‘Business as Usual’ at ASUTIL conference in Aruba – 05/09/09

ARUBA. Before the first conference session even began, buyer and supplier delegates attending the 2009 ASUTIL Conference were able to sit down face-to-face to conduct serious business at the Hyatt Regency Resort in Aruba.

More than 100 attendees showed up on Wednesday morning, 2 September, to take advantage of the early start to the formal networking sessions, which have become one of the most popular features of the South American Duty Free Association event.

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A second half-day of networking meetings on Thursday afternoon was also fully subscribed. By Friday a total of some 200 people had attended the conference – down about -19% from 2008’s record attendance, but a very respectable showing for an industry event in this troubled year.

The conference itself commenced on Thursday morning with a half day of presentations geared to examine the latest trends in airport development in the region; an analysis of the strategies adopted by two leading retailer to deal with the current crisis; and a persuasive discourse on the sales potential of the untapped market of international air travellers who do not now shop in duty free.

Following welcome remarks from ASUTIL President Daniel Montero and an overview of the regional industry from ASUTIL Secretary General Jose Luis Donagaray, Manuel Gutierrez Sola, Business Manager of Mexican airport group ASUR, and Diego Arrosa, General Manager of DFU, Uruguay, discussed development plans for their respective airports, including their approaches to optimizing duty free shopping opportunities.

Representatives from two of the Americas leading travel retailers – Enrique Urioste, President of Duty Free Americas’ Airport Division, and Marcelo Montico, Business Director of Grupo Wisa of Panama – discussed the hard decisions their companies had to take in order to survive the business crises within their airports.

As Urioste stressed, “We had to control the controllable,” when faced with a series of challenges that ranged from global financial crisis to disease. Following a combination of difficult management decisions and creative ways to increase spend among existing passengers, Wisa’s Montico said his company “is now in a better position to maximize passenger growth”, an assessment echoed by Urioste.

In the final formal conference session of Day 1, Sandra Voucher, Regional Marketing Director of Diageo in Miami, spoke how the industry might double the retail value in the liquor category in travel retail by better engaging and capturing the 80%+ passengers who currently do not shop in duty free in the Americas.

[Note: A very touching highlight of the morning came during Daniel Montero’s Opening remarks when the Association presented Travel Markets Insider’s Lois and Michael Pasternak with an engraved silver plaque in memory of Paul Pasternak, who passed away from cancer in June.]

Conference attendees appeared cautious, but optimistic, about the duty free industry’s chances for recovery in the coming year, as they shared their reasons for attending this year’s ASUTIL Conference and discussed the challenges they still see ahead.

Brown-Forman Director of Travel Retail Americas Monte Wilson commented on his company’s plans for the coming months in Latin America: “We plan on exercising our partnerships further into Latin America. We feel that we haven’t even scratched the surface considering the potential of Jack Daniel’s and Finlandia.

“The upside of the economic crisis is that it forced retailers and suppliers to think outside the box and work harder at analysing brands,” he continued. Wilson said that he saw the ASUTIL Conference as an opportunity to extend the company’s resources in the region by hiring new people, which they will be announcing in the future.

Tito Gonzalez, Area Director Latin America & Caribbean for Groupe Belvedere’s Imperial Brands subsidiary, said that companies will have to become more creative in the way they present their products in order to keep growing in this time of crisis. He and colleague Torben V. Andersen were attending the Conference, he said, “not to push, but to better understand all the operators, who are our customers, so that we can come up with better ways to meet their needs. We need to all work together for a better future.”

Braun Sales Agent for Duty Free & Special Markets Klaus Mellin said that Braun came out of the recent crisis in better shape than many other companies. He and colleague Wolf Ayen are loyal participants at the South American event.

“Fortunately, Braun was not hit so badly by the crisis since we are geographically so spread out and are not dependent on just one market for sales,” said Mellin. “But we want to keep going forward and not lose any ground after the crisis. We always have new products to show and the operators here are interested in what we are showing.”

