwide travel retail with a compound annual growth for 2005 to 2009 that is higher than any of the top 20 spirits brands in the channel

“Jameson is triple distilled for smoothness. Even within the Irish whiskey category, not all the whiskies can claim the triple distilled distinction.” Michael Cunningham, Senior Regional Manager – Travel Retail, Irish Distillers Pernod Ricard

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

Liquor News

Only three “Glenfiddich Crystal Stag Gondolas” will be on display; the first is currently with WDF in London Heathrow, while the second and third will find their way to Dubai and Frankfurt

William Grant & Sons

invests in new look and feel for Glenfiddich in global travel retail lobal premium spirits business William Grant & Sons has unveiled a pioneering new look and feel in travel retail for Glenfiddich. The new look is exclusive to travel retail and is supported by the largest investment in cutting edge merchandising across the channel that the company has ever undertaken. The first of only three incredible “Glenfiddich Crystal Stag Gondolas” saw its global premiere in WDF’s World Duty Free Store at London Heathrow’s Terminal 5. This will be followed by activity in Frankfurt and Dubai. “Our strategy revolves around brand premiumization, focusing on strong merchandising fixtures coupled with increased staff training to create engaging and memorable experiences for our customers,” says Rita Greenwood, Global Travel Retail Director at William Grant & Sons. “Travel retail offers the travelling customer the widest possible range of whiskies, displayed in some of the most sought after retail space there is.” All of the new fixtures and the new visual assets derive from the Glenfiddich Crystal Stag Gondola, which sets out to challenge con-

vention. It represents the components that make Glenfiddich unique and embodies the pioneering spirit at its core; the 24% lead crystal stag’s head, the glass teardrop and the copper and oak helix. “Although we knew that the wall units, podiums, lightboxes and visual assets that were created as a part of this project had to be both beautiful and functional, we decided at the outset that we needed a fulcrum to hold the entire project together,” says Ian Taylor, Marketing Manager for Global Travel Retail at William Grant & Sons. “That fulcrum is the Glenfiddich Crystal Stag Gondola.” “It represents all of the craft and skill that goes into producing every bottle of Glenfiddich—the Robbie Dhu spring water, the copper stills, the magnificent oak that makes the casks—but it does it in a truly outstanding and enchanting way, bringing alive the iconic Stag, the symbol of Glenfiddich, in a way that we have never done before,” continues Taylor. Alongside the Crystal Stag Gondola, wall units, podiums, lightboxes and new visual assets were designed. These new units will be rolled out across the top 20 airports and

venues within global travel retail over the coming year, while the new golden imagery will become the flagship for Glenfiddich in all travel retail advertising and promotional activities.

Brighter days for Bardinet ardinet’s Beehive Honey, a honey-flavored line extension of the classic French grape brandy, has gained a new listing at Dubai Duty Free and is already listed in Muscat Seeb and Sharjah International. Bardinet is also currently presenting the variant to all other airport shops in the region given the incremental growth that it brings to the brand. In addition to airport duty free, the supplier asserts that the entire Beehive range has been performing well with the Baltic ferry lines for the last couple of years. Bardinet also recently acquired Speyside Single Malt Whisky Glen Moray, and the company is launching an outstanding 12 year old in a liter bottle, described by Jim Murray in the Whisky Bible as one of his favorite Speysides “simply because it is so unfailingly consistent and the delicate nature of the whisky has to be experienced to be believed.” At Cannes there was also a great reception for the repackaging of Bardinet XO Brandy, one of the rare 6 year old brandies on the market. Likewise, the introduction of a limited edition Old Garnacha wine from Navarra in northern Spain, called Navasques "100,” was also met with a warm response. The wine was hand crafted by the late Joaquin de Navasqüés from low yielding 100 year old Garnacha vines growing at an altitude of 800 meters in the foothills of the Pyrennees. “This year has been a much more robust year for Bardinet Export [than 2009],” says Jeremy Belcher, Area Manager at Bardinet. “Although the world situation remains fragile and uncertain, we have seen our major brands performing better and resisting the challenges of a competitive and complex marketplace.”

