Cruise retail • Carnival Cruise Line
Reflections on the past,high hopes for the future
Erik Juul-Mortensen will step down as President of Tax Free World Association (TFWA) when his tenure ends in December, having serving 19 years in the role. He has been a key figure in the association’s development, and a driving force behind the evolution of its exhibitions, conferences, research services and charitable activities. Here he reflects on TFWA’s achievements, challenges and the role it should occupy in the industry today, as well as offering some advice to his successor. By Dermot Davitt.
The Moodie Davitt Report: Erik, how will you reflect on your time as President? What have been the highlights?
Erik Juul-Mortensen: There have been numerous highlights and achievements over the years with which the members, the Board, Management Committee and indeed the team in Paris can look back on with pride. I am particularly proud that all of this has happened while staying true to the original motto: ‘By the trade, for the trade,’ and by listening and learning, and never forgetting our reason for being.
It has been a pleasure to see – and to be part of – the growth of the two events, TFWA World Exhibition & Conference in Cannes and perhaps in particular the TFWA Asia Pacific Exhibition & Conference in Singapore, which was only five years old in 1999 [when I became President].
Of course 1999 was not the easiest year in the industry with the uncertainty that the abolition of intra-EU duty free sales brought. The event in Cannes that year was the place for numerous meetings, discussions and agreements planning the ‘new’ future in a reality where the global concept of duty free was shattered. In spite of the loss and all the difficulties the industry fought back and more or less reinvented itself.
Over the years TFWA has developed significantly on both the conference and workshop elements of the Association very much for the benefit of the entire industry. In recent years we have also invested considerably in research for our members, something we know is appreciated.
TFWA has also taken on a much more active role in defending the industry against challenges by supporting and working closely with the Duty Free World Council (DFWC) and regional trade associations.
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Erik Juul-Mortensen: “TFWA only has a justification as long as we keep delivering on the expectations of our members and the industry at large”
The creation of TFWA Care was another highlight. The interest and support from our members have been overwhelming, and personally I am proud to be part of an industry which is about ‘having it all’, but which so positively wants to give back.
On the other hand, what goals would you have liked to implement that you could not?
A global industry with the size and reach of ours needs reliable global data at the same granular level which brands find such an invaluable tool in domestic markets, and which can be used by stakeholders to measure and plan for the future. TFWA, supported by some key brand members, has worked hard to implement this through a major project, but for a number of good reasons we have so far been unable to achieve this. Together with DFWC we are embarking on a new project, and I remain hopeful and positive that we shall succeed this time. The industry needs it and deserves it.
In what important ways has TFWA evolved in its 30-plus year history? How has its role and remit changed within the industry and how would you describe that role today?
The mission of TFWA, an association of brands, is “to identify trends and opportunities, build awareness and provide a business platform for the global duty free and travel retail industry to prosper.”
That mission is still valid, but the way we cover that mission has evolved significantly over time.
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As you know, TFWA started as a single event – a global conference and exhibition on an industry-led, not for profit basis. A decade after the first ‘World Exhibition’, TFWA launched the Asia Pacific event in Singapore (1995), with a strong conference element alongside. It has grown apace, matching the increasing significance of the Asia Pacific market, and is complemented by the China’s Century Conference which takes place every two years.
The latter was set up to give members a better understanding of the Chinese market both within China, and of the upswing in Chinese travelling overseas.
TFWA is now recognised as the industry’s key platform for new products, new brands, innovation and is now the THE meeting point for the global industry in Cannes, and in the biggest single market – the Asia Pacific region. It supports its members and the industry at large with an increasing library of bespoke research.
But beyond the day to day, it has worked hard to ensure that the industry builds up the network of regional associations that it requires to defend its interests and create the best possible operating conditions. TFWA was instrumental in the setting up of the Asia Pacific Travel Retail Association (APTRA) the Duty Free World Council (DFWC), and the Middle East and Africa Duty Free Association (MEADFA) for which we also organise and run its very successful annual conference.
TFWA also works very closely with ETRC and enjoys a close relationship with IAADFS, ASUTIL and the FDFA, which together cover the Americas. As President I have been active in this field, and vocal about the need for all companies to join and support their regional trade associations. Without the work they do, our industry would not be trading as it does today. And we still face some really big issues which won’t go away and which have the potential to damage our business. In summary, the reputation and scope of TFWA has grown far beyond what we could have imagined 30 years ago.
The association needs to be relevant for all product categories, large and small, well-established and emerging, says Juul-Mortensen
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Electing a successor
The TFWA President is elected each year for a 12-month period at the TFWA Board and Management Committee meeting in December (the Management Committee is elected by the Association’s members every two years at the October AGM).
According to the association’s statutes, the President can be elected from within the members of the TFWA Management Committee, or from outside the membership of the Association – “should any candidate be able to demonstrate relevant ‘experience, knowledge of the association’s activities or specific skills”.
Members of the TFWA Management Committee have until 14 December this year to present their candidature to replace Erik Juul-Mortensen. Written applications from non-Management Committee executives must be received at least four weeks before the Management Committee meeting in December.
