Heinemann Americas is celebrating its 10th year anniversary this year, following a successful decade of establishing itself in the market and growing its business in important new directions. Travel Markets Insider’s Lois Pasternak recently met with Nicolas Hoeborn, Managing Director in Heinemann Americas’ offices located in Miami’s prestigious Coral Gables to discuss the evolution of the company and its plans for the future.
Heinemann Americas – a 100% owned subsidiary of global travel retailer Gebr. Heinemann – was opened in 2014, primarily to better serve some of the company’s existing clients, explains Hoeborn, who was named managing director 2 1/2 years ago.
“We were not present in the market, but we had customers expanding here that we worked with for many years, mainly MSC and Harding. So we said, ‘Okay, we need to be able to service them with the same standards in the Americas as we do in the rest of the world.’
“This was initially why we opened an office in Miami. It’s the heart of the cruise industry, and that’s where we want to be. Since this was a new region for us, we wanted to establish the Heinemann name and look for any other opportunities that are out there. But the spark itself was to support our existing customers in this region where they are growing.”
One of the unique characteristics of Gebr. Heinemann and its subsidiaries is that the company is equally a retailer and distributor and an expert in all sales channels of travel retail.
A myriad of supply services
Heinemann was able to leverage its distribution expertise to establish a foothold in the Americas market when it first arrived, primarily through its relationship with MSC Cruises and Harding+. While MSC handles its shipboard retail operations in-house, Heinemann started supplying key categories locally for the company.
Heinemann continues to collaborate with these key customers and has been able to extend its customer portfolio further.
In total, Heinemann Americas is currently supplying more than 50 cruise ships in the Americas with distribution services. All build on the human-centric, partnership driven approach of Gebr. Heinemann.
Retail operations
In a major milestone for the company, Heinemann Americas is now also running the retail operations on five cruise ships. The breakthrough came in 2018, when the company won the concession contract for four Carnival Cruise ships – unveiling a whole new look for the concessions onboard the Carnival Liberty later that year. In 2019, the company also began working with Royal Caribbean – and in a huge coup won the retail concession onboard Royal Caribbean’s Icon of the Seas—the world’s largest cruise ship to date – where it opened 14 retail venues earlier this year. In July, Heinemann Americas unveiled the retail concession onboard Royal Caribbean’s brand new Utopia of the Seas – the second largest cruise ship in the world –which sails out of Port Canaveral on three- and four-night cruises.
“We are currently running the retail concessions on five Royal Caribbean vessels, including Icon and Utopia, the biggest ships in the world. We were able to establish a very efficient retail business that we run with a lean but powerful team,” said Hoeborn.
Expanding into F&B
In a third critical milestone for the company, Heinemann Americas entered the F&B supply in January this year, providing key liquor brands to NCL.
“This was a great win for us as it meant we were diversifying our business. We supply Bacardi and some other spirits brands for pouring onboard. Volumes in F&B are high and the cruise ships have big, exciting events, especially on the pool decks,” explains Hoeborn, adding that the company is now in conversations with Royal Caribbean and Carnival to further grow the F&B business. “This is an important part of our strategy in the Americas.”
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Evolving the business
Looking at how the business has evolved over the past decade, Hoeborn sees the expansion into retail, first with Carnival in 2018 and then with Royal Caribbean in 2019, as major milestones. Heinemann is no longer working with Carnival as a retailer, but that contract propelled the company into the retail sector in the U.S., he says.
“Our entrance into the F&B business is the next big milestone for Heinemann. It’s key for us in terms of our strategy,” he stresses.
The COVID-19 pandemic of course put a terrible strain on the cruise business, but Hoeborn says that the time off gave the company some time to assess all their processes and reevaluate their structure.
“We took the time to figure out how we could be more efficient and set ourselves up for success. So after the pandemic, we ended up with a more concise, more efficient, but definitely stronger team. We have an average tenure within our team of more than three years, which, given we are only 10 years old, I think is a pretty strong number. Our retention rate is above 80%. The development is really encouraging, and we can say that we are cruise specialists now in Miami. And that’s why we came here.”
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Logistics
The key to serving the cruise industry is effective logistics, says Hoeborn.
“For Gebr. Heinemann, logistics is the backbone of everything, and we pride ourselves on being the best in logistics on a global scale. In the Americas, as well, it was critical to have a strong and absolutely reliable warehousing partner. Because of that, we switched our third party logistics provider three years ago, signing with French company Bolleré in Miami, who for example was able to provide a big, flexible climate-controlled area in a free trade zone.”
