Preview - Tax Free World Association World Exhibition 2013
This year's TFWA World Exhibition opens this weekend
Ahead of this year's Tax Free World Association World Exhibition, which returns to Cannes next week, Joe Bates considers the travel retail landscape.
The travel retail industry’s annual October get-together on the French Riviera keeps on getting bigger each year. Last year saw the TFWA World Exhibition attract record numbers of visitors but, with pre-registered visitors for this year’s event from China and Japan up by 33% and 21%, respectively, it’s a safe bet that last year’s record will be smashed once again.
In fact, the exhibition’s continued success is causing problems. The Palais des Festivals, the show’s enormous multi-level and multi-village venue located on Cannes’ famous Croisette, has been expanded to capacity. However, both existing exhibitors and aspiring ones are clamoring for more space.
“In the past, we have been able to find additional space, but I am afraid that at the moment there does not seem much chance of this,” says Erik Juul-Mortensen, president of show organiser TFWA, who insists the problem of extra space is now “high” on the association’s agenda.
Nevertheless, Juul-Mortensen urges wannabe exhibitors not to give up hope. “As you see from the number of ‘new’ exhibitors this year, and every year, there is around a 10% turnover of exhibiting companies. Some find that they cannot exhibit one year for their own reasons and they relinquish their space, almost invariably with great reluctance.
“Companies which can demonstrate to the [TFWA] Management Committee assessment panel that they are ideally suited to this duty free and travel retail trade show will be put on the waiting list for such a vacant place.”
Over a fifth of the show’s 441 exhibitors are wine and spirits companies. All the big liquor players will be out in force along with 10 either new (or returning) exhibitors. Among these new arrivals are South African multinational Distell, Port producer Symington Family Estates, family-owned Tesseron Cognac and Enotalia, the second-largest privately-owned Italian winery.
With all its glitz and glamour, Cannes has always been the drinks industry’s ideal launch pad for luxury wines and spirits, and this year’s show doesn’t disappoint. The Edrington Group will be showcasing the award-winning GBP2,000 Famous Grouse 40 Year Old, for instance, the oldest whisky ever released by the brand and limited to just 276 engraved decanters. Not to be outdone, Ian Macleod Distillers will launch a rare Glengoyne 35 Year Old, which carries a GBP2,250 price tag almost as hefty as the whisky’s solid oak lacquered gull wing presentation box.
However, the prize for the most ostentatious (and some would say politically incorrect) packaging at Cannes has to go to the Cordier Python4Box from high-end Bordeaux wine merchant Cordier Mestrezat Grands Cru. Containing four bottles of fine Bordeaux wine, the leather gift box’s sides are covered with the skin of a 10-metre long Indonesian python.
Exclusive whisky ranges, free from any domestic market price comparison and often featuring no age statements, are becoming increasingly popular, especially in the booming single-malt segment. William Grant & Sons will be exhibiting its recently-launched exclusive Glenfiddich Cask Collection, for instance, while Rémy Cointreau Global Travel Retail will unveil a new Bruichladdich travel-retail range comprising five expressions, including the unpeated Bruichladdich The Organic Scottish Barley, the only organic Islay malt whisky available.
Away from the trade floor, be sure to catch the show’s opening Conference on Monday (21 October), whose headline speaker this year is Lord Sebastian Coe, Olympic gold-winning athlete and the organiser of the 2012 London Olympic Games. Other speakers will include Willie Walsh, CEO of BA owner International Airlines Group, and author and consultant John Gerzema, who will map out some of key social trends currently affecting the travel-retail industry.
With hundreds of products being launched down in Cannes, be sure to visit TFWA’s handy online directory of product launches. Another indispensable tool for anybody attending Cannes is the downloadable TFWA smartphone app for Android, Blackberry and iPhone users, which are great for navigating such a large exhibition venue.
Asian visitor numbers at this week’s show may look healthy, but the global travel retail liquor business finds itself in a more uncertain trading climate than this time last year. It’s true that Western European and North American air traffic figures have staged a modest recovery this year, but crucially spend among those all-important Mainland Chinese travellers has softened. That’s a big worry as Chinese passengers often spend five times as much as their Western counterparts.
The troubling news from Asia extends further, however. The weak Japanese Yen has considerably lightened the pockets of the country's holidaymakers in popular overseas tourists spots such as Hawaii and Guam. The sluggish Korean economy has also dented the average spends of another of Asia’s most important travelling nationalities. Sales of ultra-premium spirits priced at US$100 per bottle and above remain strong, but lower down the price ladder sales of premium blended Scotch and VSOP Cognacs have slowed, leading to discounting and increased category competition.
The picture in Latin America has also been rather unsettling. Brazil has been the region’s duty free growth driver in recent years, but the Brazilian Real fell to a four-year low earlier in the year. Brazilian travellers, erstwhile duty-free spendthrifts, have suddenly become rather less keen on splashing their spare cash while abroad.
South America’s most important duty free market may well get back on its feet sooner rather than later, however. The Brazilian central bank’s recently-launched $60bn intervention programme has already bolstered the flagging Real, and a major upgrade of Brazil’s international airports ahead of next year’s FIFA World Cup should boost sales ahead and during the big event.
And there are plenty of other reasons to be cheerful. In spite of the problems mentioned already, overall international passenger traffic in the first eight months of 2013 was up by a healthy 5% on the corresponding period a year ago. Emerging aviation markets such as The Gulf, Mexico and Indonesia are growing at double-digit rates. Russian travellers continue to spend big on high-end spirits and wines. And although their spends are down, Mainland Chinese travellers have lost none of their appetite for foreign travel.
The duty free industry’s heart may be drawn back to the glamour and tradition of Cannes each year, but its head will be firmly fixed on China for many years to come.
Global market review of the travel retail drinks sector
Changing demographics, growing economies, increased disposable income and the rise in international and business travel have all contributed to the burgeoning travel retail sector....read more
Rémy Cointreau punches above its weight in spirits, having established itself as a major global player in cognac despite its relatively small size compared to Pernod Ricard and LVMH. China has been it...
Comprising of textual analysis and data tables, this in-depth and exclusive country report from Canadean provides a comprehensive view of the cider industry structure including analysis and profiles o...
The Emerging 5 Alcoholic drinks industry profile provides top-line qualitative and quantitative summary information including: market share, market size (value and volume 2007-11, and forecast to 2016...
French drinks group Belvédère has appointed Jean-Noël Reynaud as its next CEO....
The report provides a review of the mergers and acquisitions (M&As), partnering deals, and agreements entered into by companies active in the global spirits market during December 2013....
- Comment - Diageo Steps Up Defence of Haig Club
- Focus - Diageo's H1 Results by Region, Brand
- Comment - Spirits - Where Next for Scotch Whisky?
- just the Preview - Diageo Q2 & H1
- just the Facts - Top 20 US Beers by Value, Volume
- Belvedere vodka tie-up over new James Bond film
- Diageo speaks out over supplier contract changes
- Brown-Forman appoints Jack Daniel's president
- Diageo inks UK distribution deals
- ASA rejects Haig Club ad complaints
- Global RTD/RTS insights - market forecasts, product innovation and consumer trends research
- Diageo plc (DGE) - Financial and Strategic SWOT Analysis Review
- Edrington Group in Spirits (World)
- Global Consumer Trends and Key Consumer Targets in Alcoholic Beverages
- Global vodka insights - market forecasts, product innovation and consumer trends research