The Difference is… Davidoff Jean-Christophe Hollay Interviewed
7 minutes read
Introduction by: Peter Marshall
I am delighted to feature our first profile of Oettinger Davidoff AG on TRunblocked.com. Jean-Christophe Hallay, Head-Partner Markets & Duty Free EMEA/Americas, provides great insights behind the unique Davidoff dynamic, the growing portfolio and the company’s ethos.
Peter Marshall (PM): Welcome to TRunblocked.com, Jean-Christophe This is the first time that Oettinger Davidoff has appeared on the website, so it’s perhaps worthwhile to ask you to give us a brief history of this remarkable company.
Jean-Christophe Hollay (JCH): Oettinger Davidoff is a passionate family company of brands anchored around Davidoff. Proud of our Swiss heritage, we are committed to outstanding quality and craftsmanship.
It all started in 1875 when Max Oettinger opened his first specialised cigar store in Basel. But the recent history and story began in 1970 when Dr. Ernst Schneider started to establish Davidoff as an international brand following the Oettinger Group taking over Zino Davidoff’s Geneva shop.
We are one global team working with innovation, passion and integrity towards the same goal: to delight our customers with a unique brand and unrivalled retail experiences. Oettinger Davidoff is committed to surprising and delighting our customers around the world, anchored in a strong “Crop-to-Shop” philosophy, having pursued a vertical integration from the tobacco fields in the Dominican Republic and Honduras to a worldwide network of Davidoff Flagship Stores, appointed merchants, distributors and retail partners in over 130 countries. Davidoff Cigars celebrated the 50th anniversary of its selective Davidoff depositary system in 2022.
PM: If you could define the role of cigars in Travel Retail, what would it be?
JCH: There is sustained and growing demand for cigars as an aspirational lifestyle statement. The high-value potential shoppers do travel and, if appropriate planning for the Cigar Category is in position, they will make their cigar purchase within Travel Retail. They will then be much more likely than any other shopper profile to spend more in other categories.
Cigars is the category with the greatest potential to deliver meaningful footfall, to achieve purchase conversion excellence and to significantly build total basket value. This role of cigars is evidenced when analysing data from any travel retailer.
PM: Yours is a large global business – you have some 65 stores – but you manage to keep to a family ethos, placing people first. There are also key pillars for everyone in the business, aren’t there? Please take us through them.
JCH: Be pleased to do so. At Oettinger Davidoff our customers and our people are our most important assets.
* A passion for quality and innovation defines our work.
* Our culture is about a desire to win, executional excellence, transparency, ambition and collaboration.
* We value honesty, integrity, accountability, and diversity.
* We reward performance, leadership, and results.
* We are fair and listen to each other and we expect everyone to always look for a better way.
* We protect our physical assets and workplaces.
PM: So if you could describe the key USP’s of the business, what would they be?
JCH: Finest tobacco is the Cigar ingredient. However, cigars are not a tobacco commodity, rather they are a luxury. Retailing Luxury poses unique challenges and Oettinger Davidoff is focused to offer appropriate solutions to partners to fulfil the cigar role. Optimising the luxury potential necessitates shared commitment. Oettinger Davidoff also continuously invests to deliver compelling insight, utilising acquired knowledge in an agile and flexible manner to achieve speed-to-market Innovation. The Zino Fresh pack and Zino pre-cut, for example, are pioneering, leadership innovations, relished by consumers and shoppers.
PM: Travel Retail is, of course, a major platform for you. Just how important is it and what currently constitutes your product portfolio?
JCH: Oettinger Davidoff offers Travel Retail partners the opportunity to sell Oettinger Davidoff’s Luxury portfolio. Travel Retail contains the potential to be extremely important for Oettinger Davidoff, focused upon the Davidoff brand. Hence, Oettinger Davidoff is endeavouring to encourage industry stakeholders to embrace a new category vision, to partner to implement solutions for releasing tremendous new category value, to ultimately change from existing perceptions to enlightened leadership development.
In Travel Retail, we focus on two main brands: Davidoff and Zino as well as local heroes like Camacho. Davidoff was always a pioneer and a reference in the channel as the brand has enjoyed a presence for many years in travel retail. For Davidoff, the innovation is coming from our Limited Exclusive Editions – always created with the best quality in terms of packaging and tobaccos, always very successful globally in terms of sales.
Zino is a new, rejuvenated brand and already very successful in the channel. Zino is an everyday cigar for the new generation of aficionados. We like to say that Zino breaks down the rigid monochrome of the traditional cigar world. Zino has a powerful colour code, excellent blend and an accessible price. Zino is our platform to innovate into unrivalled concepts like fresh packs, to maintain cigars outside of humidors for a certain period of time.
