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Special Issue TFWA World Exhibition/ FDFA October/November 2016

Hints of recovery in Travel Retail Americas INSIDE INSIDER After nearly two years News North America of daunting challenges in the IAADFS: Changes Ahead Americas travel retail channel, International Shoppes at JFK T8 the industry is seeing hints of HMSHost, AIRMALL, recovery on the horizon. Sea-Tac, more “September is the first month Canada when the business in Brazil is Record Tourism back to growth,” said one major Peace Bridge Duty Free fragrance executive, adding “TRA China accords, has been through a storm in the Toronto, Ottawa, Calgary past few years, but we are seeing Caribbean signs that the storm is over.” Puerto Rico, The slowdown in Brazil Cuba by sea and by air obviously affected the duty free Grenada B2B - Rouge Carib business on its borders, and while it still has a long way to go for full LATAM recovery, “it seems that the decline has bottomed out” one regional spirits distributor tells us. Exchange rate stability is a International Shoppes has opened an expanded, upgraded and redesigned duty big factor in halting the decline. free store at JFK Terminal 8 highlighted by a 15-foot wide LED display at the storefront and a series of high-end beauty boutiques. See story on p. 16 Paraguayan border shop operator Shopping China reports its sales in Asuncion, and Shopping China It has been a conviction in stopped falling in the second has expanded into Ciudad del Este. the duty free industry that times of quarter of this year when the In North America, passenger economic challenge often result in René Riedi - The TMI Interview Brazilian Real stabilized. “We traffic remains at record levels increased grey market or parallel saw better progress in sales in all throughout the U.S. and Canada, sales—especially in the spirits Dufry opens Lima Duty Free Shopping China, Monalisa expand categories,” said company officials. and airport development continues category. TMI is very proud to The political turmoil in South to be strong, as seen with the major present an in-depth examination of Supplier Features America may also be subsiding renovation and expansion made the actual prevalence—and impact Estee Lauder BCA 2016 now that the more conservative, by International Shoppes at New -- of grey market distribution in Giorgio Armani TRA pro-business Michel Temer is York’s JF Kennedy International the industry. We sincerely thank L’Oréal’s digital transformation officially president of Brazil, Airport. In this issue of Travel all the many suppliers, distributors which also helps normalize Markets Insider, we cover all of and agents throughout the world economic conditions. And while these developments. who participated in this ground- Argentina is still struggling, its TMI also takes a close look breaking report. fiscal policies are expected to at the industry in Canada, which is Even as the industry worries stimulate a recovery for next year. celebrating unprecedented tourism that internet sales are eroding Travel retail operators have growth and a nice rebound in duty duty free sales, some companies continued to invest in the market. free sales. are investing serious time and In Latin America, Dufry’s new Cuba continues to open more effort studying how technology Lima Duty Free store, which opportunities to Americans, even can work for them. L’Oréal, for follows on the heels of the Dufry as the U.S. embargo remains in one, is focusing on digital tools showcase stores in Rio de Janeiro place. TMI reports on the back to transform itself into a more Special Spirits Report- and Sao Paulo, is a paean to good story behind Carnival Corp.’s efficient, effective and relevant Going Grey: the Impact of design, efficiency and retail- 20-years of preparation for sailing company. paralleling spirits in duty free tainment. DFA has spread its to Havana, and also takes our We live in interesting times. operations into 18 retail venues readers along on one of the first Plus Products-People-Places in Brazil, Monalisa has opened a commercial flights from the U.S. to Lois Pasternak, The Insider View stunning luxury department store Cuba in 54 years. Editor/Publisher THE PERFECT TEQUILA, NOW IN A BIGGER BOTTLE.

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armanibeauty.com 3 October/November 2016 TFWA/FDFA Issue TFWA/FDFA Issue October/November 2016 4

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TABLE OF CONTENTS Retail and News Features

COVER COMMENTARY Monalisa opens in Asuncion Page 58 Hints of recovery in Travel Retail Americas Shopping China expands to new borders Page 60 News shorts from around the region Page 63 BY THE NUMBERS ACI 2015 World Traffic Report Page 10 ON THE SUPPLY SIDE Fragrance & Accessories Associations Estée Lauder’s 2016 BCA campaign: IAADFS prepares for change Page 12 Working together for a cure Page 66 TFWA 2016 Page 14 Giorgio Armani Cosmetics launches in America’s finest airport stores Page 68 North America - U.S. L’Oréal TRAM embarks on a International Shoppes enhances digital transformation Page 70 luxury offer at JFK T8 Page 16 Essence Corp. brings excitement at POS Page 72 HMSHost, AIRMALL Page 24 Sekonda becomes TR powerhouse Page 78 Sea-Tac’s NorthSTAR modernization Page 26 U.S. airports set traffic records Page 28 TMI Special Report Going Grey: The impact of the parallel North America – Canada market in the duty free spirits channel Page 80 Canada’s tourism celebrates records Page 30 Operator Focus: Peace Bridge DF Spirits to renovate after winning RFP Page 32 IWSR looks at gin in GTR Page 84 Canada-China sign accords Page 34 Brown-Forman GTR celebrates Toronto Pearson, DFASS at YOW Page 35 20th anniversary Page 86 Canada airport news & numbers Page 36 Bruichladdich relishes non-conformity Page 88 Remy to bring back VSOP, XO in GTR Page 91 Caribbean EWTRA adds Sazerac Page 91 Tourists ignore Puerto Rico’s fiscal crisis Page 38 Tito’s expands to the world Page 96 Cuba: Carnival’s 20-year saga to sail DANZKA launches THE SPIRIT Page 98 to Havana Page 44 Diageo: Celebrity Cruises bartender wins TMI flies to Cuba with JetBlue Page 45 World Class bartender title Page 104 Grenada to set up B2B Free Zone Page 46 Loch Lomond Group launches Rouge Carib expands in Grenada Page 48 GTR exclusive collection Page 106

Latin America Confectionery Page 108 LATAM economic report Page 50 DFA expands in Brazil Page 51 Advertising Index Page 112 Dufry welcomes world class shopping at Lima Duty Free Page 52 People News Page 113

The TMI Interview: Dufry’s René Riedi & Cyrille Beauviche Page 56

TFWA/FDFA Issue October/November 2016 8 COGNAC FINE CHAMPAGNE ART DE VIVRE EXCELLENCE

9 October/November 2016 TFWA/FDFA Issue INSIDER

BY THE NUMBERS ACI 2015 World Traffic Report: International tourism “irrepressible” despite global challenges

Global air passenger traffic rose Middle East illustrates that air transport’s economies (5.2%) in 2015, with emerging by 6.4% to almost 7.2 billion last year, nucleus continues to move eastward. markets reaching a 44% share of global according to the 2015 ACI World Airport Despite the slowdown of economic passenger traffic. Traffic Report released in September. growth in China, ACI says that its move to This is the strongest growth rate since a consumption driven economy will further During 2015, the highest number of 2010 (6.6%), and approached the pre- stimulate air transport demand over the passengers went through airports in the recessionary growth levels that were seen long run. Asia-Pacific region: in 2004 to 2007. India is also poised to be one of the · Asia-Pacific (2.46 billion, up 8.6% over Commenting on the results, Airports largest aviation markets in the world. Brazil 2014) Council International described 2015 air and Russia, on the other hand, are suffering · Europe (1.93 billion, up 5.2% over 2014) transport demand as having “persistence from adverse macroeconomic conditions · North America (1.72 billion, up 5.3% and resilience,” despite global challenges. and a weakening of commodities, and are over 2014) International tourism in particular both in a recession. · Latin America-Caribbean (571 million, up was “irrepressible” in 2015, despite the 5.3% over 2014) “geopolitical risks” that persisted in such Key statistics: · Middle East (334 million, up 9.6% over markets as Eastern Europe and the Middle Passenger traffic 2014) East, said the ACI statement. Atlanta-Hartsfield-Jackson (ATL) · Africa (180 million, up 0.6% over 2014) Air cargo markets were weaker is again the busiest airport in the world, compared with passenger markets, growing 5.5% year-over-year in passenger With over 1.5 billion passengers, achieving a modest 2.6% growth in total traffic to the record-breaking total of over BRICS countries (Brazil, Russia, India, volumes for 2015. 100 million passengers in 2015. China and South Africa), which represent ATL was also the busiest domestic 21.4% of global passenger traffic, achieved Global analysis airport, recording 90.3 million passengers, strong growth of 8.2% in passenger traffic. The number of airports with more than up 5.7% over 2014. MINT countries (Mexico, Indonesia, 40 million passengers more than doubled Beijing, China (People’s Republic Nigeria and Turkey) achieved a 5.5% over the past ten years, from 16 airports in of China) – PEK came in at number 2 increase for passenger traffic in 2015. 2005, to 37 by 2015. The major airports with 71.3 million domestic passengers, up grew 6% year-over-year in passenger traffic 3.0% over 2014; Chicago O’Hare ORD The world’s top 30 airport cities for 2015. was number 3 with 65.9 million domestic handled almost one-third of global “This level of growth is passengers, up 11.2% over 2014. passenger traffic. London remained the unprecedented, particularly since a majority world’s largest airport system with over of the airports in this category are from the The world’s busiest international 155 million passengers handled at six typical mature markets of North America airports (measured by international airports. New York maintained the second and Europe,” noted ACI. passenger traffic): position with 123 million passengers at North America, following years of · Dubai, United Arab Emirates – DXB three airports. Tokyo was the third city consolidation and capacity discipline (77.5 million, up 10.7% over 2014) market with 113 million passengers. among US-based airlines, experienced · London, an important resurgence in air transport United Kingdom demand, particularly at many of its large – LHR (69.8 Editor/Publisher: Lois R. Pasternak hubs. million, up 2.5% In Memoriam: Paul A. Pasternak The growth of traffic in these mature over 2014) Executive Editor: Michael Pasternak markets shows that where airports have · Hong Kong, Deputy Editor: Lara P. Robicheaux physical capacity and infrastructure, they China – HKG Editorial Contributors: Larry Luxner, John Gallagher can still grow above historical levels, says (68.1 million, up Production Coordinator & Designer: Chris Hetzer Design and Production: It’s About Time, Inc. ACI. Both airlines and airport operators 8.2% over 2014) Webmaster: Michael Pasternak expanded capacity to accommodate the Airport Printing by The Printer’s Printer. Ft. Lauderdale, Florida increased demand, and the widespread traffic in This publication is a special supplement of Travel Markets Insider, published entry of low-cost carriers further stimulated emerging by Pasternak Communications, Inc., 255 NE 3rd Ave No. 312, Delray Beach, FL. 33444 USA. www.travelmarketsinsider.net competition. markets and E-mail: [email protected], [email protected] developing Tel (561) 908-2119 Fax (561) 908-2257 Travel Markets Insider is a weekly newsletter distributed 50 times a year Emerging markets economies grew via e-mail, on a subscription basis only. The significant growth of faster (8.1%) The annual subscription is US$200. Printed in the USA. All rights reserved. intercontinental hubs in Asia-Pacific and the than in advanced © 2016 by Pasternak Communications, Inc.

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Michael Payne: Changes ahead for IAADFS as Association adapts to evolving industry

The IAADFS has been focusing complete ACE by this December, so I think its efforts on a variety of items this year we are coming out of this.” but two major issues are at the forefront Payne says that the Duty Free Show currently: the new U.S. Customs automated of the Americas is clearly another focus, reporting system and strengthening its especially in light of the continuing flagship Duty Free Show of the Americas. economic struggle in parts of the Americas. On the regulatory front, IAADFS “There has been a big push to work has been heavily involved in the together with some sister organizations implementation of the new automated to coordinate more of our efforts and system to facilitate processing paperwork events and examine what synergies exist for the electronic importing and among us. Discussions are underway about exporting of goods. Called the Automated holding some joint sessions with ASUTIL Commercial Environment (ACE), it is and Frontier at the show in March. These a U.S. Customs and Border Protection joint efforts can begin to some extent in (CBP) system designed to facilitate trade 2017 but I see more happening in 2018. We Michael Payne while enhancing border security. Once have nothing official at this time, but these completed, it should improve collection, are under discussion. trying to address. If you don’t have the sharing, and processing of information but “We are definitely going to change right suppliers, you are not going to get the it got off to a very rough start when it was the format of the show, upgrading the buyers, and if you don’t have the buyers, implemented in July. educational sessions and rescheduling the suppliers aren’t going to come. You can “The ACE was supposed to make them so more people can attend. We are debate it either way.” it easier to report data. It is basically a also contacting companies that have not Payne does not deny that last year’s transition from a paper system to a pure attended the exhibition for a while and show was challenging, but says that the electronic system. We have been working have expressed interest but aren’t sure; or surveys filled out by attendees after the on this with CBP for a long time and it is are questioning the value of the event. The show indicate that most suppliers are supposed to simplify all the paper work, Board totally understands that this is an supportive and willing to help make the both for concessionaires and suppliers,” issue, and is being very engaged and pro- show work better. explained IAADFS President & CEO active, talking to companies to see how we “We are trying to refocus the business Michael Payne. can meet their needs.” for the Americas. It’s a process and is going “The IAADFS even conducted a Payne says that IAADFS may modify to take time but there is definitely interest Webinar with representatives from Customs its eligibility policies to allow more travel in doing it. But we recognize that the show explaining ACE to our members - we had retail companies to attend, rather than needs to change to reflect industry changes. 40-50 people call in. But when it kicked restricting entry to “pure airport duty free”. We recognize that it may be time to look at off there were technical glitches, and The Association is also changing some of other locations and we recognize that we training issues in certain ports, and a lack its by-laws on governance. need to be responsive to how the industry is of clear communication in other places. “A decrease in buyers due to changing, and still keep the high quality we This resulted in delays in clearing goods, consolidation is another real issue we are are known for.” particularly in Class 9 bonded warehouses, In conclusion, Payne reminds us that which is what we are. It has been a the Association is much more than a trade complicated implementation period.” show. IAADFS continues to work with “IAADFS is involved in a lot of Custom’s officials and keeps members activities that are not as visible as the apprised of issues and developments during show, but have literally saved companies the transition, sending out information to hundreds of millions of dollars. Our work assist companies facing problems. deals with the industry’s ability to sell “The snags were felt across the product that they wouldn’t be able to sell board by all industries that rely on otherwise, such as liquids and gels, and imports. I think that the new software increasing basic duty free allowances. wasn’t quite ready. And our people felt We spent easily $2 million dealing with the impact. I have no explicit data but we the proposed ban on the sale of duty free know some deliveries were delayed and tobacco. And the list goes on. When you goods didn’t get to the stores on time. add all that together, suppliers have hugely Delayed shipments incur extra costs for benefited, but they don’t connect that dot the shipper and the transporter. So there often and it is our responsibility to do a were challenges. But CBP is working to better job explaining that connection.”

TFWA/FDFA Issue October/November 2016 12 BUILD AND STRENGTHEN YOUR BUSINESS CONNECTIONS AND DISCOVER THE BEST OF THE AMERICAS!

SHOW OF THEAMERICAS March 26–29, 2017 | Orlando World Center Marriott | Orlando, Florida, USA

Learn more and register at www.iaadfs.org/DutyFreeShow 13 October/November 2016 TFWA/FDFA Issue INSIDER

TFWA creates world class venue for Travel Retail’s premier exhibition

Tax Free World Association is online service allows exhibitors to a Research Workshop detailing the latest expecting a record number of exhibitors profile and promote their products, and TFWA data on the traveling consumer. for this year’s TFWA World Exhibition & has become a well-established essential New this year, TFWA is launching Conference, taking place at a new date, resource for journalists as well as visitors a ONE2ONE meeting session, which Oct. 2-7, 2016. to the exhibition looking for the latest has proved so successful in Singapore As of press time, 473 exhibitors, information. at the TFWA Asia Pacific Exhibition & representing some of the world’s most Starting off the work week, Dufry Conference. prestigious established brands as well CEO Julián Díaz González, former UK “There is considerable opportunity as exciting new and on-trend brands, foreign secretary David Miliband and for growth in our industry, but we also had registered. This includes 58 new or social media pioneer Randi Zuckerberg face challenges from a diverse range returning companies. will headline the opening Conference on of quarters,” says TFWA president Ten of the elegant yachts moored in Monday morning. They will join TFWA Erik Juul-Mortensen. “The TFWA the Cannes marina of the Harbour Village President Erik Juul-Mortensen, who will World Exhibition & Conference will have also been chartered for the event. outline the challenges and the opportunities provide attendees with useful and Sisley, Beam Suntory, Benefit, Elizabeth facing duty free and travel retail at a time up-to-date information that will help Arden, Heineken and Moroccanoil will of considerable political and economic them to overcome these challenges. all be offering harbour-side hospitality to change and a slowing of growth of global Sharing debate on the latest thinking in visitors. sales. our business will enable us to lay the Helping exhibitors maximize their TFWA is also presenting several foundations for a successful future in the impact at the exhibition, the TFWA “debate-fueled” workshops during the duty free and travel retail industry across Product Showcase was opened at www. week, one on the inflight sales channel, the world.” tfwaproductshowcase.com. This free one a Market Watch on Russia, and one

(L to R) Former UK foreign secretary David Milibrand, social media pioneer Randi Zuckerberg, and Dufry CEO Julian Diaz Gonzalez.

NEADFA takes place in November Looking ahead, TFWA has announced will be joined by senior representatives “This has been, and continues to be, the speakers for the 2016 MEADFA from leading regional retailers, including a challenging period for many companies Conference that will take place on Tourvest Duty Free, Hamila Duty Free, in the Middle East and Africa regions, November 28-29 in Dubai. Flemingo International, IDFTA and IDFS and that makes it all the more vital for Among the business leaders sharing Morocco. the stakeholders in our industry to come their insights are MEADFA president Sean UN World Tourism Organization together to discuss ways to drive the Staunton, Dubai Duty Free executive vice director for the Middle East Amr business forward,” notes Juul-Mortensen. chairman and CEO Colm McLoughlin, Abdel Ghaffar, experienced business The MEADFA Conference is attended Lagardère Travel Retail chairman and CEO commentator Richard Dean and by all the region’s major retailers, brands Dag Rasmussen, and Jack MacGowan, entrepreneur Suzie Wokabi will also be and landlords, as the region is such a key CEO of Aer Rianta International. They making presentations. travel retail market.

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International Shoppes enhances luxury with renovated JFK T8 stores

New York-based duty free retailer Clinique, Jo Malone and La Mer -- allow “We tried to design something that International Shoppes has opened an passengers to walk through into the duty would give everybody a comfort zone, not expanded, upgraded and redesigned free space (except for MAC). just the select few traveling internationally. duty free store at JFK American Airlines Independent and family-owned, IS From the first week of sales it has been a Terminal 8. The location is highlighted by a has almost doubled its footprint in the nice success so far.” 15-foot wide LED display at the storefront American Airlines terminal, with the 5,800 The duty free store increased and a series of high-end beauty boutiques. sqf duty free store and 4,500 sqf spread personalization for many spirits and The new boutiques -- including across five specialty retail stores. Stand- fragrance brands, taking IS’ previous store Kiehl’s with Lancôme, Dior, Chanel, MAC, alone boutiques for Bulgari and Ferragamo, redesigns to the next level. and Estée Lauder, which features its brands located across from the duty free store, “Everything is new. It is all LED opened earlier this year, and Tag Heuer/ lighting, and massive personalization. Mont Blanc, Michael Kors, and Hugo Boss This store continues the redevelopment will open by the end of 2016. we started in Boston, then applied in “We have redeveloped the whole Philadelphia and JFK Terminal 5. It keeps retail landscape in the terminal. We wanted evolving. This is the latest version. The to feature high-end, recognizable brands storefront is totally new, especially with the that would not only draw international 15 foot wide, 8 foot tall digital display at passengers into the store, but also domestic the front,” says Greenbaum. passengers,” IS Vice President Matt For a local feel, IS features small Greenbaum told TMI. “We have found batch and craft brands in the store, as well that sometimes the words duty free put as spirits from the New York area. American travelers off. So we introduced “We have a lot of key global brands these unmistakable world-class brands to and players - the Jack Daniel’s, the Johnnie bring in all passengers.” Walkers, the Glenfiddichs – these brands “I think not having the word duty free are available across the board and they do there also takes down some of the borders. great. We also have the consumer who is In the US there are so many millions of looking for something a little different. people traveling – the American Airlines We’ve been playing around in the small terminal has almost 5 million passengers - craft category for a while across all but half of them are domestic and head for categories: gin, vodka, bourbon. We’ve Chanel boutique in JFK Terminal 8 the hills when they see the word duty free,” gotten to the point that we have so many says IS Vice President Scott Halpern. that we decided to give them their own

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CMJ

17 October/November 2016 TFWA/FDFA Issue INSIDER

The Estee Lauder boutique features brands Clinique, La Mer, and Joe Malone. (Top right) A sign advertises to passengers they are more than welcome to shop in the International Shoppes stores at Terminal 8. Passengers can pass through the boutiques into the main store.

home. And many of them fetch quite a nice tobacco customers will generally buy other Pacific. price,” says Halpern. things in addition to tobacco.” Cathay Pacific, which currently flies IS has also created tasting bars in all IS is also devoting more space to the four flights a day from Hong Kong to of its stores where the customer can try confectionery category than ever before. JFK T7, will begin flying to Terminal 8 in what is promoted that month. “I think confection was undersized January, and will expand to five flights a “We have a great sales force who and not very well placed in the last version day next spring. tries to upgrade that consumer and convert of this store. We have seen an explosion “It is perfect timing to have an airline them from a browser to a shopper,” says in confection sales companywide over move in that changes the profile of the Halpern. the past few years, so we are emphasizing store and have the store all ready for IS partnered with JTI to develop the confection in a way that we hadn’t that airline. International Shoppes feels tobacco section in T8. previously,” says Greenbaum. very grateful for American Airlines, for “JTI has done a really good job The area around the cash wrap is all Westfield, and for Cathay Pacific who making the tobacco section look more confectionery, with a large New York- made this a reality,” says Michael Halpern, elegant, while also complying with the themed visual display behind the registers International Shoppes President. “We non-self service regulations. They work supplied by the Otis McAllister Group changed the building before the passenger with us to make sure that all the brands we featuring all of its confectionery brands. mix warranted such stores and now we are want to feature, not just their brands, have “This has created tremendous impulse going to benefit.” the right exposure. It has been a successful buys throughout the checkout process,” “We’ve designed this store specifically partnership,” says Greenbaum, who adds says Halpern. targeting those airlines we knew Westfield that tobacco still plays a very important and American Airlines were talking with. role in the IS stores. Cathay Pacific They did a wonderful job of bringing us “Tobacco is in the center of the store, The new IS Terminal 8 duty free one of the best airlines at Kennedy Airport you can see it from everywhere. We still stores are opening just a few short months in Cathay Pacific,” says Scott Halpern. believe the tobacco category drives a lot of before the terminal welcomes a new airline “Four flights a day to Hong Kong the traffic into the store and we know that with an important passenger base: Cathay is a tremendous route. And we have Joe

TFWA/FDFA Issue October/November 2016 18 INSIDER

After entering through the Kiehl’s boutique shoppers move through the Lancome area into the main duty free store.

“Boston has been a great story for us. They’ve added some major airlines since we’ve moved in: Cathay Pacific, Hainan, Turkish, Japan.” “The city is growing tremendously and has brought in a number of world class airlines that has mirrored that growth. GE moving to Boston is a huge win for the city,” says Scott Halpern. “We have been working very closely with Massport, Airmall, and Westfield to reconfigure the brands that we have to meet the needs of the consumer base. We are in the process of bringing in La Mer and MAC. We are bringing in Chanel and Dior. We are doing a lot to maximize the revenues for the consumer base that is coming through Boston.” IS is currently building a new store for the C-E Connector, which connects JetBlue’s Terminal to the International Terminal. “The connector will allow JetBlue’s passengers to connect to all the international flights and vice versa. It opens up a big market for JetBlue with the passengers never exiting the security checkpoint,” says Greenbaum. “Later in September we are opening up a duty free store of around 1,000 sqf in that new part of Terminal E.” IS has also added a brand new airport to its northeast portfolio, and starting in the end of September, IS is expanding Malone, La Mer and other high-end luxury can stay in the building and go to the entire into Hartford, Connecticut at Bradley brands like Ferragamo and Bulgari. We are country. It is a brilliant marketing plan International Airport. Aer Lingus will begin really targeting that consumer base. from both Cathay Pacific and American service with four flights a week from the “We have a great new partner Airlines’ point of view,” says Michael airport before going to daily flights in the moving into the terminal. Cathay is new Halpern. spring. business that is not only going to benefit “Bradley International Airport also us, American Airlines, and Westfield, but Boston has, depending on the time of the year, is going to benefit Cathay Pacific because The opening of the new stores in 7-8 flights a day between Toronto and their passenger is getting a complete luxury Terminal 8 is just one of a number of Montreal. There is also a Saturday flight to experience. The consumer is used to seeing exciting projects IS is working on in the Cancun,” says Scott Halpern. certain worldwide brands and we are able northeast. “We are quite excited about Hartford. to offer them from all categories.” IS began operating in Boston in 2012 It is not the size of a Boston or a JFK, “It is perfect timing,” says in Terminals E and B working with AirMall but the airport really wants to expand its Greenbaum. “All the boutiques and stores and has since expanded into Terminal C international footprint. They have watched will be open for the first Cathay Pacific and, most recently, into Terminal A. Today JFK have explosive growth over the last flights in January.” the company is the exclusive duty free few decades and Boston over the last few “When you had Cathay Pacific in the operator at Logan International Airport. years. We trust that they can hopefully British Airlines terminal the passengers had “We increased business the first bring in more international carriers and to transfer to go to other cities. Now they two years about 50%,” says Greenbaum. we can develop that business more as they

19 October/November 2016 TFWA/FDFA Issue INSIDER

International Shoppes features personalized space for many of its spirits brands, and has devoted space for smaller, craft, and New York-based brands.

rotunda from its current duty free store. very interested in JFK Terminal 7, which is Greenbaum calls the new area 7,700 out to bid now.” sqf of “prime retail space.” “We are removing the beauty category New offices, expanded warehouse from the duty free store and creating a IS moved into new office space in series of personalized shop-in-shop style Valley Stream, New York at the end of grow.” boutiques featuring 21 full-line luxury May, allowing the company to expand its IS has also grown its business in beauty brands,” he says. “We’ll start warehouse footprint, and set itself up for Providence, Rhode Island since opening construction in October and we look future growth. there a year and a half ago. to open in the first quarter of next year. “This is really a first class office Airlines in Providence fly to Cape Once that is complete we are doing a gut facility that brings us into the 21st century. Verde, the Azores, as well as to Germany. renovation of the existing duty free store. We picked up about 11,000 sqf of usable The airport is undergoing a runway And since beauty will be removed we space in the warehouse. There was 25,000 expansion which will allow the city to will have room to expand the remaining sqf of space before,” says Scott Halpern. accommodate more flights in the future. categories: fashion, luxury, confection, “The office space is 22,000 sqf – 11,000 liquor, tobacco.” per floor. We doubled the size of our JFK Terminal 5 The beauty boutiques will run in size offices, giving us the ability to grow over IS is opening a new space in JFK’s from 115 sqf to 425 sqf, while the duty free the next decade. We have a next phase for JetBlue Terminal 5 in October, turning a store is 6,000 sqf. the warehouse to raise the roof and pick up sunglasses and watches kiosk into a more “We will have an enormous footprint more cubic space.” permanent space. in Terminal 1, which is all international and “We’ve digested a lot of growth “The new sunglasses and watches features Japan Airlines, Korean Air, Air over the last 10-15 years. Now, especially store is in a great part of the terminal that France, Luftansa, Alitalia,” says Greenbaum. with this new office facility and expanded goes into their new T5I concourse. JetBlue warehouse, we are set up to continue that has expanded its facility to accommodate Philadelphia trend. I think we are in as good of a place a customs hall and more flights,” says The announcement in August that as can be,” says Greenbaum. Greenbaum. DFASS had been awarded the duty free and “We put ourselves in the position to “We’ve noticed a tremendous increase specialty retail concession at Philadelphia fully capitalize on the opportunities that in the volume of passengers going down International Airport ended more than a lie ahead. We set ourselves up with an that way over the last year since JetBlue decade during which IS held the concession infrastructure that can support any growth opened. Our revenues have climbed quite a at the airport. that we choose,” says Michael Halpern. bit, and now with a finished looking store, “We’ve been in Philadelphia for 13 “Logistically Valley Stream is a great place we are confident that they will keep going years and we saw a lot of growth. The for us. Logistics is just as important as up.” last few years had negative growth. We’re being able to operate a retail store. This investing a lot in our other operations that facility takes us to the next level. We attract JFK Terminal 1 are generating increasing revenues. It is people from New York City. You take IS’ other big project at JFK is the unfortunate that we are not there, but you the Long Island Railroad and you are 31 expansion of its space in Terminal 1, which can’t invest everywhere,” says Greenbaum. minutes from Manhattan. We attract good will double the retailer’s footprint in the “We are pretty choosy about where talented people on Long Island.” terminal. we go. We get calls from other airports The new offices are next to IS’ old IS is redeveloping the former Japan to come take a look, but unless we can offices, allowing the company to stay close to Airlines lounge, located immediately post operate it as well as our existing operations, its “backyard.” They are a 10 minute drive to security on the opposite side of the central we won’t seriously consider them. We are JFK. IS intends to bring vendors back to the

TFWA/FDFA Issue October/November 2016 20 21 October/November 2016 TFWA/FDFA Issue INSIDER

International Shoppes devoted more space than ever before to confectionery in the new JFK Terminal 8 duty free store. (Top left) The Otis McAllister Group supplied the New York-themed visual behind the cash registers, featuring its confectionery brands. IS partnered with JTI to develop the tobacco section in its store, making sure that all brands are featured with the right exposure.

to be going in a lot of areas outside the northeast, but certainly as a northeast powerhouse we feel comfortable and there is plenty of business here.” “Over the last two years and going forward over the next twelve months, we’ve office and conduct trainings there. tobacco on the internet. We have to latch onto touched just about every location to have “It is also convenient to get down to those products that are being helpful to us. more or less complete renovations. We’re Washington, to Boston. It is a nice central “We always believed that it was a poised to grow over the next few years,” says location. For us, it was important to stay partnership between our vendors and Scott Halpern. “I think we build exceptional close to the airport and grow here,” says ourselves. Without them we have nothing stores. We play close attention to the smallest Scott Halpern. to sell. We are grateful as a company to things. Those are the little details that separate JFK is indeed IS’ backyard. The have such great vendor partners. The us from the cookie cutters. We are constantly retailer has been at the airport since 1960, companies want to grow with us because evolving what we do as a company and when it was still known as Idlewild Airport. they see what we are doing. They see the making sure we are putting a better product “We’ve seen it all. We’ve adapted. We results in Boston, saw the results when we for the customer and the airlines.” were the first ones to have beauty products. were doing our programs at JetBlue. We “We have a lot of ‘what’s nexts.’ We were pioneers. In the old days we did brought our vendor partners along with us. We’ve done a lot these past couple of years, not have liquor, tobacco, and confectionery They are willing to go with us and take a but we still have a lot more to come,” says items. Our roots are really in luxury shot with International Shoppes because Greenbaum. goods,” says Michael Halpern. they know that we understand New York, “We want tour customers to feel better “We are always looking for products understand Boston, understand where we when they walk out of the store than when that are creating that next level, creating are growing and the passengers that are they walked in,” says Michael Halpern. retail excitement. It is very hard to compete coming through our terminals. “And with a little less cash in their pocket.” with the internet, but you can’t buy liquor or “I don’t think the company is going MP

TFWA/FDFA Issue October/November 2016 22 23 October/November 2016 TFWA/FDFA Issue INSIDER

HMSHost returns to airport retailing by acquiring Stellar Partners HMSHost is re-entering the airport Johnson. “The expertise Susan and Ramon opportunities for our 250 associates and retail business with an agreement to bring will help us to develop our airport our talented management team. We look purchase the shares of U.S. travel venue retail business, as well as enhance our forward to advancing this exciting new retailer Stellar Partners, Inc. existing retail stores in our motorway alliance to our airport partners and gaining Stellar, which was founded nearly 30 channel. I have known Susan and Ramon their consent.” years ago by Susan Stackhouse at Tampa for many years, and very much look Stellar, as a subsidiary of HMSHost, International Airport, currently operates forward to working with them to grow will continue to operate its 38 locations 38 convenience and specialty retail stores Stellar in North American airports and in such airports as Tampa International in ten airports in the U.S. and has annual position HMSHost to re-enter this $1.5 Airport, Orlando International Airport, revenues of $38 million. billion market.” Philadelphia International Airport, Stellar will become an independent “We at Stellar are delighted to be Miami International Airport, San Diego subsidiary of HMSHost, which is part joining the HMSHost family, a world International Airport, and Washington of Autogrill Group. Stellar will remain leader in our industry,” said Stackhouse. Dulles International Airport. Stellar headquartered in Tampa, FL, with Stellar “I am personally honored that Host has currently operates exclusive brands Stellar President and CEO Susan Stackhouse and recognized our value, is willing to invest News and Stellar Books, as well as other Senior Vice President and COO Ramon in our future, and will allow the legacy of popular brands. Bosquez continuing to lead the business. the Stellar brand to continue. Steve and I Susan Stackhouse and Stellar Partners “We are thrilled to be re-entering the have known each other for many years and have been recognized in the industry with airport retail business by bringing Stellar, it is our mutual respect that has brought numerous awards, most recently as 2016 considered the best small operator in our companies together. Host’s resources Best Overall Retailer and Best News & the industry, into the HMSHost family,” and decades of experience will help Stellar Gift Operator by Airport Revenue News. said HMSHost President and CEO Steve grow and compete, while providing new

AIRMALL selected to manage concessions at JFK T5 JetBlue Airline has selected effort between JetBlue and AIRMALL that considered a number of factors. AIRMALL as the concessions developer with JetBlue continuing to retain control Overall, AIRMALL’s proposal was the at Terminal 5, its state-of-the-art home of which concessions are selected for T5. best and most innovative, and while we terminal at New York’s John F. Kennedy JetBlue intends to continue to elevate don’t expect any immediate changes at T5, International Airport. unique and local New York-inspired we have great ideas for the future,” said AIRMALL, a Fraport company, offerings as part of the T5 experience. Jamie Perry, JetBlue’s vice president of reports that it plans to invest tens of “The selection of AIRMALL to marketing. millions of dollars to further enhance provide management and operations of T5 International Shoppes continues to the terminal and help attract and manage concessions was a decision that was made be the duty free concessionaire at JFK concessions tenants that align with through a rigorous and competitive process Terminal 5. JetBlue’s vision for T5. AIRMALL will also lease space to T5’s concessions tenants and manage a range of day-to-day operations. “Since we began operating in North America nearly 25 years ago, AIRMALL has set the standard for airport concessions by putting the customer first. We’re excited to be working together with JetBlue and the Port Authority of New York and New Jersey, which operates JFK. We look forward to a partnership that will benefit customers, JetBlue crewmembers, T5 concessionaires and their employees, the airport and its employees alike,” said Jay Kruisselbrink, chief operating officer of AIRMALL. Decisions about the range and mix of concessions will be a collaborative

25 October/November 2016 TFWA/FDFA Issue INSIDER

Port of Seattle to double dining and retail space with Sea-Tac’s NorthSTAR modernization project

most of the year.” NorthSTAR is an unprecedented working arrangement between the Port and Alaska Airlines, Sea-Tac’s largest airline and the sole tenant of the North Satellite. Alaska is working with the Port with the goal of improving the flying experience from airport drop-off to departure. Related projects in the construction include main terminal improvements, refurbished satellite baggage systems, and already completed exterior walkways on Concourse C. The design for NorthSTAR takes references from the existing airport’s architectural vocabulary of materials, colors and articulated roof forms and creates a strong new addition to the overall airport. Inspired by Washington’s natural The Port of Seattle has unveiled plans rooftop Alaska Airlines lounge with views environment of native rivers and water, the to more than double the space devoted to of the Olympic Mountains. articulated roof form becomes the signature dining and retail of its North Satellite at “This project - which will include visual element while functionally bringing Seattle-Tacoma International Airport. new gates, increased dining and retail daylight to the central circulation spine Dubbed NorthSTAR (North Sea- options, and more robust Wi-Fi and within. The interior will feature wide, day Tac Airport Renovation), the 40-year-old connectivity – is critical for meeting the lit concourses constructed of materials, facility is being modernized to better serve region’s needs at Sea-Tac Airport for colors and finishes inspired by the Pacific passengers and respond to the continuing the next 25 years,” said Port of Seattle North West environment. The project is growth at Sea-Tac. Groundbreaking of the Commission President John Creighton. seeking LEED (Leadership in Energy & project is scheduled for the first quarter “Renovations will open up the building Environmental Design) certification. of 2017 with phase one to be complete in with natural light, bring the feeling of Operations at the North Satellite 2019. The full facility upgrade will open movement and travel inside and express will continue throughout the construction in 2021. the culture of the Pacific Northwest with process. The first phase will build out The $636 million project will include cost efficient, environmentally friendly the extension to the west of the current adding eight new gates with a 240-foot functions and materials including a living building. Once that is complete in 2019, the extension of the building to the west, add wall and collecting rainwater to supply second phase will renovate and upgrade the an upper level mezzanine, and introduce a flushing water to the restrooms throughout eastern portion of the building.