In addition to Beehive Honey’s latest listing at Dubai Duty Free, Bardinet’s entire range of spirits and wines is performing extremely well this year

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Absolut unveils Absolut Watkins travel retail limited edition

Absolut Watkins is rich, smooth and sensual in taste and aroma with the distinct qualities of freshly ground coffee and notes of almond, caramel and warm chili

he Absolut Company recently unveiled Absolut Watkins, the smashing new limited edition flavor from Absolut, created exclusively for global travelers, reflecting all of the excitement, glamour and star quality of the globetrotting fashion world. Absolut Watkins will be launched throughout the global duty free/travel retail market in January 2011. Absolut Watkins is rich, smooth and sensual in taste and aroma with the distinct, mysteriously luxurious qualities of freshly ground coffee and notes of almond, caramel and warm chili. The extravagant and glamorous decor of the unique limited edition Absolut

Watkins bottle was created by celebrated Swedish fashion illustrator and artist Liselotte Watkins, famous for her designs for fashion brands such as Miu Miu, Anna Sui and Barney’s, as well as for magazines such as Vogue and The New Yorker. “Having my name on the Absolut bottle is crazy and fantastic,” said Stockholmand Milan-based Watkins. ”I’m Swedish, so the brand has always been there for me, and looking back at previous Absolut collaborations, it’s truly a great honor to be in that company. “With my bottle decor and the campaign imagery, I wanted to convey something of my own vision regardhe Central European Distribution Corporation ing the archetype (CEDC) has announced that many of its spirof cosmopolitan its were awarded top honors at this year’s glamour,” Watkins Vodka Masters 2010 and Travel Retail Masters continues. “The fla2010 competitions, which are arranged by The vor is a traveler’s Spirit Business. exclusive and traveling is one of my great passions. Everything I In the Vodka Masters competition, CEDC’s brands do is all about people and places, traveling and were given the following accolades: new experiences.” “Absolut Watkins is a most exciting launch Award Category Brand for us indeed,” said Anders Olsson, Director Master Russia Parliament of The Absolut Company Global Travel Retail. Master Eastern Europe Zubrowka “Since our target group is global travelers and Master Eastern Europe Soplica all of our operations are all about traveling, it’s Master Premium Zubrowka a treat for us to be able to celebrate the entire Master Smooth Graduate concept of stylish travel with a brand new and unique product. Also, we’ve been delighted Gold Premium Green Mark to be involved in this kind of creative collabGold Premium Parliament oration with Liselotte Watkins, honoring, you Gold Eastern Europe Graduate might say, the creative roots of our Absolut There were 116 vodkas entered into the blind tastbrand.” ing. Furthermore, there were 15 entries in the Smooth The Absolut Watkins launch will be backed category, and only one Master award was given. by a powerful 360-degree marketing campaign in duty free/travel retail markets worldwide, In addition to the above, CEDC’s brands won the including unique in-store brand installations. following awards in the Travel Retail Masters: A special signature cocktail has been created, Absolut Watkins and Cola, with Absolut Watkins Category Award Brand and cola simply poured over ice. A dossier of Vodka Master Parliament drinks recipes also presents a number of other Master Zubrowka Flavored Vodka irresistibly glamorous Absolut Watkins cockZubrowka Bison Grass Vodka was among the CEDC’s tails. The exclusive Absolut Watkins campaign winning brands at this year’s Vodka Masters and Travel Retail is being executed worldwide by Pernod Ricard Masters competitions Travel Retail.

