Global Travel Retail Magazine's Spirits & Tobacco July 2024

Peated Malt Spanish Oak Matured in the Land of Yamazaki and Hakushu

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Innovating for a transformative future

As we enter the second half of 2024, the spirits and tobacco industries continue to demonstrate remarkable resilience and adaptability in the face of global challenges. With shifting consumer preferences to regulatory pressures and sustainability concerns, companies are innovating at an unprecedented pace to stay ahead of the curve.

Major players like ARI and Changi Airport Group are leveraging digital tools and omnichannel strategies to enhance customer engagement and streamline operations. The integration of innovative concepts like robotic bartenders at Lotte Duty Free stores showcase how technology is reshaping the travel retail experience.

The popularity of local spirits is surging, particularly in emerging markets. Companies like Delhi Duty Free, Kreol Group and Ospree Duty Free are capitalizing on the country's growing appreciation for premium and craft spirits, while Indian brands are gaining international acclaim alongside global players, reflecting a broader global movement toward authenticity and heritage in spirits consumption.

Meanwhile, the rise of Generation Z as a key consumer demographic is driving significant changes. We explore how this cohort's preference for quality, authenticity and sustainability is reshaping product offerings and marketing strategies. Global Drinks Ltd and Rémy Cointreau are responding with premium, eco-friendly products and engaging digital experiences that resonate with these values.

In the tobacco category, we're seeing a pronounced shift toward Reduced Risk Products (RRPs) and sustainability initiatives. JT Group's collaboration with Altria to expand in the heated tobacco segment and KTI's solar park initiative demonstrate the industry's commitment to reducing its environmental footprint.

Oettinger Davidoff AG's consumer-centric innovations include travel-friendly products like pre-cut cigars and short puritos, while the company’s comprehensive ESG roadmap shows how it addresses current concerns while maintaining its commitment to quality.

As these industries navigate complex regulatory environments and changing consumer preferences, the importance of travel retail as a showcase for innovation becomes ever more apparent. From Changi Airport's World of Wines & Spirits (WOWS) event to exclusive product launches in duty free shops, the travel retail channel continues to be a vital platform for brands to connect with global consumers.

We hope you enjoy this issue, with its comprehensive look at how industry leaders are rising to these challenges, setting new benchmarks for quality, sustainability and consumer engagement in an ever-evolving global marketplace.

Kindest regards,

WENDY MORLEY Senior Editor wendy@gtrmag.com

Global Travel Retail Magazine (ISSN 0962-0699) is published seven times a year by Paramount Publishing Company Inc. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or the editor. July 2024, Vol 36. No. 5. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. Paramount Publishing Company Inc.

GLOBAL TRAVEL RETAIL MAGAZINE Tel: 1 905 821 3344 www.gtrmag.com

PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca

EDITORIAL DEPARTMENT

EDITOR-IN-CHIEF Hibah Noor hibah@gtrmag.com

DEPUTY EDITOR Laura Shirk laura@gtrmag.com

SENIOR EDITOR Wendy Morley wendy@gtrmag.com

SENIOR WRITER Alison Farrington alison@gtrmag.com

ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

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WHAT’S INSIDE

14

Top stories

8

Elevated tastes

India is becoming a pivotal market for premium spirits, reflected in the increased demand for high-end and luxury spirits among travelers. In this report, we discuss spirits trends with some of the major decisionmakers in the country

14 Retail trends

Driven by evolving consumer preferences and innovative retailer strategies, the spirits market is experiencing dynamic shifts in travel retail. Here, key leaders share insights on how the industry is working to capture the discerning spirits buyer

20

Premium experiences

Since the reopening of the Babylon Terminal Departure Duty Free store at Baghdad Airport, Iraq Duty Free has welcomed a sharp increase in both liquor and tobacco sales

32 Consumption in cruise

Featuring brand, retailer and cruise line feedback from players in the channel, this report discusses drink development, activation and consumer behaviors in line with the spirits category

Features

SPIRITS OVERVIEW

24 Japanese craftsmanship

House of Suntory has reached a milestone with the introduction of its Yamazaki and Hakushu Kogei Collection; Bowmore’s single malt whiskies range to experience big change in H2

CONSUMER TRENDS

26 Generation zeitgeist

As Generation Z matures into key consumers within the travel retail spirits market, the cohort’s distinct preferences are shaping industry standards. With a clear emphasis on sustainability, authenticity and quality, this demographic is pushing all stakeholders to incorporate more responsible and engaging practices

WINE REPORT

36 Origin story

As its fourth country of origin, Penfolds discusses its relationship with China, as well as its position on digital integration, creative collaboration and experience-driven retail

40 Fine wines, full glasses

Based on industry experts and travel retail insights, Global Travel Retail Magazine reports on category trends, the return of rosé and the next generation of wine lovers

TOBACCO OVERVIEW

42 The future unfurls

With an eye set firmly on innovation, sustainability and consumercentricity, JT Group is reshaping the tobacco category and showcasing a profound pivot in industry priorities

44 Luxurious innovations

As Oettinger Davidoff AG leverages its expertise to push the boundaries of cigar innovation, the company's dedication to sustainability and consumer-centric strategies ensures its continued leadership in the luxury cigar market

46 Igniting innovation

BAT is lighting up the tobacco category in travel retail with reduced-risk products, cutting-edge technology and a commitment to sustainability

48 ANDS’ alternative nicotine one-stop offer

Arnaud Piorkowski, ANDS Managing Director – MEA & Global Travel Retail, considers the company’s focus on innovation, as well as its ability to cater to changing consumer needs and its long-term goals in the channel

50 Gaining ground

With a focus on innovation and sustainability, the independent tobacco producer KT International is expanding its presence in airport duty free shops

INDUSTRY COMMENTS

52 Key growth factors

What will influence spirit sales growth in the near future? Global Travel Retail Magazine talks with leading industry executives

BRAND NEWS

56 Travelers embrace art

Absolut Vodka's limited-edition Warhol Bottle will debut exclusively in the travel retail industry, launching first at Amsterdam Airport

58 Path to discovery

An update on William Grant & Sons’ presence in the channel; Managing Director – Global Travel Retail Rufus Parkinson discusses launches, strategies and activations across its portfolio

59 Jägermeister’s global reach

Experiencing success on a global scale, Mast-Jägermeister eyes India as a key growth market and finds a fit in the tequila category

60 Innovation and differentiation

Proximo Spirits is on a mission to source unique cask finishes and innovative production processes across its portfolio, honoring tradition and adding value along the way

62 Gin up your life

Crafter’s Gin has released a trio of miniature sensory sprays to introduce customers to the aromas of its botanical range; plus, the brand looks to the Americas as its next step in expansion

Elevated tastes

India is becoming a pivotal market for premium spirits, reflected in the increased demand for high-end and luxury spirits among travelers. In this report, we discuss spirits trends with some of the major decision-makers in the country

by WENDY MORLEY

India is becoming an increasingly important market in global travel retail for all categories, and spirits is no exception. The country’s burgeoning economy and a growing middle class are creating a surge in international travel along with a taste for premium brands – both trends to the benefit of travel retail. Evolving consumer preferences are driving significant growth and innovation, making it a focal point for industry stakeholders worldwide.

In general, Indian travel retail spirits trends are in line with those in other parts of the world, with one of the most prominent being the shift towards premiumization. Consumers in India are increasingly driven by a desire for exclusive experiences. This trend is expected to continue, with an emphasis on personalized customer experiences and exclusive product offerings.

“We are observing a strong shift towards premiumization, where consumers are increasingly opting for high-end, luxury spirits,” says Ashish Chopra, CEO Delhi Duty Free. “This trend is coupled with a growing interest in unique, limited-edition releases. We anticipate that this will continue in the coming year, with an emphasis on personalized customer experiences and exclusive product offerings.”

The broader growing consumer preference for authenticity and artisanal quality, along with a clear direction toward wellness and environmental impact, is also evident in Indian trends. “We’re seeing a growing interest in craft spirits and locally produced beverages,” says Lal Arakulath, CEO Kreol Group. “Consumers are also becoming more health-conscious, leading to a rise in demand for low-alcohol and nonalcoholic spirits. In the coming year, we

expect sustainability to be a key trend, with consumers preferring brands that prioritize eco-friendly practices.”

After years of inching its way up, tequila is finally seeing a growth explosion. “We observed significant growth in the sales of tequila, single malts and premium Scotch,” says Avishek Das, CEO Ospree Duty Free. “Tequila has seen a surge in popularity, driven by an appreciation for high-quality variants. Single malts continue to grow, with more interest in unique, limited-edition releases. Premium Scotch remains a staple, with consumers increasingly seeking aged and rare expressions.”

Premiumization trend

The Indian market has shown a remarkable shift towards premiumization, with

Delhi Duty Free CEO Ashish Chopra says Indians are increasingly opting for higher-end and luxury spirits, with an emphasis on personalized customer experiences and exclusive product offerings

At Delhi Duty Free the aim is to cater to the evolving tastes of all travelers by offering a mix of globally recognized premium brands and exceptional value options, ensuring a satisfying shopping experience for everyone

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a clear move toward high-quality, luxury spirits. Promotions and experiential activations are crucial partners in this trend, effectively highlighting the unique qualities and added value of premium products.

According to Chopra, younger consumers are leading this trend, showing a strong preference for innovative and premium offerings. He also sees a “notable” rise in the number of modern female travelers who are increasingly experimental and open to trying premium products. “Yes, Indians have enthusiastically embraced the trend of premiumization, reflecting a shift towards higher quality and luxury in their purchases,” he states.

Arakulath says the trend of premiumization is evident across various age groups and genders, with younger customers being drawn to innovative and trendy premium products, while older consumers often stick to established brands and personal favorites. “Indian consumers are willing to pay more for premium and super-premium spirits. Promotions play a crucial role in driving sales, especially during festive seasons,” he says. “Indians have certainly embraced the trend of premiumization, reflecting a growing preference for highquality, exclusive products.”

Indian spirits on the rise

The sales of Indian spirits are on the rise, driven by both knowledgeable locals and foreign travelers seeking unique souvenirs. This trend reflects a growing appreciation for the quality and heritage of Indian brands and the desire to take home a piece of India’s rich spirit culture.

“Local customers are increasingly appreciating the quality and heritage of Indian brands, while foreign travelers enjoy taking home a piece of India’s rich spirit culture,” says Chopra. “This dual appeal has contributed to the overall growth in sales.”

He adds that duty free is thriving in India, with a wide selection of high-

quality Indian spirits available. “This offers a unique opportunity for both local and international customers to explore and enjoy premium Indian brands, further enhancing the appeal of shopping at Delhi Duty Free,” Chopra says.

Arakulath says Kreol Group has observed robust sales of Indian spirits, attributed to strong domestic demand. “We expect this trend to continue, driven by the growing class of people willing to spend on premium Indian spirits.”

Das notes a significant and consistent rise in Indian spirits sales, highlighting a surge in interest in domestically produced beverages. This trend is fueled by a heightened sense of national pride and the increasing recognition of Indian whiskeys on both domestic and international stages. “Indian whiskeys have gained prominence both domestically and internationally, with brands like Indri, Rampur, Amrut, and Paul John receiving acclaim for their quality and craftsmanship,” Das says.

Looking ahead, he expects sales of Indian spirits to continue increasing, driven by several factors. The global trend towards authenticity and heritage in spirits consumption benefits Indian spirits, which often have rich histories and traditional production

For Ospree Duty Free, while white spirits are growing especially with younger consumers brown spirits continue to be more popular in India, with single malts like Glenmorangie on the rise, with promotions such as this one are key

Lal Arakulath, CEO Kreol Group, says the Group is seeing growing popularity of craft spirits and locally produced beverages and an increasing demand for low-alcohol and non-alcoholic spirits

methods. Indian distillers continue to innovate and experiment with new flavors and styles, attracting a broader audience both domestically and internationally.

“Overall, the future looks promising for Indian spirits, and we expect to see continued growth in sales as they gain recognition and appreciation on the global stage,” Das says.

Indian brands

To effectively penetrate and capture the Indian market, spirits brands must prioritize understanding the diverse consumer preferences and regional nuances, according to Chopra. The Indian market’s complexity requires a tailored approach, and brands must seek strategic promotions and partnerships. “Investing in customer behavior studies and continuously adapting strategies to meet local tastes and preferences is crucial. Additionally, focusing on premiumization and offering superior promotions will help brands capture and retain a loyal customer base,” Chopra states.

