Spoiled for choice
The tobacco segment in Japanese travel retail can be broadly summed up in two words – Mild Seven. According to Japan Tobacco (JT) media & investor relations manager Shoko Hamamoto, “Mild Seven accounts for more than half of JT’s sales volume in airports.”
Available in a range of standard, light and super light blends, Mild Seven will celebrate 30 years in the market this June. To secure its top-selling brand position, the company redesigned the packaging in 2006, preserving the Mild Seven ‘Blue Wind’ symbol.
Since May 2005, JT has also been directly marketing well-known international brands Camel, Winston and Salem. “At present we are planning to focus on our growing segments such as 1mg tar, menthol, and the new D-spec, a product especially developed to reduce the odour of cigarette smoke,” says Hamamoto.
At Japan’s top two air hubs, Narita International Airport and Kansai International Airport, Mild Seven is by far the best-selling brand. Competition from international brands is mostly in the menthol cigarettes segment at Narita Airport. At Kansai Airport, Marlboro is the international best seller. “However, the scale of sales is smaller than other JT brands,” states Tamaki Ishizumi, Kansai International Airport
Corporation’s assistant manager duty-free & other airside business. Tobacco sales in 2006 showed a steady growth for KIAC, and for 2007 the company forecasts sales increases for Chinese tobacco.
At Fukuoka Airport, the main access point to the island of Kyushu, Mild Seven is also the most
popular brand, says airport spokesperson Maiko Kanamori: “We sell the JT and international brands at a ratio of 6:4.”
However, during 2006 Fukuoka Airport reported a steady increase in Korean passengers, who benefited from the relative strength of the won to the yen – helping prospects for Korean tobacco company KT&G.
“Since 2003 KT&G has been present with Esse, The One and Raison brands in Japanese duty free,” says global business assistant manager Hyesoo Kim. Although the brand is not available in the local market, results in duty free have been rewarding. According to Kim the 100mm-length super-slim Esse competes with Vogue, Virginia Slim, Dunhill, and Mild Seven, “even though Mild Seven and Dunhill are 84mm regular type cigarettes”.
Central Japan International Airport (Centrair) reports a rising share of international tobacco brands, which now occupy 40% of the total sales. “Tobacco sales in 2006 increased 13% from the previous year. The year 2007 is also promising, as sales already posted a 16% increase,” says Centrair commerce & marketing manager Takuya Nakatsu. “We’re seeing more international travellers, especially Chinese, and Seven Star (JT), Marlboro and Zhonghua are popular among them,” continues Nakatsu, “and gifts with purchase are always well-received.”
So the extension of space underway in some of Japan’s key travel retail locations, notably Narita, promises more scope for international tobacco brands to occupy shelf space alongside Mild Seven. n
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