Suppliers, buyers optimistic about future of duty free industry

Suppliers and buyers who attended the 2014 IAADFS show are cautiously optimistic about the duty free industry.

Suppliers and buyers who attended the 2014 IAADFS show are cautiously optimistic about the duty free industry.

Color the mood cautiously optimistic for the duty free industry among those who attended or exhibited at the IAADFS Duty Free Show of the Americas.

Buyers and suppliers at the show said that increasing numbers of travelers continue to drive steady growth in many categories despite an economy whose recovery has remained slow and a rise in international tensions that could affect travel.

“There is opportunity, with potential for good growth in the channel,” said Ivo Knuesel, region manager of the Americas for Mondelez International, a leader in the confectionary category. “Overall, passenger travel grew and that remains a key indicator.

“The confectionary category has shown resilience even in times of crisis, and this allows us to be stable. Our category has had high single- to double-digit growth in recent years, and I think that will continue.”

A common theme among many suppliers and buyers is that an affordable price point will be an important factor driving success, while premium products may be able to supplement the growth.

“Overall, we are doing OK,” said Klaus R. Mellin, sales agent for travel retail and special markets for Braun. “Our growth rate in Latin America has flattened, but Argentina, Brazil, and the borders are doing well.”

Braun, which makes a variety of small electronics, from clocks to shavers to epilators, has had consistent sales across many of its categories, but less expensive hair-removal devices are proving more popular than more expensive beauty treatment options. Another well-established product that continues to do well is small, durable clocks, which many travelers like to use despite having clocks and alarms on smartphones, he said.

Duncan Baldwin, regional director for Scotch whisky distiller Angus Dundee, sees the industry as being on solid ground, but with potential to do more.

“We see great value in duty free,” he said. “We have a single malt that plays well in the UK, Europe, and Dubai airports. “Scotch has a very good reception, and it is part of ‘premiumization.’ There are international travelers happy to pay large sums for aged whiskeys they may not find in the domestic market.

“We have had some positive years, and it has picked up on the last two years.”

Cross, well-established in the gift and stationery categories, also has a positive view of how the duty free industry is doing, said David Ferreira, head of global travel retail for Cross.

“The industry is growing worldwide, with growth predicted for several years,” he said. “With some restrictions being reduced, it is easier to travel, and the industry will keep growing. We think it is very positive.”