Crafting fresh experiences in travel retail

The surging popularity of artisanal brands through and since the pandemic, a strong consumer premiumisation drive – with its focus on quality and differentiation – and the rise of cocktail culture in many markets have each played a part in the evolution of the craft spirits segment.

Those trends have helped support growth in travel retail too, with shopper demand for localisation and great stories alongside the dynamics listed above.

The craft definition applies just as much to the traditional renowned Cognac and whisky houses that are owned by the largest industry groups as it does to small-production, independent distillers.

What matters is that each brand can tell its own story of authenticity – a crucial word in the consumer lexicon today – quality and point of difference.

Within the major categories, the increased presence of tequila on the shelves of many travel retailer tells a story of brand-building with a craft angle.

ARI Global Buying Manager, Liquor and Tobacco Shane O’Sullivan told us recently: “We see that Millennials lean more towards whiskey-based cocktails, and Gen Zers prefer cocktails made with clear spirits. The Margarita is their go-to cocktail, which explains the spike in tequila sales of late.”

Tequila and rum are among the emerging drinks categories to watch as new consumers embark on their own journey of discovery while travelling, he added, though these remain a small part of the shopper base for ARI. Much larger is Irish whiskey, where differentiation, innovation and experiential activation play a vital role at home and overseas.

Similarly, new generations are influencing the makeup of the spirits offer at Lotte Duty Free in South Korea, Singapore and Australia, as Head of Merchandising Division Im (Edward) Hung-Il told us.

“Since 2023, 20-30-year-old customers accounted for 46% of spirits sales, up about +12% from 2019, the year before COVID-19,” he noted. “The MZ generation has also become more likely to purchase liquor at duty-free stores, and they prefer to try a variety of liquor. Accordingly, sales are expanding not only to currently popular items such as whisky and wine, but also to gin, Japanese sake and Chinese baijiu.”

It’s not all good news. As results from leading drinks players such as Diageo and Pernod Ricard have shown, the US and China has seen softening of spend, notably at the premium end, in the last year, for a mix of reasons. Travel retail is prone to the impact of the same factors that influence local market spend, with many retailers highlighting a weakening of prestige whisky sales, for example.

But the bigger picture for the world of craft spirits is bright. Further creativity in product development and telling authentic stories to consumers in new ways can help ensure that this segment of the drinks business can prosper and grow.

Read on for stories of how brands large and small are showcasing their craft credentials, and how they view the prospects for the category in travel retail.