AMERICAS DUTY FREE by Paramount Publishing Ltd.

Ingl és y

J U N E / J U LY 2 0 1 1 • V O L 2 1 , N O 2

esp año l

ASUTIL 2011

Neutral begins its journey p.

Latin America stays strong p.

Why they buy p.

E-cigarettes: the new alternative p.

ASUTIL welcome note

Welcome to the 2011 ASUTIL Conference! SUTIL was born thanks to the vision and drive of its founders, including Samuel Kauffmann of Dufry Brasil, Victor Hugo Bonnet of London Supply and Adolfo Pertierra Menéndez of Interbaires. They identified a need for an organization that would allow duty free executives in the region to come together to discuss pertinent topics of interest and development initiatives for the benefit of the travel retail channel in the region as a whole. ASUTIL is a novel entity in travel retail because of the fact that all of the major players in Latin American duty free come together as equals for the benefit of the industry in the region. I always make a point of saying that ASUTIL is not an organization made up of businesses represented by people, but rather by people representing businesses. By its very nature, this important distinction allows business to be conducted in a more fluid manner as executives meet face to face and begin to gain a better understanding of each other through shared experiences. What does ASUTIL offer attendees? The answer is simple: EVERYTHING. From free gifts, amazing social activities and all lunches

provided by ASUTIL to a discounted hotel rate that includes free Internet and breakfast, attendees are taken special care of at each conference. It’s also worth mentioning the memorable gala dinners that take place every year, such as the evening sponsored by Zeinal Hnos in Punta del Este in 1999 or the London Supply-sponsored gala dinner in 2005 in Buenos Aires. Put very simply, ASUTIL matters now more than ever because the travel retail industry must remain united like never before. There are multiple threats to travel retail and we must be prepared to face them knowing that our niche industry should maintain the identity and mystique that makes entering a duty free store in Latin America an experience unto itself. Over the course of the years since ASUTIL’s inception, the founders’ original objectives have been consistently pursued as the organization has grown in size and scope. This year’s conference, held at the JW Marriot in Cancun, Mexico, is perhaps the best example to date of our continued efforts to fulfill the original vision set out for ASUTIL. We invite you to celebrate with us in Cancun this year as we break a new attendance record!

SUTIL was conceived in 1995 as a humble regional association made up of duty free members from Mercosur. When I took over from Enrique Urioste as Secretary-General of ASUTIL in 2001, it was a time of great change for the entire world, and especially for the people of the United States. That year 80 people attended the conference. I’m proud to say that at this year’s conference in Cancun, Mexico, we’ll be welcoming almost 300 people. This represents a new record for the organization. ASUTIL has always made a concerted effort to secure thought provoking, internationally renowned speakers for the conference portion of the event, and this year is no exception. Furthermore, I have no doubt that the networking time we offer suppliers and operators will again be put to good use this year. Finally, the social events add a very important element to the annual gathering by allowing people in the industry to relate to one another on a

deeper level. These three pillars—the conference, the networking opportunities and the social activities—combine to make an event that is truly unique in the industry. There is much to look forward to in the coming years, both in relation to travel retail in Latin America and the ASUTIL conference specifically. More and more suppliers are asking about exhibiting products at ASUTIL and many people would like to see the conference portion take place over a three- or four-day period. These are just two examples of the myriad possibilities for the future of the organization. While it’s impossible to say what changes will take place in years to come, rest assured that ASUTIL will evolve with the industry as Latin America continues to emerge as a top player in the worldwide duty free channel. For the moment, however, let us concentrate on making this year’s conference the best it can be. Welcome to Cancun and ASUTIL 2011!

Sincerely,

Francisco Heredia President, ASUTIL

Sincerely,

José Luis Donagaray Secretary-General, ASUTIL

www.dutyfreemagazine.ca www.dutyfreemagazine.ca THE THE AMERICAS AMERICAS DUTY DUTY FREE FREE & & TRAVEL TRAVEL RETAILING RETAILING

Letter From The Editor

The Americas Duty Free & Travel Retailing (ISSN 0962-0699) is published four times a year February/March, June/July, October, November/ December) by Global Marketing Company Ltd., 26 Pearl Street, Mississauga, Ontario L5M 1X2 Canada. It is distributed throughout Central America, South America, the United States, Canada, U.S. Virgin U.S. Pacific islands and the islands in the Islands, I Caribbean.

Nurturing growth

011 got off to a winning start with a successful Duty Free Show of the Americas (IAADFS) and the positive energy has brought us to the middle of the year to our next big conference for the Americas region. The new time slot in June for the ASUTIL conference has received great feedback and what’s more, a higher number of attendees surpassing the number of visitors from last year. The move plus the popularity of the conference has proven fruitful for the organization. Attendees can expect great networking opportunities in an intimate setting with tons of social activities. When thinking of the up and up, a few retailers come to mind. One specific Argentinean operator, London Supply, is doing big things. Most recently, the retailer has been planning a huge expansion of the company’s store in Iguazú. As finishing touches are put on the plan, London Supply’s Commercial Manager Francisco Heredia has noted that the large project will likely take two years to complete. Another retailer is Top Brands. The company currently operates 28 stores in the domestic and duty free markets. Its operations

are located in Belize, Salvador, Panama, Honduras, Guatemala, Puerto Rico, Cuba and most recently Santa Martha, Colombia. Its latest project involves expanding from Central America into the South American country of Chile. The company’s distribution arm will open a wholesale showroom to help it introduce a number of high-end brands to the duty free zone. Given its existing relationships with suppliers, Top Brands will distribute everything from perfumes and accessories to confectionery. I’m sure you’ll agree that The Americas Duty Free team has worked even harder to bring you a bigger and better ASUTIL issue this year. Enjoy the read... I look forward to seeing you all again in sunny Cancun, Mexico. Thanks,

Subscriptions: $200 for one year. 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. June/July 2011, Vol. 21, No. 2. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2011 Global Marketing Company Ltd. The Americas Duty Free & Travel Retailing 26 Pearl Street Mississauga, Ontario L5M 1X2 Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemagazine.ca PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR Hibah Noor hibah@dutyfreemagazine.ca CONCESSIONS, LIQUOR & TOBACCO EDITOR Ryan White ryan@dutyfreemagazine.ca ART DIRECTOR Patrick Balanquit patrick@globalmarketingcom.ca CONTRIBUTORS Andrew Brooks

ADVERTISING SALES ADVERTISING & MARKETING MANAGER Kim Carrera kim@dutyfreemagazine.ca

Hibah Noor Editor hibah@dutyfreemagazine.ca

THE THE AMERICAS AMERICAS DUTY DUTY FREE FREE & & TRAVEL TRAVEL RETAILING RETAILING JUNE/JULY JUNE/JULY 2011 2011

CIRCULATION & SUBSCRIPTION MANAGER Deepa J deepa@globalmarketingcom.ca

Letter From The Editor

Fomentar el crecimiento l año 2011 se inició de la mejor manera con una exitosa Exposición Duty Free de las Américas (Duty Free Show of the Americas, IAADFS). Pero la energía positiva continúa luego de transcurrir el primer semestre, con nuestra próxima conferencia en la región de las Américas. El cambio de fecha de la conferencia de ASUTIL para junio ha recibido opiniones muy elogiosas, y, más aún, una cifra mayor de asistentes que superó la del año pasado. El cambio y la popularidad de la conferencia han sido fructíferos para la organización. Los asistentes pueden esperar excelentes oportunidades de contacto profesional en un entorno íntimo, con numerosas actividades sociales. Cuando pensamos en trayectorias ascendentes, nos vienen a la mente algunos minoristas de viajes. Una compañía argentina en específico, London Supply, está cosechando grandes logros. Recientemente, se ha propuesto una enorme expansión de su tienda en Iguazú. Y ahora que la planificación está en la etapa final, Francisco Heredia, Gerente Comercial de London Supply, ha destacado que en dos años el proyecto estará terminado. Otro minorista de viajes a citar es Top Brands. En la actualidad, la compañía opera 28 tiendas en los mercados nacional y duty free. Sus establecimientos están ubicados en Belice, El Salvador, Panamá, Hon-

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

duras, Guatemala, Puerto Rico, Cuba, y, recientemente, en Santa Marta, Colombia. Su proyecto más reciente consiste en ampliarse de Centroamérica a la nación suramericana de Chile. La dependencia de distribución de la compañía inaugurará un salón de exposiciones mayorista para contribuir a la introducción de varias marcas de lujo en la zona duty free. Dada su relación existente con los suministradores, Top Brands distribuirá una amplia gama de productos, desde perfumes y accesorios a confitería. Estoy segura de que ustedes estarán de acuerdo en que este año el equipo de Americas Duty Free se ha esforzado aun más para proporcionarles un número más extenso y mejor dedicado a ASUTIL. Que disfruten su lectura... Espero verlos nuevamente en Cancún, México. Cordialmente,

Hibah Noor Editora hibah@dutyfreemagazine.ca

^^^ P U[ LY WHY M \TZ M Y

J U N E / J U LY

2011

•

VOL

21,

Contents

28 14 18

IN BRIEF Essence Corp. hosts another successful beauty advisor seminar ■ Ferragamo presents Attimo pour Homme ■ Sea & Sky Supply broaden portfolio ■ Marcolin continues incrementing sales in travel retail ■ Katherine Patch-Sleipnes joins Gold Silk ■ Siñeriz to open mega store in Uruguay in 2012 ■ Tommy Hilfiger courts vast potential with its entry into the travel retail market

TOP STORY: NEUTRAL DUTY FREE

Beginning the journey Americas Duty Free speaks to Enrique Urioste about the recent private equity fund buyout of Neutral to get a sense of the journey that lies ahead for the well known duty free executive

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

18 28

LATIN AMERICA REPORT

Staying strong From Northern Mexico to Tierra del Fuego, Latin American duty free operators see increased sales buoyed by the improving US economy and the purchasing power of Brazilian travelers

Mantenerse ﬁrmes Desde el norte de México a la Tierra del Fuego, los operadores duty free latinoamericanos experimentan incrementos en las ventas impulsados por las mejoras en la economía estadounidense y el poder adquisitivo de los viajeros brasileños

Contents

MARKET RESEARCH

OPERATOR NEWS: TOP BRANDS

Why they buy New market research aims to give travel retailers valuable insight into buying decisions and behaviors

“The opportunities to come” Top Brands takes its El Dorado store concept to ZOFRI as its distribution arm gives suppliers new opportunities to crack the thriving Chilean duty free market

TRINITY REPORT

AIRPORT NEWS: ALDEASA AND ASUR

OPERATOR NEWS: UETA AND DFA

COMPANY NEWS: L’ORÉAL GROUP - PARBEL

A house united In duty free, operators and suppliers always do better when they work together

Biding time ASUR and Aldeasa continue to make Cancún a world-class airport in preparation for the eventual return of tourists to one of Mexico’s most dynamic cities

Maintaining momentum After a remarkable 2010 and an even better start to 2011, Leon Falic explains how UETA and DFA will continue their upward trajectories in the second half

A fairy-tale fragrance L’Oréal kicks off a fresh new advertising campaign for Ralph Lauren’s Romance

COMPANY NEWS: COLORFUL LICENSES INTERNATIONAL BV

Cashing in on color With its brilliant, multi-colored Oilily lifestyle brand, Colorful Licenses International makes its vibrant mark in duty free

56 Two men, two stories

COMPANY NEWS: ESSENCE CORP., CLARINS GROUP

The compelling presences and achievements of Oscar Pastorius and Enrique Iglesias provide the fuel for new launches from Essence Corp.

BEAUTY BEAT: FRAGRANCES

Fresh fragrances A line-up of innovative fragrances welcome the new season

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

WWW.LAPRAIRIE.COM ÂŠ 2011 LA PRAIRIE INC.

PURE GOLD PURE RADIANCE

The luminous power of gold is yours Light up your face with CELLULAR RADIANCE EMULSION SPF30. The new lavishly light, de-aging emulsion diminishes the appearance of wrinkles and improves elasticity, firmness and texture. Experience CELLULAR RADIANCE CONCENTRATE PURE GOLD, the newly enhanced, luxurious multi-tasking serum. One single drop to re-vitalize and illuminate the skin with a stunning radiance.

Contents

BEAUTY BEAT: SKINCARE & COSMETICS

COMPANY NEWS: SISLEY PARIS

66 68 76

Beauty regime Creative cosmetics and revolutionary skincare: traveling consumers will have plenty of options to choose from this season

The green pioneers As one of the early developers of phytocosmetology, Sisley continues to lead the way in the premium end of the market

COMPANY NEWS: LESPORTSAC

Feeling the joy LeSportsac’s collaboration with LA-based Joyrich results in a fun, colorful collection of handbags for Winter 2011

The best gets better As confectionery’s leaders gather at ASUTIL, signs are that a strong market is only getting stronger

The right brands, the right time

RUM REPORT

Freedom to choose Americas Duty Free talks to five rum brands about the huge variety that the category has to offer both connoisseurs and novices alike

88 90 94

Diageo celebrates the success of Johnnie Walker Double Black one year after its introduction as a travel retail exclusive

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

Two of a kind

COMPANY NEWS: BAT

Tradition meets innovation BAT continues to reinvent its products in Americas duty free while remaining true to its long tradition of offering consumers quality cigarette brands

COMPANY NEWS: JTI

On the up and up JTI sees sales increases in Q1 2011 and continues to invest in travel retail with the addition of new smoking lounges in Europe

COMPANY NEWS: HORIZON INTERNATIONAL DUTY FREE

The perfect combination Horizon International Duty Free rounds out its portfolio of premium brands and welcomes two duty free veterans to the team to continue generating buzz in Q2

COMPANY NEWS: DIAGEO

A year of accomplishments

CIGAR AND SPIRIT PAIRINGS

Americas Duty Free discusses the art of bringing out the best of both worlds when pairing cigars and spirits with three of the industry’s most progressive cigar companies

COMPANY NEWS: BROWN-FORMAN

72 12

CONFECTIONERY REPORT

Brown-Forman renews its focus on premium brands Woodford Reserve, Herradura, Chambord and Chambord Vodka in the Americas

NEW & NOTABLE Svedka Vodka ■ The Island Trio ■ Silk-épil 7 Dual Epilator

In Brief

Essence Corp.’s beauty advisor seminar in Cancun, Mexico

Essence Corp. hosts another successful beauty advisor seminar Miami-based luxury beauty distributor Essence The five-day event was enjoyed by 30 BAs Corp. recently concluded a beauty advisor from Central America and Mexico. The sem(BA) seminar on May 20th at Club Med Resort inar included a busy agenda with brand and in Cancun, Mexico. product training, an excursion to Xcaret and

numerous social activities. Both Clarins Group and Essence Beauty presented their novelties while providing an unforgettable experience to their BAs.

Ferragamo presents Attimo pour Homme Prestigious Italian fashion house Salvatore Ferragamo unveils its new masculine fragrance Attimo pour Homme, which will be rolled out in October. Famous Italian actor Alessandro Gassman is the face of Attimo pour Homme. The company considers him someone who “perfectly embodies the elegant Italian style of Salvatore Ferragamo as well as the ideal of Mediterranean masculine beauty. He is not only known for his career but also for being the son of Vittorio Gassman, one of the most outstanding representatives of Italian cinema worldwide.” Attimo pour Homme is a fresh and woody oriental fragrance that embodies the masculine facets of Salvatore Ferragamo’s distinctive elegance. Freshness opens the fragrance, combining aromatic notes of marjoram, effervescent cardamom and sparkling mandarin. In the heart notes a comforting spiciness of saffron conveys intensity together with a modern touch of Pimento. A powerful dry down of woods such 14

as patchouli and vetiver intensify the masculine character of the scent. Ambery cistus labdanum and soft white musk endow the fragrance with extreme oriental facets. The classy masculine flacon was created by renowned designer Sylvie de France. Its refined and cubical structure is glorified by an elegant narrow matte strip with a black Attimo logo. The soft grey glass lends a chic and urban feel and underlines the warm and intense structure of the fragrance, whereas the cubic cap with its dark silver insert adds strength to the bottle. The Salvatore Ferragamo logo glimmers in red at the base of the flacon. The outer packaging sports a warm white textile embossed paper, which recalls the refined texture of a Salvatore Ferragamo men’s shirt. The silver band and top add to the box’s modernity and masculinity, whereas the three embossed bands recall the shape of the flacon. The cardboard is ecologically certified by the Forest Stewardship Council (FSC).

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

Sea & Sky Supply broaden portfolio Offering a wider range of consumer and personal care electronics, digital imaging and accessories, Sea & Sky Supply has broadened its existing product portfolio. The company is keeping its main focus on Philips shaving and grooming, Clöudz and Fuji items. Its newest addition is the

Sea & Sky Supply adds Clöudz and Fuji products to its portfolio

brand Energizer, which is performing very well in Latin America. The company considers the electronics business a dynamic and rapidly developing market, with a consumer base that trusts the familiar and reliable brands that it offers. Sea & Sky’s most popular and unique concept is Clöudz, which together with Philips is exclusive to the travel retail market worldwide. Provided with a tailor made display, the concept offers a variety of travel comfort accessories, such as microbead neck pillows and travel blankets, Philips headphones, iPod- and iPhone cases and computer accessories. There is also a complete Clöudz kids’ range of licensed sunglasses, watches and coloring books. The company’s main goal is to increase the awareness of electronics and accessories in its travel branch and to eventually be present in every duty free shop in the world. Sea & Sky will be present at the Asutil conference in Cancun.

Katherine Patch-Sleipnes joins Gold Silk Katherine Patch Sleipnes has been appointed Gold Silk Regional Director for the Americas and Caribbean as part of the strategic initiative to provide additional sales support to this increasingly important region. As Regional Director, Patch-Sleipnes will be responsible for all operations in the region, including: Mexico; Central America; South America; the Caribbean Islands, USA and Canada, with a primary objective of developing travel retail sales in Latin America. She will also assist in the expanding Gold Silk brand within the region’s local & tourist stores segment, as well as airline and cruise retail travel channels. Previously, Patch-Sleipnes worked for P&G Prestige for over 17 years, where she held a variety of sales positions, most recently as Vice President Travel Retail Americas. In that capacity, she was responsible for fragrance brands Dolce Gabbana, Gucci, Hugo Boss, Lacoste, among others. Gold Silk will be meeting with clients and prospects at this year’s annual ASUTIL conference.

ADVERTORIAL

TAIRO continuing its stride in the Mexican Market

Attimo pour Homme by Salvatore Ferragamo

TAIRO International continues to increase and expand its business in the Mexican Markets. TAIRO is currently expanding the P&G Prestige portfolio in the recently added Mexican regions and accounts. Senior Area Manager, Ricardo Rivas, with his years of experience, is the point person who manages and overlooks the structure and implementation of new sales and training tactics in the region. With the Tairo touch already in effect, the results are being seen! Sears Cachanilla received beautiful new impactful personalized Dolce and Gabbana and Gucci furniture, and as an outcome of the improvement, more customers are being drawn to the counter to buy P&G fragrances. TAIRO is also in the process of doing a similar update for Sears Rio in Tijuana. Recently, Sears Rio had a phenomenal engraving event during Mother’s Day where P&G brands were in the spotlight. In addition, TAIRO is taking Coty Prestige to new heights in the region. Davidoff Champion has had great success since its launch here. During Easter Week, Ultra Femme and TAIRO created an outstanding Davidoff Champion animation event in La Isla and Luxury stores. The event had spray models, a one of a kind Champion game, and prizes for the lucky participants who won.

In Brief

Marcolin’s Marco Lares at the company’s new Miami showroom

Marcolin continues incrementing sales in travel retail Leading eyewear company Marcolin has recently opened a new showroom in Miami to accommodate meetings between the supplier and its partnering travel retail accounts. The company will optimize the space by presenting its newest sunglass collections. For spring Marcolin has launched the Swarovski sunglass collection, and for fall, the Diesel Sunglass collection. Best sellers for the company in the Americas region include Tom Ford (styles Jennifer, Whitney, Charles, Rickie plus others) and Roberto Cavalli (styles 370 S, 576 S and 589 S), said Marco Lares, Duty Free Sales Manager, Marcolin. The company has also opened new strategic accounts as a result of the Duty Free Show in Orlando. New retailers are being added to its list of clients, and its sunglass collections are present at a

number of key duty free locations in North, Central, South America and the Caribbean. According to Lares, purchasing a pair of designer sunglasses is no longer a daunting task, Marcolin manufactures fashion/luxury sunglasses with great selections of colors, sizes as well as styles. “The two major aspects to be considered in this fashion trend while buying sunglasses are fashion and health,” notes Lares. “Investing in a pair of branded sunglasses without considering these two issues will cost your eyes, investing in a pair of sunglasses that will protect eyes against dangerous UV rays is a very important decision.” “Thinking from the health perspective,” continues Lares, “you are trying something on your eyes, while at the same time you wish to express an ideal fashion statement by choosing to buy the best fitting designer sunglasses that express your personality.”

Siñeriz to open mega store in Uruguay in 2012 For the past 23 years, Siñeriz Shopping’s 1,800-square-meter store has offered travelers to Uruguay’s border city of Rivera only the best in imported products. In a recent interview with Americas Duty Free, Siñeriz’s Project Leader Rafael Parodi explained that the company is currently constructing a mega store on the border with Brazil. “The store will measure 10,000-squaremeters and we’re planning on inaugurating the location in February, 2012,” he explains. “Given the size, the store will be organized by department. We’ve always prided ourselves on offering consumers a wide selection of products in our existing store, and the significant size of the new location will allow us to carry essentially every category of duty free items. This will ensure that every client, regardless of preference or budget, will be able to find something to suit their taste.” By the time the new store opens, Parodi asserts that Siñeriz will have also launched its loyalty card. It will give frequent clients the opportunity to take advantage of a number of exclusive promotions across categories. “We’re working on a number of promotions in conjunction with the planned release of our loyalty card,” says Parodi. “Our three most popular categories at the moment are perfumes, spirits and clothing, so frequent buyers can expect to see some great offers on these products, as well as in other categories. The loyalty card will also be applicable to products purchased in the new store when it opens, so visitors to Rivera have a lot to look forward to from Siñeriz Shopping in the near future.”

Tommy Hilfiger courts vast potential with its entry into the travel retail market Tommy Hilfiger’s travel retail debut at TFWA Asia Pacific in May signified a step of significant growth for the global lifestyle brand and for the market in general. “More than 5 billion people travel through airports every year, with business travelers comprising a significant percentage of overall travelers,” says Briac Pinault, Vice President, Global Duty Free and Travel Retail for the Tommy Hilfiger Group. “Entering the travel retail market will enable us to reach these consumers who, due to their travel schedules, are spending an increasing amount of time in airports.” The booth at TFWA Asia Pacific replicated a travel retail shop and showcased Tommy Hilfiger Spring/Summer 2011 apparel along with accessories appropriate for travel retail customers. Although a relative newcomer to the travel retail industry, the brand presented its whole range and is already at work on exclusives. The brand’s cachet fits with the market through its golf and beachwear collections, while the “aspirational yet affordable” designs are already striking a chord with international travelers in major airport locations in

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

Latin America, including Aeroparque Jorge Newbery and Ezeiza (Buenos Aires), Santos Dumont (Rio de Janeiro), Brasilia, Congonhas and Guarulhos (Sao Paulo), Carrasco (Montevideo) and Curbela International (Punta del Este). The company has chosen to concentrate on airports and border stores during the first phase of the travel retail expansion. Downtown stores are also part of the strategy, at a later stage. Pinault says the brand fits perfectly into the duty paid environment, offering a good balance between accessibility and the brand’s style of classic American cool. “The Tommy Hilfiger brand embodies the idea of preppy with a twist,” Pinault says. “Business travelers – the main consumer in international airports – are dressing less and less formally. As a true lifestyle brand Tommy Hilfiger speaks directly to both the fashionforward consumers as well as those desiring a more casual approach to dressing.” In the Americas, Tommy Hilfiger is currently working with IOSC, Dufry, Aldeasa and Duty Free Americas.

