Three Engines of Momentum: Tobacco & Nicotine, Niche Fragrances, and Toys

Category in a Dual Role

Tobacco & Nicotine remains one of the most efficient drivers of store traffic and basket size. In 2025, the category accounted for around 16 percent of Gebr. Heinemann’s total sales, up 1.3 percentage point compared with 2024. Total sales reached approximately 410 million euros, with around 360 million euros generated in the B2C sector alone.

The category continues to perform a dual role: attracting travelers to the store and stimulating cross-category spending. Clearly communicated price advantages versus domestic markets remain a key purchase driver. To maximize shopper relevance and commercial impact, these savings are managed on a market- and, in some cases, store-specific basis.

Structural Change with a Clear Growth Path

While classic cigarettes remained the backbone of the category in 2025, the mix is shifting decisively toward new generation products (NGPs) and premium cigars. Regulatory developments and changing traveler preferences are prompting many customers to explore alternatives to traditional cigarettes.

Sales of NGPs rose by 43 percent year on year. In some airports, for instance in Eastern Europe, heated tobacco is already among the top two brands in the cigarette segment. Snus and nicotine pouches are also showing strong and sustained growth.

In the premium segment, cigars and cigarillos deliver particularly high average transaction values. With sales of around 60 million euros, these products significantly increase customer spend per purchase and strengthen the overall value contribution of the category.

Retail Experience and Activation

2025 also marked a new level of activation excellence. A multi-category promotion at Frankfurt Airport, developed with PMI, showcased smoke-free categories, such as heated tobacco and vapes, in a multisensory brand environment. Light and sound elements, scent installations, and interactive digital touchpoints invited travelers to engage with the products, while trained brand ambassadors offered personalized guidance and product education.

Another milestone was the opening of the world’s first Davidoff of Geneva airport lounge in Jeddah, featuring a walk-in humidor, a smoking lounge, and digital brand storytelling.

Ruediger Stelkens, Global Commercial Director Liquor, Tobacco, Confectionery (LTC), comments: “Such activations translate curiosity into informed choice, make new categories more tangible, and responsibly guide adult travelers to suitable alternatives. At the same time, they increase conversion and average transaction value, underlining our shared ambition with brand partners to continuously elevate the travel retail experience.”

Opportunities, Regulation, and Responsibility

The outlook for 2026 remains positive. Further growth is expected, particularly in the NGP segment, supported by potential regulatory developments such as the anticipated legalization of NGPs in Turkey and other markets. At the same time, regulatory uncertainty, flavor bans, and political initiatives will continue to influence the operating environment. Ruediger Stelkens summarizes the outlook with confidence: “Tobacco & Nicotine is no longer a legacy category. Classic cigarettes secure the sales base, NGPs drive growth, and premium cigars sharpen our profile. Snus and roll-your-own add further diversification. As a result, the category remains one of Gebr. Heinemann’s key growth drivers – economically strong, highly invested, and clearly future-oriented.”

From Trend to Strategic Pillar

What started as a trend has evolved into a core growth driver within Gebr. Heinemann’s beauty category. Niche fragrances now represent a strategic lever to attract younger, experience-driven customer segments, particularly millennials and Gen Z, while reinforcing Heinemann’s premium positioning. Niche fragrances currently account for 11 percent of Gebr. Heinemann’s B2C beauty turnover, with a clear upward trajectory. In comparison to 2024, it grew by 30 percent for B2C. “Consumers value the individuality, authenticity, and exclusivity that niche brands embody through unique compositions, artistic storytelling, and limited availability,” says Britta Hoffmann, Global Commercial Director Beauty.

In 2025, Gebr. Heinemann further expanded its dedicated niche fragrance concepts in markets such as Turkey, the Middle East, and across Europe – including smaller executions in Hamburg and those currently planned for Berlin and Düsseldorf. Jeddah now features Heinemann’s largest dedicated niche area to date, covering 350 square meters. Each concept is designed to immerse travelers in the world of niche perfumery, offering curated assortments and experiential elements.

Focus on Storytelling and Differentiation

The niche segment is becoming increasingly fragmented, with artistic fragrances, often crafted by the founders themselves, gaining traction. As a result, the storytelling of a brand becomes more important to consumers, with fragrances telling a narrative, often inspired by personal experiences or places. Individualization remains a central concept, leading to new trends such as layering, in which shoppers combine two or more scents to create their own signature fragrance. Limited editions and travel exclusives further enhance desirability. Meanwhile, price integrity and scarcity strengthen the value proposition compared to, in some cases, heavily discounted mainstream brands. First-class service on the shop floors continues to play a key role in creating an unforgettable shopping experience for travelers.

