to the TMI 2016 ASUTIL magazine special edition.

Transcription

Special
June 2016
ASUTIL
CONFERENCE
Issue
ASUTIL 2016: Step by Step ahead, even in tumultuous times
The months leading up to the
2016 ASUTIL conference have
been tumultuous to say the least.
Brazil is a socio-political
mess. The Rousseff government
has been brought down by
corruption charges, the president
herself impeached and suspended
from office and economic growth
is at a stand-still, at best, and the
fall-out continues to impact the rest
of the region.
On May 30, it was also
announced that Petrobras, the
company at the center of the
widespread corruption and
financial scandal, will face charges
in a U.S. court in September in a
case that includes contract rigging,
bribery and money laundering.
The announcement stated
that U.S. and U.K. investors
have brought suits against 18
former Petrobras executives
and 13 investment banks from
losses stemming from false and
misleading information issued by
Petrobras.
Even Brazil’s air traffic is
feeling the pinch. IATA reported
that Brazil was the only country
in the world to report a decline in
domestic air traffic in April, which
fell more than 12% in the month
compared to the year before. The
decline reflected “the country’s
ongoing economic recession and
political turmoil,” said IATA.
Brazil is not alone with its
challenges, however. The political
and economic crisis in Venezuela is
so bad that the government decreed
the public sector can temporarily
work only two days a week.
But these are macro-problems
facing a wide swath of the region.
The travel retail business in the
Congratulations to Monalisa on the opening of its new luxury store in
the Paseo La Galeria Mall in Asuncion, Paraguay on May 11, 2016.
Helping to celebrate at the official ribbon-cutting was Monalisa’s William
Hammoud, Barbara Hammound and Faisal Hammoud, with Walter
Allende (2nd from left), president of Paseo La Galeria. See story and
pictures on page 20.
Americas faced two shocking
developments of its own in the last
few weeks.
First came the profoundly
sad news that Alberto “Pancho”
Motta, Jr. had died in Panama on
April 11. Pancho, the Director of
Motta Internacional and president
of the International Association of
Airport Duty Free Stores for more
than a decade, had passed away the
weekend following the annual
Duty Free Show of the Americas.
Then, on May 5, the industry
was hit with the appalling news
that Abdul Waked and his nephew
Nidal had been accused of money
laundering by a division of the
U.S. Treasury Department, and
all of their companies put on
a sanction list. Not only has
this devastated Grupo Wisa, La
Riviera and all of the other Waked
businesses, but it severely impacts
all of the companies that have
provided goods and services to
an organization which had been
a leader in the region and the
industry.
Mr. Waked has adamantly
declared his innocence (see story
to date on page 22), even as many
of his stores are closing. He also
confirms that he is in the midst
of negotiating the sale of parts of
the company, which he says he is
being pressured into doing quickly.
No matter what the outcome
of the Waked case, there is no
doubt that the landscape of the
travel retail industry in Latin
America will be fundamentally
changed. How is yet unknown, but
we imagine there may be some
new players gaining a foothold in
the region.
As for the rest of the region,
ASUTIL Secretary General Jose
Luis Donagaray points out that
there are some small signs of
recovery on the horizon in Brazil
and Argentina, which will also help
the surrounding countries. All this
and more, we discuss inside this
issue of Travel Markets Insider.
The theme of this year’s
ASUTIL Conference, ‘Step by Step
in the right direction,’ takes full
note of the challenges in today’s
marketplace, but has been designed
to give participants the information
they will need to make the right
decisions to go forward. “We have
to move slowly, but firmly, in the
right direction. Our speakers will
stress this,” says Donagaray.
Lois Pasternak
Editor/Publisher
King’s Duty Fre e Air p or t
In the Arrivals Terminal at Johan Adolf Pengel International Airport
Paramaribo, Suriname
T: +597-422292
E: [email protected]
located at the J.A.P International Airport, Suriname
TABLE OF CONTENTS
R et ai l and N ew s F eat ur es
COVER COMMENTARY
Step by Step ahead, even in tumultuous times
Construction begins soon on
new Punta Cana terminal
BY THE NUMBERS
UNWTO Exports from international
tourism rise in 2015
Page 4
TFWA reports: Global Duty Free
& Travel Retail sales decline in 2015
China Century Conference 2017
Page 6
Page 6
British firm wins contract to plan
new Costa Rica airport Page 27
More airport privatization in Brazil
Page 28
Paraguayan tender-bids may be opened
by end of May
Page 28
ACI: Strong 1Q passenger traffic,
even as March numbers moderate
China: 30.2m 1Q outbound trips;
exports to South America fall
South America: a top source market
to U.S. in 6-year tourism forecast,
but showing a decline
DFWC Global Shopping Monitor:
South America only region showing
less customer satisfaction
FEATURES
In Memoriam:
Farewell to Alberto “Pancho” Motta
Page 8
Page 8
Page 10
Page 12
Looking for recovery, one step at a time:
ASUTIL’s Jose Luis Donagaray
Page 14
DUFRY: extends retail contracts,
expands space in Brazil airports
Page 16
MONALISA opens luxury
shopping in Asuncion Mall Page 20
Grupo Wisa Update: Stores close as Abdul Waked speaks out
Suriname’s KING’s Enterprises expands and upgrades stores in JAP Airport
NEWS
Economic Overview:
More despair in South America
Chilean air traffic up
Page 28
Chile celebrates best cruise season
in seven years
Page 29
Carnival cruises to Cuba
ASUTIL 2015 Review in Pictures
Page 9
Page 22
Page 23
Page 24
Page 27
Page 30
Page 32
ON THE SUPPLY SIDE
Essence Corp. launches Atelier Cologne
in Caribbean with Rouge Caymania DF
Page 34
Actium partners with Sisley
Page 35
Clinique’s new launches
Page 35
Essence Corp. BA Seminar
Page 35
Baylis & Harding sets its sights on TR
Page 36
Arden buys C. Aguilara fragrance license Page 36
A2Z Elite shows Qudo jewelry
Page 38
Duty Free Dynamics adds Braun
watches and clocks to portfolio
Page 40
Remy focuses on global shopper
Page 42
Special Spirits Features
One on One with Marshall Farrer,
Brown-Forman Managing Director
Global Travel Retail Page 46
“Sleeping Giant” Gruppo Campari
brings new focus to Americas
Page 50
Brazil challenges MONARQ’s sales
Page 50
RIOgaleão doubles capacity
Page 26
Argentina’s Central bank: economy
grows slightly in 1Q
Page 26
DANZKA gets “Designed to Chill” Page 52
Tocumen tender delayed?
Page 27
Godiva celebrates 90 years:
Interview with Matthew Hodges, GTR
Page 54
3
June 2016 ASUTIL Special Issue
INSIDER
UNWTO: Exports from international tourism rise 4% in 2015
The Caribbean, Central and South
America showed strong growth in
international tourism receipts in 2015,
reports the UN World Trade Organization,
in a report released in May.
The Americas continued to enjoy
robust results both in international arrivals
and receipts in 2015, with a strong US
dollar fueling outbound travel from
the United States and benefiting many
destinations across the region, says
UNWTO. The Caribbean, Central America
and South America all recorded 7% growth
in receipts, far above the global average.
North America saw a 3% increase.
Overall, international tourism receipts
in destinations around the world grew
by 3.6% in 2015, in line with the 4.4%
increase in international arrivals. For the
fourth consecutive year, international
tourism grew faster than world
merchandise trade, raising tourism’s share
in world’s exports to 7% in 2015. The total
export value from international tourism
amounted to US$1.4 trillion.
Income generated by international
visitors on accommodation, food and drink,
entertainment, shopping and other services
and goods reached an estimated US$1,232
billion (euro 1,110 billion) in 2015, an
increase of 3.6% accounting for exchange
rate fluctuations and inflation.
International tourist arrivals (overnight
visitors) increased by 4.4% in 2015,
reaching a total of 1,184 million.
International tourism also
generated an additional US$210 billion in
exports through international non-resident
passenger transport services, bringing the
total value of tourism exports up to US$1.4
trillion, or US$4 billion a day on average.
“Despite a weak and slow economic
recovery, spending on international tourism
grew significantly in 2015, proving the
sector’s relevance in stimulating economic
growth, boosting exports and creating jobs
for an increasing number of economies
worldwide,” said UNWTO SecretaryGeneral Taleb Rifai, addressing the 60th
Regional Commission for the Americas
meeting in Havana, Cuba.
International tourism represents 7%
of total world exports and 30% of services
exports.
Unusually strong exchange rate
fluctuations in 2015 seriously influenced
receipts for individual destinations
and regions, expressed in current US
dollars. Taking into account exchange
ASUTIL Special Issue June 2016
rate fluctuations and inflation, receipts in
the Americas, Asia and the Pacific and the
Middle East all grew by 4%, while in Europe
they grew by 3% and in Africa by 2%.
U.S., China, Spain and France top
tourism destinations
The United States (US$178 billion),
China (US$114 billion), Spain (US$57
billion) and France (US$46 billion)
continue to be the top destinations both in
international tourism receipts and tourist
arrivals.
The above data is preliminary and
subject to revision. 2015 has shown
some unusual strong appreciation of the
US dollar to many currencies, rendering
receipts earned in these currencies lower
in US dollars. Furthermore, China revised
both its international tourism receipts
and expenditure series substantially in
2015 and retrospectively for 2014 due to
methodological changes.
Leading source markets drive outbound
tourism
China, the United States and the
United Kingdom led outbound tourism last
year, fueled by their strong currencies and
economies.
Spending by Chinese travelers
increased 25% in 2015 to reach US$292
billion, as total outbound travelers rose
10% to 128 million.
Tourism expenditure from the
world’s second largest source market,
the United States, increased by 9% in
2015 to US$120 billion, as the number
of outbound travelers grew by 8% to 73
million. Expenditure from the United
Kingdom, the #4 market globally,
increased 8% to US$63 billion; 65 million
residents traveled abroad, up 9%. By
contrast Germany, the #3 largest market,
reported a small decline in spending
(US$76 billion), partly due to the weaker
euro.
Editor/Publisher: Lois R. Pasternak
In Memoriam: Paul A. Pasternak
Executive Editor: Michael Pasternak
Deputy Editor: Lara P Robicheaux
Editorial Contributors: John Gallagher, Larry Luxner
Production Coordinator & Designer: Chris Hetzer
Design and Production: It’s About Time, Inc.
Webmaster: Michael Pasternak
Printing by The Printer’s Printer. Ft. Lauderdale, Florida
This publication is a special supplement of Travel Markets Insider, published
by Pasternak Communications, Inc., 255 NE 3rd Ave No. 312, Delray Beach,
FL. 33444 USA. www.travelmarketsinsider.net
E-mail: [email protected], [email protected]
Tel (561) 908-2119 Fax (561) 908-2257
Travel Markets Insider is a weekly newsletter distributed 50 times a year
via e-mail, on a subscription basis only.
The annual subscription is US$200. Printed in the USA. All rights reserved.
© 2016 by Pasternak Communications, Inc.
4
THE ORIGINAL
MOMENT
THE NEW ICONIC
CAMEL PACK
5
INSIDER
Global Duty Free & Travel Retail sales decline in 2015
A number of serious challenges are
impacting the travel retail industry this
year, leading to the first decline in dollar
value recorded since 2009.
According to preliminary figures from
Generation Research, global duty free and
travel retail sales in 2015 were down 2.3%
to US$62 billion compared to 2014. Only
the Asia Pacific region showed growth
and performed just ahead of the global
average, with sales up 2.6% to US$25
billion over 2014. This is a far cry from the
high growth of 25.5% that the Asia Pacific
region recorded in 2011.
The disappointing figures were
announced by TFWA President Erik
Juul-Mortensen in his opening address at
the 2016 TFWA Asia Pacific Conference
earlier in May.
Juul-Mortensen said that while the
duty free and travel retail business has
enjoyed phenomenal growth, especially in
the Asia Pacific region, new realities were
creating challenges and putting the sector
under increasing pressure.
Among the challenges, financial issues
stemming from volatility in exchange rates
are impacting sales, noted Juul-Mortensen.
Shifts in the relative values of key currencies
are affecting retailers’ ability to offer value
and in some places, damaging the perception
of brands in duty free stores, he said.
The threat of terrorism is also causing
huge problems for tourism. According
to Forward Keys, the recent attacks in
Brussels prompted a 21% drop in planned
international arrivals in Paris globally, a
figure which rises to 23% in travelers from
the U.S., and 41% in Chinese travelers.
Juul-Mortensen said that airports
might introduce more burdensome, timeconsuming and costly security to combat
this threat, reducing precious airside dwelltime.
He also pointed out that the
industry must recognize the importance
of millennial travelers and adapt to the
expectations of a new, very different
generation of travelers.
“Conspicuous consumption is not for
them, and they are immune to the power
of the brand logo. They are influenced
by their peers, not marketing. This raises
questions about how to make our offers
relevant to them,” he said.
“Although there will always be an
appetite for luxury brands, we need to
remember that for the millennial traveler,
luxury is also about service, experience and
individuality.”
He also noted that the industry needs
to take a more sophisticated approach
to segmenting and targeting, harvesting
better data, and using that data in a more
sophisticated way.
There must also be greater
transparency and improved dialogue
between brands, retailers and landlords,
alongside the flexibility in those
relationships to adapt to sudden change, he
said.
TFWA’s next China’s Century Conference to be held in Guangzhou in March 2017
TFWA has announced that the third
TFWA China’s Century Conference
will take place from March 7-9, 2017 in
Guangzhou, and will be held at the Four
Seasons Hotel, Guangzhou. The Official
Host of the event will be Guangzhou
Baiyun International Airport Co.
Guangzhou is the third largest city
in China and has played a pivotal role
in the country’s economic development.
Its Central Business District, where the
event will be located, underwent a major
renovation in preparation for the Asian
Games of 2010. The city now boasts a
rapidly developing international airport,
which is home to China Southern Airlines,
and connects Guangzhou to the rest of
China, Europe, Asia Pacific and beyond.
The TFWA China conferences have
become essential for anyone interested in
the considerable commercial opportunities
the Chinese market presents, as well
as all those who want to gain a deeper
understanding of the Chinese traveler both
at home and outside China, says TFWA
President Erik Juul-Mortensen.
The first TFWA China’s Century
Conference took place in 2013 in Beijing.
The second conference, which was held in
Shanghai in 2015, welcomed 388 delegates
including senior executives from numerous
airlines, airports and duty free and travel
6
retail operators. Over the two days, 120
meetings took place between the industry’s
airports, concessionaires and brands.
TFWA China’s Century Conferences have
featured speakers from leading airports,
airlines and retailers, as well as high profile
researchers, academics, authors, editors
and specialist consultancies.
7
INSIDER
30.2 million Chinese outbound trips reported in the 1Q 2016
COTRI, the China Outbound Tourism
Research Institute, reports that 30.2 million
outbound border-crossings were made from
Mainland China in the first three months
of 2016. This figure, drawn from COTRI’s
internal calculations, represents an increase
of only 2.4% from the 29.5 million made
during the same period in 2015.