Similarly, Arakulath highlights the need for brands to comprehend both varied customer preferences and the regulatory environment. “Brands looking to enter or capture more of the Indian market need to understand the diverse consumer preferences. They should also be aware of the regulatory

Held at Ospree Duty Free, the Ardberg launch event featured a captivating and unforgettable mix of

entertainment

Unique opportunities

environment and consider partnering with local distributors for better market penetration,” says Arakulath.

Prioritizing the diverse regulatory landscape and understanding regional preferences also top the list for Das, when discussing how brands can break into the market. “Effective promotions and strategic partnerships with travel retail stores like us can significantly enhance their market penetration and customer reach,” he adds.

Narrowing gaps

With the growth of aviation in India, the distinction between how Indian and foreign travelers shop at duty free stores is becoming increasingly subtle. Both groups now fall into the broader category of world travelers, influenced by global trends and preferences.

“While there are some differences in preferences, such as foreigners still favoring white spirits over brown and India being predominantly whiskydriven, we are also seeing global trends influencing Indian customers. There is a notable migration towards premium gins, tequilas, and other spirits,” Chopra says. “Our aim is to cater to the evolving tastes of all travelers by offering a mix of globally recognized premium brands and exceptional value options, ensuring a satisfying shopping experience for everyone.”

The travel retail and duty free channel in India presents a unique opportunity for spirits brands who want to reach a global audience. With the recovery of travel post-pandemic, there is an anticipated surge in demand within this channel. This resurgence is coupled with a trend towards exclusive travel retail offerings, adding an element of exclusivity that attracts consumers, according to Arakulath. “Speaking specifically about Indian craft spirits, they offer a unique alternative to international spirits and are certainly worth exploring for those interested in expanding their palate. Often incorporating local ingredients and traditional distillation methods, their flavors reflect India’s rich cultural heritage,” he says.

Das emphasizes the growing demand for unique and exclusive products in the travel retail channel. “India’s travel retail and duty free channel is evolving rapidly. Travelers are increasingly seeking unique and exclusive products, and we’re committed to meeting this demand by offering a diverse range of high-quality spirits,” he says. “Our focus on personalized experiences, exclusive partnerships and innovative digital engagement ensures that Ospree Duty Free remains at the forefront of this exciting market.”

Das is excited about recent events such as the Ardbeg launch. Held at Ospree Duty Free, this launch event featured a captivating mix of fun activities and entertainment, creating an unforgettable experience for the retailer’s guests. Attendees enjoyed interactive games and live performances, all designed to celebrate the unique character of Ardbeg. “It was a fantastic opportunity to engage with our customers and showcase the exceptional quality of Ardbeg spirits in a vibrant and festive atmosphere,” Das reports.

RETAIL TRENDS

The spirits market in global travel retail is witnessing dynamic shifts driven by evolving consumer preferences and innovative retailer strategies. Here, industry leaders share insights on the most significant trends and the strategies being employed to capture the discerning spirits buyer

by WENDY MORLEY

The global travel retail industry is navigating an era marked by significant technological advancements and evolving consumer preferences. As the market continues to rebound, often surpassing 2019 traffic, retailers are leveraging innovative strategies to enhance customer engagement and streamline operations. The integration of AI and digital tools has become a cornerstone, offering personalized travel

experiences and facilitating seamless shopping. This trend is particularly evident with AI-driven recommendations for dining, accommodations and activities, which are gaining popularity among travelers globally.

Sustainability has emerged as a critical driver, influencing both product offerings and consumer behavior. The industry is witnessing a shift towards eco-friendly practices, with companies focusing on reducing packaging waste and utilizing recyclable materials. The emphasis on sustainability is also reflected in the growing premiumization of product categories, where value over volume is becoming a dominant theme. High-end offerings, such as prestige spirits and premium wines, are experiencing robust growth as consumers are willing to invest more in quality and sustainable products.

Influence on overall spend

High-value purchases and cross-category buying are pivotal to the travel

retail spirits market, and spirits have a significant impact on the overall shopping basket due to their high price points and premium nature. Paul Hunnisett, ARI Global Head of Buying for Liquor, Tobacco, Confectionery, and Souvenirs, emphasizes this dual benefit: “Spirits as a category have a significant impact on the overall shopping basket in travel retail. Spirits often have a high price point; therefore, shoppers who purchase spirits often contribute to higher overall basket spend as they are drawn to premium and exclusive products,” he says, adding: “These consumers tend to cross-category purchase as well; their propensity to explore and indulge in niche or exclusive spirits can often lead to additional purchases from complementary categories such as gourmet foods, chocolates, or even non-food categories such as beauty or accessories.”

Gwyn Sin, Vice President of Airside Concessions at Changi Airport Group, addresses the significance of premium spirits in contributing to overall sales

Paul Hunnisett, ARI Global Head of Category Liquor, Tobacco & Confectionery works closely with the global insights team to not only anticipate consumers’ needs and desires but exceed them

Events such as the World of Wines & Spirits (WOWS) not only attract connoisseurs and collectors, but also enhance the aiport’s standing as a premier destination for buyers

In

growth, stating: “The demand for premium and super-premium spirits will continue to grow as consumers increasingly value high-quality exclusive products.” At Changi Airport, a concerted effort to provide an extraordinary shopping and tasting experience sets it apart as a premier destination for discerning spirits buyers and travelers.

Significant spirits trends

White spirits are growing in popularity. Hunnisett observes increased interest in these spirits: “We are seeing growth in tequila and rum, albeit from a smaller base,” he says. “This is driven by the popularity of white-spirit cocktails alongside an increasing consumer interest in premium and diverse spirit offerings.” The increasing demand for these spirits is indicative of a broader shift towards diverse and premium spirit offerings in the travel retail market, particularly in the context of innovative cocktail culture.

Travel retail exclusives, always popular, are becoming increasingly so. Sin says, “We also anticipate a rise in the popularity of travel retail exclusives offering unique items not available in

domestic markets.” This demand for exclusive products reflects a broader market trend where exclusivity and uniqueness are highly valued. Changi Airport Group, in collaboration with Lotte Duty Free and leading brands, has been proactive in offering such travel retail exclusives, enhancing the overall shopping experience for travelers.

Retailers are leveraging the trend toward exclusivity to differentiate themselves and capture the spirits buyer’s attention. Hunnisett says, “Our strategy on Irish whiskey has seen us develop new opportunities with our ongoing range of world exclusives such as the

recently released Redbreast Cuatro Barriles Edition.” By focusing on world exclusives and niche categories, ARI creates a unique and much-desired offering in the spirits category that sets the retailer apart. This strategy is complemented by tailored and bespoke offerings in various locations, ensuring that the product mix resonates well with local and international consumers alike.

Capturing the spirits buyer

Hunnisett emphasizes the importance of understanding and anticipating consumer needs: “At ARI we work closely with our global insights team to ensure

collaboration with Lotte Duty Free and leading brands, Changi sets itself apart with its offerings of limited editions and exclusives

Innovative concepts like the robotic bartender at Lotte Duty Free flagship stores at Terminals 2 and 3 and the interactive wine sommelier at the Terminal 3 outlet capture the traveler’s attention

that we are anticipating consumer needs and demands, so that we are always striving to exceed them.” This approach enables the retailer to create a product mix that resonates with the diverse preferences of its customers.

Digital engagement and omnichannel strategies play a crucial role in enhancing the shopping experience and attracting spirits buyers. Sin notes the significance of digital tools in meeting modern travelers’ expectations: “At Changi Airport digital tools such as mobile apps and online pre-order services and our e-commerce platform iShopChangi make it easy and convenient for customers to purchase items.” These tools provide a seamless and personalized shopping experience, allowing customers to browse and buy products effortlessly. Innovative concepts like Changi’s robotic bartender and the interactive wine sommelier further enhance digital engagement, making the

shopping journey both engaging and informative.

Creating unique customer experiences is essential in attracting and retaining spirits buyers. Hunnisett highlights ARI’s efforts in this regard: “Keeping abreast of the latest consumer demands and working closely with our suppliers to create theatre instore and unique experiences for our customers.”

This strategy involves developing new opportunities with world exclusives and creating an engaging retail environment that captivates customers.

Sin points to Changi Airport’s immersive shopping experiences as a key strategy: “Throughout the year we also partner with brands to roll out Changi 1st pop-ups for various categories including spirits, which give customers the opportunity to be among the first to purchase limited-edition products.” These activations offer visitors an immersive travel journey with

interactive games, tailored product recommendations by brand ambassadors, and personalized gifting options, enhancing the overall shopping experience and driving spirits sales.

Regional differences

Tailored regional strategies are vital for addressing the distinct preferences of consumers in different markets, says Hunnisett. He emphasizes the importance of customizing approaches based on regional nuances: “Trends differ significantly between regions and we work closely with our local suppliers and with our teams in each location to ensure that we offer the best mix for that region.” For example, in Ireland, ARI focuses heavily on Irish whiskey exclusives, appealing to both local consumers and international travelers seeking unique, high-quality products. This strategy leverages Ireland’s rich whiskey heritage and ensures that the sales and

marketing activities are aligned with consumer preferences.

Enhancing regional offerings involves curating products that resonate with local tastes and cultural preferences. Hunnisett notes the success of locally produced spirits and wines in Cyprus Duty Free: “In Cyprus Duty Free the business has had superb success with its range of ‘own-brand’ locally produced spirits and wines – which delivers a very strong sense of place for travelers and gives a taste of local to visitors to the region.” Similarly, in Portugal, premium port has seen a surge in popularity. By collaborating with premium Port Houses, ARI ensures that the Portugal Duty Free locations offer an extensive range that provides shoppers with an authentic taste of Portugal.

Changi Airport’s approach includes leveraging digital tools and omnichannel strategies to cater to the preferences of modern travelers. With the strong momentum of global traffic recovery, Sin says Changi expects an uptick in spirits sales, particularly from the Chinese market. “To bolster the awareness of our offer to our target markets, we work with brands to run marketing campaigns and promotions to spotlight exclusive and rare items, as well as highlight the unique qualities of various products,” she says. This approach ensures that Changi Airport can effec-

tively target its key markets and drive awareness of its unique offerings.

Outlook and events

The future outlook for the spirits category in travel retail appears promising, driven by consumer demand for premium and exclusive products. Hunnisett sees a robust future for spirits sales, driven by innovation and consumer engagement.

Sin highlights the ongoing commitment to enhancing the shopping experience: “To grow Changi Airport’s reputation as a leader in the wines and spirits category we will be rolling out the

third edition of the prestigious World of Wines & Spirits (WOWS) in October this year.”

This event, organized in partnership with Lotte Duty Free, will showcase a curated selection of premium and rare fine wines and spirits, featuring exclusive tastings and masterclasses led by industry experts. Such events not only attract connoisseurs and collectors but also enhance the airport’s standing as a premier destination for spirits buyers.

“Attendees can expect exclusive tastings, masterclasses led by industry experts, and unique opportunities to purchase limited-edition releases,” says Sin.

ARI’s strategy includes ongoing releases of exclusives such as the Redbreast Cuatro Barriles Edition at Dublin Airport

In Lisbon, ARI ensures that the Portugal Duty Free locations provide shoppers with an authentic taste of Portugal

WE CULTIVATE 15 TERROIRS IN THE DOMINICAN REPUBLIC

EACH TERROIR’S RESPECTIVE TOBACCOS CREATE DIFFERENT SENSORIAL EXPERIENCES · DIFFERENT GROWING CONDITIONS BRING YOU DIFFERENT FLAVOUR PROFILES ·

THE WHITE BAND IS

Premium experiences

Since the reopening of the Babylon Terminal Departure Duty Free store at Baghdad International Airport, Iraq Duty Free has welcomed a sharp increase in both liquor and tobacco sales

by HIBAH NOOR

Buoyed by the recent reopening of its Babylon Terminal Departure Duty Free store at Baghdad International Airport’s international departures terminal, Iraq Duty Free is enjoying a new era of growth.

At the same time, sales across major categories have increased with the travel retailer set to expand its downtown duty free business with a shop in Al-Karkh on the western side of Baghdad, its second off-airport location in the Iraq capital.

Ambitious expansion plans have the travel retailer set to open further downtown stores nationwide in coming years, while renovations to the Baghdad International Airport Samarra arrivals

duty free store are scheduled for later this year, along with its Basra International Airport operation.