Hilfiger’s hallmark – a fashion forward look with a casual approach

Top Story: Neutral Duty Free Neutral will build a new 1,500-square-meter border store in Bella Union, Uruguay, after which time existing Neutral stores (pictured) will be brought in line with the new branding

Americas Duty Free: Can you tell us a bit about JH Partners and the private equity fund buyout of Neutral Duty Free? Enrique Urioste, CEO, Neutral Duty Free: JH Partners is a private equity fund based in San Francisco, California that invests in consumer and retail businesses. We took the opportunity to start looking for businesses with good potential for growth in Latin America. JH Partners owns businesses in the US, Europe and Australia, and we agreed that Latin America, driven primarily by the Brazilian economy, was a good place to invest. When we started looking for businesses, Neutral represented a great opportunity and it was apparent very quickly that this was a good investment. ADF: As the new CEO of Neutral, you’re essentially running your own business, which is no doubt a big advantage. EU: The biggest advantage is that I’m partnering with a strong fund that is certainly open to looking for more investments in Latin America. I really see Neutral as just the beginning of a longer road that will see more investments in the very strong Latin American market. I’ve also been able to return to my home 18

country, a region that I know very well. Right now this area of the world offers a great number of opportunities so I’m very excited about what the future will hold. ADF: Although it’s still very early, can you tell us a bit about what possibilities you’re entertaining for future investments in Latin America? EU: I can tell you that we are looking for other consumer and retail opportunities in the region, in Uruguay as well as other Latin American countries. Obviously, we’re looking at investing in other duty free operations as this would create nice synergies with Neutral, but this is a long-term project and the possibilities are really open at this point. ADF: Previously with DFA, you were instrumental in incorporating some truly revolutionary store concepts in the US. What excites you about setting your sights on Latin America? EU: Latin American consumers really understand luxury. This is a continent that is well developed in terms of its luxury offering and

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

C O N T I N U E D O N PA G E 2 0

the new fragrance

attimo.salvatoreferragamo.com

漏 2011 Patr贸n Spirits International AG, Schaffhausen, Switzerland. 35% Alc./Vol.

Perfection has a darker side.

The perfect way to enjoy Patr贸n is responsibly.

An extraordinary blend of Patr贸n tequila and the pure, natural essence of the finest coffee.

simply perfect. patronspirits.com

Top Story: Neutral Duty Free

C O N T I N U E D F R O M PA G E 1 6

retailers here have a very strong knowledge of branding. Our agenda here is to bring a luxury, first-class shopping experience to border stores, and Uruguay is the perfect place to do that. Development is the order of the day for

Like-minded

partners

JH Partners differentiates itself from traditional private equity groups by the considerable operating experience of its principals, which includes more than 35 years of combined tenure in senior operating roles. Furthermore, the company works closely with the management teams of partner companies to provide strategic, operating and financial guidance to facilitate growth and provide meaningful returns to investment and management partners. The principals of JH Partners manage, on behalf of themselves and their co-investors, approximately US$1 billion. “The senior partners of the fund come from very strong retail and brand management backgrounds,” says Urioste. “They perfectly understand three key concepts: retailing, luxury and brand building. As a result, it seemed like a perfect partnership as opposed to working with a fund that is focused only on numbers without an eye towards developing these three key pillars.”

us—developing a new level of stores at the border, brand relationships and a strong branding strategy for all eight of Neutral’s existing stores and the ones to come. ADF: Speaking of the stores, are there any plans in the works to build new locations? EU: We are currently planning the construction of a 1,500-square-meter border store in Bella Union, Uruguay on the border with Brazil and Argentina. This will be a multicategory

pletion we’re looking at building more new stores in Rio Branco, Rivera and Artigas. ADF: I’m assuming airport tenders are also on your radar in addition to building up business at the border. EU: We’re open to new tenders but at the moment there’s no news as these developments with Neutral are only a couple of months old. With regard to Santa Fe, Argentina, I can tell you the number of inter-

“Our agenda is to bring a luxury, first-class shopping experience to border stores, and Uruguay is the perfect place to do that.” Enrique Urioste, CEO, Neutral store and after construction is complete, we will begin bringing the aesthetics of the other eight Neutral stores in line with this new store in order to have a consistent branding. We have a very clear vision when it comes to rebranding the stores and reallocating spaces. In some locations we’re actually thinking of doubling the retail space. That will eventually result in 4,000-square-meter stores in some locations. ADF: Have you established a timeline for these projects? EU: With regard to a timeframe, we’re looking at a three-year horizon, from the remainder of this year to the first half of 2013. Construction of the first new store will begin as early as the next 30 days and after its com-

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

national flights has been steadily increasing at Rosario Airport. If this trend continues we may look at building new arrivals and departures stores as early as next year. ADF: It’s quite fitting that this initiative, which underscores your belief in the potential of Latin American travel retail, is getting underway just before ASUTIL. What can delegates expect from your talk on June 23 at the conference? EU: I’m looking forward to speaking at this year’s ASUTIL conference and letting attendees in on more of the details regarding our plans for Neutral and our belief in the strength of Latin America. Although we’ve only just begun this journey, there are a lot of exciting c possibilities on the table.

Top Story: Neutral Duty Free

Un viaje que recién comienza Americas Duty Free habla con Enrique Urioste acerca de la reciente adquisición de Neutral por fondos de capital privado para tener una noción del camino que tiene por delante el reconocido ejecutivo duty free Americas Duty Free: ¿Puede hablarnos acerca de JH Partners y la adquisición de Neutral Duty Free por fondos de capital privado? Enrique Urioste, Director Ejecutivo de Neutral Duty Free: JH Partners es un fondo de capital privado que radica en San Francisco, California, el cual invierte en negocios de consumo y minoristas. Aprovechamos la oportunidad de comenzar a buscar negocios con buen potencial para crecimiento en Latinoamérica. JH Partners es propietario de negocios en los Estados Unidos, Europa y Australia, y coincidimos que Latinoamérica, guidada fundamentalmente por la economía brasileña, era un sitio idóneo para invertir. Cuando comenzamos a buscar negocios, Neutral representó una gran oportunidad y rápidamente nos dimos cuenta de que era una buena inversión. ADF: En su nuevo cargo de Director Ejecutivo de Neutral, usted administra esencialmente su propio negocio, lo cual es, sin dudas, una gran ventaja. EU: La mayor ventaja es que estoy asociado con un fondo sólido que busca más inversiones en Latinoamérica. Veo realmente a Neutral como el comienzo de un camino más largo que verá más inversiones en el latinoamericano que goza de mucha fuerza. También he podido volver a mi país, una región que conozco muy bien. En la actualidad esta zona del mundo ofrece numerosas oportunidades, por lo cual estoy muy entusiasmado con lo que nos reserva el futuro. ADF: Aunque es muy temprano aún, ¿puede decirnos qué posibilidades de futuras inversiones en Latinoamérica podrían considerar? EU: Puedo decirles que estamos en busca de otras oportunidades de consumo y comercio minorista en la región, tanto en Uruguay como en otros países latinoamericanos. Obviamente, estamos buscando invertir en otras operaciones duty free, pues esto crearía excelentes sinergias con Neutral, aunque esto es un proyecto a largo plazo, y las posibilidades están disponibles realmente en este momento. ADF: En su trabajo anterior con DFA, su participación fue vital para incorporar 24

algunos conceptos de tiendas realmente revolucionarios en los Estados Unidos. ¿Qué le entusiasma en lo tocante a sus proyectos con Latinoamérica? EU: Los consumidores latinoamericanos comprenden realmente lo que es el lujo. Es un continente bien desarrollado en términos de ofertas de lujo, y los comerciantes minoristas de acá conocen a fondo la identidad de marca. Nuestra agenda acá es traer una experiencia de compras de lujo y de primera calidad a las tiendas de frontera, por lo que Uruguay es el sitio perfecto para poner en práctica esta idea. El desarrollo es el orden del día para nosotros, creando un nuevo nivel de tiendas en la frontera, así como relaciones de marca y una sólida estrategia de identidad de marca en las ocho tiendas actuales de Neutral y también en las futuras. ADF: Hablando de tiendas, ¿tienen algún proyecto entre manos para construir nuevas instalaciones? EU: En la actualidad tenemos en proyecto la construcción de una tienda de frontera de 1,500 metros cuadrados en Bella Unión, Uruguay, en la frontera entre Brasil y Argentina. Será una tienda de categorías múltiples, y al término de su construcción, haremos corresponder la estética de las otras ocho tiendas de Neutral con la más reciente, para lograr una identidad de marca consistente. Tenemos una visión muy clara en lo tocante a reformular la identidad de marca de las tiendas y a reubicar los espacios. En algunas instalaciones estamos pensando duplicar el espacio comercial. Esto dará como resultado final tiendas de 4,000 metros cuadrados en algunas instalaciones. ADF: ¿Han determinado una cronología para esos proyectos? EU: En lo que respecta a plazos de tiempo, estamos considerando un horizonte de tres años, a partir de lo que queda de año, hasta la primera mitad del 2013. La construcción de la primera tienda nueva comenzará en los próximos treinta días, y después de su terminación tenemos en proyecto construir más tiendas nuevas en Río Branco, Rivera y Artigas.

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

ADF: Asumo que también tienen bajo su radar las licitaciones en aeropuertos, además de la solidificación de sus negocios en la frontera. EU: Estamos abiertos a nuevas licitaciones, pero en estos momentos no tenemos noticias, pues esta adquisición de Neutral sólo tiene un par de meses de vida. En lo tocante a Santa Fe, Argentina, puedo decirle que la cifra de vuelos internacionales ha ido aumentando sostenidamente en el Aeropuerto de Rosario. Si sigue esta tendencia podríamos tener en cuenta la construcción de nuevas tiendas en las secciones de llegadas y salidas el año próximo. ADF: Es muy adecuado que esta iniciativa, la cual resalta su concepto del potencial del sector minorista de viajes en Latinoamérica, se haya puesto en marcha antes de la reunión de ASUTIL. ¿Qué pueden esperar los delegados de su discurso en la conferencia del 23 de junio? EU: Tengo en proyecto un discurso en la conferencia de ASUTIL de este año, y comunicarles a los asistentes más detalles con respecto a nuestros planes con Neutral y nuestra confianza en la solidez de Latinoamérica. Aunque es un viaje que acaba de comenzar, tenemos ante nosotros muchas oportunidades atractivas. c

Socios con opiniones similares

JH Partners se diferencia de los grupos tradicionales de capital privado por la considerable experiencia operativa de sus directores, que acumulan más de 35 años de experiencia combinada en cargos operativos principales. Además, la compañía trabaja en estrecha colaboración con los equipos administrativos de sus firmas asociadas para proporcionar orientación estratégica, operativa y financiera a fin de facilitar el crecimiento y otorgar réditos significativos a las inversiones y a los colaboradores de gerencia. La directiva de JH Partners controla, en representación de sí misma y de sus co-inversionistas, cerca de mil millones de dólares estadounidenses. “La gerencia principal del fondo cuenta con trayectorias muy sólidas en la administración minorista y de marcas,” dice Urioste. “Comprenden perfectamente tres conceptos vitales: sector minorista, de lujo y creación de marca. Como resultado, parecen una alianza perfecta en comparación al trabajo con un fondo que se concentra solamente en cifras sin tener en cuenta el desarrollo de esos tres pilares fundamentales”.

4 4»: HUK [OL 4 4»: JOHYHJ[LYZ HYL [YHKLTHYRZ 4HYZ

WELCOME ON BOARD!

Share the Fun!

Latin America Report

Staying strong From Northern Mexico to Tierra del Fuego, Latin American duty free operators see increased sales buoyed by the improving US economy RYAN WHITE and the purchasing power of Brazilian travelers BY

Thinking big

uring IAADFS, Americas Duty Free reported on a number of initiatives taking place at London Supply, including an upcoming project planned for the company’s store in Iguazú. While plans are still being finalized, London Supply’s Commercial Manager Francisco Heredia recently gave us a bit more information on the planned changes to the store, noting that the project is “very big” and will likely take about two years to complete. “We’re looking to enlarge the Iguazú store significantly,” Heredia says. “This is a very important project for London Supply. Along with the increase in space, we will of course be adding more categories and increasing the product offering in existing categories. The final touches are being put on the plans as we speak and I should be able to talk more about this development very soon.” In related news, the planning phase for renovations on the downtown duty free store in Ushuaia is also nearly complete. The project consists of adding an elevator and putting in a number of bridges connecting the store’s five levels. In order to disrupt the store’s operation as little

Flying high

he beginning of June will see the launch of Bright Star’s autumn/winter TAM Mercosur in-flight catalogue. Antonella Nuovo, Trade Manager at Bright Star, told Americas Duty Free that 20,000 copies are currently being printed for use onboard TAM flights to destinations such as Cochabamba, Santa Cruz, Rio de Janeiro, Sao Paulo, Buenos Aires y Santiago de Chile. “We’re including a nice mix of new products and bestsellers, all arranged conveniently according to categories such as fragrances, cosmetics, accessories, chocolates, spirits and tobacco,” explains Nuovo. New offerings in the perfume category include Dior and Bvlgari Miniatures, Boss Orange Man, Yves St. Laurent’s Belle D’Opium, 28

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

as possible, many of the pieces to be added will be pre-fabricated offsite. Heredia notes that as the renovations are performed in Tierra del Fuego, London Supply will also take time to rework the layout of the shop in order to maximize the use of available space. At the downtown duty free store in Rio Grande, the operator is also working on a renovation project that will see retail space at the store increase by more than 50% in order to give consumers the same wide selection that they’ve come to expect from other London Supply locations. “In addition to the renovations, we’re continuing to align ourselves with our suppliers in order to offer consumers the very best in exclusive products,” says Heredia. “London Supply takes pride in continuing to innovate, both in terms of the aesthetics of the stores and the products within.” Finally, the children of Puerto Iguazú will soon have a secondary school to look forward to sometime next year. Heredia confirmed that plans are now underway to construct the building adjacent to the primary school the operator built last year. More than 1,000 students will study at the complex when it is completed.

Cacharel’s Amor Amor Absolu, CK Beauty and Lacoste’s Joy of Pink. Furthermore, Bright Star will be offering Versace for the first time in the form of the latest launch, Vanitas. New in cosmetics, travelers will find Christian Dior’s Capture Totale One Essential anti-aging serum and Lip Maximizer, Lancome’s Rénergie Lift Volumetry, Celuli Laser products from Biotherm and offerings from Estée Lauder and L’Oreal. Another new cosmetic product that Bright Star will be selling in the in-flight magazine is L’Occitaine’s Provencal Pleasures travel kit. It contains Verbena Gel Douche (75mL), Amande Milk Concentrate (50mL), Extra Gentle Karite Shea Butter (50g) and Lavender Hand Gel (30ml). Other brands in this season’s in-flight catalogue include Troika, Victorinox, B+D and Nici in accessories; Lindt, Ferrero and Nestlé in chocolates; and Johnnie Walker, Baileys and wines from Familia

London Supply is set to begin a renovation project in Ushuaia that will see brides and an elevator added to increase ease of access among the store’s various levels

“London Supply takes pride in continuing to innovate, both in terms of the aesthetics of the stores and the products within.” Francisco Heredia, Commercial Manager, London Supply “We take corporate social responsibility very seriously at London Supply,” Heredia concludes. “As our President Teddy Taratuty affirms, ‘The travel retail industry is celebrated for many reasons, but none is more important than its commitment to giving back. London Supply is happy to be a part of this culture of shared responsibility.’”

“Whether on the ground or in the air, our prime objective is to keep the offering fresh for our clients.” Antonella Nuovo, Trade Manager, Bright Star www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

Latin America Report

Bright Star is known for its excellent selection of P&C products; the company has recently listed a number of new offerings for purchase in store and on TAM Mercosur flights

Zuccardi in spirits. “We’ve really worked hard to make sure that our latest in-flight catalogue exceeds the expectations of TAM Mercosur passengers,” says Nuovo. In addition to the new in-flight offerings, Bright Star recently launched Boss Orange Man in store and continues with a regular calendar of events that recently included Easter and Mother’s Day promotions, as

well as tastings of Pisco Capel and wines from Bodega Zuccardi. “Whether on the ground or in the air, our prime objective is to keep the offering fresh for our clients,” explains Nuovo. “Given the high number of frequent business travelers in the region, we get a lot of repeat customers. For this reason, it’s very important that we give them something new to discover every time they enter our store.”

Baja Duty Free’s sales in Q1 2011 were up 5% over the same period last year, largely due to the improving economy

Branching out at the border

aja Duty Free currently operates 8 stores along the US/Mexico border that vary in size from 110-squaremeters to 560-square-meters and feature many popular duty free categories, from spirits, tobacco and fragrances to accessories, luxury goods, apparel and confectionery. Achim Fritzen, CEO of Fairn & Swanson Inc., parent company of Baja Duty Free, says that the economic climate along the border has improved considerably over the last year, and that travelers are open to spending again.

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

Baja Duty Free operates 8 stores along the US/Mexico border that vary in size from 110square-meters to 560-square-meters; the operator is soon to open a 9th store in Tecate

Latin America Report

“Sales in the first quarter are up 5% over the same period last year,” he says. “The Mexican Peso has been stable for a while now and this has contributed to the increase in business, especially with regard to the spirits and tobacco categories.” Baja Duty Free is currently in the midst of planning for a new store opening in Tecate, CA. The store will measure 165-squaremeters and open during Q2 2011. In the meantime, however, the operator is focusing on a Father’s Day promotion for June. In partnership with Patrón Tequila, Baja Duty Free is offering customers with a qualifying purchase the opportunity to create personalized luggage tags that contain a message for their fathers. “This is a major promotion and we’re very happy to be working with Patrón to give our customers a very nice GWP just in time for Father’s Day,” says Fritzen. “We also plan to feature men’s fragrance brands that include Davidoff and Bvlgari in key areas throughout the

store. Finally, we’ll be launching new summer fragrances for men and women such as Issey Miyake’s L’eau D’Issey. Needless to say, customers that visit our stores during the month of June will have an opportunity to take advantage of our great promotions and many new items.” While sales are currently up at Baja Duty Free’s stores, the operator is not resting on its laurels. In addition to the upcoming opening in Tecate, Fairn & Swanson is currently revamping the Baja Duty Free website to give potential customers more information on upcoming events, launches, promotions, wait times at the border and local news. “Once the new website is completed, we’ll also be expanding into various social media sites,” explains Fritzen. “I see a lot of potential for sales to increase even more at our stores in the coming months, and making sure that we’re getting our information out to as many travelers as possible is obviously a very important step towards Baja Duty Free’s continued success.”

Offering consumers

something special

otta Internacional’s Director Erasmo Orillac says that sales in general are up in 2011, largely as a result of increased spending from two key nationalities. In Panama, Brazilians are leading the way in terms of purchasing, while there has been a rise in spend on the part of Colombian nationals in Colombia. “Perfumes and spirits are leading the way, but we’ve also seen some very good sales in the consumer electronics category,” says Orillac. “In terms of brands, Johnnie Walker Black Label always sells well and consumers are also purchasing Buchanan’s Deluxe. Across the board we’re seeing great results in the perfume category, but particular standouts are Puig, Parbel and P&G.” Like many operators, Motta is seeing a rise in the demand for confectionery. As a result, the company is increasing space in some of its stores to offer more variety to the consumer. In locations such as Bogota, Cali, El Salvador, Nicaragua and Venezuela, Motta currently offers confectionery and the category is proving to be very popular. In shops where confectionery products will be added, Motta plans to dedicate 5– 10% of total store space in order to capitalize on this purchasing trend. Orillac asserts that selected products from Nestle, Kraft, Lindt & Sprüngli, Mars, Ferrero and Cadbury will be listed in various stores during the second half of this year. While the strength of the Latin American economy has no doubt helped duty free sales in the region in general, Orillac cites Motta’s ongoing “Algo Especial” (Something Special) promotion as key to increasing sales at the company’s Attenzabranded stores. “The Something Special initiative is an advertising and promotional the “Something Special” initiative, Motta Internacional plan that includes a shopping guide for consumers, a program of preferential space Through offers consumers a monthly magazine detailing promotions across launches, as well as advertisements and giveaways,” says Orillac. “It is organized categories (Pictured: May 2011 catalogue) across the six countries where Motta operates and centers on monthly activations.” For example, in May’s shopping guide, consumers were reminded of the many gifts suitable for Mother’s Day on sale at Attenza stores. Makeup tips were offered in the cosmetics section and the recipe for the perfect Piña Colada was explained in the spirits portion of the magazine. Furthermore, numerous promotions across categories were communicated, many of which included GWPs (P&C) or “buy two for” offers (spirits). “Promoting our brands in a constant process,” says Orillac. “Although spend is up, it’s important to continue offering conErasmo Orillac, Director, sumers something new to pique their interest each time they enter the store. Travelers can expect many more pleasant surprises Motta Internacional from Motta as we move into the second half of the year.”

“Promoting our brands is a constant process. Although spend is up, it’s important to continue offering consumers something new.”

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

Sales across Mannah Duty Free’s stores have increased year on year in the first quarter of 2011 due to the operator’s strong Brazilian client base

Watching trends

ohamed Mannah, President of Mannah Duty Free, tells Americas Duty Free that sales in the first three months of 2011 were “beyond expectations due to a significant increase over the same period last year.” He credits the successful quarter to the continued strength of the Brazilian economy. Indeed, a full 50% of Mannah’s client base is Brazilian. The average ticket price in the same period was US$90—up US$2 from the first quarter of last year—and Mannah says that while Brazilians are spending the most, travelers from other economically strong Latin American countries are also purchasing: “Argentineans represent about 20% of our clientele, with Uruguayans, Chileans and Europeans making up about 15, 10 and 5% respectively. Consumers have remained consistent in terms of the categories that they’re purchasing. Just as last year, perfumes, spirits and accessories, followed by cosmetics and tobacco, are the most popular.” Specific brands that are selling well at Mannah’s stores include Carolina Herrera, Paco Rabanne, Versace, Bulgari, Ferrari, Moschino, Tommy Hilfiger and DKNY (perfumes); Johnnie Walker, Absolut Vodka and Chivas Regal (spirits); Ray Ban, Armani Exchange, Ralph Lauren, Tom Ford, Versace, D&G, Dior and Gucci (sunglasses); and Michael Kors, Fossil, Emporio Armani, Caterpillar, Mido, Certina and Sector (watches). In addition to these popular brands, Mannah has recently listed Kaloo perfumes for children and French makeup brand Bourjois. Furthermore, at the border stores in Cuidad del Este, Mannah has rounded out its sunglasses selection with the addition of Burberry. “We’re very happy with the new listings of Kaloo and Bourjois,” notes Mannah. “We’re also sure that the inclusion of Burberry sunglasses will be a success given the quality associated with the brand.” Given the popularity of accessories across all of Mannah’s stores, the company is currently in the planning phase for a renovation of the accessories section in its Petisquera border shop. In addition, the operator continues to offer regular promotions that include GWPs, contests and raffles across all categories. “We’ll have more details on the planned renovations very soon,”

says Mannah. “Whether speaking of changes to the accessories section or our regular promotions, the catalyst for any of these initiatives is always to give consumers more of what they want. Our stores are always evolving and I think keeping our offering fresh is key to the c success we’ve enjoyed so far this year.”