CEDC comes up a winner at Vodka Masters and Travel Retail Masters 2010

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

Company News: Fosters

Selling up After some recessionary “trading down,” Fosters Group sales through Dubai Duty Free are riding a new wave of consumer confidence BY ANDREW BROOKS osters Group is the major supplier of alcohol products to Dubai Duty Free (DDF), says Helena Malfait, Senior Manager, Duty Free Market for Fosters. “We do more volume than anyone else across the full product spectrum, from wines to beers—and especially spirits,” she says. As DDF has grown, Fosters has devoted more resources to it, including a dedicated key account manager. The product range supplied to DDF has broadened considerably over the past five to six years. Before that, Malfait says, the main focus was wine. Fosters hasn’t abandoned that choice turf, but it has been adding other parts of its very broad product range. Spirits have been introduced, as well as cognac, bourbon, beer and more. Fosters can exploit economies of scale that others simply can’t match. This enables the company to add small-quantity specialty products. An example are the VSOP and XO Premier Cru cognacs from Hine that have been added in recent months.

Another upmarket addition has been Penfolds Grange. Malfait says this vintage is considered by some experts to be the only first growth in the southern hemisphere. Kendall-Jackson Vintner’s Reserve Zinfandel is another new arrival. “We add wine listings about every two months,” Malfait says. “It could be a new grape variety, a new country or a new brand.”

Getting attention “A big part of our business with DDF is doing promotions to drive volume or spotlight a brand,” Malfait says. “We don’t just put a new item on the shelf. We always aim to have a promotional calendar behind it.” When she spoke with Gulf-Africa Duty Free, Malfait was planning a December promotion involving a Treasury Wine Estates portfolio, where consumers receive a six-bottle wine tote with purchase and a free bottle. Also in the works was what Malfait called a “first-time-ever” promotion with DDF. “Generally our promotions run along the two-for-one line and feature one or two products within the same brand and/or from the same country.” This time around the plan is to leverage Treasury Wine Estates’ depth to allow consumers to enjoy a much broader range of options. “We’ve come up with a promotion where we look at three brands from two countries—Italy and Australia—and the consumer can buy four wines within that range,” Malfait says. The wines range from US$10 to $60 a bottle, whereas the usual range is US$10 to $20, and the buyer gets the cheapest bot-

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

tle free of charge. The promotion covers white, red and rose wines, different price points, different grape varieties and different styles. Penfolds and KendallJackson are the top Fosters wines at DDF. Among champagnes, Louis Roederer, Bollinger, Gosset Grand Reserve and Lanson are in play—not bigger brands but definitely notable in terms of recognition, quality and value for money. In spirits, Diageo stands out, especially its Johnnie Walker Black Label and Double Black. In fact DDF was one of six travel retail sites selected for the test launch of Double Black, a deluxe addition to the Black Label line. In beers, it goes without saying that Foster’s is a mainstay, and the Mexican Corona, introduced a few years ago, is also a strong favorite. In bourbon, Jim Beam—the bestselling bourbon in the world—and Maker’s Mark are the leaders. Fosters is privately held and exact figures aren’t disclosed, but Malfait says sales have been good. She interprets the return of interest in upmarket brands as a sign that the worst of the recession is over. “Champagne was one area where people were trading down during the recession,” she says. “This was very visible last year. Now there’s more confidence and champagne sales have picked up again. That’s a very good sign. People have confidence again, and the spread of products is coming back.” Malfait notes that throughout, sales have been growing in terms of volume. It’s only the shift away from top-line purchases that c had a temporary impact on results.

Company News: Belvédère

Star power With Bruce Willis as spokesperson for Sobieski, Belvédère Duty Free prepares to take on the Middle East with a portfolio of brands that have proven to be stars in their own right

elvédère Duty Free has enjoyed immense success in many regions of the world this year with brands such as Danzka Vodka, Sobieski Vodka and 4 Orange Flavored Vodka. The company has now set its sights on travel retail in the Middle East, and in a recent interview with GulfAfrica Duty Free, Managing Director of Belvédère Duty Free Wojtek Wydro and Duty Free Sales Director Torben Vedel Andersen explained why they are confident that Middle Eastern travelers will—like many travelers throughout the world—fall head over heels for their innovative brands.

