Page 62 - IAADFS Summit 2023 Special Edition

INSIDER

on allocation,” he admits. “The Ontario Lagardère Travel Retail Peru also “Booking space on trucks and ships has
duty free market is such a small market had to be proactive to avoid shortages, the been a challenge for every supplier. One
compared to the rest of the world.” liquor category accounting for a substantial of our largest supply-chain challenges has
Like Niagara Duty Free, Ambassador 20% of total sales at Lima airport. “Since been our non-refillable bottle.”
Duty Free Store has stepped up its focus the opening of our duty free shops in Peru, Mauricio De Tuya, cluster director
on local craft distilleries, negotiating our first priority has been to stabilize the America for Spanish wine and spirits
excellent pricing with a dozen Ontario supply chain and find the best freight supplier Zamora Group, the producer of
companies such as Vodkow cream liqueur, forwarders and shipping company to Licor 43, says 2022 was a “nightmare” for
Jaan Canadian whisky and Ginslinger craft support our growth,” Letocart maintains. the company’s supply-chain team. “They
gin. “We put a special gondola in the store “The idea was to be as flexible and agile faced challenges at every turn; severe
for these, along with putting the products as possible to optimize costs. In addition, COGS [costs of goods sold] increases
in their regular sections around the store,” we have been training our teams to do the were their day-to-day battles. We intend to
Maskery reports. maximum to anticipate orders, improve simplify the business by reducing the list of
forecasts and make sure that the service SKU’s available. At the end of the day, the
International Shoppes rethinks level agreement with our suppliers was consumer will suffer a narrower range of
purchasing strategy respected. products…although it may be a good time
In the U.S., Scott Halpern, president “In terms of relationships to simplify the business too.”
of International Shoppes, which operates with suppliers, we are constantly in Despite the price increases De Tuya
duty free and speciality stores at major U.S. communication with them to look for insists Zamora managed to maintain a high
airports such as New York JFK, Boston solutions to increase service rate but also level of customer service during 2022.
Logan and George Bush Intercontinental, to reduce lead time,” he adds. “We had “We did not encounter any large delays or
admits the company has had supply issues to review our order planning to find the problems along the way. Our supply chain
with “all vendors across the board” in perfect fit between order frequency and did an extraordinary job back then. 2023
terms of supply. Retail prices have risen logistics costs. Now that we have some is quite blurry so far. Of course, we have
but the increases have come from the historical sales data, our key objective for high expectations in regard to our supply
suppliers rather than International Shoppes, 2023 will be to deploy our automatized and we believe things should improve and
he reveals. forecasting tool.” facilitate our standards. We did increase
Halpern says the crisis has made the our lead times a little, but at the same time
retailer rethink its purchasing strategy to Distributors and suppliers share their we pushed the long-term demand planning
ensure it was offering the most complete experiences with our partners.”
assortment for its customers as possible. Drinks suppliers and distributors also Similarly, Americas-focused drinks
“If one brand was out, we quickly acknowledge the scale of the problems distributor Monarq Group, whose broad
overcompensated on another to keep a they have been facing since travel retail portfolio of wines and spirits includes
healthy balance in our stores,” he explains. restarted. “Because of supply chain Champagne Bollinger, Cono Sur,
“I think we learned a lot throughout the last issues, we’ve had to plan much further Quintessential Brands, Gruppo Montenegro
three years about being a nimble company in advance, and increase our inventory in and Heineken, has also faced challenges
and adapting to change. We are well our warehouses in Miami and overseas,” despite enjoying booming sales last year.
situated to tackle any future issues should says John McDonnell, managing director, Managing director Robert de Monchy
they come our industry’s way.” international, at Tito’s Handmade Vodka. acknowledges ongoing supply shortages
on some super- and ultra-premium
lines, noting, for instance, that Bollinger
Champagne has been on strict allocation
for several years.
“Forecasting has become a key
element of our business,” he explains.
“The lead times are generally considerably
longer than before and we have moved to
larger inventories, maintaining a buffer
to overcome any hurdles or delays with
upcoming orders. This also means that free
cash is more important than ever before.
The financially stronger companies are in
better shape to deal with these situations
and will come out even stronger.
“We are currently introducing a
number of wonderful new brands such
as Uncle Nearest Premium America
Whiskey, Drumshanbo Gunpowder Gin,
Condesa Gin, Heavensake Sake and the
world’s rarest Japanese single malt whisky,
Lagardere’s duty free store in Lima, Peru

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