SWITZERLAND. Alain Bonardo, owner of Bonardo Travel Retail, professed himself “betrayed, shocked and surprised” by the decision of Swiss Delice to terminate its travel retail agency contract with immediate effect last November. In a frank interview with The Moodie Report co-publisher Martin Moodie, he talks about what happened and about his new life and new brands.
Delice’s decision to go it alone brought an end to a successful six year partnership and left Bonardo scouting for new brands in an effort to repeat the success story. Recently, the company announced its return to the sector with contracts from three premium Swiss chocolate manufacturers. The brands – Villars, Munz and Swiss Mini Golds – will be presented under the umbrella concept of “Swiss Chocolate Temptations”.
TMR: From an external perspective, the Swiss Delice termination of your contract seemed to come out of the blue. Did it?
Alain Bonardo:This event is what I would call an “Epiphenomenon” compared to the difficult time the travel retail industry is facing today. We have put the experience with Swiss Delice behind us. I have personally more than 25 years of credibility in the Travel Retail industry/markets and that should make the difference when people listen to different stories.
I am particularly well-known in the duty free industry for doing business with a high standard of ethics and I would like to believe that today’s world is acting in the same way. Just to give you an example, I have never signed or been asked to sign any contract with our exclusive agents during my whole career in duty free and this, for the simple reason that I was personally trusted and I am very proud of that. I have always respected my principals and my customers, small or large.
We are now fully committed and highly motivated by our new projects “Swiss Chocolate Temptations” and “So”¦?” fragrances for teenagers, which takes 150% of our time. We therefore look forward to a very promising future and believe me, I do not have the time to look behind. The past is over and I must admit that “Swiss Delice” was a fantastic experience for me and for my team.
TMR: What led up to that termination and what was your reaction to it? What’s the state of play with you and Delice now?
Alain Bonardo: Life is full of many unexpected surprises and is sometimes difficult to explain. As I said before, Swiss Delice was a great experience for me and for my collaborators. In 1996 and based on my knowledge and experience of the industry, I was approached by the Migros Group who were interested in starting up a duty free activity with their own brand “Chocolat Frey”.
I therefore developed a basic assortment, which was finally launched under “Swiss Delice”, a totally unknown brand which reached the level of other key Swiss chocolate suppliers. The challenge was interesting and highly motivating and in the end, the success speaks for itself.
Duty Free is a very specific market that requires expertise, knowledge and humility that take years to acquire and operators deserve to be served by experienced people in this field of activity. Duty Free is far too important to be handled by non-specialists.
Anyway as the saying goes “the show must go on” and this has always been our state of mind. The relationship between Swiss Delice and Bonardo Travel Retail is now over and we are more than happy to have the opportunity to launch a new concept.
TMR: At the time, you announced your determination to continue within the confectionery sector and work with new suppliers. That’s exactly what you have done. How tough is it going to be starting again from scratch with new brands and not necessarily ones well known in travel retail?
Alain Bonardo: Duty free and especially the confectionery business are what I enjoy doing and also what I am best at doing. I am a person who always looks straight forward and not in the past. It was therefore immediately obvious after our split with Swiss Delice that we would be looking for a new project in the same sector.
The week-end after the break, we spent the whole Sunday in the office elaborating possible new concepts and ideas. The same day and due to the gravity of the situation, it was necessary for me to discuss with Clive de la Roche and Nathalie Cline about their future within Bonardo Travel Retail, knowing that both of them were repeatedly approached by external organisations that were ready to hire them.
I was extremely pleased to hear that both of them refused to leave the boat and wanted to stay on with me and start a new project within Bonardo Travel Retail, despite the uncertain future and financial sacrifice that became necessary.
I was also very pleased and impressed with the support we received from our customers and this is the kind of message that pushes you to go ahead and is highly motivating. It is evident that especially today, considering the negative situation prevailing in our industry in recent months, we need the backing, support, confidence and understanding of our purchasing partners.
Starting from scratch is something I am used to. Just to refresh your memory and back in 1980, as area manager for the Nordic countries within Nestlé, I was asked to set up a duty free strategy and assortment for the Group after having presented a basic study to the Nestlé Management concerning the huge duty free sales of confectionery in Scandinavia at that time.
At the very beginning and for at least one year, I was on my own, travelling left and right, talking with many different operators I had never met before in order to make as many contacts as possible and to acquire the basic knowledge of what “duty free” was all about. This was the beginning of Nestlé’s duty free business and thereafter I lead the Nestlé team for approximately 10 years.
With Migros and Swiss Delice, I also started from scratch, but this was different because based on my long experience in the duty free industry, I knew exactly what was required and it’s important to remember that I was one of the pioneers who created exclusive packs for duty free.
So in a nutshell, starting from scratch once again is not something that frightens me. Of course, we could have hoped for a better time to launch our new concept, but I am confident that with our assortment and the help or our partners, we will be able to achieve our goals.
TMR: What were your criteria in selecting the new brands to work with?
Alain Bonardo: We have been contacted by many chocolate producers and all of them expressed their keen interest in working with us. This was an advantage for us and we could afford the luxury of choosing the supplier/s that fell in line with our strategy.
We started by defining a strategy in the direction we wanted our company to go. It was clear to us that we would carry on in the confectionery business. The next step was to find a positioning that would allow us to offer the trade a different approach to Swiss confectionery so that the consumer can purchase a unique and different product (more selective).
TMR: What are the immediate priorities for rebuilding the business?
Alain Bonardo: The war in Iraq and the SARS crisis are certainly not helping the business and one would normally hope for a better timing to launch new products. But let’s hope that the situation will soon be back to normal and nothing “damageable” will prevent people from travelling again. As far as we are concerned, this is business as usual and we are prepared to fly to the Middle East and to Asia tomorrow if necessary.