The world’s best traveling vodka Andersen and Wydro note that Danzka Vodka, known universally as the world’s best traveling vodka, has always been a dooropener when it comes to cracking new travel retail markets. Belvédère Duty Free intends to shine a light on the spirit’s many qualities as a way of introducing travelers in the Middle East to its other brands. “We’re well aware that there are differences among markets, but we do feel that our brands have certain universally appealing characteristics,” Andersen explains. “For example, when you look at Danzka Vodka, the packaging immediately grabs your attention. There’s really nothing like it in travel retail. Apart from the look, it’s extremely practical when traveling. Last but certainly not least, the liquid itself is excellent.” “Consumers are learning that the shatterproof Danzka Vodka is perfect to put in their checked luggage,” adds Wydro. “Danzka Vodka was, is and will always be the best traveling vodka in the world.”

Premium all the way One of the brands that Belvédère Duty Free 76

Danzka bottles are shatterproof and perfect for travelers on the go who are looking for a high-quality, great tasting vodka

RYAN WHITE

expects to perform well in the Middle East is Sobieski Vodka. Of course, Bruce Willis is the spirit’s spokesperson and part-owner of the brand’s parent company, but aside from marketing, Andersen notes that there is a truthfulness to Willis’ relationship with Sobieski that vodka fans the world over appreciate. “Having Bruce Willis as the face of Sobieski is really something that helps the brand be seen as the premium product that it is, so we feel that there’s some real potential in the Middle East for this brand given the region’s concentration on luxury, high-end products,” Andersen explains. “But perhaps more importantly, when people see that the relationship between Sobieski and Bruce Willis is truly authentic, this really does lend the brand an instant credibility.” Of course, Willis’ respect is well earned; Sobieski is the number one selling premium vodka in Poland and honors its Polish heritage by showcasing the brand’s authenticity through its award-winning “Truth in Vodka” campaign. Perhaps most noteworthy is the fact that the brand is a perennial favorite among vodka aficionados.

“With Sobieski, the quality stands out,” adds Wydro. “Indeed, it’s far beyond many of the other vodkas in its segment. We have performed blind tastings in the US where Sobieski comes out ahead of virtually every other vodka time and again, regardless of price.”

Cracking the market Apart from the quality of the company’s spirits, Wydro also asserts that Belvédère Duty Free’s impressive performance this year is certainly good for morale when attempting to break new ground: “We’ve recovered extremely well from the economic downturn, especially in South America and Asia,” he says. “I think the hard work that we’ve put into the brands over the last couple of years, combined with the quality and innovative nature of the spirits themselves, will certainly help us as we expand into the Middle East.” Andersen concludes: “While launching the brand in the Middle East will in many ways be like starting from scratch, we’re up for the challenge and we have faith that travelers will agree that our brands are as premium and innovative as any other vodka in the travel c retail market today.” Sobieski is the number one selling premium vodka in Poland; the brand is a perennial favorite in taste tests among vodka aficionados

Managing Director of Belvédère Duty Free Wojtek Wydro (left) and Duty Free Sales Director Torben Vedel Andersen (right) see the Middle East as an area of great opportunity for the company’s brands

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Company News: Monus

Striking the perfect balance BY

RYAN WHITE

Monus Tobacco Company continues to attract attention in duty free with a wide range of new and classic brands that offer both quality and value erbia-based tobacco company Monus has jumped feet first into duty free in 2010 by undertaking a large-scale advertising campaign in various trade magazines. The company has also been present at most major travel retail exhibitions and conferences this year as a means of underlining its commitment to travel retail. While many tobacco suppliers are still reeling from the effects of the economic downturn and fighting an ongoing battle against tightening restrictions on the sale of tobacco, Monus’ bold move into duty free is backed up by one simple yet extremely important fact: The company believes in the value of its wide range of cigarette brands. Perhaps more importantly, Monus has a decade of domestic success in Europe under its belt to back up the claim. “Our focus at the moment is the Middle East, North Africa, the Far East and Central Asia,” says Dragan Milic, Regional Export Manager at Monus. “These regions of the world are experiencing exponential growth. We feel that the robust domestic success of our brands in Europe will translate well into these dynamic markets.”

