Asia to drive global alcohol travel retail sector

Findings at a recent IWSR forum highlighted the spending power of Asians in driving the global alcohol travel retail industry, whose size – if counted as a country – is said to be among the top five markets for most leading spirits producers.

Travel Retail ShopTotal travel-retail volumes for liquor grew 4.1% in 2017 to reach 32.3 million nine-litre cases, while value grew 6.8% to US$9.5billion. Europe was the fastest-growing region for value (+8.1%), followed by Asia-Pacific (+7.6%).

Although Europe is still leading the way, arrival shopping in Asia coupled with growing international travels by Chinese and Korean tourists are estimated to boost the sector in the coming years, according to the report.

Travel retail shopping, notably in India and Brazil, is also on the rise. China and Japan are also introducing expanded arrivals shopping – a sector that will become much bigger in coming years, highlighting opportunities for merchants in the duty-free and travel-retail channels.

Speaking at the Tax Free World Exhibition in Cannes, Nodjame Fouad of Pernod Ricard said: “When you look at Chinese and Korean travelers, they’ve got the highest spend per head, so these are key priority nationalities for us and if you look at the luxury spend in China, it’s obviously rebounded quite significantly.

“We do see continued opportunity there, along with the very strong momentum in terms of tourism growth of Chinese nationality. We see that as something that’s going to continue and a huge opportunity and a focus area for us,” he continued.

India is another powerhouse for global travel retail. Paul Topping of Flemingo commented:  “India remains top in terms of growth. The Indian market is somewhere between 50% and 80% of the total mix of duty free, depending on which category you pick. So you can imagine how strong and how much we rely upon the liquor category.”

Marshall Farrer from Brown-Forman admitted that European market is still a very important to the company and noted growth from Asia.

“We’ve seen a real resurgence in the European market. It’s a very important business to us. We still source a lot of growth out of consumers and nationalities that might be viewed as a bit more mature for smaller companies and so having strength coming out of the European business has been fantastic,” he explained.

“The softening of the US dollar helped the Americas a bit and the next thing that continues to be a nice growth area for us is Asia,” Farrer added.

Jack Daniel’s saw travel-retail sales rise 17% to top 1m nine-litre-equivalent cases in 2017.

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