Inspiring Travelers Through Innovation and Experience

The outlook for niche fragrances is highly positive. The category has significant potential for increased penetration and basket size. Immersive retail environments and exclusive products, which are often not available in domestic markets, support this growth. Social media, particularly TikTok, amplifies demand among younger demographics, creating opportunities for rapid trend adoption. However, the fast-paced nature of these trends also creates challenges. Becoming even more agile while avoiding over-saturation will be key to preserving the essence of niche: individuality and exclusivity. One new approach is the Olfactive Table, which has already been introduced in Jeddah and is set to be rolled out in other locations. It showcases niche perfumes from seven carefully selected fragrance families. Each family is described by its characteristic notes and depicted visually by its key ingredients. The Olfactive Table guides travelers on a multisensory journey through sight and smell, making exploration intuitive and inspiring. At the same time, it enables highly personalized consultations and services, helping travelers discover fragrances that truly reflect their individuality.

Looking ahead, Gebr. Heinemann will continue to differentiate its fragrance portfolio, reducing space for widely distributed brands and allocating more room to selective, high-value labels. This strategy aligns with the company’s ambition to drive efficiency and profitability while inspiring travelers through innovation and experience. “By embracing niche fragrances as a strategic pillar, we strengthen our competitive edge and reinforce our position as a destination for curated beauty experiences in travel retail,” explains Britta Hoffmann.

Gaining Strategic Momentum

In 2025, Toys developed into a dynamic growth driver within Gebr. Heinemann’s assortment. The category delivered 27 percent B2C growth compared to 2024, fueled by impulse-driven purchases and an expanded target group. Once considered a children’s category, Toys now also strongly appeals to adults – so-called kidults – reflecting a broader global trend. Adults, buying toys for themselves rather than for children, already account for nearly 30 percent of toy sales and are a major driver of market growth. “Toys is a highly emotional category. While many travelers still buy toys for children, adults now treat themselves as well. Nostalgia and collecting are important factors,” says Jan Richter, Global Commercial Director Fashion & Accessories (FA).

Performance and Emotional Appeal

The emotional appeal of Toys makes it a perfect fit for travel retail, where gift-giving and impulse purchases thrive. In 2025, Gebr. Heinemann sold 25,000 LEGO Formula 1 blind boxes worldwide, thereby highlighting the strength of collectible formats and seasonal activations. LEGO remained the frontrunner with 35 percent retail growth, supported by licensed products and innovative sets. Demand for anime, gaming, and sports licenses grew as well. Plush toys also performed strongly, driven by appealing price points and sustainability attributes such as WWF donation shares.

Enhanced Visibility

A key activation was the LEGO Formula 1 summer campaign at Frankfurt Airport. This campaign leveraged high-visibility promotional spaces and targeted both collectors and impulse buyers. “Such activations, along with larger spaces and dedicated shop-in-shop concepts, create an emotional, experience-driven positioning,” says Jan Richter. The new Toys concept is now rolling out across major locations, having already been implemented in Jeddah and soon to be implemented in Copenhagen and Vienna. It combines Kids’ Sweets with Toys, features larger spaces and redesigned furniture, and integrates innovative digital elements. The future layout is more colorful, regionally inspired, and designed to enhance engagement and the overall customer experience.

Set on Further Growth

Thanks to its emotional appeal, versatility across price points, and strong alignment with gift-giving occasions, the Toys category will remain a strategic pillar for Gebr. Heinemann. At the same time, the category faces challenges, such as margin pressure on low-priced items and highly volatile trend cycles. To mitigate these risks, Gebr. Heinemann is working on a flexible assortment strategy that balances entry-level products with higher-margin items. Jan Richter adds: “We will further optimize our processes to act faster and more efficiently, ensuring we can better capitalize on market and trend cycles while sustainably improving the assortment profitability.” The projection for 2026 is positive. Plans include expanding the distribution business, strengthening the assortment for ongoing trends like nostalgia, and introducing exclusive airport editions to drive impulse purchases. The category will also become more experiential, launching new concepts such as a collaboration with Bon Ton Toys in Copenhagen. Bon Ton Toys is a heritage plush brand known for its sustainable production and licensed characters like Miffy and Peanuts.