“Whether speaking of changes to the accessories section or our regular promotions, the catalyst for any of these initiatives is always to give consumers more of what they want.” Mohamed Mannah, President, Mannah Duty Free Given the popularity of accessories, Mannah is currently in the planning phase for a renovation of the accessories section in its Petisquera border shop

www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

Latin America Report

Mantenerse firmes

Desde el norte de México a la Tierra del Fuego, los operadores duty free latinoamericanos experimentan incrementos en las ventas impulsados por las mejoras en la economía estadounidense y el poder adquisitivo de los viajeros brasileños

Pensar en grande

urante la IAADFS, Americas Duty Free reportó que se estaban llevando a cabo numerosas iniciativas en London Supply, como un próximo proyecto planificado para la tienda de la compañía en Iguazú. Aunque los planes están siendo finalizados, Francisco Heredia, Gerente Comercial de London Supply, nos dio recientemente más información acerca de los cambios planificados para dicha tienda, destacando que el proyecto “es muy grande” y que demoraría cerca de dos años para concluirse. “Estamos tratando de ampliar significativamente la tienda de Iguazú”, dijo Heredia. “Es un proyecto muy importante para London Supply. Conjuntamente con el incremento del espacio, incorporaremos, por supuesto, más categorías, y aumentaremos la oferta de productos en las categorías existentes. Se les están dando los toques finales a los planes en

estos mismos instantes, y muy pronto podré hablarles más acerca de este proyecto”. En noticias relacionadas, la fase de planificación para las renovaciones en la tienda duty free de la zona comercial en Ushuaia está casi terminada. El proyecto consiste en la incorporación de un ascensor y la colocación de varios puentes para conectar los cinco niveles de la tienda. Con el propósito de interrumpir lo menos posible las operaciones de la tienda, muchas de las piezas serán prefabricadas en otro sitio. Heredia destacó que mientras se realizan renovaciones en la Tierra del Fuego, London Supply también tendrá tiempo para reformular la organización interna de la tienda para aprovechas al máximo el uso del espacio disponible. Por su parte, en la tienda duty free de la zona comercial de Río Grande, el operador también está trabajando en un proyecto de renovación que incrementará el espacio comercial

l comienzo del mes de junio verá la inauguración del catálogo de ventas a bordo otoño/invierno Bright Star de Antonella Nuovo, Nuovo, Gerente Gerente Comercial Comercial de de TAM Mercosur. Antonella B Bright Star, le aseguró a Americas Duty Free que se están imprimiendo actualmente 20,000 ejemplares para su uso a bordo de los vuelos de TAM a destinos como Cochabamba, Santa Cruz, Rio de Janeiro, Sao Paulo, Buenos Aires y Santiago de Chile. “Estamos incorporando una buena mezcla de nuevos productos y de artículos más vendidos, dispuestos convenientemente de acuerdo a categorías tales como perfumes, cosméticos, accesorios, chocolates, espirituosos y tabaco”, explicó Nuovo. Entre las nuevas ofertas en la categoría de perfumes están Dior y Bvlgari Miniatures, Boss Orange Man, Belle D’Opium de Yves St. Laurent, Amor Amor Absolu de Cacharel, CK Beauty y Joy of Pink de Lacoste. Además, Bright Star venderá Versace por primera vez en su producto más reciente, Vanitas. En cuanto a las novedades de cosméticos, los viajeros tendrán a su disposición el suero anti envejecimiento y maximizador de labios Capture Totale One Essential de Christian Dior, Rénergie Lift Volumetry de Lancome, productos Celuli Laser de Biotherm y ofertas de Estée

34 34

THE THE AMERICAS AMERICAS DUTY DUTY FREE FREE & & TRAVEL TRAVEL RETAILING RETAILING JUNE/JULY JUNE/JULY 2011 2011

de la tienda en más del 50% para darles a los consumidores la misma selección amplia existente en otras instalaciones de London Supply. “Además de las renovaciones, seguimos colaborando con nuestros suministradores, para ofrecerles a los consumidores lo mejor en productos exclusivos”, añadió Heredia. “London Supply se enorgullece en continuar innovando, tanto en términos de estética de las tiendas como en los productos que contienen”. Finalmente, los niños de Puerto Iguazú tendrán muy pronto una escuela secundaria que estaría terminada en algún momento del próximo año. Heredia confirmó que ya se han puesto en marcha los planes de construcción del edificio, adyacente a la escuela primaria que el operador edificara el año pasado. Cuando esté listo, más de mil estudiantes asistirán al complejo. “London Supply toma muy en serio la responsabilidad social”, concluyó Heredia. “Como bien afirma nuestro presidente Teddy Taratuty, ‘la industria minorista de viajes es elogiada por muchas razones, pero ninguna es tan importante como su compromiso de London recompensar por la ayuda recibida’. London S Supply se complace de ser parte de esta cultura de responsabilidad compartida”.

Lauder y L’Oreal. Otro nuevo producto que estará vendiendo Bright Star en el catálogo a bordo es el juego de viaje Provencal Pleasures de L’Occitaine, que contiene Verbena Gel Douche (75ml), Amande Milk Concentrate (50ml), Extra Gentle Karite Shea Butter (50g) y Lavender Hand Gel (30ml). Otras marcas que estarán en el catálogo a bordo de esta temporada son Troika, Victorinox, B+D y Nici en accesorios; Lindt, Ferrero y Nestlé en chocolates; y Johnnie Walker, Baileys y vinos de Familia Zuccardi en los espirituosos. “Nos hemos esforzado realmente para garantizar que nuestro próximo catálogo de ventas a bordo supere las expectativas de los pasajeros de TAM Mercosur”, agregó Nuovo. Además de las nuevas ofertas a bordo, Bright Star inauguró recientemente la venta de Boss Orange Man en la tienda, y prosigue un calendario regular de eventos entre los que figuraron promociones de Semana Santa y del Día de las Madres, así como degustaciones de Pisco Capel y vinos de Bodega Zuccardi. “Ya sea en tierra o a bordo, nuestro principal objetivo es mantener fresco la oferta para nuestros clientes”, continuo Nuovo. “Dada la alta cifra de viajeros frecuentes de negocios en la región, tenemos muchos clientes repitientes. Por tal razón, es muy importante que les demos algo nuevo cada vez que entren en nuestra tienda”.

Ramificación en la frontera inniskillin.com

Part frozen. All luxury.

The #1 wine in travel retail.

PLEASE ENJOY RESPONSIBLY.

ctualmente, Baja Duty Free opera 8 tiendas en la frontera entre los Estados Unidos y México, cuyas dimensiones oscilan entre 110 y 560 metros cuadrados, y venden numerosas categorías po-pulares de duty free, desde espirituosos, tabaco y perfumes, a accesorios, artículos de lujo, prendas de vestir y confitería. Achim Fritzen, Director Ejecutivo dde Fairn & Swanson Inc., compañía matriz de Baja Duty Free, afirmó que el clima económico en la frontera ha mejorado considerablemente desde el año pasado, y que los viajeros están mostrando proclividad a gastar nuevamente. “Las ventas en el primer trimestre aumentaron hasta un 5% con relación al mismo período del año pasado”, explicó. “El peso mexicano ha estado estable por un tiempo, y esto ha contribuido al incremento del negocio, especialmente con respecto a las categorías de espirituosos y tabaco”. Baja Duty Free está actualmente en plena planificación de una nueva tienda en Tecate, California, que tendrá 165 metros cuadrados y será inaugurada durante el segundo trimestre de este año 2011. Sin embargo, entretanto, el operador está concentrado en la promoción del Día de los Padres en junio. En colaboración con Patrón Tequila, Baja Duty Free está ofreciéndoles a los clientes, con una venta elegible, la oportunidad de crear etiquetas de equipaje personalizadas que contengan un mensaje para sus padres. “Es una promoción importante, y nos complace trabajar con Patrón para darles a nuestros clientes un buen regalo con su compra para el Día de los Padres”, explicó Fritzen. “También nos proponemos vender marcas de perfumes de hombre como Davidoff y Bvlgari en sitios clave de la tienda. Finalmente, inauguraremos la venta de nuevos perfumes de verano para hombre y mujer como L’eau D’Issey de Issey Miyake. No hace falta decir que los clientes que visiten nuestras tiendas en junio, tendrán la oportunidad de aprovechar nuestras magníficas promociones y muchos artículos nuevos”. Aunque las ventas están aumentando en las tiendas de Baja Duty Free, el operador no se ha dormido en los laureles. Además de la próxima inauguración de la tienda en Tecate, Fairn & Swanson está renovando el sitio Web de Baja Duty Free para ofrecerles a los clientes potenciales más información acerca de próximos eventos, inauguraciones, promociones, tiempo de espera en la frontera, y noticias locales. “Una vez que se termine el nuevo sitio Web, también incrementaremos nuestra presencia en varios medios sociales”, aseguró Fritzen. “Veo mucho potencial para ventas a fin de incrementar aún más en nuestras tiendas en los próximos meses, y garantizar que estamos dándole nuestra información a la mayor cantidad posible de viajeros es obviamente una medida muy importante para el éxito continuo de Baja Duty Free”.

www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

Latin America Report

Ofrecerles algo especial a los consumidores

rasmo Orillac, Director de Motta Internacional, afirma que las ventas en general han aumentado en el 2011, en gran medida como resultado de un incremento de los gastos de dos nacionalidades fundamentales. En Panamá, los brasileños están a la vanguardia en términos de compra, mientras que se ha reportado un aumento de los gastos por parte de los ciudadanos colombianos en Colombia. “Los perfumes y los espirituosos están al frente, pero también hemos tenido algunas ventas buenas en la categoría de electrodomésticos”, expresó Orillac. “En términos de marcas, Johnnie Johnnie Walker Walker Black Label siempre se vende bien, y los consumidores también están B comprando Buchanan’s Deluxe. Aunque tenemos grandes resultados en la categoría de perfumes, los principales son Puig, Parbel y P&G”. Como muchos operadores, Motta está experimentando un un aumento aumento en e la demanda de confitería. Como resultado, la compañía está ampliando el espacio en algunas de sus tiendas, para ofrecer más variedad al consumidor. En tiendas de Bogotá, Cali, El Salvador, Nicaragua y Venezuela, Motta está ofreciendo actualmente confitería, y la categoría ha demostrado ser muy popular. En las tiendas donde se incorporarán productos de confitería, Motta tiene en proyecto dedicar del 5 al 10% del espacio total para capitalizar esta tendencia de compra. Orillac explicó que se venderán productos selectos de Nestlé, Kraft, Lindt & Sprüngli, Mars, Ferrero y Cadbury en varias tiendas durante la segunda mitad de este año.

Aunque la potencia de la economía latinoamericana ha ayudado sin duda a las ventas duty free sales en la región en general, Orillac citó la promoción continua de Motta “Algo Especial” como factor clave para incrementar las ventas en las tiendas de marca Attenza de la compañía. “La iniciativa ‘Algo Especial’ es un plan pu-blicitario y promocional que consiste en una guía de compras para los consumidores, un programa de inauguraciones de espacio preferencial, así como anuncios y oportunidades”, afirmó Orillac. “[La iniciativa] se ha organizado en los seis países donde opera Motta, y se enfoca en activaciones mensuales”. Por ejemplo, en la guía de compras de mayo, se les record a los consumidores los numerosos regalos disponibles para el Día de las Madres, a la venta en tiendas Attenza. Además, se ofrecieron consejos de maquillaje en la sección de cosméticos, y la receta para la piña colada perfecta en la porción de la revista destinada a espirituosos. Asimismo, se comunicaron numerosas promociones en las categorías, muchas de las cuales incluyeron regalos con la compra, (P&C) u ofertas “compre dos por” (espirituosos). “La promoción de nuestras marcas es un proceso constante. Aunque el gasto ha aumentado, es importante seguirles ofreciendo a los consumidores algo nuevo que despierte su interés cada vez que entren a la tienda. Los viajeros pueden esperar más sorpresas agradables de Motta, en la medida que entramos en la segunda mitad del año”, concluyó Orillac.

Observar las tendencias

ohamed Mannah, Presidente de Mannah Duty Free, le reveló a Americas Duty Free que las ventas en los primeros tres meses del 2011 “superaron las expectativas debido a un incremento significativo en comparación con el mismo período del año pasado”. El ejecutivo atribuye el exitoso trimestre a la solidez continua de la economía brasileña. Por cierto, el 50% de la clientela de Mannah procede de Brasil. El precio promedio de venta en el mismo período fue de US$90—un aumento de US$2 en comparación con el primer trimestre del año pasado—y Mannah afirmó que si bien los brasileños son los los que que más más gastan, los viajeros de otros países latinoamericanos con boyantes g economías también están comprando: “Los argentinos representan cerca del 20% de nuestra clientela, mientras que los uruguayos, chilenos y europeos componen el 15, 10 y 5% respectivamente. Los consumidores siguen consistentes en términos de las categorías que han estado comprando. Al igual que el año pasado, los perfumes, espirituosos y accesorios, seguidos por los cosméticos y el tabaco, son los más populares”. Entre las marcas específicas con buena venta en las tiendas Mannah están Carolina Herrera, Paco Rabanne, Versace, Bulgari, Ferrari, Moschino, Tommy Hilfiger y DKNY (perfumes); Johnnie Walker, Absolut Vodka y Chivas Regal (espirituosos); Ray Ban, Armani Exchange, Ralph Lauren, Tom Ford, Versace, D&G, Dior y Gucci

THE AMERICAS AMERICAS DUTY DUTY FREE FREE & & TRAVEL TRAVEL RETAILING RETAILING JUNE/JULY JUNE/JULY 2011 2011

(lentes de sol); y Michael Kors, Fossil, Emporio Armani, Caterpillar, Mido, Certina y Sector (relojes). Además de estas marcas populares, Mannah comenzó a vender recientemente perfumes Kaloo para niños, y la marca francesa de maquillaje Bourjois. Bourjois. Además, Además, en en las las tiendas tiendas de d frontera de Ciudad del Este, Mannah ha completado su selección de lentes de sol con la incorporación de Burberry. “Nos sentimos muy complacidos con la incorporación de Kaloo y Bourjois”, aseguró Mannah. “También estamos seguros de que la inclusión de los lentes de sol Burberry será un éxito, dada la calidad asociada con la marca”. Dada la popularidad de los accesorios en las tiendas Mannah, la compañía está actualmente en fase de planificación de una renovación de la sección de accesorios en su tienda de frontera en Petisquera. Además, el operador sigue ofreciendo promociones regulares con regalos con la compra, concursos y rifas en todas las categorías. “Muy pronto ofreceremos más detalles acerca de las renovaciones que planificamos. Ya sea hablando de cambios a la sección de accesorios o de nuestras promociones regulares, el catalizador de cualquiera de esas iniciativas es darles siempre a los consumidores más de lo que desean. Nuestras tiendas están en continua evolución y creo que mantener la frescura de nuestra oferta es clave para el éxito que estamos c disfrutando este año”, concluyó Mannah.

F O R I N F O R M AT I O N , P L E A S E C O N TAC T : T R AV E L . R E TA I L @ TO M M Y. C O M

Market Research

Why they buy New market research offers travel retailers valuable insight into buying decisions and behaviors Paris-based JMG-Research recently completed a travel retail research study and distributed the results to its initial subscribers. The research study, titled “Consuming Behaviors in Airports: Travelers lost in transaction - Why some buy? Why too many don't?” aimed to identify the factors that influence the decision by travelers to enter airport shops and the factors that influence the buying decision once they’re there. “The whole program idea came last year, following talks with my various contacts among brands sold in travel retail,” says Jérôme Goldberg, JMG-Research Managing Director. “Their key concerns can be summarized in two questions: what can be done to push more passengers into the airport shops, and then what can be done to have them leave with a shopping bag full of products... therefore identifying all the key elements of the airport shopping area experience, positive and negative.” The phrase “travelers lost in transaction” catches the main theme of the study: that there is much more that travel retailers can do to capture sales that so far have been “lost” simply because of lack of detailed, specific information about what encourages travelers to buy in airport shops. A synopsis issued by JMG-Research several months ago notes that thanks to Generation Research, excellent data are available on what is being purchased and what current sales volumes are. It’s motivation that’s the missing link. Without understanding buying motivators, retailers are left in the dark as to how to improve sales. “We made the choice to base our analysis not on the airport location, but on the passenger nationality, to see how behavior can be similar or totally opposite between citizens from different countries,” Goldberg says. To incorporate a broad range of nationalities, more than ten countries from greater Europe, in addition to Japan, China and South Korea in Asia and the US and Brazil in the Western Hemisphere, were covered. In Europe 2,400 respondents were involved, in addition to 300 from each of the three Asian and two Western Hemisphere nations for a total of 3,900. The round figure of 300 per

BY B

ANDREW BROOKS

nationality was selected to be manageable while still providing statistically meaningful input, and the notion of having a specific income threshold was discarded to keep the results as open as possible. JMG-Research first produced a draft questionnaire and then worked with the initial subscribers to fine-tune the questions and add more specifics about product categories. “As the first wave of other research to come in the future, we wanted to draw the general frame of passenger behavior versus all the product groups and their sub-categories,” Goldberg says. “So we first qualified our total of 3,900 international passengers with their gender, age, annual income, kind of trip—business alone or in a group, leisure alone, as a couple, in a family or in a group—frequent flyer or not, flying on a regular airline or a charter/low-cost airline.” The field work with the 3,900 respondents took place at the end of 2010.The option of conducting interviews on-site in airports was quickly discarded as being way too expensive and time-consuming, Goldberg says. Enter the Internet. JMG-Research partnered with GMI, a leading data collection provider, to conduct the interviews online via computer-assisted web interview (CAWI). The primary questions asked respondents whether they entered airport shops, what kinds of products they looked at, what kinds they bought and the brands they selected. All the key categories were covered: wine and spirits, tobacco, fragrances and cosmetics, fashion and accessories, jewelry, watches, gifts, confectionery and fine food. “We also covered the sub-categories, like women's fragrances, men's fragrances, unisex fragrances, children's fragrances, miniature coffrets, makeup, women's skin care, men's skin care and sun care for fragrances and cosmetics,” Goldberg says. Overall, respondents were asked three main questions: ■ did the traveler plan their purchasing ahead of time, before arriving at the airport? ■ what did the traveler expect—and do—after arriving?

■ what did the traveler buy, and what was the in-store experience like? In more detail, the questions looked at the decision to shop (or not to shop) once the traveler is in the airport: is the visit planned or on impulse, and what product category is targeted? Once the shopping decision is made, the research explored what products are sought and what is ultimately purchased, as well as what factors (shopping space, pricing, promotions, etc.) prompt the buying decision. The study is tailored for brand manufacturers and operators, Goldberg says. The research objective in the case of brand manufacturers is to enable them to better understand, among other things: ■ what passengers expect in a specific product category; ■ what attractors are most effective in driving sales; ■ the unique buying characteristics of different nationalities. For operators, the themes to be illuminated include: ■ what passengers expect from a given operator; ■ hat cross-sells can be triggered; ■ how to improve footfall and conversion; ■ how to improve the shopping experience. The impact of product packaging was also a major focus area. “Thanks to the sponsorship of our research by MeadWestvaco, which is the leading packaging solutions provider, we included some packagingspecific questions,” Goldberg says. This research included a complementary specific analysis on how passengers react to packaging in airport shops, with a focus on spirits, fragrances, cosmetics and confectionery.

of shop visitors assorted by product category. There’s conversion— the percentage of buyers among the total number of shop visitors. And then you have the global purchase rate—basically the percentage of buyers among the total number of passengers.” Looking at these results, researchers have been able to identify different “tribes” among purchasers. For example, there are the "shop tourists" who like to look around in the shops but don’t buy much, as opposed to the “pax with a mission" types—these travelers have one of the highest conversion rates because they enter the shops having already decided to buy, and know exactly what they’re looking for. The up-front decision to focus on nationality has proven well founded, Goldberg says. It turns out that traveler nationality can be “very segmenting.” For example, US citizens have a lower-thanaverage inclination to do travel retail shopping, while relative newcomers from Brazil, Russia or China demonstrate an aboveaverage interest in taking advantage of the travel retail opportunities they find at airports. “All the elements in the answers are great insights for both manufacturers and operators to fine-tune the way they interact with the passengers to multiply shopping opportunities and improve their marketing,” Goldberg says. One example of the ways in which the research can be applied comes from the identification of the “pax with a mission” category. Once this type of shopper has been identified, travel retailers know they need to work on making sure that this category can easily and quickly find what they want once they’re in the store. Results Having completed the “standard” report, which is available now By combining and analyzing questionnaire results, Goldberg says, to the subscribers, JMG-Research is now working with the subscribers JMG-Research can assemble a profile of the “average” traveler and to develop more detailed, deeper analysis, in part by mixing different compare that with unique, nationality-specific shopping and buying response categories, such as business travelers versus leisure travelers, characteristics. “For example,” he says, “it was very interesting to frequent flyers versus those who fly less often, etc., to develop an compare the three key ratios. There’s penetration—the percentage understanding of more characteristic buying behavior patterns. 78% “The next step will be a yearly update 80% RUSSIA WORLD 66% 65% to see if there is any change in the behaviors,” 70% 57% Goldberg says. “Based on our clients’ needs, 60% 49% we’ll see if we need to add new countries 50% 44% 42% 42% and investigate deeper into some categories. 34% 40% 30% We might also do some qualitative research 30% 23% 24% 21% 19% to screen some specific aspects.” Other pos20% 11% 11% sibilities include focusing on specific nation10% 0 alities and developing the ability to do adWatches Gifts Confectionery Wine & Spirits Tobacco Fragrances Fashion & Jewelry hoc research in response to client requests. & Fine Food & Cosmetics Accessories Goldberg welcomes reader inquiries at The behavior of Russian shoppers is generally similar to global norms, with notable exceptions when it comes to wines & spirits, jewelry and watches jerome.goldberg@JMG-Research.com. c www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

Operator News: Top Brands Sales at ZOFRI have grown by double digits over the last three years and business shows no signs of slowing down

“The opportunities to come” Top Brands takes its El Dorado store concept to ZOFRI as its distribution arm gives suppliers new opportunities to crack the thriving Chilean duty free market op Brands currently operates 28 stores, both domestic and duty free, located in Belize, Salvador, Panama, Honduras, Guatemala, Puerto Rico, Cuba and most recently Santa Martha, Colombia. Danny Yohoros, Vice President of Top Brands, recently spoke with Americas Duty Free about the company’s latest project, which involves expanding from Central America into the South American country of Chile. Top Brands will be opening ten El Doradobranded stores of varying sizes at Zona Franca de Iquique (ZOFRI). The company’s distribution arm will also open a wholesale showroom as a means of introducing a number of high-end brands to the duty free zone. Given its already stellar relationships with suppliers, Top Brands will be distributing everything from perfumes and accessories to confectionery. “We’ve been visiting ZOFRI for the last year or so and we’ve identified a need for distribution by a company that has both a comprehensive knowledge of duty free in the region and a very strong bond with suppliers,” explains Yohoros. “With the exception of one or two companies, many of the over 400 stores at ZOFRI are ‘mom and pop’ operations, meaning that trading is a bit more informal than many large suppliers are used to. Top Brands is in the perfect position to

be a key intermediary in this process, giving smaller operators access to big name brands and giving suppliers access to a region of South America that is literally bursting with potential.” Indeed, sales at ZOFRI have grown by double digits over the last three years and business shows no signs of slowing down. During the second half of last year, US$3.8 million was invested to grow the already expansive zone and construction of new retail areas continues this year. Of course, through its El Dorado stores, Top Brands will play a big role in the latest retail additions at ZOFRI with a total selling space of 750-square-meters. The company’s ten stores will range in size from 50-squaremeters to 200-square-meters, with the larger stores carrying a mix of duty free items and the smaller stores being dedicated to single categories. The stores will be modeled after existing El Dorado airport stores in Central America and offer consumers the luxury shopping experience they’ve come to expect from Top Brands. The stores are expected to open in July. Yohoros and company already have a manager for the Chile operations who is based in Iquique and is well versed in the inner workings of the zone. Top Brands plans on employing about 50 people to take care of the company’s distribution activities and the operation of stores.

