Blog: Andy MortonTax Free World Association - Day one: Cruise ships and Rudy Giuliani

Andy Morton | 21 October 2015

The exhibition will last until Friday

The exhibition will last until Friday

just-drinks is in Cannes this week for the Tax Free World Association exhibition. Here's the first part of Andy Morton's blog, which will keep you up-to-date at one of the most important dates in the Travel Retail calendar.

  • The sun is shining on the Cote D'Azur, but dark clouds loom for visitors to the Tax Free World Exhibition, Cannes's annual festival of all things Travel Retail. A sense of foreboding that is hanging over the industry was made manifest in the show's opening speech from Erik Juul Mortensen, TFWA's president, with statistics that show zero growth in the channel in the first six months of this year. In the all-important airport channel, sales are decreasing as passenger spend declines. For wine & spirits, the category has seen sales in all channels fall by 2.5% in the six-month period. The reasons for these decreases can be found in most international newspapers - a weakening Chinese economy and a turbulent Russia has blunted demand from these core consumers, while currency fluctuations have created uncertainty for businesses. They are, in effect, much the same issues that faced the industry during last year's TFWA, but are now further entrenched.
  • Mortensen wasn't all doom and gloom. He did highlight the vast investments being made in Travel Retail that will propel the channel's future. This expenditure is not just in airport terminals but also the new wave of cruise ships. These “mega-cruise” vessels, of which the biggest can hold 5,500 passengers and more than 2,000 staff, have the potential to transform Travel Retail in the same way they are transforming the tourist industry.
  • As per TFWA tradition, there was also a heavyweight name flown in to bring some international stardust to proceedings. Last year it was Colin Powell, the former US secretary of state. This year, it was Rudy Giuliani, the mayor of New York during the 11 September attacks. What Giuliani lacked in knowledge of Travel Retail (which admittedly was quite a lot) he made up for in performance. He may have delivered the speech he gave on leadership a thousand times before, but it went down well with an audience who needed a bit of a pep talk after Mortensen's reality check.
  • Shortly after the opening speeches, I met with Zach Sulkes, Bacardi's regional manager for Americas Travel Retail. Sulkes has been with Bacardi for nine years, but previously worked for one of the major cruise ship companies. The cruise ship market is one of his main focuses, and he says it is only growing in importance as growth in the channel outstrips all others. As Sulkes pointed out, they're not building too many new airports, but they are building a lot of new cruise ships.
  • His opposite number at Stoli Group, Dayna Dennington, also said cruise ships are taking precedence in terms of her priorities. As both pointed out, cruise ships are not just about passengers - about a quarter of the people on board are crew. Stoli has targeted these employees by finding out where they go to drink when the boats dock, and runs on-site activations. Dennington says these bars are seldom high-end but can be lots of fun. “Going to them is one of the best parts of my job,” she told me.
  • At Camus's after-show party along the Croisette today, the Cognac house was celebrating this year's launch of the Camus Extra extension Dark & Intense. It comes 15 years after the introduction of Camus Extra, which, according to Camus, changed the company. The Cognac was the idea of Camus's now president, Cyril Camus, who back then was 25 years old and looking for ways to connect with younger consumers. It worked - Camus Extra now accounts for more sales than the house's other Cognac's combined.

Sectors: Beer & cider, Spirits, Wine

Companies: Camus, Bacardi

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