Quality meets value Monus has been in business for 10 years and has recently launched its new De Santis range of cigarettes in duty free. De Santis is sold in

“Our brands offer a perfect balance between price and quality. I think this will certainly be a key to our continued success.” Dragan Milic, Regional Export Manager, Monus

Red (tar: 10 mg; nicotine: 1 mg; carbon monoxide: 10 mg) and White (tar: 7 mg; nicotine: 1 mg; carbon monoxide: 7 mg) varieties, with both options being available in regular and slim formats. Both the Reds and Whites are sold in a unique octagonal packaging that aesthetically brings together the themes of modernity and tradition. Just in time for the TFWA Exhibition in October, the company also revamped the design of its Monus brand cigarettes. The fresh and attractive restyling is being implemented in cooperation with a top Belgrade design agency. “I have no doubt that the newly redesigned Monus cigarettes will prove popular among many potential partners,” notes Milic. “The range of options, from the slim formats to unique flavors such as apple and grape, 78

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

really appeal to dynamic and enthusiastic consumers. The effort we’ve put into the brand’s redesign is really a testament to Monus’ popularity.” In addition to the above brands, the company’s Fast cigarettes, which have traditionally performed very well in the European domestic market, are now available at Hellenic Greece’s duty free locations. True to its name, the brand has taken on a life of its own and become Monus’ most popular product to date, largely because of its flavor profile and reasonable price point. “Our brands offer a perfect balance between price and quality,” explains Milic. “I think this will certainly be a key to our continued success both in duty free and the domestic market.”

The leader of the pack Monus is also set to release the highly anticipated Tzar Red brand. The brand is designed to lead the entire portfolio given its super premium positioning both in terms of the product itself and the packaging. “We’re very excited about the launch of our super premium brand Tzar Red,” Milic says. “Tzar Red is very high-end and we feel that it is perfectly suited to many of the regions that we’re targeting, particularly the Middle East and Asia. Once this brand is launched, we’ll have a complete range to offer customers. Our domestic partners are well aware that our offering is certainly broad enough to suit any taste, and we’re looking forward to highlighting the very same variety in duty free with our premium brands Tzar Red and De Santis leading the way.” Travel retail can expect to see much more of Monus during the rest of 2010 and into the new year as the company continues to become more and more active in the channel: “Our stance is simple yet powerful,” concludes Milic. “Our cigarettes have already proven themselves domestically time and again, and we’re confident that duty free consumers will also appreciate a company that prides itself on offering products that strike a perfect balance between price and c uncompromising quality.” Monus offers a wide range of products to meet the needs of consumers and has experienced unrivaled success in European domestic markets as a result

Company News: Imperial Tobacco

Full steam ahead BY

RYAN WHITE

This year saw the worldwide rollout of the new-look Davidoff cigarettes, as well as a limited centenary edition of Gauloises Blondes (pictured below)

Following 2010’s new and limited edition packaging, Imperial Tobacco is set to roll out impressive new furniture worldwide to continue strengthening its position in duty free

mperial Tobacco has been busy in 2010, from the celebration of the 100th anniversary of Gauloises and the rollout of the newlook Davidoff cigarettes to the ongoing launch of new in-store furniture and the development of an initiative aimed at helping flood victims in Pakistan and India. Gulf-Africa Duty Free recently had the opportunity to sit down with Imperial Tobacco’s Marketing Manager Global Duty Free Oliver Schramm to discuss the current developments and see what 2011 has in store for the company.

year’s TFWA Exhibition in Cannes, France. “Gauloises, on the other hand, is our international sub-premium brand with a French touch and really communicates a ‘liberte toujours’ image.” With the look of both brands fresh in the minds of travelers, Imperial Tobacco set its sights on revamping its personalized instore furniture. Schramm notes that restrictions on advertising tobacco products in duty free make the investment in new furniture a key issue for Imperial Tobacco given the communication opportunities such displays afford.