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

RYAN WHITE

“It’s really about developing relationships, whether this be with store operators through our distribution activities or with consumers in the stores,” says Yohoros. “We have a proven track record of doing just that in Central America and we’re looking forward to taking our unique brand concept to ZOFRI. I’d like to take this opportunity to invite suppliers who are interested in entering this very dynamic market to touch base with us.” Yohoros concluded our interview by reiterating the wide-ranging opportunities that exist at ZOFRI. Indeed, his enthusiasm for the duty free channel in Chile is an example of the general strength of travel retail throughout Latin America, a region that obviously still has a few tricks up its sleeve when it comes to staying high on the list of places to watch during the coming years. “There’s a lot to be excited about,” asserts Yohoros. “ZOFRI definitely represents not only an opportunity to continue generating business with our tried and true multicategory locations, but also to offer consumers from countries such as Bolivia, Paraguay, Peru and Chile a very specialized service with stores that are completely dedicated to a single category. We’ll also be helping worldwide brands get their product into the second-biggest duty free zone in Latin America through our distribution services. As a result, we’re very excited about the opportunities to come.” c

In addition to distributing a number of brands currently unavailable at ZOFRI, Top Brands will open ten new El Dorado-branded stores modeled after existing locations in Central America

THE KEY TO A TASTE OF TRADITION It takes just 3 steps to create the classic Dry Martini: 3 drops of dry vermouth, a good measure of No. 3 London Dry Gin and a twist of fresh lemon.

No. 3 â&#x20AC;&#x201C; A Taste of Tradition

Enjoy responsibly

www.no3gin.com

Trinity Report

For ARI North America, the drawing power of Imperial Tobacco’s interactive kiosk represents added value

A house united

In duty free, operators and suppliers always do better when they work together orking together is always better. For duty free operators, getting suppliers involved in promotional activities that increase brand visibility and reputation while driving sales is just common sense. But there are ways to go about it—and things to avoid. For ARI North America, cooperation with suppliers mainly takes the form of store promotions and staff contests, says John Bolger, Regional Manager, North America and Caribbean. “It provides incentives to the staff and also gives us some variety, with different things going on through the year,” he says. Operator-supplier collaboration works across the full spectrum of categories, Bolger says, and it can bring significant improvements to a brand or category that is felt to be performing below potential as well as boost sales for the top performers. ARI North America has a highly diversified portfolio of locations. At the forefront are the large stores in the big international airports, carrying a broad selection of categories, with space and resources to do promotional work on all of them. The smaller locations also do good business, but Bolger says they tend to be dominated by the easier selling categories such as liquor and tobacco. “We see the opportunity to expand those stores by pushing other categories, especially perfumes and cosmetics and confectionery,” Bolger says. “These aren’t big stores and that makes it difficult, but those are areas where we think there is good potential for us if we

ANDREW BROOKS

Absolut Vodka is one vendor that understands the value of short-term, eventcentered promotions

do more work on the promotions side.” More work is definitely in store. Bolger says ARI North America plans to invest time and effort in major airport locations and smaller airports. “It’s harder to do things there, but we’re keen to extend into these locations as well.” Bolger now has a full-time person on staff to look after the many organizational details that go into a good promotion, and is also looking at hiring a fulltime merchandising manager to fine-tune promotions in all the stores. Generally suppliers are keen to support the operator’s efforts, Bolger says, especially in perfumes and cosmetics, but also in the other categories too. He cites Imperial Tobacco as an example. About a year ago, the company approached ARI saying they wanted to remake their square footage. This particular promotion involves an interactive screen where passengers

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

view the duty free allowance for their destination, as well as what the weather will be like when they arrive. “The supplier provided the idea and design,” Bolger says. “It helped to give a better look to the whole tobacco area in the store,” which is an obvious added value for the operator, as it increases activity for the entire category, not just for the brand being promoted, although the brand naturally gets the lion’s share of the attention. When Bolger spoke with Americas Duty Free, he was about to launch a week-long Absolut promotion around the Montreal Grand Prix. HKG Duty Free operates stores across the southern border of the US, from Texas to California. Marco Arilli, Vice President of Merchandising, finds that his suppliers generally understand the value of collaborative promotions.

Trinity Report

Now that’s theater! An HKG promotion has beauty advisors and Bacardi girls promoting products in store while doing makeovers and offering drink samples

“Usually the suppliers are trying to persuade us, because we have many things to choose from,” Arilli says. “So it’s a matter of us picking what we want to do.” Arilli also generates ideas, of course, and his preference is for creating “theater” by running promotions that grab attention. “It’s one thing to walk into a store and see a sign announcing a two-for-one or a discount,” Arilli says. “But when I have a promotion involving an event, say a golf tournament, I can have a person there dressed in golf attire or something like that. This draws a lot more attention than just sticking a sign on a counter. That’s what I mean by creating theater.” One style of theater that works well is a radio remote, where a local radio station will send a mobile studio to do a show inside or in front of a store. Usually this works best if the radio host is a well recognized personality. Arilli also stresses the importance of being selective. “You can’t have too many promotions going on in the store,” he says. “If there’s too many promotions at once they lose their value, but if you have one hard-hitting promotion, that’s when it has value. So we limit the amount of promotions—we rotate them every month and we track everything on a

marketing calendar.” Operator, supplier and customer alike benefit from this targeted approach, Arilli says. In terms of contribution, the supplier usually furnishes POS, signage, GWPs and a certain amount of funding. The operator also has a valuable role to play in offering expertise on what kind of selling works best and how to avoid some common mistakes. “Our goal is to sell more without lowering the price,” Arilli says. “The way to do it is to promote with GWP, as opposed to a price discount.” Arilli is also a firm believer in the value of special packaging—an intangible addition to product value but one that he says seems to have great persuasive effect on potential buyers. At press time, HKG was collaborating with a number of suppliers on packaging-centered promotions, including one soccer-themed initiative involving team and league symbols. “There are always creative ways to promote items without reducing the price,” Arilli says. He’s guarded about giving away actual examples that have worked well for HKG, so he offers the example of a St. Patrick’s Day promotion (a very hypothetical example for him, since his clientele is mostly Mexican and they don’t pay much attention to Irish festivals) where an operator could succeed by offering

a percentage discount on any product with green visible somewhere on the packaging. When Arilli spoke with Americas Duty Free, HKG was engaged in a joint-effort promotion with MillerCoors that certainly looks set to generate its share of theater: local artists were encouraged to paint the store walls with Miller-themed graphics, with the supplier on hand to determine the winning entries. “Generally speaking, some suppliers do this well—others less well,” Bolger says. “Generally suppliers are supportive once they understand what you’re trying to do. The problem is that they themselves can’t commit a lot of time to it in the small locations, so we generally do the groundwork ourselves. It’s a lot of work for us.” For Bolger, the best guarantor of a successful promotion is when the supplier coordinates the effort well on their own and has good project management when it comes to promotions. “The companies that can actually deliver—they’re a dream to deal with,” he says. The key to success? For Bolger, long-term promotions are more viable than short-term ones. “Short-term promotions tend to be worthwhile only if they’re centered on a specific event. Duty free is different in that you have the advantage of dwell time—people stay longer and they tend to pass by on a regular basis—so a longer-term promotion can bring better results.” The Imperial Tobacco promotion is a good example of the longerterm approach, while the Absolut Grand Prix promotion, scheduled to run for 7-10 days, demonstrates the kind of effort that should be centered on a specific event. Success is a tough thing to measure for a brand like Imperial Tobacco, Bolger says. “It’s a dominant brand, so it’s likely to do well anyway,” he says. As mentioned earlier, it has value for the operator in that it “upgrades” the appearance and appeal of the whole tobacco category, while for the brand itself it’s a solid method of perpetuating and enhancing visibility. “Our buyers will usually initiate a plan around a particular brand, and if we think it’ll work we take it on,” Bolger says. “It’s a matter of looking at the brand sales and seeing what we can do to bring more excitec ment into the stores.”

GLOBAL DUTY FREE EXCLUSIVE

A Q UA L I T Y STO RY L I M I T E D E D I TI O N / 2 0 0 C I G AR E T TE S FO R S E L E C T E D AI R P O RTS

:462,9: +0, @6<5.,9 :6<9*,! ,< +09,*;0=, ,*

Airport News: Aldeasa and ASUR

Biding time

Cancún Airport’s Terminal 3

ASUR and Aldeasa continue to make Cancún a world-class airport in preparation BY RYAN WHITE for the eventual return of tourists to one of Mexico’s most dynamic cities espite a spate of challenges that have included the H1N1 virus, the bankruptcy of Mexicana, slow economic recovery in the US and cartel-related violence in Mexico, Aeropuertos del Sureste’s (ASUR) total passenger numbers across all its airports—Cancún, Cozumel, Huatulco, Mérida, Minatitlán, Oaxaca, Tapachula, Veracruz and Villahermosa—have only dropped a couple of percentage points in the first quarter of 2011 as compared to the same period in 2010. Furthermore, total traffic at Cancún Airport remained essentially flat over the same time frame.

Aldeasa has resulted in a remarkable increase in non-aeronautical revenue at Cancún Airport (Q1 2011 vs. Q1 2009) of 26.44% despite stagnant passenger numbers.

Simply the best For the second year running, Cancún Airport received top honors as best airport in Latin America at Airports Council International’s (ACI) Airport Service Quality (ASQ) awards. The awards are noteworthy because airports are scored by the passengers themselves. The ASQ passenger survey measures customer feedback on a range of service delivery param-

“ASUR takes pride in continuing to improve its airport infrastructure. We’ve invested a lot in this airport and we’re extremely pleased with the results.” Manuel Gutiérrez Sola, Commercial Director, ASUR There’s no doubt that ASUR has handled the recent obstacles to traffic growth commendably. Indeed, the very fact that the airport authority has managed to stay on par with passenger numbers over the last two years is a testament to the hard work being put into all its airports. Specifically, Cancún Airport was recently named best airport in Latin America by ACI, and continued cooperation between ASUR and retail partner 46

eters that track the customer experience at an airport from the moment of arrival to the departure gate. Analysis of this data, recorded on the day of travel, serves as a guide for better aligning service provision with customer expectations. By benchmarking the airport with other similar airports, ASQ enables airports to see where they stand in competition with their peers. This in turn helps airports to prioritize

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

improvement projects and validate their investments in new facilities and services. Manuel Gutiérrez Sola, Commercial Director at ASUR, describes Terminal 3 of Cancún Airport as “world-class,” and passengers obviously agree. After the security checkpoint, travelers pass through Aldeasa’s 1,800-square-meter walkthrough duty free store before reaching a double-height atrium that contains food service operators and other stores. All the gates are clearly marked and located directly past the atrium. The simplicity of the design truly belies the ingenuity of the terminal’s planning. In early 2012 ASUR plans on renovating Terminal 2’s lower level, where Aldeasa also has a walkthrough duty free store that measures 730-square-meters. Aldeasa has noted that some updates will likely be made to the store at the same time. “ASUR and Aldeasa are longterm partners, and we always want to be part of the airport developments,” says Pedro Castro, Aldeasa’s International Operations Director for Latin America, Middle East & Asia. No doubt key to the increases in non-aeronautical revenue at Cancún Airport over the last two years is the fact that just as Aldeasa has a hand in ASUR’s renovation projects, ASUR coordinates with the operator on its retail offers. “Throughout the year ASUR works in conjunction with Aldeasa to organize exclusive product launches, special promotions, tastings and demonstrations, as well as the distribution of promotional catalogues,” says Gutiérrez Sola. “We really work hard to communicate what we have on offer to passengers.”

Power in partnership Given the current situation in terms of passenger numbers at Cancún Airport, it goes without saying that having offers on hand

SIGNUPNOW!

CONFERENCE ISSUE

Subscribe to The Americas Duty Free & Travel Retailing magazine and its bi-weekly eNewsletter to keep you informed of the latest news. Simply fill out and return this subscription card to the following address, or fax with your credit card details to +1 905-821-2777

One Year â&#x20AC;&#x201C; 4 issues and 24 eNewsletters

US$200 .00 Two Years â&#x20AC;&#x201C; 8 issues and 48 eNewsletters

US$300 .00 Please contact Deepa J at +1 905-821-3344 ext.#21 or email deepa@globalmarketingcom.ca Mail check made payable to Global Marketing Company Ltd.:

SUBSCRIPTION FORM

company name

The Americas Duty Free & Travel Retailing magazine 26 Pearl Street Mississauga, Ontario, Canada L5M 1X2 Tel: 1-905-821-3344 Fax: 1-905-821-2777 email: deepa@globalmarketingcom.ca

name

mailing address

city

province/state

country

postal code/zip

(

) area code

(

phone

) area code

year US $200.00 4 magazine Issues & 24 eNewsletters

year US $300.00 8 magazine Issues & 48 eNewsletters

fax

Enclosed is a check or money order made payable to Global Marketing Company Ltd.

Bill me

SIGN ME UP! I would like to receive a subscription to The Americas Duty Free & Travel Retailing magazine

expiry date

credit card number

signature Payment in U.S. funds must accompany this subscription card.

Airport News: Aldeasa and ASUR

Aldeasa has had some stunning successes with the walkthrough concept, not only in Cancún but in many airports throughout the world

to entice travelers to spend is extremely important. The fact that Aldeasa operates two walkthrough stores in Terminals 2 and 3 is helpful as 100% of passengers at Cancún Airport must pass through the shops. “Aldeasa has a front of house team of specialists dealing with customers and a back of house team in charge of the stores that conduct regular and complete analyses of the business environment in order to continually adapt new concepts to our customers, the passenger flow and purchasing behavior,” explains Castro. “ASUR also has an active role in developing the retail area and we regularly receive their valuable feedback in order to constantly improve the shopping experience.” The layout of both walkthrough stores highlights Aldeasa’s core business: perfumes and cosmetics, spirits, food, tobacco and accessories such as watches and sunglasses. The operator has also boosted sales in Cancún with Les Boutique, a section dedicated to high-end leather goods. Aldeasa has had a lot of success with the walkthrough concept in Cancún’s Terminal 3, as well as in many other areas of the world. Castro notes that with each new store, the concept evolves and improves. The newest store at Cancún, the Terminal 2 Satellite walkthrough, is a perfect example this type of kinetic process. “It’s not enough to have travelers pass through the store; we have to capture their interest and get them to stay in the shop as long as possible,” Castro says. “Therefore, the layout and having the most popular categories in strategic spaces is important. We also have promotional areas located in the center of the store to make passengers stop and have a look.” Another great example of cooperation between ASUR and Aldeasa leading to passengers spending more time in store is the addition of plasma screens that display flight 48

“It’s not enough to have travelers pass through the store; we have to capture their interest and get them to stay in the shop as long as possible.” Pedro Castro, International Operations Director for Latin America, Middle East & Asia, Aldeasa information. Additionally, a recent increase in flights from Russia has prompted Aldeasa to hire Russian sales staff. Knowing the purchasing power the Russian traveler, Castro says, is an example of how Aldeasa tries to target its most important destinations. US economic woes have contributed to faltering traffic at Terminal 3, which services mostly North American customers, but Castro and Gutiérrez Sola both say that some tangible successes have been seen in Terminal 2. Regardless, both agree that the retail offerings at both terminals and the upcoming renovations will ensure that when tourists return to Cancún in full force, ASUR and Aldeasa will be ready to take full advantage with a top-class airport and a well researched product mix in the stores.

Looking ahead ASUR forecasts moderate single-digit yearon-year increases in total traffic to Cancún Airport between now and the end of the year, culminating in 9 and 8.5% increases in November and December, respectively. Moreover, the Mexican Government will be investing US$12 million to buoy the tourist industry this year. “The Mexican tourist industry is recovering,” says Gutiérrez Sola. “Just over 80% of the

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

money the government is putting into tourism in the country will go toward promoting destinations where ASUR operates airports. The remaining quantity will be split between the cruise industry and border crossings.” In addition to the expected increase in traffic, Gutiérrez Sola notes that ASUR has a number of projects in the works, including the opening of F&B locations such as Bubba Gump Shrimp Co., California Kitchen Pizza, Johnny Rockets and Starbucks in Terminal 2. Panama Jack and Watch My Watch stores will also be opened in the same terminal. Renovations of existing stores such as Harley Davidson, Los Cinco Soles, Sunglass Island and Pineda Covalin will also take place in the coming months. “ASUR takes pride in continuing to improve its airport infrastructure,” says Gutiérrez Sola. “We’ve invested a lot in this airport and we’re extremely pleased with the results. The outlook for tourist activity in Cancún indicates a moderate growth spurred on by economic recovery in the US, Canada and Europe. Continued innovation at our airport will allow us to better serve passengers as traffic continues to increase over the coming c months.”

4 U B5OB E M M

,30 :( 5Í1,9( 40 :: 4i?0 *6 [ O 73(*, 40 :: <50 =,9:, :0 *, 4

Company News: UETA and DFA

Maintaining momentum

After a remarkable 2010 and an even better start to 2011, Leon Falic explains how UETA and DFA will continue their upward trajectories in the second half BY RYAN WHITE Americas Duty Free: Have you found a replacement for Enrique Urioste yet? Leon Falic: We’re currently working on hiring a replacement for Enrique. I can’t really give you a timeline, but I can say that our family is and always has been heavily involved in the day-to-day operations of both UETA and DFA, so the companies are certainly in good hands in the meantime. ADF: Can you tell us about any new store openings and renovations? LF: We’ve recently renovated a lot of our existing DFA and UETA locations in addition to building new shops. Construction has just been completed on two new stores, one in Punta Cana Terminal 2 and another in El Paso. Each of the stores measures approximately 400-square-meters. In addition, UETA opened three large land border stores in Northern Uruguay on the border with Rio Branco do Sul, Brazil. Each of the three new stores measures 2,000square-meters. The sheer size of the stores has allowed us to not only include all of the big duty free categories, but also carry some extra products that Brazilians are looking for. They essentially look like large department stores, so the mix is quite varied DFA has also opened two Coach and two Armani boutiques in New York and Miami. These openings are noteworthy because they’re the only Coach and Armani duty free boutiques in the Americas. Finally, DFA is also opening a Thomas Pink store in Miami Airport in the very near future. Aside from that, I can tell you that we continue to bid on new tenders, although it’s a little too early to discuss details. Rest assured that you’ll see a number of new things from both UETA and DFA in the coming months.