According to a spokesperson for the travel retailer, Iraq Duty Free has witnessed a sharp increase in liquor sales since the reopening of the Babylon Terminal Departure Duty Free store. That increase is attributed to its featured products, and in particular to the retailer’s faster moving SKUs being showcased in a more premium way.

Iraq Duty Free has also noticed a change in buying habits, with an increased demand for higher end, more expensive single malt whiskies, as well as premium Scotch brands. The same can be said in the champagne and cognac categories, with purchases

increasing at a rate which the company has not seen in the past. Purchases of wine have also increased markedly, as Iraq Duty Free’s customers become more accustomed to wines of different quality and from different regions. “We are therefore moving our procurement towards these changes in buying habits,” the spokesperson adds.

Considering current trends in spirit sales and looking ahead to the near future, he notes, “Scotch whisky is still by far the number one selling type of spirit but the trend is now moving towards more premium brands and higher buying prices. We see our younger consumers now buying whiskies. Whisky is followed closely by vodka which is also very high in demand.”

Exclusive lines are not in Iraq Duty Free’s immediate plans as the company maintains a focus on ensuring it has the brands that match the demands and preferences of today’s traveling consumers.

The refreshed store offers an ideal showcase for Iraq Duty Free’s extended brand and product lineup

AMERICA’S favourite vodka for a reason tried and true

Post-renovation trends in tobacco sales

Considering how the travel retailer is meeting consumers’ demands and tailoring its offer within the tobacco and tobacco products category, Iraq Duty Free says Marlboro remains the topselling brand, followed by Winston. “We have witnessed an increase in demand for cigars and will be introducing some very nice brands to cater to this demand very soon,” the spokesperson says.

“Cigarettes have and will always come as number one in demand followed by shisha tobacco, a category in which we have experienced a tremendous growth in sales. Heated tobacco products (HTPs) or heat-not-burn (HNB) products follow and then finally the vapes.”

Underlining the strength of the shisha category, Iraq Duty Free has listed shisha tobacco in its shops for the past three years, with sales increasing “tremendously on a yearly basis”. The travel retailer has opted to introduce a

second major brand and hookahs will be available in shops by the end of July. Iraq Duty Free has yet to decide on listing hookah accessories.

Leveraging trend towards highquality smoking experiences

According to the spokesperson, there is a noticeable trend in terms of higher

quality and more exclusive brands, “but this, of course, also applies to other categories”. Gifting plays a key role in Iraq Duty Free’s offer to match the needs of its Iraqi consumers who maintain strong gifting traditions, especially when traveling and bearing gifts on their return.

Iraq Duty Free has welcomed a sharp increase in liquor sales since the reopening of the Babylon Duty Free shop

Cigarettes, tobacco and shisha products continue to play a key role in the travel retailer’s increasing sales

Japanese craftsmanship

House of Suntory has reached a new milestone with the introduction of its Yamazaki and Hakushu Kogei Collection; Bowmore’s single malt whiskies range to experience big change in H2

by ALISON FARRINGTON

The House of Suntory, a founding house of Japanese whiskies, introduced its inaugural Yamazaki and Hakushu Kogei Collection at TFWA Asia Pacific in Singapore. According to Ashish Gandham, Managing Director – Global Travel Retail at Suntory Global Spirits, the introduction exemplified how this limited-edition is a new milestone for its whisky portfolio and a sign of the company’s legacy of craftsmanship. “No other market outside Japan has seen this kind of whisky innovation in travel

retail,” says Gandham.

The Kogei Collection explores the traditional crafts of Japan through artisan partnerships, in this case a collaboration with Chiso, Kyoto’s preeminent Kimono House and creators of the finest Japanese kimonos since 1555. The two collectible whiskies showcase a fusion of peated malt and Spanish oak and will be refreshed every two years with new packaging designs. “We know travelers have a sense of exploration in our channel; this launch is an indication of how House of Suntory brings value for

Bowmore will see a revamp in Q4 to focus on aged statements “to bring different facets of whisky to the channel”

money to travelers – a key tenet of what the house offers reflecting our endless quest for quality and creativity,” explains Gandham.

Featuring designs based on Chiso kimonos, the Yamazaki packaging incorporates intricate prints inspired by the serene Yamazaki Distillery, with the depiction of three merging rivers evoking a sense of calmness. The Hakushu packaging mirrors the Japanese Southern Alps that surround the Hakushu Distillery. This design features silver stamping, designed to call to mind forest clouds and delicate kimono threads.

“We were very clear we wanted to continue our leadership of Japanese spirits through innovation and craftsmanship,” Gandham tells Global Travel Retail Magazine. “The Kogei Collection is a priority for us; it is very special and only for our travel retail customers.”

Suntory Global Spirits recognizes the tenets of global travel retail and the sense of exploration travelers have when they shop in duty free. From a shopper perspective, the channel provides value for money and exclusivity. “I’m happy this space has been recognized by the company in a range of whiskies we hold most dear for what Suntory stands for,” he says.

Bowmore’s elevated offer

In the second half of this year, the Bowmore range of single malt Scotch whiskies will see change. Bowmore will have a big relaunch in Q4, explains Gandham. On top of the recent Bowmore Timeless Series launches – a 33-YO and 29-YO – which took place in May, respectively, in addition to the 31-YO that was released in 2021.

Bowmore will increasingly have an Asia steer in its brand positioning, according to Gandham. “For us, the

top 15 air hubs as travel retail locations for activity are absolutely key. We’ve expanded our portfolio in the last three years and we have a lot of headroom for growth.

The top 15 locations globally are where we need to show our best offer. They set the tone for us, in terms of what we want to achieve; we want to own the [single malt] category in terms of market share, we want to show our best leaders and show our quality products and innovation. These are the conduits of our strategy in global travel retail,” he says.

These 15 top locations are where Suntory Global Sprits will be focused on Bowmore and Japanese whisky. But outside these locations Bowmore will have an Asia steer for promotions, while Laphroaig will have more of a Europe steer, as we have already seen with the Laphroaig Elements series launch in late 2023 in the UK.

From left: GTR Magazine’s Editor-in-Chief Hibah Noor, Ashish Gandham, Managing Director –Global Travel Retail at Suntory Global Spirits and Alison Farrington, GTR Magazine’s Senior Editor

House of Suntory launched its new global travel retail exclusive Yamazaki and Hakushu Kogei Collection in May 2024

GENERATION ZEITGEIST

As Generation Z matures into key consumers within the travel retail spirits market, the cohort’s distinct preferences are shaping industry standards. With a clear emphasis on sustainability, authenticity and quality, this demographic is pushing all stakeholders to incorporate more responsible and engaging practices

by WENDY MORLEY

With its adult population now ranging from 18 to 28 years old, Generation Z represents today’s traveling zeitgeist. This cohort is reshaping the duty free spirits market with a distinct preference for quality over quantity, aligning with its broader values of authenticity, sustainability, and unique experiences.

Gen Z travelers are frequent and adventurous, typically taking an average of three leisure trips annually. They prioritize experiences that are off the beaten path and they are heavily influenced by social media. This demographic values ethical practices and environmental sustainability, often researching companies’ approaches to these issues before making purchasing decisions.

In travel retail, Gen Z shows a growing appetite for premium and authentic products. They are more likely to spend on high-quality, ethically produced spirits and seek out brands that tell compelling stories about their heritage and production processes. This is driving retailers and brands alike to adapt their strategies, ensuring their offerings meet the high standards of Gen Z consumers.

Drinking better

The trend of “drinking less but drinking better” among Gen Z is reshaping the duty free spirits market. Brands are adapting their strategies to cater to this generation’s preference for quality over quantity, ensuring that their product offerings meet the high standards of these discerning consumers.

Global Drinks Ltd (GDL) is addressing this trend through a strategic approach to product selection, brand partnerships and sales strategies. “GDL has carefully curated our own MISAKA whisky portfolio to include six super premium spirits that come with age statements and, importantly, a product story on our packaging that details why MISAKA whisky is a premium spirit that distinguishes itself from other whiskies,” says Marketing Director Harry Kartasis. “Whether it’s our fresh watersource stream that lies 250 meters under the MISAKA mountain range in Japan or the rare Mizunara casks we use to age five of our seven SKUs, we cater to Gen Z’s preference for quality over quantity.”

Rémy Cointreau GTR is also tapping into this trend by leveraging its extensive portfolio, rich heritage and

Global Drinks Ltd Managing Director Harry Kartasis says transparent communication is key when marketing to Gen Z

Alice Hoffman, Worldwide GTR Marketing Director, Rémy Cointreau, says in reference to engaging Gen Z that the possibilities of experiential engagement activities – and the advancement of digital integration – are hugely exciting

Prestigious brands like Louis XIII are positioned to meet Gen Z’s demands for quality over quantity

expertise. “We welcome the opportunity this development gives us to shine a spotlight on our premium offerings to travelers who are seeking out exceptional spirits across various product categories,” states Alice Hoffman, Worldwide GTR Marketing Director. Rémy Cointreau’s portfolio includes prestigious brands like Louis XIII and Rémy Martin Cognac, Bruichladdich Islay single malt whisky, Cointreau liqueur and The Botanist Islay Dry Gin, perfectly positioned to meet Gen Z’s demand for exceptional drinking experiences.

To address the trend of drinking less and the growing interest in mindful consumption, Rémy Cointreau is also showcasing the versatility of its spirits through low- and no-alcohol cocktail recipes. “These are often highlighted via our travel retail activations and our digital channels, educating consumers on how to savor the flavors of our brands while moderating their alcohol intake,” Hoffman states.

Emphasizing sustainability

Sustainability has become a significant consideration for all demographics, and none more so than Gen Z, who prioritize environmental and social responsibility in their purchasing decisions.

Spirits brands are increasingly focusing on sustainable practices.

Global Drinks Ltd represents brands like Stoli Group, Quintessential Brands, and Proximo Spirits, all of which have made sustainability an essential consideration. “Many of the brands we represent have implemented sustainability measures across their operations, from carbon-neutral production processes to eco-friendly packaging and responsible sourcing practices,” says Kartasis. “We closely collaborate with our brand partners to understand their specific sustainability goals and ensure that our distribution efforts align with and amplify their commitments.”

Additionally, GDL has launched its own sustainability initiative for MISAKA Whisky. “For every 1,000 bottles of MISAKA sold, we plant a Sakura tree in the MISAKA mountains, an initiative endorsed by the local government as an important part of their own sustainability goals,” Kartasis states.

While Rémy Cointreau GTR recognizes sustainability’s importance to Gen Z, this is a happy coincidence, as it is in strong alignment with its own company values. “We know that sustainability is an important purchase influencer for Gen Z, who care about the environment and social respon-

sibility, favoring brands with proven sustainable practices and ethical sourcing. In this respect we are very fortunate, as sustainability is absolutely a core aspect of our company’s mission too – as is DEI,” states Hoffman. “Fida Bou Chabke, Rémy Cointreau GTR CEO, also leads on our Diversity, Equity & Inclusion activities, in collaboration with the Committee that represents all our countries worldwide.”

Rémy Cointreau prioritizes efficient energy usage, the use of eco-friendly materials and lighting in addition to waste reduction and responsible resource management, to minimize environmental impact. “For us, sustainability is not just an idea, but a key guiding principle across all our activation spaces,” Hoffman adds.

Several key initiatives highlight Rémy Cointreau’s commitment to sustainability, as Hoffman further elaborates: “Champagne Telmont has partnered with glassmaker Verallia to create the lightest Champagne bottle in the world to date, reducing its weight to just 800g and eliminating gift boxes and other packaging, further reducing its carbon footprint by an impressive 8%,” Hoffman reports.

Additionally, the new LOUIS XIII Cognac coffret is crafted from 100%

Prestige whisky brand Bruichladdich’s new bottle contains an average of 60% recycled glass and is 32% lighter than its predecessor

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cellulosic materials, reducing CO2 emissions by 57% and facilitating more environmentally conscious shopping, shipping and transport practices.

“Within the whisky category, Bruichladdich’s new bottle for our signature Bruichladdich Classic Laddie contains an average of 60% recycled glass and is 32% lighter than its predecessor, significantly reducing our environmental impact,” she adds.

The Botanist Islay Dry Gin is also strongly committed to sustainability, aiming to reduce its impact in terms of energy, agriculture, biodiversity, packaging and waste. “As custodians of Islay, The Botanist is working tirelessly to reduce the impact of its operations and become more environmentally conscientious in its actions,” Hoffman emphasizes.