Sea-Tac Passenger Growth For the past two years, Sea-Tac is the fastest growing large hub airport in the U.S. and is the 13th largest domestic airport based on total passengers. Through July of 2016, traffic is up nearly 10%, after increases of nearly 13% in 2015 and 7.7% in 2014. July 2016 was Sea-Tac’s busiest July ever – almost 4.7 million passengers – nearly 300,000 more than 2015 (6.5% increase) July domestic passenger traffic was up 6% vs. 2015 – international traffic was up 12%. Sea-Tac has set annual passenger records for the past five years, totaling 42.3 million in 2015, a 12.9% increase from 2014 which was 7% higher than 2013.

TFWA/FDFA Issue October/November 2016 26 DAV_Anz_TMI-Cannes_TheSpirit_216x279,4_(411)_RZZW.pdf 1 19.09.16 11:10

27 October/November 2016 TFWA/FDFA Issue INSIDER

New York New Jersey Port Authority sets air travel records for the first half of 2016 Passenger traffic at the nation’s busiest passenger records in the first half of 2016. billion to design, build, finance, operate airport system grew 6.3% over the first six Passenger traffic at JFK reached 28 million and maintain a new Terminal B. months of 2016, with a record-setting 62.4 passengers, Newark served 19.3 million Recently, Delta Air Lines, Inc. million travelers using Port Authority’s passengers and LaGuardia had 14.3 million partnered with the Port Authority to airports during that period. passengers during that period. Passenger replace Terminals C and D at LaGuardia Domestic passenger traffic grew 6.7% traffic at Atlantic City International Airport Airport, marking the second phase of the and international travelers increased by grew 1.6%. airport’s redevelopment and modernization 5.5% versus the same six-month period in The Port Authority airports have program. This project, with an estimated 2015. been the focus of a multi-billion-dollar cost of $4 billion overall, will be financed Port Authority officials credit the capital investment and redevelopment primarily by Delta, which will perform record to lower ticket prices -- nearly 6% program that includes $2.3 billion for the construction and be responsible for below the same period last year and lower Newark Airport’s Terminal A, and the any cost overruns. The Port Authority’s jet fuel costs. new LaGuardia Airport Redevelopment investment in construction, supporting John F. Kennedy International, Program, which includes a public-private infrastructure and related costs is capped Newark Liberty International and partnership with LaGuardia Gateway at $600 million, with the agency not LaGuardia airports each set individual Partners for a total fixed cost of $4.015 responsible for any cost overruns.

MIA continues growth; serves the most airlines in the country Total passenger traffic at Miami passenger and cargo carriers – the most Amsterdam in October, and Italian airline International Airport grew 3% through the of any U.S. airport. Before the year is Meridiana will launch into the Miami first six months of 2016 to 22.6 million done, KLM Royal Dutch Airlines will market with two weekly flights to Milan in travelers, despite a struggling economy return to MIA with three weekly flights to December. in Brazil, which is the airport’s busiest international market. Domestic traffic at MIA increased 5% to 12.1 million passengers; international Mid-year traffic up DEN sees record travelers rose 1% to 10.5 million passengers. In total, MIA served nearly 10% at Orlando passenger traffic 700,000 more passengers in the first half of 2016 than in the same time period last year. International Airport through June “To grow by 3% overall despite a major decrease in travel from our top Through the first half of 2016, The first half of 2016 was the busiest international market is significant,” said Orlando International Airport (MCO) six months in the history of Denver Miami-Dade Aviation Director Emilio T. has seen an overall increase of 10% in International Airport (DEN), tallying more González. “In fact, air travel throughout passenger traffic. than 27.5 million passengers through the Latin America and the Caribbean was up The 10% increase pushes overall end of June. only 1.7% through May. traffic volume on a rolling 12-month basis Year-to-date passenger traffic at DEN “Higher gains in domestic travel and up to 40,774,565, a new record. was 6.8% higher than during the same time other regions show that MIA is evolving “We have been fortunate to experience in 2015, with 27,536,633 passengers. from a regional hub to a truly global double-digit growth through the ups and “June marks the tenth consecutive gateway. After a record year of 8% growth downs of 2016, which says a lot about the record-setting month for passenger traffic in 2015, and with a busy third and fourth resiliency of this market and what it has to at Denver International Airport and the quarter ahead, we expect a strong finish at offer global business and leisure travelers,” busiest month in the history of this airport, the end of the year,” said González. says Frank Kruppenbacher, Chairman of driven by increases in airline capacity,” In addition to peak winter season the Greater Orlando Aviation Authority. airport CEO Kim Day said. “We have also traffic on existing airlines, MIA added Ιnternational traffic climbed nearly celebrated the addition of two new carriers five new airlines in September. Eurowings 15% during the first half with 2,755,837 and nine new nonstop destinations in just launched flights to Cologne, Germany; total travelers. Domestic passenger traffic the first half of this year, and continue to Silver Airways to Bimini, Bahamas; was up 9.4% to 18,708,237. Combined seek out even more options to connect our Scandinavian Airlines to Copenhagen, traffic was up 10.08% with 21,464,074 passengers with the rest of the world.” Denmark and Oslo, Norway; and passengers at Orlando International Airport June was the first full month of Dominican Wings to Punta Cana and Santo through the first six months of 2016. Lufthansa’s new service from Denver to Domingo, Dominican Republic. Increased seat capacity by a number of Munich, and Air Canada began nonstop The four new airlines in September airlines serving MCO is one of the driving service to Montreal. will add to MIA’s current total of 103 factors for the growth so far this year.

TFWA/FDFA Issue October/November 2016 28 THE PREMIER TRAVEL RETAILER IN THE AMERICAS

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www.dutyfreeamericas.com 29 October/Novemberwww.dutyfreeexpress.com 2016 TFWA/FDFA Issue INSIDER

Canada celebrates record six months of tourism arrivals

Canada welcomed close to 18 US visitors to Canada are taking million overnight visitors in 2015, up a larger share of US-Canada air- up 7.5% from the prior year, and capacity. notably above the global growth Canada’s year-to-date arrivals rate of 4.4%, according to the 2015 in all Destination Canada markets Annual Report of Destination have grown through the first six Canada, Canada’s national tourism months, with Asia-Pacific (+14.6%) marketing organization. and Latin America (+14.1%) A weakened Canadian dollar, leading the way, followed by the US air capacity increases, international (+10.0%) and Europe (+6.5%). marketing and the implementation Since the start of the year, of the CAN+ Visa program have about 70% of arrivals from created the conditions to boost Destination Canada markets in Canada’s share of world arrivals. Europe were direct air arrivals from Destination Canada promotes overseas. Air arrivals via the US Canadian tourism in 11 countries accounted for about 27% of total around the world: Australia, Brazil, arrivals from France, 18% from China, France, Germany, India, Germany and 16% from the UK. Japan, Mexico, South Korea, the UK, and the US. By land and by air Not surprisingly, 89% of Canada’s integrated three-year national marketing Land arrivals made up about 6% of visitors last year came from Destination program launched in 2016 aimed at raising French arrivals, 10% of German arrivals Canada’s markets. America’s awareness of Canada as a travel and 7% of UK arrivals. Impacting the Over three million visitors -- destination. border business, all three markets saw representing nearly $6 billion in revenue a decline in the number of land arrivals --arrived from the 10 leisure markets where Six month results compared to 2015. Destination Canada invested in 2015. This Halfway through this year, total Notable year-on-year variations for the was up 6.4% over 2014. Five of these arrivals to Canada from all international first half of 2016 include a 19% increase in markets – Australia, Brazil, China, France markets reached a record high of 7.89 arrivals from France at YVR airport, strong and India – arrived in record numbers. million. Total US visitation to Canada in increases in the number of German arrivals Arrivals from the US, Canada’s main the first half of the year rose 10.0% to 5.52 at Toronto-Pearson (+21%) and Montreal- inbound market, surpassed 12 million amid million overnight visits, the highest level Trudeau (+19%), and strong growth of UK the economic recovery south of the border reached since 2004. Arrivals by auto and arrivals at Toronto (+12%) and Montreal and the stronger purchasing power of the by air – the two primary modes of arrivals (+11%) airports. US dollar. – registered strong increases of 8.0% and Asia-Pacific was DC’s best performing 16.1%, respectively. region halfway through the year. Over the Canadian tourism from the US A strengthened US dollar (up 4.4% first half of 2016, direct air arrivals from With US passport ownership doubling over June 2015) and growth in air capacity overseas represented 72% of arrivals from since 2002, Canada renewed its focus on (up 4.9% over June 2015) are contributing China, 66% from Japan, 63% from India, the US leisure market in 2015. to continued US arrival growth. Since 50% from South Korea, and 33% from DC partnered with the Government fewer Canadians are traveling to the US Australia. of Canada, which invested $30 million, (outbound traffic was down 7.4% year- Air arrivals via the US accounted for to develop Connecting America, an over-year in June and 12% year-to-date), 42% of total arrivals from Australia, 23%

TFWA/FDFA Issue October/November 2016 30 INSIDER from Japan, 16% from South Korea, 17% Quebec) registered strong gains in US recorded a significant decrease in year-to- from China and 15% from India. arrivals by auto and non-auto modes as well date US auto arrivals of -16.8%. Arrivals from China to YUL increased as from overseas since the start of 2016. During the first half of 2016, total 669% thanks to the new Air China flight Five provinces and territories Canadian outbound travel fell 5.9% to 15.6 from Beijing. YVR and YYZ continue to see recorded double-digit growth in arrivals million trips. Largely as a result of the significant year-on-year increases in arrivals by automobile from the US, with Yukon depreciation of the loonie relative to the US from China, India, and South Korea. leading the way (+17.2%), followed dollar, Canadians have reduced their travel More than half of all arrivals through by Alberta (+12.6%), BC (+10.6%), to the US by 12.0%, substituting overseas the first half of the year from Mexico (56%) Saskatchewan (+10.3%), and Quebec destinations (+4.1%) for their international and Brazil (52%) were direct air arrivals. (+10.0%). On the other hand, Manitoba travels. Another 43% of Brazilian arrivals travel by air via the US; whereas 19% of arrivals from Mexico are via the US by air. As of June, Vancouver International Airport (YVR) has seen the largest percentage increases in arrivals from both Mexico (+96%) and Brazil (+85%) though 94% of arrivals from Brazil are direct through Toronto. Year-to-date, the provinces recording the largest increases in total international arrivals were Ontario (+335,000, +10.1%), British Columbia (+255,000, +12.4%), and Quebec (+89,500, +12.8%). All three provinces (Ontario, BC and

Canada July duty free sales up

Canada’s duty free sales were up at with more than 37% of sales, rose 23.54% (almost 19% of sales) fell 7.32%. Perfume, both airport and land border stores in July in July. Alcohol sales (20.58%) increased Cosmetics, Skincare (14.79%) increased 2016, according to the latest numbers from 21.83%. Tobacco sales were up 12.75% in 4.74%. the Canadian Border Services Agency July. Ontario, the largest land border region (CBSA). Land border sales were $20 million with $11 million July sales, rose 12% Airport sales were $39 million for in July 2016, up 7.63%. Through July land versus July 2015. Atlantic/Quebec sales the month, rising 19% versus July 2015. border sales are $83 million, an increase of were $4.9 million, a slight increase of Through the first seven months, airport around 7%. 1.46%. Pacific sales were $3 million (up sales are $220 million, an increase of Alcohol, Canada’s land border’s 6.59%), while Prairie region sales were 6.9%. Perfume, Cosmetics, Skincare, the number one category with 43.36% of $992,000, down around 4%. number one category in Canada’s airports sales, was up 14.91% in July. Tobacco

31 October/November 2016 TFWA/FDFA Issue INSIDER

Peace Bridge Duty Free to renovate store after winning first ever RFP

After winning a 20-year lease extension for its border store located at the Niagara River Crossing between Buffalo, New York and Fort Erie, Ontario, Peace Bridge Duty Free has extensive plans to renovate and expand next year, says Jim Pearce, Peace Bridge Duty Free General Manager. “With the current store starting to show its age of 18 years, we will be embarking on major renovations. We will be investing in a new retail floor layout with a focus on enhancing growth in certain commodities and lines as well as expanding the retail footprint,” Pearce tells TMI. “In addition, the latest in digital signage technology and IT systems will be implemented which will dramatically improve efficiencies. We are also currently reviewing changes to the traffic flow in and out of our site to easier encourage travelers into the store.” Peace Bridge Duty Free successfully upheld its duty free concession and signed a 20-year lease extension (15 years with a five year renewal option) with the Buffalo and Fort Erie Public Bridge Authority in now we’ve been through a RFP process, and Canadian dollars has been a boost August. who knows what the future will hold.” for tourism, which is a huge benefit for In March the Bridge Authority issued Pearce says Peace Bridge DF will land border duty free stores on both sides a request for proposals (RFP) to operate the use the latest technologies to attract new of the border. Our company strategy Canadian duty free store at Peace Bridge customers to the renovated duty free store. of having substantial investments in Duty Free. “We truly believe if we are relevant marketing continues as we remain, by far, This was the first ever tender for the to our customers we will thrive. And as we the marketing leader on the Canadian/US Peace Bridge, which opened the duty free cater to all ages, our product offerings must border,” he says. “Alcohol (Liquor, Beer & shop in 1986, and is the second busiest satisfy all of our customers. PBDF is all Wine) is the largest category and we remain border crossing between Canada and the about brands and we will be leveraging our as possibly the largest seller of Crown US with approximately 5.5 million vehicles current brand partners as well as bringing Royal in the world. Tobacco followed by crossing annually. in new brands that certain demographics Perfume & Cosmetics and Luxury lines are As one of six parties that submitted are seeking,” says Pearce. “Our new also substantial in our store.” proposals to operate the store, Peace Bridge website will feature state of the art While Peace Bridge is attracting more DF learned a lot about the RFP process, technologies and full pre-order capabilities American customers, Pearce says people says Pearce. which will be a powerful asset in helping from all walks of life visit the store. “It was a very interesting experience capture customers from both Canada and “We have the full complement of and we can’t wait until the movie comes the US traveling through the Niagara customers - various ages and nationalities, out. There was a lot of action and noise region.” all with various reasons for travel - sports behind the scenes before and after the RFP The RFP win comes in the middle of a fans, motorcoach tours, tourists, day- was released and we are very proud we positive year for Peace Bridge, with more trippers, commercial drivers, Canadian were the chosen applicant to manage one Americans crossing the northern border, snowbirds, vacation travelers, etc. of the largest land border retail operations. says Pearce. And each is unique in their needs and We also acquired much respect for those “2016 is turning into a very successful expectations. Our staff at Peace Bridge duty free companies who live in that RFP year for Peace Bridge Duty Free. The Duty Free are amazing at enhancing each bidding world. We’re retailers at heart but exchange rate difference between the US customer’s experience.”

TFWA/FDFA Issue October/November 2016 32 By targeting the second stage of luxury an incremental • $40 M • can be achieved in Scotch Whisky

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33 October/November 2016 TFWA/FDFA Issue INSIDER

Canadian tourism big winner in new Canada-China trade relationship

Canadian Prime Minister Justin Trudeau meeting with Chinese officials in Bejing Sept. 1, 2016.

The Government of Canada and establishment of diplomatic ties between areas of China will make it easier for the People’s Republic of China have Canada and China in 1970, reaffirmed potential Chinese travelers to make Canada announced new efforts to increase tourism their commitment to develop a robust their destination of choice. between the two countries, including and comprehensive strategic relationship “China is a very important market naming 2018 as the Canada-China Year of between the two countries. because they tend to spend more and Tourism and agreeing to open seven new The two tourism-related stay longer in Canada than almost any visa application centers (VACs) in China. announcements were among 17 new other international traveler,” Bell added. Up until now, VACs were limited agreements announced on Sept. 1. “According to our most recent report with to major Chinese cities making it more Visa Canada, Chinese travelers spent $372 difficult for potential travelers in other According to the Tourism Industry million dollars on travel in the summer of cities to apply for visas. Association of Canada (TIAC), Chinese 2015 - 10.4% of overall inbound volume.” At the invitation of Li Keqiang, visitation to Canada is up 23% in the first In 2010, Canada was granted Premier of the State Council of the 6 months of this year, and an “astounding” Approved Destination Status (ADS) by the People’s Republic of China, Canadian 45% jump in June numbers over 2015. Chinese government, with TIAC serving Prime Minister Justin Trudeau made TIAC – which has been a strong as administrator of the ADS program. This his first official visit to China, taking voice advocating for Canada to increase year, TIAC revamped this program to not place from August 30 to September 6, the number of VACs in the lucrative only monitor designated tour operators, 2016. Over the course of the visit, Prime Chinese market --strongly applauded the but to also help the tourism industry Minister Trudeau took the opportunity to announcements. become “China ready” to meet the unique visit Beijing, Shanghai, Hangzhou and “We have seen sustained growth out needs and desires of Chinese travelers. Hong Kong, while also attending the G20 of China since 2010, and the country is As a part of this agenda, TIAC will lead Leaders’ Summit. set to become our 2nd greatest source of a trade mission to China this fall with 12 During Prime Minister Trudeau’s visit international visitors to Canada,” states Canadian tourism businesses with a goal to to Beijing he met with President Xi Jinping TIAC President and CEO Charlotte Bell, better understand the Chinese market and of China, and Chairman Zhang Dejiang of “Today’s announcement to increase VACs, seek opportunities to showcase Canada’s the Standing Committee of the National and the designation of 2018 as the year of tourism product in these new markets. People’s Congress, respectively, while also Canada-China Tourism, will see this trend Canada’s tourism industry is a holding talks with Premier Li Keqiang. continue.” $90-billion-dollar sector, with 1.6 million The leaders, reflecting on the remarkable With a rapidly growing middle class Canadian jobs dependent on economic progress that has been made since the and a hunger for travel, VACs in more activity generated by travel and tourism.

TFWA/FDFA Issue October/November 2016 34 INSIDER

Toronto Pearson airport opens new Terminal 3 retail space

aimed at helping ease the stress of travel. The design language incorporated throughout this new section improves way-finding by creating intuitive flows for the passenger. Updated amenities improve accessibility and passenger comfort, and the digitally enhanced network of larger- than-life Samsung screens and back-end Cisco technology provide passengers with important flight information at key decision areas. The Terminal 3 Enhancement Project, expected to be completed in 2017, will improve passenger flow, introduce new and refreshed facilities and retail offerings, and better meet the needs of airport users today and in the future. Toronto Pearson is Canada’s largest On Thursday, July 21, 2016, Toronto dining locations and gifts with purchase at airport and handled 41 million passengers Pearson International Airport officially retail stores. in 2015. opened a 50,000 square foot space in The new area is located just past “The newly redesigned space in Terminal 3 for passengers to “eat, shop, security screening, and includes Dufry Terminal 3 marks another major milestone relax and recharge.” Duty Free (formerly Nuance), Discover in our work to ensure every element of The new revitalized space marks the Canada, iStore, Canadian clothing brand the airport becomes one that enhances the next step in the evolution of Terminal 3, Lolë, and Relay books and news-stands. passenger experience,” said Scott Collier, and features shops and restaurants from Several new restaurants were also Vice President, Customer and Terminal HMSHost, OTG, Dufry Duty Free and introduced. Toronto Pearson officials say Services, Greater Toronto Airports Paradies Lagardère Travel Retail, said the they are dedicated to making all aspects Authority, which operates the airport. airport officials. of new spaces passenger-centric. The “Passengers want a relaxing space to To celebrate the opening, passengers heart of this new space incorporates a unwind before a trip, they want to charge were treated to multicultural dance large skylight bringing natural light into their devices, and a variety of places to performances representing several an area filled with comfortable seating, eat and shop. This new entry to the gates international destinations serviced in charging stations integrated into tables, delivers on that in a big way.” Terminal 3 along with free sampling at LED trees, and other whimsical elements DFASS takes over YOW duty free concession Miami-based DFASS became The Authority’s CEO and President, International Airport. Our global duty free the exclusive operator of the duty free Mark Laroche, noted that the winning experience, and our familiarity with the concession at Ottawa International Airport company was selected in no small part due Canadian duty free environment by way of on September 1 after winning the airport’s to the boldness of its store designs. our program with Air Canada, will allow us RFP earlier in the year. “We’ve seen the passion and creativity to create a unique retail program. The store DFASS assumed responsibility of that DFASS has brought to the table with designs reflect the ideas and concepts we the airport’s two existing duty free shop their recent project in Terminal D at Dallas- have developed with our creative design locations, one of which serves international Fort Worth, and the fact that the same partners for Dallas and other international passengers and the other, transborder design team was engaged to work on this airports. Our retail strategy is focused on passengers. project here in Ottawa shows the priority expanding our footprint in North American The Ottawa International Airport that DFASS has given this opportunity and airports and Ottawa represents a key pillar Authority (OIAA) established several the enthusiasm with which they approach in our targeted Canadian expansion.” priorities for its new duty free concession, new markets. We’re confident that they will Implementation of the new store concepts including: unique and welcoming store offer the best of Ottawa to our international began in September 2016, with renovations designs; a “Sense of Place” (reflecting the travelers.” scheduled to be completed in early 2017. city of Ottawa in its own right and as the DFASS President of Ground Stores More than 4.6 million passengers capital of Canada); a commitment to service Jonathan Potash added: “We are very traveled through YOW in 2015 including excellence; and product offerings that are excited about the opportunity to develop 431,000 international passengers and high quality, sourced locally, and engaging. the new duty free stores at the Ottawa 735,000 transborder passengers.

35 October/November 2016 TFWA/FDFA Issue INSIDER

Canada’s big 3 airports report booming traffic

GTAA’s traffic up halfway through 2016 Pearson is the fourth largest U.S. CBP port YVR’s traffic to Latin America has The Greater Toronto Airports of entry by air to the United States. increased 20% year-over-year, driven by Authority (GTAA) reports that both The Terminal 3 area known as Air Canada’s service to Mexico City, as domestic and international traffic is up for Node C officially opened on June 28, well as Aeromexico’s new non-stop service the first half of 2016. 2016 with 50,398 square feet of building to Mexico City, which started in December Passenger volumes grew by 5.9% enhancements and retail improvements, 2015. during the first half of 2016 compared to including new post-security space for duty YVR’s European business is up last year. Toronto Pearson International free shopping, food and beverage, specialty 12.9% and its Asia Pacific traffic was also Airport is Canada’s largest airport and retail, and newsstands. up 12.9%, with new services including North America’s second busiest airport in For the six-month period ended June Air Canada Rouge non-stop to Osaka and terms of international passengers. 30, total revenues were up 7% to $618.2 China Eastern direct to Kunming helping A total of 20.8 million passengers million and non-aeronautical revenues drive the growth. traveled through Toronto Pearson increased 6.2% compared to the same International Airport in the first six months period last year. Terminal 3 opened 25 Montréal–Trudeau sets passenger record of 2016. International traffic increased by new retail stores, restaurant, and beverage for first half 2016 739,000 passengers reflecting 6% growth establishments in the last 12 months. Montréal–Trudeau International and the domestic sector increased by Airport set a new passenger record for 423,000 passengers reflecting 5.8% growth YVR on pace for a record 2016 the first half of 2016 with 7.9 million over the same period in 2015. Vancouver International Airport’s passengers, up 4.9% over the same period The two-year collaborative Security (YVR) passenger traffic is up in all sectors of 2015. All three sectors – domestic, in Advance project that provides security for the first half of 2016, when YVR transborder (U.S.) and international – clearance prior to reaching U.S. Customs welcomed 10.5 million passengers, up contributed to this sustained growth. and Border Protection, opened for 8.1% versus the same period in 2015. YVR International traffic for the first six operations in the first quarter of 2016 in is on track to break another passenger months of 2016 was up 3.5%, to 3 million Terminal 3 and the second quarter of 2016 record by the end of the year. passengers. Transborder traffic to the U.S. in Terminal 1. This project meets new U.S. International traffic (excluding the reached 1.9 million passengers, up 4.3%. CBP regulatory requirements and improves U.S.) is up 13.7%, while Transborder traffic Domestic traffic was up 6.9% to 2.96 passenger flow for U.S.-bound passengers to the U.S. has risen 2.8%. Domestic traffic million passengers. using the pre-clearance process. Toronto is up 7.6% for the first six months of 2016.

Calgary’s new international terminal to open in October

Calgary International Airport’s (YYC) traveling to the U.S. and other international plazas with new services and passenger new International Terminal will open destinations and will feature streamlined amenities. on October 31. The terminal will add 24 passenger check-in and connection The complex will more than double new gates to accommodate passengers facilities, in addition to two large retail the size of the existing terminal building, and includes new Canada and U.S. customs facilities and a 300-room hotel. There will be new ways to connect passengers through YYC including a Connections Corridor and the YYC LINK passenger shuttle, a compact transit system. The terminal’s highly sustainable design will reduce energy consumption and CO2 emissions making it one of the world’s most environmentally friendly terminals. Features include geothermal heating via in-floor radiant heat tubing, rainwater collection for use within the terminal and high-efficiency building envelope. The facility will also include a sophisticated energy-efficient baggage handling system for both inbound and outbound flights.

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Tourists ignore Puerto Rico’s economic woes and flock to the island Story and photos by Larry Luxner

Some 1.7 million cruise passengers flocked to San Juan, Puerto Rico in 2015, and arrivals are expected to grow another 2% this year, despite the island’s fiscal crisis and Zika fears. Photo by Larry Luxner taken August 2016.

As politicians gear up for a by the unions, and it was very difficult while in port. gubernatorial election dominated by Puerto to do business. That is not conducive to “Because passengers are having such Rico’s fiscal crisis and Washington’s providing a service when transportation a phenomenal experience, they go back to approval of a control board to supervise is a monopoly. And none of the previous stay for a longer-based vacation,” Paige the island’s finances, tourism offers a governors were willing to take that on. This said, estimating that in 2014, the cruise rare glimmer of hope for the troubled one did.” industry itself spent $16 million in Puerto commonwealth, even as it chafes under the Since then, she said, “everyone, Rico on food, beverages and other ship weight of the island’s $68 billion budget including those who were part of the supplies. deficit. unions, is doing extremely well.” Per-capita In 2015, the island received just over passenger spending in San Juan now stands Zika fears 1.7 million cruise ship passengers, up from at $73.12, up from $70.49 in 2012, when Out of 800 people who have registered 1.47 million in 2014. Arrivals will grow the FCCA last conducted such a study. Per- for the FCCA’s upcoming convention in another 2% in 2016, says Michele Paige, capita spending by crew is also up over the San Juan, only one has inquired about Zika executive director of the Florida-Caribbean same period, from $122 to $149. — a mosquito-borne illness that has been Cruise Association (FCCA), which is Passengers now rank San Juan 12th linked to profound birth defects including holding its annual conference and trade out of 35 Caribbean destinations in terms microcephaly, an abnormally small head show Sept. 26-30 in San Juan. She expects of overall satisfaction, said Paige. caused by the destruction of brain tissue. about 1,200 people to attend that event. “When we took this survey six years The virus has, however, led to hotel “When the current governor ago, it wasn’t as positive as it is today,” she cancellations across the island, says [Alejandro García Padilla] came into office said, noting that short excursions, food and Clarisa Jimenez, president and CEO of the four years ago, the industry was suffering,” beverages, jewelry and incidentals tend to Puerto Rico Hotel & Tourism Association Paige told TMI. “The port was controlled dominate cruise-ship passenger spending (PRHTA).

