Diageo sparks debate on future of GTR
Last week, Diageo gathered leading figures from across the travel retail industry to explore how brands can adapt to volatility, shifting traveller demographics and the growing demand for experience-led engagement.
During the Tax Free World Association’s (TFWA) Exhibition & Conference in Cannes, Diageo held an industry panel focused on the theme ‘The future of travel retail: adapting to volatility and consumer change’.
Chaired by Andrew Cowan, managing director of Diageo Global Travel, the discussion brought together leading voices from across the sector, including Hannah Tan, brands director for The Moodie Davitt Report; Vijay Talwar, chief commercial and digital officer at Avolta; Peter Zehnder, head of global travel retail at Lindt and Sprüngli; and Julie Lassaigne, secretary general of the European Travel Retail Confederation.
In his opening remark, Cowan noted that for all the passengers that pass through an airport, only 12% visit the alcohol fixture, adding that growth can be identified in abundance.
Addressing the biggest opportunities to drive growth in GTR, Tan noted there is no other channel “where brands can connect with such a diverse and dynamic audience”.
She continued: “In the past, airports were merely transit hubs, but now they’ve become destinations within themselves, and there’s a lot of opportunity with that. And that transformation isn’t happening in isolation. It’s actually supported by numbers as well.
“So in the first half of 2025, UN Tourism said there were 690 million international travellers, and that figure was up by 5% in the same period versus last year. And it’s actually up 4% versus 2019 which, you know, a lot of people consider as a peak of travel.”
“But as this is happening, these consumers and travellers that are coming back, they’re not the same people that we were catering to pre-pandemic, there’s a shift – especially among younger, Millennial and Gen Z consumers – to move away from retail transactions and material purchases towards experiences.”
Tan noted that the way the industry has executed experiences has evolved, creating many opportunities for the spirits sector.
She cited Diageo’s recent pop-up for Johnnie Walker Black Ruby at Paris Charles de Gaulle Airport, describing it as an “an incredible activation that was a one-off”.
She also noted “cross-category collaborations” across the travel retail channel such as Royal Salute partnering with L’Oréal Paris Men Expert at Bangkok airport and Lancôme’s Café De La Rose concept at Hamad Airport, which blended a beauty boutique with a patisserie.
“We always talk about liquid to lips, but there’s a lot of opportunity for brands to think outside the box, really leverage the ecosystem we have in the channel,” Tan explained. “Talk to other categories, maybe talk to F&B [food and beverage]. I can see maybe a future where a spirits company like Diageo partners with airport F&B to offer wine tastings or pairings or cocktail mixology masterclasses, to really bring that experience into the airport and to make sure that we’re surprising and delighting our passengers, especially today.”
Talwar emphasised the importance of execution over new ideas, highlighting the need for flexibility, loyalty programmes, and entertainment to engage customers.
On the last point, he noted the importance of “surprising and delighting customers” by reducing the stress of traveling and providing entertainment.
Bringing in the online space, Talwar highlighted that no one is doing hybrid apps or smart store technology at scale.
“All of us talk about self-checkout, all of us talk about an app, all of us talk about loyalty, click and collect, or reserve and collect, or whatever you want to call it,” he said. “The reality is, all of these initiatives together are anywhere from 1% to maybe 10% or 15% of your business, and until it becomes 20%, 40%, 60% then I think we can say we change the customer experience, because that consistency is what’s lacking. So that consistency will only come from execution.”
Zehnder discussed the importance of premiumisation and travel retail-exclusive products in driving growth, using the example of limited edition flavours that tap into the latest trends, such as Dubai chocolate.
Lassaigne emphasised the resilience of the travel and tourism industry and the importance of partnerships in creating better experiences for travellers.
“We have seen the incredible resilience of transport and of travel,” she said. “Tourism still has a 3-5% traffic growth in terms of air traffic. Looking at the cruise industry, 10% traffic in terms of growth capacity. So I think we still have a nice future ahead of us. I know we hear a lot of gloomy things, but I think in terms of where we are as an industry, we have all the cards in our hands to play better.
“Instead of focusing on what we can’t change – these external factors – we should focus on what we can change. I think the strength of the industry is partnerships.
“It’s really an industry grounded in partnerships that should allow us to be able to respond and create and be much more efficient and reactive than any other domestic market.”
Travel retail trends
In terms of the biggest trends that will shape travel retail in the coming years, Zehnder noted the growing importance of new nationalities, particularly Indians, and the need to cater to their preferences.
Lassaigne emphasised the importance of embracing “change and chaos”, and the need to focus on what can be controlled, such as business models and data sharing.
Meanwhile, Talwar said the industry should shift it mindset from short-term to long-term growth, focusing on untapped markets like India.
Talwar noted that compared to China, India has “been growing consistently and constantly over the last three years, five years, 10 years”.
He continued: “For our average customer in some of our biggest airports, Indians spend more than the Chinese customers today, right? So the world has shifted. And we have to shift with it.”
Tan pointed to how the industry has begun to shift away from capturing consumers in stores and are looking beyond the shop floor.
“The biggest challenge is how do we capture the attention of attention-poor Millennial and Gen Z travellers? How do we stop them in the tracks, get them in the store? And I think the answer actually starts way before they arrive in the airport. And this is where social media-targeted advertising partnerships with online travel booking platforms, ride-sharing apps like Uber, Grab can come into play.”
She highlighted the importance of out-of-home advertising to showcase airport pop-ups, and in-store information via a QR code that provides cocktail recipes or a playlist for the plane.
Tan also cited the trend of ‘treatonomics’ as consumers continue to seek affordable indulgences during uncertain times.
“To address this, we need to be able to give something in our offer that hits every portion of the price ladder, not just to cater to the current customers we’re dealing with, but also the new demographics, Indian travellers, the new diversity of travellers coming from Southeast Asia, for example, so that we have an offer for everyone who comes into the channel.”
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