IAADFS evolves; Americas summit to move to Miami

By Luke Barras-hill |

The International Association of Airport and Duty Free Stores (IAADFS) has adopted a new identity: the Duty Free and Travel Retail Association of the Americas.

In a dual announcement, attendees to the opening conference of the Summit of the Americas on Monday 15 April heard that this year’s event is the last to take place in West Palm Beach before moving to Miami in 2025.

Speaking during the opening plenary session, IAADFS Chairman René Riedi confirmed that membership to the new entity is now open to stakeholders across all channels (whereas previously airport duty free concessionaire companies only enjoyed the benefits of full membership, with additional associate supplier and buyer membership tiers – Ed).

Categories have been streamlined to three: operators, suppliers and honorary members in a move designed to foster greater inclusivity and representation while helping to simplify the organisation’s structure and broaden participation.

Americas performance update

TRBusiness understands the decision to switch to the new namesake was ratified some time ago, but the announcement was pending outreach by IAADFS to its members and to vote the new Board members in.

“Internal by-laws have prevented us from admitting other members aside airport duty free operators and we felt this was not correct as travel retail is not just airport duty free,” Riedi told TRBusiness on the sidelines of the conference.

“We realised during Covid when we asked government to support us financially with relief that we, as duty free operators, were very small as an industry and needed to associate with others and open up.”

Suppliers now have a more prominent role as supporting members with a stronger voice on the board.

René Riedi, Chairman, IAADFS: “Our association stands at the cusp of transformation. Together let us embrace this journey with a shared commitment to excellence, inclusivity and continued success of our industry.”

As reported, IAADFS appointed three prominent executives from the supplier community to its Board of Directors last month.

Greg Ford, General Manager, TR Americas, Pernod Ricard; Felipe Grant, General Manager, Puig Travel Retail Americas; Markus Suter, Market Manager GTR, The Americas, Lindt; and Julia Seve, L’Oreal Travel Retail Americas Managing Director have all taken on two-year mandates.

In February, Starboard Cruise Services President and Chief Executive Officer Lisa Bauer was named to the board, bolstering the organisation’s retailer representation.

Previously, supplier partners could avail of membership of the association but were not entitled to join the board or vote.

“This shift aims to give suppliers a stronger voice and more engaged role in the association,” said Riedi.

During his opening remarks to delegates, the Chairman offered an appraisal of the Americas.

“Despite the challenges posed by the global pandemic, the spirit and of the DF&TR industry remains. Our industry’s resilience reflects its collective dedication to excellence and innovation.”

In the wake of the worst crisis in recent history, Riedi insisted that the DF&TR industry has staged a remarkable recovery with international departures in North America surpassing pre-Covid levels with Latin America not far behind.

He used examples of air traffic growth at Dallas Fort Worth and Miami International Airports as examples of the industry’s resilience in the face of adversity.

“Overall, forecasts for 2024 reveal a promising trajectory with an anticipated 8% increase in passenger numbers.

A panel discussion entitled ‘The Americas – Change and Promise’ featured contributions from Greg Ford, General Manager TR Americas, Pernod Ricard; Felipe Grant, General Manager, Puig Travel Retail Americas; Markus Suter, Sales & Market Manager GTR The Americas, Lindt; and Nuno Amaral, Chief Operations and Business Development Officer, ARI.

“In Latin America, recovery has been swift too with projections signalling an unexpected 7% growth in 2024 compared to 2019,” he continued, while in the Caribbean he cited airport examples such as Punta Cana and Santa Domingo in the Dominican Republic, Montego Bay in Jamaica and Cancún in Mexico as high performers

He then moved to address footfall, penetration and conversion dynamics.

In North America, the share of store visitors witnessed a noticeable increase of +6% versus 2019, underpinning the growing interest among travellers in duty free offers.

Conversely, Latin America footfall is down -4% on 2019, indicating a shifting trend in consumer behaviours across the regions.

Despite the fluctuations, North America conversion rates have grown from 55-64%, while South America has witnessed a jump from 48-55%, demonstrating consumers’ positive intent to product offerings.

Confectionery, perfumes and alcoholic beverages are categories increasingly tilting towards premiumusation.

“Despite the overall increase in conversion rates, the performance of specific product categories varies. Alcoholic beverage and perfumes & cosmetics experienced growth compared to previous years, however, confectionery observed a slowdown, signalling a potential shift in consumer preferences or maybe external factors influencing purchasing decisions,” said Riedi.

Miami new home for Summit in 2024

Turning to advocacy, Riedi emphasised that the association remains steadfast in its commitment to defending the industry’s regional interests.

The association’s lobbying efforts span global support to the Duty Free World Council across a range of areas, while addressing regional specific issues such as gate delivery in North America, which requires travelling shoppers to pickup their purchases before boarding at the gate rather than on receipt of payment at point of purchase instore.

This can present an inconvenience and deterrent to sale while incurring operational costs by using staff to transport goods to gate.

View from the IAADFS Summit of the Americas convention hall. As in previous years, the split of exhibitors is strongly tilted towards wines & spirits brands and suppliers, in addition to some confectionery and tobacco firms.

“We have our own advocacy issues that we are discussing, assisting the Duty Free World Council on global issues such as illicit trade, as a very good example, but also regional projects we’re working on such as gate delivery,” Riedi told TRBusiness.

“We want this to be abolished as it makes no sense. Today, there is technology to replace gate delivery without risk. This is not something we can do easily; you need to change working practices of customs etc.”