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was done to address the situation.” At any rate, the negative trend is ending thanks to discounting by hotels and the coming winter season, said Jimenez, whose PRHTA has 530 corporate members including hotels, airlines, transportation companies, restaurants and tour operators. “The reality is that finally now, people are starting to be less worried about traveling here because there’s more information out there,” she told TMI. “If you use mosquito repellent right after putting on sunblock, there’s no need to worry unless you’re pregnant or planning to have a family. Even the CDC is advising to use repellent with DEET and wear loose clothing.” During the first seven months of 2016, Puerto Rico’s hotel occupancy rate was 75.5%, down from 79.4% in the same Most passengers cruising to San Juan pass through the port’s duty free stores upon period of 2015. The average daily rate disembarkation. was $194.92, down 2.3% from the year- ago ADR of $199.50, while revenue per available room (RevPAR) came to $147.09, “At the beginning, it was pretty bad destination. down 7.2% from the $158.50 recovered a because the numbers given by the CDC During the second three months of year earlier. were alarming. They predicted that one- this year, 35 groups cancelled their events, Nevertheless, Puerto Rico ended fiscal fourth of the population would be infected leaving vacant about 50,000 room nights 2015 with a 2.3% increase in overall hotel with Zika by the end of the year,” she said. that had been reserved through 2016 and registrations, and a 3.4% increase among “But that was the worst-case scenario. The 2017. non-residents, according to PRHTA figures. reality is that as of today, there are only “So far in total, 60,300 room “We are the only economic sector 14,000 cases, so that is less than half of 1% nights have been lost. This is the impact that has been faring well,” said Jimenez. of the population.” Zika has had on us,” Segarra told the “Everybody knows we have a financial According to Jimenez, following daily newspaper El Nuevo Día on Aug. situation, but when you come to the island, an 11% increase in hotel occupancy in 29, adding that his agency has moved it’s business as usual. New hotels are January, the industry saw drops of 3% in aggressively to attract 57 new groups opening, and there’s lots of renovation February, 5% in March, 4% in April and (equivalent to 28,000 room nights) to going on. People might get this perception 6% in May. compensate for those losses. that Puerto Rico is falling apart, and it’s In fact, a wave of hotel cancellations Segarra, former chief of the not.” in the second quarter of this year has government-run Puerto Rico Tourism

caused $44.5 million in losses for the Company, also criticized the CDC for island’s tourism industry. That’s according scaring tourists. “Saying that by the end Airport business thrives San Juan’s Luis Muñóz Marín to Milton Segarra, president and CEO of of this year 20% to 25% of Puerto Rico’s International Airport, where Aerostar Meet Puerto Rico, a nonprofit organization population would have Zika was not Airport Holdings LLC — a 50-50 venture that markets the Caribbean island as correct,” he told the paper. “They should between New York-based Highstar Capital a premier meeting and convention have specified that this was in case nothing and Mexico’s Grupo Aeroportuario del Sureste (ASUR) — is investing $1.4 billion to upgrade LMM to a world-class airport, is benefitting from increased traffic. A wave of hotel “Fortunately for us, because of these cancellations very special conditions Puerto Rico has followed the news endured recently — the financial crisis, the that Puerto Rico political crisis, Zika and also emigration mosquitoes were to the U.S. mainland — we have seen an infected with the Zika increasing number of people traveling and virus. Sign here is posted at Aerostar’s using the airport,” said Agustín Arellano, airport office. CEO of Aerostar Holdings. “You have more business people trying to get deals or

TFWA/FDFA Issue October/November 2016 40 WWW.WORLDCLASSBRANDS.COM 4153 October/November April 2016 2016 IAADFS/MHA TFWA/FDFA IssueIssue BOOTH 730 INSIDER

Dufry’s stunning new 28,000-sq-foot walk-though departures store in San Juan’s Luis Muñóz Marín International Airport Terminal B.

finding ways to help improve our financial $900 million just in 2013 and subsequent on an island whose unemployment rate situation, officials of federal agencies years. So the exercise the government did now stands at 11% — well over twice the traveling to Puerto Rico, and law firms by giving the concession to a professional 4.8% jobless rate in the 50 states. looking for business.” operator like Aerostar is a very good Sadly, Puerto Rico’s continuing Arellano, interviewed at Aerostar’s investment, and could be an example for economic crisis has led more than half a offices at LMM, expects the airport to other pieces of Puerto Rico’s infrastructure million people to seek better lives on the close 2016 with 9.0 million passengers, that are right now in trouble.” U.S. mainland in the last decade, shrinking up from 7.2 million in 2013 — the year Besides the $615 million up-front the island’s population from nearly four Aerostar took over LMM’s operations payment, the deal also requires Aerostar to million in 2006 to just over 3.4 million in a controversial privatization he says transfer $2.5 million in annual payments today. ultimately paid off for the government and to the Puerto Rico Ports Authority (PRPA) Yet this massive emigration “creates for the people of Puerto Rico. as well as 5% of annual gross revenues a new flow of local passengers” for LMM, “We closed the deal paying the between years six and 30, rising to 10% of said Arellano. government $615 million in advance rent annual gross revenues from year 31 to year “People who emigrate to the States for the concession,” Arellano told TMI. 40. The PRPA will receive $552.5 million do it because they are looking for jobs or “Then we brought in $230 million to do over the life of the 40-year concession. they already have a job there. And when the remodeling and almost $50 million in In addition, the privatization created they have a job, they travel more often to additional working capital. That’s almost 400 permanent and 2,500 temporary jobs Puerto Rico, or they invite their family to visit them in the U.S.,” he said. “People may leave family and friends here, but they do have a tendency to come back more frequently.” As a result, 80% of the 9 million Agustín Arellano, passengers who used LMM last year are CEO of Aerostar not tourists but Puerto Ricans traveling Holdings, the back and forth to visit family and friends, joint venture that said Arellano, citing surveys done at the operates San Juan’s airport’s 11 convenience stores. Luis Muñóz Marín International Airport. Aerostar will likely close 2016 with $112 million in revenues, about 30% of that coming from retail, though Arellano expects that to rise to 40% over the next five years.

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As terminals have been renovated 5% to about 38%, displacing American and retail services expanded at LMM, Airlines as the island’s dominant carrier; revenues have jumped from $2.30 per AA now has 22%, meaning six out of every passenger when Aerostar took over the 10 planes entering or leaving San Juan outdated airport to about $7.40 today. fly either the JetBlue or American logo. LMM now boasts 124 retail shops, and United, Southwest, Spirit and Delta split Dufry — the airport’s duty free operator — the remaining 40% of traffic to and from has a 28,000-sq-foot store that departing the U.S. mainland, though Arellano said passengers must pass through after clearing Southwest is growing the fastest “because security. Dufry also operates a nearly they have very good promotions, and 9,000-sq-foot shop in Concourse A, which because they don’t charge for changes or serves JetBlue and two small Caribbean for the first two pieces of luggage.” regional airlines, LIAT and Tradewinds. On Dec. 14, Allegiant Airlines will Liquor continues to be the top-selling introduce direct service from between San item at LMM, he said. But it’s not just Juan and Orlando Sanford International Bacardi and Don Q rum travelers are taking Airport. The four-times-a-week flights back to the States; champagne and whiskey are being advertised at only $50 one-way; are also big sellers. Passengers traveling three days later, Allegiant will launch direct to the U.S. mainland are exempted from service between LMM and two more cities, federal taxes on duty free airport purchases Cincinnati and Pittsburgh. — a fact Dufry trumpets via big red “Yes In fact, because of recent emigration Dufry signage assure passengers traveling to the You Can Buy” signs prominently displayed flows, the top three airport destinations U.S. mainland that they can buy duty free at the throughout its huge walk-through shop at for LMM are all in Florida: Miami, Fort airport. LMM. Lauderdale and Orlando. And that’s not Local handicrafts are also popular, likely to change anytime soon, regardless “The public-private partnership has thanks largely to El Market Puerto Rico, a of who wins Puerto Rico’s gubernatorial been a very good solution. Normally we large, colorful store featuring a variety of race this November. According to the see profits after Year 5, but for now we island products ranging from chocolates to latest polls, the pro-statehood New are making the numbers we had initially ceramics. And soon, Management Group Progressive Party has a slight edge over the planned for,” he said. “The issue here is International, which holds LMM’s master pro-commonwealth Popular Democratic you cannot make more because you are food and beverage concession, will team up Party, with only a tiny fraction of voters capped at a certain level.” with Hacienda Lealtad to open a gourmet preferring independence. For Arellano’s company, that level is coffee shop featuring Puerto Rican coffee The island’s next governor will have $62 million regardless of actual traffic. from the mountain town of Lares; other to figure out how to help Puerto Rico “Here it costs 25% less to operate iconic brands including Alto Grande, Yauco climb out of its massive debt hole while an airline than elsewhere [in the United Selecto are already available for purchase discouraging people from leaving and States],” he noted. “Even if we had 10,000 at the airport. attracting new investment to the island; operations a day, we’d still receive the Since 2005, JetBlue’s share of total tourism could play a key role in that effort. same amount as if we had only one.” traffic at LMM has jumped from under “Puerto Rico’s financial crisis is not going to be solved in two, three or four years. It’s going to take eight or 10 years,” according to Arellano. “This is what knowledgeable people are saying. So the back and forth will continue.”

Maryland-based journalist Larry Luxner just returned from a four-day trip to San Juan.

Local handicrafts are a big seller at the airport’s El Market Puerto Rico gift shop.

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The 20 year saga of Carnival’s quest to cruise to Cuba

eventually resulted in a flood of developments. “We didn’t know when it would happen, but we were ready,” says Israel. “The release of Alan Gross was key and then the special moments just kept coming. We were in contact with U.S. Assistant Secre- tary of State Roberta Jacobson, the chief negotiator for the United States during diplomacy talks with Cuba. Within hours of President Obama’s speech, U.S. flags went up in Cuba. We weren’t devils anymore.” Israel says that the opening of the Cuban embassy in Washington on July 20, Cuba president of maritime operations Nelson Torres, left, and Carnival Corp. CEO Arnold Donald 2015 was another “profound moment,” sign a deal allowing Cuba cruises from the U.S. Standing from left, Carnival Corp. senior vp of followed on August 15 when the U.S. global port development Giora Israel, Fathom President Tara Russell and Carnival Corp. general flag was raised over the reopened U.S. counsel Arnaldo Perez. embassy in Havana. In March of this year Carnival Corporation & plc made his- became part of our company. But this did Barack Obama became the first sitting U.S. tory on March 21, 2016 when it announced not deter me in any way or make me stop president to visit Cuba in nearly 90 years. that the Cuban government had granted looking at Cuba,” he says. And then with the March 21 historic news approval for the company to begin travel to “The cruise industry was created in that Carnival had been approved to sail Cuba. On May 1, Carnival’s newest cruise Miami,” points out Israel. “The modern its “social impact” Fathom cruise brand brand, Fathom, began seven-day cruises day cruise industry as we know it was cre- between the U.S. and Cuba, it looked like every other week from Miami to Cuba ated in the 1960s with Royal Caribbean’s the 20 year wait was over. onboard the 704-passenger MV Adonia, Sun Viking, Norwegian Cruise Lines M/S Unexpected trouble arose after visiting the historic ports of Havana, Cien- Sunward and the Carnival Mardi Gras in Cuban-Americans in Miami, protesting that fuegos and Santiago de Cuba. Miami, and these three companies still Cuban rules barred them from traveling Demand has been so strong, Carnival control the industry. Cruising has become to the country of their birth by ship, made has added two more sailing dates for fall such a global success -- but none of us had Carnival consider delaying the first sailing. 2016, and as of September, is still the only ever sailed to Cuba. But after Cuba announced on April 22 that U.S. cruise line currently sailing from the “Think about it. We have this land it was changing the rule to allow Cubans U.S. to Cuba. mass, Cuba, which is larger than all the and Cuban-Americans to travel on cruise The historic itinerary was two decades other Caribbean islands combined, sitting ships, the inaugural sailing took place as in the making, explains Giora Israel, Car- right off our coast 90 miles away, and we scheduled. nival Corp. senior vice president of global have to sail around it. We have 14 cruise “Carnival Corp. is not political and port development, who has spearheaded the ports in the U.S. but Americans had to sail is not involved in diplomacy. Our job is to endeavor since day one. around this major destination. deliver a safe cruise and a good product. “We first started thinking about the “But since the cruise industry was But we must comply with every regulation possibility of sailing to Cuba back in 1996, born after the embargo was put in place, the and rule of the U.S. government and we when we acquired a 50% share in Costa truth is that we didn’t miss sailing to Cuba. promised to comply with and respect all Cruise Lines. Costa had just renovated the It had never been there for us.” the Cuban laws. We also had to be sensitive cruise terminal in Havana the previous Until “D-Day” that is. On December of the emotions and history of our many December, and was sailing there regularly. 17, 2014, the Castro government released Cuban employees. But when we closed the deal with Costa, Alan Gross, a U.S. government subcontrac- “The restrictions on Cubans entering we had to abandon any cruises to Cuba tor serving a 15-year prison sentence in and leaving by boat was not a law but rath- because of the U.S. embargo laws,” Israel Cuba for “crimes against the state.” He had er a regulation enacted 45 years ago after a tells TMI. been convicted in 2011 in a verdict that fur- hi-jacking. This was just one of many de- Despite the fact that Costa could no ther aggravated relations between Washing- tails that had to be resolved. We met many longer sail to Cuba, Israel set up a Cuba ton and Havana. Hours after the release of times with the Cuban and U.S. officials to Committee to accumulate information and Gross in Cuba, the Obama administration carefully craft and coordinate our plans so prepare Carnival for the day when cruise announced that the U.S. was taking steps to that we could meet all the regulations of ships would be allowed to sail to the island. restore full diplomacy with Cuba. both countries. We had to go step by step to “Carnival was buying other cruise It took months of complex negotia- make this happen,” said Israel. lines that had visited Cuba, and they also tions and diplomatic wrangling, but the But happen it did. A sailing of 90 had to abandon the destination once they thaw in relations between the two countries miles that only took 20 years to complete.

TFWA/FDFA Issue October/November 2016 44 INSIDER

Santa Clara, first Cuba destination for U.S. jet service, relatively untouched by tourism Story and photos by Larry Luxner

Joyous Cuban-American passengers arrive from Fort Lauderdale in Santa Clara, Cuba on JetBlue on September 9.

boarded buses for the short trip to the arrivals terminal. It’s not clear why Abel Santamaría International Airport in Santa Clara — a sleepy provincial capital of 200,000 — was chosen to receive the first direct commercial U.S. flight. Perhaps it’s thanks to the airport’s 9,900-foot asphalt runway, which ranks as the sixth longest in Cuba (after Jose Martí-Havana, Santiago de Cuba, Varadero, Ciego de Ávila and Holguín). Or maybe it’s because Santa Clara is located in the center of Cuba, about 175 miles east of Havana. One thing is clear: this city is not crawling with American SANTA CLARA, Cuba — On Aug. of them for the first time in decades — to tourists — or tourists of any kind — and is 31, JetBlue became the first airline to offer the land of their birth to see family and not likely to be for some time. direct commercial jet service between the friends. “The Cuban government is very United States and Cuba, when its Flight Some of them paid only $99 each way. conscious that Havana’s hotels are already 387 from Fort Lauderdale touched down at But even my $436 round-trip ticket from maxed out, and I think it would like to see Santa Clara’s Abel Santamaría International Baltimore with a connection in FLL was an more tourism dispersed to the provinces,” Airport. incredible bargain; only a few years ago, said Cuba travel expert Christopher Baker. The flight, marked with melodramatic such a trip would have cost more than $900 “The majority of passengers on these speeches, water-cannon salutes, ribbon on a charter airline — not to mention the provincial flights will undoubtedly be cuttings and parties at both ends, hassle of obtaining a license through the Cuban-Americans returning to visit family “symbolizes our historic long-term Treasury Department’s Office of Foreign outside Havana.” commitment” to providing low-cost service Assets Control. But the ethnic travel business is between the two former adversaries, Even though it’s dramatically easier clearly booming. JetBlue President and CEO Robin Hayes for Americans to visit Cuba now than “We’re thrilled with the service. said in a statement. at any time since the 1959 revolution, It couldn’t have gone better,” Daniella Gate F6 at FLL — which JetBlue the U.S. embargo is still in effect and Sandar, a JetBlue spokeswoman told TMI. has dedicated exclusively for Cuba flights will remain so unless Congress votes to “We’re really excited to launch service into — now sports a huge wall map showing abolish it. Before boarding, each of us Camagüey on Nov. 3 and Holguín on Nov. the airline’s existing and planned routes had to fill out applications between Florida and the Cuban cities for Cuban tourist visas (at of Havana, Santa Clara, Camagüey and $50 each, payable by credit Holguín. card), and complete a form An infographic highlights the fact that explaining the purpose of travel; Cuba received 3.5 million foreign visitors a JetBlue employee told me in 2015. About 161,000 of them came from this information is sent to Cuba the United States — up 77% from 2014 — before the flight lands to avoid and arrivals through the first six months of any problems on the ground. 2016 nearly doubled compared to the first The flight to Santa Clara half of last year. took only 43 minutes. The But virtually none of my fellow 100 or so passengers on board passengers aboard Flight 387 on Sept. 9, applauded loudly, a few of them the day I flew to Santa Clara, were tourists overcome with emotion. Many in the true sense. Most of them appeared to took selfies as they clambered JetBlue highlights its new flights to Cuba at FLL. be Cuban-Americans flying back — some down the waiting staircase and

45 October/November 2016 TFWA/FDFA Issue INSIDER

10 from Fort Lauderdale, though we’re still city of Cienfuegos — a one- waiting to hear from the Cuban government hour trip — in a red 1952 on the dates [for beginning service] to Hillman for the equivalent of Havana.” $10. It’s even cheaper if you’re Sandar wouldn’t comment on willing to share the trip with passenger volume or profitability, but strangers; only 50 pesos (about explained that only 80 passengers were $2.00) for that same trip, with aboard my aircraft with 150 seats due to 12 passengers stuffed into a weight restrictions because passengers are blue 1953 Chevy truck. bringing so much heavy luggage. At the airport’s departure Since JetBlue paved the way, terminal, several small kiosks American Airlines, Spirit and Silver sell T-shirts, books, postcards Airways have jumped into the U.S.-Cuba and WiFi access cards for market, and up to 20 flights a day are Internet service. There’s also approved to Havana but awaiting the a duty free shop selling cigars, Cigars are a big seller in Santa Clara’s duty free store. Cuban government’s go-ahead to begin. perfumes and liquor, with all But first, Cuba wants to bring more hotel prices in CUC, including J&B capacity online, since the capital city’s scotch whisky (28.55); Havana Club Añejo restrictions, Americans returning from hotels are already operating at capacity. Reserva (8.00); Cachaça 51 from Brazil Cuba may now bring up to $400 worth of For now, horse-drawn carriages and (12.85) and a gift-box set that comes with goods acquired on the island for personal 1950s-era Chevrolets, Fords, Buicks and two bottles of Havana Club rum and a set use, including a maximum $100 of Oldsmobiles are far more numerous on the of mojito glasses (29.30). combined alcohol and tobacco products. streets of Santa Clara than they are in more Cigars range from cheaper Romeo y But until the travel ban (and the modern Havana. Prices are also much lower. Julietas to very expensive Cohibas. A box embargo itself) is actually abolished, don’t Many shops and restaurants list prices of 10 premium Montecristo No. 4 cigars expect duty free sales at Cuban airports — in both “moneda nacional” or Cuban was 55.00 CUC. The same store offers a or anywhere else — to take off. pesos — which are worth 24 to the dollar variety of perfumes: Fan di Fendi Extreme Baker says that any American can — and in the much more valuable “pesos (117.45); Poeme (95.00) Armani (86.60), legally fly to Cuba under the ‘people-to- convertibles” or CUCs, which are worth 212 VIP (58.90), BlackXS (60.45), Elle people’ category by signing an affadavit slightly more than a dollar each. (82.90); Boss Orange (84.20) and Boss provided by the airline. “But I don’t think Getting around is cheap too. I traveled Nuit (104.35). we’ll see wholesale change until the travel from Santa Clara to the southern coastal Under recently revised U.S. travel restrictions are lifted entirely,” he added.

Private firm offers Business-to-Business Free Zone in Grenada Urbaniza, a Miami- Brazil group of portunities and amenities.” high sustainability aspect. Buildings will be real estate companies, is developing a mas- In August 2015, Grenada passed The interwoven into the landscape, integrating terplan for a Free Zone in the Caribbean Free Trade and Processing Zone Act, which the natural topography and organic build- island of Grenada. granted Urbaniza the rights to develop a ing forms. The Government of Grenada granted Free Zone and a Container Port, with aux- “Grenada offers companies a virgin Urbaniza a 60-year Concession (with a 60 iliary facilities, and touristic, commercial business platform which permits new busi- year extension option) to create a privately and cultural projects. ness to be developed. It also has a highly owned and operated Duty Free Zone. The “Under the expanded agreement, educated and friendly population, which is Duty Free Zone concession in Grenada is Urbaniza may declare a ‘delimited space’ a key feature for development.” exclusive to Urbaniza, and the project will anywhere in the territory of Grenada as a Urbaniza is also involved with a include a Duty Free Port. free zone area and license other companies redevelopment of The Carenage, the pictur- “This will be the only duty free port to develop the property. This could be esque horseshoe shaped harbor that winds in the Caribbean,” Urbaniza Director Cris- inside the airport, port, as well as any other around the back side of a small peninsula tiane Bomeny tells TMI. “This is a project place of interest for the Concessionaire,” jutting into Grenada’s St. George’s Bay. not just for Grenada, but for the U.S., the says Bomeny. The Carenage Revitalization/Develop- U.K., Cuba and the rest of the region. It is “We are 100% privately-owned and ment will be a multi-functional project that an international project from Grenada,” she operate under a business-to-business will include condo-apartments for short and explains. “It will also benefit all levels of philosophy. We are offering a new business long term rentals; a boutique hotel, com- the population on the island.” model that will become a benchmark for mercial use, retails, and restaurants. Located in the Windward Islands trading and networking. It will allow inte- “Our plan is to promote the urban, below the hurricane belt, Grenada is the gration of a variety of diverse industries, cultural and architectural development of most accessible free port in the Caribbean expand trade opportunities and minimize the area while protecting environmental basin, says Bomeny. “Grenada is a gateway bureaucratic regulations,” she says. awareness,” says Bomeny. to South America and the project looks to The project is also very sensitive to For more information, please contact create a network of services, business op- the surrounding ecosystem and will have a [email protected]

TFWA/FDFA Issue October/November 2016 46 DISTRIBUTION FOR THE CARIBBEAN AND AMERICAS DUTY FREE: [email protected]

47 October/November 2016 TFWA/FDFA Issue 95 April 2016 IAADFS/MHA Issue INSIDER

Rouge Carib expands in Grenada with airport, mall and port stores

Since Buenos Aires-based Perfumerias The second Rouge announced it was expanding into level of the airport the Caribbean and launched its first stores will house the gates in Grand Cayman in July of last year, it has for British Airways, opened new stores on four islands and is Virgin Atlantic and on track to deliver 15 stores within the first American Airlines, two years. among other carriers And these are not just any stores. and will feature a VIP Rouge is recognized for designing elegant lounge and restaurants. retail shops that feature a distinctive Rouge will portfolio of brands and a luxurious style of open six stores on retailing. the second level this In addition to two stores operating Fall, and will begin in Grand Cayman and a water-front operating immediately using gondolas and company’s Caribbean expansion. perfumery in St. Thomas, Rouge’s Duty temporary stands until the shops are fully Even as its Grenada operations Free Retail Caribe Group division has constructed, says Kattoura. Rouge will develop, DFRG, operating as Caymania in significantly expanded its operations in also continue to operate its existing store Grand Cayman, continues to upgrade its Grenada. on the first level of the airport, and will be stores there. The downtown store opened Since taking over the operation of opening a new arrivals store in 2017. its concierge service division, and recently three stores on the exclusive British West In addition to the new airport stores, inaugurated an in-store Spa for the upscale Indies “Spice Isle” known as a favorite Rouge Grenada has finished constructing skincare brand Valmont. Caymania is for the yachting crowd, Rouge was granted its flagship store at the prestigious Port the only duty free operator at this time the concession to operate the duty free Louis Marina. This shop, carrying a full selling Valmont and its Spa is the only one concession at the new second level of array of duty free products, is scheduled to Valmont has in the duty free channel. Grenada’s Maurice Bishop Airport. be open by October 2016. Caymania’s store at Royal Watler “The new concession covers Rouge is also adding three new shops Cruise Terminal is the exclusive duty free fragrance, skin care, cosmetics, liquor at Grenada’s Spiceland Mall in the capital shop there, where it sells fragrance, skin tobacco, jewelry, watches, handbags, city of St. George’s. These shops will be care and jewelry. electronics and lingerie as well as gift located in the new section of the Mall under The Rouge St. Thomas shop is also items,” says consultant Raymond Kattoura, construction, due to open next March. being renovated and will have a new look whose company Duty Free & Travel “Our expansion with Rouge Grenada by November 2016, says Kattoura, who Retail Group Inc. is spearheading business makes us the Island’s largest and most confirms that the company has more very development for Rouge Duty Free Retail prestigious operator,” comments Marco exciting projects on the horizon. Caribe. Bordoni, who heads up the family-owned

Rouge Grenada’s flagship store at Port Louis Marina will open for business in October. (R) One of Rouge’s original duty free stores in Grenada.

TFWA/FDFA Issue October/November 2016 48 49 October/November 2016 TFWA/FDFA Issue INSIDER

Brazil and Argentina deliver depressing economic figures

Travel Markets Insider’s man in Buenos Aires John Gallagher looks at the economic situation in Latin America and how it will affect the travel retail business during the last few months of 2016.

As we approach the final quarter Argentina disappoints positive territory - lower commodity prices of 2016, the economic situation in Latin Further south in Argentina, the will mean relatively disappointing figures America remains cloudy– Brazil and promised investments for the second half from Peru, Chile and Colombia where the Argentina stumbled through the first six of the year have yet to appear. Newly mining sector plays a major part in exports months of the year, both depressed by appointed President Mauricio Macri and industrial activity. higher unemployment and negative GDP started the year well and reached a speedy Lower copper prices in Chile will growth. Business and consumer confidence agreement with the vulture funds cancelling constrict the economy to only 1.8% is wavering and travel and domestic retail the country’s default on international growth this year, rising to 2.3% in 2017. have suffered. payments; this decisive measure ensured Further north in Peru, new president The impeachment and ouster from that Argentina was able to return to the Pedro Pablo Kaczynski took office at the power of Brazilian President Dilma international capital markets. With a swift end of July, promising a wide range of Rousseff will not resolve the social, devaluation of the Argentine Peso, Macri policies to support economic activity and economic and political problems that and his economic team also managed to get increase business confidence. Economic have plagued the country over the last rid of the multiple exchange rates that have growth for 2016 is likely to be close to 2 - 3 years. And even if Dilma is the “fall troubled businesses and tourists visiting 3.7% rising to above 4% in 2017. With girl” for Brazil’s widespread political Buenos Aires. In fact, the stability of the their positive economic growth, both and economic corruption, since her Peso since the devaluation has surprised countries are also enjoying strong air impeachment, the country has experienced many. The current rate of 15 pesos to the transport. Lima Airport Partners, the airport slightly more exchange rate stability, which US Dollar is expected to drift to around 18 manager at Jorge Chaves International in has led some Brazilians to return to the in 2017. the Peruvian capital, reported an 11.5% duty free stores on the border with Uruguay But good news has been in short increase in passenger traffic; at the same and Paraguay. supply over the last few months. Inflation time the Chilean government advised that Former Vice-President Michel Temer, remains close to 40% (but at least the international passengers reached 5.25m who has now officially taken over the figures can be trusted...), unemployment in the seven months through to the end of presidency, has promised a government of is slowly rising and industrial production July, an increase of 10.7% compared to the national salvation. But he will not be able is down. Private capital projects promised same period last year. to prevent government debt from going up for the second half of the year have In Colombia, the announcement of over the next few years. On a positive note, not materialized. The government is a peace agreement with the FARC rebels economists forecast a 0.9% bounce in the expected to announce some badly delayed will clearly be positive for business and economy in 2017 following this year’s 3% infrastructure projects in the 4th quarter but consumer confidence, currently at historic contraction. The big question is whether some confirmation of substantial inward low levels. In spite of low international oil Temer can increase business confidence investment from overseas will be needed prices, the economy is expected to grow and persuade international investors to to keep the momentum going. Some of by 2.3% this year, rising to 2.9% in 2017. return. The country is still deeply divided Macri’s supporters insist that the sleeping Passenger air traffic remains strong after and Temer’s job will be difficult as he tries giant is about to wake up but business and several years of growth. The country’s to put government finances in order. consumer confidence is waning. Civil Aviation authorities advised a 6.1% Although the Summer Olympics The prolonged recession in Brazil, increase throughout the country’s airport and the Paralympics have brought a Argentina’s biggest trading partner, and network for the first seven months of 2016, partial boost to passenger figures in Rio low commodity prices are likely to push the compared to the same period last year. de Janeiro, and to a lesser extent in Sao economy into contracting between 1.1% Travel retail sales are likely to Paolo, 2016 will not be a good year for the and 1.2% this year. However international keep growing in line with international aviation business in Brazil. Latam Brazil analysts feel that there will be a healthy passenger movements. Low single digit and Gol, the country’s two biggest airlines, rebound in 2017 and increasing public and growth is likely to be the norm this year are still cutting services and domestic private investment will lead to 3% growth perhaps with the exception of cities like travel is likely to remain depressed until the in 2017. Lima, where passenger growth is close to end of 2017. Airline analysts expect 2016 10% and the new Dufry 3,000 sqm store international traffic to be in line with last Pacific nations still growing, but a little opened in August will bring additional year and domestic traffic to fall by around more slowly brands to travelers passing through the 5%. Elsewhere in South America, Peruvian hub. economic growth has slowed but is still in

TFWA/FDFA Issue October/November 2016 50 INSIDER

Duty Free Americas – now second largest TR retailer in Brazil – opens store in São Paulo-Congonhas Airport

Duty Free Americas (DFA), which duty free stores, luxury brand travel retail an outstanding shopping experience that says it is now the second largest travel boutiques, and a chain of coffee shops, will set a new standard for airport retail retailer in Brazil, announced the opening of which will be serviced by DFA’s 40,000 in Brazil, and we are honored to be able a 9,500 square foot travel retail store at São square foot state-of-the-art logistics facility to serve the airport’s 18+ million annual Paulo-Congonhas Airport. located in Curitiba. passengers.” DFA will operate the store under a 10- Jerome Falic, Chief Executive Officer Falic continued: “This concession year concession with Infraero, the Brazilian of Duty Free Americas, commented: “The is an extension of our ambition to further government corporation responsible for triumphant and resilient spirit of Brazil develop the DFA brand on an international managing Brazil’s major airports. was just showcased to the world in the level. We are now the second largest travel São Paulo-Congonhas is a commercial Olympics. DFA has been investing heavily retailer in Brazil. Through our Brazilian airport in São Paulo, Brazil, that serves in Brazil over the past few years – with stores, together with our stores in Uruguay, more than 18 million passengers per year. stores in five different Brazilian states from Colombia, Venezuela, Chile, Central Amer- The store is one of 18 retail venues Manaus in the north to Porto Alegre in the ica, and the Caribbean, we have achieved currently open or under construction by south, and employing hundreds of Brazil- a solid platform in the region which will DFA throughout Brazil, including Manaus, ians – because we are confident in the enable us to continue to grow our business Porto Alegre, Curitiba, and Maceió. When country’s future potential growth. throughout Latin America and beyond.” completed, these points of sale will com- “We are extremely pleased to partner prise approximately 45,000 square feet of with São Paulo-Congonhas Airport to build

51 October/November 2016 TFWA/FDFA Issue INSIDER

Dufry and airport operator Lima Airport Partners (LAP) inaugurated the 2,400 sqm Lima Duty Free departures store at Jorge Chavez International in Peru on August 18. Dufry welcomes world class shopping at Lima Duty Free

From the multi-colored striped lights International airport in Peru is a world class Riedi, chief executive officer of Dufry’s of the MAC boutique that beckon to addition to the travel retail offer in Latin Latin America division, LAP CEO Juan travelers passing through immigration, to America. José Salmón and Dufry Peru Gerente the specially curated selection of products Dufry and airport operator Lima General Edgar Farfan Trelles, LAP Com- for transit passengers at the far side of the Airport Partners (LAP) inaugurated the mercial Officer Sabine Trenk officially cut store, Dufry’s $7 million renovation of the store with a gala ribbon cutting on Monday, the ribbon. Dufry worked very closely with Lima Duty Free stores at Jorge Chavez August 8. Following presentations by René Lima Airport Partners during the renovation of the duty free stores at Jorge Chávez International Airport, a company which Dufry has worked continuously with since 2001. Commercial spaces now occupy a total of 3,025 sq. meters over three stores – double the previous space – with nearly 2,400 sq. meters in the departures area alone. Dufry took full advantage of the space to design modern, appealing and efficient shopping areas that still embodied a ‘sense of place’ through incorporating aspects that align with the culture and unique features of the host city. With its ‘walk through’ format, Lima Duty Free leads passengers into the curved LAP CEO Juan José Salmón, LAP Commercial Officer Sabine Trenk and René and faceted space which offers a complex Riedi, CEO of Dufry’s Latin America division, officially cut the ribbon. mix of reflections and images, representing the dynamic and changing character of the city of Lima. TFWA/FDFA Issue October/November 2016 52 INSIDER

Lima Duty Free features design elements of curved and faceted space that represent the dynamic and changing character of the city of Lima.

new stores, we have completely renewed and updated our offer at Jorge Chávez International Airport. We seek to bring together a wide range of designs from the most exclusive brands, without losing local essence and flavor. In addition, the expansion of the commercial space allows us to offer our customers a much more exciting in store experience, which includes brands that wouldn’t normally be found on the The ceiling and floor create a flow A special feature of the store is the high street. through the store, with the overlapping ceil- “Thinking Peru” area, dedicated to a broad “We thank LAP for the trust they have ing panels subtly representing the stones of range of local products, including local placed in Dufry, and we are proud of what the ancient Inca heritage of Peru. spirit pisco, chocolate produced from the we have achieved in collaboration with this Capitalizing on the expanded retail famous Peruvian cacao, and other delica- important partner. We look forward to pas- area, the new commercial offer features 15 cies like turrones and alfajores, and beauti- sengers enjoying the new commercial offer, new brands including Tom Ford, Givenchy ful scarves, gloves and hats made from and to continuing to work closely with this Make Up, Urban Decay, Viktor & Rolf, alpaca and kuna. airport for many years to come,” concluded Giorgio Armani Make Up and Polaroid. The design of the “Thinking Peru” Reidi. Seven of the new brands are not currently space is based on elements and materials LAP CEO Juan José Salmón told TMI available in the local market, adding to inherent to the Peruvian culture, such as the that LAP is very pleased with the look of their exclusivity and appeal. colorful lattice across the ceiling that brings the store and how well Dufry worked with The Lima Duty Free stores offer all the to mind the traditional Peruvian fabrics. LAP to create such a world class shopping traditional travel retail categories, as well as In his speech, René Riedi stressed that environment. a wide range of watches, leather goods, sun- “for us the renovation and expansion of our LAP Commercial Officer Sabine glasses and other items. The perfumes and new Lima Duty Free commercial space is Trenk added that LAP saw that other cosmetics selection is particularly extensive, a clear commitment to long-term invest- airports were investing in improving their with promotional areas for travel retail sets, ment in one of the major airports in which commercial offer and LAP wanted to create duos, promotions and local brands. we operate in Latin America. With these the best, most appealing offer.