Cultural exchanges

Global travel and cultural exchanges have significantly shaped Gen Z’s preferences, leading to a more adventurous and discerning approach to beverage choices. This generation’s exposure to diverse cultures and flavors has been amplified by social media, where influencers and content creators share their

travel experiences, sparking curiosity about regional spirits and cocktails.

Hoffman acknowledges that Gen Z consumers typically have more adventurous palates, willing to experiment with new and unexpected flavors and moving beyond traditional spirit categories. “This openness stems from their exposure to global cultures and their desire for unique experiences,” she states. Gen Z values transparency and authenticity, seeking brands with compelling stories, traditional production methods and high-quality ingredients. While generally cost-conscious, they are also willing to spend more on spirits that align with their values.

To cater to these preferences, Rémy Cointreau GTR curates a travel retail assortment that reflects these values, showcasing heritage brands and distinct cultural origins along with company core principles, transparency, expertise, terroirs and sustainability. The assortment includes Rémy Martin, known for the heritage and tradition of Cognac making; Cointreau, essential for classic cocktails; Mount Gay, spotlighting the rich history of rum; and Metaxa, a Greek liqueur combining brandy, muscat wine, and Mediterranean botanicals.

Bruichladdich and The Botanist offer travelers a taste of exceptional craftsmanship from their Islay distillery.

“Importantly, we regularly innovate and update our heritage portfolio with limited-edition expressions and travel retail exclusives, tapping into Gen Z consumers’ desire for something that is rare and collectible,” says Hoffamn.

Kartasis notes that social media has played a crucial role in this shift.

“Influencers and content creators sharing their travel experiences have sparked curiosity about regional spirits and cocktails. This digital storytelling inspires Gen Z to seek out those flavors when traveling or through imported products back home,” he says.

The MISAKA brand, available only through global travel retail, leverages brand ambassadors to deliver its story, engaging with passengers at airports and border crossings. “Our brand story is delivered through people engagement by brand ambassadors who are highly skilled and educated to get our message across to passengers who are either departing or arriving through an airport or border crossing,” Kartasis adds.

Marketing Director Harry Kartasis says Global Drinks Ltd is focusing on strategic listings and cross-promotion for MISAKA

CONSUMPTION IN CRUISE

Featuring brand, retailer and cruise line feedback from key channel players, this report discusses drink development, retail activation and consumer behaviors in line with the spirits category

by LAURA SHIRK

Cruise Lines International Association forecasts that global cruise capacity will grow at least 10% from 2024 to 2028. For a closer look at the multi-generational travel option that benefits from unparalleled dwell time, experience-driven retail and two forms of alcohol consumption: on board and duty free, Global Travel Retail Magazine turned to the experts. In this report, we hear from sector professionals about leading drink development and cocktail creation, the importance of a segmented approach, cruise activation and consumer behaviors.

Speaking about the cruise line’s approach to managing on-premise and off-premise consumption, Zachary Sulkes, Assistant Vice President of Beverage Operations at Carnival Cruise Line (Carnival), says on board its focus is on catering to the preferences of guests. “We recognize that when people visit one of our bars on board, they often

have specific tastes or favorites in mind, so our selection primarily includes brands that are consistently in demand,” he explains. At the same time, Carnival monitors emerging trends to match those seeking a different option during their cruise. It recently added a new Mezcal brand to its portfolio, reflecting the growing popularity of the spirit in the broader US market.

“We also recognize the importance of tailoring our offerings to enhance the guest experience, which allows us to introduce regional specialties and themed offerings. For example, on ships such as Carnival Firenze and Carnival Venezia, which embody the ‘Carnival Fun Italian Style’ experience, we feature a variety of Italian spirits and cocktails like Limoncello and Espresso Martinis, aligning with the thematic elements of each ship,” says Sulkes.

When it comes to drink innovation, mixologists curate a menu of cocktails that resonate with guests and reflect the

dynamic nature of Carnival’s dining and entertainment experiences. On evolving trends, the cruise line is also responding to those driven by sustainability practices and advancements in beverage technology. An example of this is its partnership with closed loop packaging leader ecoSPIRITS.

Tito’s Vodka says special tastings, gifts-withpurchase and price promotions, encourage travelers to engage with their favorite brands and learn about their versatility

Rising Tide Bar on Royal Caribbean Cruises; Starboard Cruise Services says there is significant interest in cross-promotion between onboard consumption and duty free sales to enhance the guest experience while driving sales in both areas

Retail integration and dwell time

To integrate the core cruise experience into the duty free channel, it is essential that parties successfully work together to make the most of the retail environment on board. Sherrie Day, Global Head of Merchandising at Starboard Cruise Services (Starboard) notes, “We collaborate closely with our spirits brand partners to deliver a well-curated selection of products, maintain adequate stock levels and provide top-notch training for staff members, ultimately enhancing the overall shopping experience for cruise guests.”

According to Day, Starboard considers passenger demographics and preferences, seasonal and destinationcentric itineraries, brand-specific training programs and supply chain coordination when making decisions. In addition to tasting sessions and mixology classes, cross-brand activations such as “Watch and Scotch” events help to cross promote between on board consumption and duty free sales. On the digital front, it uses tools like mobile apps and interactive kiosks to provide convenient shopping options and tailored promotions.

Starboard leverages the extended time with travelers by organizing

frequent and diverse retail events including themed shopping nights, product demonstrations and exclusive samplings that connect with various age groups and interests and encourage multiple shopping visits. Day says the Spirited shop aboard the ship Celebrity Ascent attracts passengers by combining digital elements, personalized tastings and “unprecedented engagement” via its “What’s Your Whiskey” quiz-based interactive activation.

Day comments, “By integrating shopping seamlessly with the overall cruise experience and continuously engaging

passengers throughout their journey, Starboard enhances the appeal and accessibility of duty free shopping, driving higher conversion rates.”

Tito’s brand discovery

A recognized name in the channel, Tito’s Handmade Vodka works with its cruise partners to ensure a seamless experience with the brand on board. Curran Zinn, Commercial Manager –Travel Retail at Tito’s Handmade Vodka, says since it’s likely that many cruise guests, especially in North America, have had their own experience with Tito’s Vodka already at home, its goal in the sector is to connect passengers with the brand in a unique and different way while they are on vacation. Special tastings, gifts-with-purchase and price promotions, encourage travelers to engage with their favorite brands and learn about their versatility.

“We appreciate that cruise lines seek to differentiate themselves from other lines, and so we’re very flexible in how we approach each cruise line. We create specific programs for each to meet their individual needs, whether that’s through bespoke cocktails or on board activations and promotions. Bar menus especially are a great way to customize our brand and engage with cruise guests in a memorable and meaningful way,” shares Zinn.

In a news update, Quintessential Brands has designed an on board, cross-category cruise pouring range to create a one-stop shop solution for operators. It has also released its full premium brand portfolio including BLOOM Gin and Feeney’s Irish Cream in partnership with Crystal Cruises. Oliver Storrie, Regional Director – Global Travel Retail at Quintessential Brands, explains the company aims to showcase its brands through the cocktail and premium menus on board. “We will then dovetail this with listings in the retail store on board, so passengers can try and buy,” he says.

Inspired by the hit Netflix series Emily in Paris, Quintessential Brands has also launched the premium Kir Royale ready-to-drink cocktail Chamère. The cocktail (10.5% ABV) is available in three formats: a 250-ml can and 20-cl and 75-cl bottles. According to Storrie, the company will be working with operators to bring the product to life in cruise via on board lifestyle events.

Carnival Cruise Line’s Amari Bar; the cruise line’s selection primarily includes brands that are consistently in demand

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Origin

story

As its fourth country of origin, Penfolds discusses its relationship with China, as well as its position on digital integration, creative collaboration and experience-driven retail

by LAURA SHIRK

Global Travel Retail Magazine recently sat down for an exclusive interview with team members at Penfolds, a division of Treasury Wine Estates. From contributing factors to Penfolds’ growth in Asia to key trends shaping the region’s wine market, the conversation covered the name’s long history with China, the launch of its first Chinasourced wine and plans for the future. Penfolds Managing Director Tom King and Michael Jackson, Global Director –Global Travel at Penfolds, spoke openly about its expansion in Asia, as well as its strategic planning.

Founded 180 years ago, the Australian wine producer first exported wines from South Australia to Shanghai, China, in 1893, forming connections in the trade and building a loyal consumer base. Penfolds launched its first Chinese wine two years ago, under the ONE by Penfolds label and in collaboration with

Penfolds Bin 389 2020 Cabernet Shiraz Travel Retail Gift Tube

The Penfolds thematic “Venture Beyond” campaign is supported by a personalized digital program and strong visual displays to boost engagement and increase brand awareness

other winemakers. In 2023, the company released its first luxury wine made in China, Chinese Winemaking Trial 521, a unique blend of Cabernet from Yunnan and Marselan from Ningxia. King noted that there is sizeable opportunity long-term to create quality Penfolds wines from these two regions.

“Over the last few years, our business has changed and our portfolio has evolved from being an Australian wine business to now a brand that makes wines from the best winemaking regions around the globe,” shared King. These include California, Bordeaux and Champagne. “We’ve always had a desire to make wines in China, which is our fourth country of origin. During this time, we’ve accelerated this in terms of understanding the landscape, the different growing regions and sending our winemakers and viticulturalists to China.”

He continued, “We’re really excited about what we’ve been able to produce

in terms of the two non-negotiables for us: our quality and Penfolds house style. Our winemakers have been able to craft a wine that is not only in line with the Penfolds house style, but also representative of the great varieties of these regions [Yunnan and Ningxia].”

The response

According to King, the response has been better than expected in regards to both the product and the welcoming received as a foreign company entering local businesses and communities. From the start, both parties wanted to partner, exchange ideas and learn more. Considering the trial is made up of limited quantities, he said it has been a challenge satisfying demand. “People have been impressed with the quality of the wine, as well as the way that we’re able to tell the story of how we make wine around the world – specifically, how we make wine in China in collaboration with local partners,” he commented.

Penfolds will be releasing a second vintage in August and hosting a reveal in Beijing, partly as a celebration of its core portfolio now being back in the China market post the lifting of tariffs.

“Wherever we make wine around the world, whether it’s in Australia, France or the US, we like to play a role in the industry that is more than just creating wines – in terms of being an active contributor,” King explained. “Clearly, at this point in time there is a desire within the Chinese government to build a domestic wine industry that rightly owns its place in the world. Penfolds wants to be part of that; not only on the production side in China, but also from a consumption perspective.”

Digital integration and creative collaboration

As shared by Jackson, Penfolds is based on three pillars: portfolio, visibility and activation, and digital. Speaking about how its reputation for innovation is

The company teamed up with Human Made Creative Director Nigo in a cultural-led partnership to create the Grange by NIGO collection

exhibited in travel retail, he pointed out digital plays a key role in consumers’ desire to be part of the brand universe. The company has several digital initiatives on the go to drive engagement online and in-store – most notably, the Penfolds Digital Sommelier program. Launched 18 months ago, the program, which delivers an immersive user experience, helps travelers overcome one of the primary barriers of the wine industry: selection. It includes both limitededition and best-selling wines – plus, an educational component via a dedicated page. Users can check out a variety of insights including product information and tasting notes.

“Our 3D installation at Changi Airport also provides strong digital content for Penfolds. We’re working to become further integrated throughout the complete travel journey, which starts at home,” he said.

The Penfolds thematic “Venture Beyond” campaign also drives the growth of the brand globally via portfolio innovation and consumer experience. Supported by a personalized digital program and strong visual displays, the multi-sensory campaign boosts engagement and increases brand awareness. It is designed to integrate the company into the pre-trip and in-transit phases of the journey. “Venture Beyond”

has already highlighted space and underwater exploration, with the next theme to be announced.

When it comes to cultural-led partnerships and the blending of winemaking and luxury design, Penfolds has also teamed up with Human Made Creative Director Nigo on a second project, the Grange by NIGO collection. Described as a one-off series, this is the first-ever design takeover of Penfolds Grange. To also mark its 180th anniversary this year, Penfolds is releasing an expanded Champagne portfolio in collaboration with family-owned Champagne House Thiénot.

“Whenever we bring a brand to life, we provide consumers with an experience that is beyond just a product on the shelf. We think about how we can engage consumers in a different way, whether it’s digitally, or through packaging or activation,” said Jackson.

