'Quality is the key'
With the integration of the Altadis business now complete, Imperial Tobacco Group (ITG) is able to focus anew on the further expansion of its travel-retail business. David Davies spoke to marketing director travel retail & global duty free, Sascha Berger (pictured left), to find out what the future holds
The acquisition by Imperial Tobacco Group (ITG) of Altadis – completed in early 2008 – is arguably the most significant change to the formation of the tobacco industry to occur during the last ten years. For Altadis brands such as Gauloises, it marked the beginning of a new era of development under the wing of ITG. For ITG, the arrival of the Altadis brands opened up an exciting new era of potential growth with a greatly expanded brand portfolio at its disposal.
As is invariably the way with such large-scale acquisitions, the integration of the Altadis business has demanded a great deal of energy over the course of many months. But now, with the process complete, ITG is able to contemplate the further growth of its portfolio across retail sectors – both domestic- and travel-retail.
To find out what the newly enlarged company is planning for the latter channel, Frontier spoke to ITG’s marketing director travel retail & global duty free, Sascha Berger. Since joining Reemtsma/ITG in March 1994, Berger has occupied a number of high-profile roles across Europe. He moved into his present position in July 2007.
What do you regard as the highlights of your career prior to your present role at ITG?
Before joining the ITG Travel Retail Global Duty Free Department I was in several senior marketing roles in Eastern Europe, namely in Kiev, Skopje and Moscow. I loved the energy and cultural richness of the region and [there was] one thing you could count on: no two days would be the same. It was an extraordinary and exciting experience that I would never have wanted to miss. As a highlight the organisation of West McLaren Mercedes Adrenaline in Kiev needs to be mentioned. We would bring 100,000 spectators to Central Kiev and see the double-seater Formula 1 car running on the streets. It was a memorable day not only for us at ITG, but for the city of Kiev as well.
What are your main priorities for your current role at ITG?
The current priority clearly is to offer brand experience to our adult smokers with relevant innovative initiatives. Even though the current climate makes people travel less and purchase less, shoppers and consumers still want to treat themselves [to high quality products]. Together with our retail partners we are working hard to deliver what they are expecting from all of us: entertaining in-store theatre in travel-retail that sets trends and does not follow them.
Is the integration of the Altadis and Imperial businesses now complete? And what implications does the arrival of the Altadis brands have for ITG’s overall travel retail business?
I am very happy to say that the integration of the Altadis and ITG businesses in travel-retail and global duty-free has been completed already very successfully. Our merged portfolio of the enlarged group is a perfect match and extends our geographical reach. We are now an even more international unit running the travel-retail and global duty-free business, which makes us a highly creative and effective team. All of us have a long history in the business and our different cultural backgrounds enable us to cater most efficiently to the needs of our retail partners and make our portfolio available worldwide for our adult smokers.
Which brands will be the focus of ITG’s travel retail business going forward, and why?
As in the past years we will focus our efforts on Davidoff cigarettes – one of the world’s most renowned and successful premium cigarette brands. Davidoff stands for contemporary luxury and despite the current economic situation the premiumisation in travel-retail has a good chance to continue. Consumers may travel and shop less; however, that will increase the demand for premium brands. Consumers will still want to try and treat themselves in the best way possible, so a purchase in travel-retail will become an even more conscious decision.
Looking at our enlarged portfolio we are in the happy position to be able to cater for any adult smoker’s demand, be it in the premium, sub-premium or economy segments, with brands like Gitanes Blondes, Gauloises Blondes, L&B, Superkings, West and Fortuna. All of these brands will see an appropriate support at trade and consumer level. In the OTP category we will further ensure the availability of global leading brands like Golden Virginia, Drum and Rizla.
Can we expect to see new launches or line extensions into travel-retail this year?
We are currently in the process of further rolling out our Davidoff Super Slims range in Asia-Pacific and
Europe, contributing to the adult smokers’ demand for this cigarette format. The super-slims are booming around the globe and with our Davidoff offer we can assure adult smokers that they are getting a contemporary luxurious brand proposition.
Since special and limited editions are clearly required by consumers within the travel-retail world, which is the showcasing window of the world, we are happy to launch a travel-retail exclusive Davidoff Gift Box and an innovative Gauloises Blondes ‘pack event’ proposition.
The travel-retail tobacco category is increasingly competitive and pressurised, so is significant growth still possible for leading players such as ITG?
Not only has the travel-retail world become increasingly competitive, it is something that we can witness around the globe. In that respect we are in a very good position, given that we at ITG over the years have been constantly investing in the quality of brands and innovation. In the current climate consumers need quality reassurance and this is exactly what we can deliver through our brand portfolio to our adult smokers. Quality is the key for sustainable growth and together with our retail partners we are working hard to achieve this goal.
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