The Latin American economy: A richer reality

Transcripción

Special
June 2011
ASUTIL
CONFERENCE
Issue
One symbol of the economic boom sweeping through parts of Latin America today is the famous Puente de las
Americas bridge that spans the Panama Canal at the Pacific entrance. See full story on page 18. Photo by Larry Luxner.
The theme of the 2011
ASUTIL Conference, Latin
America: Neither Hell Nor
Paradise, reflects South America’s
historical cyclical economic trends.
Looking back over the past decade
shows a clear pattern of ups and
downs that have had significant
impact on the region’s duty free
business.
But 2010 was a year of
strong recovery throughout Latin
America, and in the first quarter
of 2011, operators and suppliers
are reporting that their travel
retail business is consistently
“booming.” A thought-provoking
article in the May 7 issue of The
Economist suggests that this
time around, the South American
boom is based on solid economic
foundations.
Looking at Brazil’s
burgeoning housing market as the
basis of the region’s “economic
renaissance,” (not to mention the
discovery of huge oil reserves off
the coast of Rio de Janeiro), The
Economist concludes that the boom
is grounded in rising prosperity –
and a hefty increase in the number
of potential buyers — rather than
excessive debt. It reports that during
the past eight years, the number of
Brazilian households with incomes
higher than ten times the minimum
wage rose by more than half, to
around 18 million.
And the purchasing power
of these newly well-off Brazilians
is fueling much more than new
homes, as Brazil’s upper and middle
consumers throng regional and
international destinations clamoring
to purchase goods often not
available in their home market.
Stores frequented by Brazilians
on the borders and in the airports
are reporting first quarter sales
increases from 35% to 250% (in
the case of InterBaires’ new
Aeroparque arrivals store).
And passenger numbers
continue to be strong. IATA’s
air traffic results for April report
Latin American carriers saw a
25.9% increase in international
demand, which comes on top of
22.7% recorded in March.
Furthermore, IATA forecasts
that Latin America will be the
only region where air carriers
will deliver a third consecutive
year of profits, with good growth,
and trade links with the United
States and Asia in particular,
boosting traffic. IATA claims that
innovative business models and
consolidation have combined to
generate reasonable profits from
these growing markets.
Even though Latin America’s
estimated $100 million airline profit
is down considerably on the $900
million profit of 2010, capacity
INSIDE INSIDER
As members of the travel retail/duty free
industry involved with Latin America
gather for the15th Annual ASUTIL
Conference in Cancun, Mexico, Travel
Markets Insider congratulates the Board
and Members of ASUTIL, on developing
an event that has become such a valuable resource for the travel retail industry in the Americas. Above: In a highlight
from the 2010 ASUTIL Conference,
ASUTIL Secretary General Jose Luis
Donagaray, President “Paco” Heredia
(London Supply), and (far right)
VP Jose Carlos Rosa (Dufry do Brasil)
present Nestlé’s Jean Michel Juin with
ASUTIL’s Lifetime Achievement Award.
growth of 6.9% will outstrip the
6% increased growth in demand -providing additional shoppers for the
region’s duty free retailers.
Brazil and its neighbors
are not the only Latin American
countries basking in prosperity.
TMI also reports on Panama –
which is in the midst of a major
canal expansion, with tourism
and hotel development and
the expectation of a free trade
agreement with the U.S. sparking
greater opportunities in the Colón
Free Zone, already a major center
for the duty free industry.
TMI also examines the impact
that Brazil’s economic miracle
is having on the neighboring
airport and border stores, from
Buenos Aires to Miami, with
feature articles on DFA, Dufry,
InterBaires, Neutral and Pramsa,
among others. Lois Pasternak
Editor/Publisher
TABLE OF CONTENTS
R et ai l and N ew s F eat ur es
Duty Free Americas moves
ahead with expansion in both
North and South America,
pages 26-28.
COVER COMMENTARY
Retail Features
DUFRY officially opens new cruise port store
at Carnival’s Puerta Maya in Cozumel, Mexico
South America helps Dufry start 2011 strong
Page 6
Page 10
INTERBAIRES: One on One with
Commercial Director Rodrigo Manceñido
Page 12
NEUTRAL: Uruguay’s border business due for
new image as Enrique Urioste takes helm as CEO
Page 16
PANAMA: Canal expansion, Free Trade Agreement
likely to spark boom at Colón Free Zone
Page 18
PRAMSA: The challenge of booming border business
DFA & MIA: The new luxury unveiled
DFA: Latin American expansion moves ahead
WiT launches in Latin America at ASUTIL 2010
Swarovski opens Crystal Forest Boutique in Punta Cana
Page 24
Page 26
Page 28
Page 28
Page 28
PRODUCTS & SERVICES
KIEHL’s: Connecting with a new consumer MARCOLIN eyes new travel retail markets
COLOR REFLECTIONS goes Greener
DLC TRADING brings GO TRAVEL to ASUTIL
LUXOTTICA: Double digit impact at POS
CHIVAS REGAL: Age Matters campaign
rolls out in the Americas
MONARQ GROUP: new brands, new listings
CREACTION brings creative touch to ASUTIL
ESSENCE CORP. at the POS
SUNNY TOUCH goes for Oxygen
HORIZON INTERNATIONAL DUTY FREE
PROWOOD Wines & Spirits
brings Russian Romance to Duty Free
Page 29
Page 30
Page 31
Page 32
Page 34
Page 35
Page 36
Page 38
Page 40
Page 40
Page 41
Page 42
pg 6
pg 34
June 2011. ASUTIL Conference
Editor/Publisher: Lois R. Pasternak
In Memoriam: Paul A. Pasternak
Deputy Editor: Michael Pasternak
Editorial Contributors: Larry Luxner, John Gallagher
Production Coordinator & Designer: Chris Hetzer
Design and Production: It’s About Time, Inc.
Printing by 595 Printing, Inc. Ft. Lauderdale, Florida
This publication is a special supplement of
Travel Markets Insider, published by
Pasternak Communications, Inc.,
9697 North Springs Way, Coral Springs, FL 33076, USA
Tel. 1 954 344-3803 Fax: 1 954 346-2180
www.travelmarketsinsider.net
INSIDER
ASUTIL Special Issue June 2011
4
INSIDER
5
June 2011 ASUTIL Special Issue
INSIDER
Dufry officially opens new cruise port store
at Carnival’s Puerta Maya in Cozumel, Mexico
Above: Rodolfo Velasco, general manager
of Dufry Mexico S.A., Jose H. Gonzalez,
COO of Dufry America and Carnival Corp.’s Giora
Israel, senior vice president, port and destination
development.
On April 8, 2011, executives from
Dufry America and Carnival Corp. & plc.,
gathered at the Puerta Maya Welcome
Center and Cruise Port in Cozumel,
Mexico, to officially open the rebuilt, stateof-the-art walk-through duty free store at
the Carnival-run cruise facility. Among the
dignitaries were Carnival Corp.’s Giora
Israel, senior vice president, port and
destination development, Jose H. Gonzalez,
COO of Dufry America, and Rodolfo
Velasco, general manager of Dufry Mexico
S.A.
The 12,000-sq.ft walk-through store
hosts the first Hudson News outlet at a
cruise port, and only the third Hudson
News shop in the Caribbean, following
smaller airport outlets in the Dominican
Republic and San Juan, Puerto Rico. It also
houses the largest Colombian Emeralds
International (CEI) store at a seaport.
“The Dufry Duty Free shop is the
only shop located on a pier in the world,”
commented Carnival’s Giora Israel, shortly
after the ribbon cutting (above). “The store
which we are here to open today is in a
class of its own.”
The original Dufry Duty Free Shop
on the Puerta Maya pier was destroyed
during Hurricane Wilma in 2005. Carnival
Corp. invested more than $50 million to
rebuild the new two-berth pier, which has
been specifically constructed to withstand
a threshold category 5 hurricane and can
accommodate any ship in Carnival Corp.’s
cruise brand portfolio. Puerta Maya also
includes a second pier to accommodate
excursion ships.
“This cruise pier is the best pier
built in the Caribbean,” notes Israel. The
reconstructed pier was completed and
reopened in October 2008.
Construction on Dufry’s new flagship
store at the Puerta Maya cruise port was
delayed until now, as Carnival developed
plans to construct a third pier branching
off from the current cruise pier. The delay
ensured that the future pier construction
would not encroach on the shop, and that
the shop will be accessible to passengers
disembarking from the pier once it is
constructed, says Israel.
The port handles 8,000 people nearly
every day (10,000 with crew), which is
the average capacity of two ships, says
Israel. Puerta Maya has scheduled 501 port
calls in 2011. In the month of April alone,
45 ships visited the port. Carnival brings
approximately 1.5 million passengers a
year to Cozumel.
6
Dufry’s Jose H. Gonzalez comments:
“We are very proud to be back in Cozumel,
and more than that, we are honored that
Carnival Corporation has chosen us to
manage the major duty free shop in the
Caribbean. We have brought in a very
upscale assortment of products with all
our partnerships, including Hudson News,
which is the first store in the Caribbean,
and also with Colombian Emeralds.
Working with Carnival Corporation, we
will be managing the most luxurious duty
free concession in the Caribbean.”
David Candib, Carnival’s director of
port & destination development, echoes
Gonzalez’ sentiments: “Carnival is
certainly honored as well to have Dufry
partner with us in Puerta Maya to open
what we view, certainly, as a world class
shop. We are proud that it has taken time
in terms of evaluating the concept, the
look and feel of the building, and we
could not be more proud of the build-out
that Dufry has accomplished under the
circumstances. This is one of the world’s
busiest transit ports, with two berths,
and to undertake the construction of this
building while the port is in operation,
practically 5-6 days a week, is quite
monumental. This was a construction
INSIDER
7
INSIDER
Clockwise from top left: Dufry’s flagship duty free shop in Puerta Maya, Cozumel; Hudson News; Dufry’s
Tequilaria in Puerta Maya; Dufry has added Colombian Emeralds to its duty free shop in Puerta Maya.
project that was done while passengers
and crews were here and the port was
open for business.
“Last year we received a million and
a half passengers and we are proud today
to say that we have the additional offering
of 12,000 square feet and the additional
duty free merchandise and products that
complements our offer. And the team
that we have at Carnival Corporation and
at Puerta Maya as well as at Dufry, is
certainly worth noting. What we have in
Puerta Maya is one of the top welcome
centers in the Caribbean.”
More about Puerta Maya
Puerta Maya is located on about
12 acres, of which about eight have
already been developed. In addition to the
pier, about five acres are dedicated to a
transportation center, and 3-3.5 acres house
the Welcome Center and commercial areas.
An area has also been set up for shops and
services for crew.
The transportation hub features a pickup area divided into sections for taxis, rent
a car, special excursions, busses and vans,
to allow for up to 8,000 people within 90
minutes to be absorbed into the system and
allow them to quickly disperse themselves
in to the island.
In addition to the Dufry Duty Free
flagship store on the pier, the commercial
aspects of Puerta Maya include about
40 specialty shops, ranging in size from
500 sq. ft to 3,500 sq. ft divided between
jewelry, silver, tee-shirts, arts and crafts
stores. The two largest of these stores are
Ron Jon Surf Shop & Los Cinco Soles, a
top-notch Mexican crafts and souvenirs
shop that only carries items made in
Mexico.
Dufry also operates a small 2,000-sq.ft
satellite duty free store in the Puerta Maya
8
Plaza, selling liquor, tobacco and some
fragrances which has been operational
since the port reopened in 2008.
Dufry also opened a small
Tequilaria concept in mid-2009 that is
doing very well.
The 1,000-sq.ft shop sells tequila
and rum, with a very Mexican look and
feel. Both stores will remain open to
capture the traffic in the plaza, reports
Carnival’s David Candib.
There are also 18 small kiosks,
operated by small local entrepreneurs
and selling items up to $25; five Food
& Beverage facilities, and a permanent
environmental exhibit that tells the
story of the coral reefs that surround
the island. Cozumel’s reef is part of
the largest reef system in the western
hemisphere and all passengers are
given a unique beach and coral reef
etiquette card.
INSIDER
Perfection
has a darker side.