Riedi flagged the Trusted Transparent Secure Campaign and the evolving development of the DFWC Academy.

Plaudits to David Bernstein

In a change of direction, the IAADFS Chairman then moved to pay tribute to David Bernstein.

The erstwhile President and founding member of IAADFS, long-time Board Member, and founder of Duty Free International (who is not present at the Summit this year), has taken the decision to step down from his position on the Board.

“We express our deepest gratitude for his leadership, vision, success and all his future endeavours,” said Riedi. “But above all, we wish him good health.

“David has been a genuine pioneer and leader during his time in the industry. He has played a crucial role in the industry, from its infancy to what has become, today, a global powerhouse. He led the effort to help legitimise and qualify the DF&TR industry as a recognised global force.”

Riedi says IAADFS is focused on opportunities to actively collaborate and partner with other organisations as it implements the changes to its structure to provide an efficient and streamlined model for the industry, including looking at cost-efficient structures and services.

“Our association stands at the cusp of transformation. Together let us embrace this journey with a shared commitment to excellence, inclusivity and continued success of our industry.”

On that note, he sounded the end of the association’s partnership with the Palm Beach County Convention Center as the event is set to move to Miami next year.

“This year’s event at West Palm Beach marks the end of chapter and we are grateful for the three years of service. Miami’s dynamic energy, ease of access and global appeal aligns seamlessly with our commitment to innovation and growth. As we bid farewell to West Palm Beach, let’s embrace the opportunities that Miami has to offer for collaboration, innovation and the continued success of our industry.”

Panel debates demand and supply 

A panel discussion then ensued featuring Greg Ford, General Manager TR Americas, Pernod Ricard; Felipe Grant, General Manager, Puig Travel Retail Americas; Markus Suter, Sales & Market Manager GTR The Americas, Lindt; and Nuno Amaral, Chief Operations and Business Development Officer, ARI.

Commenting on their respective businesses, Amaral said Chinese passenger volumes have not yet fully restored in Canada, where ARI has several operations, but more broadly the indicators across the business have bounced back to pre-Covid levels.

ARI, like Avolta which also boasts operations in the country, have suffered with a paucity of Chinese travel volumes in recent years.

“That has had an impact, but likely we’ve been able to recover without the Chinese passengers, but obviously we miss them,” noted Amaral.

Greg Ford pointed to the “rollercoaster” experienced in the past few years, with the company witnessing a strong rebound in its Americas business post-Covid and bounceback in travel numbers stimulated by government incentives and other mechanisms. He said it’s an interesting moment for the company.

“Coinciding at the time was a lot of pressure on supply chains,” continued Ford. “We had a lot of opportunity but couldn’t capitalise on it. We saw a big increase in spend initially; what we are now seeing in past 12 months is a tougher picture. Ultimately, we’re seeing a decline in spend driven by economic factors we know about as people get through these incentives.”

Heavily travelled routes US routes to Cancún and Caribbean came back heavily with triple-digit growth to these destinations, delegates heard.

Ford said there remains an appetite for premium and ultra premium brands, but noted that the onus remains on connecting with passengers to capture purchase moments, notably at airports. On cruises, occupancy levels are good and healthy order books in the coming years bode well for future growth.

On the US spirits market, he said it’s built huge categories such as tequila that has lit the spark and that appeal has now spread internationally.

Markus Suter, Sales & Market Manager GTR, The Americas, Lindt, confirmed a strong 2023 for the confectionery firm in Argentina due to dual currency exchange rates. Progress was Slower in Brazil, but mostly back to 2019 levels.

In terms of consumer behaviour, he touched on the greater demand for premium chocolate, quality ingredients, clean labelling and higher cocoa content in products.

The trade exhibition’s three-year partnership with the Palm Beach County Convention Center ends this year and will move to Miami in 2025.

“One problem we face is the high living cost; for the time being, people are still willing to pay a premium for chocolate, but we face really high cocoa prices and we’ll need to increase these and work closely to keep it attractive for consumers,” he stated.

Asked by Riedi how the companies are increasing conversion rates and footfall, Amaral said ARI has been focusing on improving its value proposition and the fundamentals just require dialling up.

Addressing price perceptions

He said price perception is a challenge sometimes at airports, particularly among Generation Z, and how to entice them.

“But at the same time I think we’re in a a privileged place in terms of retail,” he added. “The shift into online and bricks and mortar closing shops, I think we’re one of the few retail channels consistently growing year on year. As an industry, we haven’t really nailed online. We are in a good place in terms of our growth but we can do a lot of cross-fertilisation – F&B, convenience and gifts and several things.”

Puig’s Grant singles out innovation in the business as a key opportunity.

Conversation then shifted to the role of local products in influencing the emergence of global brands.

On the opportunity and threat, Suter acknowledged it can be both, using the example of Mexico, where more space is afforded to local products that can be to the detriment of global brands.

“I see a channel trend that confectionery is losing space compared to many local markets in America,” he stressed.

Ford says Pernod Ricard’s portfolio has global reach with a local heart and the opportunity to sell a local brand in a local product is an important opportunity.

“Making global brands locally relevant can be a challenge,” he admitted. “We can put the pressure on the brand companies to innovate.”

Amaral says from a business development perspective, airport concession tenders are increasingly demanding that local elements, more often than not, are included in concession bids.

All the panellists agreed that technology will continue to play an important role in travel retailing with more seamless, connected purchasing and experience-led engagement.

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