From P&G Prestige, first time attendee Senior Vice President Alex Botero and Vice President – Travel Retail Katherine Patch-Sleipnes (a familiar figure in the region’s duty free sector) anticipated the opportunities available at the Conference. “We want to understand how the operators are feeling so that we can work with them better,” noted Patch-Sleipnes.

Botero added: “Being new to the region, I look forward to hearing the operators’ personal feedback, since they are much closer to the reality of the market. Having come from the domestic market, I have seen the advantages that innovation can bring to the category. The challenge I see ahead is to create the mindset of change and innovation that the category needs to grow.”

DAY TWO FOCUSES ON INNOVATION

Innovation was one of the themes that ran through many of the Presentations on Day 2. Maintaining – even increasing – service through greater efficiency, imagination and innovation was touched on by Marcelo Levit, Business Director of Spanish airport investment group Abertis, Zeinal Hnos Director Walter Zeinal and Dufry Brasil CEO Jose Carlos Rosa, who discussed the strategies they used to weather the current crisis and what still needs to be done for the future.

The economic overview by Argentine economist and Director of M&S Consultores Carlos Melconian was warmly received by the audience.

The threat against duty free sales of tobacco was addressed by Santiago Llairo, who handles institutional affairs for JTI International. Llairo issued a warning to the region’s retailers, urging them to work with their respective governments to make sure that the regulatory boards have accurate information about the issue.

Keynote speaker Das Narayandas, Chair of the Executive Education Program for Leadership Development from the Harvard Business School gave a rousing, refreshing discourse on ways that retailers can manage customers, deliver excellence and build loyalty.

As always the ASUTIL social activities took center stage. In the true spirit of cooperation and in recognition of the difficult business environment facing the industry, ASUTIL’s social expenses were shared among five of the Association’s retailer members.

The opening reception and a picnic held during the first day of networking, as well as lunch on Thursday and Friday were co-sponsored by Aldeasa, Duty Free Uruguay, Interbaires, London Supply and Zeinal Hnos. All of the formal networking sessions were jointly sponsored by Bacardi and Diageo. The gala dinner- a fun-filled, relaxed party directly on the Aruba beach, was sponsored by Dufry. All coffee breaks were sponsored by The Americas Duty Free magazine.

Nestlé International Travel Retail Business Manager Americas Jean-Michel Juin gave the ASUTIL 2009 Conference high marks: “The quality of the topics covered and the speakers were very good, and the casualness was a plus in the tropics. The extra day for networking at the beginning of the Conference was excellent and was superbly organized,” he concluded.

BOCCANFUSO WINS 2009 ASUTIL APPRECIATION AWARD

The 2009 ASUTIL Award of Appreciation was presented by ASUTIL President Daniel Montero and Vice President Paco Heredia to South American entrepreneur Claudio Boccanfuso, of Beauty Corp.

A proud Claudio Boccanfuso (second from right) receives the 2009 ASUTIL Award of Appreciation from ASUTIL Secretary General Jose Luis Donagaray (left), President Daniel Montero (second from left) and Vice President Paco Heredia (right)

One of the most popular figures in the duty free industry in South America, Boccanfuso has attended every one of the 13 ASUTIL Conferences.

“We were much fewer people in the beginning of ASUTIL, but I was invited to join the Association. I joined because I trusted the operators and I did business with all of them. Here we are 13 years later. This goes to show the value of the people in this industry. I am a little emotional, but thank you all,” said Boccanfuso

FOOTNOTE: Lois Pasternak is Founder and Publisher of Travel Markets Insider , a weekly e-newsletter in PDF format, supported by a twice-a-year print magazine. It is an excellent source of information on the Americas travel retail industry. The Moodie Report and Travel Markets Insider work together closely. To subscribe please contact Lois Pasternak at editor@travelmarketsinsider.net