An extraordinary blend of Patrón tequila and the pure,
natural essence of the finest coffee.
simply perfect.
patronspirits.com
The perfect way to enjoy Patrón is responsibly. © 2011 Patrón Spirits International AG, Schaffhausen, Switzerland. 35% Alc./Vol.
9
INSIDER
South America helps
Dufry start 2011 with a
strong operational performance
Dufry started 2011 strong, driven in
large part by exceptional performance in
South America, where revenue was up
more than 29% over the first quarter of
2010 (in constant exchange rates), and
continued good results in North America,
up by 7.1%.
At constant exchange rates, the global
travel retailer reported that turnover was up
9.6%, with organic growth accounting for
7.4 percentage points in the first quarter.
Dufry posted a double-digit organic growth
of 10.9% in the first quarter of 2011.
EBITDA increased by 17.1% on constant
exchange rates and net earnings reached
CHF 21.4 million for the quarter.
Julian Diaz, CEO of Dufry Group,
commented: “Dufry delivered once more
a strong set of results, and organic growth
continued to be very healthy. Profitability
was further improved, even if we faced
several external factors impacting our
business recently: Disruptions due to snow
storms in the US, political turmoil in North
Africa, and the bankruptcy of Mexicana
in Mexico, to name a few. Once again, our
strategy of diversifying our concession
portfolio and our business geographically
has proven to be the right strategy.”
The strong Swiss Franc – which
appreciated 11% and 12% against the
US Dollar and Euro respectively – hurt
reported numbers to some degree. Reported
turnover came to CHF 571.6 million
compared to CHF 585.0 million in the first
quarter of 2010.
Commenting on the impact of the
exchange rates, Diaz said that the impact,
from an accounting perspective, was the
translation effect of converting its numbers
into Swiss Franc. “We would like to
emphasize once more that our business
is to a very large extent naturally hedged
protecting our profitability from currency
swings. The main impact is therefore
only translational when converting to
Swiss Francs. If the currency markets
remain unchanged where they are today,
the translational FX effect will remain
significant in our accounts throughout
2011.”
Geographic results
By regions, the Americas continue to
shine for Dufry.
Region South America, in constant
exchange rates, reported revenue growth
of 29.2%. In absolute terms, revenue grew
to CHF 168.8 million in the first quarter of
2011 from CHF 146.4 million in the same
period last year.
Dufry said that passenger numbers
continued to grow at a high rate in
South America and it was able to grow
considerably faster than passenger growth
with a range of promotions and sales
incentives, such as the possibility of
payment in up to seven installments, which
was launched in May 2010.
Turnover of Region North America,
in constant exchange rates grew by 7.1%.
Measured in Swiss Francs, revenue
amounted to CHF 161.9 million for the first
quarter in 2011 compared to CHF 169.6
million in the first quarter of 2010.
Dufry points out that this performance
is despite disruptions in air traffic and
the subsequent cancellation of more than
20,000 flights due to snow storms in the
US in January this year. Overall, passenger
numbers continued to be positive, and
growth was further supported by an active
development of the concession portfolio as
well as productivity improvements.
Turnover of Region Central America
& Caribbean decreased by 1.3% in
constant FX rates. Translated to Swiss
Franc, turnover for the period was CHF
93.0 million in comparison to CHF 106.0
million in the first quarter of 2010. The
main impact on the performance continued
to be the bankruptcy of Mexicana, which
grounded its fleet in September 2010.
The positive performance came from the
Caribbean islands, which showed positive
growth across the region, mitigating the
lower performance of Mexico, said Dufry.
In the rest of the world, turnover of
Region Europe was up 9.5% on constant
exchange rates, but fell to CHF 71.1
million from CHF 72.7 million one year
ago, when translated to Swiss Francs.
Region Africa—where Tunisian and
10
Egyptian operations were substantially
affected by political turmoil --registered a
decrease of 9.5% in turnover on constant
FX rates, falling to CHF 28.3 million in the
first quarter of 2011 compared to CHF 35.5
million for the same period in 2010.
In Region Eurasia, turnover changed
by 3.3% on constant FX rates, and was
CHF 44.3 million in the first quarter of
2011 compared to CHF 51.1 million in
2010 when converted to Swiss Francs.
Pax growth and space expansion
In the first quarter 2011, Dufry
continued to outpace passenger growth and
posted an organic (like-for-like) growth
of 7.4%. Without the external events
mentioned, organic growth would have
been double-digit at 10.9%. This compares
to ACI (Airport Council International)
estimates of global passenger numbers
increasing by 4% for the period, where
international passenger numbers grew 4.6%
and domestic passenger growth was 3.5%.
Dufry added net new retail space of
3,000 square meters during the quarter,
with important projects in Mexico,
Guadeloupe and the United States. Overall,
Dufry opened 29 new shops to date, and
expects to open additional shops with a
total space of 9,600 sq. meters until year
end 2011.
Dufry says that operational
improvements for sales growth and
margin enhancement have been mainly a
result of the “Dufry plus One” and “One
Dufry” programs, focusing on execution
capabilities on operations, back office and
support functions. Both initiatives were
launched in 2010 and will be completed in
2013, and Dufry says they have progressed
according to plan and have contributed to
the increase in profitability.
General business trends remain
positive and latest forecasts expect
passenger growth for the full year 2011 to
remain at around 4%.
INSIDER
11
INSIDER
A Travel Markets Insider Special Interview
One on One with
InterBaires’ Commercial Director
Rodrigo Manceñido
Rodrigo Manceñido, commercial director at InterBaires, will shortly complete his first year with Argentina’s
leading airport retailer. Buenos Aires-based journalist John Gallagher talks to Manceñido about the
challenges and accomplishments of the past year, and what he sees ahead at one of the most dynamic
retail operations in the region, in this special interview with Travel Markets Insider.
Rodrigo Manceñido has been one
of the busiest men in the Latin American
duty free business over the past year as
InterBaires continues to consolidate its
position as one of the leading duty free
operators in South America. Manceñido is
one of the few executives who has worked
on both sides of the fence with several
years experience in the fragrance industry
with Kenzo and another three years with
Bodegas Salentein, one of Argentina’s
leading wineries. His hands-on experience
with two of the most important categories
in the Argentine airports has been
immensely valuable in his new post.
“Having worked as a supplier has
given me a very useful insight and I
realize that the people who sell to us
have clear objectives and have to meet
targets. InterBaires has always prized its
relationship with its suppliers and although
many think that the current sales levels
are due to the solid regional economic
situation, we also feel the excellent
cooperation that we get from the brand
owners and our business partners have
made our growth this year even higher.”
Since joining InterBaires last
September, Manceñido has been clocking
the air miles visiting trade shows in Europe
and North America, as well as spending
untold hours locked up with company CEO
Martin Leal preparing short- and long-term
transformations for the company.
“Growth is one of our major
objectives and we are targeting doubling
our revenues over the next three years,”
Manceñido tells Insider. “When I came on
board sales were already going well but we
knew that there were a number of urgent
matters which had to be resolved.
“The biggest short term challenge
was that the city’s metropolitan airport
The new look at the InterBaires Duty Free arrivals store at Buenos Aires Aeroparque airport
has boosted sales more than 250%.
Aeroparque J. Newbery was due for
temporary closure as a result of runway
work to accommodate the growing number
of regional flights to Brazil, Paraguay and
Chile that were transferring there. When
the airport closed last November, we took
the opportunity to completely renovate
our arrivals and departures stores. We only
had five weeks to demolish and rebuild the
stores which had hardly been touched in
the last ten years. We knew that we wanted
to change a lot of things but space as ever
was a problem. In the departures area we
had the same space and we were able to
gain a few extra square meters in arrivals
but in essence we were working with the
same area.”
Manceñido admits that this
was a challenge because they had to
accommodate extra passengers in that
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space and really wanted to give the shops a
totally new look.
“Both the departures and the arrivals
shops at Aeroparque had become a little
dated and didn’t correspond with the
positive image we had created at Ezeiza.
So we took the opportunity to create a new
look for all the categories and ensure that
the mix of brands was what the customer
was demanding. We wanted the shop to
have the look and the feel of modern duty
free stores. It certainly was a crazy few
months but, as we look back, we feel that
we got it mostly right.”
Results of the renovations have been
extremely positive, confirms Manceñido.
“Sales figures have been spectacular
since the reopening. It’s not really fair to
compare against last year but all categories
are showing increases of between 250%
INSIDER
Changes in the product offer and
presentations ensure that the mix of
brands at Aeroparque was what the
customer was demanding.
and 300% and we are really happy with
the indices of average sales ticket and
penetration, which are now at the same
levels as at Ezeiza.”
Aeroparque: Catering to shopping trips
Manceñido notes that the nature of
many of the travelers using Aeroparque is
changing in a way that benefits the airport
retailers.
“Prior to the renovation at
Aeroparque, the only international flights
were to Montevideo and Punta del Este
in Uruguay – but now we have flights to
Brazil, Chile and Paraguay. The airport is
very close to the center of Buenos Aires
and we are seeing a big increase in the
number of people coming to Argentina for
two- and three-day shopping trips; and they
are shopping downtown and at the airport!
The passenger profile is becoming a little
more similar to Ezeiza and with more
Brazilians using the airport, our revenues
and average sales tickets are soaring. We
have just increased the number of sales
points from 6 to 8, making it easier for
customers to complete their purchase.
We are still fine tuning the mix of brands
on sale and feel there is some room for
improvement, but in general terms we have
the right categories for the new traveling
public using Aeroparque.”
With the reopening of Aeroparque
successfully negotiated, Manceñido and
his team are now concentrating on Ezeiza,
the larger of the international airports
and the hub for intercontinental flights
arriving and departing Argentina. As at
Aeroparque, sales at Ezeiza have been
going exceptionally well during the first
few months of the year, says Manceñido:
“Total revenues for the company are
up 36% for the first five months of the
year. Aeroparque has performed really well
but so has Ezeiza with strong increases in
all categories, against a 19% increase in
international traffic.”
Ezeiza: new categories spur growth
Ezeiza is home to InterBaires flagship
store 22 which is constantly being tweaked
to ensure that the company is selling
the right brands in all the categories.
Manceñido points out the introduction
of shop-in-shops for Dior, Kiehl’s and
Chanel, which he says have worked well
with Dior and Chanel really outperforming
the category: “They are very well known
brands with our travelers using Ezeiza.”
Electronics are also hot, he says: “In
May, we opened a new electronics store
within the main store and we will now have
80 sq. meters of the latest electronic goods
with all the main brands available. We have
seen electronic sales grow very strongly in
the last few months and the category now
accounts for 8% of our total sales volume.
The Brazilian customer is very noticeable
in the departures area, looking for the latest
gadgets. They are without a doubt, the main
factor in our sales increase in this growing
category.”
Before the end of the year, InterBaires
hopes to add an additional 400 square
meters to their flagship store, giving
more space to wines, spirits, chocolates,
13
foodstuffs and toys. Manceñido says they
will also be taking a long and hard look at
regional products: “We know the Brazilian
traveler is very interested in buying quality
leather goods, for example.”
Before the end of year expansion,
the commercial team at InterBaires is
putting the final touches on a new 750-sqm
departures store in Terminal C which will
open on July 9.
“The new store is well situated in the
new terminal which will initially be used
for Aerolineas Argentinas flights,” explains
Manceñido. “Given that we do not have a
huge amount of space, we intend to focus
on leading brands, featuring the top 10
selling brands in each category. We feel we
have come up with a solution that ensures
that all categories are properly represented.
The look and the feel of the store will
invite the passenger to dwell and browse.
Essentially, it will look similar to the new
departures store at Aeroparque and we are
convinced that it will be just as successful.”
New stores, renovations at Bariloche &
Cordoba
Outside of Buenos Aires, the company
has also been making renovations at
Bariloche with two totally renovated
stores-- a 220-sqm departures stores and a
100-sqm arrivals store.
“We hope to open the new stores by
mid June in time for the high season which
starts at the end of the month. The profile
of the customer here is mainly middle class
Brazilian and the product offer will reflect
this,” says Manceñido.
INSIDER
InterBaires successfully
completed the renovations
at Aeroparque using
basically the same retail
space it had originally.
“In terms of total sales, the store is not
terribly important but it is an excellent shop
window for brands and we are sure our
total revenues and average sales tickets will
greatly improve this year,” he notes.