The “Thinking Peru” area is dedicated to a broad range of local products, including local spirit pisco, chocolate turrones and alfajores, and alpaca fashion accessories. (R) Local Peruvian color at the official opening of Lima Duty Free on Aug. 18.

53 October/November 2016 TFWA/FDFA Issue INSIDER

Peru: a shining star in Latin America

According to the latest MasterCard Global Destination cities Index, Lima tops the list of Latin America’s destinations with almost 50% more international visitors than second-ranked Mexico City. The Brazilian cities of São Paulo and Rio de Janeiro are in third and seventh, respectively. In fact, Peru is one of South America’s shining stars with an annual projected growth of 4.1% through 2030, according to the latest forecast from the EIU, as reported by the BBC. Although this growth rate is a little lower than the 6% growth of two years ago, Peru remains one of the fastest-growing economies in the Americas thanks to its close economic ties with China, strong services sector and burgeoning export industry. Lima, apart from being the top- ranked destination city in Latin America, is also the region’s fastest growing, says MasterCard. Mexico City, which is ranked second in international visitors, is only the fourth fastest growing, lagging behind Bogota and Punta Cana.

LAP to announce contract extension Lima Airport Partners, the manage- government must compensate LAP because with OSITRAN but said “the company is ment concessionaire at Lima’s Jorge it has not released land to build a second optimistic about the way conversations are Chavez International Airport, is expected to runway and an additional passenger ter- going with the new government.” announce an extension to its contract cur- minal. The delay in providing the land has If the government signs over the rently due to lapse in 2031. LAP (70.01% prevented LAP from maximizing revenues remaining land before the end of the year, Fraport AG - Frankfurt Airport, 19.99% during the first half of the original contact and the contract is extended, LAP could International Finance Corporation - World period. begin expansion work almost immediately. Bank and 10% Peruvian investment fund According to the initial concession LAP is expected to invest $1,200 million in AC Capitales SAFI S.A ) started operat- contract 7 million sqm of land was to be the runway and new terminal building. ing its 30-year contract in February 2001 provided to LAP by the end of 2004. As Last year more than 17.1 million and --in spite of occasional contretemps of today, only 50% of the land has been passengers used the airport in Lima. Traf- -- the government is highly satisfied with made available, which has considerably fic has increased 11.5% in the first seven its work. slowed LAP’s expansion plans. Both the months of 2016. The Peruvian press reports that trans- government and LAP agree to extend the LAP has invested $370 million into port infrastructure regulator OSITRAN has contract, but are negotiating the length of the airport since it won the concession and said there has been an agreement to extend the extension. has paid Peru more than $1,700 million in the contact through an addendum to the LAP CEO Juan José Salmón has concession fees and other taxes. original contract. It is understood that the been cautious about confirming the talks JG

TFWA/FDFA Issue October/November 2016 54 DUFRY_AD_8.5x11.pdf 1 3/16/16 3:12 PM

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55 October/November 2016 TFWA/FDFA Issue INSIDER

The Travel Markets Insider Interview René Riedi, CEO of Dufry’s Latin America division Cyrille Beauviche, Dufry’s Divisional Commercial Director, Latin America & Caribbean

Travel Markets Insider’s Lois Pasternak had the opportunity to speak with René Riedi, chief executive officer of Dufry’s Latin America division, and Cyrille Beauviche, Dufry’s Divisional Commercial Director, Latin America & Caribbean, during the inauguration of Dufry’s Lima Duty Free store in August. The two executives discussed some of the challenges faced by Lima Airport Partners (LAP) and Dufry and the thoughts behind creating such a state-of-the-art facility to best meet the needs of such a burgeoning market, as well as the benefits that are now accruing from combining the best practices from the various companies it has acquired.

TMI: What is the goal of the new Lima Duty Free store and how well do you think the design of the store has accomplished Dufry’s objectives?

René Riedi: We had two goals. Firstly to bring in local products, group them in one dedicated retail space and integrate them into an international brand environment, and secondly, to accommodate destination and transit passengers. With respect to the first goal, LAP clearly saw that other airports are improving and they knew that if they didn’t improve, they would lose out on the commercial side. These plans started even before the acquisition (World Duty Free) with Pedro Castro, who was in negotiations for the new contract. The new store was a René Riedi, CEO of Dufry’s Latin America division speaks at the opening of the new topic of the negotiations. Lima Duty Free store After Dufry acquired World Duty Free, we continued the negotiations. The tory authority – with the help of LAP – to featured elsewhere in the store, especially goal was to develop a store which meets create the corridor on the side of the store tobacco and spirits. the international standards of today. instead of in the center of the store. If the I think that we managed it quite well. Airports in other parts of South America corridor was in the center, it would have We may need to make some additional were investing, changing the environment been the same as it was before. Eventually fine-tuning when we see how it settles in, and improving the infrastructure. So LAP they agreed which is fantastic- we have the but as it looks today, I think we have made wanted to have a commercial environment walk-through store! a good start. more in line with those standards. The second challenge we faced was to This is a store – in my opinion – that We had to overcome some regula- accommodate both destination and transit not only looks impressive, and delivers tory issues in order to accomplish this. passengers, who had to exit into the gate a very positive in-store environment for One example is that both LAP and Dufry area through the center of the store. We had customers, but it is also efficient. And -ef wanted a walk-through store. But the local transit passengers coming in on one side, ficiency translates into revenues. regulatory authority requires a ten-meter and the other passengers coming through wide corridor in the airport. You cannot de- immigration on the complete opposite side TMI: The store sparkles. The colors are sign a walk-through store with a ten-meter of the store. The difficulty was to create an brilliant. What part does lighting play in corridor in the middle. It is not possible. environment that maximized the revenue that? You lose the aspect of the walk-through and presented the products to both sets of concept. To meet the requirement, we came passengers. Since only one section had RR: Many factors play a role in this. The up with the idea of changing the location transit passengers, and another area only personalization plays an important part. of the corridor. So, there is a huge corridor had destination passengers, we needed to And in today’s retail environments, the way on the right hand side right past security, try to create an environment that would we arrange the lighting is key. With direct which respects this 10-meter requirement. cross over both passenger groups. That was light you can illuminate ‘hot spots’, you But most passengers do not even notice a real design challenge. Our solution was to can create atmosphere, you can do so many it unless they go through the immigration ensure that the section of the store entered things with light. filter at the very far right. by the transit passengers carried a similar Lighting is a very cost effective way We were able to convince the regula- selection of some key products that are also of creating atmosphere and special effects. TFWA/FDFA Issue October/November 2016 56 INSIDER

Nuance and World Duty Free had very high standards of design. They designed very good stores. We (Dufry) had designed very nice, efficient stores, but now the combination gives us a more appealing and efficient design. You will see even more improvements going forward. It all results from retaining the know-how and building best practices. In the month that the store has been open Dufry has seen an increase of sales “by a good margin.” We can clearly see a significant increase in sales. This is partly due to the increased size of the store—we have nearly doubled the space – operating about 3000 sqm today between the departures, last minute and arrivals stores – departures has significantly increased sales, Dufry Divisional Commercial Director, Latin America & Caribbean Cyrille last minute is about the same. Beauviche (left), and Oscar Garcia Pedrosa, DCOO – Interbaires-Dufry This implies two things. We had to bring in new brands, as we said in the And impact. We have seen in the last We have a lot of promotional space presentation. We brought in 15 new brands. couple of years how lighting plays such an in this store that brand partners can use to And seven of these are new to the market important role in shop development. Digi- really showcase their products. (Peru). Even the Peruvian who travels to talization is another aspect. We are going the airport will see new brands he hasn’t to bring in video walls in the circular area RR: I think that what we have accom- seen at the airport before, and seven of where the promotions are located and also plished here in Peru with the design and de- them are not available in the local market. at the entrance of the store. velopment is a store that is raising the bar We have also increased the breadth of Suppliers will be embedded in the in the travel retail market in Latin America. the product mix. We have a lot of store to whole process of developing the design. Clearly, Peru is becoming a benchmark for fill, especially with perfumes. We have a This is only the beginning and I think that the market here and I think we have suc- huge selection. We have travel sets, duos, Cyrille can give you more ideas about the ceeded in not just designing a great store, we have very local brands that you may not next stage and the evolution of our store but a store that is appealing, efficient and have ever heard of. design. works very well for all the stakeholders; In the future, our suppliers will be Dufry, LAP, and all our other partners. CB: And we have these huge promotional much more involved in the design of the To a large extent, we are now seeing areas which are key to our strategy. On stores and will play an important part and the pay-off from the acquisitions. We have top of offering the best products, we offer obviously make valuable contributions to been able to take all the best practices from the best prices and the best deals to our the process. the different companies, and apply the customers. know-how and expertise that each team Cyrille Beauviche: We will bring even holds to the design of our stores, and we RR: To do this you need the right space, the more emotion into the store through the can see this is really coming together now. right environment, you need promotional various applications of the technology tools platforms. that we will use. CB: One of the main benefits for our Firstly, digital technology offers the passengers is that with the acquisition of CB: And it is what you do with these means to transform a message to fit dif- Nuance and World Duty Free we are now areas, how you create “in store theatre” ferent passenger profiles, depending on one single company and we are able to take to make them more impactful for the flights. For two hours we can rebrand a advantage of the best of whatever each customer. It is all about this. Our team has store to feature the products that a specific company has to offer. Each of the compa- identified a lot of improvements in terms customer profile prefers.This is how we nies has a strength, and we are combining of the promotional mix, the mechanics of it adapt to our customer profile by national- these strengths together into one company. and what we should promote. ity in real time ie. highlighting Chinese Our “promotions” include both price- cigarettes during the two-hour timeframe RR: We are going to see more of this ad- off, multi-purchase special deals, but also before a flight with Chinese passengers. vantage in the future, and airports will see HPPs and SPPs, tasting bars and product Technology also helps us communicate the advantage, and the passenger will see launches. The Coty Flower Garden is an offers. We can talk about Dufry or we can the advantage, and the supplier will take example. We give space to the brand for give the space to the brands. advantage of it, with enhanced customer a good return, not only for us but for the In Peru, the goal now is to keep up- service and in many other ways. Any brands also. We have to make every aspect grading our store. I see the video wall add- stakeholders involved with us are going to efficient and qualitative for the brands. ing real impact and making the promotion notice the positive effect of these acquisi- Both to present the brand image and to in- area a real focal point for customers. tions. vest in our store. This is another challenge. 57 October/November 2016 TFWA/FDFA Issue INSIDER

Monalisa treats guests to an “awakening of the senses” at its Asuncion inauguration

Monalisa inaugurated its stunning 3,500 sqm luxury department store in the Paseo Galleria Mall in Asuncion, Paraguay in August.

Paraguay-based retailer Monalisa “sensorial” activities for the inaugural in the store. These included Dudalina, Le continues to bask in the opening of its first event. Lis Blanc, Versace Collection, Just Cavelli, luxury department store in capital city In the Fragrances and Cosmet- M Missoni, Lauren By Ralph Lauren and Asuncion. The celebration that began with ics area, Kenzo by Flower, La Vie est Nautica, among others. Adding to the mem- the gala ribbon-cutting of the 3,500 sqm Belle Lancôme EDP and Elie Saab were orable presentation, guests could take home emporium by Faisal Hammoud, Monalisa featured as a field of fragrances, with three a portrait done in watercolor by the artist President and CEO during the inauguration fragrance-inspired installations created by Leticia Casati as a souvenir of the night. of the Paseo Gallery Mall in May, contin- artist Guillermo Sanabria. Tracing secret The Sports store spotlighted Golf with ued with a special Monalisa event on Au- gardens from around the world, special the presence of Paraguay’s very own PGA gust 18, where the family-owned store used caterers served guests with edible flowers. Champion, Carlos Franco, who advised the occasion to present guests an “awaken- In the Home section, the most color- guests about the products offered in the ing of the senses” as they discovered one of ful area of the store, guest were invited department. the most luxurious shopping experiences in to enjoy rich and colorful desserts made The central event of the evening was the country. exclusively for the occasion. a performance by the famous Orchestra Like its original Monalisa in Ciudad Monalisa’s highly acclaimed wine Cateura, which was followed by DJ Natalia del Este, the new store carries a full ar- cellar concept, La Cava, was unveiled to Doljak. ray of fragrances, cosmetics, fashion and the public in Asuncion on the night of the “This was a night of celebration casual high fashion, as well as household celebration. Special drinks were served between friends, art and the best of Mon- items and sporting goods, along with high with appetizers of hams and cheeses. alisa,” said Faisal Hammoud, who hosted quality wines. A special section for watches To celebrate the Fashion area, Monali- the evening with family and the Monalisa and jewelry will also be added. sa hosted 10 models wearing looks for all company directors. Monalisa created a number of unique ages in a wide variety of brands available

The new Monalisa store carries a full array of fragrances, cosmetics, fashion and casual high fashion, as well as sporting and household goods, among other categories.

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59 October/November 2016 TFWA/FDFA Issue INSIDER

Shopping China expands to new borders as it prepares for better times ahead

John Gallagher talks to Felipe Cogorno, CEO of Paraguayan super-store Shopping China in a special interview for Travel Markets Insider.

Shopping China, Paraguay’s biggest we have come a long way since then but categories. I have said before and will con- border retailer, has been in business for the ethos of the business remains the same tinue to say that when the customer does more than 80 years. providing our customers with international not know what the value of his purchase Back in 1933, the grandfather of cur- brands that are not easily available, at the is, he will not make important purchases. rent CEO Felipe Cogorno opened a small best prices.” Exchange rate stability is good for business 50 sqm store in Pedro Juan Caballero, over The current crisis is not a novelty for in general but it is great for border retail.” 530 kms from the capital Asuncion. Casa Cogorno and his team. Cogorno comments that the downturn Nippon soon became Casa China and the “We have seen many changes over the over the last few years is actually quite company grew steadily, as did its reputation years and on the border we know that there normal. as a solid supplier of imported products are good years and there are bad years. “There is no doubt that we are accus- with Brazilian travelers. In 2000, as Brazil Everyone realizes that 2014 and 2015 tomed to the positive and negative business started to recover from a major devalua- were not good years for the region and cycles in border retailing. We have been tion and its last major economic crisis, the the border retail business. The economic in the retail business for many years and family decided to change the name of the problems of our Brazilian neighbors have we have seen good times and bad times. In company to Shopping China. At that time, been well documented but this time these recent years the good times have been great they also began expanding the flagship were accompanied by political uncertainty times and this can make you forget that less store and rolling out their retail model to as the federal authorities investigated cor- good times are just around the corner. But adjacent countries. ruption allegations in different political and the secret is how to react when times get Cogorno proudly looks back on the business circles.” bad. Some people get very nervous but we history handed down by his forefathers. Reflecting on the start of the year, feel this is wrong and you have to be posi- “My grandfather began in a small Cogorno comments: tive. My personal view and the view of our store, selling local products to local cus- “The first few months of 2016 were group is that you have to take advantage of tomers. However my family soon realized not positive for the retail trade but in the the downturn in the market to look at your that many Brazilians crossed the border second quarter the fall in sales stopped and business and prepare for the next upturn in to look for products and brands that were as the value of the Brazilian Real stabi- the cycle. You have to fix the mistakes and not available to them locally. Obviously lized we saw better progress in sales in all errors you may have made as you grow. TFWA/FDFA Issue October/November 2016 60 61 October/November 2016 TFWA/FDFA Issue INSIDER

Customers filled Shopping China’s flagship store on Black Friday in September.

strongest companies are looking to invest right now. We have only been open for two months in Ciudad del Este but the early indications are that the investment is going to be very beneficial for our company and our suppliers.” In the past 18 months or so we have tried July, Shopping China opened what is the Shopping China is also about to open to make our organization better and more biggest store in Ciudad del Este. a new 1,500 sqm store in Rivera in north- efficient.” Cogorno added, “The 10,000 sqm ern Uruguay. Cogorno adds, “The store is He explains in more detail, “We have shop is situated in the new Shopping Paris situated in Avenida Sarandi which is the had a good look at all the different depart- Mall in the Paraguayan border town. We main shopping street in the town. We have ments of our operation and have tweaked opened on July 20 and it has coincided with been looking at Rivera for some time and different parts to make it more efficient. a small recovery in the number of Brazil- have been looking for the right place for Wines and spirits have always been a big ian shoppers visiting the town. This is our our store. At the moment we are planning category for us and we have added 3,000 sqm first store in the town but we have been to open for business sometime in Novem- to this category at our flagship store in looking to open in the town for some years ber and we feel that this store will be a Pedro Juan Caballero. Even in tough times but could never find the right location that perfect complement to our stores in Chuy. this section does well and when the Brazil- fits into our style of retailing.We feel the As in Paraguay, we have observed that ian economy starts to grow again we know Mall will become one of the main areas for there are more visitors in Rivera in recent we have the right selection of wines and tourists visiting the town and we are very months and that the retail trade is enjoying spirits to take advantage. We have also im- happy with the way business has gone over better sales compared to the first half of the proved the layout and product selection in the first few months. We occupy the whole year. We are confident that the opening of consumer electronics and we feel we will third floor of the building and we have a the Rivera store will coincide with a good be able to meet the needs of our shoppers great team of people there to look after end of the year for the travel retail trade in with the current range.” the visitors. We are seeing almost 2,000 Uruguay.” Cogorno adds, “When things are diffi- visitors per day and this will increase as the Shopping China’s new stores in cult, you also have to engage more closely Mall becomes better known to Brazilian Ciudad del Este and Rivera will undoubt- with your customer. We see this of crucial tourists.” edly benefit the company in the long term. importance and we feel this will be critical Cogorno adds, “Again as I said earlier, Opening at a low point in the economic as the business recovers. Our most recent when things are tough you have to invest cycle is ambitious, but when the boom Black Friday promotion held at the begin- in the future. The downturn in the cycle times return, the company is well placed to ning of September is a clear example of has affected every company but only the reap the benefits. this interaction. As in previous years, this was a very succesful event and we brought in a lot of people to our store and we were more than pleased with the four days of the promotion.” At the same time as making adjust- ments in their stores, Shopping China has been busy looking for new opportunities to add to its network of stores. At the end of

Shopping China opened a new 10,000 sqm shop in Shopping Paris Mall in Ciudad del Este.

TFWA/FDFA Issue October/November 2016 62 INSIDER

Buenos Aires aims to recover cruise industry business The Argentine government is giv- next year. The port authority is planning to call ing new impetus to a much postponed The government has drawn up plans a tender for the project in the first two renovation project for the cruise terminal for a new cruise terminal, with the objec- months of 2017. Scheduled to begin in in Buenos Aires port. Buenos Aires port is tive of recovering lost business. Since a 2019, the project will include relocating the only Argentine port that is under federal record 2012/2013 season, when 161 vessels cargo and warehousing areas as well as jurisdiction and President Mauricio Macri called, port calls to Buenos Aires have been building the new terminal. The govern- has given clear instructions to Gonzalo regularly falling -- 102 vessels visited the ment is expected to offer a 40 or 50 year Montola, the newly appointed CEO of port in 2015/16 and this year only 81 calls concession to attract the industry’s biggest the Argentine ports authority, to improve are scheduled for the high season. The players. conditions for the cruise industry. figures are even more disappointing since At the present time Argentine customs In mid-August, the government an- cruise traffic in Uruguay and Chile has legislation does not allow the operation nounced a reduction in passenger taxes for been stable during the same time period. of duty free stores in maritime ports. TMI the 2017-2018 season along with further Montola says the immediate target is understands that a plan to change the cur- incentives to encourage cruise lines to to bounce back and attract 100 vessel calls rent legislation is being discussed as an increase passenger disembarkation in in the 2017/2018 season. “I think the most additional incentive to bring in major cruise Buenos Aires. Argentine officials also met important factor is that we are sending line operators. with colleagues in Uruguay, leading to a clear messages to the market from the port JG joint promotion of the River Plate ports for of Buenos Aires.”

Vinci confirmed as Plans take shape for new Bogota airport owner of AERODOM The Colombian government has Colombia’s vice president German published details of a tender seeking a Vargas Llera said, “For huge infrastructure Vinci Airports has been confirmed as consultancy partner to help the country’s projects like a new airport you need to the new 100% shareholder in Aeropuertos aviation authorities plan for the building incorporate exact calculations as precisely Dominicanos Siglo XXI S.A. (AERO- of Eldorado II, a new Greenfield airport as possible in the planning stage. For this DOM), the concession operator at the 6 needed to relieve pressure at Bogota’s fast reason, we will bring in consultants to government owned airports in the country. growing international airport. The tender guarantee the success of the project from Dominican Republic President Danilo Me- was published in early September. the very beginning.” dina issued a decree ratifying the contract, Nearly 30 million (29.96m) passen- The new airport will be located 15 it was announced on July 15, 2016. gers traveled through Bogota in 2015, and kms to the east of the capital and will be Investment fund Advent International traffic is expected to double by 2040. connected by a fast transit link to Eldo- sold its shareholding in AERODOM to The government will spend 12,000m rado I close to the towns of Madrid and Vinci in December 2015. Colombian Pesos to design the overall Facatativá. Vinci has been operating the airports commercial and financial strategy along The project will be carried out under a since April this year but following the with a series of feasibility studies for a public-private partnership and be required ratification the French company is expected project expected to last for 22 months. The to fit with the country’s overall Aviation to announce expansion plans. plan is to have the first stage of the new Master Plan, which plans to invest 3 trillion JG airport operational by the end of 2021. C Pesos in 39 airports in the country. JG

New bridge for Argentina and Uruguay

Argentina and Uruguay are study- being assessed by officials in both coun- bridges linking Argentina and Uruguay: ing whether to build another international tries. Technical and environmental studies Fray Bentos - Gualeguaychú; Paysandú - bridge linking the two countries. The new will play a major part of the evaluation Colon and Salto - Concordia. The first two bridge would link Brazo Largo close to Za- process. Local officials tellTMI that the bridges have small duty free stores on the rate, in the north of Buenos Aires province bridge could eventually link up with the Uruguayan side of the international bridges and Nueva Palmira in Colonia, Uruguay. Bioceánico Aconcagua Corridor Project, and if the governments approve the new Guillermo Montenegro, the Argentine led by Eurnekian-controlled Corporacion project, an additional duty free store in Ambassador in Uruguay, announced that America. Nueva Palmira could be in the cards. the project, first aired 16 years ago, was There are presently three international JG

63 October/November 2016 TFWA/FDFA Issue INSIDER

Paraguayan tender enters final phase The long drawn-out tender to privatize airport. The 30-year concession will require regional hub. Cedicor, on the other hand, Paraguay’s Silvio Pettirossi International a minimum investment of $150 m. claims that its close association with the Airport is expected to close in September The tender is the first public private two Buenos Aires airports and Carrasco following government analysis of the partnership instigated by the Horacio Airport in Montevideo will benefit Asun- technical proposals received from the three Cartes government to improve infrastruc- cion’s development as a regional hub. final bidders. The Paraguayan Ministry of ture in the country, which is enjoying a Sacyr – Agunsa has kept a lower profile Public Works and DINAC, the country’s mini economic boom, even as neighboring but has promoted its experience in building Civil Aviation Authority, will open the Argentina and Brazil struggle with a range airports in Spain and managing airports in economic proposals at a public ceremony of political and economic problems. Chile. in Asuncion. While Paraguay’s government has Meanwhile, traffic is strong at Silvio In June, the original list of 12 inter- sought to make the process transparent, the Pettirossi Airport. International passenger ested bidders was reduced to three finalists: tender has been surrounded by controversy. traffic increased a healthy 13.2% in the first Franco-Paraguayan consortium Vinci Vinci and Cedicor have been accused of seven months of the year compared to the Airports-TOCSA (Vinci Airports S.A.S. appointing advisers close to the govern- same period last year and could reach 960k and Talavera y Ortellado S.A.); Uruguayan ment and aviation authority to increase – 980,000 for the full year. – Argentine joint venture Aeropuerto their chance of success. Cedicor, initially Incumbent duty free operators Bright Asunción Silvio Pettirossi CEDICOR – viewed as the favorite, has suffered from Star and Mannah have been operating in Caminos Viales del Uruguay (CEDICOR reports of problems with parent company the terminal for several years, and their S.A. – Caminos Viales del Uruguay S.A.) Corporacion America’s management of the future is unclear at this time. The same for and the Hispano Chilean Sacyr – Agunsa AA2000 airports in Argentina. Ukrainian border shop operator Golden consortium (SACYR Construcciones S.L. y Vinci Airports, which won the Duty Free (GDF), which purchased the air- Agencias Universales S.A.). Santiago de Chile concession last year, port arrivals and departures stores operated The finalists then submitted formal claims that it has the financial strength and by Flemingo International earlier this year. proposals to partner with the Paraguayan investment capacity to enable it to take a JG government to renovate the international long term view to develop Asuncion as a

DFA’s Rio Branco project underway Following two years of delays, DFA “There is no doubt the Mall is a bet for sqm mall and bus terminal is just over $35 Uruguay laid the foundation stone of the the future. The project was drawn up two million but the total cost once the whole $50m Rio Branco Shopping Mall, Terminal years ago but the situation on the Brazil- hotel project is completed will be closer to and Hotel development venture in the Uru- ian side of the border was not ideal to go $50 million. guayan border town of Rio Branco. ahead then with the investment. Now we The complex will include 2 large retail DFA Uruguay and a group of Panama- are under way and estimate we will be open stores, a supermarket, 40 smaller stores and nian businessmen are the lead investors in for business towards the end of 2017. If we a parking lot for 700 cars in addition to the the project situated 250 miles north east of wait until Brazil is growing again we may 4000 sqm duty free store to be operated by Montevideo on the country’s border with miss the early part of the recovery cycle. DFA Uruguay. Once the mall is open, the Brazil. “Every time it rains it eventually investors plan to complete the project with Construction on the project began at stops and we want to be totally ready when a 60 bedroom 4-star hotel. the end of August, confirmed Andres Men- the sun starts to shine again,” he added. JG delsohn, general manager of DFA Uruguay. The initial investment in the 17,000

Brazil and Uruguay study joint use of Rivera Airport Discussions between Uruguay and located on the outskirts of Rivera in north- believe that joint use and operation of the Brazil to establish Latin America’s first bi- ern Uruguay, is not served by any sched- airfield would be beneficial for tourism and national airport are progressing with more uled passenger services. The now defunct business development for both cities. meetings scheduled for the end of October. BQB Airlines operated a 5 times weekly Brazilian airline Azul reportedly has Talks between authorities in Rio service to Montevideo four years ago, but conducted studies with a view to operating Grande do Sul, Brazil and Montevideo, service was withdrawn due to infrastructure at the airport, possibly as a stopover on its Uruguay have taken place several times problems. Montevideo – Porto Alegre route. Local over the last few years but current discus- Now both countries are keen to residents are hoping that a service to one sions are examining real commercial develop joint use of the airport to serve the of the Sao Paolo airports will also be ana- possibilities. needs of Rivera and its Brazilian sister city lyzed. Currently duty free shoppers must The airport in question, a small airfield Santana do Livramento. Both countries travel to Rivera by bus or private car. JG

TFWA/FDFA Issue October/November 2016 64 FOLLOW US 65 October/November 2016 TFWA/FDFA Issue INSIDER

The 2016 Estée Lauder Companies Breast Cancer Awareness (BCA) Campaign “Take Action Together to Defeat Breast Cancer”

The 2016 Estée Lauder Companies Its efforts range from enhancing awareness ety of actions. These individuals will serve Breast Cancer Awareness (BCA) Cam- in countries around the world to raising as BCA Campaign spokespeople; communi- paign builds upon the success of last year’s funds for lifesaving medical research. cating on social and digital channels. campaign which celebrated the strength of Active in more than 70 countries, the “Our longstanding commitment to global solidarity in the fight against breast campaign has raised more than $65 million defeating breast cancer is a powerful source cancer. since it was founded, and has committed to of pride at The Estée Lauder Companies— With a focus on “togetherness,” this raising $6 million this year alone. spanning continents, cultures and languag- year’s campaign showcases the strength The BCA Campaign’s leading partner es. Each year, our employees, consumers of taking action together. In recognition of is the Breast Cancer Research Foundation and partners from around the world come this theme, The Estée Lauder Companies (BCRF), a nonprofit organization dedicated together to enhance awareness, raise funds, is bringing together a variety of influencers to advancing the world’s most promis- and inspire meaningful action to fight this and other partners worldwide to inspire, sup- ing research to eradicate breast cancer. disease,” comments ELC Executive Chair- port others and promote health and wellness. Established by Evelyn H. Lauder in 1993, man William P. Lauder, who along with The ultimate goal, of course, is to bring us BCRF is now the world’s largest private BCA Campaign Global Ambassador Eliza- closer to a world without this disease. funder of breast cancer research and has beth Hurley remain primary spokespeople While progress has been made in the accelerated major breakthroughs in breast for The 2016 Campaign. fight against breast cancer, it now repre- cancer prevention, diagnosis, treatment As in the past, ELC has created three sents one in four of all cancers in women and survivorship. Around the world, The special Pink Ribbon beauty products that worldwide. It is the most common cancer BCA Campaign partners with more than help raise funds for the Breast Cancer Re- in women worldwide and the World Health 60 breast cancer organizations to support search Foundation. For 2016, the featured Organization says that it is increasing, research, education and medical services. brands are: Aveda Limited-Edition Aveda particularly in developing countries where This year, The BCA Campaign spot- Hand Relief Moisturizing Creme with the majority of cases are diagnosed in late lights the true impact of togetherness by Uplifting Beautifying Aroma; Estée Lauder stages. An estimated 1.8 million new cases connecting a variety of influencers to bring Advanced Night Repair Synchronized Re- of breast cancer were diagnosed worldwide their diverse backgrounds and perspectives covery Complex II with Pink Ribbon Pin; in 2013, representing one in 18 women to our global community. The company has and Estée Lauder Pink Perfection Color around the world. brought together bloggers, media personali- Collection makeup palette; which are avail- The Breast Cancer Awareness (BCA) ties, authors, chefs, fitness gurus and medi- able in travel retail outlets worldwide. Campaign is The Estée Lauder Companies’ cal experts, to share a range of advice, tips For more information, go to BCAcam- largest corporate philanthropic initiative. and resources designed to encourage a vari- paign.com, @BCAcampaign or #BCAstrength

TFWA/FDFA Issue October/November 2016 66 INSIDER

ELC featured launch: La Mer introduces its next generation of renewing moisture

Loretta Miraglia, Senior Vice President of Product Development and Innovation at Estée Lauder for La Mer, explains what inspired this latest addition to the iconic skincare line and how it differs from the rest of the collection.

