COVID-19 and the challenge for craft, niche spirits (continued)
How can retailers encourage and help sustain the rise of craft products in the travel retail channel?
Chase Distillery Managing Director Andrew Carter: Retailers can help by encouraging emerging craft brands into the market, by giving them opportunity to promote and showcase their product within the store via customer engaging campaigns which highlights their brand story.
Tito’s Handmade Vodka International Managing Director John McDonnell: For one thing, duty free operators shouldn’t be using the pandemic to try to increase their margins at the expense of manufacturers, especially those in the craft sector. Suppliers and retailers alike are experiencing challenges, we need to come together as an industry to support one another – now is not the time for operators to be demanding excessive discounts, which ultimately could drive some brands to leave the channel altogether.
Also, as we discussed not long ago at the Trinity Forum, we need someone to step forward to develop a global ecommerce app for duty free, similar for example to the successful Drizly platform in the US. Consumers want convenience, and they’re willing to pay a premium for that, so think how compelling it would be to have an app that allows a consumer to easily purchase Tito’s Handmade Vodka or another craft spirit or confectionary or perfume or you name it, online, cashless and in their local currency, delivered right to the plane. An app like that would benefit us all.
Loch Lomond Group Managing Director Global Travel Retail Andre de Almeida: Premiumisation is what created the opportunity for the craft spirits segment to develop. Available research suggests also that spirit drinkers would be encouraged to pay more when this craft element is conveyed and combined with other factors such as differentiation against the category and/or unique taste offering for example. Authentic experiences can enhance this offering further and create engagement. Consumers continue to look out for new and interesting brands and flavours on offer across different categories.
Andre de Almeida
Molson Coors Beverage Company Travel Retail Senior Manager EMEA and APAC James Thacker: Craft products will never be the highest volume line, and when badly chosen and executed, they can become a burden – a slow rotating line, taking up valuable shelf life and that risks going go out of date. Recognising the role that craft can play in your range and your offer is the key to ensuring its successful. This can be to offer more interesting choices, to drive value of purchase, emphasise provenance, or most importantly to enhance the guest experience. Then retailers can lean on brand owners for help curating a range that delivers against that objective, while managing stock rotation and for support in executing it brilliantly.
InnoTRI Co-founder and Manager Christoph Henkel: Dedicate a special space in their stores for ‘True Craft’ and have a simple process to filter the brands that really are craft into this initiative.
Death’s Door Gin International Business Development Steve de Luca: By recognising that brands winning awards from leading third-party beverage alcohol publications, like Death’s Door Gin, have done so for a reason. We cannot speak for other brands, as we are unaware of the curating that goes into their production and marketing processes. At our end, we know that doing the right thing for consumers will ultimately create a win-win for our representatives, retail operators and any other channel stakeholders involved with Death’s Door Gin. We just need to be given a chance to first be considered as potentially valuable entry in operators’ assortments, and we will ensure that the brand exceeds their expectations.
Choya Senior Manager Seiji Susuki: How retailers manage sales floors and VIP customer information is key. Sending information about products and promotions by direct mail can help the rise of brands.
Bauer Spirits Global Travel Retail Director Hannes Koch: Craft products need to be highlighted either in a specific area or on the specific shelf but they should have an extra visibility in-store to increase the level of impulse purchases. Operators should use digital tools to interact with the travelling shopper especially on smaller brands to get their story, ethics and concepts across.
William Ovens (Ian Macleod Distillers): I think it is about being open minded to new brands. As an example Edinburgh Gin was only created some ten years ago and now it is the number 4 Super Premium Gin in GTR…there are many other similar examples. I think the retailers should also give these brands a fighting chance to succeed (assuming there are positive indicators) and provide appropriate guidance as to the levers which can be pulled to increase ROS.
Hunter Laing Business Development Director Scott Laing: Retailers have to avoid offering the same product selection in all the stores where they have a concession. Consumers want to have a choice and many shoppers appreciate seeing new brands that are different. This can be sustained by managing drinks category thinking among those that are shopping in the stores and those who are selling.
Dealing in diversity: Craft brands are pushing for more space but many retailers are narrowing their ranges
Wild Tiger Founder Gautom Menon: There should be a craft section where space permits. And on their website there must be a clear distinction to communicate craft spirits brands from other run of the mill products and best sellers.
Stoli Group Global Duty Free and Travel Retail Director Jean-Philippe Aucher: Retailers need to make it possible for smaller, independent brands to provide a presence in travel retail. The market is dominated by the larger spirits suppliers and that tends to make the offerings for travellers less exciting – and often very similar from airport to airport. There needs to be a shift in terms of the marketing costs, the expectation of margins, the viability of short-term activation space etc, to make the craft sector a real game-changer for travel retail. That’s when we may see a real shift to unique and authentic offerings.
Four Pillars Regional Trade & Global Travel Retail Director Mark Lawton: Retailers need to help grow the craft spirits brands so that they have the right range that shoppers are looking for when they travel. We can’t afford to have a shopper walk out of a store not buying anything.
Taste of Ireland: John Kelly greets Dermot Davitt at Cannes 2019 with a bottle of the Writers’ Tears expression, Copper Pot Japanese Cask Finish
Walsh Whiskey Walsh Whiskey Commercial Director John Kelly: Within Irish whiskey there are a number of emerging brands which are playing a key role in the growth of the category, which has been so strong in the last ten years. It’s also clear that there is a trend to premiumise within Irish whiskey as consumers and shoppers look to try something new, different and little bit more exclusive. We at Walsh Whiskey are leading the way in this premium Irish whiskey segment with both Writers’ Tears and The Irishman portfolio, complemented by the exclusive finishes we offer, often as exclusives to our key retail partners.
These exclusives help retailers to differentiate and will also help grow basket spend, which is so beneficial to the industry as a whole.: We think some retailers could be more open or proactive in having the conversation with the smaller, proven craft product suppliers and listening to what we have to offer. Consumers are changing their habits and looking for things that are new, different and exclusive. In our case, both of our core SKUs are unique in the world of whisk(e)y.
Both Writers’ Tears Copper Pot and The Irishman Founder’s Reserve are blends of two premium whiskey styles – Single Pot Still and Single Malt. This style became known as the ‘Champagne of Irish whiskey’ in the 19th century and we are the only whiskey company to offer that taste profile in the world today. So our hope is that retailers will give the smaller brands an opportunity to meet consumer demand for the unique and new.
The Moodie Davitt eZine Issue 283 | 16 September 2020
The Moodie Davitt eZine is published 12 times per year by The Moodie Davitt Report (Moodie International Ltd). © All material is copyright and cannot be reproduced without the permission of the Publisher. To find out more visit www.moodiedavittreport.com and to subscribe, please e-mail firstname.lastname@example.org