“For the moment rolling out the furniture is our top priority, but you can expect a number of new initiatives from Imperial Tobacco relat- The personal touch The versatility of the new portfolio brand furniture is such that from ing to packaging and one basic furniture design, each brand can be given its own personal image in 2011.” look by changing brand color, lighting and lightbox communicaOliver Schramm, Marketing Manager Global Duty Free, Imperial Tobacco

Looking better than ever This year saw the impeccable qualities of the Davidoff and Gauloises brands embodied in new, eye-catching packaging. The new-look Davidoff cigarette packs, while released in 2009, were rolled out worldwide this year to rave reviews. Furthermore, to celebrate the 100th anniversary of the brand, Gauloises Blondes were presented in a limited edition pack featuring an exceptional graphic design underlining the brand’s enduring values: freedom, non-conformism, creativity and “joie de vivre.” “Davidoff is an iconic, premium brand, and the new packaging perfectly reflects that,” Schramm told Gulf-Africa Duty Free at this

tion. In addition, the color of the main unit can be customized to the operator’s shop colors if required. Panels enable additional communication messages to be included, such as allowances for specific countries or information on special promotions. Furthermore, various executions are available for wallbays, gondolas and columns/pillars to enable the units to be installed regardless of shop size and configuration. “We have three pillars when it comes to marketing our brands,” explains Schramm. “The first is the personalized furniture, as it allows us the opportunity to still advertise our brands somewhat given the restrictions in many countries. The second pillar is special packaging and the third is image promotion. For the moment rolling out the furniture is our top priority, but you can expect a number of new initiatives from c Imperial Tobacco relating to packaging and image in 2011.”

A helping hand Imperial Tobacco is also committed to making a difference to those less fortunate. The company is to donate a substantial €15,000 to help flood victims in Pakistan and India following its innovative charity initiative held at the TFWA Exhibition this year. Visitors to Imperial Tobacco’s stand at the exhibition were invited to take part in an entertaining Davidoff Guess and Win game, giving them the chance to win a luxury luggage set. Each time a visitor participated in the game, an automatic charity donation of €50 was made by Imperial Tobacco. Within the stand area a special charity wall displayed the ongoing fund total, along with pictures of the visitors who helped make it happen. By the end of the week, a total of € 8,550 was raised. However, Imperial Tobacco generously decided to round this up significantly to €15,000.

Visitors to Imperial Tobacco’s stand at TFWA were invited to take part in a Davidoff Guess and Win game that also benefited flood victims in Pakistan and India

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Experience a unique variety of refined, delicate flavours

Company News: JTI

On the rise Despite increasing restrictions on the sale of tobacco products in many regions, JTI sees shipment volume improve from January to September 2010 BY RYAN WHITE

apan Tobacco International (JTI) recently released business results from January to September 2010. The company performed well given tightening restrictions on the sale of tobacco, and highlights of the report include the following: ■ The total shipment volume (Including cigars, pipe tobacco and snus, but not including private label and contract manufacturing products) and global flagship brand (GFB) shipment volume increased by 4.8% and 9.4%, respectively. These strong quarterly increases resulted from growth and prior year trade inventory adjustments in the Middle East and Turkey, improved shipment volume in Russia and continued growth in Italy and France. ■ Market share continued to grow in most key markets including Turkey, Italy, France and Russia. ■ Core net sales excluding tax (not including revenue from distribution, leaf tobacco, private label, contract manufacturing and other peripheral businesses) grew by 5.8% from July to September, primarily driven by pricing and volume increases. At constant rates of exchange, core net sales excluding tax increased by 8.9%. ■ Core net sales per thousand cigarettes excluding tax was US$23.0 from July to September. At constant rates of exchange, core net sales per thousand cigarettes excluding tax increased by 3.9% during the same period.