In Cordoba, a growing regional airport
where carriers are adding international
flights, InterBaires is also planning to
renovate the 230-sqm departures store.
“Sales are increasing with flights to Lima,
Panama, Rio de Janeiro and now Madrid.
We are hoping to have the project ready
for the end of the third quarter and work
completed towards the end of the year,”
says Manceñido.
Products: Perfume still rules
Although InterBaires has introduced
several new product categories over the
last few years, perfume continues to be
the one of the big attractions for their duty
free shopper. According to Manceñido,
sales growth of 35% last year has ensured
that the category still accounts for 34%
of total revenues: “Both Brazilian and
Argentine travelers find price differences
with the local market, and the category will
remain the principal sales driver of the total
business.”
All categories grew strongly so far
this year, says Manceñido, although sales
of traditional groups – like tobacco, which
were up 22% and wines and spirits, up by
20% -- grew a little more slowly than the
newer categories, which grew at a rate above
average. Cosmetics, for example, grew by
42%, foodstuffs and confectionary were up
38%, fashion was up 65%, sunglasses and
readers increased by 89% and electronics
were 55 points ahead of last year.
“We are optimistic this trend will
continue,” says Manceñido. “Many of these
categories will get more space towards the
end of the year, so it’s safe to say that sales
will continue to rise.”
Spirits: Premiumization shows results
With the store renovation coming
at the end of the year, the InterBaires
commercial team will be allocating
additional space to the best performing
categories. In the spirits and wines
category, in which Manceñido sees many
travelers trading up, he wants to ensure
that his customers have more 12, 15 and 18
year old whiskies available. He will also
introduce a wider range of malt whiskies
once there is more space at the end of the
year.
“Last year when we revamped our
wine selection, the average price per bottle
increased from $15 to $22 which clearly
indicates that premiumization does work,”
he comments. “We have to really look at a
better selection of high ticket spirits, wines
and champagnes because they will sell if
they are available and the brand is relevant
to the traveler.”
The future of tobacco, however,
may be uncertain after passage of a new
law last May controlling tobacco sales
throughout Argentina. “Initially we know
that advertising and promotions at the point
of sale will not be allowed, but we have
to wait for the final text of the law to be
published (within the next 30 days) to find
14
out what type of health warnings will be
compulsory in duty free stores,” he says.
Customer interaction & logistics
InterBaires’ renowned loyalty
program, which efficiently ensured that
top spenders received the best promotions
when they were in store, will be extended
in the next month or so. The retailer will
launch a new co-branded credit card with
one of the leading banks in the country
that will work in parallel to its own loyalty
program. The company also plans to step
up its use of social marketing web sites like
Facebook and offer a number of special
promotions, events and tastings to its
leading customers, says Manceñido.
InterBaires is also establishing a new
warehouse complex, updating a logistics
set up that was designed about 20 years
ago. “The new logistics and distribution
center will allow us to grow storage space
from 5,000 sqm to 15,000 sqm and will be
situated within the secure area at Ezeiza.
Everything will be fully automated and we
are aiming to reduce out of stocks to zero
– this is a very ambitious objective but we
know that the new set up will improve our
operational efficiency at both Buenos Aires’
airports,” explains Manceñido.
Even as 2011 has taken off with
exceptional results that should continue in
the foreseeable future, Manceñido and his
team are already planning the next major
project – a state of the art duty free shop
for the new state of the art terminal at
Ezeiza, due for completion in 2014! Stay
tuned.
INSIDER
15
INSIDER
Uruguay’s border business due for a new image,
as Urioste returns to Latin America as Neutral CEO
Enrique Urioste, following his high profile positions at two of the most important airport duty free retailers
in the Americas -- InterBaires and Duty Free Americas -- has come back into the duty free business in
his home country of Uruguay as CEO of travel retailer Neutral. In a special interview for Travel Markets
Insider, John Gallagher talks to Urioste, just six weeks after his appointment to the new post.
In May, after several months of
acquisition rumors, duty free veteran
Enrique Urioste announced that he
was heading up the buyout of Neutral,
Uruguay’s leading border retailer. The
buyout, made in partnership with San
Francisco-based private equity fund
JH Partners, purchased Neutral from
Victor Hugo and Santiago Mesa, for an
undisclosed sum. Victor Hugo will remain
as a minority stock holder.
Although Urioste has spent most
of his travel retail career in the airport
environment, as CEO of Montevideo-based
Neutral his major preoccupation will be the
border stores the company operates on the
Uruguay border with Brazil.
Neutral was founded in 1987 and
now operates border stores in five different
locations - Artigas, Rivera, Acegua, Río
Branco and Chuy – as well as small
departure and arrival stores at Argentine
regional airport of Rosario. With more
than 6,500sqm of retail space, 6,000sqm
of warehouse space and 600 employees,
Neutral occupies a privileged position
on the border. With his proven track
record, it is clear that Urioste will not
simply wait for the customers to walk
into the company’s stores however. As
in the past, he will court new customers
with additional retail space and bold new
concepts.
“Neutral is a very interesting
company and the Uruguayan land border
with Brazil is a very interesting place
to be doing business right now,” says
Urioste. “The business as a whole has
grown in line with the solid growth in the
Brazilian economy and the strength of
the Brazilian Real. In recent years, more
than 30 million Brazilians have acquired
middle class status with a totally different
way of looking at consumption of luxury
goods - these people want to shop in Brazil
and they want to shop when they travel
to another country. The border provides
an excellent shopping opportunity for
those who live in the south of the country
and many people travel long distances
to acquire products they cannot find in
their home cities. However, we have to
remember that each location on the border
is different from the other – Chuy attracts
the high spender in the summer who is
vacationing at a nearby beach resort,
whereas Rio Branco will attract someone
making a weekly shopping expedition who
will spend time buying household items in
duty paid stores as well as perfumes and
liquors in duty free stores.
“A blanket approach to the border
is very dangerous and we need to ensure
that the offer is tailored to the customer.
Enrique Urioste at Miami Airport
during his tenure as President of
DFA’s Airport Division
16
Over the past few months when we were
looking at making the acquisition, we
started analyzing the customer in each
border location to determine what to offer
this customer. The moment we took over
management of the company, we looked
at ways to improve the product offer. We
know that the economic offer is important
but if we can improve the whole shopping
experience for the traveler, sales will grow
faster.”
Urioste explains that the concept of
duty free on the border has changed since
the first stores were opened in 1987 in
River and Chuy, with small stores evolving
into bigger stores in excess of 1500 sq.
meters. “The whole retail experience has
changed. And we are sure that this process
of change will continue,” he says.
Urioste is convinced that he can
bring a breath of fresh air into the border
business. “We will bring a new style
of management to the company but we
will plan any changes we make in an
orderly fashion. It’s not a question of
copying proven airport retail designs and
transferring them to the border. We have
to use the best things we have learned in
airports and adapt them to each border
situation. We will also look to grow our
business substantially with renovations at a
number of locations.”
Business in 2011 has started off very
positively for the company.
“Over the first five months of this
year, sales at Neutral have grown by 35%,”
says Urioste. “We are optimistic that the
rest of the year will be strong and we are
convinced we can do better not only by
renovating outlets but also by tweaking
the product mix. We have a new team of
buyers who will be adding new products
to our range. We need to have a product
mix that is right for the shopper but not
a copy of the mix that all the other shops
have; we really need to offer something
different to have a competitive advantage
INSIDER
against other stores in the same street. For
example, we will be looking at a number
of fashion brands and sportswear that are
not available but we are also planning new
concepts that have not been tried on the
border before. We feel that we have to offer
affordable luxury to our shoppers and if we
can get the right product mix we will see
sales grow even faster.”
Urioste has retained well-known
Buenos Aires retail architect Monica
Ariaudo, who is working with a team of
local architects, to redesign stores and plan
new stores. “Ariaudo has designed some
of the best retail stores in the continent,”
he says.
Short-term plans call for renovating
the 1,500-sqm store at Acegua with a
totally new layout; doubling space at Rio
Branco to more than 3500 sq. meters, and
expand in Rivera with the addition of a
second store. The company will also open a
new 1,500-sqm store, plus an 80-bedroom
hotel and food court in Bella Union
towards the end of the year.
Urioste will also step up staff training.
“Neutral has a very loyal employee base,
many of whom have been here since the
company opened its first store 25 years
ago. We will give them more tools to do
their job more efficiently, with training
courses on products and sales strategy.
We know that looking after our staff is of
major importance for our future growth.”
A new marketing campaign with
a new corporate identity will also be
introduced, as Urioste
improves the ways
Neutral talks to its
customers:
“Promotions are a
great way of building
store traffic but we want
to do something more.”
Urioste’s arrival
at Neutral is already
raising the profile of
the company. While the
current network of stores
– and product offer -- will
change dramatically,
future growth will not
17
only come from expansion of the current
stores and planned openings. Urioste
confirms that the company will be looking
for investment opportunities throughout
Latin America: “There may be additional
travel retail opportunities but we will also
be looking at downtown possibilities as
well.”
A current Neutral store in Rivera, Uruguay
INSIDER
Experts: Canal expansion, US-Panama FTA
likely to spark boom at Colón Free Zone
Panama is booming and its Colón Free Zone, already a center of duty free activity, is on the verge of
becoming even more important. By Larry Luxner
The Colón Free Zone, already the
world’s second-largest free trade zone
after Hong Kong, will become far more
important to regional trade once the
Panama Canal’s $5.3 billion enlargement
project is finished in three years.
And ratification of a U.S.-Panama free
trade agreement now being discussed in
Washington could provide an even bigger
boost to Panama’s service-based economy,
though its passage by Congress is far
from guaranteed — despite lobbying by
Panama’s president, Ricardo Martinelli,
during his recent visit to the White House
and Capitol Hill.
“Although the percentage of world
trade that passes through the Panama Canal
has diminished to 5% in recent years,
the canal continues to play a key role in
regional trade,” according to a May 2011
report by the U.S. Commerce Department.
“We believe that the CFZ will grow
dramatically with the successful expansion
of the Panama Canal in 2014.”
Here’s why: Over the next few years,
most container capacity will be on ocean
vessels that are currently too large to transit
the 51-mile canal. But with the canal’s
expansion, containerships of up to 12,000
twenty-foot equivalent units (TEUs) — all
but a very small percentage of these super
post-Panamax vessels — will suddenly
have a new option for all-water transit
through the canal from Asia to markets in
North America, Latin America and Europe.
As a result, ports throughout the region
are now investing heavily in deep-water
capacity and transshipment capabilities.
“For this reason, we believe that
increased traffic through the canal,
primarily from the Pacific to the Atlantic,
will result in greater transshipment
activity,” said the Commerce Department
report. “Most ports in Central America,
South America and the Caribbean will not
be able to accommodate vessels that are
6,000 or more TEUs. So once their cargo
transits the canal, there is an opportunity to
break the containers down and redistribute
them via smaller vessels. And the CFZ is
co-located with the premier transshipment
ports in the region.”
Nearly 12% of Panama’s imports
entered the country through the rapidly
growing CFZ, which handles annual trade
volume of around $18 billion, much of it
in cash. In 2008, the zone added a net $807
million to Panama’s trade balance. Panama,
with 3.5 million inhabitants and the highest
per-capita income in Central America,
also benefits from the 20,000 direct jobs
generated by the free zone.
In April, for example, Canadian
clothing giant Point Zero announced it
would establish a presence at the Colón
Free Zone. With an initial investment of
$10 million, the Montreal-based retailer
plans to market its brand throughout
South America. Company president and
administrative director David Eskenazi
Esses said that in the first phase, Point Zero
expects to generate 100 jobs across the
region.
In the CFZ, U.S. exporters can sell
to one merchant, duty free, and have their
products distributed and retailed throughout
Central America, the Caribbean and South
America’s Andean region. (Brazil and
Mexico, due to their large populations,
have their own internal buying structures,
so exporters generally pursue direct
strategies in these two countries).
“Instead of traveling to every Latin
American country where there might be
export prospects, talking with merchants,
agents, representatives and distributors,
you would only need to go to one location
— Panama,” says the report, noting that
the target retailer buying in wholesale
The famous Puente de las Americas (Bridge of the Americas) spans the Panama Canal at
the Pacific entrance. Photo: Larry Luxner
18
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INSIDER
Panama City reflects the county’s vibrant economic growth.