We will be supporting our project from two different angles
• Immediate presentation to our customers of our selected duty free assortment
• Initiate talks with suppliers concerning development of new packs for duty free
This task will be headed by Nathalie Cline in close cooperation with the marketing team of Maestrani / Munz, Villars and Sechan (some projects are already in the pipe line)
As soon as the final agreements with our partners were formalised in late February, our customers were informed about the new concept “Swiss Chocolate Temptations” and samples were sent to all. Initial talks have already taken place with some leading European duty free operators and most of our customers will be visited in the following months.
The initial response to our concept has been very positive and we expect to receive confirmation of first orders before the end of April. The full range was recently presented to the trade during the IAADFS in Orlando at the end of March and the first feedback was positive. Customers were very impressed with the premium quality of products and also with the originality in packaging.
Asian and Middle East customers will be visited in April or May and we will also have the occasion to meet them at the forthcoming TFWA Asia Pacific at Singapore. I wish also to underline that we have received a lot of positive messages from the duty free industry and especially from the operators. This support has been warmly welcomed and highly appreciated in terms of the perspective of our project.
TMR: As you say, you have been something of a pioneer in duty free confectionery. What are the key changes you note in the business today from where it was?
Alain Bonardo: Compared to the early days we have seen a very positive change. In the eighties, confectionery was given very limited space. It has now earned the privilege of being part of the basic assortment in all airport shops around the world. In view of this important development, confectionery is now presented in a more professional manner and the sector obviously continues to grow. Producers also understand the importance of travel retail sales and have created innovative and exclusive packs.
We can also see that there is more “business awareness” than in the past. What I mean is that there is a strategic B to C approach now, both by suppliers and operators who work hand in hand for that. If you take for instance some dedicated corners (e.g. kids), I think it is the best B to C move one can make, as segmentation inside the shop is the future for the development of our business.
TMR: And what do you believe are the major a) issues and b) trends in the business today?
Alain Bonardo: Today, costly and upper-class branded display units are now being used by the operators and most of the space is in fact dedicated to the same well-known and multinational brands. The negative effect of this move is that we will be soon reaching some kind of uniformity in the design of shops and also some kind of limitation of the offer since less space is now given to smaller producers.
In my opinion, this is certainly not the best way to attract frequent travellers in the shops. We will have to make sure that some kind of uniformity does not kill the notion of exclusivity that our customers are looking for.
As I stated before, I would do it the other way round, with dedicated corners for kids, teenagers, gifting and so on, in order to make life easier to the consumer. Especially in confectionery, our consumers do not necessarily look for a specific brand, but more for a specific item such as, for example, gift boxes or kids products.
So, for instance, if he can find all the brands for chocolate gift boxes at the same place, it is more convenient for him. This is the reason why I’m not too keen on brand corners, which are in essence to the advantage of the suppliers, not the consumer.
The retail price is also a key issue and landlords/operators have to become more reasonable when negotiating new concession.
TMR: What are your thoughts about Dan Kongsted’s views (see earlier interview) expressed on TasteofBusiness that confectionery faces a major image crisis in duty free? That it no longer represents value for money?
Alain Bonardo: Dan is right when he is talking about the pricing issue and for obvious reason this is especially true in Nordic countries since the abolition of intra EU duty free activities.
Customers are now beginning to realise that most products can be found cheaper on the domestic market. This is a fact and we must accept this new situation and find solutions to attract people into the shops.
I am however not totally sharing Dan’s point of view when he is suggesting selling selected well known lines at deeply reduced prices. Airport shops should not become an extension of local supermarkets but should remain the exclusive “boutique” selling exclusivity at an affordable price.
People passing through airports are living a “special” experience (holiday, business trip) and are therefore expecting a special treatment, which means a cosy environment, open and up-market shops, exclusive products and also good prices. It’s important to continue to make them feel comfortable and excite their purchasing will.
It means that suppliers and operators should be more innovative, creative and exclusive and landlords less greedy. As I stated before, innovative could mean, for instance, dedicated teenagers and kids’ corners in main shops that will be selling all kinds of products for the teens and children but keeping in mind the strong “gift” connotation as adults will be the main buyers.
TMR: Looking back over your years in the business, what has been the single highlight?
Alain Bonardo: I would say the “abolition” of duty free sales within EU states back in 1999 and the remarkable way the industry has negotiated this dramatic turning.
TMR: Who is the figure you have admired most a) at retailer level and b) from the supply community?
Alain Bonardo: I have always been very proud to have established a close and trustful business relationship with our customers and this is certainly one the reasons of our success. I am convinced that most of our business has been initiated, thanks to our integrity and our business ethic before the products we have been offering.
Our industry is made up of many remarkable people but there is one person in particular that I will always remember with emotion from my very early days in duty free and this is Karl-Heinz Hofrichter, purchasing manager with Gebr Heinemann in the early 80s. Mr Hofrichter was such a straight gentleman with whom meetings lasted till 9 pm in his office overlooking the port of Hamburg and I have learned a lot from just listening to him.
TMR: Any final thoughts on the confectionery sector or on travel retail?
Alain Bonardo: The world is changing fast and so is our industry; duty free is not anymore what it used to be in the late seventies or early eighties and we all have to think about our industry in a totally different and innovative way. It is important to always stay sharp and not rest on our laurels. We constantly have to be aware of the changes in needs and desire of our customers.
This is the reason why, close relationship and collaboration between operators and suppliers is a necessity. It allows all players to maximise their chance of success.
