WINES & SPIRITS: DATA & ANALYSIS


“There is an immense amount of pressure on airports, who then transfer this to operators, who then in turn put pressure on brand owners, so some rationalisation is inevitable in the short-term. “Looking ahead, it will probably be


the larger brand owners, with multiple category brands in their portfolio, that will dominate, with challenger brand owners having a harder time in gaining listings, unless they go exclusive. “This will probably lead to a


scissoring effect for some time – more promotional offers on standard-priced products and tried- and-trusted brands – with some focus returning on the prestige category, once higher frequency business travel and high-net-worth individuals start returning.” Of course, drawing these high-


spending travellers into stores and converting them into buyers will be of paramount importance as we wait for a critical mass of international passengers to build up again. An easy way of signalling a more premium product offering – notably in whisk(e)y – is through introducing an older variant, denoted efficiently by the liquid’s age statement. TRBusiness asked Hartmann


if


age statements might become more important again in a post- Covid world. “This is still to be determined,”


he says. “However, part of the ‘streamlining’ you mentioned is favouring the lower price segments.”


Alcohol-free ‘disadvantage’ Streamlining in travel retail will inevitably mean less choice for the customer. This might not be such a bad thing, especially for segments such as gin where its rapid growth in popularity has led to an over- proliferation of brands in many locations. However, a predicted CAGR rate of +2.3% for gin between 2019 and 2024 contradicts the argument for a ‘gin fatigue’, according to Hartmann. “Gin is proving resilient in some


major domestic markets. The shine has really only come off in the Spanish domestic market with forecasts elsewhere looking bullish in pockets. We expect some demand


DECEMBER 2020


to spill over into GTR.” Speaking of what’s driving


domestic sales, there certainly appears to be a trend towards ‘health and ethical consumption’ including hard seltzers, organic or alcohol-free alternatives. TRBusiness asked Hartmann how travel retailers can tap into this demand and if he thinks we could see more premium non-alcohol spirit products being introduced in travel retail. “This will depend largely on the


channel, format and location. A few national markets are leading demand globally and for the moment most of these consumers are not travelling. Air travel favours spirits and high- end sparkling wine, with still wine, beer and probably hard seltzers seen as more ‘bulk’ items and, therefore, more geared towards the land border and ferry business. “Alcohol-free products have a


relative disadvantage in GTR in as much as the duty savings cannot be a driver. They are likely to do better in domestic markets, particularly once on-premise is back in full function.” Of course, at the moment brands


and retailers are trying to take advantage of a hike in at-home consumption, by improving their online and supermarket presence. Many drinks companies have


experienced that home-bound customers are actually upgrading their choices as they are saving money on other activities such as eating out. Unfortunately, it’s difficult to see


“Gin is proving resilient in some major domestic markets. The shine has really only come off in the Spanish domestic market with forecasts elsewhere looking bullish in pockets. We expect some demand to spill over into GTR.”


Thorsten Hartmann, IWSR Drinks Market Analysis


how this trend will benefit the global travel retail industry. “Without travel, there is no travel


retail,” according to Hartmann. “We know there is pent-up desire


to travel for leisure when it becomes possible again; in parallel we expect at least a partial on-trade recovery starting from 2021 in most major domestic markets.” However, as more companies have


had no choice but to ask many of their employees to work from home in 2020, it could encourage more companies to change their business travel policies for the long-term, with travel frequency reduced in favour of more remote communication. «


IWSR Drinks Market Analysis illustrates the Covid-19 impact on global beverage alcohol macro trends.


TRBUSINESS 27


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