This is the lowest growth rate reported
since the beginning of outbound tourism
from China in 1997 and the first singledigit growth rate in the current decade.
Based on extensive research using
available information from host countries
as well as from within China, COTRI
has begun to publish its own figures for
quarterly border-crossings from Mainland
China for the first time.
The surprisingly small year-on-year
average growth rate of 2.4% calculated for
the first quarter of 2016 indicates two very
different trends, says COTRI:
Arrival numbers for Hong Kong fell
dramatically by 15% from 12.3 million
to 10.4 million, and were down in Macau
by 2% from 5.0 million to 4.9 million,
resulting in an overall decrease of 11% for
China’s Special Administrative Regions
(SARs) in Q1 2016.
In the rest of the world, however,
this loss of almost two million arrivals
was canceled out by an increase of about
the same amount of the combined arrival
figures for Thailand, Japan, South Korea,
Vietnam, Singapore, Taiwan and the UAE.
Given the strong increases in arrivals
from China for many countries especially
in Europe and North America, it is possible
to calculate a growth rate of 22% for the
rest of the world, resulting in an overall
growth rate of 2.4%, says COTRI.
With the negative trend for Hong
Kong and Macau likely to continue,
the second quarter of 2016 could be the
first time that the SARs are no longer
responsible for more than half of all
departures from Mainland China.
But COTRI further reports that two
thirds of the missing arrivals in Hong
Kong were not leisure visitors but day
trippers, a result of the restrictions on
small “ant” traders who used to cross daily
from Shenzhen into Hong Kong to take
advantage of the lower prices of consumer
goods in the SAR.
In Macau the number of overnight
visitors even increased by about 100,000 in
the first quarter of 2016, while day tripper
arrivals fell by about 200,000.
ACI: Strong first quarter passenger traffic even as March
numbers moderate
ACI reports that global passenger
traffic delivered strong year-over-year
growth in January and February, up +6.9%
and +9.2% respectively, although traffic
growth moderated in March, but still grew
by +5.7%. As a result, total passenger
growth for the first quarter of 2016 was
+7.3%, led by international traffic, up
+8.2%, with domestic passenger growth up
+6.7%.
By region, total passenger traffic grew
by +10.4% in the Middle East, followed by
Europe (+7%), Asia-Pacific (+6.7%), Latin
America-Caribbean (+4.1%) and North
America (+3.9%). The demand for air
travel was depressed in Africa (-3.4%).
Total passenger traffic has increased
by more than 6% for the twelve month
period, testifying to the strong resilience
of demand for air transport despite the
observed volatility and uncertainty with
respect to economic conditions in various
parts of the world, reports ACI.
The United States maintained
momentum growing at 3.9% in March,
while China, the second largest aviation
market, grew by 3.5%, mainly due to
international traffic, which was up by
+13%.
Passenger traffic growth in Asia
continues to be highly stimulated by air
transport developments in India, which
grew 19.1% in March and showed 17.8%
growth year-to-date for the major airports
in the country.
Japan remains almost flat at +0.9%
with slight growth in international
passenger traffic (+3.1%).
In Europe, the three largest aviation
markets, UK, Germany and Spain, grew by
7.7%, 4.6% and 14.6% respectively.
Brazil and Russia are the only two
major markets recording declines in
total passenger traffic (-7.1% and -2.3%
respectively) for major commercial
airports, demonstrating the ongoing
economic difficulties in the two BRICS
constituents.
In the Latin America and Caribbean
region, the traffic decline in Brazil is offset
by strong growth in Mexico (+11.7%) and
Colombia (+9.5%).
Freight volumes also fell in the period
in the Latin America-Caribbean region,
and were down -3.8% in March. Freight
8
volume at Brazil’s Sao Paulo, GRU was
down by -11.3%, but other major air freight
hubs recorded substantial declines in air
freight as well, including Bogota (BOG,
-5.1%), Lima (LIM, -13.4%) and San Juan
(SJU, -5.1%).
China exports to
South America down
The economic slowdown in China
continues to be felt in Latin America.
China’s containerized exports to the
east coast of South America fell 31.1%
year-over-year in February, after falling
23.1% in January, reports the Journal of
Commerce.
Trade has now been down for seven
consecutive months. Mario O. Moreno,
Senior Economist, IHS, JOC and author of
the April issue of JOCInsights, estimates
that trade will contract 16% in 2016 as
demand continues to be weak, especially
from Brazil.
“…once credible policies and
commitment to credible structural reforms
are in place, the country might return to
the path of sustainable growth. Sluggish
growth will resume in 2018,” he comments.
INSIDER
South America a top source market to U.S. in six-year tourism
forecast, but showing a decline
will generate nearly 1.0 million more
visitors, a 19% increase compared to
2014.
Brazil, the largest source market
in the region, is expected to build on its
2014 record-breaking performance and
increase 4% in 2015. By 2020 the United
States could host 2.7 million Brazilian
visitors, an 18% increase over 2014.
Venezuela, Argentina, and
Colombia, which two years ago were
ranked 13, 14, and 15, respectively—and
were all moving up in rankings—are now
countries on different volume paths.
Colombia should continue its recent
growth performances and produce growth
of 222,000 visitors (+25%).
Argentina’s recent strong growth
will turn to declines for the first three
years of the forecast period before
returning to a growth mode to end the
forecast with a volume decline of 99,000
travelers (-15%).
Venezuela’s reversal in outlook has
been quick and profound. The longterm high hopes for this star-performing
country over the past decade has been
replaced by a forecast calling for a
The U.S. Department of Commerce
(DOC) projects international travel to the
United States will continue experiencing
growth through 2020, based on the
National Travel and Tourism Office’s
2015 Fall Travel Forecast.
Visitor volume in 2015 is expected
to end the year at a new record of 75.3
million visitors who stay one or more
nights in the United States (+ 0.4%).
2016 should build on this growth and
produce a 2.6% increase and a new
volume record of 77.3 million visitors.
Four countries are expected to
account for 56% of the projected growth
from 2014 through 2020. These volume
growth leaders are Mexico (27% of
expected total growth or 15 million
additional visitors), China (19%), Canada
(5%), and the United Kingdom (5%).
South America:
South America will remain a top
producer of additional travelers to the
United States for the next several years,
although its contribution to arrivals
growth has been downgraded in this
current forecast. By 2020 South America
sobering net loss of 155 thousand visitors
(-25%) at the end of the forecast period.
According to the current overall
global forecast, the United States would
see 0.4 % to 4.2 % annual growth rates
in visitor volume over the 2015-2020
timeframe. By 2020 this growth would
produce 90.3 million visitors, a 20%
increase, and more than 15 million
additional visitors compared to 2014.
The latest forecast produces a
compound annual growth rate over
the forecast period of 3.1%. This rate
is lower than the level in the Spring
2015 Travel Forecast due to a recent
significant downward shift in visitor
volume for many top origin markets
All but two of the top-20 visitor
origin countries are forecast to grow
from 2014 through 2020. Countries with
the largest total growth percentages are
China (129%), India (47%), Taiwan
(39%), South Korea (36%), and Australia
(27%).
Venezuela (-25%) and Argentina
(-15%) are the only countries expected
to have a decline in volume over the
forecast period.
International Visitors to the U.S. and Projections
(2000-2020)
100
Arrivals in Millions
80
60
75.0
51.2
56.1
46.9
43.6
40
41.2
46.1
49.2
51.0
05
06
58.0
55.1
60.0
62.8
66.7
75.3
77.3
80.2
83.6
86.9
90.3
70.0
20
0
00
01
Sources:
02
03
04
07
08
09
10
11
12
National Travel and Tourism Office, International Trade Administration, U.S. Department of Commerce
13
14
15(f) 16(f) 17(f) 18(f) 19(f) 20(f)
U.S. Department of Commerce, ITA, National Travel and Tourism Office; Secretaria de Turismo (Mexico);
Statistics Canada. -- Fall 2015 Travel Forecast
9
1
INSIDER
Latest DFWC Global Shopping Monitor:
South America only region showing less customer satisfaction
The Duty Free World Council’s
quarterly KPI Monitor for the first quarter
of 2016, produced in partnership with
consulting agency m1nd-set, shows that
South Americans are the only regional
segment in which the Customer Satisfaction
Index is lower than the level recorded in
Q4 2015. Globally, the Monitor showed a
slight increase in the Customer Satisfaction
Index, driven predominantly by higher
satisfaction with service levels received in
duty free shops.
The decline among South American
travelers is due to a decrease in the
satisfaction level expressed for product
variety available in the duty free shops,
according to the study. North American
travelers, on the other hand, expressed an
increased level of satisfaction with the duty
free shopping experience, an upturn which
is driven mainly by an improved perception
of both the level of service received and the
atmosphere in duty free shops.
Overall, shoppers are least satisfied
with the technology offer and the local
touch and identity offered in the Travel
Retail & Duty Free channel. Additionally
the range of affordable products and the
uniqueness of products and services offer
significant room for improvement.
Value for money -- the indicator
which has the highest impact on the overall
satisfaction level – showed no change in
the satisfaction levels, but in an interesting
development, tobacco surpassed both
alcohol and P&C as the most positively
perceived category. The Fashion category
also improved in satisfaction rankings
compared to the previous quarter.
New to this quarterly monitor report is
a comparison of the level of planned versus
impulse purchasing across the regions.
North Americans emerge as the most likely
travelers to purchase on impulse, while
Middle East and African travelers are most
likely to plan their duty free purchases.
Globally, more than 50% of purchases
continue to be on impulse with Fashion,
Accessories, Jewelry and Electronics being
the most likely categories to be bought on
impulse. Unsurprisingly, alcohol, tobacco and
cosmetics are the most planned purchases.
10
Other new features in the Q1 2016
report include details on the moment
travelers decide to make a duty free
purchase, a decision revealed to be most
commonly made at home, before leaving
for the airport, closely followed by making
the decision in the shop.
Price Comparison behavior is
another aspect covered in this Q1 monitor
with South Americans shown to be the
most likely to compare prices and North
Americans the least likely. Cosmetics and
alcohol are the categories for which prices
are most commonly compared. On a global
level, less than half – 44% – of travelers
claim to compare prices.
While the DFWC Global Shopping
Monitor reveals top level data for the most
part with some regional differentiation
insights, more detailed data on the regional
disparities for each aspect studied is
available from m1nd-set upon request
([email protected].) The report is
compiled from interviews with over 4000
travelers across all major world regions
during Q1 2016.
11
INSIDER
Farewell to Alberto “Pancho” Motta, heir of a proud legacy
and pioneering spirit
With profound sadness and immense
shock, the travel retail community heard
the news that Alberto “Pancho” Motta,
Jr., Director of Motta Internacional and
president of the International Association of
Airport Duty Free Stores, had passed away
at his home in Panama on the morning of
April 11, at the age of 69.
Many in the industry had spent the
week before with Pancho in Orlando at the
Duty Free Show of the Americas. Pancho,
who had been president of show organizer
the IAADFS for more than a decade,
looked well and seemed to be in high
spirits.
The funeral held in Panama City,
Panama on Tuesday April 12, was attended
by about 1,000 people.
“We have lost such a great man and
friend to many,” commented Rebeca
Marmol, echoing the sentiment of the
industry. The Marmol family were longtime close, personal friends of the Motta
family.
“We have lost an exceptional man,”
said Jean-Michel Juin, of Nestlé.
“Pancho was a revered and respected
figure in both the travel retail industry
and the wider Panamanian business
community,” commented the MoodieDavitt
Report.
Alberto “Pancho” Motta was son of
Motta Internacional founder Alberto Motta
Sr. As the pioneer duty free company in
the Americas, Motta Internacional holds
a special position in the development of
the industry. From its humble beginnings
back in 1949 when the original Motta &
Motta opened the first duty free store in
the hemisphere in Panama, today Motta
Internacional and its affiliated companies
encompass over 2,000 employees in 16
countries with related businesses and
investments in insurance, real estate,
banking and Copa Airlines.
In an in-depth interview with TMI in
May 2015 in Panama, in an office filled
with family photos, Pancho said that he saw
the company’s success over the past six
–plus decades as the result of the way the
company approaches the business:
“My first concern is always our
employees. If they do well, our business
will run well. Then obviously, comes our
clients,” he said.
A true gentleman in every sense,
Pancho maintained a clear and realistic
Pancho Motta spent the week of the annual Duty Free Show of the Americas in Orlando
meeting with industry members, and appeared to be in good spirits and positive about the
future. Photo by the IAADFS.
vision of the industry his company helped
create: “I hope that when people think
of Motta Internacional they see it as a
well-run company, that it is run honestly,
and that it is run so that all three parties
can make money: the supplier, us and our
clients. If one of the three doesn’t make
money, the chain stops.”
Motta Internacional CEO Erasmo
Orillac, in a statement on behalf of the
company and the family, said:
“We are sad not only for this event,
but to the fact that we have lost a great
individual who helped forge the Motta
Group to achieve new heights and become
the success it is today. Pancho will be
truly missed by all who had the pleasure of
knowing him.”
TMI and the Pasternak family add
our deepest condolences to those in the
industry, to his dear wife Loraine and her
children and grandchildren, and to all who
knew and loved Pancho. May he Rest in
Peace.
IAADFS President Alberto “Pancho” Motta Jr presided over the official ribbon-cutting opening
the 48th Duty Free Show of the Americas, shown here with members of the association’s
Board of Directors and ACI Director General Angela Gittens, who spoke at the
morning education session at the Show. Photo by John Gallagher.
12
In Memoriam
Alberto ‘Pancho’ Motta, Jr., IAADFS President
Pancho Motta was one of the most respected and beloved
figures in our industry. He served as the IAADFS President for
16 years, and will be truly missed by everyone who had the
good fortune to know him. He made the world a better place.
13
INSIDER
ASUTIL: Looking for recovery, one step at a time
Travel Markets Insider’s Lois
Pasternak spoke with ASUTIL Secretary
General Jose Luis Donagaray at the
end of a very tumultuous few weeks for
Latin America in May. First, directly
impacting the travel retail industry,
the U.S. Department of the Treasury’s
Office of Foreign Assets Control (OFAC)
levied charges of money laundering
against Panama-based Grupo Wisa. As
a consequence of the charges, OFAC
announced extensive sanctions against
the Waked organization, which controls
Grupo Wisa including its La Riviera travel
retail brand. The following week, in a
move felt across South America, Brazil’s
Senate voted 55-22 to impeach embattled
President Dilma Rousseff on charges of
violating budget laws, and suspended her
from office for 180 days as they prepare a
trial against her.
With the Senate vote against President
Rousseff, the political turmoil in Brazil
may finally be reaching some resolution,
comments Donagaray.
“The political situation in Brazil has
been a mess, but we are expecting that
with Vice President Michel Temer who
has taken over as interim president during
Dilma’s suspension, it could bring some
political peace. Maybe now the country can
recover. I think that within two months we
will see what path the new government is
taking. Now the country may achieve some
stability, and then return to growth. It is a
political process. We have begun seeing
money going back to Brazil in the past
month (April-May) and new investments,
a very positive development,” says
Donagaray.