Above: Panoramic view of Panama City’s banking district. Right: Luxury condos sprout up in Panama City’s wealthy Paitilla district.
Photos: Larry Luxner
quantities in the CFZ is generally a
department-store owner with 10 to 15
stores in his country of origin.
Among the advantages: “You sell
in dollars to a CFZ merchant. The entry
is duty free. And you are only selling
to one entity, therefore you have one
relationship to manage. Finally, the CFZ is
co-located with some of the world’s largest
transshipment ports, meaning that it’s easy
for merchants to pick and pack customized
shipments to any one of a number of
otherwise small Latin American ports of
entry.”
Most CFZ trade is in electronics,
clothing, jewelry, perfume and other luxury
goods, and most of the products distributed
through the CFA are made in Asia; U.S.
content participation ranges from 6-8%.
“If you think about the value that a
solid merchant is offering you — a strong
retail customer base, ability to offer terms,
effective third-party logistics — then you
may need to be prepared to bargain hard
for a margin that works for your business
as well as the merchant’s,” the Commercial
Service advises. “You are in a strong
position if you can show solid sales in the
U.S. already, but without an established
history of top-line revenues, you would
find negotiating with a good CFZ merchant
to be a real challenge.”
It adds: “We work closely with other
sections of the U.S. Embassy to screen
out merchants that should be avoided.
We know the best merchants, and those
merchants have every incentive to maintain
their reputation.”
During his recent visit to Washington,
President Martinelli said efforts to
negotiate a free-trade agreement with
the United States coincide with his
government’s own crackdown on tax
evasion at the CFZ as well as stepped-up
efforts in the fight against price-fixing,
illegal kickbacks, drug trafficking and
money laundering.
“This is the first time Panama has
ever been run by a businessman,” said
the 59-year-old Martinelli, a self-made
millionaire and chairman of Panama’s
Super 99 grocery chain who took office in
May 2008. “Usually in Latin America, the
politicians become businessman after they
leave office, but this was the other way
around.”
In late April, Panama — in an attempt
to silence critics who have accused it of
being a haven for laundered drug money
— signed a Tax Information Exchange
Agreement with the United States. A
necessary step for ratification of the freetrade agreement, the TIEA allows U.S.
authorities to go after Americans with bank
accounts in Panama who are suspected of
evading taxes.
But it also has an added benefit: it
makes Panama far more attractive as an
incentive-travel destination.
“When U.S. companies hold a
20
convention in Panama, all their expenses
related to that convention can be deducted
from their taxes. It wasn’t like that
before,” explained Mario E. Jaramillo,
Panama’s recently appointed ambassador
in Washington. “Since Panama didn’t have
that, it wasn’t certified as a convention
center and was losing out to Mexico
and Caribbean destinations. But now,
conventions held in Panama are taxdeductible under U.S. law.”
That could significantly boost
convention business in Panama, said
Jaramillo, which currently has 20,000
hotel rooms but is in the process of adding
another 8,000.
Said Martinelli: “You can now find
any brand of hotel in Panama from A to
Z. Even a Waldorf-Astoria is being built
there.”
In March, InterContinental Hotels
Group announced an agreement with
Shakir Investment Group for construction
of a 122-room Staybridge Suites to open in
late 2012 in Panama City. It’ll be the first
Staybridge in Central America and only the
second in Latin America.
This June, the first Trump Hotel
Collection property anywhere in Latin
America will open in Panama City. The
369-room hotel required a $400 million
investment, including $220 million from
a bond sale by Newland International
Properties Corp. in 2007. The capital city
will also get a 312-room Aloft hotel. With
INSIDER
21
INSIDER
Panama City panarama from Paitilla.
Photo courtesy of Les Röner-Hansen, Parlux
over 4,000 square feet, that hotel will open
in December 2012 as a Starwood franchise.
Hard Rock International is also opening a
66-story hotel in Panama City, with 1,499
rooms, in December 2011.
In fact, a dramatic increase in
tourism — two million foreign visitors are
expected to visit Panama this year — has
generated revenues to pay for badly needed
improvements, including an expansion
of Panama City’s Tocumen International
Airport.
In mid-June, Panama’s COPA Airlines
will begin nonstop service four times
weekly between Tocumen International and
Brasília. It’ll be the airline’s sixth Brazilian
destination and its 56th destination
worldwide
“Before, if I wanted to go to Aruba
or Buenos Aires, I’d have to fly through
Miami. But COPA has bought 39 planes,
and Panama is now one of Latin America’s
largest hubs. By 2014, well over 14 million
passengers will go through that airport,”
said Martinelli. “Panamanians coming
into the U.S. will soon be able to put their
passports through a machine in Panama and
won’t have to go through Customs once
they arrive into the United States.”
But the real challenge for Panama is
convincing reluctant U.S. lawmakers to
ratify the free-trade agreement.
Under the proposed FTA, some
88% of U.S. commercial and industrial
exports to Panama would become dutyfree upon implementation, with remaining
tarifs phased out over a 10-year period.
The FTA also covers government
procurement, bilateral investment, services,
telecommunications and intellectual
property rights.
Martinelli, whose five-year term
expires in mid-2014, said Panama now
ranks as the second-most competitive
economy in Latin America after Chile,
and is one of the few countries in the
region with investment-grade bond ratings.
Calling the FTA a “no-brainer,” Martinelli
foresees the deal sailing through Congress
in the next 60 to 90 days.
“We don’t expect any difficulty at all
getting it approved,” he said. “I don’t see
how little Panama can hurt the U.S. job
market. On the contrary, it will create more
jobs for the U.S. economy.”
Jaramillo, Martinelli’s ambassador in
Washington, says he’s sure Congress will
ratify the FTA — even though it will most
likely be considered along with similar
but much larger, and more controversial
accords with Colombia and South Korea.
“All three FTAs will be passed, but
Panama will get the most votes by far,”
said the diplomat. “That’s because we’re
such a small country, we don’t manufacture
anything, there’s no risk of the U.S. losing
jobs to us, and we’ve always had a great
relationship with the United States. We’ve
never had labor issues. And more than 80%
of congressmen and senators have had
some relationship to Panama. We’re going
to get at least 300 votes, and we don’t even
have a lobbyist.”
DFA opens flagship Showroom in Colón Free Zone
Panama’s Colon Free Zone has long been a center of warehousing and logistics for
the duty free industry, with industry leaders such as Grupo Wisa and the Motta Group,
among others, also constructing state-of-the-art showrooms for their products.
In mid-June, Duty Free Americas is scheduled to officially open a 35,000-sq. ft.,
three-story flagship showroom strategically located at the entrance of the Free Zone.
Touting the logos of the company’s three business – UETA, DFA and International Bonded
Warehouses (IBW) – DFA President Leon Falic tells Insider that the showroom will be
used to present both its own brands and those brands it distributes for other companies.
The new facility will also be used as a Training Center for staff from throughout the
region, he says.
22
INSIDER
Pramsa Duty Free:
The challenge of booming border business
Pramsa owner Eduardo Raffo
Eduardo Raffo, 25-year travel retail
veteran and owner of Montevideo-based
distribution company Pramsa Border &
Duty Free, knows how to manage selling
duty free goods on the border in Latin
America, where a booming economy is
creating its own challenges.
“You must know your customer.
You must understand the logistics of the
market. You must be aware of the time
and space restraints the retailers on the
border are dealing with. If you understand
these elements, you can make the border
business work,” says Raffo.
“The border business is not the same
as selling duty free in an airport. And each
town along the border caters to a different
customer, with different needs, as well,” he
stresses.
The border business is booming,
especially for any country linked to Brazil,
be it Uruguay, Paraguay or Argentina.
Uruguay, home to major border shopping
areas in Rivera, Chuy and Rio Branco on
the border with Brazil, and Fray Bentos on
the border with Argentina, is particularly
vibrant.
“Brazilians now have a higher
purchasing power than anyone else in the
Americas. The volume of traffic coming in
from the south of Brazil to Uruguay every
week is huge,” says Raffo. “Some 50,000
people visited one town with a population
of 30,000 on Easter Week, and they came
to shop. People queue up just to enter the
shops.”
Such massive volumes of visitors
are straining existing infrastructure – but
also spurring store renovations and new
construction. “There is often not enough
staff, and stores are small, and there can
be 45-50 outlets. And the shoppers go into
every one of the shops. Air conditioning is
an important feature,” says Raffo. “Rivera
is so busy that it represents as much as half
the total sales on the border.”
One challenge, he explains, is for
the town to provide enough infrastructure
to support the mass of shoppers, and this
includes hotels and parking.
At the store level, keeping
merchandise on the shelves is a challenge
in itself. “Shoppers can empty shelves
very quickly. As
marketing people,
we try to do it
right and keep
the presentation
as professional
as possible, but
rotation takes
precedence.”
Raffo does
point out that this
rapid depletion
of stock actually
benefits his
confectionery
brands, many
of which have a
short shelf-life:
“Nothing has a
chance to get stale,
and there is always
space for fresh
stock,” he says.
Pramsa,
which offers
permanent in-bond stock and warehousing
only a five-hour truck distance from the
tax free shops on the border with Brazil, is
an important supplier to the region. With
a broad portfolio that includes top brand
spirits, confectionery and food, including
Nestlé, Kraft, Mars and Ferrero, a broad
24
range of tobacco and cigar brands, plus
Russ toys and Spiegelau glassware from
Germany, Pramsa is a key player in the
border business throughout the region.
“Our goal is to give our customers
an opportunity to do business. By giving
good service, we are a logistic tool for
our brands. Whether they need an agent, a
distributor, or someone to handle logistics,
we offer a tailor-made program,” says
Raffo.
For more information, contact him at
[email protected]
Confectionery brands like Nestlé,
shown here in a store in Rio Branco,
move very quickly in the duty free
border shops in Latin America.
INSIDER
25
INSIDER
Miami International Airport & DFA
A new Luxury unveiled
As the primary gateway city between the
United States and Latin America, Miami is often
considered as much a part of South America as
it is of North America. With Brazil’s cash-rich
visitors driving sales in Miami as much as they
are in its neighboring countries, this description
is more apt today than ever, particularly in
Miami International Airport (MIA).
With Miami International Airport’s $2.94
billion North Terminal operational and nearing
final completion, the airport retail offers are
attracting more attention than ever. According
to Adrian Songer, Chief of Airport Concessions
Business Development at MIA, the mile-long
North Terminal currently has more than 60
concessions with about 20 more set to open this
year.
Arguably, the jewels in MIA’s retail crown
are the stunning new duty free stores built by
concessionaire Duty Free Americas, which also
include four luxury free-standing boutiques. Not
only do the DFA stores carry a full selection of
traditional duty free merchandise in beautifully
designed shops, but the concessionaire has
introduced an array of in-demand brands– such
as Victoria’s Secret, Juicy Couture, Kiehl’s,
and Vilebrequin, a European brand of luxury
swimwear for men and kids — which have
been warmly welcomed by MIA’s brand-loving
passengers.
After opening its first three new stores in
MIA’s South Terminal in 2008, DFA is now
putting the finishing touches on its 12th store,
located in the North Terminal. This 50-gate
“super concourse” is used by American Airlines
as its hub for Latin America and the Caribbean
to serve more than 20 million passengers
annually.
“We have just about completed the new
store opening phase, and now we are focusing
on the people development,” confirms Terry
Floyd, DFA’s General Manager at MIA, during
a tour of the terminal in May with Travel
Markets Insider.
As of June 2011, DFA operates five
duty free locations in the Central Terminal
in Concourses E and F, three locations in the
South Terminal in Concourses H and J and
four brand new shops in the North Terminal
in Concourse D. In addition, DFA has opened
luxury boutiques for Coach, Emporio Armani
and Montblanc, and will open a Thomas Pink
Boutique in August.
DFA’s final two duty free stores –at gates
D25 and D15, and the four boutiques, which
are located in the D1-D19 section of the North
Terminal — are ideally situated to fully benefit
from MIA’s strong international air traffic,
which surged nearly 8% in the first quarter over
the same period in 2010, which itself was a
record year for international traffic growth at the
airport.