This climate control is very important, especially when you deal with perfume, cosmetics, liquor, wine and tobacco, he explained.
“The group has since been acquired and is part of CEVA, a huge global player. The name is different but it is the same company and continues to give us the two things we rely on: consistency and efficiency. They also offer us flexibility, and can accommodate our potential for growth,” says Hoeborn.
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Diversification and data
Talking about Heinemann’s greatest point of difference from its competitors, Hoeborn points to the company’s unique retailer/distributor structure.
“This diversification gives us stability globally, so we do not need to rely on only one leg: we do distribution and we do retail. This is why Heinemann is such a stable company. It is critical for us here in America to have both legs and that stability as well. First of all, stability is an advantage for our customers and for our own retail business; but it also enables us to have a massive data set as well.
“Through our extensive global cruise distribution supply and our own retail business, we see both worlds. We know what’s going on in retail and we know what is going on with the 50-plus ships we supply. We are extremely sensitive with our customer data. We don’t share anything except for our category knowledge, or market knowledge. But these consumer insights benefit everybody, including our customers.”
Hoeborn confirms that access to data allows the company to be very dynamic, and adjust merchandise according to itineraries, passenger mix and consumer trends.
“We need to be very agile — the product mix is always evolving,” he stresses.
Trending onboard
Following the data, Heinemann is tracking three main consumer buying trends this year.
Logo or branded merchandise is one of the biggest revenue categories for Heinemann Americas Retail.
“We are particularly proud of this category because our inhouse developed product range really set a new bench mark for the industry, in terms of style, quality and most importantly PPD ,” says Hoeborn.
“Logo has gained a lot of momentum, and the cruise lines realize the potential. We have the biggest logo store ever for Royal Caribbean on Utopia of the Seas. We actually switched the P&C area into the logo store because we can drive more revenue with it. Plus apparel and souvenirs have a healthy margin. In addition, logo merchandise helps the cruise line build its brand and consumers are asking for it. So it all makes sense.”
Hoeborn says that Heinemann works with capsules when it comes to logo branded merchandise, which gives them
a lot of flexibility: “We have a vintage capsule, an inaugural capsule, a capsule for kids – you name it. It’s like a fashion store, with the addition of logo cups and magnets and other souvenirs. It’s a huge trend.”
Luxury goods, like fine watches, and pre-owned vintage leather and handbags is another big trend. They get their own boutique on every ship now, and the category has become a big part of the revenue. “Especially when you have ships out of Miami, where you have a big Latin American clientele, you can sell high, high price points. We are not seeing this category go down. It’s a trend; people like to spend and indulge themselves,” he says.
A third trend is the impact of social media on assortments, and the need to react quickly to adjust the assortment to meet the consumer’s demand for the latest viral sensation.
“As a retailer, reacting to trends means we need to find space in the store, we need to buy the product, and get deliveries. For this we need support from the brands, from marketing adjustments to getting the old stock off of the shelves. So the speed just got faster; and you need an agile team that knows what’s going on in the market.”
The ship debuted in Port Canaveral, Florida in July and offers three-night weekend and four- night weekday getaways.
Looking ahead
Looking ahead, Hoeborn says that Heinemann’s vision for the future is all about diversification, on a global scale, not just for Heinemann Americas.
Diversification gives you that resilience, that stability that you need, especially after the experience that we all had over the last couple of years with the pandemic. Over the mid-term, Heinemann Americas will definitely achieve this within the cruise industry, because we already have several channels: our own cruise retail, our distribution into retail, and now distribution into F&B, which is one of the main growth areas. And we see other potential channels within cruise for growth—for example, port shopping and retail on the private islands or the private beach clubs. These are all part of the cruise environment.
“We want to increase our cruise retail and strengthen our distribution business with our existing and new clients. We want to be the cruise partner of choice and this means that we need to do a great job on our existing business, so other cruise lines & partners reach out to us when opportunities arise. For Heinemann, the business model, besides the financials, only makes sense if it is a true partnership, so we want to grow long term partnerships.”
For the near term, Hoeborn says that the company decided not to pursue airport concessions but rather focus on the cruise channel which is working for them.
“We will revisit this topic in a few years, but for now Heinemann Americas is focusing on diversification within the cruise. We want the industry to see that we are here to stay, that we are diversifying and growing within all available cruise channels. We want them to think of us as first choice in cruise, as retailer or distributor!”