For Cannes, Estée Lauder Travel Re- brain to liquid bones that re-strengthen much smaller. In effect, the next big thing tailing is focusing on its New La Mer The and reverse aging bones, ‘super-fluids’ are is really small. Our highly specialized Soft Moisturizing Soft Lotion, the key launch revolutionizing innovations in industries Lotion Capsules surround each Moisture- for its super premium skincare brand this across the board. In the beauty world, Sphere’s soft center with a super hydrating Fall. ‘Super-fluids’ have become the precursor gel. This capsule process is remarkable, La Mer reports that it has developed for a brave new world of ‘Super lotions,’ and each one is individually formed. The a revolutionary super-lotion that delivers with unique textures.” result is a water gel made up of millions the renewing and transformative benefits of La Mer has set out to harness the of these micro-size spheres that flawlessly Crème de la Mer in a weightless yet rich, “Power of the Small” to create its own su- penetrates the skins barrier, flooding the new texture. The Moisturizing Soft Lotion per-lotion, she says, with amazing results. skin with hydration.” is an advanced formula with micro-crafted Miraglia says that the Moisturizing This soft lotion center is released and ‘Soft Lotion Capsules’ that drive Miracle Soft Lotion is a lighter texture than the melts deep into the skin immediately upon Broth and Lime Tea Concentrate deep into original Crème de La Mer, weightless, yet application to deliver the healing energy the skin to help heal dryness, replenish exquisitely rich. “Our healing moisture is that makes La Mer, La Mer, she says. energy reserves and soften signs of age. delivered so perfectly, so deeply, that you The Moisturizing Soft Lotion is ap- Loretta Miraglia, SVP of Product see and feel a difference immediately. It’s propriate to any skin type, and is a texture Development and Innovation at La Mer, the difference between a good moisturizer of choice and a way to get all the renewing says that she was inspired to create The and a small miracle. It will truly take your benefits of Crème de la Mer, she says. It is Moisturizing Soft Lotion after seeing the breath away.” super-weightless, ultra-rich and its active amazing technology called ‘Super-fluids’ She explains that the difference in ingredients Soft Lotion Capsules enable that was being developed by forward-think- the texture is due to the unique and slow penetrate deeply to begin renewal imme- ing universities and industries. process in which it is created. “We used a diately. “These ‘super-fluids’ use particles, high energy microfluidic process to smash The Moisturizing Soft Lotion is avail- gels and microchips that are so incredibly Crème emollients and liquid Miracle Broth able as of September in the travel retail small that they flow like a liquid. From together to re-master The Moisturizing Soft locations worldwide that carry La Mer. liquid computers that ‘think’ like a human Cream’s Moisture-Spheres and make them

67 October/November 2016 TFWA/FDFA Issue INSIDER

L’Oréal brings Giorgio Armani’s Italian seduction beauty to America’s finest airport stores

Perfectly timed to capitalize on the makeup brands in the front of the store,” surging popularity of makeup—especially he said. high-end luxury cosmetics - L’Oréal has Tétrel admits that selling luxury make- launched luxury skincare and makeup for up involves a commitment on the part of its Italian couture brand Giorgio Armani in the retailer: ongoing BA training, space to the travel retail channel in the Americas. carry the right assortment and a full selec- Thibault Tétrel, General Manager tion of shades to meet consumers’ needs. Travel Retail Americas for Giorgio Armani L’Oréal’s objective at the point of sale & Designer Fragrances at L’Oréal (Par- is to build a luxury brand and this requires bel) reports that the Armani beauty line the right amount of dedicated space to has opened in 15 key travel retail doors Thibault Tetrel, General Manager Travel present the brand in its iconic way, as well in North and South America over the past Retail Americas for Giorgio Armani & as specially trained dedicated staff. The year, with another 15 scheduled to join Designer Fragrances at L’Oreal Armani BA’s are a strong selling point: them by the end of 2017. starting at the Beauty Advisor level, staff “We want to make extraordinary flag- “While Travel Retail Americas (TRA) can progress to the ultimate title of “Face ship stores, and we are working with a few was always a big market for fragrance, Designer,” a designation reflecting their select retailers who understand retail excel- makeup has recently started to boom. The seniority and level of expertise. All the BAs lence and will help us implement this very trend that we saw 3-4 years ago in Asia, are makeup artists, of course. beautiful brand,” explains Tétrel. followed by Europe, is finally coming to “You need to agree to the complexity “Expanding the Armani brand into the Americas. involved to sell luxury makeup correctly skincare and makeup makes the Armani “Looking at worldwide makeup sales and I think that some retailers took some brand more feminine, and with this more for L’Oréal, Asia is doubling each year. The time to consider the opportunity and adapt premium offering we are receiving more domestic US consumer has always been a to it. But now the retailers are ready to beautiful spaces in the airport. As a result big makeup customer, but now we are see- embark on the makeup journey,” he says. of the larger spaces, we can offer greater ing the growth of makeup among Asians, Due to the huge appetite for Armani service. This is all coming together very Europeans, and finally, Latin Americans, coming from Asia –where Giorgio Armani well.” three groups that are good travel retail is already established as a full luxury beau- The rollout is taking place during a shoppers. ty brand with a very strong fashion name rebound in the market, he says, which is a “Because we have so many Latin --L’Oréal launched the Armani cosmetics good time to introduce new projects in the consumers, TRA is benefiting a little later in Hawaii last year with DFS, where it has region. Tétrel also points out that there is than TR Asia and TR Europe did. But it is been extremely successful. an important uptrend in makeup going on, coming now. We just returned from visiting “Giorgio Armani, which as a luxury/ which is especially apparent on the West the Dufry stores in Rio and Sao Paulo, couture fashion brand sits at the very high Coast of North America. and they were displaying a whole range of end of the market, is best known for its foundation and lipsticks with color appeal and extraordinary textures. We saw an immediate response from the Chinese, and Asians in general. Now we are making our way through the rest of the region,” he notes. “DFS has a beautiful retail space targeting the Chinese and Koreans in Hawaii and is now rolling out to Los Angeles in TBIT, in San Francisco with two doors and in New York JFK.” In Canada, Giorgio Armani Beauty has opened in Montreal with Aer Rianta and in Toronto with Dufry. In the U.S., MIA and Washington Dulles are underway while in South America, the brand has opened in Sao Paulo, Rio de Janeiro, Chile and Peru, as well as in Punta Cana. The Giorgio Armani Cosmetics service team (left) with L’Oréal’s Marie Dardayrol - Sandevoir, “We are now at the point where all Candice Cooper and Eugenie Ernst (right) at the opening of the GAC counter at Toronto the major retailers have embarked on the Pearson International Airport earlier this year. journey with us, not only with Giorgio

TFWA/FDFA Issue October/November 2016 68 INSIDER

“With our filters we can target, for example, a Brazilian who has traveled from Rio or Sao Paolo to Miami. These passengers who are receiving our advertising on these apps are really our core target consumers. This is a very innovative development,” says Tétrel. “I think we are increasing the relevancy of our advertising to the consumers. These passengers have been pre-selected, so we know they already watch makeup advertising and are traveling to the right countries.” Dardayrol-Sandevoir reports that the feedback from the digital programs even allow them to track the effectiveness of a specific offer in real time. “If a promotion is not working I can change it right away. I see the effects immediately.”

Giorgio Armani’s luxury dream Giorgio Armani Beauty is now featured at San Francisco International Airport. The Armani customer is primarily buying foundation and lipsticks—and products with UV protection are in high demand Armani, but with the concept of high end L’Oréal has made excellent use of from the South American consumer, while luxury makeup brands, including YSL,” digital marketing to introduce the Giorgio lipstick sales are growing substantially in says Tétrel. Armani beauty brand to this audience, North America. Strategically, L’Oréal had a clear build awareness and stimulate sales. Sales to date have been very satisfac- vision to list Giorgio Armani beauty with After first concentrating on beauty tory, says Tétrel. “Not only are we meeting only a few retailers in the most select doors articles in top beauty magazines, which all our goals – before we were selling fra- in the Americas. informed readers that the brand was avail- grance only and now we are doubling that “We started from the West Coast to able in select duty free shops, this year by selling fragrance and cosmetics -- but capture the Chinese consumers – ten air- the Giorgio Armani beauty team added a the beauty brands have created a halo effect ports deliver 90% of the Chinese travelers strong digital component to the marketing on the fragrances in Latin America, stimu- to the Americas, and five of these—NY, effort. lating sales of our women’s fragrances as Vancouver, Los Angeles, San Francisco and “We selected Brazilian bloggers, and well,” he explains. Toronto- are especially key to capture this we sent them to Paris to learn about the The products in the Armani Cosmet- target consumer. The East Coast strategy is brand so they could write about Giorgio Ar- ics portfolio clearly reflect the designer targeting European and American consum- mani extensively on their blog, and makeup himself, says Tétrel. ers.” tutorials on YouTube…. This was a way “Mr. Armani is at the heart of the Since Armani Cosmetics are not avail- for us to spread targeted awareness using brand and is probably the designer most in- able in the South American local market, social media,” says Dardayrol-Sandevoir. volved with his cosmetics. And he revolves L’Oréal sees travel retail as an excellent “We are also working directly with around Italian seduction and glamour, since opportunity to introduce the brand and the consumer inside the airport using WiFi he invented red carpet dressing, designing position it very exclusively. with Boingo, programmatic with S4M with for the likes of Cate Blanchett.” “We are targeting the niche trend- a geolocalisation strategy to drive to the Armani Cosmetics shine when it setters in Latin America. The ones who store. This is a way for us to communicate comes to foundation. “Armani is the travel a lot, and we offer them the opportu- directly with this very captive audience, foundation authority, inspired by the colors nity to bring home a product not available saying ‘Giorgio Armani is here, come and textures of the fabrics in his fashions. otherwise,” says Tétrel. discover the brand and experience a true Wherever Armani Cosmetics are listed, we luxury service.’ Earlier this year we very are the #1 foundation,” comments Darday- Digital marketing targets core successfully promoted an engraving offer rol-Sandevoir. consumers for fragrances through the app, for exam- The goal as Giorgio Armani cosmet- “But first we had to tell them that we ple. These operations are very successful, ics roll out in the region will be to drive are here, as in Latin America there is no and we can see more than 7 pax out of 10 the excitement at the point of sale, says footprint for the brand except in Mexico interested in our service or products.” Tétrel. City, and the passengers interested in the L’Oréal has gone a step further with “We are committed to bring the excite- brand usually purchase it abroad,” explains its digital efforts, however, and has refined ment that you find in a couture brand to all Marie Dardayrol-Sandevoir, Marketing the process so that it blends geo-marketing of the category along with the quality of Director Travel Retail Americas Giorgio together with further targeting, using very service that such a luxury brand requires,” Armani & Designer Fragrances. specific filtering parameters. he concludes.

69 October/November 2016 TFWA/FDFA Issue INSIDER

L’Oréal TRAM embarks on a digital transformation

L’Oréal, known for the excellent cali- ber of its training and people, has acquired a global reputation as a “talent factory,” successfully pooling the skills of employees spread throughout the world. Even in the Miami headquarters, regarded as a Latin American mainstay, L’Oréal Travel Retail’s staff represents 24 different nationalities representing five continents and with Beauty Advisors that are spread over 16 countries. “L’Oréal TRAM (Travel Retail Americas) is super-international and very diverse. Not only do our talents come from different parts of the world, but they deal with the complexities of the travel retail market, which is very different than the local market. They must understand the buying habits of consumers / markets / economies of different countries of the L’Oréal’s Travel Retail Americas team at Emerge Americas world. Not only do they deal with North & South American consumers, for example, embarked on a major program to increase Americas Conference in Miami in April, but also with the Japanese, Chinese and awareness of the opportunities provided where our teams were able to meet with top Russians, among others,” explains Munir by digital and to improve the skills of its digital experts from different industries,” Kamil, Director Human Resources - Travel people in using digital. says Kamil. Retail Americas at L’Oréal. “The objective was to go beyond the “This was a huge investment in time TR is a much more complex business basic social media such as Facebook, Twit- and effort but was a great success in than that on the domestic market, says ter, Instagram etc, in order to develop real expanding the horizon of our teams and Kamil. “If you have marketing product tools that could make a difference in our their digital understanding. The sessions managers in the local market, they are more business today and in the coming years,” help them build not only the understand- focused on their specific local market. But says Kamil. ing and role of digital in today’s world the travel retail product manager sitting in In November of last year, L’Oréal but also to network with the top digital Miami must also understand the Japanese TRAM’s Marketing, Commercial and Re- solution providing companies. When we consumer / market trends, while developing tail Education teams met with the Manag- came back, I challenged all the teams to the Hawaii market; to ensure that consumer ing Director for an informative session in think about how digital could be used gets the desired products and service. This which he communicated the importance to transform the way we work, conduct complexity is equally true for marketing, of the digital strategy. In alliance with business and build our portfolios. Each commercial and every other function of the L’Oréal NY, TRAM implemented an online team was to identify a technology that company. assessment to determine the level of digital will accelerate their business units and “For this reason, a TR center like knowledge gaps in the marketing teams to generate incremental profit, giving them Miami is treated as a hub where talent can customize their training needs. one month to prepare. be developed in different aspects of the At the same time, working with Paris, “The results were very interesting. business for our entire group. This is why they launched the L’Oréal Group’s 16-mod- At the end of May, using the insights they we have seen a lot of talent coming from ule training tool, called Essentials of obtained from the conference, each division different subsidiaries; their diverse back- Digital Marketing, EDM, which was posted presented ideas that were relevant, out of grounds, experiences pool in to the success on the L’Oréal online platform between the box and showcased creativity. We chose of TR business.” February and May. During this time, a se- our winning ideas and some of these ideas This is the crux of L’Oréal’s strategy, ries of in-depth workshops were also held, will be implemented going forward. says Kamil: to bring different types of tal- covering a range of digital-related topics. “And this is just the beginning,” notes ent into the Miami office from across the By April 15th, 85% of the targeted Kamil. “We will keep improving on our world, and then develop them as even more population had consumed the EMD must- digital training and implementation. In diverse and international professionals to have modules; today that number is at Cannes, the L’Oréal teams will get together take on even bigger challenging roles in the 100%. to ascertain where we are and how to go future. Really acting as a talent school for “To further nurture innovation, we forward. Our ambition is to eventually its people from every part of the world. took all of the members of the marketing, extend this initiative to all the divisions and Much of L’Oréal’s training now commercial and education teams who had to have a more digitally savvy Travel Retail involves digital, and the company has completed the training to the 3-day Emerge Americas.”

TFWA/FDFA Issue October/November 2016 70 71 October/November 2016 TFWA/FDFA Issue INSIDER

Versace launches Dylan Blue with Bruce Weber video starring Gigi Hadid

Euroitalia’s featured launch for the video shows martial arts stars fighting Versace this season is “Dylan Blue,” a new and loving in pure Versace style. woody fougère fragrance for men. The “I love how Dylan Blue captures such EDT combines notes of bergamot, grape- an evocative world of Versace masculinity. fruit, fig leaves, aquatic notes, violet leaves, Dylan Blue is the essence of the Versace black pepper, papyrus wood, ambrox, pa- man today. It’s a fragrance full of character tchouli, mineral musk, tonka bean, saffron and individuality, an expression of a man’s Expertise in fragrances and cosmetics and pyrogéné incense. strength and also his charisma. I love how The latest addition to the line is pre- it takes traditional notes and scents and sented in a classic Versace-style bright blue makes them totally modern, totally fresh distribution in the Americas and gold bottle, featuring the brand’s iconic for today, and tomorrow,” comments Dona- Medusa symbol. tella Versace. Versace launches Dylan Blue with a The Versace fragrances are distributed short film shot by Bruce Weber. Starring in Americas travel retail through Essence Versace’s super-model muse Gigi Hadid, Corp.

Burberry adds My Burberry Black to collection

Burberry continues its “rain in the by the Burberry trench coat. garden” story in its My Burberry collec- My Burberry Black, which fuses the tion, introducing My Burberry Black, a scent of jasmine flower and peach nectar WE ARE fragrance that this time returns to a London with vanilla and candied rose, follows after garden amidst a gathering storm, the rain the major worldwide launch of Mr. Burb- contrasting with the warm and captivat- erry this past April. PASSIONATE ing flora. The rich, amber-colored bottle is The Burberry fragrances are dis- finished with an elevated horn-look lid and tributed in Americas travel retail through a hand-tied black gabardine knot inspired Essence Corp. ABOUT OUR BRANDS PROUD TO SERVE Essence Corp. Gives Back The philosophy of Miami-based fra- is to strongly contribute to its surrounding company practices throughout the year OUR CLIENTS grance distribution company Essence Corp. community, an ethic that the philanthropic through myriad activities and special events. In one recent notable example, this summer Essence Corp. teamed up once AND DRIVEN BY again at the Miami Rescue Mission Outreach Homeless Center in Downtown Miami to participate in their annual Christ- mas in July, an event which catered to more than 2,500 people in need. EXCELLENCE The Essence Corp. team volunteered to serve a warm meal to the Miami Rescue Mission guests. In addition to serving lunch the event also included distribution of clothes, books, hygiene kits as well as a job and health fair to all of the event’s guests. Congratulations to Patricia and Jean Jacques Bona and the Essence Corp. team for another job well done.

TFWA/FDFA Issue October/November 2016 72 www.essence-corp.com Expertise in fragrances and cosmetics distribution in the Americas

WE ARE PASSIONATE ABOUT OUR BRANDS PROUD TO SERVE OUR CLIENTS AND DRIVEN BY EXCELLENCE

ww w .e ss en ce 73 -c o rp. co m October/November 2016 TFWA/FDFA Issue INSIDER

Shiseido Travel Retail focuses on new fragrances in Cannes

Shiseido Travel Retail will highlight just launched the highly anticipated Zadig his memory of a visit to The Alhambra of several new fragrances from its growing & Voltaire, a brand that brings new energy Granada. He was fascinated by the stone portfolio of brands, including Alaïa Paris, and a touch of raw edginess that will ap- screens of indented patterns, the delicate Issey Miyake and the recently launched peal to a younger demographic. And with openwork marble slabs, and its interlac- Zadig & Voltaire, at the TFWA World Exhi- Dolce&Gabbana, we are ushering in an ings, chiaroscuros and lattices, an echo of bition (booth: Riviera Village RH3). exciting new era of growth and develop- which is seen in the new bottle. Dolce&Gabbana, the latest addition to ment. Our aim is for fragrances to represent Shiseido’s fragrance portfolio following a 42% of our total retail sales by 2020.” Issey Miyake L’Eau d’Issey Pure landmark worldwide beauty licensing deal Shiseido Travel Retail will also be effective October 1, will also have signifi- Zadig & Voltaire launching Issey Miyake’s L’Eau d’Issey cant presence at the Cannes show (booth: This is Him! & This is Her! Pure Eau de Toilette for women in 2017. Beach Village 2 Beach 08). The first two fragrances from French The new scent follows the successful “We are very fashion house Zadig & Voltaire will of- introduction of the Pure Eau de Parfum this optimistic about our ficially roll out in travel retail this month July. future in fragrances, following a stylish launch in Paris in L’Eau d’Issey Pure breathes new life despite an over- June. The fragrances will be a major focus into the original L’Eau d’Issey, which was all market through 2017 as Shiseido Travel Retail first introduced in 1992 and revolutionary decline in builds Zadig & Voltaire into a new pillar for its floral-aquatic facets and use of the sales of the brand. Calone molecule to evoke the scent of wa- category last ter on a woman’s skin. It was described as a year,” said Alaïa Eau de Parfum Blanche new expression of nature; a sensual combi- Shiseido The black-and-white theme continues nation of freshness that is both aquatic and Travel Retail with Alaïa, which will introduce Eau de botanical. L’Eau d’Issey Pure spins a new Vice-Presi- Parfum Blanche – French for “white”. It aquatic story with the use of Maritima, an dent Market- is a follow-up to its inaugural fragrance, exclusive IFF molecule which calls to mind ing Elisabeth Alaïa Paris, which was bottled in translu- an image of cool clear waters and salty sea Jouguelet. cent black glass. Designer Azzedine Alaïa breeze, says the company. “We have drew inspiration for Alaïa Blanche from

FFG’s new Perry Ellis fragrance takes “Extreme” measures

Perry Ellis is now launching a new polishes off the fragrance for a warm, ad- men’s fragrance -- Perry Ellis Aqua Ex- dictive trail that complements the clean, treme – for the Fall/Holiday season in the fresh appeal. US, LATAM and Travel Retail. Perry Ellis Aqua Extreme is the richer, Perry Ellis Aqua Extreme is a follow- deeper, more modern extension to the origi- up to the successful Perry Ellis Aqua, nal Perry Ellis Aqua. The ocean-inspired which launched in 2012 and is one of the blue-sprayed heavy glass bottle is available best-selling scents for the brand. in a 3.4 fl. oz. EDT and the 3-piece Gift Set Recognizing that fragrance is an contains a 3.4 fl. oz. EDT, 6.8 oz. deodor- opportunity for a man to express his taste izing body spray, and .5 oz. EDT Mini. while having fun with style, the “nose” Perry Ellis Aqua Extreme is available behind Perry Elis Aqua Extreme, Jean- in the US at Macy’s, Dillard’s, Belk, Lord Claude Delville, Senior Perfumer at Drom & Taylor, Boscov’s, perryellis.com and Fragrances set out to create a “sheer, more. Distribution will expand globally to refreshing and masculine composition with Mexico, South America, the Middle East, lasting quality and intrigue.” Crisp top and beyond. notes include bergamot and verbena, with The Perry Ellis fragrances are middle notes of geranium, blue lavender, produced under license by DFA’s Falic and juniper. The intense blend of rich Fashion Group (FFG) subsidiary. labdanum, tobacco leaf, and milk wood

TFWA/FDFA Issue October/November 2016 74 INSIDER

Rituals continues to grow its travel retail business as it extends its product lines

Rituals, the eastern-inspired, botanical based body and home cosmetics, has extended its travel-related presence both in the air and in airport shops over the past few months. Rituals was reselected to be back on board the long haul flights of Brussels Airlines with amenity pack items of lip balms and moisturizers, as of September 1. Director of Wholesale Neil Ebbutt says that Rituals has extended its range of products for amenities and added a dedicated team to serve the needs of airlines to good effect. “This specialized focus is paying off in terms of airlines choosing to select Rituals products to help fill their amenity pack assortments with high quality and traveler-relevant items. The moisturizer is derived from Rituals’ range, The Ritual of Dao, which is inspired by the ancient Chinese philosophy of achieving a balance between the forces of Ying and Yang. It contains white lotus and yi yi ren, traditionally used in Chinese medicine lip balms and moisturizers.” The beauty brand is also growing its business significantly in World Duty Free’s UK and European airport stores, and recently opened a dedicated unit within the main WDF store in Gatwick South. The brand is also in WDF stores in Düsseldorf, Manchester Edinburgh, East Midlands, Newcastle, and Glasgow airports. They can also be found in World Duty Free’s stores in Helsinki, Barcelona, Las Palmas, Madrid and Malaga. “A presence in an international airport as big as Gatwick is a major result for us and brings our brand to millions of potential new customers,” said Ebbutt. Rituals will be supplying an assortment that includes body and home products from their best-selling Rituals collections – Ritual of Dao, Ritual of Ayurveda, Ritual of Laughing Buddha and their newest re-launched collection, Ritual of Sakura. A range of travel exclusive sets will also be offered This summer, Rituals also introduced an expanded collection of sun care products that are now available in its stand-alone airport shops. The brand is currently available in more than 400 stores worldwide, plus 1400+ shop-in-shops worldwide and is shipping to 25 countries in travel retail, and can also be found onboard 100 STAND M41 cruise ships. Green Village Rituals will be exhibiting at TFWE 2016 at Stand Number M41 in the Green Village.

75 October/November 2016 TFWA/FDFA Issue INSIDER

Baylis & Harding sets its sights on Canada’s Travel Retail Market at FDFA

Baylis & Harding, a leading ladies gift brand in the U.K., is now launching its charming, appealing gift sets in the travel retail market in the Americas through Katherine Sleipnes’ International Brand Baylis & Harding Builders International (IBBI), which will held a “road show” in be showing the line at the Frontier Duty Miami in August that Free Convention in Toronto, Canada in attracted some 20 travel November. retailers throughout the One of the fastest-growing, multi- region. channel bath, body and gift manufacturers in the world, the award-winning Baylis & Harding is best known for its affordable luxury beauty sets. Family-owned Baylis & Harding is headed by brother and sister Adrian and “We believe that now is the right time an easy gift; they’re looking for an impulse Tania Slater (MD and Creative Director to explore the growing travel retail market purchase and the Baylis & Harding product respectively) who strongly focus on afford- and are in the process of reviewing our range fits that demand perfectly.” ability, quality assurance and innovative export business in general, with a specific Baylis & Harding held a road show design. They have shaped the company focus on travel retail,” comments Adrian in Miami for two days this summer, which founded by their parents nearly 50 years Slater, MD and Co-owner. “… Travel retail was visited by more than 20 travel retail- ago into an international success that is is very much a gifting environment, partic- ers from throughout the region. For more now found in 52 territories spanning the ularly in the Airport, Maritime and Inflight information, please contact katherine@ Americas, Europe and Asia. channels. People are traveling, looking for internationalbrandbuilders.com

WITH

MAKING MEMORIES SINCE 1970

[email protected] facebook.com/baylisandharding baylisandharding.com

TFWA/FDFA Issue October/November 2016 76 INSIDER

Cross launches pen that destroys an AK47

A.T. Cross is using the power of the pen to help stop gun violence in war-torn regions of Africa. Partnering with social good company Fonderie 47, Cross is launching the Peerless Fonderie 47 Collec- tor’s–Edition Rollerball Pen, which is made said Peter Thum, Founder and CEO, Fond- assault weapons. Once secured, the guns in part from AK47 assault rifles. erie 47. “This fall we are happy to partner were melted down by a local blacksmith In addition, each Peerless Fonderie with Cross again to help bring an end to and then the team transported them back to 47 Collector’s-Edition Rollerball Pen pur- violence with the release of the collector’s the US. chased funds the destruction of one assault edition of the Peerless Fonderie 47.” The next phase of the project took root rifle inAfrica. Cross and Fonderie 47 previously in Brooklyn, NY, where they built a forge The Fonderie 47 company, which collaborated on a successful limited edi- and engaged an American blacksmith to transforms AK47s from war torn regions of tion pen in 2015. For the current edition, remake the gun steel into new ingots from Africa into luxury accessories, is respon- the two groups worked together to evolve which the signature Fonderie 47 pieces for sible for the removal of more than 55,000 the aesthetic of the pen to reflect design the pens could be created. assault rifles from circulation inAfrica. elements of the weapon itself. Each pen The craftsmen at Cross used the This special-edition rollerball pen supports features black PVD plating with 23KT blackened AK47 gunmetal to create the fine Fonderie 47’s mission to stop gun violence gold-plated appointments, a disk of black- details of the recycled steel Fonderie 47 by reducing the supply of available assault ened steel from a melted-down AK47 gun logo which is inset into the cap of this new rifles in Africa. embedded in its cap and the unique serial edition to the Peerless collection. “In the last 20 years, wars on the number of the gun that was destroyed to The Cross Peerless Fonderie 47 African continent have resulted in the create the writing instrument. Collector’s-Edition Rollerball Pen, priced loss of millions of lives. The widespread The Fonderie 47 team spent a year and at $350, is available for purchase at select availability of assault rifles has played a a half in conflict zones inAfrica negotiat- retailers and on www.Cross.com significant role in these ongoing tragedies,” ing to safely and legally obtain confiscated

Buckley London SS 2017 collections inspired by British heritage

Award winning British jewelry brand Rasmus Olsson, Head of Global Sales growth across all travel retail channels, Buckley London will preview its Spring at Buckley London, says: “Last year’s thus increasing our global presence in 2016 Summer 2017 collections at this year’s TFWA Cannes was a huge success for us, and beyond.” TFWA World Exhibition in Cannes, where resulting in 30 new locations being added Buckley London, which is represented it will showcase ten collections highlight- to our portfolio and we hope to build upon in the Americas travel retail channel by ing the brand’s signature ‘modern meets this success for SS17. We believe that the International Brand Builders International, classic’ style and take inspiration from new premium fashion profiles significantly will be exhibiting at Red Village, stand H4 iconic London architecture and British strengthen our offering and will allow for at TFWA World Exhibition in Cannes. heritage. The collection features themes of geometric shapes, polished peaks and fine line pavé-set stones, along with multi-layer and lariat style necklaces to create a range of contemporary designs for any occasion. From the street style-inspired Hackney collection with striking Blue Lace Agate triangle accents, to the organic shapes of the Lambeth collection, the SS17 range showcases best in class design at affordable prices, says the company. Buckley London will also build on the trend of stackable wrist wear, expanding its bestselling opening price point 3-for-2 bracelet offering with three colorful new styles.

77 October/November 2016 TFWA/FDFA Issue INSIDER

UK #1 watch brand Sekonda becomes a travel retail powerhouse

With more than 700,000 watches sold with great service. globally each year in the travel retail chan- “We really have a watch for everyone: nel, Sekonda, the #1 watch brand in the the watches come with Japanese move- UK, is a rising force in the industry. A divi- ments and include traditional styles and sion of Time Products (UK), Sekonda has fashion ranges, chronographs and sports been the bestselling domestic watch brand models, and dress models with hand set in the UK for the last 30 consecutive years. stones. We also have a special jewelry- From its launch in 1966, the privately- inspired fashion brand for women, called owned, value-driven brand is now available Seksy. Sekonda produces a highly reliable at 177 locations in 64 countries, reports product at a great value. And our iconic Sekonda Sales Director Gary Taylor, designs are created in-house in the UK,” during a meeting at the ASUTIL Confer- says Taylor. ence in Santiago, Chile earlier this year. In fact, Sekonda watches are so It was Taylor’s second time attending the well-regarded that the company reports a South American event, as he introduces the return rate of less than 1%. Not only that, brand that is already widely listed in travel the company says that it keeps one million retail outlets throughout Europe, Asia, the watches in stock at any one time. Middle East and in North America airports Priced at about $150 for its top range, and border stores, with DFA. and with 70% of those sold in travel retail For 2016, Sekonda’s duty free pres- “Not only did we launch the brand in coming in under $100, Sekonda has a very ence is impressive—it is onboard 110 air- Rome, but we launched it with an open-sell appealing value-style-quality offer for the lines worldwide, as well as 83 cruise ships concept, which was unheard of at that time. travel retail channel, says Taylor. The brand and ferries. Not surprisingly, the brand Sekonda had developed these tailor-made also offers a wide range of small, medium has a very high profile in its home market, POS display units for airports, and we used and large self-serve display units designed where it is presently available in 54 airport the concept in Rome. We were already con- specifically for travel retail. locations through World Duty Free Group cerned how this mainstream British brand “We are meeting all the passengers’ (now Dufry), from which it sells more than would do in Rome, the epitome of fashion. needs including those of millennials,” says 200,000 watches a year. But it turned out the brand had widespread Taylor. The Sekonda and Seksy watches are The brand must be doing something appeal, and has been growing ever since.” currently available in Latin America travel right. Taylor recounts that Sekonda’s first Taylor credits the brand’s success to retail in Cancun, Chile and Peru. More foray outside of the UK, where it had a its diverse range of high quality watches, outlets will follow at the end of 2016. strong airport presence with Alpha Retail in offered at affordable pricing, produced For more information, contact info@ the 1990s, took it to Rome. under rigorous control procedures, along sekonda.co.uk

Paul & Shark celebrates 40 years with unique designer collaboration Luxury Italian lifestyle brand Paul & concept onstand, in which three world-class mark occasion for Paul & Shark; one that Shark is celebrating its 40th anniversary designers —Zhang Zhoujie from China, we knew should be celebrated by releasing this year by sponsoring TFWA’s first Re- Ladies & Gentlemen from the USA, and something extremely special. Bringing gatta, taking place on Sunday, October 3 in Tomas Alonso from Spain – create exclu- together these three world-class designers the Bay of Cannes. sive packaging designs for the brand. Cel- to create new ideas based on our oceanic “We wanted to do something special ebrating the iconic metal can and suitcase heritage was always going to produce in Cannes this year which would relate di- in which Paul & Shark first sold its early something unforgettable.” rectly to the Paul & Shark brand,” explains British Navy inspired sweaters made of Worldwide Travel Retail Director Cath- water-repellent wool, the three packaging erine Bonelli. concepts will be made available through “The Regatta is perfect, celebrat- Paul & Shark’s flagship stores globally. ing Paul & Shark’s heritage and sense of Within Travel Retail, the 40th anniversary adventure! It’s going to be an unforgettable will be celebrated via a special display experience for all those taking part.” animation using the classic packaging that The company will be also be high- inspired the Project 40 designs. lighting its very special ‘Project 40’ Bonelli comments: “This is a land-

TFWA/FDFA Issue October/November 2016 78 INSIDER

Furla travel retail sales surge nearly 40% in first half 2016, as new shop openings continue strong

Italian lifestyle Counting multi-brands and brand Furla continues department stores, Furla is to open important new now present in some 1,200 shops in the travel retail other locations in more than channel, where it regis- 100 countries worldwide. tered extremely positive Japan continues to be the results in the first half of strongest market for the Furla 2016, up +38% compared Group, representing 26% of to the same period last the total sales in the semester. year. Furla is currently in Sales were up 30% for the 223 travel retail POS in half year in Japan, and up 52 countries, reports the the same 30% in the US. In company. Europe, sales excluding Italy Since July Furla has – that alone is responsible opened five new travel for a 34% increase in sales – retail points of sale in Asia. These include sales were up +28% to 194m Euros versus have increased by 26%. APAC sales have a store at Yangon International Airport, the 151m Euros in 2015. increased by 22%, equal to almost 20% of busiest and largest international airport of This increase is equal to +27% at the total sales for the Group. Like-for-Like Myanmar; a new personalized corner in constant exchange rates and proves that the sales have also increased significantly with Kaohsiung International Airport in Taiwan; Furla Group’s growth is well distributed well-balanced results across all regions. a new corner in Changi International worldwide thanks to increases in sales Recently, the Furla Group has opened Airport T2; a corner in the Siem Reap Gal- ranging between +22% and +34% in all the new mono-brand stores in the Citic Mall in leria, Cambodia in partnership with DFS; geographical areas where the brand is pres- Shanghai, Mira Mall in Hong Kong, GUM and a new personalized corner in Taoyuan ent, says the company. in Moscow and in Nice. In the second International Airport, T2 North, in Taiwan. The Furla Group now comprises 425 semester of 2016, the Furla Group plans Overall, the Furla Group, which mono-brand stores, up by 10 since the end to open new stores in London (Brompton closed 2015 with its highest sales and of 2015. Around 50% of these mono-brand Road) and in Paris (Rue du Faubourg Saint profitability ever, reports that first half 2016 stores are owned and franchising POS. Honoré).