DFA sales are already increasing as the
traffic mix begins to change, says Floyd: “We
are seeing the traffic in this part of the terminal
grow to such an extent that store D15 has
become our top store by sales location,” says
Floyd. “This store is located in an area that will
soon account for 50%-60% of the International
departing traffic, once the One World members,
British Airways, Iberia, etc., move back into the
North Terminal by end of year.”
Luxury Boutiques usher in a new era
DFA’s 1,075-sq.ft Coach Boutique, which
opened in February, is one of only two airport
locations in the U.S.; the second being a DFA
– operated store at New York JFK International
Airport Terminal 7. Coach, selling leathergoods
and accessories, is one of the most popular
American brands and targets the U.S. passenger.
The Coach men’s products have been selling
surprisingly well, generating as much as 30% of
the Coach sales, and the store will be expanding
the men’s product offer, says Floyd.
In April, DFA opened the 690-sq ft
Montblanc Boutique, which features the
luxury brand’s sleek new retail concept. The
stunning, 1,020-sq.ft Emporio Armani Boutique
opened on May 13 and was an immediate hit.
“The Armani jeans and tee-shirts have been
particularly popular,” says Floyd. In August,
DFA will open the 1,265-sq.ft Thomas Pink
Boutique. The only other Thomas Pink shop
in South Florida is in the very luxurious Bal
Harbor Mall.
“British Airways and Iberia are scheduled
to move into this end of the North Terminal
by the end of this year, and when they do we
DFA has enhanced its stores in Miami International Airport with top luxury brands and shop-in-shops such as Juicy Couture (above, left) and Kiehl’s
since 1851 (above, right), as well as beautiful stores with well-designed point of sale displays. The stores shown above are all located in MIA’s North
Terminal.
26
INSIDER
will have the perfect passenger profile for these
brands,” says Floyd.
The DFA stores, especially the new stores
in the North Terminal, have been highly praised
for upgrading the entire feel of Miami’s retail
program. From the appealing offers to the
overall ambience, the stores are helping to raise
the image of the Miami shopping experience.
“We have devoted a lot of effort to create a
retail environment that is warm and welcoming,
from the lighting we used to the construction
materials to the traffic flow within the store,”
says Floyd. “Every category is clearly defined
and we have tried to make them easy to see
from the front of the store. We have aimed to
create a cozy feeling, even though the store
is 6,000 square feet in size. It all adds up to
creating a positive shopping experience.”
Floyd also credits the brands available
in the stores for contributing to the success:
“DFA’s Accessories and Luxury Director,
Jerome Blanchard, has done a great job
of growing the category at Miami Airport
by strengthening relations with vendors
and introducing emerging brands to the
department.”
MIA Property Manager Sarah Abate
agrees, and says that the airport authority is very
pleased with the results.
“It has been great working with DFA, who
has been able to bring in these very high end
brands, which is what we were looking for,”
Abate told Insider.
“It is because of the partnership that we
have had with the Airport that DFA has been
able to open these types of stores in Miami
Airport,” concludes Floyd. “It has been fantastic
for both of us.”
P RO D U C T M I X
Overall, fragrances continue to be the top
performing category in DFA’s MIA stores,
accounting for just under 40%. Liquor represents
20% of the sales mix; cosmetics/ treatment is
15% of the mix with treatment being the biggest
growth category for DFA in MIA. Sunglasses
is becoming increasingly important, and the
category has grown from 10% of the mix a few
years ago, to 16% today. In confectionery,
Godiva is DFA’s leading chocolate brand, and
people are looking at it not only for gifting but for
personal consumption. Floyd reports that DFA’s
edibles business is 100% above where it was
just a couple of years ago, and he expects DFA
to have record confectionery sales this year.
DFA has opened luxury Boutiques for Coach (above and below), Emporio Armani, and Montblanc
in Miami International Airport’s North Terminal near gates D15 and D16. Right: DFA General
Manager for MIA Terry Floyd and MIA Property Manager Sarah Abate in front of the Emporio
Armani Boutique opened in May.
27
INSIDER
DFA: Latin American expansion moves ahead
The gleaming new DFA Showroom at the
entrance of the Colón Free Zone is only one
element in the company’s expansion south.
Already the largest duty free operator in the
United States – with operations in airports
throughout the country, and stores along the
borders with Canada and Mexico, DFA and
its subsidiaries currently operate as many as
40 stores in Latin America as well, says DFA
President Leon Falic.
Although a little late to open a showroom
– Motta, Grupo Wisa and Milano, among
others, have showcased goods from state-ofthe-art facilities for years, the Falic Brothers
have lost no time spreading its business.
One of the newer ventures – two stores
at Colón 2000 Cruise Port – are proving to
be especially successful. “Colón 2000 is
primarily a home port for tourists from Aruba
and Colombia, who use this facility because
they do not need a U.S. visa,” says Falic.
The DFA duty free stores in Punta Cana
Airport in the Dominican Republic have
been another bonanza for the company. DFA,
the exclusive duty free concessionaire at the
airport, now has shops in both terminals and
has recently opened a luxury store that carries
such brands as Tommy Hilfiger, Armani
and Guess, says Falic. It has also opened a
Victoria’s Secret shop-in-shop.
The remainder of the company’s
locations are a mixture of border operations
and airport stores. The company has an
important, and growing, presence in Uruguay
on the border with Brazil, with three large
stores complete with their own parking open
in Chuy, Rivera and Rio Branco. Three more
stores are being built.
The company also has a mixture of airport
and border stores in Honduras, Colombia,
Venezuela, El Salvador, Costa Rica and Belize.
Falic says the company is in the process of
building a store in San Andrés (Colombia)
airport, and a border store in Tijuana, Mexico
across from San Ysidro on the U.S. side.
Swarovski opens Crystal Forest Boutique in Punta Cana
Swarovski has announced the opening of its latest boutique featuring the Crystal Forest image at the Hard Rock Hotel & Casino in Punta Cana,
Dominican Republic. The 29.5-sqm boutique, located on the Hotel’s Commercial Blvd, opened the first week in June, 2011. It is carrying the full range
of Swarovski products, including watches.
Palace Resorts and Hard Rock International opened the first ultimate all-inclusive Hard Rock Hotel & Casino Punta Cana in October 2010, reports
Nelson Rivera, Swarovski regional sales manager for the Caribbean & Mexico.
Inaugural Latin America WiT meeting launched at ASUTIL 2010 in Puerto Rico
The inaugural meeting of the Latin American chapter of Women in
Travel (WiT) took place during the 2010 ASUTIL Conference in San Juan,
Puerto Rico. Not only did the meeting bring together a group of about
30 dedicated women in the industry, but it also raised $820 for a Chilean
charity through a prize raffle and auction. The money was donated to
Asufinis, a not-for-profit organization within the Universidad Finis Terrae
in Chile that helps victims of the earthquake that hit the country last year.
The event was organized by fashion and merchandising designer
Federica Tojo, who gathered an impressive selection of raffle and
auction gifts from suppliers and operators. Tojo also organized the 2011
WiT Breakfast, which takes place the morning of June 23 during the
Conference in Cancun. All women attending the Conference are invited to
attend.
Photo at left courtesy of Nicole Mezzasalma of DFNI.
28
INSIDER
Kiehl’s in Ezeiza Airport
Buenos Aires, Argentina
Kiehl’s in Argentina
Connecting with a new consumer
When Kiehl’s Since 1851, the venerable
New York-based purveyor of high quality
skin and hair care preparations, landed in
InterBaires’ flagship store in Buenos Aires
Ezeiza International Airport in Argentina last
December, the company knew that it would
have to find a way to introduce the quirky,
beloved American brand to a new consumer.
The 160-sq.ft shop-in-shop in Ezeiza was
the brand’s first door in South America, and
opened alongside shop-in-shops for Chanel
and Dior, both well-known brands among the
travelers in Ezeiza.
“Although Kiehl’s has a cult-like following
in the U.S., we knew that our challenge will
be to introduce Kiehl’s to the South American
traveler and recruit this new consumer. About
80% of the passengers in Ezeiza were not
familiar with the brand when we opened, so
we knew we would have to educate them to
get them to try the brand,” Gabriela Rodriguez,
Division Manager of Kiehl’s at Parbel tells
Insider. Parbel has been successfully rolling
out the Kiehl’s concepts to airports throughout
North America, where it has been garnering
excellent results.
Kiehl’s best-known expertise is in its
skincare formulas, but the brand also has a
strong offer in hair care and body creams, a
favorite of the Brazilian travelers who play such
an important role in Ezeiza’s passenger profile.
“We have started a sampling program that
focuses on our Açai and Rare Earth products.
These ingredients come from Brazil, and we
want to educate the Brazilian consumer to this
fact. Part of the education program explains that
Kiehl’s has been working with its sources in
Brazil to improve production,” says Rodriguez.
Another facet of Parbel’s education
campaign focuses on attracting men into the
store. Kiehl’s men’s products—especially the
moisturizers — are traditionally very strong,
and Rodriguez reports a growing interest in the
products in Ezeiza. The Ezeiza shop features
Kiehl’s signature fun apothecary aesthetic and
its unique design and decorations, including the
infamous Mr. Bones.
Kiehl’s is also targeting the flight crews
that are familiar with the brand: “Crews from
Iberia, Quantas and American Airlines love the
brand and love to try the new products,” says
Rodriguez.
29
“We have quite a few animations planned
that will expand the knowledge of Kiehl’s in
Argentina,” she notes, adding that InterBaires
and the IOSC buying team have been extremely
supportive in helping Parbel introduce the
Kiehl’s brand to the Ezeiza passengers.“In the
Travel Retail environment, the challenge is
always to adapt your strategy to the passenger
profile. We analyze the market to determine
the best animations for each location, and then
make a specific plan for that market,” she says.
The plan for Mexico differs from that of
Argentina, for example. In Mexico City, where
Parbel opened a 194-sq.ft Kiehl’s boutique in
Benito Juarez International Airport Terminal
2 in April, the brand already had a strong
following, since there are eight doors in the
local market, explains Rodriguez.
INSIDER
Marcolin eyewear: quality, design, fashion and a new Miami showroom
Italian eyewear company Marcolin
is attending the ASUTIL Conference
to tell the travel retail world who it is,
say International Sales Manager Marco
Lares and Commercial Director for Latin
America Eric Allred.
“Marcolin is an Italian manufacturer
with many years of experience
manufacturing some of the most luxurious
fashion eyewear brands today. We are a
leading eyewear company which stands out
in the luxury segment for its high-quality
products, attention to detail and prestige
distribution,” says Lares.
Marcolin’s portfolio of licensed brands
reads like a who’s who of the world’s finest
fashion. It is the exclusive worldwide
manufacturer of Tom Ford Eyewear, a
partnership that was recently extended
into 2022. Marcolin also manufactures and
distributes eyewear for Roberto Cavalli,
Just Cavalli, Diesel, DSquared2, Ferrari,
Kenneth Cole New York, Kenneth Cole
Reaction, Miss Sixty Glasses, Montblanc
Eyewear, Swarovski Eyewear and
Timberland, to name a few. All licenses are
on a worldwide basis.
“Marcolin’s Design expertise is one of
the things that have put us on the map since
day one,” explains Lares. “Since 1961,
the philosophy of our founder, Giovanni
Marcolin, was to come up with the best
designs, and top-notch quality, which is
what we are known for today -- quality,
design and fashion.”
“With brands that fit so perfectly in
the travel retail channel – like Montblanc,
Swarovski and Tom Ford, for example, we
have reorganized our company to more
aggressively target the travel retail channel.
We are in growth mode,” says Lares, who
heads up the travel retail activities in North
and South America Duty Free.
To optimize the way in which it
presents its eyewear collections, Marcolin
this month opened a showroom in Miami
for travel retail so that they can introduce
their brands more effectively to the market
place.
“We are one of the few Italian
manufacturers with a showroom in Miami,
so our customers look at a product that
is manufactured in Italy, but can see all
the brand new styles right here in Miami
30
without having to go to a trade show,” says
Lares. “So many of our brands are perfect
for the Latin American consumer, and we
wanted to make it easy for retailers to make
selections.”
Eric Allred describes the Miami
showroom as being very comfortable,
modern, luxurious, and fashionable, “just
like the message that we want to convey,”
he says.
“The design concept for the
Showroom was to be spacious, with dark
wood floors, white walls and fixtures,
a lot of natural light, and a feeling of
openness so people will be comfortable as
they see several different collections. It is
the complete opposite of being in a tiny,
claustrophobic room with no natural light.
