Duty free back with a bang at upbeat Cannes show

With more exhibitor space, buyers and landlords than ever before, last month’s TFWA World Exhibition showed an industry with renewed momentum.

The sun shone the entire week of last month’s TFWA World Exhibition in Cannes. The beautiful, warm weather reflected the upbeat mood of most of the 7,385 visitors who flocked to the travel retail industry’s biggest annual get-together, a 23% increase over last year’s attendance figures. The event attracted a record number of buyers and landlords, a vital sector and a clear sign that decision-makers within the business are keen to make up for lost time after the disastrous Covid years.

“People are hungry to travel again, as shown by the healthy results many airlines have reported this year, but we are not quite back to where we were in 2019,” TFWA president Erik Juul-Mortensen reflected in his annual TFWA Conference address. “IATA global passenger numbers for the first six months of 2023 are around 10% behind their pre-Covid level, although the deficit for June narrowed to 5.8%.

“Traffic in Asia is taking longer to return, with the region’s airline passengers in June at three-quarters of their 2019 level, but China’s recent expansion of authorised destinations for group travel will help,” he added. “Overall, ACI World predicts global air passenger traffic of 8.6 billion this year, 94% of the pre-pandemic level. But there are concerns in some quarters that rising airfares and the rising cost of living may dilute the demand for travel.”

To assess the current state of play within travel retail, Juul-Mortensen revealed that TFWA had recently commissioned a report by global management consultants Kearney. Based on a survey of 35,000 travellers and interviews with 35 industry experts, Kearney’s report uncovered an industry badly needing to unite to communicate a value proposition to travellers. Spend per passenger is below pre-pandemic levels, Juul-Mortensen revealed, and price perception within travel retail among travellers compared with domestic markets is often negative.

Colourful occasion

The soft recovery of travel retail this year and rising global inflation remain twin concerns but in truth, there were few glum faces at last month’s exhibition. Among the nearly 120 wine, spirit and beer exhibitors there was no shortage of upbeat cocktail parties and launch events. For instance, Ukrainian vodka brand Nemiroff staged a spectacular sunset launch party for its new ultra-premium line extension LEX by Nemiroff and Freedom to Be marketing campaign on the roof of the JW Marriott hotel, complete with a special performance by renowned Ukrainian singer Maryna Krut and a rousing speech by chief executive Yuriy Sorochynskiy.

“As a brand, we have a very long history and we are proud to be Ukrainians,” Sorochynskiy told guests, referencing the ongoing war in his native country. “We have this indomitable spirit and by being here this evening we are confirming this indomitable spirit and our desire to control our own destiny. We are talking about the freedom to be – this is inside our mind; it encouraged our strength and helped us survive during this turbulent time.”

Meanwhile, Diageo Global Travel showcased its latest innovation from Johnnie Walker down in Cannes. Johnnie Walker Blue Label Xordinaire is described by Diageo as “an all-new hand-crafted blend” created using only one in 10,000 casks from the company’s vast reserves across Scotland. Finished in French XO cognac casks and priced at around £335 for a 1-litre bottle, Johnnie Walker Blue Label Xordinaire has the “depth of flavour” you’d expect from Johnnie Walker Blue Label, according to Diageo but with “an inherent smoothness and sweetness”.

Finally, Brockmans Gin revealed its newest line extension at the show, Brockmans Agave Cut. This limited-edition release is a mix of Brockmans gin and agave spirit and comes close on the heels of the brand’s first new product launch earlier this year, Brockmans Orange Kiss. Limited initially to 9,000 bottles, Brockmans Agave Cut is inspired by the trend among New York bartenders of cutting gin cocktails with agave spirits. Each bottle is individually numbered and packaged in a dark premium gift box.

Away from Cannes, the big news on the retail side of the business last month has to be the announcement that Swiss travel retail giant Dufry now has a new name on the door, Avolta, following its merger with Italian food and beverage (F&B) behemoth Autogrill earlier this year. With expected benefits being cost savings, synergies and a stronger financial position, Avolta now operates in more than 75 countries and 1,200 locations with 5,500 points of sale in three key segments– duty free, travel convenience and essentials, and F&B.

“We see a great opportunity emerging from the changing traveller and customer expectations and their boosted appetite to travel,” said Avolta chief executive Xavier Rossinyol, reflecting on the new brand identity. “Our Destination 2027 strategy set our ambition to create a Travel Experience Revolution, and Avolta is the vessel that will help us navigate this journey with success. Avolta encapsulates our expanded vision and commitment to innovating the travellercentred experience with enhanced digital engagement.”

Rossinyol went on to say Avolta stood for “smart stores and advanced entertainment, digitalisation and omnichannel, hospitality and culinary”. While duty free retail spend per passenger has struggled to grow in recent years, the airport F&B sector has gone from strength to strength, making Dufry’s merger with Autogrill and the creation of Avolta a sound move.