KT International (KTI), which emerged in 2008 from the break-up of the Bulgarian State Tobacco Corporation and now combines over 130 years of heritage with state-of-the-art production capabilities, is set to showcase its range as a Silver Partner at the upcoming Moodie Davitt Virtual Travel Retail Expo.
KTI, one of the fastest-growing independent tobacco groups, aims to leverage the event to extend its network globally. Its mission, it says, is to exceed customer and consumer expectations through innovation, commitment to quality and long-term business relationships.
The Moodie Davitt Report spoke with KT International Chief Commercial Officer Stuart Buchanan.
The Moodie Davitt Report: What is KT International’s major focus at the Virtual Travel Retail Expo?
Stuart Buchanan: We are consistent in our corporate strategy to expand the ranges of our global brands, The King and Corset.
Staying true to our corporate philosophy of quality international brands at accessible price points, we believe that premium is a state of mind not an attitude.
Whilst distinctly premium in its benefit, our travel retail and domestic market pricing strategy is to ensure that The King and Corset retail in the premium segment but remain accessible to those who desire them.
This is a key feature we would like to showcase in today’s tough economic climate: to give back to the consumer and show that international quality premium products do not have to come with a hugely expensive price tag.
What brands will you showcase through the Expo?
The King is a leading brand in the KT International portfolio with a global domestic market and travel retail footprint. It is rooted in tradition with over 70 years of quality and heritage at its core, yet we have ensured that the brand has evolved with new formats and a progressive constant change of design and style.
As The King has evolved to meet the changing needs of consumers around the world, part of what we will be showcasing this year is the new Superslim range.
True to our philosophy of always giving more value, the new range comes with more tastes. King Rainbow Superslim features Strawberry, Cherry and Apple Mint flavours; Mango is in the pipeline. To deliver these tastes, we have developed an innovative Thread Plus Filter which ensures taste and aroma delivery beyond the ordinary.
“The key to our growth is that our pricing philosophy ensures that consumer prices are market relevant and accessible”
If we put this into context with the rest of The King range – including, Nano, Queen Size Compact, Carbon Core and Centrio (tube) filters – we have a line-up of formats that meets most consumer needs.
What we pride ourselves on, however, is that quality and a range of formats are only part of the equation of our success.
The key to our growth is that our pricing philosophy ensures that consumer prices are market relevant and accessible. Whilst our brand is certainly not a price discounter, we ensure fair margin through the supply chain.
This has been our philosophy for a number of years but this year it has been particularly relevant. As the global economy has contracted and disposable income has become a key concern for many households, consumers have become aware of abusive pricing. We have seen a shift to price-accessible, reliable, quality international brands and our 2020 performance stands testament to this.
Corset, our second global brand, takes inspiration from the fashion world of haute couture. This year we will present the latest line in our premium Shellpack range.
Launched in 2016, the world’s first Shellpack won international awards for design and innovation. Founded on the success of our first generation Shellpack, the 2020 edition’s design takes a new direction. It moves away from minimalism in design to ornate detailing, complex movement and high tactility that are all inspired by the fashion world.
This has been achieved through new technologies in both materials and printing techniques that are not only inspirational to those who crafted it but, most importantly, to consumers who have the courage to be independent, inspirational and to stand ahead of the crowd.
KTI is also proud of the fact that while, not only being the world’s first Shell pack and clearly a premium proposition, the 2020 edition always retails at a point that ensures affordability to those that desire it.
In what can only described as a difficult climate, what are your major targets?
Our focus remains on Europe where we have a significant footprint domestically. This is not a surprise considering our multimillion Euro investment in the relevant systems and technologies for EU regulation compliance, including the 2019 Track & Trace.
We are now concentrating our efforts on Eastern Europe, and at the same time we continue our growth in the Middle East and North Africa. Asia is also a region that we believe has potential to be further explored and developed and our future plans are to expand our presence in this region as well.
In your opinion, how has COVID-19 impacted the wider industry and what dynamics will drive the next stage in travel retail’s evolution?
There are still a lot of restrictions imposed on travel worldwide and a lot of uncertainties related to the unpredictable spread and peaks of the pandemic by regions. We expect a very slow return to normal, but under ‘normal’ we understand that the new reality will be below pre-COVID levels, taking years to fully recover.
With reduced travel, and a restricted global economy, we foresee two polarised opportunities. With people travelling less, the opportunity for global travel retail gifting might re-establish some presence. However, linked to this, will be a consumer need for value with accessible pricing, which as a scenario positions KTI well for the future.
How should the channel engage with travelling consumers to ensure a sustained recovery?
In-store sampling and promotions could become problematic so the future may be more focused to digital interactions and promotions where consumers have the opportunity to engage a brand pre and post check-in.
We see digital ‘on boarding’ becoming a key area of contestable space for big brands versus the current reality of shelf space and store visibility. This would be particularly true in an environment where browsing is limited by one-way consumer traffic and low levels of staff engagement.
“While this pandemic has been traumatic for millions of people around the world, I hope that in the context of global travel retail that some positivity comes out of it. That could be a realisation that the channel is not only about big luxury brands; it creates space for new entrants”
And your view on industry partnerships in this new era for travel and travel retail?
I think this year’s situation has come as a shock to many in the industry with a realisation that high pricing, expensive listing and promotional fees have created a historical presence for big brands and large corporate multinationals.
When KTI started its international journey a number of years ago, we found it very difficult as a newcomer to build presence in the channel. Our success has been achieved through years of perseverance supported by a professional approach to consumers and what are now very good retail partners.
While this pandemic has been traumatic for millions of people around the world, I hope that in the context of global travel retail that some positivity comes out of it. That could be a realisation that the channel is not only about big luxury brands; the industry creates space for new entrants.
Further to this, digitalisation and shifting to online interactions may also create new focus for more commercial partnerships. The Virtual Travel Retail Expo is a good trial to check the effectiveness and sustainability of this strategy.
“Like our brands, KT International is always changing, always original but our philosophy of quality International Brands at accessible price points still remains”
In such a challenging travel retail market, how will you ensure that KT International’s brands stand out?
As mentioned earlier, the world’s first Shell Pack, our Centrio filtration system, dedicated flavour ranges and global awards for packaging design all stand as testament to our current success.
We believe this philosophy continues to apply in the new travel retail world, but the execution will just be focused differently.
Like our brands, KT International is always changing, always original but our philosophy of quality international brands at accessible price points still remains.