This coloring allows the walls to reflect
light so that you are seeing the true color.
This is very important for sunglasses,” he
explains.
For more information about Marcolin
or to make an appointment for a meeting
at ASUTIL or in Miami, contact mlares@
marcolinusa.com. Note: Montblanc is not
available for airport distribution.
INSIDER
Color Reflections: high-end digital imaging
customized for travel retail moves forward
with Green initiative
Color Reflections, the South Florida-based producer of highend digital imaging and grand format graphics, is moving forward
with its Green Initiative very strongly.
Exhibiting its products and services at ASUTIL this year, the
Hollywood, Florida office, under the direction of industry veterans
owner Herb Jacobson and Production Manager Maggie Rose,
belongs to the largest network of professional photo and digital
imaging operations in the U.S., and counts a large number of the
Miami-area’s leading travel retail and luxury goods companies
among its clients, including Essence Corp. and Cartier.
The company was one of only 17 printers in the United
States that were selected to participate in the network to address
recycling and environmental issues that result from this industry.
The program, formed by DuPont Tyvek Graphics, said the member
printers were selected based on strict criteria for quality, testing,
training and sustainability leadership.
Tyvek is a proprietary media used for wide format banners,
displays and bags. Known for its lightweight strength, outstanding
printability and drapeability, Tyvek is recyclable and can be
repurposed for other applications, such as composite and
landscaping materials.
The new program of which Color Reflections is a part, is
called the LifeCycle Based Solutions Authorized Printer Network.
With this program, the authorized printers can offer customers a
way to create instore campaigns, access recycling services and
track recycling efforts, says DuPont.
Color Reflections Hollywood provides a broad portfolio
of services including Durst Lambda photo prints, duratrans and
murals, grand format banners and signs, direct-to-media UV
printing, trade show displays and graphics, billboards, vehicle
wraps, custom POP and retail displays, banner stands and much
more.
“Everything we make is custom; it’s not off the shelf,”
explains Color Reflection salesman Robert Prieto. “We transform
a customer’s idea into that specific display. It is custom to that
customer. If you can think it, we can print it.”
All the images, backdrops, columns, discs, and floor graphics in the
Cartier display were produced by Color Reflections.
31
INSIDER
DLC Trading brings GO TRAVEL accessories to ASUTIL
DLC Trading Panama, Inc. will be
showcasing the company’s portfolio of GO
TRAVEL accessories -- which it recently
began representing in the region --at this
year’s ASUTIL Conference.
The GO TRAVEL accessories are
already attracting attention, says Mark J.
Lewis-Jones, DLC Trading vice president
of sales for Duty Free America, Caribbean
& Latin America, who reports early listings
with Grupo Wisa, Motta International,
UETA Latinoamerica, and Brasmark, all of
whom recognized “the value of including
GO TRAVEL in their accessories category
portfolio.”
“London-based Design Go has been
both the vanguard and market leader
in travel accessories for over 30 years.
DLC is proud to have been awarded the
distribution for Latin America and to at
last bring GO TRAVEL products to duty
free operators throughout the region,”
Lewis-Jones tells Insider. DLC Trading
Panama, which is attending its 3rd ASUTIL
Conference, will also be distributing a
gift assortment of useful products to all
registered attendees at the conference.
“We are always on the look out for
new, exciting, and interesting brands to
bring to the duty free markets in our region
of the world,” he adds.
Established in 1978, Design Go still
remains a family owned business that has
come a long way from the original 10
items in its range. Today, it offers over
340 products spanning a wide variety of
consumer needs within the travel and gift
market.
Pioneers of the travel accessories
industry, Design Go says that it understands
travelers. Products benefit from quality
British design and are created by an expert
UK design team that oversees each element
of the product development process from
concept right through to production.
Since its inception in 1978, the
company has developed several variations
of the ‘Go’ mark as it has grown into what
is now a global operation. New this year
the company has introduced a striking new
logo device, and the brand’s packaging
and products now benefit from a cleaner
look and an instant readable, recognizable
name that will allow greater clarity and
recognition at retail.
Over the years, the company has
established a strong reputation for creating
great quality, innovative products in eyecatching packaging. Products are cleverly
merchandized to appeal to an increasingly
complex consumer group in a growing and
diverse market place.
Design Go now operates in 40
countries across the globe, from Europe
to the Middle East, Australasia to the
Americas and last year established a
permanent US operation, which it says
guarantees greater customer service.
For more information, contact
[email protected].
Highlights of the product range
showing at the ASUTIL Conference
include the new Mini Fan which is
possibly the world’s smallest fan, the Hand
Sanitiser, killing 99% of bacteria in as
little as 15 seconds, and offers protection
from bacteria and germs when traveling,
and a new assortment of TSA-approved
luggage locks in vibrant colors and reduced
packaging.
Possibly the world’s smallest fan, the
Mini Fan packs power and practicality in
very petite proportions. The miniaturized
casing conceals an incredibly powerful
motor offering 10,000rpm of rotational
speed. The pocket-sized Mini Fan, no
bigger than a large cigarette lighter,
features retractable fan blades that slide
back into the compact casing at the flick of
a switch, protecting them when in your bag
or pocket.
Go Travel has completely overhauled
its popular lock range, introducing clever
designs and new colors to provide safety
in style this season. The range includes
heavy duty TSA locks and twin lock packs
in fresh new packaging that is more
environmentally friendly and allows the
retailer to stock a wider range of product.
32
INSIDER
travel accessories
Authorized Distributor Latin America: DLC Trading Panama Inc.
[email protected]
33
+507.210.1422
INSIDER
Luxottica sees double-digit impact of striking
new in-store environments
Luxottica Travel Retail, the dedicated
division of the global leader in premium
fashion, luxury and sports eyewear,
Luxottica Group, has partnered with travel
retailers throughout the world to develop a
series of customized in-store environments
for the sunglasses category. Underpinned
by category management studies, these new
merchandizing fixtures have been created
with the objectives of increasing sales
for Luxottica brands and the sunglasses
category as a whole, improving the share
of voice and visibility of the category and,
most importantly, creating extra excitement
and attraction to drive store penetration and
conversion.
Luxottica has a vision to make travel
retail the specialist and most authoritative
channel for sunglasses shopping. Creating
the optimum retail environment to
showcase products and communicating best
sellers, new trends and technical features
are important steps in turning that vision
into a reality. Each of Luxottica’s new
furniture incorporates the best practices
in eyewear retailing through a balance
between the number of product facings and
brand assortment, and features that enable
additional communication messages at
brand and category level, as well as special
promotions.
Francis Gros, Group Travel Retail
Director, Luxottica outlines the approach,
“Luxottica Travel Retail is determined
to rise to the challenge of being category
leader. We launched our category
management activity two years ago in
Cannes and merchandizing and in-store
environment is an important building
block.” Gros continues, “Working with
some of the most progressive retail partners
for this category we now have some great
examples across the world. Each casestudy demonstrates the impact and success
that can be achieved when we have the
right merchandizing environment for our
category. They combine creativity and
latest materials with the fundamentals of
sunglasses category management.”
Merchandising partnership case-studies:
Sao Paolo airport, Brazil
The arrivals stores at Sao Paolo
Guarulhos airport, Brazil, host new
sunglasses merchandizing units developed
and implemented by Dufry and Luxottica.
Appealing to both male and female
customers, the units maximize the number
of facings along each side, but also feature
promotional spaces at either end. These
promotional ends are designed with the
flexibility to change the brand or range
being promoted throughout the day to
allow Dufry to tailor the merchandizing
to flights and passenger profiles. Brand
visuals are showcased through light-boxes
and special collections are displayed on
acrylic shelves at eye level.
Since implementation of these
fixtures, sales grew by +80%. Vivianne
Nunes, Regional Procurement Director,
Dufry do Brazil comments: “Sunglasses
is a major growth category for Dufry
and Luxottica’s new fixtures have been
incredibly successful. They are elegant,
enticing and really help our customers
through the decision-making process of
purchasing sunglasses. The results speak
for themselves.”
Buenos Aires Ezeiza airport, Argentina
and Punta del Este airport, Uruguay
IOSC and Luxottica have developed
new Ray-Ban personalized merchandizing
displays at Buenos Aires airport, Argentina,
and Punta del Este airport, Uruguay, to give
travel retail’s best selling sunglass brand
additional exposure in-store while at the
same time communicating the different
styles and technical options within the RayBan range.
Since installation of the fixtures, sales
for the brand have grown by +94% volume
and +107% value at Punta del Este. At
Buenos Aires, an increase in the number of
facings of only 10% achieved sales growth
of +90% in volume and +96% value. Value
out-performing volume indicates that the
communication surrounding polarized
lenses and carbon-fiber frames in the RayBan Tech range have driven purchases of
the higher-priced technical models and
increased the average transaction value.
Rodrigo Manceñido, Commercial
Manager, InterBaires Argentina comments:
“We are delighted with what our
partnership with Luxottica is achieving
in sunglasses. IOSC are strong supporters
of this category and we are pleased to
be involved in initiatives that push the
category forward with big steps. Here
IOSC has examples of best practice for the
rest of the industry.”
Left:
Sao Paulo airport, Brazil.
Right:
Punta del Este, Uruguay
34
INSIDER
Chivas’ Age Matters campaign rolls out in the Americas
Chivas Brothers CEO Christian Porta
Chivas Brothers’ Age Matters
campaign has already rolled out across Asia
and Europe to much success, and Chivas
Brothers CEO Christian Porta says his
company expects the educational campaign
to reach similar success when it comes to
the Americas in July.
Porta, who spoke to Insider at the
Pernod Ricard booth at the IAADFS Show
in Orlando in March, calls Age Matters a
long-term campaign that takes advantage of
Chivas Brothers stable of aged whiskies.
“We have launched this campaign
for a very simple reason: we, as Chivas
Brothers, have a long history and tradition
of old whiskies, aged whiskies, very old
whiskies. We have the master distillers. We
have the people in Scotland who know how
to make whisky. We have more than six
million casks, which are aging in Scotland
for a number of years,” says Porta. “At the
same time we are increasingly surprised
when we were doing consumer research
in different parts of the world by how few
of our consumers really understood what
‘twelve years of age’ meant.”
Porta says the educational aspect of
Age Matters de-mystifies the concept.
“You need to explain to consumers
what age means, why it is important, the
value of aging for so long. For them to
realize that when they buy a bottle of
Chivas Regal 12 Years Old at $32, $34,
$35 in a duty free environment it is actually
extremely good value, because the product
has been aging for twelve years in a cask in
Scotland. There is a price for that. There is
a value to that. When you look at Chivas 18
or Ballantines 17, which retail at $60-65, it
has been aging 18 years.”
“We have done a specific study on a
number of countries, which included the
U.S., Brazil, Mexico, all the top Scotch
Whisky markets in the world, and we
realized that everyone values age as an
indicator of quality. If you ask people the
question ‘is age important?’ 95% of the
people tell you yes age is important and
yes it is an indicator of quality. If you ask
them what it means only ten percent of
the people can tell you that it is the age of
the youngest whisky in the bottle. A lot
of people think it is the average and even
a significant number of people think it is
the oldest whisky. Because of what we are
doing, who we are and this misconception,
we have decided to launch this campaign
focusing first on airports, the duty free/
travel retail environment, because that is a
good way of communicating directly.”
“Now we are extending Age Matters
to the Americas. It will start in July at the
main hubs in the US: Los Angeles, New
York, and Miami. Then we will launch it
as well in Sao Paulo and in Buenos Aires.
What is important to understand is that it is
a long-term campaign. This is an initiative
that will take 3, 4, 5 years. It is a long-term
initiative to explain what aged whiskies
mean.”
Porta says duty free/travel retail was
the natural place to launch the
Age Matters campaign.
“Duty free/travel retail
is a very important channel
for Chivas Brothers with a
significant proportion of sales
happening in the duty free/
travel retail environment.
You can organize tastings,
have promoters speaking to
consumers, have them taste
different whiskies, explain to
them directly or with leaflets
what age means,” he says.
“I think travel retail is very
important. Roughly one bottle
in five sold of Chivas Regal
as a brand in the world is sold
in a duty free/travel retail
environment. So it is big.