As for the Waked situation, it is too
soon to know what will happen, he notes.
“The facts are still not clear. This is
a situation that we will have to wait and
see what happens. For now, I believe that
the government of Panama and the U.S.
are trying to arrange for some special
licenses so that the company can continue
to operate in the short term. As far as I
know, some of the operations are running
normally at this time.
“Overall in Latin America, we are
starting to see some recovery in Brazil,
and the prices of some commodities are
recovering, so we expect for the end of
the year some stable times good for the
economy.
“Remember, this is not just a Latin
American problem. Challenges are
happening all over the world. In Europe
we have fear of terrorists. We have
the slowdown in China and currency
devaluation in Mexico and the election in
the U.S.,” he explains.
“But as we say in the theme of this
year’s conference, we are going ‘Step by
Step’ in the right direction. We want to
give all the attendees the information they
will need to make the right decisions to go
forward and we have put together a most
knowledgeable panel of speakers to present
this information. At the moment, we have
to move slowly, but firmly, in the right
direction. Our speakers will stress this,”
says Donagaray.
“Gustavo Fagundes, not only will
give the welcome address, but he will give
an overview of Brazil. We will have Peter
Mohn from M(1)nd-set talk about the key
issues to the path to purchase among our
customers in the Americas. Enrique Urioste
will speak about the border business with
Brazil.
“We will have Olga San Jacinto, the
Latin American director of Google, talking
about what is happening in the digital
world and how it impacts our business. And
we will have economist Carlos Melconian,
who is now President of Banco Nación
Argentina, talk about Argentina.
“We will also have overviews of
the new Dufry stores in Latin America
14
Jose Luis Donagaray
from Juan Antonio Nieto, DCOO Brasil,
Dufry and Sandro Fernandes, CCO,
RIOGaleão. And Cyrille Beauviche,
Dufry’s Latin America & Caribbean
Division Commercial Director will give
a presentation on the new store projects
under construction at Lima airport
highlighting design, layout and current
retail trends.
“Guillermo D´Andrea, Professor, IAE
Business School – will also talk about the
digital transformation going on in retail,
especially with ebay and Amazon, and
what opportunities may be out there. And
finally, we will have a very special talk
about the triumph of the human spirit from
Dr. Roberto Canessa, one of the survivors
of the Andes plane crash who crossed the
mountains to guide rescuers back to the
crash victims. These are our speakers this
year.
“We want to give to all the people
attending the conference the tools to be
able to go forward in the future, that is our
goal. This is what we mean by step by step
in the right direction,” he concludes.
Italian Sparkling Life
15
www.bottegaspa.com
INSIDER
Dufry extends its retail concessions at Brazil’s São Paulo and
Rio de Janeiro airports, and greatly expands retail space
Expanded spaces, modern design and personalization are the hallmarks of the newb Dufry stores in Brazil.
Above, walk-through concept at Sao Paulo Guarulhos Airport.
Dufry Group has reconfirmed its
commitment to Brazil and its confidence in
the potential growth ahead for the country,
announcing major concession contract
extensions with expanded new space in
the key airports of Sao Paulo and Rio de
Janeiro. The new space encompasses both
duty free and duty-paid retail, including the
opening of more megastores and Hudson
concepts, further reinforcing Dufry’s
presence in Brazil.
In Sao Paulo, Dufry and Guarulhos
International Airport (GRU) have extended
their agreement for the operation of duty
free and duty-paid retail spaces until
2032. In addition, Dufry will operate
around 2,300 sqm of additional duty-paid
retail space, including a Dufry Shopping
megastore at Terminal 2, reports the
company.
Guarulhos International Airport is
the largest airport in South America and
in 2015 welcomed a total of 39 million
passengers, of which 25 million were
domestic passengers.
Extending a key duty free contract in the
busiest airport in Brazil
Dufry and GRU Airport signed an
agreement to extend Dufry’s duty free
retail contract at Guarulhos International
Airport until 2032. Dufry will remain the
duty free operator in terminals 2 and 3,
which welcome all international passengers
at GRU.
Dufry currently operates 26 duty
free stores at GRU airport: 22 shops at
Terminal 3 and 4 shops at Terminal 2. The
major dutyfree area is located at Terminal
3 and extends over approximately 7,500
sq. meters, comprising two general travel
retail shops in the arrival and the departure
areas. One of these shops is among Dufry´s
largest walk-through shops in the world
covering 4,350 sqm of space with 18 brand
boutiques featuring such key brands as
Polo Ralph Lauren, Hugo Boss, Montblanc
and Victoria´s Secret, among others. At
Terminal 2, Dufry operates a total of
around 4,100 sqm of retail space.
16
Increasing the duty-paid segment
Following the plan to further develop
the successful duty-paid segment, Dufry
was also awarded 2,320 sq. meters of
additional retail space. This added space
will be used to open a Dufry Shopping
megastore in Terminal 2, as well as last
minute shops, a concept which Dufry says
will further improve its profitability.
Dufry says that the megastore is inline
with the plans of GRU Airport to remodel
and improve the commercial activities, and
will further enhance the offer to domestic
passengers with best-selling brands and a
unique shopping experience.
Following the excellent success of
the first Hudson convenience shop opened
in Terminal 3, Dufry intends to open three
additional Hudson shops, extending the
reach of the convenience concept with a
comprehensive range of travel essentials.
The new spaces, which are located
airside and landside in Terminal 2, are
expected to be opened sometime in 2016.
17
INSIDER
Once they are opened, Dufry will
be operating 16 duty-paid shops, totaling
overall around 3,500 sq. meters of retail
space in Terminals 1, 2 and 3.
Tom Jobim International Airport, Rio de
Janeiro
For Rio de Janeiro, Dufry announced
that it has extended its contract with
RioGaleão at Tom Jobim International
Airport to 2023 for duty free and until 2021
for its duty-paid business.
The airport in Rio de Janeiro is the
second largest hub in Brazil and a major
gateway for Brazil and South America
overall. In 2015, the airport welcomed a
total of 17 million passengers, of which 4
million were international.
The new agreement between Dufry
and RioGaleão extends the duty free
operations from 2020 until 2023, “thus
further consolidating Dufry’s presence in
Brazil,” says the company.
The new agreement also adds about
7,000 sq meters of additional space for duty
free retail, expanding from the original
4,000 sq. meters to close to 11,000 sq.
meters at RioGaleão Airport.
Expansion of existing travel retail shops
In addition to the extension of this
important concession, Dufry also expands
its general travel retail shops located
at the departure and arrival areas in the
remodeled Terminal 2. These shops have
been designed to give a ‘sense of place’ of
the city of Rio de Janeiro for passengers.
On the departure side, the duty free
shop has been enlarged from 450 sq. meters
to more than 2,200 sq. meters of retail
space, which Dufry says will allow it to
further improve the offering. The lastminute-shops were also enlarged by more
than 900 sq. meters, going from 150 sq.
meters to 1,050 sq. meters in total.
In the arrivals area, the shop has
been more than tripled in size, from its
original surface of over 1,300 sq meters to
nearly 4,000 sq. meters. The new shop has
been designed as a walk-through concept
offering a substantially enlarged assortment
across all categories.
5 new branded shops
Following the successful roll out of
the brand boutique concept, Dufry has
also opened four new mono-brand shops
totaling almost 900 sq. meters for luxury
Julian Diaz, Dufry CEO
brands such as Salvatore Ferragamo,
Hugo Boss, Michael Kors and Polo Ralph
Lauren.
Among the new shop openings, a
major development is a new agreement to
operate a “Destination Shop” until 2021.
Located in the departure area and totaling
more than 600 sq. meters, the Destination
Shop features thematic concepts designed
to create a Rio de Janeiro atmosphere, with
a best of class look and feel of the most
popular local brands. The shop presents a
comprehensive offer including a wide range
of premium brands, such as the beachwear
Salinas, the casualwear Richards, Farm
and Osklen, Brazil’s famous flip flops
Havaianas as well as Nike, which will
sell the Brazilian football national team
T-shirts.
Duty-paid area increased by 1,400 sqm
Under the new RioGaleão agreement,
Dufry’s duty-paid operations are extended
until 2021. In addition, Dufry will add
nearly 1,400 sq. meters of duty-paid space,
incuding a Dufry Shopping megastore
that will offer customers a state-of-the art
retail experience. The existing duty-paid
operations, which cover around 500 sq.
meters of retail space, include five Hudson
shops and three “Rio2016” shops, offering
a wide range of official merchandise of the
Olympic Games. Combined with the new
megastore, Dufry will operate more than
1,800 sq. meters of duty-paid retail space at
the Rio de Janeiro airport.
Diaz confirms Dufry’s commitment to
Brazil
Julián Díaz, CEO of Dufry Group,
commented: “We are very pleased about
this new agreement with GRU Airport,
who has been partnering with us since
18
the beginning of their operations in
2012. The extension of the contracts
fosters our cooperation with GRU
Airport and it is a great platform to
further develop the business at this
important hub.
“The extension is a great opportunity
for Dufry in Brazil and reinforces our
position in South America showcasing
the strength of our company and our deep
knowledge of travel retail, the Brazilian
consumers and their preferences and
habits,” he adds.
“I would also like to highlight the
additional retail space in duty-paid, which
will allow us to open another Dufry
Shopping megastore in the country. This
new megastore together with the opening
of the new Hudson stores as well last
minute shops reinforces our strategy to
roll out and further develop the duty-paid
business.
“Last but not least, this agreement is
also a confirmation of Dufry´s commitment
with Brazil and its confidence in the
potential growth of the economy.
Rio partnership
In regards to the new agreement
in Rio de Janeiro, Diaz says: “We are
very proud to extend the contracts with
RioGaleão and to further expand our
presence at Tom Jobim International
airport. With these additional spaces and
the next generation of store concepts,
Dufry secures its presence in the Brazilian
travel retail market.The increased
commercial offering and the enlarged
number of brands being featured will
contribute to further drive growth.
“During the last months, we have been
working closely with RioGaleão, putting all
our efforts together in order to successfully
execute all these projects.
“The new contracts underline our
confidence in Brazil, as one of the relevant
markets in travel retail, where Dufry has
continuously expanded its position over
time in order to benefit from one of the
most important geographies in terms of
spend per passenger.”
Diaz concluded by thanking both
RioGaleão and GRU Airport for its trust in
Dufry.
“We look forward to continue
developing our operations together and
make the traveler’s experience in these
airport even better,” he said.
STYLE SHOWN: RED SANDS
Color. Clarity. Detail.
PolarizedPlus2® Sunglasses
19
Recommended as an effective UV filter
for the eyes and surrounding skin.
©2016 Maui Jim, Inc.
INSIDER
Paraguay’s border operators take the Capital route to Asuncion
Monalisa opens luxury shopping in Paseo La Galeria
Ciudad del Este-based Monalisa
opened a 3,500 sqm luxury department
store in the Paraguayan capital, Asuncion,
with a gala ribbon-cutting by Walter
Allende, president of Paseo Gallery and
Faisal Hammoud, president & CEO of
Monalisa on May 11. The Monalisa store
is one of the anchors in the new Paseo La
Galeria shopping and office development,
built by Guatemalan business group Blue
Tower Group. Blue Tower owner Mario
Lopez Estrada has invested close to $200
million in the 280,000 sq. meter complex.
Like its original store in Ciudad del
Este, the new Monalisa store carries a full
array of fragrances, cosmetics, fashion and
casual high fashion, as well as household
items and sporting goods. In the coming
months, Monalisa will also unveil a
section of the store for its renowned La
Cave, stocked with a wine and champagne
selection from the the top vineyards in the
world. A special section for jewelry and
watches is also in the plans.
The Paseo La Galeria luxury store is
Monalisa’s first retail project in Asuncion.
When completed, the Paseo La
Galeria shopping center, located in one of
the fastest growing districts in Asuncion,
will feature 45,000 sqm of retail space
distributed over three floors. The office
complex will also feature two elegant,
modern towers of 25 floors each and will
become one of the city’s icons, according
to the Paseo La Galeria website.
Another Ciudad del Este luxury
retailer, Sax, is the second anchor store
in the new shopping center. Sax, under
Paraguayan entrepreneur Armando Nasser,
was a specialist sunglasses store until the
owners changed their strategy in 2008,
converting the operation into a luxury
department store. By 2011, the original
two-floor store had grown to 12 floors in
an iconic building located on the main
shopping avenue in the border town.
Sax carries about 200 luxury brands in
Paraguay. Sax’ 3,600 sq. meter luxury store
in the new Asuncion shopping mall is the
company’s first venture outside of Ciudad
del Este.
The company told TMI that the
Asuncion store is key to the company’s
future development. “The new complex
will generate many new jobs. The new
development is an important step for the
future development of luxury retail in
Paraguay.”
John Gallagher & Lois Pasternak
Above: Monalisa’s William Hammoud, Barbara Hammound and Faisal Hammoud, with Walter Allende (2nd from left), president of Paseo La Galeria, at
the official opening on May 11. Right: Walter Allende and Faisal Hammoud cut the ribbon officially opening the Monalisa store at Paseo La Galeria.
20
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INSIDER
Grupo Wisa update: Waked closes Colombian stores, speaks
about charges
As TMI goes to press with this
ASUTIL issue, it is nearly a month since
the U.S. Department of the Treasury’s
Office of Foreign Assets Control (OFAC)
on May 5 levied charges of money
laundering against the Waked organization
and announced extensive sanctions against
the Group, which controls Grupo Wisa (and
its La Riviera brand).
Repercussions to the charges are
widespread and growing, with reports
of the Waked duty free and La Riviera
stores closing and being taken over by
government authorities, even as Grupo
Wisa President Abdul Waked emphatically
denies the allegations. Grupo Wisa
stresses that it is fully cooperating with the
authorities to clarify the situation, and has
a team of attorneys in Washington trying
to get information. As of May 30, there are
no legal charges against Abdul Waked in
Panama or the U.S.
To recap, on May 5, 2016 the U.S.
Department of the Treasury’s Office of
Foreign Assets Control (OFAC) designated
the Waked Money Laundering Organization
(Waked MLO) and specifically named
Nidal Waked and Abdul Waked.
OFAC also targeted six Waked MLO
associates and 68 companies, which it said
were tied to the drug money laundering
network, including Grupo Wisa, Vida
Panama (Zona Libre), and Balboa Bank &
Trust.
Nidal Waked, Abdul Waked’s
nephew and the alleged ringleader of
the organization, was arrested on May
4 in Bogotá, Colombia, in an operation
involving the U.S. Drug Enforcement
Administration. He is at this time awaiting
extradition to the United States where he
will face charges of money laundering and
bank fraud in Florida.
Abdul Waked’s attorneys are
vigorously claiming that Nidal and Abdul
are not partners.