Shipment Volume by Cluster

North and Central Europe: Total shipment volume remained flat at -0.5% from July to September (January–September 2010: 3.3%). Whilst shipment volume increased in Sweden, higher trade inventories in the United Kingdom offset the brands’ growth momentum there. GFB volume increased 4.5% from July to September (January–September 2010: 10.3%). CIS+: Total shipment volume increased 0.8% from July to September (January–September 2010: -5.1%) due to volume improvement in Russia, which offset industry contraction in Romania and lower shipment volume in Ukraine due to excise increases and industry contraction. GFB volume also increased 6.9% during the same period (January–September 2010: -1.0%). Market share grew in Russia from 36.5% to 37.0%. Rest of the World: Total shipment volume increased 18.6% from July to September (January–September 2010: 3.2%). Volume increased as a result of growth and prior year trade inventory adjustments in the Middle East, Turkey and Taiwan. GFB volume increased 21.7% during the same period (January–September 2010: 5.9%). Market share increased in Turkey and Korea.

GFB Winston: Shipment volume increased 12.4% from July to September (January–September 2010: 1.7%). Increases in Russia, the Middle East, Turkey and Italy largely compensated for declines in other markets. Camel: Shipment volume increased 5.3% from July to September (January–September 2010: 0.8%) with continued volume growth in Turkey and France. Mild Seven: Shipment volume increased 16.8% from July to September driven by growth in Korea and prior year trade inventory adjustment in Taiwan (January–September 2010: 4.1%). LD: Shipment volume increased 10.8% from July to September (January–September 2010: 5.8%). JTI attributes the increase to recovery in Russia and new product launches in the Ukraine and Turkey.

South and West Europe: Total shipment volume improved 2.3% from July to September (January–September 2010: -3.4%) compared to the same period last year. A reduction in shipment volume in Greece due to industry contraction was more than offset by strong growth in Italy and France. GFB volume increased by 4.0% during the same period (January–September 2010: 2.0%). Market share increased in all key marShipment volumes of all JTI’s global kets (i.e., Italy, France and Spain). flagship brands—which include Winston and Camel— increased from January to September 2010

JANUARY-SEPTEMBER RESULTS (July-September results for 2010 are preliminary) FOR 2009 & 2010 2009 Results

2010 Results

Jan-Mar Apr-Jun July-Sep Jan-Sep Jan-Mar Apr-Jun July-Sep Jan-Sep

Total shipment volume (billions of cigarettes) GFB shipment volume (billions of cigarettes) Core net sales, excluding tax (millions of US$) Core net sales per cigarettes, excluding tax (US$)

94.1

110.7

100.9

115.1 109.6

325.6

(-6.8%)

57.1

64.2

61.0

182.4

(-4.4%)

(-0.9%)

2,148

2,404 2,476

7,028

2,372

2,598

21.5

21.1 22.8

21.8

25.5

23.7

54.6

(-3.9%)

63.7

(+10.4%) (+8.1%)

114.8

(+4.8%)

66.7

(+9.4%)

2,621

319.5

(-1.9%)

185.1

(+1.5%)

7,591

(+5.8%)

(+8.0%)

23.0

24.0

(+18.6%) (+12.4%) (+1.0%) (+10.1%)

( ): Net change in comparison to the same period in 2009 AC Nielsen, Core EPOS and JTI internal data on a 12-month rolling average, September 2010

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

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04/10/2007 03:47:44 p.m

New & Notable BY

LIQUOR & TOBACCO Camus Masterpiece collection Company: Camus Description: This rare, limited edition cognac isiscomposed composed oof four exceptional eaux-de-vie from the Petite Champagne area, guaranteed to be at least 43 years old including two sumptuous vintage cognacs from 1962 and 1964. Only 980 decanters available worldwide

CONFECTIONERY Freia Kvikk Lunsj Tablet Company: Kraft Foods World Travel Retail LLC Description: Two of Norway’s biggest brands, Freia Melkesjokolade and Kvikk Lunsj, come together in a unique mouth-watering tablet of Freia Milk Chocolate, pieces of Kvikk Lunsj wafer and a sprinkle of sea salt

KIM CARRERA

Davidoff Puro d'Oro Company: Davidoff International Description: With the Davidoff Puro d'Oro, Davidoff has successfully reverted back to its cigar-making roots. Puro d'Oro is compromised of carefully chosen, singleorigin tobaccos featuring the exclusive Davidoff Yamasá wrapper