Future focus

Returning to the lifting of tariffs on Australian wine in China, King explained, after the imposing of taxes in 2020, Penfolds made the decision to maintain a strong base in China and to continue to invest in the brand. Penfolds moved to a divisional model and now, with the country open for business, the brand is striving to fulfill global demand. This

means it has become more selective about product allocation.

“While it was more limited, we still offered a portfolio that enabled us to provide consumers with wines and experiences – and to keep the brand alive. It gave us the opportunity to think about our business in China long-term – and about what we wanted the brand to be. And now, we’re in a good position to rebuild our full portfolio. Having our full portfolio of wines available again [in China] is a big step forward.

“Our focus for the future is to continue building a portfolio from four different countries of origin. The opportunity to provide a consumer or wine collector with the experience of trying four different Penfolds wines from four different regions around the world is exciting. And we’re looking forward to bringing this experience into travel retail,” said King.

The two closed by discussing the impact of experience-driven retail in the channel and the fact that by creating experiences that drive emotional connection, Penfolds is able to further build demand. King added, “And, by investing in partnerships at the local level, we’re able to further build the availability of the brand. Finally, by leveraging what is now a broad portfolio, we can present the right wine for the right occasion.”

“Venture Beyond” by Penfolds has already highlighted space and underwater exploration, with the next theme to be announced

Users of the Penfolds Digital Sommelier can check out a variety of insights including product information and tasting notes in line with its wine portfolio

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As an Italian red aperitivo, Rirò offers consumers a slice of the Tuscan lifestyle and a new way of drinking wine

Fine wines, full glasses

Based on industry experts and travel retail insights, Global Travel Retail Magazine reports on category trends, the return of rosé and the next generation of wine lovers by

LAURA SHIRK

“Elegant, fresh and intense,” Rosa dei Masi is described as Masi Agricola’s interpretation of the “Rosé Renaissance”

Driven by a focus on creating experiential retail environments that attract travelers seeking unique and premium items, Silvina Romani, Export Manager Global Travel Retail at VSPT Wine Group, notes that airports have transformed from transit hubs into shopping destinations. With an increasing appreciation for fine wines, travelers are willing to invest more on higher quality products and distinctive experiences. Also, given the airport setting and related circumstances, travelers are often in a mindset to indulge.

According to Romani, the Chilebased group offers a sensory wine experience, particularly via its travel retail exclusive 1865 Voyager Collection. The line consists of three wines: 20and 70-Year-Old Cabernet Sauvignons and a 40-Year-Old Red Blend. Romani explains the collection’s lifestyle is represented by discovery and a connection to exploration. “Our offerings cater to those seeking not only a wine, but an experience that aligns with their refined tastes and adventurous spirit,” she says.

Pier Giuseppe Torresani, Export & Travel Retail Sales Director at Masi

Agricola, says the unprecedented growth in demand for premium wines is partly because of the nature of the business. “While some consumers are looking for good price opportunities, others are seeking unique and exclusive products that are difficult to find in the domestic market,” he comments. “These are not necessarily different consumers; it can be the same person buying for different occasions.” Torresani adds, in this light it’s normal that there is increasing interest in premium wines, since they are linked to specific grapes, vineyards and producers and therefore scarce.

Gen Z and the Rosé Renaissance

Speaking about Gen Z, Torresani says while wine has traditionally been consumed by a more mature population, he’s confident that “step by step” the next generation of consumers will enter the wine world. It is important for Masi Agricola to offer an assortment that covers the emerging needs of consumers of all ages, which is why the company has launched the organic wine range Fresco di Masi. Made up of one white and one red, the range is low in alcohol and a response to the growing demand for sustainable and light-bodied products among the younger consumer segment.

The Italian winemaker has also introduced Rosa dei Masi, which it describes as “elegant, fresh and intense” and its interpretation of the “Rosé Renaissance.” Torresani explains wine is about enjoying flavors and pairing with foods. “Each bottle represents a specific

culture, territory and people. Choosing a specific winery or wine is a way for a wine lover to express themselves and to share certain values with others. In that sense, wine has become a lifestyle choice,” he says.

Beyond the return of rosé in the category, the segment is seeing a shift from intense pink and fruity rosé wines to those that are “light salmon in color and more mineral on the palate.”

On the digital side, VSPT Wine Group leverages digital platforms and social media to create informative and interactive content. Romani notes that partnering with influencers allows the company to reach and resonate with a younger audience. Additionally, through sustainable initiatives like its International Wineries for Climate Action membership, VSPT Wine Group demonstrates its commitment to climate change and sustainable progress –shared values among Gen Z.

Chile-based VSPT Wine Group caters its offering to those seeking an experience that aligns with their refined tastes and adventurous spirit

A new way of drinking red wine

To appeal to the next wave of consumers, Esteban Garcia, Duty Free & Travel Retail Manager at Italian Wine Brands explains the wine industry needs to adapt its strategies to align with the preferences and behaviors of the tech-savvy and socially conscious demographic. “We’re embracing such changes with our main brands including VOGA Italia, specifically it’s new offering Prosecco DOC Still,” remarks Vittoni. In addition to teaming up with social media personalities to increase awareness and engagement, Enoitalia relies on peer reviews and recommendations from trusted figures to influence purchasing decisions.

According to Vittoni, VOGA Italia Prosecco Still symbolizes modern Italian winemaking and provides a sensory experience that is both sophisticated and approachable. “With its stylish presentation, versatile appeal and commitment to quality and innovation, the wine attracts a new generation of wine lovers who appreciate the blend of tradition and contemporary flair,” she says.

Italian Wine Brands is also presenting a new way of drinking red wine with Rirò, the Italian red aperitivo. Crafted in Tuscany, Vittoni shares, the new generation of red wine respects tradition and captures the essence of a region deeply rooted in its heritage, while embracing innovation and change.

With its stylish presentation and floral undertones, VOGA Prosecco DOC Still symbolizes modern Italian winemaking

The future

unfurls

With an eye set firmly on innovation, sustainability and consumer-centricity, JT Group is reshaping tobacco and showcasing a profound pivot in industry priorities

by HIBAH NOOR

With increasingly stringent regulations and changing consumer trends, JT Group must be increasingly innovative and savvy to grow its business globally while adhering to both market demand

and applicable rules and regulations. Reduced Risk Products (RRPs) are proving an important focus that serves all these areas.

The company’s recent joint venture with Altria marks a significant step in the expansion of RRPs, particularly in the heated tobacco segment. This collaboration is set to bolster the company's strategic goals, enhancing its global presence and supporting sustainable growth for all stakeholders. In the context of the global market, this partnership provides JT Group with a competitive edge.

“The JT Group believes this newly formed partnership with Altria will support its strategic ambition to build a global presence in RRPs through a strong focus on HTS, driving sustainable growth for all stakeholders of the 4S model: our shareholders, consumers, employees and a broader society,” says Claudio Ferreira, General Manager, Global Travel Retail. The combined expertise of JT Group and Altria is expected to drive the growth of Ploom HTS in the US.

The introduction of Ploom Heated Tobacco Sticks (HTS) in major travel hubs will cater to the rising demand for next-generation products among international travelers. This aligns with JT Group's broader strategy to integrate

advanced product offerings in travel retail, ensuring that these offerings meet the diverse preferences of global consumers.

Navigating regulations

The collaboration leverages the scientific and regulatory strengths of both companies to navigate the stringent requirements of the US Food and Drug Administration (FDA). Together, JT Group and Altria are preparing to submit a Premarket Tobacco Product Application (PMTA) for the latest Ploom HTS products, targeting the first half of 2025 for submission. This joint effort is a testament to their joint commitment to innovation and regulatory compliance, aiming to set new standards in the tobacco industry.

No stranger to regulations, JT Group is in full support of regulations, a topic of great interest currently. “Proper and balanced regulation is very critical in international travel retail markets,” says Ferreira. “Some of the key regulatory challenges include the implementation of domestic regulations in the travel retail environment and the reduction of inbound duty free allowances. The company continues to advocate a balanced approach to regulation that incorporates input from all the parties involved in the travel retail ecosystem.”

Recent consumer-centric innovation offerings include the launch of Mevius Option Fizzy Dew, a new, very well-received capsule proposition

Claudio Ferreira, General Manager, Global Travel Retail, JT Group

Khim Lim Chua, Regional Director Asia Travel Retail, JT Group

A better future

JT Group is implementing new sustainability initiatives to address the increasing consumer demand for environmentally responsible products in the travel retail channel and in the retail world at large. “Our sustainability strategy is guided by our purpose and specifically defines how we actively strive for a better future focusing on our products, and wider society, including people and planet,” states Ferreira.

And, according to Ferreira, creating a better future begins with creating that better future for their consumers. “We focus our investment and innovation efforts on lowering the health risks associated with smoking by providing our consumers with a great choice of alternative products that are marketed responsibly. At the same time, we are improving circularity through new designs and materials, reducing waste, and supporting consumers in making more environmentally sustainable choices,” he says, adding that JT Group has committed to be Carbon Neutral for its own operations by 2030 and Net-Zero across its entire value chain by 2050.

The rise of alternatives

With the rising trend of healthconscious consumers, JT Group is addressing the demand for reduced-risk and non-tobacco products by introducing innovative offerings. Ploom X, the company’s latest addition in the HTS segment, represents most its exciting and ambitious launch to date.

“As our consumers are looking for alternatives to combustible tobacco and are willing to try different reduced-risk products, the company is focusing its resources on the HTS segment, as the largest, fastest-growing, and hence most promising segment, to compete more successfully in this rapidly moving category,” explains Ferreira.

In travel retail, Ploom X is now available in Japan, Switzerland, Italy and Greece, with plans for further geographic expansion in the coming 12 months in a move aimed to cater to the growing demographic of healthconscious consumers seeking reducedrisk alternatives.

Growth in APAC

As JT Group continues to expand its presence in emerging markets, the

company is focusing on a couple of its most popular offerings, which combined serve to positively impact overall growth, especially in Asia Pacific.

“Growth opportunities will increasingly come from the Asia Pacific region, where travel retail continues to grow due to the rise of Indian travelers and the recovery of Chinese travelers,” says Khim Lim Chua, Regional Director Asia Travel Retail. “We have a very strong portfolio of leading brands in Asia Pacific, centered around Mevius, the leading tobacco brand in Japan. Our consumer-centric offerings include the launch of innovations such as Mevius Option Fizzy Dew, a new capsule proposition that was very well-received by our consumers in Asia.”

To enhance consumer engagement and experience in the heated tobacco category, JT Group has expanded and rolled out new activations in Japan travel retail, including a Ploom pop-up store in Narita International Airport and a Ploom lounge in Kansai International Airport. “The Ploom lounge offers a unique shopping experience for consumers to browse the range of Ploom products, view product demonstrations, and participate in tasting sessions,” Chua says. “Ploom X is growing fast in Japan travel retail, mirroring the excellent performance obtained so far in the Japanese domestic market.”

Catering to consumers

With the increasing consumer demand for unique and premium experiences in the travel retail market, JT Group is continuously introducing innovations in its product line to cater to the changing preferences of consumers in the duty free market, with Ploom X as a prime example, according to Ferreira. He says, “It combines authentic taste, refined HeatFlow technology and personalized style, all of which come together to deliver the ultimate heated tobacco pleasure.”

New activations in Japan travel retail include a Ploom pop-up store in Narita International Airport and a Ploom lounge in Kansai International Airport

Luxurious

innovations

As Oettinger Davidoff AG leverages its expertise to push the boundaries of cigar innovation, the company's dedication to sustainability and consumer-centric strategies ensures its continued leadership in the luxury cigar market

by WENDY MORLEY

Oettinger Davidoff AG has a substantial presence in travel retail, which is a key area of its overall business strategy. Leveraging its extensive experience in the channel, Oettinger Davidoff continuously strives to innovate within the cigar category, particularly in terms of product presentation and customer engagement.

According to Jean-Christophe Hollay, Head — Partner Markets & Duty Free EMEA / Americas, the company’s merchandising model helps the company achieve superior sales in a luxury market. “Luxury poses unique

challenges to deliver the best possible shopper experience. Oettinger Davidoff has created a unique, fact-based merchandising model designed to achieve ease of navigation, enhancing shopper propensity to purchase.” This model includes innovations like the Zino Fresh Packs and Half Corona Pre-Cut in the Zino Nicaragua line, which Hollay says have been well-received by consumers and shoppers.