TUMI introduces the Landon Collection, new men’s range for Fall-Winter 2016 Premium luggage brand TUMI is security for valuables and protection from TUMI also introduced a collection introducing the ultra-premium Landon identity theft. The collection is offered in for men that represents a new level of collection at the TFWA World Exhibition classic Neutrals, Black and Grey leather, as masculine sophistication in engineering and (RG14 Riviera). Crafted from light matte well as a seasonal embossed Sueded Black structural design. The new Haydon range pebbled leather, Landon represents the that projects a cool, exotic look. is a best-in-class lightweight assortment brand’s pinnacle premium offering, char- For Holiday 2016, the Alcott Back- of soft, relaxed silhouettes that are both acterized by sophisticated and streamlined pack, Whitman Tote and Bradmoor Slim fashion-forward and functional. All styles designs and clean, contemporary details Brief get a burst of energy from a new, are crafted from a lightweight, durable fab- with advanced functionality. sporty pattern. These silhouettes will be ric with pebbled leather trim and come with The collection features subtle curved offered in a bold monochromatic black and TUMI ID Lock to guard against identity lines, a decorative aluminum luggage tag, white splatter paint print, making these theft. and refined logo treatment on the exterior, styles strong statement pieces. with leather accenting on the interior. Special exterior touches include refined hardware and magnetized anchor covers, designed to hook the removable shoulder strap with leather covers, and maintain the clean aesthetic of the bag when the shoulder strap is not in use. The interior of the bags feature a pocket that combines TUMI ID Lock and protective pocket functionality for extra

79 October/November 2016 TFWA/FDFA Issue INSIDER

Going Grey: The impact of the parallel market in the duty free spirits channel

Is grey market distribution – trading outside authorized channels – an inherent part of international business, particularly in the spirits industry? And is the duty free channel – where so many mullti-national companies have a huge flow of products trading all around the globe – an integral player in this trans-border system? Does grey market distribution destroy brands, or does it allow brands to enter markets that might otherwise be closed to them by prohibitive barriers? Whatever side of the argument you are on, grey market distribution is a “serious topic which merits some discussion” noted an experienced brand owner, one of the dozen who participated in an examination of the topic with Travel Markets Insider for this article. While grey market distribution has always been around, it appears to become more prevalent when economic times – like those of today -- are more challenging. Please note that due to the sensitivity of the topic, we assured respondents that all of their comments and insights are being presented anonymously. TMI sincerely thanks all of the executives – brand owners, agents and distributors from around the world -- who took the time to share their very candid insights with us, which we here present below. Lois Pasternak reports.

There is nothing black or white about whisky and vodka recently dropped on the owners were variations on this theme: the grey market when it comes to selling Uruguayan Brazil border and was traced to “Grey market is about the trade of spirits, especially in the duty free channel. a group of smaller shop operators who had products sold to a non-authorized channel It isn’t even that some people hate it -- (“it imported several containers ex Holland. and unintended by the manufacturers,” is toxic” scoffs one brand owner), and Dealing direct like this allowed them to added one brand owner. “Stock sold from some people don’t – (it is a route to market reduce their prices, but subsequently, the companies/individuals into territories that argue several others), but quite a few of our bigger operators were forced to reduce their do not have the ‘approval’ from brand own- respondents admit that “it depends.” Never- prices in order to compete. ers,” noted another, and “Product dedicated theless, everyone who spoke with us agrees “While this is all good for consum- for one market/channel that is shipped to a that it is part of the industry and not likely ers in the short term, it will take a very different market,” said a third. to go away any time soon. concerted effort to get prices back where Others went into more detail: “The “Wow, that’s a tough one,” responded they should be,” commented the industry opportunity to sell brands across different one senior industry official when asked for veteran relating this story. Note that these markets and regions based on the fact that a comment: “There are some companies small operators had done nothing illegal to different markets/channels receive differ- that adamantly fight grey market incursion get their product to market. ent prices for brands which have different to protect their brand’s images, while for At its most basic, the grey market – demands in each market…” explained one other companies, it is a legitimate business. often referred to as the parallel market, and international distributor/agent. But if you have built a premium brand and in some cases the informal market -- is de- Or how about this brand owner all of a sudden the market is flooded with fined as the trade of a commodity through description: “Grey market is an informal your product at 30% under your price, you distribution channels that are unintended by or parallel market. Product that has been will not be happy.” the original manufacturer. sold at a certain price for a specific channel A case in point: The price of Scotch Definitions from most of the brand (such as GTR) and with potentially A&P

TFWA/FDFA Issue October/November 2016 80 INSIDER

support on top also, then sold on informally Uruguay and Paraguay, and porous borders. –other terms for grey market --can also be to other markets, typically in another region Consumers, governments, retailers, traders a Route to Market into domestic markets and/or domestic market in order to benefit and producers are all part of the system,” like San Andrecitos in Colombia, points out from discrepancies in pricing channels.” said a distributor. another brand owner, adding that in many Or this one? Is this brand owner more Another respondent cited high import cases the product usually does not pay the cynical, or more realistic? “Grey market is tariffs on domestic markets and poor/cor- proper tax to enter a specific market (ie: irregular import – a way to get around the rupt border control along with lackluster “sacoleiros” into Brazil from Paraguay official importer/sales to a market you are customs enforcement for encouraging border busines). not allowed to supply. If you buy a case in parallel sales. But the fact is that in certain In these cases, Route to Market is kind a border shop it may be smuggling; if you cases where barriers to domestic entry are of an “official” grey market, suggested buy a pallet of liquor or more and take it in restrictive and prohibitive, parallel distribu- another brand owner. “But with RTM for resale it is grey/parallel.” tion may be the only way to market. business like this, there is an agreement Several respondents used the term Along these lines, some respondents between the manufacturer and the retailer/ “opportunistic selling” while another cited companies that have reportedly used wholesaler, covering such factors as vol- distributor candidly said it is a “route-to- grey market distribution to gain market ume, price, destination and distribution,” he market.” share in the domestic market, in areas notes. There is control, in other words. such as Latin America, through lower cost Even when parallel is the only route Greed or Need? entry via the border business, which have to market, there can be consequences So how did this parallel supply route enabled them to be competitive and gain explains one respondent. In one scenario, develop? market share quickly. using the grey market to enter a country “Greedy suppliers, distributors and “Many markets, due to legisla- with restrictive import policies could help duty free customers trying to make a fast tion, were not open for bona fide import develop awareness and demand for a brand, dollar,” argues one respondent, who has hence parallel develops. Brazil is a clear setting it up for when the market opens in been behind the growth of some very im- example, as are all the Muslim countries the future. Other times you may destroy portant brands internationally. today—Pakistan and Iran, for example, are your own market, driving down prices But others see the rationale behind huge parallel markets. We are now seeing and margins, and damaging brand loyalty. the grey market as more complicated, with Southeast Asia, Myanmar, China as well, as “But paralleling into a closed market like both external and internal forces driving the gigantic parallel markets,” explains a brand Pakistan or Iran, which is unlikely to open business. owner. up, will not damage your brand, and if the Externally, price differences and “Brazil was built that way. Millions of market does open at some point, you are a inconsistencies between continents and cases were shipped to Panama and Aruba, known brand,” he continues. countries, and fluctuations of currencies and transshipped to Bolivia, Paraguay and The so-called “internal” forces behind and exchange rates are factors behind Venezuela for parallel into Brazil to get the grey market are fed more by greed than paralleling. Big tax differences between around the restrictive legislation, done need, both from third-party traders and two neighboring countries (ie Paraguay vs on purpose by the exporting companies. from larger companies pushing for volume Brazil, Panama vs Colombia) is another Panama and Aruba were among the biggest at the end of the month and the year, say significant factor driving grey market sales. destinations for Scotch in the 80s and 90s, the respondents. “The grey market as such is a combi- and perhaps still are according to Scotch “To me the grey market was devel- nation of different factors; trade, free zones Whisky Associations,” he notes. oped by traders and operators not looking or reduced-duty zones, like the borders in Re-export and informal distribution to build brands but simply to develop a

81 October/November 2016 TFWA/FDFA Issue commercially successful enterprise,” notes product in the market,” asserts one well- So is Duty Free the Culprit? one brand owner. known owner. Respondents were divided about the Traders and distributors – low cost Several noted that even though con- role played by the duty free channel in grey companies who work on a low margin sumers may benefit on price in the short market distribution. and look for “easy” sales opportunities term from grey market sales, they also Duty free retailers -- operating world- abroad—come in for much of the blame. lose out on such variables as innovation wide or in multi countries, with a huge flow “As soon as a brand is successful, the and brand engagement when investment of products trading all around the globe-- parallelers come out. There are price sheets becomes restricted due to lower prices. certainly have the opportunity to supply every day, mostly from the Netherlands or Furthermore, the lower prices may not last grey market channels. Belgium. They offer you product and ask forever, said one: “Over time [the lower “The grey market is equally prevalent ‘Do you want the product with the codes or price] will become unsustainable and once in domestic markets as it is in duty free,” without the codes?’ There are two different larger brand owners take a larger share of said one, “while duty free is not synony- prices if you want the parallel supplier to the market, they will be able to drive prices mous with the grey market, it definitely ship the goods,” says another. up again.” contributes to the problem,” said another. Another agent sees a combination of The loss of control over your brand – “I do not see grey market coming factors in play: “public companies need to and your business --was a recurrent theme. through the travel retail airport stores, but deliver numbers constantly for shareholders “When goods start leaking to other there are other channels (ie Diplomatic, and cannot afford a sales decrease, so they legitimate markets that are not under your Border business and Airlines) where it seek out opportunities to move stock into control it can result in cannibalization of is difficult to control 100% of the final markets with less favorable buying condi- existing business,” noted another owner destination of the goods, especially since tions,” he notes. who was behind the growth of some iconic operators usually don’t share their figures. In many companies it is/was the ac- brands. “When prices in the marketplace And these channels receive important cepted culture to parallel towards the end dropped for certain products it had a price support from brand owners because of the fiscal year so coworkers could get domino effect on other markets, seriously volumes are big,” noted another. their bonus. damaging the profitability in the short “Duty free is a highly respected and “If you don’t care where your product term,” pointed out another owner. important channel of trade, but one of goes, you can always reach your numbers,” Grey market volumes that get too its stepchildren is parallel. However, all said another executive, who insists that large, and prices that go too low, can seri- aspects of the trade are involved in paral- much of the grey market is supplier driven, ously impact the regular market and retail lel from CEOs in London and Paris to and much of it a bonus issue. “And I don’t business, said several respondents: “We can ‘unshaved ship chandlers’ in Antwerp and see it changing unless we change the bonus lose control of our prices and our product Colon,” colorfully noted another owner. “A culture and adhere to realistic volumes of positioning,” one insists, and in so doing CEO can just call [using grey market dis- what a channel can bear.” “grey market also affects our brand image.” tribution] a strategic move towards a better “The grey market is not a brand build- brand positioning in a given market. No long term benefit ing channel, it’s fully driven by consumer “All brand companies parallel or qui- In an interesting observation, all of the demand,” notes one of the distributors. etly accept that their brands are paralleled,” respondents – even those who admit they In a more philosophical observa- he argues. have used grey market distribution -- point tion, one long-time spirits industry owner And as one respected owner of pre- out that in the long term, the grey market notes: “Short term you sell a container, and mium brands concluded: does not benefit most of the industry. everyone is happy. But medium term you “The grey market has always existed “Brands lose out the most, both finan- may destroy your own market due to lack and will always exist as long as price dif- cially and from an image point of view,” of trust, decreasing prices/margins and lack ferences exist in different countries, with was a common theme from the respon- of brand loyalty. I paralleled to markets that cycles based on economic performance of dents. later damaged my business. countries and companies. Grey market dis- “[The grey market] really destroys “When you parallel to get some extra tribution has gone up and down in the last brands and markets, because the distribu- business in a market in a year, it normally decade and is very dependent on exchange tor is out there building the brand and all backfires next year,” he admits. rates. At the end of the day it is simple of a sudden some duty free operator floods economics of supply and demand.”

TFWA/FDFA Issue October/November 2016 82 Special Issue TFWA World Exhibition/ FDFA October/November 2016

Hints of recovery in Travel Retail Americas

After nearly two years of daunting challenges in the Americas travel retail channel, the industry is seeing hints of recovery on the horizon. INSIDE INSIDER “September is the first month News when the business in Brazil is North America back to growth,” said one major IAADFS: Changes Ahead fragrance executive, adding “TRA International Shoppes at JFK T8 has been through a storm in the HMSHost, AIRMALL, past few years, but we are seeing Sea-Tac, more signs that the storm is over.” Canada The slowdown in Brazil Record Tourism obviously affected the duty free Peace Bridge Duty Free business on its borders, and while China accords, it still has a long way to go for full Toronto, Ottawa, Calgary recovery, “it seems that the decline Caribbean has bottomed out” one regional Puerto Rico, spirits distributor tells us. Cuba by sea and by air Exchange rate stability is a Grenada B2B - Rouge Carib big factor in halting the decline. Paraguayan border shop operator International Shoppes has opened an expanded, upgraded and redesigned duty LATAM Shopping China reports its sales free store at JFK Terminal 8 highlighted by a 15-foot wide LED display at the storefront and a series of high-end beauty boutiques. See story on p. 16 stopped falling in the second quarter of this year when the in Asuncion, and Shopping China Brazilian Real stabilized. “We has expanded into Ciudad del Este. saw better progress in sales in all In North America, passenger It has been a conviction in categories,” said company officials. traffic remains at record levels the duty free industry that times of The political turmoil in South throughout the U.S. and Canada, economic challenge often result in America may also be subsiding and airport development continues increased grey market or parallel now that the more conservative, to be strong, as seen with the major sales—especially in the spirits René Riedi - The TMI Interview pro-business Michel Temer is renovation and expansion made category. TMI is very proud to officially president of Brazil, by International Shoppes at New present an in-depth examination of Dufry opens Lima Duty Free Shopping China, Monalisa expand which also helps normalize York’s JF Kennedy International the actual prevalence—and impact economic conditions. And while Airport. In this issue of Travel -- of grey market distribution in Supplier Features Argentina is still struggling, its Markets Insider, we cover all of the industry. We sincerely thank Estee Lauder BCA 2016 fiscal policies are expected to these developments. all the many suppliers, distributors Giorgio Armani TRA L’Oréal’s digital transformation stimulate a recovery for next year. TMI also takes a close look and agents throughout the world Travel retail operators have at the industry in Canada, which is who participated in this ground- continued to invest in the market. celebrating unprecedented tourism breaking report. In Latin America, Dufry’s new growth and a nice rebound in duty Even as the industry worries Lima Duty Free store, which free sales. that internet sales are eroding follows on the heels of the Dufry Cuba continues to open more duty free sales, some companies showcase stores in Rio de Janeiro opportunities to Americans, even are investing serious time and and Sao Paulo, is a paean to good as the U.S. embargo remains in effort studying how technology design, efficiency and retail- place. can work for them. L’Oréal, for TMI reports on the back tainment. DFA has spread its story behind Carnival Corp.’s one, is focusing on digital tools operations into 18 retail venues 20-years of preparation for sailing to transform itself into a more in Brazil, Monalisa has opened a to Havana, and also takes our efficient, effective and relevant stunning luxury department store readers along on one of the first company. Special Spirits Report- commercial flights from the U.S. to We live in interesting times. Going Grey: the Impact of Cuba in 54 years. paralleling spirits in duty free Lois Pasternak, Editor/Publisher Plus Products-People-Places The Insider View

The most comprehensive coverage on the duty free and travel retail markets in the Americas. But you already know this. You’re on page 83.

83 October/November 2016 TFWA/FDFA Issue INSIDER

IWSR: Demand for gin and for super-premium spirits helped the global travel retail channel

Premiumization helped shore up lag- Gin was the biggest winner in volume- super-premium brands as producers expand ging duty free spirits volumes and sales, terms in the report, with overall volumes up their footprint and retailers look to cash in reports The IWSR. +6.0% surpassing 1.2m cases for the first on consumer interest in craft spirits. Duty free spirits volumes fell by time. The extra 250,000 cases pushed value Demand for expensive gins was one -3.3% and by value -4.2%, according to up by close to US$86 million. Three key reason, although not the only one, driving The IWSR’s annual Duty Free/Travel Re- brands drove this growth: super-premium growth of the top end of the market. In tail Summary Report, a global overview of Hendricks, premium Tanqueray, and stan- 2015, super-premium spirits rose by +3.7% duty free trends from 2009 to 2015. dard Beefeater, collectively adding almost passing the 2.6m case mark, while ultra- However, eight categories showed 50,000 9-liter cases combined. premium spirits rose to over 800,000 9-liter increases and a general trend toward premi- The gin category was further helped cases, up +3.1%. umization helped the top end of the market. by the emergence of new premium and

IWSR: Global drinks consumers have a thirst for experimentation, convenience, and brands that fit their lifestyle

The IWSR also released its annual The Category blur emerging regions such as Latin America, Global Trends Report 2016, a culmination Last year witnessed a further ero- Africa and Asia. of insights and analysis gathered by a team sion of the boundaries between categories. of researchers who have collectively visited Illustrative of this has been the number of Health consciousness 118 countries. The report looks across geo- new products launched that span multiple Almost universally, markets world- graphic and category boundaries to identify categories, such as ‘speers’ (spirit beers) wide have been shaped by greater aware- developments – both individually and in and ‘spiders’ (spirit ciders). Consumers ness of the dangers of excessive alcohol combination – that are helping to reshape are showing an increasing willingness to consumption and consumer desire to live the landscape of the global alcoholic drinks switch categories if another appears more a healthier lifestyle. Faced with evolving market. Key global findings include: dynamic or fashionable. consumer demands, producers have been This has led to migrations not only quick to respond by launching ‘lighter’ Premiumization within spirits, but also in some cases be- drinks with lower alcohol or calories. Most regions and markets worldwide tween broader categories. saw consumers trading up to higher-value Desire for convenience products last year across a wide range of Consumer evolution The enduring appeal of greater conve- categories. The trend has manifested itself There is an increasing importance of nience has been a driving force behind sev- in several ways in the international drinks millennial consumers in regions such as eral recent developments in the alcoholic market: an explosion in the number of North America, Europe and Australasia, drinks industry. These include the evolution craft producers and brands across every where their demand for authentic, engag- of new formats, such as canned wines and category; the growth of premium niches ing and high-quality brands, as well as for wines on tap. On the retail side there has like mezcal and Japanese whisky; and the new flavors, has been the driving force been significant growth in online sales, revival of aged brown spirits with their im- behind much innovation. However, female both via supermarkets and specific e- retail- age of heritage and quality. consumers are also becoming important in ers, which allow consumers to order drinks quickly and easily direct to their door.

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Brown-Forman GTR celebrates 20th anniversary in Cannes

Brown-Forman Global Travel Retail is Ferne, a veteran duty free executive, then Designed to showcase the company’s celebrating its 20th anniversary at the 2016 based in Hong Kong. Ferne was hired and travel retail portfolio with particular em- TFWA World Exhibition in Cannes. relocated to Louisville in early 1997. phasis on its American whiskies and recent In 1996, after extensive research, ex- Travel retail at Brown-Forman has Irish and Scotch acquisitions, the stand is ploration and discussion, senior executives grown exponentially in the past 20 years. more than double the size of the company’s at the corporate headquarters of Brown- Today, global travel retail is one of the top former stand and has informal gathering Forman in Louisville, Kentucky decided to six revenue generating regions for the com- space as well as a large number of meeting formally enter the global travel retail busi- pany and there is a team of more than 40 tables and four meeting rooms. ness. Prior to that decision Brown-Forman duty free staff members working in travel “We are very pleased with the appear- duty free activities were mainly embedded retail spread around the globe. ance of our new stand and the environment in various countries and regions around the “Over the past two decades, the it will offer us in Cannes. Our decision world. Brown-Forman Global Travel Retail team to move to a freestanding location on the “By the mid-90’s, Brown-Forman was has been guided by some remarkably grounds of the Palais and away from the just beginning to fully appreciate and em- talented and far-sighted leaders. These space we have occupied on the lower level brace the business opportunities outside of individuals – Richard Ferne, Patrick Moran for nearly the past two decades is just the United States,” explained Marshall Far- and Jim Perry - made a number of key another example of the increased com- rer, managing director for Brown-Forman and insightful decisions and retained a mitment Brown-Forman is making to the Global Travel Retail. remarkably talented staff in countries and global travel retail industry,” said Farrer. A majority of B-F’s business remained regions critical to travel retail. They made in the United States in 1996 and the man- Brown-Forman Global Travel Retail what Press Conference agement mindset was very much of focus- it is today,” said Farrer. “It is now our Farrer, and Campbell Brown, presi- ing on America first, says Farrer. opportunity to take our fine brands even dent of Old Forester Kentucky Bourbon, “At the time the company really didn’t further in travel retail through the excellent will conduct a joint news conference on have a full appreciation for travel retail and partnerships we have developed over these the new stand (Beach Village – B06) at the far-reaching brand building opportuni- years.” 12:15 pm on Monday, October 3, 2016. ties the channel presented. At that point During the news conference they will ad- in time the great brand building benefits New stand dress new developments in Brown-Forman of travel retail just were not well under- As part of the TFWA celebration, Global Travel Retail and with Old Forester stood. I think there may have been a slight Brown-Forman will unveil a new travel Bourbon. appreciation for the Cruise channel in the retail stand and introduce the newest addi- Farrer and Brown joined the Brown- Caribbean though,” Farrer said. tions to the Brown-Forman portfolio - Ben- Forman Board of Directors this year and In 1996 Brown-Forman executives Riach, GlenDronach, and Glenglassaugh are members of the Brown family. They decided to significantly increase its com- Single Malt Scotch Whiskies and Slane will be joined in Cannes by their cousin, mitment to travel retail and hired Richard Irish Whiskey. Robinson Brown, Brown-Forman’s regional director India, Middle East and Africa. All three are among the fifth generation of Brown family members to work at Brown- Forman. Brown-Forman was founded in 1870 by George Garvin Brown, their great- great-grandfather. Also attending the news conference will be Billy Walker, the master distiller for BenRiach, GlenDronach, and Glenglassau- gh distilleries; Alex Conyngham, founder of Slane Irish Whiskey; and Chris Morris, IT TAKES FIRE TO MAKE JACK. Brown-Forman master distiller and recent inductee into the Whiskey Hall of Fame This is only the second news conference Brown-Forman has ever conducted at the TFWA Conference in Cannes. The first AND JACK TO MAKE FIRE . occurred in 2013 to introduce Jack Daniel’s Sinatra Select and was attended by Frank #JACKFIRE Sinatra, Jr. DON’T GET BURNED. DRINK RESPONSIBLY. ©2016 Jack Daniel’s. All rights reserved. JACK DANIEL’S and TENNESSEE FIRE are registered trademarks.

TFWA/FDFA Issue October/November 2016 86 IT TAKES FIRE TO MAKE JACK. AND JACK TO MAKE FIRE . #JACKFIRE

87 October/November 2016 TFWA/FDFA Issue INSIDER

Bruichladdich relishes in its “proudly nonconformist”

Bruichladdich sets itself apart from whole series of investments in the distillery er, a wine merchant from London who other single malt scotches. to underwrite the traditional craft methods owned 5 high-end wine shops in the city. The “proudly nonconformist” Islay that are here.” “From a commercial point of view, distillery believes “the world needs an the group paid £7 million for the distillery, antidote to homogeneity and blandness.” Its Since 1881 but what they actually paid for was £7 aim is to create the most thought-provoking Bruichladdich has a history that goes million worth of stock in the warehouses whisky possible and, through a series of back to the late 19th century, even though with which they got a free distillery. That cult classic limited editions, it made its the scotch whisky distillery as it is known became the joke over the years, because the mark among scotch aficionados. today was resurrected in 2001. distillery was in very poor condition,” says Bruichladdich distillery is located on Bruichladdich Distillery was origi- Reavey. the western shore of Loch Indaal on the nally built in 1881 by the Harvey Brothers, Hebridean island of Islay, Scotland. who were members of a Glasgow whisky The wine influence The location is vitally important to family. They decided to make malt whisky Reynier coming from a wine back- Bruichladdich, which places an enormous for blends in response to the phylloxera ground instead of scotch whisky influenced influence on the terroir, on place and prov- crisis in France, which had wiped out the everything that came next for Bruichlad- enance. French vineyards and meant there was dich. All of Bruichladdich’s whisky is no cognac. However, when the French “We can’t overestimate the influence bottled on Islay, un-chill filtered and with recovered by using American root stocks, of wine and how important the concepts no added color. the brown spirits market was not as open behind fine wine were to this whole story,” Since Remy Cointreau bought to scotch as the Harveys believed it would says Reavey. “These guys were completely Bruichladdich in 2012, the new owners are become. imbued with the idea of terroir, the idea investing heavily in the brand, allowing the What followed was a series of cyclical that great wines are made by people who whisky to be made the particular way it has busts for Bruichladdich. The distillery was have a connection to their raw materi- always been crafted. closed during WWI, which was followed als, have a connection to the land, to the The only thing that has changed is the by the great depression and prohibition in climate, to the soils, to the weather.” scale of production and availability in new the US. The Harvey family eventually lost Reynier began attacking common markets like travel retail, says Carl Reavey, control of Bruichladdich in the 1930s. practices for the scotch whisky industry of Head of Press and PR for Bruichladdich. “That started a long period where the day. “We sell more to travel retail than we there were numbers of owners. It closed “Mark was not a whisky man and do any other single market. You can see during WWII. It changed hands again and was genuinely quite shocked to find that how important travel retail is to us,” he again and again,” says Reavey. the practices in the scotch whisky industry says. “What has happened since the Remy Bruichladdich was closed in 1994 and could not be further from the system of Cointreau takeover is quite extraordinary. remained shut until December 2000, when belief which was so much a part of his core The investment program is as large as the semi-derelict distillery was purchased being. He was horrified to find that scotch the original investment. There has been a by a group of investors led by Mark Reyni- whisky was being made from barley which

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reputation as it grows its travel retail presence came from who knew where. A lot of it was and he started to make enemies. He started takeover in the end. It was inevitable and Scottish, a lot of it was English, a lot was to attack the very basis under which scotch the right thing to happen,” he says. “It Belgian, Russian, Canadian.” whisky was being built.” has turned out that it was no coincidence Reynier made sure that Bruichlad- Bruichladdich is still not a member of we were purchased by Remy Cointreau, dich’s whiskies would never add color or the Scotch Whisky Association. and not by another whisky company. The chill filtration. family of Remy Cointreau has enthusias- “You educate the market to think dark Remy Cointreau tically embraced what we stand for and whisky means old whisky. In fact, that is Then Remy Cointreau came calling has invested massively, underpinning the not the case at all. These richly colored and bought Bruichladdich in July 2012 for principles we hold so dear.” whiskies that you see in vast quantities £58m. As it says in Remy Cointreau’s mis- on shelves are full of caramel. We never Reavey says it is perfect that a non- sion statement in its 2015-2016 annual add caramel,” says Reavey. “To Mark the scotch whisky company with its own love report, “There is a link between terroir and idea you would add caramel to whisky is of terroir bought Bruichladdich. soul...As it is put so aptly in Bruichladdich: absolute anathema.” “As a private company we some- We believe terroir matters.” “Mark ran some articles in national how managed to survive and expand, but One of the first things Remy Cointreau newspapers which drew attention to this we were always going to be subject to a did after it purchased Bruichladdich was

89 October/November 2016 TFWA/FDFA Issue INSIDER

double the distillery’s production to 1.3 Bruichladdich launched in Americas million liters per year and built new ware- duty free in 2015, and has found nice suc- houses on Islay to support the growth. cess as it has rolled out to markets, says Se- “What they were asking us to do was bastien Devallet, Director Rémy Cointreau to increase production to the natural levels Travel Retail Americas. the distillery was designed to do. As an “We are still in the process of listing independent we couldn’t afford to do that. Bruichladdich. We are also looking at the We couldn’t afford the barley, the casks, distribution. The point is not to be every- the warehouses to put the casks in, the where. We want to have segmentation of labor,” he says. “Remy had the resources. doors to make sure we can have the proper They wanted us to increase production of visibility, shelf location, and investment. the distillery to its natural capacity and that This is a small brand. We want to make Carl Reavey, Bruichladdich’s Director of Com- will give us the wherewithal to expand in sure where we do it properly,” he says. munications, and James Brown, who owns the the long term.” Bruichladdich is gaining important Octomore farm and provides the barley for the Bruichladdich is now working at peak listings in the region. ultra-peaty whisky, compare the difference be- capacity, says Reavey. “We want to build the brand through tween regular Islay water and water that comes from a spring on his farm. Brown’s spring water “We were short of warehouse space. the airports. We launched the brand in is used to cut Bruichladdich to bottling proof, They have built warehousing, the biggest Brazil with Dufry, and we are happy with and for Botanist Gin. private development on Islay for decades,” the results of the sellout. We are going says Reavey. to roll out the brand in every Dufry store While the purchase by Remy Coin- worldwide,” he says. “Now we are rolling treau did increase production at the distill- out with DFA/UETA. Octomore is doing ery, Reavey is quick to point out that does fantastically well for them. We should have not mean the distillery went to automation. listed next January all the duty free stores “The biggest distillery on Islay is worldwide.” Caol Ila. They are capable of making 6.5 Rémy Cointreau is launching two new million liters a year. They are making five expressions this year for Bruichladdich in or six times as much spirit as we are here. travel retail. They employ six people. At this distillery Bruichladdich unveiled ‘The Laddie we make 1.3 million liters. Onsite here Eight,’ an unpeated travel-exclusive expres- at Bruichladdich are 80 people,” he says. sion, at the IAADFS Duty Free Show of “The comparison is not direct, because we the Americas in April. The Laddie Eight very fiercely do everything we can here, launched first exclusively with the World from designing the tins, to warehousing ev- Duty Free Group in Europe, and will roll erything. We are by far the biggest private out in the Americas in October. employer on Islay.” The house of Bruichladdich also Many more people in Islay are unveiled Port Charlotte 2007 CC: 01, a indirectly employed by Bruichladdich, heavily peated Islay spirit. A single vintage, including 15 farmers who supply the barley the limited edition has been kept full-term The original Bruichladdich distillery dates back for the whisky. in French oak for eight years in casks that to 1881. previously held eaux de vie from the west- Duty Free ern Cognac region. “Bruichladdich Organic has been the Global Travel Retail is Bruichlad- Laddie Eight is replacing Bruichlad- first choice to be replaced because of the dich’s number one market, representing dich Organic, while Port Charlotte 2007 is size. It was the only one liter dedicated 26% of sales. taking the place of Port Charlotte PC 12. exclusively to travel retail, while the rest of the SKUs were 750 ml. As an entry price of $88 it was quite expensive to attract a new whisky customer,” says Devalllet. “The blue packaging has not been well accepted in every country worldwide by GTR. Although the blue has been mostly accepted in the Americas. It is such a point of difference.” Devallet insists that Bruichladdich’s point of difference will not change. “Bruichladdich is an artisan brand. We don’t want to compete with Johnnie Walker. We don’t want to look like the other brands. They really created a strong brand with a strong DNA.”