Orders from many suppliers were
immediately frozen, since any company
based in the U.S. cannot have commerce
with a company sanctioned by OFAC.
On May 13, in a further blow to
the Waked defense, U.S. Ambassador
to Panama John Feeley held a press
conference in Panama, confirming that the
U.S. government has strong evidence that
the Waked organization was involved in
money laundering in several countries, and
explicitly connected Abdul Waked with his
nephew, Nidal Waked.
According to an article in La Prensa
on May 14, Abdul Waked’s attorney
Guillermina McDonald has requested that
the U.S. provide the evidence against Mr.
Waked and give them the opportunity to
defend their client.
Temporary licenses ?
In an effort to protect as many
“innocent” employees and others involved
in the Waked businesses, Ambassador
Feeley said during the press conference
that he had “taken the extraordinary step”
of issuing several temporary authorizations
so that the government and Waked could
minimize possible harmful effects on
innocent employees .
Feeley said the Treasury Department
granted licenses to the Balboa Bank and
the Securities brokerage, in order to allow
operations. (Ed. Note: Nidal Waked has a
20% stake in Balboa Bank and is a member
of the Board. There is no mention of Abdul
Waked’s connection to the Balboa.)
Feeley said that OFAC announced
four temporary licenses had been granted
to the Waked-owned daily newspapers La
Estrella de Panama and El Siglo, and the
businesses operating in Soho Square Mall
and Millennium. These four licenses expire
on July 6, 2016.
While Grupo Wisa’s La Riviera stores
were not mentioned under these temporary
licenses, La Prensa reports that the
government in Panama is working to get
the stores included.
But it may be too late.
Bogota airport stores close
On May 27, Waked Group
International announced it had closed its
La Riviera duty free stores in Bogota’s El
Dorado airport in Colombia, turning them
over to the Superintendency of Companies
of Colombia. The group also said that at
least twenty companies representing banks
and services, as well as suppliers, broke
ties with La Riviera.
Grupo Wisa said that the closure was
voluntary and preventive, and according
to La Prensa, was done “to ensure
transparency in operations … and provide
protection to employees and creditors…
22
pursuant to the provisions of laws and
regulations that govern the country.”
La Riviera employs more than 1,270
people in Colombia, and has assets valued
at approximately $130 million with
liabilities of $45 million, noted La Prensa.
One supplier in Panama told TMI that
the La Riviera stores in Panama’s Tocumen
Airport and Mexico City were only taking
cash, and that the La Riviera arrivals store
in Mexico City had been closed. The
situation in the Waked-owned MultiPlaza
and Soho Malls were also badly affected.
Mr. Waked speaks
Abdul Waked spoke out about the
charges on May 24 in an exclusive video
interview on Telemetro Reporta Panama
with reporter Alvara Alvarado. Among
the highlights of the interview, Mr. Waked
reiterated that he was innocent of the
charges, and in fact had no idea he was
being investigated by any institution or
government. Would he have invested in a
project like Soho if he knew he was under
investigation, he asked?
He also makes a note about his debts,
noting that he owes about US$480 million,
of which $390 million is to banks for Soho,
and $90 million to suppliers. Again he
asks, if I was laundering money, would I
have such debt? He also points out that his
businesses have been fully audited in all
the countries where he has operated over
the last 20 years.
Mr. Waked voiced serious concerns
about the future of his 5,100 employees,
of which 3,000 are Panamanians, and the
40 stores the company was operating in
Tocumen airport.
He decried that the Panamanian
government is not helping enough to save
the jobs, because he cannot get money to
pay them: “I’m already ruined, I don’t want
to ruin my employees,” he noted.
Mr. Waked also confirmed that he
has received several offers by different
groups to buy some of the companies, and
that he was negotiating. But he felt he was
being pressured by the government to sell
quickly, and that any sale would depend
on permission from the U.S. and Panama
governments. The monies from any sale
would go first to pay employees and then
creditors, he said.
INSIDER
Suriname’s KING’s Enterprises expands and upgrades
duty free stores in JAP Airport
Suriname Duty Free operator
KING’S Enterprise – which operates
airport and downtown stores in the
capital city of Paramaribo as well as
border stores with the Guyana territories,
completed a major expansion and
refurbishment project at its duty free
store at Paramaribo’s Johan Adolf Pengel
International Airport at the beginning of
this year.
The 25-year-old business, which
employs more than 150 staff in Suriname,
remodeled its duty free store in
Paramaribo’s Arrivals Terminal to create a
luxurious and dynamic retail image for the
store, and expanded it to more than 500
square meters of retail space.
KING’s has been importing and
selling liquors in Suriname and the
Guyana territories for many years,
and is now expanding its trade to all
categories. The company reports that it
has signed with some of the main brands
of cosmetics, fragrances, accessories and
watches and is looking to develop these
categories further.
From its start as a small liquor store
in Suriname in 1988, KING’S is now
carrying a range of bags and accessories,
from such top selling brands as Furla,
Kipling, Guess and Fossil; jewelry from
Swarovski, Buckley London and Lola
& Grace; a full array of sunglasses from
RayBan to Oakley, and top-name watches
including Hublot, TAG Heuer, Tissot, and
Gucci. The KING’S stores also carry a
broad range of confectionery, fragrances
and cosmetics.
23
KING’s recently remodeled its
Downtown location as well, exlarging it
to more than 2,500 sqm of luxury retail,
including a Spa and Fashion Café. This
project is already in the production phase,
says the company.
Several of the company’s border
stores are being remodeled, as well.
INSIDER
More despair for South American economies
John Gallagher looks at recent economic events in Brazil and Argentina and how they affect the travel
retail market.
The impeachment of Brazilian
President Dilma for falsifying
government accounts has dominated
political and economic life throughout
Latin America over the past few months,
even as interim President Michel
Temer and Finance Minister Henrique
Meirelles are working to shore up the
ailing economy to restore confidence
and attract international investors.
“The central goal is the recovery
of growth, cutting unemployment and
raising people out of absolute poverty,”
President Temer told the country’s
Congress. “We’re going to look ahead
and put the country on the path to
growth.”
Austerity
While Temer’s words certainly
sound good, there has been little detail
on what his administration is going to
do to achieve his goals. But on May 24,
Temer announced austerity measures
aimed at reducing the nation’s large
budget deficit and eventually lifting the
country out of recession, including plans
to cut spending in all areas, including
health care and education.
Rousseff, meanwhile, has said
Temer’s plans, if enacted, would amount
to the “biggest setback in Brazil’s
history” in the social sphere.
But with the current economic crisis
considered the worst in Brazil’s history,
it is understood that capping government
spending with even more austerity
measures will be needed. The Brazilian
Central Bank confirmed that the
country’s economic activity contracted
by 1.44% in Q1 in 2016 compared to Q4
in 2015 and by 6.27% compared to the
same three-month period of 2015. After
15 consecutive months of recession, it
is clear that the government needs to act
quickly.
Meirelles says that some state
enterprises will be sold and aviation
analysts are asking what that means for
government controlled airport authority
Infraero. Brazil’s main airports have
been partially privatized, but Infraero
holds a 49% stake in those entities;
Infraero’s share could be of interest
to many of the world’s infrastructure
specialists if made available for sale, in
spite of Brazil’s current problems.
More airport sales?
In fact, on May 25 Reuters,
quoting an anonymous source, reported
that Infraero plans to raise 5 billion
Reais ($1.4 billion) by selling part of
its minority stakes in five airports—
perhaps as much as 25% -- as early as
the end of this year. The airports are
Rio de Janeiro’s Galeão, Sao Paulo’s
Guarulhos, Campinas’s Viracopos,
Belo Horizonte’s Confins and the main
airport in the capital Brasilia.
Air travel has declined as the
middle classes continue to tighten
their belts. According to ABEAR, the
Brazilian Airlines Association, demand
for domestic flights fell 7.3% in the first
4 months of the year compared to the
same period last year. Demand in April
was exceptionally bad, down by 12.2%,
a level last seen in April 2012. Looking
at these figures, it is understandable
that duty free operator Dufry reported
disappointing sales for its Brazilian
airport business in the first quarter.
Olympics
No longer will the 2016 Summer
Olympics to be held in Rio de Janeiro in
August be a celebration of a successful
dynamic country showing itself to the
World. Today the goal is to ensure
that the Games are well organized and
tourists enjoy their stay in the country.
The good news for the traveler to the
games is that airport manager RIOgaleão
has opened the new South pier in
Terminal 2 at Tom Jobim International
Airport in time for the summer games.
The 100,000 sqm terminal will greatly
increase passenger comfort and anchor
duty free retailer Dufry has vastly
24
increased its offer to passengers in
departures and arrivals.
Optimism in Argentina
Although Argentina has been
plagued with economic mismanagement
over the past few years, the situation
is still not as bad as in Brazil. Six
months after Mauricio Macri took over
the country’s presidency, he can point
to a number of positive achievements:
the country reached an agreement with
the its creditors allowing Argentina
access to the international capital
markets, employment levels are fairly
stable, plans are being made to improve
infrastructure throughout the country
and the country now has a stable unified
exchange rate.
On the negative side, inflation is
still running between 35% and 40%,
with no sign of internal investments.
There are indications of social unrest
as workers try to maintain the value of
their salaries to pay for hefty increases
in the cost of food, transport and
utilities. The government promises
that the second half of the year will
be better with lower inflation and
more investment from multinational
companies.
Of interest to dutyfree, the
Argentine middle classes are still
traveling. Traffic at both Aeroparque and
Ezeiza airports is slightly ahead of last
year and ferry traffic to Uruguay was
ahead of last year with a 23% increase
on the Buenos Aires - Colonia route.
More Argentine tourists are visiting
Iguazu and Ciudad del Este but the
lack of Brazilian travelers has hit sales
there and at the stores on the Uruguay –
Brazil border.
The outlook for the rest of the year
is unclear and much will depend on the
government managing the economy
efficiently. If inflation can be reined in,
Argentine travelers will keep traveling.
25
INSIDER
RIOgaleão doubles capacity
The RIOgaleão consortium (51%
owned by Odebrecht TransPort and Changi
Airports International and 49% by Infraero)
has opened the new South Pier in Terminal
2 at Tom Jobim International Airport in Rio
de Janeiro. The 100,000 sqm building with
26 aerobridges almost doubles the capacity
of the airport from 17 million passengers to
30 million and has been completed in time
for the Summer Olympic Games taking
place in August this year.
On average 40,000 passengers use
the airport every day but traffic will rise to
close to 85,000 during the Games. Travelers
at Tom Jobim will also be able to enjoy
additional retail opportunities; more than
100 new stores and restaurants occupying
24,000 sqm will be operational by August.
The consortium has invested 2 billion
Reais on the new pier and other airport
improvements since winning the tender
in 2013 and taking over management in
August 2014.
RIOgaleão president Luiz Rocha said
“Delivered in record time, the revamped
airport is the result of a commitment
that we made in 2014 to the city and our
passengers, and a concerted effort by the
community. We worked tirelessly to ensure
that what we have today is a world-class
airport that is ready to receive the 1.5
million visitors we are expecting at the
Olympic Games.”
“We need to provide a quality
and efficient service structure so that
passengers do not worry about anything. So
they can arrive early, enjoy the space, try
new services and already enjoy their trip at
the airport,” added Rocha.
Last year 16.94 million passengers
used the airport, a decline from 17.32
million in 2015. However the number of
international passengers increased slightly
from 4,050,191 to 4,101,413.
The anchor duty free retailer at
the airport is Dufry do Brasil. Earlier
this month Dufry announced that it had
extended the duty free contract until 2023.
The duty paid contract, which includes a
Dufry Shopping megastore and several
Hudson news outlets, was extended until
2021.
JG
Argentina’s economy grows 0.8% during first quarter says Central bank
Argentina’s economy grew 0.8% in
the first quarter of 2016 compared to the
same period last year, according to Central
Bank Governor Federico Sturzenegger,
who also stated that since President
Mauricio Macri took office employment
has remained “stable.”
South Atlantic news agency
Mercopress on May 16 reported that the
bank published a monetary policy report,
including an index to review Argentina’s
GDP, done based on reports from 18 private
consultancies and business chambers.
There is still no official GDP data for 2016
as the INDEC official statistics bureau,
which was dismantled during the previous
government, is reviewing the country’s
statistical procedures.
The Bank’s Sturzenegger is reported
as saying that consumption is falling but
investment is growing, and export levels
are much better.
Mercopress says that the Central
Bank’s forecast disagrees with reports
26
from international credit agencies and
organizations, which showed a negative
outlook for Argentina’s economy this year.
Moody’s said GDP will decline 1.5% and
the International Monetary Fund forecasted
a one percentage point drop.
All forecasts agree on a better outlook
for 2017, however. The Central Bank is
expecting “steep” economic growth next
year.
INSIDER
Tocumen tender delayed?
The new duty free tender at Panama’s
Tocumen Airport is likely to be postponed
until the uncertain situation surrounding
Grupo Wisa is resolved. The U.S.
government alleges that the company
has been involved in money laundering
activities and has levied sanctions which
prevent many companies from transacting
business with them.
The current contract for Tocumen
Terminal 1, won by Grupo Wisa and Motta
Internacional in 2007, lapses in 2017.
A new tender was expected to be
called early in Q3 of this year, but will
probably now be issued later. Dufry,
Heinemann and Duty Free Americas have
expressed interest in seeing the tender
documents, say local press reports.
In addition to the tender for Terminal
1, Tocumen is in the process of expanding
the airport, with the new Terminal 2
scheduled for completion in 2018. It
appears that the airport manager Tocumen
SA will keep the duty free tender for
Terminal 1 separate from that of Terminal
2.
In 2007 Motta and Wisa paid in
excess of $170 million in advance
to operate the current concessions.
Traffic has grown steadily at Tocumen,
developing in line with Panama’s
flagship airline Copa, which has
successfully established the airport as the
Hub of the Americas. Although passenger
traffic with Venezuela and Brazil has
suffered recently, the airport expects
traffic will continue to increase.
Tocumen handled more than
9 million passengers last year, up
significantly from 3.8 million in 2007
when the current duty free concessions
were awarded. The airport authority
received $70 million in rental fees from
duty free retailers in 2015.
However, between the recent Panama
Papers scandal and Wisa’s problems with
the U.S. government, the new tender for
Terminal 1 will likely be postponed a
few months at least, to allow the business
climate to recover before asking potential
operators to commit millions of dollars to
a long term concession contract.
JG
Construction imminent on new terminal at Punta Cana
Punta Cana International Airport will
be building a third international terminal.
Steady traffic growth over the past few
years means that the airport now accounts
for almost 60% of international traffic that
arrives in the Dominican Republic.
Last year 6.4 million passengers used
the airport and the airport authority is
forecasting traffic to grow by 5% this year.
The new terminal will increase the airport’s
capacity by 2.5 million passengers.
Traffic should continue to grow even
more after U.S. Customs and Border
Protection preclearance operations begin
early in 2017, which will lead to additional
direct flights to and from the U.S.