The higher you go in terms
of age and price the greater
that proportion goes. So duty
free and travel retail is a very
important channel for us both
from an image point of view,
35
because we can showcase our brands in a
very luxurious and premium way, and also
from a sales point of view.”
Porta says the Americas campaign will
mimic the campaign in Asia and Europe.
“Age Matters in the Americas will be
essentially the same campaign as the one
you have seen in Asia. Some markets it
will be Chivas and other markets will be
Glenlivet and other markets it will be Royal
Salute. The visuals will be mostly the
same. Each time you can use the different
brands you want to relate to each market,”
he says. “We don’t want to run a generic
campaign. If the campaign is successful, of
course it will have an impact on the whole
category, but we are not a philanthropic
organization.”
Porta says that after starting at the
major hubs in the region, the campaign will
then extend to the rest of the major airports
in the Americas
“We are quite optimistic. This
campaign promotes the quality,
authenticity, origin, craftsmanship, and
tradition of Scotch Whisky, which is very
important especially in times which are a
little bit tougher than what we are used to.
The message behind Scotch Whisky and
brown spirits is a very positive one. People
look for real products.’
INSIDER
New brands, new listings for ambitious Monarq Group
Liquor distribution and marketing
company Monarq Group continues to
expand it spirits portfolio with new and
exciting brands in a variety of beverage
categories.
The newest additions to the Monarq
portfolio are Fernet Branca, a traditional
bitter from Italy, and ultra premium tequila
Casa Noble. At press time, Monarq was
also finalizing an agreement with Mexican
brewery Femsa, part of the Heineken
Group.
Prior to the IAADFS Show in
Orlando, Monarq also signed agreements
to distribute the CEDC portfolio of vodkas,
including Zubrowka, the original Bison
Grass Vodka from Poland, in Latin America
and the Caribbean and U.S. Duty Free
markets; and the KWV wine portfolio in
the Caribbean, Central America and a part
of South America.
Monarq is also working with Mott’s
Snapple, managing, distributing and
marketing Mr&Mrs T, Rose’s, ReaLemon/
ReaLime and Clamato in the Caribbean.
Robert de Monchy, Monarq Group
Managing Director/Owner, says his
company’s goal is to have a leading brand
in each category.
“Fernet Branca is hugely successful in
Argentina, selling more than two million
cases today. People drink it with Coca
Cola. It is the drink for the past ten years,”
says de Monchy, adding that Monarq will
be rolling out Fernet Branca in Central
America, the Caribbean, and U.S. Duty
Free.
“Casa Noble, which is a single estate,
family-owned ultra premium tequila, uses
100% blue agave that comes from one
estate and is distilled at the same estate.
It has lovely packaging, the quality is
amazing, and the taste is incredibly smooth.
We will have Casa Noble for Latin America
and the Caribbean domestic and duty free
markets.”
De Monchy is particularly excited
about the potential of the Femsa brewery
deal.
“We are now finalizing the agreement
to represent the Femsa brands, most
notably Dos Equis and Sol, for Latin
America duty free. We already represent
Heineken in Latin America duty free. The
Femsa brands go next to the Heineken
portfolio that we are already representing.”
All of the brands Monarq represents
are unique or a leader in its category,
stresses de Monchy.
“It is part of our philosophy to bring
unique, powerful, special brands to the
region. We are looking for really unique
brands like Crystal Head Vodka, which we
recently added, or a leader in its category.
Either of these types of products fit really
well with what we are looking for at
Monarq and also what we want to bring
to the markets,” he says. “We are still a
relatively young company. Our portfolio is
not fully grown yet. We are striving to have
a leading brand in each of the categories.
We are not looking to have several brands
in each category. We want to have a wide
portfolio, but not a deep portfolio.”
Even before the additions of the new
brands, Monarq’s business in 2011 started
out strong, says de Monchy.
“This year has started out excellent,
really amazing. The first three months
were the same as the first five months
last year and 2010 was an excellent year
for us despite the crisis. We are growing
70-80% versus last year. Our growth
is partly organic, due to sales increases
of the current portfolio, and partly due
to expanding the portfolio with the new
brands. We also extended our organization,
hiring several people to serve our
customers and suppliers better, including a
trade marketer.”
Monarq’s new duty free listings have
36
played an important role
in the company’s success
throughout the region, notes
de Monchy .
“We listed Cachaca 51
and La Fée absinthe
with Dufry. La Fée
absinthe is in Dufry
North America,
which includes all
their stores in North
and Central America
and the Caribbean.
That was quite
a success for us
and we are very
pleased. Cachaca
51 is also listed
with Dufry North
America in their
Caribbean stores
and in Cozumel.”
Monarq
has also listed
Molinari Sambuca
and La Fée Absinthe
with London Supply and has begun to list
a number of brands with Shopping China
such as Heineken, La Fée and Molinari
Sambuca. In addition, Heineken is now
available through Monarq with Central
American duty free retail operator RTD
International, which runs about 10 duty
free stores in Central America and the
North Cone of South America.
De Monchy says, as always, he is
looking forward to ASUTIL.
“The main focus for ASUTIL is the
introduction of the newer brands in our
portfolio to our duty free customers. It
is obviously a very important part of the
event to meet with the buyers and present
our portfolio.
“As for the social parts of ASUTIL,
it is always great to see old friends and
business partners that we have in the
region. Then there are the speeches and the
conference. ASUTIL results in business,
fun, and knowledge.”
INSIDER
37
INSIDER
Creaction expands its creative design expertise in travel retail
Left: Dufry Store #25, George Bush Intercontinental Airport, Houston. Creaction designed personalizations for Lancôme, Biotherm, YSL, Clarins,
Estée Lauder, Clinique, L’Oreal Paris and The Body Shop. Right: Creaction-designed Sisley flagship store in Saks 5th Avenue, New York.
Miami design and shop fitting
company Creaction, with a very strong
expertise in luxury travel retail, has been
expanding rapidly over the past two years,
and is bringing this message to the ASUTIL
Conference as a first time attendee this
month.
Founded as a design firm in 2002 by
former Parbel executive Pierre Amezcua,
a graduate from the famous French design
school Ecole Boulle, the company now
provides its clients with a full range
of services, including design, concept
creation, manufacturing, installation and
project management, says Creaction Vice
President Christophe Beguel.
“We provide the entire chain of
service,” says Beguel, who notes that the
company has worked on concepts in some
of the highest profile store designs in the
region over the past few years, including
with DFA, Dufry, Grupo Wisa, Diamonds
International and TAG Heuer in travel
retail and for Sisley in Saks 5th Avenue and
Bloomingdale’s in New York City in the
U.S. local market.
“From 2009 to 2010 we have been
on a very strong growth trend, both in
design and project management, and in
manufacturing. But even as we get more
into manufacturing (we have workshops
in Miami, Mexico and China), we are
maintaining our design background and
heritage and we want to bring our approach
to more people,” he says.
The company has traditionally built its
reputation through servicing brands.
“We have been focusing on the
brands because we understand their
demands and the specific needs that they
have. This is a different approach from
that used by a company that manufactures
a whole store. Our idea is to be a full
service company for the brands, whether
they want us to manufacture or in some
cases just supervise the manufacturing.
In a lot of cases, European brands
in the Americas don’t have the same
merchandising or design teams that they
can have in Europe or in Asia. They subcontract us to bring the same attention
to detail – and to keep an eye on quality
– that they would have if they had their
designers from Paris onsite here,” Beguel
explains.
At the same time, Beguel points out
that the company has developed a very
strong expertise in travel retail over the
years, working with the different retailers.
“But here again our expertise will be in the
design and project management,” he says.
One of Creaction’s highest profile
projects on the retail side was creating the
designs for the eight retail concessions that
Grupo Wisa won at Panama’s Tocuman
Airport. Although a different plan was
eventually used in the final manufacturing,
the Creaction designs were successfully
used in the bidding and the company has
since done other work with Wisa.
The company also supervised
construction of two TechnoMarine watch
stores in Brazil, with manufacturing being
done by one of its partner companies.
It also has a long history with luxury
watch brand TAG Heuer, for whom it
has completed over 100 projects in the
Caribbean since 2004.
“Creaction manufactured the new
TAG store in Aruba, so whether it is
a complete project – from design to
manufacturing, and installation— or in
partnership with another company, like
Artco— we are involved,” notes Beguel.
38
Creaction also has a good record
managing multiple brands at the same
time for a specific location. Last year it
completed a major project with Dufy in
stores 25 and 13 at Houston airport in
Terminal C, creating eight personalized
back-walls and free-standing displays
for Lancôme, Biotherm, YSL, Clarins,
Estée Lauder, Clinique, L’Oreal Paris and
The Body Shop. Creaction also worked
with Dufry in Sao Paulo with projects for
Lancôme and YSL; as well as with DFA for
Lancôme, YSL, Biotherm and Clarins in
some of the new North Terminal stores at
Miami International Airport.
“We have been coordinating more and
more of these major projects and from that
we are moving to the design of the store,
which we are doing more of,” says Beguel.
The company’s growth has come from
both existing and new brands. It started
working with Essence Corp. last year;
first with Clarins and some projects with
Burberry and is now working with some
other of their brands as well. It is also
doing more and more work with Diamonds
International, and this month installed the
first personalized space for Wenger in the
Caribbean in the new DI store in Nassau.
The company is well positioned for
further expansion. It has gone from a team
of four design people in 2009, to 10 today
and will soon have 12, says Beguel. Three
of the Creaction designers are from design
schools in Paris, one is from Venezuela
and two are from Miami.
“We are now better suited to respond
to the needs of the retailers and to provide
a type of design that they are looking for,”
he says. For more information, contact
Beguel at [email protected] or go to
http://creactiondgi.com
INSIDER
Design Group, Inc.
STORE DESIGN & MILLWORK FOR TRAVEL RETAIL
Lancôme at Dufry Sao Paulo
- Design - Project Management - Custom Millwork - Brand Visibility -
2655 Lejeune Road South, Suite 906, Coral Gables, FL 33134
www.creactiondgi.com
- [email protected]
- +1 (305)
39
June 779-4851
2011 ASUTIL Special Issue
INSIDER
Essence Corp. schedules a full range of fragrance
launches throughout the Americas
Miami distribution company Essence
Corp. has maintained a full schedule of
product launches since unveiling the latest
additions to its portfolio at the IAADFS
Duty Free Show of the Americas.
Among the highlights of the launch
season were a series of HPPs in selected
Duty Free Americas U.S. airport stores for
Versace’s Vanitas and Inter Parfums’ Bebe
fragrances.
Vanitas, in a bottle that resembles
a one-shoulder Atelier Versace evening
gown, was highlighted in all the DFA stores
in the U.S. in April. The ultra-feminine
fragrance, presented in a gold box with
an engraved top, is a floral woody scent
composed of lime and freesia, tonka bean
and cedar, and featuring the tiaré flower
from Tahiti, which is traditionally worn
behind the ear.
Next up from Versace and Essence
Corp. in the Americas is the second half
launch of Versace Yellow
Diamond, which follows the
very successful Bright Crystal
that launched in 2006.
In May, DFA hosted HPPs
for the Bebe fragrances Bebe
woman and Bebe sheer. A
trendy brand based on the U.S.
retailer is synonymous with
a flirty young and vivacious
lifestyle and attitude, perfectly
reflected in its whimsical heartVersace Vanitas gets the HPP
treatment from DFA in April.
Left. Miami International Airport, North Terminal.
Sunny Touch adds trendy Oxygen watches to its portfolio
Virginie Cordero of Miami-based
distribution company Sunny Touch has
been appointed the Agent for trendy watch
brand Oxygen for Duty Free and local
markets in the Americas.
“The owners of Oxygen have a long
history – more than 20 years -- in the
watch industry and describe themselves
as ‘travel fanatics.’ I am delighted to work
with them and very confident in the huge
potential of Oxygen watches which offer
trendy models of excellent quality, at
affordable prices,” Cordero tells Insider,
saying she will be happy to present the full
collection in ASUTIL.
According to Cordero, Oxygen
watches, designed as “The traveler’s
watches for a city life” have been a real
success onboard the major airlines around
the world, including Air France, KLM,
Austrian Airlines, JAL, British Airways,
Lufthansa, Singapore Airlines, etc., since
2003, regularly ranking among the top
sellers. The company has now decided
to launch their Oxygen “globe trotters”
watches in the domestic and Travel Retail
markets. The first market to launch will
be France (in the next months) and other
markets will follow soon after.