TFWA/FDFA Issue October/November 2016 90 INSIDER

Scotch whisky struggles to hold on in The IWSR Travel Retail Top 100

Scotch whisky had the most brands of mance by many of the travel retail sector’s voisier, Rémy Martin and Camus saw their any single category in The IWSR’s Travel Top 100 brands last year. In fact, many volumes decline. Retail Top 100, although half of these of the sector’s largest brands were most Gin was one of the few spirits cat- brands suffered declines in 2015. Scotch keenly affected by its downturn, with the egories to build additional volumes in the whisky had 27 of the top 100 brands on the share of the Top 100 brands falling from travel retail channel in 2015, growing by list. 83% in 2014 to 82.6% in 2015. 5.7% overall. As a reflection of this, all of The exceptions to this negative trend Four of the top five leading travel the five gin brands ranking among the Top were largely malt Scotch whiskies, such retail brands experienced volume losses 100 improved on their 2014 positioning. as Edrington’s The Macallan, Diageo’s over the year ranging from 7,000 to over Vodka is the second-largest contributor to The Singleton, Beam Suntory’s Laphroaig 100,000 cases. Most of their volume losses the Top 100 travel retail spirits rankings and William Grant’s The Balvenie. The stemmed from the Americas and Asia- after Scotch, but once again there was a trend mirrors what is occurring in domestic Pacific duty free/travel retail regions which mixed performance among the category’s markets, with malts outperforming blended respectively declined by -6.3% and -1.3% leading brands. Scotch varieties as consumer interest in the overall between 2014 and 2015. New entrants into the Top 100 list in segment’s high production values soars, The travel retail Cognac market also 2015 included Fireball Cinnamon Whisky, says The IWSR. experienced a mixed performance in 2015, Wild Turkey Bourbon and Bundaberg rum, Despite the global 0.5% increase in with sales down in Asia-Pacific and Eu- among others. All of these brands experi- spirits consumption in domestic markets, rope, while posting marginal growth across enced double-digit growth over the year, the travel retail spirits market contracted by the Americas. Similarly, of the five Cognac propelling them into the top 100 rankings, -3.3% in 2015, shedding a total of 750,000 brands to appear among the Top 100 travel as brands such as Bowmore, Drambuie and cases over the year. This overall contraction retail spirits brands, two (Hennessy and Becherovka fell by the wayside. is reflected in the largely negative perfor- Martell) posted overall growth, while Cour-

91 October/November 2016 TFWA/FDFA Issue INSIDER

EWTRA adds Sazerac brands to leading spirits portfolio

Miami-based Edrington WEBB Travel Retail Americas (EWTRA) continues to expand, and has now added additional select brands from The Sazerac Company to its distribution and marketing portfolio in the Duty Free and Cruise Line sectors in the Americas. Beginning October 1, 2016, EWTRA will directly manage key global brands in the Sazerac portfolio including Buffalo Trace Bourbon, Blanton’s Bourbon, Eagle Rare Bourbon and Fireball Cinnamon Whisky. Those brands join Sazerac’s Southern Comfort, which was awarded to EWTRA April 1, as well as Paddy’s Irish Whiskey. EWTRA also represents The Macal- EWTRA features Macallan at Las Vegas Intl. Airport lan, Tito’s Handmade Vodka, Disaronno, Licor 43 and Highland Park Single Malt, making the company one of the strongest “Macallan continues to be the caboose Director of Sales. distributors of craft and premium wine of the company, driving growth. Macallan Portela is particularly excited about and spirits in the duty free channel in the is still growing, both at the entry levels a series of new events on cruise lines that Americas. up to the prestige range. Rare Cask Black EWTRA is launching in the next two Andy Consuegra, chief executive offi- has been a phenomenal success exceeding months. cer of EWTRA, believes the new relation- expectations for us,” he says. “Even though “At the end of September, Brand ship will further position both companies Brazil has impacted our business and we Portfolio Ambassador Joe Cabassa sail- as pre-eminent players in the travel retail are down there, we are happy to report that ing on the Disney Dream, will conduct channel in the Americas. Macallan is gaining market share. And a Macallan food and whisky pairing, the “The Sazerac brands are an excellent Buenos Aires airport has picked up as Ma- first one at sea. Cabassa is partnering with fit within the EWTRA portfolio, making callan has double-digit growth there.” Disney Cruise’s head of food and beverage our family of premium wines and spirits US darling Tito’s Vodka continues to onboard and the chef to create a menu that among the best positioned to capitalize on grow, both with Americans and interna- they will pair with Macallan,” says Portela. the traveling consumer,” said Consuegra. tional consumers in the region. “We are also launching a Macal- “We now feel like we have a portfolio “Tito’s continues to explode both in lan flight program on that voyage that that can compete with some of the largest the airports and in the cruise ships. Tito’s will feature four references: Select Oak, multi-nationals out there and possibly is on many new drink menus on the cruise Whiskymakers, Estate Reserve, and Rare the strongest in terms of craft in growing ships and it has improved facings and Cask Black and Cabassa will conduct categories. We have some of the strongest positioning in the airports. We’re in North staff trainings throughout the voyage. We liqueurs in travel retail between Disaronno, America, Mexico, Central America, and will then roll out the offer fleet-wide for Tia Maria, Licor 43, Southern Comfort, and Caribbean today with Tito’s.” Disney.” Villa Massa,” he adds. “We have Macal- In October EWTRA will feature Luc lan, the number one single malt by value, Cruise Belaire sparkling wines on The Groove backed up by a very strong Highland Park. The Cruise channel has become a big- Cruise with EDM. We have the fastest growing vodka in the ger focus for EWTRA, says Consuegra. “Luc Belaire is such a good fit for an world in Tito’s. We have the number one “Cruise is driving most of our growth, EDM cruise and will be sponsoring events flavored whisky with Fireball. And now we especially with all the new listings brought onboard. There will be a ‘sparkling under have these bourbons which have so much in through Jada Portela’s efforts,” he says. the stars’ at night event for the light up bot- potential. “We’ve had fun this year working with tles. We are going to have magnum bottles “The brands come together and mixologists to create specialty cocktails. placed at the DJ booth,” says Portela. complement each other. We think there is a On the on-premise side the cruise lines are “We are getting into our first trial run lot of potential for cross promotions.” looking for new innovative recipes. Offer- with this type of cruise, but I see the poten- Consuegra credits Macallan’s suc- ing the cruise lines these recipes has helped tial to do some nice volumes with some of cess in travel retail for fueling growth for us get several new listings, and expand our our brands.” EWTRA. portfolio with them,” says Portela, EWTRA

TFWA/FDFA Issue October/November 2016 92 C

CMY

K Please drink responsibly.

LIMONCELLO ORIGINALE

Visit us at Green Village M67 or email93 [email protected] October/November 2016 TFWA/FDFA Issue INSIDER

WEBB adds Bulldog Gin, Constellation to be having quite a lot of success recently spirits in most of the Caribbean. When Constel- EWTRA sister company WEBB, lation purchased Casa Noble it was only a which handles spirits marketing and distri- 10,000 case brand. Now it is a 40,000 case bution throughout the Caribbean, is adding brand and growing very rapidly,” he says. three new brands to its portfolio. “Svedka is the anchor brand for Con- Starting October 1 WEBB is taking on stellation Spirits’ portfolio. Last year it did Bulldog Gin, the fastest growing premium 4.2 million cases in the United States.” gin in the world (IWSR). “WEBB will be managing all of the EWTRA organization and board Caribbean with the exception of Puerto additions Rico, which still falls under Campari To continue the organic growth of USA,” says Phillip Jarrell, WEBB Director EWTRA as well as prepare for the new of Sales. “Bulldog fits in perfectly with brands, EWTRA has made several organi- the premium and super premium nature zational changes: Juan Carlos Rodriquez, of WEBB’s portfolio. We’ve been look- former Director of Corporate Finance, Juan Carlos Rodriquez, Jada Portela, Andy Consuegra ing for a gin, but we wanted to make sure Bacardi USA, joined EWTRA in July that we found the right one. Bulldog, both as group Finance Director. Jada Portela, tor of Tito’s International, to the EWTRA from an image and a quality standpoint, fits former Director of Cruiseline Retail at Star- Board. John was formerly President Inter- the message we are trying to give for our board Cruise Services, has been appointed national/Global Chief Operating Officer of portfolio. I think it is a nice complement to Director of Sales, with responsibility for Patron Spirits International A.G. and the the rest of our portfolio.” the EWTRA sales team. Anette Mourier, former Chairman of DISCUS. In addition, Bulldog is already doing well in the Director of Marketing for World Equity Andy Consuegra announces the appoint- Dominican Republic, which makes up 90% Brand Builders (WEBB), EWTRA’s sister ment of Michel Recalt, an industry veteran of the brands sales in the Caribbean, says company, moves to Marketing Director, who was Global CMO of Bacardi and later Jarrell. responsible for ILLVA, Zamora, Tito’s and Moet Hennessey and is currently a consul- Bulldog joins the latest addition to the wine portfolio of Mionetto, Belaire, tant, to the Board of WEBB, where he will WEBB’s portfolio: Constellation Brands’ The Wine Group and Cape Classics. Barry act in an advisory role on strategy and busi- Casa Noble Tequila and Svedka Vodka, Geoghegan, based in Europe, will manage ness development and relationships. which WEBB began to manage in the global key accounts on select brands for “Both Michel and John provide im- Caribbean on April 1. EWTRA. mense value given their respective experi- “We are opening up the Caribbean for EWTRA also announces the appoint- ences and track records in the industry,” these brands. Super premium tequila seems ment of John McDonnell, Managing Direc- added Consuegra.

Disaronno dresses up with ETRO

Italian liqueur Moschino, Versace and Roberto Cavalli, a suited for travel retail, with their strong shelf Disaronno is highlighting portion of the proceeds from sales of the appeal, collectability factor and unique design its latest limited edition Disaronno wears ETRO collection will be all being key sales drivers. The previous bottle designed by donated to the development of this unique three icon editions have all achieved better Italian fashion house project to develop the textile trade and fight than expected results in travel retail and ETRO at the TFWA poverty in Africa. we anticipate another successful year for World Exhibition in Since 1968, the Italian luxury label Disaronno wears ETRO.” Cannes. ETRO has made a footprint in the fashion The Disaronno wears ETRO design This is the world as one of Italy’s most celebrated draws inspiration from the brand’s Autumn/ fourth collaboration houses. ETRO is best-known for the iconic Winter 2016 season, a continuation of the with an Italian ETRO paisley print, which transforms the house’s signature paisley collection that it fashion brand Disaronno bottle with a dressed up look began producing in 1981. and the latest which the company calls perfect for gifting The exclusive limited edition 50cl interpretation of in travel retail. bottle is available from the beginning of the ICON project “There is always a huge amount of October in major travel retailers globally, to support the hype surrounding each year’s new launch, supported by activations and promotions charity, ‘Fashion and it’s something our partners, retailers, including tasting bars. 4 Development,’ and consumers get very excited about,” says For the second time, the designer sponsored by the United Nations. International Sales Director Domenico Toni. collaboration will also be available in six Following past partnerships with “The Disaronno ICON bottles are perfectly mini bottles.

TFWA/FDFA Issue October/November 2016 94 Juan Carlos Rodriquez, Jada Portela, Andy Consuegra

¡NUEVO! Disfruta de un consumo responsable

ESTE SUAVE Y CREMOSO LICOR ES LA FUSIÓN PERFECTA ENTRE LICOR 43 Y LA TRADICIONAL RECETA DE HORCHATA DE VALENCIA. ENTRE SUS DULCES Y DELICADOS SABORES SE APRECIAN NOTAS 95 DE CHUFA, October/November ESPECIAS 2016 Y CÍTRICOS. TFWA/FDFA Issue INSIDER

Tito’s: Made in America, expanding to the world

Tito’s Handmade Vodka, the Austin, and travel retail markets, with Tito’s now in Texas-made spirits sensation, continues to 96 countries. grow in every market it enters, says John “We changed the whole route to McDonnell, Tito’s Managing Director market. A lot of this success has to do with International. WEBB, EWTRA and Barry Geoghegan. “It is phenomenal what is happening I’ve got a great group of people, who are with Tito’s. Our travel retail business has all industry veterans,” he says, noting that doubled this year over last year,” he told the brand is breaking through in global TMI. “Right now Tito’s is the 11th fastest markets. growing brand and the fastest growing “Step one is still follow the vodka in the world (IWSR). And last year Americans, but in Bangkok we sold most we cracked the top 100 spirits in the world of the bottles to nationalities other than by volume (IWSR); it is #91.” Americans. We are truly making Tito’s a The US remains Tito’s biggest market, global brand.” followed by military, then travel retail. In travel retail, Tito’s was most “The military, global travel retail, and recently listed in Tel Aviv, Beirut, the Caribbean are doing extremely well. It Bangladesh, Ulan Bator, Bahrain, Sofia, is a bit of a challenge in the international Dubrovnik, and Bangalore. Tito’s is featured at International Shoppes’ new domestic markets,” says McDonnell, who “In North America we are in every duty free store at JFK Terminal 8. handles the entire world except for the US single Caribbean island except Cuba. and Canadian domestic markets. We’ve got 70% of the North American to be about attracting new consumers to In the US, Tito’s Vodka has become a duty free locations locked. Tito’s is doing travel retail. Millennials do not like to go juggernaut both on- and off-premise, taking extremely well on the Canadian border in duty free, because the stores do not have share from its bigger competitors. where Bill Harvey represents Tito’s.” the right portfolio of brands. They want “In the US now, according to IRI data more craft brands. They don’t want the through July 10, 2016, the vodka category More opportunities ahead mass produced products,” he says. “The was up 4.6%, Tito’s was up 59.2%. For on- “We’re in Panama, Costa Rica, Millennials want the craft. We are a brand premise (Guestmetrix) Tito’s was up 42.2% Nicaragua, El Salvador. We opened Brazil that the Millennials have adopted. This in unit sales the last four weeks ending just ahead of the Olympics. But there are brand has integrity. There is a guy named July 10,” he says. “All the big on-premise some big markets that we haven’t launched Tito. Most importantly, it is extremely high vodka brands are in double digit declines in yet: Argentina, Chile, etc. My priority quality at a reasonable price.” and we’re up 42.2%. In the spirits category right now is to develop Mexico to be a New research from Mintel this over the last four weeks, Tito’s has a 5.72% larger contributor to the brand, and finish summer revealed that spirits positioned as share regardless of category. It is the with travel retail. “craft” account for one in seven (15%) of number one called for vodka in on-premise “I haven’t attacked Africa yet. Right new global spirit launches to date in 2016, in the US.” now we are trying to close the loop. We are up from just one in 20 (5%) in 2011. The McDonnell says the US success is waiting for the next open order for Dubai research also says Millennials are driving translating internationally into domestic Duty Free, DFS in Singapore and Hong demand for craft spirits around the globe. Kong. We are waiting for the completion of Three quarters (75%) of US Millennials the integration of Dufry, World Duty Free, agree craft alcohol brands are higher and Nuance. There are a few outlets that we quality than big brands and 34% of UK need to be in that we are not in.” Millennials agree craft drinks are worth Tito’s is also available in the air and paying more for. on the seas. “If we don’t talk to the Millennials we “We are the exclusive vodka on might as well forget it. They are the largest American Airlines, United, JetBlue, and purchasing block in the world,” he says. Virgin America. Starting December 1 on McDonnell says Tito’s is still selling United International Business Class day one bottle at a time, but the company’s flights to Europe there will be the Bloody success has been spectacular. Mary cart featuring Tito’s,” he says. “For “It is liquid to lips. We are focused cruise, we are on 88 ships, 450 bars. In more on-premise in the domestic retail we are in 68 stores on a variety of international markets. We want to be able cruise lines.” to talk to the consumers and educate them,” he says. “Tito’s Vodka is the greatest brand Craft brand I’ve ever been associated with in the spirits Starting Dec. 1 United Airlines is featuring Tito’s The craft aspect of Tito’s is a huge industry. Who says that America can’t have Handmade Vodka in international business class selling point. the best tasting vodka brand?” day flights to Europe on the Bloody Mary Cart “My whole pitch in Cannes is going featuring Tito’s

TFWA/FDFA Issue October/November 2016 96 SMALL BATCH BOURBON AWARD-WINNING FLAVOR

97 October/November 2016 TFWA/FDFA Issue INSIDER

Waldemar Behn to launch DANZKA THE SPIRIT

DANZKA Vodka is launching a brand DANZKA has had one of its best DANZKA has enjoyed new super premium vodka – DANZKA years in the core travel retail business particular success with THE SPIRIT – at the TFWA World with Duty Free shops in airports in its multipacks, which are Exhibition during a traditional Danish 2016, experiencing expanded volume, bestsellers in travel retail “Frokost” on Monday, October 3, between distribution and facings/listings all over the world, says 3 to 5 pm at the Waldemar Behn booth, worldwide. Biais. H52 – Green village. “Europe has shown very nice “The airport Fourth generation distiller and development. Russia and Eastern Europe shops love DANZKA Waldemar Behn Managing Director are quite stable. The Middle East and Asia twin pack, which is Rüdiger Behn together with Timothy Jacob including Australia have started to show a valuable gift with Jensen, Chief designer of Jacob Jensen very good potential,” says Philippe Biais, an attractive price Design, developed the new “totally pure Waldemar Behn Export Director. point. This twin pack Vodka created on the original traditions DANZKA also introduced a new combines DANZKA’s of vodka distilling” communication created by Jacob Jensen distinguished style and combining the “highest Design in Denmark, with the message aesthetic in an easy-to- distilling arts with that DANZKA is the Design vodka. The carry set that is safe for Scandinavian design “Design Experience” theme communicates traveling,” he says. traditions.” Both Behn on two levels – DANZKA’s iconic bottle is “The 4 x 1 ltr. pack and Jensen will be at destined to set you apart from the crowd, briefcase style is ideal the “Frokost” to meet but DANZKA’s aluminum bottle chills for border shop business, with customers. faster. easy to carry, light and unbreakable. “DANZKA “The promotion focuses on the theme Only weighing 4.5kg. In Cannes we will THE SPIRIT began that DANZKA projects the Nordic way of finalize the multipack range with a 4 x 0.05 as an idea between life. The idea is to relax and enjoy the high liter gift- pack of DANZKA miniatures friends by the beautiful quality, raw, natural spirit that is DANZKA (The Original, Apple, Citrus, CranRaz). Limfjord in Denmark,” -- it is authentic, pure and aesthetic,” says The gift-pack is based on the twin pack explains Behn. “It Behn. presentation with its pure and aesthetic will be our pleasure In a major development for the aluminum feeling.” to introduce you company, DANZKA has entered the U.S. Dooley’s Cream Liqueur is to DANZKA THE market with CIL US Wines & Spirits as introducing a new flavor – Dooley’s SPIRIT in Cannes, importer and supplier. DANZKA was liquorice, a subtle blend of premium where we can explain launched on the East Coast of the U.S. vodka, Dutch cream and Belgian Toffee the full story behind this year, and the company has planned an with a hint of liquorice. this remarkable new ambitious rollout for DANZKA continuing spirit.” into 2017.

Tia Maria debuts new look

Illva Saronno is presenting new pyschology, measuring what occurs in the We’re looking packaging for its coffee liqueur Tia Maria human brain when it is subjected to stimuli to support the in Cannes (Green Village M52). related to products or brands. new bottle with The new bottle features a Tia Maria is a coffee liqueur made instore activations contemporary twist, with a silhouette to with 100% Arabica coffee and notes of and tastings in show off its shape. The deep red label on Jamaican rum and Madagascan vanilla. order to engage the black bottle renders Tia Maria even “This is a big year for Illva Saronno, directly with more prominent behind the bar and on the with the new look Tia Maria bottle and the passengers,” says shelf, says the company. new limited edition designer bottle coming Flavio Lasalandra, The new Tia Maria bottle has been out – details of which will be announced in International tested with consumers through the use of October. We’re extremely pleased with the Marketing an innovative research method based on new look for Tia Maria bottle which we’re Director. neuromarketing, which blends traditional confident will have much improved shelf marketing with neuroscience and stand out and appeal within travel retail.

TFWA/FDFA Issue October/November 2016 98 DL_Anz_TMI-Cannes_216x279,4_09_16_RZ_ZW(410).pdf 1 19.09.16 14:58

99 October/November 2016 TFWA/FDFA Issue INSIDER

Patrón Tequila introduces Duty Free exclusive Patrón Cask Collection Sherry Añejo

Patrón Spirits is introducing the duty now present Patrón Cask Collection Sherry free exclusive Patrón Cask Collection Añejo.” Sherry Añejo tequila in Cannes. Patrón Sherry Cask Añejo (80 proof) The ultra premium tequila starts is characterized by its bright, medium-gold with 100% Weber Blue Agave, which is color and its complex aroma of pecans, then steam baked in brick ovens for about fresh-cooked agave, light butter, and dried three days. The agave is then crushed, fruits. It tastes of pecans, light toasted oak, fermented and distilled using the time caramel, raisins, light vanilla, and a hint of honored “tahona” process, together with butter. the more modern roller mill method. After A very limited, exclusive allocation distillation, the tequila was aged for more of Patrón Cask Collection Sherry Añejo than two years in oak barrels from Spain was initially produced for global duty free that were previously used to produce in early 2017, prior to a broader release in Oloroso Sherry. select domestic markets in the future. “Sherry casks exhibit an elegant The entire portfolio of ultra-premium flavor and aroma of pecans, which marry Patrón tequilas and liqueurs will be beautifully with the taste of agave,” says featured at the Patrón stand in a new Francisco Alcaraz, Patrón’s master distiller location at Green Village J35 in Cannes. who developed the original small batch Also in Cannes, Patrón will continue process and recipe for Patrón tequila. to roll out to duty free operators the brand’s success of Patrón tequila, which is why “I have been working with sherry casks new exclusive 1 liter size bottles for travel we’re committed to offer unique duty for several years, to achieve the perfect retail, which have recently begun hitting free exclusive products and packages in balance of the unmistakable taste from the store shelves. this important retail channel,” says John oak without losing any of the characteristic “Travel retail continues to play Kilmartin, Vice President, Global Travel flavor of the agave, and I’m very proud to a vital role in the global growth and Retail at Patrón Spirits International. Marie Brizard bring contemporary new look to Cannes

Marie Brizard Wines & multiple facets, for a defined contemporary Gautier range, which has undergone a Spirits (MBWS) enters a ‘new look. major strategic makeover. Its new brand generation’ this year at the “Cocktails have been growing personality and package design are based TFWA World Exhibition with dramatically around the world and Marie on craftsmanship, heritage, unique know- a revived new look for its Brizard is perfectly positioned to reflect how, and generosity. ‘An accessible craft liqueurs range. that trend in Travel Retail. We have great cognac’ reflects the cognac’s relationship to With a history that tasting signature cocktails, whilst being the natural elements (wood, water, cognac goes back to 1763, the the perfect partners as ingredients in eaux-de-vie) in the cognac making process. Marie Brizard Anisette any drink creation. The Marie Brizard The new packaging features imagery of uses the new look brand is widely recognized amongst the vineyards and rivers. to bring “some set world’s best mixologists for its quality and MBWS will also feature SHOTKA, a traditions into play while versatility and they enter the Marie Brizard premium cannibus flavored vodka targeted breaking others,” with Masters global cocktail competition in at rebellious night-clubbing fans. First the company calling the great numbers, culminating in the final in launched in Spain during Summer 2015 new look synonymous Bordeaux in November,” says Kevin Baker, in a strategic partnership with Matinee with freedom of mind, Marie Brizard’s Global Travel Retail Group, SHOTKA is the focus of a targeted non-conformism and Director. activation program that will run throughout refinement. “This year’s relaunch sees the this year. The historical unveiling of an exciting new design and Sobieski, the 100% pure rye Polish slender feminine lines of activation plans to engage with travelers. vodka will also be onstand. Sobieski the bottle, which are a The Cannes exhibition provides the vodka has seen continuous growth since huge part of its success opportunity to share those plans with its international launch in 2001 and throughout the world, Global Travel Retail customers.” has received many prestigious awards remain unchanged and MBWS will also be showing the including Double Gold Medal at the San are even enhanced with new look for its multiple award-winning Francisco World Spirits Competition 2016.

TFWA/FDFA Issue October/November 2016 100 INSIDER

William Grant brings new packaging to Cannes

William Grant & Sons has refined its appeal,” says Cottrell. two WGS’ activations first hand. Monkey global travel retail portfolio with new and WGS will also introduce a new pack Shoulder will be serving pre-mixed refreshed packaging, which it will reveal to for Drambuie Scotch Liqueur, a brand cocktails and playlists on its drinks trolley, the industry at the TFWA World Exhibition the company sees as offering tremendous while guests can peddle Hendrick’s Gin’s in Cannes. potential within the category. “Master Serve ‘O’ matic’ bicycle to receive “This year sees the emphasis on “Drambuie is our secret and I am a slice of cucumber to accompany a creative new packaging and presentations really excited about it! It has a strong brand “Hendrick’s & Tonic.” for existing brands with some very relevant identity and brilliant distribution,” says “We at William Grant & Sons are brand updates that reflect customer Cottrell. “Since acquiring the brand in late proud of the strong and collaborative feedback,” says WGS Global Travel Retail 2014 we have been examining the best relationship that we have with our Managing Director Ed Cottrell. “We will ways to re-engage with existing drinkers customers. We place an enormous amount also be previewing a number of exciting and to connect the brand with an entirely of importance on these relationships, and developments for next year that continue new generation of consumers. First stage is Cannes gives us a great opportunity to to exemplify the importance that William to introduce a new upgraded presentation continue strengthening our bonds with our Grant & Sons places on Global Travel that we will be showing to our customers in partners. We look forward to welcoming all Retail and our original, inventive and Cannes.” our customers and friends to the stand in contemporary approach.” WGS is also introducing new 50cl Cannes this year,” concludes Cottrell. WGS’s travel retail packaging for Tullamore D.E.W Cider exclusive Glenfiddich Cask Cask Finish Irish whiskey and Tullamore Collection is one of the brands D.E.W Phoenix Irish whiskey, both global sporting a new look. travel retail exclusives. “We are continually “Constantly reviewing and refreshing refreshing and revitalizing the portfolio is absolutely necessary if we the Glenfiddich offer and are to ensure the total offer is right for our this move reflects the travel retail partners and – in turn – their ongoing evolution of customers. The changes and additions the Cask Collection this year sit alongside our most recent range, ensuring collections such as Grant’s Elementary, relevancy to our core a GTR exclusive range, and brands such consumers. The new as Glenfiddich, The Balvenie, House look aims to strengthen of Hazelwood, Monkey Shoulder and the collection’s visibility Hendrick’s Gin, which create a compelling on-shelf and enhances and undeniably ‘must-stock’ offer,” says the premium cues of the Cottrell. range whilst reinforcing Visitors to WGS’ stand in Cannes its contemporary (Golden Village GO2) can experience

Distell launches Three Ships 10 YO single malt whisky

Distell has launched a limited edition moment where we are now in the position James Sedgwick 10 Year Old Single Malt for its South to launch a vintage statement single malt, Distillery in African Three Ships Whisky, with a 2005 each year and one with a defined style and Wellington where vintage statement. vision. the year-round The whisky follows the successful “I use the Cape winter months for warm temperature release of the first single malt launched in fermentation to allow the yeast to follow accelerates the 2003 and the collector’s tin series over a its natural fermentation curve with as interaction between three-year period in 2010, 2011 and 2012. little temperature control interference as the cask and the Master distiller Andy Watts says possible. We distilled the spirit in 2005 in spirit, allowing this is the most powerful single malt he copper potstills before it was laid to rest for the whisky to has produced to date, a style he will be 10 years in a selection of older American portray an elegancy continuing in the single malts to come. oak to compliment the delicate flavors of associated with “When we launched South Africa’s the spirit. It’s a beautiful whisky and a very much older first single malt in 2003 we didn’t have a proud moment for me!” whiskies, says the single malt style policy in place and since Bottled at a strength of 44.6%, the company. then we have actively planned towards this un-chill filtered whisky is produced at The

101 October/November 2016 TFWA/FDFA Issue INSIDER

Beam Suntory to preview its latest whiskey releases

Beam Suntory GTR is Travel Retail channel,” says David Wilson, focus for Beam Suntory GTR, with Jim previewing new whiskies Managing Director – Global Travel Retail. Beam set to announce a new travel retail it will be launching in Beam Suntory is introducing new exclusive SKU in 2017 and expansion 2017 at the TFWA World whisky expressions from all over the into European Travel Retail for Jim Beam Exhibition, demonstrating world. Double Oak. the company’s commitment Bowmore Islay Single Malt Whisky is Beam Suntory launched Maker’s to leading whisky returning to age statements with the launch Mark Private Select in limited release in growth in the of a new travel retail range inspired by the September in Americas and Asia Pacific channel. distillery’s No.1 Vaults, the world’s oldest Travel Retail. Created using cask strength New product Scotch maturation warehouse. Maker’s Mark and finished in unique five- development will Laphroaig is introducing two travel stave barrels, these exclusive liquids have remain central to retail exclusive SKUs in early 2017, been curated by selected retailers across Beam Suntory’s following the discontinuation of Laphroaig global travel retail. global business An Cuan Mor at the end of 2016. The release follows the launch in July strategy in 2017, says Beam Suntory is launching immersive of Maker’s Mark Cask Strength, which is the company. education on peated whisk(e)ys through the taken straight from the barrel, uncut and “Beam Suntory Peated Malts of Distinction, experiential unaltered, into global travel retail. has long pioneered activations across regions, incorporating This summer Beam Suntory launched innovation in GTR and a variety of tools and masterclasses to The Chita, a Japanese single grain whisky, we’re committed to demystify the peated malt category for exclusively in travel retail in Asia Pacific continuing this in 2017 consumers. and Europe and in limited quantities in the with an exciting portfolio of NPD across Following the launch of Auchentoshan Americas. our brands. With over 11 new SKUs, three Distilled Different in September, Beam The Beam Suntory team will be platform launches and numerous global Suntory will reveal its GTR activation hosting the introduction of the new ranges activations to be unveiled at TFWA Cannes, of the platform, centered around its to customers in Cannes onboard a yacht we are excited about the opportunities Glaswegian heritage. in Cannes Harbor for the 2nd consecutive these initiatives will bring to the dynamic Bourbons will continue to remain a year.