How do you view the health of TFWA today as an organisation, from its structures to its decision-making processes? If there is one thing you would change in this regard, what might that be?
In TFWA today we have a strong and highly experienced team that is committed and driven to deliver on all objectives. Above all it understands that a membership, not-for profit association requires a different mind-set to a pure commercial business. We have good and well-functioning systems in place which enable us to deal with multiple events. Over the years we have met crises with rapid solutions – such as the move to Marina Bay Sands in Singapore when Suntec failed to meet its commitments at the 11th hour.
I believe that the structure that has prevailed from the beginning still serves us well and I see no reason to change it. A Management Committee elected from the membership by their peers, who in turn elect the Board, ensures that the membership has a strong voice in the future direction of the association. Through the network of Sub-Committees it also has an influence on how TFWA’s events are run. Inevitably this sometimes leads to a longer decision-making process, but it is fair and objective – and the Board can act swiftly when required.
The President can be elected from the Management Committee or be brought in from outside, in which case a small honorarium can be paid. I believe that having a full-blown highly paid position would not be in line with the spirit of the association which is to serve the industry. For me, it has been an opportunity to remain part of the industry which I love, and to give back to that industry.
“As an industry we are still failing to ensure that the cost and reward of a presence in this industry are shared appropriately”
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What does TFWA need to do in the years ahead to maintain and enhance its relevance?
The team in Paris has heard me say this many times before, but for me it is as relevant now as when we started the association in 1984: TFWA only has a justification as long as we keep delivering (in fact over-delivering) on the expectations of our members and the industry at large. Fortunately, listening to the response we get from our members and other industry stakeholders, that is still the case.
The TFWA events must continue to provide the ultimate meeting opportunities for the industry. For the members to meet with their counterparts on the retail side to present and discuss their brands and brand plans, and for industry leaders to meet each other.
TFWA events must continue to cater for and be relevant to all product categories within duty free and travel retail. That is so whether it is established brands or new and upcoming brands and whether brought to the market by smaller companies or the big multinational brand companies.
Our industry is still relatively small compared to some others. It is very much a ‘people’ industry and the products we sell are not commodity items. They live, breathe, sparkle and appeal to all the senses. For that reason I believe that TFWA and its events will remain relevant while they provide the opportunity to meet, exchange views and do business.
Doing business is not simply generating an order. It’s about seeing and understanding the new trends, having the opportunity to meet with senior management who are not always accessible and setting in motion the plans for successful business over the next trading period. That cannot be done through video conferencing and other technological platforms.
From small beginnings: The early days of TFWA
Erik Juul-Mortensen remembers well the early years of industry shows, before Cannes and Singapore eventually took their place as key events in the industry calendar.
In his contribution to a special title* published last year by The Moodie Davitt Report to mark the 70th anniversary of the industry’s founding, he said: “From the very beginning the trade shows served a very good purpose bringing the industry together in one place, and giving the brand companies an opportunity to showcase their products to the industry.
“The ability to network was important – in the course of a few days you were able to meet with customers, press and colleagues from the industry, including from competing brands and companies.”
The first Duty Free Symposium took place in 1973 in Amsterdam. It was managed by International Tax Free Trader magazine, the first dedicated title for the industry, which was launched in 1972. [The journal’s Vivian Raven and Julian Fox would later create Duty-Free News International in 1987, with Doug Newhouse and Martin Moodie among the senior members of the team that helped grow that business, which was sold to Euromoney in 1995.]
The Amsterdam event was followed by others in Monte Carlo, Paris, Copenhagen, London, Cannes and Málaga, with strong visitor and exhibitor attendances. But by 1983 dissatisfaction over the Duty Free Symposium run by Tax Free Trader had begun to spread, amid concerns over the costs of exhibiting.
This prompted a new supplier-led initiative to create an association, and an event, that it was felt would better serve members’ interests. Six people signed up to create a new association, namely Jean Cheramy (Chanel), Ronald Anderson (Teacher & Sons), Jean-Marie Cerruti (Philip Morris), Emile Georges (Camus Cognac), Ian McLuskie (Cross) and Juul-Mortensen himself (then with Danish Distillers). The President at the first TFWA event (held in Nice in 1985) was PBI’s Patrick Moniotte.
Juul-Mortensen said: “The first Tax Free World Exhibition in Nice in 1985 took place before the association had been formally founded. When the idea of a show ‘by the trade for the trade’ was first mooted, some brand companies immediately saw the point. But there were others – brands and retailers – who were loyal to the event that Julian Fox and Vivian Raven had created, and who consequently hesitated to come onboard.
“The reasons are clear. The Symposium had been a real catalyst for bringing the industry together. There were many meetings, many discussions, with groups of companies, with individual companies, all over Europe and beyond. By May or June, with a solid nucleus of brands ready to support the new format, and the exhibition area at the Acropolis in Nice practically full, the final brands (and the Management Committee) waited to see what RJ Reynolds, host of the famous Camel Club, would do. They backed the new venture, ‘by the trade, for the trade’, and the rest followed.”
