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Pernod: Travel retail to take ‘short-term hit’

French drinks group Pernod Ricard will adapt its travel retail business as the sector takes a “short-term hit” due to the coronavirus pandemic, The Gin Hub’s managing director has said.

Travel retail will take a “short-term hit” due to Covid-19

The travel retail sector has been affected by travel bans and lockdown measures implemented around the world to stem the spread of coronavirus.

According to Louise Ryan, managing director of Pernod Ricard’s The Gin Hub, consumer behaviour in the sector has changed as a result of the virus and producers must now adapt to meet new demands from travellers.

She said: “Global travel retail was obviously a sizeable channel, global travel had been on the rise for a number of years. Of course, with the restrictions in place I think consumer behaviours have changed. There’s been a fall in the numbers travelling.

“I think we will just have to adapt, there will be a short-term hit and it is going to take a little longer to recover than some of the other channels in which we do business, but I think that we will have to work just a little bit harder.”

Ryan said the group would continue to hold activations in the channel, but that expectations would be “moderated slightly”.

She added: “We will still continue to prioritise that channel because I do think in time people will feel a little bit more confident and will want to travel again.”

According to its full year 2020 results, Beefeater gin owner Pernod Ricard reported a 9.5% organic sales drop after the Covid-19 pandemic significantly impacted its travel retail sales.

The firm’s global travel retail business, which represents 6% of Pernod Ricard’s sales, declined by 27% during the full year.

Global growth
While monitoring the recovery of global travel retail, Ryan said The Gin Hub hopes to continue its positive momentum into fiscal 2021 and retain growth in global markets. The Gin Hub’s portfolio of brands include Malfy, Ki No Bi, Beefeater, Plymouth and Monkey 47.

Ryan said: “If you look at H1 2020, there were 50-plus markets in double digit growth at a gin category level – so there has been growth in gin across the world. Some of the really exciting frontiers are probably Latin America and other emerging markets in Asia.

“South Africa as well, we didn’t grow year on year and there was a complete lockdown and ban on sales of alcohol across South Africa for a period of time, but I still think Latin America, South Africa and Asia are important.

“Also, if you look at the established markets gin still has a long way to go in very sizeable markets like Germany, again there was strong growth in the last fiscal for our gin brands there.”

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