Construction on the new terminal is
expected to begin before the end of the
second quarter of this year and will take
around 12 months to complete.
The cost of the new development has
not been revealed but the airport’s second
terminal completed in November 2014
required an investment of $100 million.
Duty Free Americas is the anchor duty
free retailer at the airport.
JG
British firm wins contract to plan new airport for Costa Rica
British consultant Mott MacDonald
has won the $1.6 million tender to prepare
the Master Plan for a new international
gateway airport for Costa Rica. The
company has been given 12 months to
produce the plan which will include an
initial design project and confirmation of
the exact geographical position of the new
airfield at Oritina, located just over 55 kms
from San Jose, the country’s capital city.
The plan will detail the position and
alignment of runways, terminal buildings
and other airport infrastructure as well as
preliminary financing options. With this
information, the Costa Rican government
can decide the best way to call for tender
for the construction and operation of the
green field site.
The new airport will replace Juan
Santamaria Airport, located 18 kms from
the capital. Further expansion at the current
site is not possible.
Commenting on the new project,
Costa Rica President Luis Guillermo Solís
said: “It is important that we have serious,
transparent technical studies which will
allow our country to build a modern airport
which will improve communication with
27
the world.”
Mott MacDonald has been involved
with airport expansion projects in recent
years for developers or lenders at London
Heathrow, Quito, Singapore Changi and
Hong Kong. The company also advises on
a project basis to Aeris Holding, which has
managed the Juan Santamaria Airport since
late 2009.
About 3.54 million passengers
traveled through Juan Santamaria Airport
last year. The new airport should be ready
by 2025 and will have a capacity for 10
million travelers.
JG
INSIDER
More Airport privatization in Brazil
The delayed tenders to privatize the
international airports at Fortaleza, Salvador,
Florianopolis and Porto Alegre in Brazil
finally are underway as of the beginning of
May, when the government confirmed a 45day consultation period for enquiries from
potential bidders.
The tenders were originally planned to
take place in the first quarter of 2016, but
were postponed to the end of Q2. However,
the political crisis and the impeachment of
President Dilma Rousseff led to changes in
the tender schedule.
Brazil’s Tribunal de Contas da União
(TCU - Federal Court of Accounts) gave
the civil aviation authority ANAC the green
light to launch the tender last month, albeit
with some changes to the requirements.
ANAC is now expected to open the bids
early in Q3.
The government will use the same
model it used in the tenders of Sao Paolo
Guarulhos, Campinas, Brasilia, Rio de
Janeiro - Galeão and Belo Horizonte
Confins, awarding the tender to the highest
bidder for the concession. Winning bidders
will also pay 5% of total revenues to the
government.
When the tenders for the four airports
were initially announced in June 2015, the
Brazilian government estimated that a total
of R$8.5 billion in investments would be
needed for the new concessions. However,
as of May this figure had been reduced to
R$6.04 billion (Fortaleza R$1.3b, Salvador
R$2.2b, Florianópolis R$887m, Porto
Alegre R$1.6b). The government expects
to raise a minimum of R$4.11 billion from
the tenders although this figure could be
ambitious given the current economic
climate.
TCU also dictated changes in the
operational experience required by bidders.
Previously set at 10 million passengers per
year for each airport, bidders seeking to
operate Salvador and Porto Alegre must
have managed airports with a minimum of
9 million passengers, with experience of
7 million for Fortaleza and 4 million for
Florianópolis.
The concession period for Fortaleza,
Salvador and Florianópolis will be 30
years; the concession period at Porto
Alegre is for 25 years.
The four airports are currently
managed by state controlled Infraero. In
previous tenders, the federal government
required that Infraero be a partner in new
concessions. At Florianópolis, Salvador,
Porto Alegre and Fortaleza airports,
Infraero will not be a partner.
Last year, Salvador handled 8.65
million passengers, Porto Alegre 8.19
million, Fortaleza 6.18 million and
Florianópolis 3.56 million.
As the new tender details emerge,
Corporacion America-controlled
Inframerica, which already manages the
airports at Brasilia and Natal, has protested
the ruling that prevents it from seeking
a controlling interest in the airports up
for privatization. Any current operator of
previously privatized airports is restricted
to a maximum 15% shareholding.
JG
Paraguayan tender – bids to be opened by end of May?
The Paraguayan government is
continuing its plan to privatize the
country’s leading international gateway
Silvio Pettirossi International Airport.
Despite delays due to administrative
problems and information requests from
potential bidders, the government is now
scheduled to open bids for the renovation
and management of the airport on June 9.
The government has held several
information sessions for potential bidders,
but TMI has been told that several
companies are asking for more time to
arrange financing for the $150 million
project.
Reports indicate that 13 airport
concession and construction companies
are interested in submitting bids, including
French specialist Vinci Airports, Korea
Airport Corporation, Incheon International
Airport Corporation, Sacyr Concesiones
SA, OHL, and Isolux Corsam Corvian.
Buenos Aires based Corporacion
America and Agunsa from Chile complete
the international lineup. Four Paraguayan
construction companies are also expected
to bid.
International traffic at the airport
showed a healthy 12.9% increase for Q1 of
2016 compared to the same period in 2015.
Although all routes performed well, about
half of the increase came from a new route
to Madrid, Spain, operated by Air Europa.
JG
by 8.3% to 2.93 million and international
traffic grew by 8.9% to 2.35 million.
Growth should continue this year as
several airlines add service and frequencies
for international passengers at Arturo
Benitez Merino Airport, which has been
managed since October last year by the
Nuevo Pudahuel Consortium.
United Airlines and KLM reinstated
routes to Houston and Amsterdam and
Alitalia began service to Rome in May.
British Airways has also announced new
service to London Heathrow to commence
in January 2017.
JG
Chilean air traffic up
In spite of slower economic growth in
Chile and the regional economic malaise,
both international and domestic traffic
performed well. The Junta Aeronáutica
Civil, Chile’s civil aviation authority,
reports that 5.28 million passengers used
Chilean airports during the first quarter of
this year. Domestic passengers increased
28
INSIDER
Chile celebrates best cruise season in seven years
Anyone attending the global SeaTrade
conference held in Fort Lauderdale,
Florida earlier this year most likely ran
into the contingent from Chile who were
passionately lobbying for a return of cruise
ships to the country, which had suffered an
exodus of port calls following a series of
earthquakes beginning in 2010.
A brochure published by the
Southern Cone Port Corporation, tourist
operator destination Management Chile,
in association with Turismo Chile and
Sernatur, Chile’s national tourism service,
list 14 Chilean cruise ports, including
Puerto Arica, Iquique Puerto, Puerto
Antofagasta, Coquimbo Port, Puerto
Valparaiso, Port of Puerto Montt and
Puerto de Castro, along with Puerto Austral
(Punta Arenas and Puerto Natales).
The group’s efforts are showing
impressive results, as the Southern Cone
Ports Corporation reports that the October
2015/April 2016 cruise season has been
the best Chile has seen in seven years.
The number of vessel calls rose by 47% to
239 and the number of landed passengers
reached 43,000, up by 43% compared to
2014/2015.
This is the best cruise season for
Chile since 2008/2009, when the country
welcomed a record 455,000 cruise
passengers.
For the 2015/2016 season, the port
of Valparaíso led with 118,000 visitors,
followed by Punta Arenas, with 104,000
and Puerto Mont, with 99,000.
The Ports Corporation said that one of
the milestones of the season was the return
of Norwegian Cruise Line’s Norwegian
Sun, which made 40 calls in Chilean ports
and brought an estimated 100,000 visitors.
Ignacio Covacevich, president of
the Southern Cone Ports Corporation,
welcomed the positive figures and stressed
that “this season was quite successful
for the industry in Chile. We went from
302,000 to nearly 432,000 visitors and 163
to 239 landfalls compared to last season.”
Sebastián Montero, CEO of the
Southern Cone Ports Corporation said that
the success was “the result of the hard
work displayed by the Corporation for
years. Lobbying in congress, attending
the SeaTrade fair in Miami, SeaTrade
Valparaiso in 2013, and more recently
the return of NCL to Chile has helped
create this favorable environment” for the
industry in Chile.
The corporation said that one of the
pending challenges for the industry is
allowing foreign flagged cruises with more
than 400 passengers to call in all Chilean
ports with the purpose of promoting
regional tourism.
“This will enable tours of less than
seven days, which will help promote a
particular slot of the market,” he said.
The corporation also announced that
the new US$8 million passenger terminal
under construction in Valparaiso should be
finished and operational by next October.
The construction had suffered from
significant delays.
“This initiative will mean a significant
change in quality of service for passengers
since Valparaiso is the only homeport
in Chile, and this will not only benefit
Valparaiso but all the cruise ports in
Chile and the country’s tourist industry,”
concluded the report.
Clockwise from top left: Puerto Valparaiso, Crucero en Punta Arenas, Puerto Arica, Port Antofagasta.
Photos courtesy of The Southern Cone Port Corporation
29
INSIDER
First U.S. cruise to Havana set sail on May 1 after Cuba
lifts ban on Cuban-born travelers cruising with Carnival
Carnival Corporation made
history on May 1 when its newest
cruise brand, Fathom, arrived into
Havana, marking the first time in
over 50 years that a U.S. cruise
line sailed from the U.S. to Cuba.
The cruise also marked the first
time in decades that Cuban-born
individuals have been able to travel
by sea to or from Cuba.
More than 600 passengers
joined in the historic inaugural
trip to Cuba onboard Fathom’s
704-passenger Adonia cruise
ship. The Adonia is now
operating weeklong itineraries
to Cuba every other week,
where travelers can choose to partake in
onboard experiences, including Cubanand Caribbean-inspired food and films,
music and dancing, and much more. On
the alternate weeks, the Adonia sails to
the Dominican Republic for what it calls
“social impact travel,” cruises that offer
consumers the option to have meaningful
travel experiences and work alongside
locals to tackle community needs.
From all reports, the inaugural voyage
to Cuba was an incredible experience.
Fathom travelers were greeted by fanfare
and a festive celebration as they arrived
in the Port of Havana, the first of three
destinations they visited as the ship
circumnavigates the island on its sevennight voyage.
But the inaugural voyage came very
close to not taking place at all. When
bookings opened after the company
received permission to sail from Cuba on
March 21, guests buying tickets discovered
that Cuban-born Americans were not being
allowed to sail in order to comply with the
Cuban government’s prohibition against
any person born in Cuba from entering the
country by way of any sea vessel.
The outcry from the public was
immediate and widespread, accusing
Carnival of allowing a foreign government
to set rules which discriminated against
Americans trying to sail on an American
line. The Democracy Movement
(Movimiento Democracia), a nonprofit Cuban-American human rights’
organization, waged a campaign to protest
against the discrimination and two Cubanborn Americans brought lawsuits against
Fathom’s Adonia docked at Port of Havana
the cruise company for violating their civil
rights.
Carnival reported that it had been
working diligently to produce “a change in
policy” from the Cuban government, but
the protest outraged against what critics
were calling a policy of “apartheid”.
At that time Carnival Corp. responded
in a statement, saying: “There has been
a policy change with air travel to Cuba,
so we are hopeful that a similar change
can also happen with travel by sea. We
believe we have a much better chance in
helping to effect that change by working
within the current boundaries of the policy
while engaged in an active commercial
agreement.”
The statement went on to say,
however, that Carnival must comply with
the visa, entry and exit policies of each
country.
But on April 22, Arnold Donald, CEO
of Carnival Corp., announced that the
company had been successful in persuading
Cuba to change the policy that restricted
Cuban-born people from traveling to the
island by sea.
Earlier that week in fact, Carnival
Corp. had announced it would sell tickets
to Cuban-born Americans in anticipation
of the regulatory change, adding that it
would delay cruising to the island until that
change occurred.
Cuban-born travelers on Fathom still
need to follow similar processes as those
traveling by air. (Cuban-born Americans
can travel to the island on air charters).
They will have to present Cuban passports,
even if they are American citizens, and
30
present the proper visa, “a practice
still considered discriminatory by
some,” reports the Miami Herald.
Nevertheless, the policy change
is considered a move in the right
direction.
So when the Adonia set sail
to Havana on May 1, there were
Cuban-born Americans onboard,
including at least one who worked
for Carnival.
“Our arrival today in Havana
is a special moment in history
that contributes to a more positive
future, and we congratulate our
colleague Arnie Perez on being
the first person born in Cuba to
step ashore under Cuba’s new policy,” said
Carnival Corporation CEO Arnold Donald.
“We are so honored that Carnival
Corporation and our Fathom brand can be
part of such a meaningful milestone. As
we worked to become the first U.S. cruise
company to sail from the U.S. to Cuba in
more than five decades, it was clear just
how much interest there is from travelers
who want to experience Cuba. We believe
there is no better way to experience Cuba
and see this beautiful island than to cruise
with us on Fathom, and we look forward
to providing a very special and rewarding
experience to everyone who sails with us.”
“We are extremely excited and very
humbled by this historic opportunity to
give Fathom travelers an exclusive chance
to experience Cuba, which is a unique
destination unlike anywhere else in the
world,” said Tara Russell, president of
Fathom and global impact lead for Carnival
Corporation.
During each sailing, Fathom will
visit Havana, Cienfuegos and Santiago
de Cuba, three ports of call for which
Carnival Corporation has obtained berthing
approval.
Tourism between the U.S. and Cuba
is still not allowed, even though relations
between the countries are thawing. Both
countries gave Carnival approval to host
trips to the island, with itineraries that
include mandatory educational and cultural
activities. The activities fall under the 12
sanctioned categories of travel that are
currently allowed.
INSIDER
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171
April
2016
IAADFS/MHA
Issue
June
2016
ASUTIL
Special Issue
March
2015
IAADFS/MHA
Issue
INSIDER
ASUTIL 2015
32
INSIDER
Retailers, suppliers, and industry stake holders gathered in
Panama City last year for the 2015 ASUTIL Conference.
33
INSIDER
Essence Corp. debuts French luxury Atelier Cologne in
Caribbean in partnership with Rouge Caymania Duty Free
Atelier Cologne enjoyed a spectacular
launch in the duty free channel in the
Americas, when Essence Corp. debuted the
French luxury perfume in the Caribbean
in partnership with Rouge Caymania Duty
Free in Grand Cayman.
“We held a VIP Event in Caymania
Duty Free’s flagship store on May 19 at
which Atelier Cologne offered our guests
a unique opportunity to experience the
atmosphere of the brand’s Atelier Cologne
Workshop,” Patricia Martinez, Senior Area
Manager at Essence Corp, tells TMI.
“We dressed the whole shop to give
our guests the experience of being in the
Paris Atelier, beginning with reproducing
the famous Venetian blue doors that are
found on Atelier Cologne’s storefronts in
New York and Paris. And since Atelier
colognes are made from citruses blended
with precious natural raw materials, we
installed displays with lemon and orange
and bergamot and the other citruses,
such as you would see in the perfume
workshop,” explained consultant Raymond
Kattoura, whose company Kattoura Duty
34
Free & Travel Retail Group Inc. manages
the stores for Rouge in the Caribbean. “We
also wrapped the cashdesk, front windows
and interior store columns with the Atelier
citrus visuals.”