The successful launch of pre-cut cigars in the Zino Nicaragua line has paved the way for further innovations catering to modern, on-the-go lifestyles. “Zino Cigars continues to innovate with

products, providing flexibility for cigarillo fans and aficionados alike,” Hollay says. The upcoming launch of the Zino Nicaragua Short Puritos in 2024 exemplifies this trend, offering the perfect cigar for those with limited time.

Optimizing opportunities

Travel retail is an increasingly important channel for Oettinger Davidoff, with significant potential for expansion, and neither the importance of this channel for the company nor the insight it gleans on the channel’s behalf begin and end at its own doors. “We endeavor to share insights and ideas, encouraging industry stakeholders to embrace a new category vision,” says Hollay.

By optimizing opportunities in travel retail, Davidoff aims to implement solutions that release tremendous new category value. This approach, coupled with the company’s category management strategy, is enabling meaningful activities to meet the famously growing global demand for cigars, with luxury cigars sitting atop that growth.

Key focus and strategy

When tailoring strategies to strengthen its presence in specific regions like the Middle East and the Americas, Oettinger Davidoff leverages extensive consumer research and a globally focused

The ribbon cutting at the Centro de Enseñanza Tabadom marks the opening of Davidoff’s new Learning Center, offering free extracurricular English courses for employees’ children, demonstrating the company’s commitment to social responsibility

The introduction of the Zino Nicaragua Short Puritos in 2024 exemplifies Oettinger Davidoff's commitment to innovation, catering to modern on-the-go lifestyles with a perfect cigar for those with limited time

consumer profiling strategy. “We are able to prioritize respective product attributes by region or market,” Hollay notes, adding: “We also endeavour to fully understand every step in the process to deliver both a purchase and a consumption occasion, adapted to local environment.” This approach ensures that every step in delivering both purchase and consumption experiences is enhances both relevance and customer satisfaction.

Corporate responsibility is another key focus for Davidoff. “Within our ESG Roadmap, we are tackling different initiatives that cover all these areas,” Hollay explains. Recent examples include the installation of a drip water system in the company’s Dominican Republic facilities, reducing water consumption by 82 percent, and the opening of a Learning Center, offering free extracurricular English courses for employees’ children. These initiatives highlight Davidoff’s commitment to environmental responsibility and social impact.

Cigar history re-rolled

Looking to the future, Davidoff plans to continue its tradition of innovation and excitement within the cigar category. “Davidoff's brand history is rich in

exceptional cigar innovations and iconic achievements. Oettinger Davidoff AG will continue to innovate and excite the category. Davidoff will conclude its successful ‘Cigar History Re-Rolled’ series with a grande finale that will also go down in the history of the brand: The Grand Cru Diademas Finas Limited Edition Collection,” Hollay reveals. While he affirms that other launches are planned for 2024, for now details remain under wraps. This promises a steady stream of exciting developments for cigar enthusiasts.

Oettinger Davidoff is not just a leader in the cigar industry but a pioneer in innovating product presentation, customer engagement and sustainability. By leveraging extensive research, embracing unique regional characteristics and continuously introducing new products, Davidoff ensures its position at the forefront of the luxury cigar market. As Hollay succinctly puts it, “We are focused on offering appropriate solutions to shoppers, understanding their needs and concerns, and continually enhancing the shopping experience.”

Davidoff's dedication to sustainability is evident through initiatives like the installation of a drip water system in the Dominican Republic facilities, reducing water consumption by 82%

Jean-Christophe Hollay discusses the sharing of Davidoff’s insights, stating: “We believe the cigar category should be the number one retail planning priority”

Igniting innovation

British American Tobacco (BAT) is lighting up the tobacco category in travel retail with reduced-risk products, cutting-edge technology and a commitment to sustainability

by HIBAH NOOR

British American Tobacco's (BAT) progress in the first half of 2024 is marked by the rollout of innovative offerings like the Vuse Go 2.0, a single-use vapor product with enhanced taste, design and a removable battery. “We have made significant progress towards our ambition of creating A Better Tomorrow™ by building a smokeless world with our reduced-risk* products in the first half of the year,” says Andy Hrstic, BAT General Manager China and Global Travel Retail.

The glo™ brand, BAT’s flagship heated product, has also seen advancements with the introduction of glo hyper Pro and improved consumables.

Hrstic emphasizes BAT’s commitment to providing adult smokers with a wide range of satisfying alternatives: “At BAT, we are committed to building A Better Tomorrow by offering a greater choice of high-quality, enjoyable, and less-risky* products for adult smokers to switch to,” he says.

Catering to diverse preferences

BAT recognizes the diverse needs of today’s consumers and offers a variety of alternatives, each with a unique experience. The company places great importance on consumer education, ensuring that customers can make well-informed decisions when choosing their preferred products. Hrstic emphasizes the crucial

role of brand ambassadors in this process: “We ensure that our on-site brand ambassadors at the travel retail outlets educate our consumers about our products in thorough manners, so that each consumer can make an informed decision to switch to a product that best caters to their preferences,” he says. Strategic partnerships are another way BAT enhances the consumer experience and optimizes brand essence.

The VELO x McLaren Formula 1 Team Pop-Up Activation at Hamad Interna-

VELO modern oral nicotine pouches now come in recyclable cans, reflecting BAT's commitment to sustainability

Andy Hrstic, General Manager China and Global Travel Retail, BAT

tional Airport in Doha exemplifies this approach, offering a unique on-the-go experience for consumers while introducing a limited-edition product for the Qatar Grand Prix last year. “In order to optimize the unique brand essence, we often invest in partnerships to enhance our consumer experience,” Hrstic says.

Commitment to sustainability

Sustainability is a core focus for BAT, with the company taking pride in its achievements. As of 2023, 94% of packaging for new category products is reusable, recyclable or compostable. Hrstic highlights the eco-friendly features of glo and VELO: “The packaging of our glo device comes without a power adapter. The device can be recharged with a USB-C port to reduce electronic waste. VELO modern oral nicotine pouches now come in recyclable cans,” he says. BAT also focuses on responsible disposal and recyclability of its products.

The Vuse Go 2.0, a single-use vapor product with enhanced taste, design, and a removable battery, exemplifies BAT's progress in offering innovative reduced-risk alternatives

“We continue to focus on the disposal and recyclability of Vuse products through innovative design and life-cycle schemes, including the introduction of ‘Drop the Pod’ and device takeback schemes for used vape products to reduce waste sent to landfill,” Hrstic explains.

Engaging consumer activations

BAT is enhancing customer engagement and satisfaction in travel retail through innovative activations like the Vienna Tasting Bar. Located in Vienna International Airport, this immersive consumer engagement area offers an experience that goes beyond traditional product displays. “The Tasting Bar features engaging brand stories and informative details about the wide range of taste profiles available for each product category. At the same time, consumers can learn more about the reduced-risk* potential of the various smokeless alternative

products by navigating through the visual touchpoints," says Hrstic.

Ambitious goals

BAT has set ambitious targets for the future, aiming to become a predominantly smokeless business by 2035 and have 50 million consumers of noncombustible products by 2030. Hrstic highlights the role of BAT Global Travel Retail in achieving these goals:

“BAT Global Travel Retail will play a pivotal role in bringing our portfolio of world-class brands to global consumers transiting through major global travel hubs, and we will focus our efforts on delivering exceptional consumer experiences through targeted activations and educating our consumers on tobacco harm reduction,” he says.

*Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.

The Vienna Tasting Bar at Vienna International Airport provides an engaging consumer experience with informative product details and the opportunity to learn about the reducedrisk potential of smokeless alternatives

ANDS has a strong focus on the travel retail industry which the company claims to be the onestop shop of alternative nicotine

ANDS’ alternative nicotine one-stop offer

Arnaud

Retail,

Piorkowski, ANDS Managing Director MEA & Global

Travel

considers the company’s focus on innovation, its ability to cater to changing customer needs and its long-term goals in the channel

by HIBAH NOOR

Middle East-based ANDS – a specialist in alternative nicotine delivery systems – aims to place the most credible products and technologically advanced alternatives within reach of the one billion adult smokers in the Middle East, Africa and the world. The company’s Managing Director MEA & Global Travel Retail Arnaud Piorkowski details the brand’s progress and plans.

Global Travel Retail Magazine: Following recent expansions of ANDS into new markets, what strategies are you employing to cater to diverse consumer needs across different regions? Do you find much difference from region to region?

Arnaud Piorkowski: Based on the market insights, we customize our product offerings. This can include adjusting flavor profiles and product formats to align with local tastes and requirements. Navigating the regulatory landscape

Arnaud Piorkowski, Managing Director MEA & Global Travel Retail, ANDS

is crucial. We work closely with local authorities to ensure our products meet all regional regulations and standards, from labeling to advertising.

Yes, there are notable differences across regions. For example, flavor preferences can vary significantly, with some regions favoring robust, traditional flavors while others prefer lighter, fruitier options. Economic factors also play a role, affecting price sensitivity and purchasing power.

GTR Magazine: ANDS has emphasized innovation in its product line. Could you discuss the research and development process? How do you balance innovation with consumer safety and regulatory compliance?

Piorkowski: Let’s consider research and development first. At ANDS, innovation is driven by a robust research and development (R&D) process. Our multidisciplinary team of experts in chemistry, engineering and consumer behavior focuses on identifying consumer needs and market trends. We follow a structured innovation pipeline that includes idea generation, feasibility studies, prototype development, pilot production and full-scale production.

Balancing innovation with consumer safety and regulatory compliance plays a key role in our strategy. Ensuring consumer safety and regulatory compliance is paramount in our innovation process. We achieve this balance through rigorous testing, extensive safety, quality and performance tests, collaboration with global regulatory bodies, incorporation of user feedback and engagement with third-party auditors to verify standards.

GTR Magazine: Looking ahead, what are ANDS’ long-term goals in the travel retail channel? Are there new markets or product categories you are aiming to explore?

Piorkowski: ANDS definitely has a strong focus on the travel retail industry for which we claim to be the one stop shop of alternative nicotine. We are

proud member of TFWA and MEADFA and we are building with operators the future of the industry in front of the growing consumer demand.

We are looking to increase our presence in existing markets and explore new geographical areas where travel retail is growing. This includes expanding further into Europe, Africa as well as LATAM as our focus markets.

We also aim to introduce new product categories that cater to evolving consumer preferences and trends. This includes products with innovative formats that enhance convenience and user experience. We have just launched a range in Zero Nicotine, as well as in 50mg in response to customer demand in specific segments and we are set to introduce pouches as well.

GTR Magazine: In terms of corporate social responsibility (CSR), what are some of the challenges ANDS faces, and how do you address them to ensure alignment with your core values?

Piorkowski: The e-cigarette and vaping industry faces significant challenges, particularly concerning youth vaping and environmental impact. Addressing these issues is crucial to maintaining our commitment to CSR.

Preventing underage use of our products is a top priority. We implement strict age verification and advocate for clear regulations. Reducing our environmental footprint by focusing on sustainable practices in manufacturing and product lifecycle is another major challenge. Ensuring sustainable and ethical sourcing of materials is crucial as is building trust and positive relationships with the communities we operate in.

ANDS is committed to energyefficient manufacturing, using recyclable materials and minimizing waste. We promote responsible use with clear labeling and support cessation programs. We implement strict guidelines for suppliers and conduct regular audits. Engaging in educational programs, sponsorships, and volunteer efforts

helps us build stronger community ties. By addressing these challenges, ANDS ensures that our R&D and CSR efforts align with our core values and contribute positively to society and the environment.

GTR Magazine: How does ANDS engage with and educate consumers about the benefits of your products, especially in the context of travel retail environments? Could you share insights into how you get customer feedback and how it influences your product development and marketing strategies?

Piorkowski: We engage and educate consumers through visual displays and trained brand ambassadors who can provide detailed product information. We also utilize social media platforms to offer educational content for our customers.

We actively seek and analyze feedback received from consumers through social media and their direct interactions with our brand ambassadors. This feedback helps us continuously improve our products and strategies to better meet the needs of our customers.

GTR Magazine: What trends does ANDS foresee as transformative for the dutyfree market in the next few years?

Piorkowski: We envisage innovations in vape technology, such as more efficient batteries, improved e-liquid formulations and advanced flavor options, along with exclusive or limited-edition vape products that are not available in regular retail outlets.

