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Tequila, Cognac and Burgundy lead travel retail growth
Following the return of the Masters of Wines and Spirits (MOWS) exhibition, held in Macau on 17 March, Benjamin Vuchot, CEO of travel retailer DFS Group, tells db which countries and products are leading the way in Asia Pacific.
What is the significance of DFS Group staging the MOWS event in Macau this year?
“By bringing Masters of Wines and Spirits back to Macau for the second consecutive year, we hope to give our customers from across Asia, who were not able to travel during the pandemic, another opportunity to explore and experience the very best in fine wines, spirits and Champagnes – from seeing the products in person, to hearing the product stories live from a Brand Ambassador, and smelling and tasting the wines and spirits to fully engage all the senses. We welcomed over 300 of our most loyal customers back to Macau where they enjoyed a weekend of exceptional masterclasses, educational tastings and another spectacular gala event.”
How would you describe the current state of the travel retail market for wine and spirits?
“2023 is a year for rebound for the travel retail market. So far, we’ve seen a strong start from Hong Kong, Macau and China during the first quarter and are optimistic that these locations will continue in a positive trajectory, thanks to the sudden lifting of travel restrictions. Elsewhere across APAC, Japan is also performing well, and we expect the Oceania market, France and the United States to pick up once supply chain and flight schedules resume pre-pandemic operating levels.”
Which particular Asian regions are on your radar right now?
“Macau and Vietnam specifically are expected to perform well when it comes to wines and spirits in the Asia Pacific region.”
Within wine and spirits, which products are leading the way or have the strongest potential for growth?
“We see customer behaviours and trends varying by location. For example, in the US, we have seen a pivot towards Tequila and American whiskey as well as an overall premiumisation which we have adapted to by forging new partnerships with local distilleries. We have also seen a rise in the number of celebrity-endorsed or partner brands which are doing well. Elsewhere, in Macau, we continue to see the growth in Cognac, particularly where the brands are partnering with limited edition releases. We have also seen increases in red Burgundy wines and Champagne. Finally, while allocations remain a challenge, the single malt category also continues its positive trajectory, and it has been refreshing to see customers looking beyond the mainstay brands for interesting expressions.”
After Covid, has DFS come up with any new business strategies for the Hong Kong and China market?
“We remain committed to serving our customers across the Hong Kong and China markets. In addition to our four stores in Hong Kong, we have also opened a retail space spanning 20,000 square metres in Mission Hills, in partnership with Shenzhen Duty Free, and recently unveiled the first phase of our newest airport store in domestic Terminal 3A at Chongqing Jiangbei International Airport, which is set to total 1,800 square metres. We also continue to actively be on the lookout for new opportunities in these two locations.”