After invited guests passed through
all the displays, they came to Caymania
Duty Free’s special Concierge area, where
beauty advisors helped them discover the
fragrances.
“All the guests received a
complimentary 30ml Travel Spray with the
Atelier fragrance of their choice, complete
with a personalized leather case which we
engraved with their initials right there,”
said Martinez.
Kattoura said that the event was a
huge success. “The launch was attended
by 120 of Cayman’s ‘A’ list customers,
who enjoyed champagne and the ‘best
of Cayman’ catered by XQ’s restaurant.
People were so impressed with the launch
we sold more the next day and sales have
continued throughout the week since,” he
said.
Martinez says that Atelier Cologne
will be launched next exclusively in
St. Maarten with JL Penha, and will be
available with only one retailer per island
throughout the Caribbean. Essence Corp.
is the exclusive agent for Atelier Cologne
for the Latin America local market and
Travel Retail markets in the Americas and
Caribbean.
INSIDER
Essence Corp. holds 2016 BA Seminar in Orlando
Essence Corp. hosted a very successful Beauty Advisor Seminar for its Travel Retail Americas team in Orlando, Florida from May
22 – May 25.
The company reports that 51 Beauty Advisors from North & South America attended the event, held at the Buena Vista Palace Hotel.
Following the opening reception/dinner, the BA’s enjoyed a full day of training, which focused on such brands as Mr. Burberry and
My Burberry Black, Montblank Legend Spirit, the new Coach fragrance, and Eros Femme EDT and Dylan Blue from Versace.
The following day, Essence Corp. treated all the advisors to a day at Disney’s Magic Kingdom. The Seminar concluded with a gala
evening dinner party, where Achievement & Loyalty awards were presented.
Clinique: new travel products in Travel Retail
Clinique has introduced two new
products particularly applicable for
travelers and vacations, as well as for every
day use.
Clinique offers three versions of its
new mineral sunscreens to protect the skin
from the sun’s harmful rays,
Clinique’s NEW SPF 30 Mineral
Sunscreen Fluid for Face, SPF 50 Mineral
Sunscreen Fluid for Face, and NEW SPF
30 Mineral Sunscreen Lotion for Body
offer lightweight and invisible protection
that blends into skin, and help to scatter
and reflect UVA/UVB rays by blocking
them from penetrating skin.
Clinique’s latest addition to its
makeup removal franchise, Take The Day
Off Micellar Cleansing Towelettes for Face
& Eyes, are oversized, super-saturated
wipes to clean away makeup, smudges,
dirt and grime including waterproof and
long-wearing makeup. The wipes come in
a re-sealable, ready to-go package, perfect
for travel.
Both lines are available now at most
Clinique Travel Retail locations worldwide.
35
Actium and Sisley
partner for cruise
business
Actium and luxury skincare brand
Sisley Americas have signed an agency
agreement for Actium to develop Sisley’s
cruise business, it was jointly announced
by Arnaud Naintré, President Sisley
Americas and Hanan Fraysse, Director of
Actium’s Lifestyle & Beauty division.
“Sisley is a perfect match for our
portfolio as it fits with our DNA: it is a
luxury brand [that we can build] with our
strong expertise in the cruise industry,”
Fraysse tells TMI. The new partnership is
effective immediately.
Sisley is in the forefront of Phytocosmetology, the concept at the center of
Sisley’s creations, which relates to using
plant-based extracts to create its top-line
skincare, makeup, and perfume.
INSIDER
Baylis & Harding sets its sights on the Travel Retail Market
Baylis & Harding, a leading ladies gift
brand in the U.K., is bringing its affordable
luxury beauty sets to the travel retail
market in the Americas.
One of the fastest-growing, multichannel bath, body and gift manufacturers
in the world, the award-winning Baylis
& Harding is today found in one in
two British households -- an extremely
impressive statistic for a company that was
set up by a young couple back in 1969 in a
barn in the heart of England.
Now nearly 50 years later, Baylis &
Harding is headed by the next generation
with brother and sister Adrian and
Tania Slater (MD and Creative Director
respectively) who strongly focus on
affordability, quality assurance and
innovative design. They have shaped
Baylis & Harding into an international
success which is now found in 52
territories spanning the Americas, Europe
and Asia.
“We believe that now is the right time
to explore the growing travel retail market
and are in the process of reviewing our
export business in general, with a specific
focus on travel retail,” comments Adrian
Slater, MD and Co-owner.
“Currently, our presence in the channel
is small, but we recognize its potential as
there is no other brand doing what we do
Elizabeth Arden signs fragrance deal
with Christina Aguilera
Elizabeth Arden has announced it will
acquire the global license of the Christina
Aguilera fragrance brands from P&G, in a
deal expected to close in the first quarter of
fiscal 2017.
The U.S. singer/songwriter and
internationally acclaimed recording artist
introduced her first fragrance in 2007 and
today the portfolio includes seven brands.
The Elizabeth Arden statement says
Christina Aguilera is the No. 1 celebrity
fragrance brand in Europe,
“This stellar brand is one with a global
footprint and a significant international
presence in Europe,” said Arden Global
Fragrance President George Cleary. “This
acquisition is consistent with our strategy
to acquire brands to grow our fragrance
business on a global basis…”
The scents will now join Elizabeth
Arden’s wider celebrity fragrance portfolio,
which includes Britney Spears, Taylor
Swift, Nicki Minaj, Mariah Carey and
Justin Bieber.
Terms of the transaction were not
disclosed. The Christina Aguilera brand
was originally part of the P&G fragrances
portfolio that was to be acquired by Coty.
36
in this sector. Travel retail is very much
a gifting environment, particularly in the
Airport, Maritime and Inflight channels.
People are traveling, looking for an easy
gift; they’re looking for an impulse purchase
and the Baylis & Harding product range fits
that demand perfectly.”
Baylis & Harding is represented in the
Americas travel retail channel by Katherine
Sleipnes’ International Brand Builders Inc.
(IBBI), and will be showing the line at
the ASUTIL Conference. IBBI will then
present the brand in a road show format in
Miami in August.
For more information, please contact
[email protected]
be very. like perry.
PERRY ELLIS
37
RED
INSIDER
A2Z Elite brings German hand-crafted Qudo jewelry
to TR Americas
An exciting new line of fashion
jewelry with a difference has launched in
the Americas travel retail channel from
Zoila Andonie and Julia Ruiz Bisquet, two
experienced duty free executives behind
the new A2Z Elite agency. A2Z Elite is
representing the jewelry in travel retail
throughout the Americas.
The new line, Qudo from LIZAS
GmbH & Co.KG in Hanover Germany,
features top quality stainless steel, gold and
silver plating, and beautiful Italian leather,
and is adorned with Swarovski crystals,
semi-precious stones and mother of pearl,
in a range that allows easy interchanging of
colors and styles, at a very accessible price
point.
“The bracelets are made of top-quality
Napa leather, hand-crafted in Germany.
The rings are made of polished stainless
steel, and the best IP gold and rose-gold
plating so that they will not tarnish. Every
piece comes with a logo and signature,”
says Andonie.
“Best of all, consumers can customize
each piece with Qudo’s unique system of
interchangeable stones. To change the look
simply replace the top!” adds Ruiz Bisquet.
Qudo is positioned as the best quality
fashion jewelry, with prices ranging from
$18 to $103, says Andonie. Response to the
brand has been very strong throughout the
region, she says.
“LIZAS GmbH & Co, the company
that conceived and manufactures Qudo,
was formed by three businessmen in
Germany only seven years ago and
already the Qudo brand is known
throughout Europe, North America and
the Middle East. In U.S. retail, Qudo
jewelry is being sold in boutiques in New
38
York and California and the company is
finalizing negotiations for it to be carried
in Nordstrom. The company is making a
heavy investment in North America, and
will even be opening its own Qudo store in
Los Angeles later this year,” says Andonie.
For travel retail, Ruiz Bisquet says
the brand is available in the Caribbean and
Mexico, and will be instore in Panama later
this summer.
Marc Vach, one of the three cofounders of LIZAS GmbH, is passionate
about the Qudo brand.
“When we started in 2009 with Qudo,
we had only a few leather bracelets and
now we are a well-known jewelry brand
with a wide range of products, exporting to
35 countries. Honestly I did not expect that
in this short period, but it showed me that
if you do something with passion and work
hard for your targets you will succeed,”
Vach says.
No detail is too small, from the
name—“Qudo is a fantasy name, but it is
short, concise and of course international”
-- to the materials “leather is one of the
oldest materials in the world, it comes from
nature and has a perfect touch.”
Quality is paramount, says Vach.
“Nowadays our customers are
expecting the highest quality standards
even for fashion jewelry. Our mission is
to produce durable but affordable quality
products. We use only finest Italian
leathers, stainless steel and a high-tech
plating (IP-Plating). For our rings and
necklaces we work very intensively with
Swarovski.”
Qudo offers a complete jewelry
collection with bracelets, rings, earrings,
necklaces and watches that you can mix
and match. Rings and bracelets come in
multiple sizes and merchants can customize
the order by color and materials. Every
piece comes in a custom gift box and
orders include merchandising materials.
Zoila Andonie will be showing the
Qudo line at the ASUTIL Conference in
Santiago.
“This is a very professional company
that has covered all the bases,” she says.
“The jewelry is well-made using beautiful
materials and top craftsmanship and is
offered at an amazing price.”
To see the Qudo line, contact
[email protected]
39
INSIDER
Duty Free Dynamics targets expansion into new travel retail categories
Distributor brings in former Chanel executive Guy Bodart to drive business
and adds Braun watches and clocks to the portfolio
Duty Free Dynamics, the company
formed in Panama last year initially to
distribute Guess watches in the LATAM
and Caribbean travel retail markets,
announces a new partnership with Zeon
Ltd, the global licensee of Braun watches
and clocks. The agreement covers the
exclusive distribution of Braun watches
and clocks for the Travel Retail channel in
the Americas and the Caribbean.
Duty Free Dynamics is branching
out to represent other brands and product
categories in the channel, says Duty
Free Dynamics General Manager Guy
Bodart. The addition of Braun’s awardwinning collection of clocks and watches
to the Duty Free Dynamics portfolio
fits in perfectly with this objective, and
complements the work that DFD has
accomplished so far with the Guess fashion
watches.
Bodart, a well-known, respected
executive in the world of luxury in Latin
America, joined DFD earlier this year after
20 years with Chanel. At Chanel, Bodart
served as vice president of sales for Latin
America, subsequently becoming president
of the Chanel subsidiary in Mexico and
later Brazil.
Bodart’s responsibilities at Chanel
encompassed all divisions, including
fragrance and cosmetics, fashion, and
watches. He was instrumental in launching
Chanel watches and fashion in the LatAm
region, and has in-depth knowledge of
every player in the region, both in the local
markets and travel retail.
“Duty Free Dynamics has the ability
to be a strong multi-category company.
Within three years we expect to be
handling accessories, electronics, apparel
and fragrances & cosmetics, in addition
to watches and jewelry,” says Bodart. He
adds that “Our objective at DFD is to grow
vertically by taking on brands from diverse
categories, but at the same time expand
geographically by convering airports, duty
free zones and border shops in the U.S.,
Mexico and Canada.”
“We are looking for brands that want
to be in Travel Retail in the Americas but
Classic Braun ceramic watch with quartz
movement and leather strap.
cannot afford the resources or time to
do it on their own. Basically we are a
distributor made up of a young, active and
dynamic team with strong spirit. We are
pro-active, pro-solution and very sell-out
oriented. We offer brands a single voice
and single entry point in the complex
and vast world of the Travel Retail
channel throughout the Americas and the
Caribbean.”
“We do what is best for the brand,
and we are able to do it quickly. This
team, combined with my expertise, creates
a powerful tool to bring a brand into
the channel and make it grow,” stresses
Bodart.
For the present, DFD reports an
excellent year for Guess, whose men’s
and women’s fashion watches incorporate
the Guess image and appeal to young,
fashion-driven consumers around the
world. Guess watches, the largest licensed
watch brand in the world, are available in
114 countries, and growing in travel retail.
Citing its state-of-the-art supply
chain operation and efficient ‘on-line’
40
self-management ordering system, DFD
reports that it “reintroduced the [Guess]
brand as the leader in the fashion watch
segment and gained visibility in the best
stores throughout the region…in less than
6 months.”
“Our Guess brand is on a roll. We
have opened accounts in most of the
territory across the Caribbean, Central and
South America, and are seeing excellent
sell-out. We have new orders from every
place we are being sold,” Bodart reports.
DFD has listed the Guess watches
with UETA –“where the brand is doing
very well,” says Bodart – and is also with
Dufry in Argentina and Mexico City, with
more Dufry doors to open next year.
Duty Free Dynamics’ team of
energetic and highly trained, multicultural personnel bring a wide range
of experience to the new venture and
concentrate on delivering first class
customer service.
“We are focusing on moving
our products off the shelves, using
good visibility at the point of sale and
incentivizing the sale staff. We were set
up to specialize in travel retail and we
understand this market well,” he says.
Guess has now taken its fashion
expertise and incorporated it into an
award-winning Smartwatch, called the
Guess Connect. And to appeal to a broader
audience, Guess is introducing the new On
Demand collection, featuring a lower price
point to attract a new customer, selling in
duty free in the $110- $180 range.
Duty Free Dynamics’ is part of the
Liberman Group and is able to capitalize
on the financial support and extensive
experience of the Panamanian-based
multinational. The Group is a major player
in an array of industries including energy
in Central America, olive oil & winery in
Argentina, finance & banking in Uruguay,
hospitality and real estate.
DFD was created by the Group to
specifically cater to brands aiming to
establish a solid presence in the Travel
Retail segment throughout the Americas.
Galaxy® is a registered trademark. ©Mars 2016.
41
INSIDER
Remy focuses on global shopper by enlarging its portfolio
Rémy Cointreau is addressing the
challenges in the current marketplace by
focusing on premiumizing its brands and
investing in supporting sell-out at the point
of sale.
For its flagship cognac Rémy Martin,
the group is doubling its offering in Travel
Retail Americas, adding two new SKUs to
its travel retail portfolio. Along with the
travel retail exclusives of Rémy Martin
Reserve Cellar Selection No. 28 and
Rémy Martin Prime Cellar Selection No.
16, the company is adding Rémy Martin
1738 Accord Royal, its best-recognized
selection in the United States local market,
and Rémy Club Cognac, a favorite among
Chinese consumers. The two new varieties
will be on-shelf in selected airports by midsummer, says Sebastien Devallet, Director
Rémy Cointreau Travel Retail Americas.
“This is our tailor-made approach
for select airports in the region. We have
products that answer a specific need
depending on the passenger profile. The
1738 gives Americans something familiar,
and Rémy Club will be only in airports
that serve Chinese passengers—like
Vancouver, San Francisco, Los Angeles and
Washington,” explains Devallet.