Bacardi GTR features Leblon cachaça campaign in Brazil

Bacardi Global Travel Retail featured Geoff Biggs, Regional Director Dufry adds: “Leblon Capirinha is one of a significant airport campaign during Americas, Bacardi Global Travel Retail the first brand campaigns we have run in the Olympics for Leblon ultra-premium comments: “Cachaça is the third most our new stores at Rio Galeao and it’s been cachaça throughout the month of August at consumed spirit in the world and, as a hugely successful. Our shoppers have loved Rio Galeao Tom Jobin Airport and also at leading premium cachaça brand in both being able to see first-hand the art of cachaça Sao Paulo Airport. Europe and, more significantly, in North making and to understand just how easy it is The activation formed part of America where we have over 40% value to recreate at home. #liveloveleblon, a cross-market campaign market share, we wanted to capitalize on Buying a bottle of Leblon is a perfect designed to raise awareness and trial engaging the huge numbers of overseas reminder of their trip to Brazil during the of Leblon and its signature Caipirinha visitors to Rio and Sao Paulo this summer 2016 Olympic Games and we’re pleased to cocktail serve, through maximized with the iconic local Caipirinha cocktail, have seen significant sales uplift.” brand distribution in bars and in areas of ensuring they associate it with high footfall in the airports. The airport Leblon above all other brands. campaign ran across five different locations “Since our global travel in both arrivals and departures stores retail division took on the operated by Dufry, offering passengers the distribution for Leblon earlier chance to taste a Leblon Caipirinha, hand- this year in the region, this is crafted by brand ambassadors at specially our first major scale campaign made beach carts and in the dedicated and we are delighted with its in-store bar areas. success in creating sales uplift The activation included high profile and a positive halo effect for digital screens across the airports and the cachaça category.” special personal appearances from Leblon Eduardo Heusi, Global star mixologists. Category Management Director

TFWA/FDFA Issue October/November 2016 102 103 15 October/November April 2016 2016 IAADFS/MHA TFWA/FDFA IssueIssue INSIDER

Celebrity Cruises’ bartender wins Diageo Global Travel final in fifth year of TR participating in Reserve World Class contest Celebrity Cruises’ Andrej Malic was the skills and craftsmanship of our crowned Diageo Global Travel’s best bar- cruise line bartenders and last night tender at the Diageo Reserve World Class was extremely exciting with a very final held inAugust in the Diageo 396 Bar high standard displayed by all the in Miami. competitors.” Malic and bartenders Marc McArthur “World Class fits so well with from Norwegian Cruise Line and Angelo the vision that our cruise partners Sinopen of Holland America were the have of elevating and making a three semi-finalists of this year’s Diageo wonderful guest experience, and it Global Travel Retail Americas World Class fits our purpose of having our brands program. They were competing in Miami come to life in a way that creates that for the chance to represent Diageo GT guest experience. World Class has at the World Class Bartender of the Year really evolved to what you have seen global final, which takes place in Miami on tonight—the mixology, the creativ- September 25-29. ity, the showmanship, everything that There Malic will now compete against goes into being a fantastic bartender 58 of the world’s best bartenders for the and delivering a wonderful drink was ‘World Class Bartender of the Year’ title. there tonight. There is a good chance The three bartenders were part of Dia- that the winner here tonight could geo’s fully integrated world class training make it to the final 12 at the final program that has reached thousands of mix- competition. Expectations are high.” ologists aboard the three cruise lines. The Lorenzo Davidoiu, Director, interactive program incorporated Diageo F&B Operations at Celebrity Cruises Bar Academy Essentials and World Class was thrilled with Malic’s win, trainings followed by testing after every which came one year after Celeb- module. The competition attracted a record rity bartender Santos Mercedes Enriquez 700 entries this year, up 40% over last year. won the title last year. Celebrity Cruises’ Andrej Malic creating one of his In Miami, the three bartenders were “We will continue to do what prize-winning cocktails judged by a panel of the industry experts we did last year, because it really comprised of Julio Cabrera, Master Mix- worked,” he told TMI. “Diageo gets ologist, David Molina, Head Mixologist for our bartenders excited and when you get great cocktail starts with great ingredients, Diageo BAR 396 and Marcy Rudershau- the bartenders excited about the product, and our guests are extremely impressed sen, Senior Master of Whisky for Diageo. about the quality of the ingredients, they with the cocktails and the experience that Malic and his fellow competing bar- speak with passion, and this gives the we are presenting. We appreciate how tenders were judged on a range of elements guests a better experience. This year, with Diageo focuses on quality,” Davidoiu of their craft, showmanship, creativity, Andrej, we will build on what we did last continued. bartending knowledge and the overall year.” “Our goal is to elevate our beverage delivered drinking experience. “(Last year World Class cruise winner) program to be more experiential – to have Sandra Vaucher, Director Global Santos is a star onboard our fleet. His cock- our guests be involved in the creation of Cruise and Airlines at Diageo commented tails were first introduced in the crew bars, our drinks, so he gets that wow effect. on the evolution of the cruise participa- and are now featured on our cruise ship We want to do more hands on mixol- tion in the World Class program over the menus where they are marked as World ogy. We want to involve our guests in the past five years: “World Class is not just a Class winning cocktails. We also presented experience because that will be how they competition. It is all about brand training, them at our Food & Wine Festivals and remember it. That gives them the emotional mixology training, recipe creation-- we featured Santos in our sales conference connection that they seek.” received over 700 submissions this year. throughout the year.’ Davidoiu also told TMI that Celebrity Using this criteria, and working with our In addition to the competitions, would be partnering with Diageo on its partners, we select a representative from Celebrity Cruises has completed installing Learning for Life program that provides each of the cruise line partners. the cocktail-oriented World Class Bars on opportunities for training and careers in the “World Class is on a mission to inspire its five Solstice-class ships, in partnership hospitality industry to unemployed young people to drink better, and it’s fantastic that with Diageo. people. “Celebrity Cruises would love to we can offer this experience on-board our “The World Class Bars have been very partner with Diageo on that journey. And partner’s ships,” she adds. “This competi- well received by the guests, and we think we will definitely welcome these bartend- tion allows us to recognize and champion we have something great going on. Every ers and bar servers on our ships,” he said.

TFWA/FDFA Issue October/November 2016 104 INSIDER

Stoli Gluten Free makes Global Travel Retail debut

Following its introduction into the Made with 88% corn and 12% “With such US market and regional travel retail debut buckwheat, Stoli Gluten Free has been phenomenal results at the IAADFS Show of the Americas in introduced not just to meet the needs of already seen in the US, I Orlando, Stoli Gluten Free Vodka will now gluten-free consumers, but to address a am confident that Stoli be launched into global travel retail at the growing lifestyle demand. Gluten Free will prove TFWA World Exhibition. “We are absolutely delighted with itself to be another hit The company reports that the Gluten the feedback so far, our high expectations within our travel retail Free variation has received very positive have been met and we expect sales to portfolio. Retailers are initial feedback from distributors, retailers, continue growing throughout the year. In already asking when and bartenders, and received a 92 rating regards to US Duty Free, we have officially they will be able to from the Beverage Testing Institute. launched Stoli Gluten Free with Starboard have it onshelf, so I am Since April 2016, over 8,000 x 9L cruise lines and will be launching it in expecting a busy week cases of Stoli Gluten Free have been sold airports through Dufry in Q4 with a large in Cannes this year!” in the US, with distribution in over 12,300 concourse activation in Las Vegas Airport says Jean-Philippe outlets, of which 6,900 on-premise outlets in November. Q4 will also see the addition Aucher, Stoli Group are responsible for 25% of sales. It is doing of a 1.5L bottle,” says Dayna Dennington, Global Duty Free & especially well in New York City, as well Regional Director Duty Free North and Travel Retail Director. as Florida and Texas. Central America, Stoli Group.

Stoli Group to launch Bayou Rum in GTR

Stoli Group is Following a traditional ‘sugar house’ whilst generally rum has a more exotic launching Bayou Rum recipe, Bayou Rum is the first spirits connotation than Scotch or Cognac for into global travel retail in addition to the Stoli Group portfolio of younger drinkers. All this makes Bayou Cannes. premium brands, which includes the Rum perfect for duty free, lending itself The launch follows flagship Stoli Vodka brand and the ultra- well to airport activations via pop-up bars, the January announcement premium luxury vodka Stoli elit. sampling etc,” he adds. It also fits well into that Stoli Group USA “This best-selling craft American the Stoli portfolio. began a long term Rum has a fantastic heritage and superior The Bayou Rum family consists of international taste and is a perfect addition to our travel four offerings: Bayou Select Rum, Bayou partnership with retail portfolio,” says Jean-Philippe Silver, Bayou Spiced, and Bayou Satsuma Louisiana Spirits, Aucher, Stoli Group Global Duty Free Rum Liqueur. LLC, producer & Travel Retail Director. “Rum remains Using the slogan ‘Make Rum Great of Bayou Rum, an undeveloped sector with a great deal Again’ Bayou Rum is featuring extensively and the successful of potential – especially for premiums. across the US in relevant events including relaunch into the According to the West Indies Rum and Tales of the Cocktail and National Rum Americas market Spirits Producers’ Association (WIRSPA), Day which took place in mid-August. A earlier this year, the sector grew from 101.7m nine-liter case strong social media campaign is supporting and regional sales in 2000, to 142.2m in 2010 (IWSR) – the brand with activity on Facebook, introduction into which is pretty impressive, with spiced rum Instagram and Twitter. duty free. sales doubling during the same period and Continues Aucher: “We’re very much Preconceived flavored rums growing by 50%.” looking forward to introducing and tasting by Louisiana Aucher believes Bayou is perfect to Bayou Rum with our customers in Cannes Spirits in 2011 and capitalize on this trend that – he believes – this year. We’ve got a strong activation launched in 2013, is reflected well by demand in travel retail. program planned to support the launch into Bayou Rum is made in “It’s a ‘trendy’ alternative to other dark global travel retail and we’re confident that the traditional way in a traditional copper spirits in some markets and a popular mixer Bayou Rum will rapidly become a ‘must- pot, using 100% natural unrefined sugar for cocktails and long drinks. Premium stock’ item for retailers in all regions.” and molasses. rums are becoming more appreciated

105 October/November 2016 TFWA/FDFA Issue INSIDER

Loch Lomond Group launches GTR exclusive collection

Independent distiller Loch Lomond Group has brought on industry veteran Andre de Almeida as Managing Director for Global Travel Retail to develop its duty free and travel retail business worldwide. De Almeida joins Loch Lomond from William Grant & Sons where he was European Travel Retail Director. “Travel Retail is definitely an important channel for the Loch Lomond Group and as a result I have been brought in to enhance the presence of the brands, develop its strategy and ultimately to grow the One of only three distilleries in the for all categories but especially for Single business. However, this has to be achieved Campeltown region, Glen Scotia has Malt scotch whisky where consumers in a sustainable manner, recognizing the had significant investment by the Loch tend to look for discovery through new positive role of the channel as a shop Lomond Group to increase production, brands and products to add to their drink window capable of providing access to an warehousing and also the creation of a repertoire,” he says. international consumer base whilst having new shop and tasting room. There are two “The point of difference for the Loch to operate within a challenging commercial brand new variants exclusive to the GTR Lomond Group will be our brands – Glen structure,” de Almeida tells TMI. channel: the Glen Scotia Campbeltown Scotia and Loch Lomond in particular – “The main priority will be to ensure 1832, celebrating the founding date of the what they stand for and just as importantly we have the right strategy for our brands distillery, and the Glen Scotia 16 year old. the quality of our liquid.” in the channel, with a core range and an In addition, the distillery is also releasing In travel retail, Loch Lomond already appropriate route to market in line with our Glen Scotia Victoriana, a combination of started to make inroads in North America, future ambitions. At the same time, we will casks finished in heavy charred oak casks Europe, Middle East and Asia in particular, need to continue to reach out and engage from its cooperage and Pedro Ximenez says de Almeida. Chase International Inc. with consumers through our partners, as sherry casks. All the expressions are bottled has launched the scotches into US Travel we strongly believe in the quality of what non-chill filtered. Retail and Caribbean markets. is inside the bottle given the provenance, “At Loch Lomond distillery, we De Almeida says his more than decade innovation and craft involved in the maintain, craft and finish our own barrels history working in the industry has set up production of our brands, such as Glen within our cooperage, one of only four in Loch Lomond for success in travel retail. Scotia and Loch Lomond whiskies.” Scotland. Our whiskies from Loch Lomond “The experience I have had in the At the TFWA World Exhibition Loch are made with a unique combination drinks industry since joining Maxxium in Lomond is unveiling its new GTR range of craft and innovation, and this can be the UK over 12 years ago is invaluable of seven expressions of scotch whisky exemplified in the various different types in helping me to perform and succeed at for both Loch Lomond and Glen Scotia of stills used or the fact that our blended the Loch Lomond Group. It provides me Distilleries. Scotch uses only whisky distilled in with a much broader understanding than The GTR range includes 4 expressions house at one location. We also uniquely just travel retail through the workings of from Loch Lomond: The Loch Lomond in Scotland at least, produce single grain different companies and cultures – whether Single Grain exclusively distilled with whisky made exclusively with malted as a distributor or brand owner, or whether malted barley; Loch Lomond Signature, barley in a Coffey still. At Loch Lomond working in domestic with a multiple grocer a premium blend which undergoes its we are definitely not most, and we never or managing a field sales team across 100 cask solera process; Loch Lomond follow others,” he says. contemporary bars,” he says. “Personally, I 12 year old Single malt which has spirit De Almeida says it was necessary am looking to continue to learn more about from two types of stills; and Loch Lomond for Loch Lomond to create its own GTR the Scotch Whisky industry through the Inchmurrin Madeira Single malt which exclusive range to build for future growth. innovation and expertise at Loch Lomond comes exclusively from its pot stills with “Travel retail needs to continue Group. After all, every day is a school day the rectifying head. to provide a differentiated offer to when it comes to whisky!” In addition to its GTR range, Loch domestic and this must be offered through For further Brand Information contact Lomond also has available its Loch established suppliers as well as smaller marketing manager Scott Dickson scott. Lomond Original Single Malt Scotch brand owners. This provides choice to [email protected] or whisky, available as an entry level single consumers and creates a reason for them to Andre de Almeida andre.dealmeida@ malt at an RSP of £29.99 for 1L bottle. come back to the store, which is important lochlomondgroup.com.

TFWA/FDFA Issue October/November 2016 106 INSIDER

Pernod Ricard reports difficult year in Americas Travel Retail

Pernod Ricard has reported a “difficult Africa and Canada. order to leverage the region’s expertise and year” in Americas Travel Retail in its full- The Glenlivet was up +9% in the US, optimize the organization. Under the new year 2016 results, due mainly to the weak while Martell grew +25% in the country. structure, Brazil is a lead market, together market in Brazil and the appreciation of the Chivas was down -4% overall, with with Argentina, Uruguay and Chile, and US Dollar. volume driven difficulties linked to FX Mexico is the other lead market, together Americas Travel Retail sales were and recession in Brazil impacting Travel with Venezuela, Colombia and Peru. down -9%, with the decline mainly volume Retail Americas and continued challenging Looking at other parts of the world, led, particularly on Chivas and Absolut, market conditions in China. Pernod Ricard’s sales in Travel Retail with some negative pressure on pricing but Havana Club sales are up +3%, with Asia fell due mainly to domestic market positive market and quality mix. growth driven by the increased tourism to weakness (especially in China and Korea) Overall sales in the Americas were Cuba. and currency fluctuations, with the decline up +4%, with acceleration driven by the Pernod Ricard reports solid growth driven by its Scotch portfolio and a tough United States and the strong growth of in Canada, driven by Jameson and Jacob’s commercial and competitive environment. Jameson. Jameson was up 23% in the US, Creek, with good growth of overall Top The company’s sales in Travel with the brand now representing close to 14 brands thanks to positive volume and Retail Europe experienced a “small ¼ of total US Sales. Jameson was up 23% pricing. decline in a context that remains difficult” across all regions. Sales in Brazil increased +5% for the with the Russian situation and the Absolut was down -3% in the US, year, in spite of a difficult environment, Ruble devaluation continuing to impact according to Nielson, and -4% overall, with with the overall economy in recession. commercial performance. the brand still down in value. However, The sales growth was led by double-digit Overall sales at Pernod Ricard were the company reports that underlying trends average price increases to compensate for up +1% year-on-year to €8.68 billion, with are improving, with the brand on track to FX and inflation. the improvement mainly led by the US and stabilize in the medium-term. The company Pernod Ricard has created two Spain. Organic sales were up +2%. Sales in is seeing growth for the brand outside the Management Entities in Latin America China fell -9%. US and Travel Retail, especially in Europe, reporting into Pernod Ricard EMEA in

MONARQ adds new brands to portfolio

Spirits distribution and marketing oldest London Dry Gin in the world, since quite a long way to go. Brazil is a relatively company MONARQ Group continues to 1671; Thomas Dakin Small Batch Gin; and closed and bureaucratic market that add new brands and listings for its portfolio Opihr Oriental Spiced Gin. SMT recently needs to strengthen its foundations, while of leading spirits, beer, and wine, says listed Alizé, and JPT in Chile listed creating a true open economy.” Robert de Monchy, MONARQ managing Heineken. We also listed Crystal Head director/owner. Vodka, Opihr, Ole Smoky Moonshine and “Our overall business has enjoyed a Tomatin Single Malt Whisky with Golden double digit growth versus the previous Duty Free in Asuncion airport. Luxardo year,” he says. “Latin America (excluding Grappa has recently been listed with DFA Brazil), Mexico, the Caribbean and in the USA.” USA Duty Free have all shown growth, The political and economic situations particularly USA Duty Free and Mexico.” in Brazil have impacted MONARQ’s MONARQ has added new brands to business in the region, but de Monchy its portfolio over the past year including believes the market is starting to improve. Gosling’s Bermuda Rum and Akashi “Since we cover both Duty Free and Japanese Whisky. The company is also domestic markets we are not so much handling the Berry Bros. & Rudd portfolio impacted by the Brazilian crisis,” he says. with a focus on The Glenrothes Speyside “The slowdown in Brazil has obviously Single Malt Whisky. affected the duty free business on its MONARQ continues to add to listings borders, although it seems the decline has throughout the region. bottomed out. The recent impeachment “We recently listed with London of the President, Dilma Rousseff, will Supply three of our gins: Greenall’s, the eventually lead to a rebound but there is

107 October/November 2016 TFWA/FDFA Issue INSIDER

Nestle and KITKAT “Celebrate the Breakers”

Nestle International Travel Retail our concepts innovative with shopper expands KITKAT’S “Celebrate the engagement at the heart.” Breakers” campaign with the activation The activation features iconic of the campaign “However you break it, KITKAT red dedicated brand spaces set SHARE IT.” The global event is live in up to encourage travelers to experience select aiports and will continue to roll out themed break benches. The four benches in over 50 locations worldwide including include a Social Sharing Break with a Rio de Janiero, Doha, and Singapore. whiteboard for personalized messages; Stewart Dryburgh, Nestlé International a Relaxing Break with footrest; a Music Travel Retail General Manager, comments Break with piano key seats; and a Sports on the excitement surrounding the launch, Break with football and net. Visitors can “KITKAT is a brand that creates natural, footfall and conversion rates, and KITKAT share their KITKAT break experiences engaging and immersive brand activations strengthens its fan base by being part using the KITKAT selfie stick, available that benefit everyone; shoppers receive a of positive, break related experiences. upon purchase, and sharing their photos on unique experience, retailers gain increased That’s why we constantly strive to keep social media with a #mybreak hashtag.

Ferrero aims for sustainable business development with three pillars

Despite a challenging year in terms “Sustainable business development of the global economy, terrorism threats, will pivot on three pillars - exclusivity, and changes in consumer behavior, Ferrero quality and experience – and Ferrero is Travel Market posted positive growth in geared up to exploit our premier position in all regions. The company is optimistic those areas.” that both the TFWA World Exhibition and These three pillars aim to boost the year to come will follow this success Ferrero’s future in the industry, with as they continue to focus on shopper “Exclusivity” investing in brand innovation understanding and trade cooperation. and providing blockbuster, exclusive Ferrero will also look to excel product while promoting with compelling for penetration, as confectionery has one through challenging times with the use initiatives. of the highest conversion levels in the of three pillars for sustainable business The pillar of “Quality” is vital in channel. The use of exciting activations development, explains Patrick Baubry, guaranteeing consumers the best product and clear displays will improve consumer General Manager FTM, “During periods experience, says Baubry. “In addition experience, increase shopper traffic and of uncertainty, global brands like ours to creating high quality products we bring additional value. can represent a safe choice for millions of must raise the quality of service to the During the TFWA World Exhibition, travelers. There is huge potential for us as consumer by collaborating with the trade, Ferrero will be showcasing its confection- a company to leverage our brand equity maximizing sales forecast accuracy, ery portfolio, including the latest designs and also for the confectionery category as optimizing stock management, and for the Ferrero Rocher Destination a whole to play a pivotal role in raising securing the highest quality execution Collection, Kinder sharing pouches, Tic store penetration by stimulating impulse possible in-store.” Tac gifting range, and Nutella products at a purchase. “Experience” offers the opportunity new stand, 8 Bay Village. Hershey shares confectionery insights Hershey World Travel Retail will confection category in the duty free and research, confectionery shoppers in Europe share key research findings from Counter travel retail channel,” said Amy Wilson, spend an average of $36 on the category Intelligence Retail with partners during Regional Director Europe & Strategy compared with $34 globally, and also put the TFWA World Exhibition. The CiR World Travel Retail at The Hershey more items in the basket. Additionally, report includes data concerning visitor Company. “We are activating against gifting is the primary motivation for and shopping behavior, store footfall and our category growth pillars and insights European buyers, with more than half of all conversion to purchase motivation, drivers, from the new study will help us to further purchases intended as gifts. These gifting and planning levels. develop these pillars along with create purchases are followed by purchases for “Hershey is committed to investing more successful engagement at retail for self and snacking. Hershey will also share in valuable insights to share with our the category.” details on their category vision and strategy partners, with the intention of growing the Among the key findings from the during the exhibition. GALAXY® is a registered trademark. ©MARS 2016. TFWA/FDFA Issue October/November 2016 108

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Perfetti Van Melle targets next level of distribution in travel retail

Confectionery company Perfetti “Since 90% of Van Melle is rolling out a new phase of the confectionery its travel retail distribution, reports Eric offer is chocolate, Vermetten, International Account Manager our sugar Travel Retail at the Netherlands-based confectionery company that specializes in sweets, mints is pure add-on and gum. revenue for “We are still growing, although we retailers. We add have reached about 90% of our targeted a colorful, nice retail distribution,” Vermetten told TMI addition to the during the ASUTIL conference in Santiago assortment.” earlier this year. “Our first effort was to get Perfetti Van noticed, but now we are transitioning into Melle added new obtaining better positioning in the store, display units in the optimizing the assortments in each store Brazilian airports and a focus on the check-outs.” and in Chile over Colorful and engaging Perfetti Van Melle POS displays like this one in As retailers have realized that the summer, said Europe are finding listings in select Americas airports as confectionery confectionery brings people into the store, Vermetten, who is garners more space in travel retail stores. they are allocating more space to the responsible for the category. brand in Canada, the Caribbean and South of a new Mentos Choco flavor and three “With more space, brands are able America, as well as being Global Key new chewing gum flavors made with a to benefit from eye-catching displays,” he account manager for Dufry. natural green tea liquid filling. says. “Our slim floor wheels of Mentos and Among the new novelties PVM is PVM’s Global Travel Retail Manager, Chupa Chups are particularly attractive and showing in Cannes are a Mini Mentos Susan De Vree, comments: “PVM is all effective in drawing attention.” Passport Kit complete with kids passport, about innovation and originality, and of PVM, as a “category captain” in games, two stamps, crayons, and travel course delicious sweets, which we are sugar confectionery, owns two of the six themed stickers, and a refillable Chupa certain will appeal to all ages! What’s top global sugar brands: Mentos mints Chups Treasury Box containing 10 fruity important is the added value that we are and Chupa Chups lollipops. PVM often lollipops as well as a treasure map with offering, particularly for the younger combines its confectionery with an games. children’s lines. Every purchase provides additional gift item, such as toys or a game, A Chupa Chups Trolls Toiletry Bag, more than just candy – but something to even a back pack. with 12 mini lollipops with a colorful hair keep, to play with and to entertain. We are “We make sure that almost all our extension, and a Chupa Chups Trolls Tin excited to show these new innovations to packaging have a re-use value says Gift Pack filled with 8 fruity lollipops are buyers in Cannes, and gain listings in all Vermetten. also being featured, along with the launch the right locations.”

Guylian new products reflect confectionery trends

Belgian Chocolatier Guylian’s newest Guylian Belgian Chocolate Coated Fruits Temptations Tubo 316g containing 33 chocolate products reflect the changing come in Milk Chocolate Coated Raisins, chocolates and Guylian’s Temptations Flat nature of global confectionery trends. As Dark Chocolate Coated Blueberries, and Box 290g containg 30 chocolates. the market leader in boxed chocolates, Dark Chocolate Coated Cranberries in Embracing the trend of tea in Guylian looks to the future with innovative 150g resealable pouches. chocolate, Guylian adds Matcha Green products while maintaining their traditional Another growing trend embraced by Tea flavor to their star product line of chocolate-making heritage. The company is the company is the use of hermetically Sea Horse Chocolates. The new flavor also looking to the future by investing 6.8 sealed chocolates for freshness, hygiene is available encased in white chocolate million Euros in a new production unit in and portion control. Guylian’s Temptations in 147g 16 chocolate packages. Latte Sint-Niklaas, slated to open by mid-2017. now include three new flavors- soft Macchiato is another new flavor to the line, Based on the shrinking nature of Caramel, Crunchy Biscuit, and Latte presented in milk or white chocolate shells portion size trends reflecting the health- Macchiato. Additionally, new packaging in 140g 16 chocolate packages. conscious consumer, the new range of concepts join the line with Guylian’s

Come see us in Cannes • Yellow Village F57 TFWA/FDFA Issue October/November 2016 110 Where Quality Sound Lives

Come see us in Cannes • Yellow Village F57 111 October/November 2016 TFWA/FDFA Issue INSIDER

Advertiser’s Index

ASUTIL 39 Grant’s Elementary 4-5 PGT 114 Bacardi GTR 33 Grey Goose VX 21 Remy Cointreau TRA 8 Baylis & Harding 76 IAADFS 2017 13 Remy Martin Cellar Master’s Selection 9 Bulldog Gin 85 It’s About Time Productions 114 Rituals 75 Camel - JTI 17 Jack Daniel’s American Whiskey 25 Rouge Caribe 49 Courvoisier 103 Jack Daniel’s Fire 87 Shopping China 61 DANZKA THE SPIRIT Vodka 27 Jim Beam Double Oak 21 Strumento Marino 47 Dooley’s 99 Lancome BC Travel Markets Insider 83 Dufry Americas 55 Licor 43 95 TRDG- Giggs 112 Duty Free Americas 29 London Supply 65 TUMI 15 Essence Corp. 73 Macallan Rare Cask Black IBC VersaceDylan Blue 11 Estee Lauder Breast Cancer Awareness 6-7 Mars Galaxy 110 Villa Massa 93 FDFA 2016 37 Monalisa 59 Woodford Reserve 97 Furla 23 My Burberry 71 Worldclassbrands 41 Giorgio Armani Code IFC-3 Patrón Tequila Cover

PGT introduces men’s grooming tools G.E.A.R. from the beauty experts at Tweezerman

Full service sales its Myme Electronic ac- and marketing company cessories that include Premier Global Trading, headphones, chargers, Inc., will be introduc- and speakers with new ing a new line of high products specifically performance precision designed for traveling grooming tools specifi- consumers. Myme has cally designed for men been listed on cruise – G.E.A.R.—at the ships, in airports and in Frontier Duty Free As- the Caribbean, as well as sociation Convention in on the northern border. Canada in November. In the watch cat- G.E.A.R. is part of the to the Tweezerman portfolio, including this egory, PGT is introducing Zwilling Beauty Group, best known for its year’s new Gold Star Gift Set, in which the Strumento Marino, an award winning best-selling Tweezerman beauty tools. precision brow tools are coated in a bril- Italian fashion watch brand with a special Already proven a success in domestic liant gold tone for durability and corrosion focus on diving, and prestigious Italian markets, G.E.A.R. will give a definite lift resistance. luxury watches from Lancaster. to Tweezerman sales, notes PGT president Tweezerman has been listed in im- PGT represents a portfolio that spans Elizabeth Taylor. “These tools are leading portant duty free and travel retail outlets a wide range of categories including the way in the growing men’s beauty seg- throughout North America, including fragrances, beauty tools, electronic acces- ment, and driving the category of beauty Montreal Airport with Aer Rianta, in the sories, watches, men’s accessories, and and grooming tools to the next level,” most important duty free shops across the candy. Taylor tells TMI. Canadian border, as well as at Newark Taylor will be showing PGT’s full The G.E.A.R. collection includes a Airport with EJE, and with nearly all the array of exciting products at the FDFA full array of tweezers, nail clippers, shav- DFA airports, including Miami, Atlanta, Convention taking place in November at ing brushes, scissors, pumice stones and and New York JFK. the Hyatt Regency Hotel in Toronto in more. G.E.A.R. joins other new additions PGT also reports excellent sales of Suite #1557.

TFWA/FDFA Issue October/November 2016 112 INSIDER

PEOPLE NEWS

L’Oréal Travel Retail makes key passion for people coupled with innovative Retail expansion in close partnership with appointments in Americas & Asia ways to drive growth in transforming and all our business partners.” adapting organizations and skills to a world Yannick Raynaud has been appointed undergoing constant change. Well-known travel retail executive Michael L’Oréal Travel Retail Americas Man- In another key personnel change, Gebrael has taken a new position, join- aging Director succeeding Javier Lab- Emmanuel Goulin has been appointed ing Tea Forte as chief executive officer. arta. Raynaud has wide experience in the L’Oréal Travel Retail Asia Pacific Manag- Gebrael was previously a regional director Americas market, having started her career ing Director succeeding Eva Yu. Goulin at Estée Lauder Travel Retailing Americas, with L’Oréal Paris and Maybelline in Latin started his career in 2000 with Lancôme and spent more than 6 years as managing America in 1998, first in Venezuela then in in the United Kingdom before joining the director, travel retail for Shiseido in Miami, Brazil. marketing team of Biotherm International. plus a year as vice president/general man- In 2006, she moved as Managing In 2005, he joined Travel Retail Europe and ager at sister company Bare Escentuals. Director for La Roche Posay in the USA. became Division Manager for Travel Retail Gebrael is now based in Boston. Since November Asia Pacific from 2008 to 2010. 2012, Yannick Both appointments became effective Doug Bagley, Managing Director, Diageo Raynaud was on Sept. 1, 2016. Global Travel and Middle East (GTME) Managing Direc- Vincent Boinay, L’Oréal Travel Retail is leaving the company on Jan. 1, 2017. tor of the Active Managing Director, comments: “Emmanuel Dayalan Nayager who is Regional Cosmetics Divi- Goulin and Yannick Raynaud will be re- Director, Global Travel and Middle East, sion in the United sponsible for the development of L’Oréal Europe, will be promoted to Managing Kingdom & Ire- Brands - from Luxury to Mass Market and Director, Global Travel on Jan. 1, 2017. land. L’Oreal says from DermoCosmetics to Haircare - in their that she is highly travel retail zone. Both will continue to Rodolfo Müller has joined World-Connect respected for her reinforce the L’Oréal expertise in this chan- AG –SKROSS in Switzerland to handle the leadership and her nel and will contribute to L’Oréal Travel Duty Free & Travel Retail market. Yannick Raynaud

113 October/November 2016 TFWA/FDFA Issue INSIDER

PEOPLE NEWS Americas region. She will relocate to JTI’s CEO and President Rick Sasso will Americas office in Miami. assume the role of chairman of MSC North Silvia Valderrama has joined French America. Sasso led the MSC Cruises North beauty company Yves Rocher as Area Perfetti Van Melle has appointed Femke America team for more than 12 years and Director Americas. Valderrama was previ- van Veen, a 19-year veteran from Proctor successfully expanded the North American ously with L’Oreal Luxe and Sisley, where and Gamble, as its new Marketing Manager market. Long-time senior MSC Cruises she has been area director for the Americas for Global Travel Retail. executive Roberto Fusaro will assume for the past six years. Susan De Vree, PVM’s Global Travel the role of president of North America. Retail Manager, says: “For the last few For eleven years, Fusaro led MSC Cruises’ Global tobacco giant JTI has appointed years we have shown an impressive growth business in South America. Gemma Bateson, JTI WWDF General in our business and this has led us to look Fusaro holds an MBA from the Manager Middle East, Africa, UK & for a dedicated person for our Marketing University of Chicago, and is an industry Ireland, to the position of WWDF Director department. veteran. A highlight of his tenure included of Corporate Affairs and Communication “The Travel Retail market is very the debut of the MSC Divina, which sails JTI WWDF, effective October 1. dynamic and it is important to react year-round to the Caribbean. Since 2014, Bateson has been General quickly to changes and be able to give With Fusaro’s new role in North Manager JTI WWDF, with responsibility the right support to the business and set America, Adrian Ursilli and Javier for Middle East, Africa, UK & Ireland. In out a long and a short term strategy for Massignani will become managing her new role, she takes over from Gladys our global brands. We are confident that director for Brazil and Argentina, Rodriguez who served as Legal Director, Femke will play a key role in providing respectively. In their new positions, JTI WWDF, from 2019 to 2013 and then and implementing innovative NPD and a Ursilli and Massignani will look to further as Director of Corporate Affairs and refreshing vision on our category.” consolidate the leadership position that Communications, JTI WWDF since 2013. MSC Cruises has gained in South America Rodriguez now moves to the domestic MSC Cruises has made key management over the years. MSC Cruises will be market as JTI’s Director of Corporate appointments to support the next phase of deploying 11 next-generation smart cruise Affairs and Communications for the the company’s growth in North America. ships between 2017 and 2026.

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