Analysis: Spirits in global travel retail

30th January, 2018 by admin

Cognac & brandy

Apart from whisky, the other key brown spirit in the DF and TR channel is Cognac. Its share of the market is just over 16%, with another 1.3% coming from Armagnac and ‘other’ brandies. This makes the segment significant, particularly at the high end, but it has encountered considerable difficulty in recent years, following curbs on ostentatious spending by Chinese travellers.

Key brands include LVMH’s Hennessy, Rémy Cointreau’s Rémy Martin, and Pernod Ricard’s Martell. In the first half of its 2017 fiscal year, LVMH confirmed recovery in China for all sub­categories of Cognac, while Pernod Ricard is expected to leverage Martell’s strong performances in existing DF and TR markets by pushing into others. Most Cognac players consider DF and TR as being a vital channel for growth, visibility and education, and it is a strategic part of Pernod Ricard’s plans for Martell.

At Distell, GTR managing director Luke Maga says: “The global thirst for brown spirits gives every indication that it will provide a solid buffer against inevitable challenges that await the travel retail channel. This is promising for the brown spirits of Distell’s portfolio, such as Bisquit Cognac.”

Italian grappa producer Bottega has its eye on the craft side of the business. Managing director Sandro Bottega says: “I believe that craft spirits are the novelties to come because travel retail in general should show that it can also offer authenticity and be a channel for smaller brands too – not just the big corporations.”

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