Made in Dufry

Are you one of those that only buy Toblerone at the airport? Or maybe you are more of a souvenirs person that collects magnets on the fridge like trophies after your holidays? In this issue, we interview Philippe Moryl, the man behind Confectionery, Food, Souvenir & Toys, that will take us through the evolution of a group of categories intimately linked to the travel experience. The title Made in Dufry nods to one of their latest developments, which is a small revolution in the organization: the development of a Dufry brand of products.

By Jorge Muñiz

Let´s start by you telling us a bit more about yourself. How has your journey through this industry been?

It´s been a long one! Over 21 years ago, I was heading to Warsaw, Poland, with Lagardère to set up a network of convenience stores across the country. Since then, I covered several areas of our business, always working in travel retail: from finance to business development, acquisitions, wholesale service, events, in-flights service… I´ve had the chance to gain wide experience and working for different players: Aélia, Nuance and finally Dufry, where after the acquisition I was given the chance of leading several categories.

You have just embarked on a new project to develop Dufry´s Private Label. As a pure retailer, where we “just” buy things from our brand suppliers to put them on the selves of our stores… what´s the benefit of such a venture for Dufry?

The development of Dufry´s private label has been a kind of a small revolution, not just in our category, but in the company as a whole I´d say. And at first read, you could come to the conclusion that it has little sense. As a pure retailer, Dufry buys goods from suppliers and puts them in nice stores for their customers to buy. And for a large part of our business, where the power of the brands is enormous, that is what really makes sense. Certain customers don´t buy chocolate. They buy Toblerone.

In the world of souvenirs, that´s not necessarily the case. When you buy a magnet or a t-shirt as a souvenir of your visit to Los Cabos, the brand is not as important as the product itself. And we also realized that, for a large proportion of the category, there was not that much local production of the majority of the products. The London Bridge magnets that you can buy in a souvenir store are probably manufactured in the other corner of the world… and they are not different to those on sale on the high-street.

By entering into the production line, we manage to industrialize the process a little bit. But more importantly we keep better control over the whole process: from influencing the design, to getting Dufry-exclusive items, to managing the delivery. We gain in flexibility and enhanced ability to give a more structured approach to the souvenirs category, with stronger sense of place.

And how has the been experience so far?

We are currently running pilot stores in two locations – Mexico and Canada – with two different approaches. In Canada, we have focused on food products. With a very strong sense of place, we have created a brand – Explore Canada – for local food products like maple syrup. The approach here is the one of a traditional white-label, where we identify a quality supplier of local products that applies our label to their product. The Explore Canada brand makes the connection with the rest of the store space and the sense of place makes the magic.

In Mexico, we decided to work on other products from the souvenir category: magnets, but also mugs, keyrings, bags… all products that we can use to make a strong connection to the destination. Unique products by their design, they become exclusive to Dufry stores in the location.

Both of the experiences are proving very satisfactory and we are exploring further opportunities and of course areas to improve. The future for is us is a hybrid model that combines our original strategy with this new experience.

Do we have a name for our private label – as other high-street retailers – or will that remain anonymous for the end customer?

In the world of souvenirs, there is nothing truly global! We have two umbrella brands: Explore [+ Location] (for example Explore Canada) and Around the World [+ Location] (for example Around the World… Mexico). But there are existing brands, like Glorious Britain, with high acceptance in the market, that we will keep using.

Dufry demands very high quality standards, including ESG standards. Are we applying the same requirements to ourselves?

Of course! ESG (Environment, Social and Governance) is a big thing amongst all Dufry suppliers, and we have made significant inroads in ensuring that they adhere to the principles of our Supplier Code of Conduct. When selecting the product suppliers for our private label, we have taken the same duty of care as when engaging with large multinationals like Nestlé or Mondelez. And to some extent, with our private label, and especially in the souvenir category, we now have higher visibility over the whole value chain – from the factory to the shelves – so we can better ensure adherence to our ESG standards.

With the upcoming development of the Food & Beverages business, do you anticipate more opportunities for the Food category and the private label?

We are just at the start of the journey! But the answer is a round: Yes. We already have very positive experiences in snacking in Hudson, who have been marketing their own brand “Traveler’s Best” for some time now with very positive results.

About the rest of the product sub-categories: how they are accommodating to the new consumer demands?

Consumer behavior is changing and it is a global thing – of course more accentuated in certain geographies. There is increasing demand for wellbeing and sustainability. And these are being two important drivers in the development of the category, especially in food and confectionery.

The range of products on offer is now higher. We engage with traditional suppliers to cater the need for “healthier” options. These include reduced sugar, reduced fat, vegan products… that co-live side-by-side with the traditional assortment. Brands like Kusmi Tea for example, focus on specific health benefits, and they are making their Detox product line a sound success.

At the same time, we are looking at bringing new brands that connect with this need. From products that highlight health supplements (high protein content, rich in vitamins) to others that put the focus on natural ingredients (vegan, organic, natural).

On top of product range selection, work also is being done on how we showcase these products in store. There are shop-in-shop concepts, with the latest launch of Mind. Body. Soul. (see article in this issue of Dufry World) that create the perfect environment and offer a multi-category product assortment, all connected with well-being. But the approach is diverse and customized to each location.