Wine and spirits sales hit $11.3 billion in travel retail

Sales of wines and spirits in duty free and travel retail grew by 8.5% in 2017 to reach US$11.3 billion, according to Generation Research data revealed at the TFWA World Exhibition & Conference.

Erik Juul-Mortensen, outgoing president of the TFWA, confirmed the data in his annual address in Cannes

Total duty free and travel retail sales for the year grew by 9.5% to US$69.3 billion. In terms of regions, Asia Pacific was the main driver of growth, hitting sales of more than US$30bn – a 12.6% increase compared to 2016.

In his last public appearance as president of the TFWA, Erik Juul-Mortensen said that despite its buoyancy, the travel retail industry has “never before faced so many challenges to its operating environment on a global scale”.

In addition to geopolitical hurdles that can hamper people’s ability to travel and ramp up the price of goods, e-commerce poses an increasing threat to travel retail, as “traditional perceptions of price are under smartphone scrutiny 24/7”, according to Juul-Mortensen.

He also urged the industry to “find a solution” to problems inherent within its ‘trinity’ model of landlord, retailer and supplier, which he said fails to share costs and rewards appropriately.

“Airport retail will lose its momentum as brands make decisions of where to invest,” Juul-Mortensen warned. “We are not the trinity we talk about; a trinity works as one. This must be one of the industry’s most important objectives.”

The outgoing president also urged a new generation of travel retail stakeholders to support trade bodies. “To paraphrase John F Kennedy: ‘ask not what your industry can do for you, but what you can do for your industry’,” he said.

The TFWA board will elect a new president in December. Juul-Mortensen has held the post for 20 years and been a member of the association’s management committee since its creation in 1984.