ADF: How has business been so far this year? LF: This year has actually been UETA’s best year to date. We’re very happy and hope this upward trend will continue. DFA and UETA combined, we’ve seen double-digit increases in the first half of this year over the same period in 2010. ADF: Are you noticing increases in spend and travel as the economy improves? LF: I think our success so far this year has to do with a combination of factors. Certainly, the economy is improving and people are becoming more confident in their purchases. However, I think we also have better assortments in our stores and a better product mix. As a result, people are finding things that they can’t find anywhere else.

mentioned that purchases from Colombian and Venezuelan travelers have really increased, especially in the category of spirits. ADF: Are there any other categories to watch this year? LF: To be completely honest, everything is growing right now. If I had to pick a few categories, I would say accessories, especially sunglasses and watches, as well as luxury goods. Furthermore, confectionery is growing a lot. These are just a few of the categories that we’ve seen significant growth in across both UETA and DFA’s stores. It also helps that we have a regular calendar of promotions featuring big name brands across categories. These promotions change

“DFA and UETA combined, we’ve seen double-digit increases in the first half of this year over the same period in 2010.” Leon Falic, President, UETA and DFA From DFA’s point of view, US travelers are starting to purchase more, but foreign clients are far and away our best clients as their economies haven’t been as affected. Asian clientele tend to purchase the most in New York, while in Miami we’re catering to a lot of Brazilian travelers. As a result we’ve beefed up our cognac category to appeal to Asians, while Brazilians tend to purchase from our wide selection of P&C products. Additionally, when speaking of nationalities that are spending in Miami, it should be

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

on a monthly basis and we really enjoy working with our supplier partners to bring travelers something different every time they enter our stores. Also important to sales is staff training, and we’ve recently started a new program that we’ll be able to speak more about in the near future. Both DFA and UETA make a concerted effort to continue upping the ante when it comes to training because an educated salesperson often means the difference between c making or losing a sale.

innovative travel retail solutions

Cross Accessories â&#x20AC;&#x201C; Travel Retail David Ferreira â&#x20AC;&#x201C; dferreira@cross.com

Company News: L’Oréal Group – Parbel

A fairy-tale fragrance BY

HIBAH NOOR

L’Oréal kicks off a fresh new advertising campaign for Ralph Lauren’s Romance eauty powerhouse L’Oréal Group market, maintaining [its place] within the top has unveiled a new advertising cam- three best-selling fragrances in the travel retail paign for its ever popular Ralph feminine market,” says Javier Labarta, CEO Lauren Romance fragrance. of Parbel (L’Oréal Luxury Product Americas). The quintessential scent is a key strategic The fragrance embodies the key values of fragrance for the company’s portfolio. Ralph Lauren. This includes “the expression Launched in 1998, Romance has become a in the successful romantic encounter between top seller in the women’s fragrance segNew Ralph ment, according to L’Oréal. Romance “Romance is the number one femi- Lauren in store visual nine fragrance for Ralph Lauren fragrances and continues to grow with a reputable stance in the feminine fragrance

Javier Labarta, CEO, Parbel *Photo courtesy of Zoltan Prepszent

a man and a woman, the revelation of a woman’s heart, her loving nature, her deeper identity,” says the company. “In 2011, we want to go further and bring newness, excitement and a stronger dimension of emotion back to Romance. Indeed, 2011 is the year of romance. Considering at the number of royal weddings and high profile celebrity engagements, it is obvious that romance is more than ever present on people’s minds and hearts,” says Guillaume de Lesquen, President Worldwide of Ralph Lauren Fragrances. Fresh-faced Argentinean polo player Nacho Figueras and his wife Delfi will grace the advertisement visuals to further enhance the scenario of an authentic love story. “Choosing Delfi and Nacho was a natural choice for Ralph Lauren when it came time to develop the new Romance campaign. Their love for each other is charming and organic...They have an international appeal 52

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

as they travel the world together as a family supporting Nacho in his Polo tournaments, but it’s their honest approachability and genuine family love that transcends across the globe,” comments Labarta. The idea behind Romance’s new campaign is to “portray and express the genuine charm of a real-life romance, real passion, real love and bring a new level of emotion. The objective was to tell our romantic story with a reallife couple and portray their true aspirational fairy-tale life,” says Ralph Lauren’s de Lesquen. The couple were photographed in their house in Argentina, with their family, horses and dogs, which certainly brought the cinematic element that is unique to the Ralph Lauren world. Ralph Lauren also wanted to associate Romance with the brand’s lifestyle of equestrian Polo heritage. Both husband and wife are living a modern age fairy tale, says de Lesquen. “They convey to our new campaign passion, sincerity, bringing back the essence of romantic love. For the first time, the campaign is in color to express the spontaneity of a true love story of the real-life couple.” The advertising visual captures a special moment, with Figueras stealing a kiss from his wife while horse riding around the couple’s estate. This new visual is available for print, TV and online with a two-minute trailer that features clips of an interview with the couple. On the POS front, huge emphasis will be placed on new merchandising and impactful in-store visuals that will glorify the new advertising for the fragrance and reinstate a strong in-store presence. Labarta explains that no matter what the economic climate, whenever the local market invests in their local market media, it impacts the company’s sales. An example of this, he notes, was when the US local market launched its World of Polo campaign on Father’s Day in 2009. Despite the slow economy, the World of Polo franchise grew during the time of the company’s media investment. L’Oréal is confident it will have even better results with its new campaign for Romance. “Ralph Lauren believes strongly in the new Romance campaign,” says Labarta, “and as their media investment increases in the brand, we will see a positive impact in our stores.” c

Company News: Colorful Licenses International BV

Cashing in on

color

With its brilliant, multi-colored Oilily lifestyle brand, Colorful Licenses International makes its vibrant mark in duty free BY

HIBAH NOOR

Oilily Beauty Bag Spring/Summer 2011

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2011

ounded in the 1990s, Colorful Licenses Int., a Dutch licensee of fragrances and accessories, has brought a world of color to the duty free channel with its signature brand Oilily. With Oilily lifestyle products at its core, the company is currently active in the travel retail and duty free markets across Europe, Asia and the Americas. “We know the great impact that the travel retail and duty free markets have on brand awareness globally and also in the domestic markets,” says Cees Homburg, the company’s Founder and Director. Homburg had a multifaceted organization in mind from the very beginning – a company that would manage licenses for global brands. In the Americas duty free channel, Colorful Licenses Int. started early by partnering with sought-after retailers in Uruguay and in Argentina. Its goal was to commercialize Oilily products in the market, and it has been pleased with its success so far. “The results have been amazing. Thanks to this success, we are expanding quite fast in new duty free markets in these regions, as well as in domestic markets in South and Central America,” explains Homburg, whose vision includes placing a heavy focus on the Central and South American markets right through to 2020. To get a sense of where the company stands, Homburg explains that in South America Oilily products are doing well between the borders of Argentina and Brazil and Uruguay and Brazil, along with Central America, namely Mexico. “In the next three to four years we would like to be present in 80% of the duty free markets in these regions,” he notes. “Of course Brazil and the Central American countries are one of our focuses.” The breakdown of worldwide duty free turnover for the company is as follows: 54% in Europe, 33% in Asia, 7% in the Americas and 6% in the Middle East. Duty free also has the added benefit of providing an easier import and distribution

arrangement for the company, in comparison to the domestic market. “In the local markets we and our partners find some difficulties when it comes to the registration of imported textiles, perfumes and cosmetics. This makes the whole process of delivery and custom clearance more complicated, expensive and slow, with all the commercial consequences that this entails,” says Homburg. “Fortunately,

New visual for Oilily Classic Fragance

we do not experience this situation on the duty free markets.” Nonetheless, business in the local market is growing year on year, and the potential for future growth is there, sums up Homburg. “Knowing that consumers are happy with Oilily products (will) motivate the team for the work ahead.”

Range of products Colorful Licenses Int. offers several Oilily accessory products, including the entire Oilily perfumes range, beauty bag collections (a very commercial and compact collection) and fashion bags collection (a much larger collection).

The fashion bags collection, which includes a children’s and women’s group, is more fashion oriented. There is also an Oilily luggage and travel collection and the Oilily scarves collection. Best sellers are Oilily perfume products and the Oilily beauty bags collections. Color continues to be an important signature for the brand, as the company continues to offer customers Oilily products characterized by magic, vibrancy, color and quality. These characteristics, says Homburg, are in line with the wants and taste preferences of South and Central American consumers. “Oilily products give these emotions of satisfaction to the consumers, and this is the reason why our company and our partners are experiencing this success,” says Homburg. In terms of new launches, Oilily is currently introducing two bag collections annually – the Spring Summer and Fall Winter collections. Each comes with completely new printings, designs and models. On the perfume front, there is some revamping taking place. “Regarding the perfume line, we will relaunch, in September, our Oilily Classic Fragance, almost 20 years on the market, with a new image, new visuals and a new packaging,” says Homburg. “Piquing shopper interest, Colorful Licenses recently unveiled onboard exclusives gift sets, which have been selling well on airlines worldwide.” It would be fair to say that Colorful Licenses Int. is pretty well versed when it comes to knowing its clientele, and the specific needs of customers in each region. This includes the Americas. “We know that the traveler in the Americas is a very mature traveler and consumer. They are consumers looking for special and unique products for themselves and also for gifts for their family, friends and beloved,” says Homburg. “They know what they want and what are they looking for. They are modern, independent, self assured, very well educated, interested in fashion, and very attentive for c quality and luxury products.”

HISTORY

THE Oilily was conceived by Marieke and Willem Olsthoorn in 1963.The unique signature style of Oilily came about when the founders couldn’t find nice clothes for their children. As a result, Oilily products focused on unique color combinations, striking designs, unexpected combination of materials, folkloric elements and high value. www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

Company News: Essence Corp., Clarins Group Singer Enrique Iglesias has been the face of Azzaro pour Homme since 2009, now gracing the ad visual of Eau d’Azzaro pour Homme

Two men, two stories BY

HIBAH NOOR

The compelling presences and achievements of Oscar Pastorius and Enrique Iglesias provide the fuel for new launches from Essence Corp. ssence Corp’s Clarins Group division, based in Miami, has associated its leading fragrance brands, Azzaro and Thierry Mugler, with compelling masculine personalities to further boost the success of their fragrances Eau d’Azzaro pour Homme and Thierry Mugler’s A*Men. The new brand ambassador for A*Men is the outstanding athlete Oscar Pistorius, a world-class sprinter who was born with a congenital malformation that resulted in the amputation of both legs when he wasn’t yet a year old. He learned to walk with artificial limbs and went on to become an outstanding sprinter using special carbon fiber prosthetics. He won several medals in the 2004 Paralympic Games in Athens and became triple world record holder and triple Paralympic champion in the 100, 200 and 400 meter races. A*Men was the first men’s fragrance created by Thierry Mugler, and for Clarins Group, the fragrance, its designer and the athlete are a perfect fit. “Oscar Pistorius possesses the masculine values which Thierry Mugler holds so dear: he shows that by using mental strength and willpower man can exceed the limits of what is possible, make incredible achievements and create a remarkable destiny,” the company said in a statement on the new relationship with Pistorius. “For me, Thierry Mugler is an audacious and innovative brand, constantly pushing the boundaries,” Pistorius says. “I identify myself with the image conveyed by A*Men: personally excelling, the taste for a challenge, fulfilling your dreams… The message I spread on a daily basis is to encourage oneself to find the courage and inner strength to defeat prejudice, to not be influenced by the way other people look at you.” The worldwide A*Men campaign anchored on the Pistorius legend was launched in March. The fragrance features an oriental woody dimension that establishes an intense, virile character, matched with a vigorous dimension rooted in boldness and tenacity. The fragrance is available in a 100ml refillable metal spray and non-refillable 100 and 50ml rubber sprays. The line is complemented by a 125ml deodorant spray. This year, exclusively through travel retail in the Americas and the Caribbean, Clarins Group will launch a new Azzaro fragrance and a new visual with Enrique Iglesias, who has been the face of Azzaro pour Homme since 2009. The campaign accompanies the launch of “Eau d’Azzaro pour Homme,” an alternative to the more intense “Azzaro pour Homme” that nonetheless maintains the sensual trademark of the original. Hesperidia citrus oils and lavender give the new fragrance its lightness, while woody and aromatic tones establish the scent’s character, and patchouli, musk and sandalwood provide the sensual foundation. Clarins Group describes Iglesias as the ideal masculine incarnation of its values; “an alter-ego that is a testament to the brand’s Italian roots, embodying the intrinsic and compelling seduction of this fragrance.” The new promotional campaign emphasizes the artists’s deeply sensual appeal and masculinity. Eau d’Azzaro pour Homme is available in 100 and 50ml eau de toilette sprays and a 150ml deodorant spray. Following the exclusive travel retail launch in the Americas c and Caribbean, the worldwide rollout will take place in 2012.

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

Athlete Oscar Pistorius is the new brand ambassador for Thierry Mugler’s A*Men

Beauty Beat: Fragrances

Fresh fragrances A line-up of innovative fragrances welcome the new season BY

Montblanc Legend Company: Essence Corp. Description: Created by Olivier Pescheux, the scent belongs to the fougere fragrance family. The design of the ﬂacon was conceived by Montblanc’s inhouse design team, the bottle captures the essence of masculinity, timeless design, and bears the classic Montblanc hallmarks

HIBAH NOOR

Belle D’Opium Company: Yves Saint Laurent, L’Oréal 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

Too Too by Betsey Johnson Company: InterParfums Inc., Essence Corp. Description: The fragrance was directly inspired by the designer’s creativity and the brand’s originality. This chypre fruity fragrance blends notes of pineapple, mandarin, musk and ginger with fruity and floral heart notes. The base notes mingle black vanilla and patchouli with woody notes. The whimsical scent is encased in a feminine round shaped bottle with black fishnet stockings covering it. The frosted semi-opaque bust sports a shiny black bustier. A frilly embellished pink tulle tutu dresses the bottle

Elie Saab Le Parfum Company: Beauté Prestige International Description: Created by Francis Kurkdjian, the fragrance pays homage to designer Elie Saab. The floral-woody scent is encased in a luminous heavy glass, cut like a crystal showing off the honeyed tones of the perfume

Pure Nautica Discovery Company: Coty Beauty Price: Edt 100ml: US$55; 50ml: US$42 Description: A scent of energizing freshness, the masculine breeze of spicy woods is perfect for the adventurous man

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

Jimmy Choo Edp Company: Essence Corp. Description: The fragrance consists of fruity chypre notes with warm, rich, woody depths. It’s inspired by modern women – strong, beautiful and alluring. Luminous green top notes provide a burst of freshness, while the heart contains a rich and exotic Tiger orchid. The base notes comprise sweet toffee and Indonesian patchouli

Beyonce Heat Rush Company: Coty Beauty Price: Edt 100ml: US$50; Edt 50ml: US$42 Description: The fresh, sparkling, fruity fragrance captures Beyonce’s shining personality and passion for life, all wrapped in a soft seduction

Beauty Beat: Skincare & Cosmetics

Beauty regime Creative cosmetics and revolutionary skincare: traveling consumers will have plenty of options to choose from this season BY

HIBAH NOOR

Cellular Radiance Emulsion SPF 30 Company: La Prairie Description: A light, skin-brightening, moisture-replenishing lotion with a high level of SPF protection and multiple anti-aging benefits, Cellular Radiance Emulsion SPF 30 is designed to help restore youthful skin and vitality

Double Strength Deep Wrinkle Filler Company: Kiehl’s, L’Oréal Description: A breakthrough wrinkle treatment that offers instant and long-term results - without the use of silicones. It is clinically demonstrated to diminish the look of lines and wrinkles and has been shown to minimize the number of facial lines over time, in as little as four weeks

Rouge Pur Couture Company: Yves Saint Laurent, L’Oréal Description: A new-generation lipstick inspired by Monsieur Saint Laurent’s iconic color palette – red, fuchsia and orange – in a collection of captivating couture shades that offer each complexion a customized look. Lips are saturated with intense, stay-true color, thanks to the Coloreveal Technology, while natural extracts provide comforting moisture that lasts all day

Colour Definition Ombre Minérale 4 couleurs Cellular Eye Cream Platinum Rare Company: La Prairie Description: Combines the intense and immediate action of a high-performance serum with the superb hydrating powers of a rich yet light moisturizer that melts into the skin. The key ingredient is Pure Colloidal Platinum, which helps reorganize and rebalance the skin’s natural buffer zone, shielding it from the damaging effects of external factors and preventing unnecessary moisture loss

Company: Clarins Group, Essence Corp. Description: Highly concentrated in mineral pigments, these eye shadows really light up the eyes. The set includes four satin and iridescent shades and two foam applicators

Cellular Energizing Bodycare Company: La Prairie Description: The collection includes, Cellular Energizing Bath and Shower Gelee and Body Lotion. The one part skincare, one part fragrance set not only hydrates, smoothes and firms the body; it also invigorates the psyche with an intriguing olfactory blend of buoyant fruity and spicy notes with a beautiful floral heart

Magic Brush Mascara High Definition Mascara Company: Clarins Group, Essence Corp. Description: Clarins offers two brushes in one wand. The brush with nylon fibres helps add volume, helping to thicken the entire length of each lash. The elastomer bristle tip hugs and defines corner lashes including their tips that traditional mascara tends to forget

Company: Artdeco cosmetic GmbH Description: A two-in-one mascara offered in an easy-to-use dual-wiper system: the wiper in the smaller cap refines the application for a clean sweep and a natural day look, while using the larger cap loads the lashes for greater impact and a dramatic look and volume at night

Verdon Outdoor Moisturizer SPF30 50ml Company: L’Occitane Description: A moisturizing and anti-UV fluid that resists to water, in a nomad and practical tube, a shield for outdoor activities

Everlasting Compact Foundation SPF 15

Rose Shimmering Gel Limited Edition

Company: Clarins Group, Essence Corp. Description: Clarins has created a breakthrough high-tech compact foundation.The texture combines the lasting hold of its Everlasting liquid version with the softness of a powder plus Clarins skincare expertise

Company: L’Occitane Description: A fresh and moisturizing gel which leaves an iridescent veil on the skin

Your professional duty free travel retail supplier I Sea & Sky Supply is an official Duty Free distributor offering a wide range

of A-branded electronics worldwide and exclusive distributor for Cloudz travel comfort accessories and licensed kids products. I We strive to fulfill the retailer’s needs by offering plug-and-play concepts of electronics together with travel comfort accessories.

Laura Klingeman, Sales Manager, Latin-America and Military Tel: +31 786534586

Website: www.seasky.nl

www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

Company News: Sisley Paris

The green pioneers As one of the early developers of phytocosmetology, Sisley continues to lead the way in the premium end of the market

pecializing in skincare, fragrances and cosmetics for three generations, Sisley Paris is a family-run business that is selectively branching out into new duty free territories. The Paris-based company opened a regional office in Miami, headed by Managing Director Arnaud Naintré and Area Director Americas Silvia Valderrama, who is in charge of Latin America and Caribbean local markets and North and South America for duty free. Americas Duty Free spoke with Valderrama to get a sense of where Sisley is headed next. She says that because it is a prestigious brand, Sisley distribution is selective and this is also the case for travel retail. “Worldwide we are

Sisley’s top selling fragrance Eau du Soir Best selling skincare line Sisleya

in about 150 duty free doors, mainly in Europe with 80,” says Valderrama. Sisley was first introduced to travel retail in the Americas through Brazil in 2004. Currently, the brand is available in seven doors in airports in the Americas. This includes Washington Dulles, Miami, Panama Tocumen, Mexico Benito Juarez, Sao Paulo Guarulhos and Rio de Janeiro Galeao. “Our clientele is very excited and they are now looking for us at the airports. They expect the same expert advice they receive in the local markets and this is our main priority, having our beauty consultants prepared to provide advice and service with the time and space constraints we encounter in an airport,” says Valderrama. The offerings in the market are anything but slim. Sisley offers the same assortment in travel retail as it does in the local markets, “and this year we are introducing Travel Retail Kits,” explains Valderrama. Amongst the company’s best sellers are the skincare lines Sisleya, Hydraglobal, All Day All Year Emulsion Ecologique, night treatment Supremya, and the company’s fragrance Eau du Soir and the Oil Free MakeUp Phyto Teint Eclat. What sets Sisley apart is the company’s focus on the product itself rather than advertising. “Being a family-owned company, independent and not in the stock market, the company follows a long-term policy. The D’Ornano family is involved at all levels of the company starting with the product development,” explains Valderrama. The importance placed on research and

When the Cont Hubert d’Ornano founded Sisley in 1976, the aromatherapy and phytotherapy wave had not yet hit Europe. The use of plants and essential oils in beauty products was still a highly innovative concept. The Cont Hubert d’Ornano understood very early on that the plant world offers an extensive field of research, with around 800,000 different plants to be found on the planet. Given that the life of man is closely dependent on plants to breathe, eat and heal, he saw the potential of developing research into this area. A true pioneer, he specialized his research laboratories in phytocosmetology and chose to use the best plants to create the best c cosmetics.

Silvia Valderrama, Area Director Americas, Sisley Paris THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

HIBAH NOOR

About Sisley

“Our clientele is very excited and they are now looking for us at the airports. They expect the same expert advice they receive in the local markets and this is our main priority...”

testing has no time or budget constraints; what is key is building a coherent line based on phytocosmetology know-how. Phytocosmetology involves using natural plant extracts in beauty products. Each natural extract contains key active ingredients that perform a specific action. The synergy of natural extracts results in the amplification and strengthening of the effects of each individual active ingredient. In terms of price positioning, Sisley compares with high-end brands such as La Prairie and Estée Lauder’s La Mer. Having this positioning is also an incentive for travelers to buy Sisley products in duty free, where they can save on cost. For added value, Sisley offers special gifts-with-purchase, such as pouches filled with samples, which are also available in the local markets. Valderrama explains: “We are still far from our potential distribution in travel retail. The objective is to open slowly in doors where we will have the suited sales and the prestigious image we need to ensure. Latin America airports are definitely the priority as Sisley is consistently growing in those local markets.”

Company News: LeSportsac

Feeling the joy LeSportsac’s collaboration with LA-based Joyrich results in a fun, colorful collection of handbags for Winter 2011 BY HIBAH NOOR

lassic American lifestyle brand LeSportsac has embarked on a string of new collaborations with edgy and unique partners to introduce prolific new collections for the winter season. This includes Joyrich, a hip, fashionable clothing brand. LeSportsac’s yearlong collaboration with Los Angeles design house concludes with the partnership’s Winter 2011 collection. In this final collection you can still see the collaboration’s signature oversized gold zippers and zipper pulls, gold logo plate, chains and coin charms, as well as the introduction of three new Joyrich designed prints. The design house’s tongue-in-cheek luxe style is also still evident in its colorful play on the camouflage trend. The Candy Camo, however, steers away from the military and looks more like bright poppy abstract art with its hot pink, bright orange, turquoise and purple hues. And a collection with Joyrich is not complete without one of their quintessential florals: Ambush Floral. This winter floral gives a distinct nod to the brand’s Los Angeles roots and includes sweet ‘90s style roses on a white backdrop with bright white trim. Smiling back at the large logo trend, Joyrich has also created a black and white logo repeat, Joyfont, which lets everyone know that the bag is definitely a LeSportsac X Joyrich – a great print that exemplifies LeSportsac’s first yearlong collaboration. The LeSportsac X Joyrich collection will be available online at LeSportsac.com and at all LeSportsac flagship boutiques worldwide in November 2011. LeSportsac is also available at better department stores and select specialty stores. Mainly known for its stylish, travel-friendly nylon bags, LeSportsac also offers fashionforward accessories. A LeSportsac spokesperson explains that the Joyrich collection has performed exceptionally well worldwide. “We assume consumers started to prefer carrying showy young prints rather than just simple designs.” In other trend news for the Americas duty free market, “shiny solid colors are increasing sales although matt solids were doing better before. (It’s) not really a new trend, but bright florals have always received a high reputation,” says the spokesperson. Even though LeSportsac remains a New York-based brand, its popularity has reached across the globe. In the Americas travel retail sector, Brazil and Uruguay are generating a great amount of sales. Internationally, in the duty free channel, Korea pulls in the most sales. For the Americas duty free market, the company is pinning its efforts on developing a border duty free business between Uruguay and Brazil, including in cities such as Rivera, Chuy and Rio Branco. Airports are also being targeted. “We are also very much looking forward to growing our business in airports, as we are an international brand and already have many stores in airports in other regions such c Asia,” says LeSportsac. 66

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2011

yrich ’s Jo rtsac ollection o p S Le 11 c g 20 Sprin

Rich, dark and unexpected.

Savor Macanudo 1968 The same impeccable Macanudo quality youâ&#x20AC;&#x2122;ve come to expect over the past 40 years, now with a richer, darker taste. The smoke is rich and cedary with a touch of caramel on the finish. Medium bodied and balanced. This is Macanudo 1968, the evolution of a legend. For further information on Macanudo 1968 and other General Cigar products please email cameron.shaw@st-group.com or visit www.cigarworld.com

ÂŠ2011 General Cigar Co., Inc

Confectionery Report

The best

gets better

Raffaello’s signature coconut flavor is a hit in Latin America

As confectionery’s leaders gather at ASUTIL, signs are that a strong market is only getting stronger BY

ANDREW BROOKS

he theme for this year’s ASUTIL conference is a forbidding-sounding one – “Latin America: Neither Hell nor Paradise” – but the snapshot of the confectionery market that attendees will take away with them will be decidedly more worldly than those words imply, and much more suggestive of life’s simpler pleasures. The confectionery market’s potential is definitely positive as far as Eric Vermetten, Area Manager, Europe and Americas for Perfetti Van Melle, is concerned. That’s why his company is paving the way for future growth in this part of the world. “We’ve been focusing on increasing the number of POS worldwide,” Vermetten says, “and the Americas is one of the first regions where we have reached a reasonably tight distribution network.” The company is well established in North and South America, Vermetten says, and also has near-complete distribution in Central America, although work remains to be done in the Caribbean. Perfetti will be providing more detailed information to the market at ASUTIL. “The Americas is performing really well for us,” Vermetten says. Growth for the first half of this year is an impressive 30% ahead of the figure for the first half of 2010 –in terms of both volume and turnover. The travel retail focus, Vermetten says, continues to be in the Mentos and Chupa Chups, both of which rank high in the sugar confectionery sector. “All of our products are exclusive for the travel retail market,” Vermetten says, “the Mentos Jumboroll and Chupa Chups Mega Chups being our icons.” The momentum has been beefed up with the recent introduction of Chupa Chups Flower Bouquet and Surprise Travel Pack, and Mentos Mini and Mentos Kidz, unveiled in the Americas at Orlando earlier this year. The Flower Bouquet features flowers with personal note cards and two Chupa Chups.