“Rémy Cointreau Travel Retail
Americas is really looking at targeting
the Global Shopper at the point of sale by
enhancing the product. For example, we
used a limited edition Rémy Martin red
sleeve on the gold boxes to attract more
attention to the products during Chinese
New Year and the Christmas holidays,
which was very effective. The point is
to animate the brand to make it more
visible in store and connect better with the
customers.”
Rémy Martin is increasing visibility
by investing in tastings, personalized back
walls and specially designed presentations
that reflect the image of the brand.
One very successful element Rémy
Martin is using to dress up the ‘shelves’
for its top-of-line Louis XIII is a VIP
presentation that features the bottle on a
silver tray with a beautiful custom handmade crystal glass and candle. The display
was shown to customers in Orlando and
has already been displayed in flagship
stores such as San Francisco, Los Angeles
and Vancouver Airports.
“The effect of the display conveys
the DNA of Louis XIII while it increases
visibility and awareness of the brand
at the Point of Sale. It really shows
the premiumness of the brand within
this special ambiance we have created.
Our brand’s vision is to make Louis
XIII –already recognized as one of the
best cognacs in the world - even more
premium,” Devallet tells TMI.
42
To further enhance the image of
Rémy’s Louis XIII the company recently
engaged American actor John Malkovich
to star in an innovative cinematic project
called ‘100 Years – The Movie You Will
Never See’.
Directed by Robert Rodriguez, the
film envisions Earth one hundred years
from now and will not be released until
2115. It was placed in a state-of-the-art safe
that will open automatically on Nov. 18,
2115.
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A special look at the consumption trends in the hottest segments in the industry, with definitions, key
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2015 wine and spirits brand volume and value data by category
Five-year forecasts by category
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www.theiwsr.com
43
INSIDER
The film was inspired by the century
of careful craftsmanship and patience it
takes to create each decanter of Louis XIII
Cognac and was conceived as a proactive
piece of art that explores the dynamic
relationship of the past, the present, and the
future, says the company.
One thousand guests from around
the world received an exclusive invitation
to give to their descendants to attend the
premiere of ‘100 Years’, on November
18, 2115, at the House of Louis XIII
in Cognac, France. While present day
viewers cannot see the finished film, a
trailer and three teasers are live on WWW.
LOUISXIII-COGNAC.COM. The concept
was also presented to customers during a
world tour.
All of the brands in the Rémy
Cointreau travel retail portfolio occupy
a premium level. The company is now
rolling out its artisanal Islay gin, The
Botanist, which is made from nine classic
gin botanicals augmented by 22 local herbs
and flowers.
“The sell-out has been very good in
Europe and we expect a good showing here
in the Americas, as well,” says Devallet.
For Cointreau, Rémy’s iconic orangeflavored liqueur, the company will be
launching a new limited edition later this
year, called Sparkle. Presented in a beautiful
textured bottle designed to emphasize the
gifting message, Sparkle will animate the
point of sales with eye-catching visibility
“We are creating some exclusive display carts
to showcase the Cointreau range in travel
retail,” says Devallet.
Rémy Cointreau is also directing
attention to its single malt whiskies, with
two new launches this year. Bruichladdich
unveiled ‘The Laddie Eight,’ an unpeated
travel-exclusive expression, at the IAADFS
Duty Free Show of the Americas in April.
The Laddie Eight launched first exclusively
with the World Duty Free Group in
Europe, and will roll out in the Americas in
October.
The house of Bruichladdich also
unveiled Port Charlotte 2007 CC: 01, a
heavily peated Islay spirit. A single vintage,
the limited edition has been kept full-term
in French oak for eight years in casks
that previously held eaux de vie from the
western Cognac region.
For its Barbados-made Mount Gay
Rum, Rémy Cointreau is rolling-out the
44
more premium Black Barrel (43% ABV), a
small batch, hand-crafted rum, to its travel
retail portfolio. The award-winning Black
Barrel is distinguished by its use of a high
proportion of intensely aromatic, expensive
‘double pot distillate’ to add complexity
and depth of flavor.
“Black Barrel is replacing Mount Gay
Eclipse in our portfolio, another step in our
goal to offer more premium products in
travel retail,” says Devallet.
Rémy Cointreau, like the other luxury
brands in travel retail, has been affected
by the loss of purchasing power in China,
and to a lesser degree in Latin America,
combined with the impact of the strong
dollar and weaker currency exchange.
“One way we see to combat
the challenges in the market is by
premiumization, a definite trend in travel
retail. As a group, our brands are at the
premium level in every category: cognac,
rum, gin and whisky. We certainly have the
right products and the right portfolio. Now
we are working on increasing awareness of
our niche brands, and are investing in POS,
in media, in digital.”
45
INSIDER
One on One with Marshall Farrer,
Brown-Forman Managing Director Global Travel Retail
It has been a little over one year since Marshall Farrer took over as Brown-Forman Managing Director
Global Travel Retail from Jim Perry. In that short period of time devastating political, socioeconomic and
exchange issues have impacted the entire category. Farrer sat down with Travel Market Insider’s Michael
Pasternak in Brown-Forman’s Louisville offices and explained how the 140-year-old family-run spirits
giant has not only weathered the storm, but is well-positioned for growth in the future.
Marshall Farrer’s first year as BrownForman Managing Director Global Travel
Retail was filled with both challenges and
opportunities. Since Marshall assumed
his role on May 1, 2015, Brown-Forman
has bought and sold spirits brands, dealt
with chaos in the key emerging markets of
Brazil and Russia, and celebrated important
anniversaries.
Farrer joined Brown-Forman in 1998
and was most recently vice president,
global brand director for Jack Daniel’s
Tennessee Honey. He previously served
as managing director of Australia/New
Zealand, and director for Latin America
and the Caribbean.
“I’m new to the role, but not new to
the channel after seven and a half years
across Latin America and Australia. It
has been a great first year, very exciting
and filled with lots of challenges. The
biggest challenge unquestionably for us
has been foreign currency exchange. The
vulnerability of it was as extreme as it
has been in recent years. Major emerging
economies like Brazil and Russia that index
highly in travel retail on our brands were
significantly affected,” he told TMI.
“These are not one-year problems,
but multi-year, particularly when you look
at Russia, and Brazil with the chaos down
there at the moment. If they can get their
act together it would be great, because
the Brazilians are really important in the
Americas especially.”
Farrer says what surprised him
the most is the breadth of international
passengers that come through travel retail
and the fluidity of where they travel to and
from.
“Depending on what macroeconomic,
sociopolitical or other factors driving it, we
see the passenger nationalities shifting their
preference points. That’s exciting because
Marshall Farrer, Managing Director B-F Global Travel Retail
it opens up lots of new opportunities.
“For example, Chinese passengers are
shifting out of Hong Kong, but going into
Seoul and Tokyo much more aggressively.
We’ve seen it with European passengers
in North America, Brazilian passengers in
North America. You rely on them in one
space and they are gone, but somebody
else comes and fills the void. This could
mean new airports taking on greater
opportunities.”
While the changing consumer affects
sales, Farrer says Brown-Forman is able to
look at the bigger picture beyond just travel
retail.
“Sometimes we might lose consumers
in travel retail, but regain them in the local
economy. If we are patient and build the
brands in the local economy, when they
come back we will see real strong sales.
“We like to take a long-term approach.
46
Being a family business with a long-term
perspective, we can endure the bumps and
bruises along the way a lot better than other
companies which are really beholden to
quarter results. We understand that there
are going to be challenges, yet our brands
can still be built very strongly during this
period.”
Whisky Focus
In the past few months Brown-Forman
sold its liqueur brands Southern Comfort
and Tuaca and purchased single malt
scotches The GlenDronach, BenRiach, and
Glenglassaugh. Along with its purchase
of the Slane Distillery in Ireland, these
moves have made Brown-Forman’s spirits
portfolio more premium, says Farrer.
“If you look at the history of BrownForman’s portfolio over the years, there
has been this long-term trend towards
premiumization. We used to be a very
U.S.-focused portfolio and we had agency
brands in the U.S. We really shifted to
owning our own brands with long-term
premiumization. More recently that meant
the sale of Southern Comfort and Tuaca,
INSIDER
which are standard-priced liqueurs in not
as fast growth segments. Coincidentally,
we ended up with three fantastic, very
premium single malt brands and an
exciting, longer-term Irish Whiskey project,
which is quite premium.
“The moves certainly speak to our
strategy to be stronger in whiskey. We are
leaders in American Whiskey. We are going
to drive that and we think we can bring
a lot of growth to the industry by being
successful in that area. We also think this
expertise allows us to participate in other
exciting categories of whiskey, and there
are hardly any categories more exciting
than single malts and premium Irish
Whiskey.”
The new scotches from The BenRiach
Distillery are known by Scotch enthusiasts
who are looking to buy beyond the wellknown brands, says Farrer.
“In our early learnings about the
brands, I would say that true single malt
enthusiasts are well aware of these brands.
And that is really where we hope we will
find success. They are highly acclaimed
whiskies and there is clear demand. Our
ambitions are not to go knock heads with
the three or four biggest single malts in
the category, it is to offer a complement
in that category, offer excitement and
exploration.”
With the upcoming opening of its Slane
Distillery Brown-Forman is gaining entry
into the booming Irish Whiskey category.
“The category is not crowded. There
are very strong competitors, but there is
room for a number of other brands to come
in and find their own space and add value
to the category. We’ve got an incredible
distillery site with unbelievable history and
authenticity. Travel retail will be part of the
roll out.”
Even as Brown-Forman is moving
into Scotch and Irish Whiskey, American
Whiskey is still the company’s number one
focus.
“Our commitment is to lead American
Whiskey and to make it a major growth
contributor for travel retail. You will
see more and more focus on American
Whiskey going forward and we will bring
some exciting concepts,” he says.
“We think we have done an
outstanding job developing the American
Whiskey category in travel retail. It
previously didn’t exist. It was a fringe
category with tertiary visibility and we
brought it to the forefront.”
This fiscal year the company will
introduce Cooper’s Craft, its first new
bourbon in 20 years, which celebrates the
company’s 70-plus years of barrel-making
and wood expertise.
“With Cooper’s Craft we saw an
opportunity where we can better connect
with the bourbon consumers. We have this
incredible asset with the Brown-Forman
Cooperage. We are the only distillery
worldwide that makes its own barrels,
47
and that is about 70% of the flavor that
goes into bourbon. We think the story of
coopering barrels and what that does to the
whiskey is very relevant to the millennial
consumer. We will slowly be introducing
Cooper’s Craft into travel retail. We want
to find the right pockets and find the right
way to communicate it effectively and
build it up in the U.S.”
Farrer says the new brand fits perfectly
with its American Whiskey portfolio and
will eventually be placed alongside Jack
Daniel’s, Woodford Reserve, and Old
Forester in its American Whiskey display.
Brown-Forman has also been putting
more emphasis behind its founding brand
Old Forester.
“Old Forester is the only bourbon
that was produced before, during, and
after prohibition. It’s Louisville’s bourbon.
We’ve introduced Old Forester into some
European airports this past year and
had some great success. It’s had some
distribution in the U.S., but it wasn’t
something we had prioritized. But with
our new distillery opening in 2017, there is
going to be a lot of interest in this product.
“Bartenders tell us there is huge
category excitement in bourbon but when
people are looking for authentic historical
brands Old Forester becomes the beacon
they point people to. We’ve got a great
story to tell in travel retail.”
Brown-Forman’s number one and
most important brand is still Jack Daniel’s.
According to The IWSR, it remains the
number two brand in Americas travel retail,
and the number three brand in travel retail
globally.
Even with this success, Farrer says
Jack Daniel’s is still a relatively new
brand internationally and has only lightly
penetrated emerging markets.
“Twenty years ago I think about 86%
of Jack Daniel’s sales came from the U.S.
Now that number is about 44%. We think
we have tremendous upside to grow. We’re
putting a renewed emphasis behind Old No.
7. With some of the economic challenges
that are out there we have retailers coming
back telling us ‘We’ve been on a real
strong super premium strategy, we actually
think we need to reinitiate with you on Old
No. 7. That has a better chance of bringing
in more footfall to our stores.’”
Brown-Forman has expanded the Jack
Daniel’s portfolio with exciting new entries
like Sinatra Select and No. 27 Tennessee
Gold.
INSIDER
“The Sinatra Select played a great role
in introducing Jack Daniel’s into the ultra
premium segments, garnering excitement
and collectability. And now we have Gold
that we have been rolling out, which is
doing really well in many parts of the
world.
“We’ve just been rolling out Jack
Daniel’s Tennessee Fire, which is having
real early success. The initial feedback and
data from Australia to Germany and U.S.
Travel Retail has been encouraging.”
Anniversaries
In another exciting development,
Brown-Forman is celebrating the 150th
anniversary of Jack Daniel’s Distillery this
year with partnerships with travel retailers
around the world.
“We have a number of retailers that
are supporting the 150th anniversary.
DFS really jumped on the concept from
the outset and are putting on a year-long
program allowing us to promote and
support the brand.”
Unique individual barrels of Jack
Daniel’s Single Barrel selected by DFS
teams working with Jack Daniel’s Master
Distiller Jeff Arnett and Assistant Master
Distiller Chris Fletcher will be bottled and
sold exclusively at DFS airport stores in
New York JFK, San Francisco, Los Angeles
and Honolulu as well as Hong Kong and
Singapore. Each bottle will carry a special
DFS and 150th Anniversary medallion.
Brown-Forman is also celebrating
the anniversary by placing 150 barrels
worldwide filled with prizes that consumers
will be able to locate by following a series
of clues.
“It is very much like a treasure hunt,”
says Farrer. “We have placed barrels
in several airports around the world.
The ultimate prize is winning a trip to
the distillery for a 150th anniversary
celebration.”
This year Brown-Forman is also
celebrating the 70th year of barrel-making
at the Brown-Forman Cooperage in
Louisville as well as the 20th birthday of
the Woodford Reserve Distillery.
Still a Brown in Brown-Forman
More than 145 years after it was
founded, there are still many Brown family
members in various levels of leadership at
Brown-Forman.
Founded by George Garvin Brown
in 1870, today George Garvin Brown IV
serves as chairman of the board.
Farrer, himself a member of the
Brown family, says the Brown family
remaining involved in the company is
crucial.
“The family has a deep emotion and
care about the company and its impact on
the community.
“We’ve found from our partners that
us being a family company provides a
sense of continuity among ownership and
management, and gives them tremendous
comfort when they need to come to us
about opportunities or problems. We are
not a faceless corporation. We are a familybacked business.”
The family aspect also helps in global
travel retail, where many operations are
family-run.
“When I am able to sit down with
48
the heads of those companies, often times
those meetings include two generations in
those families. I think we have different
conversations than they have with other
suppliers. Those conversations span history
and talk about partnership, and trust. We
think it is a tremendous asset.”
Looking ahead
It has only been a few years since
Brown-Forman has treated global travel
retail as a true standalone region, and
Farrer says there are more growth
opportunities as the company gets more
serious about the channel.
