Preview - Tax Free World Association Asia Pacific Conference & Exhibition 2013
By Joe Bates | 9 May 2013
The TFWA Asia Pacific conference & exhibition kicks off this weekend
The Travel Retail world will start making its way to Singapore this weekend, in time for next week's TFWA Asia Pacific Conference & Exhibition. Joe Bates takes a look at what visitors to the event can expect as well as how the TR channel in the region is fairing.
Last-minute stand-in exhibition venues don’t come much more upmarket than Singapore’s Marina Bay Sands Expo & Convention Center: It’s the world’s most expensive hotel and casino resort. It’s also the new location for next week’s TFWA Asia Pacific Exhibition, from 12 to 16 May, after renovations at the show’s usual venue, the Suntec Centre, overran.
If buyers and visitors fancy a break from traipsing around the Marina Bay’s 120,000 square-metre convention centre, they’ll find plenty of other ways to amuse themselves. Temptations to sneak away include a casino filled with 1,500 slot machines, a 4,000-seat theatre and a skating rink. Most spectacularly of all, a 150-metre rooftop swimming pool perches on top of the resort’s three 55-storey towers.
Whether anyone attending next week’s show will actually find the time to brush up on their backstroke is another matter. With an opening conference, numerous workshops and networking events all on the agenda, free time is going to be a precious commodity.
The number of pre-registered visitors is up 5% on 2012 at a record-breaking 2,164, according to the TFWA. The tally of exhibitors is also up nearly 7% to 252. Given these promising figures, I suspect the majority of appointment books will be chock full.
“We will offer all the facilities expected of a world-class event,” says TFWA president Erik Juul-Mortensen, who is confident the eleventh-hour change of venue won’t cause any problems. “They will include a challenging and stimulating conference and four workshops on the theme of ‘Striving for Perfection’; an exhibition hall bursting with new ideas and innovative products; our very popular ONE2ONE pre-arranged meetings service, and plenty of networking opportunities.”
It’s not hard to fathom the TFWA Asia Pacific Exhibition’s growing size and importance. With Europe and North America still in the doldrums, the global duty-free trade’s future prosperity increasingly rests squarely on this region’s shoulders. This is especially true of China, which is planning to build over 80 new provincial airports by 2015.
“In 2011, for the first time, Asia/Pacific overtook Europe as the dominant region for duty free and travel retail sales with nearly 35% of the market versus 34% and an increase in sales over 2010 of 26%,” says Juul-Mortensen. “The region retained this pre-eminent position in 2012 with nearly 38% of the global market, compared with Europe’s 31%, and an increase in sales year-on-year of 16.3%.”
Despite this growth, the Asian duty-free liquor business is not without its concerns. In economic terms, the Chinese dragon has been roaring a little less loudly of late. Traffic and retail sales were disappointing during this year’s key Chinese New Year travel period. The recent crackdown of new Chinese president Xi Jinping on luxury goods spending among party officials is furrowing the brows of many international drinks executives.
However, Juul-Mortensen remains bullish about the Chinese duty-free market’s potential. “It is well documented that Chinese inbound and outbound passengers have been and continue to be a significant driving force in the duty free and travel retail market,” he says. “The affluent middle class has a remarkable appetite for luxury goods. Premium and super-premium wines and spirits are up there at the top of their shopping lists.”
Amidst all the excitement that understandably surrounds a booming business, the Asian duty-free industry is now keen to present a more responsible regional approach to duty-free liquor retailing. To that end, industry body the Asia Pacific Travel Retail Association has recently launched a Responsible Retail Training Programme.
Backed by a number of leading liquor suppliers, the programme aims a train sales staff to adhere to local alcohol retailing legislation, and to refrain from selling wines and spirits to passengers, who may have their purchases confiscated in other countries due to airport security restrictions.
Forty-four wine and spirit companies will be exhibiting at the show. Their ranks include industry heavyweights Diageo Global Travel and Middle East (GTME), and Pernod Ricard Asia Duty Free. Both multinationals will be shining the spotlight on major travel retail-exclusive whisky launches. In the case of Diageo, it’s the Johnnie Walker Explorers’ Club Collection, while for Pernod Ricard, it’s the Chivas Brother’s Blend.
As if to underline the growing importance of Asian duty-free to the big multinational players, both of these fierce competitors have made important changes to their regional duty-free management teams in the past month. Pernod Ricard China managing director Con Constandis has replaced Thibault de Poutier de Sone at the helm of an expanded Pernod Ricard Asia Travel Retail, which now includes the Mainland Chinese and Japanese duty-free markets.
As for Diageo, it has named Rudy Paoli as its new regional director of global travel for Asia. Previously Diageo Global Reserve managing director for five years, Paoli now finds himself focusing on super-premium brands from the Diageo stable with a growing presence in Asian duty-free such as Johnnie Walker Blue and Gold Label, Shui Jing Fang and Cîroc. He reports to Diageo GTME managing director Roland Abella.
A glance at the press releases filling my inbox over the past few weeks suggests the number of super- and ultra-premium releases making their Asian duty-free debuts at Singapore continues to grow year on year. For instance, at next week’s show, Pays d-Auge-based Pere Magloire will be unveiling a 35 year- old calvados, while Family-owned Cognac house Bache-Gabrielsen will launch Dupuy Auguste; a Cognac containing eaux-de-vie aged between 50 and 70 years.
It’s not all rare spirit, cut-crystal decanters and mahogany presentation boxes, however. International Beverage Holdings will present a new travel-retail exclusive range of Old Pulteney whiskies. The most expensive is priced at just GBP54.99 (US$85.25). Also, Rémy Cointreau Global Travel Retail (GTR) will launch a limited-edition travel-retail exclusive Cointreau bottle called ‘Une Soirée a Paris’ priced at around EUR21.
What is particularly noticeable this year is that the smaller European exhibitors at the show are a surprisingly diverse bunch. French absinthes (Distilleries et Domaines de Provence); Swiss chocolate cream liqueurs (Cresta), Italian limoncellos (Distellerie Franciacorta) and Spanish wines and brandies (Torres) will all be vying for buyers’ attention.
They are all aiming to expand into a market still largely dominated by super-premium Cognac, blended Scotch whisky, vintage Bordeaux wines and Asian spirits. The latter category will be represented by a number of new Asian exhibitors, which includes the Bleeding Heart Rum Company from the Philippines, Taiwan’s Kinmen Kaoliang, and Luzhou Laojiao from Hong Kong.
As you can see, it’s going to be a busy week. Don’t bother packing your swimming trunks.
“Global Business Travelers’ Airport Retail Trends, 2012–2013” is a new report by Canadean that analyzes trends in airport retail and explores how opportunities and demand are set to change in 2012–2013. Furthermore, this report not only provides a comprehensive overview of business travelers visits and time spent at airport retail stores in 2012, but also showcases average expenditure.
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Preview - Tax Free World Association Asia Pacific Conference & Exhibition 2013