Whisky in travel retail: the key to recovery

Scotch and American whiskies have always had a strong position in travel retail, but other nation’s offerings are getting a look-in as the category drives growth.

*This feature was originally published in the September 2023 issue of The Spirits Business magazine.

“Scotch and travel retail go together on the ‘runway’, to pardon the pun, for the category remains strong,” says Sarah Shimmons, marketing and innovation director, Diageo Global Travel.

“New-to-world brands, flavour innovations, exclusives and limited editions support the growth of the category in established Scotch markets as they do in markets and regions where Scotch is growing and evolving.”

In a recent IWSR Drinks Market Analysis report, Jairo Lopez Suáprez, head of the firm’s global travel retail insights, called whisky “the key engine for volume recovery in 2022, notably US whiskeys benefiting from strong performance in the Americas”.

Volumes jumped by 77% last year for ‘total whisky’, and the same for Scotch, according to IWSR. However, it was not enough to plug the deep chasm in blended Scotch and single malt sales in GTR caused by the Covid-19 pandemic. Both “are still way short of pre-crisis volumes (down by 22% for malt and down by 16% for blends)”, claimed Suárez.

Beam Suntory’s Scotch portfolio “had already recovered in 2022 versus pre-pandemic”, says the firm’s GTR marketing director, Manuel González. “That was driven by Bowmore, which really benefitted from Covid. By leveraging Hainan, we really managed to grow Bowmore significantly.” China’s domestic duty-free hotspot was a lifeline for brand owners when Chinese international travel collapsed. “In Hainan recently we have opened our latest luxury whisky boutique,” says Shimmons at Diageo. “This brings together experience, education, sampling, gifting and exclusive products.”

Since 2019 Diageo has also been rolling out its ‘What’s your whisky’ programme in travel retail, and last year launched Talisker Surge as a GTR exclusive, which has since “become the number-one selling smoky whisky airside” says Shimmons.

Meanwhile Bacardi claims it is “continuing to grow its whisky portfolio across Dewar’s and the range of single malts, with 20 limited editions and travel retail exclusives launching this year”.

Whisky accounts for almost half of GTR spirits by value, thanks in part to American whiskey. Jack Daniel’s saw net sales jump by 41% in the year to 30 April 2023, according to David Rodiek, managing director of GTR at Brown-Forman. He says: “Travel retail environments, such as airports and cruise ships, provide an excellent opportunity for world-famous brands like Jack Daniel’s to gain high visibility and exposure to a broad range of consumers.”

Slow recovery

Yet for González, US whiskey is “one of those categories that has not yet recovered as fast as it should”. The delayed reopening of Australian airways hurt his main brand, but things are improving. “Already in 2023 we’re seeing that the performance of Jim Beam is healthier, and we’re not relying so much on price promotion or bigger formats,” he says.

Beam is being relaunched, and González is looking forward to releasing a stream of new flavour extensions.

Duty Free Global’s founder, Barry Geoghegan, is upbeat about the category, saying: “We work with Buffalo Trace, and we’re only held back by allocation.”

Japanese whisky is often in the same boat, much to the satisfaction of Beam Suntory’s González, who says: “I think it’s a good thing for certain layers of product to be scarce, and this is an important year for Suntory as we’re celebrating our 100th anniversary.”

Find an overview of the whole spirits travel retail market here.