Ferrero display in Asuncion Airport departures

The Surprise Travel Pack contains 12 surprise gifts and four Chupa Chups, each with a surprise toy. Mentos Mini features 20 miniature Mentos rolls in strawberry, cola, lime and orange flavors, while the Mentos Kidz bag contains 15 miniature boxes, and features a game on the back of the bag. The travel retail market is robust enough, and for Perfetti Van Melle at least growth in the last year has been strong enough, that the company has expanded its travel retail team with the recent addition of Laurens Krijgsman as Area Manager for Asia. Confectionery has always had worldwide appeal, says Giannicola Losacco, General Manager for Ferrero’s Travel Market division. “It makes a perfect gift and indulgence wherever you are in the world.” Losacco says Latin America is leading the growth in demand, thanks in large measure to how well known the Kinder brand is in that part of the world. “Our premium Ferrero Collection and Ferrero Rocher and Rondnoir – from gift boxes down to small trio and 4-piece packs – are doing very well, and Raffaello is also performing above expectations as the coconut flavor is well liked in the region,” Losacco says. The Tic Tac brand is strong throughout the Americas and the newly launched Liberty by Tic Tac is enjoying good results.

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

Overall, Losacco says probably the biggest change in the company’s approach to travel retail was the very establishment of the travel retail division two years ago. “That signalled that the company had recognized the importance of the channel,” Losacco says. Undoubtedly there were some eyebrows raised about making such a move as the recession was at its worst, but the long-term approach seems to have been amply justified since then. Jessica Guzzo, Marketing Manager for Switzerland-based Goldkenn, says that the Americas market is “still growing,” and that the overall trend in confectionery and food is upward. “We are very pleased with our results for the current year,” she says. “But the Swiss franc is currently very high, which complicates our export sales, and unfortunately for us this trend is likely to continue.” Goldkenn’s best seller worldwide is the “Goldbar,” a perfect miniature replica of the 12.5kg gold bars stored in Swiss bank vaults. Chocolate liqueurs are performing well throughout Greater Europe, especially in Russia, and Guzzo says that the 30th anniversary of the Goldbar is coming up, along with a complete revamp of the Chocolate Club Collection – a new “sleek and premium design” that will be launched at TFWA Cannes. “The travel retail market has really picked

Confectionery Report

up in the last two years, and although the Americas have been slower to recover from recession than, for example, Asia, there are now strong signs of growth in the US,” says Ferrero’s Losacco. Several South American countries, such as Argentina and Brazil, managed to avoid bearing the brunt of the downturn and are now seeing strong growth in passenger The recently introduced Mentos Mini pack leverages the brand’s strong visual presence traffic, with an accompanying growth in demand for confectionery. Guzzo says that Goldkenn focuses its Ferrero grew strongly in 2010, with travel efforts on articulating portion sizes as the retail sales growing 30% year-over-year, an “supersize” trend is now a thing of the past. impressive achievement considering that the “So we developed exclusively our Mini Golds, overall travel retail confectionery market five grams of an exquisite praline blended grew by 15%. In the Americas, sales boomed with the finest cocoa beans, delicate nougatine by an amazing 98%, Losacco says. Ferrero is with rich almond and hazelnuts.” a relative newcomer to travel retail – the diviAs far as promotions are concerned, for sion Losacco heads up was only established Perfetti Van Melle the accent continues to be at the end of 2009 – but such figures are still on increasing visibility rather than pushing amazing in their own right. specific promotions, Vermetten says. “We Demand for Ferrero Rocher and Kinder is know that purchases of Mentos and Chupa growing nicely in the Americas, Losacco says. Chups are very high-impulse, and therefore “Our foothold there is less well established than strong merchandising and display are crucial in Europe and Asia, so there’s plenty of oppor- to our sales,” he says. “To this end, we are tunity for the future.” Tic Tac has good potential now looking at the potential of till-point and is already strong on the domestic market, sales programs, which we know to be an while Nutella has a “cult image” which it is excellent point for impulse purchase.” hoped will augur well for the new Nutella 30g Chewing gum is very important for Perfetti jars. In the Kinder range Fererro is rolling out and will be increasingly important in the years the new Kinder Friends pouch and the Kinder to come. All of its chewing gum is sugarfree, Happy Hippo Chocobox. Ferrero Rocher, of although the brand does not consider this is course, is well established in the luxury gifting currently a major selling point in travel retail. Goldkenn’s niche: “they symbolize all that is good about This may, of course, change in the future. 180g Mini Golds pack premium European chocolate, which appeals Losacco says that response has been very features 365g Swiss pralines to the American psyche,” Losacco says. positive to the launch of Ferrero’s new sugarwrapped in At ASUTIL, Losacco says that Ferrero will free mouth freshener mints in Wildberries gold foil be outlining a selection of innovative lines and Coolmint flavors. Pairing them with Tic that complement the range that will be pre- Tac gives the customer a bigger range of c sented at Cannes, some of them exclusive to choices, he says. Goldkenn’s signature Goldbar is a miniature travel retail. The essence of the Ferrero strategy, replica of the real 12.5kg gold bars stored in Swiss Losacco explains, is to offer high-quality bank vaults. Each pack products in a range of presentation styles contains 30 individuallywrapped pralines. Packs tailored to the market, mixing things up and are available in milk or maintaining buyer interest with occasional dark chocolate offers, in addition to keeping travel retail distinct from the high street with offers exclusive to this channel. “On a regional basis we work closely with the retailers in the Americas, and we are open to new distributors in the region,” Losacco says. “We find that one-plus-one, GWP and other value added promotions work well here.” 70

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

The wheel display unit for Chupa Chups

Confectionery News

Confiteca’s POS displays in travel retail

Chocolates Turin debuts at ASUTIL: Confiteca to launch new products BY

ANDREW BROOKS

uty free is taking on a whole new meaning for Turin Chocolates, as the Mexico-based confectioner makes its debut at ASUTIL, Latin America's premier dutyfree conference in Cancun this month. "This is the first time we are presenting at this conference, so our goal is to introduce our brands to the trade," says Ann Marie Cavanaugh, National Sales Manager in the US for Chocolates Turin, S.A. de C.V. Turin manufactures premium chocolates under the Bailey's, Kahlúa, Grand Marnier, Malibu and Jose Cuervo brands. Meanwhile, Ecuador’s premier confectioner, Confiteca Corporation, is taking its Latin American expansion very seriously, if its lineup for ASUTIL is any indication. Gonzalo Jose Chiriboga, Confiteca’s Category Manager for Chocolates, appears excited as he talks about the new products being presented at ASUTIL. "We are going to introduce a new line of chocolate liqueur and another line of chocolate and coffee pairings," he says. "Then there is a delicious line of hot chocolate powder and a new chocolate bar that we call Galapagos because it is mixed with Galapagos Island coffee nibs. We also offer chocolates covered with exotic oranges and many, many other products. " Both companies are focused on expansion. Turin, for instance, in an effort to sell in regions where alcohol is either taboo or is a secondtier market, offers non-alcoholic/flavor-filled chocolates. This offering has attracted wider

audiences, as was indicated by the recent agreement with India-based Kreol Travel Retail, which becomes Turin’s official agent for the Middle East and the Indian subcontinent. Turin, like other companies, has lived with flat sales for the past couple of years thanks to the worldwide recession, but certain segments are beginning to improve, one of them being duty free. The company is currently working with American Caribbean Getaway of Fort Lauderdale, Florida, to grow its duty free market. "Even though we have been in an economic recession, people still want to indulge in something," says Cavanaugh. "Thankfully, chocolate is at the top of their list.” While gift-giving accounts for a large portion of Turin’s listings, chocolates are also favored for impulse buying and consumption. Confiteca’s impressive product line includes premium 3.5oz chocolate bars, stand-up bags in both 2.1oz and 4.23oz sizes, large 7oz cylinder tubes of chocolate, gift boxes in several different sizes, a reusable shaker jar filled with chocolates and a collectible tin bottle filled with branded chocolates. Chiriboga says that Confiteca’s new bestseller is the Coffee Kit, a bag of Galapagos Island coffee and nine chocolate bites from the different provinces of Ecuador. The main business of República del Cacao – a division of Group Confiteca founded five years ago – remains souvenir gifting rather than personal use, hence the importance of duty free shops and prominent tourist locations such as the Charles Darwin Foundation on Galapagos Island. Chiriboga says this year’s ASUTIL is important because República del Cacao is expanding to two Latin American countries, bringing its c global total to eight.

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

A colorful selection of Turin’s liqueur chocolates on display in duty free

‘BE ST IRIS WS H W WA 201 HIS 0/ WW KEY A2 011 ’

WHIPPING UP A STORM The Multi Award-Winning Irish Whiskey Collection www.thewildgeesecollection.com In North America The Wild Geese Irish Whiskey Collection is sold under the ‘brand name’ of “The Wild Geese Irish Soldiers & Heroes”. The Wild Geese, The Wild Geese Rare Irish Whiskey, The Wild Geese Irish Soldiers & Heroes, The Wild Geese Soldiers & Heroes and Untamed are registered trademarks. Made under the authority of the trademark proprietor. © Avalon Group Inc. 2002 – 2011.

TAILOR MADE FOR YOUR MARKET Available for meetings at

ASUTIL, Cancun, Mexico June, 22nd-25th

SEEKING DISTRIBUTORS

CONTACT: IAN SMART, Director Business Development TEL: +44 (0) 8700 339 866 EMAIL: sales@protege-international.com

www.protege-international.com After Hours and After Dark are registered trademarks. Made under the authority of the trade mark proprietor. ÂŠ FenderTobacco Inc 2004 - 2011.

Company News: Brown-Forman

Brown-Forman renews its focus on premium brands Woodford Reserve, Herradura, Chambord and Chambord Vodka in the Americas BY RYAN WHITE ontgomery Wilson, BrownForman’s Director of Americas Duty Free, discusses the company’s focus on its premium brands moving into the second half of the year. While more and more consumers are trading up as economies in the Americas continue to improve, Wilson tells Americas Duty Free that the impetus for the renewed push on high-end brands such as Woodford Reserve, Herradura, Chambord and Chambord Vodka has more to do with the intrinsic value of the brands themselves and what they communicate to consumers in terms of versatility, luxury appeal and tradition.

Americas Duty Free: What is Brown-Forman’s core focus in the Americas at the moment? Montgomery Wilson: Key areas of concentration in terms of brands are Woodford Reserve, Herradura Tequila, Chambord and Chambord Vodka. Woodford Reserve is already a mainstay in the whiskey section of most North American shops and is increasing its travel retail distribution around the world. Herradura is expanding its presence beyond the traditional tequila market of Mexico, which is also encouraging. Finally, Chambord is expanding outside of North America into Northern Europe and select Asia Pacific markets, while Chambord Vodka is expanding into North American duty free.

ADF: In terms of promotional activity for the brands, is there anything in the pipeline that you can tell us about? MW: We are continuing to focus on permanent displays and value-added promotions for our core brands. Merchandising is a key part of our marketing strategy and therefore we are investing in permanent displays that help travelers find their favorite brands and then tell them more about these brands and encourage exploration within the brand families. We are promoting during core promotion periods with added-value packs and impactful sampling activity throughout Latin America. ADF: Are there any new listings to speak of? MW: Jack Daniel’s Scenes from Lynchburg, Gentleman Jack and Jack Daniel’s Single Barrel continue to be a primary focus for new listing opportunities, which allows us to trade consumers up from our Jack Daniel’s Black Label to the rest of the Jack Daniel’s family. The billboard effect this creates on shelf is extremely impactful and alluring to the international consumer. Our customers enjoy the incremental register rings as well. Woodford Reserve Bourbon is also becoming a staple in most airport stores as it perfectly fits what travel retail consumers are looking for—something unique, gift-worthy and premium. Fortunately, our Herradura Tequila and Chambord family of brands meet that consumer proposition as well!

Brown-Forman continues to expand its operations in Mexico, taking advantage of the Herradura operations purchased a few years ago

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

ADF: Is the improving economic situation and the fact that consumers are now more willing to trade up a contributing factor for this renewed focus on your premium brands? MW: The time is right because the brands are right. Each of these brands is a leader in its category: Woodford Reserve brings traditional bourbon to a new level in a stunning package; Herradura is one of the oldest and most popular tequilas and is finally enjoying the acclaim outside of Mexico that it deserves; and Chambord is an iconic liquor found in any premium bar in the world. Consumers are now learning that it should be part of their bar at home. Finally, Chambord Vodka brings the Chambord experience and taste profile to the world’s largest spirits category. So, simply, it is time for these brands to show themselves off on the world stage. ADF: Regionally, what are some areas of focus for Brown-Forman in the Americas? MW: Latin America is a country by country approach. This diverse marketplace mixes numerous cultures, languages and regulations that require us to analyze each market individually. We continue to expand our operations in Mexico, taking advantage of the Herradura operations purchased by Brown-Forman a few years ago. Additionally, Brown-Forman’s new distribution operation in Brazil intends to focus some of its efforts on the travel retail opportunities available in the southern cone of South America. ADF: Are there any other developments that our readers should know about? MW: We are pleased to announce two new hires for the Americas region effective March 2011. Pierre-Hubert Plessis has been hired as Duty Free Territory Manager for the United States, Mexico and Caribbean. Additionally, Alexandre Leonardo has been hired as Duty Free Territory Manager for Brazil, Paraguay and Uruguay. c Chambord is expanding outside of North America into Northern Europe and select Asia Pacific markets, while Chambord Vodka is expanding into North American duty free

IT’S NOT SCOTCH. IT’S NOT BOURBON.

It s Jack.

Rum Report

Americas Duty Free talks to five rum brands about the huge variety that the category has to offer both connoisseurs and novices alike BY

Something for everyone

he reasons that consumers purchase spirits run the gamut from wanting to create simple cocktails at home to desiring a super premium, displayworthy bottle to enjoy neat on special occasions. Luckily for Appleton Estate, the company’s portfolio of fine rums ensures that there is an expression available for essentially every preference. “Appleton Estate Jamaica Rum is uniquely positioned as one of the world’s truly historic alcohol brands,” says Peter Hottmann, Appleton Estate’s Regional Sales and Marketing Manager, NAFTA Region. “Our rum is the exceptional start of many classic cocktails such as the Mai Tai. As one of the most versatile spirits on earth, our rum can be enjoyed neat, on the rocks or in almost any mixed beverage imaginable.” For those who prefer an aged rum, Hottmann notes that Appleton Estate 21 Year

Old is exemplary of the highest standards in rum making. The expression, which was recently given a new, bespoke look, is a oncea-year limited release that is sold on an allocation basis. Much like a super premium whisky, the age statement on 21 Year Old means that the youngest rum in the bottle is aged for 21 years. Indeed, aficionados who purchase the spirit are drinking a blend of aged rums, some of which may have matured in barrels for 30 years or more. “Connoisseurs who have a deep understanding of what sets apart certain fine, aged rums represent a growing segment of the base, and for this reason Appleton Estate 21 Year Old fits the bill perfectly,” says Hottmann. “However, the very essence of our brand is about being accessible to every person who responsibly enjoys fine rum—whether that be our many valued consumers who love their Appleton Estate V/X or Reserve mixed with

A unique proposition

rugal Extra Viejo Reserva and Brugal Añejo Reserva—distributed by Rémy Cointreau Travel Retail Americas on behalf of The Edrington Group—made their debut at IAADFS 2011 in Orlando. Americas Duty Free caught up with André de Almeida, Edrington Group’s Area Director – Americas Duty Free and UK & Ireland Domestic, to see what operators think of the premium aged rums. “The reaction to Brugal has been fantastic, with the trade really embracing the brand,” he says. “All the clients to whom we have introduced the product have been very welcoming and we’re confident that it’s going to be a success in travel retail. One of the key messages that we’ve heard from operators had to do with the high-end side of the business. There is the appetite for high-end whiskies and I think there is an opportunity to sell premium rum in the Americas as well.” Indeed, Brugal has already proven both itself and the popularity of premium rums in general. It is the number one rum in the Caribbean, inarguably a place where consumers certainly know an authentic rum when they see it, and it is the number three rum in the world and growing. “History and tradition are also important with any premium product, and the Brugal family has been produced since 1888,” explains de Almeida. “It is now being produced by the fifth generation of Maestro Roneros, our Master Blenders. Furthermore, it has a distinctive, lighter style with drier woody notes that come through whether drunk neat or mixed. Finally, Brugal is produced under a very tightly controlled distillation process to guarantee a clean spirit with low levels of congeners. All of this combines to make Brugal a very unique proposition in the rum category in travel retail.” 78

RYAN WHITE

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

Appleton Estate’s rum portfolio offers a wide variety for both connoisseurs and those who prefer to mix their rum with cola or juice (Pictured: Appleton Estate 21 Year Old)

cola or juice, or whether that be our growing list of fans who prefer our rare, aged rums served neat, we are equally happy to accommodate everyone.” Brugal has already proven both itself and the popularity of premium rums in general as the number one rum in the Caribbean

Balancing innovation and tradition

ne need only look as far as Bacardi’s rum portfolio to get an idea of the variety that the category as a whole has to offer. From the classic Bacardi Superior and its flavored variations to Bacardi 8, Bacardi Gold and a number of other expressions, the company’s selection of rums is truly beyond compare. “We pride ourselves on the exceptional quality of all our rums, and that applies most of all to Bacardi 8 Year Old Rum, the pinnacle of premium rums,” says Vinay Golikeri, Marketing Director for Bacardi’s Global Travel Retail Division. “The quality of Bacardi 8 says everything about our rum credentials, our rum-making expertise and our rum-making heritage.” Next year Bacardi will be celebrating its 150th anniversary, and Bacardi 8’s roots go all the way back to 1862, when Don Facundo Bacardí Massó created an elegant sipping rum that remained the sole preserve of the Bacardi family until its release in 1998. For those rum lovers that are looking for something

different, Bacardi is releasing Arctic Grape flavored rum. The offering is made from Arctic berries, also known as Lingon berries, which are native to the Arctic Tundra throughout the Northern Hemisphere from Eurasia to North America. For Golikeri and Bacardi, it’s about continuing to stay fresh in the form of new products while at the same time maintaining the tradition that Don Facundo pioneered so many years ago. “We pride ourselves on always innovating,” Golikeri explains. “Another example is the recent, incredible success of the Bacardi Mojito RTS. We’re now following up that success with the launch of two new RTS products, Bacardi Pina Colada and Bacardi Strawberry Daiquiri. Indeed, it is still possible to break new ground in travel retail’s rum category.” Bacardi 8’s roots go all the way back to 1862, when Don Facundo Bacardí Massó created an elegant sipping rum that was the sole preserve of the Bacardi family until its release in 1998

Extending the franchise Keeping it exotic

ernod Ricard’s Malibu Rum is entering the popular full-proof spirit segment with the launch of new Malibu Black, a 70 proof spirit with a hint of Malibu’s signature coconut flavor. The new expression is launching now and gaining distribution nationally. “The combination of the bold Caribbean flavor and the subtle hints of coconut create a smooth and lingering finish that is great served straight up or enjoyed in a refreshing cocktail,” says Pernod Ricard. In taste tests, consumers scored Malibu Black high on taste appeal. Those sampled said they consider the product to have “just right” levels of coconut and find Malibu Black and Cola to be a refreshing beverage option. “Malibu Black extends the Malibu franchise into the full-proof spirit category allowing the brand to reach a new audience in new occasions,” added Pernod Ricard. “Malibu Black is the perfect choice for young men who like to socialize, have fun and frequent a more high-energy style account than the traditional Malibu consumer. Malibu Black is also a great choice for current Malibu drinkers looking for a new higher proof option for those higher energy occasions. “70 proof and higher proof products maintain a commanding share of the total rum category and are driving category performance,” Pernod Ricard explains. “Now is the time to extend the Malibu franchise into this dynamic and growing segment. Our consumers have been asking for a higher proof Malibu and Malibu Black delivers.” Malibu Rum has released Malibu Black, a 70 proof spirit with a hint of Malibu’s signature coconut flavor; the new expression is launching now and gaining distribution throughout the Americas

“M

ount Gay is the rum that invented rum!” says Rémy Cointreau’s Regional Director of Americas Duty Free Francois Van Aal. While quite a bold statement, it happens to be true in Mount Gay’s case. Van Aal notes that Mount Gay is the oldest rum brand in the world, having been established in 1703 in Barbados. It is made from molasses using water that is naturally filtered through the coral limestone of the island. The rum is distilled in pot and column stills and aged in charred Kentucky oak barrels, making Mount Gay a highly awarded and sought after brand. “Rum is often linked to exotic islands and immediately brings to mind the notion of vacations and a relaxed mindset,” says Van Aal. “It’s also smooth and easy to drink neat. Finally, rum is extremely versatile in a cocktail. All of these important traits apply to Mount Gay.” This year Mount Gay will have the support of an investment plan that targets more visibility, tastings and promotions. The brand has long been associated with sailing, and Rémy Cointreau will be giving away nautical bags as GWPs in selected travel retail locations, as well Mount Gay is the oldest as running a special promotion targeted rum brand in the world, having been established in at all sea lovers. 1703 in Barbados “Rum has a very broad target audience thanks to the depth of offerings and prices,” Van Aal says. “Rum is slowly becoming a category for connoisseurs, but it will still take time before the rum category’s core business will come from high-end propositions. Either way, given its tradition, versatility and exoticism, Mount Gay is well positioned to continue c growing in popularity as the rum category evolves.” www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

Company News: Diageo

A year of accomplishments

Diageo celebrates the success of Johnnie Walker Double Black one year after its introduction as a travel retail exclusive BY RYAN WHITE ohnnie Walker Double Black has made a substantial impact on the liquor category in travel retail, reports brandowner Diageo. Generation Research data reveals that, from a standing start, by the final quarter of 2010 (latest available data), Johnnie Walker Double Black had already established itself as the number eight brand by value. In doing so it has already overtaken established names

Jane Ewing, Managing Director at Diageo GTME, says: “We think this has been one of the most extraordinary liquor products launched in travel retail for many years. Its success is built on the fact that each stage of its journey—from consumer insight and product design through to a partnership approach with our retail customers and in-store execution—was addressed meticulously.