Cordero also reports that her Givenchy
and Kenzo scarves and stoles will debut
in Cancun for the Fall/Winter season.
Sercosur, which has the concession of more
than 15 stores mainly in the major hotels of
Cancun and Riviera Maya, has listed both
lines for some of their most prestigious
boutiques. Sunny touch will present the
Spring Summer collection at ASUTIL.
40
Essence Corp. showcased the Bebe Woman
and Bebe Sheer fragrances from Inter
Parfums with DFA in May, as shown here at
Miami International Airport.
shaped bottles. During the Orlando Duty
Free Show, Essence Corp. also unveiled,
Bebe Gold, the third and final fragrance
that rounds out the collection.
Essence Corp. announces that among
the other fragrances on the launch schedule
from Inter Parfums during the first half of
2011 are Burberry Sport Ice for men and
women, celebrating the first anniversary of
the launch of the Burberry Sport fashion
line and original Burberry Sport fragrances;
Jimmy Choo, a sensual fruity chypre with
a snakeskin design on package that echoes
the famous Jimmy Choo shoes; and Marry
Me! By Lanvin, a young and romantic
sparkling fruit floral fragrance featuring
Lanvin’s traditional bow motif.
For men, Essence Corp. launched
in May Inter Parfums’ first fragrance
under its license with Mont Blanc, a
fresh woody fougere called Mont Blanc
Legend. Presented in a heavy and slightly
curved bottle of black and metallic colors
inspired by the famous Meisterstück pen
design, and a stunning black and white ad
campaign featuring British model Simon
Clark photographed by Peter Lindbergh,
Legend is a pure Mont Blanc statement.
For Van Cleef & Arpels, Essence is
now introducing the Midnight in Paris pour
homme that launched last year in Europe to
the Americas. The bottle and presentation are
based on a famous VCA watch that shows
the night sky with constellations as seen from
the Place Vendôme in the center of Paris.
INSIDER
INSIDER
Upstart Horizon International Duty Free expands brands, team
Jose B. Chao’s Horizon International
Duty Free has expanded its growing
portfolio of premium brands and added
new category specialists as it diversifies its
product offerings.
“The original strategy was to diversify
in travel retail with more of a travel
retail expertise, rather than just in wines
and spirits. It really makes us multidimensional and, because of the talent that
we have, we are able to service all of our
customers the right way,” says Chao.
Horizon has now entered the
sunglasses sector, signing an agreement
with Buch+Deichman to represent its
sunglasses and readers in North America
(minus Canada), the Caribbean, and
Central America.
José B. Chao
“I think B+D has great design
elements. The sunglasses are unique and
José
B. Chao has
RobertoTravel
CromRetail
has aveteran
sense of
elegance,
officially
launched
Horizon
a sense
of what
is really
cool.International
The brand
Free, a new
company
is Duty
an extension
of the
owner that
and will
I love
represent
premium
brands
in
that,” says Chao. “I also reallytraditional
like that
channels. offering different
thetravel
brandretail
is segmented,
Chao, with more than 25 years of
price points. A distributor wants a product
experience representing luxury goods,
that truly has a unique, differentiated offer.
including 12 years in the world-wide
B+D features a design-led element and is
duty free industry, brings his expertise to
A
affordable luxury. It doesn’t have a strong
presence yet in domestic markets, so it is
almost like handling a duty free exclusive
with a very niche positioning.”
Horizon has also added VnC, Very
Nice Cocktails, a ready to drink, ready
to pour, 100% natural flavors brand from
New Zealand, which it will represent for all
promoting both established and developing
of the Americas, duty free and duty paid,
brands as President of the new company.
except
the U.S..
Horizon
International Duty Free
“VnC
comes
in five
100%
will represent
the full
rangeflavors,
of dutyallfree/
natural,
all in
very lightweight
travel
retail
categories
includingpackaging
wines and
with a unique
positioning.
I presented
it to
spirits,
cigarettes,
confections,
beauty, and
Dufry and itprimarily
is going to
the Americas.”
accessories,
in all
theof
Americas
but
The Horizon portfolio already
also globally.
includes
premium
brands
U’Luvka Polish
“Horizon’s
points
of difference
Vodka, being
Vice Vodka
Icewine andfact-based;
Tequilas
include
‘shopper-centric’;
innovative;
yet entrepreneurial;
de la Dona corporate
in the spirits
category, Tortuga
and
committed
to the brand-building
Rumfully
Cakes
in the food/confectionery
process,
which
will
be
a major
focus ofin
thethe
category, and Cilia eyelash
enhancer
company,”
explains Chao.
beauty category.
“Our
to drivethe
value
and market
Chaoaim
saysis getting
brands
is only
share
growth
forequation
our customers,
as lead
well to
one half
of the
that will
as
for their success.
retail partners. Our activities
Horizon’s
will focus
on
raising
brand awareness
and
“It is really
a one-two
punch strategy.
enhancing brand image.”
First you get the brands. Then you get
Chao says that Horizon International
the people to sell the brands,” he says.
Duty Free has the flexibility to serve brands
“We now have people with tremendous
as agent, distributor, and/ or marketing
credentials that have expertise in multiple
categories for Horizon. Doug Andrews
leads the accessories and cosmetics sector.
We have retained Eduardo Berger who
will be running and leading the charge for
tobacco, and Horizon is soon going to be
filling a North American position to really
start focusing
in on all
those has
customers.”
consultant.
In addition,
Horizon
the
Chao
says
the
company’s
short term
capability to provide complete logistics
goal going
into 2012
is toclearance,
add more brands.
services
– including
customs
now haveand
a lot
of good people
bonded “We
warehousing,
real-time
who cantracking
drive the
business.
It isoftime
inventory
-- making
it one
the to
better
brands travel
over time,
some
fewget
truly
integrated
retail perhaps
companies.
established
Chao tellsbrands,
Insider which
that oneallows
of the us to
nurture
these younger
brands.
new
brandssome
in theofportfolio
is U’Luvka,
a luxury
that isI would
perfectly
for at
Goingvodka
into 2012
likesuited
to have
Travel
is representing
the that are
leastRetail.
twelveChao
brands
in our portfolio
brand
in thedifferentiated
Americas as well
all fully
and as
notproviding
necessarily
additional
consultancy
services
the
in one sector. That will be a for
great
launch
in
other
markets,
both
domestic
and
accomplishment.”
Travel Retail.
“Going into next year the goal is
new
company
is already
working
to The
really
start
showing
that Horizon
can
with
a
number
of
other
brands
as
well,
provide a value to customers that have
which will be announced shortly. In the
entrusted their brands with us. The name
coming months, Horizon International
of the game is delivery. We have talent. We
will attend IAADFS, MHA, TFAP and
have well differentiated brands. We now
ASUTIL.
need
get ainformation,
couple of big
brands.
Fortomore
contact
JoséThat’s
B.
the
game,”
he
says.
Chao at [email protected].
TR Veteran José Chao launches
Horizon International Duty Free
BRIGHTER FUTURE IS
JUST OVER THE HORIZON
W E VA L U E
INNOVATION
BRAND BUILDING
CUSTOMER SERVICE
Horizon International Duty Free
showcases an exciting line up of
premium and luxury brands with a
global reach and regional focus in US,
Caribbean, and Latin American markets.
Portfolio Brands Include
U’Luvka Polish Vodka
Vice Vodka Icewine
Tortuga Rum Cakes
Tequilas de la Doña
We’re building the brands of the future - Find us at IAADFS Stand #801
© Horizon International Duty Free - phone - 305-716-9993 - fax - 305-591-3547 - www.horizonintdf.com
131 41
June2011
2011IAADFS/MHA
ASUTIL Special
Issue
March/April
Issue
INSIDER
Prowood Wines & Spirits brings spirits with
Russian Romance to ASUTIL
California-based importer and
distributor Prowood Wine & Spirits, Inc.
is bringing the mystique and luxury of
premium Russian spirits to ASUTIL this
year. The exclusive importer and distributor
for the U.S., Canada, and Mexico of quality
exclusive brands, PWS has become one of
the largest importers of vodka from Russia.
The jewel of the exceptional portfolio is its
super-premium Imperial Collection Vodka,
which is presented in a Faberge Egg Art
Carafe that sells for more than a thousand
dollars.
“Since we established PWS in 2003,
we have continued to expand the portfolio
by responding to consumer’s desire for
quality and exceptionally smooth spirits,”
says PWS owner and president, Henrik
Sargsyan. “Our mission is to provide
nationwide service to our customers while
committing to long term brand building
activities. We respect our customers and
that is why we observe the market situation
with attention to do our best to provide
quality spirits with excellent taste and one
of a kind packaging.”
In the U.S., the company also
actively targets different markets with
strong promotional media support
and sponsorships -- PWS sponsored
the USA and World Bartenders’
Championship in 2006 and participated
in the “internationally spirited vodka
sipumentary.” It also attends trade shows
such as the IAADFS and now ASUTIL, to
introduce its new, unquestionably unique
spirits, says Sargsyan.
In addition to the Imperial Collection
Vodka, the PWS portfolio also features
Vodka Matrioshka, Moscow Moon Nights,
Tequila Bracero and California wine TASI.
Additionally, PWS will be introducing its
new Imperial Collection Gold Vodka at the
ASUTIL Conference.
Imperial Collection Gold is one of
the best Russian vodkas, says Sargsyan.
Produced in St. Petersburg by awardwinning spirits company Ladoga Group,
Imperial Collection Gold is made from
a unique formula of vodka flavored with
honey and linden blossom based on recipes
dating back to the reign of the Russian
Emperor Peter the Great. “Century-long
traditions of making the Russian traditional
drink have thus been implemented in
modern times,” says Sargsyan.
“We use only the highest quality grain
alcohol made from grain that Ladoga grows
on clean and fertile soils in its own fields
that are located at a significant distance
from industrial centers. The water comes
from the Ladoga Lake, a glacial lake that
is Europe’s largest source of the purest
drinking water. At our factory the water
is treated using a sophisticated multistep filtration system and enriched with
necessary salts and microelements as a final
stage of the treatment. And the production
process of Imperial Collection Gold vodka
includes 12 stages of purification using a
sophisticated multi-step system of coal and
sand filters, with special golden membrane
filters being used at the final stage. This
gives the drink a special texture and a
unique taste,” he explains.
Ladoga packages Imperial Collection
Gold according to its premium status, says
Sargsyan. Bottles are made from medical
glass to carefully preserve the unique
taste. The bottle is then partially satinated
(matted) and decorated with real 24 karat
gold in order to make it “especially alluring
and beautiful,” he adds.
“This is not simply high-quality
vodka; Imperial Collection Gold is an
image product, declaring prestige and
status. The filtration process, the natural
components, and ‘deluxe’ spirit provide
true pleasure for real connoisseurs,” says
Sargsyan.
42
Highlights from the other selections
being shown by Prowood at ASUTIL,
include:
Vodka Matrioshka – Presented in
bottles replicating the famous Russian
Matrioshka nesting dolls, Matrioshka
Vodka is available in classic Lux,
Matrioshka-Honey using natural linden and
flower honey, and Cranberry, made with the
natural extract of cranberries.
Moscow Moon Nights vodka is
non-aged and is exceptionally clean to
the palate with a gentle hint of wheat
characteristic.
Imperial Collection Super Premium
Strong is distinguished by its fresh taste
with a trace of black currants with a light
hint of cedar nuts.
Tequila Bracero is produced with
100% blue agave from Jalisco, Mexico.
Tequila Bracero Anejo is kept in the white
oak caskets for more than one year. Tequila
Bracero Reposado is kept in white oak
caskets for up to two months. Tequila
Bracero Blanco is the traditional tequila. It
is fresh, clear and transparent, and it keeps
the strong flavor of blue agave.
Tasi means “By the Sea” and the
Chardonney, Merlot and Cabernet Tasi
wines are made from veteran Napa Valley
winemaker Bob Broman.
Prowood Wine & Spritis, Inc. is
represented in Duty Free by the Kattoura
Group.
INSIDER
43
INSIDER
44

The Latin American economy: A richer reality

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