We are also looking at newly introduced categories that are gaining popularity among adult smokers like oral tobacco products and nicotine pouches, these are gaining a lot of attention among adult smokers and travel retail operators as well. And we are working with our manufacturing partners to provide these products as part of our portfolio to domestic markets and travel retail too.

Gaining ground

With a focus on innovation and sustainability, the independent tobacco producer KT International is expanding its presence in airport duty free shops

by HIBAH NOOR

Capitalizing on its strong domestic market performance, KT International (KTI) is making significant strides in global travel retail. The independent tobacco producer’s strategic approach is yielding positive results in this traditionally multinational-dominated channel.

“We are really starting to see the benefits of our long-term strategy of building strong domestic markets crossing over into travel retail,” says Stuart Buchanan, Chief Commercial Officer. “As an independent producer we have historically struggled to get listings in major airports. However, in the last two years we have seen a rapid increase in the number of airports where we are available, supported by very good off-take.”

The company now has presence in around 20 airports across Europe, with plans for further expansion in 2024. This marks a shift in the traditionally multinational-dominated airport retail landscape, as Buchanan notes,“Our performance in 2023 across our airport locations has shown good growth as consumers have access to more choice of brands and formats.”

Flavor innovations

Responding to increasing demand for flavored cigarette propositions in Asia and the Middle East, KTI has expanded

its portfolio with new offerings tailored for this market, including some with a travel retail focus. “In the past couple of months we have been working on developing an extensive range of flavor and capsule products to launch first as a special offering for the GTR channel,” says Buchanan.

The company’s flagship feminine brand CORSET has unveiled the new FUSION FLAIR collection, available in its signature shell-pack format. “The technology behind the product is innovative and unique, featuring a chocolateflavored tobacco blend, special brown cigarette paper, sweet tipping and a fruit capsule in the filter,” Buchanan explains. Available in three varieties – Golden Touch /mango capsule; Summer Scent /watermelon capsule; and Red Velvet / cherry capsule – the new range aims to offer a truly luxurious experience.

The company’s value brand, The King, is also expanding into the flavor segment with THE KING FLAVOR POP range. Offered in a compact format with options including Melon, Mango, Berry, Mint and Apple, the new line

aims to deliver “unbeatable value at an accessible price – and constantly evolving,” according to Buchanan.

Navigating challenges

Despite the highly regulated nature of the tobacco industry, KTI continues to innovate within its constraints. “Tobacco and nicotine alternatives are highly regulated, and as such it is difficult to provide the same level of consumer interaction as other categories,” Buchanan acknowledges. However, the company believes in “providing different and innovative formats that go beyond the traditional Brand, Price, Value equation in driving purchase,” he says.

Looking ahead, KTI is poised to capitalize on evolving consumer trends in the travel retail space. The company has recently launched LIV, its noncombustible brand, starting with a range of travel-friendly nicotine pouches.

As the tobacco industry continues to evolve, KTI appears well-positioned to meet changing consumer demands while expanding its global travel retail footprint.

KTI’s new CORSET FUSION FLAIR offer as an intriguing blend of chocolate-infused tobacco and fruit flavors in a sleek shell-pack design

CRAFTED IN THE NORTH

OVER 20,000 YEARS IN THE MAKING. WE ARE CANADA’S VODKA.

KEY GROWTH FACTORS

What will influence spirit sales growth in the near future? Global Travel Retail Magazine talks with leading industry executives

What key factors will influence spirits sales growth in travel retail over the next few years?

Simon Roffe, Director Of Business Development, The Welsh Whisky Company (Penderyn)

Against the most recent prediction of very moderate growth in the coming years for the global spirits market, the travel retail business is going to have to fight harder than ever to ensure the liquor category retains its status as a core category within the overall mix. Simply relying on value and price discounts is not the way forward in my mind.

Operators must look to innovate in their ranges, be flexible in their approaches to category features and ensure promotional space is allocated to products and promotions that actually drive up spend per head.

The continued polarization of retailer and brand powerbases is continuing but the business must ensure diversity in consumer choice and elevate the travel retail experience to excite the shopper.

Albane Lussat, Head of Travel Retail, Champagne Lanson

In GTR, people want exclusivity and high quality products at the best price. Champagne Lanson offers this promise to consumers by offering high-end experiences throughout the year where passengers can enter the magic world of Maison Lanson. We create tailor-made experiences such as seen at Roissy CDG with the olfactory activity during the launch of Le Rosé Création in May 2024.

Luke Maga, Managing Director – Global Travel Retail, Loch Lomond Group

As we see consumer trends changing, growth will come from brands that do a great job with innovation as well offering something that can’t be found in their local market. This will come through GTR exclusives, creativity in brands disrupting the traditional norms within the category through pushing boundaries on flavors, finishes, packaging and quality not price. Duty Free retailing in general needs to continue to be a destination for passengers to have a reason to visit the stores through theatre and engagement.

Rodrigo Bazan, Global Travel Retail Manager, Rum Trading International Corp, (Flor de Caña Rum)

Sustainability will become increasingly important, as consumers want to know what you are doing as a brand to be a good corporate citizen and what credentials you have. For example, our Carbon Neutral and Fair Trade certifications speak volumes of our commitment to sustainable and ethical production of rum.

Premiumization is also likely to continue given that consumers are looking to drink less but better, so they’ll seek high-quality products as a way to reward themselves.

Experiential marketing may be another big element, as consumers want to establish closer relationships with brand, they want to interact with them and their products, learn about their back stories and have memorable experiences that they can share with friends and family.

Seiji Susuki, Overseas Dept. Deputy General Manager, Choya Umeshu Co.

The growing focus on health and environmental consciousness may influence the choice of spirits, with organic sustainable products, as well as low-alcohol options, attracting increased attention.

Choya is a low-alcohol spirits maker and places great importance on organic initiatives.

We believe that pursuing environmental efforts is essential and will continue to focus on this in the near future.

Violaine Creuzé, Global Duty Free & Travel Retail Director, González Byass

Several key factors are expected to influence spirits sales growth in travel retail including the recovery of international travel after the impact of the COVID-19. Premiumization will also be a key factor as passengers have shown a tendency towards purchasing premium and super premium spirits, and diversification as spirits brands extend their portfolios, introducing new and innovative products. The availability of a diverse range of spirits can help drive impulse purchases in travel retail.

David Hogan, GTR & International Director, Four Pillars Gin

Consumers are still looking for exclusive and differentiated products when traveling. By ensuring these offerings are available in key locations we can help to drive the category forward. In order to do so we need PAX back in the air with cash to spend. As the macroeconomic environment improves in Q3/4 or 2024 and beyond we should start to realize the 5+% CAGR the gin category is expected to achieve over the next five years.

Leila Stansfield, Managing Director, Bacardi Global Travel Retail

By far the greatest opportunity for travel retail is the extraordinary growth in super premium tequila, a category that is on fire across the globe. In travel retail globally, it is the biggest contributor in the premiumization of the entire spirits category.

PATRÓN is the world’s number one super premium tequila and has defined and ignited the super premium tequila category in global travel retail. Our strategic focus is to drive further category value and we are investing in high impact PATRÓN activations in new markets, underpinned by a strong pipeline of prestige innovations such as PATRÓN El Cielo and PATRÓN El Alto, taking PATRÓN to new heights.

Eamon Prunty, Head of Global Travel Retail, Halewood

From our perspective the main influences that are, and will continue to affect sales performance over the next few years, are how we invest in our brands to continue growing organically, how brands can continue to drive sales through innovation and how the economic climate will affect purchasing patterns by the traveling consumer.

William Ovens,

Global Travel Retail Director, Ian Macleod Distillers

Travel Retail remains an important place to educate and inspire consumers on our premium spirits brands and drive trial. We will therefore continue to invest in visibility and engagement with consumers in key strategic locations around the world, especially with our core brands, Edinburgh Gin, Glengoyne Highland Single Malt, Tamdhu Speyside Single Malt, Rosebank Lowland Single Malt, Smokehead Islay Single Malt and King Robert Blended Scotch Whisky.We have a pipeline of exciting new product launches to pique consumer interest, and we are really enthusiastic about the opening of our new distilleries for Edinburgh Gin and Rosebank, where consumers can immerse themselves even further in the brands. We have also just opened a boutique at Edinburgh Airport to showcase Edinburgh Gin’s pioneering flavor, craft and creativity to travelers in its home city.

There is no question that the key global economies are fragile just now, with lower consumer confidence and an upturn in this will no doubt benefit travel retail sales, especially of super premium and above spirits.

On a positive note, the projections are that the passenger numbers are set to increase year on year, in quite a dynamic way, which will again help to drive premium spirits sales.

Travelers Embrace

Art

by REBECCA BYRNE

Andy Warhol once mused that everyone would have 15 minutes of fame. In today's fast-paced world, it feels more like 15 seconds, making it essential to create something iconic to truly capture attention. Absolut Vodka's latest collaboration does just that.

At an exclusive launch party, the company unveiled the Warhol Bottle, a limited-edition bottle in collaboration with The Andy Warhol Foundation for the Visual Arts. The event provided a fascinating glimpse into how Absolut brings together artists old and new under the theme of unity. At the event a panel comprising Liya Zhang, VP Global Marketing at Pernod Ricard Global Travel Retail, Deb Dasgupta, VP Global Marketing for Absolut Vodka, and renowned director Santiago Sierra Soler discussed the shared history between Absolut and Warhol and the reasoning behind the initial launch into the travel retail market.

The thrill of discovery

Talking on the panel, Zhang, a frequent traveler herself, invited us to join her on a journey that intertwines travel and discovery. She emphasized the excitement of embarking on a new journey at an airport, the anticipation, and the thrill of discovery. This is the moment you often find something unexpected and special, such as the Warhol limitededition bottle. She added that travel isn’t just about moving from one destination to another; it is about discovery and making connections with others, the world, and even oneself. The nature of travel allows for a moment of self-reflection and discovery, fostering a deeper understanding of our place in the world. When asked about the bottle’s debut in travel retail, Zhang spoke about the significance of this launch for the brand's evolution and its connection with travelers, “We are honored to play our role in connecting Absolut Warhol to the world, igniting this campaign on

From left: Deb Dasgupta, VP Marketing

Absolut Vodka, Mexican Director and Photographer Santiago Sierra Solar and Liya Zhang, VP Global Marketing at Pernod Ricard Global Travel Retail

Absolut Vodka's limited-edition Warhol Bottle will debut exclusively in the travel retail industry, launching first at Amsterdam Airport

The Absolut Warhol limited-edition 1L bottles will retail for RRP €22 (US$24). Each shade of blue has been carefully extracted from the rediscovered painting, delivering a striking likeness to the original and a stunning finish through the lens of the Absolut Vodka

a global scale. This launch is significant for Absolut in travel retail, where the brand has built an incredible reputation over several decades. Staying true to the spirit of inclusivity, we are delighted that through this partnership with The Andy Warhol Foundation, we can democratize art and bring it to all nationalities; delighting existing fans while also recruiting new generations of consumers.”

Talking about the link with the artist, Deb Dasgupta, VP Global Marketing for Absolut Vodka, added, “We are thrilled to collaborate with The Andy Warhol Foundation to reintroduce this timeless Absolut Warhol artwork to the public. Embracing our values of inclusivity and a commitment to fostering a culture of boundless creative expression, we aim to unite diverse voices and spark meaningful conversations to inspire positive change through the transformative power of art. With the limited-edition bottle, we are excited to offer consumers everywhere a chance to become part of the Absolut Warhol legacy and to own their own piece of artwork.”

Exclusive travel retail launch

To mark the launch, an Andy Warhol pop-up store will open at Amsterdam Airport. The global activation campaign will bring it to life with immersive 3D OOH media, digital touchpoints, and voice activations at key airports from London to Dubai, from Singapore to Sao Paulo, and more.

Speaking exclusively to GTR Magazine, Zhang discussed how the Amsterdam marketing for the Warhol Bottle will start in the journey to the airport through a collaboration with Uber. This is not the first time the company has linked with Uber; a trial in Miami garnered much success. She mentioned that while social media has its place in marketing, campaigns face much competition, whereas in the Uber, it talks directly to the customer. A highly successful six month pop-up campaign at Changi Airport demonstrated the power of this type of marketing and it will form an instrumental part of the roll out in the Warhol Bottle’s GTR campaign. Zhang hinted at future collaborations with artists in the near future. Absolut has long believed in the

unifying power of art. This belief dates back to 1985, when Andy Warhol first created artwork based on the silhouette of Absolut’s iconic apothecary-inspired bottle. His original ‘Absolut Warhol’ painting – a vibrant depiction of the Absolut bottle on a black background – is legendary. For decades, rumors of a second Absolut Warhol painting circulated until ‘Absolut blue’ was rediscovered at auction in 2020. The original contract confirming the two commissioned paintings was also unearthed. This rediscovered piece will be unveiled at Stockholm’s Spritmuseum on October 17, 2024.

