COVID-19 and the challenge for craft, niche spirits (continued)

What are the challenges for smaller, less recognised brand names?

Walsh Whiskey Commercial Director John Kelly: Getting our voice heard is probably one of the biggest challenges we face in the channel. We have a number of very strong relationships with key retailers and our business with those partners had been exceptionally good over the years, but outside of that we find that getting the opportunity to present and engage with retailers can be difficult. We are selling our whiskeys since 2006 and are in over 50 countries, so we are super-confident in the quality of what we have to offer with Writers’ Tears and The Irishman. All we are asking for is the opportunity to present what we have and a chance to prove what the brands can do for a retailer’s business – give us the chance and we won’t let you down.

Loch Lomond Group Managing Director Global Travel Retail Andre de Almeida: Travel will return and we must ensure that a diverse offer is available to those visiting travel retail. A lack of diversity in product offered creates the risk of the ‘shopping mall syndrome’, which in turn reduces the attractiveness of travel retail stores to travellers worldwide.

The main challenge facing niche products currently is the loss of distribution as travel retailers move to rationalise their ranges. Interestingly, this is counter to some of the trends being seen in domestic markets, whereby niche brands are benefiting from increased sales due to higher levels of ecommerce adoption by consumers.

Tito’s Handmade Vodka International Managing Director John McDonnell: One of the top challenges for smaller brands is getting sufficient shelf space and endcaps in stores. For this highly visible real estate, duty free operators charge the same fees whether to a big name brand or a smaller emerging product, and it’s just not financially feasible for many of these craft spirits and companies with smaller portfolios. Retailers should consider offering an endcap dedicated to craft brands, which those brands can come together to share the cost to be featured in these prominent locations.

Travel retail represents an opportunity to tell a good story well, in this case of Rémy Martin and its rich history

Choya Senior Manager Seiji Susuki: The challenge is in decreasing customer awareness. Without large advertising investment, travellers’ reviews play a key role in increasing that awareness. As travellers are absent and forget, it will take time for the full market recovery and to increase brand awareness.

William Ovens (Ian Macleod Distillers): There is a challenge in that some retailers may – post C-19 - decide to rationalise their ranges and focus only on the larger selling brands (some have already taken action in this regard, and this is understandable to an extent). A consequence of this potential move will mean that there is less choice for consumers. In addition the ‘cost to play’ in the channel may become so prohibitive that it is simply not feasible for smaller suppliers / brands to continue to supply.

Death’s Door Gin International Business Development Steve de Luca: With our Death’s Door Gin, we face the same key challenge that we had with our market-share beating RumChata brand in its earliest days: establishing awareness for a superior-tasting brand. While we have no doubt that this is Death’s Door Gin’s key challenge, consumers are not yet educated on why Death’s Door Gin taste so much better on its own, and makes what we believe is a far superior Gin & Tonic. We are just beginning to repurpose the strategy that built RumChata, so that is our challenge. Any craft spirit brand with limited brand awareness, but without a superior product and concept, will face even larger challenges, so we believe that we are in a good relative position.

Hunter Laing Business Development Director Scott Laing: Smaller brands have to fight for retail space with the larger brands whose owners often sell category-wide assortments and demand preferential shelf positioning. However, consumers do prefer choice and want to try new products sold by smaller companies.

Molson Coors Beverage Company Travel Retail Senior Manager EMEA and APAC James Thacker: With the onset of COVID-19 an increasing challenge is gaining brand awareness with consumers. Craft brands don’t tend to have big ATL budgets, and often rely on sampling as the best way to reach consumers, educate them about your brand and drive trial. Unfortunately given new guidance and regulations we will have to rethink how we sample consumers and market our lesser known brands.

Additionally, as retailers reopen after COVID shutdown, we’re seeing them focus more on their core ranges, that they and consumers already know, and have a proven track record. Less recognised brands risk getting marginalised in this environment, at least for the short term.

InnoTRI Co-founder and Manager Christoph Henkel: That retailers will focus promotions on well-known and bestseller brands with high rotation, and they have high demand on promotional returns. That they are less open to “experiments” and whether demand for smaller or local brands is there from customer perspective.