“We think this has been one of the most extraordinary liquor products launched in travel retail for many years.” Jane Ewing, Managing Director, Diageo GTME such as Absolut Blue Label, Jack Daniel’s and Famous Grouse. From Diageo’s point of view, while Johnnie Walker Black Label is a massive brand in GTME, Johnnie Walker Double Black has already grown to about one third the size of its 102 year-old cousin without adversely impacting sales. Johnnie Walker Double Black’s achievements highlight the holistic strengths of the product, says Diageo, beginning with its conception through to the liquid and packaging, and finally on to the in-store and on-concourse executions. Steve White, recently appointed Marketing Director for GTME and former Marketing and Innovation Director for Diageo’s Johnnie Walker Global Brand Team, explains: “Johnnie Walker Double Black was, from the outset, an extraordinarily bold innovation, taking as its starting point the ‘crown jewel’ in Diageo’s travel retail portfolio—Johnnie Walker Black Label. “It has been exclusive to the travel retail channel for the last twelve months and though, going forward, we are planning to allow a small number of domestic markets to have the product for limited periods only, travel retail remains the principal channel for Johnnie Walker Double Black,” he adds. 80

“Unprecedented levels of consumer insight identified the needs of the consumer and the opportunity for Johnnie Walker Double Black,” Ewing continues. “With many travelers saying they are convinced that travel retail has nothing new to surprise them, it is only through the development and shared promotion of products of the caliber of Johnnie Walker Double Black that we can persuade them to think differently.” Diageo says it believes that Johnnie Walker Double Black represents the most significant success ever achieved in travel retail through a premium product specifically developed in response to consumer insight. “This success also illustrates the effectiveness of trinitystyle approaches where suppliers, retailers and airports share in the strategy of driving new excitement and engagement in the channel,” the company notes. For Diageo, the strength of Johnnie Walker Black Label offered a powerful opportunity for the development of a major brand extension. However, the company notes that such an opportunity had to be achieved not only through the development of a truly exceptional liquid but also with the character and credibility that demonstrated the house of Walker’s continuing spirit of innovation and progress. As such, it

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

Diageo believes that Double Black represents the most significant success ever achieved in travel retail through a premium product specifically developed in response to consumer insight

was vital to Diageo that the new variant expressed “its own unique personality while echoing the authenticity, quality and brand integrity of its membership of the house of Walker.” Diageo’s extensive insight program played a major role in the success, as Sara Springer, GTME Innovation Director explains: “Johnnie Walker Double Black actually has its origins in the minds of our target consumers. By understanding their deep appreciation of the Johnnie Walker brand, we were able to identify the DNA of a product extension that would further expand on their reverence. The Master Blender used this to guide his creation of the flavors and attributes of the liquid itself, and this commitment to perfection was maintained in the contemporary design of the bottle and the quality of the packaging.” “Johnnie Walker Double Black demonstrates Diageo GTME’s continuing commitment to growing the category through innovation, investment and raising the shopper experience,” Diageo says. “With Johnnie Walker Double Black, the combination of insight, product quality and shared commitment with our partners has given travel retail a significant boost and further demonstrated the channel’s potential to drive a stronger c performance.”

In 2010, Freixenet sold 2 million bottles of sparkling wines, champagnes and still wines in Latin America alone

Liquor News Freixenet continues evolving while remaining true to its origins The only thing that Freixenet cannot promise you in person at this year's ASUTIL trade show and conference is Shakira, the face of Spain's bubbly and the Freixenet brand ambassador. Other than that, expect an elaborate array of Freixenet’s constantly expanding list of sparkling and still wines at South America's largest duty free conference. While the glamorous and gorgeous “loca” singer is important to Freixenet, as witnessed by the sexy Christmas Champagne ad she shot for Freixenet last year, newer markets—especially Latin American duty free—are the company’s new building blocks. "Duty free for us is important," says Gonzalo Lopez de Ceballos, Travel Retail Director for Freixenet. "We are expanding more and more in South America. Brazil is growing quite fast, as is the rest of South America. "The duty free sector in Europe is very experienced, with investments all over Europe and beautiful shops everywhere,” he says. "We don't see the same in the US and North America yet. Of course that will arrive, but it will take a little more time." De Ceballos notes that visitors to this year's ASUTIL event will see the new face of Freixenet. Recently, the company began a complete makeover of its product line, pointing out to the trade media that "great brands never stand still."

"We are changing many things—special bottles, special presentations—the same as our company, which changes constantly,” de Ceballos says. “In 2000, 90% of our product was sparkling wine and 10% still wine. Today 60% is sparkling wine and 40% still wine from seven different countries. In 10 years many things have changed in our company." One can see the truth of this in Freixenet’s sales and revenue. In 2010, Freixenet sold about 200 million bottles of sparkling wines, champagnes and still wines, the latter from 18 wineries in seven countries (Spain, France, United States, Mexico, Argentina, Chile and Australia). Total revenue was about US$500 million. "In Latin America alone we sold two million bottles, which is a very good number," says de Ceballos, pointing out that the company produces 400 different wines, sparkling wines and champagnes. "We continue to be one of the preferred brands." Freixenet remains a private family controlled company, still run by the Ferrer children and grandchildren and still putting down roots in the communities where it does business, whether that’s at home in Spain or overseas. Even the Shakira Christmas commercial was a good case in point: half a million dollars of the US$670,000 paid to the star went towards building a school in Haiti and another one in Colombia.

www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

IndustryNews Liquor & Retailer News

Bottega sparkles in the Americas

Russian Standard Vodka ranked 8th most powerful vodka brand in the world Russian Standard Vodka, the number one premium vodka in Russia, was recently ranked as the 8th most powerful vodka brand in the world, surpassing Ketel One, Wyborowa and Three Olives, according to Intangible Business’s 2011 Power 100 ranking. Amongst the Top 100 spirit brands, Russian Standard Vodka was ranked 44th, a substantial leap from the brand’s 54th place standing last year. In addition, the brand’s significant growth earned a spot amongst only four brands to receive the prestigious Star Performance Award for exceptional performance. This is the second year that the brand has been recognized by the Power 100 ranking, a leading source for industry trends and statistics. Russian Standard Vodka first entered the ranking in 2010 for its tremendous, double digit global sales growth. The brand was also acknowledged in 2010 as a Star Performer and the second highest new entrant for its continued upward trajectory and worldwide success. “We are very proud of the remarkable growth in 2010 and our achievements in 2011,” said Jonathan Stordy, CEO of Russian Standard International. “Our continued climb among the top 100 spirit brands is an important recognition of our success and is reflective upon Russian Standard’s continued commitment to bringing Russia’s number one premium vodka to the world.” Intangible Business, a consultancy that specializes in gauging brand value, researched nearly 10,000 spirit and wine brands across the globe to produce The Power 100. The brands are rated according to their market share, future growth, premium price position, awareness, relevance, heritage and brand perception. Russian Standard Vodka is the global leader in authentic Russian premium vodka. The Russian Standard vodka portfolio dominates the premium segment in Russia with a 50% market share and sales of over 2.5 million cases in 2010 in Russia and more than 75 export markets across Europe, the US and Asia. Roustam Tariko, the founder of Russian Standard, introduced the flagship product in 1998 as the first authentic Russian premium vodka. Russian Standard vodkas are made with only the finest Russian ingredients, conforming to the formula for vodka established in 1894 by famed Russian scientist Dmitri Mendeleev for Russia’s Czars. Two years after launch, sales of Russian Standard surpassed all imported premium vodkas on the Russian market, leading to broad international expansion and the launch of Russian Standard Platinum in 2001, IMPERIA Vodka, the company's luxury brand, in 2004, and Russian Standard Gold in 2008. Russian Standard is made with only the finest Russian ingredients, conforming to the formula established in 1894 by famed Russian scientist Dmitri Mendeleev

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE 2011

it was recently confirmed that Bottega Gold will be re-listed onboard United Airlines starting in October

In a recent conversation with Americas Duty Free, Sandro Bottega, President of Distilleria Bottega, confirmed that Bottega Gold will be re-listed onboard United Airlines from October. Furthermore, Prosecco Bottega DOC is also being served aboard US Airways in envoy class. “We’re seeing our best successes in the Americas coming from inflight sales,” says Bottega. “In fact, our products are sold on most airlines. Also, cruise lines and border shops are very important to our business, and sales in these locations are doing extremely well indeed.” Bottega notes that on the ground, tastings are always the best way of communicating the many virtues of the products. However, as tastings aren’t permitted in every location, Distilleria Bottega is currently considering employing a more avant-garde approach by installing scale replicas of the distillery for display in stores or incorporating a lemon tree in conjunction with a price-off mechanism to promote the company’s Limoncino. “At the moment sales are up 25% over last year in the Americas,” Bottega says. “We’re very happy with our performance in Brazil, Canada, the Caribbean and Argentina specifically. Nonetheless, I feel that creativity in regard to promotional activities is the way forward for us to continue growing sales in the Americas throughout the rest of the year.”

William Grant & Sons continues to sharpen its regional focus in Latin America As a result of William Grant & Sons’ increasing regional focus in travel retail, the company has lately seen some important successes in Latin America and the Caribbean. Americas Duty Free recently spoke to Jose Castellvi, William Grant’s Regional Director for Latin America Travel Retail, the Caribbean and Cruise Lines, about the progress the company has made this year in the region and what traveling consumers can expect to see from the core range—Grant’s, Glenfiddich, The Balvenie and Hendrick’s Gin—in the months to come in travel retail. In terms of sales, Castellvi asserts that the malts, Glenfiddich and The Balvenie, are growing. “Malts are a relatively small percentage of total whiskey sales in Latin America, but by percentage its one of the fastest-growing categories,” he says. “Also growing from a small base after being released in Latam about a year and a half ago is Hendrick’s, which is actually the top-selling super premium gin in the region.” Of course, given strong passenger numbers throughout Latin America, travel retail is the perfect shop window for William Grant & Sons to target not only Latin Americans traveling within the region, but also a large number of international travelers. Castellvi cites Brazil, Argentina, Uruguay and Chile as strong markets for the company, with Central America and the Caribbean also performing well. “In Latin America we’ve seen about a 30% increase in business over last year,” he explains. “Again, this is from a smaller base, but it is very encouraging. It’s also important to point out that William Grant & Sons’ strategy isn’t to pursue volume, but rather to make sure that we are in all the key airport locations in the region. Once there, we target value through GWP promotions as opposed to a lot of discount offers.” Travelers in Latin America can expect the Hendrick’s Tea Time set to make a triumphant return this year after great success last year. Furthermore, trolley bags for Grant’s and GWPs that are “in line with the premium nature of The Balvenie” will also be available in selected airports in the region. “Recognition of our brands in Latam travel retail has increased significantly over the last couple of years,” says Castellvi. “A perfect example of this is the fact that many operators are now listing more premium expressions of Glenfiddich such as 21 and 30 year old after seeing the success of our core Glenfiddich expressions— 12, 15 and 18 year old. With a clearly defined strategy for all of the brands, we’re looking forward to continuing this upward trend in the months and years to come.”

The Hendrick’s Tea Time set will make a triumphant return this year to Latin American travel retail after great success last year

Protégé International prepares to take on Latin America with new premium rum Protégé International has seen great success to date in many regions of the world with The Wild Geese Irish Soldiers and Heroes Irish Whiskey Collection, which recently won Best Irish Whisky at the World of Whisky Awards. Andre Levy, Chairman of Protégé International, tells Americas Duty Free that in addition to the critical acclaim that has been heaped upon the collection since its creation, promotional activity underpinned by tastings has resulted in very encouraging results in store as well. Given the Collection’s success both with critics and consumers, Protégé is now setting its sights on conquering the burgeoning Latin American duty free market, an area of the world that the company previously hadn’t targeted. “It was never about being in as many markets as we could as quickly as we could,” Levy explains. “We wanted to get it right to ensure that the growth was sustainable.”

Protégé is currently developing a line extension that includes a premium rum as well as VSOP and XO cognacs. According to Levy, the three spirits will all fall under the already well established umbrella of The Wild Geese. “The rum is being developed for the Americas specifically, and we expect it to do very well,” explains Levy. “What we’re trying to do is build a platform of premium and super premium products without limiting ourselves to one specific subcategory. People who know The Wild Geese Irish Soldiers and Heroes Irish Whiskey Collection understand that the quality of the liquid is uncompromising, and we see this perception of quality carrying over to the rum and cognac offerings.” Levy will attend this year’s ASUTIL conference to discuss The Wild Geese’s new rum expression, which should be launched in Q3 of this year, as well Protégé International’s entire portfolio of spirit and cigarette brands.

The Wild Geese Irish Soldiers and Heroes Irish Whiskey Collection recently won Best Irish Whisky at the World of Whisky Awards; Protégé International will be releasing a rum expression under The Wild Geese umbrella in Q3

www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

Liquor News

White Gold vodka releases Black Edition

Vincor releases 2007 vintage of Inniskillin Gold Icewine In a recent conversation with Americas Duty Free, Amanda Dolotowicz, Business Development Manager at Vincor Canada, confirmed that the company is set to release a 2007 vintage of its award-winning Inniskillin Gold Icewine in the second half of 2011. The launch will be worldwide, but in addition to Asia, Europe and the Middle East, Vincor has its sights on the strong Latin American market. “We’re very well positioned in Asia and Europe,” says Dolotowicz. “Furthermore, we’re pleased with our presence in the Middle East. We’re ready to set our sights on South America with a specific focus on Brazil.” Although the strength of Brazil’s economy makes it the lynchpin in many suppliers’ strategies in South America, Dolotowicz notes that the resilience of South America in general means that there are infinite possibilities throughout the region. Vincor feels that Inniskillin’s unique positioning within the wine category gives it a distinct advantage over the competition. “Although we’re competing in a wine market, there’s really nothing like Inniskillin,” she says. “We’re confident that our recognition as a producer of a unique premium product like Icewine will make for a lot of opportunities in the region. In addition, we’re expecting the extra buzz created by the launch of the 2007 vintage of Inniskillin Gold Icewine to be the catalyst for The newly increased exposure in the very important South released 2007 vintage of Inniskillin American duty free market.” Gold Icewine

Spurred on by the success of Patrón Reposado, Silver and Añejo (pictured), Patrón’s sales have grown 12% year to date in Latin America

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

White Gold is one of the largest alcoholic beverage companies in Russia, founded in 2002 but with roots in the spirits industry since 1901. The company was named as a tribute to its most popular brand, White Gold vodka, a spirit that is well known in many countries around the world due to its uncompromising quality and strong ties with tradition. In fact, White Gold has won accolades in recent years from a number of esteemed organizations, including the IWSC. Duty free operators have now taken note of the company, and White Gold currently has brands listed with Gebr Heinemann, Dufry and Aer Rianta. Given the popularity of White Gold vodka in both domestic and duty free markets from North and Latin America to Europe and Asia, the company has released a new variant called White Gold Black Edition. The limited edition spirit comes in a sleek black bottle and is triple-filtered in black coal and a silver ion filter for crystal clarity and a pleasant palate. The variant is designed to appeal to trendy clubgoers, with a design that pays tribute to the traditional cues of the original spirit while communicating a sense of modernity and mystery. “This year, White Gold will continue its strategy of expanding the business through organic growth,” said a spokesperson from the company. “Sales have dramatically increased year by year and our continued focus will be on exporting our main brands: White Gold, White Gold Black Edition, Russian Gold and Gzheka.” Given the popularity of White Gold vodka in both domestic and duty free markets, the White Gold company has released a new variant called White Gold Black Edition

Patrón continues to seize opportunities in Latin America Patrón Spirits International has announced that it continues to grow sales in Latin America and across the globe. The company reports that year to date, total business is up 12% in domestic and duty free markets in Latam. The company’s biggest success story in the region this year is Patrón XO Cafe, which is enjoying a year-to-date sales increase of 76%. The brand is a unique ultra-premium coffee liqueur made with Patrón Silver tequila that has been steadily gaining traction over the last year in both local and travel retail markets the world over. In duty free in Latin America specif-

MONARQ thrives in the Americas with numerous new distribution agreements MONARQ continues to take on new clients with the addition of a number of premium brands to its portfolio. In a recent conversation with Robert de Monchy, Managing Director of MONARQ, Americas Duty Free learned that Crystal Head Vodka, the entire CEDC portfolio, which includes Zubrowka Bison Grass Vodka and Green Mark Vodka, and Branca International’s portfolio are the latest additions to the distributor’s brand base. “Crystal Head was one of our star performers during this year’s IAADFS show in Orlando and MONARQ will be distributing the brand in Latin America and the Caribbean in the domestic and duty free markets,” says de Monchy. “It’s a truly unique proposition. The product itself and the striking packaging set the brand apart from the pack. Nearly one million bottles of Crystal Head were sold in 2010 in the US.” Also far from ordinary are Zubrowka, the original bison grass vodka, and Green Mark, Russia’s number one selling vodka. MONARQ will be distributing the brands domestically and in duty free in Latin America and the Caribbean, as well as in US duty free. As mentioned, MONARQ has also secured a deal with Branca International, whose most famous brand is Italian bitter Fernet Branca, for duty free distribution in the Caribbean, Latin America and the US. “In addition to these new partnerships, we continue securing new listings for our existing portfolio,” notes de Monchy. “Cachaca 51 and La Fée absinthe have been listed with Dufry Americas and Molinari Sambuca, the number one sambuca worldwide,

ically, Patrón is continuing to see positive results. For example, across its awardwinning portfolio, Patrón is enjoying a year-to-date increase in sales of 68% at Aldeasa Cancun. “Our brands are fairly well developed in the Caribbean and in Latin American duty free, but we still have considerable growth opportunities in several domestic markets in the region,” says Joe Arellano, Patrón’s Vice President for Latin America and Travel Retail. “The good news is that our success and acceptance in duty free is helping us penetrate into many of those untapped domestic markets. Throughout the region and around the world, we're focused on expanding our portfolio offerings and increasing local partner capabilities with all of our domestic and duty free partners.” Indeed, Patrón is well aware that domes-

is now at London Supply. Also, a number of brands have been listed with Shopping China, such as Heineken, Molinari and La Fée absinthe.” In addition to the Heineken listings, MONARQ has started to distribute Heineken through RTD International’s duty free stores in Central America and Venezuela. Currently customized furniture is being installed in two of the operator’s flagship stores. As if the above developments weren’t enough, MONARQ is also working on a number of new duty free projects along the Uruguay-Brazil border. “Although our portfolio is rounding out nicely, we remain very selective in the brands we take on,” says de Monchy. “We are approached by suppliers on a weekly basis, sometimes even more, but we only work with brands that are leaders in their category or which are truly unique. “At the same time, we’re continuously growing our organization and hiring talented staff, the latest example being a new trade marketer, which is a new position at MONARQ,” de Monchy concludes. “I’m looking forward to some great discussions at this year’s ASUTIL conference and to seeing all our Latin American clients and friends.” CEDC’s Zubrowka Vodka (known in the Americas as ZU) and Crystal Head Vodka are just two of the many new brands that MONARQ is distributing in selected markets

tic and duty free channels reinforce one another. Arellano uses Brazil as an example, noting that Dufry Brasil is well poised for increased sales of Patrón’s spirits once the supplier opens up the Brazilian domestic market. In turn, Patrón’s domestic partners will no doubt benefit by the strong success that Dufry has already achieved in raising awareness and preference for Patrón’s portfolio. “Duty free and domestic markets may operate independently, but the relationship between the two benefits all,” Arellano explains. “Just as our exposure is increasing due to the interplay between markets, our entire portfolio of ultra premium brands, which includes Pyrat Rum and Ultimat Vodka, is getting a lot more attention due to the success of Patrón Silver, Reposado, Añejo and Platinum.” www.dutyfreemagazine.ca THE AMERICAS DUTY FREE & TRAVEL RETAILING

Cigar & Spirits Report

Two of a kind

Americas Duty Free discusses the art of bringing out the best of both worlds when pairing cigars and spirits with three of the industry’s most progressive cigar companies BY RYAN WHITE he pastime of enjoying premium, handcrafted cigars with fine spirits—particularly brown spirits like whisky, cognac, rum and bourbon—goes hand in hand. While enjoying a high-end cigar or spirit on its own is certainly a pleasurable experience, pairing the two together brings out complexities and subtle nuances that can make a relaxing smoking interlude that much more enjoyable. Americas Duty Free recently asked Habanos, General Cigar and Ted’s Cigars their opinions on the best way to make a great experience that much better by combining the best of both worlds.

A world of choice Habanos certainly knows a thing or two about pairing its cigars with fine spirits. From cognac and scotch whisky to tequila and brandy, spirits play a big role in the Habanos Festival every year. Given that there are more than 250 Habanos to choose from, the company even promotes pairings with tea, chocolate and other foods. In fact, the annual Habanosommelier international contest is dedicated to finding the best matches between Habanos cigars and fine products throughout the world. Every year since 2002, Habanos has staged a global contest for Habanosommeliers wherein the winners of countless regional contests all over the world meet in Havana during the Habanos Festival to decide who will be the world champion for the year. Contestants must study the way in which tobacco is grown and how cigars are made in Cuba. They must also be familiar with every size in the leading Habanos brands and be aware of all their different flavors. Each is required to present a personal recommendation for an ideal combination of a particular Habano with a specific drink. The recommendation is then assessed on the preparation and service of both products. “Habanosommeliers are really broadening the horizons of the many ways to enhance the enjoyment of Habanos in conjunction with other products of similar quality, heritage and tradition,” says Gonzalo Fernández de Navarrete, Marketing Deputy Manager at Habanos. “Of course, at times a consumer may prefer to concentrate on the essential flavors and aromas of a Habano alone, but we actively promote matching a cigar’s flavors 86

with spirits like malt whiskies, fine cognacs or vintage ports. One of my favorite pairings is the Cohiba Behike BHK 56 and Havana Club Selección de Maestros.” Indeed, the list of spirits with which Habanos have been associated since 2000 is long. In addition to more traditional pairings, the wine category—including ports, champagnes and Sherries, as well as red and white wines from all over the world—has also become a popular choice among aficionados. Regardless of preference, Fernández de Navarrete suggests searching out the advice of experts like Habanosommeliers while at the same time being adventurous when combining your favorite Habano with a drink. “Perhaps the most traditional approach to selecting a match is to pick examples of products with similar strengths to ensure that in the combination one does not overcome the other,” he explains. “Consequently, it would be appropriate to try one of the full-flavored Habanos brands with a powerful rum aged in oak barrels. However, opposites can attract too, so you should not avoid putting a full-flavored Habano like Cohiba Behike, Partagás, Bolivar or Ramón Allones up against, for example, a lighter tasting Armagnac. “In any case, the object is to find combinations of great products that please your palate,” concludes Fernández de Navarrete. “Take your favorite Habanos, seek the advice of an expert like a Habanosommelier and start to explore!”

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

Among the numerous possible pairings for the over 250 Habanos from which consumers may choose is Behike BHK 56 and Havana Club Selección de Maestros

“The peak of perfection” “In today’s world, cigars and fine spirits have become affordable luxuries, and consumers can readily find the perfect cigar to complement their spirit of choice,” says Cameron Shaw, Director of Sales and Marketing, General Cigar International. “As a general rule of thumb, we like to recommend that when pairing, the best thing to do is to match the body of the cigar to the body of a spirit.” Shaw suggests that mild and medium cigars such as Macanudo, Cohiba, CAO and Excalibur pair best with lightertasting spirits such as blended scotches, Lowland single malts and light rums. Conversely, fullbodied cigars such as Partagas Black Label, Macanudo 1968, and El Rico Habano go best with heavier spirits such as bourbons, dark rums and Highland single malts. While the above are “classic”

pairings, Shaw notes that many consumers are becoming more adventurous with the spirits they choose to enjoy with their cigars: “Consumer palettes are becoming more and more sophisticated,” he explains. “Some aficionados opt to enjoy their cigar with a cognac or calvados.” General Cigar actively promotes pairings as a means of allowing consumers to get the most enjoyment out of their chosen cigar. The company has had success pairing Macanudo with The Glenlivet, and Cigar Master Benji Menendez also suggests pairing the company’s cigars with spirits during presentations. “Both cigars and spirits are made of the finest ingredients by master blenders,” concludes Shaw. “They are meticulously aged until they reach the peak of perfection and they offer a wide spectrum of flavors and strengths when paired together.”