Global availability

Starting in September, the limitededition bottle will be available in over 50 additional global markets. The limited run consists of two million bottles.

The Absolut Warhol limited-edition 1L bottles will retail for RRP €22 (US$24). They will be available for sale exclusively for two months in global travel retail before being rolled out in over 50 global markets from September 2024 in both 1L and 700ml bottle sizes.

The Absolut Warhol bottle will debut in some of the world’s busiest airports, from London Heathrow to Dubai International

From left: Pernod Ricard's Liya Zhang with GTR Magazine's Rebecca Byrne at the launch party in London, UK

The path to discovery

An update

on William Grant & Sons’ presence in the channel; Managing Director – Global Travel Retail Rufus Parkinson discusses launches, strategies and activations across its portfolio

by ALISON FARRINGTON

In April, William Grant & Sons launched a new blended whisky, Wildmoor, with a pop-up at Changi Airport. The range of seven, rare, blended whiskies is described as being created in homage to dramatic Scottish landscapes and is a Scottish whisky flavor map in a glass. The travel retail activation is designed to entice visitors to “escape into a biophilic oasis” and features an immersive tasting experience across touch, taste and sounds of the wilderness – culminating in the gastronomic exploration of curated whisky and food pairings at the pop-up bar.

“Wildmoor is a key new-to-world brand launch for us this year. We see the opportunity for a brand offering something slightly different and building on our unique collection of aged stocks. With our 23-Year-Old and 30-Year-Old expressions exclusive to global travel retail, we can offer something truly

different for the traveler as they explore the taste profiles from different parts of Scotland, which is a key component of our Changi-first experiential pop-up in May,” says Rufus Parkinson, Managing Director – Global Travel Retail at William Grant & Sons.

“Liquid on lips” is a key activation driver for William Grant & Sons travel retail exclusives, Parkinson adds. From the Glenfiddich Perpetual collection to Wildmoor and Monkey Shoulder, the company likes to focus on air hubs based on traveler profiles. "So, for whisky, it’s about discovery, which is why we’ve launched a permanent activation space at Incheon Airport, Seoul, and in Mumbai too. Next, with this concept will be Taipei – to make sure we can revolve our latest promotions in these key travel retail hubs – across our newest gifting and personalization opportunities,” he shares.

“Activations are a key strategy that we are continuing to build on for our brands. For example, the recent pop-up in Schiphol, Amsterdam, for Hendrick’s Perfumerie with the atomizer fragrance experience offers something interactive for the traveler,” explains Parkinson. “We’ve mapped out which airports we want to offer something to travelers, so we can engage with them all of the time. We can showcase our luxury propositions, but also offer storytelling with screens that we can change to suit our collections. We can tailor the promotional content to the demographic in these markets, so for whisky in Mumbai it’s very different than Incheon.”

After acquiring the UK-based gin brand Silent Pool in 2023, William Grant & Sons has launched its first global travel retail exclusive, Silent Pool Mediterranean. Opened in May, the exclusive debuted with an activation at London Heathrow in partnership with Avolta. Silent Pool Mediterranean will be expanded into other markets later this year. To enter it into international gin hubs such as Sydney, Singapore and Dubai, the approach is to have a hero SKU, along with an exclusive in the channel.

William Grant & Sons designed an experiential pop-up at Changi Airport to launch its Wildmoor blended whisky

JÄGERMEISTER’S GLOBAL REACH

Experiencing success on a global scale, Mast-Jägermeister eyes India as a key growth market and finds a fit in the tequila category

Asia is the number one growth priority for the group, in terms of potential, Tobias Witte, VP Global Travel Retail at Mast-Jägermeister SE, tells Global Travel Retail Magazine. For the recent TFWA Asia Pacific show, Witte says the company took away the focus on China slightly, with the intention to instead look at the whole region – and its growth points – for example, India has a lot of potential as consumers understand the Jägermeister brand there, according to Witte.

“For Asia, we are looking beyond China,” says Witte. “India is a key growth market for us and the team is focused on building our reputation from domestic to global travel retail; whether it’s Bangalore, Mumbai or Delhi as the main hubs. We have HPP (high-profile promotion) activations planned in all of these locations with both Jägermeister and Teremana.”

The Chinese consumer is coming back, but still slowly internationally, says Witte. “Domestically they have returned for us, but in global travel retail we are hoping they will come back stronger in the second half,” he continues. “For Asia, a premiumization approach, with Jägermeister at the core is important. Our premium product, Manifest, does well in global travel retail already and

we are looking to promote more drinking occasions with our three Jägermeister brands.

We focus on exclusivity for our partners and are still promoting the return of travelers to the channel, with our ‘The Secret is You’ branding for tasting engagement opportunities. We still want to expand our footprint across the Asia territory, we want to do more activations with our existing partners to grow the exposure of the brand.”

The launch of Jägermeister’s limitededition 9556 at the end of last year was well received. The high price point did not deter customers and the company sold out in Europe. Last to launch was Asia earlier this year, where it has also done very well. According to him, in the company’s home markets it sold out very quickly, in Germany for example in 10 minutes. “While the liquid was premium, due to the production limitations, 9556 was an important milestone to establish a more premium offer,” explains Witte.

The tequila wave

Further to taking a stake in Teremana Tequila, co-owned by actor Dwayne Johnson, also known as The Rock, in 2022, the small-batch tequila is a key new brand for Mast-Jägermeister’s

global travel retail operations. “We in travel retail are leading the global launch exclusively ahead of a couple of domestic markets. In just a couple of months, since we launched in the channel, the brand has been really successful, so we have high hopes based on sales to date,” says Witte.

With more than one million 9-liter cases sold just two and a half years after it was established, Teremana was the fastest selling spirit to reach one million cases (specific to the United States).

“We think this is down to strong family values associated with the product. They are the same values as our company, it’s a good fit,” he says.

“There is a tequila wave, yes, it’s a celebrity tequila wave, but it’s also around authenticity, which is what Teremana stands for; natural ingredients, telling the story of the manufacturing process. The Rock’s presence is authentic too, which consumers are appreciating,” adds Witte.

He says the company has a big job to do: to grow the brand’s presence outside of Mexico and the United States, which is why it’s introducing it to a global audience through travel retail.

Mast-Jägermeister is rolling out

Teremana “Share the Mana” airport activations in Europe

by ALISON FARRINGTON

Innovation and differentiation

Proximo Spirits is on a mission to source unique cask finishes and innovative production processes across its portfolio, honoring tradition and adding value along the way

by ALISON FARRINGTON

From whisky to tequila, Proximo Spirits is focused on sourcing unique cask finishes and innovative production processes.

Just launched in the United States and set for global expansion, Proximo Spirits is savoring the debut of its new 1800 GauchiMonton tequila in travel retail. “This is a key launch for Proximo and celebrates the innovation that is core to the 1800 Tequila brand,” says Patrick Lynch, Trade Marketing Manager at the company.

The 1800 GauchiMonton is described as the first luxury añejo tequila aged in American and French oak barrels and finished in orange tequila liqueur casks. It honors the legacy and agriculture of the Tequila Valley and is presented in a red ceramic trapezoidal-shaped bottle with a spherical carved wooden cap, inspired by the pyramids and red clay found throughout the UNESCO World Heritage site of Los Guachimontones.

1800 GuachiMonton not only represents the roots of Mexican tradition and culture, but also Mexican terroir and ritual, says Master Distiller and Head of Production, Alex Coronado. “A nod to the fragrant orange trees surrounding the pyramids of Los Guachimontones and our family-owned distillery, the liquid is inspired by the timeless ritual of plucking fresh oranges to garnish a

Bushmills is building extra value in travel retail with an extended range of single malt exclusives

glass of Añejo. Its decadent and persistent orange citrus flavor profile provides a premium, modern twist to an already luxurious Añejo tasting experience," he explains.

1800 GauchiMonton was launched into global travel retail with a pop-up display at JFK and LAX airports in April.

Bushmills pushes a new position

Adding value for travelers looking for single malt differentiation is the main focus for Bushmills Irish Whisky Global Marketing Manager David Hackett who says the brand is looking to elevate its reputation in the single malt category. In May, it launched a new Bushmills 12-YO single malt, available only in the Asia Pacific region as part of its growing World Wood series. The series already features a 15-YO and 21-YO, which launched last year at duty free locations in Asia Pacific and Europe.

Introducing new ABVs to travel retail is an important strategy for the brand. “We didn’t have 46% in the core single malt range, so from a category perspective, our ideal goal is for the consumer to look at Bushmills as a single malt focus brand. We want our customer to think of Bushmills as: they have a big

range with eclectic casks and they’re giving us extra ABVs, extra value in the travel retail channel and the packaging is different to showcase that,” shares Hackett.

Promoting exclusive packaging and different expressions for travel retail is still relatively new for Bushmills. “We want to be different and push the message in travel retail that we have a great range of single malts. We want to be recognized as a top single malt player and we have the range [and the packaging] to back it up,” he continues.

Described as having a real hit of smoothness and fruitiness, which is especially attractive for the Asia Pacific market, Hackett says the latest portfolio launch has been “extremely well received” by both existing and new travel retail customers. “When we were looking at the right reference for the Asia Pacific and Australia regions, we knew it needed to be a sweet and fruity taste profile, which we found from working with Pedro Ximénez, our sherry casks supplier. It’s an Asia Pacific exclusive, and we see this one working for existing customers who have the 15-YO and the 21-YO, now we want to strengthen the range with the new 12-YO,” he explains.

GIN UP YOUR LIFE

Crafter’s Gin has released a trio of miniature sensory sprays to introduce customers to the aromas of its botanical range; plus, the brand looks to the Americas as its next step in expansion

by ALISON FARRINGTON

Crafter’s Gin has launched miniature sensory potion sprays – one for each of its three key expressions, London Dry Gin, Aromatic Flower and Wild Forest – to introduce customers to the aromas from its botanicals range.

Liviko Export Marketing Specialist Gloria Hallaste says the sensory potions have been well received in global travel retail, in addition to its HPP (high-profile promotion) “Gin Up Your Life” campaign. According to Hallaste, Crafter’s is going from strength to strength in key markets including Asia and Europe. “The Americas is next for us for expansion; we’ve already started in Latin America markets such as Paraguay and Uruguay, but it’s a challenging market and gin is a crowded category,” she tells Global Travel Retail Magazine.

The Crafter’s botanicals message is clear with new marketing that focuses on the sensory and botanical flavor notes that customers can learn more about during the Crafter’s master classes in store. “We are working with Ereman Duty Free, Lotte Duty Free and Heinemann in Asia and markets such as India

and Malaysia are picking up for the brand,” she says.

The sensory sprays are used by brand ambassadors in store to help customers decide which gin is right for them, much like a fragrance finder; the three-pack of aroma sprays can also be offered as a gift with purchase. “We’ve started to show off the colors our gins turn when mixed with tonic – our Aromatic Flower expression is copper colored and turns pink when mixed,” she explains, while the Wild Forest expression is green and represents the evergreen botanicals used.

Crafter’s is exploring exclusive product developments with key travel retail customers. For example, a special edition Golden Saffron Gin made for

Dubai Duty Free for its 40th anniversary has seen good sell through and carries a more premium price.

“We have the capacity to do more exclusive developments; it’s important for us to grow in this area, we want to do something extra for travel retail customers where possible,” says Hallaste.

Crafter’s newest expression, Wild Forest Gin, is inspired by the evergreen untouched forests of Estonia and at only two years old it’s still a focus for rollout in travel retail. The Nordic crispness is a central theme in the POS material: forests near the shoreline shaken by autumnal winds, rocks gathering moss, tall ancient trees touching the sky and adventurous fishermen tarring their boats. Bold, earthy flavors of the forest.

Crafter’s Wild Forest Gin is inspired by the evergreen untouched forests of Estonia

Crafter’s Aromatic Flower Gin is a refined expression that turns pink when mixed with tonic