The Balvenie Forty Company: William Grant Description: Small amounts of The Balvenie matured in seven different vintage casks have been used to produce only 150 handnumbered bottles of The Baileys Original Irish Balvenie Forty, exclusively Cream Mint, Caramel available to travel retail

and Coffee flavored liqueur chocolates

Company: Lir Chocolates Description: Following the phenomenal success of its Baileys Original Irish Cream Liqueur Chocolate collection, Lir has introduced a new selection of Mint, Caramel and Coffee flavored chocolates -each filled with the unique and creamy Baileys Liqueurs

Chocobloc Orange Company: Chocolat Frey Description: The newly designed Chocobloc Orange contains fine milk chocolate with orange flavor and almond-honey-nougat

Liberty by Tic Tac Company: Ferrero Description: Tiny sugar-free mouth freshener mints in two flavors – Wildberries and Coolmint – which are presented in neat little tins that slip into a pocket. Perfect as an impulse purchase at the till-point

Chocolate shaped airplanes Company: Starbrook Airlines Description: These milk chocolate airplanes evoke the style of the early 50’s aviation era. All the products and packaging is developed by Jaak De Koninck

N GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

Newcastle Brown Ale Company: Heineken International Duty Free & Travel Retail Description: Newcastle Brown Ale is an authentic dark beer with unique personality. It is as refreshing and easy-to-drink as lager but has the real characteristics of traditional British Ale

Chivas Regal 18 year old limited edition Company: Pernod Ricard Description: With flamboyant creativity, innovation and in true Lacroix style, Christian Lacroix has brought haute couture to Scotch whisky with the bejeweled Chivas 18 year old bottle, presented in a mirrored treasure box

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New & Notable

JEWELRY & WATCHES Kenneth Cole Touch Screen Company: Geneva, a Binda Company Description: Featuring Digi-Touch technology, the new Touch Screen Watch includes 32-city world time capabilities, alarm, stop watch and light-up screen that can all be activated at the touch of a finger

TRAVEL ACCESSORIES Hungry Monkey Company: Wizz Description: ‘Hungry Monkey’ screams and waves his arms when his banana is taken away. Give him the banana back and he is happy again. It works on a simple but clever magnetic mechanism with four versions available: lying, hanging, jumping and one waving his arms

Vivaldi’s 8 piece set Company: Gerzon Description: Vivaldi’s eight piece sets remain the perfect gift; a charming set of costume jewelry with six pierced earrings and two matching pendants; all presented in luxury window gift box. The items are gold and/or rhodium plated with pearls or crystal

Alpha Bravo Collection Company: Tumi Description: Alpha Bravo continues to expand with a greater selection of day bags. Contemporary in design and attitude, ballistic nylon is applied in a softer, less structured manner and enhanced with antique pewter hardware and leather detailing

Dolce Vita Collection Company: Toscow Description: Toscow’s new Dolce Vita collection is elegant, playful and colorful perfect to adorn any wardrobe

DC 9011 WP Company: Minox GMBH Description: Boasting a sturdy body that is waterproof up to a depth of three meters, this compact digital camera repels dust, water, sand and salt. It is a must-have for lovers of water sports and outdoor enthusiasts

Adidas Timepieces Company: Fossil Inc Description: The new Adidas NYC collection stylishly integrates the playfulness of a plastic digital with the street heritage of Adidas Originals

The Sphaira Collection Company: Tateossian Description: Delicately hand crafted in Italy, the silver and gold vermeil pieces use the mesh design feature that has become a Tateossian signature. The collection combines unity, simplicity and symmetry

The Ultra Slim Titanium Collection Company: Skagen Designs Description: The Skagen Denmark® Titanium Collection draws from powerful seas iconic to the artist’s village of Skagen. Forceful in nature, water is one of the Earth’s most raw elements and the lightweight, durable material of titanium mirrors this same essence. The signature mesh band wraps around the wrist to create a seamless contour

GULF-AFRICA DUTY FREE & TRAVEL RETAILING NOVEMBER/DECEMBER 2010

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