We have also recently launched a “pre-cut” half-corona format offered in the tin box of 5 cigars. This is the first long filler cigar pre-cut ever. This concept is ideal for travelers and shoppers who want to enjoy a cigar “on-the-go” when the occasion occurs during their trips.
PM: It’s not a static market, is it? To be market leader, you also have to be market maker and you have launched a whole series of new products over the past couple of years. If we can just focus on the impact of the Zino brand for GTR as well as Davidoff itself, with The Difference campaign.
JCH: The Cigar market is diversified and vibrant. Oettinger Davidoff embraces a positive competitive environment, aspiring to deliver market leadership whilst resolved to maintain Oettinger Davidoff heritage through organisational values and disciplines. Zino has proved to be transformational for the category in GTR, adding impactful modernity and addressing important shopper needs. The Zino success story is enhancing and broadening category multi-channel appeal, and Oettinger Davidoff is investing resource to optimise the opportunity.
We have come a long way from the Davidoff family’s first tobacco store, the first humidor, and the many more milestones we have achieved until today. Every day, Caribbean passion meets Swiss precision in our production halls, on our fields, in our stores and, of course, our cigars. Following our ‘crop-to-shop’ philosophy, we can steer and control every single step of cigar creation and production. Always guided by our core values of craftsmanship, quality and consistency, we have managed to uphold our high standards for handmade cigars – even throughout the most difficult of times. We are proudly presenting these values to our customers through a fact-based communication campaign.
We want to ensure that, no matter where our customers come into touch with Davidoff, they will learn about ‘The Difference’.
PM: Let’s move on to Travel Retail exclusives. Would you say that these are the ultimate shopper-centric cigars? Just how much research – global and local – goes into you bringing new product to the different markets you are in?
GTR exclusives and Limited Editions are an important and expected part of the Travel Retail proposition all over the globe.
Davidoff Limited Edition programs are always successful in both domestic and travel retail environments. Just to name one, our traditional “Year of” Edition to celebrate the Chinese New Year is beating sales records year after year all-around the world.
In light of this experience, we have developed customized Limited Editions for the travel retail channel. The project consisted of Different Davidoff Exclusive Editions for major Airports like Istanbul, Zürich, Paris or Dubai. Not only were numbered boxes produced specifically for each location but also the blend of the cigars was created in collaboration with the retailers themselves. This allows our shoppers to acquire a unique product that they cannot find anywhere else and also serves the important demand for gifting in the category. This program of “Exclusive Editions” received a Frontier Award in Cannes in 2021 – a true recognition of our capacity to develop specific products for the channel.
PM: So, moving on, are you developing a direct-to-consumer business?
JCH: Not directly in GTR. We are working through a network of partners and anchoring our route to market through their own direct-to-consumer strategy. Individual local legislation is important also as tobacco is a complex category in terms of regulations.
PM: We touched upon this earlier, noting the seven guiding principles you have of all employees. Interestingly, these codes of behaviour also apply to your business partners. When it comes to collaboration, how would you assess this industry?
JCH: Collaboration for the long-term, to achieve wins versus mutually beneficial objectives, is a core theme for Oettinger Davidoff. Forward momentum happens at a widely varied pace and progress can be restricted by entrenched, long-established strategies. Oettinger Davidoff maintains the steadfast belief in the value of change.
PM: Developing this point, category management is pivotal to everything that you do. What is your approach in this regard?
JCH: If an Oettinger Davidoff retail partner strives to attract high-value purchasers, to increase shopper spend, to build total basket value, then the Oettinger Davidoff category management approach is for them. The start point is understanding the enormous commercial gap (as nearly all cigar consumers do not actually use their purchase opportunities in GTR), and then harnessing Oettinger Davidoff’s leadership, fact-based insights to create implementable ideas. The structured approach importantly contains twenty-three category initiatives for growth, and a retail partner can move forward on any one or more initiatives at a given time, as required.
Close alignment between a retail partner and Oettinger Davidoff, engaging the approach together to change existing practices, delivers unprecedented and previously unimagined commercial upsides.
PM: One last question, Jean Christophe. How do you see the future unfolding?
JCH: At Oettinger Davidoff we will endeavour to continue advocating change to create a future in which the adult traveling cigar consumer will enter a Travel Retail store, where their category and brands will be highly visible, both being exceptionally well presented and serviced to deliver an experiential purchase occasion. The adult cigar consumer, now a Travel Retail shopper, will then add non-tobacco purchases to their basket spend.