He added later: “I am not sure that any of the small group of people who set out to create TFWA had many thoughts about the possible longevity of the association. This came later when the association was formally established with proper structures and procedures in place. There have been low moments over the years, but there were never any doubts about its survival.”
*Extracted from ’70 Years of Duty Free & Travel Retail’, published in 2017 by The Moodie Davitt Report. The archived digital edition can be found at MoodieDavittReport.com.
More broadly, how well is the voice of the brand owner community heard within the industry Trinity today? What would you change about the way the business is structured and the relationships within it?
The industry has come a long way since we started talking about the Trinity and what was required, and we have even added the fourth important element in our discussions, the travelling consumer. However, it will not come as a surprise that I still believe we have a long way to go. As an industry we are still failing to ensure that the cost and reward of a presence in this industry are shared appropriately.
The principles of the concession model are not necessarily wrong, and I have no alternative solutions to offer. The model has worked successfully for many of our industry’s 70 years of existence. However, I maintain that in many cases the business model driven by concession terms needs to be more fairly balanced. We have seen – and continue to see – the damage of the model’s heavy demands upon concession operators and as a consequence upon the brands.
With concession fees climbing, and with all parties tasked with creating ever more stunning stores and experiential activations, airport retailing in particular is becoming ever more expensive for retailers and brands. And this is also true whether inflight, on the ground or at sea, with demands at times being unrealistic.
With many consumer polls saying that ‘duty free’ does not represent good value, the industry is set for a perfect storm unless it achieves a sensible balance.
Show time: The TFWA World Exhibition Gala Dinner, 1993
Do we as an industry market ourselves to the consumer as well as we should? What could we do better? Should TFWA be that lead voice to world beyond?
The easy answer is no, we don’t, and it would be great if the message of duty free and travel retail came over much better to the traveller. However, that is easier said than done. An industry marketing campaign to consumers would be a difficult task to take on.
‘Duty free’ as an overall term took a hit in 1999 with intra-EU abolition, and many stores which cater for travellers now trade on a duty paid basis. Retailers also have different perspectives and the offer is inconsistent in terms of allowances, value etc.
The TFWA poster campaign marking the 70th anniversary of duty free which received an overwhelming reception from around the globe was an attempt at a more generic campaign about the beauty of shopping when travelling. Perhaps this could be taken forward by the various trade associations and the DFWC.
TFWA has included in its communication strategy outreach to the financial and transport media to gain broader PR coverage for the significant revenues that our industry generates for transport infrastructure round the world, and how this supports connectivity. It has not been easy to gain traction but is worth pursuing further.
Up in lights: TFWA Asia Pacific began in 1995 and has undergone sustained growth since its move to the Marina Bay Sands complex in 2014
Are you optimistic about the future of the business in this digital age?
Yes, very much so. Our business needs to embrace and utilise what the digital world has to offer to support our industry, and we see this happening at a fast rate.
Unlike the High Street and online retail, our stores are placed at points where there is not only a guaranteed flow of potential customers, but one that is forecast to double in the next 20 years.
Duty free and travel retail offers comprehensive assortments both in depth, range and services, and is increasingly experiential and personal. Online offers a functional, limited trading platform only. The prerequisites for a bright future are there for our industry to seize – the retail offer just has to be irresistible to our potential customers.
Show Guides down the years
For you personally, what’s next on the agenda?
I have no concrete plans. At the beginning it will involve more time for the family (as a double granddad in Spain and Denmark). Then perhaps I’ll visit some of the many places I have been over the years, but never really had the time to explore in detail.
Finally, what words of advice do you have for your successor?
For what they are worth, I have three clear pieces of advice. First, focus on the essence of TFWA – ‘By the trade, for the trade’ – remembering that TFWA is not a commercial company but a trade association representing a broad variety of members across categories, serving a wide number of retail channels and a global industry.
Number two, always put the members and the industry first. The President, and indeed the Board and Management Committee are there to serve the industry, not to gain advantage for their company or category, or for personal gain.
Third, serve with integrity and humility – and a dash of humour!
Erik Juul-Mortensen: A career in travel retail
Erik Juul-Mortensen spent much of his career with Danish Distillers, where he fulfilled various management roles before being named Vice President in charge of the export and duty free division in 1987.
In 1991 his promotion to Senior Vice President and Export Director followed, and in 1996 he was named Senior Vice President and International Director. Following the acquisition of Danish Distillers by V&S Group in December 1999, he transferred to V&S International Brands as Senior Vice President and Commercial Director.
In 2003 he was promoted to President of V&S Absolut Global Duty Free, with responsibility for the entire V&S portfolio in the global duty free market. From 2005 to 2010 Juul-Mortensen served as President of Maxxium Global Travel Retail, a division of Maxxium Worldwide, which was a joint venture between V&S Group, Remy-Cointreau, The Edrington Group and Beam Global Spirits & Wine.
In addition to his responsibilities as TFWA President, Juul-Mortensen is also Treasurer of the Duty Free World Council, a member of the Supervisory and Managing Boards of the European Travel Retail Confederation and a board member of the Middle East & Africa Duty Free Association and the Asia Pacific Travel Retail Association.
The Moodie Davitt Report • The Online Magazine • October 2018