Pairing made easy Ted’s Cigars began making individually packaged Connecticut wrapper cigars in 1995. Owing largely to the subtle, sophisticated blend of premium tobaccos rolled by hand, the cigars quickly earned a reputation for being perfect for the everyday smoking experience and are now available globally. However, Ted’s Cigars is perhaps best known for creating Maker’s Mark Cigars fifteen years ago. Seasoned with the famous bourbon and sealed in airtight glass with Marker’s Mark’s signature red wax, the cigars exploded in popularity and proved to be the catalyst for a number of other creative collaborations with major spirits brands. Thankfully for cigar lovers who don’t feel confident enough in their knowledge of spirits to pair a smoke with an appropriate drink, Ted’s Cigars has done all the legwork. “We spend many hours reviewing the companies and brands that we feel would be appropriate for us to partner with,” says Ted Jackson, President of Ted’s Cigars. “We initially started with Maker’s Mark seasoned cigars and have continued to grow our business with the addition of Dumante Liqueur, Forty Creek Canadian Whiskey, Grand Marnier and now our own

branded HOPZ cigars, seasoned with Centennial hops.” Through the use of Ted’s Cigars’ proprietary seasoning process, the company has subtly imparted the aroma and flavor of Centennial hops into the cigar, creating a unique blend for cigar and beer enthusiasts alike. The HOPZ Cigar is a premium handmade 6 X 50 Toro with a Cameroon Wrapper, US Connecticut binder and Dominican Republic filler. Jackson notes that soon Ted’s Cigars will have a smoking experience for nearly every type of spirit lover. The company’s goal is to add additional seasoned cigars to its portfolio over the next two years. Ted’s is interested in developing rum-, scotch-, cognac- and tequilaflavored cigars among others. “Cigars and premium spirits have always had an association,” says Jackson. “For centuries there has been nothing better than sitting down and enjoying a great cigar with a great spirit to reflect on an important occasion or just to relax. We have taken this occasion to the next level and allowed the consumer to enjoy their favorite spirit with a great handmade cigar whenever or wherever they would like. It’s a natural progression and one that cigar c smokers certainly appreciate.”

General Cigar has had success pairing Macanudo with The Glenlivet and actively promotes matching cigars and spirits at events

Ted’s Cigars’ newest creation is a Centennial hops-flavored cigar called HOPZ

One of Ted’s Cigars’ more recent offerings is seasoned using the high-end spirit Grand Marnier

Company News: British American Tobacco

Tradition meets innovation

BAT continues to reinvent its products in Americas duty free while remaining true to its long tradition of offering consumers quality cigarette brands BY RYAN WHITE

nnovation is key in any market, but its importance increases exponentially in duty free, where travelers expect to be pleasantly surprised with new products and travel retail exclusives at every turn. Although British American Tobacco (BAT) owns some of the world’s most prestigious and critically acclaimed cigarette brands such as Dunhill, Lucky Strike, Kent and Vogue, it has never shied away from thinking outside the box. Indeed, it is likely the unique combination of tradition and innovation inherent in the company’s brands that has kept BAT at the forefront of the ever-evolving duty free tobacco trade over the years. Americas Duty Free recently spoke with Carlos Felipe dos Santos Rocha, BAT’s Global Travel Retail Marketing Manager for the Americas, about the company’s newest products: Dunhill Blends. “The Dunhill Blends platform is one of our most exciting new

developments,” says Rocha. “Americas is the first region in the world where the products are available. With Dunhill Blends, we’re targeting adult consumers who seek a distinctive premium offer composed of the finest tobacco and materials that translate into a truly indulgent and differentiated experience.” The Dunhill Blends platform consists of three new products— Master Blend, Swiss Blend and Blonde Blend—made without any tobacco additives and featuring Reloc technology, which provides consumers with a resealable pack. As Rocha points out, the company has been crafting blends for over 100 years: “That’s why we carefully seal them with Reloc—so they keep fresher for longer and may be enjoyed in the way our masters blenders intended,” he says.

Three distinct experiences Dunhill Master Blend is described as distinctively rich and balanced. Inspired by the Mediterranean landscape, the product contains two kinds of superior Virginia tobaccos combined with Burley and Oriental leaves for a rich smoke. The result is a full bodied smoke with notes of summer hay warmed with nuances of cultured cedar wood. Dunhill Swiss Blend is deep, full bodied and robust. Inspired by a traditional Swiss blend recipe, it includes rare Tibagi and Maryland tobaccos blended with Virginia and Oriental leaves. The result is a round taste; aromatic layers of oak and walnut are combined with Master Blend, Swiss Blend and Blonde Blend are made without any tobacco additives and feature Dunhill’s exclusive Reloc technology balsamic hints for a rich finish. Dunhill Blonde Blend is bright, aromatic and velvety, expertly blended The resulting sensation is an unexpectedly delicate and mellow tasting with burley and oriental leaves and topped with golden Virginia tobaccos. smoke with soft resinous notes and a velvety finish.

Making it happen

Thinking ahead

After securing strategic customers’ full support for the 2011 portfolio, innovations and major initiatives during IAADFS earlier this year, Rocha notes that BAT is ready to bring these exciting initiatives to consumers. “Dunhill Blends are currently being introduced, and in selected duty free stores consumers will be able to experience full brand immersion, guided by our hostesses and sales staff,” he explains. “This will allow travelers to learn more about our brands, experience them and ultimately decide which blend is best suited to their individual tastes. We are confident that this will translate into winning the hearts and minds of our consumers.”

Rocha says that 2011 has been the best year to date for BAT so far. “The channel is experiencing sustainable passenger and value growth, airports and stores are been remodeled and together with our customers we have been able to capture this opportunity.” Despite the numerous current developments at BAT, Rocha tells Americas Duty Free that more innovations are on the way in terms of products, exclusive offers and unique in-store experiences. “Developing a consumerrelevant marketing mix is a critical ongoing process,” he concludes. “Although it’s too early to speak about some of our future initiatives, I can tell you that BAT will remain in line with the forward-thinking nature of the travel retail industry by continuing to bring innovation to its consumers, customers c and the tobacco category.”

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

Company News: JTI

On the up and up JTI sees sales increases in Q1 2011 and continues to invest in travel retail with the addition of new smoking lounges in Europe

apan Tobacco International recently released figures for January-March 2011, noting that core net sales excluding tax increased by 4.4% over the same period in 2010, primarily driven by pricing and volume increases. “At constant rates of exchange, core net sales excluding tax grew by 6.5%,” the company said. “Core net sales excluding tax per thousand cigarettes increased by 6.0% to US$26.70 at constant rates of exchange.” Global flagship brand (GFB) and total shipment volume increased by 2.1% and 0.5% respectively. GFB growth was driven by Russia, Turkey, Taiwan and Korea. Yearon-year market share continued to grow in most key markets including Turkey, Taiwan, Italy, France and Russia. In Southern and Western Europe, total and GFB shipment volume decreased by 9.7% and 9.1% respectively compared to the same period of the prior year. The volume decrease was a result of significant industry contraction in Spain and in Greece, which was slightly offset by a volume increase in Italy. Market share increased in the key markets of Italy and France. In Northern and Central Europe, total shipment volume increased by 1.1%, driven by a volume increase ahead of a tax hike in March in the UK. GFB shipments increased by 4.1%. Market share grew in Sweden and Poland. In the CIS, GFB shipment volume grew by 7.3% and total shipment volume increased by 0.7%. The volume increase was due to solid growth in Russia where GFB shipment volume grew by 9.2% compared to the previous year, strengthening JTI’s leading position. This improved performance was offset by continued industry contraction in Ukraine, resulting from numerous tax hikes. Market share increased in Russia. For the rest of the world, total shipment volume increased by 5.3%, driven by growth in the Middle East, Taiwan, Korea and Turkey. GFB volume increased by 3.9%. Market share increased in Turkey, Taiwan, Korea and Malaysia. Among JTI global flagship brands, Winston shipment volume increased by 3.1%, driven by strong performances in Russia, Turkey and Italy, which compensated for declines in Spain and Ukraine. Camel shipment volume declined by 5.7% due to significant industry contraction in Spain. Mild Seven shipment volume increased 90

by 16.4% with particularly strong growth in Taiwan and Korea. In spite of continued industry contraction in Ukraine, LD shipment volume increased by 5.5% due to growth in Russia.

Investing in the future JTI is known as a leader in airport smoking lounges, having built over 300 of them throughout the world. Americas Duty Free recently spoke with Santiago Llairo, Corporate Affairs and Communications Director for Worldwide Duty Free at JTI, to learn about how the company is continuing to invest in making both traveling smokers and non-

smokers more comfortable in many European airports. JTI recently refurbished six existing smoking lounges in Zurich and built three new ones, making for a total of 25 lounges of varying sizes in Zurich Airport. Always known for leading the pack in terms of creating modern, well ventilated lounges, JTI’s recent renovations were spurred on by advancements related to both the technology and aesthetics of the lounges. “This represents both a complete stylistic change and also includes some new additions in terms of the technology,” says Llairo. “We’ll be continuing to renovate more lounges throughout the year in addition to building new lounges in some very exciting locations.” Of the locations where new smoking lounges are set to be built, Llairo notes that 12 Winston and Sobranie lounges will be built in Russia this year in addition to the three that already exist in the country’s airports. Llairo also notes that plans are in the works for more lounges outside

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

RYAN WHITE

Europe, although details can’t yet be released. “We’re in active talks with Latin American airports to begin building smoking lounges in the region,” Llairo explains. “After having built so many of these high-quality smoking lounges we’re receiving interest from many different places around the world. A lot of airport authorities are starting to realize that smoking lounges provide obvious advantages to both smokers and non-smokers and are therefore becoming more open to the idea. JTI will continue to work with airports to develop innovative solutions that make the airport experience better for all travelers.” c

“JTI will continue to work with airports to develop innovative solutions that make the airport experience better for all travelers.” Santiago Llairo, Corporate Affairs and Communications Director for Worldwide Duty Free, JTI

Tobacco News Publicly traded pioneer leads electronic cigarette industry Since 2008, electronic cigarettes have become increasingly popular as an alternative to smoking traditional tobacco cigarettes given the fact that e-cigarettes can be used virtually anywhere. At the forefront of this burgeoning movement is pioneering e-cigarette company Vapor Corp. [OTCBB: VPCO], which offers a range of e-cigarette brands—from the rechargeable Fifty-One brand to the disposable Krave brand—to satisfy the varied needs of virtually any smoker. “Vapor Corp.’s e-cigarette brands are distinct from many other e-cigarettes available today, both in terms of the quality and the cutting-edge technology employed,” says Adam Frija, Director of Business Development at Vapor Corp. “Our electronic cigarettes do not emit any second-hand smoke. Instead, our products emit an odorless vapor. Our electronic cigarettes look like, taste like and feel like a cigarette, but they aren't cigarettes." The filter of the Fifty-One contains flavoring, nicotine and an atomizer that essentially vaporizes the nicotine. When you inhale, a microcomputer activates the atomizer and the battery (contained in the white part of the e-cigarette). The end of the Fifty-One even glows when you puff it. The Fifty-One starter kit will retail in duty free for about US$100, after which time consumers will only need to buy refill cartridges at a retail cost of just US$3 per cartridge. The Fifty-One’s battery can run all day on a full charge and the starter kit contains a charger that can plug into a wall socket or a USB port. Over the last 3 years, Vapor Corp. has crossed into virtually every distribution channel available in the US, such as convenience stores, tobacco shops and supermarket chains. The company also sells direct-to-consumer on its website and has carved out a very respectable niche selling in mall kiosks throughout the US. The worldwide duty free channel is attractive to a company like Vapor Corp. for two main reasons, says Frija: “First of all, airports are very high-traffic areas for retail, which is what any company looks for. Furthermore, e-cigarettes are a perfect fit for the duty-free customer, for the busy traveler on the go. Vapor Corp. has increased its business exponentially year over year since its inception and I have no doubt that both the traveling public and the duty free industry will see immense value in our brands.” The Fifty-One starter kit will retail in duty free for about US$100; a refill cartridge costs US$3 and each can last as long as two pack of traditional cigarettes

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

The Gauloises Blondes Cube is a special edition that contains 10 packs of 20 cigarettes and is available in blue, red and yellow variations

Imperial Tobacco continues innovating with two travel retail exclusives Imperial Tobacco recently launched two new special editions for its core brands Davidoff and Gauloises for 2011. Exclusive to travel retail, the concepts indicate Imperial Tobacco’s continued commitment to and investment in the sector. They are the Davidoff Cigarettes Book Edition and the Gauloises Cube. The Davidoff Cigarettes Book Edition is presented in a book format to emphasize the brand’s heritage and quality in a contemporary way. It combines the successful story of the pack design re-launch and the heritage of the brand. The book contains 200 Davidoff cigarettes which are available in Classic, Lights, One and Slim variations. In support of the launch, Imperial Tobacco is running an in-store promotion, initially set for the Middle East and key European airports, offering travelers the chance to enter a prize draw for a 10day shopping trip to New York where they will take in a fashion show. Every participant receives a special Davidoff bookmark and is entered into the prize draw. In addition, a free gift is being offered with the purchase of two cartons. Consumers can choose from a Davidoff ballpoint pen or a branded notebook. The Gauloises Blondes Cube is a special edition that hit shelves in May 2011. This unique Cubeshaped sleeve—designed along the lines of a Rubik’s Cube—contains 10 packs of 20 cigarettes and is available in blue, red and yellow variations. In support of the launch, Imperial Tobacco will is running an in-store promotion initially in key European and selected Middle Eastern airports. The promotion will offer travelers the chance to enter a prize draw and receive GWPs. “We are very excited about these special editions for 2011,” says Oliver Schramm, Marketing Manager Duty Free at Imperial Tobacco. “Imperial Tobacco strongly believes in the need for ongoing innovation and new product development for the tobacco category in travel retail. Tobacco remains a key driver for sales within travel retail, but as a supplier you cannot sit still. You must bring freshness to the category, inspire consumers and create theatre and excitement around launches.”

Sweet Life

" % " # $" # #

& ##

Company News: Horizon International Duty Free

VICE Vodka Icewine proved extremely popular at TFWA AP Singapore—especially with in-flight buyers— given the popularity of Icewine with Asian consumers

Kanye West (right) and Quincy Jones (left) receive bottles of U’Luvka Vodka at this year’s Cannes Film Festival

The perfect

combination

Horizon International Duty Free rounds out its portfolio of premium brands and welcomes BY RYAN WHITE two duty free veterans to the team to continue generating buzz in Q2 orizon International Duty Free, which debuted at IAADFS 2011 and recently showcased products from new and existing clients at TFAP 2011 in Singapore, will be attending this year’s ASUTIL conference to continue promoting a host of brands that have already garnered a significant amount of interest in duty free circles. Horizon currently represents U’Luvka Luxury Polish Vodka, VICE Vodka Icewine, Tortuga Rum Cakes, Tequilas de la Doña, VnC Cocktails and Cilea eyelash growth stimulator. To support the brands, Horizon has invested through the creation of a new website (horizoninternationaldf.com) and has also brought two duty free veterans on board to handle new business development with specific category foci.

Building the brands President of Horizon International José Chao tells Americas Duty Free that both the company and its brands have come out of the gate strong since debuting in Orlando: “With VICE Vodka Icewine, we’re building on a strong Orlando show and an especially successful TFWA AP in Singapore,” he says. “Given the fact that Icewine is so popular in Asia, the brand is getting a lot of attention, particularly from in-flight buyers.” With regard to U’Luvka Luxury Polish Vodka, Horizon’s role to date has been to polish the brand’s messaging, put together a solid marketing foundation and iron out holiday gifting offerings. Stock has arrived at the Horizon warehouse and initial customer orders have been shipped, Chao says. Inter94

estingly enough, although U’Luvka is looking forward to showcasing at Cannes, the vodka has already been there and back for the annual film festival where bottles were presented to Kanye West and Quincy Jones. Tequilas de la Doña, one of the newest companies Horizon is working with, offers tequila made from 100% agave. “Horizon is carrying three of the company’s tequilas— super premium El Secreto, premium La Doña and value brand Don Max,” explains Chao. “The company was created in 1997 and we’re very pleased to be working with founder Alberto Becherano.” Cilea eyelash growth stimulator showcased its wares with Horizon for the first time in Singapore this year. The reaction to the product was phenomenal, says Chao, given the fact that Cilea’s laboratory-proven ingredients boost hydration, stimulate hair growth and strengthen lashes. Another new addition to the Horizon portfolio that is creating a lot of buzz is VnC Cocktails. This line of 100% natural pre-mixed cocktails (Pomegranate Cosmo, which contains anti-oxidants; Pacific Breeze with coconut, lime and pineapple; Mojito, with fresh garden mint and West Indies limes; and Margarita, made with blanco tequila) is made in New Zealand and comes in 1L and 200mL sizes. “We’ve worked very hard on building a strong portfolio of amazing brands, and with internationally renowned Tortuga Rum Cakes rounding out the pack, we feel we’re in great shape to continue generating new business going into this year’s ASUTIL conference,” says Chao.

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

The people behind the brands The newest additions to the Horizon team are duty free veterans Doug Andrews and Eduardo Berger. Andrews is a cosmetics, fragrance and accessories executive with over 20 years’ experience in travel retail. Previously Manager of International Operations Western Hemisphere for Giorgio Beverly Hills, Lancaster, Davidoff Cool Water, Dolce & Gabbana, Moschino and Versace, Andrews also served as International Operations Manager for Chase Durer, Fendi and Movado watch groups. Berger is a 14-year player in the tobacco industry, with 6 years as Duty Free Senior Manager for British American Tobacco in Latin America. Berger’s role at Horizon will be to build brands given his solid knowledge in marketing, logistics and commercial applications. With a degree in Foreign Commerce and several languages under his belt, Berger communicates with fluency at any level of management and through various cultures. From his base in Buenos Aires, he will focus on South American duty free and duty paid markets. “We’re very happy to welcome Doug and Eduardo to the team at Horizon International Duty Free,” explains Chao. “With the right brands and the right people on board, we’re looking forward to a successful ASUTIL conference in Cancun and, further on, a productive c TFWA WE exhibition in Cannes.”

For more information, contact Bob Syner of Specialty Brands at 954-722-0222 or info@specialtybrands.net

New & Notable LIQUOR

TRAVEL ACCESSORIES

Prairie Organic / Kosher Vodka

Silk-épil 7 Dual Epilator

Company: Specialty Brands Description: This cornbased vodka is certified organic and kosher. From the corn to the stills to the bottling, Prairie is organic and has reduced the environmental impact of production significantly

Company: Braun GmbH Description: The new Braun Silk-épil7 Dual Epilator is a hair removal device that combines the better of two worlds. Not only does it provide the best of epilation but it also gives great long lasting shaving results with superior smoothness and less pain in just one stroke

Silk-épil Bikini Styler Company: Braun GmbH Description: The Silk-épil Bikini Styler is a hair removal tool that allows precise styling in the bikini area thanks to the slim bikini zone cutting head and high performance 5mm precision cutting head. The product is available in pink or white and comes in airlinefriendly packaging

CONFECTIONERY Gems Milk Chocolate Strawberry Truffles Limited Edition Company: Godiva Chocolatier Description: Milk chocolate truffles filled with a delicious mousse made with real strawberries. A fruity wrapper describes the sweet flavor inside. The limited edition contains 22 truffles

Svedka Vodka Company: Stansfeld Scott Description: Imported from Sweden, Svedka Vodka is distilled five times from Swedish winter wheat and contains all natural flavors. With its clean bottle design and colorful Svedka band, this vodka is a chic addition to any back bar

The Island Trio Company: Hawaiian Host Description: The Island Trio is a 15.3oz clear pack with zipper and tote handle containing 18 two-piece bars; six bars each of MacNut Crunch, Maui Caramacs, and chocolate covered macadamias

EYEWEAR DG 4116 – Lace Collection Company: Luxottica Group Description: Refined, oversized shades made with authentic Dolce&Gabbana lace inserted within the acetate temples and frames. Colors available include black, scarlet, white, and green. This model comes with exclusive lace covered packaging, which features the signature gold and silver-colored Dolce&Gabbana plaque

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

DG 4121– Lace Collection Company: Luxottica Group Description: Alluring 80s shaped model with solid colored acetate rims coupled with an elegant touch of authentic laced temples. The laced temples feature a gold colored metal Dolce&Gabbana logo. Colors available include white, timeless black, an elegant shade of red

Unzip a new skin feeling that lasts, in one stroke. New Silk épil 7 Dual Epilator •

with

Braun GmbH, Dept. IAM-DF, Frankfurter Straße 145, D-61476 Kronberg, Germany, Tel.: +49 6173 30 2221, E-mail: mellin.k@pg.com, www.braun.com/global

Did you know…? Americas Duty Free offers up some interesting facts about Mexico, the host country for this year’s ASUTIL conference 1. Mexico introduced chocolate, corn and vanilla to the world. 2. In 1539, Mexico City was home to North America’s first printing press. 3. The National University of Mexico is the oldest university in North America. 4. Mexico is second only to Brazil in total number of Catholic citizens. 5. There are over 200,000 different species of plants and animals in Mexico.

Francois Van Aal, Regional Director of Americas Duty Free at Rémy Cointreau, with his family in Connecticut

Where the industry is vacationing Mexico is legendary for its amazing vacation spots, but it’s just one of many locations around the globe where tourists flock. Americas Duty Free asked some well known industry figures where they’ve vacationed recently.

6. Mexico receives over 20 million tourists a year.

Marco A. Lares, Duty Free/Travel Retail Sales Manager at Marcolin USA Inc., in Southern Brazil

7. Mexico is the most populated Spanish speaking country in the world. 8. Because Mexico City was built on a lake bed, the metropolis is sinking at a rate of 6 to 8 inches a year as pumps continuously draw water out for the city’s growing population. 9. Aztecs played tlachtli, a ritual ball game in which the losers were often sacrificed to the gods. 10. The first recorded convention of astronomers was held in the Mayan capital of Copán in 700 AD. 11. The “arbol de Tule” in the state of Oaxaca is a tree estimated to be over 2,000 years old and is considered one of the oldest in the world. 12. The Mayans built the pyramid at Chichen Itza, an ancient archaeological site, in such a way that the shadow of a snake appears to crawl up the structure’s side during the two equinoxes. 13. Northern Mexico’s Zone of Silence, located about 400 miles from El Paso, is a wellknown hotspot for UFO activity; watches, compasses and radio equipment often malfunction there.

Essence Corp’s JeanJacques and Patricia Bona trekking in Macchu Picchu, Peru

14. The tomato got its name from the ancient language of the Aztecs. 15. The first version of hot chocolate was actually served cold and included crushed chili peppers as a main ingredient; conquering Spaniards reported that Aztec ruler Moctezuma would sometimes drink up to 50 cups a day! 98

THE AMERICAS DUTY FREE & TRAVEL RETAILING JUNE/JULY 2011

HK Global Duty Free’s Vice President of Merchandising Marco Arilli in South Africa where he dove with Great White sharks

Smoking Kills