“There will be more channel
exclusives, which we find is a motivator to
purchase. You’ll see us looking to deliver
more experiences inside travel retail stores.
You are going to see more of an emphasis
on visibility for our key brands Jack
Daniel’s and Woodford Reserve.
“Global Travel Retail in BrownForman has more attention and focus
behind it than it probably ever has had. I
think for the first time our brand teams are
looking at using the channel to introduce
brands, to generate demand and awareness,
and help lead local economies as opposed
to the other way around.”
Even with the issues negatively
impacting global travel retail, Farrer is
optimistic about the channel.
“Last year global travel retail
contracted. You have to have the fortitude
to endure challenging years. You can look
historically at the channel and one year of
contraction is always followed by sustained
years of growth.”
Special
June 20
16
ASUTIL
CONFE
RENCE
Issue
ASUTIL
2016: St
ep by S
tep ahea
d, even
in tumu
The mon
ths leadin
2016 AS
g up to th
UT
e
been tum IL conference ha
ve
ultuous to
sa
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Brazil is
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socio-po
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litical
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governm
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brought
do
Riviera an
corruption
wn by
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ch
business
e other W
herself im arges, the presid
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peached
t
all of the but it severely im ed
and susp
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announce
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against 18
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Editor/P
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The most comprehensive coverage
on the duty free and travel retail
markets in the Americas.
But you already know this.
You’re on page 49.
49
INSIDER
“Sleeping Giant” Gruppo Campari brings new focus to Americas
Gruppo Campari has signaled the
growing importance of its travel retail
business by bringing in some familiar faces
in both global and regional roles.
First, Leigh Irvine, formerly Americas
Regional Director with Bacardi Global
Travel Retail, was hired as Gruppo
Campari’s Gobal Travel Retail Director last
year. In April Irvine brought in Diego Lord,
who spent the past four years as Bacardi’s
Travel Retail Manager in South America,
as Gruppo Campari’s Travel Retail
America Director.
Lord’s hiring demonstrates a
significant investment by Gruppo Campari
in the future of its brands in the Americas.
“We have also been working on things
behind the scenes, with investments in
new route to market solutions as well as a
commitment to more in-market customer
facing resources. With this new set up
and team we will be able to focus on our
customers and the opportunities which are
there for our brands,” Lord tells TMI.
Lord sees enormous potential for
Gruppo Campari Travel Retail in the
region.
“Gruppo Campari (We) sees it as
‘sleeping giant’ and we have been putting
in a lot of effort to get ready to wake him
up! We see great opportunity for the brands
in travel retail across the whole region and
across all the channels. Our portfolio of
brands is performing exceptionally well in
the local domestic markets, so it is time to
reflect and support that success in travel
retail,” he says.
The Americas was Gruppo Campari’s
largest region with 42.3% of its global
sales in fiscal year 2015. The U.S. makes
up a majority of those sales (22.1%),
followed by Jamaica (5.9%), Brazil (4.2%),
Argentina (3.1%), and Canada (2.9%). Italy
is still Gruppo Campari’s most important
market with more than a quarter of its
sales.
While Lord has only been with
Gruppo Campari a few short months,
he says it has been a great year so far,
although Brazil’s dramatic slowdown has
certainly negatively impacted Gruppo
Campari’s business in the region.
“After nearly a decade of solid
economic growth, the speed with which
the economy has fallen is staggering. High
inflation, dwindling consumer confidence,
lower domestic consumption and falling
industrial investment were contributing
factors. Brazilian travelers are renowned
big spenders when they travel but exchange
rate volatility has affected their purchasing
behavior and the knock-on effect is seen
throughout the continent, so we believe it
is extremely important to be next to our
customers, support them and understand
the consumer reality,” he says.
“As we look forward, we see only
more exceptional opportunities for brands
– Campari, Aperol, Wild Turkey, Appleton,
Glen Grant Cinzano and Bull Dog – and
to collaborate closely with our domestic
market in celebrating the uniquely
Brazilian rhythm of the summer Olympics.
“The entire portfolio is having a great
year so far. And the recent acquisition of
Grand Marnier will only add to this success
given its strength in the region, particularly
with the North American consumer. We are
really excited to have another great global
brand to develop.”
Brazil impacts MONARQ’s South American sales
MONARQ Group, celebrating its 10th
anniversary in 2016, exhibited another
year of double digit growth in 2015, led by
its sales in the Caribbean and U.S. Duty
Free, says Robert de Monchy, MONARQ
Managing Director/Owner.
“The year 2016 started well for the
Caribbean & Central American region plus
U.S. Duty Free, while large parts of South
America remain under pressure due to
the continuous Brazilian crisis. The most
heavily impacted area is duty free on the
Brazilian borders. Argentina travel retail/
duty free continued to do well throughout
2015 but has started to be impacted as well
in 2016.”
The main challenge affecting
MONARQ’s Latin American business has
been the socio-economic-political crisis in
Brazil, says de Monchy.
“I believe that it’s very likely that we
will be facing a few more challenging years
ahead of us in Brazil. There is always light
at the end of the tunnel but the country
will need to undergo serious restructuring,
which will take a few years at best.”
There have been some bright spots in
the region, though.
“Colombia and Mexico are facing
some challenges due to exchange rate
issues but the remaining socio-economic
indicators are positive for these markets.
The Caribbean, including the cruise
ship business, and U.S. Duty Free, keep
50
performing very well.”
MONARQ added new listings in
South America, starting Heineken with
JPT in Chile, Tomatin Highland Single
Malt Whisky ands Jeffersons Bourbon with
Shopping China and AIX Rose de Provence
with London Supply, and launched a number
of new brands in Uruguay Duty Free, such
as Teeling Irish Whiskey and Alizé.
In U.S. Duty Free, they introduced
Luxardo Grappa with DFA and Alizé with
SMT.
After presenting new brands Tamdhu
Speyside Single Malt Whisky, Tomatin
Highland Single Malt Whisky, Del Maguey
Mezcal, St Germain liqueur and Cognac
D’Ussé in Orlando at the Duty Free Show
of the Americas, MONARQ will present
its newest premium spirit brands Leblon
Cachaca, Benromach Speyside Single Malt
Whisky and Kilchoman Islay Single Malt
Whisky during ASUTIL.
Disfruta de un consumo responsable
¡NUEVO!
ESTE SUAVE Y CREMOSO LICOR ES LA FUSIÓN PERFECTA ENTRE LICOR 43 Y
LA TRADICIONAL RECETA DE HORCHATA DE VALENCIA. ENTRE SUS DULCES Y
51
June 2016 ASUTIL
Special Issue
DELICADOS
SABORES SE APRECIAN NOTAS
DE CHUFA, ESPECIAS
Y CÍTRICOS.
INSIDER
DANZKA Vodka launches new “Designed to Chill” campaign
After introducing a new
communication platform for DANZKA
Vodka at the TFWA Asia Pacific Exhibition
& Conference in May, Waldemar Behn
is now set to launch “Designed to Chill”
in the Americas, says Ricardo “Tito”
Gonzalez, Regional Director Latin America
and Caribbean.
“We are presenting the new DANZKA
brand image campaign in the region:
‘Designed to Chill.’ We have developed
a new communication platform to really
identify and transmit to the consumer
what DANZKA is really about. DANZKA
presents itself with dignity
and is confident
in its Danish
heritage,
displaying an
essential and
consistent
language of
pureness;
there is
an aim to
involve
emotions and
sensations
which are
closely
connected
to the taste
experience.
ASUTIL will be the perfect occasion to
send this new message to the markets,” he
says.
The Brazilian consumer has always
been crucial to DANZKA’s success
in South America, so the political and
economic adversity in the world’s seventh
largest economy has hurt the brand’s
success in the region.
“DANZKA is an established brand in
the region; small but it is a known brand.
Our major consumer has always been the
Brazilians, and with the Real devaluation
a few years ago, the consumer spending
has also diminished. Brazilians who used
to buy 6 to 12 bottles in the border stores,
now buy 1 or 2 bottles at a time. Fix Brazil
and we go back to selling container loads
to the region.”
Despite Brazil’s troubles, Waldemar
Behn continues to invest in its brands in
Latin America.
“As we expected, current customers
keep on buying at a cautious rhythm, but
uninterrupted; major deals are all on hold
until confidence returns to the marketplace.
I cannot say we are doing great, but we are
not doing so bad either. Exchange rates are
still fluctuating; socio-political situations
in the major markets are in dire straits; and
traveling spending is low.”
DANZKA Vodka has gained a number
of new listings in the region, but more in
the duty paid segment of the markets.
“We are launching DANZKA in
Argentina by August this year with London
Supply local distribution operation. Other
than that, we have potential listings in the
Caribbean, following up on new markets
we met in Orlando a few months ago.
Everything will fall into place once we start
developing the brand in the U.S. market.”
DANZKA Vodka announced last
month that it is making its long awaited reentry into the U.S. domestic market shortly,
and has chosen CIL US Wines & Spirits,
the American subsidiary of independent
and family-owned Camus Wines & Spirits,
as importer and supplier for the market.
DANZKA Vodka will initially be
launching in New York, New Jersey,
Massachusetts, Florida and Illinois in mid2016, with an aggressive rollout continuing
into 2017 and will be supported nationally
with print advertising, on- and off-premise
POS, public relations and events.
The brand is receiving recognition:
DANZKA Vodka was recently awarded the
prestigious Gold Medal at the 2016 San
Francisco World Spirits Competition.
Connected with DANZKA’s U.S.
launch, Behn continues to support the
brand in travel retail through a program
with Dufry in June in Chicago, Houston,
Newark, Seattle and Las Vegas (through
Dufry’s Nuance store).
Diego Zamora Group launches creamy new Licor 43 Orochata
Spanish wine and spirits producer
Diego Zamora Group has launched its first
innovation in the history of its best-selling
Licor 43. Inspired by Horchata, the national
drink of Spain, Licor 43 Orochata is a light
and creamy liqueur with delicate, sweet
Mediterranean flavors layered with spice
and citrus.
It will be available exclusively in
the Global Travel Retail channel from
late May, rolling out to selected domestic
markets in the autumn.
Primarily aimed at “adventurous”
women aged 23-45, Licor 43 Orochata is
made with tiger nuts and infused with Licor
43 Original, and is best served over ice,
says the company.
Unlike traditional cream liqueurs, it is
vegetable-based and contains no cream. It
has an ABV of 16%.
“With Licor 43 Orochata we are
bringing excitement into the spirits
category and offering consumers a creamy
liqueur with a difference. It is light,
delicious and easy to drink but contains
no cream. It is a unique product steeped in
Spanish heritage and comes from a wellknown and much loved brand renowned for
its vibrancy and inimitable passion,” says
Thomas Clamens, Managing Director for
Zamora International.
The Licor 43 Orochata label features
a hand-drawn mosaic painted by Spanish
craftsmen. The bottle showcases the Licor
43 logo in the center and has a creamy
pearlescent finish, which reflects the color
of the liquid inside.
International sales of Licor 43
52
Original have more
than doubled over
the past five years.
It is the #1 liqueur
in The Netherlands,
the #1 international
fruit liqueur in
Germany, and the
fastest growing
imported liqueur
in Mexico. Sales
in Global Travel
Retail have grown
by 64% during the
last three years. It
is represented in
Americas travel retail
by Edrington WEBB.
53
INSIDER
Godiva at 90 celebrates its past with gala dipping event in Orlando
Matthew Hodges, who joined Godiva
Chocolatier from Rémy Cointreau in
September 2015, attended the Duty Free
Show of the America where Godiva was
celebrating its 90th anniversary with
a tasting reception. Godiva’s gourmet
chocolatiers created hand-dipped chocolate
covered strawberries, raspberries and
macaroons in front of guests.
Speaking about the special event,
Hodges said that Godiva has staged these
dipping events selectively around the
world: “It is a great way to show Godiva,
and it certainly attracts people. This is
exactly what we do in some airports
throughout the world, and when we do
it, passengers are really surprised to see
it. People really like to watch the chefs
dipping the fruits in the chocolate; it
becomes a lot more than just a tasting.”
Hodges added: “I think that
confectionery has a real opportunity to
bring a little levity to a trip, and bring a
smile to people’s faces and invite them
into the store. People are curious. If they
know the brand, they taste it because they
like it. If they haven’t tasted it before,
they are curious to understand what sets
Godiva apart from other brands. So we
find that when we do a tasting and dipping
like this, people come with many different
motivations, and it really puts a smile on
their face even if they do not buy.
“But the increase in sales where we
hold an event like this is quite astonishing,
and is worth the amount of preparation that
it entails,” he noted.
Commenting on Godiva’s travel
retail strategy for the Americas, Hodges
tells TMI “We are planning a combination
of things, because there are still plenty
of places for us to expand, particularly
in Latin America, where the brand sees
pockets of opportunities. We have a much
larger presence in North America and as
the airport infrastructure improves there
we see more opportunity to work on the
experience of Godiva. And this is our key
focus for the region in this next year.”
Godiva is celebrating the 90th
anniversary with an ambitious release of
innovative new launches in a year-long
sensory journey that focuses on color and
iconic chocolates from its past.
In travel retail, Godiva began the year
with the Coeur Iconique Travel Exclusive
Edition 2016, which was showcased in
Cannes and shipped in January. This was
the second Coeur Iconique limited edition,
following the original collection that was
launched to great success in June 2015.
The heart-shaped boxes come in
elegant colors that are inspired by 2016
54
fashion palette trend predictions. The soft
touch matte packaging features a die-cut
effect for an eye-catching and tactile effect.
“The look is a tie-in to Belgian lace
and the new edition introduced two new
colors,” Thom Blincoe, Trade Marketing
Mgr Americas & Caribbean for Godiva
Global Travel Retail, told TMI.
Godiva has also created a very
special limited edition Gold Anniversary
Collection.
The Gold Anniversary Collection
features eight of Godiva’s most “iconic”
chocolates -- one from almost every decade
– and each piece signifies an important
moment in Godiva’s history, says the
company.
Godiva’s iconic gold box has also
been dressed up for the anniversary with a
vibrant design that echoes bright confetti
and effervescent fireworks, specially
commissioned for Godiva by Belgian artist
Oli B. The artist will be collaborating with
Godiva for the entire year, and has other
special designs in the pipeline.
The Gold Anniversary Collection is
formally rolling out in domestic and travel
retail markets worldwide in April.
“Godiva, which is using chefs to
bring innovation to market, has some very
exciting plans for Travel Retail this year,
which includes tastings and pairings with
ice wines and cognacs and a number of
other instore activations as we continue this
multi-sensory journey,” Blincoe told TMI.
E N J O Y B O M B A Y S A P P H I R E R E S P O N S I B LY
B O M B AY SA P P H I R E A N D I T S T RA D E D R E S S A R E T RA D E M A R K S
The Ultimate
Gin & Tonic

to the TMI 2016 ASUTIL magazine special edition.

Transcription

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